[Congressional Record (Bound Edition), Volume 151 (2005), Part 1]
[Senate]
[Pages 343-587]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. GREGG (for himself, Mr. Frist, Mr. Sessions, Mr. DeWine, 
        Mr. Allen, Mr. Santorum, Mr. McConnell, and Mr. DeMint):
  S. 3. A bill to strengthen and protect America in the war on terror; 
to the Committee on Finance.
  Mr. ENZI. Mr. President, as reports continue to appear in the media, 
there can be little doubt that a critical area of homeland security, 
and one on which I will be focusing as Chairman of the Health, 
Education, Labor and Pensions Committee, is the issue of bioterrorism. 
It is clear that we cannot separate the need for a strong national 
biodefense from other aspects of emergency preparedness.
  Last summer, when President Bush signed the Project Bioshield Act 
into law, he called bioterrorism and efforts to use modern technologies 
against us the greatest danger of our time. The threat posed by 
bioterror has not gone unnoticed by terrorists and those who wish to do 
us harm. That is why we must continue to do everything we can to ensure 
our ability to respond to the use of biological weapons.
  In the months to come, my Committee will be working together to 
develop the strategy we will need to provide for a strong national 
biodefense. We will be exploring a number of options in that effort, 
like providing incentives to increase private sector participation in 
the development of bioterror countermeasures and biopreparedness tools. 
We will also be examining ways to strengthen our domestic vaccine 
industry and increase the overall readiness of our public health 
system.
  While I commend its intent, I declined to cosponsor S. 3, the 
Republican leadership bioterrorism bill introduced today. I look 
forward to developing bipartisan legislation to strengthen our national 
biodefense system in our Committee. Senator Burr, who will be heading 
the Subcommittee on Bioterrorism and Public Health Preparedness, will 
be an important part of that effort. I am also looking forward to the 
input of my fellow Committee members, including Senators Kennedy, Gregg 
and Hatch, as well as Senator Lieberman, who, while not a member of my 
Committee, has made this a priority of his work in the Congress and put 
a great deal of thought and effort into the area. In the coming weeks 
and months, I will also be convening a number of discussions with 
critical stakeholders and experts as we develop our legislation.
  Together, I am confident we can build on the work Congress and 
President Bush began with the Project Bioshield legislation and do what 
is necessary to ensure that we are as prepared as we possibly can be 
for the ever-present and constantly changing threat of bioterrorism.
                                 ______
                                 
      By Mr. ENZI (for himself, Mr. Frist, and Mr. McConnell):
  S. 9. A bill to improve American competitiveness in the global 
economy by improving and strengthening Federal education and training 
programs, and for other purposes; to the Committee on Finance.
  Mr. ENZI. Mr. President, last week we had an opportunity to be a part 
of a truly historic event. As we gathered together on the west front of 
the Capitol, a huge crowd joined us along the Mall and down 
Pennsylvania Avenue to witness the inauguration of President

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Bush. It was a great moment for America as the President took his oath 
of office. Later, in what was one of the best inaugural speeches I have 
ever heard, he outlined his vision for the future and the theme for his 
second term.
  It filled my heart with pride to hear him speak about freedom and the 
role America would continue to play in helping to bring its bright 
light to bear on the darkest regions of the world. As he spoke, I was 
pleased to hear him also renew, his commitment to our Nation's 
education system and to bringing the highest standards to our schools. 
The President made it clear that such an effort was an important part 
of making sure that every American has a stake in our future as a 
nation. Without it, the American dream we have shared for many years 
may be reduced to a nightmare for future generations.
  Clearly, we can't allow that to happen. That is why I am pleased to 
join, with the distinguished majority leader, Dr. Frist, and my friend 
and colleague, from Tennessee, Senator Alexander, in introducing 
legislation we have written to address that need and ensure a brighter 
future for our children. Among the goals our legislation seeks to 
address is the importance of strengthening our public education system, 
ensuring parents are involved in the process and, above all, giving our 
teachers the support they need to obtain the results we must have if 
our children are to have the best chance to succeed in life.
  The legislation I am introducing today continues the work we began 
with the passage of the No Child Left Behind Act. That bipartisan 
legislation made it clear that we had high expectations for all public 
school children. It made making sure those expectations were met the 
center of our Federal education policy. That policy has had good 
results. Children all over the country, including minority children, 
are improving their reading skills. Their math scores are getting 
better. In another 2 years, when science is included in the State 
assessments, I believe we will see that students are doing better in 
that subject, too. Thanks to the passage of the No Child Left Behind 
Act that we all had a hand in, we are continuing to see more and more 
positive results in our schools.
  Although our record of success is impressive, there is still room for 
more improvement. According to the most recent National Assessment of 
Education Progress, over 25 percent of twelfth grade students could not 
read at grade level. Only two-thirds of students entering the ninth 
grade are expected to complete high school within 4 years. That is a 
dire forecast for our future, but it need not be so if we stick to the 
goals we have set and work to achieve them.
  We want to make sure we continue to set high expectations of what all 
students can achieve, regardless of their background. This needs to be 
a common theme in all our Federal education programs. All students can 
learn and every child can be a star pupil. It is not just a slogan. It 
is a philosophy that our teachers need to put into practice every day 
in the classroom. It must then be echoed by every student's parents 
each evening at home at the dinner table.
  We need to make sure Federal programs emphasize accountability, but 
we also need to make sure we do it in a way that makes sense. Many 
Federal programs designed to serve the same population of students have 
different requirements. We can help our teachers serve their students 
better by reducing the amount of time they spend outside the classroom 
on activities that don't help our children learn. Federal program 
requirements should not work against the, goal we have set of improving 
student achievement.
  It is important to provide flexibility to the States so they can 
manage Federal program dollars and address their unique needs in the 
most effective manner possible. We need to let leaders at the State and 
local level make the important decisions about this country's 
education, because they are at the level closest to the people--and 
closest to the classroom where we must continue to get good results 
from our efforts.
  The needs of rural schools must also continue to be addressed. 
Schools in rural States like Wyoming have unique needs and serve 
smaller populations. They can't be administered like the large schools 
of the big cities in the East. One-size-fits-all policies that may work 
in large population centers are all too often doomed to fail in the 
smaller towns and cities of the West.
  Although funding will be a key in the effort to address these issues, 
the Federal Government provides only a fraction of education spending 
in this country. For K-12 education, the Federal investment is still 
around 8 percent. The rest of the money comes from States and local 
districts. We need to trust these educators and administrators to work 
on behalf of the children in their charge. We must ensure they have the 
tools they need to serve their students and help all children in their 
area succeed.
  We also want to support lifelong learning opportunities for students 
at every stage in their life. Education is changing; the way we 
approach learning has to change as well. Federal programs should 
reflect these changes and help our students adapt to them. Las year, 
more than 70 percent of college students were considered 
``nontraditional.'' Our education system needs to address the needs of 
adult learners, as well as children who take the more ``traditional'' 
track in education.
  We want to create a strong link between education and the workforce. 
Businesses are creating and filling good jobs with good candidates, and 
we want to make sure we are filling those jobs with American workers.
  In our technology-driven economy, school can never be out. It is 
estimated that 60 percent of tomorrow's jobs will require skills that 
only 20 percent of today's workers possess. It is also estimated that 
the average worker leaving college today will switch careers 14 times 
in their life, and 10 of those careers haven't been invented yet.
  To address those needs, we need a system in place that can support a 
lifetime of education, training, and retraining. As tomorrow's workers 
change careers, they will need to learn new skills, or to apply their 
current skills in new ways. Our postsecondary institutions will play a 
critical role in supporting these students, as they do now through a 
number of Federal education programs.
  High school dropouts are the most at-risk school population in the 
workforce. We must look at Federal efforts to reform high schools to 
make sure we are keeping students in school. We need to make sure that 
students are leaving high school with a diploma, a quality education, 
and the strong foundation of reading, writing, math and science skills 
that will help them succeed in the workforce. We must also reach out to 
those who do not have high school diplomas to give them an opportunity 
to increase the level of their skills so that they, too, have a chance 
to succeed in life. We can do that by increasing their awareness of and 
involvement in lifetime of learning programs.
  In this bill, we have also included language to reauthorize the 
Workforce Investment Act. That will help an estimated 900,000 
unemployed workers each year get back to work and provide American 
workers with the skills they will need to be competitive in the global 
marketplace. That will help them land the good jobs that will be 
created in the years to come. Our legislation will also support the 
needs of businesses including small businesses looking for skilled 
workers. In addition, the bill will strengthen the role of public 
education institutions in the Federal workforce preparation effort, 
including our community colleges.
  As we work on this and other education legislation, we must ensure we 
are focused on getting the results that will help our children succeed 
in life. We can do that by incorporating high expectations, 
accountability, flexibility for our States in administering Federal 
assistance, and a lifetime of learning opportunities, into our 
education policies. If we do that, every child's life will be a success 
story and everyone will have the freedom to live their own version of 
the American dream.

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  As we continue to work on improving our Nation's education system, an 
educated citizenry will continue to be our goal. It will never be 
enough to provide our children with a diploma. We must provide them 
with the skills they will need to compete for and win the jobs of 
tomorrow and keep them.
                                 ______
                                 
      By Mr. LEVIN (for himself, Mr. Reid, Ms. Mikulski, Ms. Stabenow, 
        Mr. Inouye, Mr. Dorgan, Mr. Lautenberg, Mr. Leahy, Mr. Salazar, 
        Mr. Rockefeller, Mrs. Murray, Mr. Bingaman, Mrs. Feinstein, Mr. 
        Durbin, Mr. Kennedy, Mr. Corzine, Mr. Pryor, Mr. Nelson of 
        Nebraska, Mr. Reed, Mr. Schumer, and Mr. Dayton):
  S. 11. A bill to amend title 10, United States Code, to ensure that 
the strength of the Armed Forces and the protections and benefits for 
members of the Armed Forces and their families are adequate for keeping 
the commitment of the people of the United States to support their 
service members, and for other purposes; to the Committee on Finance.
  Mr. LEVIN. Mr. President, I am honored to introduce the Standing with 
Our Troops Act of 2005. This bill addresses the needs of the Soldiers, 
Sailors, Airmen, and Marines who have responded so bravely to the call 
of our Nation. We owe it to them and their families to ensure that they 
are properly trained and equipped for the hazardous duties they are 
performing, that they are fairly compensated for their service, and 
that they receive their pay in the correct amount, on time.
  We start with the recognition that we have cut our troop strength too 
far to sustain current military operations. This bill would authorize 
increases of up to 40,000 additional active duty Soldiers and Marines 
over the next two years. The bill authorizes an increase in the active 
duty Army end strength by up to 20,000 Soldiers in 2006 and an 
additional 10,000 in 2007, and it authorizes an increase in the Marine 
Corps' active duty end strength by up to 5,000 Marines in 2006 and an 
additional 5,000 Marines in 2007.
  The Department of Defense currently reports numbers of service 
members killed or seriously wounded in action in our ongoing combat 
operations in Iraq and Afghanistan. This bill would require a formal 
monthly report that includes the numbers of Soldiers, Sailors, Airmen 
and Marines who are killed in action; killed as a result of non-combat 
injuries incurred during combat operations; killed as a result of self-
inflicted wounds or suicide; wounded in action, when the injuries 
prevent the service member from returning to duty within 72 hours; 
wounded in action when the service member returns to duty within 72 
hours, insofar as this data is currently maintained; and the total 
number of service personnel evacuated from theater for medical reasons.
  To ensure that awards and decorations are expeditiously and fairly 
awarded to deserving military personnel, this bill would establish an 
Advisory Panel on Military Awards and Decorations to review the 
policies and practices of each of the Services for awarding medals and 
decorations and to report to Congress. This Panel would compare the 
different Service policies and practices for decorating its military 
personnel, and make a recommendation as to whether individual service 
practices should be continued or a single standard adopted that applies 
to all Services; recommend measures that can be taken to ensure that 
service members serving in combat are at least as likely to receive 
medals as those not exposed to combat, and enlisted personnel are just 
as likely as officers to be decorated for their service.
  This bill would create an Office of Mobilization Planning and 
Preparedness within the National Security Council to ensure that all of 
our national resources are assembled and organized to respond to a 
national security emergency. National resources include our military, 
labor, transportation, industry and financial resources.
  We know that current military operations are wearing out military 
equipment faster than we are replacing it. To address this, this bill 
would require the Secretary of Defense to report to Congress on the 
needs of our military forces for reconstituting stocks of equipment and 
material damaged, destroyed, and worn out in Operation Iraqi Freedom 
and Operation Enduring Freedom. The report will include the needs of 
each military service, including the reserve components, for repair and 
replacement of equipment; and authorize appropriation of $8.5 billion 
for the Army and $2.1 billion for the Marine Corps for repair, 
refurbishment, and replacement of equipment used in OIF and OEF.
  The Government Accountability Office (GAO) found, and I agree, that 
the Department of Defense's mobilization and deployment policies were 
implemented in a piecemeal fashion not linked to a strategic framework. 
We owe it to our service men and women to have clear policies regarding 
lengths of deployments. The Department of Defense must clearly 
communicate these policies and other deployment related information to 
service members and their families. This bill would require the 
Secretary of Defense to report to Congress on DoD policies on lengths 
of mobilization and deployment periods and on the use of stop-loss to 
keep military personnel in the service beyond their service 
commitments.
  In two separate reports, the GAO has found that more than 90 percent 
mobilized reserve component personnel experienced pay problems. The GAO 
found that ``These pay problems often had a profound adverse impact on 
individual soldiers and their families.'' This bill would require the 
designation of a senior official to ensure implementation of GAO 
recommendations to correct these pay problems.
  Representation of our reserve component personnel at the highest 
levels in the Department of Defense has not kept pace with the 
increased role of our Guard and Reserve personnel. Accordingly, this 
bill creates a new position, a Deputy Under Secretary of Defense for 
Reserve Affairs, to speak for the Reserve Components.
  This bill would give tax relief to mobilized service members and 
employers who make up for pay lost to service members who are ordered 
to active duty. It would amend the Internal Revenue Code to authorize 
activated National Guard and Reserve personnel to make penalty free 
withdrawals from qualified retirement plans; allow employers a tax 
deduction for making up the difference between military pay and 
civilian income of mobilized reservists; and authorize a tax credit to 
small business employers who continue to compensate members of the 
Ready Reserve ordered to active duty and for costs of hiring a 
replacement employee.
  We know that the military pay of about a third of our mobilized 
National Guard and Reserve personnel is less than the pay they received 
from their civilian jobs. Many private employers already pay a wage 
differential to those who lose money, and we will encourage more to do 
so with the tax incentives I have just described. The biggest employer 
of our Guard and Reserve personnel is the Federal Government, and the 
Federal Government should do as much as the private employers do for 
those who lose money while serving our Nation. This bill would require 
Federal Agencies to make up the pay differences for Federal employees 
who are ordered to active duty.
  Studies have shown that 40 percent of our junior enlisted members in 
the reserve components have no health insurance except when they are on 
active duty. This bill would provide access to the military's TRICARE 
health care program for all members of the Selected Reserve and their 
families. They would pay a subsidized premium similar to the premium 
charged Federal Employees for health care. This will help to ensure 
that members of the National Guard and Reserves are medically ready 
when called to serve in the military.
  When a Soldier, Sailor, Airmen or Marine dies on active duty, his 
survivors currently receive a death gratuity of just over $12,000. This 
is simply not enough. This bill would raise the death gratuity to 
$100,000, and would

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allow survivors to receive Dependency and Indemnity Compensation from 
the VA as well as a Survivor Benefit Plan annuity from the Department 
of Defense.
  United States taxpayers have borne a disproportionate share of the 
cost for the reconstruction of Iraq. The support of the international 
community for this reconstruction is critical. This bill would require 
the President to report to Congress on U.S., Iraqi, and foreign 
contributions to Iraq's reconstruction before any new U.S. 
reconstruction funds are appropriated. The bill would also require any 
U.S. funds for reconstruction in Iraq be in the form of a 
collateralized loan which the U.S. would guarantee unless the President 
reports to Congress that it is in the U.S. national security interest 
to provide the funds other than in the form of a loan.
  I again want to compliment the service of the young men and women 
serving in our military forces for their magnificent and unselfish 
service to our Nation. I trust that the measures included in this bill 
will serve as a token of the Nation's sincere appreciation for their 
great sacrifices and service.
  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 as 
follows:

                                 S. 11

       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 ``Standing With Our Troops Act 
     of 2005''.

  DIVISION A--FULFILLMENT OF OBLIGATIONS TO THE MEMBERS OF THE ARMED 
                                 FORCES

     TITLE I--STRENGTHS OF THE ARMY AND MARINE CORPS ACTIVE FORCES

     SEC. 101. FINDINGS.

       Congress makes the following findings:
       (1) While the United States Armed Forces remain the premier 
     fighting force in the world, the Defense Science Board, in a 
     study carried out in the summer of 2004, found that ``When we 
     match the existing and projected force structure with the 
     current and projected need for stabilization forces we see an 
     enduring shortfall in both total numbers of people and their 
     ability to sustain the continuity of stabilization 
     efforts.''.
       (2) Between 1989 and 2004, the military personnel end 
     strength of the Army has been reduced by more than 34 
     percent, and the Department of the Army's civilian workforce 
     has been reduced by more than 45 percent, while the mission 
     rate of the Army has increased by 300 percent.
       (3) Because of the personnel reductions, the Army National 
     Guard and the Army Reserve are repeatedly being called to 
     active duty to meet Army mission requirements that the 
     active-duty force of the Army is no longer large enough to 
     meet alone. Army National Guard and Army Reserve units have 
     provided up to 40 percent of the military personnel engaged 
     in Operation Iraqi Freedom while they have also been 
     performing a dramatically increased role in homeland defense 
     and continuing to respond to natural disasters, other 
     domestic emergencies, and military contingencies. As a 
     result, the reserve components of the Army have been pushed 
     to the breaking point.

     SEC. 102. ARMY.

       (a) Strength for Fiscal Year 2006.--Effective on October 1, 
     2005, section 691(b)(1) of title 10, United States Code, is 
     amended by striking ``502,400'' and inserting ``522,400''.
       (b) Strength for Fiscal Years After Fiscal Year 2006.--
     Effective on October 1, 2006, section 691(b)(1) of such title 
     is amended by striking ``522,400'' and inserting ``532,400''.

     SEC. 103. MARINE CORPS.

       (a) Strength for Fiscal Year 2006.--Effective on October 1, 
     2005, section 691(b)(3) of title 10, United States Code, is 
     amended by striking ``178,000'' and inserting ``183,000''.
       (b) Strength for Fiscal Years After Fiscal Year 2006.--
     Effective on October 1, 2006, section 691(b)(3) of title 10, 
     United States Code, is amended by striking ``183,000'' and 
     inserting ``188,000''.

  TITLE II--FULL RECOGNITION OF SACRIFICE AND VALOR OF UNITED STATES 
                             SERVICEMEMBERS

                          Subtitle A--Findings

     SEC 201. FINDINGS.

       Congress makes the following findings:
       (1) On November 21, 2004, the Columbia Broadcasting System 
     television program 60 Minutes reported that the staff of that 
     program had received from the Department of Defense a letter 
     containing the assertion that ``[m]ore than 15,000 troops 
     with so-called `non-battle' injuries and diseases have been 
     evacuated from Iraq.''.
       (2) This report was a rare disclosure by the Department of 
     Defense, as it is the policy of the Department of Defense not 
     to disclose publicly the number of Armed Forces personnel 
     that sustain non-combat injuries.

 Subtitle B--Accounting for Casualties Incurred in the Prosecution of 
                      the Global War on Terrorism

     SEC. 211. MONTHLY ACCOUNTING.

       Not later than five days after the end of each month, the 
     Secretary of Defense shall publish, for such month for each 
     operation described in section 212, a full accounting of the 
     casualties among the members of the Armed Forces that were 
     incurred in such operation during that month.

     SEC. 212. OPERATIONS COVERED.

       The operations referred to in section 211 are as follows:
       (1) Operation Iraqi Freedom.
       (2) Operation Enduring Freedom.
       (3) Each other operation undertaken by the Armed Forces in 
     the prosecution of the Global War on Terrorism.

     SEC. 213. COMPREHENSIVE CONTENT OF ACCOUNTING.

       For the purpose of providing a full and complete accounting 
     of casualties covered by a report under section 211, the 
     Secretary of Defense shall include in the report the number 
     of casualties in each casualty status in accordance with 
     section 214.

     SEC. 214. CASUALTY STATUS.

       (a) Status Types.--In a report under this title, each 
     casualty among members of the Armed Forces shall be 
     characterized by the most specific casualty status applicable 
     to the member as follows:
       (1) Killed in action.
       (2) Killed in non-hostile duty.
       (3) Killed, self-inflicted.
       (4) Wounded in action, not returned to duty.
       (5) Wounded in action, returned to duty (to the extent that 
     data is available to support this characterization of 
     casualty status).
       (6) Evacuated for medical reasons.
       (b) Definitions.--In this section:
       (1) Killed in action.--The term ``killed in action'', with 
     respect to a member of the Armed Forces, means that the 
     member incurred one or more mortal wounds while involved in 
     an action against a hostile force, whether or not the wounds 
     are inflicted by the hostile force.
       (2) Killed in non-hostile duty.--The term ``killed in non-
     hostile duty'', with respect to a member of the Armed Forces, 
     means that the member incurred one or more mortal wounds that 
     were not self-inflicted and not inflicted during an action 
     against a hostile force.
       (3) Killed, self-inflicted.--The term ``killed, self-
     inflicted'', with respect to a member of the Armed Forces, 
     means a suicide of the member or the death of the member as a 
     result of one or more self-inflicted injuries.
       (4) Wounded in action, not returned to duty.--The term 
     ``wounded in action, not returned to duty'', with respect to 
     a member of the Armed Forces, means that the member, while 
     involved in an action against a hostile force, incurred one 
     or more non-mortal injuries that required medical attention 
     and that prevented the member from returning to duty within 
     72 hours after incurring the injury or injuries.
       (5) Wounded in action, returned to duty.--The term 
     ``wounded in action, returned to duty'', with respect to a 
     member of the Armed Forces, means that the member, while 
     involved in an action against a hostile force, incurred one 
     or more non-mortal injuries that required medical attention 
     but did not prevent the member from returning to duty within 
     72 hours after incurring the injury or injuries.
       (6) Evacuated for medical reasons.--The term ``evacuated 
     for medical reasons'', with respect to a member of the Armed 
     Forces, means that the member was evacuated from a theater of 
     operations for medical reasons.

     SEC. 215. PUBLICATION AND RELEASE OF REPORT.

       The Secretary of Defense shall--
       (1) post the report under this title on the official 
     website of the Department of Defense; and
       (2) transmit a copy of the report to the chairmen and 
     ranking members of the Committees on Armed Services of the 
     Senate and the House of Representatives.

     SEC. 216. SENSE OF CONGRESS.

       It is the sense of Congress that the Secretary of Defense 
     has an obligation to ensure full and accurate reporting of 
     casualties among the members of the Armed Forces to Congress 
     and the people of the United States.

     Subtitle C--Advisory Panel on Military Awards and Decorations

     SEC. 221. ESTABLISHMENT.

       The Secretary of Defense shall establish within the 
     Department of Defense an Advisory Panel on Military Awards 
     and Decorations.

     SEC. 222. DUTIES.

       (a) Comprehensive Review of Military Decorations System.--
     The Advisory Panel shall conduct a comprehensive review of 
     the standards and processes used in the Armed Forces to award 
     medals and decorations to members of the Armed Forces. The 
     review shall include the following matters:

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       (1) An examination and evaluation of the standards of each 
     of the Armed Forces for awarding each medal and decoration.
       (2) A comparison of the standards of each of the Armed 
     Forces with the standards of each of the other Armed Forces 
     for awarding comparable medals and decorations.
       (3) An examination and evaluation of the speed with which--
       (A) each of the Armed Forces identifies and considers 
     members for the awarding of medals and decorations; and
       (B) the medals and decorations are ultimately awarded.
       (4) A review of the medals and decorations awarded by the 
     Armed Forces during 2002, 2003, and 2004, together with a 
     review of the ranks of the recipients and the mission-related 
     and other circumstances that are associated with the awarding 
     of the medals and decorations to those recipients.
       (b) Report.--
       (1) Requirement for report.--Not later than 18 months after 
     the date of the enactment of this Act, the Advisory Panel 
     shall submit a report on the results of the review under this 
     section to the Secretary of Defense and to Congress.
       (2) Content.--The report under this subsection shall 
     contain the findings and conclusions of the Advisory Panel 
     together with any recommendations for action that the panel 
     considers appropriate, and shall include the following 
     matters:
       (A) A discussion of the merits of maintaining for each of 
     the Armed Forces separate policies for the awarding of 
     comparable medals and decorations of the Armed Forces, 
     together with a discussion of the merits of adopting uniform 
     standards for awarding such medals and decorations.
       (B) Measures that can be taken by each of the Armed Forces 
     to expedite the process for timely identifying a member who 
     deserves a medal of decoration, determining the 
     appropriateness of awarding the medal or decoration to the 
     member, and, in each appropriate case, awarding the medal or 
     decoration to the member.
       (C) Measures that can be taken to ensure that--
       (i) members serving in combat are at least equally as 
     likely to be considered for the awarding of medals and 
     decorations as are personnel not exposed to combat; and
       (ii) enlisted personnel are at least as likely to be 
     considered for the awarding of medals and decorations as are 
     officers.
       (D) A recommendation regarding whether the Valor device 
     awarded by each of the Armed Forces should be replaced by a 
     separate class of medals honoring special bravery in combat.
       (E) A determination of the desirability of adding a new 
     class of medals, similar to the Purple Heart, to be awarded 
     to military personnel who incur non-combat injuries in 
     connection with performance of an official mission or duty 
     during a combat operation in order to honor their sacrifice 
     in service to the people of the United States.
       (c) Scope Limited to Department of Defense.--The scope of 
     the review and report under this section does not include the 
     Coast Guard.

     SEC. 223. COMPOSITION AND ADMINISTRATION.

       (a) Composition.--
       (1) Number; appointment.--The Advisory Panel shall be 
     composed of not more than seven members appointed by the 
     Secretary of Defense.
       (2) General and flag officers.--The Secretary shall ensure 
     that the membership of the task force includes a retired 
     general or flag officer from each of the Army, Navy, Air 
     Force, and Marine Corps who is familiar with the policies of 
     the Armed Forces regarding military awards and decorations.
       (3) Veterans.--The Secretary shall appoint at least one 
     representative of a leading veterans' advocacy organization 
     as a member of the Advisory Panel.
       (b) Time for Appointment.--All members of the Advisory 
     Panel shall be appointed within 60 days after the date of the 
     enactment of this Act.
       (c) Chairperson.--The chairperson of the Advisory Panel 
     shall be selected from among the members of the Advisory 
     Panel by a majority vote of the members.
       (d) Compensation and Expenses of Members.--Each member of 
     the Advisory Panel shall serve without compensation, but 
     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 member's home or regular places of 
     business in the performance of services for the Advisory 
     Panel.
       (e) Federal Advisory Committee Act.--The Federal Advisory 
     Committee Act (5 U.S.C. App) shall not apply to the Advisory 
     Panel.

     SEC. 224. COOPERATION OF FEDERAL AGENCIES.

       (a) Information.--The Advisory Panel may obtain directly 
     from the Department of Defense, the Department of Veterans 
     Affairs, or any other department or agency of the United 
     States any information of such department or agency that the 
     panel considers necessary for the panel to carry out its 
     duties.
       (b) Other Cooperation.--The Secretary of Defense, the 
     Secretary of Veterans Affairs, and any other official of the 
     United States shall provide the Advisory Panel with full and 
     timely cooperation requested by the panel in carrying out its 
     duties under this section.

     SEC. 225. TERMINATION.

       The Advisory Panel on Military Awards and Decorations shall 
     terminate 30 days after the submission of the report to 
     Congress under section 222(b).

               TITLE III--MILITARY EQUIPMENT AND MATERIEL

     SEC. 301. FINDINGS.

       Congress makes the following findings:
       (1) United States military personnel serving in Operations 
     Iraqi Freedom have experienced significant shortages of 
     critical equipment, such as body armor, aircraft 
     survivability equipment, and armored trucks, including up-
     armored High Mobility Multipurpose Wheeled Vehicles. In many 
     cases the shortages have lasted several months. For example, 
     the individual body armor needed for protecting every member 
     of the Armed Forces and Department of Defense civilians in 
     Iraq was not produced and fielded until February 2004, 11 
     months after Operation Iraqi Freedom was launched. Shortages 
     of armor for Army trucks still existed as of the beginning of 
     2005.
       (2) Operation Iraqi Freedom and Operation Enduring Freedom 
     have taken a substantial toll on military equipment of the 
     Armed Forces. The commanding general of the Army Material 
     Command estimated in 2004 that the Army is wearing out its 
     equipment in Iraq and Afghanistan at a rate that could be up 
     to 10 times faster than the rate at which it wears out its 
     equipment elsewhere during peacetime, and there are no 
     significant reserve stocks of that equipment remaining.
       (3) It is a solemn obligation of the United States 
     Government to ensure that, whenever the Armed Forces are 
     called into battle, the military personnel fighting or 
     supporting the battle are provided with the safest, most 
     effective technology and equipment.

     SEC. 302. MOBILIZATION PLANNING AND PREPAREDNESS.

       (a) Director of Mobilization Planning and Preparedness.--
     Title I of the National Security Act of 1947 (50 U.S.C. 402 
     et seq.) is amended by striking section 107 and inserting the 
     following new sections:


          ``director of mobilization planning and preparedness

       ``Sec. 107. Definitions.--In this section:
       ``(1) The term `Director' means the Director of 
     Mobilization Planning and Preparedness referred to in 
     subsection (b)(1), except where the context clearly indicates 
     otherwise.
       ``(2) The term `national security emergency' means any 
     occurrence, including a natural disaster, a military or 
     terrorist attack against the territory of the United States, 
     a military operation carried out by the Armed Forces abroad, 
     a technological emergency, or any other emergency, that 
     either seriously degrades or threatens the security of the 
     United States or the Armed Forces.
       ``(3) The term `mobilization' means the act of assembling 
     and organizing national resources, including military 
     personnel and equipment, labor, transportation systems, 
     industry, and financial resources, to support national 
     objectives of the United States in time of a national 
     security emergency.
       ``(4) The term `mobilization planning and preparedness' 
     means all aspects of planning and preparing for a 
     mobilization for a national security emergency, including the 
     identification of functions that would have to be performed 
     during a national security emergency, development of plans 
     for performing such functions, development of the capability 
     to execute such plans, and development of policies that 
     maximize the speed and efficiency with which such plans can 
     be executed during a national security emergency.
       ``(b) Position of Director.--
       ``(1) Establishment.--There is a Director of Mobilization 
     Planning and Preparedness on the staff of the National 
     Security Council.
       ``(2) Appointment.--The Director is appointed by the 
     Assistant to the President for National Security Affairs.
       ``(3) Relationship to national security advisor.--The 
     Director reports directly to the Assistant to the President 
     for National Security Affairs.
       ``(c) Duties.--
       ``(1) Principal duty.--The Director is the principal 
     adviser to the Assistant to the President for National 
     Security Affairs on matters of mobilization planning and 
     preparedness.
       ``(2) Specific duties.--The duties of the Director include 
     the following:
       ``(A) Identify which governmental and private sector 
     functions must be performed on a sustained basis during a 
     national security emergency.
       ``(B) Develop plans for the sustained performance of the 
     identified functions.
       ``(C) Provide guidance on the development of the capability 
     to execute the plans.
       ``(D) Recommend policies for the maximization of the speed 
     and efficiency with which the plans can be executed during a 
     national security emergency.
       ``(E) Recommend planning and policy guidance regarding 
     involvement of the National

[[Page 348]]

     Guard in 2 or more national security emergency operations 
     concurrently.
       ``(F) Administer quarterly exercises simulating 
     mobilization for various types of national security 
     emergencies, including the following:
       ``(i) A major military operation carried out in and around 
     1 or more foreign countries.
       ``(ii) An occupation and reconstruction mission.
       ``(iii) A terrorist attack within the United States.
       ``(iv) A natural disaster within the United States.
       ``(v) A major humanitarian crisis in 1 or more foreign 
     countries.
       ``(vi) A minor military intervention in a foreign country.
       ``(3) Related duties.--
       ``(A) Mobilization planning and preparedness policy 
     coordinating committee.--The Director serves on the 
     Mobilization Planning and Preparedness Policy Coordinating 
     Committee as provided in section 107A.
       ``(B) Department of defense primary allocation of 
     industrial resources task force.--The Director serves as a 
     member of the Primary Allocation of Industrial Resources Task 
     Force of the Department of Defense.
       ``(d) Office of Mobilization Planning and Preparedness.--
       ``(1) Establishment.--There is an Office of Mobilization 
     Planning and Preparedness within the National Security 
     Council. The Director is the head of the office.
       ``(2) Composition.--The Office of Mobilization Planning and 
     Preparedness is composed of the following personnel:
       ``(A) Thirty employees appointed by the Assistant to the 
     President for National Security Affairs.
       ``(B) An employee of the Department of Defense, who shall 
     be detailed to the Office by the Under Secretary of Defense 
     for Acquisition, Technology, and Logistics to serve as 
     liaison between the Department of Defense and the Director to 
     ensure that comprehensive and accurate information on the 
     needs of the Armed Forces for equipment and materiel in a 
     national security emergency are timely communicated to the 
     Director.
       ``(e) Coordination With National Counterterrorism Center.--
       ``(1) Liaison officer.--The Director shall detail an 
     employee of the Office to the National Counterterrorism 
     Center to serve as a liaison officer between the Director of 
     Mobilization Planning and Preparedness and the Director of 
     the National Counterterrorism Center for collaboration on 
     counterterrorism-related information and issues necessary for 
     effective mobilization planning and preparedness.
       ``(2) Responsibility of director of national 
     counterterrorism center.--The Director of the National 
     Counterterrorism Center shall ensure that the liaison officer 
     is accorded such privileges at the Center as are necessary to 
     ensure that the collaboration between the Director of the 
     National Counterterrorism Center and the Director of 
     Mobilization Planning and Preparedness on counterterrorism-
     related information and issues is effective.
       ``(f) Annual Report.--
       ``(1) Requirement for report.--The President, acting 
     through the Director, shall submit to Congress each year a 
     report on mobilization planning and preparedness.
       ``(2) Content.--The annual report under this subsection 
     shall include the following information:
       ``(A) Funding needs for mobilization planning and 
     preparedness.
       ``(B) An assessment of the state of mobilization planning 
     and preparedness in the United States.
       ``(C) Any recommended policies on mobilization planning and 
     preparedness that the President, in consultation with the 
     Assistant to the President for National Security Affairs and 
     the Director, considers appropriate.


 ``mobilization planning and preparedness policy coordinating committee

       ``Sec. 107A. (a) Mobilization Planning and Preparedness 
     Defined.--In this section, the term `mobilization planning 
     and preparedness' has the meaning given that term in section 
     107(a).
       ``(b) Establishment.--There is in the executive branch an 
     interagency committee known as the `Mobilization Planning and 
     Preparedness Policy Coordinating Committee'.
       ``(c) Composition.--The Committee shall be composed of the 
     following members:
       ``(1) The Director of Mobilization Planning and 
     Preparedness of the National Security Council, who shall 
     chair the committee.
       ``(2) The Under Secretary for Emergency Preparedness and 
     Response of the Department of Homeland Security.
       ``(3) The Under Secretary of State for Economic, Business, 
     and Agricultural Affairs.
       ``(4) The Under Secretary of Defense for Acquisition, 
     Technology, and Logistics.
       ``(5) The Associate Attorney General.
       ``(6) The Assistant Secretary of the Interior for Land and 
     Minerals Management.
       ``(7) The Under Secretary of Commerce for Industry and 
     Security.
       ``(8) The Deputy Secretary of Labor.
       ``(9) The Assistant Secretary of Health and Human Services 
     for Public Health Emergency Preparedness.
       ``(10) The Under Secretary of Transportation for Policy.
       ``(11) The Under Secretary of Energy for Energy, Science, 
     and Environment.
       ``(12) One member designated by the Assistant to the 
     President for National Security Affairs.
       ``(13) One member designated by the Director of National 
     Intelligence.
       ``(d) Duties.--The Committee has the following duties:
       ``(1) To review, at least once each year, the mobilization 
     planning and preparedness policies of the United States.
       ``(2) To make any recommendations for action to improve 
     mobilization planning and preparedness that the Committee 
     determines appropriate.
       ``(3) To participate in the exercises conducted by the 
     Director of Mobilization Planning and Preparedness of the 
     Department under section 510(b)(2)(F).''.
       (b) Clerical Amendment.--The table of contents in the first 
     section of the National Security Act of 1947 is amended by 
     striking the item relating to section 107 and inserting the 
     following new items:

``Sec. 107. Director of Mobilization Planning and Preparedness.
``Sec. 107A. Mobilization Planning and Preparedness Policy Coordinating 
              Committee.''.

     SEC. 303. REPORT ON RECONSTITUTION NEEDS OF THE ARMED FORCES.

       (a) Report Required.--
       (1) Requirement for report.--Not later than March 1, 2005, 
     the Secretary of Defense shall submit to the congressional 
     defense committees a report on the needs of the Armed Forces 
     for reconstituting its stocks of military equipment and other 
     materiel in view of the attrition of military equipment and 
     other materiel experienced by the Armed Forces in Operation 
     Iraqi Freedom and Operation Enduring Freedom.
       (2) Consultation.--The Secretary shall consult with the 
     Chief of Staff of the Army, the Chief of Staff of the Air 
     Force, the Chief of Naval Operations, the Commandant of the 
     Marine Corps, and the Inspector General of each of the Armed 
     Forces in preparing the report under this section.
       (b) Content.--The report shall include an assessment of 
     each of the following matters:
       (1) The extent of the damage and destruction of military 
     equipment and other military materiel in Operation Iraqi 
     Freedom and Operation Enduring Freedom.
       (2) The amount of such equipment, if any, that has become 
     ineffective or obsolete by age or other causes.
       (3) The needs of each of the Armed Forces, including the 
     reserve components as well as the regular components, for 
     repair and replacement of equipment.
       (4) The total cost of reconstituting the stocks of military 
     equipment and other materiel of the Armed Forces to meet the 
     needs of the Armed Forces.
       (5) The time needed to reconstitute such stocks to meet 
     those needs.
       (c) Form of Report.--The report shall be submitted in 
     unclassified form, but may include a classified annex.

     SEC. 304. AUTHORIZATIONS OF APPROPRIATIONS.

       (a) Army.--Funds are hereby authorized to be appropriated 
     for fiscal year 2005 for the use of the Army for the repair, 
     refurbishment, and replacement of equipment used by the Army 
     in Operation Iraqi Freedom or Operation Enduring Freedom, as 
     follows:
       (1) Operation and maintenance.--For expenses, not otherwise 
     provided for, for operation and maintenance, $6,000,000,000.
       (2) Procurement.--For procurement, $2,500,000,000.
       (b) Marine Corps.--Fund are hereby authorized to be 
     appropriated for fiscal year 2005 for the use of the Marine 
     Corps for the repair, refurbishment, and replacement of 
     equipment used by the Marine Corps in Operation Iraqi Freedom 
     or Operation Enduring Freedom, as follows:
       (1) Operation and maintenance.--For expenses, not otherwise 
     provided for, for operation and maintenance, $640,000,000.
       (2) Procurement.--For procurement, $1,500,000,000.
       (c) Availability Through Fiscal Year 2006.--Amounts 
     authorized to be appropriated under this section shall remain 
     available until September 30, 2006.
       (d) Limitation.--None of the funds appropriated pursuant to 
     an authorization of appropriations in this section may be 
     obligated or expended until the date that is 15 days after 
     the date on which the Secretary of Defense transmits to the 
     congressional defense committees a report on the specific use 
     for which the funds are to be obligated or expended, 
     respectively.

     SEC. 305. CONGRESSIONAL DEFENSE COMMITTEES DEFINED.

       In this title, the term ``congressional defense 
     committees'' has the meaning given such term in section 
     101(a)(16) of title 10, United States Code.

         TITLE IV--PERIODS OF OVERSEAS DEPLOYMENTS OF RESERVES

     SEC. 401. FINDINGS.

       Congress makes the following findings:
       (1) The Department of Defense failed to establish an 
     adequate troop deployment and rotation policy for Operation 
     Iraqi Freedom

[[Page 349]]

     until several months after the operation had begun. For 
     several reserve component units involved in that operation 
     before 2005, the demobilization date was rescheduled three or 
     more times before the unit members were finally allowed to 
     return home.
       (2) Without an adequate deployment and rotation plan, the 
     Department of Defense has relied on a series of stop-gap 
     measures to retain a sufficient number of troops to carry out 
     the United States missions in Operation Iraqi Freedom and 
     Operation Enduring Freedom, including--
       (A) institution of a so-called ``stop-loss'' policy that 
     prevents personnel from leaving their units during 
     deployment;
       (B) extensions of deployments beyond scheduled 
     demobilization dates; and
       (C) activation of members of the Individual Ready Reserve.
       (3) In September 2004, the Government Accountability Office 
     reported that ``Many of DOD's policies that affect mobilized 
     reserve component personnel were implemented in a piecemeal 
     manner and were not linked within the context of a strategic 
     framework to meet the organizational goals. . . . Without a 
     strategic framework, OSD and the services made several 
     changes to their personnel policies to increase the 
     availability of the reserve components for the longer-term 
     requirements of the Global War on Terrorism, and 
     predictability declined for reserve component members.''.
       (4) Fairness to the men and women of the Armed Forces 
     deployed overseas requires that the Department of Defense--
       (A) have clear policies regarding lengths of deployment 
     periods; and
       (B) communicate these policies and other deployment-related 
     information to them and their families.

     SEC. 402. SENSE OF CONGRESS ON TWO-YEAR LIMIT ON 
                   MOBILIZATION.

       It is the sense of Congress that the Secretary of Defense 
     should continue the existing Department of Defense policy of 
     limiting to a total of 24 months the period for which members 
     of the reserve components serve on active duty to which 
     called or ordered in support of a contingency operation.

     SEC. 403. COMMUNICATION OF LENGTHS OF DEPLOYMENT PERIODS TO 
                   RESERVES IN OPERATION IRAQI FREEDOM.

       (a) Report of Department of Defense Policies.--
       (1) Requirement for report.--Not later than March 1, 2005, 
     the Secretary of Defense shall submit to the Committees on 
     Armed Services of the Senate and the House of Representatives 
     a report on--
       (A) Department of Defense policies governing the length of 
     mobilization and deployment periods applicable to members of 
     reserve components of the Armed Forces in connection with 
     Operation Iraqi Freedom, and on the communication between the 
     Department of Defense and reserve component personnel and 
     their families regarding the lengths of the mobilization 
     deployment periods; and
       (B) Department of Defense stop-loss policies.
       (2) Consultation requirement.--In preparing the report, the 
     Secretary shall consult with the Chairman and other members 
     of the Joint Chiefs of Staff and with such other officials as 
     the Secretary considers appropriate.
       (b) Content of Report.--The report under this section shall 
     contain a discussion of the matters described in subsection 
     (a)(1), including a discussion of the following matters:
       (1) The process by which the Department of Defense 
     determined its policy regarding the lengths of mobilization 
     deployment periods.
       (2) The reason that an adequate troop deployment policy was 
     not in place before Operation Iraqi Freedom began.
       (3) A comparison of the policies during Operation Iraqi 
     Freedom with Department of Defense policies that applied to 
     previous contingency operations.
       (4) The timeliness of the process for notifying reserve 
     component units for activation.
       (5) The process for communicating with activated reserve 
     component members and their families about demobilization 
     schedules.
       (6) The justification for delaying demobilization after 
     members and their families have been notified of the 
     anticipated demobilization schedule.
       (7) The justification for current stop-loss policies, 
     together with a statement of the period for which those 
     policies are to remain in effect and the conditions under 
     which management of personnel under those policies would 
     terminate.
       (8) The family support programs provided by the National 
     Guard and other reserve components for families of activated 
     Reserves.
       (9) An assessment of lessons learned about how the 
     increased operation tempos of the National Guard and other 
     reserve components can be expected to affect readiness, 
     recruitment and retention, civilian employers of Reserves, 
     and equipment and supply resources of the National Guard and 
     the other reserve components.
       (c) Matters for Particular Emphasis.--In the discussion of 
     the matters included in the report under this section, the 
     Secretary of Defense shall place particular emphasis on--
       (1) lessons learned, including deficiencies identified; and
       (2) near-term and long-term corrective actions to address 
     the identified deficiencies.
       (d) Form of Report.--The report under this section shall be 
     submitted in unclassified form, but may include a classified 
     annex.

                     TITLE V----TIMELY COMPENSATION

     SEC. 501. FINDINGS.

       Congress makes the following findings:
       (1) In November 2003, the General Accounting Office 
     reported, in connection with a study conducted by that 
     office, that among Army National Guard soldiers ``450 of the 
     481 soldiers from our 6 case study units had at least 1 pay 
     problem associated with their mobilization. These pay 
     problems severely constrain the Army's and the Department of 
     Defense's (DOD) ability to provide a most basic service to 
     these personnel, many of whom were risking their lives in 
     combat.''.
       (2) In August 2004, a second study by that office (by then 
     renamed the Government Accountability Office) found that 
     among Army Reserve soldiers ``332 of 348 soldiers (95 
     percent) we audited at 8 case study units that were 
     mobilized, deployed, and demobilized at some time during the 
     18-month period from August 2002 through January 2004 had at 
     least 1 pay problem.''.
       (3) The August 2004 report concluded that ``These pay 
     problems often had a profound adverse impact on individual 
     soldiers and their families. For example, soldiers were 
     required to spend considerable time, sometimes while deployed 
     in remote, hostile environments overseas, seeking help on pay 
     inquiries or in correcting errors in their active duty pays, 
     allowances, and related tax benefits.''.

     SEC. 502. CORRECTION OF MILITARY PAY PROBLEMS FOR ACTIVATED 
                   RESERVE COMPONENT PERSONNEL.

       The Secretary of the Army shall designate a senior level 
     official of the Department of the Army to implement--
       (1) the recommendations for executive action that are set 
     forth in the report of the Comptroller General of the United 
     States entitled ``Military Pay, Army National Guard Personnel 
     Mobilized to Active Duty Experienced Significant Pay 
     Problems'', dated November 2003; and
       (2) the recommendations for executive action that are set 
     forth in the report of the Comptroller General of the United 
     States entitled ``Military Pay, Army Reserve Soldiers 
     Mobilized to Active Duty Experienced Significant Pay 
     Problems'', dated August 2004.

     SEC. 503. SUPERVISION BY COMPTROLLER OF DEPARTMENT OF 
                   DEFENSE.

       The official designated under section 502 shall report 
     directly to, and be subject to the direction of, the Under 
     Secretary of Defense (Comptroller) regarding performance of 
     the duties that the official is designated to carry out under 
     such section.

     SEC. 504. TERMINATION OF REQUIREMENT.

       The designation under section 502 shall terminate upon the 
     submission of a certification of the Under Secretary of 
     Defense (Comptroller) to Congress that all recommendations 
     referred to in such section have been implemented.

  TITLE VI--IMPROVED REPRESENTATION OF RESERVE PERSONNEL INTERESTS IN 
                   DEPARTMENT OF DEFENSE SECRETARIAT

     SEC. 601. FINDINGS.

       Congress makes the following findings:
       (1) Since September 11, 2001, the National Guard and the 
     other reserve components of the Armed Forces have experienced 
     an expansion of their role in the total force structure of 
     the Armed Forces to an unprecedented level. In 2004, the 
     reserve components comprised 40 percent of the total force of 
     the Armed Forces. Reservists are experiencing a dramatic 
     increase in operation tempo and average length of deployment.
       (2) While the extent of the role of the reserve component 
     has changed so dramatically, the Department of Defense 
     approach to management of the reserve components has remained 
     much the same. No new senior leadership positions have been 
     established to manage the reserve components more effectively 
     in the expanded role.

     SEC. 602. DEPUTY UNDER SECRETARY OF DEFENSE FOR PERSONNEL AND 
                   READINESS (RESERVE AFFAIRS).

       (a) Establishment of Position.--
       (1) Position and duties.--Chapter 4 of title 10, United 
     States Code, is amended by inserting after section 136a the 
     following new section:

     ``Sec. 136b. Deputy Under Secretary of Defense for Personnel 
       and Readiness (Reserve Affairs)

       ``(a) There is a Deputy Under Secretary of Defense for 
     Personnel and Readiness (Reserve Affairs), appointed from 
     civilian life by the President, by and with the advice and 
     consent of the Senate.
       ``(b) The Deputy Under Secretary of Defense for Personnel 
     and Readiness (Reserve Affairs) shall have as his principal 
     duty the overall supervision of reserve component affairs of 
     the Department of Defense.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of such chapter is

[[Page 350]]

     amended by inserting after the item relating to section 136a 
     the following new item:

``136b. Deputy Under Secretary of Defense for Personnel and Readiness 
              (Reserve Affairs).''.

       (b) Executive Level IV.--Section 5315 of title 5, United 
     States Code, is amended by inserting after ``Deputy Under 
     Secretary of Defense for Personnel and Readiness.'' the 
     following:
       ``Deputy Under Secretary of Defense for Personnel and 
     Readiness (Reserve Affairs).''.

     SEC. 603. ELIMINATION OF POSITION OF ASSISTANT SECRETARY OF 
                   DEFENSE FOR RESERVE AFFAIRS.

       (a) Repeal of Requirement for Position.--Subsection (b) of 
     section 138 of title 10, United States Code, is amended--
       (1) by striking paragraph (2); and
       (2) by redesignating paragraphs (3), (4), and (5), as 
     paragraphs (2), (3), and (4), respectively.
       (b) Reduction in Total Number of Assistant Secretaries of 
     Defense.--
       (1) Authorized number.--Subsection (a) of such section is 
     amended by striking ``nine'' and inserting ``eight''.
       (2) Conforming amendment.--Section 5315 of title 5, United 
     States Code, is amended by striking ``(9)'' after ``Assistant 
     Secretaries of Defense'' and inserting ``(8)''.
       (c) Effective Date.--The amendments made by subsections (a) 
     and (b) shall take effect on the date on which a person is 
     first appointed as Deputy Under Secretary of Defense for 
     Personnel and Readiness (Reserve Affairs).

                DIVISION B--MILITARY FAMILY PROTECTIONS

          TITLE XXI--GUARDSMEN AND RESERVISTS FINANCIAL RELIEF

     SEC. 2101. FINDINGS.

       Congress makes the following findings:
       (1) According to a Government Accountability Office report 
     in November 2004, ``The September 11, 2001, terrorist attacks 
     and the global war on terrorism have triggered the largest 
     activation of National Guard forces since World War II. As of 
     June 2004, over one-half of the National Guard's 457,000 
     personnel had been activated for overseas warfighting or 
     domestic homeland security missions in Federal and State 
     active duty roles.''. In all, over 400,000 reservists have 
     been mobilized between September 11, 2001, and the beginning 
     of 2005.
       (2) In March 2003, the General Accounting Office reported 
     that among members of the National Guard and other reserve 
     components of the Armed Forces ``. . . data for past military 
     operations show that 41 percent of drilling unit members 
     reported income loss . . .''. The report further noted that 
     senior officers in the reserve component reported average 
     losses of $5,000 in income upon activation.
       (3) Not only has operation tempo drastically increased for 
     members of the reserve components, meaning that reservists 
     are being called away from their civilian jobs more often, 
     but also the durations of deployments have increased 
     dramatically as well, meaning that reservists are being 
     called away from their civilian jobs for longer periods. The 
     Government Accountability Office reported in September 2004 
     that the average annual days of duty performed by members of 
     the reserve components has risen from approximately 40 days 
     in 1989 to approximately 120 days in 2003. A consequence of 
     both increased operations tempo and increased duration of 
     deployment has been a far greater loss of income for 
     reservists answering their country's call to duty.

     SEC. 2102. PENALTY-FREE WITHDRAWALS FROM RETIREMENT PLANS FOR 
                   INDIVIDUALS CALLED TO ACTIVE DUTY FOR AT LEAST 
                   179 DAYS.

       (a) In General.--Paragraph (2) of section 72(t) of the 
     Internal Revenue Code of 1986 (relating to 10-percent 
     additional tax on early distributions from qualified 
     retirement plans) is amended by adding at the end the 
     following new subparagraph:
       ``(G) Distributions from retirement plans to individuals 
     called to active duty.--
       ``(i) In general.--Any qualified reservist distribution.
       ``(ii) Qualified reservist distribution.--For purposes of 
     this subparagraph, the term `qualified reservist 
     distribution' means any distribution to an individual if--

       ``(I) such distribution is from any qualified retirement 
     plan (as defined in section 4974(c)),
       ``(II) such individual was (by reason of being a member of 
     a reserve component (as defined in section 101 of title 37, 
     United States Code)), ordered or called to active duty for a 
     period in excess of 179 days or for an indefinite period, and
       ``(III) such distribution is made during the period 
     beginning on the date of such order or call and ending at the 
     close of the active duty period.

       ``(iii) Application of subparagraph.--This subparagraph 
     applies to individuals ordered or called to active duty after 
     September 11, 2001, and before September 12, 2005.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to distributions after September 11, 2001.

     SEC. 2103. INCOME TAX WITHHOLDING ON DIFFERENTIAL WAGE 
                   PAYMENTS.

       (a) In General.--Section 3401 of the Internal Revenue Code 
     of 1986 (relating to definitions) is amended by adding at the 
     end the following new subsection:
       ``(i) Differential Wage Payments to Active Duty Members of 
     the Uniformed Services.--
       ``(1) In general.--For purposes of subsection (a), any 
     differential wage payment shall be treated as a payment of 
     wages by the employer to the employee.
       ``(2) Differential wage payment.--For purposes of paragraph 
     (1), the term `differential wage payment' means any payment 
     which--
       ``(A) is made by an employer to an individual with respect 
     to any period during which the individual is performing 
     service in the uniformed services while on active duty for a 
     period of more than 30 days, and
       ``(B) represents all or a portion of the wages the 
     individual would have received from the employer if the 
     individual were performing service for the employer.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to remuneration paid after December 31, 2004.

     SEC. 2104. TREATMENT OF DIFFERENTIAL WAGE PAYMENTS FOR 
                   RETIREMENT PLAN PURPOSES.

       (a) Pension Plans.--
       (1) In general.--Section 414(u) of the Internal Revenue 
     Code of 1986 (relating to special rules relating to veterans' 
     reemployment rights under USERRA) is amended by adding at the 
     end the following new paragraph:
       ``(11) Treatment of differential wage payments.--
       ``(A) In general.--Except as provided in this paragraph, 
     for purposes of applying this title to a retirement plan to 
     which this subsection applies--
       ``(i) an individual receiving a differential wage payment 
     shall be treated as an employee of the employer making the 
     payment,
       ``(ii) the differential wage payment shall be treated as 
     compensation, and
       ``(iii) the plan shall not be treated as failing to meet 
     the requirements of any provision described in paragraph 
     (1)(C) by reason of any contribution which is based on the 
     differential wage payment.
       ``(B) Special rule for distributions.--
       ``(i) In general.--Notwithstanding subparagraph (A)(i), for 
     purposes of section 401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii), 
     403(b)(11)(A), or 457(d)(1)(A)(ii), an individual shall be 
     treated as having been severed from employment during any 
     period the individual is performing service in the uniformed 
     services described in section 3401(i)(2)(A).
       ``(ii) Limitation.--If an individual elects to receive a 
     distribution by reason of clause (i), the plan shall provide 
     that the individual may not make an elective deferral or 
     employee contribution during the 6-month period beginning on 
     the date of the distribution.
       ``(C) Nondiscrimination requirement.--Subparagraph (A)(iii) 
     shall apply only if all employees of an employer performing 
     service in the uniformed services described in section 
     3401(i)(2)(A) are entitled to receive differential wage 
     payments on reasonably equivalent terms and, if eligible to 
     participate in a retirement plan maintained by the employer, 
     to make contributions based on the payments. For purposes of 
     applying this subparagraph, the provisions of paragraphs (3), 
     (4), and (5), of section 410(b) shall apply.
       ``(D) Differential wage payment.--For purposes of this 
     paragraph, the term `differential wage payment' has the 
     meaning given such term by section 3401(i)(2).''.
       (2) Conforming amendment.--The heading for section 414(u) 
     of such Code is amended by inserting ``and to Differential 
     Wage Payments to Members on Active Duty'' after ``USERRA''.
       (b) Differential Wage Payments Treated as Compensation for 
     Individual Retirement Plans.--Section 219(f)(1) of the 
     Internal Revenue Code of 1986 (defining compensation) is 
     amended by adding at the end the following new sentence: 
     ``The term `compensation' includes any differential wage 
     payment (as defined in section 3401(i)(2)).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning after December 31, 2004.
       (d) Provisions Relating to Plan Amendments.--
       (1) In general.--If this subsection applies to any plan or 
     annuity contract amendment--
       (A) such plan or contract shall be treated as being 
     operated in accordance with the terms of the plan or contract 
     during the period described in paragraph (2)(B)(i), and
       (B) except as provided by the Secretary of the Treasury, 
     such plan shall not fail to meet the requirements of the 
     Internal Revenue Code of 1986 or the Employee Retirement 
     Income Security Act of 1974 by reason of such amendment.
       (2) Amendments to which section applies.--
       (A) In general.--This subsection shall apply to any 
     amendment to any plan or annuity contract which is made--
       (i) pursuant to any amendment made by this section, and
       (ii) on or before the last day of the first plan year 
     beginning on or after January 1, 2007.

[[Page 351]]

       (B) Conditions.--This subsection shall not apply to any 
     plan or annuity contract amendment unless--
       (i) during the period beginning on the date the amendment 
     described in subparagraph (A)(i) takes effect and ending on 
     the date described in subparagraph (A)(ii) (or, if earlier, 
     the date the plan or contract amendment is adopted), the plan 
     or contract is operated as if such plan or contract amendment 
     were in effect; and
       (ii) such plan or contract amendment applies retroactively 
     for such period.

     SEC. 2105. READY RESERVE-NATIONAL GUARD EMPLOYEE CREDIT AND 
                   READY RESERVE-NATIONAL GUARD REPLACEMENT 
                   EMPLOYEE CREDIT.

       (a) Ready Reserve-National Guard Credit.--
       (1) In general.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business-related credits) is amended by inserting after 
     section 45I the following new section:

     ``SEC. 45J. READY RESERVE-NATIONAL GUARD EMPLOYEE CREDIT.

       ``(a) General Rule.--For purposes of section 38, in the 
     case of an eligible taxpayer, the Ready Reserve-National 
     Guard employee credit determined under this section for any 
     taxable year with respect to each Ready Reserve-National 
     Guard employee of such taxpayer is an amount equal to 50 
     percent of the lesser of--
       ``(1) the actual compensation amount with respect to such 
     employee for such taxable year, or
       ``(2) $30,000.
       ``(b) Definition of Actual Compensation Amount.--For 
     purposes of this section, the term `actual compensation 
     amount' means the amount of compensation paid or incurred by 
     an eligible taxpayer with respect to a Ready Reserve-National 
     Guard employee on any day when the employee was absent from 
     employment for the purpose of performing qualified active 
     duty.
       ``(c) Limitations.--No credit shall be allowed with respect 
     to any day that a Ready Reserve-National Guard employee who 
     performs qualified active duty was not scheduled to work (for 
     reason other than to participate in qualified active duty).
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Eligible taxpayer.--
       ``(A) In general.--The term `eligible taxpayer' means a 
     small business employer.
       ``(B) Small business employer.--
       ``(i) In general.--The term `small business employer' 
     means, with respect to any taxable year, any employer who 
     employed an average of 50 or fewer employees on business days 
     during such taxable year.
       ``(ii) Controlled groups.--For purposes of clause (i), all 
     persons treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 shall be treated as a single 
     employer.
       ``(2) Qualified active duty.--The term `qualified active 
     duty' means--
       ``(A) active duty under an order or call for a period in 
     excess of 179 days or for an indefinite period, other than 
     the training duty specified in section 10147 of title 10, 
     United States Code (relating to training requirements for the 
     Ready Reserve), or section 502(a) of title 32, United States 
     Code (relating to required drills and field exercises for the 
     National Guard), in connection with which an employee is 
     entitled to reemployment rights and other benefits or to a 
     leave of absence from employment under chapter 43 of title 
     38, United States Code, and
       ``(B) hospitalization incident to such duty.
       ``(3) Compensation.--The term `compensation' means any 
     remuneration for employment, whether in cash or in kind, 
     which is paid or incurred by a taxpayer and which is 
     deductible from the taxpayer's gross income under section 
     162(a)(1).
       ``(4) Ready reserve-national guard employee.--The term 
     `Ready Reserve-National Guard employee' means an employee who 
     is a member of the Ready Reserve of a reserve component of an 
     Armed Force of the United States as described in sections 
     10142 and 10101 of title 10, United States Code.
       ``(5) Certain rules to apply.--Rules similar to the rules 
     of section 52 shall apply.
       ``(e) Termination.--This section shall not apply to any 
     amount paid or incurred after December 31, 2005.''.
       (2) Credit to be part of general business credit.--
     Subsection (b) of section 38 of the Internal Revenue Code of 
     1986 (relating to general business credit) is amended by 
     striking ``plus'' at the end of paragraph (18), by striking 
     the period at the end of paragraph (19) and inserting ``, 
     plus'', and by adding at the end the following:
       ``(20) the Ready Reserve-National Guard employee credit 
     determined under section 45J(a).''.
       (3) Denial of double benefit.--Section 280C(a) of the 
     Internal Revenue Code of 1986 (relating to rule for 
     employment credits) is amended by inserting ``45J(a),'' after 
     ``45A(a),''.
       (4) Conforming amendment.--The table of sections for 
     subpart D of part IV of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by inserting after 
     the item relating to section 45I the following:

``Sec. 45J. Ready Reserve-National Guard employee credit.''.

       (5) Effective date.--The amendments made by this subsection 
     shall apply to amounts paid or incurred after September 30, 
     2004, in taxable years ending after such date.
       (b) Ready Reserve-National Guard Replacement Employee 
     Credit.--
       (1) In general.--Paragraph (1) of section 51(d) of the 
     Internal Revenue Code of 1986 (relating to members of 
     targeted groups) is amended by striking ``or'' at the end of 
     subparagraph (G), by striking the period at the end of 
     subparagraph (H) and inserting ``, or'' and by adding at the 
     end the following new subparagraph:
       ``(I) a qualified replacement employee.''.
       (2) Qualified replacement employee.--Section 51(d) of the 
     Internal Revenue Code of 1986 is amended by redesignating 
     paragraphs (10), (11), and (12) as paragraphs (11), (12), and 
     (13), respectively, and by inserting after paragraph (9) the 
     following new paragraph:
       ``(10) Qualified replacement employee.--
       ``(A) In general.--The term `qualified replacement 
     employee' means an individual who is certified by the 
     designated local agency as being hired by an eligible 
     taxpayer to replace a Ready Reserve-National Guard employee 
     of such taxpayer, but only with respect to the period during 
     which such Ready Reserve-National Guard employee participates 
     in qualified active duty, including time spent in travel 
     status.
       ``(B) General definitions and special rules.--For purposes 
     of this paragraph--
       ``(i) Eligible taxpayer.--The term `eligible taxpayer' 
     means a small business employer.
       ``(ii) Small business employer.--

       ``(I) In general.--The term `small business employer' 
     means, with respect to any taxable year, any employer who 
     employed an average of 50 or fewer employees on business days 
     during such taxable year.
       ``(II) Controlled groups.--For purposes of subclause (I), 
     all persons treated as a single employer under subsection 
     (b), (c), (m), or (o) of section 414 shall be treated as a 
     single employer.

       ``(iii) Ready reserve-national guard employee.--The term 
     `Ready Reserve-National Guard employee' has the meaning given 
     such term by section 45J(d)(3).
       ``(iv) Qualified active duty.--The term `qualified active 
     duty' has the meaning given such term by section 45J(d)(1).
       ``(C) Disallowance for failure to comply with employment or 
     reemployment rights of members of the reserve components of 
     the armed forces of the united states.--No credit shall be 
     allowed under subsection (a) by reason of paragraph (1)(I) to 
     a taxpayer for--
       ``(i) any taxable year, beginning after the date of the 
     enactment of this section, in which the taxpayer is under a 
     final order, judgment, or other process issued or required by 
     a district court of the United States under section 4323 of 
     title 38 of the United States Code with respect to a 
     violation of chapter 43 of such title, and
       ``(ii) the 2 succeeding taxable years.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to amounts paid or incurred to an individual who 
     begins work for the employer after September 30, 2004.
       (c) Study by GAO.--
       (1) In general.--The Comptroller General of the United 
     States shall study the following:
       (A) What, if any, problems exist in recruiting individuals 
     for a reserve component of an Armed Force of the United 
     States.
       (B) What, if any, problems exist as the result of providing 
     differential wage payments (as defined in section 3401(i)(2) 
     of the Internal Revenue Code of 1986 (as added by this Act)) 
     to individuals described in subparagraph (A) in the 
     recruitment and retention of individuals as regular members 
     of the Armed Forces of the United States.
       (C) Whether the credit allowed under section 45J of the 
     Internal Revenue Code of 1986 (as added by this section) is 
     an effective incentive for the hiring and retention of 
     employees who are individuals described in subparagraph (A) 
     and whether there exists any compliance problems in the 
     administration of such credit.
       (2) Report.--The Comptroller General of the United States 
     shall report on the results of the study required under 
     paragraph (1) to the Committee of Finance of the Senate and 
     the Committee on Ways and Means of the House of 
     Representatives before July 1, 2005.

     SEC. 2106. NONREDUCTION IN PAY WHILE FEDERAL EMPLOYEE IS 
                   PERFORMING ACTIVE SERVICE IN THE UNIFORMED 
                   SERVICES OR NATIONAL GUARD.

       (a) Preservation of Pay Level.--
       (1) Requirements.--Subchapter IV of chapter 55 of title 5, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 5538. Nonreduction in pay while serving in the 
       uniformed services or National Guard

       ``(a) An employee who is absent from a position of 
     employment with the Federal Government in order to perform 
     active duty in the uniformed services pursuant to a call or 
     order to active duty under a provision of law referred to in 
     section 101(a)(13)(B) of title 10 shall be entitled, while 
     serving on active duty, to receive, for each pay period 
     described in subsection (b), an amount equal to the amount by 
     which--

[[Page 352]]

       ``(1) the amount of basic pay which would otherwise have 
     been payable to such employee for such pay period if such 
     employee's civilian employment with the Government had not 
     been interrupted by that service, exceeds (if at all)
       ``(2) the amount of pay and allowances which (as determined 
     under subsection (d))--
       ``(A) is payable to such employee for that service; and
       ``(B) is allocable to such pay period.
       ``(b)(1) Amounts under this section shall be payable with 
     respect to each pay period (which would otherwise apply if 
     the employee's civilian employment had not been 
     interrupted)--
       ``(A) during which such employee is entitled to 
     reemployment rights under chapter 43 of title 38 with respect 
     to the position from which such employee is absent (as 
     referred to in subsection (a)); and
       ``(B) for which such employee does not otherwise receive 
     basic pay (including by taking any annual, military, or other 
     paid leave) to which such employee is entitled by virtue of 
     such employee's civilian employment with the Government.
       ``(2) For purposes of this section, the period during which 
     an employee is entitled to reemployment rights under chapter 
     43 of title 38--
       ``(A) shall be determined disregarding the provisions of 
     section 4312(d) of title 38; and
       ``(B) shall include any period of time specified in section 
     4312(e) of title 38 within which an employee may report or 
     apply for employment or reemployment following completion of 
     service on active duty to which called or ordered as 
     described in subsection (a).
       ``(c) Any amount payable under this section to an employee 
     shall be paid--
       ``(1) by such employee's employing agency;
       ``(2) from the appropriation or fund which would be used to 
     pay the employee if such employee were in a pay status; and
       ``(3) to the extent practicable, at the same time and in 
     the same manner as would basic pay if such employee's 
     civilian employment had not been interrupted.
       ``(d) The Office of Personnel Management shall, in 
     consultation with Secretary of Defense, prescribe any 
     regulations necessary to carry out the preceding provisions 
     of this section.
       ``(e)(1) The head of each agency referred to in section 
     2302(a)(2)(C)(ii) shall, in consultation with the Office, 
     prescribe procedures to ensure that the rights under this 
     section apply to the employees of such agency.
       ``(2) The Administrator of the Federal Aviation 
     Administration shall, in consultation with the Office, 
     prescribe procedures to ensure that the rights under this 
     section apply to the employees of that agency.
       ``(f) For purposes of this section--
       ``(1) the terms `employee', `Federal Government', and 
     `uniformed services' have the same respective meanings as 
     given them in section 4303 of title 38;
       ``(2) the term `employing agency', as used with respect to 
     an employee entitled to any payments under this section, 
     means the agency or other entity of the Government (including 
     an agency referred to in section 2302(a)(2)(C)(ii)) with 
     respect to which such employee has reemployment rights under 
     chapter 43 of title 38; and
       ``(3) the term `basic pay' includes any amount payable 
     under section 5304.''.
       (2) Clerical amendment.--The table of sections for chapter 
     55 of title 5, United States Code, is amended by inserting 
     after the item relating to section 5537 the following:

``5538. Nonreduction in pay while serving in the uniformed services or 
              National Guard.''.

       (b) Effective Date.--
       (1) In general.--Section 5538 of title 5, United States 
     Code (as added by subsection (a)), shall apply with respect 
     to pay periods (as described in subsection (b) of such 
     section) beginning on or after the date of the enactment of 
     this Act.
       (2) Conditional retroactive application.--
       (A) Section 5538 of title 5, United States Code (as added 
     by subsection (a)), shall apply with respect to pay periods 
     (as described in subsection (b) of such section) beginning on 
     or after October 11, 2002 through the date of the enactment 
     of this Act, subject to the availability of appropriations.
       (B) There are authorized to be appropriated $100,000,000 
     for purposes of subparagraph (A).

  TITLE XXII--NATIONAL GUARD AND RESERVE COMPREHENSIVE HEALTH BENEFITS

     SEC. 2201. SHORT TITLE.

       This title may be cited as the ``National Guard and Reserve 
     Comprehensive Health Benefits Act of 2005''.

     SEC. 2202. FINDINGS.

       Congress makes the following findings:
       (1) According to the results of a Department of Defense 
     survey conducted in 2000, 20 percent of members of the 
     reserve components of the Armed Forces, including 40 percent 
     of junior enlisted personnel, had no health care coverage 
     while not on active duty.
       (2) In 2004, Congress passed legislation authorizing 
     reservists to obtain access to the military TRICARE health 
     care program for one year for each 90-day period of active 
     duty service. While the enactment of this law was an 
     important step forward, the law only provides eligibility for 
     health care after active duty has been completed and fails to 
     provide the complete health care coverage necessary to ensure 
     that reservists are medically ready to answer a future call 
     to active duty.
       (3) In September 2004, the Government Accountability 
     Office, after reviewing pre-deployment health screenings of 
     over 240,000 reservists, reported finding that nearly 7 
     percent of activated reservists were categorized as 
     nondeployable for health reasons, including nearly 10 percent 
     of the Army Reserve.

     SEC. 2203. TRICARE COVERAGE FOR MEMBERS OF THE READY RESERVE.

       (a) Eligibility.--Section 1076b of title 10, United States 
     Code, is amended to read as follows:

     ``Sec. 1076b. TRICARE program: coverage for members of the 
       Ready Reserve

       ``(a) Eligibility.--Members of the Selected Reserve of the 
     Ready Reserve of a reserve component of the armed forces and 
     members of the Individual Ready Reserve described in 
     subsection 10144(b) of this title are eligible, subject to 
     subsection (h)(1), to enroll in the following TRICARE program 
     options:
       ``(1) TRICARE Prime.
       ``(2) TRICARE Standard.
       ``(b) Types of Coverage.--(1) A member eligible under 
     subsection (a) may enroll for either of the following types 
     of coverage:
       ``(A) Self alone coverage.
       ``(B) Self and family coverage.
       ``(2) An enrollment by a member for self and family covers 
     the member and the dependents of the member who are described 
     in subparagraph (A), (D), or (I) of section 1072(2) of this 
     title.
       ``(c) Open Enrollment Periods.--The Secretary of Defense 
     shall provide for at least one open enrollment period each 
     year. During an open enrollment period, a member eligible 
     under subsection (a) may enroll in the TRICARE program or 
     change or terminate an enrollment in the TRICARE program.
       ``(d) Scope of Care.--(1) A member and the dependents of a 
     member enrolled in the TRICARE program under this section 
     shall be entitled to the same benefits under this chapter as 
     a member of the uniformed services on active duty or a 
     dependent of such a member, respectively.
       ``(2) Section 1074(c) of this title shall apply with 
     respect to a member enrolled in the TRICARE program under 
     this section.
       ``(e) Premiums.--(1) The Secretary of Defense shall charge 
     premiums for coverage pursuant to enrollments under this 
     section. The Secretary shall prescribe for each of the 
     TRICARE program options referred to in subsection (a) a 
     premium for self alone coverage and a premium for self and 
     family coverage.
       ``(2) The monthly amount of the premium in effect for a 
     month for a type of coverage under this section shall be the 
     amount equal to 28 percent of the total amount determined by 
     the Secretary on an appropriate actuarial basis as being 
     reasonable for the coverage.
       ``(3) The premiums payable by a member under this 
     subsection may be deducted and withheld from basic pay 
     payable to the member under section 204 of title 37 or from 
     compensation payable to the member under section 206 of such 
     title. The Secretary shall prescribe the requirements and 
     procedures applicable to the payment of premiums by members 
     not entitled to such basic pay or compensation.
       ``(4) Amounts collected as premiums under this subsection 
     shall be credited to the appropriation available for the 
     Defense Health Program Account under section 1100 of this 
     title, shall be merged with sums in such Account that are 
     available for the fiscal year in which collected, and shall 
     be available under subsection (b) of such section for such 
     fiscal year.
       ``(f) Other Charges.--A person who receives health care 
     pursuant to an enrollment in a TRICARE program option under 
     this section, including a member who receives such health 
     care, shall be subject to the same deductibles, copayments, 
     and other nonpremium charges for health care as apply under 
     this chapter for health care provided under the same TRICARE 
     program option to dependents described in subparagraph (A), 
     (D), or (I) of section 1072(2) of this title.
       ``(g) Termination of Enrollment.--(1) A member enrolled in 
     the TRICARE program under this section may terminate the 
     enrollment only during an open enrollment period provided 
     under subsection (c), except as provided in subsection 
     (h)(2).
       ``(2) An enrollment of a member for self alone or for self 
     and family under this section shall terminate on the first 
     day of the first month beginning after the date on which the 
     member ceases to be eligible under subsection (a).
       ``(3) The enrollment of a member under this section may be 
     terminated on the basis of failure to pay the premium charged 
     the member under this section.
       ``(h) Relationship to Transition TRICARE Coverage Upon 
     Separation From Active Duty.--(1) A member may not enroll in 
     the TRICARE program under this section while entitled to 
     transitional health care under subsection (a) of section 1145 
     of this title or while authorized to receive health care 
     under subsection (c) of such section.
       ``(2) A member who enrolls in the TRICARE program under 
     this section within

[[Page 353]]

     90 days after the date of the termination of the member's 
     entitlement or eligibility to receive health care under 
     subsection (a) or (c) of section 1145 of this title may 
     terminate the enrollment at any time within one year after 
     the date of the enrollment.
       ``(i) Regulations.--The Secretary of Defense, in 
     consultation with the other administering Secretaries, shall 
     prescribe regulations for the administration of this 
     section.''.
       (b) Definitions.--
       (1) Tricare options.--Section 1072 of title 10, United 
     States Code, is amended by adding at the end the following 
     new paragraphs:
       ``(10) The term `TRICARE Prime' means the managed care 
     option of the TRICARE program.
       ``(11) The term `TRICARE Standard' means the Civilian 
     Health and Medical Program of the Uniformed Services option 
     under the TRICARE program.''.
       (2) Conforming amendments.--
       (A) Section 1076d(f) of such title is amended--
       (i) by striking ``(f) Definitions.--'' and all that follows 
     through ``(1) The'' and inserting ``(f) Immediate Family 
     Defined.--In this section, the''; and
       (ii) by striking paragraph (2).
       (B) Section 1097a(f) of such title is amended by striking 
     ``Definitions.--In this section:'' and all that follows 
     through ``(2) The term'' and inserting ``Catchment Area 
     Defined.--In this section, the term''.
       (c) Period for Implementation.--Section 1076b of title 10, 
     United States Code (as added by subsection (a)), shall apply 
     with respect to months that begin on or after the date that 
     is 180 days after the date of the enactment of this Act.
       (d) Coordination With Overlapping Authority.--
       (1) Repeal.--Effective one year after the date of the 
     enactment of this Act--
       (A) section 1076d of title 10, United States Code, is 
     repealed; and
       (B) the table of sections at the beginning of chapter 55 of 
     such title is amended by striking the item relating to 
     section 1076d.
       (2) Transition coverage.--The Secretary of Defense shall 
     provide for an orderly transition to TRICARE coverage under 
     section 1076b of title 10, United States Code (as amended by 
     subsection (a)), for persons enrolled for TRICARE coverage 
     under section 1076d of such title before the repeal of such 
     section takes effect under paragraph (1)(A).

     SEC. 2204. ALLOWANCE FOR CONTINUATION OF NON-TRICARE HEALTH 
                   BENEFITS COVERAGE FOR CERTAIN MOBILIZED 
                   RESERVES.

       (a) Payment of Premiums.--
       (1) Requirement to pay premiums.--Chapter 55 of title 10, 
     United States Code, is amended by inserting after section 
     1078a the following new section:

     ``Sec. 1078b. Continuation of non-TRICARE health benefits 
       plan coverage for certain Reserves called or ordered to 
       active duty and their dependents

       ``(a) Payment of Premiums.--The Secretary concerned shall 
     pay the applicable premium to continue in force any qualified 
     health benefits plan coverage for an eligible reserve 
     component member for the benefits coverage continuation 
     period if timely elected by the member in accordance with 
     regulations prescribed under subsection (j).
       ``(b) Eligible Member.--A member of a reserve component is 
     eligible for payment of the applicable premium for 
     continuation of qualified health benefits plan coverage under 
     subsection (a) while serving on active duty pursuant to a 
     call or order issued under a provision of law referred to in 
     section 101(a)(13)(B) of this title during a war or national 
     emergency declared by the President or Congress.
       ``(c) Qualified Health Benefits Plan Coverage.--For the 
     purposes of this section, health benefits plan coverage for a 
     member called or ordered to active duty is qualified health 
     benefits plan coverage if--
       ``(1) the coverage was in force on the date on which the 
     Secretary notified the member that issuance of the call or 
     order was pending or, if no such notification was provided, 
     the date of the call or order;
       ``(2) on such date, the coverage applied to the member and 
     dependents of the member described in subparagraph (A), (D), 
     or (I) of section 1072(2) of this title; and
       ``(3) the coverage has not lapsed.
       ``(d) Applicable Premium.--The applicable premium payable 
     under this section for continuation of health benefits plan 
     coverage in the case of a member is the amount of the premium 
     payable by the member for the coverage of the member and 
     dependents.
       ``(e) Maximum Amount.--The total amount that may be paid 
     for the applicable premium of a health benefits plan for a 
     member under this section in a fiscal year may not exceed the 
     amount determined by multiplying--
       ``(1) the sum of one plus the number of the member's 
     dependents covered by the health benefits plan, by
       ``(2) the per capita cost of providing TRICARE coverage and 
     benefits for dependents under this chapter for such fiscal 
     year, as determined by the Secretary of Defense.
       ``(f) Benefits Coverage Continuation Period.--The benefits 
     coverage continuation period under this section for qualified 
     health benefits plan coverage in the case of a member called 
     or ordered to active duty is the period that--
       ``(1) begins on the date of the call or order; and
       ``(2) ends on the earlier of the date on which--
       ``(A) the member's eligibility for transitional health care 
     under section 1145(a) of this title terminates under 
     paragraph (3) of such section; or
       ``(B) the member elects to terminate the continued 
     qualified health benefits plan coverage of the dependents of 
     the member.
       ``(g) Extension of Period of COBRA Coverage.--
     Notwithstanding any other provision of law--
       ``(1) any period of coverage under a COBRA continuation 
     provision (as defined in section 9832(d)(1) of the Internal 
     Revenue Code of 1986) for a member under this section shall 
     be deemed to be equal to the benefits coverage continuation 
     period for such member under this section; and
       ``(2) with respect to the election of any period of 
     coverage under a COBRA continuation provision (as so 
     defined), rules similar to the rules under section 
     4980B(f)(5)(C) of such Code shall apply.
       ``(h) Nonduplication of Benefits.--A dependent of a member 
     who is eligible for benefits under qualified health benefits 
     plan coverage paid on behalf of a member by the Secretary 
     concerned under this section is not eligible for benefits 
     under the TRICARE program during a period of the coverage for 
     which so paid.
       ``(i) Revocability of Election.--A member who makes an 
     election under subsection (a) may revoke the election. Upon 
     such a revocation, the member's dependents shall become 
     eligible for benefits under the TRICARE program as provided 
     for under this chapter.
       ``(j) Regulations.--The Secretary of Defense shall 
     prescribe regulations for carrying out this section. The 
     regulations shall include such requirements for making an 
     election of payment of applicable premiums as the Secretary 
     considers appropriate.''.
       (2) Clerical amendment.--The table of sections at the 
     beginning of such chapter is amended by inserting after the 
     item relating to section 1078a the following new item:

``1078b. Continuation of non-TRICARE health benefits plan coverage for 
              certain Reserves called or ordered to active duty and 
              their dependents.''.

       (b) Applicability.--Section 1078b of title 10, United 
     States Code (as added by subsection (a)), shall apply with 
     respect to calls or orders of members of reserve components 
     of the Armed Forces to active duty as described in subsection 
     (b) of such section, that are issued by the Secretary of a 
     military department on or after the date of the enactment of 
     this Act.

    TITLE XXIII--IMPROVED DEATH GRATUITY AND OTHER SURVIVOR BENEFITS

     SEC. 2301. FINDINGS.

       Congress makes the following findings:
       (1) No amount of money can make up for the loss of a loved 
     one. But the United States can, and is obliged to, honor the 
     service of lost servicemembers by ensuring that their 
     families are financially supported at the time of great need 
     occasioned by those losses.
       (2) The Federal Government owes families of servicemembers 
     dying on duty a death gratuity that is sufficient to help 
     each family pay for costs associated with the death of the 
     servicemember and to help the members of the family adjust to 
     the financial instability that results from termination of 
     the servicemember's income.
       (3) Survivors of fallen military personnel who are eligible 
     for both a Survivor Benefit Plan annuity and Dependency and 
     Indemnity Compensation suffer a loss of income as a result of 
     the law that requires a reduction in the Survivor Benefit 
     Plan annuity by the amount of the Dependency and Indemnity 
     Compensation. This unjust prohibition against concurrent 
     receipt of two independent benefits prevents the United 
     States from fulfilling its obligation to the survivors during 
     the time of financial need that is occasioned by the deaths 
     of the fallen servicemembers.

     SEC. 2302. INCREASED AMOUNT OF DEATH GRATUITY.

       (a) Amount of Death Gratuity.--Section 1478(a) of title 10, 
     United States Code, is amended by striking ``$12,000'' in the 
     first sentence and inserting ``$100,000''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as of September 11, 2001, and shall apply 
     with respect to deaths occurring on or after that date.

     SEC. 2303. DEATH GRATUITY EXCLUDABLE FROM FEDERAL INCOME 
                   TAXATION.

       (a) In General.--Paragraph (1) of section 134(b) of the 
     Internal Revenue Code of 1986 (relating to certain military 
     benefits) is amended by adding at the end the following new 
     flush sentence:
     ``Such term shall include any death gratuity to which the 
     limitation in section 1478(a) of title 10, United States 
     Code, applies.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to amounts paid with respect to deaths occurring 
     on or after September 11, 2001.

[[Page 354]]



     SEC. 2304. REPEAL OF REQUIREMENT OF REDUCTION OF SBP SURVIVOR 
                   ANNUITIES BY DEPENDENCY AND INDEMNITY 
                   COMPENSATION.

       (a) Repeal.--Subchapter II of chapter 73 of title 10, 
     United States Code is amended--
       (1) in section 1450(c)(1), by inserting after ``to whom 
     section 1448 of this title applies'' the following: ``(except 
     in the case of a death as described in subsection (d) or (f) 
     of such section)''; and
       (2) in section 1451(c)--
       (A) by striking paragraph (2); and
       (B) by redesignating paragraphs (3) and (4) as paragraphs 
     (2) and (3), respectively.
       (b) Prohibition on Retroactive Benefits.--No benefits may 
     be paid to any person for any period before the effective 
     date provided under subsection (e) by reason of the 
     amendments made by subsection (a).
       (c) Prohibition on Recoupment of Certain Amounts Previously 
     Refunded to SBP Recipients.--A surviving spouse who is or has 
     been in receipt of an annuity under the Survivor Benefit Plan 
     under subchapter II of chapter 73 of title 10, United States 
     Code, that is in effect before the effective date provided 
     under subsection (e) and that is adjusted by reason of the 
     amendments made by subsection (a) and who has received a 
     refund of retired pay under section 1450(e) of title 10, 
     United States Code, shall not be required to repay such 
     refund to the United States.
       (d) Reconsideration of Optional Annuity.--Section 
     1448(d)(2) of title 10, United States Code, is amended by 
     adding at the end the following new sentences: ``The 
     surviving spouse, however, may elect to terminate an annuity 
     under this subparagraph in accordance with regulations 
     prescribed by the Secretary concerned. Upon such an election, 
     payment of an annuity to dependent children under this 
     subparagraph shall terminate effective on the first day of 
     the first month that begins after the date on which the 
     Secretary concerned receives notice of the election, and, 
     beginning on that day, an annuity shall be paid to the 
     surviving spouse under paragraph (1) instead.''.
       (e) Effective Date.--The amendments made by this section 
     shall take effect on the later of--
       (1) the first day of the first month that begins after the 
     date of the enactment of this Act; or
       (2) the first day of the fiscal year that begins in the 
     calendar year in which this Act is enacted.

     SEC. 2305. EFFECTIVE DATE FOR PAID-UP COVERAGE UNDER SURVIVOR 
                   BENEFIT PLAN.

       Section 1452(j) of title 10, United States Code, is amended 
     by striking ``October 1, 2008'' and inserting ``October 1, 
     2005''.

                    DIVISION C--TAXPAYER PROTECTION

             TITLE XXXI--FUNDING OF RECONSTRUCTION IN IRAQ

     SEC. 3101. FINDINGS.

       Congress makes the following findings:
       (1) The international community's support for Iraq's 
     efforts to reconstruct the infrastructure of Iraq following 
     the overthrow of Saddam Hussein's regime is critical to the 
     achievement of regional and international stability and to 
     the protection of national security interests of the United 
     States.
       (2) United States taxpayers have borne a disproportionate 
     burden in supporting the reconstruction of Iraq. The United 
     States Government has committed to providing Iraq with grants 
     of financial assistance worth more than 500 percent more than 
     the grant assistance that has been committed by the 
     governments of all of the rest of the countries of the world 
     combined.
       (3) The disproportionate contribution of the United States 
     to the reconstruction of Iraq has resulted in a commitment of 
     United States resources to reconstruction that otherwise 
     would be available for supporting the efforts of United 
     States military personnel to rid Iraq and Afghanistan of 
     hostile insurgents.
       (4) Iraq possesses the world's second largest reserve of 
     crude oil, with 112,000,000,000 barrels, and administration 
     officials have stated on several occasions that revenue from 
     Iraq's oil industry could fund a significant portion of the 
     costs of the reconstruction of Iraq.

     SEC. 3102. REPORT ON ADDITIONAL NEEDS FOR FUNDING MILITARY 
                   AND RECONSTRUCTION EFFORTS.

       (a) Requirement for Report.--Whenever the President submits 
     to Congress a request for a supplemental appropriation of 
     funds for use in connection with United States military or 
     reconstruction efforts in Iraq, the President shall submit to 
     the chairmen and ranking members of the appropriate 
     committees of Congress in accordance with this section a 
     report on the status of United States financial commitments 
     to the reconstruction of Iraq.
       (b) Content.--The report under subsection (a) shall include 
     the following information:
       (1) An estimate of the amount of the United States 
     Government funds spent for the reconstruction of Iraq between 
     March 19, 2003, and the date of the report that is 
     attributable to tax revenue collected from United States 
     taxpayers.
       (2) An assessment of the activities funded by that amount, 
     together with a discussion of the results that such 
     activities have achieved.
       (3) An estimate of the amount of the funds that have been 
     contributed by all other foreign governments for the 
     reconstruction of Iraq and in relief of Iraq's national debt.
       (4) The amount of the crude oil that has been extracted by 
     Iraq since March 19, 2003, and the total value of that oil in 
     United States dollars.
       (c) Time for Report.--The President shall submit the report 
     under this section not later than 24 hours after any proposed 
     legislation to provide a supplemental appropriation of funds 
     requested by the President for use in connection with United 
     States military or reconstruction activities in Iraq is 
     introduced in either the Senate or the House of 
     Representatives.
       (d) Form.--The report under this section shall be submitted 
     in unclassified form.

     SEC. 3103. LIMITATION ON USE OF FUNDS.

       (a) Limitation.--Funds appropriated or otherwise available 
     for providing financial assistance for reconstruction 
     activities in Iraq may not be obligated or expended for 
     providing financial assistance for such activities other than 
     in the form of a collateralized loan until the President 
     submits to the chairmen and ranking members of the 
     appropriate committees of Congress a report that contains the 
     following matters:
       (1) The President's plan for seeking increased financial 
     support for reconstruction activities in Iraq from the 
     international community.
       (2) The President's statement that he has determined that--
       (A) Iraq is incapable of producing sufficient revenues from 
     its oil industry to pay for future reconstruction activities; 
     and
       (B) it is not in the national security interests of the 
     United States for the United States to provide financial 
     assistance for reconstruction activities in Iraq solely in 
     the form of loans.
       (b) Waiver Authority.--The President may waive the 
     applicability of the limitation in subsection (a) to an 
     obligation or expenditure of funds if the President 
     determines that the applicability of the limitation to such 
     obligation or expenditure would adversely affect the physical 
     safety of United States Armed Forces personnel operating in 
     Iraq, except that any such waiver shall not take effect 
     before the President submits a written notification of the 
     waiver and determination to the chairmen and ranking members 
     of the appropriate committees of Congress.

     SEC. 3104. APPROPRIATE COMMITTEES OF CONGRESS DEFINED.

       In this title, the term ``appropriate committees of 
     Congress'' mean the following committees:
       (1) The Committee on Foreign Relations Committee, the 
     Committee on Armed Services, and the Committee on 
     Appropriations of the Senate.
       (2) The Committee on International Relations, the Committee 
     on Armed Services, and the Committee on Appropriations of the 
     House of Representatives.
                                 ______
                                 
      By Mr. BIDEN (for himself, Mr. Reid, Mr. Bingaman, Ms. Mikulski, 
        Mr. Durbin, Ms. Stabenow, Mr. Rockefeller, Mr. Lautenberg, and 
        Mr. Schumer):
  S. 12. A bill to combat international terrorism, and for other 
purposes; to the Committee on Foreign Relations.
  Mr. BIDEN. Mr. President, I am pleased to join the Democratic Leader 
in introducing S. 12, a bill to combat international terrorism.
  We all know that the primary security threat facing America is from 
terrorists motivated by a radical Islamic fundamentalism. Since the 9/
11 attacks, we have done much to confront this threat, but we must do 
much more. As the 9/11 Commission reported, we are safer, but we are 
not yet safe. I know that all Senators are committed to the objective 
of making our country safer.
  We must understand that those who would spread radical Islamic 
fundamentalism and weapons of mass destruction are beyond the reach of 
reason. We must--and we will--defeat them. But hundreds of millions of 
hearts and minds around the world are open to American ideas and 
ideals. We must reach them.
  This bill contains a range of proposals that are designed to 
strengthen our anti-terrorism efforts in a broad range of areas. It 
will strengthen our military by expanding our special forces. It will 
strengthen our intelligence operations by increasing the cadre of the 
trained linguists in the government. It will strengthen our public 
diplomacy by increasing funds for State Department programs, 
international exchanges, and international broadcasting. It will 
strengthen our effort to expand basic educational opportunities in the 
Muslim world and combat radical madrassas. It will strengthen our 
assistance to non-governmental

[[Page 355]]

organizations working to build democratic institutions. It will 
strengthen our programs to help Russia account for, secure and destroy 
dangerous nuclear materials. And it will strengthen our law enforcement 
by increasing support for cops on the beat--the people who labor on the 
front lines of homeland security.
  I cannot take credit for every proposal in this bill. Many of them 
are ideas contributed by my Democratic colleagues. The Democratic 
Leader has graciously allowed me to be the lead sponsor of the bill, 
for which I am grateful. I look forward to working with all my 
colleagues to strengthen America's defenses against the threat of 
terrorism--through this and other legislation--in the coming Congress.
  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. 12

       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 ``Targeting Terrorists More 
     Effectively Act of 2005''.
               TITLE I--EFFECTIVELY TARGETING TERRORISTS

     SEC. 101. INCREASED STRENGTH OF ARMY SPECIAL OPERATIONS 
                   FORCES.

       (a) Sense of Congress.--It is the sense of Congress that 
     the number of the active-duty Army personnel comprising the 
     Army Special Forces Command as of the last day of a fiscal 
     year should be increased as follows:
       (1) To 4,644, as of September 30, 2006.
       (2) To 5,144, as of September 30, 2007.
       (3) To 5,644, as of September 30, 2008.
       (4) To 6,144, as of September 30, 2009.
       (b) Increased Active Forces End Strengths To Effectuate 
     Policy on Increase in Strength of Army Special Forces.--
       (1) Fiscal year 2006.--Effective on October 1, 2005, 
     section 691(b)(1) of title 10, United States Code, is amended 
     by striking ``502,400'' and inserting ``502,900''.
       (2) Fiscal year 2007.--Effective on October 1, 2006, 
     section 691(b)(1) of such title is amended by striking 
     ``502,900'' and inserting ``503,400''.
       (3) Fiscal year 2008.--Effective on October 1, 2007, 
     section 691(b)(1) of such title is amended by striking 
     ``503,400'' and inserting ``503,900''.
       (4) Fiscal year 2009.--Effective on October 1, 2008, 
     section 691(b)(1) of such title is amended by striking 
     ``503,900'' and inserting ``504,400''.

     SEC. 102. FOREIGN LANGUAGE EXPERTISE.

       (a) Findings.--Congress makes the following findings:
       (1) Success in the global war on terrorism will require a 
     dramatic increase in institutional and personal expertise in 
     the languages and cultures of the societies where terrorism 
     has taken root, including a substantial increase in the 
     number of national security personnel who obtain expert 
     lingual training.
       (2) The National Commission on Terrorist Attacks Upon the 
     United States identified the countries in the Middle East, 
     South Asia, Southeast Asia, and West Africa as countries that 
     serve or could serve as terrorist havens.
       (3) Although 22 countries have Arabic as their official 
     language, the National Commission on Terrorist Attacks Upon 
     the United States found that a total of only 6 undergraduate 
     degrees for the study of Arabic were granted by United States 
     colleges and universities in 2002.
       (4) The report of the National Commission on Terrorist 
     Attacks Upon the United States contained several criticisms 
     of the lack of linguistic expertise in the Central 
     Intelligence Agency and the Federal Bureau of Investigation 
     prior to the September 11, 2001 terrorist attacks, and called 
     for the Central Intelligence Agency to ``develop a stronger 
     language program, with high standards and sufficient 
     financial incentives''.
       (5) An audit conducted by the Department of Justice in July 
     2004, revealed that the Federal Bureau of Investigation has a 
     backlog of hundreds of thousands of untranslated audio 
     recordings from terror and espionage investigations.
       (6) The National Security Education Program Trust Fund, 
     which funds critical grant and scholarship programs for 
     linguistic training in regions critical to national security, 
     will have exhausted all its funding by fiscal year 2006, 
     unless additional appropriations are made to the Trust Fund.
       (b) Sense of Congress.--It is the sense of Congress that--
       (1) the overwhelming majority of Muslims reject terrorism 
     and a small, radical minority has grossly distorted the 
     teachings of one of the world's great faiths to seek 
     justification for acts of terrorism, such radical Islamic 
     fundamentalism constitutes a primary threat to the national 
     security interests of the United States, and an effective 
     strategy for combating terrorism should include increasing 
     the number of personnel throughout the Federal Government 
     with expertise in languages spoken in predominately Muslim 
     countries and in the culture of such countries;
       (2) Muslim-Americans constitute an integral and cherished 
     part of the fabric of American society and possess many 
     talents, including linguistic, historic, and cultural 
     expertise that should be harnessed in the war against 
     radical, fundamentalist terror; and
       (3) amounts appropriated for the National Flagship Language 
     Initiative pursuant to the amendments made by subsection 
     (e)(2) should be used to support the establishment, 
     operation, and improvement of programs for the study of 
     Arabic, Persian, and other Middle Eastern, South Asian, 
     Southeast Asian, and West African languages in institutes of 
     higher education in the United States.
       (c) Authorization of Appropriations.--
       (1) National security education trust fund.--Section 810 of 
     the David L. Boren National Security Education Act of 1991 
     (50 U.S.C. 1910) is amended by adding at the end the 
     following:
       ``(d) Authorization of Appropriations for the Fund for 
     Fiscal Year 2006.--
       ``(1) In general.--There are authorized to be appropriated 
     to the Fund $150,000,000 for fiscal year 2006.
       ``(2) Availability of funds.--Amounts appropriated pursuant 
     to the authorization of appropriations in paragraph (1) shall 
     remain available until expended and not more than $15,000,000 
     of such amounts may be obligated and expended during any 
     fiscal year.''.
       (2) National flagship language initiative.--
       (A) In general.--Section 811(a) of the David L. Boren 
     National Security Education Act of 1991 (50 U.S.C. 1911(a)) 
     is amended by striking ``there is authorized to be 
     appropriated to the Secretary for each fiscal year, beginning 
     with fiscal year 2003, $10,000,000'' and inserting ``there is 
     authorized to be appropriated to the Secretary for each 
     fiscal year 2003 through 2005, $10,000,000, and for each 
     fiscal year after 2005, $20,000,000,''.
       (B) Availability of funds.--Section 811(b) of such Act (50 
     U.S.C. 1911(b)) is amended by inserting ``for fiscal years 
     2003 through 2005'' after ``this section''.
       (3) Demonstration program.--There are authorized to be 
     appropriated to the Director of National Intelligence such 
     sums as may be necessary for each of fiscal years 2006, 2007, 
     and 2008 in order to carry out the demonstration program 
     established under subsection (c).

     SEC. 103. CURTAILING TERRORIST FINANCING.

       (a) Findings.--Congress makes the following findings:
       (1) The report of the National Commission on Terrorist 
     Attacks Upon the United States stated that ``[v]igorous 
     efforts to track terrorist financing must remain front and 
     center in United States counterterrorism efforts''.
       (2) The report of the Independent Task Force sponsored by 
     the Council on Foreign Relations stated that ``currently 
     existing U. S. and international policies, programs, 
     structures, and organizations will be inadequate to assure 
     sustained results commensurate with the ongoing threat posed 
     to the national security of the United States''.
       (3) The report of the Independent Task Force contained the 
     conclusion that ``[l]ong-term success will depend critically 
     upon the structure, integration, and focus of the U. S. 
     Government--and any intergovernmental efforts undertaken to 
     address this problem''.
       (b) Policy.--It is the policy of the United States--
       (1) to work with the Government of Saudi Arabia to curtail 
     terrorist financing originating from that country using a 
     range of methods, including diplomacy, intelligence, and law 
     enforcement;
       (2) to ensure effective coordination and sufficient 
     resources for efforts of the agencies and departments of the 
     United States to disrupt terrorist financing by carrying out, 
     through the Office of Terrorism and Financial Intelligence in 
     the Department of the Treasury, a comprehensive analysis of 
     the budgets and activities of all such agencies and 
     departments that are related to disrupting the financing of 
     terrorist organizations;
       (3) to provide each agency or department of the United 
     States with the appropriate number of personnel to carry out 
     the activities of such agency or department related to 
     disrupting the financing of terrorist organizations;
       (4) to centralize the coordination of the efforts of the 
     United States to combat terrorist financing and utilize 
     existing authorities to identify foreign jurisdictions and 
     foreign financial institutions suspected of abetting 
     terrorist financing and take actions to prevent the provision 
     of assistance to terrorists; and
       (5) to work with other countries to develop and enforce 
     strong domestic terrorist financing laws, and increase 
     funding for bilateral and multilateral programs to enhance 
     training and capacity-building in countries who request 
     assistance.
       (c) Authorization of Appropriations To Provide Technical 
     Assistance To Prevent Financing of Terrorists.--
       (1) In general.--There are authorized to be appropriated to 
     the President for the ``Economic Support Fund'' to provide 
     technical

[[Page 356]]

     assistance under the provisions of chapter 4 of part II of 
     the Foreign Assistance Act of 1961 (22 U.S.C. 2346 et seq.) 
     to foreign countries to assist such countries in preventing 
     the financing of terrorist activities--
       (A) for fiscal year 2006, $300,000,000; and
       (B) for fiscal years 2007 and 2008, such sums as may be 
     necessary.
       (2) Availability of funds.--Amounts appropriated pursuant 
     to the authorization of appropriations in this subsection are 
     authorized to remain available until expended.
       (3) Additional funds.--Amounts authorized to be 
     appropriated under this subsection are in addition to amounts 
     otherwise available for such purposes.

     SEC. 104. PROHIBITION ON TRANSACTIONS WITH COUNTRIES THAT 
                   SUPPORT TERRORISM.

       (a) Clarification of Certain Actions Under IEEPA.--In any 
     case in which the President takes action under the 
     International Emergency Economic Powers Act (50 U.S.C. 1701 
     et seq.) with respect to a foreign country, or persons 
     dealing with or associated with the government of that 
     foreign country, as a result of a determination by the 
     Secretary of State that the government of that foreign 
     country has repeatedly provided support for acts of 
     international terrorism, such action shall apply to a United 
     States person or other person.
       (b) Definitions.--In this section:
       (1) Controlled in fact.--The term ``is controlled in fact'' 
     includes--
       (A) in the case of a corporation, holds at least 50 percent 
     (by vote or value) of the capital structure of the 
     corporation; and
       (B) in the case of any other kind of legal entity, holds 
     interests representing at least 50 percent of the capital 
     structure of the entity.
       (2) State.--The term ``State'' means each of the several 
     States of the United States, the District of Columbia, the 
     Commonwealth of Puerto Rico, Guam, the Virgin Islands, and 
     other territories or possessions of the United States.
       (3) United states person.--The term ``United States 
     person'' includes any United States citizen, permanent 
     resident alien, entity organized under the law of the United 
     States or of any State (including foreign branches), wherever 
     located, or any other person in the United States.
       (c) Applicability.--
       (1) In general.--In any case in which the President has 
     taken action under the International Emergency Economic 
     Powers Act and such action is in effect on the date of 
     enactment of this Act, the provisions of subsection (a) shall 
     not apply to a United States person (or other person) if such 
     person divests or terminates its business with the government 
     or person identified by such action within 90 days after the 
     date of enactment of this Act.
       (2) Actions after date of enactment.--In any case in which 
     the President takes action under the International Emergency 
     Economic Powers Act on or after the date of enactment of this 
     Act, the provisions of subsection (a) shall not apply to a 
     United States person (or other person) if such person divests 
     or terminates its business with the government or person 
     identified by such action within 90 days after the date of 
     such action.
       (d) Notification of Congress of Termination of 
     Investigation by Office of Foreign Assets Control.--The 
     Office of Federal Procurement Policy Act (41 U.S.C. 403 et 
     seq.) is amended by adding at the end the following new 
     section:

     ``SEC. 42. NOTIFICATION OF CONGRESS OF TERMINATION OF 
                   INVESTIGATION BY OFFICE OF FOREIGN ASSETS 
                   CONTROL.

       ``The Director of the Office of Foreign Assets Control 
     shall notify Congress upon the termination of any 
     investigation by the Office of Foreign Assets Control of the 
     Department of the Treasury if any sanction is imposed by the 
     Director of such office as a result of the investigation.''.
   TITLE II--PREVENTING THE GROWTH OF RADICAL ISLAMIC FUNDAMENTALISM
             Subtitle A--Quality Educational Opportunities

     SEC. 201. FINDINGS, POLICY, AND DEFINITION.

       (a) Findings.--Congress makes the following findings:
       (1) The report of the National Commission on Terrorist 
     Attacks Upon the United States stated that ``[e]ducation that 
     teaches tolerance, the dignity and value of each individual, 
     and respect for different beliefs is a key element in any 
     global strategy to eliminate Islamic terrorism''.
       (2) According to the United Nations Development Program 
     Arab Human Development Report for 2002, 10,000,000 children 
     between the ages of 6 through 15 in the Arab world do not 
     attend school, and \2/3\ of the 65,000,000 illiterate adults 
     in the Arab world are women.
       (3) The report of the National Commission on Terrorist 
     Attacks Upon the United States concluded that ensuring 
     educational opportunity is essential to the efforts of the 
     United States to defeat global terrorism and recommended that 
     the United States Government ``should offer to join with 
     other nations in generously supporting [spending funds] . . . 
     directly on building and operating primary and secondary 
     schools in those Muslim states that commit to sensibly 
     investing financial resources in public education''.
       (b) Policy.--It is the policy of the United States--
       (1) to work toward the goal of dramatically increasing the 
     availability of basic education in the developing world, 
     which will reduce the influence of radical madrassas and 
     other institutions that promote religious extremism;
       (2) to join with other countries in generously supporting 
     the International Youth Opportunity Fund authorized under 
     section 7114 of the 9/11 Commission Implementation Act of 
     2004 (Public Law 108-458), with the goal of building and 
     operating primary and secondary schools in Muslim countries 
     that commit to sensibly investing the resources of such 
     countries in public education;
       (3) to work with the international community, including 
     foreign countries and international organizations to raise 
     $7,000,000,000 to $10,000,000,000 each year to fund education 
     programs in Muslim countries;
       (4) to offer additional incentives to countries to increase 
     the availability of basic education; and
       (5) to work to prevent financing of educational 
     institutions that support radical Islamic fundamentalism.
       (c) Appropriate Congressional Committees Defined.--In this 
     subtitle, the term ``appropriate congressional committees'' 
     means the Committee on Foreign Relations and the Committee on 
     Appropriations of the Senate and the Committee on 
     International Relations and the Committee on Appropriations 
     of the House of Representatives.

     SEC. 202. ANNUAL REPORT TO CONGRESS.

       Not later than June 1 of each year, the Secretary of State 
     shall submit to the appropriate congressional committees a 
     report on the efforts of countries in the developing world to 
     increase the availability of basic education and to close 
     educational institutions that promote religious extremism and 
     terrorism. Each report shall include--
       (1) a list of countries that are making serious and 
     sustained efforts to increase the availability of basic 
     education and to close educational institutions that promote 
     religious extremism and terrorism;
       (2) a list of countries that are making efforts to increase 
     the availability of basic education and to close educational 
     institutions that promote religious extremism and terrorism, 
     but such efforts are not serious and sustained; and
       (3) a list of countries that are not making efforts to 
     increase the availability of basic education and to close 
     educational institutions that promote religious extremism and 
     terrorism.

     SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

       (a) International Education Programs.--There are authorized 
     to be appropriated to the President for ``Development 
     Assistance'' for international education programs carried out 
     under sections 105 and 496 of the Foreign Assistance Act of 
     1961 (22 U.S.C. 2151c and 2293)--
       (1) for fiscal year 2006, $1,000,000,000; and
       (2) for fiscal years 2007 and 2008, such sums as may be 
     necessary.
       (b) International Youth Opportunity Fund.--There are 
     authorized to be appropriated to the President for fiscal 
     years 2006, 2007, and 2008 such sums as may be necessary for 
     the United States contribution to the International Youth 
     Opportunity Fund authorized under section 7114 of the 9/11 
     Commission Implementation Act of 2004 (Public Law 108-458) 
     for international education programs.
       (c) Additional Funds.--Amounts authorized to be 
     appropriated in this section are in addition to amounts 
     otherwise available for such purposes.
       Subtitle B--Democracy and Development in the Muslim World

     SEC. 211. PROMOTING DEMOCRACY AND DEVELOPMENT IN THE MIDDLE 
                   EAST, CENTRAL ASIA, SOUTH ASIA, AND SOUTHEAST 
                   ASIA.

       (a) Findings.--Congress makes the following findings:
       (1) Al-Qaeda and affiliated groups have established a 
     terrorist network with linkages throughout the Middle East, 
     Central Asia, South Asia, and Southeast Asia.
       (2) While political repression and lack of economic 
     development do not justify terrorism, increased political 
     freedoms and economic growth can contribute to an environment 
     that undercuts tendencies and conditions that facilitate the 
     rise of terrorist organizations.
       (3) It is in the national security interests of the United 
     States to promote democracy, good governance, political 
     freedom, independent media, women's rights, private sector 
     development, and open economic systems in the countries of 
     the Middle East, Central Asia, South Asia, and Southeast 
     Asia.
       (b) Policy.--It is the policy of the United States--
       (1) to promote the objectives described in subsection 
     (a)(3) in the countries of the Middle East, Central Asia, 
     South Asia, and Southeast Asia;
       (2) to provide assistance and resources to organizations 
     that are committed to promoting such objectives; and
       (3) to work with other countries and international 
     organizations to increase the resources devoted to promoting 
     such objectives.

[[Page 357]]

       (c) Strategy.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary of State shall submit to 
     Congress a strategy to promote the policy of the United 
     States set out in subsection (b). Such strategy shall 
     describe how funds appropriated pursuant to the authorization 
     of appropriations in subsection (d) will be used.
       (d) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     the President for the ``Economic Support Fund'' for 
     activities carried out under chapter 4 of part II of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2346 et seq.) to 
     promote the policy of the United States set out in subsection 
     (b)--
       (A) for fiscal year 2006, $500,000,000; and
       (B) for fiscal years 2007 and 2008, such sums as may be 
     necessary.
       (2) Sense of congress on use of funds.--It is the sense of 
     Congress that a substantial portion of the funds appropriated 
     pursuant to the authorization of appropriations in paragraph 
     (1) should be made available to non-governmental 
     organizations that have a record of success working in the 
     countries of the Middle East, Central Asia, South Asia, and 
     Southeast Asia to support democratic parties, human rights 
     organizations, independent media, and the efforts to promote 
     the rights of women.
       (3) Additional funds.--Amounts authorized to be 
     appropriated in paragraph (1) are in addition to amounts 
     otherwise available for such purposes.

     SEC. 212. MIDDLE EAST FOUNDATION.

       (a) Purposes.--The purposes of this section are to support, 
     through the provision of grants, technical assistance, 
     training, and other programs, in the countries of the Middle 
     East, the expansion of--
       (1) civil society;
       (2) opportunities for political participation for all 
     citizens;
       (3) protections for internationally recognized human 
     rights, including the rights of women;
       (4) educational system reforms;
       (5) independent media;
       (6) policies that promote economic opportunities for 
     citizens;
       (7) the rule of law; and
       (8) democratic processes of government.
       (b) Middle East Foundation.--
       (1) Designation.--The Secretary of State is authorized to 
     designate an appropriate private, nonprofit organization that 
     is organized or incorporated under the laws of the United 
     States or of a State as the Middle East Foundation (referred 
     to in this section as the ``Foundation'').
       (2) Funding.--The Secretary of State is authorized to 
     provide funding to the Foundation through the Middle East 
     Partnership Initiative of the Department of State. The 
     Foundation shall use amounts provided under this paragraph to 
     carry out the purposes of this section, including through 
     making grants and providing other assistance to entities to 
     carry out programs for such purposes.
       (3) Notification to congressional committees.--The 
     Secretary of State shall notify the Committee on Foreign 
     Relations of the Senate and the Committee on International 
     Relations of the House of Representatives prior to 
     designating an appropriate organization as the Foundation.
       (c) Grants for Projects.--
       (1) Foundation to make grants.--The Secretary of State 
     shall enter into an agreement with the Foundation that 
     requires the Foundation to use the funds provided under 
     subsection (b)(2) to make grants to persons (other than 
     governments or government entities) located in the Middle 
     East or working with local partners based in the Middle East 
     to carry out projects that support the purposes specified in 
     subsection (a).
       (2) Center for public policy.--Under the agreement 
     described in paragraph (1), the Foundation may make a grant 
     to an institution of higher education located in the Middle 
     East to create a center for public policy for the purpose of 
     permitting scholars and professionals from the countries of 
     the Middle East and from other countries, including the 
     United States, to carry out research, training programs, and 
     other activities to inform public policymaking in the Middle 
     East and to promote broad economic, social, and political 
     reform for the people of the Middle East.
       (3) Applications for grants.--An entity seeking a grant 
     from the Foundation under this section shall submit an 
     application to the head of the Foundation at such time, in 
     such manner, and including such information as the head of 
     the Foundation may reasonably require.
       (d) Private Character of the Foundation.--Nothing in this 
     section shall be construed to--
       (1) make the Foundation an agency or establishment of the 
     United States Government, or to make the officers or 
     employees of the Foundation officers or employees of the 
     United States for purposes of title 5, United States Code; or
       (2) to impose any restriction on the Foundation's 
     acceptance of funds from private and public sources in 
     support of its activities consistent with the purposes of 
     this section.
       (e) Limitation on Payments to Foundation Personnel.--No 
     part of the funds provided to the Foundation under this 
     section shall inure to the benefit of any officer or employee 
     of the Foundation, except as salary or reasonable 
     compensation for services.
       (f) Retention of Interest.--The Foundation may hold funds 
     provided under this section in interest-bearing accounts 
     prior to the disbursement of such funds to carry out the 
     purposes of this section, and may retain for use for such 
     purposes any interest earned without returning such interest 
     to the Treasury of the United States and without further 
     appropriation by Congress.
       (g) Financial Accountability.--
       (1) Independent private audits of the foundation.--The 
     accounts of the Foundation shall be audited annually in 
     accordance with generally accepted auditing standards by 
     independent certified public accountants or independent 
     licensed public accountants certified or licensed by a 
     regulatory authority of a State or other political 
     subdivision of the United States. The report of the 
     independent audit shall be included in the annual report 
     required by subsection (h).
       (2) GAO audits.--The financial transactions undertaken 
     pursuant to this section by the Foundation may be audited by 
     the General Accounting Office in accordance with such 
     principles and procedures and under such rules and 
     regulations as may be prescribed by the Comptroller General 
     of the United States.
       (3) Audits of grant recipients.--
       (A) In general.--A recipient of a grant from the Foundation 
     shall agree to permit an audit of the books and records of 
     such recipient related to the use of the grant funds.
       (B) Recordkeeping.--Such recipient shall maintain 
     appropriate books and records to facilitate an audit referred 
     to subparagraph (A), including--
       (i) separate accounts with respect to the grant funds;
       (ii) records that fully disclose the use of the grant 
     funds;
       (iii) records describing the total cost of any project 
     carried out using grant funds; and
       (iv) the amount and nature of any funds received from other 
     sources that were combined with the grant funds to carry out 
     a project.
       (h) Annual Reports.--Not later than January 31, 2006, and 
     annually thereafter, the Foundation shall submit to Congress 
     and make available to the public an annual report that 
     includes, for the fiscal year prior to the fiscal year in 
     which the report is submitted, a comprehensive and detailed 
     description of--
       (1) the operations and activities of the Foundation that 
     were carried out using funds provided under this section;
       (2) grants made by the Foundation to other entities with 
     funds provided under this section;
       (3) other activities of the Foundation to further the 
     purposes of this section; and
       (4) the financial condition of the Foundation.
            Subtitle C--Restoring American Moral Leadership

     SEC. 221. ADVANCING UNITED STATES INTERESTS THROUGH PUBLIC 
                   DIPLOMACY.

       (a) Findings.--Congress makes the following findings:
       (1) The United States needs to improve its communication of 
     information and ideas to people in foreign countries, 
     particularly in countries with significant Muslim 
     populations.
       (2) Public diplomacy should reaffirm the paramount 
     commitment of the United States to democratic principles, 
     including preserving the civil liberties of all the people of 
     the United States, including Muslim-Americans.
       (3) The report of the National Commission on Terrorist 
     Attacks Upon the United States stated that, ``Recognizing 
     that Arab and Muslim audiences rely on satellite television 
     and radio, the government has begun some promising 
     initiatives in television and radio broadcasting to the Arab 
     world, Iran, and Afghanistan. These efforts are beginning to 
     reach large audiences. The Broadcasting Board of Governors 
     has asked for much larger resources. It should get them.''.
       (4) A significant expansion of United States international 
     broadcasting would provide a cost-effective means of 
     improving communication with countries with significant 
     Muslim populations by providing news, information, and 
     analysis, as well as cultural programming, through both radio 
     and television broadcasts.
       (b) Special Authority for Surge Capacity.--The United 
     States International Broadcasting Act of 1994 (22 U.S.C. 6201 
     et seq.) is amended by adding at the end the following new 
     section:

     ``SEC. 316. SPECIAL AUTHORITY FOR SURGE CAPACITY.

       ``(a) Emergency Authority.--
       ``(1) In general.--Whenever the President determines it to 
     be important to the national interests of the United States 
     and so certifies to the appropriate congressional committees, 
     the President, on such terms and conditions as the President 
     may determine, is authorized to direct any department, 
     agency, or other entity of the United States to furnish the 
     Broadcasting Board of Governors with such assistance as may 
     be necessary to provide international broadcasting activities 
     of the United States with a surge capacity to support United 
     States foreign policy objectives during a crisis abroad.

[[Page 358]]

       ``(2) Supersedes existing law.--The authority of paragraph 
     (1) supersedes any other provision of law.
       ``(3) Surge capacity defined.--In this subsection, the term 
     `surge capacity' means the financial and technical resources 
     necessary to carry out broadcasting activities in a 
     geographical area during a crisis.
       ``(b) Authorization of Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     to the President such sums as may be necessary for the 
     President to carry out this section, except that no such 
     amount may be appropriated which, when added to amounts 
     previously appropriated for such purpose but not yet 
     obligated, would cause such amounts to exceed $25,000,000.
       ``(2) Availability of funds.--Amounts appropriated pursuant 
     to the authorization of appropriations in this subsection are 
     authorized to remain available until expended.
       ``(3) Designation of appropriations.--Amounts appropriated 
     pursuant to the authorization of appropriations in this 
     subsection may be referred to as the `United States 
     International Broadcasting Surge Capacity Fund'.''.
       (c) Report.--An annual report submitted to the President 
     and Congress by the Broadcasting Board of Governors under 
     section 305(a)(9) of the United States International 
     Broadcasting Act of 1994 (22 U.S.C. 6204(a)(9)) shall provide 
     a detailed description of any activities carried out under 
     section 316 of such Act, as added by subsection (b).
       (d) Authorization of Appropriations for United States 
     International Broadcasting Activities.--
       (1) In general.--In addition to amounts otherwise available 
     for such purposes, the following amounts are authorized to be 
     appropriated to carry out United States Government 
     broadcasting activities under the United States Information 
     and Educational Exchange Act of 1948 (22 U.S.C. 1431 et 
     seq.), the United States International Broadcasting Act of 
     1994 (22 U.S.C. 6201 et seq.), the Foreign Affairs Reform and 
     Restructuring Act of 1998 (as enacted in division G of the 
     Omnibus Consolidated and Emergency Supplemental 
     Appropriations Act, 1999; Public Law 105-277), and this Act, 
     and to carry out other authorities in law consistent with 
     such purposes:
       (A) International broadcasting operations.--For 
     ``International Broadcasting Operations'', $497,000,000 for 
     the fiscal year 2006.
       (B) Broadcasting capital improvements.--For ``Broadcasting 
     Capital Improvements'', $70,000,000 for the fiscal year 2006.
       (2) Availability of funds.--Amounts appropriated pursuant 
     to the authorization of appropriations in this section are 
     authorized to remain available until expended.

     SEC. 222. DEPARTMENT OF STATE PUBLIC DIPLOMACY PROGRAMS.

       (a) United States Educational, Cultural, and Public 
     Diplomacy Programs.--There is authorized to be appropriated 
     for the Department of State to carry out public diplomacy 
     programs of the Department under the United States 
     Information and Educational Exchange Act of 1948, the Mutual 
     Educational and Cultural Exchange Act of 1961, Reorganization 
     Plan Number 2 of 1977, the Foreign Affairs Reform and 
     Restructuring Act of 1998, the Center for Cultural and 
     Technical Interchange Between East and West Act of 1960, the 
     Dante B. Fascell North-South Center Act of 1991, and the 
     National Endowment for Democracy Act, and to carry out other 
     authorities in law consistent with the purposes of such Acts 
     for ``Educational and Cultural Exchange Programs'', 
     $500,000,000 for the fiscal year 2006.
       (b) Administration of Foreign Affairs.--
       The is authorized to be appropriated for the Department of 
     State under ``Administration of Foreign Affairs'' to carry 
     out the authorities, functions, duties, and responsibilities 
     in the conduct of foreign affairs of the United States, and 
     for other purposes authorized by law for ``Diplomatic and 
     Consular Programs'', $500,000,000 for the fiscal year 2006, 
     which shall only be available for public diplomacy 
     international information programs.

     SEC. 223. TREATMENT OF DETAINEES.

       (a) Findings.--Consistent with the report of the National 
     Commission on Terrorist Attacks Upon the United States, 
     Congress makes the following findings:
       (1) Carrying out the global war on terrorism requires the 
     development of policies with respect to the detention and 
     treatment of captured international terrorists that are 
     adhered to by all coalition forces.
       (2) Article 3 of the Convention Relative to the Treatment 
     of Prisoners of War, done at Geneva August 12, 1949 (6 UST 
     3316), was specifically designed for cases in which the usual 
     rules of war do not apply, and the minimum standards of 
     treatment pursuant to such Article are generally accepted 
     throughout the world as customary international law.
       (b) Policy.--The policy of the United States is as follows:
       (1) It is the policy of the United States to treat all 
     foreign persons captured, detained, interned, or otherwise 
     held in the custody of the United States (hereinafter 
     ``detainees'') humanely and in accordance with the legal 
     obligations under United States law and international law, 
     including the obligations in the Convention Against Torture 
     and in the minimum standards set forth in the Geneva 
     Conventions.
       (2) It is the policy of the United States that all 
     officials of the United States are bound both in wartime and 
     in peacetime by the legal prohibitions against torture, 
     cruel, inhumane, or degrading treatment set out in the 
     Constitution, laws, and treaties of the United States.
       (3) If there is any doubt as to whether a detainee is 
     entitled to the protections afforded by the Geneva 
     Conventions, it is the policy of the United States that such 
     detainee shall enjoy the protections of the Convention 
     Relative to the Treatment of Prisoners of War, done at Geneva 
     August 12, 1949 (6 UST 3316) until such time as the 
     detainee's status can be determined pursuant to the 
     procedures authorized by Army Regulation 190-8, Section 1-6.
       (4) It is the policy of the United States to provide 
     individualized hearings for all detainees for the purpose of 
     expeditiously holding detainees accountable for violations of 
     the law of war, other relevant international prohibitions, or 
     criminal laws alleged to have been committed by such 
     detainees or to expeditiously conduct intelligence 
     debriefings of such detainees.
       (5) It is the policy of the United States to avoid the 
     indefinite detention of any individual in a manner which is 
     contrary to the legal principles and security interests of 
     the United States.
       (c) Reporting.--The Secretary shall submit to the 
     appropriate congressional committees:
       (1) A quarterly report providing the number of detainees 
     who were denied prisoner of war status under the Geneva 
     Conventions and the basis for denying such status to each 
     such detainee.
       (2) Not later than 180 days after the date of the enactment 
     of this Act, a report setting forth--
       (A) the proposed schedule for military commissions to be 
     held at Guantanamo Bay, Cuba; and
       (B) the number of individuals currently held at Guantanamo 
     Bay, Cuba, the number of such individuals who are unlikely to 
     face a military commission in the next six months, and each 
     reason for not bringing such individuals before a military 
     commission.
       (3) Not later than 15 days after the date of the enactment 
     of this Act, all International Committee of the Red Cross 
     reports, completed prior to the enactment of this Act, 
     concerning the treatment of detainees in United States 
     custody at Guantanamo Bay, Cuba, Iraq, and Afghanistan. Such 
     reports should be provided, in classified form.
       (4) Not later than 90 days after the date of the enactment 
     of this Act, a report setting forth all interrogation 
     techniques approved, as of the date of the enactment of this 
     Act, by officials of the United States for use with 
     detainees.
       (d) Annual Training Requirement.--The Secretary of Defense 
     shall certify to the appropriate congressional committees, no 
     later than June 1 of each year, that all Federal employees 
     and civilian contractors engaged in the handling or 
     interrogating of detainees have fulfilled an annual training 
     requirement on the laws of war, the Geneva Conventions, the 
     Convention Against Torture, and the obligations of the United 
     States under international humanitarian law.
       (e) Prohibition on Torture or Cruel, Inhumane, or Degrading 
     Treatment or Punishment.--
       (1) In general.--No detainee shall be subject to torture or 
     cruel, inhumane, or degrading treatment or punishment that is 
     prohibited by the Constitution, laws, or treaties of the 
     United States.
       (2) Relationship to geneva conventions.--Nothing in this 
     section shall affect the status of any person under the 
     Geneva Conventions or whether any person is entitled to the 
     protections of the Geneva Conventions.
       (f) Rules, Regulations, and Guidelines.--
       (1) Requirement.--Not later than 180 days after the date of 
     the enactment of this Act, the Secretary and the Director 
     shall prescribe the rules, regulations, or guidelines 
     necessary to ensure compliance with the prohibition in 
     subsection (e)(1) by all personnel of the United States 
     Government and by any person providing services to the United 
     States Government on a contract basis.
       (2) Report to congress.--The Secretary and the Director 
     shall submit to Congress the rules, regulations, or 
     guidelines prescribed under paragraph (1), and any 
     modifications to such rules, regulations, or guidelines--
       (A) not later than 30 days after the effective date of such 
     rules, regulations, guidelines, or modifications; and
       (B) in a manner and form that will protect the national 
     security interests of the United States.
       (g) Reports on Possible Violations.--
       (1) Requirement.--The Secretary and the Director shall each 
     submit, on a timely basis and not less than twice each year, 
     a report to Congress on the circumstances surrounding, and a 
     status report on, any investigation of a possible violation 
     of the prohibition in subsection (e)(1) by United States 
     Government personnel or by a person providing services to the 
     United States Government on a contract basis.

[[Page 359]]

       (2) Form of report.--A report required under paragraph (1) 
     shall be submitted in a manner and form that--
       (A) will protect the national security interests of the 
     United States; and
       (B) will not prejudice any prosecution of an individual 
     alleged to have violated the prohibition in subsection 
     (e)(1).
       (h) Definitions.--In this section:
       (1) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means the Committee 
     on Armed Services, the Committee on the Judiciary, and the 
     Committee on Foreign Relations of the Senate and the 
     Committee on Armed Services, the Committee on the Judiciary, 
     and the Committee on International Relations of the House of 
     Representatives.
       (2) Convention Against Torture.--The term ``Convention 
     Against Torture'' means the Convention Against Torture and 
     Other Cruel, Inhuman or Degrading Treatment or Punishment, 
     done at New York December 10, 1984.
       (3) Director.--The term ``Director'' means the Director of 
     National Intelligence.
       (4) Geneva conventions.--The term ``Geneva Conventions'' 
     means--
       (A) the Convention for the Amelioration of the Condition of 
     the Wounded and Sick in Armed Forces in the Field, done at 
     Geneva August 12, 1949 (6 UST 3114);
       (B) the Convention for the Amelioration of the Condition of 
     the Wounded, Sick, and Shipwrecked Members of Armed Forces at 
     Sea, done at Geneva August 12, 1949 (6 UST 3217);
       (C) the Convention Relative to the Treatment of Prisoners 
     of War, done at Geneva August 12, 1949 (6 UST 3316); and
       (D) the Convention Relative to the Protection of Civilian 
     Persons in Time of War, done at Geneva August 12, 1949 (6 UST 
     3516).
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of Defense.
       (6) Torture.--The term ``torture'' has the meaning given 
     that term in section 2340 of title 18, United States Code.

     SEC. 224. NATIONAL COMMISSION TO REVIEW POLICY REGARDING THE 
                   TREATMENT OF DETAINEES.

       (a) Establishment of Commission.--There is established the 
     National Commission To Review Policy Regarding the Treatment 
     of Detainees.
       (b) Purposes.--The purposes of the Commission are as 
     follows:
       (1) To examine and report upon the role of policymakers in 
     the development of intelligence related to the treatment of 
     individuals detained during Operation Iraqi Freedom or 
     Operation Enduring Freedom.
       (2) To examine and report on the impact of the abuse of 
     prisoners by the United States personnel on the security of 
     the Armed Forces of the United States.
       (3) To build upon the reviews of the policies of the United 
     States related to the treatment of individuals detained by 
     the United States, including such reviews conducted by the 
     executive branch, Congress, or other entities.
       (c) Composition of the Commission.--
       (1) Members.--The Commission shall be composed of 15 
     members, of whom--
       (A) 3 members shall be appointed by the majority leader of 
     the Senate;
       (B) 3 members shall be appointed by the Speaker of the 
     House of Representatives;
       (C) 3 members shall be appointed by the minority leader of 
     the Senate;
       (D) 3 members shall be appointed by the minority leader of 
     the House of Representatives;
       (E) 1 member shall be appointed by the Judge Advocate 
     General of the Army;
       (F) 1 member shall be appointed by the Judge Advocate 
     General of the Navy; and
       (G) 1 member shall be appointed by the Judge Advocate 
     General of the Air Force.
       (2) Chairperson; vice chairperson.--
       (A) In general.--Subject to subparagraph (B), the 
     Chairperson and Vice Chairperson of the Commission shall be 
     elected by the members.
       (B) Political party affiliation.--The Chairperson and Vice 
     Chairperson may not be from the same political party.
       (3) Initial meeting.--Once 9 or more members of the 
     Commission have been appointed, those members who have been 
     appointed may meet and, if necessary, select a temporary 
     chairperson, who may begin the operations of the Commission, 
     including the hiring of staff.
       (4) Quorum; vacancies.--After its initial meeting, the 
     Commission shall meet upon the call of the Chairperson or a 
     majority of its members. Eight members of the Commission 
     shall constitute a quorum. Any vacancy in the Commission 
     shall not affect its powers, but shall be filled in the same 
     manner in which the original appointment was made.
       (5) Sense of congress on qualifications of commission 
     members.--It is the sense of Congress that individuals 
     appointed to the Commission should be prominent United States 
     citizens, with national recognition and significant depth of 
     experience in the fields of intelligence, law enforcement, or 
     foreign affairs, or experience serving the United States 
     Government, including service in the Armed Forces.
       (d) Functions of the Commission.--The functions of the 
     Commission are--
       (1) to conduct an investigation that--
       (A) investigates the development of policy relating to 
     individuals detained during Operation Iraqi Freedom or 
     Operation Enduring Freedom;
       (B) determines whether the United States policy related to 
     the treatment of detained individuals has adversely affected 
     the security of the members of the Armed Forces of the United 
     States;
       (C) determines whether and to what extent the incidences of 
     abuse of detained individuals has affected the standing of 
     the United States in the world;
       (D) determines whether and to what extent leaders of the 
     United States Armed Forces were given the opportunity to 
     comment on and influence policy relating to treatment of 
     detained individuals; and
       (E) determines whether and to what extent policy relating 
     to the treatment of individuals detained during Operation 
     Iraqi Freedom or Operation Enduring Freedom differed from the 
     policies and practices regarding detainees established by the 
     Armed Forces prior to such operations; and
       (2) to submit to the President and Congress such report as 
     is required by this section containing such findings, 
     conclusions, and recommendations as the Commission shall 
     determine, including proposing organization, coordination, 
     planning, management arrangements, procedures, rules, and 
     regulations.
       (e) Powers of the Commission.--
       (1) In general.--
       (A) Hearings and evidence.--The Commission or, on the 
     authority of the Commission, any subcommittee or member 
     thereof, may, for the purpose of carrying out this section--
       (i) hold such hearings and sit and act at such times and 
     places, take such testimony, receive such evidence, 
     administer such oaths; and
       (ii) require, by subpoena or otherwise, the attendance and 
     testimony of such witnesses and the production of such books, 
     records, correspondence, memoranda, cables, electronic 
     messages, papers, and documents, as the Commission or such 
     designated subcommittee or designated member may determine 
     advisable.
       (B) Subpoenas.--
       (i) Issuance.--Subpoenas issued under subparagraph (A)(ii) 
     may be issued under the signature of the Chairperson of the 
     Commission, the Vice Chairperson of the Commission, the 
     chairperson of any subcommittee created by a majority of the 
     Commission, or any member designated by a majority of the 
     Commission, and may be served by any person designated by the 
     Chairperson, subcommittee chairperson, or member.
       (ii) Enforcement.--
       (I) In general.--In the case of contumacy or failure to 
     obey a subpoena issued under subparagraph (A)(ii), the United 
     States district court for the judicial district in which the 
     subpoenaed person resides, is served, or may be found, or 
     where the subpoena is returnable, may issue an order 
     requiring such person to appear at any designated place to 
     testify or to produce documentary or other evidence. Any 
     failure to obey the order of the court may be punished by the 
     court as a contempt of that court.
       (II) Additional enforcement.--In the case of any failure of 
     any witness to comply with any subpoena or to testify when 
     summoned under authority of this section, the Commission may, 
     by majority vote, certify a statement of fact constituting 
     such failure to the appropriate United States attorney, who 
     may bring the matter before the grand jury for its action, 
     under the same statutory authority and procedures as if the 
     United States attorney had received a certification under 
     sections 102 through 104 of the Revised Statutes of the 
     United States (2 U.S.C. 192 through 194).
       (2) Closed meetings.--
       (A) In general.--Meetings of the Commission may be closed 
     to the public under section 10(d) of the Federal Advisory 
     Committee Act (5 U.S.C. App.) or other applicable law.
       (B) Additional authority.--In addition to the authority 
     under subparagraph (A), section 10(a)(1) and (3) of the 
     Federal Advisory Committee Act (5 U.S.C. App.) shall not 
     apply to any portion of a Commission meeting if the President 
     determines that such portion or portions of that meeting is 
     likely to disclose matters that could endanger national 
     security. If the President makes such determination, the 
     requirements relating to a determination under section 10(d) 
     of that Act shall apply.
       (3) Contracting.--The Commission may, to such extent and in 
     such amounts as are provided in appropriation Acts, enter 
     into contracts to enable the Commission to discharge its 
     duties under this section.
       (4) Information from federal agencies.--The Commission is 
     authorized to secure directly from any executive department, 
     bureau, agency, board, commission, office, independent 
     establishment, or instrumentality of the Government 
     information, suggestions, estimates, and statistics for the 
     purposes of this section. Each department, bureau, agency, 
     board, commission, office, independent establishment, or 
     instrumentality shall, to the extent authorized by law, 
     furnish such information, suggestions, estimates, and 
     statistics directly to the Commission, upon request made by 
     the Chairperson, the chairperson of any subcommittee created 
     by a majority of the Commission, or

[[Page 360]]

     any member designated by a majority of the Commission.
       (5) Assistance from federal agencies.--
       (A) General services administration.--The Administrator of 
     General Services shall provide to the Commission on a 
     reimbursable basis administrative support and other services 
     for the performance of the Commission's functions.
       (B) Other departments and agencies.--In addition to the 
     assistance prescribed in subparagraph (A), departments and 
     agencies of the United States are authorized to provide to 
     the Commission such services, funds, facilities, staff, and 
     other support services as they may determine advisable and as 
     may be authorized by law.
       (6) Gifts.--The Commission may accept, use, and dispose of 
     gifts or donations of services or property.
       (7) Postal services.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as departments and agencies of the United States.
       (f) Staff of the Commission.--
       (1) Appointment and compensation.--The Chairperson and Vice 
     Chairperson, in accordance with rules agreed upon by the 
     Commission, may appoint and fix the compensation of a staff 
     director and such other personnel as may be necessary to 
     enable the Commission to carry out its functions, without 
     regard to the provisions of title 5, United States Code, 
     governing appointments in the competitive service, and 
     without regard to the provisions of chapter 51 and subchapter 
     III of chapter 53 of such title relating to classification 
     and General Schedule pay rates, except that no rate of pay 
     fixed under this subsection may exceed the equivalent of that 
     payable for a position at level V of the Executive Schedule 
     under section 5316 of title 5, United States Code.
       (2) Personnel as federal employees.--
       (A) In general.--The executive director and any personnel 
     of the Commission who are employees shall be employees under 
     section 2105 of title 5, United States Code, for purposes of 
     chapters 63, 81, 83, 84, 85, 87, 89, and 90 of that title.
       (B) Members of commission.--Subparagraph (A) shall not be 
     construed to apply to a member of the Commission.
       (3) Detailees.--Any Federal Government employee may be 
     detailed to the Commission without reimbursement from the 
     Commission, and such detailee shall retain the rights, 
     status, and privileges of his or her regular employment 
     without interruption.
       (4) Consultant services.--The Commission is authorized to 
     procure the services of experts and consultants in accordance 
     with section 3109 of title 5, United States Code, but at 
     rates not to exceed the daily rate paid a person occupying a 
     position at level IV of the Executive Schedule under section 
     5315 of title 5, United States Code.
       (g) Compensation and Travel Expenses.--
       (1) Compensation.--Each member of the Commission may be 
     compensated at not to exceed the daily equivalent of the 
     annual rate of basic pay in effect for a position at level IV 
     of the Executive Schedule under section 5315 of title 5, 
     United States Code, for each day during which that member is 
     engaged in the actual performance of the duties of the 
     Commission.
       (2) Travel expenses.--While away from their homes or 
     regular places of business in the performance of services for 
     the Commission, members of the Commission shall be allowed 
     travel expenses, including per diem in lieu of subsistence, 
     in the same manner as persons employed intermittently in the 
     Government service are allowed expenses under section 5703(b) 
     of title 5, United States Code.
       (h) Security Clearances for Commission Members and Staff.--
     The appropriate departments and agencies of the Government 
     shall cooperate with the Commission in expeditiously 
     providing to the Commission members and staff appropriate 
     security clearances in a manner consistent with existing 
     procedures and requirements, except that no person shall be 
     provided with access to classified information under this 
     section who would not otherwise qualify for such security 
     clearance.
       (i) Report of the Commission.--Not later than 9 months 
     after the date of the first meeting of the Commission, the 
     Commission shall submit to the President and Congress a 
     report containing such findings, conclusions, and 
     recommendations as have been agreed to by a majority of 
     Commission members.
       (j) Termination.--
       (1) Termination.--The Commission, and all the authorities 
     of this section, shall terminate 60 days after the date on 
     which the report is submitted under subsection (i).
       (2) Administrative activities before termination.--The 
     Commission may use the 60-day period referred to in paragraph 
     (1) for the purpose of concluding its activities, including 
     providing testimony to committees of Congress concerning its 
     reports and disseminating the second report.
       (k) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Commission to carry out this 
     section $5,000,000, to remain available until expended.
     Subtitle D--Strategy for the United States Relationship With 
                Afghanistan, Pakistan, and Saudi Arabia

     SEC. 231. AFGHANISTAN.

       (a) Afghanistan Freedom Support Act of 2002.--Section 
     108(a) the Afghanistan Freedom Support Act of 2002 (22 U.S.C. 
     7518(a)) is amended by striking ``such sums as may be 
     necessary for each of the fiscal years 2005 and 2006'' and 
     inserting ``$2,400,000,000 for fiscal year 2006 and such sums 
     as may be necessary for each of the fiscal years 2007 and 
     2008''.
       (b) Other Authorizations of Appropriations.--
       (1) Fiscal year 2006.--There are authorized to be 
     appropriated to the President for providing assistance for 
     Afghanistan in a manner consistent with the provisions of the 
     Afghanistan Freedom Support Act of 2002 (22 U.S.C. 7501 et 
     seq.) for fiscal year 2006--
       (A) for ``International Military Education and Training'', 
     $1,000,000 to carry out the provisions of section 541 of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2347);
       (B) for ``Foreign Military Financing Program'' grants, 
     $444,000,000 to carry out the provisions of section 23 of the 
     Arms Export Control Act (22 U.S.C. 2763); and
       (C) for ``Peacekeeping Operations'', $30,000,000 to carry 
     out the provisions of section 551 of the Foreign Assistance 
     Act of 1961 (22 U.S.C. 2348).
       (2) Fiscal years 2007 and 2008.--
       (A) Authorization of appropriation.--There are authorized 
     to be appropriated for each of the purposes described in 
     subparagraphs (A) through (C) of paragraph (1) such sums as 
     may be necessary for each of the fiscal years 2007 and 2008.
       (B) Sense of congress.--It is the sense of Congress that 
     the amount appropriated for each purpose described in 
     subparagraphs (A) through (C) of paragraph (1) for each of 
     the fiscal years 2007 and 2008 should be an amount that is 
     equal to 125 percent of the amount appropriated for such 
     purpose during the preceding fiscal year.
       (3) Other funds.--Amounts authorized to be appropriated 
     under this section are in addition to amounts otherwise 
     available for such purposes.

     SEC. 232. PAKISTAN.

       (a) Findings.--Congress makes the following findings:
       (1) Since September 11, 2001, the Government of Pakistan 
     has been an important partner in helping the United States 
     remove the Taliban regime in Afghanistan and combating 
     international terrorism in the frontier provinces of 
     Pakistan.
       (2) There remain a number of critical issues that threaten 
     to disrupt the relationship between the United States and 
     Pakistan, undermine international security, and destabilize 
     Pakistan, including--
       (A) curbing the proliferation of nuclear weapons 
     technology;
       (B) combating poverty and corruption;
       (C) building effective government institutions, especially 
     secular public schools;
       (D) promoting democracy and rule of law, particularly at 
     the national level; and
       (E) effectively dealing with Islamic extremism.
       (b) Policy.--It is the policy of the United States--
       (1) to work with the Government of Pakistan to combat 
     international terrorism, especially in the frontier provinces 
     of Pakistan;
       (2) to establish a long-term strategic partnership with the 
     Government of Pakistan to address the issues described in 
     subparagraphs (A) through (E) of subsection (a)(2);
       (3) to dramatically increase funding for United States 
     Agency for International Development and Department of State 
     programs that assist Pakistan in addressing such issues, if 
     the Government of Pakistan demonstrates a commitment to 
     building a moderate, democratic state; and
       (4) to work with the international community to secure 
     additional financial and political support to effectively 
     implement the policies set forth in this subsection and help 
     to resolve the dispute between the Government of Pakistan and 
     the Government of India over the disputed territory of 
     Kashmir.
       (c) Strategy on Pakistan.--
       (1) Requirement for report on strategy.--Not later than 90 
     days after the date of enactment of this Act, the President 
     shall submit to the appropriate congressional committees a 
     report, in classified form if necessary, that describes the 
     long-term strategy of the United States to engage with the 
     Government of Pakistan to address the issues described in 
     subparagraphs (A) through (E) of subsection (a)(2) in order 
     accomplish the goal of building a moderate, democratic 
     Pakistan.
       (2) Appropriate congressional committees defined.--In this 
     subsection the term ``appropriate congressional committees'' 
     means the Committee on Appropriations and the Committee on 
     Foreign Relations in the Senate, and the Committee on 
     Appropriations and the Committee on International Relations 
     of the House of Representatives.
       (d) Nuclear Proliferation.--
       (1) Finding.--Congress finds that Pakistan's maintenance of 
     a global missile and nuclear proliferation network would be 
     inconsistent with Pakistan being considered an ally of the 
     United States.
       (2) Sense of congress.--It is the sense of Congress that 
     the national security interest of the United States will best 
     be served if the United States develops and implements a

[[Page 361]]

     long-term strategy to improve the United States relationship 
     with Pakistan and works with the Government of Pakistan to 
     stop nuclear proliferation.
       (3) Limitation on assistance to pakistan.--None of the 
     funds appropriated for a fiscal year to provide military or 
     economic assistance to the Government of Pakistan may be made 
     available for such purpose unless the President submits to 
     Congress for such fiscal year a certification that no 
     military or economic assistance provided by the United States 
     to the Government of Pakistan will be provided, either 
     directly or indirectly, to a person that is opposing or 
     undermining the efforts of the United States Government to 
     halt the proliferation of nuclear weapons.
       (e) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     the President for providing assistance for Pakistan for 
     fiscal year 2006--
       (A) for ``Development Assistance'', $50,000,000 to carry 
     out the provisions of section 103, 105, and 106 of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2151a, 2151c, and 
     2151d,);
       (B) for the ``Child Survival and Health Programs Fund'', 
     $35,000,000 to carry out the provisions of sections 104 of 
     the Foreign Assistance Act of 1961 (22 U.S.C. 2151b);
       (C) for the ``Economic Support Fund'', $350,000,000 to 
     carry out the provisions of chapter 4 of part II of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2346 et seq.);
       (D) for ``International Narcotics and Law Enforcement'', 
     $50,000,000 to carry out the provisions of section 481 of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2291);
       (E) for ``Nonproliferation, Anti-Terrorism, Demining, and 
     Related Programs'', $10,000,000;
       (F) for ``International Military Education and Training'', 
     $2,000,000 to carry out the provisions of section 541 of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2347); and
       (G) for ``Foreign Military Financing Program'', 
     $300,000,000 grants to carry of the provision of section 23 
     of the Arms Export Control Act (22 U.S.C. 2763).
       (2) Other funds.--Amounts authorized to be appropriated 
     under this section are in addition to amounts otherwise 
     available for such purposes.

     SEC. 233. SAUDI ARABIA.

       (a) Findings.--Congress makes the following findings:
       (1) The Kingdom of Saudi Arabia has an uneven record in the 
     fight against terrorism, especially with respect to terrorist 
     financing, support for radical madrassas, and a lack of 
     political outlets for its citizens, that poses a threat to 
     the security of the United States, the international 
     community, and the Kingdom of Saudi Arabia itself.
       (2) The United States has a national security interest in 
     working with the Government of Saudi Arabia to combat 
     international terrorists that operate within that nation or 
     that operate outside Saudi Arabia with the support of 
     citizens of Saudi Arabia.
       (3) In order to more effectively combat terrorism, the 
     Government of Saudi Arabia must undertake a number of 
     political and economic reforms, including increasing anti-
     terrorism operations conducted by law enforcement agencies, 
     providing more political rights to its citizens, increasing 
     the rights of women, engaging in comprehensive educational 
     reform, enhancing monitoring of charitable organizations, 
     promulgating and enforcing domestic laws and regulation on 
     terrorist financing.
       (b) Policy.--It is the policy of the United States--
       (1) to engage with the Government of Saudi Arabia to openly 
     confront the issue of terrorism, as well as other problematic 
     issues such as the lack of political freedoms, with the goal 
     of restructuring the relationship on terms that leaders of 
     both nations can publicly support;
       (2) to enhance counterterrorism cooperation with the 
     Government of Saudi Arabia, if the political leaders of such 
     Government are committed to making a serious, sustained 
     effort to combat terrorism; and
       (3) to support the efforts of the Government of Saudi 
     Arabia to make political, economic, and social reforms 
     throughout the country.
       (c) Strategy on Saudi Arabia.--
       (1) Requirement for report on strategy.--Not later than 90 
     days after the date of enactment of this Act, the President 
     shall submit to the appropriate congressional committees a 
     report, in classified form if necessary, that describes the 
     long-term strategy of the United States--
       (A) to engage with the Government of Saudi Arabia to 
     facilitate political, economic, and social reforms that will 
     enhance the ability of the Government of Saudi Arabia to 
     combat international terrorism; and
       (B) to effectively prevent the financing of terrorists in 
     Saudi Arabia.
       (2) Appropriate congressional committees defined.--In this 
     subsection the term ``appropriate congressional committees'' 
     means the Committee on Appropriations and the Committee on 
     Foreign Relations in the Senate, and the Committee on 
     Appropriations and the Committee on International Relations 
     of the House of Representatives.
  TITLE III--PROTECTION FROM TERRORIST ATTACKS THAT UTILIZE NUCLEAR, 
             CHEMICAL, BIOLOGICAL, AND RADIOLOGICAL WEAPONS
                 Subtitle A--Non-Proliferation Programs

     SEC. 301. REPEAL OF LIMITATIONS TO THREAT REDUCTION 
                   ASSISTANCE.

       Section 5 of S. 2980 of the 108th Congress (the ``Nunn-
     Lugar Cooperative Threat Reduction Act of 2004''), as 
     introduced on November 16, 2004, is hereby enacted into law.

     SEC. 302. REUSE OF RUSSIAN NUCLEAR FACILITIES.

       (a) In General.--The Secretary of Energy shall work with 
     the Minister of Atomic Energy of Russia to carry out a 
     program to close or convert to non-defense work one or more 
     nuclear weapons assembly and disassembly facilities in 
     Russia.
       (b) Designation of Facilities.--The Secretary of Energy and 
     Minister of Atomic Energy of Russia shall jointly designate 
     each facility to be covered by the program under subsection 
     (a).
       (c) Commissions To Provide Advice and Recommendations.--
       (1) In general.--Not later than two months after the 
     designation of a facility under subsection (b), the Secretary 
     of Energy shall establish a commission to provide advice and 
     recommendations on the closure or conversion of the facility 
     to non-defense work.
       (2) Commission membership.--Each commission established 
     under paragraph (1) shall consist of such personnel, 
     including Russian nationals, as the Secretary considers 
     appropriate for its work. The names of each member of each 
     commission shall be made public upon designation under this 
     paragraph.
       (3) Personnel matters.--
       (A) Compensation.--Each member of a commission established 
     under paragraph (1) who is not an officer or employee of the 
     Federal Government shall be compensated at a rate equal to 
     the daily equivalent of the annual rate of basic pay 
     prescribed for level IV of the Executive Schedule under 
     section 5315 of title 5, United States Code, for each day 
     (including travel time) during which such member is engaged 
     in the performance of the duties of such commission. All 
     members of a commission who are officers or employees of the 
     United States shall serve without compensation in addition to 
     that received for their services as officers or employees of 
     the United States.
       (B) Travel expenses.--The members of a commission 
     established under paragraph (1) shall be allowed travel 
     expenses, including per diem in lieu of subsistence, at rates 
     authorized for employees of agencies under subchapter I of 
     chapter 57 of title 5, United States Code, while away from 
     their homes or regular places of business in the performance 
     of services for such commission.
       (4) FACA.--The Federal Advisory Committee Act (5 U.S.C. 
     App.) shall not apply to any activities of a commission 
     established under paragraph (1).
       (5) Open meetings.--The meetings of any commission under 
     paragraph (1) shall, to the maximum extent practicable, be 
     open to the public.
       (d) Proposed Facility Reuse Plan.--
       (1) Requirement for proposed plan.--Not later than six 
     months after the designation of a facility under subsection 
     (b), the commission for the facility under subsection (c) 
     shall submit to the Secretary of Energy and the Minister of 
     Atomic Energy of Russia a proposed plan on the closure or 
     conversion of the facility to non-defense work.
       (2) Elements of proposed plan.--A proposed plan under 
     paragraph (1) may include one or more of the elements 
     specified in subsection (f).
       (3) Availability of proposed plan.--Any proposed plan 
     submitted under paragraph (1) shall be made public upon its 
     submittal.
       (e) Final Facility Reuse Plan.--
       (1) Requirement for final plan.--Not later than nine months 
     after receiving a proposed plan for a facility under 
     subsection (d), the Secretary of Energy and the Minister of 
     Atomic Energy of Russia shall jointly develop a final plan on 
     the closure or conversion of the facility to non-defense 
     work.
       (2) Elements of final plan.--A final plan for a facility 
     under paragraph (1) shall include the following:
       (A) Any of the elements specified in subsection (f).
       (B) Assurances of access to the facility necessary to carry 
     out the final plan.
       (C) Resolution of any matters relating to liability and 
     taxation.
       (D) An estimate of the costs of the United States, and of 
     Russia, under the final plan.
       (E) The commitment of Russia to pay at least 15 percent of 
     the costs of the final plan.
       (F) Milestones for the final plan, including a deadline for 
     the closure or conversion of the facility to non-defense 
     work.
       (G) Appropriate auditing and accounting mechanisms.
       (f) Plan Elements.--The plan for a facility under 
     subsection (d) or (e) may include one or more of the 
     following elements:
       (1) A retraining program for facility employees.
       (2) Economic incentives to attract and facilitate 
     commercial ventures in connection with the facility.
       (3) A site preparation plan.
       (4) Technical exchange and training programs.
       (5) The participation of a redevelopment manager and of 
     business, legal, financial, or other appropriate experts.

[[Page 362]]

       (6) Promotional or marketing plans.
       (7) Provision for startup funds, loans, or grants, or other 
     venture capital or financing.
       (g) Limitation on Availability of Funds.--No amount 
     authorized to be appropriated by subsection (h) may be 
     available for a facility under the program established under 
     subsection (a) unless the deadlines for the preparation of 
     the proposed facility reuse plan for the facility under 
     subsection (d) and for the preparation of the final facility 
     reuse plan for the facility under subsection (e) are both 
     met.
       (h) Authorization of Appropriations.--
       (1) In general.--There is authorized to be appropriated to 
     the Department of Energy, $60,000,000 to carry out this 
     section, of which not more than $4,000,000 may be available 
     to each commission established under subsection (c).
       (2) Availability of funds.--The amount authorized to be 
     appropriated by paragraph (1) shall remain available until 
     expended.

     SEC. 303. RUSSIAN TACTICAL NUCLEAR WEAPONS.

       (a) Report Required.--Not later than six months after the 
     date of the enactment of this Act, the President shall submit 
     to Congress a report setting forth the following:
       (1) An assessment of the number, location, condition, and 
     security of Russian tactical nuclear weapons.
       (2) An assessment of the threat that would be posed by the 
     theft of Russian tactical nuclear weapons.
       (3) A plan for developing with Russia a cooperative program 
     to secure, consolidate, and, as appropriate, dismantle 
     Russian tactical nuclear weapons.
       (b) Program.--The Secretary of Defense and the Secretary of 
     Energy shall jointly work with Russia to establish a 
     cooperative program, based on the report under subsection 
     (a), to secure, consolidate, and, as appropriate, dismantle 
     Russian tactical nuclear weapons in order to achieve 
     reductions in the total number of Russian tactical nuclear 
     weapons.
       (c) Authorization of Appropriations.--
       (1) Department of defense.--There is authorized to be 
     appropriated for the Department of Defense, $25,000,000 to 
     carry out this section.
       (2) Department of energy.--There is authorized to be 
     appropriated for the Department of Energy, $25,000,000 to 
     carry out this section.

     SEC. 304. ADDITIONAL ASSISTANCE TO ACCELERATE NON-
                   PROLIFERATION PROGRAMS.

       (a) Authorization of Appropriations for the Department of 
     Defense.--There is authorized to be appropriated to the 
     Department of Defense $40,000,000 for fiscal year 2006 for 
     Cooperative Threat Reduction Activities as follows:
       (1) To accelerate security upgrades at warhead storage 
     sites located in Russia or another country of the former 
     Soviet Union, $15,000,000.
       (2) To accelerate security upgrades at warhead storage 
     sites located in countries other than the countries of the 
     former Soviet Union, $10,000,000.
       (3) To accelerate biological weapons proliferation 
     prevention programs in Kazakhstan, Georgia, and Uzbekiztan, 
     $15,000,000.
       (b) Authorization of Appropriations for the Department of 
     Energy.--There is authorized to be appropriated to the 
     Department of Energy $95,000,000 for fiscal year 2006 for 
     nonproliferation activities of the National Nuclear Security 
     Administration as follows:
       (1) To accelerate the Global Threat Reduction Initiative, 
     $20,000,000.
       (2) To accelerate security upgrades at warhead storage 
     sites located in Russia or another country of the former 
     Soviet Union, $15,000,000.
       (3) To accelerate the closure of the plutonium producing 
     reactor at Zheleznogorsk, Russia as part of the program to 
     eliminate weapons grade plutonium production, $25,000,000.
       (4) To accelerate completion of comprehensive security 
     upgrades at Russian storage sites for weapons-usable nuclear 
     materials, $15,000,000.
       (c) Authorization of Appropriations for the Department of 
     State.--
       (1) In general.--There is authorized to be appropriated to 
     the Department of State $25,000,000 for fiscal year 2006 for 
     nonproliferation activities as follows:
       (A) To accelerate engagement of former chemical an 
     biological weapons scientists in Russia and the countries of 
     the former Soviet Union through the Bio-Chem Redirect 
     Program, $15,000,000.
       (B) To enhance efforts to combat bioterrorism by 
     transforming the for Soviet biological weapons research and 
     production facilities to commercial enterprises through the 
     BioIndustry Initiative, $10,000,000.
       (2) Availability of funds.--The amount authorized to be 
     appropriated by paragraph (1) shall remain available until 
     expended.

     SEC. 305. ADDITIONAL ASSISTANCE TO THE INTERNATIONAL ATOMIC 
                   ENERGY AGENCY.

       There is authorized to be appropriated to the Department of 
     Energy $20,000,000 to be used to provide technical and other 
     assistance to the International Atomic Energy Agency to 
     support nonproliferation programs. Such amount is in addition 
     to amounts otherwise available for such purpose.
                     Subtitle B--Border Protection

     SEC. 311. FINDINGS.

       Congress makes the following findings:
       (1) More than 500,000,000 people cross the borders of the 
     United States at legal points of entry each year, including 
     approximately 330,000,000 people who are not citizens of the 
     United States.
       (2) The National Commission on Terrorist Attacks Upon the 
     United States found that 15 of the 19 hijackers involved in 
     the September 11, 2001 terrorist attacks ``were potentially 
     vulnerable to interception by border authorities''.
       (3) Officials with the Bureau of Customs and Border 
     Protection and with the Bureau of Immigration and Customs 
     Enforcement have stated that there is a shortage of agents in 
     such Bureaus. Due to an inadequate budget, the Bureau of 
     Immigration and Customs Enforcement has effected a hiring 
     freeze since March 2004, and the Bureau has not made public 
     any plans to end this freeze.

     SEC. 312. HIRING AND TRAINING OF BORDER SECURITY PERSONNEL.

       (a) Inspectors and Agents.--
       (1) Increase in inspectors and agents.--During each of 
     fiscal years 2005 through 2008, the Under Secretary shall--
       (A) increase the number of full-time agents and associated 
     support staff in the Bureau of Immigration and Customs 
     Enforcement of the Department of Homeland Security by the 
     equivalent of at least 100 more than the number of such 
     employees in the Bureau as of the end of the preceding fiscal 
     year; and
       (B) increase the number of full-time inspectors and 
     associated support staff in the Bureau of Customs and Border 
     Protection by the equivalent of at least 200 more than the 
     number of such employees in the Bureau as of the end of the 
     preceding fiscal year.
       (2) Waiver of fte limitation.--The Under Secretary is 
     authorized to waive any limitation on the number of full-time 
     equivalent personnel assigned to the Department of Homeland 
     Security to fulfill the requirements of paragraph (1).
       (b) Training.--The Under Secretary shall provide 
     appropriate training for agents, inspectors, and associated 
     support staff on an ongoing basis to utilize new technologies 
     and to ensure that the proficiency levels of such personnel 
     are acceptable to protect the borders of the United States.
                     Subtitle C--Seaport Protection

     SEC. 321. FINDINGS.

       Congress makes the following findings:
       (1) The United States port system is a vital artery of the 
     economy of the United States. Almost 95 percent of all 
     foreign trade passes through one or more of the 361 ports in 
     the United States. Such seaports handle more than 
     2,000,000,000 tons of domestic and international freight each 
     year of which has a value of more than $740,000,000. The 
     shipment of cargo in vessels creates employment for 
     13,000,000 people within the United States.
       (2) The United States Coast Guard has estimated that, given 
     this tremendous commerce, a terrorist attack shutting down a 
     major port in the United States would have a $60,000,000 
     impact on the United States economy during the first 30 days 
     after such an attack.
       (3) Although 6,000,000 cargo containers, each a possible 
     hiding place for a bomb or other weapon, are off-loaded at 
     ports in the United States each year, less than \1/10\ of 
     these containers are physically inspected. A container ship 
     can carry as many as 3,000 containers, each one weighing up 
     to 45,000 pounds, hundreds of which may be off-loaded at a 
     port.
       (4) The United States Coast Guard has estimated that the 
     maritime security requirements set for ports by the Maritime 
     Transportation Security Act of 2002 (Public Law 107-295; 116 
     Stat. 2064), which are critical to protecting United States 
     ports from a nuclear terrorist attack, will cost 
     $5,400,000,000 to implement over a 10-year period.

     SEC. 322. PORT SECURITY GRANT FUNDING.

       Section 70107(h) of title 46, United States Code, is 
     amended to read as follows:
       ``(h) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary to carry out 
     subsections (a) through (g)--
       ``(1) $500,000,000 for fiscal year 2006;
       ``(2) $750,000,000 for fiscal year 2007;
       ``(3) $1,000,000,000 for fiscal year 2008;
       ``(4) $1,250,000,000 for fiscal year 2009; and
       ``(5) such sums as may be needed for each fiscal year after 
     fiscal year 2009.''.

     SEC. 323. DEPLOYMENT OF RADIATION DETECTION PORTAL EQUIPMENT; 
                   INTEGRATED CARGO INSPECTION SYSTEM.

       (a) In General.--Subtitle C of title IV of the Homeland 
     Security Act of 2002 (6 U.S.C. 231 et seq.) is amended by 
     adding at the end the following new section:

     ``SEC. 431. DETECTION OF NUCLEAR MATERIAL AT UNITED STATES 
                   SEAPORTS.

       ``(a) Deployment of Radiation Detection Portal Equipment.--
       ``(1) Deployment.--Not later than September 30, 2006, the 
     Undersecretary for Border and Transportation Security shall 
     deploy radiation detection portal equipment at all United 
     States seaports, other United States

[[Page 363]]

     ports of entry, and major facilities as determined by the 
     Undersecretary.
       ``(2) Report.--Not later than December 31, 2005, the 
     Undersecretary shall submit to the appropriate congressional 
     committees a report on the implementation of the requirement 
     under paragraph (1).
       ``(3) Authorization of appropriations.--There is authorized 
     to be appropriated to the Undersecretary $217,000,000 for 
     fiscal year 2006 to carry out this subsection.
       ``(b) Integrated Cargo Inspection System.--
       ``(1) Plan.--The Undersecretary for Border and 
     Transportation Security shall develop a plan to integrate 
     radiation detection portal equipment with gamma-ray 
     inspection technology equipment at United States seaports and 
     foreign seaports that are participating the Container 
     Security Initiative in order to facilitate the detection of 
     nuclear weapons in maritime cargo containers. Such plan shall 
     include methods for automatic identification of containers 
     and vehicles for inspection in a timely manner and a data 
     sharing network capable of transmitting gamma-ray images and 
     cargo data among relevant ports and the National Targeting 
     Center of the Bureau of Customs and Border Protection.
       ``(2) Report.--Not later than 180 days after the date of 
     the enactment of the Targeting Terrorists More Effectively 
     Act of 2005, the Undersecretary for Border and Transportation 
     Security shall prepare and submit to the appropriate 
     congressional committees a report that contains--
       ``(A) a description of the plan developed under paragraph 
     (1), including any infrastructure improvements required at 
     the seaports involved;
       ``(B) an estimate of the costs associated with 
     implementation of the plan; and
       ``(C) an estimate of the timeframe for implementation of 
     the plan.''.

     SEC. 324. ACCELERATION OF THE MEGAPORTS INITIATIVE.

       (a) Deployment.--Not later than September 30, 2007, the 
     Administrator of the National Nuclear Security Administration 
     shall--
       (1) complete agreements under the Megaports Initiative of 
     the Office of International Material Protection and 
     Cooperation with each country that possesses one or more of 
     the world's twenty largest seaports, as defined by volume of 
     maritime cargo traffic; and
       (2) deploy radiation portal monitoring equipment to each 
     seaport operating under an agreement described in subsection 
     (a)(1).
       (b) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Administrator such funds as are 
     necessary to carry out the provisions of this section.

     SEC. 325. TANKER SECURITY INITIATIVE.

       (a) Establishment.--The Secretary of Homeland Security 
     shall establish a Tanker Security Initiative to promulgate 
     and enforce standards and carry out activities to ensure that 
     tanker vessels that transport oil, natural gas, or other 
     materials are not used by terrorists or as carriers of 
     weapons of mass destruction.
       (b) Elements.--To carry out the Tanker Security Initiative 
     the Secretary of Homeland Security may--
       (1) develop physical standards intended to prevent 
     terrorists from placing a weapon of mass destruction in or on 
     a tanker vessel without detection;
       (2) develop detection equipment, and prescribe the use of 
     such equipment, to be employed on a tanker vessel that is 
     bound for a United States port of entry;
       (3) develop new security inspection procedures required to 
     be carried out on a tanker vessel at a foreign port of 
     embarkation, on the high seas, or in United States waters 
     prior to the arrival of such tanker at a United States port 
     of entry;
       (4) carry out research and development of sensing devices 
     to detect any nuclear device that is placed in or on a tanker 
     vessel; and
       (5) provide assistance to a foreign country to assist such 
     country in carrying out any provisions of the Tanker Security 
     Initiative.
       (c) Report.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary of Homeland Security 
     shall submit to Congress a report that includes--
       (1) a description of the terrorism risks posed by tanker 
     vessels:
       (2) the elements of the Tanker Security Initiative 
     developed to combat such risks;
       (3) a proposed budget describing the resources needed to 
     carry out the Tanker Security Initiative during the 3-year 
     period beginning on the date of the enactment of this Act; 
     and
       (4) any proposal for legislation that the Secretary 
     determines would address effectively such risks.
                      Subtitle D--First Responders

     SEC. 331. FINDINGS.

       Congress makes the following findings:
       (1) In a report entitled ``Emergency First Responders: 
     Drastically Underfunded, Dangerously Unprepared'', an 
     independent task force sponsored by the Council on Foreign 
     Relations found that ``America's local emergency responders 
     will always be the first to confront a terrorist incident and 
     will play the central role in managing its immediate 
     consequences. Their efforts in the first minutes and hours 
     following an attack will be critical to saving lives, 
     establishing order, and preventing mass panic. The United 
     States has both a responsibility and a critical need to 
     provide them with the equipment, training, and other 
     resources necessary to do their jobs safely and 
     effectively.''.
       (2) The task force further concluded that many state and 
     local emergency responders, including police officers and 
     firefighters, lack the equipment and training needed to 
     respond effectively to a terrorist attack involving weapons 
     of mass destruction.
       (3) The Federal Government has a responsibility to ensure 
     that the people of the United States are protected to the 
     greatest possible extent against a terrorist attack, 
     especially an attack that utilizes nuclear, chemical, 
     biological, or radiological weapons, and consequently, the 
     Federal Government has a critical responsibility to address 
     the equipment, training, and other needs of State and local 
     first responders.

     SEC. 332. RESTORATION OF JUSTICE ASSISTANCE FUNDING.

       (a) Findings.--Congress makes the following findings:
       (1) State and local police officers, firefighters, and 
     emergency responders play an essential role in the efforts of 
     the United States to prevent terrorist attacks and, if an 
     attack occurred, to address the effects of the attack.
       (2) An independent task force has concluded that hundreds 
     of local police offices and firefighting and emergency 
     response units throughout the United States are unprepared 
     for responding to a terrorist attack involving nuclear, 
     chemical, biological, or radiological weapons.
       (3) The Edward Byrne Memorial Justice Assistance Grant 
     Program provides critical Federal support for personnel, 
     equipment, training, and technical assistance for the 
     homeland security responsibilities of local law enforcement 
     offices.
       (4) The Consolidated Appropriations Act, 2005 (Public Law 
     108-447) appropriated funding for the Edward Byrne Memorial 
     Justice Assistance Grant Program, a program that resulted 
     from the combination of the Edward Byrne Memorial Grant 
     Program and the Local Law Enforcement Block Grant Program.
       (5) Funding for the Edward Byrne Memorial Justice 
     Assistance Grant Program, as provided in the Consolidated 
     Appropriations Act, 2005, has been reduced by nearly 50 
     percent since fiscal year 2002.
       (b) Sense of Congress.--It is the sense of Congress that 
     the President should request in the annual budget proposal, 
     and Congress should appropriate, the full amount authorized 
     to be appropriated in subsection (c).
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated for the Edward Byrne Memorial Justice 
     Assistance Grant Program--
       (1) for fiscal year 2006, $1,250,000,000;
       (2) for fiscal year 2007, $1,400,000,000; and
       (3) for fiscal year 2008, $1,600,000,000.

     SEC. 333. PROVIDING RELIABLE OFFICERS, TECHNOLOGY, EDUCATION, 
                   COMMUNITY PROSECUTORS, AND TRAINING IN OUR 
                   NEIGHBORHOOD INITIATIVE.

       (a) COPS Program.--Section 1701(a) of title I of the 
     Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 
     3796dd(a)) is amended by--
       (1) inserting ``and prosecutor'' after ``increase police''; 
     and
       (2) inserting ``to enhance law enforcement access to new 
     technologies, and'' after ``presence,''.
       (b) Hiring and Redeployment Grant Projects.--Section 
     1701(b) of title I of the Omnibus Crime Control and Safe 
     Streets Act of 1968 (42 U.S.C. 3796dd(b)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (B)--
       (i) by inserting after ``Nation'' the following: ``, or pay 
     overtime to existing career law enforcement officers to the 
     extent that such overtime is devoted to community policing 
     efforts''; and
       (ii) by striking ``and'' at the end;
       (B) in subparagraph (C), by--
       (i) striking ``or pay overtime''; and
       (ii) striking the period at the end and inserting ``; 
     and''; and
       (C) by adding at the end the following:
       ``(D) promote higher education among in-service State and 
     local law enforcement officers by reimbursing them for the 
     costs associated with seeking a college or graduate school 
     education.''; and
       (2) in paragraph (2) by striking all that follows ``Support 
     Systems.--'' and inserting ``Grants pursuant to--
       ``(A) paragraph (1)(B) for overtime may not exceed 25 
     percent of the funds available for grants pursuant to this 
     subsection for any fiscal year;
       ``(B) paragraph (1)(C) may not exceed 20 percent of the 
     funds available for grants pursuant to this subsection in any 
     fiscal year; and
       ``(C) paragraph (1)(D) may not exceed 5 percent of the 
     funds available for grants pursuant to this subsection for 
     any fiscal year.''.
       (c) Additional Grant Projects.--Section 1701(d) of title I 
     of the Omnibus Crime Control and Safe Streets Act of 1968 (42 
     U.S.C. 3796dd(d)) is amended--
       (1) in paragraph (2)--
       (A) by inserting ``integrity and ethics'' after 
     ``specialized''; and

[[Page 364]]

       (B) by inserting ``and'' after ``enforcement officers'';
       (2) in paragraph (7) by inserting ``school officials, 
     religiously-affiliated organizations,'' after ``enforcement 
     officers'';
       (3) by striking paragraph (8) and inserting the following:
       ``(8) establish school-based partnerships between local law 
     enforcement agencies and local school systems, by using 
     school resource officers who operate in and around elementary 
     and secondary schools to serve as a law enforcement liaison 
     with other Federal, State, and local law enforcement and 
     regulatory agencies, combat school-related crime and disorder 
     problems, gang membership and criminal activity, firearms and 
     explosives-related incidents, illegal use and possession of 
     alcohol, and the illegal possession, use, and distribution of 
     drugs;'';
       (4) in paragraph (10) by striking ``and'' at the end;
       (5) in paragraph (11) by striking the period that appears 
     at the end and inserting ``; and''; and
       (6) by adding at the end the following:
       ``(12) develop and implement innovative programs (such as 
     the TRIAD program) that bring together a community's sheriff, 
     chief of police, and elderly residents to address the public 
     safety concerns of older citizens.''.
       (d) Technical Assistance.--Section 1701(f) of title I of 
     the Omnibus Crime Control and Safe Streets Act of 1968 (42 
     U.S.C. 3796dd(f)) is amended--
       (1) in paragraph (1)--
       (A) by inserting ``use up to 5 percent of the funds 
     appropriated under subsection (a) to'' after ``The Attorney 
     General may'';
       (B) by inserting at the end the following: ``In addition, 
     the Attorney General may use up to 5 percent of the funds 
     appropriated under subsections (d), (e), and (f) for 
     technical assistance and training to States, units of local 
     government, Indian tribal governments, and to other public 
     and private entities for those respective purposes.'';
       (2) in paragraph (2) by inserting ``under subsection (a)'' 
     after ``the Attorney General''; and
       (3) in paragraph (3)--
       (A) by striking ``the Attorney General may'' and inserting 
     ``the Attorney General shall'';
       (B) by inserting ``regional community policing institutes'' 
     after ``operation of''; and
       (C) by inserting ``representatives of police labor and 
     management organizations, community residents,'' after 
     ``supervisors,''.
       (e) Technology and Prosecution Programs.--Section 1701 of 
     title I of the Omnibus Crime Control and Safe Streets Act of 
     1968 (42 U.S.C. 3796dd) is amended by--
       (1) striking subsection (k);
       (2) redesignating subsections (f) through (j) as 
     subsections (g) through (k); and
       (3) striking subsection (e) and inserting the following:
       ``(e) Law Enforcement Technology Program.--Grants made 
     under subsection (a) may be used to assist police 
     departments, in employing professional, scientific, and 
     technological advancements that will help them--
       ``(1) improve police communications through the use of 
     wireless communications, computers, software, videocams, 
     databases and other hardware and software that allow law 
     enforcement agencies to communicate more effectively across 
     jurisdictional boundaries and effectuate interoperability;
       ``(2) develop and improve access to crime solving 
     technologies, including DNA analysis, photo enhancement, 
     voice recognition, and other forensic capabilities; and
       ``(3) promote comprehensive crime analysis by utilizing new 
     techniques and technologies, such as crime mapping, that 
     allow law enforcement agencies to use real-time crime and 
     arrest data and other related information--including non-
     criminal justice data--to improve their ability to analyze, 
     predict, and respond pro-actively to local crime and disorder 
     problems, as well as to engage in regional crime analysis.
       ``(f) Community-Based Prosecution Program.--Grants made 
     under subsection (a) may be used to assist State, local or 
     tribal prosecutors' offices in the implementation of 
     community-based prosecution programs that build on local 
     community policing efforts. Funds made available under this 
     subsection may be used to--
       ``(1) hire additional prosecutors who will be assigned to 
     community prosecution programs, including programs that 
     assign prosecutors to handle cases from specific geographic 
     areas, to address specific violent crime and other local 
     crime problems (including intensive illegal gang, gun and 
     drug enforcement projects and quality of life initiatives), 
     and to address localized violent and other crime problems 
     based on needs identified by local law enforcement agencies, 
     community organizations, and others;
       ``(2) redeploy existing prosecutors to community 
     prosecution programs as described in paragraph (1) of this 
     section by hiring victim and witness coordinators, 
     paralegals, community outreach, and other such personnel; and
       ``(3) establish programs to assist local prosecutors' 
     offices in the implementation of programs that help them 
     identify and respond to priority crime problems in a 
     community with specifically tailored solutions.

     At least 75 percent of the funds made available under this 
     subsection shall be reserved for grants under paragraphs (1) 
     and (2) and of those amounts no more than 10 percent may be 
     used for grants under paragraph (2) and at least 25 percent 
     of the funds shall be reserved for grants under paragraphs 
     (1) and (2) to units of local government with a population of 
     less than 50,000.''.
       (f) Retention Grants.--Section 1703 of title I of the 
     Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 
     3796dd-2) is amended by inserting at the end the following:
       ``(d) Retention Grants.--The Attorney General may use no 
     more than 50 percent of the funds under subsection (a) to 
     award grants targeted specifically for retention of police 
     officers to grantees in good standing, with preference to 
     those that demonstrate financial hardship or severe budget 
     constraint that impacts the entire local budget and may 
     result in the termination of employment for police officers 
     funded under subsection (b)(1).''.
       (g) Definitions.--
       (1) Career law enforcement officer.--Section 1709(1) of 
     title I of the Omnibus Crime Control and Safe Streets Act of 
     1968 (42 U.S.C. 3796dd-8) is amended by inserting after 
     ``criminal laws'' the following: ``including sheriffs 
     deputies charged with supervising offenders who are released 
     into the community but also engaged in local community 
     policing efforts.''.
       (2) School resource officer.--Section 1709(4) of title I of 
     the Omnibus Crime Control and Safe Streets Act of 1968 (42 
     U.S.C. 3796dd-8) is amended--
       (A) by striking subparagraph (A) and inserting the 
     following:
       ``(A) to serve as a law enforcement liaison with other 
     Federal, State, and local law enforcement and regulatory 
     agencies, to address and document crime and disorder problems 
     including gangs and drug activities, firearms and explosives-
     related incidents, and the illegal use and possession of 
     alcohol affecting or occurring in or around an elementary or 
     secondary school;'';
       (B) by striking subparagraph (E) and inserting the 
     following:
       ``(E) to train students in conflict resolution, restorative 
     justice, and crime awareness, and to provide assistance to 
     and coordinate with other officers, mental health 
     professionals, and youth counselors who are responsible for 
     the implementation of prevention/intervention programs within 
     the schools;''; and
       (C) by adding at the end the following:
       ``(H) to work with school administrators, members of the 
     local parent teacher associations, community organizers, law 
     enforcement, fire departments, and emergency medical 
     personnel in the creation, review, and implementation of a 
     school violence prevention plan;
       ``(I) to assist in documenting the full description of all 
     firearms found or taken into custody on school property and 
     to initiate a firearms trace and ballistics examination for 
     each firearm with the local office of the Bureau of Alcohol, 
     Tobacco, and Firearms;
       ``(J) to document the full description of all explosives or 
     explosive devices found or taken into custody on school 
     property and report to the local office of the Bureau of 
     Alcohol, Tobacco, and Firearms; and
       ``(K) to assist school administrators with the preparation 
     of the Department of Education, Annual Report on State 
     Implementation of the Gun-Free Schools Act which tracks the 
     number of students expelled per year for bringing a weapon, 
     firearm, or explosive to school.''.
       (h) Authorization of Appropriations.--Section 1001(a)(11) 
     of title I of the Omnibus Crime Control and Safe Streets Act 
     of 1968 (42 U.S.C. 3793(a)(11)) is amended--
       (1) by amending subparagraph (A) to read as follows:
       ``(A) There are authorized to be appropriated to carry out 
     part Q, to remain available until expended--
       ``(i) $1,150,000,000 for fiscal year 2006;
       ``(ii) $1,150,000,000 for fiscal year 2007;
       ``(iii) $1,150,000,000 for fiscal year 2008;
       ``(iv) $1,150,000,000 for fiscal year 2009;
       ``(v) $1,150,000,000 for fiscal year 2010; and
       ``(vi) $1,150,000,000 for fiscal year 2011.''; and
       (2) in subparagraph (B)--
       (A) by striking ``3 percent'' and inserting ``5 percent'';
       (B) by striking ``1701(f)'' and inserting ``1701(g)'';
       (C) by striking the second sentence and inserting ``Of the 
     remaining funds, if there is a demand for 50 percent of 
     appropriated hiring funds, as determined by eligible hiring 
     applications from law enforcement agencies having 
     jurisdiction over areas with populations exceeding 150,000, 
     no less than 50 percent shall be allocated for grants 
     pursuant to applications submitted by units of local 
     government or law enforcement agencies having jurisdiction 
     over areas with populations exceeding 150,000 or by public 
     and private entities that serve areas with populations 
     exceeding 150,000, and no less than 50 percent shall be 
     allocated for grants pursuant to applications submitted by 
     units of local government or law enforcement agencies having 
     jurisdiction over areas with populations less than 150,000 or 
     by public and private entities that serve areas with 
     populations less than 150,000.'';

[[Page 365]]

       (D) by striking ``85 percent'' and inserting 
     ``$600,000,000''; and
       (E) by striking ``1701(b),'' and all that follows through 
     ``of part Q'' and inserting the following: ``1701 (b) and 
     (c), $350,000,000 to grants for the purposes specified in 
     section 1701(e), and $200,000,000 to grants for the purposes 
     specified in section 1701(f).''.

     SEC. 334. FIRST RESPONDERS ANTI-TERRORISM PARTNERSHIP.

       (a) Definitions.--In this section:
       (1) Indian tribe.--The term ``Indian tribe'' has the same 
     meaning as in section 4(e) of the Indian Self-Determination 
     and Education Assistance Act (25 U.S.C. 450b(e)).
       (2) Law enforcement officer.--The term ``law enforcement 
     officer'' means any officer, agent, or employee of a State, 
     unit of local government, public or private college or 
     university, or Indian tribe authorized by law or by a 
     government agency to engage in or supervise the prevention, 
     detection, or investigation of any violation of criminal law, 
     or authorized by law to supervise sentenced criminal 
     offenders.
       (3) Public safety officer.--The term ``public safety 
     officer'' means any person serving a public or private agency 
     with or without compensation as a law enforcement officer, as 
     a firefighter, or as a member of a rescue squad or ambulance 
     crew.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Homeland Security.
       (5) State.--The term ``State'' means each of the 50 States, 
     the District of Columbia, and the Commonwealth of Puerto 
     Rico.
       (6) Unit of local government.--The term ``unit of local 
     government'' means a county, municipality, town, township, 
     village, parish, borough, or other unit of general government 
     below the State level.
       (b) First Responders Partnership Grant Program for Public 
     Safety Officers.--
       (1) In general.--The Secretary is authorized to make grants 
     to States, units of local government, and Indian tribes to 
     support public safety officers in their efforts to protect 
     homeland security and prevent and respond to acts of 
     terrorism.
       (2) Use of funds.--Grants awarded under this section shall 
     be--
       (A) distributed directly to the State, unit of local 
     government, or Indian tribe; and
       (B) used to fund overtime expenses, equipment, training, 
     and facilities to support public safety officers in their 
     efforts to protect homeland security and prevent and respond 
     to acts of terrorism.
       (3) Allocation and distribution of funds.--
       (A) Set-aside for indian tribes.--
       (i) In general.--The Secretary shall reserve 1 percent of 
     the amount appropriated for grants pursuant to this section 
     to be used for grants to Indian tribes.
       (ii) Selection of indian tribes.--

       (I) In general.--The Secretary shall award grants under 
     this paragraph to Indian tribes on the basis of a competition 
     conducted pursuant to specific criteria.
       (II) Rulemaking.--The criteria under subclause (I) shall be 
     contained in a regulation promulgated by the Secretary after 
     notice and public comment.

       (B) Set-aside for rural states.--
       (i) In general.--The Secretary shall reserve 5 percent of 
     the amount appropriated for grants pursuant to this section 
     to be used for grants to rural States.
       (ii) Selection of rural states.--The Secretary shall award 
     grants under this subparagraph to rural States (as defined in 
     section 1501(b) of the Omnibus Crime Control and Safe Streets 
     Act of 1968 (42 U.S.C. 3796bb(b))).
       (C) Minimum amount.--The Secretary shall allocate, from the 
     total amount appropriated for grants to States under this 
     subsection--
       (i) not less than 0.75 percent for each State; and
       (ii) not less than 0.25 percent for American Samoa, Guam, 
     the Northern Mariana Islands, and the United States Virgin 
     Islands, respectively.
       (D) Allocation to metropolitan cities and urban counties.--
     The balance of the total amount appropriated for grants to 
     States under this subsection after allocations have been made 
     to Indian tribes, rural States, and the minimum amount to 
     each State pursuant to subparagraphs (A) through (C), shall 
     be allocated by the Secretary to metropolitan cities and 
     urban counties pursuant to subparagraphs (E) and (F).
       (E) Computation of amount allocated to metropolitan 
     cities.--
       (i) Computation ratios.--The Secretary shall determine the 
     amount to be allocated to each metropolitan city, which shall 
     bear the same ratio to the allocation for all metropolitan 
     cities as the weighted average of--

       (I) the population of the metropolitan city divided by the 
     population of all metropolitan cities;
       (II) the potential chemical security risk of the 
     metropolitan city divided by the potential chemical security 
     risk of all metropolitan cities;
       (III) the proximity of the metropolitan city to the nearest 
     operating nuclear power plant compared to the proximity of 
     all metropolitan cities to the nearest operating nuclear 
     power plant to each such city;
       (IV) the proximity of the metropolitan cities to the 
     nearest United States land or water port compared with the 
     proximity of all metropolitan cities to the nearest United 
     States land or water port to each such city;
       (V) the proximity of the metropolitan city to the nearest 
     international border compared with the proximity of all 
     metropolitan cities to the nearest international border to 
     each such city; and
       (VI) the proximity of the metropolitan city to the nearest 
     Disaster Medical Assistance Team (referred to in this 
     subsection as ``DMAT'') compared with the proximity of all 
     metropolitan cities to the nearest DMAT to each such city.

       (ii) Clarification of computation ratios.--

       (I) Relative weight of factor.--In determining the average 
     of the ratios under clause (i), the ratio involving 
     population shall constitute 50 percent of the formula in 
     calculating the allocation and the remaining factors shall be 
     equally weighted.
       (II) Potential chemical security risk.--If a metropolitan 
     city is within the vulnerable zone of a worst-case chemical 
     release (as specified in the most recent risk management 
     plans filed with the Environmental Protection Agency, or 
     another instrument developed by the Environmental Protection 
     Agency or the Homeland Security Department that captures the 
     same information for the same facilities), the ratio under 
     clause (i)(II) shall be 1 divided by the total number of 
     metropolitan cities that are within such a zone.
       (III) Proximity as it pertains to nuclear security.--If a 
     metropolitan city is located within 50 miles of an operating 
     nuclear power plant (as identified by the Nuclear Regulatory 
     Commission), the ratio under clause (i)(III) shall be 1 
     divided by the total number of metropolitan cities, not to 
     exceed 100, which are located within 50 miles of an operating 
     nuclear power plant.
       (IV) Proximity as it pertains to port security.--If a 
     metropolitan city is located within 50 miles of 1 of the 100 
     largest United States ports (as stated by the Department of 
     Transportation, Bureau of Transportation Statistics, United 
     States Port Report by All Land Modes), or within 50 miles of 
     1 of the 30 largest United States water ports by metric tons 
     and value (as stated by the Department of Transportation, 
     Maritime Administration, United States Foreign Waterborne 
     Transportation Statistics), the ratio under clause (i)(IV) 
     shall be 1 divided by the total number of metropolitan cities 
     that are located within 50 miles of a United States land or 
     water port.
       (V) Proximity to international border.--If a metropolitan 
     city is located within 50 miles of an international border, 
     the ratio under clause (i)(V) shall be 1 divided by the total 
     number of metropolitan cities that are located within 50 
     miles of an international border.
       (VI) Proximity to disaster medical assistance team.--If a 
     metropolitan city is located within 50 miles of a DMAT, as 
     organized by the National Disaster Medical System, the ratio 
     under clause (i)(VI) shall be 1 divided by the total number 
     of metropolitan cities that are located within 50 miles of a 
     DMAT.

       (F) Computation of amount allocated to urban counties.--
       (i) Computation ratios.--The Secretary shall determine the 
     amount to be allocated to each urban county, which shall bear 
     the same ratio to the allocation for all urban counties as 
     the weighted average of--

       (I) the population of the urban county divided by the 
     population of all urban counties;
       (II) the potential chemical security risk of the urban 
     county divided by the potential chemical security risk of all 
     urban counties;
       (III) the proximity of the urban county to the nearest 
     operating nuclear power plant compared to the proximity of 
     all urban counties to the nearest operating nuclear power 
     plant to each such county;
       (IV) the proximity of the urban counties to the nearest 
     United States land or water port compared with the proximity 
     of all urban counties to the nearest United States land or 
     water port to each such county;
       (V) the proximity of the urban county to the nearest 
     international border compared with the proximity of all urban 
     counties to the nearest international border to each such 
     county; and
       (VI) the proximity of the urban county to the nearest 
     Disaster Medical Assistance Team compared with the proximity 
     of all urban counties to the nearest DMAT to each such 
     county.

       (ii) Clarification of computation ratios.--

       (I) Relative weight of factor.--In determining the average 
     of the ratios under clause (i), the ratio involving 
     population shall constitute 50 percent of the formula in 
     calculating the allocation and the remaining factors shall be 
     equally weighted.
       (II) Potential chemical security risk.--If an urban county 
     is within the vulnerable zone of a worst-case chemical 
     release (as specified in the most recent risk management 
     plans filed with the Environmental Protection Agency, or 
     another instrument developed by the Environmental Protection 
     Agency or the Homeland Security Department that captures the 
     same information for the same facilities), the ratio under 
     clause (i)(II) shall be 1 divided by the total number of 
     urban counties that are within such a zone.

[[Page 366]]

       (III) Proximity as it pertains to nuclear security.--If an 
     urban county is located within 50 miles of an operating 
     nuclear power plant (as identified by the Nuclear Regulatory 
     Commission), the ratio under clause (i)(III) shall be 1 
     divided by the total number of urban counties, not to exceed 
     100, which are located within 50 miles of an operating 
     nuclear power plant.
       (IV) Proximity as it pertains to port security.--If an 
     urban county is located within 50 miles of 1 of the 100 
     largest United States ports (as stated by the Department of 
     Transportation, Bureau of Transportation Statistics, United 
     States Port Report by All Land Modes), or within 50 miles of 
     1 of the 30 largest United States water ports by metric tons 
     and value (as stated by the Department of Transportation, 
     Maritime Administration, United States Foreign Waterborne 
     Transportation Statistics), the ratio under clause (i)(IV) 
     shall be 1 divided by the total number of urban counties that 
     are located within 50 miles of a United States land or water 
     port.
       (V) Proximity to international border.--If an urban county 
     is located within 50 miles of an international border, the 
     ratio under clause (i)(V) shall be 1 divided by the total 
     number of urban counties that are located within 50 miles of 
     an international border.
       (VI) Proximity to disaster medical assistance team.--If an 
     urban county is located within 50 miles of a DMAT, as 
     organized by the National Disaster Medical System, the ratio 
     under clause (i)(VI) shall be 1 divided by the total number 
     of urban counties that are located within 50 miles of a DMAT.

       (G) Exclusions.--
       (i) In general.--In computing amounts or exclusions under 
     subparagraph (F) with respect to any urban county, units of 
     general local government located in the county shall be 
     excluded if the populations of such units are not counted to 
     determine the eligibility of the urban county to receive a 
     grant under this paragraph.
       (ii) Independent cities.--

       (I) In general.--In computing amounts under clause (i), 
     there shall be included any independent city (as defined by 
     the Bureau of the Census) which--

       (aa) is not part of any county;
       (bb) is not eligible for a grant;
       (cc) is contiguous to the urban county;
       (dd) has entered into cooperation agreements with the urban 
     county which provide that the urban county is to undertake or 
     to assist in the undertaking of essential community 
     development and housing assistance activities with respect to 
     such independent city; and
       (ee) is not included as a part of any other unit of general 
     local government for purposes of this section.

       (II) Limitation.--Any independent city that is included in 
     the computation under subclause (I) shall not be eligible to 
     receive assistance under this paragraph for the fiscal year 
     for which such computation is used to allocate such 
     assistance.

       (H) Inclusion.--
       (i) Local government straddling county line.--In computing 
     amounts or exclusions under subparagraph (F) with respect to 
     any urban county, all of the area of any unit of local 
     government shall be included, which is part of, but is not 
     located entirely within the boundaries of, such urban county 
     if--

       (I) the part of such unit of local government that is 
     within the boundaries of such urban county would otherwise be 
     included in computing the amount for such urban county under 
     this subsection; and
       (II) the part of such unit of local government that is not 
     within the boundaries of such urban county is not included as 
     a part of any other unit of local government for the purpose 
     of this subsection.

       (ii) Use of grant funds outside urban county.--Any amount 
     received under this section by an urban county described 
     under clause (i) may be used with respect to the part of such 
     unit of local government that is outside the boundaries of 
     such urban county.
       (I) Population.--
       (i) Effect of consolidation.--Where data are available, the 
     amount to be allocated to a metropolitan city that has been 
     formed by the consolidation of 1 or more metropolitan cities 
     within an urban county shall be equal to the sum of the 
     amounts that would have been allocated to the urban county or 
     cities and the balance of the consolidated government if such 
     consolidation had not occurred.
       (ii) Limitation.--Clause (i) shall apply only to a 
     consolidation that--

       (I) included all metropolitan cities that received grants 
     under this section for the fiscal year preceding such 
     consolidation and that were located within the urban county;
       (II) included the entire urban county that received a grant 
     under this section for the fiscal year preceding such 
     consolidation; and
       (III) took place on or after January 1, 2005.

       (iii) Growth rate.--The population growth rate of all 
     metropolitan cities defined in this section shall be based on 
     the population of metropolitan cities other than consolidated 
     governments the grant for which is determined under this 
     paragraph and cities that were metropolitan cities before 
     their incorporation into consolidated governments.
       (4) Maximum amount per grantee.--
       (A) In general.--A qualifying State, unit of local 
     government, or Indian tribe may not receive more than 5 
     percent of the total amount appropriated for grants under 
     this section.
       (B) Aggregate amount per state.--A State, together with the 
     grantees within the State, may not receive more than 20 
     percent of the total amount appropriated for grants under 
     this section.
       (5) Matching funds.--
       (A) In general.--The portion of the costs of a program 
     provided by a grant under paragraph (1) may not exceed 90 
     percent.
       (B) Waiver.--If the Secretary determines that a grantee is 
     experiencing fiscal hardship, the Secretary may waive, in 
     whole or in part, the matching requirement under subparagraph 
     (A).
       (C) Exception.--Any funds appropriated by Congress for the 
     activities of any agency of an Indian tribal government or 
     the Bureau of Indian Affairs performing law enforcement 
     functions on any Indian lands may be used to provide the non-
     Federal share of a matching requirement under subparagraph 
     (A).
       (c) Applications.--
       (1) In general.--To request a grant under this section, the 
     chief executive of a State, unit of local government, or 
     Indian tribe shall submit an application to the Secretary in 
     such form and containing such information as the Secretary 
     may reasonably require.
       (2) Regulations.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall promulgate 
     regulations to implement this subsection (including the 
     information that must be included and the requirements that 
     the States, units of local government, and Indian tribes must 
     meet) in submitting the applications required under this 
     subsection.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated $5,000,000,000 for fiscal year 2006 to 
     carry out this section.
                     TITLE IV--PROTECTING TAXPAYERS

     SEC. 401. REPORTS ON METRICS FOR MEASURING SUCCESS IN GLOBAL 
                   WAR ON TERRORISM.

       (a) Requirement for Reports.--The Comptroller General of 
     the United States shall submit to Congress reports on the 
     metrics for use in tracking and measuring acts of global 
     terrorism, international counterterrorism efforts, and the 
     success of United States counterterrorism policies and 
     practices including specific, replicable definitions, 
     criteria, and standards of measurement to be used for the 
     following:
       (A) Counting and categorizing acts of international 
     terrorism.
       (B) Monitoring counterterrorism efforts of foreign 
     governments.
       (C) Monitoring financial support provided to terrorist 
     groups.
       (D) Assessing the success of United States counterterrorism 
     policies and practices.
       (b) Schedule of Reports.--The Comptroller General shall 
     submit to Congress an initial report under subsection (a) not 
     later than 1 year after the date of enactment of this Act and 
     a second report not later than 1 year after the date on which 
     the initial report is submitted.

     SEC. 402. PROHIBITION ON WAR PROFITEERING.

       (a) Findings.--Congress makes the following findings:
       (1) War profiteering, the overcharging of taxpayers for any 
     good or service with the specific intent to excessively 
     profit from a conflict or reconstruction situation, not only 
     defrauds taxpayers in the United States, but also threatens 
     the safety of United States troops in harms way by hindering 
     reconstruction progress, damaging the credibility of the 
     United States, and wasting resources that could be used for 
     troop protection.
       (2) Laws prohibiting fraud protect against waste of tax 
     dollars within the United States, but no current fraud 
     statute expressly prohibits waste of tax dollars resulting 
     from war profiteering during conflicts in foreign countries.
       (3) War profiteers have hindered United States efforts to 
     secure and reconstruct Iraq. In its third quarterly report, 
     the Coalition Provisional Authority Inspector General 
     reported that, as of October 12, 2004, it had received a 
     total of 113 potential criminal cases.
       (4) In nine separate reports, the Defense Contract Audit 
     Agency, the Coalition Provisional Authority Inspector 
     General, and the Government Accountability Office have found 
     widespread, systematic abuses by the Halliburton Company and 
     its subsidiaries, including instances of overcharging worth 
     tens of millions of dollars, fraudulent accounting practices, 
     and kickbacks. Contracts awarded to Custer Battles, LLC, were 
     suspended by the Department of Defense after it uncovered 
     fraudulent billing practices including the establishment of 
     phantom off-shore corporations. Government investigators have 
     found contract irregularities, including lack of transparency 
     and poor accounting, in contracts awarded to other firms.
       (b) Prohibition of Profiteering.--
       (1) Prohibition.--
       (A) In general.--Chapter 47 of title 18, United States 
     Code, is amended by adding at the end the following new 
     section:

     ``Sec. 1038. War profiteering and fraud relating to military 
       action, relief, and reconstruction efforts

       ``(a) Prohibition.--

[[Page 367]]

       ``(1) In general.--Whoever, in any matter involving a 
     contract or the provision of goods or services, directly or 
     indirectly, in connection with the war, military action, or 
     relief or reconstruction activities, knowingly and 
     willfully--
       ``(A) executes or attempts to execute a scheme or artifice 
     to defraud the United States;
       ``(B) falsifies, conceals, or covers up by any trick, 
     scheme, or device a material fact;
       ``(C) makes any materially false, fictitious, or fraudulent 
     statements or representations, or makes or uses any 
     materially false writing or document knowing the same to 
     contain any materially false, fictitious, or fraudulent 
     statement or entry; or
       ``(D) materially overvalues any good or service with the 
     specific intent to excessively profit from the war, military 
     action, or relief or reconstruction activities;

     shall be fined under paragraph (2), imprisoned not more than 
     20 years, or both.
       ``(2) Fine.--A person convicted of an offense under 
     paragraph (1) may be fined the greater of--
       ``(A) $1,000,000; or
       ``(B) if such person derives profits or other proceeds from 
     the offense, not more than twice the gross profits or other 
     proceeds.
       ``(b) Extraterritorial Jurisdiction.--There is 
     extraterritorial Federal jurisdiction over an offense under 
     this section.
       ``(c) Venue.--A prosecution for an offense under this 
     section may be brought--
       ``(1) as authorized by chapter 211 of this title;
       ``(2) in any district where any act in furtherance of the 
     offense took place; or
       ``(3) in any district where any party to the contract or 
     provider of goods or services is located.''.
       (2) Table of sections.--The table of sections for chapter 
     47 of title 18, United States Code, is amended by adding at 
     the end the following:

``1038. War profiteering and fraud relating to military action, relief, 
              and reconstruction efforts.''.

       (c) Civil Forfeiture.--Section 981(a)(1)(C) of title 18, 
     United States Code, is amended by inserting ``1038,'' after 
     ``1032,''.
       (d) Criminal Forfeiture.--Section 982(a)(2)(B) of title 18, 
     United States Code, is amended by striking ``or 1030'' and 
     inserting ``1030, or 1038''.
       (e) Money Laundering.--Section 1956(c)(7)(D) of title 18, 
     United States Code, is amended by inserting ``section 1038 
     (relating to war profiteering and fraud relating to military 
     action, relief, and reconstruction efforts),'' after 
     ``liquidating agent of financial institution),''.
       (f) Relationship to Existing Law.--This section shall not 
     limit or repeal any additional authorities provided by law.
       (g) Effective Date of Amendments.--The amendments made by 
     this section shall be effective during the 7-year period 
     beginning on the date of enactment of this Act.
                                 ______
                                 
      By Mr. AKAKA (for himself, Mr. Reid, Ms. Mikulski, Ms. Stabenow, 
        Mr. Inouye, Mr. Dorgan, Mr. Lautenberg, Mr. Leahy, Mr. Salazar, 
        Mr. Rockefeller, Mrs. Murray, Mr. Bingaman, Mrs. Feinstein, Mr. 
        Durbin, Mr. Kennedy, Mr. Corzine, Mr. Pryor, Mr. Schumer, Mr. 
        Sarbanes, and Mr. Dayton):
  S. 13. A bill to amend titles 10 and 38, United States Code, to 
expand and enhance health care, mental health, transition, and 
disability benefits for veterans, and for other purposes; to the 
Committee on Veterans' Affairs.
  Mr. AKAKA. Mr. President, I rise today to introduce a bill that would 
make sweeping changes to the way the Department of Veterans Affairs 
(VA) delivers health care and benefits to our nation's veterans. S. 13 
would, among other things, guarantee full funding for VA health care, 
provide for full concurrent receipt, enhance mental health care 
services, and ease the transition from military service to civilian 
life.
  This bill would mean that the 115,000 veterans who choose to make 
Hawaii their home would be assured the services they have earned. The 
nearly 18,000 veterans who avail themselves of VA health care in 
Honolulu, Hawaii, Kauai, and Maui would not have to worry if resources 
for doctors and nurses will materialize next year.
  And because so many of our reservists and Guardsmen are being 
deployed for the current wars in Iraq and Afghanistan, this bill will 
help ensure they get the care they need upon their return.
  Every year the President sends forward his budget proposal to 
Congress, and every year we go through the same battles to get VA 
health care the money it needs to adequately serve its veteran 
patients. The time has come to approach this process more rationally. 
This legislation would ensure full funding for VA health care by simply 
changing the way funds are allocated. To be perfectly clear, this bill 
merely shifts money already being allocated over to a more reliable 
mechanism.
  The American Legion, the Disabled American Veterans, and the Veterans 
of Foreign Wars support this approach to fully fund the veterans health 
care system.
  These three organizations--representing more than 7 million military 
veterans--rightly believe that veterans have earned the right to VA 
medical care through their ``extraordinary sacrifices and service to 
this Nation.''
  We have seen huge numbers of veterans seeking VA care for the first 
time. I, for one, believe this is a good thing. Others rationalize that 
as we are at war, we must cut back on VA care. I simply do not 
understand this logic. We are at war, and therefore we must do 
everything we can to show our military that VA health care will be 
there for all veterans who served. To accomplish this goal, we must 
change the way VA health care is funded.
  Although we have continued to make progress on eliminating the long-
standing injustice that has affected our disabled retired veterans' 
retirement pay, we still have work to do.
  S. 13 will correct this unfairness by allowing all disabled military 
retirees to collect both their full military retired and VA disability 
pay concurrently.
  Most military retirees who have a service-connected disability are 
not permitted to collect both their retirement and disability benefits 
concurrently. Military retired pay is the promised reward for 20 or 
more years of uniformed service and is based on length of service. VA 
disability compensation is unrelated to length of service and is 
intended to compensate a veteran for a service-connected loss of 
function.
  In order to continue to recruit and retain quality soldiers, sailors, 
airmen and marines, we must pay attention not only to the present, but 
also to the future. George Washington said:

       The willingness with which our young people are likely to 
     serve in any war, no matter how justified, shall be directly 
     proportional to how they perceive the Veterans of earlier 
     wars were treated and appreciated by their nation.

  Our disabled military retirees deserve to receive the retirement pay 
that they earned and be compensated for their service-connected 
disabilities. Our young people will wear the uniforms of our Armed 
Forces only if they believe that their service is appreciated and 
compensated accordingly.
  Along those lines, S. 13 also seeks to ensure that veterans and 
returning service members can receive the mental health care they might 
need as a result of their service. The legislation requires that VA 
employ at least one psychiatrist and treatment team at each medical 
center that does not currently have one. This legislation would also 
mandate that VA carry out a community outreach program to let Operation 
Iraqi Freedom and Operation Enduring Freedom veterans know about the 
services available to them at VA.
  Why is good VA mental health care so important?
  Because so often battle wounds do not manifest in physical illness, 
but in quiet and equally debilitating mental illness. These wounds are 
revealed as post-traumatic stress disorder with effects that linger and 
symptoms that can be brought on years after combat.
  While hypertension and heart disease afflict vast numbers of 
veterans, mental illness is not far behind. It might surprise some of 
my colleagues to know that cancer and depression affect roughly the 
same number of veterans. But is VA reaching and treating all veterans 
who need care? This remains very much an open question.
  This legislation also seeks to improve access to needed prescription 
drugs. Many veterans have expressed their desire to bring prescriptions 
from their Medicare doctors to VA pharmacies to get them filled. 
Current VA policy requires that nearly all veterans see a VA doctor 
before such prescriptions are issued. This does not make sense.

[[Page 368]]

  The Department's inspector general testified that VA could see 
savings of $1 billion a year if veterans were allowed to bring their 
outside prescriptions, because it would obviate the need for VA to re 
diagnose patients and then re-issue prescriptions that have already 
been written. S. 13 would allow these veterans to get their 
prescriptions filled by VA at prices that are far better than in the 
private sector.
  This legislation also seeks to help veterans with their education. S. 
13 would exclude MGIB benefits from computation as income when 
calculating campus based aid, such as Perkins loans. This draws the 
distinction between a benefit that has been earned, and paid for, by 
the veterans, and other types of income. This allows the individual 
applying for financial aid to subtract $1,200 from the expected family 
contribution for 1 year. This $1,200 represents the money that the 
individual paid to participate in the MGIB program.
  S. 13 also offers an opportunity for enrollment in the MGIB education 
program for servicemembers who participated in or were eligible to 
participate in the post-Vietnam era educational assistance program, 
known as VEAP. This bill would create a 1-year window and requires the 
individual to pay $2,700, which was the VEAP contribution.
  Last year, Congress extended the period of eligibility for education 
benefits for survivors of servicemembers who were killed during active 
duty. We would like to further extend this delimiting date for veterans 
and other dependents. The 10-year period of eligibility would not begin 
to toll until they began to use the benefit, rather than when they 
became eligible for the benefit.
  Overall, this is a bill to spur dialogue started on the issues that 
are truly important to our Nation's veterans.
  We all need to work harder towards the goal of seeing that the 
promises made to the men and women who are serving today are met; that 
their sacrifices were not in vain.
  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. 13

       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 ``Fulfilling Our Duty to 
     America's Veterans Act of 2005''.

                      TITLE I--HEALTH CARE MATTERS

     SEC. 100. FINDINGS.

       Congress makes the following findings:
       (1) The three largest veterans advocacy groups, the 
     Disabled American Veterans, the American Legion, and the 
     Veterans of Foreign Wars, have called upon Congress to change 
     veterans funding to a mandatory process, stating, ``We 
     believe it is time to guarantee health care funding for all 
     veterans. We believe health care rationing must end. We 
     believe it is time the promise is kept.''.
       (2) The May 2003 report of The President's Task Force To 
     Improve Health Care Delivery For Our Nation's Veterans found 
     that ``there is a significant mismatch in VA between demand 
     and available funding--an imbalance that . . . if unresolved, 
     will delay veterans' access to care and could threaten the 
     quality of VA health care.''.
       (3) Under the current funding process, the VA has 
     experienced billion-dollar shortfalls every year for the past 
     several years, resulting in waiting lists several months long 
     for appointments with physicians, a substantial disability 
     claims backlog, and policies designed to prevent veterans 
     from obtaining the health care they were promised.

                      Subtitle A--Funding Matters

     SEC. 101. FUNDING TO ADDRESS CHANGES IN POPULATION AND 
                   INFLATION.

       (a) In General.--Chapter 17 of title 38, United States 
     Code, is amended by inserting after section 1706 the 
     following new section:

     ``Sec. 1706A. Management of health care: funding to address 
       changes in population and inflation

       ``(a) By the enactment of this section, Congress and the 
     President intend to ensure access to health care for all 
     veterans. Upon the enactment of this section, funding for the 
     programs, functions, and activities of the Veterans Health 
     Administration specified in subsection (d) to accomplish this 
     objective shall be provided through a combination of 
     discretionary and mandatory funds. The discretionary amount 
     should be equal to the fiscal year 2005 discretionary funding 
     for such programs, functions, and activities, and should 
     remain unchanged each fiscal year thereafter. The annual 
     level of mandatory amount shall be adjusted according to the 
     formula specified in subsection (c). While this section does 
     not purport to control the outcome of the annual 
     appropriations process, it anticipates cooperation from 
     Congress and the President in sustaining discretionary 
     funding for such programs, functions, and activities in 
     future fiscal years at the level of discretionary funding for 
     such programs, functions, and activities for fiscal year 
     2005. The success of that arrangement, as well as of the 
     funding formula, are to be reviewed after two years.
       ``(b) On the first day of each fiscal year, the Secretary 
     of the Treasury shall make available to the Secretary of 
     Veterans Affairs the amount determined under subsection (c) 
     with respect to that fiscal year. Each such amount is 
     available, without fiscal year limitation, for the programs, 
     functions, and activities of the Veterans Health 
     Administration specified in subsection (d). There is hereby 
     appropriated, out of any sums in the Treasury not otherwise 
     appropriated, amounts necessary to implement this section.
       ``(c)(1) The amount applicable to fiscal year 2006 under 
     this subsection is the amount equal to--
       ``(A) 130 percent of the amount obligated by the Department 
     during fiscal year 2004 for the purposes specified in 
     subsection (d); minus
       ``(B) the amount appropriated for those purposes for fiscal 
     year 2005.
       ``(2) The amount applicable to any fiscal year after fiscal 
     year 2006 under this subsection is the amount equal to the 
     product of the following, minus the amount appropriated for 
     the purposes specified for subsection (d) for fiscal year 
     2005:
       ``(A) The sum of--
       ``(i) the number of veterans enrolled in the Department 
     health care system under section 1705 of this title as of 
     July 1 preceding the beginning of such fiscal year; and
       ``(ii) the number of persons eligible for health care under 
     chapter 17 of this title who are not covered by clause (i) 
     and who were provided hospital care or medical services under 
     such chapter at any time during the fiscal year preceding 
     such fiscal year.
       ``(B) The per capita baseline amount, as increased from 
     time to time pursuant to paragraph (3)(B).
       ``(3)(A) For purposes of paragraph (2)(B), the term `per 
     capita baseline amount' means the amount equal to--
       ``(i) the amount obligated by the Department during fiscal 
     year 2005 for the purposes specified in subsection (d); 
     divided by
       ``(ii) the number of veterans enrolled in the Department 
     health care system under section 1705 of this title as of 
     September 30, 2004.
       ``(B) With respect to any fiscal year, the Secretary shall 
     provide a percentage increase (rounded to the nearest dollar) 
     in the per capita baseline amount equal to the percentage by 
     which--
       ``(i) the Consumer Price Index (all Urban Consumers, United 
     States City Average, Hospital and related services, 
     Seasonally Adjusted), published by the Bureau of Labor 
     Statistics of the Department of Labor for the 12-month period 
     ending on the June 30 preceding the beginning of the fiscal 
     year for which the increase is made; exceeds
       ``(ii) such Consumer Price Index for the 12-month period 
     preceding the 12-month period described in clause (i).
       ``(d)(1) Except as provided in paragraph (2), the purposes 
     for which amounts are made available pursuant to subsection 
     (b) shall be all programs, functions, and activities of the 
     Veterans Health Administration.
       ``(2) Amounts made available pursuant to subsection (b) are 
     not available for--
       ``(A) construction, acquisition, or alteration of medical 
     facilities as provided in subchapter I of chapter 81 of this 
     title (other than for such repairs as were provided for 
     before the date of the enactment of this section through the 
     Medical Care appropriation for the Department); or
       ``(B) grants under subchapter III of chapter 81 of this 
     title.
       ``(e) Nothing in this section shall be construed to prevent 
     or limit the authority of Congress to reauthorize provisions 
     relating to veterans health care.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by adding at the end the 
     following new item:

``1706A. Management of health care: funding to address changes in 
              population and inflation.''.

     SEC. 102. COMPTROLLER GENERAL REPORT.

       (a) Requirement for Report.--Not later than January 31, 
     2008, the Comptroller General of the United States shall 
     submit to Congress a report on the extent to which section 
     1706A of title 38, United States Code (as added by section 
     101 of this Act), has achieved the objective set forth in 
     subsection (a) of such section 1706A during fiscal years 2006 
     and 2007.
       (b) Content.--The report under subsection (a) shall set 
     forth the following:
       (1) The amount appropriated for fiscal year 2005 for the 
     programs, functions, and activities of the Veterans Health 
     Administration

[[Page 369]]

     specified in subsection (d) of section 1706A of title 38, 
     United States Code (as so added).
       (2) The amount appropriated by annual appropriations Acts 
     for each of fiscal years 2006 and 2007 for such programs, 
     functions, and activities.
       (3) The amount provided by section 1706A of title 38, 
     United States Code (as so added), for each of fiscal years 
     2006 and 2007 for such programs, functions, and activities.
       (4) An assessment whether the amount described in paragraph 
     (3) for each of fiscal years 2006 and 2007 was appropriate to 
     address the changes in costs to the Veterans Health 
     Administration for such programs, functions, and activities 
     that were attributable to changes in population and in 
     inflation over the course of such fiscal years.
       (5) An assessment whether the amount provided by section 
     1706A of title 38, United States Code (as so added), in each 
     of fiscal years 2006 and 2007, when combined with amounts 
     appropriated by annual appropriations Acts for each of such 
     fiscal years for such programs, functions, and activities, 
     provided adequate funding of such programs, functions, and 
     activities in each such fiscal year.
       (6) Such recommendations as the Comptroller General 
     considers appropriate regarding modifications of the formula 
     under subsection (c) of section 1706A of title 38, United 
     States Code (as so added), or any other modifications of law, 
     to better ensure adequate funding of such programs, 
     functions, and activities.

     SEC. 103. CONGRESSIONAL CONSIDERATION OF COMPTROLLER GENERAL 
                   RECOMMENDATIONS.

       (a) Applicable Procedure.--The procedure provided under 
     this section shall apply to consideration of a joint 
     resolution described in subsection (b) in the Senate and the 
     House of Representatives.
       (b) Joint Resolution Defined.--For purposes of this 
     section, the term ``joint resolution'' means only a joint 
     resolution that is introduced in the House of Representatives 
     by the Speaker of the House of Representatives (or the 
     Speaker's designee) or the Minority Leader (or the Minority 
     Leader's designee), or in the Senate by the Majority Leader 
     (or the Majority Leader's designee) or the Minority Leader 
     (or the Minority Leader's designee), within the 10-day period 
     beginning on the date on which Congress receives the report 
     of the Comptroller General of the United States under section 
     102, and--
       (1) that does not have a preamble;
       (2) the matter after the resolving clause of which consists 
     of amendments of title 38, United States Code, or other 
     amendments or modifications of laws administered by the 
     Secretary of Veterans Affairs to implement the 
     recommendations of the Comptroller General in the report 
     under section 102(b)(6); and
       (3) the title of which is as follows: ``Joint resolution to 
     ensure adequate funding of health care for veterans.''.
       (c) Referral.--A joint resolution described in subsection 
     (b) that is introduced in the House of Representatives shall 
     be referred to the Committee on Veterans' Affairs of the 
     House of Representatives. A joint resolution described in 
     subsection (b) introduced in the Senate shall be referred to 
     the Committee on Veterans' Affairs of the Senate.
       (d) Discharge.--If the committee to which a joint 
     resolution described in subsection (b) is referred has not 
     reported such resolution (or an identical resolution) by the 
     end of the 20-day period beginning on the date on which the 
     Comptroller General submits to Congress the report under 
     section 102, such committee shall be, at the end of such 
     period, discharged from further consideration of such 
     resolution, and such resolution shall be placed on the 
     appropriate calendar of the House involved.
       (e) Consideration.--
       (1) Motion to proceed to consideration.--On or after the 
     third day after the date on which the committee to which such 
     a joint resolution is referred has reported, or has been 
     discharged (under subsection (d)) from further consideration 
     of, such a resolution, it is in order (even though a previous 
     motion to the same effect has been disagreed to) for any 
     Member of the respective House to move to proceed to the 
     consideration of the resolution (but only on the day after 
     the calendar day on which such Member announces to the House 
     concerned the Member's intention to do so). The motion is 
     highly privileged in the House of Representatives and is 
     privileged in the Senate and is not debatable. The motion is 
     not subject to amendment, or to a motion to postpone, or to a 
     motion to proceed to the consideration of other business. A 
     motion to reconsider the vote by which the motion is agreed 
     to or disagreed to shall not be in order. If a motion to 
     proceed to the consideration of the resolution is agreed to, 
     the respective House shall immediately proceed to 
     consideration of the joint resolution without intervening 
     motion, order, or other business, and the resolution shall 
     remain the unfinished business of the respective House until 
     disposed of.
       (2) Debate.--Debate on the resolution, and on all debatable 
     motions and appeals in connection therewith, shall be limited 
     to not more than 2 hours, which shall be divided equally 
     between those favoring and those opposing the resolution. An 
     amendment to the resolution is not in order. A motion further 
     to limit debate is in order and not debatable. A motion to 
     postpone, or a motion to proceed to the consideration of 
     other business, or a motion to recommit the resolution is not 
     in order. A motion to reconsider the vote by which the 
     resolution is agreed to or disagreed to is not in order.
       (3) Vote on final passage.--Immediately following the 
     conclusion of the debate on a joint resolution described in 
     subsection (b) and a single quorum call at the conclusion of 
     the debate if requested in accordance with the rules of the 
     appropriate House, the vote on final passage of the 
     resolution shall occur.
       (4) Appeals from decisions of the chair.--Appeals from the 
     decisions of the Chair relating to the application of the 
     rules of the Senate or the House of Representatives, as the 
     case may be, to the procedure relating to a joint resolution 
     described in subsection (b) shall be decided without debate.
       (f) Consideration by Other House.--
       (1) Procedure.--If, before the passage by one House of a 
     joint resolution of that House described in subsection (b), 
     that House receives from the other House a joint resolution 
     described in subsection (b), then the following procedures 
     shall apply:
       (A) The resolution of the other House shall not be referred 
     to a committee and may not be considered in the House 
     receiving it except in the case of final passage as provided 
     in subparagraph (B)(ii).
       (B) With respect to a joint resolution described in 
     subsection (b) of the House receiving the resolution--
       (i) the procedure in that House shall be the same as if no 
     resolution had been received from the other House; but
       (ii) the vote on final passage shall be on the resolution 
     of the other House.
       (2) Disposition.--Upon disposition of the resolution 
     received from the other House, it shall no longer be in order 
     to consider the resolution that originated in the receiving 
     House.
       (g) Rules of Senate and House.--This section is enacted by 
     Congress--
       (1) as an exercise of the rulemaking power of the Senate 
     and House of Representatives, respectively, and as such it is 
     deemed a part of the rules of each House, respectively, but 
     applicable only with respect to the procedure to be followed 
     in that House in the case of a joint resolution described in 
     subsection (b), and it supersedes other rules only to the 
     extent that it is inconsistent with such rules; and
       (2) with full recognition of the constitutional right of 
     either House to change the rules (so far as relating to the 
     procedure of that House) at any time, in the same manner, and 
     to the same extent as in the case of any other rule of that 
     House.

                   Subtitle B--Mental Health Matters

     SEC. 111. FINDINGS.

       Congress makes the following findings:
       (1) A study published in the New England Journal of 
     Medicine reported that about one in six soldiers of the Iraq 
     war displays symptoms of post-traumatic stress disorder.
       (2) Clinical experts are anticipating an increase in the 
     number of post-traumatic stress disorder cases in light of 
     the increasing duration of military deployment.
       (3) 86 of 163 Department of Veterans Affairs Medical 
     Centers have post-traumatic stress disorder treatment 
     programs.
       (4) Section 1706 of title 38, United States Code, requires 
     that the Secretary of Veterans Affairs ensure, in accordance 
     with that section, that the Department of Veterans Affairs 
     maintains its capacity to provide for the specialized 
     treatment and rehabilitative needs of disabled veterans 
     within distinct programs or facilities of the Department.

     SEC. 112. POST-TRAUMATIC STRESS DISORDER TREATMENT FOR 
                   VETERANS OF SERVICE IN AFGHANISTAN AND IRAQ AND 
                   THE WAR ON TERROR.

       (a) Enhanced Capacity for Department of Veterans Affairs.--
     Using funds available to the Secretary of Veterans Affairs 
     for fiscal year 2006 for ``Medical Care'', the Secretary 
     shall employ at least one psychiatrist and a complementary 
     clinical team at each medical center of the Department of 
     Veterans Affairs in order to conduct a specialized program 
     for the diagnosis and treatment of post-traumatic stress 
     disorder and to employ additional mental health services 
     specialists at the medical center.
       (b) Outreach at the Community Level.--
       (1) Program.--The Secretary of Veterans Affairs shall, 
     within the authorities of the Secretary under title 38, 
     United States Code, carry out a program to provide outreach 
     at the community level to veterans who participated in 
     Operation Iraqi Freedom or Operation Enduring Freedom who are 
     or may be suffering from post-traumatic stress disorder.
       (2) Program sites.--The program shall be carried out on a 
     nation-wide basis through facilities of the Department of 
     Veterans Affairs.
       (3) Program content.--The program shall provide for 
     individualized case management to be conducted on a one-on-
     one basis, counseling, education, and group therapy to help 
     participants cope with post-traumatic stress disorder. The 
     program--

[[Page 370]]

       (A) shall emphasize early identification of veterans who 
     may be experiencing symptoms of post-traumatic stress 
     disorder; and
       (B) shall include group-oriented, peer-to-peer settings for 
     treatment.

     SEC. 113. ARMED FORCES REVIEW OF MENTAL HEALTH PROGRAMS.

       (a) Review of Mental Health Programs.--The Secretary of 
     each military department shall conduct a comprehensive review 
     of the mental health care programs of the Armed Forces under 
     the jurisdiction of that Secretary in order to determine ways 
     to improve the efficacy of such care, including a review of 
     joint Department of Defense and Department of Veterans 
     Affairs clinical guidelines to ensure a seamless delivery of 
     care during transitions from active duty or reserve status to 
     civilian life.
       (b) Report to Congress.--The Secretary of Defense shall 
     submit to Congress a report setting forth the results of such 
     review not later than 90 days after the date of the enactment 
     of this Act.

                       Subtitle C--Other Matters

     SEC. 121. AUTHORITY OF DEPARTMENT OF VETERANS AFFAIRS 
                   PHARMACIES TO DISPENSE MEDICATIONS TO VETERANS 
                   ON PRESCRIPTIONS WRITTEN BY PRIVATE 
                   PRACTITIONERS.

       (a) Findings.--Congress makes the following findings:
       (1) Under longstanding regulations of the Department of 
     Veterans Affairs, most veterans who receive prescriptions for 
     medication from private doctors are forced to complete 
     physicals conducted by Department of Veterans Affairs 
     physicians before the veterans can have their prescriptions 
     filled by a pharmacy. This bureaucratic red tape can prevent 
     veterans from quickly receiving the medical treatment they 
     need.
       (2) In December 2000, the Inspector General of the 
     Department of Veterans Affairs reported that eliminating this 
     unnecessary red tape would save the underfunded Department of 
     Veterans Affairs over $1,000,000,000 per year. The report 
     concluded that ``a decision to continue the current policies 
     results in inefficiency and waste that we estimate annually 
     costs the Department over $1,000,000,000 in resources that 
     could be better used in the delivery of healthcare services 
     to veterans.''.
       (3) In 2004, the Department of Justice, in a reversal of an 
     earlier legal opinion, stating that the Secretary of Veterans 
     Affairs has the authority to eliminate this rule without 
     further legislative action. The Secretary has failed to take 
     such a step, thus necessitating action by Congress.
       (b) Authority.--Section 1712 of title 38, United States 
     Code, is amended--
       (1) by redesignating subsection (e) as subsection (f); and
       (2) by inserting after subsection (d) the following new 
     subsection (e):
       ``(e)(1) The Secretary shall furnish to any medicare-
     eligible veteran on an out-patient basis such drugs and 
     medicines as may be ordered on prescription of a duly 
     licensed physician as specific therapy in the treatment of 
     any illness or injury suffered by such veteran.
       ``(2) In this subsection, the term `medicare-eligible 
     veteran' means any veteran who--
       ``(A) is entitled to or enrolled in hospital insurance 
     benefits under part A of title XVIII of the Social Security 
     Act (42 U.S.C. 1395 et seq.); or
       ``(B) is enrolled in the supplementary medical insurance 
     program under part B of such title (42 U.S.C. 1395j et seq.).
       ``(3) The furnishing of drugs and medicines under this 
     subsection shall be subject to the provisions of section 
     1722A(b) of this title.''.
       (c) Copayment Requirements.--
       (1) In general.--Section 1722A of such title is amended--
       (A) in subsection (a)(1), by inserting ``(other than a 
     veteran covered by subsection (b))'' after ``require a 
     veteran'';
       (B) by redesignating subsections (b) and (c) as subsections 
     (c) and (d), respectively;
       (C) by inserting after subsection (a) the following new 
     subsection (b):
       ``(b)(1) In the case of a veteran who is furnished 
     medications on an out-patient basis under section 1712(e) of 
     this title, the Secretary shall require the veteran to pay, 
     at the election of the Secretary, one or more of the 
     following:
       ``(A) An annual enrollment fee in an amount determined 
     appropriate by the Secretary.
       ``(B) A copayment for each 30-day supply of such 
     medications in an amount determined appropriate by the 
     Secretary.
       ``(C) An amount equal to the cost to the Secretary of such 
     medications, as determined by the Secretary.
       ``(2)(A) In determining the amounts to be paid by a veteran 
     under paragraph (1), and the basis of payment under one or 
     more subparagraphs of that paragraph, the Secretary shall 
     ensure that the total amount paid by veterans for medications 
     under that paragraph in a year is not less than the costs of 
     the Department in furnishing medications to veterans under 
     section 1712(e) of this title during that year, including the 
     cost of purchasing and furnishing medications, and other 
     costs of administering that section.
       ``(B) The Secretary shall take appropriate actions to 
     ensure, to the maximum extent practicable, that amounts paid 
     by veterans under paragraph (1) in a year are equal to the 
     costs of the Department referred to in subparagraph (A) in 
     that year.
       ``(3) In determining amounts under paragraph (1), the 
     Secretary may take into account the following:
       ``(A) Whether or not the medications furnished are generic 
     medications or brand name medications.
       ``(B) Whether or not the medications are furnished by mail.
       ``(C) Whether or not the medications furnished are listed 
     on the National Prescription Drug Formulary of the 
     Department.
       ``(D) Any other matters the Secretary considers 
     appropriate.
       ``(4) The Secretary may from time to time adjust any amount 
     determined by the Secretary under paragraph (1), as 
     previously adjusted under this paragraph, in order to meet 
     the purpose specified in paragraph (2).''; and
       (D) in subsection (d), as so redesignated--
       (i) by striking ``subsection (a)'' and inserting 
     ``subsections (a) and (b)''; and
       (ii) by striking ``subsection (b)'' and inserting 
     ``subsection (c)''.
       (2) Deposit of collections in medical care collections 
     fund.--Paragraph (4) of section 1729A(b) of such title is 
     amended to read as follows:
       ``(4) Subsection (a) or (b) of section 1722A of this 
     title.''.
       (d) Clerical Amendments.--(1) The heading for section 1712 
     of such title is amended by striking ``for certain disabled 
     veterans''.
       (2) The table of sections at the beginning of chapter 17 of 
     such title is amended in the item relating to section 1712 by 
     striking ``for certain disabled veterans''.

   TITLE II--CONCURRENT RECEIPT OF RETIRED PAY AND SERVICE-CONNECTED 
                        DISABILITY COMPENSATION

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Retired Pay Restoration 
     Act of 2005''.

     SEC. 202. FINDINGS.

       Congress makes the following findings:
       (1) The United States Government has an essential 
     obligation to provide support and care for men and women who 
     have completed honorable military service in defense of the 
     Nation. In no instance is this obligation more critical than 
     for veterans who were injured or disabled during their 
     military service.
       (2) Disability compensation and military retired pay are 
     benefits earned for two distinct reasons. Disability 
     compensation is provided to veterans for disabilities 
     resulting from their military service to the Nation as an 
     expression of the Nation's gratitude and as recompense for 
     their sacrifice. Military retired pay is earned by members of 
     the Armed Forces for the devotion of 20 or more years of 
     their lives to the military service of the Nation.
       (3) Until 2002, Federal law prohibited disabled veterans 
     from concurrently receiving both disability compensation and 
     retirement pay. The prohibition against concurrent receipt 
     was a gross violation of the Government's commitment to 
     veterans.
       (4) Despite recent legislative advances, over 1,500,000 
     disabled veterans continue to be prohibited from receiving 
     both military retirement and disability payments 
     concurrently.

     SEC. 203. FULL PAYMENT OF BOTH RETIRED PAY AND COMPENSATION 
                   TO DISABLED MILITARY RETIREES.

       (a) Restoration of Full Retired Pay Benefits.--Section 1414 
     of title 10, United States Code, is amended to read as 
     follows:

     ``Sec. 1414. Members eligible for retired pay who are also 
       eligible for veterans' disability compensation: payment of 
       retired pay and veterans' disability compensation

       ``(a) Payment of Both Retired Pay and Compensation.--Except 
     as provided in subsection (b), a member or former member of 
     the uniformed services who is entitled to retired pay (other 
     than as specified in subsection (c)) and who is also entitled 
     to veterans' disability compensation is entitled to be paid 
     both without regard to sections 5304 and 5305 of title 38.
       ``(b) Special Rule for Chapter 61 Career Retirees.--The 
     retired pay of a member retired under chapter 61 of this 
     title with 20 years or more of service otherwise creditable 
     under section 1405 of this title at the time of the member's 
     retirement is subject to reduction under sections 5304 and 
     5305 of title 38, but only to the extent that the amount of 
     the member's retired pay under chapter 61 of this title 
     exceeds the amount of retired pay to which the member would 
     have been entitled under any other provision of law based 
     upon the member's service in the uniformed services if the 
     member had not been retired under chapter 61 of this title.
       ``(c) Exception.--Subsection (a) does not apply to a member 
     retired under chapter 61 of this title with less than 20 
     years of service otherwise creditable under section 1405 of 
     this title at the time of the member's retirement.
       ``(d) Definitions.--In this section:
       ``(1) The term `retired pay' includes retainer pay, 
     emergency officers' retirement pay, and naval pension.
       ``(2) The term `veterans' disability compensation' has the 
     meaning given the term `compensation' in section 101(13) of 
     title 38.''.
       (b) Repeal of Combat-Related Special Compensation 
     Program.--Section 1413a of such title is repealed.
       (c) Clerical Amendment.--The table of sections at the 
     beginning of chapter 71 of

[[Page 371]]

     such title is amended by striking the items relating to 
     sections 1413a and 1414 and inserting the following:

``1414. Members eligible for retired pay who are also eligible for 
              veterans' disability compensation: payment of retired pay 
              and veterans' disability compensation.''.

     SEC. 204. EFFECTIVE DATE; PROHIBITION ON RETROACTIVE 
                   BENEFITS.

       (a) In General.--The amendments made by section 202 shall 
     take effect on--
       (1) the first day of the first month that begins after the 
     date of the enactment of this Act; or
       (2) the first day of the fiscal year that begins in the 
     calendar year in which this Act is enacted, if later than the 
     date specified in paragraph (1).
       (b) Retroactive Benefits.--No benefits may be paid to any 
     person by reason of section 1414 of title 10, United States 
     Code, as amended by section 202(a), for any period before the 
     effective date applicable under subsection (a).

TITLE III--SEAMLESS TRANSITION FROM MILITARY SERVICE TO VETERANS STATUS

     SEC. 301. FINDINGS.

       Congress makes the following findings:
       (1) In its final report, the President's Task Force To 
     Improve Health Care Delivery For Our Nation's Veterans found 
     that ``. . . increased collaboration between the Departments 
     [of Defense and Veterans Affairs] for the transfer of 
     personnel and health information is needed. Within VA, 
     broader sharing of the information received from the DOD and 
     individual veterans is required so that veterans are not met 
     at every turn with the question, `Who are you and what do you 
     want?' A `seamless transition' from military service to 
     veteran status is especially critical in the context of 
     health care, where readily available, accurate, and current 
     medical information must be accessible to health care 
     providers''.
       (2) The Task Force put forward a series of seven 
     recommendations designed to create a seamless transition from 
     military service to veteran status. Nearly two years after 
     the submittal of its final report, few of the recommendations 
     have been adopted.
       (3) Leading nonpartisan veterans' advocates, including the 
     American Legion, Veterans of Foreign Wars, Disabled American 
     Veterans, and the Military Officers Association of America, 
     support the adoption of the recommendations made by the Task 
     Force to create a seamless transition from military service 
     to veteran status.

     SEC. 302. REPORT ON DEVELOPMENT OF INTEROPERABLE ELECTRONIC 
                   MEDICAL RECORDS.

       Not later than 60 days after the date of the enactment of 
     this Act, the Secretary of Defense and the Secretary of 
     Veterans Affairs shall jointly submit to Congress a report on 
     the status of the development of interoperable electronic 
     medical records for members of the Armed Forces and veterans 
     that are utilizable by both the Department of Defense and the 
     Department of Veterans Affairs.

     SEC. 303. EXCHANGE OF MEDICAL RECORDS FOR SEAMLESS TRANSITION 
                   IN THE PROVISION OF HEALTHCARE SERVICES.

       The Secretary of Health and Human Services shall modify 
     section 164.512(k)(1) of title 45, Code of Federal 
     Regulations, to provide that the Department of Defense and 
     the Department of Veterans Affairs may exchange protected 
     health information of members of the Armed Forces and 
     veterans in a manner that, as determined jointly by the 
     Secretary of Health and Human Services, the Secretary of 
     Defense, and the Secretary of Veterans Affairs, facilitates a 
     seamless transition between the provision of health care 
     services by the Department of Defense to members of the Armed 
     Forces and the provision of health care services by the 
     Department of Veterans Affairs to veterans who require such 
     services after their separation or retirement from the Armed 
     Forces.

     SEC. 304. ENHANCEMENT OF PRESEPARATION PHYSICAL EXAMINATION 
                   REQUIREMENTS.

       Section 1145 of title 10, United States Code, is amended--
       (1) in subsection (a), by striking paragraph (4);
       (2) by redesignating subsections (d) and (e) as subsections 
     (e) and (f), respectively; and
       (3) by inserting after subsection (c) the following new 
     subsection (d):
       ``(d) Preseparation Physical.--(1) The Secretary concerned 
     shall require a member of the armed forces to be separated 
     from active duty to undergo a physical examination before 
     that separation.
       ``(2) The physical examination of a member under this 
     subsection shall be conducted before the member receives 
     preseparation counseling under section 1142 of this title.
       ``(3)(A) The physical examinations conducted under this 
     subsection shall be comprehensive and, to the maximum extent 
     practicable, uniform throughout the armed forces.
       ``(B) The purpose of a physical examination conducted for a 
     member under this subsection shall be--
       ``(i) to determine the immediate health care needs, if any, 
     of the member as of separation and the ongoing health care 
     needs, if any, of the member after separation; and
       ``(ii) to identify any illness, injury, or other medical 
     conditions that may make the member eligible for benefits as 
     a veteran under the laws administered by the Secretary of 
     Veterans Affairs.
       ``(C) The Secretary of Defense shall prescribe in 
     regulations the requirements for physical examinations 
     conducted under this subsection.
       ``(4) The results of the physical examination of a member 
     under this subsection shall be included on the Form DD214 of 
     the member (or any successor form).
       ``(5) The Secretary concerned shall transmit in electronic 
     form to the Secretary of Veterans Affairs the results of each 
     physical examination conducted by such Secretary under this 
     subsection.''.

     SEC. 305. ENHANCEMENT OF PRESEPARATION COUNSELING 
                   REQUIREMENTS.

       Section 1142(b) of title 10, United States Code, is 
     amended--
       (1) by redesignating paragraphs (3) through (10) as 
     paragraphs (4) through (11), respectively; and
       (2) by striking paragraph (2) and inserting the following 
     new paragraphs:
       ``(2) A description (to be developed with the assistance of 
     the Secretary of Veterans Affairs) of the health care and 
     other benefits to which the member may be entitled under the 
     laws administered by the Secretary of Veterans Affairs, 
     including compensation and vocational rehabilitation benefits 
     in the case of a member being medically separated or being 
     retired under chapter 61 of this title, which shall be taken 
     into account the preseperation physical examination of the 
     member conducted under section 1145(d) of this title.
       ``(3) In the case of a member who, as determined pursuant 
     to the preseperation physical examination conducted under 
     section 145(d) of this title, may be entitled to compensation 
     or pensions benefits under the laws administered by the 
     Secretary of Veterans Affairs, a referral (to be provided 
     with the assistance of the Secretary of Veterans Affairs) for 
     a compensation and pension examination by the Secretary of 
     Veterans Affairs.''.

     SEC. 306. EPIDEMIOLOGICAL STUDIES.

       (a) In General.--The Secretary of Defense and the Secretary 
     of Veterans Affairs may, during the five-year period 
     beginning on October 1, 2005, jointly carry out such 
     epidemioligical studies relating to veterans' health 
     conditions that develop as a result of occupational exposure 
     during military service as such Secretaries consider 
     appropriate.
       (b) Funding.--
       (1) Department of defense.--Of the amount authorized to be 
     appropriated for fiscal year 2006 for the Department of 
     Defense for the Defense Health Program, $2,500,000 shall be 
     available for the epidemiological studies authorized by 
     subsection (a).
       (2) Department of veterans affairs.--Of the amount 
     appropriated for fiscal year 2006 for the Department of 
     Veterans Affairs for Medical Care, $2,500,000 shall be 
     available for the epidemiological studies authorized by 
     subsection (a).
       (3) Availability.--Amounts available under this subsection 
     shall be available without fiscal year limitation.

     SEC. 307. INFORMATION SHARING.

       (a) In General.--The Secretary of Defense and the Secretary 
     of Veterans Affairs shall jointly develop protocols to 
     facilitate the sharing of information between the Department 
     of Defense and the Department of Veterans Affairs on the 
     matters referred to in subsection (c) with respect to each 
     member of the Armed Forces.
       (b) Purpose.--The purpose of the protocols is to facilitate 
     determinations by the Department of Veterans Affairs of the 
     existence and extent of a connection any illness or injury 
     experienced by a former member of the Armed Forces after 
     separation from the Armed Forces and the exposure of the 
     member to toxic or hazardous substances in the course of the 
     member's duties or assignments as a member of the Armed 
     Forces.
       (c) Covered Matters.--The matters referred to in this 
     subsection with respect to a member of the Armed Forces are 
     as follows:
       (1) The duties and assignments of the member, including the 
     location of such duties and assignments.
       (2) Any exposures of the member in the course of such 
     duties and assignments to toxic or hazardous substances.
       (3) Any illness or injury of the member incurred or 
     aggravated in the course of such duties and assignments.
       (d) Elements of Protocols.--The protocols on the sharing of 
     information developed under subsection (a) shall include the 
     following:
       (1) Mechanisms to ensure that the Department of Veterans 
     Affairs receives information to facilitate the timely and 
     accurate assessment of the illnesses or injuries of a member 
     of the Armed Forces that may have been incurred or aggravated 
     by the members's exposure to toxic or hazardous substances 
     during service in the Armed Forces.
       (2) Mechanisms that provide, to the maximum extent 
     practicable consistent with the national security interests 
     of the United States, for the declassification of information 
     necessary to achieve the purpose of the protocols.

[[Page 372]]

       (3) Procedures to ensure that information is shared under 
     the protocols as a matter of routine operations of the 
     Department of Defense and the Department of Veterans Affairs.
       (e) Report.--Not later than one year after the date of the 
     enactment of this Act, the Secretary of Defense and the 
     Secretary of Veterans Affairs shall jointly submit to 
     Congress a report on the protocols developed under subsection 
     (a). The report shall include such recommendations for 
     legislative or administrative action as the Secretaries 
     consider appropriate.
       (f) Funding.--
       (1) Department of defense.--Amounts authorized to be 
     appropriated for fiscal year 2006 for the Department of 
     Defense for operation and maintenance, defense-wide, shall be 
     available for the development of protocols under subsection 
     (a).
       (2) Department of veterans affairs.--Amounts authorized to 
     be appropriated for fiscal year 2006 for the Department of 
     Veterans Affairs shall be available for the development of 
     protocols under subsection (a).

     SEC. 308. COORDINATION OF LONG-TERM RESEARCH ON HEALTH CARE.

       (a) Department of Veterans Affairs Representative on Armed 
     Force Epidemiological Board.--
       (1) In general.--The Secretary of Defense shall appoint to 
     the Armed Forces Epidemiological Board, as an ex officio 
     member, an officer of the Department of Veterans Affairs 
     designated by the Secretary of Veterans Affairs for the 
     purpose of this subsection.
       (2) Purpose.--The purpose of the appointment under this 
     subsection is to ensure that the Armed Forces Epidemiological 
     Board considers and takes into account the views and 
     recommendations of the Department of Veterans Affairs in 
     providing advice to the Assistant Secretary of Defense for 
     Health Affairs and the surgeons general of the Armed Forces.
       (b) Department of Veterans Affairs Representative on 
     Department of Defense Safety and Occupational Health 
     Committee.--
       (1) In general.--The Secretary of Defense shall appoint to 
     the Department of Defense Safety and Occupational Health 
     Committee, as an ex officio member, an officer of the 
     Department of Veterans Affairs designated by the Secretary of 
     Veterans Affairs for the purpose of this subsection.
       (2) Purpose.--The purpose of the appointment under 
     paragraph (1) is to ensure that the Department of Defense and 
     the Department of Veterans Affairs establish and maintain 
     effective collaboration on matters relating to occupational 
     safety and health of current and former members of the Armed 
     Forces.
       (c) Annual Report on Force Health Protection.--Not later 
     than March 1 each year, the Secretary of Defense and the 
     Secretary of Veterans Affairs shall jointly submit to 
     Congress each year a report on the efforts of the Department 
     of Defense and Department of Veterans Affairs, respectively, 
     during the preceding calendar year, to accomplish the 
     following:
       (1) The identification of illnesses and injuries incurred 
     or aggravated by members of the Armed Forces during service 
     in the Armed Forces through exposure to occupational hazards 
     and other toxic and hazardous substances.
       (2) The treatment of members of the Armed Forces and 
     veterans for illnesses and injuries described in paragraph 
     (1).
       (3) The conduct of epidemiological studies on the health 
     consequences of the exposure of members of the Armed Forces 
     to occupational hazards and other toxic and hazardous 
     substances during service in the Armed Forces.
       (4) The development of guidance and other information on 
     policies and practices intended to prevent, reduce, or 
     mitigate the exposure of members of the Armed Forces to 
     occupational hazards and other toxic and hazardous substances 
     during service in the Armed Forces.

    TITLE IV--INCREASED GOVERNMENT COMMITMENT TO VETERANS' EDUCATION

     SEC. 401. SHORT TITLE.

       This title may be cited as the ``Montgomery GI Bill for the 
     21st Century Act''.

     SEC. 402. FINDINGS.

       Congress makes the following findings:
       (1) 2004 marked the 60th anniversary of the Servicemen's 
     Readjustment Act of 1944, better known as the G.I. Bill. Out 
     of an eligible population of 15,500,000 veterans, nearly 
     8,000,000 received education or training as a result of this 
     legislation, one of the most successful Federal Government 
     programs in United States history.
       (2) Since Congress first enacted the G.I. Bill, veterans' 
     benefits have been updated to keep pace with changing times. 
     Over 21,000,000 veterans have now received educational 
     assistance through the G.I. Bill and its successors.
       (3) Congress has a duty to ensure that the VA can continue 
     to offer an education assistance program that robustly 
     supports veterans' efforts to obtain higher education and 
     make a successful transition from military to civilian life.

     SEC. 403. EXCLUSION OF BASIC PAY CONTRIBUTIONS FOR 
                   PARTICIPATION IN BASIC EDUCATIONAL ASSISTANCE 
                   IN CERTAIN COMPUTATIONS ON STUDENT FINANCIAL 
                   AID.

       (a) Exclusion.--Subchapter II of chapter 30 of title 38, 
     United States Code, is amended by adding at the end the 
     following new section:

     ``Sec. 3020A. Exclusion of basic pay contributions in certain 
       computations on student financial aid

       ``(a) In General.--The expected family contribution 
     computed under section 475, 476, or 477 of the Higher 
     Education Act of 1965 (20 U.S.C. 1087oo, 1087pp, 1087qq) for 
     a covered student shall be decreased by $1,200 for the 
     applicable year.
       ``(b) Definitions.--In this section:
       ``(1) The term `academic year' has the meaning given the 
     term in section 481(a)(2) of the Higher Education Act of 1965 
     (20 U.S.C. 1088(a)(2)).
       ``(2) The term `applicable year' means the first academic 
     year for which a student uses entitlement to basic 
     educational assistance under this chapter.
       ``(3) The term `covered student' means any individual 
     entitled to basic educational assistance under this chapter 
     whose basic pay or voluntary separation incentives was or 
     were subject to reduction under section 3011(b), 3012(c), 
     3018(c), 3018A(b), or 3018B(b) of this title.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by inserting after the 
     item relating to section 3020 the following new item:

``3020A. Exclusion of basic pay contributions in certain computations 
              on student financial aid.''.

     SEC. 404. OPPORTUNITY FOR ENROLLMENT IN BASIC EDUCATIONAL 
                   ASSISTANCE PROGRAM OF CERTAIN INDIVIDUALS WHO 
                   PARTICIPATED OR WERE ELIGIBLE TO PARTICIPATE IN 
                   POST-VIETNAM ERA VETERANS EDUCATIONAL 
                   ASSISTANCE PROGRAM.

       (a) Opportunity for Enrollment.--Section 3018C(e) of title 
     38, United States Code, is amended--
       (1) in paragraph (1), by inserting ``or (3)'' after 
     ``paragraph (2)'';
       (2) by redesignating paragraphs (3), (4), and (5) as 
     paragraphs (4), (5), and (6), respectively;
       (3) by inserting after paragraph (2) the following new 
     paragraph (3):
       ``(3) A qualified individual referred to in paragraph (1) 
     is also an individual who meets each of the following 
     requirements:
       ``(A) The individual is a participant in the educational 
     benefits program under chapter 32 of this title as of the 
     date of the enactment of the Montgomery GI Bill for the 21st 
     Century Act, or was eligible to participate in such program, 
     but had not participated in that program or any other 
     educational benefits program under this title, as of that 
     date.
       ``(B) The individual meets the requirements of subsection 
     (a)(3).
       ``(C) The individual, when discharged or released from 
     active duty, is discharged or released therefrom with an 
     honorable discharge.'';
       (4) in paragraph (5), as so redesignated, by striking 
     ``paragraph (3)(A)(ii)'' and inserting ``paragraph 
     (4)(A)(ii)''; and
       (5) in paragraph (6), as so redesignated, by inserting ``, 
     or individuals eligible to participate in that program who 
     have not participated in that program or any other 
     educational benefits program under this title,'' after 
     ``chapter 32 of this title''.
       (b) Conforming and Clerical Amendments.--(1) The heading of 
     such section is amended to read as follows:

     ``Sec. 3018C. Opportunity to enroll: certain VEAP 
       participants; certain individuals eligible for 
       participation in VEAP''.

       (2) The table of sections at the beginning of chapter 30 of 
     such title is amended by striking the item relating to 
     section 3018C and inserting the following new item:

``3018C. Opportunity to enroll: certain VEAP participants; certain 
              individuals eligible for participation in VEAP.''.

     SEC. 405. COMMENCEMENT OF 10-YEAR DELIMITING PERIOD FOR 
                   VETERANS, SURVIVORS, AND DEPENDENTS WHO ENROLL 
                   IN TRAINING PROGRAM.

       (a) Veterans.--Section 3031 of title 38, United States 
     Code, is amended--
       (1) in subsection (a), by striking ``through (g), and 
     subject to subsection (h)'' and inserting ``through (h), and 
     subject to subsection (i)'';
       (2) by redesignating subsection (h) as subsection (i); and
       (3) by inserting after subsection (g) the following new 
     subsection (h):
       ``(h) In the case of an individual eligible for educational 
     assistance under this chapter who, during the 10-year period 
     described in subsection (a) of this section, enrolls in a 
     program of training under this chapter, the period during 
     which the individual may use the individual's entitlement to 
     educational assistance under this chapter expires on the last 
     day of the 10-year period beginning on the first day of the 
     individual's pursuit of such program of training.''.
       (b) Eligible Children.--Subsection (a) of section 3512 of 
     such title is amended--
       (1) in paragraph (6)(B), by striking ``and'' at the end;

[[Page 373]]

       (2) in paragraph (7), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(8) if the person enrolls in a program of special 
     restorative training under subchapter V of this chapter, such 
     period shall begin on the first day of the person's pursuit 
     of such program of special restorative training.''.
       (c) Eligible Surviving Spouses.--Subsection (b) of such 
     section is amended by adding at the end the following new 
     paragraph:
       ``(3) Notwithstanding the provisions of paragraph (1) of 
     this subsection, any eligible person (as defined in section 
     3501(a)(1)(B) or (D)(ii) of this title) who, during the 10-
     year period described in paragraph (1) of this subsection, 
     enrolls in a program of special restorative training under 
     subchapter V of this chapter may be afforded educational 
     assistance under this chapter during the 10-year period 
     beginning on the first day of the individual's pursuit of 
     such program of special restorative training.''.
                                 ______
                                 
      By Ms. STABENOW (for herself, Mr. Reid, Mr. Corzine, Mr. Kennedy, 
        Mr. Inouye, Ms. Mikulski, Mr. Dorgan, Mr. Leahy, Mr. 
        Rockefeller, Mr. Schumer, Mr. Durbin, and Mr. Dayton):
  S. 14. A bill to provide fair wages for America's workers, to create 
new jobs through investment in America, to provide for fair trade and 
competitiveness, and for other purposes; to the Committee on Finance.
  Ms. STABENOW. 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. 14

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Fair Wage, 
     Competition, and Investment Act of 2005''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents. 

               TITLE I--FAIR WAGES FOR AMERICA'S WORKERS

                 Subtitle A--Overtime Rights Protection

Sec. 111. Short title. 
Sec. 112. Clarification of regulations relating to overtime 
              compensation. 

                     Subtitle B--Fair Minimum Wage

Sec. 121. Short title. 
Sec. 122. Minimum wage. 

 Subtitle C--Sense of the Senate Regarding Multiemployer Pension Plans

Sec. 131. Sense of the Senate regarding multiemployer pension plans. 

       TITLE II--CREATING NEW JOBS THROUGH INVESTMENT IN AMERICA

           Subtitle A--Eliminating Incentives for Outsourcing

Sec. 211. Taxation of income of controlled foreign corporations 
              attributable to imported property. 
Sec. 212. Amendments to the Worker Adjustment and Retraining 
              Notification Act. 

                Subtitle B--Investment in Infrastructure

                Chapter 1--Transportation Infrastructure

Sec. 221. Transportation infrastructure funding. 

                    Chapter 2--Water Infrastructure

Sec. 231. Water infrastructure funding. 

                     Chapter 3--Rail Infrastructure

Sec. 241. Rail infrastructure funding.
Sec. 242. Grant authority.
Sec. 243. Grant conditions for right-of-way projects.
Sec. 244. Use of funds for near-term projects.
Sec. 245. Treatment of rail operators using grant-funded rail 
              infrastructure.

                   Chapter 4--Transit Infrastructure

Sec. 251. Transit.

                   Chapter 5--Aviation Infrastructure

Sec. 261. Authorization of appropriations.
Sec. 262. Distribution of funds.
Sec. 263. Nonapplicability of certain laws.
Sec. 264. Use of funds for near-term projects.

                 Chapter 6--Broadband Access Tax Credit

Sec. 271. Expensing of broadband Internet access expenditures.

             Chapter 7--Research And Development Tax Credit

Sec. 281. Findings. 
Sec. 282. Permanent extension of research credit. 
Sec. 283. Increase in rates of alternative incremental credit. 
Sec. 284. Alternative simplified credit for qualified research 
              expenses. 
Sec. 285. Expansion of research credit.

                    Subtitle C--Technology Programs

Sec. 291. Authorizations of appropriations for the Advanced Technology 
              Program and the Manufacturing Extension Partnership 
              Program. 
Sec. 292. Sense of the Senate promoting science and technology funding 
              for a strong economic future. 

               TITLE III--FAIR TRADE AND COMPETITIVENESS

               Subtitle A--Trade Enforcement Enhancement

Sec. 311. Identification of trade expansion priorities.
Sec. 312. Chief enforcement negotiator.
Sec. 313. Foreign debt. 
Sec. 314. Authorization of appropriations.

       Subtitle B--Exchange Rate Policy and Currency Manipulation

Sec. 321. Negotiations regarding currency valuation.

                Subtitle C--Trade Adjustment Assistance

                       Chapter 1--Service Workers

Sec. 331. Short title. 
Sec. 332. Extension of trade adjustment assistance to services sector. 
Sec. 333. Trade adjustment assistance for firms and industries. 
Sec. 334. Monitoring and reporting. 
Sec. 335. Alternative trade adjustment assistance. 
Sec. 336. Effective date. 

         Chapter 2--Trade Adjustment Assistance for Communities

Sec. 341. Short title. 
Sec. 342. Purpose. 
Sec. 343. Trade adjustment assistance for communities. 
Sec. 344. Conforming amendments. 
Sec. 345. Effective date. 

            Chapter 3--Office Of Trade Adjustment Assistance

Sec. 351. Short title. 
Sec. 352. Office of Trade Adjustment Assistance. 
Sec. 353. Effective date. 

Chapter 4--Improvement Of Credit for Health Insurance Costs of Eligible 
                              Individuals

Sec. 361. Improvement of the affordability of the credit. 
Sec. 362. Offering of Federal fallback coverage.
Sec. 363. Clarification of eligibility of spouse of certain individuals 
              entitled to medicare. 

        Subtitle D--Sense of the Senate on Free Trade Agreements

Sec. 371. Sense of the Senate on free trade agreements. 

               TITLE I--FAIR WAGES FOR AMERICA'S WORKERS

                 Subtitle A--Overtime Rights Protection

     SEC. 111. SHORT TITLE.

       This subtitle may be cited as the ``Overtime Rights 
     Protection Act of 2005''.

     SEC. 112. CLARIFICATION OF REGULATIONS RELATING TO OVERTIME 
                   COMPENSATION.

       Section 13 of the Fair Labor Standards Act of 1938 (29 
     U.S.C. 213) is amended by adding at the end the following:
       ``(k)(1) Notwithstanding the provisions of subchapter II of 
     chapter 5 and chapter 7 of title 5, United States Code 
     (commonly referred to as the Administrative Procedures Act) 
     or any other provision of law, any portion of the final rule 
     promulgated on April 23, 2004, revising part 541 of title 29, 
     Code of Federal Regulations, that exempts from the overtime 
     pay provision of section 7 of this Act any employee who would 
     not otherwise be exempt if the regulations in effect on March 
     31, 2003 remained in effect, shall have no force or effect 
     and that portion of such regulations (as in effect on March 
     31, 2003) that would prevent such employee from being exempt 
     shall be reinstated.
       ``(2) The Secretary shall adjust the minimum salary level 
     for exemption under section 13(a)(1) in the following manner:
       ``(A) Not later than 60 days after the date of enactment of 
     this subsection, the Secretary shall increase the minimum 
     salary level for exemption under subsection (a)(1) for 
     executive, administrative, and managerial occupations from 
     the level of $155 per week in 1975 to $591 per week (an 
     amount equal to the increase in the Employment Cost Index 
     (published by the Bureau of Labor Statistics) for executive, 
     administrative, and managerial occupations between 1975 and 
     2005).
       ``(B) Not later than December 31 of the calendar year 
     following the increase required in subparagraph (A), and each 
     December 31 thereafter, the Secretary shall increase the 
     minimum salary level for exemption under subsection (a)(1) by 
     an amount equal to the increase in the Employment Cost Index 
     for executive, administrative, and managerial occupations for 
     the year involved.''.

                     Subtitle B--Fair Minimum Wage

     SEC. 121. SHORT TITLE.

       This subtitle may be cited as the ``Fair Minimum Wage Act 
     of 2005''.

     SEC. 122. MINIMUM WAGE.

       (a) In General.--Section 6(a)(1) of the Fair Labor 
     Standards Act of 1938 (29 U.S.C. 206(a)(1)) is amended to 
     read as follows:
       ``(1) except as otherwise provided in this section, not 
     less than--
       ``(A) $5.85 an hour, beginning on the 60th day after the 
     date of enactment of the Fair Minimum Wage Act of 2005;

[[Page 374]]

       ``(B) $6.55 an hour, beginning 12 months after that 60th 
     day; and
       ``(C) $7.25 an hour, beginning 24 months after that 60th 
     day;''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect 60 days after the date of enactment of this 
     Act.

 Subtitle C--Sense of the Senate Regarding Multiemployer Pension Plans

     SEC. 131. SENSE OF THE SENATE REGARDING MULTIEMPLOYER PENSION 
                   PLANS.

       (a) Findings.--The Senate makes the following findings:
       (1) Multiemployer pension plans have been a major force in 
     the delivery of employee benefits to active and retired 
     American workers and their dependents for over half a 
     century.
       (2) There are approximately 1,700 multiemployer defined 
     benefit pension plans in which approximately 9,700,000 
     workers and retirees participate.
       (3) Three-quarters of the approximately 60,000 to 65,000 
     employers that participate in multiemployer plans have fewer 
     that 100 employees.
       (4) Multiemployer plans allow for greater access and 
     affordability for smaller employers and pension portability 
     for their employees as they move from one job to another, and 
     permit workers to earn a pension where they might otherwise 
     not be able to do so.
       (5) The 2000-2002 drop in the stock market and decline in 
     equity values has affected all investors, including 
     multiemployer plans.
       (6) The decline in value sustained by multiemployer defined 
     benefit pension plans have threatened the stability of this 
     private sector source of secure retirement income.
       (7) Participating employers could face onerous excise taxes 
     and other penalties as a result of the serious, adverse 
     financial impact due to these market losses.
       (8) In 2004, the United States Senate recognized the 
     severity of this situation and passed by an overwhelmingly, 
     large bipartisan margin of 86 to 9 temporary relief 
     provisions for single and multiemployer defined benefit 
     pension plans.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that the Senate--
       (1) expresses its strong support for multiemployer defined 
     benefit pension plans;
       (2) recognizes the importance of an environment in which 
     multiemployer plans can continue their vital role in 
     providing benefits to working men and women;
       (3) recognizes that multiemployer pension plan relief must 
     be designed for the multiemployer labor-relations environment 
     that supports the plans; and
       (4) supports legislation to strengthen and protect the 
     viability of multiemployer pension plans for the continued 
     benefit of current and retired members, and their families 
     and survivors, and to strengthen the ability of all plans to 
     address funding problems that occur.

       TITLE II--CREATING NEW JOBS THROUGH INVESTMENT IN AMERICA

           Subtitle A--Eliminating Incentives for Outsourcing

     SEC. 211. TAXATION OF INCOME OF CONTROLLED FOREIGN 
                   CORPORATIONS ATTRIBUTABLE TO IMPORTED PROPERTY.

       (a) General Rule.--Subsection (a) of section 954 of the 
     Internal Revenue Code of 1986 (defining foreign base company 
     income) is amended by striking ``and'' at the end of 
     paragraph (4), by striking the period at the end of paragraph 
     (5) and inserting ``, and'', and by adding at the end the 
     following new paragraph:
       ``(6) imported property income for the taxable year 
     (determined under subsection (j) and reduced as provided in 
     subsection (b)(5)).''.
       (b) Definition of Imported Property Income.--Section 954 of 
     the Internal Revenue Code of 1986 is amended by adding at the 
     end the following new subsection:
       ``(j) Imported Property Income.--
       ``(1) In general.--For purposes of subsection (a)(6), the 
     term `imported property income' means income (whether in the 
     form of profits, commissions, fees, or otherwise) derived in 
     connection with--
       ``(A) manufacturing, producing, growing, or extracting 
     imported property;
       ``(B) the sale, exchange, or other disposition of imported 
     property; or
       ``(C) the lease, rental, or licensing of imported property.

     Such term shall not include any foreign oil and gas 
     extraction income (within the meaning of section 907(c)) or 
     any foreign oil related income (within the meaning of section 
     907(c)).
       ``(2) Imported property.--For purposes of this subsection--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the term `imported property' means property which 
     is imported into the United States by the controlled foreign 
     corporation or a related person.
       ``(B) Imported property includes certain property imported 
     by unrelated persons.--The term `imported property' includes 
     any property imported into the United States by an unrelated 
     person if, when such property was sold to the unrelated 
     person by the controlled foreign corporation (or a related 
     person), it was reasonable to expect that--
       ``(i) such property would be imported into the United 
     States; or
       ``(ii) such property would be used as a component in other 
     property which would be imported into the United States.
       ``(C) Exception for property subsequently exported.--The 
     term `imported property' does not include any property which 
     is imported into the United States and which--
       ``(i) before substantial use in the United States, is sold, 
     leased, or rented by the controlled foreign corporation or a 
     related person for direct use, consumption, or disposition 
     outside the United States; or
       ``(ii) is used by the controlled foreign corporation or a 
     related person as a component in other property which is so 
     sold, leased, or rented.
       ``(3) Definitions and special rules.--
       ``(A) Import.--For purposes of this subsection, the term 
     `import' means entering, or withdrawal from warehouse, for 
     consumption or use. Such term includes any grant of the right 
     to use intangible property (as defined in section 
     936(h)(3)(B)) in the United States.
       ``(B) United states.--For purposes of this subsection, the 
     term `United States' includes the Commonwealth of Puerto 
     Rico, the Virgin Islands of the United States, Guam, American 
     Samoa, and the Commonwealth of the Northern Mariana Islands.
       ``(C) Unrelated person.--For purposes of this subsection, 
     the term `unrelated person' means any person who is not a 
     related person with respect to the controlled foreign 
     corporation.
       ``(D) Coordination with foreign base company sales 
     income.--For purposes of this section, the term `foreign base 
     company sales income' shall not include any imported property 
     income.''.
       (c) Separate Application of Limitations on Foreign Tax 
     Credit for Imported Property Income.--
       (1) Before 2007.--
       (A) In general.--Paragraph (1) of section 904(d) of the 
     Internal Revenue Code of 1986 (relating to separate 
     application of section with respect to certain categories of 
     income), as in effect for taxable years beginning before 
     January 1, 2007, is amended by striking ``and'' at the end of 
     subparagraph (H), by redesignating subparagraph (I) as 
     subparagraph (J), and by inserting after subparagraph (H) the 
     following new subparagraph:
       ``(I) imported property income, and''.
       (B) Imported property income defined.--Paragraph (2) of 
     section 904(d) of such Code, as so in effect, is amended by 
     redesignating subparagraphs (H) and (I) as subparagraphs (I) 
     and (J), respectively, and by inserting after subparagraph 
     (G) the following new subparagraph:
       ``(H) Imported property income.--The term `imported 
     property income' means any income received or accrued by any 
     person which is of a kind which would be imported property 
     income (as defined in section 954(j)).''.
       (C) Look-thru rules to apply.--Subparagraph (F) of section 
     904(d)(3) of such Code, as so in effect, is amended by 
     striking ``or (D)'' and inserting ``(D), or (I)''.
       (2) After 2006.--
       (A) In general.--Paragraph (1) of section 904(d) of such 
     Code (relating to separate application of section with 
     respect to certain categories of income), as in effect for 
     taxable years beginning after December 31, 2006, is amended 
     by striking ``and'' at the end of subparagraph (A), by 
     redesignating subparagraph (B) as subparagraph (C), and by 
     inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) imported property income, and''.
       (B) Imported property income defined.--Paragraph (2) of 
     section 904(d) of such Code, as so in effect, is amended by 
     redesignating subparagraphs (I) and (J) as subparagraphs (J) 
     and (K), respectively, and by inserting after subparagraph 
     (H) the following new subparagraph:
       ``(I) Imported property income.--The term `imported 
     property income' means any income received or accrued by any 
     person which is of a kind which would be imported property 
     income (as defined in section 954(j)).''.
       (C) Conforming amendment.--Clause (ii) of section 
     904(d)(2)(A) of such Code, as so in effect, is amended by 
     inserting ``or imported property income'' after ``passive 
     category income''.
       (d) Technical Amendments.--
       (1) Clause (iii) of section 952(c)(1)(B) of the Internal 
     Revenue Code of 1986 (relating to certain prior year deficits 
     may be taken into account) is amended--
       (A) by redesignating subclauses (II), (III), (IV), and (V) 
     as subclauses (III), (IV), (V), and (VI), and
       (B) by inserting after subclause (I) the following new 
     subclause:

       ``(II) imported property income,''.

       (2) Paragraph (5) of section 954(b) of such Code (relating 
     to deductions to be taken into account) is amended by 
     striking ``and the foreign base company oil related income'' 
     and inserting ``the foreign base company oil related income, 
     and the imported property income''.
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this

[[Page 375]]

     section shall apply to taxable years of foreign corporations 
     beginning after the date of the enactment of this Act, and to 
     taxable years of United States shareholders within which or 
     with which such taxable years of such foreign corporations 
     end.
       (2) Subsection (c).--The amendments made by subsection 
     (c)(1) shall apply to taxable years beginning after the date 
     of the enactment of this Act and before January 1, 2007, and 
     the amendments made by subsection (c)(2) shall apply to 
     taxable years beginning after December 31, 2006.

     SEC. 212. AMENDMENTS TO THE WORKER ADJUSTMENT AND RETRAINING 
                   NOTIFICATION ACT.

       (a) Definition.--Section 2(a) of the Worker Adjustment and 
     Retraining Notification Act (29 U.S.C. 2101(a)) is amended--
       (1) in paragraph (3)(B), by striking ``for--'' and all that 
     follows through ``500 employees'' in clause (ii), and 
     inserting ``for not less than 50 employees'';
       (2) in paragraph (7), by striking ``and'' after the 
     semicolon;
       (3) in paragraph (8), by striking the period and inserting 
     ``; and''; and
       (4) by adding at the end the following:
       ``(9) the term `offshoring of jobs' means any action taken 
     by an employer the effect of which is to create, shift, or 
     transfer employment positions or facilities outside the 
     United States and which results in an employment loss during 
     any 30-day period for 15 or more employees.''.
       (b) Notice.--Section 3 of the Worker Adjustment and 
     Retraining Notification Act (29 U.S.C. 2102) is amended--
       (1) in subsection (a)--
       (A) in the matter preceding paragraph (1), by striking 
     ``60-day'' and inserting ``90-day'';
       (B) in paragraph (1), by striking ``and'' after the 
     semicolon;
       (C) in paragraph (2), by striking the period and inserting 
     ``; and''; and
       (D) by inserting after paragraph (2), the following:
       ``(3) to the Secretary of Labor.'';
       (2) in subsection (b), by striking ``60-day'' both places 
     that such term appears and inserting ``90-day''; and
       (3) by adding at the end the following:
       ``(e) Notice for Offshoring of Jobs.--In the case of a 
     notice under subsection (a) regarding the offshoring of jobs, 
     the notice shall include, in addition to the information 
     otherwise required by the Secretary with respect to other 
     notices under such subsection, information concerning--
       ``(1) the number of jobs affected;
       ``(2) the location that the jobs are being shifted or 
     transferred to; and
       ``(3) the reasons that such shifting or transferring of 
     jobs is occurring.''.
       (c) Technical Amendments.--The Worker Adjustment and 
     Retraining Notification Act (29 U.S.C. 2101 et seq.) is 
     amended--
       (1) by striking ``plant closing or mass layoff'' each place 
     that such term appears and inserting ``plant closing, mass 
     layoff, or offshoring of jobs'';
       (2) by striking ``closing or layoff'' each place that such 
     term appears and inserting ``closing, layoff, or 
     offshoring'';
       (3) in section 3--
       (A) in the section heading by striking ``PLANT CLOSINGS AND 
     MASS LAYOFFS'' and inserting ``PLANT CLOSINGS, MASS LAYOFFS, 
     AND OFFSHORING OF JOBS'';
       (B) in subsection (b)(2)(A), by striking ``the closing or 
     mass layoff'' and inserting ``the closing, layoff, or 
     offshoring''; and
       (C) in subsection (d), by striking ``section 2(a) (2) or 
     (3)'' and inserting ``paragraph (2), (3), or (9) of section 
     2(a)''; and
       (4) in section 5(a)(1), in the matter following 
     subparagraph (B), by striking ``60 days'' and inserting ``90 
     days''.
       (d) Posting of Employee Rights.--The Worker Adjustment and 
     Retraining Notification Act (29 U.S.C. 2101 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 12. POSTING OF NOTICE OF RIGHTS.

       ``(a) Development.--Not later than 60 days after the date 
     of enactment of this section, the Secretary of Labor shall 
     develop a notice of employee rights under this Act for 
     posting by employers.
       ``(b) Posting.--Each employer shall post in a conspicuous 
     place in places of employment the notice of the rights of 
     employees as developed by the Secretary under subsection 
     (a).''.
       (e) Annual Report.--The Worker Adjustment and Retraining 
     Notification Act (29 U.S.C. 2101 et seq.), as amended by 
     subsection (d), is further amended by adding at the end the 
     following:

     ``SEC. 13. CONTENTS OF ANNUAL REPORTS BY THE SECRETARY OF 
                   LABOR.

       ``(a) In General.--The Secretary of Labor shall collect and 
     compile statistics based on the information submitted to the 
     Secretary under subsections (a)(3) and (e) of section 3.
       ``(b) Report.--Not later than 120 days after the date on 
     which each regular session of Congress commences, the 
     Secretary of Labor shall prepare and submit to the President 
     and the appropriate committees of Congress a report on the 
     offshoring of jobs (as defined in section 2(a)(9)). Each such 
     report shall include information concerning--
       ``(1) the number of jobs affected by offshoring;
       ``(2) the locations to which jobs are being shifted or 
     transferred;
       ``(3) the reasons why such shifts and transfers are 
     occurring; and
       ``(4) any other relevant data compiled under subsection 
     (a).''.

                Subtitle B--Investment in Infrastructure

                CHAPTER 1--TRANSPORTATION INFRASTRUCTURE

     SEC. 221. TRANSPORTATION INFRASTRUCTURE FUNDING.

       (a) Funding.--
       (1) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this chapter for each of 
     fiscal years 2005 and 2006 $7,000,000,000, to remain 
     available until expended.
       (2) Distribution.--The Secretary of Transportation, acting 
     through the Administrator of the Federal Highway 
     Administration, shall distribute funds made available under 
     this subsection to States in accordance with section 105 of 
     title 23, United States Code.
       (b) Additional Requirements.--
       (1) Nonapplicability of certain provisions.--Funds made 
     available under this section shall not be subject to--
       (A) section 120 of title 23, United States Code; or
       (B) any limitation on obligations under any other provision 
     of law.
       (2) Use of funds for near-term projects.--The Secretary of 
     Transportation shall ensure, to the maximum extent 
     practicable, that funds made available under this section are 
     directed to projects that may be obligated in the near term, 
     as determined by the Secretary of Transportation.

                    CHAPTER 2--WATER INFRASTRUCTURE

     SEC. 231. WATER INFRASTRUCTURE FUNDING.

       (a) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Administrator of the Environmental 
     Protection Agency to make grants to States under--
       (1) title VI of the Federal Water Pollution Control Act (33 
     U.S.C. 1381 et seq.), $3,000,000,000 for each of fiscal years 
     2005 and 2006; and
       (2) section 1452 of the Safe Drinking Water Act (42 U.S.C. 
     300j-12), $3,000,000,000 for each of fiscal years 2005 and 
     2006.
       (b) Availability of Funds.--Funds transferred under 
     subsection (a) shall remain available until expended.

                     CHAPTER 3--RAIL INFRASTRUCTURE

     SEC. 241. RAIL INFRASTRUCTURE FUNDING.

       (a) Amount for Capital Projects Grants.--There is 
     authorized to be appropriated to the Secretary of 
     Transportation for each of fiscal years 2005 and 2006, 
     $1,500,000,000, which shall be available for the Secretary of 
     Transportation to make grants to States, rail carriers, and 
     other entities as determined by the Secretary of 
     Transportation for intercity passenger and freight railroad 
     capital projects in accordance with this chapter.
       (b) Availability of Funds.--Funds transferred under 
     subsection (a) shall remain available until expended.
       (c) Nonapplicability of Certain Provisions.--Funds made 
     available under this chapter shall not be subject to any 
     limitation on obligations under any other provision of law.

     SEC. 242. GRANT AUTHORITY.

       (a) Public Benefit Projects.--The Secretary of 
     Transportation shall make grants to States, rail carriers, 
     and other entities, as determined by the Secretary, for 
     intercity passenger and freight railroad capital projects 
     that provide a public benefit, including projects involving 
     the following purposes:
       (1) Track and track structure rehabilitation, relocation, 
     improvement, and development.
       (2) Railroad safety and security improvements.
       (3) Communications and signaling improvements.
       (4) Intercity passenger rail equipment acquisition.
       (5) Rail station and intermodal facilities development.
       (b) Public Benefit Defined.--In this section, the term 
     ``public benefit'' means a benefit accrued to the public in 
     the form of enhanced mobility of people or goods, 
     environmental protection or enhancement, congestion 
     mitigation, enhanced trade and economic development, improved 
     air quality or land use, more efficient energy use, enhanced 
     public safety or security, reduction of public expenditures 
     due to improved transportation efficiency or infrastructure 
     preservation, and any other positive community effects (as 
     defined by the Secretary after any consultation with State 
     official and rail carriers that the Secretary determines 
     appropriate).

     SEC. 243. GRANT CONDITIONS FOR RIGHT-OF-WAY PROJECTS.

       The Secretary of Transportation shall require as a 
     condition of making any grant under this chapter that 
     includes the improvement or use of rights-of-way owned by a 
     railroad that--
       (1) a written agreement exist between the applicant and the 
     railroad regarding such use and ownership, including--
       (A) any compensation for such use;
       (B) assurances regarding the adequacy of infrastructure 
     capacity to accommodate both existing and future freight and 
     passenger operations; and
       (C) an assurance by the railroad that collective bargaining 
     agreements with the railroad's employees (including terms 
     regulating

[[Page 376]]

     the contracting of work) will remain in full force and effect 
     according to their terms for work performed by the railroad 
     on the railroad transportation corridor; and
       (2) the applicant agrees to comply with--
       (A) the standards under section 24312 of title 49, United 
     States Code, as such section was in effect on September 1, 
     2003, with respect to the project in the same manner that the 
     National Railroad Passenger Corporation is required to comply 
     with those standards for construction work financed under an 
     agreement made under section; and
       (B) the protective agreements established under section 504 
     of the Railroad Revitalization and Regulatory Reform Act of 
     1976 with respect to employees affected by actions taken in 
     connection with the project.

     SEC. 244. USE OF FUNDS FOR NEAR-TERM PROJECTS.

       The Secretary of Transportation shall ensure, to the 
     maximum extent practicable, that funds made available under 
     this chapter are directed to projects that may be obligated 
     in the near term, as determined by the Secretary of 
     Transportation.

     SEC. 245. TREATMENT OF RAIL OPERATORS USING GRANT-FUNDED RAIL 
                   INFRASTRUCTURE.

       A person that conducts rail operations over rail 
     infrastructure constructed or improved with funding provided 
     in whole or in part in a grant made under this chapter--
       (1) shall be considered an employer for purposes of the 
     Railroad Retirement Act of 1974 (45 20 U.S.C. 231 et seq.); 
     and
       (2) shall be considered a carrier for purposes of the 
     Railway Labor Act (43 U.S.C. 151 et seq.) unless such a 
     person is an operator with respect to commuter rail passenger 
     transportation (as defined in section 24102(4) of title 49, 
     United States Code) of a State or local government authority 
     (as such terms are defined in section 5302 of such title) 
     eligible to receive financial assistance under section 5307 
     of such title, a contractor performing services in connection 
     with the operations with respect to commuter rail passenger 
     transportation (as so defined), or the Alaska Railroad or its 
     contractors.

                   CHAPTER 4--TRANSIT INFRASTRUCTURE

     SEC. 251. TRANSIT.

       (a) Authorization of Appropriations.--
       (1) Amounts for fiscal years 2005 and 2006.--There is 
     authorized to be appropriated to the Secretary of 
     Transportation for each of the fiscal years 2005 and 2006, 
     $1,750,000,000.
       (2) Availability of funds.--Funds appropriated under 
     paragraph (1) shall remain available until expended.
       (b) Distribution of Funds.--
       (1) In general.--Of the funds authorized to be appropriated 
     under subsection (a)--
       (A) 50.18 percent shall be available to carry out section 
     5307 of title 49, United States Code;
       (B) 45 percent shall be available to carry out section 
     5309(a)(1) of title 49, United States Code, of which--
       (i) 40 percent shall be available to carry out subparagraph 
     (A) of such paragraph;
       (ii) 40 percent shall be available to carry out 
     subparagraph (E) of such paragraph; and
       (iii) 20 percent shall be available to carry out 
     subparagraph (F) of such paragraph;
       (C) 1.32 percent shall be available to carry out section 
     5310 of title 49, United States Code; and
       (D) 3.5 percent shall be available to carry out section 
     5311 of title 49, United States Code.
       (2) Formulas.--Funds made available under subparagraphs 
     (A), (C), and (D) of paragraph (1) shall be distributed in 
     accordance with the formulas established under sections 5307, 
     5310, and 5311, respectively, of title 49, United States 
     Code.
       (3) Determination by secretary.--
       (A) In general.--The Secretary of Transportation shall 
     determine the allocation of funds made available under 
     clauses (i) and (iii) of paragraph (1)(B).
       (B) Modernization of existing fixed guideway systems.--The 
     Secretary of Transportation shall determine the amount 
     apportioned to each urbanized area under paragraph (1)(B)(ii) 
     on a pro rata basis in accordance with the distribution 
     formula established under section 5337 of title 49, United 
     States Code.
       (C) Near term projects.--In allocating funds under this 
     paragraph, the Secretary of Transportation shall ensure, to 
     the maximum extent practicable, that funds are directed to 
     near term projects.
       (c) Limitation for Capital Projects.--Funds may be used 
     under this section only for capital projects.
       (d) Inapplicability of Certain Provisions.--Funds 
     distributed under subsection (b) shall not be subject to 
     sections 5307(e), 5309(h), or 5311(g) of title 49, United 
     States Code.

                   CHAPTER 5--AVIATION INFRASTRUCTURE

     SEC. 261. AUTHORIZATION OF APPROPRIATIONS FOR AVIATION 
                   INFRASTRUCTURE.

       There is authorized to be appropriated for each of fiscal 
     years 2005 and 2006 to carry out this chapter, 
     $1,500,000,000, to remain available until expended.

     SEC. 262. DISTRIBUTION OF FUNDS.

       The Secretary of Transportation, acting through the 
     Administrator of the Federal Aviation Administration, shall 
     distribute funds made available under this chapter to public 
     use airports for the purposes provided under chapter 471 of 
     title 49, United States Code, including for enhancement of 
     aviation safety, enhancement of aviation capacity, and 
     defrayal of the cost of security requirements imposed on 
     airport operators by the Administrator or by the 
     Administrator of the Transportation Security Administration.

     SEC. 263. NONAPPLICABILITY OF CERTAIN LAWS.

       Funds made available under this chapter shall not be 
     subject to--
       (1) a matching requirement under section 47109 of title 49, 
     United States Code; or
       (2) any limitation on obligation under any other provision 
     of law.

     SEC. 264. USE OF FUNDS FOR NEAR-TERM PROJECTS.

       The Secretary of Transportation shall ensure, to the 
     maximum extent practicable, that funds made available under 
     this chapter are directed to projects that may be obligated 
     in the near-term, as determined by the Secretary of 
     Transportation.

                 CHAPTER 6--BROADBAND ACCESS TAX CREDIT

     SEC. 271. EXPENSING OF BROADBAND INTERNET ACCESS 
                   EXPENDITURES.

       (a) In General.--Part VI of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to itemized 
     deductions for individuals and corporations) is amended by 
     inserting after section 190 the following new section:

     ``SEC. 191. BROADBAND EXPENDITURES.

       ``(a) Treatment of Expenditures.--
       ``(1) In general.--A taxpayer may elect to treat any 
     qualified broadband expenditure which is paid or incurred by 
     the taxpayer as an expense which is not chargeable to capital 
     account. Any expenditure which is so treated shall be allowed 
     as a deduction.
       ``(2) Election.--An election under paragraph (1) shall be 
     made at such time and in such manner as the Secretary may 
     prescribe by regulation.
       ``(b) Qualified Broadband Expenditures.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified broadband 
     expenditure' means, with respect to any taxable year, any 
     direct or indirect costs incurred and properly taken into 
     account with respect to--
       ``(A) the purchase or installation of qualified equipment 
     (including any upgrades thereto), and
       ``(B) the connection of such qualified equipment to any 
     qualified subscriber.
       ``(2) Certain satellite expenditures excluded.--Such term 
     shall not include any costs incurred with respect to the 
     launching of any satellite equipment.
       ``(3) Leased equipment.--Such term shall include so much of 
     the purchase price paid by the lessor of qualified equipment 
     subject to a lease described in subsection (c)(2)(B) as is 
     attributable to expenditures incurred by the lessee which 
     would otherwise be described in paragraph (1).
       ``(4) Limitation with regard to current generation 
     broadband services.--Only 50 percent of the amounts taken 
     into account under paragraph (1) with respect to qualified 
     equipment through which current generation broadband services 
     are provided shall be treated as qualified broadband 
     expenditures.
       ``(c) When Expenditures Taken Into Account.--For purposes 
     of this section--
       ``(1) In general.--Qualified broadband expenditures with 
     respect to qualified equipment shall be taken into account 
     with respect to the first taxable year in which--
       ``(A) current generation broadband services are provided 
     through such equipment to qualified subscribers, or
       ``(B) next generation broadband services are provided 
     through such equipment to qualified subscribers.
       ``(2) Limitation.--
       ``(A) In general.--Qualified expenditures shall be taken 
     into account under paragraph (1) only with respect to 
     qualified equipment--
       ``(i) the original use of which commences with the 
     taxpayer, and
       ``(ii) which is placed in service, after the date of the 
     enactment of this Act.
       ``(B) Sale-leasebacks.--For purposes of subparagraph (A), 
     if property--
       ``(i) is originally placed in service after the date of the 
     enactment of this Act by any person, and
       ``(ii) sold and leased back by such person within 3 months 
     after the date such property was originally placed in 
     service,

     such property shall be treated as originally placed in 
     service not earlier than the date on which such property is 
     used under the leaseback referred to in clause (ii).
       ``(d) Special Allocation Rules.--
       ``(1) Current generation broadband services.--For purposes 
     of determining the amount of qualified broadband expenditures 
     under subsection (a)(1) with respect to qualified equipment 
     through which current generation broadband services are 
     provided, if the qualified equipment is capable of serving 
     both qualified subscribers and other subscribers, the 
     qualified broadband expenditures shall be multiplied by a 
     fraction--
       ``(A) the numerator of which is the sum of the number of 
     potential qualified subscribers within the rural areas and 
     the underserved areas which the equipment is capable of 
     serving with current generation broadband services, and
       ``(B) the denominator of which is the total potential 
     subscriber population of the area

[[Page 377]]

     which the equipment is capable of serving with current 
     generation broadband services.
       ``(2) Next generation broadband services.--For purposes of 
     determining the amount of qualified broadband expenditures 
     under subsection (a)(1) with respect to qualified equipment 
     through which next generation broadband services are 
     provided, if the qualified equipment is capable of serving 
     both qualified subscribers and other subscribers, the 
     qualified expenditures shall be multiplied by a fraction--
       ``(A) the numerator of which is the sum of--
       ``(i) the number of potential qualified subscribers within 
     the rural areas and underserved areas, plus
       ``(ii) the number of potential qualified subscribers within 
     the area consisting only of residential subscribers not 
     described in clause (i),

     which the equipment is capable of serving with next 
     generation broadband services, and
       ``(B) the denominator of which is the total potential 
     subscriber population of the area which the equipment is 
     capable of serving with next generation broadband services.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Antenna.--The term `antenna' means any device used to 
     transmit or receive signals through the electromagnetic 
     spectrum, including satellite equipment.
       ``(2) Cable operator.--The term `cable operator' has the 
     meaning given such term by section 602(5) of the 
     Communications Act of 1934 (47 U.S.C. 522(5)).
       ``(3) Commercial mobile service carrier.--The term 
     `commercial mobile service carrier' means any person 
     authorized to provide commercial mobile radio service as 
     defined in section 20.3 of title 47, Code of Federal 
     Regulations.
       ``(4) Current generation broadband service.--The term 
     `current generation broadband service' means the transmission 
     of signals at a rate of at least 1,000,000 bits per second to 
     the subscriber and at least 128,000 bits per second from the 
     subscriber.
       ``(5) Multiplexing or demultiplexing.--The term 
     `multiplexing' means the transmission of 2 or more signals 
     over a single channel, and the term `demultiplexing' means 
     the separation of 2 or more signals previously combined by 
     compatible multiplexing equipment.
       ``(6) Next generation broadband service.--The term `next 
     generation broadband service' means the transmission of 
     signals at a rate of at least 22,000,000 bits per second to 
     the subscriber and at least 5,000,000 bits per second from 
     the subscriber.
       ``(7) Nonresidential subscriber.--The term `nonresidential 
     subscriber' means any person who purchases broadband services 
     which are delivered to the permanent place of business of 
     such person.
       ``(8) Open video system operator.--The term `open video 
     system operator' means any person authorized to provide 
     service under section 653 of the Communications Act of 1934 
     (47 U.S.C. 573).
       ``(9) Other wireless carrier.--The term `other wireless 
     carrier' means any person (other than a telecommunications 
     carrier, commercial mobile service carrier, cable operator, 
     open video system operator, or satellite carrier) providing 
     current generation broadband services or next generation 
     broadband service to subscribers through the radio 
     transmission of energy.
       ``(10) Packet switching.--The term `packet switching' means 
     controlling or routing the path of any digitized transmission 
     signal which is assembled into packets or cells.
       ``(11) Provider.--The term `provider' means, with respect 
     to any qualified equipment--
       ``(A) a cable operator,
       ``(B) a commercial mobile service carrier,
       ``(C) an open video system operator,
       ``(D) a satellite carrier,
       ``(E) a telecommunications carrier, or
       ``(F) any other wireless carrier,
     providing current generation broadband services or next 
     generation broadband services to subscribers through such 
     qualified equipment.
       ``(12) Provision of services.--A provider shall be treated 
     as providing services to 1 or more subscribers if--
       ``(A) such a subscriber has been passed by the provider's 
     equipment and can be connected to such equipment for a 
     standard connection fee,
       ``(B) the provider is physically able to deliver current 
     generation broadband services or next generation broadband 
     services, as applicable, to such a subscriber without making 
     more than an insignificant investment with respect to such 
     subscriber,
       ``(C) the provider has made reasonable efforts to make such 
     subscribers aware of the availability of such services,
       ``(D) such services have been purchased by 1 or more such 
     subscribers, and
       ``(E) such services are made available to such subscribers 
     at average prices comparable to those at which the provider 
     makes available similar services in any areas in which the 
     provider makes available such services.
       ``(13) Qualified equipment.--
       ``(A) In general.--The term `qualified equipment' means 
     equipment which provides current generation broadband 
     services or next generation broadband services--
       ``(i) at least a majority of the time during periods of 
     maximum demand to each subscriber who is utilizing such 
     services, and
       ``(ii) in a manner substantially the same as such services 
     are provided by the provider to subscribers through equipment 
     with respect to which no deduction is allowed under 
     subsection (a)(1).
       ``(B) Only certain investment taken into account.--Except 
     as provided in subparagraph (C) or (D), equipment shall be 
     taken into account under subparagraph (A) only to the extent 
     it--
       ``(i) extends from the last point of switching to the 
     outside of the unit, building, dwelling, or office owned or 
     leased by a subscriber in the case of a telecommunications 
     carrier,
       ``(ii) extends from the customer side of the mobile 
     telephone switching office to a transmission/receive antenna 
     (including such antenna) owned or leased by a subscriber in 
     the case of a commercial mobile service carrier,
       ``(iii) extends from the customer side of the headend to 
     the outside of the unit, building, dwelling, or office owned 
     or leased by a subscriber in the case of a cable operator or 
     open video system operator, or
       ``(iv) extends from a transmission/receive antenna 
     (including such antenna) which transmits and receives signals 
     to or from multiple subscribers, to a transmission/receive 
     antenna (including such antenna) on the outside of the unit, 
     building, dwelling, or office owned or leased by a subscriber 
     in the case of a satellite carrier or other wireless carrier, 
     unless such other wireless carrier is also a 
     telecommunications carrier.
       ``(C) Packet switching equipment.--Packet switching 
     equipment, regardless of location, shall be taken into 
     account under subparagraph (A) only if it is deployed in 
     connection with equipment described in subparagraph (B) and 
     is uniquely designed to perform the function of packet 
     switching for current generation broadband services or next 
     generation broadband services, but only if such packet 
     switching is the last in a series of such functions performed 
     in the transmission of a signal to a subscriber or the first 
     in a series of such functions performed in the transmission 
     of a signal from a subscriber.
       ``(D) Multiplexing and demultiplexing equipment.--
     Multiplexing and demultiplexing equipment shall be taken into 
     account under subparagraph (A) only to the extent it is 
     deployed in connection with equipment described in 
     subparagraph (B) and is uniquely designed to perform the 
     function of multiplexing and demultiplexing packets or cells 
     of data and making associated application adaptions, but only 
     if such multiplexing or demultiplexing equipment is located 
     between packet switching equipment described in subparagraph 
     (C) and the subscriber's premises.
       ``(14) Qualified subscriber.--The term `qualified 
     subscriber' means--
       ``(A) with respect to the provision of current generation 
     broadband services--
       ``(i) any nonresidential subscriber maintaining a permanent 
     place of business in a rural area or underserved area, or
       ``(ii) any residential subscriber residing in a dwelling 
     located in a rural area or underserved area which is not a 
     saturated market, and
       ``(B) with respect to the provision of next generation 
     broadband services--
       ``(i) any nonresidential subscriber maintaining a permanent 
     place of business in a rural area or underserved area, or
       ``(ii) any residential subscriber.
       ``(15) Residential subscriber.--The term `residential 
     subscriber' means any individual who purchases broadband 
     services which are delivered to such individual's dwelling.
       ``(16) Rural area.--The term `rural area' means any census 
     tract which--
       ``(A) is not within 10 miles of any incorporated or census 
     designated place containing more than 25,000 people, and
       ``(B) is not within a county or county equivalent which has 
     an overall population density of more than 500 people per 
     square mile of land.
       ``(17) Rural subscriber.--The term `rural subscriber' means 
     any residential subscriber residing in a dwelling located in 
     a rural area or nonresidential subscriber maintaining a 
     permanent place of business located in a rural area.
       ``(18) Satellite carrier.--The term `satellite carrier' 
     means any person using the facilities of a satellite or 
     satellite service licensed by the Federal Communications 
     Commission and operating in the Fixed-Satellite Service under 
     part 25 of title 47 of the Code of Federal Regulations or the 
     Direct Broadcast Satellite Service under part 100 of title 47 
     of such Code to establish and operate a channel of 
     communications for distribution of signals, and owning or 
     leasing a capacity or service on a satellite in order to 
     provide such point-to-multipoint distribution.
       ``(19) Saturated market.--The term `saturated market' means 
     any census tract in which, as of the date of the enactment of 
     this section--
       ``(A) current generation broadband services have been 
     provided by a single provider to 85 percent or more of the 
     total number of potential residential subscribers residing in

[[Page 378]]

     dwellings located within such census tract, and
       ``(B) such services can be utilized--
       ``(i) at least a majority of the time during periods of 
     maximum demand by each such subscriber who is utilizing such 
     services, and
       ``(ii) in a manner substantially the same as such services 
     are provided by the provider to subscribers through equipment 
     with respect to which no deduction is allowed under 
     subsection (a)(1).
       ``(20) Subscriber.--The term `subscriber' means any person 
     who purchases current generation broadband services or next 
     generation broadband services.
       ``(21) Telecommunications carrier.--The term 
     `telecommunications carrier' has the meaning given such term 
     by section 3(44) of the Communications Act of 1934 (47 U.S.C. 
     153(44)), but--
       ``(A) includes all members of an affiliated group of which 
     a telecommunications carrier is a member, and
       ``(B) does not include a commercial mobile service carrier.
       ``(22) Total potential subscriber population.--The term 
     `total potential subscriber population' means, with respect 
     to any area and based on the most recent census data, the 
     total number of potential residential subscribers residing in 
     dwellings located in such area and potential nonresidential 
     subscribers maintaining permanent places of business located 
     in such area.
       ``(23) Underserved area.--The term `underserved area' 
     means--
       ``(A) any census tract which is located in--
       ``(i) an empowerment zone or enterprise community 
     designated under section 1391, or
       ``(ii) the District of Columbia Enterprise Zone established 
     under section 1400, or
       ``(B) any census tract--
       ``(i) the poverty level of which is at least 30 percent 
     (based on the most recent census data), and
       ``(ii) the median family income of which does not exceed--

       ``(I) in the case of a census tract located in a 
     metropolitan statistical area, 70 percent of the greater of 
     the metropolitan area median family income or the statewide 
     median family income, and
       ``(II) in the case of a census tract located in a 
     nonmetropolitan statistical area, 70 percent of the 
     nonmetropolitan statewide median family income.

       ``(24) Underserved subscriber.--The term `underserved 
     subscriber' means any residential subscriber residing in a 
     dwelling located in an underserved area or nonresidential 
     subscriber maintaining a permanent place of business located 
     in an underserved area.
       ``(f) Special Rules.--
       ``(1) Property used outside the united states, etc., not 
     qualified.--No expenditures shall be taken into account under 
     subsection (a)(1) with respect to the portion of the cost of 
     any property referred to in section 50(b) or with respect to 
     the portion of the cost of any property specified in an 
     election under section 179.
       ``(2) Basis reduction.--
       ``(A) In general.--For purposes of this title, the basis of 
     any property shall be reduced by the portion of the cost of 
     such property taken into account under subsection (a)(1).
       ``(B) Ordinary income recapture.--For purposes of section 
     1245, the amount of the deduction allowable under subsection 
     (a)(1) with respect to any property which is of a character 
     subject to the allowance for depreciation shall be treated as 
     a deduction allowed for depreciation under section 167.
       ``(3) Coordination with section 38.--No credit shall be 
     allowed under section 38 with respect to any amount for which 
     a deduction is allowed under subsection (a)(1).''.
       (b) Special Rule for Mutual or Cooperative Telephone 
     Companies.--Section 512(b) of the Internal Revenue Code of 
     1986 (relating to modifications) is amended--
       (1) by redesignating paragraph (18) as added by section 
     702(a) of the American Jobs Creation Act of 2004 as paragraph 
     (19), and
       (2) by adding at the end the following new paragraph:
       ``(20) Special rule for mutual or cooperative telephone 
     companies.--A mutual or cooperative telephone company which 
     for the taxable year satisfies the requirements of section 
     501(c)(12)(A) may elect to reduce its unrelated business 
     taxable income for such year, if any, by an amount that does 
     not exceed the qualified broadband expenditures which would 
     be taken into account under section 191 for such year by such 
     company if such company was not exempt from taxation. Any 
     amount which is allowed as a deduction under this paragraph 
     shall not be allowed as a deduction under section 191 and the 
     basis of any property to which this paragraph applies shall 
     be reduced under section 1016(a)(32).''.
       (c) Conforming Amendments.--
       (1) Section 263(a)(1) of the Internal Revenue Code of 1986 
     (relating to capital expenditures) is amended by striking 
     ``or'' at the end of subparagraph (H), by striking the period 
     at the end of subparagraph (I) and inserting ``, or'', and by 
     adding at the end the following new subparagraph:
       ``(J) expenditures for which a deduction is allowed under 
     section 191.''.
       (2) Section 1016(a) of such Code is amended by striking 
     ``and'' at the end of paragraph (30), by striking the period 
     at the end of paragraph (31) and inserting ``, and'', and by 
     adding at the end the following new paragraph:
       ``(32) to the extent provided in section 191(f)(2).''.
       (3) The table of sections for part VI of subchapter A of 
     chapter 1 of such Code is amended by inserting after the item 
     relating to section 190 the following new item:

``Sec. 191. Broadband expenditures.''.

       (d) Designation of Census Tracts.--
       (1) In general.--The Secretary of the Treasury shall, not 
     later than 90 days after the date of the enactment of this 
     Act, designate and publish those census tracts meeting the 
     criteria described in paragraphs (16), (22), and (23) of 
     section 191(e) of the Internal Revenue Code of 1986 (as added 
     by this section). In making such designations, the Secretary 
     of the Treasury shall consult with such other departments and 
     agencies as the Secretary determines appropriate.
       (2) Saturated market.--
       (A) In general.--For purposes of designating and publishing 
     those census tracts meeting the criteria described in 
     subsection (e)(19) of such section 191--
       (i) the Secretary of the Treasury shall prescribe not later 
     than 30 days after the date of the enactment of this Act the 
     form upon which any provider which takes the position that it 
     meets such criteria with respect to any census tract shall 
     submit a list of such census tracts (and any other 
     information required by the Secretary) not later than 60 days 
     after the date of the publication of such form, and
       (ii) the Secretary of the Treasury shall publish an 
     aggregate list of such census tracts and the applicable 
     providers not later than 30 days after the last date such 
     submissions are allowed under clause (i).
       (B) No subsequent lists required.--The Secretary of the 
     Treasury shall not be required to publish any list of census 
     tracts meeting such criteria subsequent to the list described 
     in subparagraph (A)(ii).
       (e) Other Regulatory Matters.--
       (1) Prohibition.--No Federal or State agency or 
     instrumentality shall adopt regulations or ratemaking 
     procedures that would have the effect of eliminating or 
     reducing any deduction or portion thereof allowed under 
     section 191 of the Internal Revenue Code of 1986 (as added by 
     this section) or otherwise subverting the purpose of this 
     section.
       (2) Treasury regulatory authority.--It is the intent of 
     Congress in providing the election to deduct qualified 
     broadband expenditures under section 191 of the Internal 
     Revenue Code of 1986 (as added by this section) to provide 
     incentives for the purchase, installation, and connection of 
     equipment and facilities offering expanded broadband access 
     to the Internet for users in certain low income and rural 
     areas of the United States, as well as to residential users 
     nationwide, in a manner that maintains competitive neutrality 
     among the various classes of providers of broadband services. 
     Accordingly, the Secretary of the Treasury shall prescribe 
     such regulations as may be necessary or appropriate to carry 
     out the purposes of section 191 of such Code, including--
       (A) regulations to determine how and when a taxpayer that 
     incurs qualified broadband expenditures satisfies the 
     requirements of section 191 of such Code to provide broadband 
     services, and
       (B) regulations describing the information, records, and 
     data taxpayers are required to provide the Secretary to 
     substantiate compliance with the requirements of section 191 
     of such Code.
       (f) Effective Date.--The amendments made by this section 
     shall apply to expenditures incurred after the date of the 
     enactment of this Act and before the date which is 60 months 
     after the date of the enactment of this Act.

             CHAPTER 7--RESEARCH AND DEVELOPMENT TAX CREDIT

     SEC. 281. FINDINGS.

       Congress finds the following:
       (1) Research and development performed in the United States 
     results in quality jobs, better and safer products, increased 
     ownership of technology-based intellectual property, and 
     higher productivity in the United States.
       (2) Since 1994, private sector research and development 
     employment has grown at a faster rate than overall private 
     sector employment in the United States. From 1994 to 2000, 
     there was an average annual growth rate of 5.4 percent in 
     research and development employment, compared with 2.7 
     percent in total employment.
       (3) The extent to which companies perform and increase 
     research and development activities in the United States is 
     in part dependent on Federal tax policy.
       (4) The private sector performed most of the Nation's 
     research and development and accounted for more than two-
     thirds of total research and development performance in 2003. 
     Of the $194,000,000,000 in industrial research and 
     development performed in 2003, more than 90 percent was 
     funded by industry.
       (5) Many of the countries with which the United States 
     competes have introduced new or revised national plans for 
     science, technology, and innovation policy, and a growing 
     number of countries have established targets

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     for increased research and development spending. Virtually 
     all countries are seeking ways to enhance the quality and 
     efficiency of public research, stimulate business investments 
     in research and development, and strengthen linkages between 
     the public and private sectors.
       (6) Direct government support to business research and 
     development has declined, both in absolute terms and as a 
     share of business research and development, and greater 
     emphasis is being placed on indirect measures, such as tax 
     incentives for research and development.
       (7) Congress should make permanent a research and 
     development credit that provides a meaningful incentive to 
     all types of taxpayers.

     SEC. 282. PERMANENT EXTENSION OF RESEARCH CREDIT.

       (a) In General.--Section 41 of the Internal Revenue Code of 
     1986 (relating to credit for increasing research activities) 
     is amended by striking subsection (h).
       (b) Conforming Amendment.--Paragraph (1) of section 45C(b) 
     of such Code is amended by striking subparagraph (D).
       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after the date of the 
     enactment of this Act, in taxable years ending after such 
     date.

     SEC. 283. INCREASE IN RATES OF ALTERNATIVE INCREMENTAL 
                   CREDIT.

       (a) In General.--Subparagraph (A) of section 41(c)(4) of 
     the Internal Revenue Code of 1986 (relating to election of 
     alternative incremental credit) is amended--
       (1) by striking ``2.65 percent'' and inserting ``3 
     percent'',
       (2) by striking ``3.2 percent'' and inserting ``4 
     percent'', and
       (3) by striking ``3.75 percent'' and inserting ``5 
     percent''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

     SEC. 284. ALTERNATIVE SIMPLIFIED CREDIT FOR QUALIFIED 
                   RESEARCH EXPENSES.

       (a) In General.--Subsection (c) of section 41 of the 
     Internal Revenue Code of 1986 (relating to base amount) is 
     amended by redesignating paragraphs (5) and (6) as paragraphs 
     (6) and (7), respectively, and by inserting after paragraph 
     (4) the following new paragraph:
       ``(5) Election of alternative simplified credit.--
       ``(A) In general.--At the election of the taxpayer, the 
     credit determined under subsection (a)(1) shall be equal to 
     12 percent of so much of the qualified research expenses for 
     the taxable year as exceeds 50 percent of the average 
     qualified research expenses for the 3 taxable years preceding 
     the taxable year for which the credit is being determined.
       ``(B) Special rule in case of no qualified research 
     expenses in any of 3 preceding taxable years.--
       ``(i) Taxpayers to which subparagraph applies.--The credit 
     under this paragraph shall be determined under this 
     subparagraph if the taxpayer has no qualified research 
     expenses in any 1 of the 3 taxable years preceding the 
     taxable year for which the credit is being determined.
       ``(ii) Credit rate.--The credit determined under this 
     subparagraph shall be equal to 6 percent of the qualified 
     research expenses for the taxable year.
       ``(C) Election.--An election under this paragraph shall 
     apply to the taxable year for which made and all succeeding 
     taxable years unless revoked with the consent of the 
     Secretary. An election under this paragraph may not be made 
     for any taxable year to which an election under paragraph (4) 
     applies.''.
       (b) Coordination With Election of Alternative Incremental 
     Credit.--
       (1) In general.--Section 41(c)(4)(B) of the Internal 
     Revenue Code of 1986 (relating to election) is amended by 
     adding at the end the following: ``An election under this 
     paragraph may not be made for any taxable year to which an 
     election under paragraph (5) applies.''.
       (2) Transition rule.--In the case of an election under 
     section 41(c)(4) of the Internal Revenue Code of 1986 which 
     applies to the taxable year which includes the date of the 
     enactment of this Act, such election shall be treated as 
     revoked with the consent of the Secretary of the Treasury if 
     the taxpayer makes an election under section 41(c)(5) of such 
     Code (as added by subsection (a)) for such year.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

     SEC. 285. EXPANSION OF RESEARCH CREDIT.

       (a) Credit for Expenses Attributable to Certain 
     Collaborative Research Consortia.--
       (1) In general.--Section 41(a) of the Internal Revenue Code 
     of 1986 (relating to credit for increasing research 
     activities) is amended by striking ``and'' at the end of 
     paragraph (1), by striking the period at the end of paragraph 
     (2) and inserting ``, and'', and by adding at the end the 
     following new paragraph:
       ``(3) 20 percent of the amounts paid or incurred by the 
     taxpayer in carrying on any trade or business of the taxpayer 
     during the taxable year (including as contributions) to a 
     research consortium.''.
       (2) Research consortium defined.--Section 41(f) of such 
     Code (relating to special rules) is amended by adding at the 
     end the following new paragraph:
       ``(6) Research consortium.--
       ``(A) In general.--The term `research consortium' means any 
     organization--
       ``(i) which is--

       ``(I) described in section 501(c)(3) or 501(c)(6) and is 
     exempt from tax under section 501(a) and is organized and 
     operated primarily to conduct research, or
       ``(II) organized and operated primarily to conduct research 
     in the public interest (within the meaning of section 
     501(c)(3)),

       ``(ii) which is not a private foundation,
       ``(iii) to which at least 5 unrelated persons paid or 
     incurred during the calendar year in which the taxable year 
     of the organization begins amounts (including as 
     contributions) to such organization for research, and
       ``(iv) to which no single person paid or incurred 
     (including as contributions) during such calendar year an 
     amount equal to more than 50 percent of the total amounts 
     received by such organization during such calendar year for 
     research.
       ``(B) Treatment of persons.--All persons treated as a 
     single employer under subsection (a) or (b) of section 52 
     shall be treated as related persons for purposes of 
     subparagraph (A)(iii) and as a single person for purposes of 
     subparagraph (A)(iv).''.
       (3) Conforming amendment.--Section 41(b)(3)(C)(ii) of such 
     Code is amended by inserting ``(other than a research 
     consortium)'' after ``organization''.
       (b) Repeal of Limitation on Contract Research Expenses Paid 
     to Small Businesses, Universities, and Federal 
     Laboratories.--Section 41(b)(3) of the Internal Revenue Code 
     of 1986 (relating to contract research expenses) is amended 
     by adding at the end the following new subparagraph:
       ``(D) Amounts paid to eligible small businesses, 
     universities, and federal laboratories.--
       ``(i) In general.--In the case of amounts paid by the 
     taxpayer to--

       ``(I) an eligible small business,
       ``(II) an institution of higher education (as defined in 
     section 3304(f)), or
       ``(III) an organization which is a Federal laboratory,

     for qualified research, subparagraph (A) shall be applied by 
     substituting `100 percent' for `65 percent'.
       ``(ii) Eligible small business.--For purposes of this 
     subparagraph, the term `eligible small business' means a 
     small business with respect to which the taxpayer does not 
     own (within the meaning of section 318) 50 percent or more 
     of--

       ``(I) in the case of a corporation, the outstanding stock 
     of the corporation (either by vote or value), and
       ``(II) in the case of a small business which is not a 
     corporation, the capital and profits interests of the small 
     business.

       ``(iii) Small business.--For purposes of this 
     subparagraph--

       ``(I) In general.--The term `small business' means, with 
     respect to any calendar year, any person if the annual 
     average number of employees employed by such person during 
     either of the 2 preceding calendar years was 500 or fewer. 
     For purposes of the preceding sentence, a preceding calendar 
     year may be taken into account only if the person was in 
     existence throughout the year.
       ``(II) Startups, controlled groups, and predecessors.--
     Rules similar to the rules of subparagraphs (B) and (D) of 
     section 220(c)(4) shall apply for purposes of this clause.

       ``(iv) Federal laboratory.--For purposes of this 
     subparagraph, the term `Federal laboratory' has the meaning 
     given such term by section 4(6) of the Stevenson-Wydler 
     Technology Innovation Act of 1980 (15 U.S.C. 3703(6)), as in 
     effect on the date of the enactment of this subparagraph.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after the date of the 
     enactment of this Act, in taxable years ending after such 
     date.

                    Subtitle C--Technology Programs

     SEC. 291. AUTHORIZATIONS OF APPROPRIATIONS FOR THE ADVANCED 
                   TECHNOLOGY PROGRAM AND THE MANUFACTURING 
                   EXTENSION PARTNERSHIP PROGRAM.

       (a) Advanced Technology Program.--
       (1) Findings.--Congress makes the following findings:
       (A) The Advanced Technology Program (ATP) has played an 
     important role in helping United States companies develop 
     new, breakthrough technologies. ATP has funded research 
     ranging from cancer vaccines, to hi-tech flexible displays, 
     to composite materials, to fuel cells, all of which are the 
     kinds of technological advances that give the United States a 
     competitive advantage globally.
       (B) The National Academy of Science has found it to be an 
     effective program that could use more funding wisely, and the 
     National Association of Manufacturers (NAM), the 
     Biotechnology Industry Organization (BIO), the Industrial 
     Research Institute, the Alliance for Science and Technology 
     Research in America, and the American Chemical Society 
     support ATP.

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       (C) Businesses need this type of program more than ever as 
     venture capital funds have become more scarce in the current 
     economy. ATP bridges this gap between the research lab and 
     market capital, facilitating the critical transfer of 
     technology to the private sector that leads to the 
     development of products and services that make use of new, 
     technological breakthroughs.
       (D) Not only does ATP promote economic security and global 
     competitiveness for the nation as a whole, it is an important 
     program for generating jobs domestically. Last year nearly 80 
     percent of ATP awards went to small businesses, an essential 
     job-creating sector in the United States economy.
       (E) ATP is also vital to the homeland security of the 
     United States. ATP has funded many projects in detection, 
     preparedness, prevention and response with significant 
     applications for homeland security. With continued financial 
     support through ATP to develop these projects and their 
     security applications, the United States will become more 
     secure.
       (F) Despite the importance and success of ATP, current 
     funding levels do not meet the demand. Over 1,000 proposals 
     for ATP funding that were submitted in 2002 yielded enough 
     high quality projects for the ATP funding that was available 
     in both fiscal years 2002 and 2003. The 870 applications for 
     ATP funding received in fiscal year 2004 made the second 
     highest number of applications for ATP funding that were 
     received in any fiscal year, but funding was only available 
     for 59 awards. No funding for new awards is available in 
     fiscal year 2005.
       (G) According to the 2004 annual report on the ATP, returns 
     from just 41 of the 736 ATP projects have exceeded 
     $17,000,000,000 in economic benefits, more than 8 times the 
     amount of money spent on all 736 projects.
       (2) Authorization of appropriations.--There are authorized 
     to be appropriated to the Secretary of Commerce for the 
     Advanced Technology Program of the National Institute of 
     Standards and Technology--
       (A) $247,200,000 for fiscal year 2005;
       (B) $254,616,000 for fiscal year 2006;
       (C) $262,254,000 for fiscal year 2007; and
       (D) $270,122,000 for fiscal year 2008.
       (b) Manufacturing Extension Partnership Program.--
       (1) Findings.--Congress makes the following findings:
       (A) Small- and medium-sized manufacturers in the United 
     States employ 7,000,000 people and contribute 
     $711,000,000,000, or 7 percent of the Gross Domestic Product 
     to the United States economy. The Hollings Manufacturing 
     Extension Partnership (MEP) Program supports a network of 
     locally run centers that provide technical advice and 
     consulting to these firms in all fifty States and Puerto 
     Rico. Since its inception, the Hollings MEP Program has 
     assisted 149,000 of the 380,000 small and medium-sized 
     manufacturers in the United States.
       (B) The Hollings MEP Program is a proven program. Studies 
     show that Hollings MEP Program manufacturers have four times 
     more productivity growth than non-MEP firms, and the program 
     has proven to lead to increased sales, increased capital 
     investment, cost savings and the creation or retention of 
     jobs in the United States.
       (C) The Hollings MEP Program is more important today than 
     ever as the Nation faces a looming current account deficit. 
     The United States has lost over 880,000 manufacturing jobs 
     during 2003 and 2004. Such manufacturing jobs pay on average 
     19 percent higher wages than the industry average.
       (D) The Hollings MEP Program is not just about economic 
     security. Manufacturers with fewer than 500 employees 
     comprise more than 80 percent of the suppliers in key defense 
     sectors. Helping such manufacturers helps the national 
     security of the United States.
       (2) Authorization of appropriations.--There are authorized 
     to be appropriated to the Secretary of Commerce for the 
     Hollings Manufacturing Extension Partnership Program of the 
     National Institute of Standards and Technology--
       (A) $110,210,000 for fiscal year 2005;
       (B) $113,516,000 for fiscal year 2006;
       (C) $116,921,000 for fiscal year 2007; and
       (D) $120,429,000 for fiscal year 2008.
       (3) Manufacturing extension partnership program defined.--
     In this subsection, the term ``Hollings Manufacturing 
     Extension Partnership Program'' means the program of Hollings 
     Manufacturing Extension Partnership carried out by the 
     National Institute of Standards and Technology under section 
     26 of the National Institute of Standards and Technology Act 
     (15 U.S.C. 278l), as provided in part 292 of title 15, Code 
     of Federal Regulations.

     SEC. 292. SENSE OF THE SENATE PROMOTING SCIENCE AND 
                   TECHNOLOGY FUNDING FOR A STRONGER ECONOMIC 
                   FUTURE.

       (a) Findings.--The Senate makes the following findings:
       (1) Leading economists have consistently attributed more 
     than 50 percent of the growth in the economy of the United 
     States to scientific and technological innovation. The 
     economic future of the United States, thus, depends on the 
     United States remaining the world leader in science and 
     technology.
       (2) If the United States loses its leadership in science 
     and technology, its capacity for economic growth and high-
     wage job creation will soon atrophy, with deleterious effects 
     on the national security of the United States. In 2001, the 
     Hart-Rudman Commission on National Security for the 21st 
     Century characterized the failure of the United States to 
     invest in science and to reform science and mathematics 
     education as the second biggest threat to national security, 
     stating that ``[s]econd only to a weapon of mass destruction 
     detonating in an American city, we can think of nothing more 
     dangerous than a failure to manage properly science, 
     technology, and education for the common good over the next 
     quarter century''.
       (3) The United States has reaped enormous economic benefits 
     from being the first country to lead in the development of 
     the Internet and the harnessing of biotechnology. These 
     developments, though, are far from being the last 
     technological revolutions to influence the economy of the 
     United States. Technological changes that promise major 
     economic effects are now being made in areas such as--
       (A) microelectronics, including the continued 
     miniaturization of electronic devices and the increasingly 
     widespread diffusion of data processing power;
       (B) high-end supercomputing;
       (C) telecommunications technologies;
       (D) artificial materials, including materials in which the 
     structure has been designed and built at the atomic or 
     molecular level, the essence of nanotechnology;
       (E) robotics; and
       (F) new energy technologies, particular including renewable 
     energy technologies that are as inexpensive as traditional 
     fossil sources of energy, technologies using hydrogen as an 
     energy carrier, and technologies for energy efficiencies.
       (4) Because of the interconnected nature of modern science 
     and technology, advances in one field depend on research 
     results in other, seemingly unrelated fields. Biomedical 
     science has been consistently shown to rely on advances in 
     fields such as chemistry, materials science, mathematics, 
     computer science, and physics. Without basic advances in 
     chemistry, computer science, and mathematics, the sequencing 
     of the human genome could not have been successfully 
     undertaken.
       (5) In the 60 years since World War II, other countries and 
     regions of the world have built science and technology 
     capabilities that rival those of the United States today, or 
     that could rival such capabilities of the United States in 
     the future. The governments of China, India, Japan, and the 
     countries of the European Union have all targeted significant 
     advancements in research and innovation as central elements 
     of the plans for future national and regional economic 
     prosperity.
       (6) President George W. Bush has largely ignored this 
     challenge, proposing budgets that have under-funded or 
     terminated key programs promoting United States scientific 
     and technological strength, including cuts to--
       (A) basic and applied research in the Department of 
     Defense;
       (B) agricultural research;
       (C) transportation research; and
       (D) fundamental research in the physical sciences and 
     engineering at the Department of Energy and elsewhere.
       (7) For other programs that have been proposed for small 
     increases, such as the National Science Foundation, the 
     amount of funding provided to individual grantees is well 
     below the amounts that would lead to optimal scientific 
     productivity and continued United States leadership in 
     science and technology. In fiscal year 2004, the National 
     Science Foundation's stringent peer review evaluation process 
     judged approximately 12,000 out of some 40,000 proposals as 
     ``very good to excellent'' or ``excellent,'' yet, due to 
     budget constraints, only 56 percent of such proposals were 
     funded.
       (8) The National Science Foundation and the Office of 
     Science in the Department of Energy are among the greatest 
     assets of the United States for the advancement of science, 
     mathematical, engineering, and technology research and 
     education. Although the National Science Foundation accounts 
     for only 4 percent of Federal research and development 
     spending, it provides nearly 50 percent of all Federal 
     support for non-medical basic research conducted in United 
     States colleges and universities. Similarly, the Office of 
     Science of the Department of Energy funds over half of all 
     university research in disciplines such as physics and 
     materials science, and has played a crucial role in national 
     science and technology initiatives such as advancing high-
     performance computing and the sequencing of the human genome. 
     Both the National Science Foundation and the Office of 
     Science fund research in new frontiers of scientific inquiry 
     and contribute to creating a highly skilled, competitive 
     workforce in science and engineering.
       (9) President Bush has also consistently proposed 
     terminating the Advanced Technology Program at the Department 
     of Commerce, which helps stimulate companies to participate 
     in high-risk, high-payoff research and development and is 
     perhaps one of the most successful programs in directly 
     stimulating industrial innovation in the United

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     States. Projects supported by the Advanced Technology Program 
     span a broad range of key technology areas, such as oil 
     exploration, automobile manufacturing, and new medical 
     diagnostic and therapeutic technologies and investments made 
     by the program accelerate the development process for 
     innovative technologies that promise significant commercial 
     payoff and widespread benefits.
       (10) The continual cycle of basic research, applied 
     research, and development gives rise to new products and 
     processes, new ideas and understanding, and new researchers 
     and educators. Each link in this chain depends on the others. 
     Basic research produces the fundamental understandings that 
     underpin applications and the development process. The 
     resulting technologies and innovations create economic growth 
     through new products and job creation and stimulate new 
     thinking and advances in scientific instrumentation, which in 
     turn stimulate new inquiries that lead to new fundamental 
     research. All of this activity improves the quality of life 
     in the United States, and when adequately supported, 
     contributes to the continued leadership of the United States 
     in science and technology.
       (11) A revitalized science and technology policy focused on 
     advancing all of the links of this chain, from basic research 
     through technology deployment, is necessary if the United 
     States is to maintain its technological preeminence over the 
     next decade and beyond. Applications stemming from basic 
     research can take over 20 years to evolve into next 
     generation technologies. Inadequate funding of basic research 
     may not seem acute today, but 20 years from now, it will be 
     extremely difficult to correct an inability of the United 
     States to compete scientifically and technologically, which 
     could be caused by inadequate funding now.
       (12) In order to ensure strength in these areas, it is 
     necessary for the United States Government to ensure that 
     scientists and technology experts in the United States 
     receive the best education possible. After the Russians 
     launched Sputnik, Congress passed the National Defense 
     Education Act of 1958 (Public Law 85-864), which declared 
     ``an educational emergency'' and led to the more than 
     doubling of Federal expenditures for education. The programs 
     authorized under that Act helped the United States to improve 
     rapidly in the areas of science and technology, and led to 
     United States dominance in the arms race and the global 
     economy.
       (13) The United States would be well served by the 
     enactment of a new National Defense Education Act. Third in 
     the world in 1975, America now ranks 15th in the development 
     of new scientists and engineers. Today, India and China 
     annually produce 10 times as many new engineers as the United 
     States. Out of over 15,000,000 college students in the United 
     States, fewer than 400,000 individuals graduate with a 
     bachelor's degree in math, science, engineering, or 
     technology each year, and only 75,000 postgraduate students 
     go on to obtain a master's degree in math, science, 
     engineering, or technology.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) Congress and the President should direct significant 
     new investments in the National Science Foundation, the 
     Office of Science at the Department of Energy, the National 
     Institutes of Health, and the National Institute of Standards 
     and Technology to increase federally funded research in basic 
     science and technology so that the United States can better 
     compete in the international economy; and
       (2) Congress and the President should direct significant 
     new investments into the enhancement of elementary and 
     secondary education programs related to math, science, and 
     technology and substantially expand access to postsecondary 
     education for United States students seeking degrees in math, 
     science, and technology.

               TITLE III--FAIR TRADE AND COMPETITIVENESS

               Subtitle A--Trade Enforcement Enhancement

     SEC. 311. IDENTIFICATION OF TRADE EXPANSION PRIORITIES.

       Section 310 of the Trade Act of 1974 (19 U.S.C. 2420) is 
     amended to read as follows:

     ``SEC. 310. IDENTIFICATION OF TRADE EXPANSION PRIORITIES.

       ``(a) Identification.--
       ``(1) Identification and report.--Within 30 days after the 
     submission in each of calendar year 2005 through 2009 of the 
     report required by section 181(b), the Trade Representative 
     shall--
       ``(A) review United States trade expansion priorities;
       ``(B) identify priority foreign country practices, the 
     elimination of which is likely to have the most significant 
     potential to increase United States exports, either directly 
     or through the establishment of a beneficial precedent; and
       ``(C) submit to the Committee on Finance of the Senate and 
     the Committee on Ways and Means of the House of 
     Representatives and publish in the Federal Register a report 
     on the priority foreign country practices identified.
       ``(2) Factors.--In identifying priority foreign country 
     practices under paragraph (1), the Trade Representative shall 
     take into account all relevant factors, including--
       ``(A) the major barriers and trade distorting practices 
     described in the National Trade Estimate Report required 
     under section 181(b);
       ``(B) the trade agreements to which a foreign country is a 
     party and its compliance with those agreements;
       ``(C) the medium- and long-term implications of foreign 
     government procurement plans; and
       ``(D) the international competitive position and export 
     potential of United States products and services.
       ``(3) Contents of report.--The Trade Representative may 
     include in the report, if appropriate--
       ``(A) a description of foreign country practices that may 
     in the future warrant identification as priority foreign 
     country practices; and
       ``(B) a statement about other foreign country practices 
     that were not identified because they are already being 
     addressed by provisions of United States trade law, by 
     existing bilateral trade agreements, or as part of trade 
     negotiations with other countries and progress is being made 
     toward the elimination of such practices.
       ``(b) Initiation of Consultations.--By no later than the 
     date that is 21 days after the date on which a report is 
     submitted to the appropriate congressional committees under 
     subsection (a)(1), the Trade Representative shall seek 
     consultations with each foreign country identified in the 
     report as engaging in priority foreign country practices for 
     the purpose of reaching a satisfactory resolution of such 
     priority practices.
       ``(c) Initiation of Investigation.--If a satisfactory 
     resolution of priority foreign country practices has not been 
     reached under subsection (b) within 90 days after the date on 
     which a report is submitted to the appropriate congressional 
     committees under subsection (a)(1), the Trade Representative 
     shall initiate under section 302(b)(1) an investigation under 
     this chapter with respect to such priority foreign country 
     practices.
       ``(d) Agreements for the Elimination of Barriers.--In the 
     consultations with a foreign country that the Trade 
     Representative is required to request under section 303(a) 
     with respect to an investigation initiated by reason of 
     subsection (c), the Trade Representative shall seek to 
     negotiate an agreement that provides for the elimination of 
     the practices that are the subject of the investigation as 
     quickly as possible or, if elimination of the practices is 
     not feasible, an agreement that provides for compensatory 
     trade benefits.
       ``(e) Reports.--The Trade Representative shall include in 
     the semiannual report required by section 309 a report on the 
     status of any investigations initiated pursuant to subsection 
     (c) and, where appropriate, the extent to which such 
     investigations have led to increased opportunities for the 
     export of products and services of the United States.''.

     SEC. 312. CHIEF ENFORCEMENT NEGOTIATOR.

       (a) Establishment of Position.--Section 141(b)(2) of the 
     Trade Act of 1974 (19 U.S.C. 2171(b)(2)) is amended to read 
     as follows:
       ``(2) There shall be in the Office 3 Deputy United States 
     Trade Representatives, 1 Chief Agricultural Negotiator, and 1 
     Chief Enforcement Negotiator. The 3 Deputy United States 
     Trade Representatives and the 2 Chief Negotiators shall be 
     appointed by the President, by and with the advice and 
     consent of the Senate. As an exercise of the rulemaking power 
     of the Senate, any nomination of a Deputy United States Trade 
     Representative, the Chief Agricultural Negotiator, or the 
     Chief Enforcement Negotiator submitted to the Senate for its 
     advice and consent, and referred to a committee, shall be 
     referred to the Committee on Finance. Each Deputy United 
     States Trade Representative, the Chief Agricultural 
     Negotiator, and the Chief Enforcement Negotiator shall hold 
     office at the pleasure of the President and shall have the 
     rank of Ambassador.''.
       (b) Functions of Position.--Section 141(c) of the Trade Act 
     of 1974 (19 U.S.C. 2171(c)) is amended by adding at the end 
     the following new paragraph:
       ``(6) The principal function of the Chief Enforcement 
     Negotiator shall be to conduct negotiations to ensure 
     compliance with trade agreements relating to United States 
     manufactured goods and services. The Chief Enforcement 
     Negotiator shall recommend investigating and prosecuting 
     cases before the World Trade Organization and under trade 
     agreements to which the United States is a party. The Chief 
     Enforcement Negotiator shall recommend administering United 
     States trade laws relating to foreign government barriers to 
     United States goods and services. The Chief Enforcement 
     Negotiator shall perform such other functions as the United 
     States Trade Representative may direct.''.

     SEC. 313. FOREIGN DEBT.

       (a) Short Title.--This section may be cited as the 
     ``Foreign Debt Ceiling Act of 2005''.
       (b) Foreign Debt Ceiling.--
       (1) Findings.--Congress makes the following findings:
       (A) The United States has become the world's largest net 
     debtor Nation, having run up massive trade deficits since the 
     1990s.
       (B) At the end of 2002, the net United States foreign debt 
     stood at $2,553,000,000,000.

[[Page 382]]

       (C) The United States foreign debt position worsened in 
     2003, when the United States had a record trade deficit of 
     $489,000,000,000, equivalent to 4.4 percent of the United 
     States GDP that year.
       (D) The large and growing United States foreign debt 
     represents claims on United States assets by foreign 
     nationals, which will eventually have to be repaid. If 
     unchecked, the foreign debt could seriously undermine our 
     children's future standard of living.
       (E) Moreover, the growing accumulation of foreign claims on 
     United States assets, including over $1,200,000,000,000 in 
     United States Treasury securities, makes the United States 
     economy vulnerable to the whims of foreign investors.
       (F) Congress presently places a ceiling on United States 
     public debt, but does not place a ceiling on United States 
     foreign debt.
       (G) Just as Congress recognized the importance of placing a 
     ceiling on the United States public debt, it is appropriate 
     that Congress place a limit on the United States foreign 
     debt.
       (2) Actions triggered by united states foreign debt.--
       (A) In general.--Not later than the 15th day of the second 
     month after the date of enactment of this Act, and every 3 
     months thereafter, the United States Trade Representative 
     shall determine if--
       (i) the net United States foreign debt for the preceding 
     12-month period is more than 25 percent of United States GDP 
     for the same period; or
       (ii) the United States trade deficit for the preceding 12-
     month period is more than 5 percent of United States GDP for 
     the same period.
       (B) Action by ustr.--Whenever an affirmative determination 
     is made under subparagraph (A) (i) or (ii), the United States 
     Trade Representative shall--
       (i) within 15 days of the determination, convene an 
     emergency meeting of the Trade Policy Review Group to develop 
     a plan of action to reduce the United States trade deficit; 
     and
       (ii) within 45 days of the determination, present to 
     Congress a report detailing the Trade Policy Review Group's 
     trade deficit reduction plan.
       (3) Measurement of foreign debt.--
       (A) Statistical sources.--For purposes of the calculations 
     described in paragraph (2)(A), the United States Trade 
     Representative shall rely on the most recent period for which 
     the following data, published by the Department of Commerce, 
     is available:
       (i) In the case of United States foreign debt, the United 
     States Trade Representative shall use the net international 
     investment position of the United States, with direct 
     investment positions determined at market value, as compiled 
     by the Bureau of Economic Analysis.
       (ii) In the case of the United States trade deficit, the 
     United States Trade Representative shall use the goods and 
     services trade deficit data compiled by the United States 
     Census Bureau.
       (iii) In the case of the United States GDP, the United 
     States Trade Representative shall use the nominal gross 
     domestic product data compiled by the Bureau of Economic 
     Analysis.
       (B) Adjustment.--The United States Trade Representative may 
     adjust the data described in subparagraph (A) to ensure that 
     the determination is made for comparable time period.

     SEC. 314. AUTHORIZATION OF APPROPRIATIONS.

       (a) Authorization of Appropriations for the Office of the 
     General Counsel and the Office of Monitoring and 
     Enforcement.--There are authorized to be appropriated to the 
     Office of the United States Trade Representative for the 
     appointment of additional staff in the Office of the General 
     Counsel and the Office of Monitoring and Enforcement--
       (1) $2,000,000 for fiscal year 2005; and
       (2) $2,000,000 for fiscal year 2006.
       (b) Responsibilities of Additional Staff.--The 
     responsibilities of the additional staff appointed under 
     subsection (a) shall include--
       (1) investigating, prosecuting, and defending cases before 
     the World Trade Organization and under trade agreements to 
     which the United States is a party;
       (2) administering United States trade laws, including title 
     III of the Trade Act of 1974 (19 U.S.C. 2411 et seq.) and 
     other trade laws relating to foreign government barriers to 
     United States goods and services, including barriers 
     involving intellectual property rights, government 
     procurement, and telecommunications; and
       (3) monitoring compliance with the Uruguay Round Agreements 
     (as defined in section 2 of the Uruguay Round Agreements Act 
     (19 U.S.C. 3501)) and other trade agreements, particularly by 
     the People's Republic of China.

       Subtitle B--Exchange Rate Policy and Currency Manipulation

     SEC. 321. NEGOTIATIONS REGARDING CURRENCY VALUATION.

       (a) Findings.--Congress makes the following findings:
       (1) The currency of the People's Republic of China, known 
     as the yuan or renminbi, is artificially pegged at a level 
     significantly below its market value. Economists estimate the 
     yuan to be undervalued by between 15 percent and 40 percent 
     or an average of 27.5 percent.
       (2) The undervaluation of the yuan provides the People's 
     Republic of China with a significant trade advantage by 
     making exports less expensive for foreign consumers and by 
     making foreign products more expensive for Chinese consumers. 
     The effective result is a significant subsidization of 
     China's exports and a virtual tariff on foreign imports.
       (3) The Government of the People's Republic of China has 
     intervened in the foreign exchange markets to hold the value 
     of the yuan within an artificial trading range. China's 
     foreign reserves are estimated to be over $609,900,000,000 as 
     of January 12, 2004, and have increased by over 
     $206,700,000,000 in the last 12 months.
       (4) China's undervalued currency, China's trade advantage 
     from that undervaluation, and the Chinese Government's 
     intervention in the value of its currency violates the spirit 
     and letter of the world trading system of which the People's 
     Republic of China is now a member.
       (5) The Government of the People's Republic of China has 
     failed to promptly address concerns or to provide a 
     definitive timetable for resolution of these concerns raised 
     by the United States and the international community 
     regarding the value of its currency.
       (6) Article XXI of the GATT 1994 (as defined in section 
     2(1)(B) of the Uruguay Round Agreements Act (19 U.S.C. 
     3501(1)(B))) allows a member of the World Trade Organization 
     to take any action which it considers necessary for the 
     protection of its essential security interests. Protecting 
     the United States manufacturing sector is essential to the 
     interests of the United States.
       (b) Negotiations and Certification Regarding the Currency 
     Valuation Policy of the People's Republic of China.--
       (1) In general.--Notwithstanding the provisions of title I 
     of Public Law 106-286 (19 U.S.C. 2431 note), on and after the 
     date that is 180 days after the date of enactment of this 
     Act, unless a certification described in paragraph (2) has 
     been made to Congress, in addition to any other duty, there 
     shall be imposed a rate of duty of 27.5 percent ad valorem on 
     any article that is the growth, product, or manufacture of 
     the People's Republic of China, imported directly or 
     indirectly into the United States.
       (2) Certification.--The certification described in this 
     paragraph means a certification by the President to Congress 
     that the People's Republic of China is no longer acquiring 
     foreign exchange reserves to prevent the appreciation of the 
     rate of exchange between its currency and the United States 
     dollar for purposes of gaining an unfair competitive 
     advantage in international trade. The certification shall 
     also include a determination that the currency of the 
     People's Republic of China has undergone a substantial upward 
     revaluation placing it at or near its fair market value.
       (3) Alternative certification.--If the President certifies 
     to Congress 180 days after the date of enactment of this Act 
     that the People's Republic of China has made a good faith 
     effort to revalue its currency upward placing it at or near 
     its fair market value, the President may delay the imposition 
     of the tariffs described in paragraph (1) for an additional 
     180 days. If at the end of the 180-day period the President 
     determines that China has developed and started actual 
     implementation of a plan to revalue its currency, the 
     President may delay imposition of the tariffs for an 
     additional 12 months, so that the People's Republic of China 
     shall have time to implement the plan.
       (4) Negotiations.--Beginning on the date of enactment of 
     this Act, the Secretary of the Treasury, in consultation with 
     the United States Trade Representative, shall begin 
     negotiations with the People's Republic of China to ensure 
     that the People's Republic of China adopts a process that 
     leads to a substantial upward currency revaluation within 180 
     days after the date of enactment of this Act. Because various 
     Asian governments have also been acquiring substantial 
     foreign exchange reserves in an effort to prevent 
     appreciation of their currencies for purposes of gaining an 
     unfair competitive advantage in international trade, and 
     because the People's Republic of China has concerns about the 
     value of those currencies, the Secretary shall also seek to 
     convene a multilateral summit to discuss exchange rates with 
     representatives of various Asian governments and other 
     interested parties, including representatives of other G-7 
     nations.

                Subtitle C--Trade Adjustment Assistance

                       CHAPTER 1--SERVICE WORKERS

     SEC. 331. SHORT TITLE.

       This chapter may be cited as the ``Trade Adjustment 
     Assistance Equity for Service Workers Act of 2005''.

     SEC. 332. EXTENSION OF TRADE ADJUSTMENT ASSISTANCE TO 
                   SERVICES SECTOR.

       (a) Adjustment Assistance for Workers.--Section 
     221(a)(1)(A) of the Trade Act of 1974 (19 U.S.C. 
     2271(a)(1)(A)) is amended by striking ``agricultural firm)'' 
     and inserting ``agricultural firm, and workers in a service 
     sector firm or subdivision of a service sector firm or public 
     agency)''.

[[Page 383]]

       (b) Group Eligibility Requirements.--Section 222 of the 
     Trade Act of 1974 (19 U.S.C. 2272) is amended--
       (1) in subsection (a)--
       (A) in the matter preceding paragraph (1), by striking 
     ``agricultural firm)'' and inserting ``agricultural firm, and 
     workers in a service sector firm or subdivision of a service 
     sector firm or public agency)'';
       (B) in paragraph (1), by inserting ``or public agency'' 
     after ``of the firm''; and
       (C) in paragraph (2)--
       (i) in subparagraph (A)(ii), by striking ``like or directly 
     competitive with articles produced'' and inserting ``or 
     services like or directly competitive with articles produced 
     or services provided''; and
       (ii) by striking subparagraph (B) and inserting the 
     following:
       ``(B)(i) there has been a shift, by such workers' firm, 
     subdivision, or public agency to a foreign country, of 
     production of articles, or in provision of services, like or 
     directly competitive with articles which are produced, or 
     services which are provided, by such firm, subdivision, or 
     public agency; or
       ``(ii) such workers' firm, subdivision, or public agency 
     has obtained or is likely to obtain such services from a 
     foreign country.'';
       (2) in subsection (b)--
       (A) in the matter preceding paragraph (1), by striking 
     ``agricultural firm)'' and inserting ``agricultural firm, and 
     workers in a service sector firm or subdivision of a service 
     sector firm or public agency)'';
       (B) in paragraph (2), by inserting ``or service'' after 
     ``related to the article''; and
       (C) in paragraph (3)(A), by inserting ``or services'' after 
     ``component parts'';
       (3) in subsection (c)--
       (A) in paragraph (3)--
       (i) by inserting ``or services'' after ``value-added 
     production processes'';
       (ii) by striking ``assembly or finishing'' and inserting 
     ``assembly, finishing, or testing'';
       (iii) by inserting ``or services'' after ``for articles''; 
     and
       (iv) by inserting ``(or subdivision)'' after ``such other 
     firm''; and
       (B) in paragraph (4)--
       (i) by striking ``for articles'' and inserting ``, or 
     services, used in the production of articles or in the 
     provision of services''; and
       (ii) by inserting ``(or subdivision)'' after ``such other 
     firm''; and
       (4) by adding at the end the following new subsection:
       ``(d) Basis for Secretary's Determinations.--
       ``(1) Increased imports.--For purposes of subsection 
     (a)(2)(A)(ii), the Secretary may determine that increased 
     imports of like or directly competitive articles or services 
     exist if the workers' firm or subdivision or customers of the 
     workers' firm or subdivision accounting for not less than 20 
     percent of the sales of the workers' firm or subdivision 
     certify to the Secretary that they are obtaining such 
     articles or services from a foreign country.
       ``(2) Obtaining services abroad.--For purposes of 
     subsection (a)(2)(B)(ii), the Secretary may determine that 
     the workers' firm, subdivision, or public agency has obtained 
     or is likely to obtain like or directly competitive services 
     from a firm in a foreign country based on a certification 
     thereof from the workers' firm, subdivision, or public 
     agency.
       ``(3) Authority of the secretary.--The Secretary may obtain 
     the certifications under paragraphs (1) and (2) through 
     questionnaires or in such other manner as the Secretary 
     determines is appropriate.''.
       (c) Training.--Section 236(a)(2)(A) of the Trade Act of 
     1974 (19 U.S.C. 2296(a)(2)(A)) is amended by striking 
     ``$220,000,000'' and inserting ``$440,000,000''.
       (d) Definitions.--Section 247 of the Trade Act of 1974 (19 
     U.S.C. 2319) is amended--
       (1) in paragraph (1)--
       (A) by inserting ``or public agency'' after ``of a firm''; 
     and
       (B) by inserting ``or public agency'' after ``or 
     subdivision'';
       (2) in paragraph (2)(B), by inserting ``or public agency'' 
     after ``the firm'';
       (3) by redesignating paragraphs (8) through (17) as 
     paragraphs (9) through (18), respectively; and
       (4) by inserting after paragraph (6) the following:
       ``(7) The term `public agency' means a department or agency 
     of a State or local government or of the Federal Government.
       ``(8) The term `service sector firm' means an entity 
     engaged in the business of providing services.''.
       (e) Technical Amendment.--Section 245(a) of the Trade Act 
     of 1974 (19 U.S.C. 2317(a)) is amended by striking ``, other 
     than subchapter D''.

     SEC. 333. TRADE ADJUSTMENT ASSISTANCE FOR FIRMS AND 
                   INDUSTRIES.

       (a) Firms.--
       (1) Assistance.--Section 251 of the Trade Act of 1974 (19 
     U.S.C. 2341) is amended--
       (A) in subsection (a), by inserting ``or service sector 
     firm'' after ``(including any agricultural firm'';
       (B) in subsection (c)(1)--
       (i) in the matter preceding subparagraph (A), by inserting 
     ``or service sector firm'' after ``(including any 
     agricultural firm'';
       (ii) in subparagraph (B)(ii), by inserting ``or service'' 
     after ``of an article''; and
       (iii) in subparagraph (C), by striking ``articles like or 
     directly competitive with articles which are produced'' and 
     inserting ``articles or services like or directly competitive 
     with articles or services which are produced or provided''; 
     and
       (C) by adding at the end the following:
       ``(e) Basis for Secretary Determination.--
       ``(1) Increased imports.--For purposes of subsection 
     (c)(1)(C), the Secretary may determine that increases of 
     imports of like or directly competitive articles or services 
     exist if customers accounting for not less than 20 percent of 
     the sales of the workers' firm certify to the Secretary that 
     they are obtaining such articles or services from a foreign 
     country.
       ``(2) Authority of the secretary.--The Secretary may obtain 
     the certifications under paragraph (1) through questionnaires 
     or in such other manner as the Secretary determines is 
     appropriate. The Secretary may exercise the authority under 
     section 249 in carrying out this subsection.''.
       (2) Authorization of appropriations.--Section 256(b) of the 
     Trade Act of 1974 (19 U.S.C. 2346(b)) is amended by striking 
     ``$16,000,000'' and inserting ``$32,000,000''.
       (3) Definitions.--Section 261 of the Trade Act of 1974 (19 
     U.S.C. 2351) is amended to read as follows:

     ``SEC. 261. DEFINITIONS.

       ``For purposes of this chapter:
       ``(1) Firm.--The term `firm' includes an individual 
     proprietorship, partnership, joint venture, association, 
     corporation (including a development corporation), business 
     trust, cooperative, trustee in bankruptcy, and receiver under 
     decree of any court. A firm, together with any predecessor or 
     successor firm, or any affiliated firm controlled or 
     substantially beneficially owned by substantially the same 
     persons, may be considered a single firm where necessary to 
     prevent unjustifiable benefits.
       ``(2) Service sector firm.--The term `service sector firm' 
     means a firm engaged in the business of providing 
     services.''.
       (b) Industries.--Section 265(a) of the Trade Act of 1974 
     (19 U.S.C. 2355(a)) is amended by inserting ``or service'' 
     after ``new product''.

     SEC. 334. MONITORING AND REPORTING.

       Section 282 of the Trade Act of 1974 (19 U.S.C. 2393) is 
     amended--
       (1) in the first sentence--
       (A) by striking ``The Secretary'' and inserting ``(a) 
     Monitoring Programs.--The Secretary'';
       (B) by inserting ``and services'' after ``imports of 
     articles'';
       (C) by inserting ``and domestic provision of services'' 
     after ``domestic production'';
       (D) by inserting ``or providing services'' after 
     ``producing articles''; and
       (E) by inserting ``, or provision of services,'' after 
     ``changes in production''; and
       (2) by adding at the end the following:
       ``(b) Collection of Data and Reports on Services Sector.--
       ``(1) Secretary of labor.--Not later than 3 months after 
     the date of the enactment of the Trade Adjustment Assistance 
     Equity for Service Workers Act of 2005, the Secretary of 
     Labor shall implement a system to collect data on adversely 
     affected service workers that includes the number of workers 
     by State, industry, and cause of dislocation of each worker.
       ``(2) Secretary of commerce.--Not later than 6 months after 
     such date of enactment, the Secretary of Commerce shall, in 
     consultation with the Secretary of Labor, conduct a study and 
     report to the Congress on ways to improve the timeliness and 
     coverage of data on trade in services, including methods to 
     identify increased imports due to the relocation of United 
     States firms to foreign countries, and increased imports due 
     to United States firms obtaining services from firms in 
     foreign countries.''.

     SEC. 335. ALTERNATIVE TRADE ADJUSTMENT ASSISTANCE.

       (a) In General.--Section 246(a)(3) of the Trade Act of 1974 
     (19 U.S.C. 2318(a)(3)) is amended to read as follows:
       ``(3) Eligibility.--A worker in the group that the 
     Secretary has certified as eligible for the alternative trade 
     adjustment assistance program may elect to receive benefits 
     under the alternative trade adjustment assistance program if 
     the worker--
       ``(A) is covered by a certification under subchapter A of 
     this chapter;
       ``(B) obtains reemployment not more than 26 weeks after the 
     date of separation from the adversely affected employment;
       ``(C) is at least 40 years of age;
       ``(D) earns not more than $50,000 a year in wages from 
     reemployment;
       ``(E) is employed on a full-time basis as defined by State 
     law in the State in which the worker is employed; and
       ``(F) does not return to the employment from which the 
     worker was separated.''.
       (b) Conforming Amendments.--Section 246 of the Trade Act of 
     1974 (19 U.S.C. 2318) is amended--
       (1) in subsection (a)(2)(A), by striking ``paragraph 
     (3)(B)'' and inserting ``paragraph (3)'';
       (2) in subsection (a)(2)(B), by striking ``paragraph 
     (3)(B)'' and inserting ``paragraph (3)''; and

[[Page 384]]

       (3) in subsection (b)(2), by striking ``subsection 
     (a)(3)(B)'' and inserting ``subsection (a)(3)''.

     SEC. 336. EFFECTIVE DATE.

       (a) In General.--Except as provided in subsection (b), the 
     amendments made by this chapter shall take effect on the date 
     of enactment of this Act.
       (b) Special Rule for Certain Service Workers.--A group of 
     workers in a service sector firm, or subdivision of a service 
     sector firm, or public agency (as defined in section 247 (7) 
     and (8) of the Trade Act of 1974, as added by section 332(d) 
     of this Act) who--
       (1) would have been certified eligible to apply for 
     adjustment assistance under chapter 2 of title II of the 
     Trade Act of 1974 if the amendments made by this Act had been 
     in effect on November 4, 2002; and
       (2) file a petition pursuant to section 221 of the Trade 
     Act of 1974 (19 U.S.C. 2271) not later than 6 months after 
     the date of enactment of this Act, shall be eligible for 
     certification under section 223 of the Trade Act of 1974 (19 
     U.S.C. 2273) if the workers' last total or partial separation 
     from the firm or subdivision of the firm or public agency 
     occurred on or after November 4, 2002 and before the date of 
     enactment of this Act.

         CHAPTER 2--TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITIES

     SEC. 341. SHORT TITLE.

       This chapter may be cited as the ``Trade Adjustment 
     Assistance for Communities Act of 2005''.

     SEC. 342. PURPOSE.

       The purpose of this chapter is to assist communities 
     negatively impacted by trade with economic adjustment through 
     the integration of political and economic organizations, the 
     coordination of Federal, State, and local resources, the 
     creation of community-based development strategies, and the 
     provision of economic transition assistance.

     SEC. 343. TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITIES.

       (a) Repeal of Terminated Provisions.--Chapter 4 of the 
     Trade Act of 1974 (19 U.S.C. 2371 et seq.) is repealed.
       (b) Trade Adjustment Assistance for Communities.--Title II 
     of the Trade Act of 1974 (19 U.S.C. 2251 et seq.) is amended 
     by inserting after chapter 3 the following new chapter:

        ``CHAPTER 4--TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITIES

     ``SEC. 271. DEFINITIONS.

       ``In this chapter:
       ``(1) Affected domestic producer.--The term `affected 
     domestic producer' means any manufacturer, producer, service 
     provider, farmer, rancher, fisherman or worker representative 
     (including associations of such persons) that was affected by 
     a finding under the Antidumping Act, 1921 (title II of the 
     Act of May 27, 1921; 42 Stat. 11, chapter 14), or by an 
     antidumping or countervailing duty order issued under title 
     VII of the Tariff Act of 1930 (19 U.S.C. 1671 et seq.).
       ``(2) Agricultural commodity producer.--The term 
     `agricultural commodity producer' has the same meaning as the 
     term `person' as prescribed by regulations promulgated under 
     section 1001(e) of the Food Security Act of 1985 (7 U.S.C. 
     1308(e)).
       ``(3) Community.--The term `community' means a city, 
     county, or other political subdivision of a State or a 
     consortium of political subdivisions of a State that the 
     Secretary certifies as being negatively impacted by trade.
       ``(4) Community negatively impacted by trade.--A community 
     negatively impacted by trade means a community with respect 
     to which a determination has been made under section 273.
       ``(5) Eligible community.--The term `eligible community' 
     means a community certified under section 273 for assistance 
     under this chapter.
       ``(6) Fisherman.--
       ``(A) In general.--The term `fisherman' means any person 
     who--
       ``(i) is engaged in commercial fishing; or
       ``(ii) is a United States fish processor.
       ``(B) Commercial fishing, fish, fishery, fishing, fishing 
     vessel, person, and united states fish processor.--The terms 
     `commercial fishing', `fish', `fishery', `fishing', `fishing 
     vessel', `person', and `United States fish processor' have 
     the same meanings as given such terms in section 3 of the 
     Magnuson-Stevens Fishery Conservation and Management Act (16 
     U.S.C. 1802).
       ``(7) Job loss.--The term `job loss' means the total 
     separation or partial separation of an individual, as those 
     terms are defined in section 247.
       ``(8) Secretary.--Except as otherwise provided, the term 
     `Secretary' means the Secretary of Commerce.

     ``SEC. 272. COMMUNITY TRADE ADJUSTMENT ASSISTANCE PROGRAM.

       ``(a) Establishment.--Not later than 6 months after the 
     date of enactment of the Trade Adjustment Assistance for 
     Communities Act of 2005, the Secretary shall establish a 
     Trade Adjustment Assistance for Communities Program at the 
     Department of Commerce.
       ``(b) Personnel.--The Secretary shall designate such staff 
     as may be necessary to carry out the responsibilities 
     described in this chapter.
       ``(c) Coordination of Federal Response.--The Secretary 
     shall--
       ``(1) provide leadership, support, and coordination for a 
     comprehensive management program to address economic 
     dislocation in eligible communities;
       ``(2) coordinate the Federal response to an eligible 
     community--
       ``(A) by identifying all Federal, State, and local 
     resources that are available to assist the eligible community 
     in recovering from economic distress;
       ``(B) by ensuring that all Federal agencies offering 
     assistance to an eligible community do so in a targeted, 
     integrated manner that ensures that an eligible community has 
     access to all available Federal assistance;
       ``(C) by assuring timely consultation and cooperation 
     between Federal, State, and regional officials concerning 
     economic adjustment for an eligible community; and
       ``(D) by identifying and strengthening existing agency 
     mechanisms designed to assist eligible communities in their 
     efforts to achieve economic adjustment and workforce 
     reemployment;
       ``(3) provide comprehensive technical assistance to any 
     eligible community in the efforts of that community to--
       ``(A) identify serious economic problems in the community 
     that are the result of negative impacts from trade;
       ``(B) integrate the major groups and organizations 
     significantly affected by the economic adjustment;
       ``(C) access Federal, State, and local resources designed 
     to assist in economic development and trade adjustment 
     assistance;
       ``(D) diversify and strengthen the community economy; and
       ``(E) develop a community-based strategic plan to address 
     economic development and workforce dislocation, including 
     unemployment among agricultural commodity producers, and 
     fishermen;
       ``(4) establish specific criteria for submission and 
     evaluation of a strategic plan submitted under section 
     274(d);
       ``(5) establish specific criteria for submitting and 
     evaluating applications for grants under section 275;
       ``(6) administer the grant programs established under 
     sections 274 and 275; and
       ``(7) establish an interagency Trade Adjustment Assistance 
     for Communities Working Group, consisting of the 
     representatives of any Federal department or agency with 
     responsibility for economic adjustment assistance, including 
     the Department of Agriculture, the Department of Education, 
     the Department of Labor, the Department of Housing and Urban 
     Development, the Department of Health and Human Services, the 
     Small Business Administration, the Department of the 
     Treasury, the Department of Commerce, and any other Federal, 
     State, or regional department or agency the Secretary 
     determines necessary or appropriate.

     ``SEC. 273. CERTIFICATION AND NOTIFICATION.

       ``(a) Certification.--Not later than 45 days after an event 
     described in subsection (c)(1), the Secretary shall determine 
     if a community described in subsection (b)(1) is negatively 
     impacted by trade, and if a positive determination is made, 
     shall certify the community for assistance under this 
     chapter.
       ``(b) Determination That Community Is Eligible.--
       ``(1) Community described.--A community described in this 
     paragraph means a community with respect to which on or after 
     October 1, 2005--
       ``(A) the Secretary of Labor certifies a group of workers 
     (or their authorized representative) in the community as 
     eligible for assistance pursuant to section 223;
       ``(B) the Secretary of Commerce certifies a firm located in 
     the community as eligible for adjustment assistance under 
     section 251;
       ``(C) the Secretary of Agriculture certifies a group of 
     agricultural commodity producers (or their authorized 
     representative) in the community as eligible for adjustment 
     assistance under section 293;
       ``(D) an affected domestic producer is located in the 
     community; or
       ``(E) the Secretary determines that a significant number of 
     fishermen in the community is negatively impacted by trade.
       ``(2) Negatively impacted by trade.--The Secretary shall 
     determine that a community is negatively impacted by trade, 
     after taking into consideration--
       ``(A) the number of jobs affected compared to the size of 
     the workforce in the community;
       ``(B) the severity of the rates of unemployment in the 
     community and the duration of the unemployment in the 
     community;
       ``(C) the income levels and the extent of underemployment 
     in the community;
       ``(D) the outmigration of population from the community and 
     the extent to which the outmigration is causing economic 
     injury in the community; and
       ``(E) the unique problems and needs of the community.
       ``(c) Events Described.--
       ``(1) In general.--An event described in this paragraph 
     means one of the following:
       ``(A) A notification described in paragraph (2).
       ``(B) A certification of a firm under section 251.
       ``(C) A finding under the Antidumping Act, 1921, or an 
     antidumping or countervailing

[[Page 385]]

     duty order issued under title VII of the Tariff Act of 1930.
       ``(D) A determination by the Secretary that a significant 
     number of fishermen in a community have been negatively 
     impacted by trade.
       ``(2) Notification.--The Secretary of Labor, immediately 
     upon making a determination that a group of workers is 
     eligible for trade adjustment assistance under section 223, 
     (or the Secretary of Agriculture, immediately upon making a 
     determination that a group of agricultural commodity 
     producers is eligible for adjustment assistance under section 
     293, as the case may be) shall notify the Secretary of the 
     determination.
       ``(d) Notification to Eligible Communities.--Immediately 
     upon certification by the Secretary that a community is 
     eligible for assistance under subsection (b), the Secretary 
     shall notify the community--
       ``(1) of the determination under subsection (b);
       ``(2) of the provisions of this chapter;
       ``(3) how to access the clearinghouse established by the 
     Department of Commerce regarding available economic 
     assistance;
       ``(4) how to obtain technical assistance provided under 
     section 272(c)(3); and
       ``(5) how to obtain grants, tax credits, low income loans, 
     and other appropriate economic assistance.

     ``SEC. 274. STRATEGIC PLANS.

       ``(a) In General.--An eligible community may develop a 
     strategic plan for community economic adjustment and 
     diversification.
       ``(b) Requirements for Strategic Plan.--A strategic plan 
     shall contain, at a minimum, the following:
       ``(1) A description and justification of the capacity for 
     economic adjustment, including the method of financing to be 
     used.
       ``(2) A description of the commitment of the community to 
     the strategic plan over the long term and the participation 
     and input of groups affected by economic dislocation.
       ``(3) A description of the projects to be undertaken by the 
     eligible community.
       ``(4) A description of how the plan and the projects to be 
     undertaken by the eligible community will lead to job 
     creation and job retention in the community.
       ``(5) A description of how the plan will achieve economic 
     adjustment and diversification.
       ``(6) A description of how the plan and the projects will 
     contribute to establishing or maintaining a level of public 
     services necessary to attract and retain economic investment.
       ``(7) A description and justification for the cost and 
     timing of proposed basic and advanced infrastructure 
     improvements in the eligible community.
       ``(8) A description of how the plan will address the 
     occupational and workforce conditions in the eligible 
     community.
       ``(9) A description of the educational programs available 
     for workforce training and future employment needs.
       ``(10) A description of how the plan will adapt to changing 
     markets and business cycles.
       ``(11) A description and justification for the cost and 
     timing of the total funds required by the community for 
     economic assistance.
       ``(12) A graduation strategy through which the eligible 
     community demonstrates that the community will terminate the 
     need for Federal assistance.
       ``(c) Grants To Develop Strategic Plans.--The Secretary, 
     upon receipt of an application from an eligible community, 
     may award a grant to that community to be used to develop the 
     strategic plan.
       ``(d) Submission of Plan.--A strategic plan developed under 
     subsection (a) shall be submitted to the Secretary for 
     evaluation and approval.

     ``SEC. 275. GRANTS FOR ECONOMIC DEVELOPMENT.

       ``(a) In General.--The Secretary, upon approval of a 
     strategic plan from an eligible community, may award a grant 
     to that community to carry out any project or program that is 
     certified by the Secretary to be included in the strategic 
     plan approved under section 274(d), or consistent with that 
     plan.
       ``(b) Additional Grants.--
       ``(1) In general.--Subject to paragraph (2), in order to 
     assist eligible communities to obtain funds under Federal 
     grant programs, other than the grants provided for in section 
     274(c) or subsection (a), the Secretary may, on the 
     application of an eligible community, make a supplemental 
     grant to the community if--
       ``(A) the purpose of the grant program from which the grant 
     is made is to provide technical or other assistance for 
     planning, constructing, or equipping public works facilities 
     or to provide assistance for public service projects; and
       ``(B) the grant is one for which the community is eligible 
     except for the community's inability to meet the non-Federal 
     share requirements of the grant program.
       ``(2) Use as non-federal share.--A supplemental grant made 
     under this subsection may be used to provide the non-Federal 
     share of a project, unless the total Federal contribution to 
     the project for which the grant is being made exceeds 80 
     percent and that excess is not permitted by law.
       ``(c) Rural Community Preference.--The Secretary shall 
     develop guidelines to ensure that rural communities receive 
     preference in the allocation of resources.

     ``SEC. 276. GENERAL PROVISIONS.

       ``(a) Regulations.--The Secretary shall prescribe such 
     regulations as are necessary to carry out the provisions of 
     this chapter. Before implementing any regulation or guideline 
     proposed by the Secretary with respect to this chapter, the 
     Secretary shall submit the regulation or guideline to the 
     Committee on Finance of the Senate and the Committee on Ways 
     and Means of the House of Representatives for approval.
       ``(b) Supplement Not Supplant.--Funds appropriated under 
     this chapter shall be used to supplement and not supplant 
     other Federal, State, and local public funds expended to 
     provide economic development assistance for communities.
       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary $100,000,000 
     for each of fiscal years 2005 through 2008, to carry out this 
     chapter. Amounts appropriated pursuant to this subsection 
     shall remain available until expended.''.

     SEC. 344. CONFORMING AMENDMENTS.

       (a) Termination.--Section 285(b) of the Trade Act of 1974 
     (19 U.S.C. 2271 note) is amended by adding at the end the 
     following new paragraph:
       ``(3) Assistance for communities.--Technical assistance and 
     other payments may not be provided under chapter 4 after 
     September 30, 2008.''.
       (b) Table of Contents.--The table of contents for title II 
     of the Trade Act of 1974 is amended by striking the items 
     relating to chapter 4 of title II and inserting after the 
     items relating to chapter 3 the following new items:

        ``Chapter 4--TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITIES

``Sec. 271. Definitions.
``Sec. 272. Community Trade Adjustment Assistance Program.
``Sec. 273. Certification and notification.
``Sec. 274. Strategic plans.
``Sec. 275. Grants for economic development.
``Sec. 276. General provisions.''.

       (c) Judicial Review.--Section 284(a) of the Trade Act of 
     1974 (19 U.S.C. 2395(a)) is amended by striking ``section 
     271'' and inserting ``section 273''.

     SEC. 345. EFFECTIVE DATE.

       The amendments made by this chapter shall take effect on 
     the date of enactment of this Act.

            CHAPTER 3--OFFICE OF TRADE ADJUSTMENT ASSISTANCE

     SEC. 351. SHORT TITLE.

       This chapter may be cited as the ``Trade Adjustment 
     Assistance for Firms Reorganization Act''.

     SEC. 352. OFFICE OF TRADE ADJUSTMENT ASSISTANCE.

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

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

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

``Sec. 255A. Office of Trade Adjustment Assistance.''.

     SEC. 353. EFFECTIVE DATE.

       The amendments made by this chapter shall take effect on 
     the date of enactment of this Act.

CHAPTER 4--IMPROVEMENT OF CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE 
                              INDIVIDUALS

     SEC. 361. IMPROVEMENT OF THE AFFORDABILITY OF THE CREDIT.

       (a) Improvement of Affordability.--
       (1) In General.--Section 35(a) of the Internal Revenue Code 
     of 1986 (relating to credit for health insurance costs of 
     eligible individuals) is amended to read as follows:
       ``(a) Amount of Credit.--
       ``(1) In general.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by 
     subtitle A an amount equal to the excess of--
       ``(A) the amount paid by the taxpayer for coverage of the 
     taxpayer and qualifying family members under qualified health 
     insurance for eligible coverage months beginning in the 
     taxable year, over
       ``(B) the amount described in paragraph (2).
       ``(2) Amount described.--For purposes of paragraph (1), the 
     amount described in this paragraph is the lesser of--

[[Page 386]]

       ``(A) the amount equal to 20 percent of the amount 
     determined under paragraph (1)(A) for the taxable year, or
       ``(B) the amount equal to 5 percent of the taxpayer's 
     certified income (as determined under subsection (g)(9)) for 
     such taxable year.''.
       (2) Conforming amendment.--Section 7527(b) of such Code 
     (relating to advance payment of credit for health insurance 
     costs of eligible individuals) is amended by striking ``65 
     percent of the amount'' and all that follows through the 
     period at the end and inserting ``the amount determined under 
     section 35(a)(1) for such taxable year.''.
       (b) Determination of Certified Income.--Section 35(g) of 
     such Code (relating to special rules), is amended--
       (1) by redesignating paragraph (9) as paragraph (10), and
       (2) by inserting after paragraph (8) the following new 
     paragraph:
       ``(9) Certified income.--
       ``(A) In general.--The Secretary shall enter into 
     agreements with States to determine an individual's certified 
     income for purposes of subsection (a)(2)(B) for any taxable 
     year.
       ``(B) Requirements.--An agreement under subparagraph (A) 
     with a State shall--
       ``(i) permit an individual to complete an application for 
     certification of income for a taxable year (in such form and 
     manner as the Secretary shall determine) and to submit the 
     application to the State,
       ``(ii) require the State to determine the individual's 
     income for the taxable year on the basis of the individual's 
     monthly family income as of the month preceding the month in 
     which the application is submitted, and
       ``(iii) require the State to issue a certification of 
     income to the individual upon receipt of an application under 
     clause (i), which shall apply for purposes of determining the 
     taxpayer's certified income for purposes of subsection 
     (a)(2)(B) for the taxable year unless the State determines 
     upon completion of the processing of the application that the 
     certification is erroneous.
       ``(C) Notification of change in income.--An individual 
     issued a certification of income shall notify the State of 
     any substantial change in income that applies for at least 60 
     days and the taxpayer's certified income for the taxable year 
     shall be adjusted accordingly. An individual who fails to so 
     notify the State shall remit the difference (if any) between 
     the amount described in subsection (a)(2) for the taxable 
     year and such amount which would have been described under 
     such subsection for such taxable year if the notification had 
     been made as an addition to tax, plus interest at the 
     underpayment rate established under section 6621.''.
       (c) Effective Date.--The amendments made by this section 
     apply to taxable years beginning after December 31, 2004.

     SEC. 362. OFFERING OF FEDERAL FALLBACK COVERAGE.

       (a) Provision of Fallback Coverage.--
       (1) In general.--The Director of the Office of Personnel 
     Management jointly with the Secretary of the Treasury shall 
     establish a program under which eligible individuals (as 
     defined in section 35(c) of the Internal Revenue Code of 
     1986) are offered enrollment under health benefit plans that 
     are made available under FEHBP.
       (2) Terms and conditions.--The terms and conditions of 
     health benefits plans offered under paragraph (1) shall be 
     the same as the terms and coverage offered under FEHBP, 
     except that the percentage of the premium charged to eligible 
     individuals (as so defined) for such health benefit plans 
     shall be equal to the percentage that an employee would be 
     required to contribute for coverage under FEHBP.
       (3) Study.--The Director of the Office of Personnel 
     Management jointly with the Secretary of the Treasury shall 
     conduct a study of the impact of the offering of health 
     benefit plans under this subsection on the terms and 
     conditions, including premiums, for health benefit plans 
     offered under FEHBP and shall submit to Congress, not later 
     than 2 years after the date of the enactment of this Act, a 
     report on such study. Such report may contain such 
     recommendations regarding the establishment of separate risk 
     pools for individuals covered under FEHBP and eligible 
     individuals covered under health benefit plans offered under 
     paragraph (1) as may be appropriate to protect the interests 
     of individuals covered under FEHBP and alleviate any adverse 
     impact on FEHBP that may result from the offering of such 
     health benefit plans.
       (4) FEHBP defined.--In this section, the term ``FEHBP'' 
     means the Federal Employees Health Benefits Program offered 
     under chapter 89 of title 5, United States Code.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 35(e) of the Internal Revenue 
     Code of 1986 is amended by adding at the end the following 
     new subparagraph:
       ``(K) Coverage under a health benefits plan offered under 
     section 362(a)(1) of the Fair Wage, Competition, and 
     Investment Act of 2005.''.
       (2) Section 173(f)(2)(A) of the Workforce Investment Act of 
     1998 (29 U.S.C. 2918(f)(2)(A)) is amended by adding at the 
     end the following new clause:
       ``(xi) Coverage under a health benefits plan offered under 
     section 362(a)(1) of the Fair Wage, Competition, and 
     Investment Act of 2005.''.

     SEC. 363. CLARIFICATION OF ELIGIBILITY OF SPOUSE OF CERTAIN 
                   INDIVIDUALS ENTITLED TO MEDICARE.

       (a) In General.--Subsection (b) of section 35 of the 
     Internal Revenue Code of 1986 (defining eligible coverage 
     month) is amended by adding at the end the following:
       ``(3)  Special rule for spouse of individual entitled to 
     medicare.--Any month which would be an eligible coverage 
     month with respect to a taxpayer (determined without regard 
     to subsection (f)(2)(A)) shall be an eligible coverage month 
     for any spouse of such taxpayer.''.
       (b) Conforming Amendment.--Section 173(f)(5)(A)(i) of the 
     Workforce Investment Act of 1998 (29 U.S.C. 2918(f)(5)(A)(i)) 
     is amended by inserting ``(including with respect to any 
     month for which the eligible individual would have been 
     treated as such but for the application of paragraph 
     (7)(B)(i))'' before the comma.

        Subtitle D--Sense of the Senate on Free Trade Agreements

     SEC. 371. SENSE OF THE SENATE ON FREE TRADE AGREEMENTS.

       (a) Findings.--The Senate makes the following findings:
       (1) The United States is participating in the Doha Round of 
     World Trade Organization (``WTO'') negotiations, which seeks 
     to lower trade barriers for all members of the WTO.
       (2) In addition to participating in the Doha Round of WTO 
     negotiations, the United States is negotiating bilateral free 
     trade agreements with 20 countries.
       (3) Only 1 of those 20 countries is among the top 30 
     trading partners of the United States.
       (4) During the debate on the legislation that was enacted 
     as the Trade Act of 2002 (Public Law 107-210; 116 Stat. 933), 
     a representative of the President argued that ``[i]ncreased 
     trade will help our workers, farmers, businesses, and economy 
     by enhancing employment opportunities, opening more markets 
     to American goods and services, and increasing choices and 
     lowering costs for consumers''.
       (5) During that debate and on other occasions, the 
     President and individuals in the Executive Branch of the 
     United States have repeatedly argued that increased trade 
     means an increase in the number of jobs in the United States 
     and a higher standard of living for people in the United 
     States.
       (6) The President and individuals in the Executive Branch 
     of the United States have also argued that trade expands 
     markets for United States goods and services, creates higher-
     paying jobs in the United States, and invigorates local 
     communities and their economies.
       (7) Trade agreements between the United States and 
     countries with small economies have little impact on creating 
     jobs in the United States or a higher standard of living for 
     people in the United States.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) the trade policy of the United States should focus on 
     creating more jobs in the United States and a higher standard 
     of living for people in the United States; and
       (2) to best accomplish these goals, the United States 
     should focus its efforts on trade negotiations occurring at 
     the WTO and, when negotiating trade agreements on a bilateral 
     basis, focus on agreements with countries that have large 
     economies that will provide meaningful export opportunities 
     for United States farmers, workers, and businesses.
                                 ______
                                 
      By Mr. BINGAMAN (for himself, Mr. Reid, Mr. Kennedy, Mr. Corzine, 
        Mr. Durbin, Mr. Reed, Mr. Schumer, Mr. Dodd, Mr. Harkin, Ms. 
        Mikulski, Ms. Stabenow, Mr. Lautenberg, Mrs. Feinstein, Mrs. 
        Clinton, Mr. Inouye, Mr. Rockefeller, Mr. Sarbanes, and Mr. 
        Dayton):
  S. 15. A bill to improve education for all students, and for other 
purposes; to the Committee on Finance
  Mr. BINGAMAN. 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. 15

       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 ``Quality Education for All 
     Act''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

       TITLE I--STRENGTHENING HEAD START AND CHILD CARE PROGRAMS

          Subtitle A--Increasing Access to Head Start Programs

Sec. 101. Authorization of appropriations.

[[Page 387]]

Sec. 102. Strengthening Indian and migrant and seasonal Head Start 
              programs.
Sec. 103. Expanding Early Head Start programs.
Sec. 104. Participation in Head Start programs.

   Subtitle B--Enhancing the School Readiness of Head Start Children

Sec. 111. School readiness standards.
Sec. 112. Staff.

     Subtitle C--Expanding Access to Quality, Affordable Child Care

Sec. 121. Authorization of appropriations.

          Subtitle D--Strengthening the Quality of Child Care

Sec. 131. State plan requirements relating to training.
Sec. 132. Strengthening the quality of child care.

  TITLE II--PROVIDING SAFE, RELIABLE TRANSPORTATION FOR RURAL SCHOOL 
                                CHILDREN

Sec. 201. Findings and purpose.
Sec. 202. Definitions.
Sec. 203. Grant program.
Sec. 204. Authorization of appropriations.

TITLE III--SENSE OF THE SENATE REGARDING FULLY FUNDING THE INDIVIDUALS 
                WITH DISABILITIES EDUCATION ACT BY 2011

Sec. 301. Findings.
Sec. 302. Sense of the Senate regarding authorization of 
              appropriations.

      TITLE IV--IMPROVEMENT OF ELEMENTARY AND SECONDARY EDUCATION

 Subtitle A--Public School Choice, Supplemental Educational Services, 
                          and Teacher Quality

Sec. 401. Public school choice capacity.
Sec. 402. Supplemental educational services.
Sec. 403. Qualifications for teachers and paraprofessionals.

          Subtitle B--Adequate Yearly Progress Determinations

Sec. 421. Review of adequate yearly progress determinations for schools 
              for the 2002-2003 school year.
Sec. 422. Review of adequate yearly progress determinations for local 
              educational agencies for the 2002-2003 school year.
Sec. 423. Definitions.

                    Subtitle C--Technical Assistance

Sec. 451. Technical assistance.

            TITLE V--IMPROVING ASSESSMENT AND ACCOUNTABILITY

Sec. 501. Grants for increasing data capacity for purposes of 
              assessment and accountability.
Sec. 502. Grants for assessment of children with disabilities and 
              children who are limited English proficient.
Sec. 503. Reports on student enrollment and graduation rates.
Sec. 504. Civil rights.

  TITLE VI--SENSE OF THE SENATE REGARDING FUNDING FOR ELEMENTARY AND 
                          SECONDARY EDUCATION

Sec. 601. Sense of the Senate.

    TITLE VII--PROVIDING A ROADMAP FOR FIRST GENERATION COLLEGE FOR 
                                STUDENTS

Sec. 701. Expansion of TRIO and GEARUP.

  TITLE VIII--COLLEGE TUITION RELIEF FOR STUDENTS AND THEIR FAMILIES 
                          THROUGH PELL GRANTS

Sec. 801. Pell Grants tax tables hold harmless.
Sec. 802. Sense of the Senate regarding increasing the maximum Pell 
              Grant.
Sec. 803. Establishment of a Pell demonstration program.

 TITLE IX--TUITION FREE COLLEGE FOR MATHEMATICS, SCIENCE, AND SPECIAL 
                           EDUCATION TEACHERS

Sec. 901. Purpose.
Sec. 902. Tuition free college for mathematics, science, and special 
              education teachers.
Sec. 903. Offset for tuition free college for mathematics, science, and 
              special education teachers.

          TITLE X--MAKING COLLEGE AFFORDABLE FOR ALL STUDENTS

Sec. 1001. Expansion of deduction for higher education expenses.
Sec. 1002. Credit for interest on higher education loans.
Sec. 1003. Hope and Lifetime Learning credits to be refundable.

       TITLE I--STRENGTHENING HEAD START AND CHILD CARE PROGRAMS

          Subtitle A--Increasing Access to Head Start Programs

     SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

       Section 639(a) of the Head Start Act (42 U.S.C. 9834(a)) is 
     amended by striking ``such sums'' and all that follows and 
     inserting the following: ``$8,570,000,000 for fiscal year 
     2006, $10,445,000,000 for fiscal year 2007, $12,384,000,000 
     for fiscal year 2008, $14,334,000,000 for fiscal year 2009, 
     and $16,332,000,000 for fiscal year 2010.''.

     SEC. 102. STRENGTHENING INDIAN AND MIGRANT AND SEASONAL HEAD 
                   START PROGRAMS.

       Section 640(a)(2) of the Head Start Act (42 U.S.C. 
     9835(a)(2)) is amended by striking subparagraph (A) and 
     inserting the following:
       ``(A) Indian Head Start programs, services for children 
     with disabilities, and migrant and seasonal Head Start 
     programs, except that the Secretary shall reserve for each 
     fiscal year for use by Indian Head Start and migrant and 
     seasonal Head Start programs (referred to in this 
     subparagraph as `covered programs'), on a nationwide basis, a 
     sum that is the total of not less than 4 percent of the 
     amount appropriated under section 639(a) for that fiscal year 
     (for Indian Head Start programs), and not less than 5 percent 
     of that appropriated amount (for migrant and seasonal Head 
     Start programs), except that--
       ``(i) if reserving the specified percentages for covered 
     programs and would reduce the number of children served by 
     Head Start programs, relative to the number of children 
     served on the date of enactment of the Quality Education for 
     All Act, taking into consideration an appropriate adjustment 
     for inflation, the Secretary shall reserve percentages that 
     approach, as closely as practicable, the specified 
     percentages and that do not cause such a reduction; and
       ``(ii) notwithstanding any other provision of this 
     subparagraph, the Secretary shall reserve for each fiscal 
     year for use by Indian Head Start programs and by migrant and 
     seasonal Head Start programs, on a nationwide basis, not less 
     than the amount that was obligated for use by Indian Head 
     Start programs and by migrant and seasonal Head Start 
     programs, respectively, for the previous fiscal year;''.

     SEC. 103. EXPANDING EARLY HEAD START PROGRAMS.

       Section 640(a)(6) of the Head Start Act (42 U.S.C. 
     9835(a)(6)) is amended--
       (1) in subparagraph (A), by striking ``7.5 percent for 
     fiscal year 1999'' and all that follows and inserting ``12 
     percent for fiscal year 2006, 14 percent for fiscal year 
     2007, 16 percent for fiscal year 2008, 18 percent for fiscal 
     year 2009, and 20 percent for fiscal year 2010, of the amount 
     appropriated pursuant to section 639(a).'';
       (2) by striking subparagraph (B); and
       (3) by redesignating subparagraph (C) as subparagraph (B).

     SEC. 104. PARTICIPATION IN HEAD START PROGRAMS.

        Section 645 of the Head Start Act (42 U.S.C. 9840) is 
     amended--
       (1) in subsection (a)(1)(A), by inserting ``130 percent 
     of'' after ``below''; and
       (2) by adding at the end the following:
       ``(e) After demonstrating a need through a community needs 
     assessment, a Head Start agency may apply to the Secretary to 
     convert part-day sessions, particularly consecutive part-day 
     sessions, into full-day sessions.''.

   Subtitle B--Enhancing the School Readiness of Head Start Children

     SEC. 111. SCHOOL READINESS STANDARDS.

       Section 641A(a)(1)(B)(ii) of the Head Start Act (42 U.S.C. 
     9836(a)(1)(B)(ii)) is amended by striking ``at a minimum'' 
     and all that follows and inserting the following: ``at a 
     minimum, develop and demonstrate--
       ``(I) language skills, including an expanded use of 
     vocabulary;
       ``(II) interest in and appreciation of books, reading, and 
     writing (either alone or with others), phonological and 
     phonemic awareness, and varied modes of expression and 
     communication;
       ``(III) premathematics knowledge and skills, including 
     knowledge and skills relating to aspects of classification, 
     seriation, numbers, spatial relations, and time;
       ``(IV) cognitive abilities related to academic achievement;
       ``(V) abilities related to social and emotional 
     development;
       ``(VI) gross and fine motor skills; and
       ``(VII) in the case of children with limited English 
     proficiency, abilities related to progress toward acquisition 
     of the English language.''.

     SEC. 112. STAFF.

       (a) Staff Qualifications and Development.--Section 648A of 
     the Head Start Act (42 U.S.C. 9843a) is amended--
       (1) in subsection (a)(2)--
       (A) in subparagraph (A)--
       (i) in the matter preceding clause (i), by striking ``not 
     later than September 30, 2003'' and all that follows through 
     ``programs have'' and inserting ``not later than the date 
     determined under subparagraph (D) for a Head Start region, 
     each Head Start agency in the region with a center-based 
     program shall ensure that all classrooms in the program have 
     at least 1 teacher who has'';
       (ii) in clause (i), strike ``an associate, baccalaureate,'' 
     and insert ``a baccalaureate''; and
       (iii) in clause (ii), strike ``an associate, 
     baccalaureate,'' and insert ``a baccalaureate''; and
       (B) by striking subparagraph (B) and inserting the 
     following:
       ``(B) Temporary requirement.--Until the date determined 
     under subparagraph (D) for a Head Start region, the Secretary 
     shall ensure that at least 50 percent of all Head Start 
     teachers in the region in center-based programs have--
       ``(i) an associate, baccalaureate, or advanced degree in 
     early childhood education; or
       ``(ii) an associate, baccalaureate, or advanced degree in a 
     field related to early

[[Page 388]]

     childhood education, with experience in teaching preschool 
     children.
       ``(C) Requirement for new head start teachers.--Not later 
     than 3 years after the date of enactment of the Quality 
     Education for All Act, the Secretary shall require that all 
     teachers hired nationwide in center-based programs of Head 
     Start agencies following the date of the requirement--
       ``(i) have an associate, baccalaureate, or advanced degree 
     in early childhood education;
       ``(ii) have an associate, baccalaureate, or advanced degree 
     in a field related to early childhood education, with 
     experience in teaching preschool children; or
       ``(iii) be enrolled, or enroll not later than 1 year after 
     the date of hire, in a program of study leading to an 
     associate degree in early childhood education.
       ``(D) Appropriate date.--The Secretary shall determine an 
     appropriate date for Head Start agencies in each Head Start 
     region to reach the result described in subparagraph (A), but 
     in no case shall such a date be later than 8 years after the 
     date of enactment of Quality Education for All Act.
       ``(E) Progress.--
       ``(i) Requirement.--The Secretary shall require Head Start 
     agencies with center-based programs to demonstrate continuing 
     and consistent progress each year to reach the results 
     described in subparagraphs (A) and (C).
       ``(ii) Plan.--Each State shall establish a plan for the 
     Head Start agencies with center-based programs in the State 
     to reach the results described in subparagraphs (A) and (C).
       ``(iii) Progress.--Each Head Start agency shall prepare and 
     submit to the Secretary and the Governor of the State a 
     report indicating the number and percentage of its teachers 
     in center-based programs with child development associate 
     credentials or associate, baccalaureate, or advanced degrees 
     in early childhood education or a field related to early 
     childhood education. The Secretary shall compile all such 
     reports and submit a summary of the compiled reports to the 
     Committee on Health, Education, Labor, and Pensions of the 
     Senate and the Committee on Education and the Workforce of 
     the House of Representatives.'';
       (2) in subsection (a)(3), by striking ``(2)(A)'' and 
     inserting ``(2)(B)''; and
       (3) by adding at the end the following:
       ``(f) Pre-Literacy and Language Training.--To support local 
     efforts to enhance early language and pre-literacy 
     development of children in Head Start programs, and to 
     provide the children with high-quality oral language skills 
     and environments that are rich in literature, in which to 
     acquire early language and pre-literacy skills, each Head 
     Start agency shall ensure that all of the agency's Head Start 
     teachers receive ongoing training in language and emergent 
     literacy. Such training shall also include information 
     regarding appropriate curricula and assessments to improve 
     instruction and learning. Such training shall include 
     training in methods to promote phonological and phonemic 
     awareness and vocabulary development in an age-appropriate 
     and culturally and linguistically appropriate manner.
       ``(g) Professional Development Plans.--Each Head Start 
     agency and center shall create, in consultation with 
     employees of the agency or center (including family service 
     workers), a professional development plan for employees who 
     provide direct services to children, including a plan for 
     teachers, to meet the requirements set forth in subsection 
     (a).''.
       (b) Attracting and Retaining High-Quality Head Start 
     Teachers; Tribal College or University-Head Start Partnership 
     Program.--
       (1) Program.--The Head Start Act is amended by inserting 
     after section 648A (42 U.S.C. 9843a) the following:

     ``SEC. 648B. ATTRACTING AND RETAINING HIGH-QUALITY HEAD START 
                   TEACHERS.

       ``(a) In General.--The Secretary shall make grants to 
     eligible Head Start agencies to enable the agencies to reach 
     the results described in subparagraphs (A) and (C) of section 
     648A(a)(2). The Secretary shall make the grants from 
     allotments determined under subsection (b).
       ``(b) Allotments.--From the funds made available under 
     section 639(c) for a fiscal year and not reserved under 
     subsection (d), the Secretary shall allot to each Head Start 
     agency an amount that bears the same relationship to such 
     funds as the amount received by the agency under section 640 
     for that fiscal year bears to the amount received by all Head 
     Start agencies under section 640 for that fiscal year.
       ``(c) Salary Plan.--A Head Start agency that receives a 
     grant under this section shall develop and carry out a plan 
     to raise the average salaries of teachers in the agency's 
     Head Start programs. In developing the plan, the agency shall 
     take into consideration the training, level of education, and 
     experience of the teachers, and the average salaries of 
     prekindergarten and kindergarten teachers employed by the 
     local educational agency for the school district in which the 
     Head Start agency is located, with similar training, level of 
     education, and experience.
       ``(d) Salaries in High-Cost Areas.--The Secretary may 
     reserve and use a portion of the funds available under 
     section 639(c) to assist Head Start agencies located in high-
     cost areas to help reduce the discrepancy between such 
     average salaries of such teachers and such average salaries 
     of such prekindergarten and kindergarten teachers.

     ``SEC. 648C. TRIBAL COLLEGE OR UNIVERSITY-HEAD START 
                   PARTNERSHIP PROGRAM.

       ``(a) Tribal College or University-Head Start Partnership 
     Program.--
       ``(1) Grants.--The Secretary is authorized to award grants, 
     of not less than 5 years duration, to Tribal Colleges and 
     Universities to--
       ``(A) implement education programs that include tribal 
     culture and language and increase the number of associate, 
     baccalaureate, and graduate degrees in early childhood 
     education and related fields that are earned by Indian Head 
     Start agency staff members, parents of children served by 
     such an agency, and members of the tribal community involved;
       ``(B) develop and implement the programs under subparagraph 
     (A) in technology-mediated formats; and
       ``(C) provide technology literacy programs for Indian Head 
     Start agency staff members and children and families of 
     children served by such an agency.
       ``(2) Staffing.--The Secretary shall ensure that the 
     American Indian Programs Branch of the Head Start Bureau of 
     the Department of Health and Human Services shall have 
     staffing sufficient to administer the programs under this 
     section and to provide appropriate technical assistance to 
     Tribal Colleges and Universities receiving grants under this 
     section.
       ``(b) Application.--Each Tribal College or University 
     desiring a grant under this section shall submit an 
     application to the Secretary, at such time, in such manner, 
     and containing such information as the Secretary may require, 
     including a certification that the Tribal College or 
     University has established a partnership with 1 or more 
     Indian Head Start agencies for the purpose of conducting the 
     activities described in subsection (a).
       ``(c) Definitions.--In this section:
       ``(1) Institution of higher education.--The term 
     `institution of higher education' has the meaning given such 
     term in section 101(a) of the Higher Education Act of 1965 
     (20 U.S.C. 1001(a)).
       ``(2) Tribal college or university.--The term `Tribal 
     College or University' means an institution--
       ``(A) defined by such term in section 316(b) of the Higher 
     Education Act of 1965 (20 U.S.C. 1059c(b)); and
       ``(B) determined to be accredited or a candidate for 
     accreditation by a nationally recognized accrediting agency 
     or association.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $10,000,000 for fiscal year 2006 and such sums as may be 
     necessary for each of fiscal years 2007 through 2010.''.
       (2) Authorization of appropriations.--Section 639 of the 
     Head Start Act (42 U.S.C. 9834) is amended--
       (A) in subsection (a), by inserting ``(other than section 
     648B)'' after ``this subchapter''; and
       (B) by adding at the end the following:
       ``(c) There are authorized to be appropriated to carry out 
     section 648B $387,000,000 for fiscal year 2006, $496,000,000 
     for fiscal year 2007, $608,000,000 for fiscal year 2008, 
     $723,000,000 for fiscal year 2009, and $841,000,000 for 
     fiscal year 2010.''.
       (3) Conforming amendments.--Section 640 of the Head Start 
     Act (42 U.S.C. 9835) is amended--
       (A) in subsection (a)--
       (i) in paragraph (1), by striking ``section 639'' and 
     inserting ``section 639(a)'';
       (ii) in paragraph (2)--

       (I) in the matter preceding subparagraph (A), by inserting 
     ``pursuant to section 639(a)'' after ``appropriated'';
       (II) in subparagraph (B), in the matter following clause 
     (ii), by inserting ``pursuant to section 639(a)'' after 
     ``appropriated''; and
       (III) in subparagraph (C), by inserting ``pursuant to 
     section 639(a)'' after ``appropriated'' each place it 
     appears; and

       (iii) in paragraph (4), in the matter preceding 
     subparagraph (A), by inserting ``pursuant to section 639(a)'' 
     after ``appropriated''; and
       (B) in subsection (g)(1), by inserting ``pursuant to 
     section 639(a)'' after ``appropriated'' each place it 
     appears.

     Subtitle C--Expanding Access to Quality, Affordable Child Care

     SEC. 121. AUTHORIZATION OF APPROPRIATIONS.

       Section 658B of the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9858) is amended--
       (1) by striking ``is'' and inserting ``are''; and
       (2) by striking ``subchapter'' and all that follows and 
     inserting ``subchapter $3,100,000,000 for fiscal year 2006, 
     $4,100,000,000 for fiscal year 2007, $5,100,000,000 for 
     fiscal year 2008, $6,100,000,000 for fiscal year 2009, and 
     $7,100,000,000 for fiscal year 2010.''.

          Subtitle D--Strengthening the Quality of Child Care

     SEC. 131. STATE PLAN REQUIREMENTS RELATING TO TRAINING.

       Section 658E(c) of the Child Care and Development Block 
     Grant Act of 1990 (42 U.S.C.

[[Page 389]]

     9858c(c)) is amended by adding at the end the following:
       ``(6) Training in early learning and childhood 
     development.--The State plan shall describe any training 
     requirements that are in effect within the State that are 
     designed to enable child care providers to promote the 
     social, emotional, physical, and cognitive development of 
     children and that are applicable to child care providers that 
     provide services for which assistance is made available under 
     this subchapter in the State.''.

     SEC. 132. STRENGTHENING THE QUALITY OF CHILD CARE.

       Section 658G of the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9858e) is amended to read as follows:

     ``SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.

       ``(a) In General.--
       ``(1) Reservation.--Each State that receives funds 
     appropriated under section 639(a) for a fiscal year shall 
     reserve and use not less than 6 percent of the funds for 
     activities provided directly, or through grants or contracts 
     with resource and referral organizations or other appropriate 
     entities, that are designed to improve the quality of child 
     care services.
       ``(2) Activities.--The funds reserved under paragraph (1) 
     may only be used to--
       ``(A) develop and implement voluntary guidelines on pre-
     reading and language skills and activities, for child care 
     programs in the State, that are aligned with State standards 
     for kindergarten through grade 12 or the State's general 
     goals for school preparedness;
       ``(B) support activities and provide technical assistance 
     in child care settings to enhance early learning for young 
     children, to promote literacy, and to foster school 
     preparedness;
       ``(C) offer training, professional development, and 
     educational opportunities for child care providers that 
     relate to the use of developmentally appropriate and age-
     appropriate curricula, and early childhood teaching 
     strategies, that are scientifically based and aligned with 
     the social, emotional, physical, and cognitive development of 
     children, including--
       ``(i) developing and operating distance learning child care 
     training infrastructures;
       ``(ii) developing model technology-based training courses;
       ``(iii) offering training for caregivers in informal child 
     care settings; and
       ``(iv) offering training for child care providers who care 
     for infants and toddlers and children with special needs;
       ``(D) engage in programs designed to increase the retention 
     and improve the competencies of child care providers, 
     including wage incentive programs and initiatives that 
     establish tiered payment rates for providers that meet or 
     exceed child care services guidelines, as defined by the 
     State;
       ``(E) evaluate and assess the quality and effectiveness of 
     child care programs and services offered in the State to 
     young children on improving overall school preparedness; and
       ``(F) carry out other activities determined by the State to 
     improve the quality of child care services provided in the 
     State and for which measurement of outcomes relating to 
     improved child safety, child well-being, or school 
     preparedness is possible.
       ``(b) Certification.--For each fiscal year beginning after 
     September 30, 2005, the State shall annually submit to the 
     Secretary a certification in which the State certifies and 
     demonstrates that the State was in compliance with subsection 
     (a) during the preceding fiscal year and describes how the 
     State used funds made available to carry out this subchapter 
     to comply with subsection (a) during that preceding fiscal 
     year.''.

  TITLE II--PROVIDING SAFE, RELIABLE TRANSPORTATION FOR RURAL SCHOOL 
                                CHILDREN

     SEC. 201. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds that--
       (1) school transportation issues have concerned parents, 
     local educational agencies, lawmakers, the National Highway 
     Traffic Safety Administration, the National Transportation 
     Safety Board, and the Environmental Protection Agency for 
     years;
       (2) millions of children face potential future health 
     problems because of exposure to noxious fumes emitted from 
     older school buses;
       (3) the Environmental Protection Agency established the 
     Clean School Bus USA program to replace 129,000 of the oldest 
     diesel buses that cannot be retrofitted in an effort to help 
     children and the environment by improving air quality;
       (4) unfortunately, many rural local educational agencies 
     are unable to participate in that program because of the 
     specialized fuels needed to sustain a clean bus fleet;
       (5) many rural local educational agencies are operating 
     outdated, unsafe school buses that are failing inspections 
     because of automotive flaws, resulting in the depletion of 
     the school bus fleets of the local educational agencies; and
       (6) many rural local educational agencies are unable to 
     afford to buy newer, safer buses.
       (b) Purpose.--The purpose of this title is to establish 
     within the Department of Education a Federal cost-sharing 
     program to assist rural local educational agencies with 
     older, unsafe school bus fleets in purchasing newer, safer 
     school buses.

     SEC. 202. DEFINITIONS.

       In this title:
       (1) Rural local educational agency.--The term ``rural local 
     educational agency'' means a local educational agency, as 
     defined in section 9101 of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 7801), with respect to 
     which--
       (A) each county in which a school served by the local 
     educational agency is located has a total population density 
     of fewer than 10 persons per square mile;
       (B) all schools served by the local educational agency are 
     designated with a school locale code of 7 or 8, as determined 
     by the Secretary; or
       (C) all schools served by the local educational agency have 
     been designated, by official action taken by the legislature 
     of the State in which the local educational agency is 
     located, as rural schools for purposes relating to the 
     provision of educational services to students in the State.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Education.
       (3) School bus.--The term ``school bus'' means a vehicle 
     the primary purpose of which is to transport students to and 
     from school or school activities.

     SEC. 203. GRANT PROGRAM.

       (a) In General.--From amounts appropriated under subsection 
     (e) for a fiscal year, the Secretary shall provide grants, on 
     a competitive basis, to rural local educational agencies to 
     pay the Federal share of the cost of purchasing new school 
     buses.
       (b) Application.--
       (1) In general.--Each rural local educational agency that 
     seeks to receive a grant under this title shall submit to the 
     Secretary for approval an application at such time, in such 
     manner, and accompanied by such information (in addition to 
     information required under paragraph (2)) as the Secretary 
     may require.
       (2) Contents.--Each application submitted under paragraph 
     (1) shall include--
       (A) documentation that, of the total number of school buses 
     operated by the rural local educational agency, not less than 
     50 percent of the school buses are in need of repair or 
     replacement;
       (B) documentation of the number of miles that each school 
     bus operated by the rural local educational agency traveled 
     in the most recent 9-month academic year;
       (C) documentation that the rural local educational agency 
     is operating with a reduced fleet of school buses;
       (D) a certification from the rural local educational agency 
     that--
       (i) authorizes the application of the rural local 
     educational agency for a grant under this title; and
       (ii) describes the dedication of the rural local 
     educational agency to school bus replacement programs and 
     school transportation needs (including the number of new 
     school buses needed by the rural local educational agency); 
     and
       (E) an assurance that the rural local educational agency 
     will pay the non-Federal share of the cost of the purchase of 
     new school buses under this title from non-Federal sources.
       (c) Priority.--In providing grants under this title, the 
     Secretary shall give priority to rural local educational 
     agencies that, as determined by the Secretary--
       (1) are transporting students in a bus manufactured before 
     1977;
       (2) have a grossly depleted fleet of school buses; or
       (3) serve a school that is required, under section 
     1116(b)(9) of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 6316(b)(9)), to provide transportation to 
     students to enable the students to transfer to another public 
     school served by the rural local educational agency.
       (d) Use of Funds.--School buses purchased with grant funds 
     awarded under subsection (a) shall be in compliance with 
     proposed air quality regulations and standards of the 
     Environmental Protection Agency for 2006.
       (e) Payments; Federal Share.--
       (1) Payments.--The Secretary shall pay to each rural local 
     educational agency having an application approved under this 
     section the Federal share described in paragraph (2) of the 
     cost of purchasing such number of new school buses as is 
     specified in the approved application.
       (2) Federal share.--The Federal share of the cost of 
     purchasing a new school bus under this title shall be 75 
     percent.

     SEC. 204. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out this 
     title $50,000,000 for fiscal year 2006 and such sums as may 
     be necessary for each of fiscal years 2007 through 2010.

TITLE III--SENSE OF THE SENATE REGARDING FULLY FUNDING THE INDIVIDUALS 
                WITH DISABILITIES EDUCATION ACT BY 2011

     SEC. 301. FINDINGS.

       (a) Findings.--The Senate finds the following:
       (1) Disability is a natural part of the human experience 
     and in no way diminishes the right of individuals to 
     participate in or contribute to society. Improving 
     educational

[[Page 390]]

     results for children with disabilities is an essential 
     element of our national policy of ensuring equality of 
     opportunity, full participation, independent living, and 
     economic self-sufficiency for individuals with disabilities.
       (2) Before the date of enactment of the Education for All 
     Handicapped Children Act of 1975 (Public Law 94-142), the 
     predecessor to the Individuals with Disabilities Education 
     Act (20 U.S.C. 1400 et seq.), the educational needs of 
     millions of children with disabilities were not being fully 
     met because--
       (A) the children did not receive appropriate educational 
     services;
       (B) the children were excluded entirely from the public 
     school system and from being educated with their peers;
       (C) undiagnosed disabilities prevented the children from 
     having a successful educational experience; or
       (D) a lack of adequate resources within the public school 
     system forced such families to find services outside the 
     public school system.
       (3) The Individuals with Disabilities Education Act has 
     been successful in ensuring children with disabilities and 
     the families of such children access to a free appropriate 
     public education and in improving educational results for 
     children with disabilities.
       (4) The implementation of the Individuals with Disabilities 
     Education Act has been impeded by the Federal Government's 
     failure to honor the commitment it made 30 years ago to 
     provide States with 40 percent of the excess costs of special 
     education.
       (5) While States, local educational agencies, and 
     educational service agencies are primarily responsible for 
     providing an education for all children with disabilities, it 
     is in the national interest that the Federal Government have 
     a supporting role in assisting State and local efforts to 
     educate children with disabilities in order to improve 
     results for such children and to ensure equal protection of 
     the law.
       (6) Congress passed authorizing language to fully fund the 
     Individuals with Disabilities Education Act and should 
     appropriate such sums as authorized.
       (7) A more equitable allocation of resources is essential 
     for the Federal Government to meet its responsibility to 
     provide an equal educational opportunity for all individuals.

     SEC. 302. SENSE OF THE SENATE REGARDING AUTHORIZATION OF 
                   APPROPRIATIONS.

        It is the sense of the Senate that for the purpose of 
     carrying out the Federal Government's commitment to children, 
     parents, and the States, there should be authorized to be 
     appropriated--
       (1) $14,648,647,143 or the maximum amount available for 
     awarding grants under section 611(a)(2) of the Individuals 
     with Disabilities Education Act, whichever is lower, for 
     fiscal year 2006, and there should be appropriated 
     $4,058,901,319 for fiscal year 2006, which should become 
     available for obligation on July 1, 2006, and should remain 
     available through September 30, 2007, except that if the 
     maximum amount available for awarding grants under section 
     611(a)(2) of such Act is less than $14,648,647,143, then the 
     amount should be reduced by the difference between 
     $14,648,647,143 and the maximum amount available for awarding 
     grants under section 611(a)(2) of such Act;
       (2) $16,938,917,714 or the maximum amount available for 
     awarding grants under section 611(a)(2) of the Individuals 
     with Disabilities Education Act, whichever is lower, for 
     fiscal year 2007, and there should be appropriated 
     $6,349,171,890 for fiscal year 2007, which should become 
     available for obligation on July 1, 2007, and should remain 
     available through September 30, 2008, except that if the 
     maximum amount available for awarding grants under section 
     611(a)(2) of such Act is less than $16,938,917,714, then the 
     amount should be reduced by the difference between 
     $16,938,917,714 and the maximum amount available for awarding 
     grants under section 611(a)(2) of such Act;
       (3) $19,229,188,286 or the maximum amount available for 
     awarding grants under section 611(a)(2) of the Individuals 
     with Disabilities Education Act, whichever is lower, for 
     fiscal year 2008, and there should be appropriated 
     $8,639,442,462 for fiscal year 2008, which should become 
     available for obligation on July 1, 2008, and should remain 
     available through September 30, 2009, except that if the 
     maximum amount available for awarding grants under section 
     611(a)(2) of such Act is less than $19,229,188,286, then the 
     amount should be reduced by the difference between 
     $19,229,188,286 and the maximum amount available for awarding 
     grants under section 611(a)(2) of such Act;
       (4) $21,519,458,857 or the maximum amount available for 
     awarding grants under section 611(a)(2) of the Individuals 
     with Disabilities Education Act, whichever is lower, for 
     fiscal year 2009, and there should be appropriated 
     $10,929,713,033 for fiscal year 2009, which should become 
     available for obligation on July 1, 2009, and should remain 
     available through September 30, 2010, except that if the 
     maximum amount available for awarding grants under section 
     611(a)(2) of such Act is less than $21,519,458,857, then the 
     amount should be reduced by the difference between 
     $21,519,458,857 and the maximum amount available for awarding 
     grants under section 611(a)(2) of such Act;
       (5) $23,809,729,429 or the maximum amount available for 
     awarding grants under section 611(a)(2) of the Individuals 
     with Disabilities Education Act, whichever is lower, for 
     fiscal year 2010, and there should be appropriated 
     $13,219,983,605 for fiscal year 2010, which should become 
     available for obligation on July 1, 2010, and should remain 
     available through September 30, 2011, except that if the 
     maximum amount available for awarding grants under section 
     611(a)(2) of such Act is less than $23,809,729,429, then the 
     amount should be reduced by the difference between 
     $23,809,729,429 and the maximum amount available for awarding 
     grants under section 611(a)(2) of such Act;
       (6) $26,100,000,000 or the maximum amount available for 
     awarding grants under section 611(a)(2) of the Individuals 
     with Disabilities Education Act, whichever is lower, for 
     fiscal year 2011, and there should be appropriated 
     $15,510,254,176 for fiscal year 2011, which should become 
     available for obligation on July 1, 2011, and should remain 
     available through September 30, 2012, except that if the 
     maximum amount available for awarding grants under section 
     611(a)(2) of such Act is less than $26,100,000,000, then the 
     amount should be reduced by the difference between 
     $26,100,000,000 and the maximum amount available for awarding 
     grants under section 611(a)(2) of such Act; and
       (7) the maximum amount available for awarding grants under 
     section 611(a)(2) of the Individuals with Disabilities 
     Education Act for fiscal year 2012 and each succeeding fiscal 
     year, and there should be appropriated for each such year an 
     amount equal to the maximum amount available for awarding 
     grants under section 611(a)(2) of such Act for the fiscal 
     year for which the determination is made minus 
     $10,589,745,824, which should become available for obligation 
     on July 1 of the fiscal year for which the determination is 
     made and should remain available through September 30 of the 
     succeeding fiscal year.

      TITLE IV--IMPROVEMENT OF ELEMENTARY AND SECONDARY EDUCATION

 Subtitle A--Public School Choice, Supplemental Educational Services, 
                          and Teacher Quality

     SEC. 401. PUBLIC SCHOOL CHOICE CAPACITY.

       (a) School Capacity.--Section 1116(b)(1)(E) of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6316(b)(1)(E)) is amended--
       (1) in clause (i), by striking ``In the case'' and 
     inserting ``Subject to clauses (ii) and (iii), in the case'';
       (2) by redesignating clause (ii) as clause (iii);
       (3) by inserting after clause (i) the following:
       ``(ii) School capacity.--The obligation of a local 
     educational agency to provide the option to transfer to 
     students under clause (i) is subject to all applicable State 
     and local health and safety code requirements regarding 
     facility capacity.''; and
       (4) in clause (iii) (as redesignated by paragraph (2)), by 
     inserting ``and subject to clause (ii),'' after ``public 
     school,''.
       (b) Grants for School Construction and Renovation.--
       (1) In general.--Subpart 1 of part A of title I of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6311 et seq.) is amended by adding at the end the following:

     ``SEC. 1120C. GRANTS FOR SCHOOL CONSTRUCTION AND RENOVATION.

       ``(a) Program Authorized.--From funds appropriated under 
     subsection (g), the Secretary is authorized to award grants 
     to local educational agencies experiencing overcrowding in 
     the schools served by the local educational agencies, for the 
     construction and renovation of safe, healthy, high-
     performance school buildings.
       ``(b) Application.--Each local educational agency desiring 
     a grant under this section shall submit an application to the 
     Secretary at such time, in such manner, and accompanied by 
     such additional information as the Secretary may require.
       ``(c) Priority.--In awarding grants under this section, the 
     Secretary shall give priority to local educational agencies--
       ``(1) who have documented difficulties in meeting the 
     public school choice requirements of paragraph (1)(E), 
     (5)(A), (7)(C)(i), or (8)(A)(i) of section 1116(b), or 
     section 1116(c)(10)(C)(vii); and
       ``(2) with the highest number of schools at or above 
     capacity.
       ``(d) Award Basis.--From funds remaining after awarding 
     grants under subsection (c), the Secretary shall award grants 
     to local educational agencies that are experiencing 
     overcrowding in the schools served by the local educational 
     agencies.
       ``(e) Prevailing Wages.--Any laborer or mechanic employed 
     by any contractor or subcontractor in the performance of work 
     on any construction funded by a grant awarded under this 
     section will be paid wages at rates not less than those 
     prevailing on similar construction in the locality as 
     determined by the Secretary of Labor under subchapter IV of 
     chapter 31 of title 40, United States Code (commonly referred 
     to as the Davis-Bacon Act).
       ``(f) Definitions.--In this section:

[[Page 391]]

       ``(1) At or above capacity.--The term `at or above 
     capacity', in reference to a school, means a school in which 
     1 additional student would increase the average class size of 
     the school above the average class size of all schools in the 
     State in which the school is located.
       ``(2) Healthy, high-performance school building.--The term 
     `healthy, high-performance school building' has the meaning 
     given such term in section 5586.
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $250,000,000 for fiscal year 2006, and such sums as may be 
     necessary for each of the 2 succeeding fiscal years.''.
       (2) Table of contents.--The table of contents of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C.6301 
     note) is amended by inserting after the item relating to 
     section 1120B the following:

``Sec. 1120C. Grants for school construction and renovation.''.

     SEC. 402. SUPPLEMENTAL EDUCATIONAL SERVICES.

       Section 1116(e) of the Elementary and Secondary Education 
     Act of 1965 (20 U.S.C. 6316(e)) is amended--
       (1) in paragraph (4)--
       (A) in subparagraph (B), by striking the semicolon and 
     inserting ``, including criteria that--
       ``(i) ensure that personnel delivering supplemental 
     educational services to students have adequate 
     qualifications; and
       ``(ii) may, at the State's discretion, ensure that 
     personnel delivering supplemental educational services to 
     students are teachers that are highly qualified, as such term 
     is defined in section 9101;'';
       (B) in subparagraph (D), by striking ``and'' after the 
     semicolon;
       (C) in subparagraph (E), by striking the period and 
     inserting ``; and''; and
       (D) by adding at the end the following:
       ``(F) ensure that the list of approved providers of 
     supplemental educational services described in subparagraph 
     (C) includes a choice of providers that have sufficient 
     capacity to provide effective services for children who are 
     limited English proficient and children with disabilities.'';
       (2) in paragraph (5)(C)--
       (A) by striking ``applicable''; and
       (B) by inserting before the period ``, and acknowledge in 
     writing that, as an approved provider in the relevant State 
     educational agency program of providing supplemental 
     educational services, the provider is deemed to be a 
     recipient of Federal financial assistance'';
       (3) by redesignating paragraphs (6), (7), (8), (9), (10), 
     (11), and (12) as paragraphs (7), (8), (9), (10), (11), (12), 
     and (13), respectively;
       (4) by inserting after paragraph (5) the following:
       ``(6) Rule of construction.--Nothing in this section shall 
     be construed to prohibit a local educational agency from 
     being considered by a State educational agency as a potential 
     provider of supplemental educational services under this 
     subsection, if such local educational agency meets the 
     criteria adopted by the State educational agency in 
     accordance with paragraph (5).'';
       (5) in paragraph (13) (as redesignated by paragraph (3))--
       (A) in subparagraph (B)--
       (i) in clause (ii), by striking ``and'' after the 
     semicolon;
       (ii) in clause (iii), by striking ``and'' after the 
     semicolon; and
       (iii) by adding at the end the following:
       ``(iv) may employ teachers who are highly qualified, as 
     such term is defined in section 9101; and
       ``(v) pursuant to its inclusion on the relevant State 
     educational agency's list described in paragraph (4)(C), is 
     deemed to be a recipient of Federal financial assistance; 
     and''; and
       (B) in subparagraph (C)--
       (i) in the matter preceding clause (i), by striking 
     ``are'';
       (ii) in clause (i)--

       (I) by inserting ``are'' before ``in addition''; and
       (II) by striking ``and'' after the semicolon;

       (iii) in clause (ii), by striking the period and inserting 
     ``; and''; and
       (iv) by adding at the end the following:
       ``(iii) if provided by providers that are included on the 
     relevant State educational agency's list described in 
     paragraph (4)(C), shall be deemed to be programs or 
     activities of the relevant State educational agency.''; and
       (6) by adding at the end the following:
       ``(14) Civil rights.--In providing supplemental educational 
     services under this subsection, no State educational agency 
     or local educational agency may, directly or through 
     contractual, licensing, or other arrangements with a provider 
     of supplemental educational services, engage in any form of 
     discrimination prohibited by--
       ``(A) title VI of the Civil Rights Act of 1964;
       ``(B) title IX of the Education Amendments of 1972;
       ``(C) section 504 of the Rehabilitation Act of 1973;
       ``(D) titles II and III of the Americans with Disabilities 
     Act;
       ``(E) the Age Discrimination Act of 1975;
       ``(F) regulations promulgated under the authority of the 
     laws listed in subparagraphs (A) through (E); or
       ``(G) other Federal civil rights laws.''.

     SEC. 403. QUALIFICATIONS FOR TEACHERS AND PARAPROFESSIONALS.

       (a) High Objective Uniform State Standard of Evaluation.--
     Section 1119 of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 6319) is amended--
       (1) in subsection (a)(2)--
       (A) by redesignating subparagraphs (A) through (C) as 
     clauses (i) through (iii), respectively, and indenting as 
     appropriate;
       (B) by striking ``(2) State plan.--As part'' and inserting 
     the following:
       ``(2) State plan.--
       ``(A) In general.--As part''; and
       (C) by adding at the end the following:
       ``(B) Availability of state standards.--Each State 
     educational agency shall make available to teachers in the 
     State the high objective uniform State standard of 
     evaluation, as described in section 9101(23)(C)(ii), for the 
     purpose of meeting the teacher qualification requirements 
     established under this section.'';
       (2) by redesignating subsections (e), (f), (g), (h), (i), 
     (j), (k), and (l) as subsections (f), (g), (h), (i), (j), 
     (k), (l), and (m), respectively;
       (3) by inserting after subsection (d) the following:
       ``(e) State Responsibilities.--Each State educational 
     agency shall ensure that local educational agencies in the 
     State make available all options described in subparagraphs 
     (A) through (C) of subsection (c)(1) to each new or existing 
     paraprofessional for the purpose of demonstrating the 
     qualifications of the paraprofessional, consistent with the 
     requirements of this section.''; and
       (4) in subsection (l) (as redesignated by paragraph (2)), 
     by striking ``subsection (l)'' and inserting ``subsection 
     (m)''.
       (b) Definition of Highly Qualified Teachers.--Section 
     9101(23)(B)(ii) is amended--
       (1) in subclause (I), by striking ``or'' after the 
     semicolon;
       (2) in subclause (II), by striking ``and'' after the 
     semicolon; and
       (3) by adding at the end the following:

       ``(III) in the case of a middle school teacher, passing a 
     State-approved middle school generalist exam when the teacher 
     receives a license to teach middle school in the State;
       ``(IV) obtaining a State middle school or secondary school 
     social studies certificate that qualifies the teacher to 
     teach history, geography, economics, civics, and government 
     in middle schools or in secondary schools, respectively, in 
     the State; or
       ``(V) obtaining a State middle school or secondary school 
     science certificate that qualifies the teacher to teach earth 
     science, biology, chemistry, and physics in middle schools or 
     secondary schools, respectively, in the State; and''.

       (c) Ensuring Highly Qualified Teachers.--
       (1) Requirement.--The Secretary of Education shall improve 
     coordination among the teacher quality programs authorized 
     under the Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 6301 et seq.), the Individuals with Disabilities 
     Education Act (20 U.S.C. 1400 et seq.), the Higher Education 
     Act of 1965 (20 U.S.C. 1001 et seq.), and the Carl D. Perkins 
     Vocational and Technical Education Act of 1998 (20 U.S.C. 
     2301 et seq.), to provide a unified effort in strengthening 
     the American teaching workforce and ensuring highly qualified 
     teachers.
       (2) Report.--Not later than 6 months after the date of 
     enactment of this Act, the Secretary of Education shall 
     submit a report to the relevant committees of Congress, that 
     shall be made available on the website of the Department of 
     Education, on efforts to coordinate programs pursuant to 
     paragraph (1).

          Subtitle B--Adequate Yearly Progress Determinations

     SEC. 421. REVIEW OF ADEQUATE YEARLY PROGRESS DETERMINATIONS 
                   FOR SCHOOLS FOR THE 2002-2003 SCHOOL YEAR.

       (a) In General.--The Secretary shall require each local 
     educational agency to provide each school served by the 
     agency with an opportunity to request a review of a 
     determination by the agency that the school did not make 
     adequate yearly progress for the 2002-2003 school year.
       (b) Final Determination.--Not later than 30 days after 
     receipt of a request by a school for a review under this 
     section, a local educational agency shall issue and make 
     publicly available a final determination on whether the 
     school made adequate yearly progress for the 2002-2003 school 
     year.
       (c) Evidence.--In conducting a review under this section, a 
     local educational agency shall--
       (1) allow the principal of the school involved to submit 
     evidence on whether the school made adequate yearly progress 
     for the 2002-2003 school year; and
       (2) consider that evidence before making a final 
     determination under subsection (b).
       (d) Standard of Review.--In conducting a review under this 
     section, a local educational agency shall revise, consistent 
     with the applicable State plan under section 1111 of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6311), the local educational agency's original determination 
     that a school did not make adequate yearly progress for the 
     2002-2003 school year if the agency finds that the school 
     made such progress, taking into consideration--

[[Page 392]]

       (1) the amendments made to part 200 of title 34, Code of 
     Federal Regulations (68 Fed. Reg. 68698) (relating to 
     accountability for the academic achievement of students with 
     the most significant cognitive disabilities); or
       (2) any regulation or guidance that, subsequent to the date 
     of such original determination, was issued by the Secretary 
     relating to--
       (A) the assessment of limited English proficient children;
       (B) the inclusion of limited English proficient children as 
     part of the subgroup described in section 
     1111(b)(2)(C)(v)(II)(dd) of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6311(b)(2)(C)(v)(II)(dd)) 
     after such children have obtained English proficiency; or
       (C) any requirement under section 1111(b)(2)(I)(ii) of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6311(b)(2)(I)(ii)).
       (e) Effect of Revised Determination.--
       (1) In general.--If pursuant to a review under this section 
     a local educational agency determines that a school made 
     adequate yearly progress for the 2002-2003 school year, upon 
     such determination--
       (A) any action by the Secretary, the State educational 
     agency, or the local educational agency that was taken 
     because of a prior determination that the school did not make 
     such progress shall be terminated; and
       (B) any obligations or actions required of the local 
     educational agency or the school because of the prior 
     determination shall cease to be required.
       (2) Exceptions.--Notwithstanding paragraph (1), a 
     determination under this section shall not affect any 
     obligation or action required of a local educational agency 
     or school under the following:
       (A) Section 1116(b)(13) of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6316(b)(13)) (requiring a 
     local educational agency to continue to permit a child who 
     transferred to another school under such section to remain in 
     that school until completion of the highest grade in the 
     school).
       (B) Section 1116(e)(9) of the Elementary and Secondary 
     Education Act of 1965 (as redesignated by section 402(3)) (20 
     U.S.C. 6316(e)(9)) (requiring a local educational agency to 
     continue to provide supplemental educational services under 
     such section until the end of the school year).
       (3) Subsequent determinations.--In determining whether a 
     school is subject to school improvement, corrective action, 
     or restructuring as a result of not making adequate yearly 
     progress, the Secretary, a State educational agency, or a 
     local educational agency may not take into account a 
     determination that the school did not make adequate yearly 
     progress for the 2002-2003 school year if such determination 
     was revised under this section and the school received a 
     final determination of having made adequate yearly progress 
     for the 2002-2003 school year.
       (f) Notification.--The Secretary--
       (1) shall require each State educational agency to notify 
     each school served by the agency of the school's ability to 
     request a review under this section; and
       (2) not later than 30 days after the date of the enactment 
     of this section, shall notify the public by means of the 
     Department of Education's website of the review process 
     established under this section.

     SEC. 422. REVIEW OF ADEQUATE YEARLY PROGRESS DETERMINATIONS 
                   FOR LOCAL EDUCATIONAL AGENCIES FOR THE 2002-
                   2003 SCHOOL YEAR.

       (a) In General.--The Secretary shall require each State 
     educational agency to provide each local educational agency 
     in the State with an opportunity to request a review of a 
     determination by the State educational agency that the local 
     educational agency did not make adequate yearly progress for 
     the 2002-2003 school year.
       (b) Application of Certain Provisions.--Except as 
     inconsistent with, or inapplicable to, this section, the 
     provisions of section 421 shall apply to review by a State 
     educational agency of a determination described in subsection 
     (a) in the same manner and to the same extent as such 
     provisions apply to review by a local educational agency of a 
     determination described in section 421(a).

     SEC. 423. DEFINITIONS.

       In this subtitle:
       (1) The term ``adequate yearly progress'' has the meaning 
     given to that term in section 1111(b)(2)(C) of the Elementary 
     and Secondary Education Act of 1965 (20 U.S.C. 
     6311(b)(2)(C)).
       (2) The term ``local educational agency'' means a local 
     educational agency (as that term is defined in section 9101 
     of the Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 7801)) receiving funds under part A of title I of such 
     Act (20 U.S.C. 6311 et seq.).
       (3) The term ``Secretary'' means the Secretary of 
     Education.
       (4) The term ``school'' means an elementary school or a 
     secondary school (as those terms are defined in section 9101 
     of the Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 7801)) served under part A of title I of such Act (20 
     U.S.C. 6311 et seq.).
       (5) The term ``State educational agency'' means a State 
     educational agency (as that term is defined in section 9101 
     of the Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 7801)) receiving funds under part A of title I of such 
     Act (20 U.S.C. 6311 et seq.).

                    Subtitle C--Technical Assistance

     SEC. 451. TECHNICAL ASSISTANCE.

       (a) In General.--Part F of title IX of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 7941) is amended--
       (1) in the part heading, by inserting ``AND TECHNICAL 
     ASSISTANCE'' after ``EVALUATIONS''; and
       (2) by adding at the end the following:

     ``SEC. 9602. TECHNICAL ASSISTANCE.

       ``The Secretary shall ensure that the technical assistance 
     provided by, and the research developed and disseminated 
     through, the Institute of Education Sciences and other 
     offices or agencies of the Department provide educators and 
     parents with the needed information and support for 
     identifying and using educational strategies, programs, and 
     practices, including strategies, programs, and practices 
     available through the clearinghouses supported under the 
     Education Sciences Reform Act of 2002 (20 U.S.C. 9501 et 
     seq.) and other federally supported clearinghouses, that have 
     been successful in improving educational opportunities and 
     achievement for all students.''.
       (b) Table of Contents.--The table of contents of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6301 note) is amended by inserting after the item relating to 
     section 9601 the following:

``Sec. 9602. Technical assistance.''.

            TITLE V--IMPROVING ASSESSMENT AND ACCOUNTABILITY

     SEC. 501. GRANTS FOR INCREASING DATA CAPACITY FOR PURPOSES OF 
                   ASSESSMENT AND ACCOUNTABILITY.

       (a) Program Authorized.--From funds appropriated for a 
     fiscal year, the Secretary may award grants, on a competitive 
     basis, to State educational agencies--
       (1) to enable the State educational agencies to develop or 
     increase the capacity of data systems for assessment and 
     accountability purposes, including the collection of 
     graduation rates; and
       (2) to award subgrants to increase the capacity of local 
     educational agencies to upgrade, create, or manage 
     longitudinal data systems for the purpose of measuring 
     student academic progress and achievement.
       (b) State Application.--Each State educational agency 
     desiring a grant under this section shall submit an 
     application to the Secretary at such time, in such manner, 
     and containing such information as the Secretary may require.
       (c) State Use of Funds.--Each State educational agency that 
     receives a grant under this section shall use--
       (1) not more than 20 percent of the grant funds for the 
     purpose of--
       (A) increasing the capacity of, or creating, State 
     databases to collect, disaggregate, and report information 
     related to student achievement, enrollment, and graduation 
     rates for assessment and accountability purposes; and
       (B) reporting, on an annual basis, for the elementary 
     schools and secondary schools within the State, on--
       (i) the enrollment data from the beginning of the academic 
     year;
       (ii) the enrollment data from the end of the academic year; 
     and
       (iii) the twelfth grade graduation rates; and
       (2) not less than 80 percent of the grant funds to award 
     subgrants to local educational agencies within the State to 
     enable the local educational agencies to carry out the 
     authorized activities described in subsection (e).
       (d) Local Application.--Each local educational agency 
     desiring a subgrant under this section shall submit an 
     application to the State educational agency at such time, in 
     such manner, and containing such information as the State 
     educational agency may require. Each such application shall 
     include, at a minimum, a demonstration of the local 
     educational agency's ability to put a longitudinal data 
     system in place.
       (e) Local Authorized Activities.--Each local educational 
     agency that receives a subgrant under this section shall use 
     the subgrant funds to increase the capacity of the local 
     educational agency to upgrade or manage longitudinal data 
     systems consistent with the uses in subsection (c)(1), by--
       (1) purchasing database software or hardware;
       (2) hiring additional staff for the purpose of managing 
     such data;
       (3) providing professional development or additional 
     training for such staff; and
       (4) providing professional development or training for 
     principals and teachers on how to effectively use such data 
     to implement instructional strategies to improve student 
     achievement and graduation rates.
       (f) Definitions.--In this section:
       (1) Graduation rate.--The term ``graduation rate'' means 
     the percentage that--
       (A) the total number of students who--
       (i) graduate from a secondary school with a regular diploma 
     (which shall not include

[[Page 393]]

     the recognized equivalent of a secondary school diploma or an 
     alternative degree) in an academic year; and
       (ii) graduated on time by progressing 1 grade per academic 
     year; represents of
       (B) the total number of students who entered the secondary 
     school in the entry level academic year applicable to the 
     graduating students.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Education.
       (3) State educational agency and local educational 
     agency.--The terms ``State educational agency'' and ``local 
     educational agency'' have the meanings given such terms in 
     section 9101 of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 7801).
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section $100,000,000 for 
     fiscal year 2006, and such sums as may be necessary for each 
     of the 2 succeeding fiscal years.

     SEC. 502. GRANTS FOR ASSESSMENT OF CHILDREN WITH DISABILITIES 
                   AND CHILDREN WHO ARE LIMITED ENGLISH 
                   PROFICIENT.

       (a) Grants for Assessment of Children With Disabilities and 
     Children Who Are Limited English Proficient.--Part E of title 
     I of the Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 6491 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 1505. GRANTS FOR ASSESSMENT OF CHILDREN WITH 
                   DISABILITIES AND CHILDREN WHO ARE LIMITED 
                   ENGLISH PROFICIENT.

       ``(a) Grants Authorized.--From amounts authorized to be 
     appropriated under subsection (e) for a fiscal year, the 
     Secretary shall award grants, on a competitive basis, to 
     State educational agencies, or to consortia of State 
     educational agencies, to enable the State educational 
     agencies or consortia to collaborate with institutions of 
     higher education, research institutions, or other 
     organizations--
       ``(1) to design and improve State academic assessments for 
     students who are limited English proficient and students with 
     disabilities; and
       ``(2) to ensure the most accurate, valid, and reliable 
     means to assess academic content standards and student 
     academic achievement standards for students who are limited 
     English proficient and students with disabilities.
       ``(b) Authorized Activities.--A State educational agency or 
     consortium that receives a grant under this section shall use 
     the grant funds to carry out 1 or more of the following 
     activities:
       ``(1) Developing alternate assessments for students with 
     disabilities, consistent with section 1111 and the amendments 
     made on December 9, 2003, to part 200 of title 34, Code of 
     Federal Regulations (68 Fed. Reg. 68698) (relating to 
     accountability for the academic achievement of students with 
     the most significant cognitive disabilities), including--
       ``(A) the alignment of such assessments, as appropriate and 
     consistent with such amendments, with--
       ``(i) State student academic achievement standards and 
     State academic content standards for all students; or
       ``(ii) alternate State student academic achievement 
     standards that reflect the intended instructional construct 
     for students with disabilities;
       ``(B) activities to ensure that such assessments do not 
     reflect the disabilities, or associated characteristics, of 
     the students that are extraneous to the intent of the 
     measurement;
       ``(C) the development of an implementation plan for pilot 
     tests for such assessments, in order to determine the level 
     of appropriateness and feasibility of full-scale 
     administration; and
       ``(D) activities that provide for the retention of all 
     feasible standardized features in the alternate assessments.
       ``(2) Developing alternate assessments that meet the 
     requirements of section 1111 for students who are limited 
     English proficient, including--
       ``(A) the alignment of such assessments with State student 
     academic achievement standards and State academic content 
     standards for all students;
       ``(B) the development of parallel native language 
     assessments or linguistically modified assessments for 
     limited English proficient students that meet the 
     requirements of section 1111(b)(3)(C)(ix)(III);
       ``(C) the development of an implementation plan for pilot 
     tests for such assessments, in order to determine the level 
     of appropriateness and feasibility of full-scale 
     administration; and
       ``(D) activities that provide for the retention of all 
     feasible standardized features in the alternate assessments.
       ``(3) Developing, modifying, or revising State policies and 
     criteria for appropriate accommodations to ensure the full 
     participation of students who are limited English proficient 
     and students with disabilities in State academic assessments, 
     including--
       ``(A) developing a plan to ensure that assessments provided 
     with accommodations are fully included and integrated into 
     the accountability system, for the purpose of making the 
     determinations of adequate yearly progress required under 
     section 1116;
       ``(B) ensuring the validity, reliability, and 
     appropriateness of such accommodations, such as--
       ``(i) a modification to the presentation or format of the 
     assessment;
       ``(ii) the use of assistive devices;
       ``(iii) an extension of the time allowed for testing;
       ``(iv) an alteration of the test setting or procedures;
       ``(v) the administration of portions of the test in a 
     method appropriate for the level of language proficiency of 
     the test taker;
       ``(vi) the use of a glossary or dictionary; and
       ``(vii) the use of a linguistically modified assessment;
       ``(C) ensuring that State policies and criteria for 
     appropriate accommodations take into account the form or 
     program of instruction provided to students, including the 
     level of difficulty, reliability, cultural difference, and 
     content equivalence of such form or program;
       ``(D) ensuring that such policies are consistent with the 
     standards prepared by the Joint Committee on Standards for 
     Educational and Psychological Testing of the American 
     Educational Research Association, the American Psychological 
     Association, and the National Council on Measurement in 
     Education; and
       ``(E) developing a plan for providing training on the use 
     of accommodations to school instructional staff, families, 
     students, and other appropriate parties.
       ``(4) Developing universally designed assessments that can 
     be accessible to all students, including--
       ``(A) examining test item or test performance for students 
     with disabilities and students who are limited English 
     proficient, to determine the extent to which the test item or 
     test is universally designed;
       ``(B) using think aloud and cognitive laboratory 
     procedures, as well as item statistics, to identify test 
     items that may pose particular problems for students with 
     disabilities or students who are limited English proficient;
       ``(C) developing and implementing a plan to ensure that 
     developers and reviewers of test items are trained in the 
     principles of universal design; and
       ``(D) developing computer-based applications of universal 
     design principles.
       ``(c) Application.--Each State educational agency, or 
     consortium of State educational agencies, desiring to apply 
     for a grant under this section shall submit an application to 
     the Secretary at such time, in such manner, and containing 
     such information as the Secretary may require, including--
       ``(1) information regarding the institutions of higher 
     education, research institutions, or other organizations that 
     are collaborating with the State educational agency or 
     consortium, in accordance with subsection (a);
       ``(2) in the case of a consortium of State educational 
     agencies, the designation of 1 State educational agency as 
     the fiscal agent for the receipt of grant funds;
       ``(3) a description of the process and criteria by which 
     the State educational agency will identify students that are 
     unable to participate in general State content assessments 
     and are eligible to take alternate assessments, consistent 
     with the amendments made to part 200 of title 34, Code of 
     Federal Regulations (68 Fed. Reg. 68698);
       ``(4) in the case of a State educational agency or 
     consortium carrying out the activity described in subsection 
     (b)(1)(A), a description of how the State educational agency 
     plans to fulfill the requirement of subsection (b)(1)(A);
       ``(5) in the case of a State educational agency or 
     consortium carrying out the activities described in 
     paragraphs (1), (2), and (4) of subsection (b), information 
     regarding the proposed techniques for the development of 
     alternate assessments, including a description of the 
     technical adequacy of, technical aspects of, and scoring for 
     such assessments;
       ``(6) a plan for providing training for school 
     instructional staff, families, students, and other 
     appropriate parties on the use of alternate assessments; and
       ``(7) information on how the scores of students 
     participating in alternate assessments will be reported to 
     the public and to parents.
       ``(d) Evaluation and Reporting Requirements.--Each State 
     educational agency receiving a grant under this section shall 
     submit an annual report to the Secretary describing the 
     activities carried out under the grant and the result of such 
     activities, including--
       ``(1) details on the effectiveness of the activities 
     supported under this section in helping students with 
     disabilities, or students who are limited English proficient, 
     better participate in State assessment programs; and
       ``(2) information on the change in achievement, if any, of 
     students with disabilities and students who are limited 
     English proficient, as a result of a more accurate assessment 
     of such students.
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $50,000,000 for fiscal year 2006, and such sums as may be 
     necessary for each of the 2 succeeding fiscal years.''.
       (b) Table of Contents.--The table of contents of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6301 note) is amended by inserting after the item relating to 
     section 1504 the following:


[[Page 394]]


``Sec. 1505. Grants for assessment of children with disabilities and 
              children who are limited English proficient.''.

     SEC. 503. REPORTS ON STUDENT ENROLLMENT AND GRADUATION RATES.

       (a) Student Enrollment and Graduation Rates.--Part E of 
     title I of the Elementary and Secondary Education Act of 1965 
     (as amended by section 502) (20 U.S.C. 6491 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 1506. REPORTS ON STUDENT ENROLLMENT AND GRADUATION 
                   RATES.

       ``(a) In General.--The Secretary shall collect from each 
     State educational agency, local educational agency, and 
     school, on an annual basis, the following data:
       ``(1) The number of students enrolled in each of grades 7 
     through 12 at the beginning of the most recent school year.
       ``(2) The number of students enrolled in each of grades 7 
     through 12 at the end of the most recent school year.
       ``(3) The graduation rate for the most recent school year.
       ``(4) The data described in paragraphs (1) through (3), 
     disaggregated by the groups of students described in section 
     1111(b)(2)(C)(v)(II).
       ``(b) Annual Report.--The Secretary shall report the 
     information collected under subsection (a) on an annual 
     basis.''.
       (b) Table of Contents.--The table of contents of the 
     Elementary and Secondary Education Act of 1965 (as amended by 
     section 502(b)) (20 U.S.C. 6301 note) is amended by inserting 
     after the item relating to section 1505 the following:

``Sec. 1506. Reports on student enrollment and graduation rates.''.

     SEC. 504. CIVIL RIGHTS.

       Section 9534 of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 7914) is amended--
       (1) by redesignating subsections (a) and (b) as subsections 
     (b) and (c), respectively; and
       (2) by inserting before subsection (b) (as redesignated by 
     paragraph (1)) the following:
       ``(a) Prohibition of Discrimination.--Discrimination on the 
     basis of race, color, religion, sex (except as otherwise 
     permitted under title IX of the Education Amendments of 
     1972), national origin, or disability in any program funded 
     under this Act is prohibited.''.

  TITLE VI--SENSE OF THE SENATE REGARDING FUNDING FOR ELEMENTARY AND 
                          SECONDARY EDUCATION

     SEC. 601. SENSE OF THE SENATE.

       (a) Findings.--The Senate finds the following:
       (1) Congress enacted, with bipartisan support, and the 
     President signed into law the No Child Left Behind Act of 
     2001 (Public Law 107-210; 115 Stat. 1425), that reauthorized 
     the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6301 et seq.). The new law required States to set high 
     standards for learning and required schools to implement 
     reforms to help improve student achievement. In return, 
     Congress and the President pledged to make sure schools would 
     have resources to carry out the reforms as called for in the 
     new law.
       (2) $22,750,000,000 is needed to fund part A of title I of 
     the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6311 et seq.) in fiscal year 2006, as promised pursuant to 
     the No Child Left Behind Act of 2001 (Public Law 107-210; 115 
     Stat. 1425).
       (3) $25,000,000,000 is needed to fund part A of title I of 
     the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6311 et seq.) in fiscal year 2007, as promised pursuant to 
     the No Child Left Behind Act of 2001 (Public Law 107-210; 115 
     Stat. 1425).
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) it is in the best interest of the Nation that all 
     students have access to a high-quality elementary and 
     secondary education; and
       (2) part A of title I of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6311 et seq.) should be 
     funded as promised pursuant to the No Child Left Behind Act 
     of 2001 (Public Law 107-210; 115 Stat. 1425).

    TITLE VII--PROVIDING A ROADMAP FOR FIRST GENERATION COLLEGE FOR 
                                STUDENTS

     SEC. 701. EXPANSION OF TRIO AND GEARUP.

       The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) 
     is amended--
       (1) in section 402A(f), by striking ``$700,000,000 for 
     fiscal year 1999'' and inserting ``$1,000,000,000 for fiscal 
     year 2006''; and
       (2) by striking section 404H and inserting the following:

     ``SEC. 404H. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     chapter $400,000,000 for fiscal year 2006 and such sums as 
     may be necessary for each of the 4 succeeding fiscal 
     years.''.

  TITLE VIII--COLLEGE TUITION RELIEF FOR STUDENTS AND THEIR FAMILIES 
                          THROUGH PELL GRANTS

     SEC. 801. PELL GRANTS TAX TABLES HOLD HARMLESS.

        Notwithstanding any other provision of law, the annual 
     updates to the allowance for State and other taxes in the 
     tables used in the Federal Need Analysis Methodology to 
     determine a student's expected family contribution for the 
     award year 2005-2006 under part F of title IV of the Higher 
     Education Act of 1965 (20 U.S.C. 1087kk et seq.), published 
     in the Federal Register on Thursday, December 23, 2004 (69 
     Fed. Reg. 76926), shall not apply to a student to the extent 
     the updates will reduce the amount of Federal student 
     assistance for which the student is eligible.

     SEC. 802. SENSE OF THE SENATE REGARDING INCREASING THE 
                   MAXIMUM PELL GRANT.

       (a) Findings.--The Senate makes the following findings:
       (1) Increasing the percentage of individuals who obtain a 
     postsecondary education has become increasingly important, 
     not just to the individual beneficiary, but to the Nation as 
     a whole. The growth and continued expansion of the Nation's 
     economy is heavily dependent on an educated and highly 
     skilled workforce.
       (2) The opportunity to gain a postsecondary education also 
     is important to the Nation as a means to help advance the 
     American ideals of progress and equality.
       (3) The Federal Government plays an invaluable role in 
     making student financial aid available to ensure that 
     qualified students are able to attend college, regardless of 
     their financial means. Since the inception of the Pell Grant 
     program in 1973, nearly 80,000,000 grants have helped low- 
     and middle-income students go to college, enrich their lives, 
     and become productive members of society.
       (4) Nationwide, almost 63 percent of secondary school 
     graduates continue on to higher education immediately after 
     completing secondary school. This degree of college 
     participation would not exist without the Federal investment 
     in student aid, especially the Pell Grant program. More than 
     4,000,000 low- and middle-income students receive Pell 
     Grants; 95 percent of whom have a family income of not more 
     than $40,000.
       (5) In the next 10 years, the number of undergraduate 
     students enrolled in the Nation's colleges and universities 
     will increase by 15 percent to more than 15,000,000 students. 
     Many of these students will be the first in their families to 
     attend college. The continued investment in the Pell Grant 
     program is essential if college is to remain an achievable 
     part of the American dream.
       (6) Increasing the maximum Pell Grant to $5,100 would allow 
     more than 430,000 additional students to benefit from the 
     program.
       (7) Increasing the maximum Pell Grant to $5,100 would 
     result in 200,000 new Pell Grant recipients.
       (8) Pell Grant recipients are more likely to graduate with 
     student loan debt and to amass more debt than other student 
     borrowers. Increasing the maximum Pell Grant to $5,100 will 
     help remedy this disparity.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) the maximum Pell Grant should be increased to $5,100 
     during award year 2006-2007; and
       (2) the maximum Pell Grant amount set by Congress should be 
     the amount eligible students receive.

     SEC. 803. ESTABLISHMENT OF A PELL DEMONSTRATION PROGRAM.

       (a) Findings.--Congress finds that:
       (1) A student remains eligible to receive a Federal Pell 
     Grant as long as the student is income-eligible and has not 
     received a bachelor's degree.
       (2) By encouraging persistence and degree acquisition in a 
     timely manner, the Federal Government, in effect, saves 
     money--
       (A) by reducing the courses that do not lead to a degree; 
     and
       (B) by helping students get the financial benefits of a 
     college degree as soon as possible.
       (b) Pell Demonstration Program.--
       (1) Authorization.--The Secretary of Education shall 
     establish a demonstration program to facilitate the ability 
     of low-income students to complete the students' degree 
     within 150 percent of the time expected to complete such 
     degree.
       (2) Grants.--The Secretary of Education shall award 
     competitive grants to institutions of higher education to 
     enable students who are eligible to receive Federal Pell 
     Grants under subpart 1 of part A of title IV of the Higher 
     Education Act of 1965 (20 U.S.C. 1070a et seq.) to enroll in 
     courses in the summer at such institutions to expedite the 
     students' graduation from the institutions.
       (3) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection $500,000,000 
     for the period of fiscal years 2006 through 2008.

 TITLE IX--TUITION FREE COLLEGE FOR MATHEMATICS, SCIENCE, AND SPECIAL 
                           EDUCATION TEACHERS

     SEC. 901. PURPOSE.

       It is the purpose of this title to make public college 
     tuition free for future mathematics, science, and special 
     education teachers and to provide additional assistance to 
     students eligible to receive a Federal Pell Grant under 
     subpart 1 of part A of title IV of the Higher Education Act 
     of 1965 (20 U.S.C. 1070a et seq.).

     SEC. 902. TUITION FREE COLLEGE FOR MATHEMATICS, SCIENCE, AND 
                   SPECIAL EDUCATION TEACHERS.

       (a) Additional Amounts for Teachers in Mathematics, 
     Science, and Special Education.--

[[Page 395]]

       (1) Ffel loans.--Section 428J(c)(3) of the Higher Education 
     Act of 1965 (20 U.S.C. 1078-10(c)(3)) is amended by striking 
     ``$17,500'' and inserting ``$23,000''.
       (2) Direct loans.--Section 460(c)(3) of the Higher 
     Education Act of 1965 (20 U.S.C. 1087j(c)(3)) is amended by 
     striking ``$17,500'' and inserting ``$23,000''.
       (b) Effective Date.--The amendments made by this section 
     shall apply only with respect to eligible individuals who are 
     new borrowers on or after October 1, 1998.

     SEC. 903. OFFSET FOR TUITION FREE COLLEGE FOR MATHEMATICS, 
                   SCIENCE, AND SPECIAL EDUCATION TEACHERS.

       (a) Special Allowances.--
       (1) In general.--Section 438(b)(2)(B) of the Higher 
     Education Act of 1965 (20 U.S.C. 1087-1(b)(2)(B)) is 
     amended--
       (A) in clause (iv), by striking ``or refunded after 
     September 30, 2004, and before January 1, 2006,'' and 
     inserting ``or refunded on or after the date of enactment of 
     the Taxpayer-Teacher Protection Act of 2004,''; and
       (B) by striking clause (v) and inserting the following:
       ``(v) Notwithstanding clauses (i) and (ii), the quarterly 
     rate of the special allowance shall be the rate determined 
     under subparagraph (A), (E), (F), (G), (H), or (I) of this 
     paragraph, or paragraph (4), as the case may be, for loans--

       ``(I) originated, transferred, or purchased on or after the 
     date of enactment of the Taxpayer-Teacher Protection Act of 
     2004;
       ``(II) financed by an obligation that has matured, been 
     retired, or defeased on or after the date of enactment of the 
     Taxpayer-Teacher Protection Act of 2004;
       ``(III) which the special allowance was determined under 
     such subparagraphs or paragraph, as the case may be, on or 
     after the date of enactment of the Taxpayer-Teacher 
     Protection Act of 2004;
       ``(IV) for which the maturity date of the obligation from 
     which funds were obtained for such loans was extended on or 
     after the date of enactment of the Taxpayer-Teacher 
     Protection Act of 2004; or
       ``(V) sold or transferred to any other holder on or after 
     the date of enactment of the Taxpayer-Teacher Protection Act 
     of 2004.''.

       (2) Rule of construction.--Nothing in the amendment made by 
     paragraph (1) shall be construed to abrogate a contractual 
     agreement between the Federal Government and a student loan 
     provider.
       (b) Available Funds From Reduced Expenditures.--
       (1) In general.--Any funds available to the Secretary of 
     Education as a result of reduced expenditures under section 
     438 of the Higher Education Act of 1965 (20 U.S.C. 1087-1) 
     secured by the enactment of subsection (a) shall first be 
     used by the Secretary for loan cancellation and loan 
     forgiveness for teachers under sections 428J and 460 of the 
     Higher Education Act of 1965 (20 U.S.C. 1078-10, 1087j), as 
     amended by section 902 of this Act.
       (2) Remaining funds.--
       (A) In general.--Any such funds remaining after carrying 
     out paragraph (1) shall be used by the Secretary of Education 
     to make payments to each nonprofit lender in an amount that 
     bears the same relation to the remaining funds as the amount 
     the nonprofit lender receives for fiscal year 2005 under 
     section 438(b)(2)(B) of the Higher Education Act of 1965 (20 
     U.S.C. 1087-1(b)(2)(B)) bears to the total amount received by 
     nonprofit lenders for fiscal year 2005 under such section.
       (B) Definition of nonprofit lender.--In this paragraph the 
     term ``nonprofit lender'' means an eligible lender (as 
     defined in section 435(d) of the Higher Education Act of 1965 
     (20 U.S.C.1085(d)) that--
       (i) is an organization described in section 501(c)(3) of 
     the Internal Revenue Code of 1986;
       (ii) is a nonprofit entity as defined by applicable State 
     law; and
       (iii) meets the following requirements:

       (I) The nonprofit lender does not confer a salary or 
     benefits to any employee of the nonprofit lender in an amount 
     that is in excess of the salary and benefits provided to the 
     Secretary of Education by the Department of Education.
       (II) The nonprofit lender does not maintain an ongoing 
     relationship whereby the nonprofit lender passes on revenue 
     directly or indirectly through lease, securitization, resale, 
     or any other financial instrument to a for-profit entity or 
     to shareholders.
       (III) The nonprofit lender does not offer benefits to a 
     borrower in a manner directly or indirectly predicated on 
     such borrower's participation--

       (aa) in a program under part B or D of title IV of the 
     Higher Education Act of 1965 (20 U.S.C. 1071 et seq., 1087a 
     et seq.); or
       (bb) with any particular lender.

       (IV) The nonprofit lender certifies that the nonprofit 
     lender uses the payment received pursuant to subparagraph (A) 
     to confer grant or scholarship benefits to students who are 
     eligible to receive Federal Pell Grants under subpart 1 of 
     part A of title IV of the Higher Education Act of 1965 (20 
     U.S.C. 1070a et seq.).
       (V) The nonprofit lender is subject to public oversight 
     through either a State charter, or through not less than 50 
     percent of the nonprofit lender's board of directors 
     consisting of State appointed representatives.
       (VI) The nonprofit lender does not engage in the marketing 
     of the relative value of programs under part B of title IV of 
     the Higher Education Act of 1965 as compared to programs 
     under part D of title IV of the Higher Education Act of 1965, 
     nor does the nonprofit lender engage in the marketing of 
     loans or programs offered by for-profit lenders. This 
     subclause shall not be construed to prohibit the nonprofit 
     lender from conferring basic information on lenders under 
     part B of title IV of the Higher Education Act of 1965 and 
     the related benefits offered by such nonprofit lenders.

          TITLE X--MAKING COLLEGE AFFORDABLE FOR ALL STUDENTS

     SEC. 1001. EXPANSION OF DEDUCTION FOR HIGHER EDUCATION 
                   EXPENSES.

       (a) Amount of Deduction.--Subsection (b) of section 222 of 
     the Internal Revenue Code of 1986 (relating to deduction for 
     qualified tuition and related expenses) is amended to read as 
     follows:
       ``(b) Limitations.--
       ``(1) Dollar limitations.--
       ``(A) In general.--Except as provided in paragraph (2), the 
     amount allowed as a deduction under subsection (a) with 
     respect to the taxpayer for any taxable year shall not exceed 
     the applicable dollar limit.
       ``(B) Applicable dollar limit.--The applicable dollar limit 
     for any taxable year shall be determined as follows:

                                                             Applicable
  ``Taxable year:                                        dollar amount:
  2005 and 2006..................................................$6,000
  2007 and 2008..................................................$8,000
  2009 and 2010.................................................$10,000
  2011 and thereafter..........................................$12,000.

       ``(2) Limitation based on modified adjusted gross income.--
       ``(A) In general.--The amount which would (but for this 
     paragraph) be taken into account under subsection (a) shall 
     be reduced (but not below zero) by the amount determined 
     under subparagraph (B).
       ``(B) Amount of reduction.--The amount determined under 
     this subparagraph equals the amount which bears the same 
     ratio to the amount which would be so taken into account as--
       ``(i) the excess of--

       ``(I) the taxpayer's modified adjusted gross income for 
     such taxable year, over
       ``(II) $65,000 ($130,000 in the case of a joint return), 
     bears to

       ``(ii) $15,000 ($30,000 in the case of a joint return).
       ``(C) Modified adjusted gross income.--For purposes of this 
     paragraph, the term `modified adjusted gross income' means 
     the adjusted gross income of the taxpayer for the taxable 
     year determined--
       ``(i) without regard to this section and sections 199, 911, 
     931, and 933, and
       ``(ii) after the application of sections 86, 135, 137, 219, 
     221, and 469.

     For purposes of the sections referred to in clause (ii), 
     adjusted gross income shall be determined without regard to 
     the deduction allowed under this section.
       ``(D) Inflation adjustments.--
       ``(i) In general.--In the case of any taxable year 
     beginning in a calendar year after 2005, both of the dollar 
     amounts in subparagraph (B)(i)(II) shall be increased by an 
     amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, by substituting `calendar year 2004' for 
     `calendar year 1992' in subparagraph (B) thereof.

       ``(ii) Rounding.--If any amount as adjusted under clause 
     (i) is not a multiple of $50, such amount shall be rounded to 
     the nearest multiple of $50.''.
       (b) Qualified Tuition and Related Expenses of Eligible 
     Students.--
       (1) In general.--Section 222(a) of the Internal Revenue 
     Code of 1986 (relating to allowance of deduction) is amended 
     by inserting ``of eligible students'' after ``expenses''.
       (2) Definition of eligible student.--Section 222(d) of such 
     Code (relating to definitions and special rules) is amended 
     by redesignating paragraphs (2) through (6) as paragraphs (3) 
     through (7), respectively, and by inserting after paragraph 
     (1) the following new paragraph:
       ``(2) Eligible student.--The term `eligible student' has 
     the meaning given such term by section 36(b)(3).''.
       (c) Deduction Made Permanent.--Title IX of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001 (relating to 
     sunset of provisions of such Act) shall not apply to the 
     amendments made by section 431 of such Act.
       (d) Effective Date.--The amendments made by this section 
     shall apply to payments made in taxable years beginning after 
     December 31, 2004.

     SEC. 1002. CREDIT FOR INTEREST ON HIGHER EDUCATION LOANS.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     nonrefundable personal credits) is amended by inserting after 
     section 25B the following new section:

     ``SEC. 25C. INTEREST ON HIGHER EDUCATION LOANS.

       ``(a) Allowance of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to

[[Page 396]]

     the interest paid by the taxpayer during the taxable year on 
     any qualified education loan.
       ``(b) Maximum Credit.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     credit allowed by subsection (a) for the taxable year shall 
     not exceed $1,500.
       ``(2) Limitation based on modified adjusted gross income.--
       ``(A) In general.--If the modified adjusted gross income of 
     the taxpayer for the taxable year exceeds $50,000 ($100,000 
     in the case of a joint return), the amount which would (but 
     for this paragraph) be allowable as a credit under this 
     section shall be reduced (but not below zero) by the amount 
     which bears the same ratio to the amount which would be so 
     allowable as such excess bears to $20,000 ($40,000 in the 
     case of a joint return).
       ``(B) Modified adjusted gross income.--The term `modified 
     adjusted gross income' means adjusted gross income determined 
     without regard to sections 199, 222, 911, 931, and 933.
       ``(C) Inflation adjustment.--In the case of any taxable 
     year beginning after 2005, the $50,000 and $100,000 amounts 
     referred to in subparagraph (A) shall be increased by an 
     amount equal to--
       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, by substituting `2004' for `1992'.
       ``(D) Rounding.--If any amount as adjusted under 
     subparagraph (C) is not a multiple of $50, such amount shall 
     be rounded to the nearest multiple of $50.
       ``(c) Dependents Not Eligible for Credit.--No credit shall 
     be allowed by this section to an individual for the taxable 
     year if a deduction under section 151 with respect to such 
     individual is allowed to another taxpayer for the taxable 
     year beginning in the calendar year in which such 
     individual's taxable year begins.
       ``(d) Limit on Period Credit Allowed.--A credit shall be 
     allowed under this section only with respect to interest paid 
     on any qualified education loan during the first 60 months 
     (whether or not consecutive) in which interest payments are 
     required. For purposes of this paragraph, any loan and all 
     refinancings of such loan shall be treated as 1 loan.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Qualified education loan.--The term `qualified 
     education loan' has the meaning given such term by section 
     221(d)(1).
       ``(2) Dependent.--The term `dependent' has the meaning 
     given such term by section 152.
       ``(f) Special Rules.--
       ``(1) Denial of double benefit.--No credit shall be allowed 
     under this section for any amount taken into account for any 
     deduction under any other provision of this chapter.
       ``(2) Married couples must file joint return.--If the 
     taxpayer is married at the close of the taxable year, the 
     credit shall be allowed under subsection (a) only if the 
     taxpayer and the taxpayer's spouse file a joint return for 
     the taxable year.
       ``(3) Marital status.--Marital status shall be determined 
     in accordance with section 7703.''.
       (b) Conforming Amendment.--The table of sections for 
     subpart A of part IV of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by inserting after 
     the item relating to section 25B the following new item:

``Sec. 25C. Interest on higher education loans.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to any qualified education loan (as defined in 
     section 25C(e)(1) of the Internal Revenue Code of 1986, as 
     added by this section) incurred on, before, or after the date 
     of the enactment of this Act, but only with respect to any 
     loan interest payment due after December 31, 2004.

     SEC. 1003. HOPE AND LIFETIME LEARNING CREDITS TO BE 
                   REFUNDABLE.

       (a) Credit To Be Refundable.--Section 25A of the Internal 
     Revenue Code of 1986 (relating to Hope and Lifetime Learning 
     credits) is hereby moved to subpart C of part IV of 
     subchapter A of chapter 1 of such Code (relating to 
     refundable credits) and inserted after section 35.
       (b) Technical Amendments.--
       (1) Section 36 of such Code is redesignated as section 37.
       (2) Section 25A of such Code (as moved by subsection (a)) 
     is redesignated as section 36.
       (3) Paragraph (1) of section 36(a) of such Code (as 
     redesignated by paragraph (2)) is amended by striking ``this 
     chapter'' and inserting ``this subtitle''.
       (4) Subparagraph (B) of section 72(t)(7) of such Code is 
     amended by striking ``section 25A(g)(2)'' and inserting 
     ``section 36(g)(2)''.
       (5) Subparagraph (A) of section 135(d)(2) of such Code is 
     amended by striking ``section 25A'' and inserting ``section 
     36''.
       (6) Section 221(d) of such Code is amended--
       (A) by striking ``section 25A(g)(2)'' in paragraph (2)(B) 
     and inserting ``section 36(g)(2)'',
       (B) by striking ``section 25A(f)(2)'' in the matter 
     following paragraph (2)(B) and inserting ``section 
     36(f)(2)'', and
       (C) by striking ``section 25A(b)(3)'' in paragraph (3) and 
     inserting ``section 36(b)(3)''.
       (7) Section 222 of such Code is amended--
       (A) by striking ``section 25A'' in subparagraph (A) of 
     subsection (c)(2) and inserting ``section 36'',
       (B) by striking ``section 25A(f)'' in subsection (d)(1) and 
     inserting ``section 36(f)'', and
       (C) by striking ``section 25A(g)(2)'' in subsection (d)(1) 
     and inserting ``section 36(g)(2)''.
       (8) Section 529 of such Code is amended--
       (A) by striking ``section 25A(g)(2)'' in subclause (I) of 
     subsection (c)(3)(B)(v) and inserting ``section 36(g)(2)'',
       (B) by striking ``section 25A'' in subclause (II) of 
     subsection (c)(3)(B)(v) and inserting ``section 36'', and
       (C) by striking ``section 25A(b)(3)'' in clause (i) of 
     subsection (e)(3)(B) and inserting ``section 36(b)(3)''.
       (9) Section 530 of such Code is amended--
       (A) by striking ``section 25A(g)(2)'' in subclause (I) of 
     subsection (d)(2)(C)(i) and inserting ``section 36(g)(2)'',
       (B) by striking ``section 25A'' in subclause (II) of 
     subsection (d)(2)(C)(i) and inserting ``section 36'', and
       (C) by striking ``section 25A(g)(2)'' in clause (iii) of 
     subsection (d)(4)(B) and inserting ``section 36(g)(2)''.
       (10) Subsection (e) of section 6050S of such Code is 
     amended by striking ``section 25A'' and inserting ``section 
     36''.
       (11) Subparagraph (J) of section 6213(g)(2) of such Code is 
     amended by striking ``section 25A(g)(1)'' and inserting 
     ``section 36(g)(1)''.
       (12) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by inserting before the period ``or 
     from section 36 of such Code''.
       (13) The table of sections for subpart C of part IV of 
     subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 is amended by striking the item relating to section 36 
     and inserting the following:

``Sec. 36. Hope and Lifetime Learning credits.
``Sec. 37. Overpayments of tax.''.
       (14) The table of sections for subpart A of such part IV is 
     amended by striking the item relating to section 25A.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.
                                 ______
                                 
      By Mr. KENNEDY (for himself, Mr. Reid, Ms. Stabenow, Mr. Corzine, 
        Mr. Schumer, Ms. Mikulski, Mr. Akaka, Mr. Inouye, Mr. Levin, 
        Mr. Kerry, Mr. Lautenberg, Mr. Rockefeller, Mr. Dodd, Mr. 
        Pryor, and Mr. Durbin):
  S. 16. A bill to reduce to the cost of quality health care coverage 
and improve the availability of health care coverage for all Americans; 
to the Committee on Finance.
  Mr. KENNEDY. Mr. President, it's an honor to join our Democratic 
Leader and so many of our colleagues in introducing the Affordable 
Health Care Act.
  This legislation states our strong commitment as Democrats to end the 
crisis in health care that affects every family. It's a down payment on 
our commitment to quality, affordable health care for every American, 
and we will not rest until that goal is achieved.
  The worsening crisis in health care is caused by skyrocketing costs, 
declining insurance coverage, and less security for every family. 
Businesses--especially small businesses--find it increasingly difficult 
to provide decent coverage for their employees. Companies struggling 
with foreign competition are at an every-larger competitive 
disadvantage because of their constantly rising costs.
  Last year, the percentage of the Nation's gross domestic product 
devoted to health was 15.5%, the highest in our history. Since 2000, 
annual spending on health care has risen from $1.3 trillion to $1.7 
trillion, an increase of almost half a trillion dollars in just four 
years.
  Even worse, insurance premiums have soared by 59 percent during those 
four years. The cost of insurance for a family has risen by almost 
$3,000. Last year, the cost of the premiums for family coverage 
averaged $10,000, and was much higher for many families.
  Drug costs are also out of control. According to current data, they 
rose 47 percent in the first three years of the Bush Administration. 
Too many patients are cutting the pills their doctors prescribe in half 
or going without them altogether, because they can't afford the drugs 
they need to treat or prevent disease.
  Even Medicare premiums are out of control. The largest premium 
increase in Medicare's history went into effect just three weeks ago. 
Since President Bush took office, Medicare premiums

[[Page 397]]

have climbed by 72 percent. Senior citizens, with an average income of 
$15,000, now have to pay almost $1,000 a year for their Part B premiums 
under Medicare. The recent report of the Medicare trustees included the 
stunning revelation that Medicare cost sharing and premiums will soon 
eat up more than 40 percent of the total Social Security benefit of the 
typical 85 year old.
  As a proportion of Gross Domestic Product spent on health care, 
America is first in the world by a large margin. We spend 30 percent 
more than the Swiss who are number two, a third more than the Germans, 
fifty percent more than the French and the Canadians, and seventy-eight 
percent more than the Japanese.
  These extraordinarily high levels of health spending might be 
justified if they produced dramatically better health care for the 
American people. But they don't. Among the world's leading 
industrialized countries, the United States ranks 22nd in average life 
expectancy and 25th in infant mortality.
  We also face a worsening crisis of the uninsured. Since President 
Bush took office, the number of uninsured Americans has increased by a 
shameful million a year. Today, 45 million Americans have no coverage. 
Between 2001 and 2004, five million jobs offering health insurance were 
lost.
  Even these figures understate the problem. Over a two-year period, 82 
million Americans--one out of every three non-elderly Americans--will 
be uninsured for a significant period of time.
  Tragically, eight and a half million children are uninsured and may 
well be denied the opportunity for a healthy start in life that should 
be the birthright of every child. Even people who have health insurance 
today cannot count on it being there for them tomorrow. No American 
family is more than one pink slip or one employer decision away from 
being uninsured.
  The uninsured are vulnerable not only to unaffordable costs, but to 
substandard or health care or no care at all. In any given year, one-
third of the uninsured go without needed medical care. Two hundred 
seventy thousand children suffering from asthma never see a doctor. 
Three hundred fifty thousand children with recurrent earaches never see 
a doctor. Three hundred fifty thousand children with severe sore 
throats never see a doctor.
  Twenty-seven thousand uninsured women are diagnosed with breast 
cancer each year. They are twice as likely as insured women not to 
receive medical treatment until their cancer has spread too far, and 
they are 50 percent more likely to die of the disease.
  Thirty-two thousand Americans with heart disease go without life-
saving and life-enhancing bypass surgery or angioplasty--because they 
are uninsured.
  The bottom line is that whether the disease is AIDS or mental illness 
or cancer or heart disease or diabetes, the uninsured are left out and 
left behind. In hospital and out, young or old, black or brown or 
white, they receive less care, suffer more, and are 25 percent more 
likely to die prematurely than those who have insurance.
  Even for those with insurance, the quality of health care is often 
needlessly compromised. Recent events cast serious doubt on the FDA's 
ability to respond promptly when drugs it has approved turn out to have 
dangerous side effects. By some estimates, tens of thousands of 
unnecessary deaths have resulted.
  The lack of coordination in our system results in duplicative, 
costly, and often counterproductive tests and procedures. The Midwest 
Business Group on Health estimates that the cost of poor quality care 
to employers providing health insurance coverage is $2,000 per worker, 
and it's paid in the form of higher insurance premiums. A recent study 
found that for many serious illnesses, patients are as likely to 
receive substandard care as they are to receive care meeting accepted 
professional standards.
  In the face of this massive crisis in health care, the Administration 
and Congress have been missing in action for too long. The Bush 
Administration and the Republican leadership in Congress defend the 
special interests that profit from the status quo and ignore the 
suffering of the millions of families victimized by their neglect.
  Reports suggest in fact that the Administration's new budget will 
propose to cut Medicaid, which provides health care for more than 50 
million of the poorest of the poor. The deficit must be addressed--but 
it was created by the Administration's tax breaks for the wealthy, and 
the poor and the sick should not have to bear the burden of reducing 
it. That's the wrong priority and the wrong values.
  The legislation we are offering today will not solve all these 
problems, but it is a good start, and we are committed to finishing the 
job.
  The Affordable Health Care Act guarantees that every child in America 
will have quality health care coverage.
  It reduces health costs substantially, by making FDA-approved drugs 
available at the same fair prices available to Canadians and Europeans, 
rather than the inflated prices charged to U.S. patients.
  It takes a giant step toward adoption of modern information 
technology in health care, which has the potential to dramatically 
improve the quality of care and dramatically reduce its cost--by as 
much as $140 billion a year. It also improves quality by giving the FDA 
additional authority to monitor the safety of approved drugs.
  It addresses the special burden faced by small businesses by offering 
tax credits to reduce the premiums they pay to cover their employees. 
It also establishes a demonstration program in 25 cities to see if a 
successful program in Michigan to expand insurance coverage for small 
businesses can be replicated elsewhere. Finally, our bill includes a 
sense of the Senate resolution to put Congress firmly on record against 
destructive cuts in Medicaid.
  Affordable health care is a high priority for every family, and it 
should be an equally high priority for this Congress. We face a crisis, 
and it is time to act. Senate Democrats are committed to guaranteeing 
the basic right to health care for all Americans, and when we say 
``all'', we mean ``all''.
  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. 16

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.

      TITLE I--MAKING PRESCRIPTION DRUGS MORE SAFE AND AFFORDABLE

                Subtitle A--Access to Prescription Drugs

Sec. 101. Findings.
Sec. 102. Repeal of certain section regarding importation of 
              prescription drugs.
Sec. 103. Importation of prescription drugs; waiver of certain import 
              restrictions.
Sec. 104. Additional waivers regarding personal importation; 
              enforcement policies of Secretary.
Sec. 105. Disposition of certain drugs denied admission into United 
              States.
Sec. 106. Civil actions regarding property.
Sec. 107. Wholesale distribution of drugs; Statements regarding prior 
              sale, purchase, or trade.
Sec. 108. Repeal of importation exemption under Controlled Substances 
              Import and Export Act.
Sec. 109. Effect on administration practices.

                    Subtitle B--Ensuring Drug Safety

Sec. 121. Drug safety. 
Sec. 122. Report by GAO on drug safety.

              TITLE II--MODERNIZING THE HEALTH CARE SYSTEM

Sec. 201. Amendment to the Public Health Service Act.
Sec. 202. Standardized measures of quality health care and data 
              collection.

TITLE III--MAKING HEALTH CARE MORE AFFORDABLE FOR CHILDREN AND PREGNANT 
                                 WOMEN

                   Subtitle A--Covering all Children

Sec. 300. Findings.

   Chapter 1--Expanded Coverage of Children Under Medicaid and SCHIP

Sec. 301. State option to receive 100 percent fmap for medical 
              assistance for children in poverty in exchange for 
              expanded coverage of children in working poor families 
              under title XXI.

[[Page 398]]

Sec. 302. Elimination of cap on SCHIP funding for States that expand 
              eligibility for children.

   Chapter 2--State Options for Incremental Child Coverage Expansions

Sec. 311. State option to enroll low-income children of State employees 
              in SCHIP.
Sec. 312. State option for passive renewal of eligibility for children 
              under medicaid and SCHIP.

  Chapter 3--Tax Incentives for Health Insurance Coverage of Children

Sec. 321. Refundable credit for health insurance coverage of children.
Sec. 322. Forfeiture of personal exemption for any child not covered by 
              health insurance.

                        Chapter 4--Miscellaneous

Sec. 331. Requirement for group market health insurers to offer 
              dependent coverage option for workers with children.
Sec. 332. Effective date.

                  Subtitle B--Covering Pregnant Women

Sec. 351. State option to expand or add coverage of pregnant women 
              under the medicaid program and State Children's Health 
              Insurance Program.
Sec. 352. Optional coverage of legal immigrants under the medicaid 
              program and SCHIP.
Sec. 353. Promoting cessation of tobacco use under the medicaid 
              program.
Sec. 354. Promoting cessation of tobacco use under the maternal and 
              child health services block grant program.
Sec. 355. State option to provide family planning services and supplies 
              to individuals with incomes that do not exceed a State's 
              income eligibility level for medical assistance.
Sec. 356. State option to extend the postpartum period for provision of 
              family planning services and supplies.
Sec. 357. State option to provide wrap-around SCHIP coverage to 
              children who have other health coverage.
Sec. 358. Innovative outreach programs.

            Subtitle C--Affirming the Importance of Medicaid

Sec. 361. Sense of the Senate.

        TITLE IV--REDUCING HEALTH CARE COSTS FOR SMALL EMPLOYERS

                         Subtitle A--Tax Relief

Sec. 401. Refundable credit for small business employee health 
              insurance expenses.

                    Subtitle B--Three-Share Program

Sec. 421. Three-share programs.

      TITLE I--MAKING PRESCRIPTION DRUGS MORE SAFE AND AFFORDABLE

                Subtitle A--Access to Prescription Drugs

     SEC. 101. FINDINGS.

       Congress finds that--
       (1) Americans unjustly pay up to 5 times more to fill their 
     prescriptions than consumers in other countries;
       (2) the United States is the largest market for 
     pharmaceuticals in the world, yet American consumers pay the 
     highest prices for brand pharmaceuticals in the world;
       (3) a prescription drug is neither safe nor effective to an 
     individual who cannot afford it;
       (4) allowing and structuring the importation of 
     prescription drugs to ensure access to safe and affordable 
     drugs approved by the Food and Drug Administration will 
     provide a level of safety to American consumers that they do 
     not currently enjoy;
       (5) American seniors alone will spend $1,800,000,000,000 on 
     pharmaceuticals over the next 10 years; and
       (6) allowing open pharmaceutical markets could save 
     American consumers at least $38,000,000,000 each year.

     SEC. 102. REPEAL OF CERTAIN SECTION REGARDING IMPORTATION OF 
                   PRESCRIPTION DRUGS.

       Chapter VIII of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 381 et seq.) is amended by striking section 804.

     SEC. 103. IMPORTATION OF PRESCRIPTION DRUGS; WAIVER OF 
                   CERTAIN IMPORT RESTRICTIONS.

       (a) In General.--Chapter VIII of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 381 et seq.), as amended by 
     section 102, is further amended by inserting after section 
     803 the following:

     ``SEC. 804. COMMERCIAL AND PERSONAL IMPORTATION OF 
                   PRESCRIPTION DRUGS.

       ``(a) Importation of Prescription Drugs.--
       ``(1) In general.--The Secretary shall in accordance with 
     this section provide by regulation that, in the case of 
     qualifying drugs imported or offered for import into the 
     United States from registered exporters or by registered 
     importers--
       ``(A) the limitation on importation that is established in 
     section 801(d)(1) is waived; and
       ``(B) the standards referred to in section 801(a) regarding 
     admission of the drugs are subject to subsection (g) of this 
     section (including with respect to qualifying drugs to which 
     section 801(d)(1) does not apply).
       ``(2) Importers.--A qualifying drug may not be imported 
     under paragraph (1) unless--
       ``(A) the drug is imported by a pharmacy or a wholesaler 
     that is a registered importer; or
       ``(B) the drug is imported by an individual for personal 
     use or for the use of a family member of the individual (not 
     for resale) from a registered exporter.
       ``(3) Rule of construction.--This section shall apply only 
     with respect to a drug that is imported or offered for import 
     into the United States--
       ``(A) by a registered importer; or
       ``(B) from a registered exporter to an individual.
       ``(4) Definitions.--
       ``(A) Registered exporter; registered importer.--For 
     purposes of this section:
       ``(i) The term `registered exporter' means an exporter for 
     which a registration under subsection (b) has been approved 
     and is in effect.
       ``(ii) The term `registered importer' means a pharmacy, 
     group of pharmacies, or a wholesaler for which a registration 
     under subsection (b) has been approved and is in effect.
       ``(iii) The term `registration condition' means a condition 
     that must exist for a registration under subsection (b) to be 
     approved.
       ``(B) Qualifying drug.--For purposes of this section, the 
     term `qualifying drug' means a prescription drug, other than 
     any of the following:
       ``(i) A controlled substance, as defined in section 102 of 
     the Controlled Substances Act (21 U.S.C. 802).
       ``(ii) A biological product, as defined in section 351 of 
     the Public Health Service Act (42 U.S.C. 262).
       ``(iii) An infused drug, including a peritoneal dialysis 
     solution.
       ``(iv) An intravenously injected drug.
       ``(v) A drug that is inhaled during surgery.
       ``(C) Other definitions.--For purposes of this section:
       ``(i) The term `exporter' means a person that is in the 
     business of exporting a drug from Canada to individuals in 
     the United States or that, pursuant to submitting a 
     registration under subsection (b), seeks to be in such 
     business.
       ``(ii) The term `importer' means a pharmacy, a group of 
     pharmacies, or a wholesaler that is in the business of 
     importing a drug into the United States or that, pursuant to 
     submitting a registration under subsection (b), seeks to be 
     in such business.
       ``(iii) The term `pharmacist' means a person licensed by a 
     State to practice pharmacy, including the dispensing and 
     selling of prescription drugs.
       ``(iv) The term `pharmacy' means a person that--

       ``(I) is licensed by a State to engage in the business of 
     selling prescription drugs at retail; and
       ``(II) employs 1 or more pharmacists.

       ``(v) The term `prescription drug' means a drug that is 
     described in section 503(b)(1).
       ``(vi) The term `wholesaler'--

       ``(I) means a person licensed as a wholesaler or 
     distributor of prescription drugs in the United States under 
     section 503(e)(2)(A); and
       ``(II) does not include a person authorized to import drugs 
     under section 801(d)(1).

       ``(D) Permitted country.--The term `permitted country' 
     means--
       ``(i) Australia;
       ``(ii) Canada;
       ``(iii) a member country of the European Union as of 
     January 1, 2003;
       ``(iv) Japan;
       ``(v) New Zealand; and
       ``(vi) Switzerland.
       ``(b) Registration of Importers and Exporters.--
       ``(1) Registration of importers and exporters.--A 
     registration condition is that the importer or exporter 
     involved (referred to in this subsection as a `registrant') 
     submits to the Secretary a registration containing the 
     following:
       ``(A) The name of the registrant and an identification of 
     all places of business of the registrant that relate to 
     qualifying drugs, including each warehouse or other facility 
     owned or controlled by, or operated for, the registrant.
       ``(B) Such information as the Secretary determines to be 
     necessary to demonstrate that the registrant is in compliance 
     with registration conditions under--
       ``(i) in the case of an importer, subsections (c), (d), 
     (e), (g), and (j) (relating to the sources of exported drugs; 
     the inspection of facilities of the importer; the payment of 
     fees; compliance with the standards referred to in section 
     801(a); and maintenance of records and samples); or
       ``(ii) in the case of an exporter, subsections (c), (d), 
     (f), (g), (h), (i), and (j) (relating to the sources of 
     exported drugs; the inspection of facilities of the exporter 
     and the marking of compliant shipments; the payment of fees; 
     and compliance with the standards referred to in section 
     801(a); being licensed as a pharmacist; conditions for 
     individual importation from Canada; and maintenance of 
     records and samples).
       ``(C) An agreement by the registrant that the registrant 
     will not under subsection (a) import or export any drug that 
     is not a qualifying drug.

[[Page 399]]

       ``(D) An agreement by the registrant to--
       ``(i) notify the Secretary of a recall or withdrawal of a 
     drug distributed in a permitted country that the registrant 
     has exported or imported, or intends to export or import, to 
     the United States under subsection (a);
       ``(ii) provide for the return to the registrant of such 
     drug; and
       ``(iii) cease, or not begin, the exportation or importation 
     of such drug unless the Secretary has notified the registrant 
     that exportation or importation of such drug may proceed.
       ``(E) An agreement by the registrant to ensure and monitor 
     compliance with each registration condition, to promptly 
     correct any noncompliance with such a condition, and to 
     promptly report to the Secretary any such noncompliance.
       ``(F) A plan describing the manner in which the registrant 
     will comply with the agreement under subparagraph (E).
       ``(G) An agreement by the registrant to enforce a contract 
     under subsection (c)(3)(B) against a party in the chain of 
     custody of a qualifying drug with respect to the authority of 
     the Secretary under clauses (ii) and (iii) of that 
     subsection.
       ``(H) An agreement by the registrant to notify the 
     Secretary of--
       ``(i) any change that the registrant intends to make 
     regarding information provided under subparagraph (A) or (B); 
     and
       ``(ii) any change that the registrant intends to make in 
     the compliance plan under subparagraph (F).
       ``(I) In the case of an exporter--
       ``(i) An agreement by the exporter that a qualifying drug 
     will not under subsection (a) be exported to any individual 
     not authorized pursuant to subsection (a)(2)(B) to be an 
     importer of such drug.
       ``(ii) An agreement to post a bond, payable to the Treasury 
     of the United States if, after opportunity for an informal 
     hearing, the Secretary determines that the exporter has 
     exported a drug to the United States that is not a qualifying 
     drug or that is not in compliance with subsections (g) or 
     (i), that is equal in value to the lesser of--

       ``(I) the value of drugs exported by the exporter to the 
     United States in a typical 4-week period over the course of a 
     year under this section; or
       ``(II) $1,000,000.

       ``(J) Such other provisions as the Secretary may require to 
     protect the public health while permitting--
       ``(i) the importation by pharmacies, groups of pharmacies, 
     wholesalers as registered importers of qualifying drugs under 
     subsection (a); and
       ``(ii) importation by individuals of qualifying drugs under 
     subsection (a).
       ``(2) Approval or disapproval of registration.--
       ``(A) In general.--Not later than 90 days after the date on 
     which a registrant submits to the Secretary a registration 
     under paragraph (1), the Secretary shall notify the 
     registrant whether the registration is approved or is 
     disapproved. The Secretary shall disapprove a registration if 
     there is reason to believe that the registrant is not in 
     compliance with one or more registration conditions, and 
     shall notify the registrant of such reason. In the case of a 
     disapproved registration, the Secretary shall subsequently 
     notify the registrant that the registration is approved if 
     the Secretary determines that the registrant is in compliance 
     with such conditions.
       ``(B) Changes in registration information.--Not later than 
     30 days after receiving a notice under paragraph (1)(G) from 
     a registrant, the Secretary shall determine whether the 
     change involved affects the approval of the registration of 
     the registrant under paragraph (1), and shall inform the 
     registrant of the determination.
       ``(3) Publication of contact information for registered 
     exporters.--Through the Internet website of the Food and Drug 
     Administration, the Secretary shall make readily available to 
     the public a list of registered exporters, including contact 
     information for the exporters. Promptly after the approval of 
     a registration submitted under paragraph (1), the Secretary 
     shall update the Internet website accordingly.
       ``(4) Suspension and termination.--
       ``(A) Suspension.--With respect to the effectiveness of a 
     registration submitted under paragraph (1):
       ``(i) Subject to clause (ii), if the Secretary determines, 
     after notice and opportunity for a hearing, that the 
     registrant has failed to maintain substantial compliance with 
     all registration conditions, the Secretary may suspend the 
     registration.
       ``(ii) If the Secretary determines that, under color of the 
     registration, the exporter has exported a drug or the 
     importer has imported a drug that is not a qualifying drug, 
     or a drug that does not meet the criteria under subsection 
     (g)(2)(A), or has exported a qualifying drug to an individual 
     in violation of subsection (i)(1)(F), the Secretary shall 
     immediately suspend the registration. A suspension under the 
     preceding sentence is not subject to the provision by the 
     Secretary of prior notice, and the Secretary shall provide to 
     the registrant an opportunity for a hearing not later than 10 
     days after the date on which the registration is suspended.
       ``(iii) The Secretary may reinstate the registration, 
     whether suspended under clause (i) or (ii), if the Secretary 
     determines that the registrant has demonstrated that further 
     violations of registration conditions will not occur.
       ``(B) Termination.--The Secretary, after notice and 
     opportunity for a hearing, may terminate the registration 
     under paragraph (1) of a registrant if the Secretary 
     determines that the registrant has engaged in a pattern or 
     practice of violating 1 or more registration conditions, or 
     if on 1 or more occasions the Secretary has under 
     subparagraph (A)(ii) suspended the registration of the 
     registrant. The Secretary may make the termination permanent, 
     or for a fixed period of not less than 1 year. During the 
     period in which the registration is terminated, any 
     registration submitted under paragraph (1) by the registrant, 
     or a person that is a partner in the export or import 
     enterprise, or a principal officer in such enterprise, and 
     any registration prepared with the assistance of the 
     registrant or such a person, has no legal effect under this 
     section.
       ``(c) Sources of Qualifying Drugs.--A registration 
     condition is that the exporter or importer involved agrees 
     that a qualifying drug will under subsection (a) be exported 
     or imported to the United States only if there is compliance 
     with the following:
       ``(1) The drug was manufactured in an establishment--
       ``(A) required to register under subsection (h) or (i) of 
     section 510; or
       ``(B) inspected by the Secretary as provided by this 
     section.
       ``(2) The establishment is located in the United States or 
     in any foreign country, and the establishment manufactured 
     the drug for distribution in the United States or for 
     distribution in 1 or more of the permitted countries (without 
     regard to whether in addition the drug was manufactured for 
     distribution in a foreign country that is not a permitted 
     country).
       ``(3) The exporter or importer obtained the drug--
       ``(A) directly from the establishment; or
       ``(B) directly from an entity that, by contract with the 
     exporter or importer--
       ``(i) provides to the exporter or importer a statement (in 
     such form and containing such information as the Secretary 
     may require) that, for the chain of custody from the 
     establishment, identifies each prior sale, purchase, or trade 
     of the drug (including the date of the transaction and the 
     names and addresses of all parties to the transaction);
       ``(ii) agrees to permit the Secretary to inspect such 
     statements and related records to determine their accuracy;
       ``(iii) agrees, with respect to the qualifying drugs 
     involved, to permit the Secretary to inspect warehouses and 
     other facilities of the entity for purposes of determining 
     whether the facilities are in compliance with any standards 
     under this Act that are applicable to facilities of that type 
     in the United States; and
       ``(iv) has ensured, through such contractual relationships 
     as may be necessary, that the Secretary has the same 
     authority regarding other parties in the chain of custody 
     from the establishment that the Secretary has under clauses 
     (ii) and (iii) regarding such entity.
       ``(4) The foreign country from which the importer will 
     import the drug is a permitted country.
       ``(5) The foreign country from which the exporter will 
     export the drug is Canada.
       ``(6) During any period in which the drug was not in the 
     control of the manufacturer of the drug, the drug did not 
     enter any country that is not a permitted country.
       ``(7) The exporter or importer retains a sample of each lot 
     of the drug sufficient for testing by the Secretary.
       ``(d) Inspection of Facilities; Marking of Shipments.--
       ``(1) Inspection of facilities.--A registration condition 
     is that, for the purpose of assisting the Secretary in 
     determining whether the exporter involved is in compliance 
     with all other registration conditions--
       ``(A) the exporter agrees to permit the Secretary--
       ``(i) to conduct onsite inspections, including monitoring 
     on a day-to-day basis, of places of business of the exporter 
     that relate to qualifying drugs, including each warehouse or 
     other facility owned or controlled by, or operated for, the 
     exporter;
       ``(ii) to have access, including on a day-to-day basis, 
     to--

       ``(I) records of the exporter that relate to the export of 
     such drugs, including financial records; and
       ``(II) samples of such drugs;

       ``(iii) to carry out the duties described in paragraph (3); 
     and
       ``(iv) to carry out any other functions determined by the 
     Secretary to be necessary regarding the compliance of the 
     exporter; and
       ``(B) the Secretary has assigned 1 or more employees of the 
     Secretary to carry out the functions described in this 
     subsection for the Secretary not less than every 3 weeks on 
     the premises of places of businesses referred to in 
     subparagraph (A)(i), and such an assignment remains in effect 
     on a continuous basis.
       ``(2) Marking of compliant shipments.--A registration 
     condition is that the exporter

[[Page 400]]

     involved agrees to affix to each shipping container of 
     qualifying drugs exported under subsection (a) such markings 
     as the Secretary determines to be necessary to identify the 
     shipment as being in compliance with all registration 
     conditions. Markings under the preceding sentence--
       ``(A) shall be designed to prevent affixation of the 
     markings to any shipping container that is not authorized to 
     bear the markings; and
       ``(B) may include anti-counterfeiting or track-and-trace 
     technologies.
       ``(3) Certain duties relating to exporters.--Duties of the 
     Secretary with respect to an exporter include the following:
       ``(A) Verifying the chain of custody of a statistically 
     significant sample of qualifying drugs from the establishment 
     in which the drug was manufactured to the exporter, which may 
     be accomplished by the use of anticounterfeiting or track-
     and-trace technologies, if available.
       ``(B) Randomly reviewing records of exports to individuals 
     for the purpose of determining whether the drugs are being 
     imported by the individuals in accordance with the conditions 
     under subsection (i). Such reviews shall be conducted in a 
     manner that will result in a statistically significant 
     determination of compliance with all such conditions.
       ``(C) Monitoring the affixing of markings under paragraph 
     (2).
       ``(D) Inspect as the Secretary determines is necessary the 
     warehouses and other facilities of other parties in the chain 
     of custody of qualifying drugs.
       ``(E) Determine whether the exporter is in compliance with 
     all other registration conditions.
       ``(4) Certain duties relating to importers.--Duties of the 
     Secretary with respect to an importer include the following:
       ``(A) As authorized under section 704, inspect not less 
     than every 3 weeks, the places of business of the importer 
     that relate to the receipt and distribution of a qualifying 
     drug, including each warehouse or other facility owned or 
     controlled by, or operated for, the importer at which 
     qualifying drugs are received or from which they are 
     distributed to pharmacies.
       ``(B) During the inspections under subparagraph (A), verify 
     the chain of custody of a statistically significant sample of 
     qualifying drugs from the establishment in which the drug was 
     manufactured to the importer, which may be accomplished by 
     the use of anticounterfeiting or track-and-trace 
     technologies, if available.
       ``(C) Inspect as the Secretary determines is necessary the 
     warehouses and other facilities of other parties in the chain 
     of custody of qualifying drugs.
       ``(D) Determine whether the importer is in compliance with 
     all other registration conditions.
       ``(e) Importer Fees.--
       ``(1) Registration fee.--A registration condition is that 
     the importer involved pays to the Secretary a fee of $10,000 
     due on the date on which the importer first submits the 
     registration to the Secretary under subsection (b).
       ``(2) Inspection fee.--A registration condition is that the 
     importer involved pays to the Secretary in accordance with 
     this subsection a fee on a semiannual basis, with the first 
     fee due on the date that is 6 months after the date on which 
     the registration of the importer under subsection (b) is 
     first approved by the Secretary.
       ``(3) Amount of inspection fee.--
       ``(A) Aggregate total of fees.--The Secretary shall ensure 
     that the aggregate total of fees collected under paragraph 
     (2) for a fiscal year from all importers is sufficient, and 
     no more than necessary, to pay the costs of administering 
     this section with respect to registered importers for a 
     fiscal year, including--
       ``(i) inspection of the facilities of importers under 
     subsection (d)(4);
       ``(ii) reviewing qualifying drugs offered for import to 
     importers; and
       ``(iii) determining the compliance of importers with 
     registration conditions.
       ``(B) Limitation.--The aggregate total of fees collected 
     under paragraph (2) shall not exceed 1 percent of the total 
     price of drugs imported annually to the United States by 
     registered importers under this section.
       ``(C) Individual importer fee.--Subject to the limitation 
     described in subparagraph (B), a fee under paragraph (2) for 
     an importer shall be an amount that is a reasonable estimate 
     by the Secretary of the semiannual share of the importer of 
     the volume of drugs imported by importers under this section.
       ``(D) Adjustment of fee.--The Secretary shall annually 
     adjust the fees under paragraph (2) to ensure that the fees 
     accurately reflect the actual costs referred to in 
     subparagraph (A) and do not exceed, in the aggregate, 1 
     percent of the total price of drugs imported annually to the 
     United States under this section.
       ``(4) Use of fees.--Subject to appropriations Acts, fees 
     collected by the Secretary under paragraphs (1) and (2) are 
     available only to the Secretary and are for the sole purpose 
     of paying the costs referred to in paragraph (3)(A).
       ``(f) Exporter Fees.--
       ``(1) Registration fee.--A registration condition is that 
     the exporter involved pays to the Secretary a fee of $10,000 
     due on the date on which the exporter first submits that 
     registration to the Secretary under subsection (b).
       ``(2) Inspection fee.--A registration condition is that the 
     exporter involved pays to the Secretary in accordance with 
     this subsection a fee on a semiannual basis, with the first 
     fee due on the date that is 6 months after the date on which 
     the registration of the exporter under subsection (b) is 
     first approved by the Secretary.
       ``(3) Amount of inspection fee.--
       ``(A) Aggregate total of fees.--The Secretary shall ensure 
     that the aggregate total of fees collected under paragraph 
     (2) for a fiscal year from all exporters is sufficient, and 
     not more than necessary, to pay the costs of administering 
     this section with respect to registered exporters for a 
     fiscal year, including--
       ``(i) monitoring foreign facilities under subsection (d);
       ``(ii) developing, implementing, and maintaining under such 
     subsection a system to mark shipments to indicate compliance 
     with all registration conditions; and
       ``(iii) conducting under such subsection inspections within 
     the United States to determine compliance with conditions 
     under subsections (h) and (i).
       ``(B) Limitation.--The aggregate total of fees collected 
     under paragraph (2) shall not exceed 1 percent of the total 
     price of drugs imported annually to the United States by 
     registered exporters under this section.
       ``(C) Individual exporter fee.--Subject to the limitation 
     described in subparagraph (B), a fee under paragraph (2) for 
     an exporter shall be an amount that is a reasonable estimate 
     by the Secretary of the semiannual share of the exporter of 
     the volume of drugs exported by exporters under this section.
       ``(D) Adjustment of fee.--The Secretary shall annually 
     adjust the fees under paragraph (2) to ensure that the fees 
     accurately reflect the actual costs referred to in 
     subparagraph (A) and do not exceed, in the aggregate, 1 
     percent of the total price of drugs imported annually to the 
     United States under this section.
       ``(4) Use of fees.--Subject to appropriations Acts, fees 
     collected by the Secretary under paragraphs (1) and (2) are 
     only available to the Secretary and are for the sole purpose 
     of paying the costs referred to in paragraph (3)(A).
       ``(g) Compliance With Section 801(a).--
       ``(1) In general.--A registration condition is that each 
     qualifying drug exported under subsection (a) by the 
     registered exporter involved or imported under subsection (a) 
     by the registered importer involved is in compliance with the 
     standards referred to in section 801(a) regarding admission 
     of the drug into the United States, subject to paragraphs 
     (2), (3), and (4).
       ``(2) Section 505; approval status.--
       ``(A) In general.--For purposes of administrative and 
     judicial procedure, there is a presumption that a drug 
     proposed for export or import under subsection (a) is an 
     approved drug under section 505(b) if the following criteria 
     are met:
       ``(i) The drug proposed for export or import is in 
     compliance with subsection (c).
       ``(ii) The drug proposed for export or import has the same 
     active ingredient or ingredients, route of administration, 
     dosage form, and strength, according to information provided 
     by the labeling of the drug proposed for export or import, as 
     a drug (referred to in this subsection as a `U.S. label 
     drug') that--

       ``(I) is manufactured by or for the person that 
     manufactures the drug proposed for export or import; and
       ``(II) is approved under section 505(b).

       ``(B) Importation.--Subject to subparagraphs (D) and (E), a 
     drug meeting the criteria described in subparagraph (A) may, 
     in accordance with the other subsections of this section, be 
     imported into the United States.
       ``(C) Notice by manufacturer; general provisions.--
       ``(i) In general.--The person that manufactures a drug that 
     may be imported under subsection (a) shall in accordance with 
     this paragraph submit to the Secretary a notice that--

       ``(I) includes each difference in the drug from a condition 
     established in the approved application for the U.S. label 
     drug beyond the variations provided for in the application, 
     any difference in labeling, the date on which the drug with 
     such difference was, or will be, introduced for commercial 
     distribution in a permitted country, and such additional 
     information as the Secretary may require; or
       ``(II) states that there is no difference in the drug from 
     a condition established in the approved application for the 
     U.S. label drug beyond the variations provided for in the 
     application and differences in labeling.

       ``(ii) Information regarding foreign government.--A notice 
     under clause (i)(I) shall with respect to the permitted 
     country that approved the drug for commercial distribution, 
     or with respect to which such approval is sought, include the 
     following:

       ``(I) Information demonstrating that the person submitting 
     the notice has also notified the government of the permitted 
     country in writing that the person is submitting to the 
     Secretary a notice under clause (i)(I), which notice 
     describes the difference in the drug from a condition 
     established in the approved application for the U.S. label 
     drug.

[[Page 401]]

       ``(II) The information that the person submitted or will 
     submit to the government of the permitted country for 
     purposes of obtaining approval for commercial distribution of 
     the drug in the country which, if in a language other than 
     English, shall be accompanied by an English translation 
     verified to be complete and accurate, with the name, address, 
     and a brief statement of the qualifications of the person 
     that made the translation.

       ``(iii) Certifications.--The chief executive officer and 
     the chief medical officer of the manufacturer involved shall 
     each certify in the notice under clause (i) that--

       ``(I) the information provided in the notice is complete 
     and true; and

       ``(II) a copy of the notice has been provided to the 
     Federal Trade Commission and to the Assistant Attorney 
     General in charge of the Antitrust Division of the Department 
     of Justice (referred to in this subsection as the `Assistant 
     Attorney General').

       ``(iv) Fee.--If a notice submitted under clause (i) 
     includes a difference that would, under section 506A, require 
     the submission of a supplemental application if made as a 
     change to the U.S. label drug, the person that submits the 
     notice shall pay to the Secretary a fee in the same amount as 
     would apply if the person were paying a fee pursuant to 
     section 736(a)(1)(A)(ii). Subject to appropriations Acts, 
     fees collected by the Secretary under the preceding sentence 
     are available only to the Secretary and are for the sole 
     purpose of paying the costs of reviewing notices submitted 
     under clause (i).
       ``(v) Timing of submission of notices.--

       ``(I) Prior approval notices.--A notice under clause (i) to 
     which subparagraph (D) applies shall be submitted to the 
     Secretary not later than 120 days before the drug with the 
     difference is introduced for commercial distribution in a 
     permitted country, unless the country requires that 
     distribution of the drug with the difference begin less than 
     120 days after the country requires the difference.
       ``(II) Other approval notices.--A notice under clause (i) 
     to which subparagraph (E) applies shall be submitted to the 
     Secretary not later than the day on which the drug with the 
     difference is introduced for commercial distribution in a 
     permitted country.
       ``(III) Other notices.--A notice under clause (i) to which 
     subparagraph (F) applies shall be submitted to the Secretary 
     on the date that the drug is first introduced for commercial 
     distribution in a permitted country and annually thereafter.

       ``(vi) Review by secretary.--

       ``(I) In general.--In this paragraph, the difference in a 
     drug that may be imported under subsection (a) from the U.S. 
     label drug shall be treated by the Secretary as if it was a 
     manufacturing change to the U.S. label drug under section 
     506A.
       ``(II) Review by the secretary.--The Secretary shall review 
     and approve or disapprove the difference in a notice 
     submitted under clause (i), if required under section 506A, 
     not later than 120 days after the date on which the notice is 
     submitted.
       ``(III) Establishment inspection.--If review of such 
     difference would require an inspection by the Secretary of 
     the establishment in which the drug is manufactured, such 
     inspection shall be authorized by section 704.

       ``(vii) Publication of information on notices.--

       ``(I) In general.--Through the Internet website of the Food 
     and Drug Administration, the Secretary shall readily make 
     available to the public a list of notices submitted under 
     clause (i).
       ``(II) Contents.--The list under subclause (I) shall 
     include the date on which a notice is submitted and whether--

       ``(aa) a notice is under review;
       ``(bb) the Secretary has ordered that importation of the 
     drug from a permitted country cease; or
       ``(cc) the importation of the drug is permitted under 
     subsection (a).

       ``(III) Update.--The Secretary shall promptly update the 
     Internet website with any changes to the list.

       ``(D) Notice; drug difference requiring prior approval.--In 
     the case of a notice under subparagraph (C)(i) that includes 
     a difference that would, under section 506A(c) or 
     (d)(3)(B)(i), require the approval of a supplemental 
     application before the difference could be made to the U.S. 
     label drug the following shall occur:
       ``(i) Promptly after the notice is submitted, the Secretary 
     shall notify registered exporters, registered importers, the 
     Federal Trade Commission, and the Assistant Attorney General 
     that the notice has been submitted with respect to the drug 
     involved.
       ``(ii) If the Secretary has not made a determination 
     whether a supplemental application regarding the U.S. label 
     drug would be approved or disapproved by the date on which 
     the drug involved is to be introduced for commercial 
     distribution in a permitted country, the Secretary shall--

       ``(I) order that the importation of the drug involved from 
     the permitted country cease for the period in which the 
     Secretary completes review of the notice; and
       ``(II) promptly notify registered exporters, registered 
     importers, the Federal Trade Commission, and the Attorney 
     General of the order.

       ``(iii) If the Secretary determines that such a 
     supplemental application regarding the U.S. label drug would 
     not be approved, the Secretary shall--

       ``(I) order that the importation of the drug involved from 
     the permitted country cease, or provide that an order under 
     clause (ii), if any, remains in effect;
       ``(II) notify the permitted country that approved the drug 
     for commercial distribution of the determination; and
       ``(III) promptly notify registered exporters, registered 
     importers, the Federal Trade Commission, and the Assistant 
     Attorney General of the determination.

       ``(iv) If the Secretary determines that such a supplemental 
     application regarding the U.S. label drug would be approved, 
     the Secretary shall vacate the order under clause (ii), if 
     any, permit importation of the drug under subsection (a), and 
     promptly notify registered exporters, registered importers, 
     the Federal Trade Commission, and the Assistant Attorney 
     General of the determination.
       ``(E) Notice; drug difference not requiring prior 
     approval.--In the case of a notice under subparagraph (C)(i) 
     that includes a difference that would, under section 
     506A(d)(3)(B)(ii), not require the approval of a supplemental 
     application before the difference could be made to the U.S. 
     label drug the following shall occur:
       ``(i) During the period in which the notice is being 
     reviewed by the Secretary, the authority under this 
     subsection to import the drug involved continues in effect.
       ``(ii) If the Secretary determines that such a supplemental 
     application regarding the U.S. label drug would not be 
     approved, the Secretary shall order that the importation of 
     the drug involved from the permitted country cease, shall 
     notify the permitted country that approved the drug for 
     commercial distribution of the determination, and shall 
     promptly notify registered exporters, registered importers, 
     the Federal Trade Commission, and the Assistant Attorney 
     General of the determination.
       ``(F) Notice; drug difference not requiring approval; no 
     difference.--In the case of a notice under subparagraph 
     (C)(i) that includes a difference for which, under section 
     506A(d)(1)(A), a supplemental application would not be 
     required for the difference to be made to the U.S. label 
     drug, or that states that there is no difference, the 
     Secretary--
       ``(i) may not order that the importation of the drug 
     involved cease; and
       ``(ii) shall promptly notify registered exporters and 
     registered importers.
       ``(G) Differences in active ingredient, route of 
     administration, dosage form, or strength.--
       ``(i) In general.--A person who manufactures a U.S. label 
     drug shall submit an application under section 505(b) for a 
     drug that is manufactured for distribution in a permitted 
     country by or for the person that manufactures the U.S. label 
     drug if--

       ``(I) there is no drug for export from at least half of the 
     permitted countries with the same active ingredient or 
     ingredients, route of administration, dosage form, and 
     strength as the U.S. label drug; and
       ``(II) each active ingredient of the drug is related to an 
     active ingredient of the U.S. label drug, as defined in 
     clause (v).

       ``(ii) Application under section 505(b).--The application 
     under section 505(b) required under clause (i) shall--

       ``(I) request approval of the drug for the indication or 
     indications for which the U.S. label drug is approved under 
     section 505;
       ``(II) include the information that the person submitted to 
     the government of the permitted country for purposes of 
     obtaining approval for commercial distribution of the drug in 
     that country, which if in a language other than English, 
     shall be accompanied by an English translation verified to be 
     complete and accurate, with the name, address, and a brief 
     statement of the qualifications of the person that made the 
     translation;
       ``(III) include a right of reference to the application 
     under section 505(b) for the U.S. label drug; and
       ``(IV) include such additional information as the Secretary 
     may require.

       ``(iii) Timing of submission of application.--An 
     application under section 505(b) required under clause (i) 
     shall be submitted to the Secretary not later than the day on 
     which the information referred to in clause (ii)(II) is 
     submitted to the government of the permitted country.
       ``(iv) Notice of decision on application.--The Secretary 
     shall promptly notify registered exporters, registered 
     importers, the Federal Trade Commission, and the Assistant 
     Attorney General of a determination to approve or to 
     disapprove an application under section 505(b) required under 
     clause (i).
       ``(v) Related active ingredients.--For purposes of clause 
     (i)(II), 2 active ingredients are related if they are--

       ``(I) the same; or
       ``(II) different salts, esters, or complexes of the same 
     moiety.

       ``(3) Section 502; labeling.--
       ``(A) Importation by registered importer.--
       ``(i) In general.--In the case of a qualifying drug that is 
     imported or offered for import by a registered importer, such 
     drug

[[Page 402]]

      shall be considered to be in compliance with section 502 if 
     the drug bears--

       ``(I) a copy of the labeling approved for the drug under 
     section 505, without regard to whether the copy bears the 
     trademark involved;
       ``(II) the name of the manufacturer and location of the 
     manufacturer;
       ``(III) the lot number assigned by the manufacturer; and
       ``(IV) the name, location, and registration number of the 
     importer.

       ``(ii) Request for copy of the labeling.--The Secretary 
     shall provide such copy to the registered importer involved, 
     upon request of the importer.
       ``(B) Importation by individual.--In the case of a 
     qualifying drug that is imported or offered for import by a 
     registered exporter to an individual, such drug shall be 
     considered to be in compliance with section 502 if the drug 
     bears a label providing the directions for use by the 
     consumer, and bears a copy of any special labeling that would 
     be required by the Secretary had the drug been dispensed by a 
     pharmacist in the United States, without regard to whether 
     the special labeling bears the trademark involved. The 
     Secretary shall provide to the registered exporter involved a 
     copy of the special labeling, upon request of the exporter.
       ``(4) Section 501; standards for refusing admission.--
       ``(A) In general.--For purposes of administrative and 
     judicial procedure, there is a presumption that a drug 
     proposed for export or import under subsection (a) is in 
     compliance with section 501 if the drug is in compliance with 
     subsection (c).
       ``(B) Standards for refusing admission.--A qualifying drug 
     exported under subsection (a) from a registered exporter or 
     imported by a registered importer may be refused admission 
     into the United States if 1 or more of the following applies:
       ``(i) The shipping container appears damaged in a way that 
     may affect the strength, quality, or purity of the drug.
       ``(ii) The Secretary becomes aware that--

       ``(I) the drug may be counterfeit;
       ``(II) the drug may have been prepared, packed, or held 
     under insanitary conditions; or
       ``(III) the methods used in, or the facilities or controls 
     used for, the manufacturing, processing, packing, or holding 
     of the drug do not conform to good manufacturing practice.

       ``(iii) The Secretary has obtained an injunction under 
     section 302 that prohibits the distribution of the drug in 
     interstate commerce.
       ``(iv) The Secretary has under section 505(e) withdrawn 
     approval of the drug.
       ``(v) The manufacturer of the drug has instituted a recall 
     of the drug.
       ``(vi) If the qualifying drug is exported from a registered 
     exporter to an individual and 1 or more of the following 
     applies:

       ``(I) The shipping container for such drug does not bear 
     the markings required under subsection (d)(2).
       ``(II) The markings on the shipping container appear to be 
     counterfeit.
       ``(III) The shipping container or markings appear to have 
     been tampered with.

       ``(h) Licensing as Pharmacist.--A registration condition is 
     that the exporter involved agrees that a qualifying drug will 
     be exported to an individual only if the Secretary has 
     verified that--
       ``(1) the exporter is authorized under Canadian law to 
     dispense prescription drugs; and
       ``(2) the exporter employs persons that are licensed under 
     Canadian law to dispense prescription drugs in sufficient 
     number to dispense safely the qualifying drugs exported by 
     the exporter to individuals, and the exporter assigns to 
     those persons responsibility for dispensing such qualifying 
     drugs to individuals.
       ``(i) Individuals; Conditions for Importation From 
     Canada.--
       ``(1) In general.--For purposes of subsection (a)(2)(B), 
     the importation of a qualifying drug by an individual is in 
     accordance with this subsection if the following conditions 
     are met:
       ``(A) The drug is accompanied by a copy of a prescription 
     for the drug, which prescription--
       ``(i) is valid under applicable Federal and State laws; and
       ``(ii) was issued by a practitioner who, under the law of a 
     State of which the individual is a resident, or in which the 
     individual receives care from the practitioner who issues the 
     prescription, is authorized to administer prescription drugs.
       ``(B) The drug is accompanied by a copy of the 
     documentation that was required under the law or regulations 
     of Canada as a condition of dispensing the drug to the 
     individual.
       ``(C) The copies referred to in subparagraphs (A)(i) and 
     (B) are marked in a manner sufficient--
       ``(i) to indicate that the prescription, and the equivalent 
     document in Canada, have been filled; and
       ``(ii) to prevent a duplicative filling by another 
     pharmacist.
       ``(D) The individual has provided to the registered 
     exporter a complete list of all drugs used by the individual 
     for review by the individuals who dispense the drug.
       ``(E) The quantity of the drug does not exceed a 90-day 
     supply.
       ``(F) The drug is not an ineligible subpart H drug. For 
     purposes of this section, a prescription drug is an 
     `ineligible subpart H drug' if the drug was approved by the 
     Secretary under subpart H of part 314 of title 21, Code of 
     Federal Regulations (relating to accelerated approval), with 
     restrictions under section 520 of such part to assure safe 
     use, and the Secretary has published in the Federal Register 
     a notice that the Secretary has determined that good cause 
     exists to prohibit the drug from being imported pursuant to 
     this subsection.
       ``(2) Notice regarding drug refused admission.--If a 
     registered exporter ships a drug to an individual pursuant to 
     subsection (a)(2)(B) and the drug is refused admission to the 
     United States, a written notice shall be sent to the 
     individual and to the exporter that informs the individual 
     and the exporter of such refusal and the reason for the 
     refusal.
       ``(j) Maintenance of Records and Samples.--A registration 
     condition is that the importer or exporter involved shall--
       ``(1) maintain records required under this section for not 
     less than 2 years; and
       ``(2) maintain samples of each lot of a drug required under 
     this section for not less than 2 years.
       ``(k) Drug Recalls.--
       ``(1) Manufacturers.--A person that manufactures a 
     prescription drug imported from a permitted country under 
     this section shall promptly inform the Secretary--
       ``(A) if the drug is recalled or withdrawn from the market 
     in a permitted country;
       ``(B) how the drug may be identified, including lot number; 
     and
       ``(C) the reason for the recall or withdrawal.
       ``(2) Secretary.--With respect to each permitted country, 
     the Secretary shall--
       ``(A) enter into an agreement with the government of the 
     country to receive information about recalls and withdrawals 
     of prescription drugs in the country; or
       ``(B) monitor recalls and withdrawals of prescription drugs 
     in the country using any information that is available to the 
     public in any media.
       ``(3) Notice.--The Secretary may notify, as appropriate, 
     registered exporters, registered importers, wholesalers, 
     pharmacies, or the public of a recall or withdrawal of a 
     prescription drug in a permitted country.''.
       (b) Prohibited Acts.--The Federal Food, Drug, and Cosmetic 
     Act is amended--
       (1) in section 301 (21 U.S.C. 331), by striking paragraph 
     (aa) and inserting the following:
       ``(aa)(1) The sale or trade by a pharmacist, or by a 
     business organization of which the pharmacist is a part, of a 
     qualifying drug that under section 804(a)(2)(A) was imported 
     by the pharmacist, other than--
       ``(A) a sale at retail made pursuant to dispensing the drug 
     to a customer of the pharmacist or organization; or
       ``(B) a sale or trade of the drug to a pharmacy or a 
     wholesaler registered to import drugs under section 804.
       ``(2) The sale or trade by an individual of a qualifying 
     drug that under section 804(a)(2)(B) was imported by the 
     individual.
       ``(3) The making of a materially false, fictitious, or 
     fraudulent statement or representation, or a material 
     omission, in a notice under clause (i) of section 
     804(g)(2)(C) or in an application required under section 
     804(g)(2)(G), or the failure to submit such a notice or 
     application.
       ``(4) The importation of a drug in violation of a 
     requirement under section 804.''; and
       (2) in section 303(a) (21 U.S.C. 333(a)), by striking 
     paragraph (6) and inserting the following:
       ``(6) Notwithstanding subsection (a), any person that 
     knowingly violates section 301(aa) (3) or (4) shall be 
     imprisoned not more than 10 years, or fined in accordance 
     with title 18, United States Code, or both.''.
       (c) Implementation.--
       (1) Rulemaking.--
       (A) In general.--
       (i) Promulgation by secretary.--Not later than 90 days 
     after the date of the enactment of this Act, the Secretary of 
     Health and Human Services shall promulgate an interim rule 
     for implementing section 804 of the Federal Food, Drug, and 
     Cosmetic Act, as added by subsection (a) of this section. 
     Such rule shall be developed and promulgated by the Secretary 
     without providing general notice of proposed rulemaking. Not 
     later than 1 year after the date on which the interim rule is 
     promulgated, the Secretary shall, in accordance with 
     procedures under section 553 of title 5, United States Code, 
     promulgate a final rule for implementing such section 804, 
     which may incorporate by reference provisions of the interim 
     rule, to the extent that such provisions are not modified.
       (ii) Effect of rules.--The rules promulgated under clause 
     (i) shall permit the importation of prescription drugs--

       (I) from registered exporters by individuals effective on 
     the date of the promulgation of the interim rule;
       (II) from Canada by registered importers effective on the 
     date of the promulgation of the interim rule; and
       (III) from Australia, a member country of the European 
     Union as of January 1, 2003, Japan, New Zealand, or 
     Switzerland by registered importers on the date that is 1 
     year after the date of the enactment of this Act.

[[Page 403]]

       (B) Certain exporters.--The interim rule under subparagraph 
     (A) shall provide that, in the review of registrations 
     submitted under subsection (b) of the section 804 referred to 
     in such subparagraph, registrations submitted by entities in 
     Canada that are significant exporters of prescription drugs 
     to individuals in the United States as of the date of the 
     enactment of this Act will have priority during the period in 
     which the interim rule under subparagraph (A) is in effect. 
     During such period, the reference in subsection (b)(2)(A) of 
     such section 804 to 90 days (relating to approval or 
     disapproval of registrations) is, as applied to such 
     entities, deemed to be 30 days.
       (C) Drugs for import from canada.--The notices with respect 
     to drugs to be imported from Canada that are required under 
     subsection (g)(2)(C)(i)(I) of such section 804 and that 
     require approval under subsection (g)(2)(D) or (E) of such 
     section 804 shall be submitted to the Secretary not later 
     than 30 days after the date of enactment of this Act. The 
     notices with respect to drugs to be imported from Canada that 
     are required under subsection (g)(2)(C)(i) of such section 
     804 and that do not require approval under subsection 
     (g)(2)(D) or (E) of such section 804 shall be submitted to 
     the Secretary not later than 90 days after the date of 
     enactment of this Act.
       (D) Drugs for import from other countries.--The notices 
     with respect to drugs to be imported from Australia, a member 
     country of the European Union as of January 1, 2003, Japan, 
     New Zealand, or Switzerland that are required under 
     subsection (g)(2)(C)(i)(I) of such section 804 and that 
     require approval under subsection (g)(2)(D) or (E) of such 
     section 804 shall be submitted to the Secretary not later 
     than 180 days after the date of enactment of this Act. The 
     notices with respect to drugs to be imported from such 
     countries that are required under subsection (g)(2)(C)(i)(II) 
     of such section 804 and that do not require approval under 
     subsection (g)(2)(D) or (E) of such section 804 shall be 
     submitted to the Secretary not later than 270 days after the 
     date of enactment of this Act.
       (2) Personal importation from canada.--Until the expiration 
     of the 60-day period beginning on the date on which the 
     interim rule under paragraph (1)(A) is promulgated, an 
     individual may import a prescription drug from Canada for 
     personal use or for the use of a family member of the 
     individual (rather than for resale), subject to compliance 
     with the following conditions:
       (A) The drug is not--
       (i) a controlled substance, as defined in section 102 of 
     the Controlled Substances Act (21 U.S.C. 802);
       (ii) a biological product, as defined in section 351 of the 
     Public Health Service Act (42 U.S.C. 262);
       (iii) an infused drug, including a peritoneal dialysis 
     solution;
       (iv) an intravenously injected drug;
       (v) a drug that is inhaled during surgery; or
       (vi) a drug approved by the Secretary under subpart H of 
     part 314 of title 21, Code of Federal Regulations (relating 
     to accelerated approval) with restrictions under section 520 
     of such part to assure safe use.
       (B) The drug is dispensed by a person licensed in Canada to 
     dispense such drugs.
       (C) The drug is accompanied by a copy of the prescription 
     for the drug, which prescription--
       (i) is valid under applicable Federal and State laws; and
       (ii) was issued by a practitioner who, under the law of a 
     State of which the individual is a resident, or in which the 
     individual receives care from the practitioner who issues the 
     prescription, is authorized to administer prescription drugs.
       (D) The drug is accompanied by a copy of the document that 
     was required in Canada as a condition of dispensing the drug 
     to the individual.
       (E) The copies referred to in subparagraphs (C) and (D) are 
     marked in a manner sufficient--
       (i) to indicate that the prescription, and the equivalent 
     document in Canada, have been filled; and
       (ii) to prevent a duplicative filling by another 
     pharmacist.
       (F) The quantity of the drug does not exceed a 90-day 
     supply.
       (3) Facilitation of canadian imports.--Not less than 15 
     days after the enactment of this Act and until the expiration 
     of the 60-day period that begins on the date on which the 
     interim rule under paragraph (1)(A) is promulgated, the 
     Secretary shall, through the Internet website of the Food and 
     Drug Administration, make readily available to the public a 
     list of persons licensed in Canada to dispense prescription 
     drugs who are willing to export drugs under paragraph (2) to 
     individuals in the United States.
       (4) Effect of provisions.--The amendments made in 
     subsection (d), section 6, and section 7 of this Act shall 
     have no effect with respect to imports made under paragraph 
     (2).
       (d) Amendment of Certain Provision.--Section 801 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 381) is 
     amended by striking subsection (g) and inserting the 
     following:
       ``(g) With respect to a prescription drug that is imported 
     or offered for import into the United States by an individual 
     who is not in the business of such importation, that is not 
     shipped by a registered exporter under section 804, and that 
     is refused admission under subsection (a), the Secretary 
     shall notify the individual that--
       ``(1) the drug has been refused admission because the drug 
     was not a lawful import under section 804;
       ``(2) the drug is not otherwise subject to a waiver of the 
     requirements of subsection (a);
       ``(3) the individual may under section 804 lawfully import 
     certain prescription drugs from Canadian exporters registered 
     with the Secretary; and
       ``(4) the individual can find information about such 
     importation, including a list of registered exporters, on the 
     Internet website of the Food and Drug Administration.''.
       (e) Anticompetitive Practices Relating to Importing and 
     Exporting Drugs to the United States.--
       (1) In general.--The Clayton Act (15 U.S.C. 12 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 27. RESTRAINT OF TRADE REGARDING PRESCRIPTION DRUGS.

       ``(a) In General.--It shall be unlawful for any person 
     engaged in commerce, directly or indirectly to--
       ``(1) charge a higher price for prescription drugs sold to 
     a registered exporter or other person that exports 
     prescription drugs to the United States under section 804 of 
     the Federal Food, Drug, and Cosmetic Act than the price that 
     is charged to another person that is in the same country and 
     that does not export prescription drugs into the United 
     States under section 804 of such Act;
       ``(2) charge a higher price for prescription drugs sold to 
     a registered importer or other person that distributes, 
     sells, or uses prescription drugs imported to the United 
     States under section 804 of such Act than the price that is 
     charged to another person in the United States that does not 
     import prescription drugs under section 804 of such Act, or 
     that does not distribute, sell, or use such drugs;
       ``(3) deny supplies of prescription drugs to a registered 
     exporter or other person that exports prescription drugs to 
     the United States under section 804 of such Act or to a 
     registered importer or other person that distributes, sells, 
     or uses prescription drugs imported to the United States 
     under section 804 of such Act;
       ``(4) publicly, privately, or otherwise refuse to do 
     business with a registered exporter or other person that 
     exports prescription drugs to the United States under section 
     804 of such Act or with a registered importer or other person 
     that distributes, sells, or uses prescription drugs imported 
     to the United States under section 804 of such Act;
       ``(5) specifically restrict supplies of prescription drugs 
     to a registered exporter or other person that exports 
     prescription drugs to the United States under section 804 of 
     such Act or to a registered importer or other person that 
     distributes, sells, or uses prescription drugs imported to 
     the United States under section 804 of such Act;
       ``(6) fail to submit a notice under subsection (g)(2)(C)(i) 
     of section 804 of such Act, fail to submit such a notice on 
     or before the date specified in subsection (g)(2)(C)(v) of 
     section 804 of such Act, submit such a notice that makes a 
     materially false, fictitious, or fraudulent statement, or 
     fail to provide promptly any information requested by the 
     Secretary of Health and Human Services to review such a 
     notice;
       ``(7) fail to submit an application required under 
     subsection (g)(2)(G) of section 804 of such Act, fail to 
     submit such an application on or before the date specified in 
     subsection (g)(2)(G)(ii) of section 804 of such Act, submit 
     such an application that makes a materially false, 
     fictitious, or fraudulent statement, or fail to provide 
     promptly any information requested by the Secretary of Health 
     and Human Services to review such an application;
       ``(8) cause there to be a difference (including a 
     difference in active ingredient, route of administration, 
     dosage form, strength, formulation, manufacturing 
     establishment, manufacturing process, or person that 
     manufactures the drug) between a prescription drug for 
     distribution in the United States and a prescription drug for 
     distribution in Australia, Canada, a member country of the 
     European Union as of January 1, 2003, Japan, New Zealand, or 
     Switzerland for the purpose of restricting importation of the 
     drug to the United States under section 804 of such Act;
       ``(9) refuse to allow an inspection authorized under 
     section 804 of such Act of an establishment that manufactures 
     a prescription drug that is offered for import under such 
     section;
       ``(10) fail to conform to the methods used in, or the 
     facilities used for, the manufacturing, processing, packing, 
     or holding of a prescription drug offered for import under 
     section 804 to good manufacturing practice under such Act; or
       ``(11) engage in any other action that the Federal Trade 
     Commission determines to unfairly restrict competition under 
     section 804 of such Act.

[[Page 404]]

       ``(b) Presumption.--A difference (including a difference in 
     active ingredient, route of administration, dosage form, 
     strength, formulation, manufacturing establishment, 
     manufacturing process, or person that manufactures the drug) 
     between a prescription drug for distribution in the United 
     States and a prescription drug for distribution in Australia, 
     Canada, a member country of the European Union as of January 
     1, 2003, Japan, New Zealand, or Switzerland made after 
     January 1, 2004, shall be presumed to be for the purpose of 
     restricting importation of the drug to the United States 
     under section 804 of the Federal Food, Drug, and Cosmetic Act 
     unless--
       ``(1) the person manufacturing the drug for distribution in 
     the United States proves that the difference was required by 
     the country in which the drug is distributed;
       ``(2) the Secretary of Health and Human Services, acting 
     through the Commissioner of Food and Drug, determines that 
     the difference was necessary to improve the safety or 
     efficacy of the drug; or
       ``(3) the person manufacturing the drug for distribution in 
     the United States has given notice to the Secretary of Health 
     and Human Services under subsection (g)(2)(C)(i) of section 
     804 of such Act that the drug for distribution in the United 
     States is not different from a drug for distribution in not 
     fewer than half of those countries.
       ``(c) Affirmative Defense.--It shall be an affirmative 
     defense to a charge that a person has violated paragraph (1), 
     (2), (3), (4), or (5) of subsection (a) that the higher 
     prices charged for prescription drugs sold to a person, the 
     denial of supplies of prescription drugs to a person, the 
     refusal to do business with a person, or the specific 
     restriction or delay of supplies to a person is not based, in 
     whole or in part, on--
       ``(1) the person exporting or importing prescription drugs 
     to the United States under section 804 of the Federal Food, 
     Drug, and Cosmetic Act; or
       ``(2) the person distributing, selling, or using 
     prescription drugs imported to the United States under 
     section 804 of such Act.
       ``(d) Definitions.--In this section:
       ``(1) Prescription drug.--The term `prescription drug' 
     means a drug that is described in section 503(b)(1) of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)(1)).
       ``(2) Registered importer.--The term `registered importer' 
     has the meaning given such term in section 804 of the Federal 
     Food, Drug, and Cosmetic Act.
       ``(3) Registered exporter.--The term `registered exporter' 
     has the same meaning as in section 804 of the Federal Food, 
     Drug, and Cosmetic Act.''.
       (2) Applicability of amendments to importation under the 
     pharmaceutical market access and fair trade act of 2004.--
       (A) Personal importation from canada.--Paragraphs (1) 
     through (5) and (11) of subsection (a) of section 27 of the 
     Clayton Act (15 U.S.C. et seq.) (as amended by paragraph (1)) 
     shall apply with respect to the importation of drugs from 
     Canada under subsection (c)(2).
       (B) Notices respecting drug for import.--Paragraph (6) of 
     subsection (a) of section 27 of the Clayton Act (15 U.S.C. et 
     seq.) (as amended by paragraph (1)) shall apply with respect 
     to notices required under section 804(g)(2)(C)(i) of the 
     Federal Food Drug and Cosmetic Act (21 U.S.C. 
     384(g)(2)(C)(i)) that are not submitted by the dates required 
     under subsections (c)(1)(C) and (D).
       (f)  Exhaustion.--
       (1) In general.--Section 271 of title 35, United States 
     Code, is amended--
       (A) by redesignating subsections (h) and (i) as (i) and 
     (j), respectively; and
       (B) by inserting after subsection (g) the following:
       ``(h) It shall not be an act of infringement to use, offer 
     to sell, or sell within the United States or to import into 
     the United States any patented invention under section 804 of 
     the Federal Food, Drug, and Cosmetic Act that was first sold 
     abroad by or under authority of the owner or licensee of such 
     patent.''.
       (2) Rule of construction.--Nothing in the amendment made by 
     paragraph (1) shall be construed to affect the ability of a 
     patent owner or licensee to enforce their patent, subject to 
     such amendment.

     SEC. 104. ADDITIONAL WAIVERS REGARDING PERSONAL IMPORTATION; 
                   ENFORCEMENT POLICIES OF SECRETARY.

       (a) In General.--Section 801 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 381) is amended by adding at the end 
     the following:
       ``(p)(1) Waivers under this subsection are in addition to, 
     and independent of, the waiver pursuant to section 
     804(a)(2)(B).
       ``(2) With respect to the standards referred to in 
     subsection (d)(1), the Secretary shall establish by 
     regulation a waiver of such standards in the case of the 
     importation by an individual of a drug into the United States 
     in the following circumstances:
       ``(A) The drug was dispensed to the individual while the 
     individual was in the United States, the drug was dispensed 
     by a pharmacist or by a practitioner licensed by law to 
     administer the drug, and the individual traveled from the 
     United States with the drug.
       ``(B) The individual is entering the United States and the 
     drug accompanies the individual at the time of entry.
       ``(C) The drug does not appear to the Secretary to be 
     adulterated.
       ``(D) The quantity of the drug does not exceed a 90-day 
     supply.
       ``(E) The drug is accompanied by a statement that the 
     individual seeks to import the drug into the United States 
     under a personal importation waiver.
       ``(F) Such additional standards as the Secretary determines 
     to be appropriate to protect the public health.
       ``(3) With respect to the standards referred to in 
     subsections (a) and (d)(1), the Secretary shall establish by 
     regulation a waiver of such standards in the case of the 
     importation by an individual of a drug into the United States 
     in the following circumstances:
       ``(A) The drug was dispensed to the individual while the 
     individual was in a foreign country, and the drug was 
     dispensed in accordance with the laws and regulations of such 
     country.
       ``(B) The individual is entering the United States and the 
     drug accompanies the individual at the time of entry.
       ``(C) The drug is approved for commercial distribution in 
     the foreign country in which the drug was obtained.
       ``(D) The drug does not appear to the Secretary to be 
     adulterated.
       ``(E) The quantity of the drug does not exceed--
       ``(i) a 90-day supply if the drug is dispensed in 
     Australia, Canada, a member country of the European Union as 
     of January 1, 2003, Japan, New Zealand, or Switzerland; or
       ``(ii) a 14-day supply otherwise.
       ``(F) The drug is accompanied by a statement that the 
     individual seeks to import the drug into the United States 
     under a personal importation waiver.
       ``(G) Such additional standards as the Secretary determines 
     to be appropriate to protect the public health.
       ``(q) The Secretary may not administer any enforcement 
     policy that has the effect of permitting the importation of a 
     prescription drug into the United States in violation of this 
     Act or section 351 of the Public Health Service Act.''.
       (b) Additional Waiver.--This Act and the amendments made by 
     this Act shall not be construed as limiting the authority of 
     the Secretary of Health and Human Services to establish a 
     waiver of the standards referred to in section 801(a) of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 381(a)) with 
     respect to the importation by an individual of a drug into 
     the United States that does not meet such standards, provided 
     that such waiver is no more permissive than the guidance, as 
     in effect on January 1, 2004, that is provided in the item 
     numbered 2 (relating to a specific situation, consisting of 
     conditions (a) through (d)) under the heading ``Drugs, 
     Biologics, and Devices'' in chapter 9 of the FDA/ORA 
     Regulatory Procedures Manual (relating to import operations/
     actions), in the subchapter relating to coverage of personal 
     importations.

     SEC. 105. DISPOSITION OF CERTAIN DRUGS DENIED ADMISSION INTO 
                   UNITED STATES.

       (a) In General.--Chapter VIII of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 381 et seq.), as amended by 
     section 102, is further amended by adding at the end the 
     following section:

     ``SEC. 805. DISPOSITION OF CERTAIN DRUGS DENIED ADMISSION.

       ``(a) In General.--The Secretary of Homeland Security shall 
     refuse admission to a shipment of drugs that is imported or 
     offered for import into the United States if the shipment has 
     a declared value of less than $10,000 and the drugs are in 
     violation of any standard referred to in section 801(a) or 
     801(d)(1), including any drugs imported or offered for import 
     under enforcement policies prohibited under section 801(q).
       ``(b) Importation Under Section 804.--In the case of a drug 
     that under section 804 is imported or offered for import from 
     a registered exporter, the reference in subsection (a) to 
     standards referred to in section 801(a) or 801(d)(1) shall be 
     considered a reference to standards referred to in section 
     804(g)(4)(B).
       ``(c) Destruction of Violative Shipments.--Drugs refused 
     admission under subsection (a) or (b) shall be destroyed, 
     subject to subsection (e). Section 801(b) does not authorize 
     the delivery of the drugs pursuant to the execution of a 
     bond, and the drugs may not be exported.
       ``(d) Certain Procedures.--
       ``(1) In general.--The refusal of admission and destruction 
     of drugs under this section may be carried out without notice 
     to the importer, owner, or consignee of the drugs except as 
     required by section 801(g) or section 804(i)(2). The issuance 
     of receipts for the drugs, and recordkeeping activities 
     regarding the drugs, may be carried out on a summary basis.
       ``(2) Objective of procedures.--Procedures promulgated 
     under paragraph (1) shall be designed toward the objective of 
     ensuring that, with respect to efficiently utilizing Federal 
     resources available for carrying out this section, a 
     substantial majority of shipments of drugs subject to 
     subsection (a) or (b) are identified and refused admission 
     and destroyed.

[[Page 405]]

       ``(e) Evidence Exception.--Drugs may not be destroyed under 
     subsection (c) to the extent that the Attorney General of the 
     United States determines that the drugs should be preserved 
     as evidence or potential evidence with respect to an offense 
     against the United States.
       ``(f) Rule of Construction.--This section may not be 
     construed as having any legal effect on applicable law with 
     respect to a shipment of drugs that is imported or offered 
     for import into the United States and has a declared value 
     equal to or greater than $10,000.''.
       (b) Procedures.--Procedures for carrying out section 805 of 
     the Federal Food, Drug, and Cosmetic Act, as added by 
     subsection (a), shall be established not later than 90 days 
     after the date of the enactment of this Act.

     SEC. 106. CIVIL ACTIONS REGARDING PROPERTY.

        Section 303 of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 333) is amended by adding at the end the following 
     subsection:
       ``(g)(1) If a person is alienating or disposing of 
     property, or intends to alienate or dispose of property, that 
     is obtained as a result of or is traceable to a drug imported 
     in violation of section 801(a) or 801(d), the Attorney 
     General may commence a civil action in any Federal court--
       ``(A) to enjoin such alienation or disposition of property; 
     or
       ``(B) for a restraining order to--
       ``(i) prohibit any person from withdrawing, transferring, 
     removing, dissipating, or disposing of any such property or 
     property of equivalent value; and
       ``(ii) appoint a temporary receiver to administer such 
     restraining order.
       ``(2) Proceedings under paragraph (1) shall be carried out 
     in the same manner as applies under section 1345 of title 18, 
     United States Code.''.

     SEC. 107. WHOLESALE DISTRIBUTION OF DRUGS; STATEMENTS 
                   REGARDING PRIOR SALE, PURCHASE, OR TRADE.

       (a) Striking of Exemptions; Applicability to Registered 
     Exporters.--Section 503(e) of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 353(e)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``and who is not the manufacturer or an 
     authorized distributor of record of such drug'';
       (B) by striking ``to an authorized distributor of record 
     or''; and
       (C) by striking subparagraph (B) and inserting the 
     following:
       ``(B) The fact that a drug subject to subsection (b) is 
     exported from the United States does not with respect to such 
     drug exempt any person that is engaged in the business of the 
     wholesale distribution of the drug from providing the 
     statement described in subparagraph (A) to the person that 
     receives the drug pursuant to the export of the drug.
       ``(C)(i) The Secretary may by regulation establish 
     requirements that supersede subparagraph (A) (referred to in 
     this subparagraph as `alternative requirements') to identify 
     the chain of custody of a drug subject to subsection (b) from 
     the manufacturer of the drug throughout the wholesale 
     distribution of the drug to a pharmacist who intends to sell 
     the drug at retail if the Secretary determines that the 
     alternative requirements, which may include anti-
     counterfeiting or track-and-trace technologies, will identify 
     such chain of custody or the identity of the drug with equal 
     certainty to the requirements of subparagraph (A), and that 
     the alternative requirements are economically and technically 
     feasible.
       ``(ii) If the Secretary promulgates a final rule to 
     establish such alternative requirements, the final rule in 
     addition shall, with respect to the registration condition 
     established in clause (i) of section 804(c)(3)(B), establish 
     a condition equivalent to the alternative requirements, and 
     such equivalent condition supersedes such clause (i).'';
       (2) in paragraph (2)(A), by adding at the end the 
     following: ``The preceding sentence may not be construed as 
     having any applicability with respect to a registered 
     exporter under section 804.''; and
       (3) in paragraph (3), by striking ``and subsection (d)--'' 
     in the matter preceding subparagraph (A) and all that follows 
     through ``the term `wholesale distribution' means'' in 
     subparagraph (B) and inserting the following: ``and 
     subsection (d), the term `wholesale distribution' means''.
       (b) Conforming Amendment.--Section 503(d) of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 353(d)) is amended by 
     adding at the end the following:
       ``(4) Each manufacturer of a drug subject to subsection (b) 
     shall maintain at its corporate offices a current list of the 
     authorized distributors of record of such drug.
       ``(5) For purposes of this subsection, the term `authorized 
     distributors of record' means those distributors with whom a 
     manufacturer has established an ongoing relationship to 
     distribute such manufacturer's products.''.

     SEC. 108. REPEAL OF IMPORTATION EXEMPTION UNDER CONTROLLED 
                   SUBSTANCES IMPORT AND EXPORT ACT.

       Section 1006 of the Controlled Substances Import and Export 
     Act (21 U.S.C. 956) is repealed.

     SEC. 109. EFFECT ON ADMINISTRATION PRACTICES.

       Notwithstanding any provision of this Act (and the 
     amendments made by this Act), nothing in this Act (or the 
     amendments made by this Act) shall be construed to change, 
     limit, or restrict the practices of the Food and Drug 
     Administration or the Bureau of Customs and Border Protection 
     in effect on January 1, 2004, with respect to the importation 
     of prescription drugs into the United States by an 
     individual, on the person of such individual, for personal 
     use.

                    Subtitle B--Ensuring Drug Safety

     SEC. 121. DRUG SAFETY.

       (a) In General.--Chapter V of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 351 et seq.) is amended by inserting 
     after section 506C the following:

     ``SEC. 507. DRUG SAFETY.

       ``(a) Phase IV Studies.--
       ``(1) In general.--The Secretary may require that the 
     sponsor of a drug that is approved or licensed under section 
     505(c) or under section 351 of the Public Health Service Act 
     conduct one or more studies, to be completed by a date after 
     approval or licensing of such drug specified by the 
     Secretary, that confirms or refutes an empirical or 
     theoretical hypothesis of a significant safety issue with the 
     drug, raised with respect to the drug or the class of the 
     drug, found in--
       ``(A) the MedWatch post-market surveillance system;
       ``(B) a clinical or epidemiological study; or
       ``(C) the scientific literature.
       ``(b) Supplements.--The sponsor of a drug that is approved 
     or licensed under section 505(c) or under section 351 of the 
     Public Health Service Act shall promptly submit the results 
     of a study required under subsection (a) as a supplement to 
     the application for the drug.
       ``(c) Public Disclosure.--The Secretary shall, not less 
     than every quarter, make public each study required under 
     subsection (a), including a description of, and the reason 
     for, the study, the required completion date, and whether the 
     study has been completed, through--
       ``(1) a notice in the Federal Register; and
       ``(2) a database that shall be readily accessible to the 
     public through the Internet site of the Food and Drug 
     Administration.
       ``(d) Civil Penalties.--
       ``(1) In general.--The Secretary may order the sponsor of a 
     drug that is approved or licensed under section 505(c) or 
     under section 351 of the Public Health Service Act to pay a 
     civil penalty, subject to paragraph (2), if, after providing 
     an opportunity for an informal hearing, the Secretary 
     determines that--
       ``(A) the sponsor has failed to complete a study required 
     under subsection (a) by the date specified by the Secretary; 
     and
       ``(B) there is no legitimate reason for such failure.
       ``(2) Amount of penalties.--The civil penalty order under 
     paragraph (1) may be assessed for each day the completion of 
     a required study of a drug is delayed in an amount that is 
     not more than 3 times the gross revenue received by the 
     sponsor for the average sales of the drug in a day.
       ``(3) Records relating to gross revenue.--When provided an 
     opportunity for an informal hearing under paragraph (1), a 
     drug sponsor shall provide to the Secretary all records 
     relating to the gross revenues received by the sponsor for 
     average sales of the drug in a day.
       ``(4) Procedure.--The provisions of paragraphs (3) (other 
     than subparagraph (A)), (4), and (5) of section 303(f) shall 
     apply to a violation under subsection (a) in the same manner 
     as such provisions apply to a violation of a requirement of 
     this Act that relates to devices.''.
       (b) Resources.--In addition to fees that may be available 
     to the Office of Drug Safety under sections 735 and 736 of 
     the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379g and 
     379h), there is authorized to be appropriated for the Office 
     of Drug Safety within the Center for Drug Evaluation and 
     Research of the Food and Drug Administration--
       (1) $30,000,000 for fiscal year 2006;
       (2) $40,000,0000 for fiscal year 2007;
       (3) $50,000,000 for fiscal year 2008;
       (4) $60,000,000 for fiscal year 2009; and
       (5) $70,00,000 for fiscal year 2010.

     SEC. 122. REPORT BY GAO ON DRUG SAFETY.

       (a) In General.--The Government Accountability Office shall 
     provide for the conduct of a study concerning measures to 
     increase the safety of prescription drugs, including--
       (1) whether Federal funding levels are adequate to ensure 
     drug safety and whether the uncertainty associated with the 
     Federal budgetary process hampers planning;
       (2) whether the lack of permanent leadership at the Food 
     and Drug Administration has contributed to problems in 
     decisionmaking and in transmitting information to the public 
     concerning the safety of drugs;
       (3) whether prolonged and rampant vacancies within the Food 
     and Drug Administration have contributed to the ability of 
     the Food and Drug Administration to properly examine drug 
     safety;
       (4) whether conflicts of interest exist that unduly bias 
     approvals or later reviews of drug safety;
       (5) whether employees of the Food and Drug Administration 
     have been improperly

[[Page 406]]

     threatened or face any barriers to raising concerns about 
     drug safety;
       (6) whether the procedure of the Food and Drug 
     Administration for notifying the public of possible drug 
     safety issues is appropriate and complied with;
       (7) whether further measures or authorities are necessary 
     to ensure the safety of drugs; and
       (8) other matters determined appropriate.
       (b) Report.--Not later than 90 days after the date of 
     enactment of this Act, the Government Accountability Office 
     shall prepare and submit to the appropriate committees of 
     Congress a report concerning the results of the study 
     conducted under subsection (a). Such report shall include a 
     proposal (including legislative language) for improving the 
     safety of prescription drugs.

              TITLE II--MODERNIZING THE HEALTH CARE SYSTEM

     SEC. 201. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT.

       The Public Health Service Act (42 U.S.C. 201 et seq.) is 
     amended by adding at the end thereof the following:

            ``TITLE XXIX--HEALTH CARE INFORMATION TECHNOLOGY

     ``SEC. 2901. DEFINITIONS.

       ``In this title:
       ``(1) Coverage area.--The term `coverage area' means the 
     boundaries of a local health information infrastructure.
       ``(2) Director.--The term `Director' means the Director of 
     the Office of Health Information Technology.
       ``(3) Health care provider.--The term `health care 
     provider' means a hospital, skilled nursing facility, home 
     health entity, health care clinic, community health center, 
     group practice (as defined in section 1877(h)(4) of the 
     Social Security Act, including practices with only 1 
     physician), and any other facility or clinician determined 
     appropriate by the Director.
       ``(4) Health information technology.--The term `health 
     information technology' means a computerized system that--
       ``(A) is consistent with the standards developed pursuant 
     to section 2903;
       ``(B) permits the secure electronic transmission of 
     information to other health care providers and public health 
     entities; and
       ``(C) includes--
       ``(i) an electronic health record (EHR) that provides 
     access in real-time to the patient's complete medical record;
       ``(ii) a personal health record (PHR) through which an 
     individual (and anyone authorized by such individual) can 
     maintain and manage their health information;
       ``(iii) computerized provider order entry (CPOE) technology 
     that permits the electronic ordering of diagnostic and 
     treatment services, including prescription drugs;
       ``(iv) decision support to assist physicians in making 
     clinical decisions by providing electronic alerts and 
     reminders to improve compliance with best practices, promote 
     regular screenings and other preventive practices, and 
     facilitate diagnoses and treatments;
       ``(v) error notification procedures so that a warning is 
     generated if an order is entered that is likely to lead to a 
     significant adverse outcome for the patient; and
       ``(vi) tools to allow for the collection, analysis, and 
     reporting of data on adverse events, near misses, and the 
     quality of care provided to the patient.
       ``(5) Local health information infrastructures.--The term 
     `local health information infrastructure' means an 
     independent organization of health care entities established 
     for the purpose of linking health information systems to 
     electronically shared information. A local health information 
     infrastructure may not be a single business entity.
       ``(6) Office.--The term `Office' means the Office of Health 
     Information Technology established under section 2902.

     ``SEC. 2902. OFFICE OF HEALTH INFORMATION TECHNOLOGY.

       ``(a) Establishment.--There is established within the 
     executive office of the President an Office of Health 
     Information Technology. The Office shall be headed by a 
     Director to be appointed by the President. The Director shall 
     report directly to the President.
       ``(b) Purpose.--It shall be the purpose of the Office to--
       ``(1) improve the quality and increase the efficiency of 
     health care delivery through the use of health information 
     technology;
       ``(2) provide national leadership relating to, and 
     encourage the adoption of, health information technology;
       ``(3) direct all health information technology activities 
     within the Federal Government; and
       ``(4) facilitate the interaction between the Federal 
     Government and the private sector relating to health 
     information technology development and use.
       ``(c) Duties and Responsibilities.--The Office shall be 
     responsible for the following:
       ``(1) National strategy.--The Office shall develop a 
     national strategy for improving the quality and enhancing the 
     efficiency of health care through the improved use of health 
     information technology and the creation of a National Health 
     Information Infrastructure.
       ``(2) Federal leadership.--The Office shall--
       ``(A) serve as the principle advisor to the President 
     concerning health information technology;
       ``(B) direct all health information technology activity 
     within the Federal Government, including approving or 
     disapproving agency policies submitted under paragraph (3);
       ``(C) work with public and private health information 
     technology stakeholders to implement the national strategy 
     described in paragraph (1); and
       ``(D) ensure that health information technology is utilized 
     as fully as practicable in carrying out health surveillance 
     efforts.
       ``(3) Agency policies.--
       ``(A) In general.--The Office shall, in accordance with 
     this paragraph, approve or disapprove the policies of Federal 
     departments or agencies with respect to any policy proposed 
     to be implemented by such agency or department that would 
     significantly affect that agency or department's use of 
     health information technology.
       ``(B) Submission of proposal.--The head of any Federal 
     Government agency or department that desires to implement any 
     policy with respect to such agency or department that would 
     significantly affect that agency or department's use of 
     health information technology shall submit an implementation 
     proposal to the Office at least 60 days prior to the proposed 
     date of the implementation of such policy.
       ``(C) Approval or disapproval.--Not later than 60 days 
     after the date on which a proposal is received under 
     subparagraph (B), the Office shall determine whether to 
     approve the implementation of such proposal. In making such 
     determination, the Office shall consider whether the proposal 
     is consistent with the national strategy described in 
     paragraph (1). If the Office fails to make a determination 
     within such 60-day period, such proposal shall be deemed to 
     be approved.
       ``(D) Failure to approve.--Except as otherwise provided for 
     by law, a proposal submitted under subparagraph (B) may not 
     be implemented unless such proposal is approved or deemed to 
     be approved under subparagraph (C).
       ``(4) Coordination.--The Office shall--
       ``(A) encourage the development and adoption of clinical, 
     messaging, and decision support health information data 
     standards, pursuant to the requirements of section 2903;
       ``(B) ensure the maintenance and implementation of the data 
     standards described in subparagraph (A);
       ``(C) oversee and coordinate the health information 
     technology efforts of the Federal Government;
       ``(D) ensure the compliance of the Federal Government with 
     Federally adopted health information technology data 
     standards;
       ``(E) ensure that the Federal Government consults and 
     collaborates on decision making with respect to health 
     information technology with the private sector and other 
     interested parties; and
       ``(F) in consultation with private sector, adopt 
     certification and testing criteria to determine if electronic 
     health information systems interoperate.
       ``(5) Communication.--The Office shall--
       ``(A) act as the point of contact for the private sector 
     with respect to the use of health information technology; and
       ``(B) work with the private sector to collect and 
     disseminate best health information technology practices.
       ``(6) Evaluation and dissemination.--The Office shall 
     coordinate with the Agency for Health Research and Quality 
     and other Federal agencies to--
       ``(A) evaluate and disseminate information relating to 
     evidence of the costs and benefits of health information 
     technology and to whom those costs and benefits accrue;
       ``(B) evaluate and disseminate information on the impact of 
     health information technology on the quality and efficiency 
     of patient care; and
       ``(C) review Federal payment structures and differentials 
     for health care providers that utilize health information 
     technology systems.
       ``(7) Technical assistance.--The Office shall utilize 
     existing private sector quality improvement organizations 
     to--
       ``(A) promote the adoption of health information technology 
     among healthcare providers; and
       ``(B) provide technical assistance concerning the 
     implementation of health information technology to healthcare 
     providers.
       ``(8) Federal reimbursement.--
       ``(A) In general.--Not later than 6 months after the date 
     of enactment of this title, the Office shall make 
     recommendations to the President and the Secretary of Health 
     and Human Services on changes to Federal reimbursement and 
     payment structures that would encourage the adoption of 
     information technology (IT) to improve health care quality 
     and safety.
       ``(B) Plan.--Not later than 90 days after receiving 
     recommendations under subparagraph (A), the Secretary shall 
     provide to the relevant Committees of Congress a report that 
     provides, with respect to each recommendation, a plan for the 
     implementation, or an explanation as to why implementation is 
     inadvisable, of such recommendations. The Office shall 
     continue to monitor

[[Page 407]]

     federally funded and supported information technology and 
     quality initiatives (including the initiatives authorized in 
     this title), and periodically update recommendations to the 
     President and the Secretary.
       ``(d) Resources.--The President shall make available to the 
     Office, the resources, both financial and otherwise, 
     necessary to enable the Director to carry out the purposes 
     of, and perform the duties and responsibilities of the Office 
     under, this section.
       ``(e) Detail of Federal Employees.--Upon the request of the 
     Director, the head of any Federal agency is authorized to 
     detail, without reimbursement from the Office, any of the 
     personnel of such agency to the Office to assist it in 
     carrying out its duties under this section. Any such detail 
     shall not interrupt or otherwise affect the civil service 
     status or privileges of the Federal employee.

     ``SEC. 2903. PROMOTING THE INTEROPERABILITY OF HEALTH CARE 
                   INFORMATION TECHNOLOGY SYSTEMS.

       ``(a) Development, and Federal Government Adoption, of 
     Standards.--
       ``(1) Adoption.--
       ``(A) In general.--Not later than 2 years after the date of 
     the enactment of this title, the Director, in collaboration 
     with the Consolidated Health Informatics Initiative (or a 
     successor organization to such Initiative), shall provide for 
     the adoption by the Federal Government of national data and 
     communication health information technology standards that 
     promote the efficient exchange of data between varieties of 
     provider health information technology systems. In carrying 
     out the preceding sentence, the Director may adopt existing 
     standards. Except as otherwise provided for in this title, 
     standards adopted under this section shall be voluntary for 
     private sector entities.
       ``(B) Grants or contracts.--The Director may utilize grants 
     or contracts to provide for the private sector development of 
     standards for adoption by the Federal Government under 
     subparagraph (A).
       ``(C) Definition.--In this paragraph, the term `provide 
     for' means that the Director shall promulgate, and each 
     Federal agency or department shall adopt, regulations to 
     ensure that each such agency or department complies with the 
     requirements of subsection (b).
       ``(2) Requirements.--The standards developed and adopted 
     under paragraph (1) shall be designed to--
       ``(A) enable health information technology to be used for 
     the collection and use of clinically specific data;
       ``(B) promote the interoperability of health care 
     information across health care settings;
       ``(C) facilitate clinical decision support through the use 
     of health information technology; and
       ``(D) ensure the privacy and confidentiality of medical 
     records.
       ``(3) Public private partnership.--Consistent with 
     activities being carried out on the date of enactment of this 
     title, including the Consolidated Health Informatics 
     Initiative (or a successor organization to such Initiative), 
     health information technology standards shall be adopted by 
     the Director under paragraph (1) at the conclusion of a 
     collaborative process that includes consultation between the 
     Federal Government and private sector health care and 
     information technology stakeholders.
       ``(4) Privacy and security.--The regulations promulgated by 
     the Secretary under part C of title XI of the Social Security 
     Act (42 U.S.C. 1320d et seq.) and sections 261, 262, 263, and 
     264 of the Health Insurance Portability and Accountability 
     Act of 1996 (42 U.S.C. 1320d-2 note) with respect to the 
     privacy, confidentiality, and security of health information 
     shall apply to the implementation of programs and activities 
     under this title.
       ``(5) Pilot tests.--To the extent practical, the Director 
     shall pilot test the health information technology data 
     standards developed under paragraph (1) prior to their 
     implementation under this section.
       ``(6) Dissemination.--
       ``(A) In general.--The Director shall ensure that the 
     standards adopted under paragraph (1) are widely disseminated 
     to interested stakeholders.
       ``(B) Licensing.--To facilitate the dissemination and 
     implementation of the standards developed and adopted under 
     paragraph (1), the Director may license such standards, or 
     utilize other means, to ensure the widespread use of such 
     standards.
       ``(b) Implementation of Standards.--
       ``(1) Purchase of systems by the secretary.--Effective 
     beginning on the date that is 1 year after the adoption of 
     the technology standards pursuant to subsection (a), the 
     Secretary shall not purchase any health care information 
     technology system unless such system is in compliance with 
     the standards adopted under subsection (a), nor shall the 
     Director approve any proposal pursuant to section 2902(c)(3) 
     unless such proposal utilizes systems that are in compliance 
     with the standards adopted under subsection (a).
       ``(2) Recipients of federal funds.--Effective on the date 
     described in paragraph (1), no appropriated funds may be used 
     to purchase a health care information technology system 
     unless such system is in compliance with applicable standards 
     adopted under subsection (a).
       ``(c) Modification of Standards.--The Director shall 
     provide for ongoing oversight of the health information 
     technology standards developed under subsection (a) to--
       ``(1) identify gaps or other shortcomings in such 
     standards; and
       ``(2) modify such standards when determined appropriate or 
     develop additional standards, in collaboration with standard 
     setting organizations.

     ``SEC. 2904. LOAN GUARANTEES FOR THE ADOPTION OF HEALTH 
                   INFORMATION TECHNOLOGY.

       ``(a) In General.--The Director shall guarantee payment of 
     the principal of and the interest on loans made to eligible 
     entities to enable such entities--
       ``(1) to implement local health information infrastructures 
     to facilitate the development of interoperability across 
     health care settings to improve quality and efficiency; or
       ``(2) to facilitate the purchase and adoption of health 
     information technology to improve quality and efficiency.
       ``(b) Eligibility.--To be eligible to receive a loan 
     guarantee under subsection (a) an entity shall--
       ``(1) with respect to an entity desiring a loan guarantee--
       ``(A) under subsection (a)(1), be a coalition of entities 
     that represent an independent consortium of health care 
     stakeholders within a community that--
       ``(i) includes--

       ``(I) physicians (as defined in section 1881(r)(1) of the 
     Social Security Act);
       ``(II) hospitals; and
       ``(III) group health plans or other health insurance 
     issuers (as such terms are defined in section 2791); and

       ``(ii) may include any other health care providers; or
       ``(B) under subsection (a)(2) be a health care provider;
       ``(2) to the extent practicable, adopt the national health 
     information technology standards adopted under section 2903;
       ``(3) provide assurances that the entity shall submit to 
     the Director regular reports on the activities carried out 
     under the loan guarantee, including--
       ``(A) a description of the financial costs and benefits of 
     the project involved and of the entities to which such costs 
     and benefits accrue;
       ``(B) a description of the impact of the project on health 
     care quality and safety; and
       ``(C) a description of any reduction in duplicative or 
     unnecessary care as a result of the project involved;
       ``(4) provide assurances that not later than 30 days after 
     the development of the standard quality measures pursuant to 
     section 2906, the entity shall submit to the Director regular 
     reports on such measures, including provider level data and 
     analysis of the impact of information technology on such 
     measures;
       ``(5) prepare and submit to the Director an application at 
     such time, in such manner, and containing such information as 
     the Director may require.
       ``(c) Use of Funds.--Amounts received under a loan 
     guarantee under subsection (a) shall be used--
       ``(1) with respect to a loan guarantee described in 
     subsection (a)(1)--
       ``(A) to develop a plan for the implementation of a local 
     health information infrastructure under this section;
       ``(B) to establish systems for the sharing of data in 
     accordance with the national health information technology 
     standards developed under section 2903;
       ``(C) to purchase directly related integrated hardware and 
     software to establish an interoperable health information 
     technology system that is capable of linking to a local 
     health care information infrastructure; and
       ``(D) to train staff, maintain health information 
     technology systems, and maintain adequate security and 
     privacy protocols;
       ``(2) with respect to a loan guarantee described in 
     subsection (a)(2)--
       ``(A) to develop a plan for the purchase and installation 
     of health information technology;
       ``(B) to purchase directly related integrated hardware and 
     software to establish an interoperable health information 
     technology system that is capable of linking to a national or 
     local health care information infrastructure; and
       ``(C) to train staff, maintain health information 
     technology systems, and maintain adequate security and 
     privacy protocols; and
       ``(3) to carry out any other activities determined 
     appropriate by the Director.
       ``(d) Special Considerations for Certain Entities.--In 
     awarding loan guarantees under this section, the Director 
     shall give special consideration to eligible entities that--
       ``(1) provide service to low-income and underserved 
     populations; and
       ``(2) agree to electronically submit the information 
     described in paragraphs (3) and (4) of subsection (b) on a 
     daily basis.
       ``(e) Special Considerations for Local Health Information 
     Infrastructures.--In awarding loan guarantees under this 
     section to local health information infrastructures, the 
     Director shall give special consideration to eligible 
     entities that--
       ``(1) include at least 50 percent of the patients living in 
     the designated coverage area;

[[Page 408]]

       ``(2) incorporate public health surveillance and reporting 
     into the overall architecture of the proposed infrastructure; 
     and
       ``(3) link local health information infrastructures.
       ``(f) Areas of Specific Interest.--In awarding loan 
     guarantees under this section, the Director shall include--
       ``(1) entities with a coverage area that includes an entire 
     State; and
       ``(2) entities with a multi-state coverage area.
       ``(g) Administrative Provisions.--
       ``(1) Aggregate amount.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the aggregate amount of principal of loans guaranteed under 
     subsection (a) with respect to an eligible entity may not 
     exceed $5,000,000. In any 12-month period the amount 
     disbursed to an eligible entity under this section (by a 
     lender under a guaranteed loan) may not exceed $5,000,000.
       ``(B) Exception.--The cumulative total of the principal of 
     the loans outstanding at any time to which guarantees have 
     been issued under subsection (a) may not exceed such 
     limitations as may be specified in appropriation Acts.
       ``(2) Protection of federal government.--
       ``(A) In general.--The Director may not approve an 
     application for a loan guarantee under this section unless 
     the Director determines that--
       ``(i) the terms, conditions, security (if any), and 
     schedule and amount of repayments with respect to the loan 
     are sufficient to protect the financial interests of the 
     United States and are otherwise reasonable, including a 
     determination that the rate of interest does not exceed such 
     percent per annum on the principal obligation outstanding as 
     the Director determines to be reasonable, taking into account 
     the range of interest rates prevailing in the private market 
     for loans with similar maturities, terms, conditions, and 
     security and the risks assumed by the United States; and
       ``(ii) the loan would not be available on reasonable terms 
     and conditions without the enactment of this section.
       ``(B) Recovery.--
       ``(i) In general.--The United States shall be entitled to 
     recover from the applicant for a loan guarantee under this 
     section the amount of any payment made pursuant to such loan 
     guarantee, unless the Director for good cause waives such 
     right of recovery, and, upon making any such payment, the 
     United States shall be subrogated to all of the rights of the 
     recipient of the payments with respect to which the loan was 
     made.
       ``(ii) Modification of terms.--Any terms and conditions 
     applicable to a loan guarantee under this section may be 
     modified by the Director to the extent the Director 
     determines it to be consistent with the financial interest of 
     the United States.
       ``(3) Defaults.--The Director may take such action as the 
     Director deems appropriate to protect the interest of the 
     United States in the event of a default on a loan guaranteed 
     under this section, including taking possession of, holding, 
     and using real property pledged as security for such a loan 
     guarantee.
       ``(h) Authorization of Appropriations.--
       ``(1) In general.--There is authorized to be appropriated 
     to carry out this section, such sums as may be necessary for 
     each of fiscal years 2006 through 2011.
       ``(2) Availability.--Amounts appropriated under 
     subparagraph (A) shall remain available for obligation until 
     expended.

     ``SEC. 2905. GRANTS FOR THE PURCHASE OF HEALTH INFORMATION 
                   TECHNOLOGY.

       ``(a) In General.--The Director may award competitive 
     grants to eligible entities--
       ``(1) to implement local health information infrastructures 
     to facilitate the development of interoperability across 
     health care settings; or
       ``(2) to facilitate the purchase and adoption of health 
     information technology.
       ``(b) Eligibility.--To be eligible to receive a grant under 
     subsection (a) an entity shall--
       ``(1) demonstrate financial need to the Director;
       ``(2) with respect to an entity desiring a grant--
       ``(A) under subsection (a)(1), represent an independent 
     consortium of health care stakeholders within a community 
     that--
       ``(i) includes--

       ``(I) physicians (as defined in section 1881(r)(1) of the 
     Social Security Act);
       ``(II) hospitals; and
       ``(III) group health plans or other health insurance 
     issuers (as such terms are defined in section 2791); and

       ``(ii) may include any other health care providers; or
       ``(B) under subsection (a)(2) be a health care provider 
     that provides health care services to low-income and 
     underserved populations;
       ``(3) adopt the national health information technology 
     standards developed under section 2903;
       ``(4) provide assurances that the entity shall submit to 
     the Director regular reports on the activities carried out 
     under the loan guarantee, including--
       ``(A) a description of the financial costs and benefits of 
     the project involved and of the entities to which such costs 
     and benefits accrue;
       ``(B) a description of the impact of the project on health 
     care quality and safety; and
       ``(C) a description of any reduction in duplicative or 
     unnecessary care as a result of the project involved;
       ``(5) provide assurances that not later than 30 days after 
     the development of the standard quality measures pursuant to 
     section 2906, the entity shall submit to the Director regular 
     reports on such measures, including provider level data and 
     analysis of the impact of information technology on such 
     measures;
       ``(6) prepare and submit to the Director an application at 
     such time, in such manner, and containing such information as 
     the Director may require; and
       ``(7) agree to provide matching funds in accordance with 
     subsection (g).
       ``(c) Use of Funds.--Amounts received under a grant under 
     subsection (a) shall be used to--
       ``(1) with respect to a grant described in subsection 
     (a)(1)--
       ``(A) to develop a plan for the implementation of a local 
     health information infrastructure under this section;
       ``(B) to establish systems for the sharing of data in 
     accordance with the national health information technology 
     standards developed under section 2903;
       ``(C) to implement, enhance, or upgrade a comprehensive, 
     electronic health information technology system; and
       ``(D) to maintain adequate security and privacy protocols;
       ``(2) with respect to a grant described in subsection 
     (a)(2)--
       ``(A) to develop a plan for the purchase and installation 
     of health information technology;
       ``(B) to purchase directly related integrated hardware and 
     software to establish an interoperable health information 
     technology system that is capable of linking to a national or 
     local health care information infrastructure; and
       ``(C) to train staff, maintain health information 
     technology systems, and maintain adequate security and 
     privacy protocols;
       ``(3) maintain adequate security and privacy protocols; and
       ``(4) carry out any other activities determined appropriate 
     by the Director.
       ``(d) Special Considerations for Certain Entities.--In 
     awarding grants under this section, the Director shall give 
     special consideration to eligible entities that--
       ``(1) provide service to low-income and underserved 
     populations; and
       ``(2) agree to electronically submit the information 
     described in paragraphs (4) and (5) of subsection (b).
       ``(e) Special Considerations for Local Health Information 
     Infrastructures.--In awarding grants under this section to 
     local health information infrastructures, the Director shall 
     give special consideration to eligible entities that--
       ``(1) include at least 50 percent of the patients living in 
     the designated coverage area;
       ``(2) incorporate public health surveillance and reporting 
     into the overall architecture of the proposed infrastructure; 
     and
       ``(3) link local health information infrastructures;
       ``(f) Areas of Specific Interest.--In awarding grants under 
     this section, the Director shall include--
       ``(1) entities with a coverage area that includes an entire 
     State; and
       ``(2) entities with a multi-state coverage area.
       ``(g) Matching Requirement.--
       ``(1) In general.--The Director may not make a grant under 
     this section to an entity unless the entity agrees that, with 
     respect to the costs to be incurred by the entity in carrying 
     out the infrastructure program for which the grant was 
     awarded, the entity will make available (directly or through 
     donations from public or private entities) non-Federal 
     contributions toward such costs in an amount equal to not 
     less than 20 percent of such costs ($1 for each $5 of Federal 
     funds provided under the grant).
       ``(2) Determination of amount contributed.--Non-Federal 
     contributions required under paragraph (1) may be in cash or 
     in kind, fairly evaluated, including equipment, technology, 
     or services. Amounts provided by the Federal Government, or 
     services assisted or subsidized to any significant extent by 
     the Federal Government, may not be included in determining 
     the amount of such non-Federal contributions.
       ``(h) Authorization of Appropriations.--
       ``(1) In general.--There is authorized to be appropriated 
     to carry out this section, such sums as may be necessary for 
     each of fiscal years 2006 through 2011.
       ``(2) Availability.--Amounts appropriated under paragraph 
     (1) shall remain available for obligation until expended.''.

     SEC. 202. STANDARDIZED MEASURES OF QUALITY HEALTH CARE AND 
                   DATA COLLECTION.

       Title XXIX of the Public Health Service Act, as added by 
     section 201, is amended by adding at the end the following:

     ``SEC. 2906. STANDARDIZED MEASURES OF QUALITY HEALTH CARE.

       ``(a) In General.--

[[Page 409]]

       ``(1) Collaboration.--The Secretary of Health and Human 
     Services, the Secretary of Defense, and the Secretary of 
     Veterans Affairs (referred to in this section as the 
     `Secretaries'), in consultation with the Quality Interagency 
     Coordination Taskforce (as established by Executive Order on 
     March 13, 1998), the Institute of Medicine, the Joint 
     Commission on Accreditation of Healthcare Organizations, the 
     National Committee for Quality Assurance, the American Health 
     Quality Association, the National Quality Forum, the Medicare 
     Payment Advisory Committee, and other individuals and 
     organizations determined appropriate by the Secretaries, 
     shall establish uniform health care quality measures to 
     assess the effectiveness, timeliness, patient-centeredness, 
     efficiency, equity, and safety of care delivered across all 
     federally supported health delivery programs.
       ``(2) Development of measures.--Not later than 18 months 
     after the date of enactment of this title, the Secretaries 
     shall develop standardized sets of quality measures for each 
     of the 20 priority areas for improvement in health care 
     quality as identified by the Institute of Medicine in their 
     report entitled `Priority Areas for National Action' in 2003, 
     or other such areas as identified by the Secretaries in order 
     to assist beneficiaries in making informed choices about 
     health plans or care delivery systems. The selection of 
     appropriate quality indicators under this subsection shall 
     include the evaluation criteria formulated by clinical 
     professionals, consumers, and data collection experts.
       ``(3) Pilot testing.--Each federally supported health 
     delivery program may conduct a pilot test of the quality 
     measures developed under paragraph (2) that shall include a 
     collection of patient-level data and a public release of 
     comparative performance reports.
       ``(b) Public Reporting Requirements.--The Secretaries, 
     working collaboratively, shall establish public reporting 
     requirements for clinicians, institutional providers, and 
     health plans in each of the federally supported health 
     delivery program described in subsection (a). Such 
     requirements shall provide that the entities described in the 
     preceding sentence shall report to the appropriate Secretary 
     on the measures developed under subsection (a).
       ``(c) Full Implementation.--The Secretaries, working 
     collaboratively, shall implement all sets of quality measures 
     and reporting systems developed under subsections (a) and (b) 
     by not later than the date that is 1 year after the date on 
     which the measures are developed under subsection (a)(2).
       ``(d) Reports.--Not later than 1 year after the date of 
     enactment of this title, and annually thereafter, the 
     Secretary shall--
       ``(1) submit to Congress a report that details the 
     collaborative efforts carried out under subsection (a), the 
     progress made on standardizing quality indicators throughout 
     the Federal Government, and the state of quality measurement 
     for priority areas that links data to the report submitted 
     under paragraph (2) for the year involved; and
       ``(2) submit to Congress a report that details areas of 
     clinical care requiring further research necessary to 
     establish effective clinical treatments that will serve as a 
     basis for additional quality indicators.
       ``(e) Comparative Quality Reports.--Beginning not later 
     than 3 years after the date of enactment of this title, in 
     order to make comparative quality information available to 
     health care consumers, including members of health disparity 
     populations, health professionals, public health officials, 
     researchers, and other appropriate individuals and entities, 
     the Secretaries shall provide for the pooling, analysis, and 
     dissemination of quality measures collected under this 
     section. Nothing in this section shall be construed as 
     modifying the privacy standards under the Health Insurance 
     Portability and Accountability Act of 1996 (Public Law 104-
     191).
       ``(f) Ongoing Evaluation of Use.--The Secretary of Health 
     and Human Services shall ensure the ongoing evaluation of the 
     use of the health care quality measures established under 
     this section.
       ``(g) Evaluation and Regulations.--
       ``(1) Evaluation.--
       ``(A) In general.--The Secretary shall, directly or 
     indirectly through a contract with another entity, conduct an 
     evaluation of the collaborative efforts of the Secretaries to 
     establish uniform health care quality measures and reporting 
     requirements for federally supported health care delivery 
     programs as required under this section.
       ``(B) Report.--Not later than 1 year after the date of 
     enactment of this title, the Secretary of Health and Human 
     Services shall submit a report to the appropriate committees 
     of Congress concerning the results of the evaluation under 
     subparagraph (A).
       ``(2) Regulations.--
       ``(A) Proposed.--Not later than 6 months after the date on 
     which the report is submitted under paragraph (1)(B), the 
     Secretary shall publish proposed regulations regarding the 
     application of the uniform health care quality measures and 
     reporting requirements described in this section to federally 
     supported health delivery programs.
       ``(B) Final regulations.--Not later than 1 year after the 
     date on which the report is submitted under paragraph (1)(B), 
     the Secretary shall publish final regulations regarding the 
     uniform health care quality measures and reporting 
     requirements described in this section.
       ``(h) Definitions.--In this section, the term `federally 
     supported health delivery program' means a program that is 
     funded by the Federal Government under which health care 
     items or services are delivered directly to patients.''.

TITLE III--MAKING HEALTH CARE MORE AFFORDABLE FOR CHILDREN AND PREGNANT 
                                 WOMEN

                   Subtitle A--Covering all Children

     SEC. 300. FINDINGS.

       Congress makes the following findings:
       (1) Need for universal coverage.--
       (A) Currently, there are 9,000,000 children under the age 
     of 19 that are uninsured. One out of every 8 children are 
     uninsured while 1 in 5 Hispanic children and 1 in 7 African 
     American children are uninsured. Three-quarters, 
     approximately 6,800,000, of these children are eligible but 
     not enrolled in the medicaid program or the State children's 
     health insurance program (SCHIP). Long-range studies found 
     that 1 in 3 children went without health insurance for all or 
     part of 2002 and 2003.
       (B) Low-income children are 3 times as likely as children 
     in higher income families to be uninsured. It is estimated 
     that 65 percent of uninsured children have at least 1 parent 
     working full time over the course of the year.
       (C) It is estimated that 50 percent of all legal immigrant 
     children in families with income that is less than 200 
     percent of the Federal poverty line are uninsured. In States 
     without programs to cover immigrant children, 57 percent of 
     non-citizen children are uninsured.
       (D) Children in the Southern and Western parts of the 
     United States were nearly 1.7 times more likely to be 
     uninsured than children in the Northeast. In the Northeast, 
     9.4 percent of children are uninsured while in the Midwest, 
     8.3 percent are uninsured. The South's rate of uninsured 
     children is 14.3 percent while the West has an uninsured rate 
     of 13 percent.
       (E) Children's health care needs are neglected in the 
     United States. One-quarter of young children in the United 
     States are not fully up to date on their basic immunizations. 
     One-third of children with chronic asthma do not get a 
     prescription for the necessary medications to manage the 
     disease.
       (F) According to the Centers for Disease Control and 
     Prevention, nearly \1/2\ of all uninsured children have not 
     had a well-child visit in the past year. One out of every 5 
     children has problems accessing needed care, and 1 out of 
     every 4 children do not receive annual dental exams. One in 6 
     uninsured children had a delayed or unmet medical need in the 
     past year. Minority children are less likely to receive 
     proven treatments such as prescription medications to treat 
     chronic disease.
       (G) There are 7,600,000 young adults between the ages of 19 
     and 20. In the United States, approximately 28 percent, or 
     2,100,000 individuals, of this group are uninsured.
       (H) Chronic illness and disability among children are on 
     the rise. Children most at risk for chronic illness and 
     disability are children who are most likely to be poor and 
     uninsured.
       (2) Role of the medicaid and state children's health 
     insurance programs.--
       (A) The medicaid program and SCHIP serve as a crucial 
     health safety net for 30,000,000 children. During the recent 
     economic downturn and the highest number of uninsured 
     individuals ever recorded in the United States, the medicaid 
     program and SCHIP offset losses in employer-sponsored 
     coverage. While the number of children living in low-income 
     families increased by 2,000,000 between 2000 and 2003, the 
     number of uninsured children fell due to the medicaid program 
     and SCHIP.
       (B) In 2003, 25,000,000 children were enrolled in the 
     medicaid program, accounting for \1/2\ of all enrollees and 
     only 19 percent of total program costs.
       (C) The medicaid program and SCHIP do more than just fill 
     in the gaps. Gains in public coverage have reduced the 
     percentage of low-income uninsured by a \1/3\ from 1997 to 
     2003. In addition, a recent study found that publicly-insured 
     children are more likely to obtain medical care, preventive 
     care and dental care than similar low-income privately -
     insured children.
       (D) Publicly funded programs such as the medicaid program 
     and SCHIP actually improve children's health. Children who 
     are currently insured by public programs are in better health 
     than they were a year ago. Expansion of coverage for children 
     and pregnant women under the medicaid program and SCHIP 
     reduces rates of avoidable hospitalizations by 22 percent.
       (E) Studies have found that children enrolled in public 
     insurance programs experienced a 68 percent improvement in 
     measures of school performance.
       (F) Despite the success of expansions in general under the 
     medicaid program and SCHIP, due to current budget 
     constraints, many States have stopped doing aggressive 
     outreach and have raised premiums and cost-sharing 
     requirements on families under these programs. In addition, 8 
     States stopped enrollment in SCHIP for a period of time 
     between April 2003 and July 2004. As a result,

[[Page 410]]

     SCHIP enrollment fell by 200,000 children for the first time 
     in the program's history.
       (G) It is estimated that nearly 50 percent of children 
     covered through SCHIP do not remain in the program due to 
     reenrollment barriers. A recent study found that between 10 
     and 40 percent of these children are ``lost'' in the system. 
     Difficult renewal policies and reenrollment barriers make 
     seamless coverage in SCHIP unattainable. Studies indicate 
     that as many as 67 percent of children who were eligible but 
     not enrolled for SCHIP had applied for coverage but were 
     denied due to procedural issues.
       (H) While the medicaid program and SCHIP expansions to date 
     have done much to offset what otherwise would have been a 
     significant loss of coverage among children because of 
     declining access to employer coverage, the shortcomings of 
     previous expansions, such as the failure to enroll all 
     eligible children and caps on enrollment in SCHIP because of 
     under-funding, also are clear.

   CHAPTER 1--EXPANDED COVERAGE OF CHILDREN UNDER MEDICAID AND SCHIP

     SEC. 301. STATE OPTION TO RECEIVE 100 PERCENT FMAP FOR 
                   MEDICAL ASSISTANCE FOR CHILDREN IN POVERTY IN 
                   EXCHANGE FOR EXPANDED COVERAGE OF CHILDREN IN 
                   WORKING POOR FAMILIES UNDER TITLE XXI.

       (a) State Option.--Title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) is amended by redesignating section 1936 
     as section 1937, and by inserting after section 1935 the 
     following:


 ``STATE OPTION FOR INCREASED FMAP FOR MEDICAL ASSISTANCE FOR CHILDREN 
  IN POVERTY IN EXCHANGE FOR EXPANDED COVERAGE OF CHILDREN IN WORKING 
                     POOR FAMILIES UNDER TITLE XXI

       ``Sec. 1936. (a) 100 Percent FMAP.--
       ``(1) In general.--Notwithstanding any other provision of 
     this title, in the case of a State that, through an amendment 
     to each of its State plans under this title and title XXI (or 
     to a waiver of either such plan), agrees to satisfy the 
     conditions described in subsections (b), (c), and (d) the 
     Federal medical assistance percentage shall be 100 percent 
     with respect to the total amount expended by the State for 
     providing medical assistance under this title for each fiscal 
     year quarter beginning on or after the date described in 
     subsection (e) for children whose family income does not 
     exceed 100 percent of the poverty line.
       ``(2) Limitation on scope of application of increase.--The 
     increase in the Federal medical assistance percentage for a 
     State under this section shall apply only with respect to the 
     total amount expended for providing medical assistance under 
     this title for a fiscal year quarter for children described 
     in paragraph (1) and shall not apply with respect to--
       ``(A) any other payments made under this title, including 
     disproportionate share hospital payments described in section 
     1923;
       ``(B) payments under title IV or XXI; or
       ``(C) any payments made under this title or title XXI that 
     are based on the enhanced FMAP described in section 2105(b).
       ``(b) Eligibility Expansions.--The condition described in 
     this subsection is that the State agrees to do the following:
       ``(1) Coverage under medicaid or schip for children in 
     families whose income does not exceed 300 percent of the 
     poverty line.--
       ``(A) In general.--The State agrees to provide medical 
     assistance under this title or child health assistance under 
     title XXI to children whose family income exceeds the 
     medicaid applicable income level (as defined in section 
     2110(b)(4) but by substituting `January 1, 2005' for `March 
     31, 1997'), but does not exceed 300 percent of the poverty 
     line.
       ``(B) State option to expand coverage through subsidized 
     purchase of family coverage.--A State may elect to carry out 
     subparagraph (A) through the provision of assistance for the 
     purchase of dependent coverage under a group health plan or 
     health insurance coverage if--
       ``(i) the dependent coverage is consistent with the benefit 
     standards under this title or title XXI, as approved by the 
     Secretary; and
       ``(ii) the State provides `wrap-around' coverage under this 
     title or title XXI.
       ``(C) Deemed satisfaction for certain states.--A State 
     that, as of January 1, 2005, provides medical assistance 
     under this title or child health assistance under title XXI 
     to children whose family income is 300 percent of the poverty 
     line shall be deemed to satisfy this paragraph.
       ``(2) Coverage for children under age 21.--The State agrees 
     to define a child for purposes of this title and title XXI as 
     an individual who has not attained 21 years of age.
       ``(3) Opportunity for higher income children to purchase 
     schip coverage.--The State agrees to permit any child whose 
     family income exceeds 300 percent of the poverty line to 
     purchase full or `wrap-around' coverage under title XXI at 
     the full cost of providing such coverage, as determined by 
     the State.
       ``(4) Coverage for legal immigrant children.--The State 
     agrees to--
       ``(A) provide medical assistance under this title and child 
     health assistance under title XXI for alien children who are 
     lawfully residing in the United States (including battered 
     aliens described in section 431(c) of the Personal 
     Responsibility and Work Opportunity Reconciliation Act of 
     1996) and who are otherwise eligible for such assistance in 
     accordance with section 1903(v)(4) and 2107(e)(1)(E); and
       ``(B) not establish or enforce barriers that deter 
     applications by such aliens, including through the 
     application of the removal of the barriers described in 
     subsection (c).
       ``(c) Removal of Enrollment and Access Barriers.--The 
     condition described in this subsection is that the State 
     agrees to do the following:
       ``(1) Presumptive eligibility for children.--The State 
     agrees to--
       ``(A) provide presumptive eligibility for children under 
     this title and title XXI in accordance with section 1920A;
       ``(B) treat any items or services that are provided to an 
     uncovered child (as defined in section 2110(c)(8)) who is 
     determined ineligible for medical assistance under this title 
     as child health assistance for purposes of paying a provider 
     of such items or services, so long as such items or services 
     would be considered child health assistance for a targeted 
     low-income child under title XXI.
       ``(2) Adoption of 12-month continuous enrollment.--The 
     State agrees to provide that eligibility for assistance under 
     this title and title XXI shall not be regularly redetermined 
     more often than once every year for children.
       ``(3) Acceptance of self-declaration of income.--The State 
     agrees to permit the family of a child applying for medical 
     assistance under this title or child health assistance under 
     title XXI to declare and certify by signature under penalty 
     of perjury family income for purposes of collecting financial 
     eligibility information.
       ``(4) Adoption of acceptance of eligibility determinations 
     for other assistance programs.--The State agrees to accept 
     determinations (made within a reasonable period, as found by 
     the State, before its use for this purpose) of an 
     individual's family or household income made by a Federal or 
     State agency (or a public or private entity making such 
     determination on behalf of such agency), including the 
     agencies administering the Food Stamp Act of 1977, the 
     Richard B. Russell National School Lunch Act, and the Child 
     Nutrition Act of 1966, notwithstanding any differences in 
     budget unit, disregard, deeming, or other methodology, but 
     only if--
       ``(A) such agency has fiscal liabilities or 
     responsibilities affected or potentially affected by such 
     determinations; and
       ``(B) any information furnished by such agency pursuant to 
     this subparagraph is used solely for purposes of determining 
     eligibility for medical assistance under this title or for 
     child health assistance under title XXI.
       ``(5) No assets test.--The State agrees to not (or 
     demonstrates that it does not) apply any assets or resources 
     test for eligibility under this title or title XXI with 
     respect to children.
       ``(6) Eligibility Determinations and Redeterminations.--
       ``(A) In general.--The State agrees for purposes of initial 
     eligibility determinations and redeterminations of children 
     under this title and title XXI not to require a face-to-face 
     interview and to permit applications and renewals by mail, 
     telephone, and the Internet.
       ``(B) Nonduplication of information.--
       ``(i) In general.--For purposes of redeterminations of 
     eligibility for currently or previously enrolled children 
     under this title and title XXI, the State agrees to use all 
     information in its possession (including information 
     available to the State under other Federal or State programs) 
     to determine eligibility or redetermine continued eligibility 
     before seeking similar information from parents.
       ``(ii) Rule of construction.--Nothing in clause (i) shall 
     be construed as limiting any obligation of a State to provide 
     notice and a fair hearing before denying, terminating, or 
     reducing a child's coverage based on such information in the 
     possession of the State.
       ``(7) No waiting list for children under schip.--The State 
     agrees to not impose any numerical limitation, waiting list, 
     waiting period, or similar limitation on the eligibility of 
     children for child health assistance under title XXI or to 
     establish or enforce other barriers to the enrollment of 
     eligible children based on the date of their application for 
     coverage.
       ``(8) Adequate provider payment rates.--The State agrees 
     to--
       ``(A) establish payment rates for children's health care 
     providers under this title that are no less than the average 
     of payment rates for similar services for such providers 
     provided under the benchmark benefit packages described in 
     section 2103(b);
       ``(B) establish such rates in amounts that are sufficient 
     to ensure that children enrolled under this title or title 
     XXI have adequate access to comprehensive care, in accordance 
     with the requirements of section 1902(a)(30)(A); and
       ``(C) include provisions in its contracts with providers 
     under this title guaranteeing compliance with these 
     requirements.
       ``(d) Maintenance of Medicaid Eligibility Levels for 
     Children.--
       ``(1) In general.--The condition described in this 
     subsection is that the State agrees to

[[Page 411]]

     maintain eligibility income, resources, and methodologies 
     applied under this title (including under a waiver of such 
     title or under section 1115) with respect to children that 
     are no more restrictive than the eligibility income, 
     resources, and methodologies applied with respect to children 
     under this title (including under such a waiver) as of 
     January 1, 2005.
       ``(2) Rule of construction.--Nothing in this section shall 
     be construed as implying that a State does not have to comply 
     with the minimum income levels required for children under 
     section 1902(l)(2).
       ``(e) Date Described.--The date described in this 
     subsection is the date on which, with respect to a State, a 
     plan amendment that satisfies the requirements of subsections 
     (b), (c), and (d) is approved by the Secretary.
       ``(f) Definition of Poverty Line.--In this section, the 
     term `poverty line' has the meaning given that term in 
     section 2110(c)(5).''.
       (b) Conforming Amendments.--
       (1) The third sentence of section 1905(b) of the Social 
     Security Act (42 U.S.C. 1396d(b)) is amended by inserting 
     before the period the following: ``, and with respect to 
     amounts expended for medical assistance for children on or 
     after the date described in subsection (d) of section 1936, 
     in the case of a State that has, in accordance with such 
     section, an approved plan amendment under this title and 
     title XXI''.
       (2) Section 1903(f)(4) of the Social Security Act (42 
     U.S.C. 1396b(f)(4)) is amended--
       (A) in subparagraph (C), by adding ``or'' after ``section 
     1611(b)(1),''; and
       (B) by inserting after subparagraph (C), the following:
       ``(D) who would not receive such medical assistance but for 
     State electing the option under section 1936 and satisfying 
     the conditions described in subsections (b), (c), and (d) of 
     such section,''.

     SEC. 302. ELIMINATION OF CAP ON SCHIP FUNDING FOR STATES THAT 
                   EXPAND ELIGIBILITY FOR CHILDREN.

       (a) In General.--Section 2105 of the Social Security Act 
     (42 U.S.C. 1397dd) is amended by adding at the end the 
     following:
       ``(h) Guaranteed Funding for Child Health Assistance for 
     Coverage Expansion States.--
       ``(1) In general.--Only in the case of a State that has, in 
     accordance with section 1936, an approved plan amendment 
     under this title and title XIX, any payment cap that would 
     otherwise apply to the State under this title as a result of 
     having expended all allotments available for expenditure by 
     the State with respect to a fiscal year shall not apply with 
     respect to amounts expended by the State on or after the date 
     described in section 1936(d).
       ``(2) Appropriation.--There is appropriated, out of any 
     money in the Treasury not otherwise appropriated, such sums 
     as may be necessary for the purpose of paying a State 
     described in paragraph (1) for each quarter beginning on or 
     after the date described in section 1936(d), an amount equal 
     to the enhanced FMAP of expenditures described in paragraph 
     (1) and incurred during such quarter.''.
       (b) Conforming Amendments.--Section 2104 of the Social 
     Security Act (42 U.S.C. 1397dd) is amended--
       (1) in subsection (a), by inserting ``subject to section 
     2105(h),'' after ``under this section,'';
       (2) in subsection (b)(1), by inserting ``and section 
     2105(h)'' after ``Subject to paragraph (4)''; and
       (3) in subsection (c)(1), by inserting ``subject to section 
     2105(h),'' after ``for a fiscal year,''.

   CHAPTER 2--STATE OPTIONS FOR INCREMENTAL CHILD COVERAGE EXPANSIONS

     SEC. 311. STATE OPTION TO ENROLL LOW-INCOME CHILDREN OF STATE 
                   EMPLOYEES IN SCHIP.

       Section 2110(b)(2) of the Social Security Act (42 U.S.C. 
     1397jj(b)(2)) is amended--
       (1) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively and realigning the left margins of 
     such clauses appropriately;
       (2) by striking ``Such term'' and inserting the following:
       ``(A) In general.--Such term''; and
       (3) by adding at the end the following:
       ``(B) State option to enroll low-income children of state 
     employees.--At the option of a State, subparagraph (A)(ii) 
     shall not apply to any low-income child who would otherwise 
     be eligible for child health assistance under this title but 
     for such subparagraph.''.

     SEC. 312. STATE OPTION FOR PASSIVE RENEWAL OF ELIGIBILITY FOR 
                   CHILDREN UNDER MEDICAID AND SCHIP.

       (a) In General.--Section 1902(l) of the Social Security Act 
     (42 U.S.C. 1396a(l)) is amended by adding at the end the 
     following:
       ``(5) Notwithstanding any other provision of this title, a 
     State may provide that an individual who has not attained 21 
     years of age who has been determined eligible for medical 
     assistance under this title shall remain eligible for medical 
     assistance until such time as the State has information 
     demonstrating that the individual is no longer so 
     eligible.''.
       (b) Application under Title XXI.--Section 2107(e)(1) of the 
     Social Security Act (42 U.S.C. 1397gg(e)) is amended--
       (1) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (C) through (E), respectively; and
       (2) by inserting after subparagraph (A), the following:
       ``(B) Section 1902(l)(5) (relating to passive renewal of 
     eligibility for children).''.

  CHAPTER 3--TAX INCENTIVES FOR HEALTH INSURANCE COVERAGE OF CHILDREN

     SEC. 321. REFUNDABLE CREDIT FOR HEALTH INSURANCE COVERAGE OF 
                   CHILDREN.

       (a) In General.--Subpart C of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     refundable credits) is amended by redesignating section 36 as 
     section 37 and by inserting after section 35 the following 
     new section:

     ``SEC. 36. HEALTH INSURANCE COVERAGE OF CHILDREN.

       ``(a) In General.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by this 
     subtitle an amount equal to so much of the amount paid during 
     the taxable year, not compensated for by insurance or 
     otherwise, for qualified health insurance for each dependent 
     child of the taxpayer, as exceeds 5 percent of the adjusted 
     gross income of such taxpayer for such taxable year.
       ``(b) Dependent child.--For purposes of this section, the 
     term `dependent child' means any child (as defined in section 
     152(f)(1)) who has not attained the age of 19 as of the close 
     of the calendar year in which the taxable year of the 
     taxpayer begins and with respect to whom a deduction under 
     section 151 is allowable to the taxpayer.
       ``(c) Qualified Health Insurance.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified health insurance' 
     means insurance, either employer-provided or made available 
     under title XIX or XXI of the Social Security Act, which 
     constitutes medical care as defined in section 213(d) without 
     regard to--
       ``(A) paragraph (1)(C) thereof, and
       ``(B) so much of paragraph (1)(D) thereof as relates to 
     qualified long-term care insurance contracts.
       ``(2) Exclusion of certain other contracts.--Such term 
     shall not include insurance if a substantial portion of its 
     benefits are excepted benefits (as defined in section 
     9832(c)).
       ``(d) Medical Savings Account and Health Savings Account 
     Contributions.--
       ``(1) In general.--If a deduction would (but for paragraph 
     (2)) be allowed under section 220 or 223 to the taxpayer for 
     a payment for the taxable year to the medical savings account 
     or health savings account of an individual, subsection (a) 
     shall be applied by treating such payment as a payment for 
     qualified health insurance for such individual.
       ``(2) Denial of double benefit.--No deduction shall be 
     allowed under section 220 or 223 for that portion of the 
     payments otherwise allowable as a deduction under section 220 
     or 223 for the taxable year which is equal to the amount of 
     credit allowed for such taxable year by reason of this 
     subsection.
       ``(e) Special Rules.--
       ``(1) Determination of insurance costs.--The Secretary 
     shall provide rules for the allocation of the cost of any 
     qualified health insurance for family coverage to the 
     coverage of any dependent child under such insurance.
       ``(2) Coordination with deduction for health insurance 
     costs of self-employed individuals.--In the case of a 
     taxpayer who is eligible to deduct any amount under section 
     162(l) for the taxable year, this section shall apply only if 
     the taxpayer elects not to claim any amount as a deduction 
     under such section for such year.
       ``(3) Coordination with medical expense and high deductible 
     health plan deductions.--The amount which would (but for this 
     paragraph) be taken into account by the taxpayer under 
     section 213 or 224 for the taxable year shall be reduced by 
     the credit (if any) allowed by this section to the taxpayer 
     for such year.
       ``(4) Denial of credit to dependents.--No credit shall be 
     allowed under this section to any individual with respect to 
     whom a deduction under section 151 is allowable to another 
     taxpayer for a taxable year beginning in the calendar year in 
     which such individual's taxable year begins.
       ``(5) Denial of double benefit.--No credit shall be allowed 
     under subsection (a) if the credit under section 35 is 
     allowed and no credit shall be allowed under 35 if a credit 
     is allowed under this section.
       ``(6) Election not to claim credit.--This section shall not 
     apply to a taxpayer for any taxable year if such taxpayer 
     elects to have this section not apply for such taxable 
     year.''.
       (b) Information Reporting.--
       (1) In general.--Subpart B of part III of subchapter A of 
     chapter 61 of the Internal Revenue Code of 1986 (relating to 
     information concerning transactions with other persons) is 
     amended by inserting after section 6050T the following new 
     section:

     ``SEC. 6050U. RETURNS RELATING TO PAYMENTS FOR QUALIFIED 
                   HEALTH INSURANCE.

       ``(a) In General.--Any governmental unit or any person who, 
     in connection with a trade or business conducted by such 
     person,

[[Page 412]]

     receives payments during any calendar year from any 
     individual for coverage of a dependent child (as defined in 
     section 36(b)) of such individual under creditable health 
     insurance, shall make the return described in subsection (b) 
     (at such time as the Secretary may by regulations prescribe) 
     with respect to each individual from whom such payments were 
     received.
       ``(b) Form and Manner of Returns.--A return is described in 
     this subsection if such return--
       ``(1) is in such form as the Secretary may prescribe, and
       ``(2) contains--
       ``(A) the name, address, and TIN of the individual from 
     whom payments described in subsection (a) were received,
       ``(B) the name, address, and TIN of each dependent child 
     (as so defined) who was provided by such person with coverage 
     under creditable health insurance by reason of such payments 
     and the period of such coverage, and
       ``(C) such other information as the Secretary may 
     reasonably prescribe.
       ``(c) Creditable Health Insurance.--For purposes of this 
     section, the term `creditable health insurance' means 
     qualified health insurance (as defined in section 36(c)).
       ``(d) Statements To Be Furnished to Individuals With 
     Respect to Whom Information Is Required.--Every person 
     required to make a return under subsection (a) shall furnish 
     to each individual whose name is required under subsection 
     (b)(2)(A) to be set forth in such return a written statement 
     showing--
       ``(1) the name and address of the person required to make 
     such return and the phone number of the information contact 
     for such person,
       ``(2) the aggregate amount of payments described in 
     subsection (a) received by the person required to make such 
     return from the individual to whom the statement is required 
     to be furnished, and
       ``(3) the information required under subsection (b)(2)(B) 
     with respect to such payments.
     The written statement required under the preceding sentence 
     shall be furnished on or before January 31 of the year 
     following the calendar year for which the return under 
     subsection (a) is required to be made.
       ``(e) Returns Which Would Be Required To Be Made by 2 or 
     More Persons.--Except to the extent provided in regulations 
     prescribed by the Secretary, in the case of any amount 
     received by any person on behalf of another person, only the 
     person first receiving such amount shall be required to make 
     the return under subsection (a).''.
       (2) Assessable penalties.--
       (A) Subparagraph (B) of section 6724(d)(1) of such Code 
     (relating to definitions) is amended by redesignating clauses 
     (xiii) through (xviii) as clauses (xiv) through (xix), 
     respectively, and by inserting after clause (xii) the 
     following new clause:
       ``(xiii) section 6050U (relating to returns relating to 
     payments for qualified health insurance),''.
       (B) Paragraph (2) of section 6724(d) of such Code is 
     amended by striking ``or'' at the end of the next to last 
     subparagraph, by striking the period at the end of the last 
     subparagraph and inserting ``, or'', and by adding at the end 
     the following new subparagraph:
       ``(CC) section 6050U(d) (relating to returns relating to 
     payments for qualified health insurance).''.
       (3) Clerical amendment.--The table of sections for subpart 
     B of part III of subchapter A of chapter 61 of such Code is 
     amended by inserting after the item relating to section 6050T 
     the following new item:

``Sec. 6050U. Returns relating to payments for qualified health 
              insurance.''.

       (c) Conforming Amendments.--
       (1) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by inserting before the period ``, or 
     from section 36 of such Code''.
       (2) The table of sections for subpart C of part IV of 
     subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 is amended by striking the last item and inserting the 
     following new items:

``Sec. 36. Health insurance coverage of children.
``Sec. 37. Overpayments of tax.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.

     SEC. 322. FORFEITURE OF PERSONAL EXEMPTION FOR ANY CHILD NOT 
                   COVERED BY HEALTH INSURANCE.

       (a) In General.--Section 151(d) of the Internal Revenue 
     Code of 1986 (relating to exemption amount) is amended by 
     adding at the end the following new paragraph:
       ``(5) Reduction of exemption amount for any child not 
     covered by health insurance.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the exemption amount otherwise determined under 
     this subsection for any dependent child (as defined in 
     section 36(b)) for any taxable year shall be reduced by the 
     same percentage as the percentage of such taxable year during 
     which such dependent child was not covered by qualified 
     health insurance (as defined in section 36(c)).
       ``(B) Full reduction if no proof of coverage is provided.--
     For purposes of subparagraph (A), in the case of any taxpayer 
     who fails to attach to the return of tax for any taxable year 
     a copy of the statement furnished to such taxpayer under 
     section 6050U, the percentage reduction under such 
     subparagraph shall be deemed to be 100 percent.
       ``(C) Nonapplication of paragraph to taxpayers in lowest 
     tax bracket.--This paragraph shall not apply to any taxpayer 
     whose taxable income for the taxable year does not exceed the 
     initial bracket amount determined under section 
     1(i)(1)(B).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.

                        CHAPTER 4--MISCELLANEOUS

     SEC. 331. REQUIREMENT FOR GROUP MARKET HEALTH INSURERS TO 
                   OFFER DEPENDENT COVERAGE OPTION FOR WORKERS 
                   WITH CHILDREN.

       (a) ERISA.--
       (1) In general.--Subpart B of part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1185 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 714. REQUIREMENT TO OFFER OPTION TO PURCHASE DEPENDENT 
                   COVERAGE FOR CHILDREN.

       ``(a) Requirements for Coverage.--A group health plan, and 
     a health insurance issuer providing health insurance coverage 
     in connection with a group health plan, shall offer an 
     individual who is enrolled in such coverage the option to 
     purchase dependent coverage for a child of the individual.
       ``(b) No Employer Contribution Required.--An employer shall 
     not be required to contribute to the cost of purchasing 
     dependent coverage for a child by an individual who is an 
     employee of such employer.
       ``(c) Definition of Child.--In this section, the term 
     `child' means an individual who has not attained 21 years of 
     age.''.
       (2) Clerical amendment.--The table of contents in section 1 
     of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1001) is amended by inserting after the item relating 
     to section 713 the following:

``Sec. 714. Requirement to offer option to purchase dependent coverage 
              for children.''.

       (b) Public Health Service Act.--Subpart 2 of part A of 
     title XXVII of the Public Health Service Act (42 U.S.C. 
     300gg-4 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 2707. REQUIREMENT TO OFFER OPTION TO PURCHASE 
                   DEPENDENT COVERAGE FOR CHILDREN.

       ``(a) Requirements for Coverage.--A group health plan, and 
     a health insurance issuer providing health insurance coverage 
     in connection with a group health plan, shall offer an 
     individual who is enrolled in such coverage the option to 
     purchase dependent coverage for a child of the individual.
       ``(b) No Employer Contribution Required.--An employer shall 
     not be required to contribute to the cost of purchasing 
     dependent coverage for a child by an individual who is an 
     employee of such employer.
       ``(c) Definition of Child.--In this section, the term 
     `child' means an individual who has not attained 21 years of 
     age.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to plan years beginning on or after 
     January 1, 2006.

     SEC. 332. EFFECTIVE DATE.

       Unless otherwise provided, the amendments made by this 
     subtitle shall take effect on October 1, 2005, and shall 
     apply to child health assistance and medical assistance 
     provided on or after that date without regard to whether or 
     not final regulations to carry out such amendments have been 
     promulgated by such date.

                  Subtitle B--Covering Pregnant Women

     SEC. 351. STATE OPTION TO EXPAND OR ADD COVERAGE OF PREGNANT 
                   WOMEN UNDER THE MEDICAID PROGRAM AND STATE 
                   CHILDREN'S HEALTH INSURANCE PROGRAM.

       (a) Medicaid.--
       (1) Authority to expand coverage.--Section 1902(l)(2)(A)(i) 
     of the Social Security Act (42 U.S.C. 1396a(l)(2)(A)(i)) is 
     amended by inserting ``(or such higher percentage as the 
     State may elect for purposes of expenditures for medical 
     assistance for pregnant women described in section 
     1905(u)(4)(A))'' after ``185 percent''.
       (2) Enhanced matching funds available if certain conditions 
     met.--Section 1905 of the Social Security Act (42 U.S.C. 
     1396d), as amended by section 311(b)(2), is amended--
       (A) in the fourth sentence of subsection (b), by striking 
     ``or (u)(4)'' and inserting ``, (u)(4), or (u)(5)''; and
       (B) in subsection (u)--
       (i) by redesignating paragraph (5) as paragraph (6); and
       (ii) by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) For purposes of the fourth sentence of subsection (b) 
     and section 2105(a), the expenditures described in this 
     paragraph are the following:
       ``(A) Certain pregnant women.--If the conditions described 
     in subparagraph (B) are met, expenditures for medical 
     assistance for

[[Page 413]]

     pregnant women described in subsection (n) or under section 
     1902(l)(1)(A) in a family the income of which exceeds 185 
     percent of the poverty line, but does not exceed the income 
     eligibility level established under title XXI for a targeted 
     low-income child.
       ``(B) Conditions.--The conditions described in this 
     subparagraph are the following:
       ``(i) The State plans under this title and title XXI do not 
     provide coverage for pregnant women described in subparagraph 
     (A) with higher family income without covering such pregnant 
     women with a lower family income.
       ``(ii) The State does not apply an effective income level 
     for pregnant women that is lower than the effective income 
     level (expressed as a percent of the poverty line and 
     considering applicable income disregards) that has been 
     specified under the State plan under subsection 
     (a)(10)(A)(i)(III) or (l)(2)(A) of section 1902, as of 
     January 1, 2005, to be eligible for medical assistance as a 
     pregnant woman.
       ``(C) Definition of poverty line.--In this subsection, the 
     term `poverty line' has the meaning given such term in 
     section 2110(c)(5).''.
       (3) Payment from title xxi allotment for medicaid expansion 
     costs; elimination of counting medicaid child presumptive 
     eligibility costs against title xxi allotment.--Section 
     2105(a)(1) of the Social Security Act (42 U.S.C. 
     1397ee(a)(1)) is amended--
       (A) in the matter preceding subparagraph (A), by striking 
     ``(or, in the case of expenditures described in subparagraph 
     (B), the Federal medical assistance percentage (as defined in 
     the first sentence of section 1905(b)))''; and
       (B) by striking subparagraph (B) and inserting the 
     following new subparagraph:
       ``(B) for the provision of medical assistance that is 
     attributable to expenditures described in section 
     1905(u)(5)(A);''.
       (b) SCHIP.--
       (1) Coverage.--Title XXI of the Social Security Act (42 
     U.S.C. 1397aa et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 2111. OPTIONAL COVERAGE OF TARGETED LOW-INCOME 
                   PREGNANT WOMEN.

       ``(a) Optional Coverage.--Notwithstanding any other 
     provision of this title, a State may provide for coverage, 
     through an amendment to its State child health plan under 
     section 2102, of pregnancy-related assistance for targeted 
     low-income pregnant women in accordance with this section, 
     but only if--
       ``(1) the State has established an income eligibility level 
     for pregnant women under subsection (a)(10)(A)(i)(III) or 
     (l)(2)(A) of section 1902 that is at least 185 percent of the 
     income official poverty line; and
       ``(2) the State meets the conditions described in section 
     1905(u)(5)(B).
       ``(b) Definitions.--For purposes of this title:
       ``(1) Pregnancy-related assistance.--The term `pregnancy-
     related assistance' has the meaning given the term child 
     health assistance in section 2110(a) as if any reference to 
     targeted low-income children were a reference to targeted 
     low-income pregnant women, except that the assistance shall 
     be limited to services related to pregnancy (which include 
     prenatal, delivery, and postpartum services and services 
     described in section 1905(a)(4)(C)) and to other conditions 
     that may complicate pregnancy.
       ``(2) Targeted low-income pregnant woman.--The term 
     `targeted low-income pregnant woman' means a woman--
       ``(A) during pregnancy and through the end of the month in 
     which the 60-day period (beginning on the last day of her 
     pregnancy) ends;
       ``(B) whose family income exceeds the effective income 
     level (expressed as a percent of the poverty line and 
     considering applicable income disregards) that has been 
     specified under subsection (a)(10)(A)(i)(III) or (l)(2)(A) of 
     section 1902, as of January 1, 2005, to be eligible for 
     medical assistance as a pregnant woman under title XIX but 
     does not exceed the income eligibility level established 
     under the State child health plan under this title for a 
     targeted low-income child; and
       ``(C) who satisfies the requirements of paragraphs (1)(A), 
     (1)(C), (2), and (3) of section 2110(b).
       ``(c) References to Terms and Special Rules.--In the case 
     of, and with respect to, a State providing for coverage of 
     pregnancy-related assistance to targeted low-income pregnant 
     women under subsection (a), the following special rules 
     apply:
       ``(1) Any reference in this title (other than in subsection 
     (b)) to a targeted low-income child is deemed to include a 
     reference to a targeted low-income pregnant woman.
       ``(2) Any such reference to child health assistance with 
     respect to such women is deemed a reference to pregnancy-
     related assistance.
       ``(3) Any such reference to a child is deemed a reference 
     to a woman during pregnancy and the period described in 
     subsection (b)(2)(A).
       ``(4) In applying section 2102(b)(3)(B), any reference to 
     children found through screening to be eligible for medical 
     assistance under the State medicaid plan under title XIX is 
     deemed a reference to pregnant women.
       ``(5) There shall be no exclusion of benefits for services 
     described in subsection (b)(1) based on any preexisting 
     condition and no waiting period (including any waiting period 
     imposed to carry out section 2102(b)(3)(C)) shall apply.
       ``(6) Subsection (a) of section 2103 (relating to required 
     scope of health insurance coverage) shall not apply insofar 
     as a State limits coverage to services described in 
     subsection (b)(1) and the reference to such section in 
     section 2105(a)(1)(C) is deemed not to require, in such case, 
     compliance with the requirements of section 2103(a).
       ``(7) In applying section 2103(e)(3)(B) in the case of a 
     pregnant woman provided coverage under this section, the 
     limitation on total annual aggregate cost-sharing shall be 
     applied to such pregnant woman.
       ``(8) The reference in section 2107(e)(1)(D) to section 
     1920A (relating to presumptive eligibility for children) is 
     deemed a reference to section 1920 (relating to presumptive 
     eligibility for pregnant women).
       ``(d) Automatic Enrollment for Children Born to Women 
     Receiving Pregnancy-Related Assistance.--If a child is born 
     to a targeted low-income pregnant woman who was receiving 
     pregnancy-related assistance under this section on the date 
     of the child's birth, the child shall be deemed to have 
     applied for child health assistance under the State child 
     health plan and to have been found eligible for such 
     assistance under such plan or to have applied for medical 
     assistance under title XIX and to have been found eligible 
     for such assistance under such title, as appropriate, on the 
     date of such birth and to remain eligible for such assistance 
     until the child attains 1 year of age. During the period in 
     which a child is deemed under the preceding sentence to be 
     eligible for child health or medical assistance, the child 
     health or medical assistance eligibility identification 
     number of the mother shall also serve as the identification 
     number of the child, and all claims shall be submitted and 
     paid under such number (unless the State issues a separate 
     identification number for the child before such period 
     expires).''.
       (2) Additional allotments for providing coverage of 
     pregnant women.--
       (A) In general.--Section 2104 of the Social Security Act 
     (42 U.S.C. 1397dd) is amended by inserting after subsection 
     (c) the following new subsection:
       ``(d) Additional Allotments for Providing Coverage of 
     Pregnant Women.--
       ``(1) Appropriation; total allotment.--For the purpose of 
     providing additional allotments to States under this title, 
     there is appropriated, out of any money in the Treasury not 
     otherwise appropriated, for each of fiscal years 2006 through 
     2009, $200,000,000.
       ``(2) State and territorial allotments.--In addition to the 
     allotments provided under subsections (b) and (c), subject to 
     paragraphs (3) and (4), of the amount available for the 
     additional allotments under paragraph (1) for a fiscal year, 
     the Secretary shall allot to each State with a State child 
     health plan approved under this title--
       ``(A) in the case of such a State other than a commonwealth 
     or territory described in subparagraph (B), the same 
     proportion as the proportion of the State's allotment under 
     subsection (b) (determined without regard to subsection (f)) 
     to the total amount of the allotments under subsection (b) 
     for such States eligible for an allotment under this 
     paragraph for such fiscal year; and
       ``(B) in the case of a commonwealth or territory described 
     in subsection (c)(3), the same proportion as the proportion 
     of the commonwealth's or territory's allotment under 
     subsection (c) (determined without regard to subsection (f)) 
     to the total amount of the allotments under subsection (c) 
     for commonwealths and territories eligible for an allotment 
     under this paragraph for such fiscal year.
       ``(3) Use of additional allotment.--Additional allotments 
     provided under this subsection are not available for amounts 
     expended before October 1, 2005. Such amounts are available 
     for amounts expended on or after such date for child health 
     assistance for targeted low-income children, as well as for 
     pregnancy-related assistance for targeted low-income pregnant 
     women.
       ``(4) No payments unless election to expand coverage of 
     pregnant women.--No payments may be made to a State under 
     this title from an allotment provided under this subsection 
     unless the State provides pregnancy-related assistance for 
     targeted low-income pregnant women under this title, or 
     provides medical assistance for pregnant women under title 
     XIX, whose family income exceeds the effective income level 
     applicable under subsection (a)(10)(A)(i)(III) or (l)(2)(A) 
     of section 1902 to a family of the size involved as of 
     January 1, 2005.''.
       (B) Conforming amendments.--Section 2104 of the Social 
     Security Act (42 U.S.C. 1397dd), as amended by section 
     302(b), is amended--
       (i) in subsection (a), in the matter preceding paragraph 
     (1), by inserting ``subsection (d) and'' before ``section 
     2105(h)'';
       (ii) in subsection (b)(1), by inserting ``, subsection 
     (d),'' after ``Subject to paragraph (4)''; and
       (iii) in subsection (c)(1), by inserting ``subsection (d) 
     and'' after ``section 2105(h)''.

[[Page 414]]

       (3) Additional conforming amendments.--
       (A) No cost-sharing for pregnancy-related benefits.--
     Section 2103(e)(2) of the Social Security Act (42 U.S.C. 
     1397cc(e)(2)) is amended--
       (i) in the heading, by inserting ``or pregnancy-related 
     services'' after ``preventive services''; and
       (ii) by inserting before the period at the end the 
     following: ``or for pregnancy-related services''.
       (B) No waiting period.--Section 2102(b)(1)(B) (42 U.S.C. 
     1397bb(b)(1)(B)) is amended--
       (i) in clause (i), by striking ``, and'' at the end and 
     inserting a semicolon;
       (ii) in clause (ii), by striking the period at the end and 
     inserting ``; and''; and
       (iii) by adding at the end the following new clause:
       ``(iii) may not apply a waiting period (including a waiting 
     period to carry out paragraph (3)(C)) in the case of a 
     targeted low-income pregnant woman.''.
       (c) Authority for States That Provide Medicaid or SCHIP 
     Coverage for Pregnant Women With Income Above 185 Percent of 
     the Poverty Line To Use Portion of SCHIP Funds for Medicaid 
     Expenditures.--Section 2105(g) of the Social Security Act (42 
     U.S.C. 1397ee(g)) is amended--
       (1) in the subsection heading, by inserting ``and Certain 
     Pregnancy Coverage Expansion States'' after ``Qualifying 
     States'';
       (2) by adding at the end the following:
       ``(4) Special authority for certain pregnancy coverage 
     expansion states.--
       ``(A) In general.--In the case of a State that, as of the 
     date of enactment of the Affordable Health Care Act of 2005, 
     has an income eligibility standard under title XIX or this 
     title (under section 1902(a)(10)(A) or under a statewide 
     waiver in effect under section 1115 with respect to title XIX 
     or this title) that is at least 185 percent of the poverty 
     line with respect to pregnant women, the State may elect to 
     use not more than 20 percent of any allotment under section 
     2104 for any fiscal year (insofar as it is available under 
     subsections (e) and (g) of such section) for payments under 
     title XIX in accordance with subparagraph (B), instead of for 
     expenditures under this title.
       ``(B) Payments to states.--
       ``(i) In general.--In the case of a State described in 
     subparagraph (A) that has elected the option described in 
     that subparagraph, subject to the availability of funds under 
     such subparagraph and, if applicable, paragraph (1)(A), with 
     respect to the State, the Secretary shall pay the State an 
     amount each quarter equal to the additional amount that would 
     have been paid to the State under title XIX with respect to 
     expenditures described in clause (ii) if the enhanced FMAP 
     (as determined under subsection (b)) had been substituted for 
     the Federal medical assistance percentage (as defined in 
     section 1905(b)).
       ``(ii) Expenditures described.--For purposes of this 
     subparagraph, the expenditures described in this clause are 
     expenditures, made after the date of the enactment of this 
     paragraph and during the period in which funds are available 
     to the State for use under subparagraph (A), for medical 
     assistance under title XIX for pregnant women whose family 
     income is at least 185 percent of the poverty line.
       ``(iii) No impact on determination of budget neutrality for 
     waivers.--In the case of a State described in subparagraph 
     (A) that uses amounts paid under this paragraph for 
     expenditures described in clause (ii) that are incurred under 
     a waiver approved for the State, any budget neutrality 
     determinations with respect to such waiver shall be 
     determined without regard to such amounts paid.''; and
       (3) in paragraph (3), by striking ``and (2)'' and inserting 
     ``(2), and (4)''.
       (d) Other Amendments to Medicaid.--
       (1) Eligibility of a newborn.--Section 1902(e)(4) of the 
     Social Security Act (42 U.S.C. 1396a(e)(4)) is amended in the 
     first sentence by striking ``so long as the child is a member 
     of the woman's household and the woman remains (or would 
     remain if pregnant) eligible for such assistance''.
       (2) Application of qualified entities to presumptive 
     eligibility for pregnant women under medicaid.--Section 
     1920(b) of the Social Security Act (42 U.S.C. 1396r-1(b)) is 
     amended by adding after paragraph (2) the following flush 
     sentence:

     ``The term `qualified provider' includes a qualified entity 
     as defined in section 1920A(b)(3).''.
       (e) Effective Date.--The amendments made by this section 
     apply to items and services furnished on or after October 1, 
     2005, without regard to whether regulations implementing such 
     amendments have been promulgated.

     SEC. 352. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS UNDER THE 
                   MEDICAID PROGRAM AND SCHIP.

       (a) Medicaid Program.--Section 1903(v) of the Social 
     Security Act (42 U.S.C. 1396b(v)) is amended--
       (1) in paragraph (1), by striking ``paragraph (2)'' and 
     inserting ``paragraphs (2) and (4)''; and
       (2) by adding at the end the following new paragraph:
       ``(4)(A) A State may elect (in a plan amendment under this 
     title) to provide medical assistance under this title for 
     aliens who are lawfully residing in the United States 
     (including battered aliens described in section 431(c) of the 
     Personal Responsibility and Work Opportunity Reconciliation 
     Act of 1996) and who are otherwise eligible for such 
     assistance, within any of the following eligibility 
     categories:
       ``(i) Pregnant women.--Women during pregnancy (and during 
     the 60-day period beginning on the last day of the 
     pregnancy).
       ``(ii) Children.--Children (as defined under such plan), 
     including optional targeted low-income children described in 
     section 1905(u)(2)(B).
       ``(B)(i) In the case of a State that has elected to provide 
     medical assistance to a category of aliens under subparagraph 
     (A), no debt shall accrue under an affidavit of support 
     against any sponsor of such an alien on the basis of 
     provision of assistance to such category and the cost of such 
     assistance shall not be considered as an unreimbursed cost.
       ``(ii) The provisions of sections 401(a), 402(b), 403, and 
     421 of the Personal Responsibility and Work Opportunity 
     Reconciliation Act of 1996 shall not apply to a State that 
     makes an election under subparagraph (A).''.
       (b) Title XXI.--Section 2107(e)(1) of the Social Security 
     Act (42 U.S.C. 1397gg(e)(1)) is amended by adding at the end 
     the following new subparagraph:
       ``(E) Section 1903(v)(4) (relating to optional coverage of 
     permanent resident alien pregnant women and children), but 
     only with respect to an eligibility category under this 
     title, if the same eligibility category has been elected 
     under such section for purposes of title XIX.''.
       (c) Effective Date.--The amendments made by this section 
     take effect on October 1, 2005, and apply to medical 
     assistance and child health assistance furnished on or after 
     such date.

     SEC. 353. PROMOTING CESSATION OF TOBACCO USE UNDER THE 
                   MEDICAID PROGRAM.

       (a) Dropping Exception From Medicaid Prescription Drug 
     Coverage for Tobacco Cessation Medications.--Section 
     1927(d)(2) of the Social Security Act (42 U.S.C. 1396r-
     8(d)(2)) is amended--
       (1) by striking subparagraph (E);
       (2) by redesignating subparagraphs (F) through (J) as 
     subparagraphs (E) through (I), respectively; and
       (3) in subparagraph (F) (as redesignated by paragraph (2)), 
     by inserting before the period at the end the following: ``, 
     except agents approved by the Food and Drug Administration 
     for purposes of promoting, and when used to promote, tobacco 
     cessation''.
       (b) Requiring Coverage of Tobacco Cessation Counseling 
     Services for Pregnant Women.--Section 1905 of the Social 
     Security Act (42 U.S.C. 1396d(a)(4)) is amended--
       (1) in subsection (a)(4)--
       (A) by striking ``and'' before ``(C)''; and
       (B) by inserting before the semicolon at the end the 
     following new subparagraph: ``; and (D) counseling for 
     cessation of tobacco use (as defined in subsection (x)) for 
     pregnant women''; and
       (2) by adding at the end the following:
       ``(y)(1) For purposes of this title, the term `counseling 
     for cessation of tobacco use' means therapy and counseling 
     for cessation of tobacco use for pregnant women who use 
     tobacco products or who are being treated for tobacco use 
     that is furnished--
       ``(A) by or under the supervision of a physician; or
       ``(B) by any other health care professional who--
       ``(i) is legally authorized to furnish such services under 
     State law (or the State regulatory mechanism provided by 
     State law) of the State in which the services are furnished; 
     and
       ``(ii) is authorized to receive payment for other services 
     under this title or is designated by the Secretary for this 
     purpose.
       ``(2) Subject to paragraph (3), such term is limited to--
       ``(A) therapy and counseling services recommended in 
     `Treating Tobacco Use and Dependence: A Clinical Practice 
     Guideline', published by the Public Health Service in June 
     2000, or any subsequent modification of such Guideline; and
       ``(B) such other therapy and counseling services that the 
     Secretary recognizes to be effective.
       ``(3) Such term shall not include coverage for drugs or 
     biologicals that are not otherwise covered under this 
     title.''.
       (c) Removal of Cost-Sharing for Tobacco Cessation 
     Counseling Services for Pregnant Women.--Section 1916 of the 
     Social Security Act (42 U.S.C. 1396o) is amended in each of 
     subsections (a)(2)(B) and (b)(2)(B) by inserting ``, and 
     counseling for cessation of tobacco use (as defined in 
     section 1905(x))'' after ``complicate the pregnancy''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after the date that 
     is 1 year after the date of enactment of this Act.

     SEC. 354. PROMOTING CESSATION OF TOBACCO USE UNDER THE 
                   MATERNAL AND CHILD HEALTH SERVICES BLOCK GRANT 
                   PROGRAM.

       (a) Quality Maternal and Child Health Services Includes 
     Tobacco Cessation Counseling and Medications.--
       (1) In general.--Section 501 of the Social Security Act (42 
     U.S.C. 701) is amended by

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     adding at the end the following new subsection:
       ``(c) For purposes of this title, counseling for cessation 
     of tobacco use (as defined in section 1905(y)), drugs and 
     biologicals used to promote smoking cessation, and the 
     inclusion of antitobacco messages in health promotion 
     counseling shall be considered to be part of quality maternal 
     and child health services.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the date that is 1 year after the date 
     of enactment of this Act.
       (b) Evaluation of National Core Performance Measures.--
       (1) In general.--The Administrator of the Health Resources 
     and Services Administration shall assess the current national 
     core performance measures and national core outcome measures 
     utilized under the Maternal and Child Health Block Grant 
     under title V of the Social Security Act (42 U.S.C. 701 et 
     seq.) for purposes of expanding such measures to include some 
     of the known causes of low birthweight and prematurity, 
     including the percentage of infants born to pregnant women 
     who smoked during pregnancy.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Administrator of the Health 
     Resources and Services Administration shall submit to the 
     appropriate committees of Congress a report concerning the 
     results of the evaluation conducted under paragraph (1).

     SEC. 355. STATE OPTION TO PROVIDE FAMILY PLANNING SERVICES 
                   AND SUPPLIES TO INDIVIDUALS WITH INCOMES THAT 
                   DO NOT EXCEED A STATE'S INCOME ELIGIBILITY 
                   LEVEL FOR MEDICAL ASSISTANCE.

       (a) In General.--Title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.), as amended by section 301(a), is 
     amended--
       (1) by redesignating section 1937 as section 1938; and
       (2) by inserting after section 1936 the following new 
     section:


    ``state option to provide family planning services and supplies

       ``Sec. 1937. (a) In General.--Subject to subsections (b) 
     and (c), a State may elect (through a State plan amendment) 
     to make medical assistance described in section 1905(a)(4)(C) 
     available to any individual whose family income does not 
     exceed the greater of--
       ``(1) 185 percent of the income official poverty line (as 
     defined by the Office of Management and Budget, and revised 
     annually in accordance with section 673(2) of the Omnibus 
     Budget Reconciliation Act of 1981) applicable to a family of 
     the size involved; or
       ``(2) the eligibility income level (expressed as a 
     percentage of such poverty line) that has been specified 
     under a waiver authorized by the Secretary or under section 
     1902(r)(2)), as of January 1, 2005, for an individual to be 
     eligible for medical assistance under the State plan.
       ``(b) Comparability.--Medical assistance described in 
     section 1905(a)(4)(C) that is made available under a State 
     plan amendment under subsection (a) shall--
       ``(1) not be less in amount, duration, or scope than the 
     medical assistance described in that section that is made 
     available to any other individual under the State plan; and
       ``(2) be provided in accordance with the restrictions on 
     deductions, cost sharing, or similar charges imposed under 
     section 1916(a)(2)(D).
       ``(c) Option To Extend Coverage During a Post-Eligibility 
     Period.--
       ``(1) Initial period.--A State plan amendment made under 
     subsection (a) may provide that any individual who was 
     receiving medical assistance described in section 
     1905(a)(4)(C) as a result of such amendment, and who becomes 
     ineligible for such assistance because of hours of, or income 
     from, employment, may remain eligible for such medical 
     assistance through the end of the 6-month period that begins 
     on the first day the individual becomes so ineligible.
       ``(2) Additional extension.--A State plan amendment made 
     under subsection (a) may provide that any individual who has 
     received medical assistance described in section 
     1905(a)(4)(C) during the entire 6-month period described in 
     paragraph (1) may be extended coverage for such assistance 
     for a succeeding 6-month period.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply to medical assistance provided on and after October 1, 
     2005.

     SEC. 356. STATE OPTION TO EXTEND THE POSTPARTUM PERIOD FOR 
                   PROVISION OF FAMILY PLANNING SERVICES AND 
                   SUPPLIES.

       (a) In General.--Section 1902(e)(5) of the Social Security 
     Act (42 U.S.C. 1396a(e)(5)) is amended--
       (1) by striking ``eligible under the plan, as though'' and 
     inserting ``eligible under the plan--
       ``(A) as though'';
       (2) by striking the period and inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(B) for medical assistance described in section 
     1905(a)(4)(C) for so long as the family income of such woman 
     does not exceed the maximum income level established by the 
     State for the woman to be eligible for medical assistance 
     under the State plan (as a result of pregnancy or 
     otherwise).''.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply to medical assistance provided on and after October 1, 
     2005.

     SEC. 357. STATE OPTION TO PROVIDE WRAP-AROUND SCHIP COVERAGE 
                   TO CHILDREN WHO HAVE OTHER HEALTH COVERAGE.

       (a) In General.--
       (1) SCHIP.--
       (A) State option to provide wrap-around coverage.--Section 
     2110(b) of the Social Security Act (42 U.S.C. 1397jj(b)) is 
     amended--
       (i) in paragraph (1)(C), by inserting ``, subject to 
     paragraph (5),'' after ``under title XIX or''; and
       (ii) by adding at the end the following:
       ``(5) State option to provide wrap-around coverage.--A 
     State may waive the requirement of paragraph (1)(C) that a 
     targeted low-income child may not be covered under a group 
     health plan or under health insurance coverage, if the State 
     satisfies the conditions described in subsection (c)(8). The 
     State may waive such requirement in order to provide--
       ``(A) services for a child with special health care needs; 
     or
       ``(B) all services.

     In waiving such requirement, a State may limit the 
     application of the waiver to children whose family income 
     does not exceed a level specified by the State, so long as 
     the level so specified does not exceed the maximum income 
     level otherwise established for other children under the 
     State child health plan.''.
       (B) Conditions described.--Section 2105(c) of the Social 
     Security Act (42 U.S.C. 1397ee(c)) is amended by adding at 
     the end the following:
       ``(8) Conditions for provision of wrap-around coverage.--
     For purposes of section 2110(b)(5), the conditions described 
     in this paragraph are the following:
       ``(A) Income eligibility.--The State child health plan 
     (whether implemented under title XIX or this XXI)--
       ``(i) has the highest income eligibility standard permitted 
     under this title as of January 1, 2005;
       ``(ii) subject to subparagraph (B), does not limit the 
     acceptance of applications for children; and
       ``(iii) provides benefits to all children in the State who 
     apply for and meet eligibility standards.
       ``(B) No waiting list imposed.--With respect to children 
     whose family income is at or below 200 percent of the poverty 
     line, the State does not impose any numerical limitation, 
     waiting list, or similar limitation on the eligibility of 
     such children for child health assistance under such State 
     plan.
       ``(C) No more favorable treatment.--The State child health 
     plan may not provide more favorable coverage of dental 
     services to the children covered under section 2110(b)(5) 
     than to children otherwise covered under this title.''.
       (C) State option to waive waiting period.--Section 
     2102(b)(1)(B) of the Social Security Act (42 U.S.C. 
     1397bb(b)(1)(B)), as amended by section 2(b)(3)(B), is 
     amended--
       (i) in clause (ii), by striking ``, and'' at the end and 
     inserting a semicolon;
       (ii) in clause (iii), by striking the period at the end and 
     inserting ``; and''; and
       (iii) by adding at the end the following new clause:
       ``(iv) at State option, may not apply a waiting period in 
     the case of a child described in section 2110(b)(5), if the 
     State satisfies the requirements of section 2105(c)(8).''.
       (2) Application of enhanced match under medicaid.--Section 
     1905 of the Social Security Act (42 U.S.C. 1396d), as amended 
     by section 2(a)(2), is amended--
       (A) in subsection (b), in the fourth sentence, by striking 
     ``or (u)(4)'' and inserting ``(u)(4), or (u)(5)''; and
       (B) in subsection (u)--
       (i) by redesignating paragraph (5) as paragraph (6); and
       (ii) by inserting after paragraph (4) the following:
       ``(5) For purposes of subsection (b), the expenditures 
     described in this paragraph are expenditures for items and 
     services for children described in section 2110(b)(5), but 
     only in the case of a State that satisfies the requirements 
     of section 2105(c)(8).''.
       (3) Application of secondary payor provisions.--Section 
     2107(e)(1) of the Social Security Act (42 U.S.C. 
     1397gg(e)(1)), as amended by section 3(b), is amended by 
     adding at the end the following:
       ``(F) Section 1902(a)(25) (relating to coordination of 
     benefits and secondary payor provisions) with respect to 
     children covered under a waiver described in section 
     2110(b)(5).''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on January 1, 2005, and shall apply to 
     child health assistance and medical assistance provided on or 
     after that date.

     SEC. 358. INNOVATIVE OUTREACH PROGRAMS.

       Title XXI of the Social Security Act (42 U.S.C. 1397aa et 
     seq.), as amended by section 351(b), is amended by adding at 
     the end the following:

     ``SEC. 2112. EXPANDED OUTREACH ACTIVITIES.

       ``(a) In General.--Funds made available under subsection 
     (f) for expenditure under

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     this section for a fiscal year shall be used by the Secretary 
     to award grants to eligible entities to conduct innovative 
     outreach and enrollment efforts that are designed to increase 
     the enrollment and participation of eligible children under 
     this title and title XIX.
       ``(b) Priority for Grants in Certain Areas.--In making 
     grants under subsection (a), the Secretary shall give 
     priority to eligible entities that propose to target 
     geographic areas with high rates of--
       ``(1) eligible but unenrolled children, including such 
     children who reside in rural areas;
       ``(2) families for whom English is not their primary 
     language; or
       ``(3) racial and ethnic minorities and health disparity 
     populations
       ``(c) Application.--An eligible entity that desires to 
     receive a grant under this section shall submit an 
     application to the Secretary in such form and manner, and 
     containing such information, as the Secretary may decide. 
     Such application shall include--
       ``(1) quality and outcomes performance measures to evaluate 
     the effectiveness of activities funded by a grant under this 
     paragraph to ensure that the activities are meeting their 
     goals; and
       ``(2) an assurance that the entity will--
       ``(A) collect and report enrollment data; and
       ``(B) disseminate findings from evaluations of the 
     activities funded under the grant.
       ``(d) Report.--The Secretary shall report to Congress on an 
     annual basis the results of the outreach efforts under grants 
     awarded under this section.
       ``(e) Definition of Eligible Entity.--In this section, the 
     term `eligible entity' means any of the following:
       ``(1) A State.
       ``(2) A national, local, or community-based public or 
     nonprofit private organization.
       ``(f) Appropriation.--For the purpose of awarding grants to 
     eligible entities under this section, there is appropriated, 
     out of any money in the Treasury not otherwise appropriated, 
     $50,000,000 for each of fiscal years 2006 and 2007.''.

            Subtitle C--Affirming the Importance of Medicaid

     SEC. 361. SENSE OF THE SENATE.

       (a) Findings.--The Senate makes the following findings:
       (1) The Medicaid program under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.) provides essential 
     health care and long-term care coverage to more than 
     50,000,000 low-income children, pregnant women and families, 
     individuals with disabilities, and senior citizens. It is a 
     Federal guarantee that even the most vulnerable will have 
     access to needed medical services.
       (2) Medicaid provides health insurance for more than \1/4\ 
     of America's children and is the largest purchaser of 
     maternity care, paying for more than \1/3\ of all the births 
     in the United States each year.
       (3) Medicaid provides critical help for the elderly and 
     individuals living with disabilities. Medicaid is America's 
     single largest purchaser of nursing home services and other 
     long-term care, covering the majority of nursing home 
     residents.
       (4) Medicaid pays for personal care and other supportive 
     services, which are typically not provided by private health 
     insurance, even if individuals could obtain it. These 
     services are necessary to enable individuals with spinal cord 
     injuries, developmental disabilities, neurological 
     degenerative diseases, serious and persistent mental 
     illnesses, HIV/AIDS, and other chronic conditions to remain 
     in the community, to work, and to maintain independence.
       (5) Medicaid is an essential supplement to the Medicare 
     program under title XVIII of the Social Security Act (42 
     U.S.C. 1395 et seq.) for more than 6,000,000 Medicare 
     beneficiaries who are low-income elderly or disabled, 
     assisting them with their Medicare premiums and co-insurance, 
     wrap-around benefits, and, in most States, the costs of 
     nursing home care that Medicare does not cover.
       (6) About 42 percent of all Medicaid spending is for those 
     who are elderly or are living with disabilities and are 
     dually eligible for Medicare and Medicaid.
       (7) Medicaid faces an ever growing burden as a result of 
     Medicare's gaps. The Medicaid program spent nearly 
     $40,000,000,000 on uncovered Medicare services in 2002. 
     Medicaid payments for low-income Medicare beneficiary cost-
     sharing are the largest and fastest growing share of Medicaid 
     spending.
       (8) The Medicare drug benefit imposes additional costs on 
     States, which will add to the already significant long-term 
     care cost burden. Medicaid spending on Medicare 
     beneficiaries' long-term care costs is expected to double 
     from $25,000,000,000 in 2002 to $51,000,000,000 in 2012.
       (9) Medicaid helps ensure access to care for all Americans. 
     Medicaid is the single largest source of revenue for the 
     Nation's safety net hospitals and health centers and is 
     critical to the ability of those providers to serve Medicaid 
     enrollees and uninsured Americans.
       (10) Medicaid serves a major role in ensuring that the 
     number of Americans without health insurance, approximately 
     45,000,000 in 2003, is not substantially higher. Medicaid 
     helps buffer the drop in private coverage during recessions. 
     More than 4,800,000 Americans lost employer sponsored 
     coverage between 2000 and 2003. Medicaid covered an 
     additional 5,800,000 Americans during this period, preventing 
     even greater numbers of uninsured.
       (11) Medicaid matters to women in America. More than 
     16,000,000 women depend on Medicaid for their health care. 
     Women comprise the majority of seniors (71 percent) on 
     Medicaid. Half of nonelderly women with permanent mental or 
     physical disabilities have health coverage through Medicaid. 
     Medicaid provides treatment for low-income women diagnosed 
     with breast or cervical cancer in every State.
       (12) Medicaid is critical for children with disabilities. 
     Medicaid covers 78 percent of poor children with disabilities 
     who are under 5 years of age and 70 percent of poor children 
     with disabilities who are between the ages of 5 and 17. 
     Similarly, Medicaid covers a substantial portion of children 
     with disabilities who are near poor, covering 40 percent of 
     children with disabilities who are under 5 years of age and 
     25 percent of children with disabilities who are between the 
     ages of 5 and 17.
       (13) Medicaid is the Nation's largest source of payment for 
     mental health services, HIV/AIDS care, and care for children 
     with special needs. Much of this care is either not covered 
     by private insurance or limited in scope or duration. 
     Medicaid is also a critical source of funding for health care 
     for children in foster care and for health services in 
     schools.
       (14) The need for Medicaid is greater than ever today, 
     because the number of Americans living in poverty has 
     increased by 8,000,000 over the last 4 years and the number 
     of the uninsured has increased by 5,000,000.
       (15) The system of Federal matching for State Medicaid 
     expenditures ensures that Federal funds will grow as State 
     spending increases in response to unmet needs.
       (16) Despite the varied population served by the Medicaid 
     program, including those with significant health care needs, 
     Medicaid per capita growth has been consistently about half 
     the rate of growth in private insurance premiums and Medicaid 
     has far lower administrative costs. Medicaid costs less per 
     person than private coverage for people who have similar 
     health status.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) the Medicaid program under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.) is a critical component 
     of the health care system of the United States;
       (2) Federal support for the Medicaid program must be 
     adequate to support State spending meeting the essential 
     health needs of the low-income elderly, low-income 
     individuals with disabilities, and low-income children and 
     families, and should not be cut or capped; and
       (3) any retreat from the Federal commitment to Medicaid 
     would threaten not only the health care safety net of the 
     United States but the entire health care system

        TITLE IV--REDUCING HEALTH CARE COSTS FOR SMALL EMPLOYERS

                         Subtitle A--Tax Relief

     SEC. 401. REFUNDABLE CREDIT FOR SMALL BUSINESS EMPLOYEE 
                   HEALTH INSURANCE EXPENSES.

       (a) In General.--Subpart C of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     refundable credits) is amended by redesignating section 36 as 
     section 37 and inserting after section 35 the following new 
     section:

     ``SEC. 36. SMALL BUSINESS EMPLOYEE HEALTH INSURANCE EXPENSES.

       ``(a) Determination of Amount.--In the case of a qualified 
     small employer, there shall be allowed as a credit against 
     the tax imposed by this subtitle for the taxable year an 
     amount equal to the expense amount described in subsection 
     (b) paid by the taxpayer during the taxable year.
       ``(b)  Expense Amount.--For purposes of this section--
       ``(1) In general.--The expense amount described in this 
     subsection is the applicable percentage of the amount of 
     qualified employee health insurance expenses of each 
     qualified employee.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage is equal to--
       ``(A) for any qualified small employer described in 
     subparagraph (A) of paragraph (4), 50 percent,
       ``(B) for any qualified small employer described in 
     subparagraph (B) of paragraph (4), 35 percent, and
       ``(C) for any qualified small employer described in 
     subparagraph (C) of paragraph (4), 25 percent.
       ``(3) Per employee dollar limitation.--The amount of 
     qualified employee health insurance expenses taken into 
     account under paragraph (1) with respect to any qualified 
     employee for any taxable year shall not exceed--
       ``(A) $1,500 in the case of self-only coverage; and
       ``(B) $3,500 in the case of family coverage.
       ``(4) Qualified small employers described.--A qualified 
     small employer is described in--
       ``(A) this subparagraph if such employer employed an 
     average of 9 or fewer employees (as determined under 
     subsection (c)(1)(A)(ii)),

[[Page 417]]

       ``(B) this subparagraph if such employer employed an 
     average of more than 9 but less than 25 employees (as so 
     determined), and
       ``(C) this subparagraph if such employer employed an 
     average of more than 24 but not more than 50 employees (as so 
     determined).
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualified small employer.--
       ``(A) In general.--The term `qualified small employer' 
     means, with respect to any calendar year, any employer if--
       ``(i) such employer pays or incurs at least 75 percent of 
     the qualified employee health insurance expenses of each 
     qualified employee (determined without regard to subsection 
     (b)(3)), and
       ``(ii) such employer employed an average of 50 or fewer 
     employees on business days during either of the 2 preceding 
     calendar years.

     For purposes of clause (ii), a preceding calendar year may be 
     taken into account only if the employer was in existence 
     throughout such year.
       ``(B) Employers not in existence in preceding year.--In the 
     case of an employer which was not in existence throughout the 
     1st preceding calendar year, the determination under 
     subparagraph (A)(ii) shall be based on the average number of 
     employees that it is reasonably expected such employer will 
     employ on business days in the current calendar year.
       ``(2) Qualified employee health insurance expenses.--
       ``(A) In general.--The term `qualified employee health 
     insurance expenses' means any amount paid by an employer for 
     health insurance coverage (as defined in section 9832(b)(1)) 
     to the extent such amount is attributable to coverage 
     provided to any employee while such employee is a qualified 
     employee.
       ``(B) Exception for amounts paid under salary reduction 
     arrangements.--No amount paid or incurred for health 
     insurance coverage pursuant to a salary reduction arrangement 
     shall be taken into account under subparagraph (A).
       ``(3) Qualified employee.--
       ``(A) In general.--The term `qualified employee' means, 
     with respect to any period, an employee of an employer if--
       ``(i) the annual amount of hours in the employ of such 
     employer by such employee is at least 400 hours,
       ``(ii) the total amount of wages paid or incurred by such 
     employer to such employee at an annual rate during the 
     taxable year is at least $5,000, and
       ``(iii) such employee is not eligible for--

       ``(I) any benefits under title XVIII, XIX, or XXI of the 
     Social Security Act, or
       ``(II) any other publicly-sponsored health insurance 
     program.

       ``(B) Treatment of certain employees.--For purposes of 
     subparagraph (A), the term `employee'--
       ``(i) shall not include an employee within the meaning of 
     section 401(c)(1), and
       ``(ii) shall include a leased employee within the meaning 
     of section 414(n).
       ``(C) Wages.--The term `wages' has the meaning given such 
     term by section 3121(a) (determined without regard to any 
     dollar limitation contained in such section).
       ``(d) Certain Rules Made Applicable.--For purposes of this 
     section, rules similar to the rules of section 52 shall 
     apply.
       ``(e) Coordination With Deduction for Health Insurance 
     Costs of Self-Employed Individuals.--In the case of a 
     taxpayer who is eligible to deduct any amount under section 
     162(l) for the taxable year, this section shall apply only if 
     the taxpayer elects not to claim any amount as a deduction 
     under such section for such year.''.
       (b) Conforming Amendments.--
       (1) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by inserting before the period ``, or 
     from section 36 of such Code''.
       (2) The table of sections for subpart C of part IV of 
     subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 is amended by striking the last item and inserting the 
     following new items:

``Sec. 36. Small business employee health insurance expenses.
``Sec. 37. Overpayments of tax.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred in taxable years 
     beginning after December 31, 2005.

                    Subtitle B--Three-Share Program

     SEC. 421. THREE-SHARE PROGRAMS.

       The Social Security Act (42 U.S.C. 301 et seq.) is amended 
     by adding at the end the following:

               ``TITLE XXII--PROVIDING FOR THE UNINSURED

     ``SEC. 2201. THREE-SHARE PROGRAMS.

       ``(a) Pilot Programs.--The Secretary, acting through the 
     Administrator, shall award grants under this section for the 
     startup and operation of 25 eligible three-share pilot 
     programs for a 5-year period.
       ``(b) Grants for Three-Share Programs.--
       ``(1) Establishment.--The Administrator may award grants to 
     eligible entities--
       ``(A) to establish three-share programs;
       ``(B) to provide for contributions to the premiums assessed 
     for coverage under a three-share program as provided for in 
     subsection (c)(2)(B)(iii); and
       ``(C) to establish risk pools.
       ``(2) Three-share program plan.--Each entity desiring a 
     grant under this subsection shall develop a plan for the 
     establishment and operation of a three-share program that 
     meets the requirements of paragraphs (2) and (3) of 
     subsection (c).
       ``(3) Application.--Each entity desiring a grant under this 
     subsection shall submit an application to the Administrator 
     at such time, in such manner and containing such information 
     as the Administrator may require, including--
       ``(A) the three-share program plan described in paragraph 
     (2); and
       ``(B) an assurance that the eligible entity will--
       ``(i) determine a benefit package;
       ``(ii) recruit businesses and employees for the three-share 
     program;
       ``(iii) build and manage a network of health providers or 
     contract with an existing network or licensed insurance 
     provider;
       ``(iv) manage all administrative needs; and
       ``(v) establish relationships among community, business, 
     and provider interests.
       ``(4) Priority.--In awarding grants under this section the 
     Secretary shall give priority to an applicant--
       ``(A) that is an existing three-share program;
       ``(B) that is an eligible three-share program that has 
     demonstrated community support; or
       ``(C) that is located in a State with insurance laws and 
     regulations that permit three-share program expansion.
       ``(c) Grant Eligibility.--
       ``(1) In general.--The Secretary, acting through the 
     Administrator, shall promulgate regulations providing for the 
     eligibility of three-share programs for participation in the 
     pilot program under this section.
       ``(2) Three-share program requirements.--
       ``(A) In general.--To be determined to be an eligible 
     three-share program for purposes of participation in the 
     pilot program under this section a three-share program 
     shall--
       ``(i) be either a non-profit or local governmental entity;
       ``(ii) define the region in which such program will provide 
     services;
       ``(iii) have the capacity to carry out administrative 
     functions of managing health plans, including monthly 
     billings, verification/enrollment of eligible employers and 
     employees, maintenance of membership rosters, development of 
     member materials (such as handbooks and identification 
     cards), customer service, and claims processing; and
       ``(iv) have demonstrated community involvement.
       ``(B) Payment.--To be eligible under paragraph (1), a 
     three-share program shall pay the costs of services provided 
     under subparagraph (A)(ii) by charging a monthly premium for 
     each covered individual to be divided as follows:
       ``(i) Not more than 30 percent of such premium shall be 
     paid by a qualified employee desiring coverage under the 
     three-share program.
       ``(ii) Not more than 30 percent of such premium shall be 
     paid by the qualified employer of such a qualified employee.
       ``(iii) At least 40 percent of such premium shall be paid 
     from amounts provided under a grant under this section.
       ``(iv) Any remaining amount shall be paid by the three-
     share program from other public, private, or charitable 
     sources.
       ``(C) Program flexibility.--A three-share program may set 
     an income eligibility guideline for enrollment purposes.
       ``(3) Coverage.--
       ``(A) In general.--To be an eligible three-share program 
     under this section, the three-share program shall provide at 
     least the following benefits:
       ``(i) Physicians services.
       ``(ii) In-patient hospital services.
       ``(iii) Out-patient services.
       ``(iv) Emergency room visits.
       ``(v) Emergency ambulance services.
       ``(vi) Diagnostic lab fees and x-rays.
       ``(vii) Prescription drug benefits.
       ``(B) Limitation.--Nothing in subparagraph (A) shall be 
     construed to require that a three-share program provide 
     coverage for services performed outside the region described 
     in paragraph (2)(A)(i).
       ``(C) Preexisting conditions.--A program described in 
     subparagraph (A) shall not be an eligible three-share program 
     under paragraph (1) if any individual can be excluded from 
     coverage under such program because of a preexisting health 
     condition.
       ``(d) Grants for Existing Three-Share Programs To Meet 
     Certification Requirements.--
       ``(1) In general.--The Administrator may award grants to 
     three-share programs that are operating on the date of 
     enactment of this section.
       ``(2) Application.--Each eligible entity desiring a grant 
     under this subsection shall submit an application to the 
     Administrator at such time, in such manner, and containing 
     such information as the Administrator may require.
       ``(e) Application of State Laws.--Nothing in this section 
     shall be construed to preempt State law.

[[Page 418]]

       ``(f) Distressed Business Formula.--
       ``(1) In general.--Not later than 60 days after the date of 
     enactment of this section, the Administrator of the Health 
     Resources and Services Administration shall develop a formula 
     to determine which businesses qualify as distressed 
     businesses for purposes of this section.
       ``(2) Effect on insurance market.--Granting eligibility to 
     a distressed business using the formula under paragraph (1) 
     shall not interfere with the insurance market. Any business 
     found to have reduced benefits to qualify as a distressed 
     business under the formula under paragraph (1) shall not be 
     eligible to be a three-share program for purposes of this 
     section.
       ``(g) Definitions.--In this section:
       ``(1) Administrator.--The term `Administrator' means the 
     Administrator of the Health Resources and Services 
     Administration.
       ``(2) Covered individual.--The term `covered individual' 
     means--
       ``(A) a qualified employee; or
       ``(B) a child under the age of 23 or a spouse of such 
     qualified employee who--
       ``(i) lacks access to health care coverage through their 
     employment or employer;
       ``(ii) lacks access to health coverage through a family 
     member;
       ``(iii) is not eligible for coverage under the medicare 
     program under title XVIII or the medicaid program under title 
     XIX; and
       ``(iv) does not qualify for benefits under the State 
     Children's Health Insurance Program under title XXI.
       ``(3) Distressed business.--The term `distressed business' 
     means a business that--
       ``(A) in light of economic hardship and rising health care 
     premiums may be forced to discontinue or scale back its 
     health care coverage; and
       ``(B) qualifies as a distressed business according to the 
     formula under subsection (g).
       ``(4) Eligible entity.--The term `eligible entity' means an 
     entity that meets the requirements of subsection (a)(2)(A).
       ``(5) Qualified employee.--The term `qualified employee' 
     means any individual employed by a qualified employer who 
     meets certain criteria including--
       ``(A) lacking access to health coverage through a family 
     member or common law partner;
       ``(B) not being eligible for coverage under the medicare 
     program under title XVIII or the medicaid program under title 
     XIX; and
       ``(C) agreeing that the share of fees described in 
     subsection (a)(2)(B)(i) shall be paid in the form of payroll 
     deductions from the wages of such individual.
       ``(6) Qualified employer.--The term `qualified employer' 
     means an employer as defined in section 3(d) of the Fair 
     Labor Standards Act of 1938 (29 U.S.C. 203(d)) who--
       ``(A) is a small business concern as defined in section 
     3(a) of the Small Business Act (15 U.S.C. 632);
       ``(B) is located in the region described in subsection 
     (a)(2)(A)(i); and
       ``(C) has not contributed to the health care benefits of 
     its employees for at least 12 months consecutively or 
     currently provides insurance but is classified as a 
     distressed business.
       ``(h) Evaluation.--Not later than 90 days after the end of 
     the 5-year period during which grants are available under 
     this section, the Government Accountability Office shall 
     submit to the Secretary and the appropriate committees of 
     Congress a report concerning--
       ``(1) the effectiveness of the programs established under 
     this section;
       ``(2) the number of individuals covered under such 
     programs;
       ``(3) any resulting best practices; and
       ``(4) the level of community involvement.
       ``(i) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, such 
     sums as may be necessary for each of fiscal years 2006 
     through 2011.''.
                                 ______
                                 
      By Mr. DODD (for himself, Mr. Reid, Ms. Mikulski, Ms. Stabenow, 
        Mr. Rockefeller, and Mr. Schumer):
  S. 17. A bill to amend the Help America Vote Act of 2002 to protect 
voting rights and to improve the administration of Federal elections, 
and for other purposes; to the Committee on Rules and Administration.
  Mr. DODD. 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. 17

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Voting 
     Opportunity and Technology Enhancement Rights Act of 2005''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents. 
Sec. 2. Findings and purposes.
Sec. 3. National Federal write-in absentee ballot.
Sec. 4. Voter verified ballots.
Sec. 5. Requirements for counting provisional ballots.
Sec. 6. Minimum required voting systems and poll workers in polling 
              places. 
Sec. 7. Election day registration. 
Sec. 8. Integrity of voter registration list.
Sec. 9. Early voting. 
Sec. 10. Acceleration of study on election day as a public holiday. 
Sec. 11. Improvements to voting systems. 
Sec. 12. Voter registration. 
Sec. 13. Establishing voter identification. 
Sec. 14. Impartial administration of elections. 
Sec. 15. Strengthening the election assistance commission.
Sec. 16. Authorization of appropriations.
Sec. 17. Effective date. 

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) The right of all eligible citizens to vote and have 
     their vote counted is the cornerstone of a democratic form of 
     government and the core precondition of government of the 
     people, by the people, and for the people.
       (2) The right of citizens of the United States to vote is a 
     fundamental civil right guaranteed under the United States 
     Constitution.
       (3) Congress has an obligation to reaffirm the right of 
     each American to have an equal opportunity to vote and have 
     that vote counted in Federal elections, regardless of color, 
     ethnicity, disability, language, or the resources of the 
     community in which they live.
       (4) Congress has an obligation to ensure the uniform and 
     nondiscriminatory exercise of that right by removing barriers 
     in the form of election administration procedures and 
     technology and insufficient and unequal resources of State 
     and local governments.
       (b) Purposes.--The purposes of this Act are as follows:
       (1) To secure the opportunity to participate in democracy 
     for all eligible American citizens by establishing a national 
     Federal write-in absentee ballot for Federal elections.
       (2) To expand and establish uniform and nondiscriminatory 
     requirements and standards to remove administrative 
     procedural barriers and technological obstacles to casting a 
     vote and having that vote counted in Federal elections.
       (3) To expand and establish uniform and nondiscriminatory 
     requirements and standards to provide for the accessibility, 
     accuracy, verifiability, privacy, and security of all voting 
     systems and technology used in Federal elections.
       (4) To provide a Federal funding mechanism for the States 
     to implement the requirements and standards to preserve and 
     protect voting rights and th integrity of Federal elections 
     in the United States.

     SEC. 3. NATIONAL FEDERAL WRITE-IN ABSENTEE BALLOT.

       (a) In General.--
       (1) In general.--Title III of the Help America Vote Act of 
     2002 (42 U.S.C. 15481 et seq.) is amended by adding at the 
     end the following new subtitle:

                 ``Subtitle C--Additional Requirements

     ``SEC. 321. USE OF NATIONAL FEDERAL WRITE-IN ABSENTEE BALLOT.

       ``(a) In General.--Any person who is otherwise qualified to 
     vote in a Federal election in a State shall be permitted to 
     use the national Federal write-in absentee ballot prescribed 
     by the Election Assistance Commission under section 298 to 
     cast a vote in an election for Federal office.
       ``(b) Submission and Processing.--
       ``(1) In general.--Except as otherwise provided in this 
     section, a national Federal write-in absentee ballot shall be 
     submitted and processed in the manner provided by law for 
     absentee ballots in the State involved.
       ``(2) Deadline.--An otherwise eligible national Federal 
     write-in absentee ballot shall be counted if postmarked or 
     signed before the close of the polls on election day and 
     received by the appropriate State election official on or 
     before the date which is 10 days after the date of the 
     election or the date provided for receipt of absentee ballots 
     under State law, whichever is later.
       ``(c) Special Rules.--The following rules shall apply with 
     respect to national Federal write-in absentee ballots:
       ``(1) In completing the ballot, the voter may designate a 
     candidate by writing in the name of the candidate or by 
     writing in the name of a political party (in which case the 
     ballot shall be counted for the candidate of that political 
     party).
       ``(2) In the case of the offices of President and Vice 
     President, a vote for a named candidate or a vote by writing 
     in the name of a political party shall be counted as a vote 
     for the electors supporting the candidate involved.
       ``(3) Any abbreviation, misspelling, or other minor 
     variation in the form of the name of a candidate or a 
     political party shall be disregarded in determining the 
     validity of the ballot.
       ``(d) Effective Date.--Each State shall be required to 
     comply with the requirements of this section on and after 
     January 1, 2007.''.
       (2) Conforming amendment.--Section 401 of the Help America 
     Vote Act of 2002 (42

[[Page 419]]

     U.S.C. 15511) is amended by striking ``and 303'' and 
     inserting ``303, and subtitle C''.
       (b) National Federal Write-in Absentee Ballot.--
       (1) In general.--Title II of the Help America Vote Act of 
     2002 (42 U.S.C. 15321 et seq.) is amended by adding at the 
     end the following new subtitle:

                  ``Subtitle E--Guidance and Standards

     ``SEC. 297. NATIONAL FEDERAL WRITE-IN ABSENTEE BALLOT.

       ``(a) Form of Ballot.--The Commission shall prescribe a 
     national Federal write-in absentee ballot (including a 
     secrecy envelope and mailing envelope for such ballot) for 
     use in elections for Federal office.
       ``(b) Standards.--The Commission shall prescribe standards 
     for--
       ``(1) distributing the national Federal write-in absentee 
     ballot, including standards for distributing such ballot 
     through the Internet; and
       ``(2) processing and submission of the national Federal 
     write-in absentee ballot.''.
       (2) Conforming amendment.--Section 202 of the Help America 
     Vote Act of 2002 (42 U.S.C. 15322) is amended by 
     redesignating paragraphs (5) and (6) as paragraphs (6) and 
     (7), respectively, and by inserting after paragraph (4) the 
     following new paragraph:
       ``(5) carrying out the duties described in subtitle E.''.
       (c) Coordination With Uniformed and Overseas Citizens 
     Absentee Voting Act.--
       (1) In general.--The Presidential designee under the 
     Uniformed and Overseas Absentee Voting Act, in consultation 
     with the Election Assistance Commission, shall facilitate the 
     use and return of the national Federal write-in ballot for 
     absent uniformed services voters and overseas voters.
       (2) Definitions.--The terms ``absent uniformed service 
     voter'' and ``overseas voter'' shall have the meanings given 
     such terms by section 107 of the Uniformed and Overseas 
     Citizens Absentee Voting Act (42 U.S.C. 1973gg-6).

     SEC. 4. VOTER VERIFIED BALLOTS.

       (a) Verification.--
       (1) In general.--Section 301(a) of the Help America Vote 
     Act of 2002 (42 U.S.C. 15481(a)) is amended by adding at the 
     end the following new paragraph:
       ``(7) Voter verified ballots.--In order to meet the 
     requirements of paragraph (1)(A)(i), on and after January 1, 
     2009:
       ``(A) The voting system shall provide an independent means 
     of voter verification which meets the requirements of 
     subparagraph (B) and which allows each voter to verify the 
     ballot before it is cast and counted.
       ``(B) A means of voter verification meets the requirements 
     of this subparagraph if the voting system allows the voter to 
     choose from one of the following options to verify the 
     voter's vote selection:
       ``(i) A paper record.
       ``(ii) An audio record.
       ``(iii) A pictorial record.
       ``(iv) An electronic record or other means that provides 
     for voter verification that is accessible for individuals 
     with disabilities, including nonvisual accessibility for the 
     blind and visually impaired, in a manner that provides 
     privacy and independence equal to that provided for other 
     voters.
       ``(C) Any means of verification described in clause (ii), 
     (iii), or (iv) of subparagraph (B) must provide verification 
     which is equal or superior to verification through the use of 
     a paper record.
       ``(D) The requirements of this paragraph shall not apply to 
     any voting system purchased before January 1, 2009, in order 
     to meet the requirements of paragraph (3)(B).''.
       (2) Conforming amendment.--Clause (i) of section 
     301(a)(1)(A) of the Help America Vote Act of 2002 (42 U.S.C. 
     15481(a)(1)(A)(i)) is amended by inserting ``and consistent 
     with the requirements of paragraphs (2), (4), and (7)'' after 
     ``independent manner''.
       (b) Guidance.--Subtitle E of Title II of the Help America 
     Vote Act of 2002, as added by this Act, is amended by adding 
     at the end the following new section:

     ``SEC. 298. VOTER VERIFIED BALLOTS.

       ``The Commission shall issue uniform and nondiscriminatory 
     standards--
       ``(1) for voter verified ballots required under section 
     301(a)(7); and
       ``(2) for meeting the audit requirements of section 
     301(a)(2).''.
       (c) Reports.--
       (1) Election assistance commission.--Section 207 of the 
     Help America Vote Act of 2002 (42 U.S.C. 15327) is amended by 
     redesignating paragraph (5) as paragraph (6) and by inserting 
     after paragraph (4) the following new paragraph:
       ``(5) A description of the progress on implementing the 
     voter verified ballot requirements of section 301(a)(7) and 
     the impact of the use of such requirements on the 
     accessibility, privacy, security, usability, and auditability 
     of voting systems.''.
       (2) State reports.--Section 258 of the Help America Vote 
     Act of 2002 (42 U.S.C. 15408) is amended by striking ``and'' 
     at the end of paragraph (2), by striking the period at the 
     end of paragraph (3) and inserting ``; and'', and by adding 
     at the end the following new paragraph:
       ``(4) an analysis and description in the form and manner 
     prescribed by the Commission of the progress on implementing 
     the voter verified ballot requirements of section 
     301(a)(7).''.

     SEC. 5. REQUIREMENTS FOR COUNTING PROVISIONAL BALLOTS.

       (a) In General.--Section 302 of the Help America Vote Act 
     of 2002 (42 U.S.C. 15482) is amended by redesignating 
     subsection (d) as subsection (e) and by inserting after 
     subsection (c) the following new subsection:
       ``(d) Statewide Counting of Provisional Ballots.--For 
     purposes of subsection (a)(4), notwithstanding at which 
     polling place a provisional ballot is cast within the State, 
     the State shall count such ballot if the individual who cast 
     such ballot is otherwise eligible to vote.''.
       (b) Effective Date.--
       (1) In general.--Subsection (e) of section 302 of the Help 
     America Vote Act of 2002 (42 U.S.C. 15482(e)), as 
     redesignated under subsection (a), is amended by adding at 
     the end the following:
       ``(2) Effective date for statewide counting of provisional 
     ballots.--Each State shall be required to comply with the 
     requirements of subsection (d) on and after January 1, 
     2007.''.
       (2) Conforming amendment.--Subsection (e) of section 302 of 
     the Help America Vote Act of 2002 (42 U.S.C. 15482(e)), as 
     redesignated under subsection (a), is amended by striking 
     ``Each'' and inserting the following:
       ``(1) In general.--Except as provided in paragraph (2), 
     each''.

     SEC. 6. MINIMUM REQUIRED VOTING SYSTEMS AND POLL WORKERS IN 
                   POLLING PLACES.

       (a) In General.--Subtitle C of title III of the Help 
     America Vote Act of 2002, as added by this Act, is amended by 
     adding at the end the following new section:

     ``SEC. 322. MINIMUM REQUIRED VOTING SYSTEMS AND POLL WORKERS.

       ``(a) In General.--Each State shall provide for the minimum 
     required number of voting systems and poll workers for each 
     polling place on the day of any Federal election and on any 
     days during which such State allows early voting for a 
     Federal election in accordance with the standards determined 
     under section 299A
       ``(b) Effective Date.--Each State shall be required to 
     comply with the requirements of this section on and after 
     January 1, 2007.''.
       (b) Standards.--Subtitle E of the Help America Vote Act of 
     2002, as added and amended by this Act, is amended by adding 
     at the end the following new section:

     ``SEC. 299. STANDARDS FOR ESTABLISHING THE MINIMUM REQUIRED 
                   VOTING SYSTEMS AND POLL WORKERS.

       ``(a) In General.--The Commission shall issue standards 
     regarding the minimum number of voting systems and poll 
     workers required in each polling place on the day of any 
     Federal election and on any days during which early voting is 
     allowed for a Federal election.
       ``(b) Distribution.--The standards described in subsection 
     (a) shall provide for a uniform and nondiscriminatory 
     geographic distribution of such systems and workers.
       ``(c) Deviation.--The standards described in subsection (a) 
     shall permit States, upon providing adequate public notice, 
     to deviate from any allocation requirements in the case of 
     unforseen circumstances such as a natural disaster, terrorist 
     attack, or a change in voter turnout.''.

     SEC. 7. ELECTION DAY REGISTRATION.

       (a) Requirement.--Subtitle C of title III of the Help 
     America Vote Act of 2002 is, as added and amended by this 
     Act, is amended by adding at the end the following new 
     section:

     ``SEC. 323. ELECTION DAY REGISTRATION.

       ``(a) In General.--
       ``(1) Registration.--Notwithstanding section 8(a)(1)(D) of 
     the National Voter Registration Act of 1993 (42 U.S.C. 
     1973gg-6), each State shall permit any individual on the day 
     of a Federal election--
       ``(A) to register to vote in such election at the polling 
     place using the form established by the Election Assistance 
     Commission pursuant to section 297; and
       ``(B) to cast a vote in such election.
       ``(2) Exception.--The requirements under paragraph (1) 
     shall not apply to a State in which, under a State law in 
     effect continuously on and after the date of the enactment of 
     this Act, there is no voter registration requirement for 
     individuals in the State with respect to elections for 
     Federal office.
       ``(b) Effective Date.--Each State shall be required to 
     comply with the requirements of subsection (a) on and after 
     January 1, 2007.''.
       (b) Election Day Registration Form.--Subtitle E of Title II 
     of the Help America Vote Act of 2002, as added and amended by 
     this Act, is amended by adding at the end the following new 
     section:

     ``SEC. 299A. ELECTION DAY REGISTRATION FORM.

       ``The Commission shall develop an election day registration 
     form for elections for Federal office.''.

     SEC. 8. INTEGRITY OF VOTER REGISTRATION LIST.

       Subtitle C of title III of the Help America Vote Act of 
     2002, as added and amended by this Act, is amended by adding 
     at the end the following new section:

     ``SEC. 324. REMOVAL FROM VOTER REGISTRATION LIST.

       ``(a) Public Notice.--Not later than 45 days before any 
     Federal election, each State

[[Page 420]]

     shall provide public notice of all names which have been 
     removed from the voter registration list of such State under 
     section 303 since the later of the most recent election for 
     Federal office or the day of the most recent previous public 
     notice provided under this section.
       ``(b) Notice to Individual Voters.--
       ``(1) In general.--No individual shall be removed from the 
     voter registration list under section 303 unless such 
     individual is first provided with a notice which meets the 
     requirements of paragraph (2).
       ``(2) Requirements of notice.--The notice required under 
     paragraph (1) shall be--
       ``(A) provided to each voter in a uniform and 
     nondiscriminatory manner;
       ``(B) consistent with the requirements of the National 
     Voter Registration Act of 1993 (42 U.S.C. 1973gg et seq.); 
     and
       ``(C) in the form and manner prescribed by the Election 
     Assistance Commission.
       ``(c) Effective Date.--Each State shall be required to 
     comply with the requirements of this section on and after 
     January 1, 2007.''.

     SEC. 9. EARLY VOTING.

       (a) In General.--Subtitle C of title III of the Help 
     America Vote Act of 2002, as added and amended by this Act, 
     is amended by adding at the end the following new section:

     ``SEC. 325. EARLY VOTING.

       ``(a) In General.--Each State shall allow individuals to 
     vote in an election for Federal office not less than 15 days 
     prior to the day scheduled for such election in the same 
     manner as voting is allowed on such day.
       ``(b) Minimum Early Voting Requirements.--Each polling 
     place which allows voting prior to the day of a Federal 
     election pursuant to subsection (a) shall--
       ``(1) allow such voting for no less than 4 hours on each 
     day (other than Sunday); and
       ``(2) have uniform hours each day for which such voting 
     occurs.
       ``(c) Effective Date.--Each State shall be required to 
     comply with the requirements of this section on and after 
     January 1, 2007.''.
       (b) Standards for Early Voting.--Subtitle E of the Help 
     America Vote Act of 2002, as added and amended by this Act, 
     is amended by adding at the end the following new section:

     ``SEC. 299B. STANDARDS FOR EARLY VOTING.

       ``(a) In General.--The Commission shall issue standards for 
     the administration of voting prior to the day scheduled for a 
     Federal election. Such standards shall include the 
     nondiscriminatory geographic placement of polling places at 
     which such voting occurs.
       ``(b) Deviation.--The standards described in subsection (a) 
     shall permit States, upon providing adequate public notice, 
     to deviate from any requirement in the case of unforseen 
     circumstances such as a natural disaster, terrorist attack, 
     or a change in voter turnout.''.

     SEC. 10. ACCELERATION OF STUDY ON ELECTION DAY AS A PUBLIC 
                   HOLIDAY.

       (a) In General.--Section 241 of the Help America Vote Act 
     of 2002 (42 U.S.C. 15381) is amended by adding at the end the 
     following new subsection:
       ``(d) Report on Election Day.--
       ``(1) In general.--The report required under subsection (a) 
     with respect to election administration issues described in 
     subsection (b)(10) shall be submitted not later than 6 months 
     after the date of the enactment of the Voting Enhancement and 
     Technology Accuracy Rights Act of 2005.
       ``(2) Authorization of appropriations.--Of the amount 
     authorized to be appropriated under section 210 for fiscal 
     year 2006, $100,000 shall be authorized solely to carry out 
     the purposes of this subsection.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 11. IMPROVEMENTS TO VOTING SYSTEMS.

       (a) In General.--Subparagraph (B) of section 301(a)(1) of 
     the Help America Vote Act of 2002 (42 U.S.C. 15481(a)(1)(B)) 
     is amended by striking ``, a punch card voting system, or a 
     central count voting system''.
       (b) Clarification of Requirements for Punch Card Systems.--
     Subparagraph (A) of section 301(a)(1) of the Help America 
     Vote Act of 2002 (42 U.S.C. 15481(a)(1)(A)) is amended by 
     inserting ``punch card voting system,'' after ``any''.

     SEC. 12. VOTER REGISTRATION.

       (a) In General.--Paragraph (4) of section 303(b) of the 
     Help America Vote Act of 2002 (42 U.S.C. 15483(b)(4)) is 
     amended by adding at the end the following new subparagraph:
       ``(C) Exception.--On and after January 1, 2007--
       ``(i) in lieu of the questions and statements required 
     under subparagraph (A), such mail voter registration form 
     shall include an affidavit to be signed by the registrant 
     attesting both to citizenship and age; and
       ``(ii) subparagraph (B) shall not apply.''.
       (b) Internet Registration.--Subtitle C of title III of the 
     Help America Vote Act of 2002, as added and amended by this 
     Act, is amended by adding at the end the following new 
     section:

     ``SEC. 326. INTERNET REGISTRATION.

       ``(a) Internet Registration.--Each State shall establish a 
     program under which individuals may access and submit voter 
     registration forms electronically through the Internet.
       ``(b) Effective Date.--Each State shall be required to 
     comply with the requirements of this section on and after 
     January 1, 2009.''.
       (c) Standards for Internet Registration.--Subtitle E of the 
     Help America Vote Act of 2002, as added and amended by this 
     Act, is amended by adding at the end the following new 
     section:

     ``SEC. 299C. STANDARDS FOR INTERNET REGISTRATION PROGRAMS.

       ``The Commission shall establish standards regarding the 
     design and operation of programs which allow electronic voter 
     registration through the Internet.''.

     SEC. 13. ESTABLISHING VOTER IDENTIFICATION.

       (a) In General.--
       (1) In person voting.--Clause (i) of section 303(b)(2)(A) 
     of the Help America Vote Act of 2002 (42 U.S.C. 
     15483(b)(2)(A)(i)) is amended by striking ``or'' at the end 
     of subclause (I) and by adding at the end the following new 
     subclause:

       ``(III) executes a written affidavit attesting to such 
     individual's identity; or''.

       (2) Voting by mail.--Clause (ii) of section 303(b)(2)(A) of 
     the Help America Vote Act of 2002 (42 U.S.C. 
     15483(b)(2)(A)(ii)) is amended by striking ``or'' at the end 
     of subclause (I), by striking the period at the end of 
     subclause (II) and inserting ``; or'', and by adding at the 
     end the following new subclause:

       ``(III) a written affidavit, executed by such individual, 
     attesting to such individual's identity.''.

       (b) Standards for Verifying Voter Information.--Subtitle E 
     of the Help America Vote Act of 2002, as added and amended by 
     this Act, is amended by adding at the end the following new 
     section:

     ``SEC. 299D. VOTER IDENTIFICATION.

       ``The Commission shall develop standards for verifying the 
     identification information required under section 303(a)(5) 
     in connection with the registration of an individual to vote 
     in a Federal election.''.

     SEC. 14. IMPARTIAL ADMINISTRATION OF ELECTIONS.

       Subtitle C of title III of the Help America Vote Act of 
     2002, as added and amended by this Act, is amended by adding 
     at the end the following new section:

     ``SEC. 327. ELECTION ADMINISTRATION REQUIREMENTS.

       ``(a) Notice of Changes in State Election Laws.--Not later 
     than 15 days prior to any Federal election, each State shall 
     issue a public notice describing all changes in State law 
     affecting the administration of Federal elections since the 
     most recent prior election.
       ``(b) Observers.--
       ``(1) In general.--Each State shall allow uniform and 
     nondiscriminatory access to any polling place for purposes of 
     observing a Federal election to--
       ``(A) party challengers;
       ``(B) voting rights and civil rights organizations; and
       ``(C) nonpartisan domestic observers and international 
     observers.
       ``(2) Notice of denial of observation request.--Each State 
     shall issue a public notice with respect to any denial of a 
     request by any observer described in paragraph (1) for access 
     to any polling place for purposes of observing a Federal 
     election. Such notice shall be issued not later than 24 hours 
     after such denial.
       ``(c) Effective Date.--Each State shall be required to 
     comply with the requirements of this section on and after 
     January 1, 2007.''.

     SEC. 15. STRENGTHENING THE ELECTION ASSISTANCE COMMISSION.

       (a) Budget Requests.--Part 1 of subtitle A of title II of 
     the Help America Vote Act of 2002 (42 U.S.C. 15321 et seq.) 
     is amended by inserting after section 209 the following new 
     section:

     ``SEC. 209A. SUBMISSION OF BUDGET REQUESTS.

       ``Whenever the Commission submits any budget estimate or 
     request to the President or the Office of Management and 
     Budget, it shall concurrently transmit a copy of such 
     estimate or request to the Congress and to the Committee on 
     House Administration of the House of Representatives and the 
     Committee on Rules and Administration of the Senate.''.
       (b) Exemption From Paperwork Reduction Act.--Paragraph (1) 
     of section 3502 of title 44, United States Code, is amended 
     by redesignating subparagraphs (B), (C), and (D) as 
     subparagraphs (C), (D), and (E), respectively, and by 
     inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) the Election Assistance Commission;''.
       (c) Rulemaking.--Section 209 of the Help America Vote Act 
     of 2002 (42 U.S.C. 15239) is amended--
       (1) by striking ``The Commission'' and inserting the 
     following:
       ``(a) In General.--Except as provided in subsection (b), 
     the Commission'', and
       (2) by inserting at the end the following new subsection:
       ``(b) Exception.--On and after January 1, 2007, subsection 
     (a) shall not apply to any authority granted under subtitle E 
     of this title or subtitle C of title III.''.
       (d) NIST Authority.--Subtitle E of title II of the Help 
     America Vote Act of 2002, as added and amended by this Act, 
     is amended by adding at the end the following new section:

     ``SEC. 299E. TECHNICAL SUPPORT.

       ``At the request of the Commission, the Director of the 
     National Institute of Standards

[[Page 421]]

     and Technology shall provide the Commission with technical 
     support necessary for the Commission to carry out its duties 
     under this title.''.
       (e) Authorization of Appropriations.--Section 210 of the 
     Help America Vote Act of 2002 (42 U.S.C. 15330) is amended by 
     striking ``for each of fiscal years 2003 through 2005 such 
     sums as may be necessary (but not to exceed $10,000,000 for 
     each such year)'' and inserting ``$23,000,000 for fiscal year 
     2006 (of which $3,000,000 are authorized solely to carry out 
     the purposes of section 299E) and such sums as may be 
     necessary for succeeding fiscal years''.

     SEC. 16. AUTHORIZATION OF APPROPRIATIONS.

       Subsection (a) of section 257 of the Help America Vote Act 
     of 2002 (42 U.S.C. 15408(a)) is amended by adding at the end 
     the following new paragraphs:
       ``(4) For fiscal year 2006, $2,000,000,000.
       ``(5) For each fiscal year after 2006, such sums as are 
     necessary.''.

     SEC. 17. EFFECTIVE DATE.

       (a) In General.--Except as provided by section 10 and 
     subsection (b), the amendments made by this Act shall take 
     effect on January 1, 2007.
       (b) Exceptions.--The amendments made by section 4, section 
     11, section 12(b), and subsections (a) and (b) of section 15 
     shall take effect on January 1, 2009.
                                 ______
                                 
      By Mr. DAYTON (for himself, Mr. Reid, Ms. Stabenow, Mrs. 
        Feinstein, Mr. Kennedy, Mr. Corzine, Mr. Schumer, Mrs. Murray, 
        Ms. Mikulski, Mr. Lautenberg, Mr. Akaka, Mr. Inouye, Mrs. 
        Clinton, Mr. Levin, Mr. Kerry, Mr. Leahy, Mr. Rockefeller, Mr. 
        Dodd, Mr. Sarbanes, and Mr. Durbin):
  S. 18. A bill to amend title XVIII of the Social Security Act to make 
improvements to the medicare program for beneficiaries; to the 
Committee on Finance.
  Mr. DAYTON. 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. 18

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Meeting 
     Our Responsibility to Medicare Beneficiaries Act of 2005''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

           TITLE I--ELIMINATING SPECIAL INTEREST PREFERENCES

Sec. 101. Negotiating fair prices for medicare prescription drugs.
Sec. 102. Elimination of MA Regional Plan Stabilization Fund (Slush 
              Fund).
Sec. 103. Application of risk adjustment reflecting characteristics for 
              the entire medicare population in payments to Medicare 
              Advantage organizations.

       TITLE II--IMPROVING THE MEDICARE PROGRAM FOR BENEFICIARIES

Sec. 201. Eliminating coverage gap.
Sec. 202. Requiring two prescription drug plans to avoid Federal 
              fallback.
Sec. 203. Waiver of part D late enrollment penalty for transition 
              period.
Sec. 204. Improving the transition of full-benefit dual eligible 
              individuals to coverage under the medicare drug benefit.
Sec. 205. Part B premium reduction.
Sec. 206. Study and report on providing incentives to preserve retiree 
              coverage.
Sec. 207. Promoting transparency in employer subsidy payments.

           TITLE I--ELIMINATING SPECIAL INTEREST PREFERENCES

     SEC. 101. NEGOTIATING FAIR PRICES FOR MEDICARE PRESCRIPTION 
                   DRUGS.

       (a) In General.--Section 1860D-11 of the Social Security 
     Act (42 U.S.C. 1395w-111) is amended by striking subsection 
     (i) (relating to noninterference) and by inserting the 
     following new subsection:
       ``(i) Authority To Negotiate Prices With Manufacturers.--
       ``(1) In general.--The Secretary shall have authority 
     similar to that of other Federal entities that purchase 
     prescription drugs in bulk to negotiate contracts with 
     manufacturers of covered part D drugs, consistent with the 
     requirements and in furtherance of the goals of providing 
     quality care and containing costs under this part.
       ``(2) Required use of authority.--
       ``(A) Fallback plans.--The Secretary shall exercise the 
     authority described in paragraph (1) with respect to covered 
     part D drugs offered under each fallback prescription drug 
     plan under subsection (g).
       ``(B) PDPs and ma-pd plans.--In order to ensure that 
     beneficiaries enrolled under prescription drug plans and MA-
     PD plans and taxpayers are getting fair and affordable prices 
     for covered part D drugs that reflect the bulk purchasing 
     power of such enrollees, the Secretary shall exercise the 
     authority described in paragraph (1) with respect to such 
     drugs offered under all such plans if the Secretary 
     determines that the negotiated prices available under such 
     plans for such drugs are not fair and affordable prices 
     compared to the prices obtained by other Federal government 
     programs for such drugs.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the enactment of section 
     101(a) of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2071).

     SEC. 102. ELIMINATION OF MA REGIONAL PLAN STABILIZATION FUND 
                   (SLUSH FUND).

       (a) In General.--Subsection (e) of section 1858 of the 
     Social Security Act (42 U.S.C. 1395w-27a) is repealed.
       (b) Conforming Amendment.--Section 1858(f)(1) of the Social 
     Security Act (42 U.S.C. 1395w-27a(f)(1)) is amended by 
     striking ``subject to subsection (e),''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of section 
     221(c) of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2181).

     SEC. 103. APPLICATION OF RISK ADJUSTMENT REFLECTING 
                   CHARACTERISTICS FOR THE ENTIRE MEDICARE 
                   POPULATION IN PAYMENTS TO MEDICARE ADVANTAGE 
                   ORGANIZATIONS.

       Effective January 1, 2006, in applying risk adjustment 
     factors to payments to organizations under section 1853 of 
     the Social Security Act (42 U.S.C. 1395w-23), the Secretary 
     of Health and Human Services shall ensure that payments to 
     such organizations are adjusted based on such factors to 
     ensure that the health status of the enrollee is reflected in 
     such adjusted payments, including adjusting for the 
     difference between the health status of the enrollee and 
     individuals enrolled under the original medicare fee-for-
     service program under parts A and B of title XVIII of such 
     Act. Payments to such organizations must, in aggregate, 
     reflect such differences.

       TITLE II--IMPROVING THE MEDICARE PROGRAM FOR BENEFICIARIES

     SEC. 201. ELIMINATING COVERAGE GAP.

       (a) In General.--Section 1860D-2(b)(4)(B) of the Social 
     Security Act (42 U.S.C. 1395w-102(b)(4)(B)) is amended to 
     read as follows:
       ``(B) Annual out-of-pocket threshold.--For purposes of this 
     part, the `annual out-of-pocket threshold' specified in this 
     subparagraph for a year is equal to the greater of--
       ``(i) $3,600; or
       ``(ii) the initial coverage limit for the year specified in 
     paragraph (3).''.
       (b) Conforming Amendment.--Section 1860D-22(a)(3)(B)(ii) of 
     the Social Security Act (42 U.S.C. 1395w-132(b)(4)(B)(ii)) is 
     amended by striking ``and the annual out-of-pocket threshold, 
     respectively, are annually adjusted under paragraphs (1) and 
     (4)(B) of section 1860D-2(b)'' and inserting ``is annually 
     adjusted under paragraph (1) of section 1860D-2(b) (using the 
     percentage increase specified in paragraph (6) of such 
     section)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of section 
     101(a) of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2071).

     SEC. 202. REQUIRING TWO PRESCRIPTION DRUG PLANS TO AVOID 
                   FEDERAL FALLBACK.

       (a) In General.--Section 1860D-3(a) of the Social Security 
     Act (42 U.S.C. 1395w-103(a)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``qualifying plans (as defined in paragraph 
     (3))'' and inserting ``prescription drug plans''; and
       (B) by striking ``, at least one of which is a prescription 
     drug plan'';
       (2) in paragraph (2), by striking ``qualifying plans'' and 
     inserting ``prescription drug plans''; and
       (3) by striking paragraph (3).
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of section 
     101(a) of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2071).

     SEC. 203. WAIVER OF PART D LATE ENROLLMENT PENALTY FOR 
                   TRANSITION PERIOD.

       (a) In General.--Section 1860D-13(b) of the Social Security 
     Act (42 U.S.C. 1895w-113(b)) is amended by adding at the end 
     the following new paragraph:
       ``(8) Waiver of penalty for months prior to 2008.--A part D 
     eligible individual who enrolls for the first time in a 
     prescription drug plan or an MA-PD plan under this part prior 
     to January 1, 2008, shall not be subject an increase in the 
     monthly beneficiary premium established under subsection (a) 
     with respect to months occurring prior to such date.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the enactment of section 
     101(a) of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (117 Stat. 2071).

[[Page 422]]



     SEC. 204. IMPROVING THE TRANSITION OF FULL-BENEFIT DUAL 
                   ELIGIBLE INDIVIDUALS TO COVERAGE UNDER THE 
                   MEDICARE DRUG BENEFIT.

       (a) In General.--Notwithstanding subsection (d)(1) of 
     section 1935 of the Social Security Act (42 U.S.C. 1396u-5), 
     beginning on January 1, 2006, the Secretary of Health and 
     Human Services shall administer a 12-month period during 
     which full-benefit dual eligible individuals (as defined in 
     section 1935(c)(6) of the Social Security Act) shall 
     gradually transition from receiving medical assistance for 
     prescribed drugs under the medicaid program under title XIX 
     of such Act to obtaining coverage of covered part D drugs (as 
     defined in section 1860D-2(e) (42 U.S.C. 1395w-102(e)) under 
     title XVIII of such Act in order to assure that such 
     individuals continue to receive the outpatient prescription 
     drugs they need.
       (b) Adjustments to Phased-Down State Contribution.--The 
     Secretary of Health and Human Services shall make appropriate 
     adjustments to the amount of payments required to be made by 
     a State or the District of Columbia under section 1935(c) of 
     the Social Security Act (42 U.S.C. 1396u-5(c)) for months 
     occurring during the period described in subsection (a) in 
     order to account for increased costs for the provision of 
     medical assistance incurred by the State or the District of 
     Columbia by reason of the application of the transition 
     period required under this section.

     SEC. 205. PART B PREMIUM REDUCTION.

       Section 1839(a) of the Social Security Act (42 U.S.C. 
     1395r(a)) is amended--
       (1) in paragraph (3), in the first sentence, by striking 
     ``The Secretary'' and inserting ``Subject to paragraph (5), 
     the Secretary''; and
       (2) by adding at the end the following new paragraph:
       ``(5) For each year (beginning with 2006), the Secretary 
     shall reduce the monthly premium rate determined under 
     paragraph (3) for each month in the year for each individual 
     enrolled under this part (including such an individual 
     subject to an increased premium under subsection (b) or (i)) 
     so that the aggregate amount of such reductions in the year 
     is equal to the aggregate amount of reduced expenditures from 
     the Federal Supplementary Medicare Insurance Trust Fund in 
     the year that the Secretary estimates will result from the 
     provisions of section 103 of the Meeting Our Responsibility 
     to Medicare Beneficiaries Act of 2005.''.

     SEC. 206. STUDY AND REPORT ON PROVIDING INCENTIVES TO 
                   PRESERVE RETIREE COVERAGE.

       (a) Study.--The Secretary of Health and Human Services 
     shall conduct a study to determine what additional incentives 
     should be provided to employers in order for such employers 
     to continue to provide retirees with prescription drug 
     coverage. Such study shall include an assessment of 
     permitting costs incurred by an employer for covered part D 
     drugs on behalf of a retiree to be treated as incurred costs 
     for purposes of reaching the annual out-of-pocket threshold 
     under section 1860D-2(b)(4) of the Social Security Act (42 
     U.S.C. 1395w-102(b)(4)).
       (b) Report.--Not later than January 1, 2006, the Secretary 
     of Health and Human Services shall submit to Congress a 
     report on the study under subsection (a) together with such 
     recommendations for legislation as the Secretary deems 
     appropriate.

     SEC. 207. PROMOTING TRANSPARENCY IN EMPLOYER SUBSIDY 
                   PAYMENTS.

       (a) In General.--Section 1860D-22(a) of the Social Security 
     Act (42 U.S.C. 1895w-132(a)) is amended by adding at the end 
     the following new paragraph:
       ``(7) Disclosure of certain information.--The Secretary 
     shall make the following information regarding the sponsor of 
     a qualified prescription drug plan receiving a subsidy under 
     this section available to the public through the Internet 
     website of the Centers for Medicare & Medicaid Services and 
     other appropriate means:
       ``(A) The information used by the Secretary to ensure that 
     the prescription drug coverage offered under the plan meets 
     the requirements for subsidy payments under this section.
       ``(B) The total amount of the subsidy payments made to the 
     sponsor under this section.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the enactment of section 
     101(a) of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2071).

  Mr. KENNEDY. Mr. President, the Bush Administration and the 
Republican Congress are no friend of America's seniors. In 2003, they 
enacted legislation to dismantle Medicare, even though Medicare has 
helped a generation of seniors live their golden years with health and 
dignity.
  Now their target is Social Security. They want to privatize this 
trusted program for the benefit of Wall Street bankers. They even want 
to cut benefits for women because--in the Republican view--they live 
too long. It's time to end these shameful attacks on our senior 
citizens, restore Medicare and protect Social Security.
  I commend the leadership of my colleague from Minnesota, Senator 
Dayton, and our Democratic Leader, Senator Reid, in introducing this 
urgently needed legislation today to enable Medicare to keep its 
promise to the elderly.
  Forty years ago, Congress enacted the landmark legislation that 
established Medicare. We would do well today to remember President 
Lyndon Johnson's words on signing that historic bill in 1965: ``No 
longer will older Americans be denied the healing miracle of modern 
medicine. No longer will illness crush and destroy the savings they 
have so carefully put away over a lifetime so that they might enjoy 
dignity in their later years.''
  The ruinous Medicare legislation that the Republican Congress enacted 
in 2003 breaks that solemn promise.
  Before Medicare was created, millions of seniors could obtain health 
care coverage only at the whim of the insurance industry. If they were 
too sick or too poor to be profitable to an insurance company, they 
would be denied health care coverage. Their savings--and their 
children's savings--were in jeopardy when illness struck. Before 
Medicare, senior citizens were among the poorest Americans, with almost 
three in ten living in poverty. Bankruptcies from overwhelming medical 
bills were common.
  Medicare changed all that, and 40 years later, President Bush and the 
Republican Congress are wrong to try to turn back the clock.
  Some of my colleagues attempt to portray Medicare as a failure. But 
the facts show that it is one of the most successful endeavors the 
Nation has ever undertaken. In 1963, before Medicare was enacted, 
almost half of America's seniors were uninsured. Today that number is 
one in a hundred.
  Before Medicare was enacted, Americans turning 65 could expect to 
live another 14 years. Today, they can expect almost 18 more years.
  Seniors understand that Medicare works. They don't want to return to 
the days when they had to gamble their health, their savings and their 
lives on risky private insurance.
  The 2003 Republican bill was sold to the American people as a way to 
help seniors with the high cost of prescription drugs, so you might 
think it does something about the high cost of drugs. But it doesn't.
  It not only fails to help Medicare lower the cost of drugs--it 
actually makes it illegal for Medicare to try. Republicans were so 
worried about protecting drug company profits that they made it illegal 
for Medicare to do what the Veterans Administration does for veterans--
negotiate discounts on drug prices. The Bush Administration and the GOP 
Congress wouldn't dare to prohibit the VA from doing that for the 
veterans, and they shouldn't do it for senior citizens either.
  The discounts on drug prices for veterans are substantial. On 
average, the price paid by the VA is 45 percent of the retail price, 
but often, the savings are even more dramatic. The retail price for 
Mevacor is $4 a pill, but the VA pays only 23 cents. The undiscounted 
price of Zantac is $1.83, but the VA pays two cents.
  Senator Dayton's legislation abolishes the unconscionable provision 
that bars Medicare from negotiating discounts on drug prices for 
America's seniors. That's not price control--it's common sense.
  Republicans also claim that their new drug benefit is ``voluntary.'' 
Not exactly. If seniors don't sign up the first year, they have to pay 
more and more to join in subsequent years. When they need the coverage, 
they may not be able to afford it.
  Senator Dayton's legislation reverses this flagrant system of fines 
and makes the Medicare drug program truly voluntary. When Congress 
enacts it, seniors will be able to sign up for the drug program without 
facing ruinous fines.
  Good prescription drug coverage for senior citizens is a priority for 
Democrats. For the Administration and the Republicans in Congress, 
however, tax cuts for billionaires are more important than health care 
for senior citizens.
  In addition, the 2003 Medicare law leaves too many elderly citizens 
with

[[Page 423]]

unaffordable costs. Seniors with moderate incomes and high drug 
expenses still face high drug costs. The benefits under the GOP law--
with its $250 deductible, 25 percent cost-sharing, an out-of-pocket 
limit of $3,600 on costs, but continued co-payment obligations even 
after the limit is reached--are far less generous than those enjoyed by 
most younger Americans, even though the elderly's need for prescription 
drugs is much greater.
  Senior citizens with an income of $15,000 and drug expenses of $4,000 
would have to pay more than $2,900, including premiums, out of their 
own pocket. That's too heavy a burden.
  If they fall into the so-called doughnut hole, their situation is 
much worse. Under the 2003 law, the government makes no contribution to 
any drug costs between $2,250 in expenditures and $5,100 in 
expenditures. Patients who need $5,200 worth of prescriptions could be 
forced to pay $2,850 in drug expenses without any help at all from 
Medicare. That's too much for an elderly person to pay and still meet 
other essential medical needs, pay the rent or mortgage, and buy food 
and other necessities of life.
  Senator Dayton's proposal begins to fill in that doughnut hole by not 
allowing the cap on total out of pocket expenditures to rise year after 
year, as it does under the GOP act. Under Senator Dayton's proposal, 
seniors will have the certainty of knowing where that limit is from one 
year to the next. As drug expenses rise, more seniors will gain the 
benefit of the assistance from Medicare at these high spending levels, 
and ultimately, the doughnut hole will close.
  The Republican Medicare law is a raw deal for seniors, but it's a 
bonanza for the drug industry and the insurance industry.
  It gives massive subsidies to HMOs. Most Americans probably think 
it's the job of insurance companies to guarantee the health of their 
beneficiaries, but according to the Republican view that's wrong. They 
make America's seniors guarantee the health and wealth of HMOs.
  The government already pays private insurance plans 104 percent of 
what it costs Medicare to provide seniors with the same health care. 
Republicans claim to be in favor of competition, but the playing field 
is tilted toward HMOs, and their 2003 Act tilted it further. You might 
think HMOs need that overpayment because they serve sicker or needier 
beneficiaries. Not true. Enrollees in private plans are actually 
healthier than those in Medicare, resulting in a further bonus of 8.7 
percent to the private plans.
  Senator Dayton's legislation requires realistic risk adjustment for 
private plans that provide services to seniors under Medicare. It 
removes the artificial calculations that inflate payments to HMOs and 
other private insurance carriers.
  Another problem with the 2003 Act is that if the subsidies don't 
provide enough profits, the Republican bill provides cash handouts for 
the insurance industry. If an HMO doesn't think it can make enough 
money in some area of the country, the Bush Administration can simply 
ladle out the cash--up to $12 billion a year--until the bribe is high 
enough to get the company to participate.
  Senator Dayton's legislation reverses this outrageous giveaway and 
ensures that the dollars devoted to this slush fund are used instead to 
provide better health care for seniors.
  The Republican law stacks the deck against seniors in other ways. It 
allows a region to be served by only one prescription drug plan, along 
with a PPO. That gives the drug plan a monopoly in that region for 
seniors who want to remain in Medicare. If the only available drug plan 
is tailored to the healthiest and youngest seniors, it might be 
acceptable for a senior whose prescription needs are limited. But it 
gives no help to seniors who take medications for multiple chronic 
conditions every day. Seniors have no real recourse if they can't 
afford the monopoly drug plan. The only way they can get prescription 
drug coverage is to enroll in the PPO.
  Senator Dayton's legislation provides an effective guarantee that 
seniors who wish to remain in traditional Medicare will have a genuine 
choice of prescription-only plans. If a choice between at least two 
private drug-only plans is not available in any region, the Federal 
Government will provide a plan. This proposal ensures that any senior 
who wishes to remain in Medicare will have access to high-quality 
affordable prescription drug coverage.
  The Republican Medicare law also dealt a harsh blow to the employer 
plans that millions of retirees depend on. The Congressional Budget 
Office estimates that almost three million retirees will lose their 
current drug coverage, because employers will drop the coverage when 
retirees become eligible for the new federal benefit, which is not as 
comprehensive.
  Democrats fought to include provisions in that flawed legislation to 
help employers maintain the good coverage that so many Americans depend 
on to meet their needs in retirement. Sadly, some employers could abuse 
these subsidies by failing to use them to assist their employees--and 
the Bush Administration is letting them get away with it. Toothless 
enforcement and weak regulation allow some unscrupulous employers to 
pocket the subsidy and weaken the coverage.
  Senator Dayton's legislation will put an end to this scandalous 
practice by requiring employers to account for the funds they receive 
in subsidies. No longer will employers be able to hide that they are 
accepting subsidies to maintain retiree health coverage and still cut 
back the coverage. The Dayton bill also requires new research on ways 
to help employers maintain retiree coverage.
  One of the most troubling aspects of the 2003 Act is that it 
victimizes six million senior citizens and disabled people on 
Medicaid--the poorest of the poor. Their out-of-pocket payments for 
drugs will be raised, even though they do not even have coverage for 
the drugs they need the most.
  Today, under Federal law, people with drug coverage under Medicaid 
may be charged only nominal amounts for the drugs they need. The vast 
majority of states charge nothing.
  For every other Medicare benefit, Medicaid wraps around Medicare 
coverage and picks up the out-of-pocket costs that Medicare does not 
pay. Not under this legislation. States are prohibited from wrapping 
around the Medicare benefits with their Medicaid program. Instead, a 
uniform Federal co-payment is imposed. It is indexed, so that it 
increases every year. If low income seniors need a drug that is not in 
the insurance company formulary, they have to go through a burdensome 
appeals process. Most will simply go without the drug they need.
  The people we are talking about are truly the poorest of the poor. In 
most cases, their incomes are well below poverty. And the impact of 
even small co-payments is devastating. Study after study finds that 
when the poor have to pay more for drugs, they end up hospitalized, in 
nursing homes, or dead.
  Senator Dayton's legislation reverses this cruel provision and allows 
States to delay implementing the requirement that the new Medicare 
provisions must immediately supplant State Medicaid programs for the 
poorest of the poor.
  Congress should be helping seniors with the burden of high drug 
costs, not allowing a right wing agenda to destroy the guarantee of 
affordable health care that America's seniors deserve and expect.
  That's why Senator Dayton and Senator Reid have introduced this 
needed legislation, and I urge my colleagues to support it.
                                 ______
                                 
      By Mr. CONRAD (for himself, Mr. Reid, Mr. Feingold, Ms. Mikulski, 
        Ms. Stabenow, Mr. Inouye, Mr. Leahy, Mr. Salazar, Mr. 
        Rockefeller, Mr. Schumer, Mrs. Feinstein, Mr. Dayton, Mr. Dodd, 
        and Mrs. Clinton):
  S. 19. A bill to reduce budget deficits by restoring budget 
enforcement and strengthening fiscal responsibility; to the Committee 
on the Budget.
  Mr. CONRAD. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.

[[Page 424]]

  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 19

       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 ``Fiscal Responsibility for a 
     Sound Future Act''.

     SEC. 2. EXTENSION OF THE DISCRETIONARY SPENDING CAPS.

       (a) In General.--Section 251(c) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 (2 U.S.C. 901(c)) is 
     amended to read as follows:
       ``(c) Discretionary Spending Limit.--As used in this part, 
     the term `discretionary spending limit' means, with respect 
     to fiscal year 2005--
       ``(1) for the discretionary category: $836,268,000,000 in 
     new budget authority and $895,966,000,000 in outlays;
       ``(2) for the highway category: $31,761,000,000 in outlays; 
     and
       ``(3) for the mass transit category: $956,000,000 in new 
     budget authority and $6,748,000,000 in outlays;
     as adjusted in strict conformance with subsection (b).''.
       (b)  Commitment of the Senate.--Congress should enact a 
     limit on total discretionary spending for fiscal year 2006.

     SEC. 3. EXTENSION OF PAY-AS-YOU-GO REQUIREMENT.

       Section 252 of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 is amended--
       (1) in subsection (a), by striking ``enacted before October 
     1, 2002''; and
       (2) in subsection (b), by striking ``enacted before October 
     1, 2002,''.

     SEC. 4. EXTENSION OF BUDGET ENFORCEMENT THROUGH 2015.

       Section 275 of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 (2 U.S.C. 900 note) is amended by adding 
     at the end the following:
       ``(d) Reenactment.--Part C of this title is reenacted into 
     law effective for fiscal year 2005. Part C shall expire at 
     the end of fiscal year 2015.''.

     SEC. 5. RECONCILIATION FOR DEFICIT REDUCTION IN THE SENATE.

       (a) In General.--It shall not be in order in the Senate to 
     consider under the expedited procedures applicable to 
     reconciliation in sections 305 and 310 of the Congressional 
     Budget Act of 1974 any bill, resolution, amendment, amendment 
     between Houses, motion, or conference report that increases 
     the deficit in the first fiscal year covered by the most 
     recently adopted concurrent resolution on the budget, the 
     period of the first 5 fiscal years covered by the most 
     recently adopted concurrent resolution on the budget, or the 
     period of the 5 fiscal years following the first 5 fiscal 
     years covered by the most recently adopted concurrent 
     resolution on the budget.
       (b) Budget Resolution.--It shall not be in order in the 
     Senate to consider pursuant to sections 301, 305, or 310 of 
     the Congressional Budget Act of 1974 pertaining to concurrent 
     resolutions on the budget any resolution, concurrent 
     resolution, amendment, amendment between the Houses, motion, 
     or conference report that contains any reconciliation 
     directive that would increase the deficit in the first fiscal 
     year covered by the most recently adopted concurrent 
     resolution on the budget, the period of the first 5 fiscal 
     years covered by the most recently adopted concurrent 
     resolution on the budget, or the period of the 5 fiscal years 
     following the first 5 fiscal years covered by the most 
     recently adopted concurrent resolution on the budget.
       (c) Supermajority Waiver and Appeal.--This section may be 
     waived or suspended in the Senate only by an affirmative vote 
     of \3/5\ of the Members, duly chosen and sworn. An 
     affirmative vote of \3/5\ of the Members of the Senate, duly 
     chosen and sworn, shall be required in the Senate to sustain 
     an appeal of the ruling of the Chair on a point of order 
     raised under this section.

     SEC. 6. SENATE PAYGO RULE.

       (a) In General.--Section 505(a)(5)(A) of H. Con. Res. 95 
     (108th Congress) is amended by striking ``as adjusted for any 
     changes in revenues or direct spending assumed by such 
     resolution''.
       (b) Expiration Date.--Section 505(e) of H. Con. Res. 95 
     (108th Congress) is amended by striking ``2008'' and 
     inserting ``2015''.
                                 ______
                                 
      By Mr. REID (for himself, Mrs. Murray, Mr. Schumer, Mr. Corzine, 
        Mr. Lautenberg, Mrs. Clinton, Mr. Kerry, Mrs. Feinstein, Ms. 
        Cantwell, Mr. Harkin, Ms. Mikulski, Mr. Inouye, Mr. Akaka, Mr. 
        Levin, Mr. Kennedy, Mr. Leahy, Mr. Wyden, and Ms. Stabenow):
  S. 20. A bill to expand access to preventive health care services 
that help reduce unintended pregnancy, reduce the number of abortions, 
and improve access to women's health care; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. REID. 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. 20

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

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

             TITLE I--TITLE X OF PUBLIC HEALTH SERVICE ACT

Sec. 101. Short title.
Sec. 102. Authorization of appropriations.

              TITLE II--FAMILY PLANNING STATE EMPOWERMENT

Sec. 201. Short title.
Sec. 202. State option to provide family planning services and supplies 
              to additional low-income individuals.
Sec. 203. State option to extend the period of eligibility for 
              provision of family planning services and supplies.

 TITLE III--EQUITY IN PRESCRIPTION INSURANCE AND CONTRACEPTIVE COVERAGE

Sec. 301. Short title.
Sec. 302. Amendments to Employee Retirement Income Security Act of 
              1974.
Sec. 303. Amendments to Public Health Service Act relating to the group 
              market.
Sec. 304. Amendment to Public Health Service Act relating to the 
              individual market.

      TITLE IV--EMERGENCY CONTRACEPTION EDUCATION AND INFORMATION

Sec. 401. Short title.
Sec. 402. Emergency contraception education and information programs.

         TITLE V--COMPASSIONATE ASSISTANCE FOR RAPE EMERGENCIES

Sec. 501. Short title.
Sec. 502. Survivors of sexual assault; provision by hospitals of 
              emergency contraceptives without charge.

                 TITLE VI--TEENAGE PREGNANCY PREVENTION

Sec. 601. Short title.
Sec. 602. Teenage pregnancy prevention.

            TITLE VII--ACCURACY OF CONTRACEPTIVE INFORMATION

Sec. 701. Short title.
Sec. 702. Accuracy of contraceptive information.

     SEC. 2. FINDINGS.

       The Congress finds as follows:
       (1) Although the Centers for Disease Control and Prevention 
     (referred to in this section as the ``CDC'') included family 
     planning in its published list of the Ten Great Public Health 
     Achievements in the 20th Century, the United States still has 
     one of the highest rates of unintended pregnancies among 
     industrialized nations.
       (2) Each year, 3,000,000 pregnancies, nearly half of all 
     pregnancies, in the United States are unintended, and nearly 
     half of unintended pregnancies end in abortion.
       (3) In 2002, 34,000,000 women-half of all women of 
     reproductive age (ages 15-44)-were in need of contraceptive 
     services and supplies to help prevent unintended pregnancy, 
     and half of those were in need of public support for such 
     care.
       (4) The United States also has the highest rate of 
     infection with sexually transmitted diseases of any 
     industrialized country. In 2003 there were approximately 
     19,000,000 new cases of sexually transmitted diseases. 
     According to the CDC (November 2004), these sexually 
     transmitted diseases impose a tremendous economic burden with 
     direct medical costs as high as $15,500,000,000 per year.
       (5) Increasing access to family planning services will 
     improve women's health and reduce the rates of unintended 
     pregnancy, abortion, and infection with sexually transmitted 
     diseases. Contraceptive use saves public health dollars. 
     Every dollar spent on providing family planning services 
     saves an estimated $3 in expenditures for pregnancy-related 
     and newborn care for Medicaid alone.
       (6) Contraception is basic health care that improves the 
     health of women and children by enabling women to plan and 
     space births.
       (7) Women experiencing unintended pregnancy are at greater 
     risk for physical abuse and women having closely spaced 
     births are at greater risk of maternal death.
       (8) The child born from an unintended pregnancy is at 
     greater risk of low birth weight, dying in the first year of 
     life, being abused, and not receiving sufficient resources 
     for healthy development.
       (9) The ability to control fertility also allows couples to 
     achieve economic stability by facilitating greater 
     educational achievement and participation in the workforce.
       (10) The average American woman desires two children and 
     spends five years of her life pregnant or trying to get 
     pregnant and

[[Page 425]]

     roughly 30 years trying to prevent pregnancy. Without 
     contraception, a sexually active woman has an 85 percent 
     chance of becoming pregnant within a year.
       (11) The percentage of sexually active women ages 15 
     through 44 who were not using contraception increased from 
     5.4 percent to 7.4 percent in 2002, an increase of 37 
     percent, according to the CDC. This represents an apparent 
     increase of 1,430,000 women and could raise the rate of 
     unintended pregnancy.
       (12) Many poor and low-income women cannot afford to 
     purchase contraceptive services and supplies on their own. 
     12,100,000 or 20 percent of all women ages 15 through 24 were 
     uninsured in 2002, and that proportion has increased by 10 
     percent since 1999.
       (13) Public health programs like Medicaid and title X (of 
     the Public Health Service Act), the national family planning 
     program, provide high-quality family planning services and 
     other preventive health care to underinsured or uninsured 
     individuals who may otherwise lack access to health care.
       (14) Medicaid is the single largest source of public 
     funding for family planning services and HIV/AIDS care in the 
     United States. Half of all public dollars spent on 
     contraceptive services and supplies in the United States are 
     provided through Medicaid and approximately 5,500,000 women 
     of reproductive age-nearly one in 10 women between the ages 
     of 15 and 44-rely on Medicaid for their basic health care 
     needs.
       (15) Each year, title X services enable Americans to 
     prevent approximately 1,000,000 unintended pregnancies, and 
     one in three women of reproductive age who obtains testing or 
     treatment for sexually transmitted diseases does so at a 
     title X-funded clinic. In 2003, title X-funded clinics 
     provided 2,800,000 Pap tests, 5,100,000 sexually transmitted 
     disease tests, and 526,000 HIV tests.
       (16) The increasing number of uninsured, stagnant funding, 
     health care inflation, new and expensive contraceptive 
     technologies, and improved but expensive screening and 
     treatment for cervical cancer and sexually transmitted 
     diseases, have diminished the ability of title X funded 
     clinics to adequately serve all those in need. Taking 
     inflation into account, funding for the title X program 
     declined by 58 percent between 1980 and 2003.
       (17) While Medicaid remains the largest source of 
     subsidized family planning services, States are facing 
     significant budgetary pressures to cut their Medicaid 
     programs, putting many women at risk of losing coverage for 
     family planning services.
       (18) In addition, eligibility for Medicaid in many States 
     is severely restricted leaving family planning services 
     financially out of reach for many poor women. Many States 
     have demonstrated tremendous success with Medicaid family 
     planning waivers that allow them to expand access to Medicaid 
     family planning services. However, the administrative burden 
     of applying for a waiver poses a significant barrier to 
     States that would like to expand their coverage of family 
     planning programs through Medicaid.
       (19) As of January of 2005, 21 States offered expanded 
     family planning benefits as a result of Medicaid family 
     planning waivers. The cost-effectiveness of these waivers was 
     affirmed by a recent evaluation funded by the Centers for 
     Medicare & Medicaid. This evaluation of six waivers found 
     that all such programs resulted in significant savings to 
     both the Federal and State governments. Moreover, the 
     researchers found measurable reductions in unintended 
     pregnancy.
       (20) Although employer-sponsored health plans have improved 
     coverage of contraceptive services and supplies, largely in 
     response to State contraceptive coverage laws, there is still 
     significant room for improvement. The ongoing lack of 
     coverage in health insurance plans, particularly in self-
     insured and individual plans, continues to place effective 
     forms of contraception beyond the financial reach of many 
     women.
       (21) Including contraceptive coverage in private health 
     care plans saves employers money. Not covering contraceptives 
     in employee health plans costs employers 15 to 17 percent 
     more than providing such coverage.
       (22) Approved for use by the Food and Drug Administration, 
     emergency contraception is a safe and effective way to 
     prevent unintended pregnancy after unprotected sex. It is 
     estimated that the use of emergency contraception could cut 
     the number of unintended pregnancies in half, thereby 
     reducing the need for abortion. New research confirms that 
     easier access to emergency contraceptives does not increase 
     sexual risk-taking or sexually transmitted diseases.
       (23) In 2000, 51,000 abortions were prevented by the use of 
     emergency contraception. Increased use of emergency 
     contraception accounted for up to 43 percent of the total 
     decline in abortions between 1994 and 2000.
       (24) A February 2004 CDC study of declining birth and 
     pregnancy rates among teens concluded that the reduction in 
     teen pregnancy between 1991 and 2001 suggests that increased 
     abstinence and increased use of contraceptives were equally 
     responsible for the decline. As such, it is critically 
     important that teens receive accurate, unbiased information 
     about contraception.
       (25) Thirteen percent of all teens give birth before age 
     20. 88 percent of births to teens age 17 or younger were 
     unintended. 24 percent of Hispanic females gave birth before 
     the age of 20. (CDC, December 2004).
       (26) The American Medical Association, the American Nurses 
     Association, the American Academy of Pediatrics, the American 
     College of Obstetricians and Gynecologists, the American 
     Public Health Association, and the Society for Adolescent 
     Medicine, support responsible sexuality education that 
     includes information about both abstinence and contraception.
       (27) Teens who receive sex education that includes 
     discussion of contraception are more likely than those who 
     receive abstinence-only messages to delay sex and to have 
     fewer partners and use contraceptives when they do become 
     sexually active.
       (28) Government-funded abstinence only programs are 
     precluded from discussing contraception except to talk about 
     failure rates. A December 2004 review of federally-funded 
     abstinence-only programs by the United States House of 
     Representatives Committee on Government Reform (Minority 
     Staff) found that many federally funded abstinence-only 
     program curricula distort public health data and misrepresent 
     the effectiveness of contraception. Information on the 
     effectiveness of condoms, in preventing pregnancy and 
     sexually transmitted diseases, including HIV, was often 
     highly inaccurate.

             TITLE I--TITLE X OF PUBLIC HEALTH SERVICE ACT

     SEC. 101. SHORT TITLE.

       This Act may be cited as the ``Title X Family Planning 
     Services Act of 2005''.

     SEC. 102. AUTHORIZATION OF APPROPRIATIONS.

       For the purpose of making grants and contracts under 
     section 1001 of the Public Health Service Act, there are 
     authorized to be appropriated $643,000,000 for fiscal year 
     2006, and such sums as may be necessary for each subsequent 
     fiscal year.

              TITLE II--FAMILY PLANNING STATE EMPOWERMENT

     SEC. 201. SHORT TITLE.

       This Act may be cited as the ``Family Planning State 
     Empowerment Act''.

     SEC. 202. STATE OPTION TO PROVIDE FAMILY PLANNING SERVICES 
                   AND SUPPLIES TO ADDITIONAL LOW-INCOME 
                   INDIVIDUALS.

       (a) In General.--Title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) is amended--
       (1) by redesignating section 1936 as section 1937; and
       (2) by inserting after section 1935 the following:


  ``state option to provide family planning services and supplies to 
                   additional low-income individuals

       ``Sec. 1936.
       ``(a) In General.--A State may elect (through a State plan 
     amendment) to make medical assistance described in section 
     1905(a)(4)(C) available to any individual not otherwise 
     eligible for such assistance--
       ``(1) whose family income does not exceed an income level 
     (specified by the State) that does not exceed the greatest 
     of--
       ``(A) 200 percent of the income official poverty line (as 
     defined by the Office of Management and Budget, and revised 
     annually in accordance with section 673(2) of the Community 
     Services Block Grant Act) applicable to a family of the size 
     involved;
       ``(B) in the case of a State that has in effect (as of the 
     date of the enactment of this section) a waiver under section 
     1115 to provide such medical assistance to individuals based 
     on their income level (expressed as a percent of the poverty 
     line), the eligibility income level as provided under such 
     waiver; or
       ``(C) the eligibility income level (expressed as a percent 
     of such poverty line) that has been specified under the plan 
     (including under section 1902(r)(2)), for eligibility of 
     pregnant women for medical assistance; and
       ``(2) at the option of the State, whose resources do not 
     exceed a resource level specified by the State, which level 
     is not more restrictive than the resource level applicable 
     under the waiver described in paragraph (1)(B) or to pregnant 
     women under paragraph (1)(C).
       ``(b) Flexibility.--A State may exercise the authority 
     under subsection (a) with respect to one or more classes of 
     individuals described in such subsection.''.
       (b) Conforming Amendment.--Section 1905(a) of such Act (42 
     U.S.C. 1396d(a)) is amended, in the matter before paragraph 
     (1)--
       (1) by striking ``and'' at the end of clause (xii);
       (2) by adding ``and'' at the end of clause (xiii); and
       (3) by inserting after clause (xiii) the following new 
     clause:
       ``(xiv) individuals described in section 1935, but only 
     with respect to items and services described in paragraph 
     (4)(C),''.
       (c) Effective Date.--The amendments made by this section 
     apply to medical assistance provided on and after October 1, 
     2005.

     SEC. 203. STATE OPTION TO EXTEND THE PERIOD OF ELIGIBILITY 
                   FOR PROVISION OF FAMILY PLANNING SERVICES AND 
                   SUPPLIES.

       (a) In General.--Section 1902(e) of the Social Security Act 
     (42 U.S.C. 1396a(e)) is amended by adding at the end the 
     following new paragraph:

[[Page 426]]

       ``(13) At the option of a State, the State plan may provide 
     that, in the case of an individual who was eligible for 
     medical assistance described in section 1905(a)(4)(C), but 
     who no longer qualifies for such assistance because of an 
     increase in income or resources or because of the expiration 
     of a post-partum period, the individual may remain eligible 
     for such assistance for such period as the State may specify, 
     but the period of extended eligibility under this paragraph 
     shall not exceed a continuous period of 24 months for any 
     individual. The State may apply the previous sentence to one 
     or more classes of individuals and may vary the period of 
     extended eligibility with respect to different classes of 
     individuals.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply to medical assistance provided on and after October 1, 
     2005.

 TITLE III--EQUITY IN PRESCRIPTION INSURANCE AND CONTRACEPTIVE COVERAGE

     SEC. 301. SHORT TITLE.

       This Act may be cited as the ``Equity in Prescription 
     Insurance and Contraceptive Coverage Act''.

     SEC. 302. AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY 
                   ACT OF 1974.

       (a) In General.--Subpart B of part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1185 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 714. STANDARDS RELATING TO BENEFITS FOR 
                   CONTRACEPTIVES.

       ``(a) Requirements for Coverage.--A group health plan, and 
     a health insurance issuer providing health insurance coverage 
     in connection with a group health plan, may not--
       ``(1) exclude or restrict benefits for prescription 
     contraceptive drugs or devices approved by the Food and Drug 
     Administration, or generic equivalents approved as 
     substitutable by the Food and Drug Administration, if such 
     plan or coverage provides benefits for other outpatient 
     prescription drugs or devices; or
       ``(2) exclude or restrict benefits for outpatient 
     contraceptive services if such plan or coverage provides 
     benefits for other outpatient services provided by a health 
     care professional (referred to in this section as `outpatient 
     health care services').
       ``(b) Prohibitions.--A group health plan, and a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan, may not--
       ``(1) deny to an individual eligibility, or continued 
     eligibility, to enroll or to renew coverage under the terms 
     of the plan because of the individual's or enrollee's use or 
     potential use of items or services that are covered in 
     accordance with the requirements of this section;
       ``(2) provide monetary payments or rebates to a covered 
     individual to encourage such individual to accept less than 
     the minimum protections available under this section;
       ``(3) penalize or otherwise reduce or limit the 
     reimbursement of a health care professional because such 
     professional prescribed contraceptive drugs or devices, or 
     provided contraceptive services, described in subsection (a), 
     in accordance with this section; or
       ``(4) provide incentives (monetary or otherwise) to a 
     health care professional to induce such professional to 
     withhold from a covered individual contraceptive drugs or 
     devices, or contraceptive services, described in subsection 
     (a).
       ``(c) Rules of Construction.--
       ``(1) In general.--Nothing in this section shall be 
     construed--
       ``(A) as preventing a group health plan and a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan from imposing 
     deductibles, coinsurance, or other cost-sharing or 
     limitations in relation to--
       ``(i) benefits for contraceptive drugs under the plan or 
     coverage, except that such a deductible, coinsurance, or 
     other cost-sharing or limitation for any such drug shall be 
     consistent with those imposed for other outpatient 
     prescription drugs otherwise covered under the plan or 
     coverage;
       ``(ii) benefits for contraceptive devices under the plan or 
     coverage, except that such a deductible, coinsurance, or 
     other cost-sharing or limitation for any such device shall be 
     consistent with those imposed for other outpatient 
     prescription devices otherwise covered under the plan or 
     coverage; and
       ``(iii) benefits for outpatient contraceptive services 
     under the plan or coverage, except that such a deductible, 
     coinsurance, or other cost-sharing or limitation for any such 
     service shall be consistent with those imposed for other 
     outpatient health care services otherwise covered under the 
     plan or coverage;
       ``(B) as requiring a group health plan and a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan to cover experimental or 
     investigational contraceptive drugs or devices, or 
     experimental or investigational contraceptive services, 
     described in subsection (a), except to the extent that the 
     plan or issuer provides coverage for other experimental or 
     investigational outpatient prescription drugs or devices, or 
     experimental or investigational outpatient health care 
     services; or
       ``(C) as modifying, diminishing, or limiting the rights or 
     protections of an individual under any other Federal law.
       ``(2) Limitations.--As used in paragraph (1), the term 
     `limitation' includes--
       ``(A) in the case of a contraceptive drug or device, 
     restricting the type of health care professionals that may 
     prescribe such drugs or devices, utilization review 
     provisions, and limits on the volume of prescription drugs or 
     devices that may be obtained on the basis of a single 
     consultation with a professional; or
       ``(B) in the case of an outpatient contraceptive service, 
     restricting the type of health care professionals that may 
     provide such services, utilization review provisions, 
     requirements relating to second opinions prior to the 
     coverage of such services, and requirements relating to 
     preauthorizations prior to the coverage of such services.
       ``(d) Notice Under Group Health Plan.--The imposition of 
     the requirements of this section shall be treated as a 
     material modification in the terms of the plan described in 
     section 102(a)(1), for purposes of assuring notice of such 
     requirements under the plan, except that the summary 
     description required to be provided under the last sentence 
     of section 104(b)(1) with respect to such modification shall 
     be provided by not later than 60 days after the first day of 
     the first plan year in which such requirements apply.
       ``(e) Preemption.--Nothing in this section shall be 
     construed to preempt any provision of State law to the extent 
     that such State law establishes, implements, or continues in 
     effect any standard or requirement that provides coverage or 
     protections for participants or beneficiaries that are 
     greater than the coverage or protections provided under this 
     section.
       ``(f) Definition.--In this section, the term `outpatient 
     contraceptive services' means consultations, examinations, 
     procedures, and medical services, provided on an outpatient 
     basis and related to the use of contraceptive methods 
     (including natural family planning) to prevent an unintended 
     pregnancy.''.
       (b) Clerical Amendment.--The table of contents in section 1 
     of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1001) is amended by inserting after the item relating 
     to section 713 the following:

``Sec. 714. Standards relating to benefits for contraceptives.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to plan years beginning on or after 
     January 1, 2006.

     SEC. 303. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT RELATING TO 
                   THE GROUP MARKET.

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

     ``SEC. 2707. STANDARDS RELATING TO BENEFITS FOR 
                   CONTRACEPTIVES.

       ``(a) Requirements for Coverage.--A group health plan, and 
     a health insurance issuer providing health insurance coverage 
     in connection with a group health plan, may not--
       ``(1) exclude or restrict benefits for prescription 
     contraceptive drugs or devices approved by the Food and Drug 
     Administration, or generic equivalents approved as 
     substitutable by the Food and Drug Administration, if such 
     plan or coverage provides benefits for other outpatient 
     prescription drugs or devices; or
       ``(2) exclude or restrict benefits for outpatient 
     contraceptive services if such plan or coverage provides 
     benefits for other outpatient services provided by a health 
     care professional (referred to in this section as `outpatient 
     health care services').
       ``(b) Prohibitions.--A group health plan, and a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan, may not--
       ``(1) deny to an individual eligibility, or continued 
     eligibility, to enroll or to renew coverage under the terms 
     of the plan because of the individual's or enrollee's use or 
     potential use of items or services that are covered in 
     accordance with the requirements of this section;
       ``(2) provide monetary payments or rebates to a covered 
     individual to encourage such individual to accept less than 
     the minimum protections available under this section;
       ``(3) penalize or otherwise reduce or limit the 
     reimbursement of a health care professional because such 
     professional prescribed contraceptive drugs or devices, or 
     provided contraceptive services, described in subsection (a), 
     in accordance with this section; or
       ``(4) provide incentives (monetary or otherwise) to a 
     health care professional to induce such professional to 
     withhold from covered individual contraceptive drugs or 
     devices, or contraceptive services, described in subsection 
     (a).
       ``(c) Rules of Construction.--
       ``(1) In general.--Nothing in this section shall be 
     construed--
       ``(A) as preventing a group health plan and a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan from imposing 
     deductibles, coinsurance, or other cost-sharing or 
     limitations in relation to--
       ``(i) benefits for contraceptive drugs under the plan or 
     coverage, except that such a deductible, coinsurance, or 
     other cost-sharing

[[Page 427]]

     or limitation for any such drug shall be consistent with 
     those imposed for other outpatient prescription drugs 
     otherwise covered under the plan or coverage;
       ``(ii) benefits for contraceptive devices under the plan or 
     coverage, except that such a deductible, coinsurance, or 
     other cost-sharing or limitation for any such device shall be 
     consistent with those imposed for other outpatient 
     prescription devices otherwise covered under the plan or 
     coverage; and
       ``(iii) benefits for outpatient contraceptive services 
     under the plan or coverage, except that such a deductible, 
     coinsurance, or other cost-sharing or limitation for any such 
     service shall be consistent with those imposed for other 
     outpatient health care services otherwise covered under the 
     plan or coverage;
       ``(B) as requiring a group health plan and a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan to cover experimental or 
     investigational contraceptive drugs or devices, or 
     experimental or investigational contraceptive services, 
     described in subsection (a), except to the extent that the 
     plan or issuer provides coverage for other experimental or 
     investigational outpatient prescription drugs or devices, or 
     experimental or investigational outpatient health care 
     services; or
       ``(C) as modifying, diminishing, or limiting the rights or 
     protections of an individual under any other Federal law.
       ``(2) Limitations.--As used in paragraph (1), the term 
     `limitation' includes--
       ``(A) in the case of a contraceptive drug or device, 
     restricting the type of health care professionals that may 
     prescribe such drugs or devices, utilization review 
     provisions, and limits on the volume of prescription drugs or 
     devices that may be obtained on the basis of a single 
     consultation with a professional; or
       ``(B) in the case of an outpatient contraceptive service, 
     restricting the type of health care professionals that may 
     provide such services, utilization review provisions, 
     requirements relating to second opinions prior to the 
     coverage of such services, and requirements relating to 
     preauthorizations prior to the coverage of such services.
       ``(d) Notice.--A group health plan under this part shall 
     comply with the notice requirement under section 714(d) of 
     the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements of this section as if such 
     section applied to such plan.
       ``(e) Preemption.--Nothing in this section shall be 
     construed to preempt any provision of State law to the extent 
     that such State law establishes, implements, or continues in 
     effect any standard or requirement that provides coverage or 
     protections for enrollees that are greater than the coverage 
     or protections provided under this section.
       ``(f) Definition.--In this section, the term `outpatient 
     contraceptive services' means consultations, examinations, 
     procedures, and medical services, provided on an outpatient 
     basis and related to the use of contraceptive methods 
     (including natural family planning) to prevent an unintended 
     pregnancy.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply with respect to group health plans for plan years 
     beginning on or after January 1, 2006.

     SEC. 304. AMENDMENT TO PUBLIC HEALTH SERVICE ACT RELATING TO 
                   THE INDIVIDUAL MARKET.

       (a) In General.--Part B of title XXVII of the Public Health 
     Service Act (42 U.S.C. 300gg-41 et seq.) is amended--
       (1) by redesignating the first subpart 3 (relating to other 
     requirements) as subpart 2; and
       (2) by adding at the end of subpart 2 the following:

     ``SEC. 2753. STANDARDS RELATING TO BENEFITS FOR 
                   CONTRACEPTIVES.

       ``The provisions of section 2707 shall apply to health 
     insurance coverage offered by a health insurance issuer in 
     the individual market in the same manner as they apply to 
     health insurance coverage offered by a health insurance 
     issuer in connection with a group health plan in the small or 
     large group market.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to health insurance coverage 
     offered, sold, issued, renewed, in effect, or operated in the 
     individual market on or after January 1, 2006.

      TITLE IV--EMERGENCY CONTRACEPTION EDUCATION AND INFORMATION

     SEC. 401. SHORT TITLE.

       This Act may be cited as the ``Emergency Contraception 
     Education Act''.

     SEC. 402. EMERGENCY CONTRACEPTION EDUCATION AND INFORMATION 
                   PROGRAMS.

       (a) Definitions.--For purposes of this section:
       (1) Emergency contraception.--The term ``emergency 
     contraception'' means a drug or device (as the terms are 
     defined in section 201 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 321)) or a drug regimen that is--
       (A) used after sexual relations;
       (B) prevents pregnancy, by preventing ovulation, 
     fertilization of an egg, or implantation of an egg in a 
     uterus; and
       (C) approved by the Food and Drug Administration.
       (2) Health care provider.--The term ``health care 
     provider'' means an individual who is licensed or certified 
     under State law to provide health care services and who is 
     operating within the scope of such license.
       (3) Institution of higher education.--The term 
     ``institution of higher education'' has the same meaning 
     given such term in section 1201(a) of the Higher Education 
     Act of 1965 (20 U.S.C. 1141(a)).
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (b) Emergency Contraception Public Education Program.--
       (1) In general.--The Secretary, acting through the Director 
     of the Centers for Disease Control and Prevention, shall 
     develop and disseminate to the public information on 
     emergency contraception.
       (2) Dissemination.--The Secretary may disseminate 
     information under paragraph (1) directly or through 
     arrangements with nonprofit organizations, consumer groups, 
     institutions of higher education, Federal, State, or local 
     agencies, clinics and the media.
       (3) Information.--The information disseminated under 
     paragraph (1) shall include, at a minimum, a description of 
     emergency contraception, and an explanation of the use, 
     safety, efficacy, and availability of such contraception.
       (c) Emergency Contraception Information Program for Health 
     Care Providers.--
       (1) In general.--The Secretary, acting through the 
     Administrator of the Health Resources and Services 
     Administration and in consultation with major medical and 
     public health organizations, shall develop and disseminate to 
     health care providers information on emergency contraception.
       (2) Information.--The information disseminated under 
     paragraph (1) shall include, at a minimum--
       (A) information describing the use, safety, efficacy and 
     availability of emergency contraception;
       (B) a recommendation regarding the use of such 
     contraception in appropriate cases; and
       (C) information explaining how to obtain copies of the 
     information developed under subsection (b), for distribution 
     to the patients of the providers.
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $10,000,000 for 
     each of the fiscal years 2006 through 2010.

         TITLE V--COMPASSIONATE ASSISTANCE FOR RAPE EMERGENCIES

     SEC. 501. SHORT TITLE.

       This Act may be cited as the ``Compassionate Assistance for 
     Rape Emergencies Act''.

     SEC. 502. SURVIVORS OF SEXUAL ASSAULT; PROVISION BY HOSPITALS 
                   OF EMERGENCY CONTRACEPTIVES WITHOUT CHARGE.

       (a) In General.--Federal funds may not be provided to a 
     hospital under any health-related program, unless the 
     hospital meets the conditions specified in subsection (b) in 
     the case of--
       (1) any woman who presents at the hospital and states that 
     she is a victim of sexual assault, or is accompanied by 
     someone who states she is a victim of sexual assault; and
       (2) any woman who presents at the hospital whom hospital 
     personnel have reason to believe is a victim of sexual 
     assault.
       (b) Assistance for Victims.--The conditions specified in 
     this subsection regarding a hospital and a woman described in 
     subsection (a) are as follows:
       (1) The hospital promptly provides the woman with medically 
     and factually accurate and unbiased written and oral 
     information about emergency contraception, including 
     information explaining that--
       (A) emergency contraception does not cause an abortion; and
       (B) emergency contraception is effective in most cases in 
     preventing pregnancy after unprotected sex.
       (2) The hospital promptly offers emergency contraception to 
     the woman, and promptly provides such contraception to her on 
     her request.
       (3) The information provided pursuant to paragraph (1) is 
     in clear and concise language, is readily comprehensible, and 
     meets such conditions regarding the provision of the 
     information in languages other than English as the Secretary 
     may establish.
       (4) The services described in paragraphs (1) through (3) 
     are not denied because of the inability of the woman or her 
     family to pay for the services.
       (c) Definitions.--For purposes of this section:
       (1) The term ``emergency contraception'' means a drug, drug 
     regimen, or device that is--
       (A) used postcoitally;
       (B) prevents pregnancy by delaying ovulation, preventing 
     fertilization of an egg, or preventing implantation of an egg 
     in a uterus; and
       (C) is approved by the Food and Drug Administration.
       (2) The term ``hospital'' has the meanings given such term 
     in title XVIII of the Social Security Act, including the 
     meaning applicable in such title for purposes of making 
     payments for emergency services to hospitals that do not have 
     agreements in effect under such title.
       (3) The term ``Secretary'' means the Secretary of Health 
     and Human Services.

[[Page 428]]

       (4) The term ``sexual assault'' means coitus in which the 
     woman involved does not consent or lacks the legal capacity 
     to consent.
       (d) Effective Date; Agency Criteria.--This section takes 
     effect upon the expiration of the 180-day period beginning on 
     the date of enactment of this Act. Not later than 30 days 
     prior to the expiration of such period, the Secretary shall 
     publish in the Federal Register criteria for carrying out 
     this section.

                 TITLE VI--TEENAGE PREGNANCY PREVENTION

     SEC. 601. SHORT TITLE.

       This title may be cited as the ``Preventing Teen Pregnancy 
     Act''.

     SEC. 602. TEENAGE PREGNANCY PREVENTION.

       Part P of title III of the Public Health Service Act (42 
     U.S.C. 280g et seq.) is amended by inserting after section 
     399N the following section:

     ``SEC. 399N-1. TEENAGE PREGNANCY PREVENTION GRANTS.

       ``(a) Authority.--The Secretary may award on a competitive 
     basis grants to public and private entities to establish or 
     expand teenage pregnancy prevention programs.
       ``(b) Grant Recipients.--Grant recipients under this 
     section may include State and local not-for-profit coalitions 
     working to prevent teenage pregnancy, State, local, and 
     tribal agencies, schools, entities that provide afterschool 
     programs, and community and faith-based groups.
       ``(c) Priority.--In selecting grant recipients under this 
     section, the Secretary shall give--
       ``(1) highest priority to applicants seeking assistance for 
     programs targeting communities or populations in which--
       ``(A) teenage pregnancy or birth rates are higher than the 
     corresponding State average; or
       ``(B) teenage pregnancy or birth rates are increasing; and
       ``(2) priority to applicants seeking assistance for 
     programs that--
       ``(A) will benefit underserved or at-risk populations such 
     as young males or immigrant youths; or
       ``(B) will take advantage of other available resources and 
     be coordinated with other programs that serve youth, such as 
     workforce development and after school programs.
       ``(d) Use of Funds.--Funds received by an entity as a grant 
     under this section shall be used for programs that--
       ``(1) replicate or substantially incorporate the elements 
     of one or more teenage pregnancy prevention programs that 
     have been proven (on the basis of rigorous scientific 
     research) to delay sexual intercourse or sexual activity, 
     increase condom or contraceptive use (without increasing 
     sexual activity), or reduce teenage pregnancy; and
       ``(2) incorporate one or more of the following strategies 
     for preventing teenage pregnancy: encouraging teenagers to 
     delay sexual activity; sex and HIV education; interventions 
     for sexually active teenagers; preventive health services; 
     youth development programs; service learning programs; and 
     outreach or media programs.
       ``(e) Complete Information.--Programs receiving funds under 
     this section that choose to provide information on HIV/AIDS 
     or contraception or both must provide information that is 
     complete and medically accurate.
       ``(f) Relation to Abstinence-Only Programs.--Funds under 
     this section are not intended for use by abstinence-only 
     education programs. Abstinence-only education programs that 
     receive Federal funds through the Maternal and Child Health 
     Block Grant, the Administration for Children and Families, 
     the Adolescent Family Life Program, and any other program 
     that uses the definition of `abstinence education' found in 
     section 510(b) of the Social Security Act are ineligible for 
     funding.
       ``(g) Applications.--Each entity seeking a grant under this 
     section shall submit an application to the Secretary at such 
     time and in such manner as the Secretary may require.
       ``(h) Matching Funds.--
       ``(1) In general.--The Secretary may not award a grant to 
     an applicant for a program under this section unless the 
     applicant demonstrates that it will pay, from funds derived 
     from non-Federal sources, at least 25 percent of the cost of 
     the program.
       ``(2) Applicant's share.--The applicant's share of the cost 
     of a program shall be provided in cash or in kind.
       ``(i) Supplementation of Funds.--An entity that receives 
     funds as a grant under this section shall use the funds to 
     supplement and not supplant funds that would otherwise be 
     available to the entity for teenage pregnancy prevention.
       ``(j) Evaluations.--
       ``(1) In general.--The Secretary shall--
       ``(A) conduct or provide for a rigorous evaluation of 10 
     percent of programs for which a grant is awarded under this 
     section;
       ``(B) collect basic data on each program for which a grant 
     is awarded under this section; and
       ``(C) upon completion of the evaluations referred to in 
     subparagraph (A), submit to the Congress a report that 
     includes a detailed statement on the effectiveness of grants 
     under this section.
       ``(2) Cooperation by grantees.--Each grant recipient under 
     this section shall provide such information and cooperation 
     as may be required for an evaluation under paragraph (1).
       ``(k) Definition.--For purposes of this section, the term 
     `rigorous scientific research' means based on a program 
     evaluation that:
       ``(1) Measured impact on sexual or contraceptive behavior, 
     pregnancy or childbearing.
       ``(2) Employed an experimental or quasi-experimental design 
     with well-constructed and appropriate comparison groups.
       ``(3) Had a sample size large enough (at least 100 in the 
     combined treatment and control group) and a follow-up 
     interval long enough (at least six months) to draw valid 
     conclusions about impact.
       ``(l) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $20,000,000 for fiscal year 2006, and such sums as may be 
     necessary for each subsequent fiscal year. In addition, there 
     are authorized to be appropriated for evaluations under 
     subsection (j) such sums as may be necessary for fiscal year 
     2006 and each subsequent fiscal year.''.

            TITLE VII--ACCURACY OF CONTRACEPTIVE INFORMATION

     SEC. 701. SHORT TITLE.

       This title may be cited as the ``Truth in Contraception 
     Act''.

     SEC. 702. ACCURACY OF CONTRACEPTIVE INFORMATION.

       Notwithstanding any other provision of law, any information 
     concerning the use of a contraceptive provided through any 
     federally funded sex education, family life education, 
     abstinence education, comprehensive health education, or 
     character education program shall be medically accurate and 
     shall include health benefits and failure rates relating to 
     the use of such contraceptive.
                                 ______
                                 
      By Mrs. HUTCHISON:
  S. 24. A bill to establish an emergency reserve fund to provide 
timely financial assistance in response to domestic disasters and 
emergencies; to the Committee on the Budget.
  Mrs. HUTCHISON. Mr. President, over the past decade, Congress has 
approved over $46 billion in disaster relief and emergency spending. 
This is an average of $4.6 billion a year. The majority of this 
funding--$34 billion--has been provided through supplemental bills, not 
subject to the normal appropriations process.
  Supporters of supplemental spending suggest it provides Congress 
flexibility to respond to emergencies and to priorities that did not 
receive the proper consideration during the budget cycle. While 
supplemental bills do offer flexibility, they are not always helpful 
for fiscal responsibility. Millions of dollars are put in emergency 
spending bills that should go through the regular budget process, 
adding more and more to the bottom line.
  America is at a critical time--we must be prepared to address 
domestic emergencies without increasing the deficit or being forced to 
fund non-emergency projects in order to release necessary funds. 
Supplemental spending circumvents budgetary enforcement mechanisms and 
can lead lawmakers to under-fund programs in the regular appropriations 
process, because they know they ultimately can get what is needed 
through a supplemental.
  Supplemental bills allocate funding for emergencies, and we have all 
witnessed, firsthand, how a natural disaster can impact a country 
severely. Merely because something is unforeseen does not mean we 
should not prepare. Congress needs to plan in a manner that is fiscally 
responsible and procedurally transparent.
  Today, I offer a bill to create an emergency fund under the office of 
the Secretary of the Treasury, in an interest bearing account, 
containing 1.2 percent of the annual non-defense domestic spending, or 
roughly $4.6 billion. This will be America's rainy day fund--a savings 
account ready for almost any potential unforeseen domestic emergencies.
  This account is not designed to eliminate the need for supplemental 
bills but rather lessen the need for them.
  Last year, in supplemental spending alone, Congress spent $2.5 
billion on disaster relief in America. Domestic discretionary 
supplemental bills enacted in response to natural disasters, such as 
hurricanes and earthquakes, rose steadily through the 1990s. Federal 
Emergency Management Agency, FEMA, was the second-largest recipient of 
supplemental spending during the 1990s. Supplemental appropriations for 
``non-natural'' disasters such as the Los Angeles riots in 1992 and the 
Oklahoma City bombing in 1995 as well as

[[Page 429]]

the September 11 terrorist attack have also demanded quick and 
efficient funding. History is teaching us a lesson; while we do not 
know what the emergencies will be, we can feel certain there will be 
something to which we will need to respond.
  Beyond the clear fiscal conservatism we need, I believe this rainy 
day fund would reduce the time it takes to respond to emergencies by 
giving Congress a more efficient, less political process. My bill would 
require the contingency fund to be expended before supplemental 
spending for domestic disasters can be pursued, with the exclusion of 
defense spending.
  As we seek to be more fiscally responsible, our next step forward 
should be this account, from which the funds we draw upon are planned 
for and set aside through the normal appropriations process. Our 
current system regularly underfunds FEMA and other agencies for 
emergencies, and this should end.
  As we prepare for the future, it is my goal that we save and prepare 
for the vital needs of our people should there be a domestic emergency. 
Recent events worldwide demand we be fiscally responsible and 
procedurally capable of this, our most important duty, the protection 
and safe-keeping of the American people.
                                 ______
                                 
      By Mr. CHAMBLISS:
  S. 25. A bill to promote freedom, fairness, and economic opportunity 
by repealing the income tax and other taxes, abolishing the Internal 
Revenue Service, and enacting a national sales tax to be administered 
primarily by the States; to the Committee on Finance.
  Mr. CHAMBLISS. Mr. President, I rise today to introduce the Fair Tax 
Act of 2005. This bill will promote freedom, fairness, and economic 
opportunity by repealing the Federal income tax and other taxes, 
abolishing the Internal Revenue Service, and enacting a national sales 
tax.
  The Fair Tax, which offers a national sales tax as the primary source 
of Federal revenue, is a necessary piece of tax reform that, should it 
pass, upon its inception would eliminate our current archaic and 
inefficient Tax Code and replace it with a simpler, fairer means of 
collecting revenue.
  Our antiquated Tax Code was implemented in 1913 and has since been 
modified numerous times. The Federal Tax Code in its present form is 
overly complicated and desperately in need of an overhaul. We are well 
beyond rectifying the unfairness in our current system by tinkering 
around the edges. All Americans are in dire need of unbiased, sweeping 
tax reform--and the Fair Tax provides just that.
  The Fair Tax Act of 2005 would repeal the individual income tax, the 
corporate income tax, capital gains taxes, all payroll taxes, the self-
employment tax and the estate and gift taxes in lieu of a 23 percent 
tax on the final sale of all goods and services. Elimination of these 
inefficient taxing mechanisms will not only bring about equality within 
in our tax system, it will also bring about simplicity.
  This bill will also provide for tax relief for business-to-business 
transactions. These transactions, including used-product transactions 
which have already been taxed, are not subject to the sales tax, 
thereby abrogating any double taxation.
  Social Security and Medicare benefits would remain untouched under 
the Fair Tax bill. There would be no financial reductions to either one 
of these vital programs. Instead, the source of the trust-fund revenue 
for these two programs would be replaced simply by sales-tax revenue 
instead of payroll-tax revenue.
  Lastly, under the Fair Tax Act, every American would receive a 
monthly rebate check equal to spending up to the Federal poverty level 
according to the Department of Health and Human Services guidelines. 
This rebate would ensure that no American pays taxes on the purchase of 
necessities.
  The Fair Tax creates a fairer, simpler code that allows every 
American the freedom to determine his or her own priorities and 
opportunities. Ronald Reagan once said, ``I believe we really can, 
however, say that God did give mankind virtually unlimited gifts to 
invent, produce and create. And for that reason alone, it would be 
wrong for governments to devise a tax structure or economic system that 
suppresses and denies those gifts.'' I couldn't agree more.
  And as long as we continue to operate under our current skewed Tax 
Code, we will continue to suppress and deny these unlimited gifts to 
the American people, who would otherwise thrive boundlessly under the 
Fair Tax.
                                 ______
                                 
      By Mrs. HUTCHISON (for herself, Mr. Frist, Ms. Cantwell, Mr. 
        Ensign, Mr. Alexander, and Mr. Cornyn):
  S. 27. A bill to amend the Internal Revenue Code of 1986 to make 
permanent the deduction of State and local general sales taxes; to the 
Committee on Finance.
  Mrs. HUTCHISON. Mr. President, I am pleased to introduce a bill to 
permanently correct an injustice in the tax code that has harmed 
citizens in many States of this great Nation.
  State and local governments have various alternatives for raising 
revenue. Some levy income taxes, some use sales taxes, and others use a 
combination of the two. The citizens who pay State and local income 
taxes have been able to offset some of what they pay by receiving a 
deduction on their federal taxes. Before 1986, taxpayers also had the 
ability to deduct their sales taxes.
  The philosophy behind these deductions is simple: people should not 
have to pay taxes on their taxes. The money that people must give to 
one level of government should not also be taxed by another level of 
government.
  Unfortunately, citizens of some States were treated differently after 
1986 when the deduction for State and local sales taxes was eliminated. 
This discriminated against those living in States, such as my home 
State of Texas, with no income taxes. It is important to remember the 
lack of an income tax does not mean citizens in these States do not pay 
State taxes; revenues are simply collected differently.
  It is unfair to give citizens from some States a deduction for the 
revenue they provide their State and local governments, while not doing 
the same for citizens from other States. Federal tax law should not 
treat people differently on the basis of State residence and differing 
tax collection methods, and it should not provide an incentive for 
States to establish income taxes over sales taxes.
  This discrepancy had a significant impact on Texas. According to the 
Texas Comptroller, the ability of taxpayers to deduct their sales taxes 
will lead to an additional $974 million staying in the hands of Texans 
each year, the creation of more than 21,800 new jobs, and the addition 
of $1.2 billion in State economic activity.
  Last year, we took an important step by reinstating a sales tax 
deduction. As a result, everyone now has the opportunity to deduct 
either their State and local income taxes or sales taxes. For the 55 
million of us in the 7 States with a sales tax but no income tax, this 
means the tax code no longer discriminates against us. Unfortunately, 
the new deduction is only in effect for 2004 and 2005. We must act to 
prevent the inequity from returning.
  The legislation I am offering today will fix this problem for good by 
making the State and local sales tax deduction permanent. This will 
permanently end the discrimination suffered by my fellow Texans and 
citizens of other States who do not have the option of an income tax 
deduction.
  This legislation is about reestablishing equity to the tax code and 
defending the important principle of eliminating taxes on taxes. I hope 
my fellow Senators will support this effort.
  I ask unanimous consent that the test of the bill be printed in the 
Record. 
  Ms. CANTWELL. Mr. President, today I am joining my good friend the 
Senator from Texas, (Mrs. Hutchison), and the Senator from Tennessee, 
the Majority Leader, Mr. Frist, in legislation to permanently extend 
the State sales tax deduction. This bill aims to make permanent 
legislation that the Congress passed and the President

[[Page 430]]

signed into law last year on October 22, 2004 as a provision of the 
JOBS Act. It is a change to the tax code that I have worked to see 
enacted since coming to the U.S. Senate, and one I want to maintain.
  The JOBS Act reinstituted, for a period of 2 years, the ability of 
taxpayers to deduct State and local sales taxes just as they would 
State and local income taxes. Residents of States such as Washington 
that do not have income taxes, but have State sales taxes, had not been 
able to do this since the 1986.
  Make no mistake about it: permanently extending the sales tax 
deduction is a tax cut for Washington State taxpayers. Such a cut will 
strengthen our economy and fundamentally restore basic tax fairness.
  When the Federal income tax was first imposed in 1913, Congress 
allowed taxpayers to deduct State and local sales so they would not be 
taxed on once at the State level and then, again, at the Federal level 
in the same calendar year.
  In 1986, after 74 years of precedent, this tax equity abruptly ended. 
Taxpayers from States without income taxes were given a raw deal when 
Congress made a budgetary squeeze play and ended the tax deduction for 
State sales taxes.
  For States like Washington, where sales tax revenues are nearly 60 
percent of the State budget, the impact is immense. The loss to 
Washington State taxpayers in 2004 alone, is estimated to be $500 
million.
  Washington taxpayers waited 18 years to for the Federal government to 
correct the unique burden on them that amounts to requiring them to pay 
taxes twice on the same money. Now that the burden has been lifted for 
2 years, with thanks to this body and the President, Washington 
taxpayers are now looking for--and must have--permanence in the tax 
code with regard to their ability to deduct State and local sales taxes 
from their Federal income tax.
  As I mentioned, this issue has been a primary one for me on behalf of 
the people I serve. In fact, when I became a member of this body in the 
107th Congress, one of my first legislative acts was to cosponsor sales 
tax deduction legislation that at the time was introduced by the former 
Senator from Tennessee, Mr. Thompson. In the 108th Congress, Senator 
Hutchison and I carried the banner as the lead sponsors of similar 
legislation, the core of which we saw enacted into law for a 2-year 
period.
  I am here once again in the 109th Congress with the Senator from 
Texas, Mrs. Hutchison, on the heels of a victory for a two-year 
reprieve for our constituents, looking, now, for permanent equity in 
the tax code. I look forward to continuing to work with Senator 
Hutchison, as well as Senator Frist and others, in moving this sales 
tax deduction legislation forward in the coming months.
  Only by making the two-year law permanent will we be able to see to 
it that taxpayers from Washington State, or any other State, are not 
unfairly singled out to pay higher taxes.
  I urge prompt action on this measure.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself and Mr. Leahy):
  S. 29. A bill to amend title 18, United States Code, to limit the 
misuse of social security numbers, to establish criminal penalties for 
such misuse, and for other purposes; to the Committee on the Judiciary.
  Mrs. FEINSTEN. Mr. President, I rise on behalf of myself and Senator 
Leahy to again introduce legislation to protect one of Americans' most 
valuable but vulnerable assets: Social Security numbers. This is the 
second Congress in a row that I have introduced this legislation, to 
restrict the sale and display of Social Security numbers.
  We have just begun the New Year, and unfortunately we can say with 
certainty that it will be another year in which millions of Americans 
will be victimized by identity theft, a crime so often linked to 
unprotected Social Security numbers. It is my hope that Congress will 
finally approve this legislation this year. For the benefit of all 
Californians and of all Americans, the Senate needs to take this step, 
to stop those who would do us harm by taking our very identities.
  The goal of this bill is straightforward--to get Social Security 
numbers out of the public domain, so that identity thieves can't get 
them. Toward this goal, this bill will do the following:
  The heart of this bill prohibits anyone from selling or displaying an 
individual's Social Security number to the general public without the 
individual's express consent.
  But in recognition that sometimes there are legitimate needs for 
Social Security numbers, the bill also makes exceptions. Perhaps the 
most important exception allows the sale of Social Security numbers 
between businesses, or between the government and businesses. The bill 
also makes exceptions for law enforcement, national security, 
compliance with other laws, and a few other areas.
  Additionally, this bill prohibits government entities from displaying 
Social Security numbers on public records that are posted on the 
Internet or in other electronic media after the legislation's effective 
date. It also prohibits governments from printing Social Security 
numbers on government checks.
  This bill also punishes people who fraudulently use Social Security 
numbers to obtain benefits that they do not deserve.
  Finally, this law has teeth to enforce its provisions. It gives the 
Attorney General the authority to issue civil penalties of up to $5,000 
for people who misuse Social Security numbers. It also creates a 
criminal penalty, of up to five years in prison, for anyone who obtains 
another person's Social Security number for the purpose of locating or 
identifying that individual with the intent to physically harm that 
person. And it lets the victims of identity theft sue in court to 
recover their loss from the person who causes it.
  Mr. President, the need for this bill should be clear. Theft of a 
Social Security number can be especially devastating, because that 
piece of information has become a de facto universal identifier in 
American society.
  Despite the widespread use of Social Security numbers, the General 
Accounting Office reported recently that ``No single federal law 
regulates the overall use or restricts the disclosure of SSNs by 
governments.'' (Source: Social Security numbers: SSNs are Widely Used 
by Government and Could be Better Protected, 2002 (Report Number GAO-
02-691T) at page 5). As a result, the use of Social Security numbers is 
regulated by an inconsistent and insufficient patchwork of state and 
federal laws, that often leaves the numbers in plain view of the whole 
world.
  One recent book on privacy in the United States documents how far the 
use of Social Security numbers has spread beyond its original purpose, 
when they were created in 1936, of tracking American workers' earnings 
and benefits. According to the book: ``The SSN began to be used for 
military personnel, legally admitted aliens, anyone receiving or 
applying for federal benefits, food stamps, school lunch program 
eligibility, draft registration, and federal loans. State and local 
governments, as well as private sector entities such as schools and 
banks, began to use SSNs as well--for drivers' licenses, birth 
certificates, blood donation, jury selection, worker's compensation, 
occupational licenses, and marriage licenses.'' (Source: Daniel Solove 
and Marc Rotenberg, Information Privacy Law, Aspen Publishers, 2003, at 
page 447-48.)
  It isn't surprising, then, that the sale of Social Security numbers 
is proceeding at a furious pace. According to the GAO in a report that 
it released earlier this year, ``Internet-based information resellers 
whose Web sites we accessed also obtain SSNs from their customers and 
scour public records and other publicly available information to 
provide the information to persons willing to pay a fee.'' (Source: 
Social Security numbers: Private Sector Entities Routinely Obtain and 
Use SSNs, and Laws Limit the Disclosure of this Information (2004, 
Report Number GAO-04-11, on Highlights Page).

[[Page 431]]

  Governments also play a role in the widespread availability of Social 
Security numbers to the general public. According to another GAO 
report, issued just the other month in November 2004, ``State agencies 
in 41 States and the District of Columbia reported visible SSNs in at 
least one type of record.'' (Source: Government Could Do More to Reduce 
Display in Public Records and on Identity Cards, (November 2004, Report 
Number GAO-05-59, on Highlights Page). This affects about 94 percent of 
the country's population. The report continues that ``15 to 28 percent 
of the nation's 3,141 counties do place [Social Security numbers] on 
the Internet and this could affect millions of people.''
  If anyone who has doubts about the important role that this 
legislation will in protecting the identity of Americans, let me offer 
a few facts.
  For the past four years, the Federal Trade Commission has ranked 
identity theft as its top consumer complaint. When the new numbers for 
2004 come out in early February, I will not be surprised if identity 
theft again ranks as the most common complaint.
  The most comprehensive survey of identity-theft victimization, a 
Federal Trade Commission report released in 2003, found that nearly 10 
million Americans had been victimized by identity theft in the previous 
year. The California Office of Privacy Protection estimates that 1.1 
million of those victims were Californians.
  A separate FTC report found California to have the third-highest rate 
of identity theft per capita in 2003, with the number of victims 
increasing by more than 28 percent from 2002.
  For anyone still unconvinced about the need for this law, let me 
offer a few specific examples of identity theft.
  In November, 2004, in my home state of California, a married couple--
Antonio and Rose Espino--pled guilty after stealing the identities of 
over 1,000 victims, and also stealing more than $8.8 million in 
fraudulent unemployment insurance. They obtained employer payroll lists 
that included names and Social Security numbers. (Source: ``San Joaquin 
couple plead guilty in identity-theft case,'' Fresno Bee, November 23, 
2004).
  In another case, Christopher Jones, a twenty-five-year-old employee 
at the University of North Carolina-Pembroke, stole approximately 3,000 
Social Security numbers through his job, handing out towels and other 
equipment at the university gym, and then tried to sell them in blocks 
of 1,000 on eBay. He stated in his advertisement: ``100 (one hundred 
Social Security # Numbers Obtain False Credit Cards Idenity Theft I 
Don't Care Bid Starts at a Dollar a Piece USPS Money Orders only all 
Different.''
  Similar behavior--using the Web to gather Social Secuirty numbers--
still continues. As The Washington Post reported last February, by 
using the common search engine Google on the Web, ``Search strings . . 
. often bring up spread sheets, credit card numbers, and Social 
Security numbers linked to a customer list.'' (Source: ``Online Search 
Engines Help Lift Cover of Privacy,'' The Washington Post, February 9, 
2004, at A1).
  I personally first became aware of the need for a law to restrict the 
sale and display of Social Security numbers about eight years ago, when 
one of my staff members sat me down and downloaded my own Social 
Security Number from the Internet in a matter of minutes.
  Unfortunately, Congress has done little to protect Social Security 
numbers since then. We still badly need a uniform law. Year after year, 
I have advocated and proposed such legislation that would restrict the 
public display and use of Social Security numbers:
  In the 106th Congress, I introduced S. 2966.
  In the 107th Congress, I introduced, S. 848 and S. 3100.
  In the 108th Congress, I introduced S. 228, S. 745, and S. 2801.
  None of these bills moved. Today, I stand before you yet again, to 
introduce for a seventh time a bill to take steps that will make it 
more difficult for thieves to steal this precious resource. This issue 
does not concern Republican government or Democratic government; this 
is an issue of good government.
  Last year, the President signed into law a bill that I helped to 
author, to increase penalties for those who steal the identities of 
others. But punishment is not enough. We need to stop identity theft 
from occurring in the first place. This information should have been 
under lock and key long ago. It is time for us to act. Thank you Mr. 
President.
  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. 29

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Social 
     Security Number Misuse Prevention Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents
Sec. 2. Findings
Sec. 3. Prohibition of the display, sale, or purchase of social 
              security numbers
Sec. 4. Application of prohibition of the display, sale, or purchase of 
              social security numbers to public records
Sec. 5. Rulemaking authority of the Attorney General
Sec. 6. Treatment of social security numbers on government documents
Sec. 7. Limits on personal disclosure of a social security number for 
              consumer transactions
Sec. 8. Extension of civil monetary penalties for misuse of a social 
              security number
Sec. 9. Criminal penalties for the misuse of a social security number
Sec. 10. Civil actions and civil penalties
Sec. 11. Federal injunctive authority

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The inappropriate display, sale, or purchase of social 
     security numbers has contributed to a growing range of 
     illegal activities, including fraud, identity theft, and, in 
     some cases, stalking and other violent crimes.
       (2) While financial institutions, health care providers, 
     and other entities have often used social security numbers to 
     confirm the identity of an individual, the general display to 
     the public, sale, or purchase of these numbers has been used 
     to commit crimes, and also can result in serious invasions of 
     individual privacy.
       (3) The Federal Government requires virtually every 
     individual in the United States to obtain and maintain a 
     social security number in order to pay taxes, to qualify for 
     social security benefits, or to seek employment. An 
     unintended consequence of these requirements is that social 
     security numbers have become one of the tools that can be 
     used to facilitate crime, fraud, and invasions of the privacy 
     of the individuals to whom the numbers are assigned. Because 
     the Federal Government created and maintains this system, and 
     because the Federal Government does not permit individuals to 
     exempt themselves from those requirements, it is appropriate 
     for the Federal Government to take steps to stem the abuse of 
     social security numbers.
       (4) The display, sale, or purchase of social security 
     numbers in no way facilitates uninhibited, robust, and wide-
     open public debate, and restrictions on such display, sale, 
     or purchase would not affect public debate.
       (5) No one should seek to profit from the display, sale, or 
     purchase of social security numbers in circumstances that 
     create a substantial risk of physical, emotional, or 
     financial harm to the individuals to whom those numbers are 
     assigned.
       (6) Consequently, this Act provides each individual that 
     has been assigned a social security number some degree of 
     protection from the display, sale, and purchase of that 
     number in any circumstance that might facilitate unlawful 
     conduct.

     SEC. 3. PROHIBITION OF THE DISPLAY, SALE, OR PURCHASE OF 
                   SOCIAL SECURITY NUMBERS.

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

     ``Sec. 1028A. Prohibition of the display, sale, or purchase 
       of social security numbers

       ``(a) Definitions.--In this section:
       ``(1) Display.--The term `display' means to intentionally 
     communicate or otherwise make available (on the Internet or 
     in any other manner) to the general public an individual's 
     social security number.
       ``(2) Person.--The term `person' means any individual, 
     partnership, corporation, trust, estate, cooperative, 
     association, or any other entity.
       ``(3) Purchase.--The term `purchase' means providing 
     directly or indirectly, anything of value in exchange for a 
     social security number.

[[Page 432]]

       ``(4) Sale.--The term `sale' means obtaining, directly or 
     indirectly, anything of value in exchange for a social 
     security number.
       ``(5) State.--The term `State' means any State of the 
     United States, the District of Columbia, Puerto Rico, the 
     Northern Mariana Islands, the United States Virgin Islands, 
     Guam, American Samoa, and any territory or possession of the 
     United States.
       ``(b) Limitation on Display.--Except as provided in section 
     1028B, no person may display any individual's social security 
     number to the general public without the affirmatively 
     expressed consent of the individual.
       ``(c) Limitation on Sale or Purchase.--Except as otherwise 
     provided in this section, no person may sell or purchase any 
     individual's social security number without the affirmatively 
     expressed consent of the individual.
       ``(d) Prerequisites for Consent.--In order for consent to 
     exist under subsection (b) or (c), the person displaying or 
     seeking to display, selling or attempting to sell, or 
     purchasing or attempting to purchase, an individual's social 
     security number shall--
       ``(1) inform the individual of the general purpose for 
     which the number will be used, the types of persons to whom 
     the number may be available, and the scope of transactions 
     permitted by the consent; and
       ``(2) obtain the affirmatively expressed consent 
     (electronically or in writing) of the individual.
       ``(e) Exceptions.--Nothing in this section shall be 
     construed to prohibit or limit the display, sale, or purchase 
     of a social security number--
       ``(1) required, authorized, or excepted under any Federal 
     law;
       ``(2) for a public health purpose, including the protection 
     of the health or safety of an individual in an emergency 
     situation;
       ``(3) for a national security purpose;
       ``(4) for a law enforcement purpose, including the 
     investigation of fraud and the enforcement of a child support 
     obligation;
       ``(5) if the display, sale, or purchase of the number is 
     for a use occurring as a result of an interaction between 
     businesses, governments, or business and government 
     (regardless of which entity initiates the interaction), 
     including, but not limited to--
       ``(A) the prevention of fraud (including fraud in 
     protecting an employee's right to employment benefits);
       ``(B) the facilitation of credit checks or the facilitation 
     of background checks of employees, prospective employees, or 
     volunteers;
       ``(C) the retrieval of other information from other 
     businesses, commercial enterprises, government entities, or 
     private nonprofit organizations; or
       ``(D) when the transmission of the number is incidental to, 
     and in the course of, the sale, lease, franchising, or merger 
     of all, or a portion of, a business;
       ``(6) if the transfer of such a number is part of a data 
     matching program involving a Federal, State, or local agency; 
     or
       ``(7) if such number is required to be submitted as part of 
     the process for applying for any type of Federal, State, or 
     local government benefit or program;

     except that, nothing in this subsection shall be construed as 
     permitting a professional or commercial user to display or 
     sell a social security number to the general public.
       ``(f) Limitation.--Nothing in this section shall prohibit 
     or limit the display, sale, or purchase of social security 
     numbers as permitted under title V of the Gramm-Leach-Bliley 
     Act, or for the purpose of affiliate sharing as permitted 
     under the Fair Credit Reporting Act, except that no entity 
     regulated under such Acts may make social security numbers 
     available to the general public, as may be determined by the 
     appropriate regulators under such Acts. For purposes of this 
     subsection, the general public shall not include affiliates 
     or unaffiliated third-party business entities as may be 
     defined by the appropriate regulators.''.
       (2) Conforming amendment.--The chapter analysis for chapter 
     47 of title 18, United States Code, is amended by inserting 
     after the item relating to section 1028 the following:

``1028A. Prohibition of the display, sale, or purchase of social 
              security numbers''.

       (b) Study; Report.--
       (1) In general.--The Attorney General shall conduct a study 
     and prepare a report on all of the uses of social security 
     numbers permitted, required, authorized, or excepted under 
     any Federal law. The report shall include a detailed 
     description of the uses allowed as of the date of enactment 
     of this Act, the impact of such uses on privacy and data 
     security, and shall evaluate whether such uses should be 
     continued or discontinued by appropriate legislative action.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Attorney General shall report to 
     Congress findings under this subsection. The report shall 
     include such recommendations for legislation based on 
     criteria the Attorney General determines to be appropriate.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date that is 30 days after the date 
     on which the final regulations promulgated under section 5 
     are published in the Federal Register.

     SEC. 4. APPLICATION OF PROHIBITION OF THE DISPLAY, SALE, OR 
                   PURCHASE OF SOCIAL SECURITY NUMBERS TO PUBLIC 
                   RECORDS.

       (a) Public Records Exception.--
       (1) In general.--Chapter 47 of title 18, United States Code 
     (as amended by section 3(a)(1)), is amended by inserting 
     after section 1028A the following:

     ``Sec. 1028B. Display, sale, or purchase of public records 
       containing social security numbers

       ``(a) Definition.--In this section, the term `public 
     record' means any governmental record that is made available 
     to the general public.
       ``(b) In General.--Except as provided in subsections (c), 
     (d), and (e), section 1028A shall not apply to a public 
     record.
       ``(c) Public Records on the Internet or in an Electronic 
     Medium.--
       ``(1) In general.--Section 1028A shall apply to any public 
     record first posted onto the Internet or provided in an 
     electronic medium by, or on behalf of a government entity 
     after the date of enactment of this section, except as 
     limited by the Attorney General in accordance with paragraph 
     (2).
       ``(2) Exception for government entities already placing 
     public records on the internet or in electronic form.--Not 
     later than 60 days after the date of enactment of this 
     section, the Attorney General shall issue regulations 
     regarding the applicability of section 1028A to any record of 
     a category of public records first posted onto the Internet 
     or provided in an electronic medium by, or on behalf of a 
     government entity prior to the date of enactment of this 
     section. The regulations will determine which individual 
     records within categories of records of these government 
     entities, if any, may continue to be posted on the Internet 
     or in electronic form after the effective date of this 
     section. In promulgating these regulations, the Attorney 
     General may include in the regulations a set of procedures 
     for implementing the regulations and shall consider the 
     following:
       ``(A) The cost and availability of technology available to 
     a governmental entity to redact social security numbers from 
     public records first provided in electronic form after the 
     effective date of this section.
       ``(B) The cost or burden to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments of complying with 
     section 1028A with respect to such records.
       ``(C) The benefit to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments if the Attorney General 
     were to determine that section 1028A should apply to such 
     records.

     Nothing in the regulation shall permit a public entity to 
     post a category of public records on the Internet or in 
     electronic form after the effective date of this section if 
     such category had not been placed on the Internet or in 
     electronic form prior to such effective date.
       ``(d) Harvested Social Security Numbers.--Section 1028A 
     shall apply to any public record of a government entity which 
     contains social security numbers extracted from other public 
     records for the purpose of displaying or selling such numbers 
     to the general public.
       ``(e) Attorney General Rulemaking on Paper Records.--
       ``(1) In general.--Not later than 60 days after the date of 
     enactment of this section, the Attorney General shall 
     determine the feasibility and advisability of applying 
     section 1028A to the records listed in paragraph (2) when 
     they appear on paper or on another nonelectronic medium. If 
     the Attorney General deems it appropriate, the Attorney 
     General may issue regulations applying section 1028A to such 
     records.
       ``(2) List of paper and other nonelectronic records.--The 
     records listed in this paragraph are as follows:
       ``(A) Professional or occupational licenses.
       ``(B) Marriage licenses.
       ``(C) Birth certificates.
       ``(D) Death certificates.
       ``(E) Other short public documents that display a social 
     security number in a routine and consistent manner on the 
     face of the document.
       ``(3) Criteria for attorney general review.--In determining 
     whether section 1028A should apply to the records listed in 
     paragraph (2), the Attorney General shall consider the 
     following:
       ``(A) The cost or burden to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments of complying with 
     section 1028A.
       ``(B) The benefit to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments if the Attorney General 
     were to determine that section 1028A should apply to such 
     records.''.
       (2) Conforming amendment.--The chapter analysis for chapter 
     47 of title 18, United States Code (as amended by section 
     3(a)(2)), is amended by inserting after the item relating to 
     section 1028A the following:

``1028B. Display, sale, or purchase of public records containing social 
              security numbers''.

       (b) Study and Report on Social Security Numbers in Public 
     Records.--

[[Page 433]]

       (1) Study.--The Comptroller General of the United States 
     shall conduct a study and prepare a report on social security 
     numbers in public records. In developing the report, the 
     Comptroller General shall consult with the Administrative 
     Office of the United States Courts, State and local 
     governments that store, maintain, or disseminate public 
     records, and other stakeholders, including members of the 
     private sector who routinely use public records that contain 
     social security numbers.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Comptroller General of the United 
     States shall submit to Congress a report on the study 
     conducted under paragraph (1). The report shall include a 
     detailed description of the activities and results of the 
     study and recommendations for such legislative action as the 
     Comptroller General considers appropriate. The report, at a 
     minimum, shall include--
       (A) a review of the uses of social security numbers in non-
     federal public records;
       (B) a review of the manner in which public records are 
     stored (with separate reviews for both paper records and 
     electronic records);
       (C) a review of the advantages or utility of public records 
     that contain social security numbers, including the utility 
     for law enforcement, and for the promotion of homeland 
     security;
       (D) a review of the disadvantages or drawbacks of public 
     records that contain social security numbers, including 
     criminal activity, compromised personal privacy, or threats 
     to homeland security;
       (E) the costs and benefits for State and local governments 
     of removing social security numbers from public records, 
     including a review of current technologies and procedures for 
     removing social security numbers from public records; and
       (F) an assessment of the benefits and costs to businesses, 
     their customers, and the general public of prohibiting the 
     display of social security numbers on public records (with 
     separate assessments for both paper records and electronic 
     records).
       (c) Effective Date.--The prohibition with respect to 
     electronic versions of new classes of public records under 
     section 1028B(b) of title 18, United States Code (as added by 
     subsection (a)(1)) shall not take effect until the date that 
     is 60 days after the date of enactment of this Act.

     SEC. 5. RULEMAKING AUTHORITY OF THE ATTORNEY GENERAL.

       (a) In General.--Except as provided in subsection (b), the 
     Attorney General may prescribe such rules and regulations as 
     the Attorney General deems necessary to carry out the 
     provisions of section 1028A(e)(5) of title 18, United States 
     Code (as added by section 3(a)(1)).
       (b) Display, Sale, or Purchase Rulemaking With Respect to 
     Interactions Between Businesses, Governments, or Business and 
     Government.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Attorney General, in consultation 
     with the Commissioner of Social Security, the Chairman of the 
     Federal Trade Commission, and such other heads of Federal 
     agencies as the Attorney General determines appropriate, 
     shall conduct such rulemaking procedures in accordance with 
     subchapter II of chapter 5 of title 5, United States Code, as 
     are necessary to promulgate regulations to implement and 
     clarify the uses occurring as a result of an interaction 
     between businesses, governments, or business and government 
     (regardless of which entity initiates the interaction) 
     permitted under section 1028A(e)(5) of title 18, United 
     States Code (as added by section 3(a)(1)).
       (2) Factors to be considered.--In promulgating the 
     regulations required under paragraph (1), the Attorney 
     General shall, at a minimum, consider the following:
       (A) The benefit to a particular business, to customers of 
     the business, and to the general public of the display, sale, 
     or purchase of an individual's social security number.
       (B) The costs that businesses, customers of businesses, and 
     the general public may incur as a result of prohibitions on 
     the display, sale, or purchase of social security numbers.
       (C) The risk that a particular business practice will 
     promote the use of a social security number to commit fraud, 
     deception, or crime.
       (D) The presence of adequate safeguards, procedures, and 
     technologies to prevent--
       (i) misuse of social security numbers by employees within a 
     business; and
       (ii) misappropriation of social security numbers by the 
     general public, while permitting internal business uses of 
     such numbers.
       (E) The presence of procedures to prevent identity thieves, 
     stalkers, and other individuals with ill intent from posing 
     as legitimate businesses to obtain social security numbers.
       (F) The impact of such uses on privacy.

     SEC. 6. TREATMENT OF SOCIAL SECURITY NUMBERS ON GOVERNMENT 
                   DOCUMENTS.

       (a) Prohibition of Use of Social Security Account Numbers 
     on Checks Issued for Payment by Governmental Agencies.--
       (1) In general.--Section 205(c)(2)(C) of the Social 
     Security Act (42 U.S.C. 405(c)(2)(C)) is amended by adding at 
     the end the following:
       ``(x) No Federal, State, or local agency may display the 
     social security account number of any individual, or any 
     derivative of such number, on any check issued for any 
     payment by the Federal, State, or local agency.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply with respect to violations of section 
     205(c)(2)(C)(x) of the Social Security Act (42 U.S.C. 
     405(c)(2)(C)(x)), as added by paragraph (1), occurring after 
     the date that is 3 years after the date of enactment of this 
     Act.
       (b) Prohibition of Inmate Access to Social Security Account 
     Numbers.--
       (1) In general.--Section 205(c)(2)(C) of the Social 
     Security Act (42 U.S.C. 405(c)(2)(C)) (as amended by 
     subsection (b)) is amended by adding at the end the 
     following:
       ``(xi) No Federal, State, or local agency may employ, or 
     enter into a contract for the use or employment of, prisoners 
     in any capacity that would allow such prisoners access to the 
     social security account numbers of other individuals. For 
     purposes of this clause, the term `prisoner' means an 
     individual confined in a jail, prison, or other penal 
     institution or correctional facility pursuant to such 
     individual's conviction of a criminal offense.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply with respect to employment of prisoners, or entry 
     into contract with prisoners, after the date that is 1 year 
     after the date of enactment of this Act.

     SEC. 7. LIMITS ON PERSONAL DISCLOSURE OF A SOCIAL SECURITY 
                   NUMBER FOR CONSUMER TRANSACTIONS.

       (a) In General.--Part A of title XI of the Social Security 
     Act (42 U.S.C. 1301 et seq.) is amended by adding at the end 
     the following:

     ``SEC. 1150A. LIMITS ON PERSONAL DISCLOSURE OF A SOCIAL 
                   SECURITY NUMBER FOR CONSUMER TRANSACTIONS.

       ``(a) In General.--A commercial entity may not require an 
     individual to provide the individual's social security number 
     when purchasing a commercial good or service or deny an 
     individual the good or service for refusing to provide that 
     number except--
       ``(1) for any purpose relating to--
       ``(A) obtaining a consumer report for any purpose permitted 
     under the Fair Credit Reporting Act;
       ``(B) a background check of the individual conducted by a 
     landlord, lessor, employer, voluntary service agency, or 
     other entity as determined by the Attorney General;
       ``(C) law enforcement; or
       ``(D) a Federal, State, or local law requirement; or
       ``(2) if the social security number is necessary to verify 
     the identity of the consumer to effect, administer, or 
     enforce the specific transaction requested or authorized by 
     the consumer, or to prevent fraud.
       ``(b) Application of Civil Money Penalties.--A violation of 
     this section shall be deemed to be a violation of section 
     1129(a)(3)(F).
       ``(c) Application of Criminal Penalties.--A violation of 
     this section shall be deemed to be a violation of section 
     208(a)(8).
       ``(d) Limitation on Class Actions.--No class action 
     alleging a violation of this section shall be maintained 
     under this section by an individual or any private party in 
     Federal or State court.
       ``(e) State Attorney General Enforcement.--
       ``(1) In general.--
       ``(A) Civil actions.--In any case in which the attorney 
     general of a State has reason to believe that an interest of 
     the residents of that State has been or is threatened or 
     adversely affected by the engagement of any person in a 
     practice that is prohibited under this section, the State, as 
     parens patriae, may bring a civil action on behalf of the 
     residents of the State in a district court of the United 
     States of appropriate jurisdiction to--
       ``(i) enjoin that practice;
       ``(ii) enforce compliance with such section;
       ``(iii) obtain damages, restitution, or other compensation 
     on behalf of residents of the State; or
       ``(iv) obtain such other relief as the court may consider 
     appropriate.
       ``(B) Notice.--
       ``(i) In general.--Before filing an action under 
     subparagraph (A), the attorney general of the State involved 
     shall provide to the Attorney General--

       ``(I) written notice of the action; and
       ``(II) a copy of the complaint for the action.

       ``(ii) Exemption.--

       ``(I) In general.--Clause (i) shall not apply with respect 
     to the filing of an action by an attorney general of a State 
     under this subsection, if the State attorney general 
     determines that it is not feasible to provide the notice 
     described in such subparagraph before the filing of the 
     action.
       ``(II) Notification.--With respect to an action described 
     in subclause (I), the attorney general of a State shall 
     provide notice and a copy of the complaint to the Attorney 
     General at the same time as the State attorney general files 
     the action.

       ``(2) Intervention.--
       ``(A) In general.--On receiving notice under paragraph 
     (1)(B), the Attorney General shall have the right to 
     intervene in the action that is the subject of the notice.

[[Page 434]]

       ``(B) Effect of intervention.--If the Attorney General 
     intervenes in the action under paragraph (1), the Attorney 
     General shall have the right to be heard with respect to any 
     matter that arises in that action.
       ``(3) Construction.--For purposes of bringing any civil 
     action under paragraph (1), nothing in this section shall be 
     construed to prevent an attorney general of a State from 
     exercising the powers conferred on such attorney general by 
     the laws of that State to--
       ``(A) conduct investigations;
       ``(B) administer oaths or affirmations; or
       ``(C) compel the attendance of witnesses or the production 
     of documentary and other evidence.
       ``(4) Actions by the attorney general of the united 
     states.--In any case in which an action is instituted by or 
     on behalf of the Attorney General for violation of a practice 
     that is prohibited under this section, no State may, during 
     the pendency of that action, institute an action under 
     paragraph (1) against any defendant named in the complaint in 
     that action for violation of that practice.
       ``(5) Venue; service of process.--
       ``(A) Venue.--Any action brought under paragraph (1) may be 
     brought in the district court of the United States that meets 
     applicable requirements relating to venue under section 1391 
     of title 28, United States Code.
       ``(B) Service of process.--In an action brought under 
     paragraph (1), process may be served in any district in which 
     the defendant--
       ``(i) is an inhabitant; or
       ``(ii) may be found.
       ``(f) Sunset.--This section shall not apply on or after the 
     date that is 6 years after the effective date of this 
     section.''.
       (b) Evaluation and Report.--Not later than the date that is 
     6 years and 6 months after the date of enactment of this Act, 
     the Attorney General, in consultation with the chairman of 
     the Federal Trade Commission, shall issue a report evaluating 
     the effectiveness and efficiency of section 1150A of the 
     Social Security Act (as added by subsection (a)) and shall 
     make recommendations to Congress as to any legislative action 
     determined to be necessary or advisable with respect to such 
     section, including a recommendation regarding whether to 
     reauthorize such section.
       (c) Effective Date.--The amendment made by subsection (a) 
     shall apply to requests to provide a social security number 
     occurring after the date that is 1 year after the date of 
     enactment of this Act.

     SEC. 8. EXTENSION OF CIVIL MONETARY PENALTIES FOR MISUSE OF A 
                   SOCIAL SECURITY NUMBER.

       (a) Treatment of Withholding of Material Facts.--
       (1) Civil penalties.--The first sentence of section 
     1129(a)(1) of the Social Security Act (42 U.S.C. 1320a-
     8(a)(1)) is amended--
       (A) by striking ``who'' and inserting ``who--'';
       (B) by striking ``makes'' and all that follows through 
     ``shall be subject to'' and inserting the following:
       ``(A) makes, or causes to be made, a statement or 
     representation of a material fact, for use in determining any 
     initial or continuing right to or the amount of monthly 
     insurance benefits under title II or benefits or payments 
     under title VIII or XVI, that the person knows or should know 
     is false or misleading;
       ``(B) makes such a statement or representation for such use 
     with knowing disregard for the truth; or
       ``(C) omits from a statement or representation for such 
     use, or otherwise withholds disclosure of, a fact which the 
     individual knows or should know is material to the 
     determination of any initial or continuing right to or the 
     amount of monthly insurance benefits under title II or 
     benefits or payments under title VIII or XVI and the 
     individual knows, or should know, that the statement or 
     representation with such omission is false or misleading or 
     that the withholding of such disclosure is misleading, shall 
     be subject to'';
       (C) by inserting ``or each receipt of such benefits while 
     withholding disclosure of such fact'' after ``each such 
     statement or representation'';
       (D) by inserting ``or because of such withholding of 
     disclosure of a material fact'' after ``because of such 
     statement or representation''; and
       (E) by inserting ``or such a withholding of disclosure'' 
     after ``such a statement or representation''.
       (2) Administrative procedure for imposing penalties.--The 
     first sentence of section 1129A(a) of the Social Security Act 
     (42 U.S.C. 1320a-8a(a)) is amended--
       (A) by striking ``who'' and inserting ``who--''; and
       (B) by striking ``makes'' and all that follows through 
     ``shall be subject to'' and inserting the following:
       ``(1) makes, or causes to be made, a statement or 
     representation of a material fact, for use in determining any 
     initial or continuing right to or the amount of monthly 
     insurance benefits under title II or benefits or payments 
     under title VIII or XVI, that the person knows or should know 
     is false or misleading;
       ``(2) makes such a statement or representation for such use 
     with knowing disregard for the truth; or
       ``(3) omits from a statement or representation for such 
     use, or otherwise withholds disclosure of, a fact which the 
     individual knows or should know is material to the 
     determination of any initial or continuing right to or the 
     amount of monthly insurance benefits under title II or 
     benefits or payments under title VIII or XVI and the 
     individual knows, or should know, that the statement or 
     representation with such omission is false or misleading or 
     that the withholding of such disclosure is misleading, shall 
     be subject to''.
       (b) Application of Civil Money Penalties to Elements of 
     Criminal Violations.--Section 1129(a) of the Social Security 
     Act (42 U.S.C. 1320a-8(a)), as amended by subsection (a)(1), 
     is amended--
       (1) by redesignating paragraph (2) as paragraph (4);
       (2) by redesignating the last sentence of paragraph (1) as 
     paragraph (2) and inserting such paragraph after paragraph 
     (1); and
       (3) by inserting after paragraph (2) (as so redesignated) 
     the following:
       ``(3) Any person (including an organization, agency, or 
     other entity) who--
       ``(A) uses a social security account number that such 
     person knows or should know has been assigned by the 
     Commissioner of Social Security (in an exercise of authority 
     under section 205(c)(2) to establish and maintain records) on 
     the basis of false information furnished to the Commissioner 
     by any person;
       ``(B) falsely represents a number to be the social security 
     account number assigned by the Commissioner of Social 
     Security to any individual, when such person knows or should 
     know that such number is not the social security account 
     number assigned by the Commissioner to such individual;
       ``(C) knowingly alters a social security card issued by the 
     Commissioner of Social Security, or possesses such a card 
     with intent to alter it;
       ``(D) knowingly displays, sells, or purchases a card that 
     is, or purports to be, a card issued by the Commissioner of 
     Social Security, or possesses such a card with intent to 
     display, purchase, or sell it;
       ``(E) counterfeits a social security card, or possesses a 
     counterfeit social security card with intent to display, 
     sell, or purchase it;
       ``(F) discloses, uses, compels the disclosure of, or 
     knowingly displays, sells, or purchases the social security 
     account number of any person in violation of the laws of the 
     United States;
       ``(G) with intent to deceive the Commissioner of Social 
     Security as to such person's true identity (or the true 
     identity of any other person) furnishes or causes to be 
     furnished false information to the Commissioner with respect 
     to any information required by the Commissioner in connection 
     with the establishment and maintenance of the records 
     provided for in section 205(c)(2);
       ``(H) offers, for a fee, to acquire for any individual, or 
     to assist in acquiring for any individual, an additional 
     social security account number or a number which purports to 
     be a social security account number; or
       ``(I) being an officer or employee of a Federal, State, or 
     local agency in possession of any individual's social 
     security account number, willfully acts or fails to act so as 
     to cause a violation by such agency of clause (vi)(II) or (x) 
     of section 205(c)(2)(C), shall be subject to, in addition to 
     any other penalties that may be prescribed by law, a civil 
     money penalty of not more than $5,000 for each violation. 
     Such person shall also be subject to an assessment, in lieu 
     of damages sustained by the United States resulting from such 
     violation, of not more than twice the amount of any benefits 
     or payments paid as a result of such violation.''.
       (c) Clarification of Treatment of Recovered Amounts.--
     Section 1129(e)(2)(B) of the Social Security Act (42 U.S.C. 
     1320a-8(e)(2)(B)) is amended by striking ``In the case of 
     amounts recovered arising out of a determination relating to 
     title VIII or XVI,'' and inserting ``In the case of any other 
     amounts recovered under this section,''.
       (d) Conforming Amendments.--
       (1) Section 1129(b)(3)(A) of the Social Security Act (42 
     U.S.C. 1320a-8(b)(3)(A)) is amended by striking ``charging 
     fraud or false statements''.
       (2) Section 1129(c)(1) of the Social Security Act (42 
     U.S.C. 1320a-8(c)(1)) is amended by striking ``and 
     representations'' and inserting ``, representations, or 
     actions''.
       (3) Section 1129(e)(1)(A) of the Social Security Act (42 
     U.S.C. 1320a-8(e)(1)(A)) is amended by striking ``statement 
     or representation referred to in subsection (a) was made'' 
     and inserting ``violation occurred''.
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply with respect to 
     violations of sections 1129 and 1129A of the Social Security 
     Act (42 U.S.C. 1320-8 and 1320a-8a), as amended by this 
     section, committed after the date of enactment of this Act.
       (2) Violations by government agents in possession of social 
     security numbers.--Section 1129(a)(3)(I) of the Social 
     Security Act (42 U.S.C. 1320a-8(a)(3)(I)), as added by 
     subsection (b), shall apply with respect to violations of 
     that section occurring on or after the effective date 
     described in section 3(c).

[[Page 435]]



     SEC. 9. CRIMINAL PENALTIES FOR THE MISUSE OF A SOCIAL 
                   SECURITY NUMBER.

       (a) Prohibition of Wrongful Use as Personal Identification 
     Number.--No person may obtain any individual's social 
     security number for purposes of locating or identifying an 
     individual with the intent to physically injure, harm, or use 
     the identity of the individual for any illegal purpose.
       (b) Criminal Sanctions.--Section 208(a) of the Social 
     Security Act (42 U.S.C. 408(a)) is amended--
       (1) in paragraph (8), by inserting ``or'' after the 
     semicolon; and
       (2) by inserting after paragraph (8) the following:
       ``(9) except as provided in subsections (e) and (f) of 
     section 1028A of title 18, United States Code, knowingly and 
     willfully displays, sells, or purchases (as those terms are 
     defined in section 1028A(a) of title 18, United States Code) 
     any individual's social security account number without 
     having met the prerequisites for consent under section 
     1028A(d) of title 18, United States Code; or
       ``(10) obtains any individual's social security number for 
     the purpose of locating or identifying the individual with 
     the intent to injure or to harm that individual, or to use 
     the identity of that individual for an illegal purpose;''.

     SEC. 10. CIVIL ACTIONS AND CIVIL PENALTIES.

       (a) Civil Action in State Courts.--
       (1) In general.--Any individual aggrieved by an act of any 
     person in violation of this Act or any amendments made by 
     this Act may, if otherwise permitted by the laws or rules of 
     the court of a State, bring in an appropriate court of that 
     State--
       (A) an action to enjoin such violation;
       (B) an action to recover for actual monetary loss from such 
     a violation, or to receive up to $500 in damages for each 
     such violation, whichever is greater; or
       (C) both such actions.

     It shall be an affirmative defense in any action brought 
     under this paragraph that the defendant has established and 
     implemented, with due care, reasonable practices and 
     procedures to effectively prevent violations of the 
     regulations prescribed under this Act. If the court finds 
     that the defendant willfully or knowingly violated the 
     regulations prescribed under this subsection, the court may, 
     in its discretion, increase the amount of the award to an 
     amount equal to not more than 3 times the amount available 
     under subparagraph (B).
       (2) Statute of limitations.--An action may be commenced 
     under this subsection not later than the earlier of--
       (A) 5 years after the date on which the alleged violation 
     occurred; or
       (B) 3 years after the date on which the alleged violation 
     was or should have been reasonably discovered by the 
     aggrieved individual.
       (3) Nonexclusive remedy.--The remedy provided under this 
     subsection shall be in addition to any other remedies 
     available to the individual.
       (b) Civil Penalties.--
       (1) In general.--Any person who the Attorney General 
     determines has violated any section of this Act or of any 
     amendments made by this Act shall be subject, in addition to 
     any other penalties that may be prescribed by law--
       (A) to a civil penalty of not more than $5,000 for each 
     such violation; and
       (B) to a civil penalty of not more than $50,000, if the 
     violations have occurred with such frequency as to constitute 
     a general business practice.
       (2) Determination of violations.--Any willful violation 
     committed contemporaneously with respect to the social 
     security numbers of 2 or more individuals by means of mail, 
     telecommunication, or otherwise, shall be treated as a 
     separate violation with respect to each such individual.
       (3) Enforcement procedures.--The provisions of section 
     1128A of the Social Security Act (42 U.S.C. 1320a-7a), other 
     than subsections (a), (b), (f), (h), (i), (j), (m), and (n) 
     and the first sentence of subsection (c) of such section, and 
     the provisions of subsections (d) and (e) of section 205 of 
     such Act (42 U.S.C. 405) shall apply to a civil penalty 
     action under this subsection in the same manner as such 
     provisions apply to a penalty or proceeding under section 
     1128A(a) of such Act (42 U.S.C. 1320a-7a(a)), except that, 
     for purposes of this paragraph, any reference in section 
     1128A of such Act (42 U.S.C. 1320a-7a) to the Secretary shall 
     be deemed to be a reference to the Attorney General.

     SEC. 11. FEDERAL INJUNCTIVE AUTHORITY.

       In addition to any other enforcement authority conferred 
     under this Act or the amendments made by this Act, the 
     Federal Government shall have injunctive authority with 
     respect to any violation by a public entity of any provision 
     of this Act or of any amendments made by this Act.
                                 ______
                                 
      By Mr. SARBANES (for himself, Mr. Corzine, Mrs. Clinton, Mr. 
        Akaka, Mr. Bingaman, Mr. Schumer, Mr. Dodd, Mrs. Boxer, Ms. 
        Mikulski, and Mr. Reid):
  S. 31. A bill to amend the Electronic Fund Transfer Act to extend 
certain consumer protections to international remittance transfers of 
funds originating in the United States, and for other purposes; to the 
Committee on Banking, Housing, and Urban Affairs.
  Mr. SARBANES. Mr. President, today I am introducing the International 
Remittance Consumer Protection Act of 2005. This legislation extends 
basic consumer protection rights to those who send remittances, and it 
creates new avenues and incentives for federally insured financial 
institutions to provide remittance and basic banking services to those 
who currently do not use such institutions to send remittances.
  The practice of sending remittances is not new. Immigrants to the 
United States traditionally have used remittances to provide financial 
assistance to family members who remained in their country of origin, 
but the practice has been largely overlooked; it has not been 
systematically studied and its implications have not been fully 
understood. The 2000 census shows that 30 million people in this 
country are foreign-born--the largest number in our Nation's history--
and the vast majority of them--22 million are citizens or legal 
residents. More than 40 percent of our Nation's foreign-born population 
immigrated to the United States in the 1990s, and some 15.4 million, or 
more than half the immigrant community, have come from Latin American 
countries. Immigrants make a vital contribution to the economic and 
social life of our Nation.
  In a recent study, Sending Money Home: Remittances to Latin America 
from the U.S., 2004, the Inter-American Development Bank, IADB, found 
that nationwide over 60 percent of Latin American immigrants send 
remittances. On average, each immigrant sends $240 at a time, 12 times 
per year. Although these individual transactions are not large, they 
have constituted an aggregate amount of over $30 billion from America 
to our Latin American neighbors in this year alone.
  In my State of Maryland, we have 175,000 immigrants from Latin 
America and the vast majority send remittances back home. According to 
the IADB's study 80 percent of Maryland's immigrants from Latin America 
send remittances. The typical sender remits an average of $245, 14 
times per year--in other words, remittances are a monthly matter, with 
special gifts for Christmas and Mother's Day.
  The subject of remittances has been a major interest of mine for some 
time. As chairman of the Banking Committee, in February, 2002, during 
the 107th Congress, I chaired what I understand was the first 
Congressional hearing devoted exclusively to the subject. Dr. Manuel 
Orozco, a leading researcher on remittances at the Inter-American 
Dialogue, told the Committee that remittances from the U.S. to Latin 
America had grown substantially--at that point to an estimated $20 
billion in 2001--and that between 15 to 20 percent--$3-$4 billion--was 
being lost in fees and other transaction costs. Since Dr. Orozco 
testified, remittances to Latin America have grown by $10 billion, or 
50 percent, in just three years, and continued growth is expected.
  That an estimated 15 percent to 20 percent of the money sent in 
remittances is diverted to fees and other transaction costs, often 
hidden from the remittance sender, is evidence of the abusive practices 
that exist in the remittance market. There are two primary factors that 
account for this abuse. First, studies have shown that people who send 
remittances tend to be relatively low-wage earners, with modest formal 
education and relatively little experience in dealing with this 
country's complex system of financial institutions. As a result they 
are susceptible to unscrupulous actors who can take advantage of them 
by charging all sorts of exorbitant fees, which are often hidden or 
misrepresented. The exchange rate conversion is often the mechanism for 
this abusive practice.
  Second, remittances are currently not subject to the requirements set 
by Federal consumer protection law, including the disclosure of fees. 
There is no requirement that a remittance transfer provider disclose to 
the consumer the exchange rate fee that will

[[Page 436]]

be applied in the transaction. Without knowing the exchange rate fee 
that the company is charging, a consumer has little ability to gauge 
accurately the full cost of sending a remittance. As Sergio Bendixen, a 
leading researcher of public opinion and behavior, with a specialty 
among Hispanic consumers, testified before the Banking Committee: ``an 
overwhelming majority of Hispanic immigrants are unaware that their 
families in Latin America receive less money than what they send from 
the United States.'' Further, a remittance sender cannot effectively 
shop between remittance transfer providers. The lack of basic 
information limits the amount of competition in this market.
  The legislation I am introducing today extends basic consumer rights 
to those who send remittances. Further, by requiring clear and 
understandable disclosures to the remittance sender of the cost of the 
remittance, thus presenting to the consumer the full cost of sending 
money, the legislation will enhance competition, which in turn should 
lead to an overall decrease in the cost of sending remittances. As 
Sergio Bendixen testified to the Banking Committee, ``Full disclosure 
should unleash market forces that, hopefully, will result in a 
significant reduction in the cost of sending cash remittances.''
  This legislation amends the Electronic Fund Transfer Act, EFTA, which 
is the primary vehicle for providing basic protections to most persons 
who engage in electronic transactions, to cover remittances, and to 
provide the basic rights associated with EFTA to remittance 
transactions. The two most important components of EFTA are the 
requirement of full disclosure of fees and the establishment of a 
process for the resolution of transactional errors. These rights have 
been an integral part of the regulations that govern our banking 
infrastructure since EFTA's enactment in 1978. The new legislation will 
build upon the success of EFTA by extending these basic rights to 
remittance senders.
  The cornerstone of this legislation is the requirement that 
remittance transfer providers make three key disclosures to their 
consumers: One, the total cost of the remittance, represented in a 
single dollar amount; two, the total amount of currency that will be 
sent to the designated recipient; and three, the promised date of 
delivery for the remittance. These disclosures follow the core 
recommendations of the Inter-American Development Bank, which in its 
publication, Remittances to Latin America and the Caribbean: Goals and 
Recommendations, states: ``Remittance institutions should disclose in a 
fully transparent manner, complete information on total costs and 
transfer conditions, including all commissions and fees, foreign 
exchange rates applied and execution time.''
  The total cost disclosure will include the cost of the exchange rate 
conversion as well as all up-front fees. This single item will both 
give consumers a more accurate representation of the cost of the 
remittance transaction and allow consumers to more effectively compare 
costs between remittance transfer providers.
  In order to calculate the cost of the exchange rate conversion, which 
is part of the total cost, the legislation requires that the Treasury 
Department post on its website, on a daily basis, the exchange rate for 
all currencies. At present the Treasury receives this information on a 
daily basis, but posts it only on a quarterly basis on the Treasury 
website. By posting the information daily, the Treasury could create a 
uniform and credible source for exchange rate information.
  To calculate the cost to the consumer of the exchange rate 
differential, remittance transfer providers will use the difference 
between the previous business day's exchange rate, as posted on the 
Treasury website, and the exchange rate that the remittance transfer 
provider offers. Using the exchange rate posted by the Treasury will 
ensure that the exchange rate cost is calculated on a uniform base. 
When the exchange rate cost is disclosed to the consumer as part of the 
total cost of the remittance transfer, the consumer will be better able 
to understand the full cost of the transaction and to shop between 
different remittance transfer providers.
  In addition to fee disclosure requirements, this legislation 
establishes an error resolution mechanism so that consumers whose 
remittance transactions experience an error have a fair, open, and 
expedient process through which they may resolve those errors with the 
institution that conducted the flawed transaction. This basic right is 
already afforded to consumers who are protected by EFTA, and now this 
right will be extended to cover consumers who send remittances as well. 
Further, the legislation establishes an error resolution mechanism for 
remittance transfer errors that is responsive to the different types of 
errors that can occur in a remittance transaction and is reflective of 
the unique characteristics of the remittance market and its 
participants.
  Under this legislation, a consumer has one year from the date that 
the remittance transfer company promised to deliver the money to notify 
the company that an error has occurred. The company is then required to 
resolve the error within 90 days. To resolve the error, the company 
must either 1. refund the full amount of the remittance that was not 
properly transferred, 2. resend that amount at no additional cost to 
the consumer or the designated recipient, or 3. demonstrate to the 
consumer that there was no error. The Federal Reserve Board is also 
granted the authority to establish additional remedies for specific 
situations that cannot be addressed by the three specific remedies that 
are described in the legislation.
  It is urgent that we continue to encourage efforts to bring those who 
send remittances into the financial mainstream. In his testimony to the 
Banking Committee, Dr. Orozco pointed out that, ``About two-thirds of 
immigrants cash their salary checks in check cashing stores that charge 
exorbitant fees. Many of these same immigrants then use what remains of 
their income to send remittances back home. In this common scenario, 
immigrants are penalized in both receiving and sending their 
earnings.'' In order to further bank those who are currently unbanked, 
the legislation that I am introducing today requires that the Federal 
banking agencies and the National Credit Union Administration provide 
guidelines to financial institutions regarding the offering of low-cost 
remittance transfers and no-cost or low-cost basic consumer accounts. 
This legislation also amends the Federal Credit Union Act to allow 
credit unions to offer remittances and to cash checks for persons who 
are in their field of membership but are not credit union members. The 
guidelines set out in the legislation will help educate the financial 
services industry about the importance and potential profitability of 
providing these services.
  The sending of remittances in a fair and scrupulous manner is likely 
to be profitable for the institution that provides the remittance 
service, and indeed we have begun to see aggressive moves into the 
remittance market by many of the largest banking institutions. 
Individuals who send remittances but are currently unbanked represent 
an expanded and profitable customer base for financial institutions.
  By its very nature, the issues involved in sending remittances affect 
both the United States and other nations. As Professor Susan Martin of 
Georgetown University, who also testified at our hearing, told the 
Banking Committee: ``Until relatively recently, researchers and policy 
makers tended to dismiss the importance of remittances or emphasize 
only their negative aspects . . . but recent work on remittances show a 
far more complex and promising picture. . . . Experts now recognize 
that remittances have far greater positive impact on communities in 
developing countries than previously acknowledged.'' In fact, the size 
of the remittance market is such that for six Central American and 
Caribbean nations--Nicaragua, Haiti, El Salvador, Honduras, Guyana and 
Jamaica--remittances constitute more than 10 percent of GDP; Haiti and 
Jamaica receive more in remittances than in revenues from trade. The 
World

[[Page 437]]

Bank estimates that Mexico receives more in remittances than it does in 
foreign direct investment. Reducing the costs of remittances is in the 
interest of both the United States and the countries that receive them.
  Given the growing importance of annual remittance flows, we must work 
to increase their efficiency. One mechanism for accomplishing this 
objective, and for increasing the ability of financial institutions to 
offer remittances, is linking our banking infrastructure with the 
banking infrastructures of other nations. The Federal Reserve operates 
an international automated clearing house system, ACHi, that is 
currently linked to seven countries, of which the vast majority are 
highly developed trading partners that receive relatively low levels of 
remittances. The ACHi was recently connected to Mexico, however, which 
will allow financial institutions throughout the United States, 
especially those institutions of smaller size, to provide remittance 
services more easily and cheaply to Mexico. This legislation directs 
the Fed to take into account the importance of remittance flows to 
other countries as it continues to expand the ACHi system. Linking the 
ACHi to countries that receive significant remittances has the 
potential to result in great benefits to consumers who send remittances 
from America as well as to those who receive the remittances around the 
world.
  Finally, I am acutely aware of the need for better and more broadly 
available financial literacy and education for all Americans. I am 
pleased to report that in the last Congress, as part of the 
reauthorization of the Fair Credit Reporting Act, we established a 
Presidential Financial Literacy and Education Commission, which is 
charged with developing a national strategy to promote financial 
literacy and education. The Act addresses the issue of remittances by 
including in the Commission's work a focus on increasing the 
``awareness of the particular financial needs and financial 
transactions, such as the sending of remittances, of consumers who are 
targeted in multilingual financial literacy and education programs.'' 
The legislation that I am introducing today builds on that framework by 
instructing the bank and credit union regulators to work with the 
Commission to specifically increase the financial education efforts 
that target those persons who send remittances.
  Millions of Americans send remittances to family members around the 
world, for a total far exceeding the $30 billion that goes to Latin 
America alone. Yet almost all of these transactions take place without 
the basic consumer rights and protections that apply to other 
electronic transfers. Consumers who send remittances are often 
immigrants and workers who earn modest wages, who are not aware of the 
full costs of each remittance, and as a practical matter have no way of 
finding out, and, as a consequence, in the aggregate pay billions of 
dollars in costs and hidden fees. They do not have available to them an 
established procedure for resolving transactional errors. This 
legislation rectifies this situation by extending to remittances the 
basic consumer rights established in EFTA. The bill also contains 
provisions that, when implemented, will allow more insured financial 
institutions to provide remittance services--and potentially at lower 
costs to consumers. The bill contains important provisions to help 
bring the unbanked--men and women without an account at a bank or 
credit union into the financial mainstream. Taken together, these 
measures will increase transparency, competition and efficiency in the 
remittance market, while helping to bring more Americans into the 
financial mainstream.
  A broad range of community, civil rights, and consumer groups have 
endorsed this legislation including the National Council of La Raza, 
the Mexican American Legal Defense and Educational Fund, the League of 
United Latin American Citizens, the Leadership Conference on Civil 
Rights, United Farm Workers of America, the Farmworker Justice Fund, 
the NAACP, Casa de Maryland, the National Federation of Filipino 
American Associations, the Asian Pacific American Labor Alliance, 
National Asian Pacific American Legal Consortium, Consumers Union, 
Consumer Federation of America, the National Consumer Law Center, the 
National Community Reinvestment Coalition, the Center for Responsible 
Lending, U.S. PIRG, ACORN, Woodstock Institute, and the National 
Association of Consumer Advocates. The Credit Union National 
Association and the World Council of Credit Unions, both of whom 
provide remittance services, have also endorsed this legislation.
  I ask unanimous consent that the text of International Remittance 
Consumer Protection Act be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 31

       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 ``International Remittance 
     Consumer Protection Act of 2005''.

     SEC. 2. TREATMENT OF REMITTANCE TRANSFERS.

       (a) In General.--The Electronic Fund Transfer Act (15 
     U.S.C. 1693 et seq.) is amended--
       (1) in section 902(b), by inserting ``and remittance'' 
     after ``electronic fund'';
       (2) by redesignating sections 918, 919, 920, and 921 as 
     sections 919, 920, 921, and 922, respectively; and
       (3) by inserting after section 917 the following:

     ``SEC. 918. REMITTANCE TRANSFERS.

       ``(a) Disclosures Required for Remittance Transfers.--
       ``(1) In general.--Each remittance transfer provider shall 
     make disclosures to consumers, as specified by this section 
     and augmented by regulation of the Board.
       ``(2) Specific disclosures.--In addition to any other 
     disclosures applicable under this title, a remittance 
     transfer provider shall clearly and conspicuously disclose, 
     in writing and in a form that the consumer may keep, to each 
     consumer requesting a remittance transfer--
       ``(A) at the time at which the consumer makes the request, 
     and prior to the consumer making any payment in connection 
     with the transfer--
       ``(i) the total amount of currency that will be required to 
     be tendered by the consumer in connection with the remittance 
     transfer;
       ``(ii) the amount of currency that will be sent to the 
     designated recipient of the remittance transfer, using the 
     values of the currency into which the funds will be 
     exchanged;
       ``(iii) the total remittance transfer cost, identified as 
     the `Total Cost'; and
       ``(iv) an itemization of the charges included in clause 
     (iii), as determined necessary by the Board; and
       ``(B) at the time at which the consumer makes payment in 
     connection with the remittance transfer, if any--
       ``(i) a receipt showing--

       ``(I) the information described in subparagraph (A);
       ``(II) the promised date of delivery;
       ``(III) the name and telephone number or address of the 
     designated recipient; and

       ``(ii) a notice containing--

       ``(I) information about the rights of the consumer under 
     this section to resolve errors; and
       ``(II) appropriate contact information for the remittance 
     transfer provider and its State licensing authority and 
     Federal or State regulator, as applicable.

       ``(3) Exemption authority.--The Board may, by rule, and 
     subject to subsection (d)(3), permit a remittance transfer 
     provider--
       ``(A) to satisfy the requirements of paragraph (2)(A) 
     orally if the transaction is conducted entirely by telephone;
       ``(B) to satisfy the requirements of paragraph (2)(B) by 
     mailing the documents required under such paragraph to the 
     consumer not later than 1 business day after the date on 
     which the transaction is conducted, if the transaction is 
     conducted entirely by telephone; and
       ``(C) to satisfy the requirements of subparagraphs (A) and 
     (B) of paragraph (2) with 1 written disclosure, but only to 
     the extent that the information provided in accordance with 
     paragraph (2)(A) is accurate at the time at which payment is 
     made in connection with the subject remittance transfer.
       ``(b) Foreign Language Disclosures.--The disclosures 
     required under this section shall be made in English and in 
     the same languages principally used by the remittance 
     transfer provider, or any of its agents, to advertise, 
     solicit, or market, either orally or in writing, at that 
     office, if other than English.
       ``(c) Remittance Transfer Errors.--
       ``(1) Error resolution.--
       ``(A) In general.--If a remittance transfer provider 
     receives oral or written notice from the consumer within 365 
     days of the promised date of delivery that an error occurred

[[Page 438]]

     with respect to a remittance transfer, including that the 
     full amount of the funds to be remitted was not made 
     available to the designated recipient in the foreign country, 
     the remittance transfer provider shall resolve the error 
     pursuant to this subsection.
       ``(B) Remedies.--Not later than 90 days after the date of 
     receipt of a notice from the consumer pursuant to 
     subparagraph (A), the remittance transfer provider shall, as 
     applicable to the error and as designated by the consumer--
       ``(i) refund to the consumer the total amount of funds 
     tendered by the consumer in connection with the remittance 
     transfer which was not properly transmitted;
       ``(ii) make available to the designated recipient, without 
     additional cost to the designated recipient or to the 
     consumer, the amount appropriate to resolve the error;
       ``(iii) provide such other remedy, as determined 
     appropriate by rule of the Board for the protection of 
     consumers; or
       ``(iv) demonstrate to the consumer that there was no error.
       ``(2) Rules.--The Board shall establish, by rule, clear and 
     appropriate standards for remittance transfer providers with 
     respect to error resolution relating to remittance transfers, 
     to protect consumers from such errors.
       ``(d) Applicability of Other Provisions of Law.--
       ``(1) Applicability of title 18 and title 31 provisions.--A 
     remittance transfer provider may only provide remittance 
     transfers if such provider is in compliance with the 
     requirements of section 5330 of title 31, United States Code, 
     and section 1960 of title 18, United States Code, as 
     applicable.
       ``(2) Applicability of this title.--A remittance transfer 
     that is not an electronic fund transfer, as defined in 
     section 903, shall not be subject to any of sections 905 
     through 913. A remittance transfer that is an electronic fund 
     transfer, as defined in section 903, shall be subject to all 
     provisions of this title that are otherwise applicable to 
     electronic fund transfers under this title.
       ``(3) Rule of construction.--Nothing in this section shall 
     be construed--
       ``(A) to affect the application to any transaction, to any 
     remittance provider, or to any other person of any of the 
     provisions of subchapter II of chapter 53 of title 31, United 
     States Code, section 21 of the Federal Deposit Insurance Act 
     (12 U.S.C. 1829b), or chapter 2 of title I of Public Law 91-
     508 (12 U.S.C. 1951-1959), or any regulations promulgated 
     thereunder; or
       ``(B) to cause any fund transfer that would not otherwise 
     be treated as such under paragraph (2) to be treated as an 
     electronic fund transfer, or as otherwise subject to this 
     title, for the purposes of any of the provisions referred to 
     in subparagraph (A) or any regulations promulgated 
     thereunder.
       ``(e) Publication of Exchange Rates.--The Secretary of the 
     Treasury shall make available to the public in electronic 
     form, not later than noon on each business day, the dollar 
     exchange rate for all foreign currencies, using any 
     methodology that the Secretary determines appropriate, which 
     may include the methodology used pursuant to section 613(b) 
     of the Foreign Assistance Act of 1961 (22 U.S.C. 2363(b)).
       ``(f) Agents and Subsidiaries.--A remittance transfer 
     provider shall be liable for any violation of this section by 
     any agent or subsidiary of that remittance transfer provider.
       ``(g) Definitions.--As used in this section--
       ``(1) the term `exchange rate fee' means the difference 
     between the total dollar amount transferred, valued at the 
     exchange rate offered by the remittance transfer provider, 
     and the total dollar amount transferred, valued at the 
     exchange rate posted by the Secretary of the Treasury in 
     accordance with subsection (e) on the business day prior to 
     the initiation of the subject remittance transfer;
       ``(2) the term `remittance transfer' means the electronic 
     (as defined in section 106(2) of the Electronic Signatures in 
     Global and National Commerce Act (15 U.S.C. 7006(2))) 
     transfer of funds at the request of a consumer located in any 
     State to a person in another country that is initiated by a 
     remittance transfer provider, whether or not the consumer is 
     an account holder of the remittance transfer provider or 
     whether or not the remittance transfer is also an electronic 
     fund transfer, as defined in section 903;
       ``(3) the term `remittance transfer provider' means any 
     person or financial institution that provides remittance 
     transfers on behalf of consumers in the normal course of its 
     business, whether or not the consumer is an account holder of 
     that person or financial institution;
       ``(4) the term `State' means any of the several States, the 
     Commonwealth of Puerto Rico, the District of Columbia, and 
     any territory or possession of the United States; and
       ``(5) the term `total remittance transfer cost' means the 
     total cost of a remittance transfer expressed in dollars, 
     including all fees charged by the remittance transfer 
     provider, including the exchange rate fee.''.
       (b) Effect on State Laws.--Section 919 of the Electronic 
     Fund Transfer Act (12 U.S.C. 1693q) is amended--
       (1) in the first sentence, by inserting ``or remittance 
     transfers (as defined in section 918)'' after ``transfers''; 
     and
       (2) in the fourth sentence, by inserting ``, or remittance 
     transfer providers (as defined in section 918), in the case 
     of remittance transfers,'' after ``financial institutions''.

     SEC. 3. FEDERAL CREDIT UNION ACT AMENDMENT.

       Paragraph (12) of section 107 of the Federal Credit Union 
     Act (12 U.S.C. 1757(12)) is amended to read as follows:
       ``(12) in accordance with regulations prescribed by the 
     Board--
       ``(A) to provide remittance transfers, as defined in 
     section 918(h) of the Electronic Fund Transfer Act, to 
     persons in the field of membership; and
       ``(B) to cash checks and money orders for persons in the 
     field of membership for a fee;''.

     SEC. 4. AUTOMATED CLEARINGHOUSE SYSTEM.

       (a) Expansion of System.--The Board of Governors of the 
     Federal Reserve System shall work with the Federal reserve 
     banks to expand the use of the automated clearinghouse system 
     for remittance transfers to foreign countries, with a focus 
     on countries that receive significant remittance transfers 
     from the United States, based on--
       (1) the number, volume, and sizes of such transfers;
       (2) the significance of the volume of such transfers, 
     relative to the external financial flows of the receiving 
     country; and
       (3) the feasibility of such an expansion.
       (b) Report to Congress.--Not later than 180 days after the 
     date of enactment of this Act, and on April 30 biannually 
     thereafter, the Board of Governors of the Federal Reserve 
     System shall submit a report to the Committee on Banking, 
     Housing, and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives on the 
     status of the automated clearinghouse system and its progress 
     in complying with the requirements of this section.

     SEC. 5. EXPANSION OF FINANCIAL INSTITUTION PROVISION OF 
                   REMITTANCE TRANSFERS.

       (a) Provision of Guidelines to Institutions.--Each of the 
     Federal banking agencies (as defined in section 3 of the 
     Federal Deposit Insurance Act) and the National Credit Union 
     Administration shall provide guidelines to financial 
     institutions under the jurisdiction of the agency regarding 
     the offering of low-cost remittance transfers and no-cost or 
     low-cost basic consumer accounts, as well as agency services 
     to remittance transfer providers.
       (b) Content of Guidelines.--Guidelines provided to 
     financial institutions under this section shall include--
       (1) information as to the methods of providing remittance 
     transfer services;
       (2) the potential economic opportunities in providing low-
     cost remittance transfers; and
       (3) the potential value to financial institutions of 
     broadening their financial bases to include persons that use 
     remittance transfers.
       (c) Assistance to Financial Literacy Commission.--The 
     Secretary of the Treasury and each agency referred to in 
     subsection (a) shall, as part of their duties as members of 
     the Financial Literacy and Education Commission, assist that 
     Commission in improving the financial literacy and education 
     of consumers who send remittances.

     SEC. 6. STUDY AND REPORT ON REMITTANCES.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study and analysis of the remittance transfer 
     system, including an analysis of its impact on consumers.
       (b) Areas of Consideration.--The study conducted under this 
     section shall include, to the extent that information is 
     available--
       (1) an estimate of the total amount, in dollars, 
     transmitted from individuals in the United States to other 
     countries, including per country data, historical data, and 
     any available projections concerning future remittance 
     levels;
       (2) a comparison of the amount of remittance funds, in 
     total and per country, to the amount of foreign trade, 
     bilateral assistance, and multi-development bank programs 
     involving each of the subject countries;
       (3) an analysis of the methods used to remit the funds, 
     with estimates of the amounts remitted through each method 
     and descriptive statistics for each method, such as market 
     share, median transaction size, and cost per transaction, 
     including through--
       (A) depository institutions;
       (B) postal money orders and other money orders;
       (C) automatic teller machines;
       (D) wire transfer services; and
       (E) personal delivery services;
       (4) an analysis of advantages and disadvantages of each 
     remitting method listed in subparagraphs (A) through (E) of 
     paragraph (3);
       (5) an analysis of the types and specificity of disclosures 
     made by various types of remittance transaction providers to 
     consumers who send remittances; and
       (6) if reliable data are unavailable, recommendations 
     concerning options for Congress to consider to improve the 
     state of information on remittances from the United States.
       (c) Report to Congress.--Not later than 1 year after the 
     date of enactment of this Act,

[[Page 439]]

     the Comptroller General shall submit a report to the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate and the Committee on Financial Services of the House 
     of Representatives on the results of the study conducted 
     under this section.
                                 ______
                                 
      By Ms. CANTWELL (for herself, Mr. Bingaman, Mrs. Feinstein, Mrs. 
        Murray, and Mr. Feingold):
  S. 33. A bill to prohibit energy market manipulation; to the 
Committee on Energy and Natural Resources.
  Ms. CANTWELL. Mr. President, today I am introducing the Electricity 
Needs Rules and Oversight Now, or ENRON, Act.
  This legislation does two simple--yet critical--things. The ENRON Act 
would amend the Federal Power Act to put in place a broad prohibition 
on all manipulative practices in electricity markets--rather than just 
round-trip trading, as included in last year's comprehensive energy 
bill; and it would specify that electricity rates resulting from 
manipulative practices are not just and reasonable under the Federal 
Power Act.
  Many of my colleagues are, by now, familiar with the provisions of 
this legislation, as I have often described the circumstances that led 
me to propose it. While the Senate has been considering comprehensive 
energy legislation over the past few years, various investigations have 
unearthed Enron's ``smoking gun'' memos--detailing the company's 
schemes to drive up electricity prices--and other evidence leading the 
Federal Energy Regulatory Commission (FERC) to conclude that market 
manipulation was ``epidemic'' in western markets during 2000-2001. 
Recently, even more information--including audio files detailing Enron 
traders' conversations--has come to light. Meanwhile, the energy crisis 
continues to take a serious toll on American consumers and businesses: 
it's been estimated that, as a result, the West has lost $35 billion in 
domestic economic product--in other words, a 1.5 percent decline in 
productivity and a total loss of 589,000 jobs. Adding insult to injury, 
Enron has now sued a number of utilities throughout the country--for 
almost a $1 billion--attempting to collect penalty charges on inflated 
contracts, cancelled when the company went bankrupt. In essence, Enron 
is asking the same consumers it gouged to pay yet again.
  As I have discussed on the Senate floor many times, the Western 
market meltdown of 2000-2001 has had a profound impact on my state's 
economy, the pocketbooks and economic well-being of my constituents--
too many of whom have had to make the choice between keeping their heat 
and lights on and buying food, paying rent, and purchasing prescription 
drugs. In some parts of Washington state, utility disconnection rates 
have risen more than 40 percent. People just can't pay their utility 
bills.
  As my colleagues can imagine, what we have seen and heard since the 
height of the crisis--as we have learned about the market manipulation 
and fraud that took place in the Western market, while Enron energy 
traders laughed about the plight of ``Grandma Millie''--has added 
tremendous insult to substantial economic injury. Moreover, the Western 
crisis has brought to the forefront a number of very important policy 
questions about the kind of behavior that will be tolerated in our 
Nation's electricity markets, as the Federal Energy Regulatory 
Commission has continued to pursue its ``restructuring'' agenda.
  I believe we need strong leadership that will condemn the types of 
schemes used by Enron traders--manipulation tactics with infamous 
nicknames like Get Shorty, Death Star and Ricochet. We need to send a 
strong and unanimous message that these practices will not be tolerated 
in our nation's electricity markets. Next, we need to agree--as a 
matter of policy--that the victims of these schemes should not have to 
pay the inflated power prices resulting from market manipulation. The 
ENRON Act will make these commonsense principles the law of the land.
  I would like to thank the original cosponsors of this legislation, 
the Senator from New Mexico, Mr. Bingaman, the Senator from California, 
Mrs. Feinstein, the senior Senator from Washington, Mrs. Murray, and 
the junior Senator from Wisconsin, Mr. Feingold, for joining me today. 
It is our hope that the Senate will move toward swift passage of the 
ENRON Act.
  Mr. President, I ask unanimous consent that a copy 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. 33

       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 ``Electricity Needs Rules and 
     Oversight Now (ENRON) Act''.

     SEC. 2. PROHIBITION OF ENERGY MARKET MANIPULATION.

       (a) Prohibition.--Part II of the Federal Power Act (16 
     U.S.C. 824 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 215. PROHIBITION OF MARKET MANIPULATION.

       ``It shall be unlawful for any person, directly or 
     indirectly, to use or employ, in connection with the purchase 
     or sale of electric energy or the purchase or sale of 
     transmission services subject to the jurisdiction of the 
     Commission, any manipulative or deceptive device or 
     contrivance in contravention of such regulations as the 
     Commission may promulgate as appropriate in the public 
     interest or for the protection of electric ratepayers.''.
       (b) Rates Resulting From Market Manipulation.--Section 
     205(a) of the Federal Power Act (16 U.S.C. 824d(a)) is 
     amended by inserting after ``not just and reasonable'' the 
     following: ``or that result from a manipulative or deceptive 
     device or contrivance''.

  Mr. FEINGOLD. Mr. President, I am proud to cosponsor the Energy Needs 
Regulatory Oversight Now or ENRON Act of 2005, S. 33, introduced today 
by Senator Cantwell. Last summer the release of audiotapes of Enron 
traders gloating about their ability to manipulate energy markets 
shocked the Nation. As more tapes surface and energy prices continue to 
rise, the need for the Senate to pass the ENRON Act has never been more 
clear.
  A public utility near Seattle, which is trying to get back the money 
it lost to Enron's unscrupulous energy trading practices, received the 
tapes from the Justice Department. These tapes confirm what we all 
suspected: Enron manipulated energy markets and gouged consumers. 
According to these tapes, Enron traders celebrated when a forest fire 
shut down a major transmission line into California in 2000. This 
shutdown cut power supplies and raised energy prices. An energy trader 
sang: ``Burn, baby, burn. That's a beautiful thing.'' These taped 
conversations also provide evidence that Enron made secret pacts with 
power producers, and Enron traders deliberately drove up prices by 
ordering power plants to shut down. The traders also brag about their 
ability to manipulate markets and steal money from the ``grandmothers 
of California,'' who one trader called ``Grandma Millie.'' The 
arrogance of these traders shocks the conscience. It also demonstrates 
the need for Congress to protect consumers from energy market 
manipulation. We cannot let the market abuses that took place during 
the Western energy crisis of 2000 happen again.
  S. 2105 requires the Federal Energy Regulatory Commission to prohibit 
the use of manipulative practices like these that put at risk consumers 
and the reliability of the transmission grid. We learned from this 
crisis that electricity markets need close government oversight to 
ensure that companies do not engage in risky and deceptive trading 
schemes leading to soaring energy prices and their own possible 
financial failure. In both cases, consumers--the people who depend upon 
the electricity these companies generate or trade--are the losers.
  The Senate recently went on record in support of barring abusive 
energy market practices when it approved an amendment to the fiscal 
year 2004 agricultural appropriations bill offered by Senator Cantwell. 
I am disappointed this language was stripped from the omnibus spending 
bill. These necessary protections were also omitted from the final 
energy conference report and the revised energy bill we voted on in 
April 2004.

[[Page 440]]

  We need to send a clear message to the energy industry that this 
behavior will not be tolerated, and we must show consumers that we will 
protect them from energy market manipulation. I encourage my fellow 
colleagues to pass this legislation.
                                 ______
                                 
      By Mr. LIEBERMAN:
  S. 34. A bill to provide for the development of a global tsunami 
detection and warning system, to improve existing communication of 
tsunami warnings to all potentially affected nations, and for other 
purposes; to the Committee on Commerce, Science, and Transportation.
  Mr. LIEBERMAN. Mr. President, I rise today to introduce legislation 
that would close the gaps in our present tsunami warning system and 
establish a global network that will give all the world's coastal 
communities a chance to evacuate--much like the hurricane and typhoon 
warning system works today across international boundaries.
  Although the probability is slim, the United States, like all coastal 
nations, is vulnerable to tsunamis. The threat to the Pacific is 
greatest because of its relatively extensive seismic activity. But 
while the threat is less in the Atlantic, it also does exist. Tsunamis 
early in the last century struck coastal Newfoundland and regions of 
the Caribbean including Puerto Rico, and the U.S. Virgin Islands.
  As events last month in the Indian Ocean have shown, a large tsunami 
can be catastrophic when it catches a coastal population unwarned and 
unprepared. Existing technology, however, can detect tsunamis and with 
the right forecasting models, be used to predict potential landfall of 
a tsunami and provide the warning needed for those in the path of the 
destructive waves.
  The United States has been a leader in developing instrumentation for 
detecting tsunamis and developing forecasting models used for 
predicting tsunami landfall. Such technology is used in two existing 
tsunami warning centers, one in Alaska and one in Hawaii. The recent 
tsunami in South Asia has alerted the world to the dangers of these 
destructive waves, and has caused many of us to seek ways that the 
United States can help the world avoid such tragic loss again.
  The legislation I am introducing today builds on the existing United 
States model. It authorizes funding that will enable us to expand our 
existing capabilities, completes our network of seismic and tsunami 
sensors, and directs us to work in partnership with other nations as 
needed to build additional centers and the necessary network for 
disseminating warnings to the appropriate local officials. Similar 
efforts are being put forth by Senators Stevens and Inouye as leaders 
of the Commerce Committee, and by the Administration. I look forward to 
working with them to enact legislation which, at relatively low cost, 
will allow us to partner with other nations and complete a global 
detection and warning system. This will help ensure that the kind of 
tragedy that befell the nations of the Indian Ocean region never 
happens again.
  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. 34

       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 ``Global Tsunami Detection and 
     Warning System Act of 2005''.

     SEC. 2. DEVELOPMENT AND DEPLOYMENT OF TSUNAMI SENSORS.

       (a) Responsibilities of Secretary of Commerce.--The 
     Secretary of Commerce shall--
       (1) identify deficiencies in the existing system of 
     worldwide seismic stations that can identify in real or near 
     real time potentially tsunamigenic earthquakes in any 
     location in the Pacific, Atlantic, or Indian Oceans and 
     associated seas;
       (2) work with the Secretary of State to enlist 
     international cooperation in deploying seismic sensors to 
     eliminate such deficiencies;
       (3) work with the Secretary of the Interior, through the 
     Director of the United States Geological Survey to identify 
     and implement any additions or improvements to the United 
     States' maintained network of seismic stations that are 
     necessary to improve real time or near real time signal 
     acquisition and processing capability for detection of 
     potentially tsunamigenic seismic events.
       (4) identify tsunami sensors, such as those developed by 
     the National Oceanic and Atmospheric Administration and 
     deployed under its Deep Ocean Assessment and Report of 
     Tsunamis Project, or other appropriate ocean-based sensors, 
     that can be deployed to detect potential tsunamis generated 
     by any type of disturbance, including earthquake, underwater 
     landslide, above water landslide, eruption of an explosive 
     volcano, and meteor impact;
       (5) identify the number and location of such sensors that 
     must be deployed throughout the Atlantic, Indian, and Pacific 
     Oceans, and associated seas, and any other bodies of water of 
     concern, to provide a system offering complete global 
     coverage for detection of a tsunami, taking into 
     consideration and coordinating with any regional systems in 
     place or under development through other nations in the 
     affected regions;
       (6) procure and deploy such sensors;
       (7) establish the measurement system, forecast system, and 
     communication system and infrastructure needed to receive and 
     process the signals generated by such tsunami sensors, by 
     building on existing infrastructure at existing Centers of 
     the National Oceanic and Atmospheric Administration, such as 
     the Pacific Tsunami Warning Center and West Coast and Alaska 
     Tsunami Center; and
       (8) disseminate tsunami forecasts and warnings as necessary 
     to all potentially affected nations.
       (b) Report to Congress.--Not later than 180 days after the 
     date of the enactment of this Act, the Secretary of Commerce 
     shall submit to Congress a report on the progress made in 
     carrying out the requirements of subsection (a).

     SEC. 3. INTERNATIONAL CONFERENCE ON GLOBAL TSUNAMI DETECTION 
                   AND WARNING.

       (a) Sense of Congress on Convening Conference.--It is the 
     sense of Congress that the President, in consultation with 
     the leaders of nations described in section 4(a)(1), should 
     undertake to convene, within 180 days after the date of the 
     enactment of this Act, an international conference on global 
     tsunami detection and warning for the purposes of--
       (1) supporting the common objective of such nations of 
     preventing or reducing the toll of human loss from future 
     tsunami-related natural disasters in the Pacific, Indian, and 
     Atlantic Oceans and associated seas; and
       (2) seeking international agreement on the most effective 
     means for deploying and funding a global tsunami detection 
     and warning system.
       (b) Sense of Congress on Alternative Action.--It is further 
     the sense of Congress that a conference described in 
     subsection (a) would not be necessary if, as determined by 
     the President after consultation with the Secretary of State 
     and the Secretary of Commerce, satisfactory international 
     agreement as described in paragraph (2) of that subsection 
     has been reached within 90 days after the date of the 
     enactment of this Act.

     SEC. 4. NETWORK OF NATIONS POTENTIALLY AFFECTED BY TSUNAMIS.

       (a) Requirement for Strategy.--The Secretary of State, in 
     consultation with the Secretary of Commerce, shall prepare 
     and implement a comprehensive strategy to achieve the 
     following objectives:
       (1) Identify all coastal nations that have the potential to 
     be adversely affected by tsunamis, particularly the nations 
     that border the Pacific, Indian, and Atlantic Oceans, and 
     associated seas.
       (2) Identify appropriate organizations, agencies, and 
     contacts within the governments of those nations for 
     disseminating tsunami warnings by working with--
       (A) the United Nations Educational, Scientific, and 
     Cultural Organization; and
       (B) other appropriate organizations.
       (3) Develop, with cooperating nations and their agencies 
     and organizations, a structure for a Global Tsunami Warning 
     System that has an appropriate number of regional operational 
     headquarters.
       (4) Identify, with cooperating nations and their agencies 
     and organizations, and establish an appropriate chain of 
     command structure to ensure that warnings of potential or 
     approaching tsunamis are directed to the appropriate contacts 
     in potentially affected countries in a timely manner through 
     the Global Tsunami Warning System network.
       (5) Implement, with cooperating nations and their agencies 
     and organizations, a tsunami forecasting system that includes 
     tsunami early detection and monitoring instrumentation 
     integrated with modeling technology essential to producing 
     real-time tsunami forecasts.
       (6) Utilize the forecasts developed under the tsunami 
     forecasting system to form appropriate warnings, and rapidly 
     disseminate such warnings to potentially affected nations.
       (7) Develop an appropriate warning communications system 
     involving telephone, Internet, radio, fax, and other 
     appropriate

[[Page 441]]

     means to convey warnings as rapidly as possible to all 
     potentially affected nations.
       (8) Work in partnership with the nations identified as 
     described in paragraph (1), as needed, to develop, establish, 
     and maintain appropriate educational and response planning 
     partnerships to ensure that tsunami warnings are properly 
     interpreted by officials in other nations and that coastal 
     communities respond appropriately to tsunami warnings.
       (9) Seek funding assistance from participating nations to 
     fund the sensor systems identified under section 4 and the 
     ongoing operation and maintenance of such systems.
       (b) Report to Congress.--Not later than 180 days after the 
     date of the enactment of this Act, the Secretary of State 
     shall submit to Congress a report on the strategy required 
     under subsection (a). The report shall include the following:
       (1) The strategy.
       (2) The progress made on implementing the strategy.

     SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

       Funds are hereby authorized to be appropriated to carry out 
     this Act as follows:
       (1) For fiscal year 2005, $30,000,000.
       (2) For each of fiscal years 2006 through 2014, $7,500,000.
                                 ______
                                 
      By Mr. CONRAD:
  S. 35. A bill to amend the Internal Revenue Code of 1986 to extend 
the credit for production of electricity from wind; to the Committee on 
Finance.
  Mr. CONRAD. Mr. President, I rise today to introduce the Wind Energy 
Production Tax Credit Extension Act. This legislation is very important 
for the expansion and competitiveness of the wind energy sector in 
North Dakota and the rest of the country.
  There should be no doubt that the wind energy production tax credit, 
PTC, is vital for the continued growth of the wind energy sector. The 
PTC was enacted in 1992. Delays in renewing the PTC have caused a boom-
and-bust cycle in the development of new wind projects. These delays of 
the credit inhibit the development of a favorable and secure investment 
climate for wind projects and are also economically damaging as 
companies involved in wind energy lay off workers or put off hiring 
until the credit is extended. Given the long lead time required to 
develop new wind projects, short-term extensions of the credit do not 
give companies enough certainty to expand wind energy production. We 
need a long-term extension to provide that certainty.
  Wind energy is an important component of our Nation's energy 
portfolio. Wind is a clean source of energy that fosters economic 
development in rural communities. Combined with other domestic sources 
of energy, the use of wind energy helps reduce our dependence on 
foreign sources of energy. In addition, advanced wind energy technology 
could one day be an important component of a hydrogen-based economy. In 
order to ensure that wind power remains competitive with other fuels, 
passage of a longer-term wind PTC is necessary.
  In my home State, a long-term extension of the wind PTC is especially 
important. North Dakota is ranked number one in wind energy potential. 
As in other parts of the country, reliance on Congress to re-extend the 
wind PTC prevents companies tied to wind energy from adding workers and 
negotiating long-term contracts. In general terms, this uncertainty 
inflicts economic costs on communities and certain manufacturers. For 
North Dakota, a long-term wind PTC extension is vital to continue the 
development of wind energy resources that are second to none.
  The bill I am introducing today will extend the wind energy PTC, 
indexed to inflation, for five years. I believe that Congress has the 
responsibility to ensure that the wind energy sector in this country 
grows at its full potential. In my view, wind is a crucial part of our 
country's energy portfolio and energy security. This bill will help the 
wind energy industry grow and remain competitive with other types of 
energy. I urge my colleagues to support this legislation.
                                 ______
                                 
      By Mr. INOUYE:
  S. 36. A bill to amend title 10, United States Code, to recognize the 
United States Military Cancer Institute as an establishment within the 
Uniformed Services University of the Health Sciences, to require the 
Institute to promote the health of members of the Armed Forces and 
their dependents by enhancing cancer research and treatment, to provide 
for a study of the epidemiological causes of cancer among various 
ethnic groups for cancer prevention and early detection efforts, and 
for other purposes; to the Committee on Armed Services.
  Mr. INOUYE. Mr. President, today I introduce the United States 
Military Cancer Institute Research Collaborative Act. This legislation 
would formally establish the United States Military Cancer Institute 
(USMCI), and support the collaborative augmentation of research efforts 
in cancer epidemiology, prevention and control. Although the USMCI 
already exists as an informal collaborative effort, this bill will 
formally establish the institution with a mission of providing for the 
maintenance of health in the military by enhancing cancer research and 
treatment, and studying the epidemiological causes of cancer among 
various ethnic groups. By formally establishing the USMCI, it will be 
in a better position to unite military research efforts with other 
cancer research centers.
  Cancer prevention, early detection, and treatment are significant 
issues for the military population, thus the USMCI was organized to 
coordinate the existing military cancer assets. The USMCI has a 
comprehensive database of its beneficiary population of 9 million 
people. The military's nationwide tumor registry, the Automated Central 
Tumor Registry, has acquired more than 180,000 cases in the last 14 
years, and a serum repository of 30 million specimens from military 
personnel collected sequentially since 1987. This population is 
predominantly Caucasian, African-American, and Hispanic.
  The Director of the USMCI, Dr. John Potter, is a Professor of Surgery 
at the Uniformed Services University of the Health Sciences (USUHS). A 
highly talented cancer epidemiologist, Dr. Kangmin Zhu, has also been 
recruited to lead the USMCI Prevention and Control Programs.
  The USMCI currently resides in the Washington, D.C., area, and its 
components are located at the National Naval Medical Center, the 
Malcolm Grow Medical Center, the Armed Forces Institute of Pathology, 
and the Armed Forces Radiobiology Research Institute. There are more 
than 70 research workers, both active duty and Department of Defense 
civilian scientists, working in the USMCI.
  The USMCI intends to expand its research activities to military 
medical centers across the Nation. Special emphasis will be placed on 
the study of genetic and environmental factors in carcinogenesis among 
the entire population, including Asian, Caucasian, African-American and 
Hispanic subpopulations.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 36

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

     SECTION 1. THE UNITED STATES MILITARY CANCER INSTITUTE.

       (a) Establishment.--Chapter 104 of title 10, United States 
     Code, is amended by adding at the end the following new 
     section:

     ``Sec. 2117. United States Military Cancer Institute

       ``(a) Establishment.--(1) There is a United States Military 
     Cancer Institute in the University. The Director of the 
     United States Military Cancer Institute is the head of the 
     Institute.
       ``(2) The Institute is composed of clinical and basic 
     scientists in the Department of Defense who have an expertise 
     in research, patient care, and education relating to oncology 
     and who meet applicable criteria for participation in the 
     Institute.
       ``(3) The components of the Institute include military 
     treatment and research facilities that meet applicable 
     criteria and are designated as affiliates of the Institute.
       ``(b) Research.--(1) The Director of the United States 
     Military Cancer Institute shall carry out research studies on 
     the following:
       ``(A) The epidemiological features of cancer, including 
     assessments of the carcinogenic effect of genetic and 
     environmental factors, and of disparities in health, inherent

[[Page 442]]

     or common among populations of various ethnic origins.
       ``(B) The prevention and early detection of cancer.
       ``(C) Basic, translational, and clinical investigation 
     matters relating to the matters described in subparagraphs 
     (A) and (B).
       ``(2) The research studies under paragraph (1) shall 
     include complementary research on oncologic nursing.
       ``(c) Collaborative Research.--The Director of the United 
     States Military Cancer Institute shall carry out the research 
     studies under subsection (b) in collaboration with other 
     cancer research organizations and entities selected by the 
     Institute for purposes of the research studies.
       ``(d) Annual Report.--(1) Promptly after the end of each 
     fiscal year, the Director of the United States Military 
     Cancer Institute shall submit to the President of the 
     University a report on the results of the research studies 
     carried out under subsection (b).
       ``(2) Not later than 60 days after receiving the annual 
     report under paragraph (1), the President of the University 
     shall transmit such report to the Secretary of Defense and to 
     Congress.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by adding at the end the 
     following new item:

``2117. United States Military Cancer Institute.''.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself and Mrs. Hutchison):
  S. 37. A bill to extend the special postage stamp for breast cancer 
research for 2 years; to the Committee on Homeland Security and 
Governmental Affairs.
  Mrs. FEINSTEIN. Mr. President, on behalf of Senator Hutchison and 
myself, I rise today to introduce legislation to reauthorize the 
tremendously successful Breast Cancer Research Stamp for 2 additional 
years.
  Without Congressional action, the Breast Cancer Research Stamp will 
expire on December 31 of this year.
  The life of this extraordinary stamp deserves to be extended as it 
has proven to be a highly effective and self-supporting fundraiser.
  Since 1998, the American people have bought over 588 million breast 
cancer stamps--raising $42.66 million for breast cancer research.
  The National Cancer Institute and the Department of Defense have put 
these research dollars to good use by funding novel and innovative 
research in the area of breast cancer.
  Over a 7 year period, the Breast Cancer Stamp has demonstrated a very 
sustained and committed customer base.
  Millions of Americans have bought the stamps to honor loved ones with 
the disease, to highlight their own personal battle with breast cancer 
or to promote general public awareness--in hope of helping to find a 
cure.
  One cannot calculate in dollars and cents how the stamp has focused 
public awareness on this devastating disease and the need for 
additional research funding.
  There is still so much more to do because this disease has far 
reaching effects on our Nation:
  Breast cancer is the most commonly diagnosed cancer among women in 
the United States, ranking second among cancer deaths in women after 
lung cancer.
  In 2005, approximately 211,240 women in the U.S. will get breast 
cancer.
  About 40,410 women will die from the disease this year.
  There are over two million women living today in the U.S. who have 
been treated for breast cancer.
  Though much less common, about 1,300 men in America are diagnosed 
with breast cancer each year.
  It is imperative that we extend the life of this stamp so that we can 
continue to reach out to American women and men who do not know of 
their cancer and to those who are living with it.
  This legislation would extend the authorization of the Breast Cancer 
Research stamp for two additional years until December 31, 2007.
  The stamp would continue to have a surcharge of up to 25 percent 
above the value of a first-class stamp with the surplus revenues going 
to breast cancer research.
  Extending the Breast Cancer Research stamp does not affect any other 
semi-postal proposals under consideration by the Postal Service.
  We urge our colleagues to join us in passing this important 
legislation to extend the Breast Cancer Research Stamp for another 2 
years.
  Thanks to breakthroughs in cancer research, more and more people are 
becoming cancer survivors rather than cancer victims. Every dollar we 
continue to raise will help save lives.
  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. 37

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

     SECTION 1. 2-YEAR EXTENSION OF POSTAGE STAMP FOR BREAST 
                   CANCER RESEARCH.

       Section 414(h) of title 39, United States Code, is amended 
     by striking ``2005'' and inserting ``2007''.
                                 ______
                                 
      By Mr. NELSON of Nebraska (for himself, Mr. Domenici, and Mr. 
        Craig):
  S. 41. A bill to amend the Safe Drinking Water Act to exempt 
nonprofit small public water systems from certain drinking water 
standards relating to naturally occurring contaminants; to the 
Committee on Environment and Public Works.
  Mr. NELSON of Nebraska. Mr. President, today I am offering 
legislation with Senator Pete Domenici and Senator Larry Craig to allow 
small rural communities more time to meet an onerous and financially 
burdensome water quality regulation that is being imposed on local 
governments by the Environmental Protection Agency. The bipartisan 
Rural Community Arsenic Relief Act (RCARA) will amend the Safe Drinking 
Water Act to exempt small rural communities with population of up to 
ten thousand from the EPA's strict requirement to limit arsenic in 
drinking water to 10 parts per billion by January 1, 2006. Currently 
the allowable level of arsenic in drinking water is 50 ppb.
  As a former governor who fought against unfunded Federal mandates 
from Washington, I understand the impact a policy such as this can have 
on local budgets.
  Small rural communities simply don't have the resources and tax base 
to meet the arsenic standard arbitrarily set by the EPA. This unfunded 
mandate is a strain on local government budgets and will drive up local 
taxes. It is not right to ask the elected officials of our small 
communities to spend their limited funds on risks that we are learning 
are not as dangerous as they have been portrayed. This legislation will 
allow local governments more time to plan for and absorb the costs of 
meeting the EPA's standards for arsenic.
  With each passing day it is increasingly evident that small 
communities will not be able to count on any immediate federal 
assistance in converting their water systems to meet the new arsenic 
standard. This bipartisan bill represents one means of giving more time 
to these communities, most of which have lived with arsenic--a widely 
distributed naturally occurring element--for ages.
  Rural communities across America are grasping for solutions to comply 
with the new arsenic standard. Many reach the same conclusion--it is 
just too expensive. RCARA acknowledges that this is happening, 
recognizes that a one-size-fits-all solution doesn't work, and provides 
a framework to protect public health, while at the same time giving 
communities the flexibility they need to comply.
  State officials in Nebraska estimate it could cost communities $120 
million--$176 million to comply with the standard. Many communities, 
fearing that this regulation could bankrupt them, are considering 
dramatically raising rates for drinking water to cover the cost of new 
treatment and equipment. Extending the deadline is crucial for 
taxpayers and ratepayers throughout the country.
  This bill allows small communities to adopt a locally supported 
public health policy as an alternative to the one prescribed by EPA. In 
many communities, the rule can reasonably be expected to more than 
double water rates on low-income families without

[[Page 443]]

improving the quality of their water in any appreciative manner. Our 
bill provides a reasonable amount of time for our small communities to 
understand and implement EPA's requirements, without bankrupting the 
system. It is the least we should do.
  Mr. CRAIG. Mr. President, I rise to address an issue that has begun 
to emerge and gain our attention in rural America. This issue is an 
important one because it has the potential to devastate, economically, 
small cities and towns across the inter-mountain west--like in my 
State, of Idaho.
  The new Environmental Protection Agency drinking water standard of 10 
parts per billion for arsenic is something the current Administration 
inherited from the prior Administration and is now trying to implement. 
I would remind my colleagues, however, that the new lowered arsenic 
standard was not universally supported in Congress when it was 
proposed.
  There were Senators--not many, but I was certainly one of them--that 
knew that the cost of complying with the new arsenic standard was going 
to cripple economically--was going to break the back financially--of 
rural communities and small towns across the western United States.
  I fought this new standard on the floor of the Senate. I knew the 
costs were crippling and the health benefit was bogus. I also knew that 
the science to support the lower standard is being exposed as based on 
examples and sample populations that were very, very flawed. The 
science is now revealing that extrapolating from those sample 
communities to the whole of the United States was a very, very flawed 
basis for the drinking water standard.
  I fought this new standard, but I did not succeed.
  There are communities now in Idaho that will not be able to come into 
compliance with this new standard by the time it takes effect. Some of 
these Idaho communities have estimated that it would take double or 
triple their entire city budget, just to try to come into compliance--
and that would mean that no other city services could be paid for.
  That kind of situation is clearly ridiculous, and I will fight as 
long and as hard as I can to find solutions to this problem.
  Last year, I raised this issue with then-EPA Administrator Mike 
Leavitt. Mike Leavitt is a Westerner--his folks in Utah are having some 
of the same problems.
  I discussed the issue with him. I will raise it with any successor of 
his who is nominated to head the EPA. I will keep raising this issue 
and looking for solutions. The problem is that EPA bureaucrats--who are 
so good at being bureaucrats--think they know Idaho better than 
Idahoans do. Some of our Idaho communities have requested of EPA Region 
10 that EPA exercise some flexibility with this standard. This is 
flexibility that EPA has already incorporated into its final agency 
rule on the arsenic standard.
  Unfortunately, EPA bureaucrats are doing what they are good at. They 
are saying no to flexibility and hey, by the way, Castleford, Idaho or 
New Plymouth, Idaho--this won't disadvantage you economically as much 
as you say. That is what EPA says to the communities of Idaho. We know 
better than you.
  Seeing that EPA cannot be reasonable, I have worked with my 
colleagues Senator Nelson of Nebraska and Senator Domenici of New 
Mexico. Both of their States have similar problems. The product of our 
collaboration is a bill that we introduced last year and are re-
introducing today. The name of this bill is the Rural Community Arsenic 
Relief Act. While it may not provide all the relief that I would like 
to see, and it does not repeal the new arsenic standard--as I believe 
is merited by the science--this bill is a good compromise and a good 
start.
  With this bill, we are trying to force States--and in Idaho's case, 
the EPA since Idaho is what they call a ``non-primacy state''--to 
approve requests from communities to delay their compliance with the 
new arsenic standard.
  The bill is straightforward, it is vital, and it is needed. It will 
save some of these communities from bankruptcy or from discontinuing 
essential community services. Many other States--other than Idaho, 
Nebraska, and New Mexico--face this same crisis. I implore my 
colleagues to learn about what their small communities are facing, and 
to join with us in enacting this essential regulatory relief.
                                 ______
                                 
      By Mr. ALLEN (for himself, Mr. Nelson of Florida, Mr. DeWine, Mr. 
        Nelson of Nebraska, Mrs. Dole, Ms. Murkowski, and Mr. Vitter).
  S. 42. A bill to amend title 10, United States Code, to increase the 
death gratuity payable with respect to deceased members of the Armed 
Forces, and for other purposes; to the Committee on Armed Services.
  Mr. ALLEN. Mr. President, I rise to bring to my colleagues' attention 
a bill I introduced today called the Honoring the Fallen Soldiers and 
Families Act of 2005, sharing the same views of Senator Sessions of 
Alabama, who has worked on this legislation, as well as many of us over 
the years, including my partner, Senator Warner. This measure is 
originally cosponsored by Senators Bill Nelson, Mike DeWine, Ben 
Nelson, Elizabeth Dole, Lisa Murkowski, and David Vitter.
  Mr. President, as Americans, I believe we need to do everything we 
can to make sure our men and women in uniform are provided with the 
most technologically advanced armaments and equipment for their safety 
and their security when they are protecting our liberty. We also need 
to take care of the families of the soldiers who lose their lives, 
those who are killed in action and on duty. We need to care more about 
their surviving families.
  Currently, there are a number of benefits that are provided to family 
members who lose a loved one while serving our great Nation. Some of 
these benefits include the Servicemen's Group Life Insurance policies, 
the Dependency and Indemnity Compensation Program, education benefits, 
and Government housing.
  However, there is one benefit I have been concerned with during my 
tenure in the Senate. This is called the military death gratuity. It is 
a tax-exempt cash payment, currently at the amount of $12,000, which 
provides immediate financial compensation to families of those service 
men and women who have lost their lives serving our great Nation. 
During the past 108th Congress, I cosponsored legislation authored by 
Senator Susan Collins of Maine to double the death gratuity from $6,000 
to $12,000, which at the time was apparently a big deal, since Congress 
had sparingly raised the death gratuity since its inception in 1908. 
The last increase before then was at the end of the first gulf war in 
1991. Even then, half of that benefit was subjected to taxation.
  Some of us in Congress understood the need to provide this financial 
assistance and were able to get this provision included in a larger 
bill, the Military Family Tax Relief Act of 2003. Not only did this 
legislation double the death gratuity from $6,000 to $12,000, but it 
also made the payments of these moneys tax exempt.
  However, that is not enough, $12,000. I still believe this current 
amount of $12,000 is a miserly and paltry amount. Indeed, I consider it 
insulting. I have been speaking with people from Virginia and all 
across America and listening to them. It is confirmed to me how truly 
insulting this sum of money is. My sense is that a grateful Nation 
wants to better help the widows, widowers, and the children of those 
who have given their lives and their futures in defense of our country 
and our liberties, whether it was in Afghanistan, Iraq, or elsewhere in 
the world.
  When I was bringing this issue up, I got an e-mail and many messages 
from people across the country. This one is from Mrs. Margaret 
Stubenhofer from Springfield, VA, who wrote:

       Dear Senator Allen: On December 7, 2004, our son Captain 
     Mark Stubenhofer (U.S. Army) was killed in action while 
     serving in Iraq. He was shot by insurgents. Mark, who was 
     born and raised in Springfield, VA, leaves behind his wife 
     (Patty, age 30) and 3 small children (Lauren, 5 yrs, Justin, 
     2\1/2\ yrs, and Hope, 4 months). I am writing to you in 
     support of the proposed legislation to raise the military 
     survivor benefits. It is appalling

[[Page 444]]

     to me that our people, who also suffered a great tragedy, are 
     receiving millions of dollars after their loved ones died on 
     9-11 . . . yet, dependents of military personnel killed in 
     action while bravely serving their country in a foreign land 
     receive only slightly more than $12,000 as a death gratuity 
     and $100,000 in insurance benefits. I am very much in favor 
     of these benefits being raised to a more reasonable level; 
     and I ask you to continue to support such action as to make 
     this possible. In all good conscience, how can we possibly 
     ask these young men and women to be ready to die for their 
     country . . . and then leave their survivors with almost 
     nothing when their worst nightmare actually becomes a 
     reality?

  That is a good question. That is why I am introducing, with a number 
of my Senate colleagues who are cosponsoring, the Honoring Our Fallen 
Soldiers and Families Act of 2005. I am glad this is getting a lot of 
support from both sides of the aisle and leadership.
  This legislation will raise the military death gratuity from $12,000 
to $100,000 for the families of those service men and women who have 
lost their lives serving our great Nation since October 1, 2001. The 
reason for October 1, 2001--the retroactivity--is that is when the 
military action began in Afghanistan. As I mentioned, there a number of 
other benefits that family members whose loved one has died will 
receive, but unlike the death gratuity that reaches family members 
within 48 hours of the death, the other benefits can take some time--in 
fact, months--to make it to the family. That is just too long a period 
of time. They will eventually get it, but that short-term, immediate 
influx of money helps provide for the monetary stability at a time of 
great grief and uncertainty. The money can help pay for a home mortgage 
or for rent or gas or utilities bills, car payments, or schooling. 
School kids may be in schools where there are expenses. It will also 
help put food on the table. As a matter of fact, many of the fallen 
soldiers were the sole or significant breadwinner for the families, and 
the families are left without any immediate source of income.
  It is doubly important for members of the Guard and Reserve. 
Approximately a quarter to a third of those who serve in the Guard and 
Reserve actually take a pay cut when they are called up or activated to 
serve. While it is a source of income that may be less than they were 
receiving in the private sector, it is still a significant, substantial 
part of that family household's income. So when a soldier loses his or 
her life, even if it is a lower amount, the money stops. That is why it 
is imperative that we in Congress raise the death gratuity to a level 
that will take care of the immediate financial needs of these families.
  Some have questioned or critics may argue that raising the death 
gratuity to $100,000 is too costly. I contend that if you look at 
firefighters and police officers, these great citizens of our 
communities who are our warriors at home, saving lives from fires or in 
law enforcement actions, they generally get a death gratuity in the 
amount of $50,000 to $100,000. In our Commonwealth of Virginia, a 
police officer or firefighter who loses his or her life in the line of 
duty receives a $75,000 death gratuity. My proposal is to put some 
logical symmetry between what our warriors on the homefront--the police 
officers and firefighters--get and what our soldiers stationed at home 
and abroad get.
  In addition, as long as we have an all-volunteer Army, we need to 
make sure our soldiers know and their families know they have the best 
possible benefits should the unthinkable happen. I believe this 
legislation will help put some of those worries at ease. Whatever the 
amount may be, I guarantee to each of my colleagues that any family 
would rather have their loved one there at holidays and birthdays and 
anniversaries than the $100,000, but there is a big financial hole in 
their lives. There is also one that cannot be compensated. But it is 
one that a grateful Nation would want to provide.
  I will close by quoting George Washington, who was one of our 
greatest leaders, when he made a very wise and still cogent 
observation.
  He cautioned that the willingness of future generations to fight for 
their country, no matter how just the cause, will be proportional to 
how they perceive previous veterans were treated.
  It is important that we show a deeper appreciation for those heroic 
soldiers who died defending our liberty and also their brave families 
back home who have paid the ultimate sacrifice as well. This 
legislation is a significant striding step in that direction.
  I urge my colleagues in the Senate to quickly act on this legislation 
and all others trying to help our families of fallen heroes and their 
loved ones and pass these measures as quickly as possible, and also 
make them retroactive for all of those nearly 1,500 who have lost their 
lives protecting our freedom, advancing liberty throughout the world, 
and people who are truly American heroes whom we will always remember.
                                 ______
                                 
      By Mr. HAGEL (for himself, Mr. Coleman, Mr. Kennedy, Mr. DeWine, 
        and Mr. Obama):
  S. 43. A bill to provide certain enhancements to the Montgomery GI 
Bill Program for certain individuals who serve as members of the Armed 
Forces after the September 11, 2001, terrorist attacks, and for other 
purposes; to the Committee on Armed Services.
  Mr. HAGEL. Mr. President, I rise today to re-introduce the ``Military 
Death Benefit Improvement Act of 2005'' and the ``G.I. Bill Enhancement 
Act of 2005.'' These pieces of legislation recognize the service and 
sacrifice of the men and women of our armed forces who are proudly and 
bravely serving our country around the world. These bills also 
recognize the sacrifices borne by the families of our men and women in 
uniform.
  The ``Military Death Benefit Improvement Act of 2005'' would raise 
the military death gratuity paid to the families of military personnel 
killed while on active duty from $12,000 to $100,000. This increase 
would also be applied retroactively to all service members on active 
duty who have died since September 11, 2001.
  The military death gratuity is money provided within 72 hours to 
families of service members who are killed while on active duty. These 
funds assist next-of-kin with their immediate financial needs.
  Though nothing can replace the hole left in a family by the loss of a 
son, daughter, mother or father, this bill will help alleviate some of 
the financial hardships faced by the families of our brave service men 
and women who give their lives in service to our country. It will send 
a message to our brave young men and women and their families that 
their Nation appreciates their service and sacrifice.
  As we face the challenges of the 21st Century, service men and women 
sacrificing for their country in a time of war should be assured that 
their families will be taken care of. The loss of a loved one is a 
tremendous emotional hardship for families. Congress must do what it 
can to ensure that it does not cause devastating financial hardship as 
well.
  I also rise today to re-introduce the ``G.I. Bill Enhancement Act of 
2005.'' This legislation would waive the Montgomery G.I. Bill program's 
$1,200 enrollment fee for active duty members of our Nation's military.
  The G.I. Bill Enhancement Act covers any member of the United States 
military, including Reserve and National Guard members, serving on 
active duty during the period after President Bush's November 2001 
Executive Order that placed the military on a wartime footing. This 
legislation would: Waive the G.I. Bill enrollment fee until President 
Bush's November 2001 Executive Order is rescinded; allow all service 
men and women to opt into the G.I. Bill with no penalty or enrollment 
fee; and reimburse those service men and women covered by this bill who 
have already paid the $1,200 enrollment fee prior to the enactment of 
this legislation.
  The current Montgomery G.I. Bill is tailored to serve members of our 
military in a time of peace. Upon enlistment, recruits are given the 
option of enrolling in the G.I. Bill. If they choose to participate, 
they are charged a $1,200 enrollment fee which is deducted from their 
monthly pay over 12 months.

[[Page 445]]

However, we are now in a time of war and the demands on our service 
members and their families have been transformed and increased. To that 
end, changes must be made to the G.I. Bill to ensure that it continues 
to provide realistic and relevant educational opportunities to those 
who are defending our country.
  This is an issue of fundamental fairness. The men and women serving 
our country in wartime should not have to choose between the long-term 
benefits of the G.I. Bill and the short-term demands of their paycheck. 
The G.I. Bill is one of the great legacies of military service to our 
country. Men and women sacrificing for their country in a time of war 
need to be assured that access to higher education is in their future. 
Congress must do all it can to ensure that education options for our 
veterans are accessible and real.
  The G.I. Bill has long been recognized as one of the most important 
Congressional acts of post World War II America. This legislation 
ensured that all who served their Nation would not be penalized as a 
result of their time away from their careers and communities in service 
to their country. The G.I. Bill helped members of our ``greatest 
generation'' upon their return home by providing them with the 
educational tools necessary to pursue the opportunities enjoyed by all 
Americans.
  Over the last 60 years, the Federal Government has invested billions 
of dollars in education benefits for our Nation's veterans. Over 21 
million men and women have benefitted from the G.I. Bill, resulting in 
a workforce that transformed American society. The bill's far-reaching 
impact can be seen here today, as Members of this body, including this 
Senator, have prospered as a result of the benefits of the G.I. Bill.
  Every American should be proud of how we have responded to the 
challenges of terrorism following September 11, 2001. We owe much to 
the men and women who have fought bravely in Afghanistan and Iraq. The 
``Military Death Benefit Improvement Act of 2005'' and the ``G.I. Bill 
Enhancement Act of 2005'' recognize these sacrifices. I hope that my 
Senate colleagues will give serious consideration to these important 
pieces of legislation, and that we will pass these bills and they will 
be signed into law by President Bush. I ask unanimous consent that the 
text of these two bills be printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                 S. 43

       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 ``Montgomery GI Bill 
     Enhancement Act of 2005''.

     SEC. 2. EXEMPTION FROM PAYMENT OF INDIVIDUAL CONTRIBUTIONS 
                   UNDER MONTGOMERY GI BILL OF INDIVIDUALS WHO 
                   SERVE AS ACTIVE DUTY MEMBERS OF THE ARMED 
                   FORCES UNDER EXECUTIVE ORDER 13235.

       (a) Active Duty Program.--Notwithstanding section 3011(b) 
     of title 38, United States Code, no reduction in basic pay 
     otherwise required by such section shall be made in the case 
     of a covered member of the Armed Forces.
       (b) Selected Reserve Program.--Notwithstanding section 
     3012(c) of such title, no reduction in basic pay otherwise 
     required by such section shall be made in the case of a 
     covered member of the Armed Forces.
       (c) Termination of On-Going Reductions in Basic Pay.--In 
     the case of a covered member of the Armed Forces who first 
     became a member of the Armed Forces or first entered on 
     active duty as a member of the Armed Forces before the date 
     of the enactment of this Act and whose basic pay would, but 
     for subsection (a) or (b) of this section, be subject to 
     reduction under section 3011(b) or 3012(c) of such title for 
     any month beginning on or after that date, the reduction of 
     basic pay of such covered member of the Armed Forces under 
     such section 3011(b) or 3012(c), as applicable, shall cease 
     commencing with the first month beginning on or after that 
     date.
       (d) Refund of Contributions.--(1) In the case of any 
     covered member of the Armed Forces whose basic pay was 
     reduced under section 3011(b) or 3012(c) of such title for 
     any month beginning before the date of the enactment of this 
     Act, the Secretary concerned shall pay to such covered member 
     of the Armed Forces an amount equal to the aggregate amount 
     of reductions of basic pay of such member of the Armed Forces 
     under such section 3011(b) or 3012(c), as applicable, as of 
     that date.
       (2) Any amount paid to a covered member of the Armed Forces 
     under paragraph (1) shall not be included in gross income 
     under the Internal Revenue Code of 1986.
       (3) Amounts for payments made by a Secretary concerned 
     under paragraph (1) during fiscal year 2005 shall be derived 
     from amounts made available for such fiscal year in an Act 
     making supplemental appropriations for defense and the 
     reconstruction of Iraq.
       (4) In this subsection, the term ``Secretary concerned'' 
     means--
       (A) the Secretary of the Army, with respect to matters 
     concerning the Army;
       (B) the Secretary of the Navy, with respect to matters 
     concerning the Navy or the Marine Corps;
       (C) the Secretary of the Air Force, with respect to matters 
     concerning the Air Force; and
       (D) the Secretary of Homeland Security, with respect to 
     matters concerning the Coast Guard.
       (e) Covered Member of the Armed Forces Defined.--In this 
     section, the term ``covered member of the Armed Forces'' 
     means any individual who serves on active duty as a member of 
     the Armed Forces during the period--
       (1) beginning on November 16, 2001, the date of Executive 
     Order 13235, relating to National Emergency Construction 
     Authority; and
       (2) ending on the termination date of the Executive order 
     referred to in paragraph (1).

     SEC. 3. OPPORTUNITY FOR INDIVIDUALS WHO SERVE AS ACTIVE DUTY 
                   MEMBERS OF THE ARMED FORCES UNDER EXECUTIVE 
                   ORDER 13235 TO WITHDRAW ELECTION NOT TO ENROLL 
                   IN MONTGOMERY GI BILL.

       Section 3018 of title 38, United States Code, is amended--
       (1) by redesignating subsections (c) and (d) as subsection 
     (d) and (e), respectively;
       (2) by inserting after subsection (b) the following new 
     subsection (c):
       ``(c)(1) Notwithstanding any other provision of this 
     chapter, during the one-year period beginning on the date of 
     the enactment of this subsection, an individual who--
       ``(A) serves on active duty as a member of the Armed Forces 
     during the period beginning on November 16, 2001, and ending 
     on the termination date of Executive Order 13235, relating to 
     National Emergency Construction Authority; and
       ``(B) has served continuously on active duty without a 
     break in service following the date the individual first 
     becomes a member or first enters on active duty as a member 
     of the Armed Forces,

     shall have the opportunity, on such form as the Secretary of 
     Defense shall prescribe, to withdraw an election under 
     section 3011(c)(1) or 3012(d)(1) of this title not to receive 
     education assistance under this chapter.
       ``(2) An individual described paragraph (1) who made an 
     election under section 3011(c)(1) or 3012(d)(1) of this title 
     and who--
       ``(A) while serving on active duty during the one-year 
     period beginning on the date of the enactment of this 
     subsection makes a withdrawal of such election;
       ``(B) continues to serve the period of service which such 
     individual was obligated to serve;
       ``(C) serves the obligated period of service described in 
     subparagraph (B) or before completing such obligated period 
     of service is described by subsection (b)(3)(B); and
       ``(D) meets the requirements set forth in paragraphs (4) 
     and (5) of subsection (b),

     is entitled to basic educational assistance under this 
     chapter.''; and
       (3) in subsection (e), as so redesignated, by inserting 
     ``or (c)(2)(A)'' after ``(b)(1)''.
                                 ______
                                 
      By Mr. HAGEL (for himself, Mr. DeWine, Mrs. Clinton, Mr. Kennedy, 
        Mr. Lautenberg, and Mr. Salazar):
  S. 44. A bill to amend title 10, United States Code, to increase the 
amount of the military death gratuity from $12,000 to $100,000; to the 
Committee on Armed Services.

                                 S. 44

       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 ``Military Death Benefit 
     Improvement Act of 2005''.

     SEC. 2. INCREASE IN DEATH GRATUITY PAYABLE WITH RESPECT TO 
                   MEMBERS OF THE ARMED FORCES.

       (a) Amount of Death Gratuity.--Section 1478(a) of title 10, 
     United States Code, is amended by striking ``$12,000'' and 
     inserting ``$100,000''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply with respect to deaths occurring on or after 
     November 16, 2001, the date of Executive Order 13235, 
     relating to National Emergency Construction Authority.
       (c) Funding.--

[[Page 446]]

       (1) Source of funds.--Amounts for the payment during fiscal 
     year 2005 of death gratuities by a Secretary concerned under 
     sections 1475 through 1477 of title 10, United States Code, 
     as amended by subsection (a), shall be derived from amounts 
     made available for such fiscal year in an Act making 
     emergency supplemental appropriations for defense and for the 
     reconstruction of Iraq.
       (2) Secretary concerned defined.--In this subsection, the 
     term ``Secretary concerned'' has the meaning given such term 
     in section 101(a)(9) of title 10, United States Code.
                                 ______
                                 
      By Mr. LEVIN (for himself, Mr. Hatch, and Mr. Biden):
  S. 45. A bill to amend the Controlled Substances Act to lift the 
patient limitation on prescribing drug addiction treatments by medical 
practitioners in group practices, and for other purposes; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. LEVIN. Mr. President, the legislation I am introducing today 
along with my colleagues Senator Hatch and Senator Biden, addresses an 
unintended effect of a provision in the original Drug Abuse and 
Treatment Act of 2000 (DATA) that hinders access to a revolutionary new 
treatment for thousands of individuals who seek it.
  When Congress passed DATA as Title XXXV of the Children's Health Act 
of 2000, it allowed for the dispensing and prescribing of Schedule III 
drugs, like buprenorphine/naloxone, in an office-based setting, for the 
treatment of heroin addiction. As a result of DATA, access to treatment 
is significantly expanded; patients no longer are restricted to 
receiving treatment in a large public clinic, usually at a great 
distance, but now may receive such care in the private, nearby office 
of qualified physicians.
  DATA limits individual physicians to treating no more than 30-
patients at a time. Unfortunately, the law results in the same 30-
patient limit on physician group practices. The difficulties that have 
arisen, including the dashed hopes for treatment of many, have resulted 
in the underutilization of this proven therapy all across this country, 
including my home state of Michigan.
  One of the authors of DATA, I can tell you that it clearly was not 
our intention that individuals seeking this new treatment have less 
access simply because they receive care from a physician practicing in 
a group, or from a group-based or mixed-model health plan. 
Nevertheless, this is the effect and it is having a severe effect.
  The problem is addressed by removing the 30-patient aggregate limit 
on medical groups. This is achieved in the bill we are introducing 
today. Our bill simply removes the statutory limit on physician group 
practices, while maintaining the 30-patient limit on each physician. I 
am pleased that the Senate has already gone on record in support of 
this modification to DATA. On October 11, 2004, the Senate Passed S. 
2976, to remove the 30-patient limit on the group practices. However, 
the House adjourned before acting on the legislation. It is our hope 
that the bill we are introducing today will receive speedy action in 
both the Senate and House in the very near future.
  Mr. President, I would like to share some of the sentiments that have 
been expressed in support of the group practice modification, as well 
as some first hand accounts of individuals who are being successfully 
treated with buprenorphine/naloxone. Dr. Charles Schuster, a former 
director of the National Institute on Drug Abuse who currently heads 
the Addiction Research Institute at Wayne State University, writes:

       We have three physicians in a group, all of whom have been 
     trained and granted waivers by the U.S. Department of Health 
     and Human Services to prescribe Suboxone and Subutex for the 
     treatment of opiate addiction. All are specialists in the 
     treatment of addictive disorders. Rather than being able to 
     bring this potentially life saving therapy to 90 members of 
     our community, they are restricted to a total of thirty.
       This situation is particularly heart breaking in places 
     where there are a few or only one provider. This situation 
     will only get worse as physicians and practice plans reach 
     their 30-patient limitation.
       I have been involved in the development of Suboxone and 
     Subutex for the treatment of opiate addiction for many years. 
     It is a safer medication with less abuse potential than 
     methadone. It allows people who fear public knowledge of 
     their addictive disease to more discreetly seek help from a 
     private physician. It is a medication that can be used for a 
     short period with adolescents who have become addicted to 
     opiates because it is easier to taper them off of this drug 
     than methadone. In short, office-based practice with Suboxone 
     and Subutex is a major addition to our country's treatment 
     system for opiate addiction. It is essential that we remove 
     the impediment of limiting Physician Practice Plans to 30 
     patients so that each of the physicians in such Practice 
     Plans who are trained to use this medication can bring their 
     services to those in need.

  Peter DeMarco, in an article in the May 30, 2004 Boston Globe, 
writes:

       When buprenorphine became available as a treatment for 
     OxyContin and heroin addiction 18 months ago, many medical 
     professionals and addicts hailed it as a miracle drug, 
     bringing addicts back from the brink and helping them lead 
     normal lives when all else had failed. But for many addicts, 
     buprenorphine remains one of the hardest drugs to obtain. . . 
     . (B)prenorphine doesn't cloud the minds of patients, 
     allowing them to work or study as if they're not on any drug 
     at all. Nearly all who take buprenorphine, meanwhile, say 
     they lose all physical cravings for street drugs.
       But a combination of federal limits on the distribution of 
     buprenorphine . . . has kept thousands of opiate addicts from 
     receiving the drug in Massachusetts and across the country. 
     At the heart of the issue is federal legislation passed in 
     2000--two years before the drug was approved by the FDA--that 
     restricts individual clinical practices from treating more 
     than 30 patients with buprenorphine at a time.
       While many substance-abuse experts say the 30-patient 
     figure is too low for some practices, their main quarrel with 
     the Drug Addiction Treatment Act of 2000 is its failure to 
     differentiate single-physician practices, hospitals, and 
     health care organizations. For example, all the doctors who 
     work for Tufts Health Plan can treat a combined 30 patients--
     the same total as can be seen by a physician practicing 
     alone.
       Boston health officials, along with their counterparts in 
     the State and Federal governments, say the Federal 
     legislation erred on the side of caution, and needs to be 
     changed to allow wider access to buprenorphine.
       ``Boston Medical Center's main practice has 200 or more 
     general internal-medicine doctors, and within that practice, 
     we can only treat 30 people. It's the craziest loophole,'' 
     said Colleen Labelle, nurse-manager of the hospital's Office-
     Based Opioid Treatment Program. ``We get 20 calls a day from 
     across the state. People are begging, desperate to get 
     treated, who we can't treat.''
       The Federal Substance Abuse and Mental Health Services 
     Administration has begun an internal process to increase the 
     30-patient cap. But because any proposed change would be 
     subject to the public-review process, approval could take as 
     long as two years, said Nick Reuter, a senior public health 
     analyst with the agency.
       Timothy Tigges says his addiction began after he wrenched 
     his back and bummed a few Percocet pills, a prescription 
     analgesic, from a friend to dull the pain. Before he knew it, 
     he was hooked on opiates, alternating between OxyContin and 
     shooting up heroin as his life went to pieces.
       In October, Tigges, a 27-year-old East Boston carpet 
     installer, began taking buprenorphine, placing an orange pill 
     the size of a dime under his tongue until it dissolves, four 
     times daily. He hasn't touched an illegal drug since the day 
     he started the program, has put on 80 pounds from lifting 
     weights at the gym, and has yet to miss a day of work. For 
     the first time in three years, Tigges hopes to see his 5-
     year-old daughter, whose mother has refused to let him visit.
       ``I've had clean urines, 100 percent, for nine months now. 
     There's nothing I'm prouder of than that,'' he said, choking 
     back emotion. ``What I read on the front page of the paper 
     every day is 18- and 20-year-old kids dying of garbage drugs. 
     There's just no need for it. I would take every ounce of 
     heroin off the street and give them this stuff. You watch the 
     crime rate go down.''

  Mr. President, I ask unanimous consent that the text of the 
legislation be included at the end of my remarks.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 45

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

     SECTION 1. MAINTENANCE OR DETOXIFICATION TREATMENT WITH 
                   CERTAIN NARCOTIC DRUGS; ELIMINATION OF 30-
                   PATIENT LIMIT FOR GROUP PRACTICES.

       (a) In General.--Section 303(g)(2)(B) of the Controlled 
     Substance Act (21 U.S.C. 823(g)(2)(B)) is amended by striking 
     clause (iv).
       (b) Conforming Amendment.--Section 303(g)(2)(B) of the 
     Controlled Substance Act (21 U.S.C. 823(g)(2)(B)) is amended 
     in clause (iii) by striking ``In any case'' and all that 
     follows through ``the total'' and inserting ``The total''.

[[Page 447]]

       (c) Effective Date.--This section shall take effect on the 
     date of enactment of this Act.
                                 ______
                                 
      By Mr. LEVIN (for himself and Mr. Lugar):
  S. 46. A bill to authorize the extension of unconditional and 
permanent nondiscriminatory treatment (permanent normal trade relations 
treatment) to the products of Ukraine, and for other purposes; to the 
Committee on Finance.
  Mr. LEVIN. Mr. President, today I introduce with my colleague, 
Senator Lugar, a bill to grant normal trade treatment to the products 
of Ukraine. My brother, Congressman Sander Levin and other members are 
introducing a similar bill in the House. It is our hope that enactment 
of this legislation will help to build stronger economic ties between 
the United States and Ukraine.
  The Cold War era Jackson-Vanik trade restrictions that deny most 
favored nation trade status to imports from former Soviet-Bloc 
countries are outdated and, when applied to Ukraine, inappropriate. 
Those restrictions were established as a tool to pressure Communist 
nations to allow their people to freely emigrate in exchange for 
favorable trade treatment by the United States.
  Ukraine does allow its citizens the right and opportunity to 
emigrate. It has met the Jackson-Vanik test. In fact, Ukraine has been 
found to be in full compliance with the freedom of emigration 
requirements under the Jackson-Vanik law. Ukraine has been certified as 
meeting the Jackson-Vanik requirements on an annual basis since 1992 
when a bilateral trade agreement went into effect.
  It is time the United States recognizes this reality by eliminating 
the Jackson-Vanik restrictions and granting Ukraine normal trading 
status on a permanent basis. Our bill does this as well as addressing 
traditional Jackson-Vanik issues such as emigration, religious freedom, 
restoration of property, and human rights. It also deals with the 
important trade issues that must be considered when granting a country 
permanent normal trade relations (PNTR), such as making progress toward 
World Trade Organization (WTO), accession and tariff and excise tax 
reductions.
  Since reestablishing independence in 1991, Ukraine has taken 
important steps toward the creation of democratic institutions and a 
free-market economy. As a member state of the Organization for Security 
and Cooperation in Europe (OSCE), Ukraine is committed to developing a 
system of governance in accordance with the principles regarding human 
rights that are set forth in the Final Act of the Conference on 
Security and Cooperation in Europe, the Helsinki Final Act.
  On December 26, 2004, Ukraine took another historic step in its 
pursuit of democracy with the legitimate election of its new President 
Viktor Yuschenko. This election showed the world that Ukraine has 
joined the family of democracies. The United States can help advance 
this young democracy by repealing our Cold War-era laws that should no 
longer apply to them and welcoming them to the international economic 
community as a full partner. This bill will accomplish these goals.
  In addition to welcoming the Ukrainian government to the family of 
democracies, we must also take a moment to honor the Ukranian people 
for their commitment to democratic institutions in civil society 
through peaceful demonstrations. Free and fair elections were conducted 
only because of the courage and hard work of the Ukranian people. 
Without their persistence Ukraine was in danger of moving forward with 
an illegitimately elected president.
  By drawing Ukraine into normal trade relations, the international 
community will be helping Ukraine to achieve greater market reform and 
continue its commitment to safeguarding religious liberty and enforcing 
laws to combat discrimination. PNTR status will hopefully do more than 
increase bilateral trade between the United States and Ukraine and 
encourage increased international investment in Ukraine. Hopefully it 
will also stimulate the reform we all want and the Ukrainian people 
deserve on their way to achieving a more mature and stable democracy.
  It's time we recognize Ukraine's accomplishments and status as an 
emerging democracy and market economy by lifting the Jackson-Vanik 
restrictions. I hope my colleagues will support this important bill.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 46

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

     SECTION 1. FINDINGS.

       Congress finds that--
       (1) Ukraine allows its citizens the right and opportunity 
     to emigrate, free of anything more than a nominal tax on 
     emigration or on the visas or other documents required for 
     emigration and free of any tax, levy, fine, fee, or other 
     charge on any citizens as a consequence of the desire of such 
     citizens to emigrate to the country of their choice;
       (2) Ukraine has been found to be in full compliance with 
     the freedom of emigration requirements under title IV of the 
     Trade Act of 1974 since 1997;
       (3) since reestablishing independence in 1991, Ukraine has 
     taken important steps toward the creation of democratic 
     institutions and a free-market economy and, as a 
     participating state of the Organization for Security and 
     Cooperation in Europe (OSCE), is committed to developing a 
     system of governance in accordance with the principles 
     regarding human rights and humanitarian affairs that are set 
     forth in the Final Act of the Conference on Security and 
     Cooperation in Europe (also known as the ``Helsinki Final 
     Act'') and successive documents;
       (4) the people of Ukraine deserve praise for demonstrating 
     a deep commitment to democracy and through peaceful civil 
     action demanding a process that achieved a fair election in 
     Ukraine's most recent Presidential runoff;
       (5) Ukraine has made progress toward meeting international 
     commitments and standards in the most recent Presidential 
     runoff elections, including in the implementation of 
     Ukraine's new elections laws;
       (6) as a participating state of the Organization for 
     Security and Co-operation in Europe (OSCE), Ukraine is 
     committed to addressing issues relating to its national and 
     religious minorities and to adopting measures to ensure that 
     persons belonging to national minorities have full equality 
     both individually and communally;
       (7) Ukraine has enacted legislation providing protection 
     against incitement to violence against persons or groups 
     based on national, racial, ethnic, or religious 
     discrimination, including anti-Semitism, and has committed 
     itself, including through a letter to the President of the 
     United States, to ensuring freedom of religion and combating 
     racial and ethnic intolerance and hatred;
       (8) Ukraine has engaged in efforts to combat ethnic and 
     religious intolerance by cooperating with various United 
     States nongovernmental organizations;
       (9) Ukraine is continuing the restitution of religious 
     properties, including religious and communal properties 
     confiscated from national and religious minorities during the 
     Soviet era, is facilitating the revival of those minority 
     groups, and remains committed to developing a legislative 
     framework for completing this process, as promised in a 
     letter to the President of the United States;
       (10) Ukraine has received normal trade relations treatment 
     since concluding a bilateral trade agreement with the United 
     States that entered into force on June 23, 1992;
       (11) Ukraine's accession to the World Trade Organization 
     would be a welcome step, recognizing that many issues remain 
     to be resolved, including commitments relating to access of 
     United States agricultural products, protection of 
     intellectual property rights, tariff and excise tax 
     reductions for goods (including automobiles), trade in 
     services, elimination of export incentives for industrial 
     goods, and reform of customs procedures and other non-tariff 
     barriers;
       (12) Ukraine has enacted protections reflecting 
     internationally recognized labor rights;
       (13) as a participating state of the OSCE, Ukraine has 
     committed itself to respecting freedom of the press, and the 
     new administration has affirmed this commitment;
       (14) Ukraine has stated its desire to pursue a course of 
     Euro-Atlantic integration with a commitment to ensuring 
     democracy and prosperity for its citizens; and
       (15) Ukraine has participated with the United States in its 
     peacekeeping operations in Europe and has provided important 
     cooperation in the global struggle against international 
     terrorism.

     SEC. 2. TERMINATION OF APPLICATION OF TITLE IV OF THE TRADE 
                   ACT OF 1974 TO UKRAINE.

       (a) Presidential Determinations and Extension of 
     Unconditional and Permanent

[[Page 448]]

     Nondiscriminatory Treatment.--Notwithstanding any provision 
     of title IV of the Trade Act of 1974 (19 U.S.C. 2431 et 
     seq.), the President may--
       (1) determine that such title should no longer apply to 
     Ukraine; and
       (2) after making a determination under paragraph (1) with 
     respect to Ukraine, proclaim the extension of unconditional 
     and permanent nondiscriminatory treatment (permanent normal 
     trade relations treatment) to the products of that country.
       (b) Termination of Application of Title IV.--On and after 
     the effective date of the extension under subsection (a)(2) 
     of nondiscriminatory treatment to the products of Ukraine, 
     chapter 1 of title IV of the Trade Act of 1974 shall cease to 
     apply to that country.

     SEC. 3. SENSE OF CONGRESS.

       It is the sense of Congress that the United States remain 
     fully committed to a multifaceted engagement with Ukraine, 
     including by--
       (1) encouraging Ukraine to continue to meet its commitments 
     as a participating member of the OSCE and welcoming further 
     progress on implementing policy--
       (A) of providing for the free emigration of its citizens;
       (B) of safeguarding religious liberty throughout Ukraine;
       (C) of enforcing existing Ukrainian laws at the national 
     and local levels to combat ethnic, religious, and racial 
     discrimination and violence;
       (D) of expanding the restitution of religious and communal 
     properties, including establishing a legal framework for the 
     completion of such restitution in the future;
       (E) of meeting international standards of democracy, 
     including implementation of newly adopted election laws;
       (F) of creating a more independent legal and judicial 
     system, governed by the rule of law, and free of political 
     interference and corruption; and
       (G) of respecting media freedoms fully, including by 
     prohibiting physical harm to and intimidation of journalists;
       (2) supporting Ukraine's efforts to make further market-
     oriented reforms, to pursue a policy of Euro-Atlantic 
     integration, to join the WTO, and to combat corruption;
       (3) supporting Ukraine's efforts to make substantial and 
     meaningful progress in enacting and enforcing the protection 
     of intellectual property rights; and
       (4) working with Ukraine to ensure quick resolution of 
     trade disputes that may arise, particularly in the 
     intellectual property, poultry, and other agricultural 
     sectors.

     SEC. 4. CONTINUED ENJOYMENT OF RIGHTS UNDER THE JUNE 23, 
                   1992, BILATERAL TRADE AGREEMENT.

       (a) Finding.--Congress finds that the trade agreement 
     between the United States and Ukraine that entered into force 
     on June 23, 1992, remains in force between the 2 countries 
     and provides the United States with important rights, 
     including the right to use specific safeguard rules to 
     respond to import surges from Ukraine.
       (b) Applicability of Safeguard.--Section 421 of the Trade 
     Act of 1974 (19 U.S.C. 2451) shall apply to Ukraine to the 
     same extent as such section applies to the People's Republic 
     of China, so long as the trade agreement described in 
     subsection (a) remains in force.

     SEC. 5. EXERCISE OF CONGRESSIONAL OVERSIGHT OVER WTO 
                   ACCESSION NEGOTIATIONS.

       (a) Notice of Agreement on Accession to WTO by Ukraine.--
     Not later than 5 days after the date on which the United 
     States has entered into a bilateral agreement with Ukraine on 
     the terms of accession by Ukraine to the World Trade 
     Organization, the President shall so notify Congress, and the 
     President shall transmit to Congress, not later than 15 days 
     after that agreement is entered into, a report that sets 
     forth the provisions of that agreement.
       (b) Congressional Oversight Resolution.--
       (1) Introduction.--If a Congressional Oversight Resolution 
     is introduced in the House of Representatives or the Senate 
     during the 30-day period (not counting any day which is 
     excluded under section 154(b) of the Trade Act of 1974 (19 
     U.S.C. 2194(b)), beginning on the date on which the President 
     first notifies Congress under subsection (a) of the agreement 
     referred to in that subsection, that Congressional Oversight 
     Resolution shall be considered in accordance with this 
     subsection.
       (2) Congressional oversight resolution.--In this 
     subsection, the term ``Congressional Oversight Resolution'' 
     means only a joint resolution of the two Houses of Congress, 
     the matter after the resolving clause of which is as follows: 
     ``That it is the sense of the Congress that the agreement 
     between the United States and Ukraine on the terms of 
     accession by Ukraine to the World Trade Organization, of 
     which Congress was notified on ________, does not adequately 
     advance the interests of the United States.'', with the blank 
     space being filled with the appropriate date.
       (3) Procedures for considering resolutions.--
       (A) Introduction and referral.--A Congressional Oversight 
     Resolution--
       (i) in the House of Representatives--

       (I) may be introduced by any Member of the House;
       (II) shall be referred to the Committee on Ways and Means 
     and, in addition, to the Committee on Rules; and
       (III) may not be amended by either Committee; and

       (ii) in the Senate--

       (I) may be introduced by any Member of the Senate;
       (II) shall be referred to the Committee on Finance; and
       (III) may not be amended.

       (B) Committee discharge and floor consideration.--The 
     provisions of subsections (c) through (f) of section 152 of 
     the Trade Act of 1974 (19 U.S.C. 2192 (c) through (f)) 
     (relating to committee discharge and floor consideration of 
     certain resolutions in the House and Senate) apply to a 
     Congressional Oversight Resolution to the same extent as such 
     subsections apply to resolutions under such section.
       (c) Rules of House of Representatives and Senate.--
     Subsection (b) is enacted by Congress--
       (1) as an exercise of the rulemaking power of the House of 
     Representatives and the Senate, respectively, and as such is 
     deemed a part of the rules of each House, respectively, and 
     the procedures described in such subsection supersede other 
     rules only to the extent that they are inconsistent with such 
     other rules; and
       (2) with the full recognition of the constitutional right 
     of either House to change the rules (so far as relating to 
     the procedures of that House) at any time, in the same 
     manner, and to the same extent as any other rule of that 
     House.

  Mr. LUGAR. Mr. President, I rise today in support of a bill that I 
have introduced with Senator Carl Levin authorizing the extension of 
permanent normal trade relations treatment. Ukraine is still subject to 
the provisions of the Jackson-Vanik amendment to the Trade Act of 1974, 
which sanctions nations for failure to comply with freedom of 
emigration requirements. Our bill would repeal permanently the 
application of Jackson-Vanik to Ukraine.
  In the post-cold-war era, Ukraine has demonstrated a commitment to 
meet these requirements, and in addition, has expressed a strong desire 
to abide by free market principles and good governance. Last November, 
I served as President Bush's personal representative to the runoff 
election between Prime Minister Yanukovich and Viktor Yushchenko. 
During that visit, I promoted free and fair election procedures that 
would strengthen worldwide respect for the legitimacy of the winning 
candidate. Unfortunately, that was not possible. The Government of 
Ukraine allowed, or aided and abetted, wholesale fraud and abuse that 
changed the results of the election. It is clear that Prime Minister 
Yanukovich did not win the election.
  In response, the people of Ukraine rallied in the streets and 
demanded justice. After tremendous international pressure and 
mediation, Ukraine repeated the runoff election on December 26. A newly 
named Central Election Commission and a new set of election laws led to 
a much-improved process. International monitors concluded that the 
process was generally free and fair. This past weekend Viktor 
Yushchenko was inaugurated as President of Ukraine.
  Extraordinary events have occurred in Ukraine over the last three 
months. A free press has revolted against government intimidation and 
reasserted itself. An emerging middle class has found its political 
footing. A new generation has embraced democracy and openness. A 
society has rebelled against the illegal activities of its government. 
It is in our interest to recognize and protect these advances in 
Ukraine.
  The United States has a long record of cooperation with Ukraine 
through the Nunn-Lugar Cooperative Threat Reduction. Ukraine inherited 
the third largest nuclear arsenal in the world with the fall of the 
Soviet Union. Through the Nunn-Lugar program the United States has 
assisted Ukraine in eliminating this deadly arsenal and joining the 
Nonproliferation Treaty as a non-nuclear State.
  One of the areas where we can deepen United States-Ukrainian 
relations is bilateral trade. Our trade relations between the United 
States and Ukraine are currently governed by a bilateral trade 
agreement signed in 1992. There are other economic agreements in place 
seeking to further facilitate economic cooperation between the United

[[Page 449]]

States and Ukraine, including a bilateral investment treaty which was 
signed in 1996, and a taxation treaty signed in 2000. In addition, 
Ukraine commenced negotiations to become a member of the World Trade 
Organization in 1993, further demonstrating its commitment to adhere to 
free market principles and fair trade. In light of its adherence to 
freedom of emigration requirements, democratic principles, compliance 
with threat reduction and several agreements on economic cooperation, 
the products of Ukraine should not be subject to the sanctions of 
Jackson-Vanik.
  There are areas in which Ukraine needs to continue to improve. These 
include market access, protection of intellectual property and 
reduction of tariffs. The U.S. must remain committed to assisting 
Ukraine in pursuing market economic reforms. The permanent waiver of 
Jackson-Vanik and establishment of permanent normal trade relations 
will be the foundation on which further progress in a burgeoning 
economic partnership can be made.
  I am hopeful that my colleagues will review this legislation and join 
Senator Levin and I in supporting this important legislation.
                                 ______
                                 
      By Mr. BINGAMAN (for himself and Mr. Domenici):
  S. 47. A bill to provide for the exchange of certain Federal land in 
the Santa Fe National Forest and certain non-Federal land in the Pecos 
National Historical Park in the State of New Mexico; to the Committee 
on Energy and Natural Resources.
  Mr. BINGAMAN. Mr. President, today, I am introducing along with Mr. 
Domenici the ``Pecos National Historical Park Land Exchange Act of 
2005''. This bill will authorize a land exchange between the Federal 
government and a private landowner that will benefit the Pecos National 
Historical Park in my State of New Mexico.
  Specifically, the bill will enable the Park Service to acquire a 
private inholding within the Park's boundaries in exchange for the 
transfer of a nearby tract of National Forest System land. The National 
Forest parcel has been identified as available for exchange in the 
Santa Fe National Forest Land and Resource Management Plan and is 
surrounded by private lands on three sides.
  The Pecos National Historical Park possesses exceptional historic and 
archaeological resources. The Park preserves the ruins of the great 
Pecos pueblo, which was a major trade center, and the ruins of two 
Spanish colonial missions dating from the 17th and 18th centuries.
  The Glorieta Unit of the Park protects key sites associated with the 
1862 Civil War Battle of Glorieta Pass, a significant event that ended 
the Confederate attempt to expand the war into the West. This Unit will 
directly benefit from the land exchange.
  Similar bills passed the Senate in both the 106th and the 108th 
Congresses, and I hope it finally will be enacted this Congress.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 47

       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 ``Pecos National Historical 
     Park Land Exchange Act of 2005''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Federal land.--The term ``Federal land'' means the 
     approximately 160 acres of Federal land within the Santa Fe 
     National Forest in the State, as depicted on the map.
       (2) Landowner.--The term ``landowner'' means the 1 or more 
     owners of the non-Federal land.
       (3) Map.--The term ``map'' means the map entitled 
     ``Proposed Land Exchange for Pecos National Historical 
     Park'', numbered 430/80,054, dated November 19, 1999, and 
     revised September 18, 2000.
       (4) Non-federal land.--The term ``non-Federal land'' means 
     the approximately 154 acres of non-Federal land in the Park, 
     as depicted on the map.
       (5) Park.--The term ``Park'' means the Pecos National 
     Historical Park in the State.
       (6) Secretaries.--The term ``Secretaries'' means the 
     Secretary of the Interior and the Secretary of Agriculture, 
     acting jointly.
       (7) State.--The term ``State'' means the State of New 
     Mexico.

     SEC. 3. LAND EXCHANGE.

       (a) In General.--On conveyance by the landowner to the 
     Secretary of the Interior of the non-Federal land, title to 
     which is acceptable to the Secretary of the Interior--
       (1) the Secretary of Agriculture shall, subject to the 
     conditions of this Act, convey to the landowner the Federal 
     land; and
       (2) the Secretary of the Interior shall, subject to the 
     conditions of this Act, grant to the landowner the easement 
     described in subsection (b).
       (b) Easement.--
       (1) In general.--The easement referred to in subsection 
     (a)(2) is an easement (including an easement for service 
     access) for water pipelines to 2 well sites located in the 
     Park, as generally depicted on the map.
       (2) Route.--The Secretary of the Interior, in consultation 
     with the landowner, shall determine the appropriate route of 
     the easement through the Park.
       (3) Terms and conditions.--The easement shall include such 
     terms and conditions relating to the use of, and access to, 
     the well sites and pipeline, as the Secretary of the 
     Interior, in consultation with the landowner, determines to 
     be appropriate.
       (4) Applicable law.--The easement shall be established, 
     operated, and maintained in compliance with applicable 
     Federal law.
       (c) Valuation, Appraisals, and Equalization.--
       (1) In general.--The value of the Federal land and non-
     Federal land--
       (A) shall be equal, as determined by appraisals conducted 
     in accordance with paragraph (2); or
       (B) if the value is not equal, shall be equalized in 
     accordance with paragraph (3).
       (2) Appraisals.--
       (A) In general.--The Federal land and non-Federal land 
     shall be appraised by an independent appraiser selected by 
     the Secretaries.
       (B) Requirements.--An appraisal conducted under 
     subparagraph (A) shall be conducted in accordance with--
       (i) the Uniform Appraisal Standards for Federal Land 
     Acquisition; and
       (ii) the Uniform Standards of Professional Appraisal 
     Practice.
       (C) Approval.--The appraisals conducted under this 
     paragraph shall be submitted to the Secretaries for approval.
       (3) Equalization of values.--
       (A) In general.--If the values of the non-Federal land and 
     the Federal land are not equal, the values may be equalized 
     by--
       (i) the Secretary of the Interior making a cash 
     equalization payment to the landowner;
       (ii) the landowner making a cash equalization payment to 
     the Secretary of Agriculture; or
       (iii) reducing the acreage of the non-Federal land or the 
     Federal land, as appropriate.
       (B) Cash equalization payments.--Any amounts received by 
     the Secretary of Agriculture as a cash equalization payment 
     under section 206(b) of the Federal Land Policy and 
     Management Act of 1976 (43 U.S.C. 1716(b)) shall--
       (i) be deposited in the fund established by Public Law 90-
     171 (commonly known as the ``Sisk Act'') (16 U.S.C. 484a); 
     and
       (ii) be available for expenditure, without further 
     appropriation, for the acquisition of land and interests in 
     land in the State.
       (d) Costs.--Before the completion of the exchange under 
     this section, the Secretaries and the landowner shall enter 
     into an agreement that allocates the costs of the exchange 
     among the Secretaries and the landowner.
       (e) Applicable Law.--Except as otherwise provided in this 
     Act, the exchange of land and interests in land under this 
     Act shall be in accordance with--
       (1) section 206 of the Federal Land Policy and Management 
     Act of 1976 (43 U.S.C. 1716); and
       (2) other applicable laws, including the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
       (f) Additional Terms and Conditions.--The Secretaries may 
     require, in addition to any requirements under this Act, such 
     terms and conditions relating to the exchange of Federal land 
     and non-Federal land and the granting of easements under this 
     Act as the Secretaries determine to be appropriate to protect 
     the interests of the United States.
       (g) Completion of the Exchange.--
       (1) In general.--The exchange of Federal land and non-
     Federal land shall be completed not later than 180 days after 
     the later of--
       (A) the date on which the requirements of the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) 
     have been met;
       (B) the date on which the Secretary of the Interior 
     approves the appraisals under subsection (c)(2)(C); or
       (C) the date on which the Secretaries and the landowner 
     agree on the costs of the exchange and any other terms and 
     conditions of the exchange under this section.
       (2) Notice.--The Secretaries shall submit to the Committee 
     on Energy and Natural Resources of the Senate and the 
     Committee on

[[Page 450]]

     Resources of the House of Representatives notice of the 
     completion of the exchange of Federal land and non-Federal 
     land under this Act.

     SEC. 4. ADMINISTRATION.

       (a) In General.--The Secretary of the Interior shall 
     administer the non-Federal land acquired under this Act in 
     accordance with the laws generally applicable to units of the 
     National Park System, including the Act of August 25, 1916 
     (commonly known as the ``National Park Service Organic Act'') 
     (16 U.S.C. 1 et seq.).
       (b) Maps.--
       (1) In general.--The map shall be on file and available for 
     public inspection in the appropriate offices of the 
     Secretaries.
       (2) Transmittal of revised map to congress.--Not later than 
     180 days after completion of the exchange, the Secretaries 
     shall transmit to the Committee on Energy and Natural 
     Resources of the Senate and the Committee on Resources of the 
     House of Representatives a revised map that depicts--
       (A) the Federal land and non-Federal land exchanged under 
     this Act; and
       (B) the easement described in section 3(b).
                                 ______
                                 
      By Mr. LAUTENBERG (for himself and Mr. Corzine):
  S. 48. A bill to reauthorize appropriations for the New Jersey 
Coastal Heritage Trail Route, and for other purposes; to the Committee 
on Energy and Natural Resources.
  Mr. LAUTENBERG. Mr. President, I rise today to speak about a bill 
that Senator Corzine and I are introducing, the New Jersey Coastal 
Heritage Trail Route bill. Our bill would reauthorize a law based on a 
bill that former Senator Bill Bradley and I first introduced in 1988. 
That law was extended once but its authorization has now expired, 
bringing work on the Trail to a complete standstill.
  This bill would reauthorize federal appropriations for New Jersey's 
Coastal Heritage Trail. This authority would sunset in 2009, allowing 
enough time for unfinished trail projects to be completed.
  The 300-mile Trail is divided into five sections that extend south 
from Perth Amboy to Cape May and west to Deepwater. New Jersey's 
Coastal Heritage Trail is unique. It is neither a National Heritage 
Area, nor a National Trail. Collaboration on this Trail marked the 
National Park Service's first attempt at protecting a significant 
resource without actually acquiring it. This experiment has been a 
resounding success.
  The State of New Jersey is heavily developed, and the National Park 
Service, the State, and many other public and private organizations 
have worked hard to preserve the natural and cultural heritage along 
the Trail.
  This experiment has also been a bargain. Between 1988 and 2004, the 
Park Service spent 3.9 million dollars on Trail projects, while non-
federal sources contributed 5.4 million dollars in matching funds. 
These funds represent an important investment in New Jersey's economy. 
Last year, 65 million visitors came to New Jersey, and the majority of 
those visitors went to the shore where many spent time on sections of 
the Coastal Heritage Trail.
  In the past, Federal funds have contributed to signs and exhibits 
along the Trail which entice tourists and local New Jerseyans to 
explore our maritime history, coastal habitats, and wildlife migration.
  Most people think that New Jersey is a crowded, highly industrialized 
State. That is true. But New Jersey also contains incredible beauty, 
such as a Bald Eagle silhouetted against a Delaware Bay sunset; a lone 
fishing boat making its way through Barnegat Inlet at dawn; or the 
quiet, dark waters flowing slowly through the Pine Barrens.
  Such sights can be enjoyed in New Jersey, and the Coastal Heritage 
Trail invites New Jerseyans and our many visitors to enjoy these 
splendors.
  Mr. President, in the House, Congressman LoBiondo is sponsoring a 
companion bill to this legislation, so this is truly a bipartisan 
effort. The Congressman and I have worked with our respective 
committees of jurisdiction and have come to agreement on identical 
language in our bills. So, it is my hope that the Senate will be able 
to pass this bill promptly. Getting it passed and signed into law will 
help to protect our environment and markedly improve the quality of 
life for millions of Americans--all at a very low cost to the Nation's 
taxpayers.
  Mr. President, I ask for 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. 48

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

     SECTION 1. REAUTHORIZATION OF APPROPRIATIONS FOR NEW JERSEY 
                   COASTAL HERITAGE TRAIL ROUTE.

       (a) Reauthorization.--Section 6 of Public Law 100-515 (16 
     U.S.C. 1244 note) is amended--
       (1) in subsection (b)(1), by striking ``$4,000,000'' and 
     all that follows and inserting ``such sums as are 
     necessary''; and
       (2) in subsection (c), by striking ``10'' and inserting 
     ``12''.
       (b) Strategic Plan.--
       (1) In general.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary of the Interior shall 
     prepare a strategic plan for the New Jersey Coastal Heritage 
     Trail Route.
       (2) Contents.--The strategic plan shall describe--
       (A) opportunities to increase participation by national and 
     local private and public interests in the planning, 
     development, and administration of the New Jersey Coastal 
     Heritage Trail Route; and
       (B) organizational options for sustaining the New Jersey 
     Coastal Heritage Trail Route.
                                 ______
                                 
      By Mr. STEVENS (for himself and Ms. Murkowski):
  S. 49. A bill to establish a joint Federal-State Floodplain and 
Erosion Mitigation Commission for the State of Alaska; to the Committee 
on Energy and Natural Resources.
  Mr. STEVENS. Mr. President, on behalf of myself and Senator 
Murkowski, I introduce S. 49, the Alaska Floodplain and Erosion 
Mitigation Commission Act.
  For the last several years, we have seen coastal river flooding and 
erosion destroy homes, public buildings, and runways, threatening the 
traditional lifestyle of our Alaska Native people and rural residents. 
Over 100 feet of land can be lost in a single storm, with homes and 
buildings literally being washed into the ocean.
  Last year, the Federal Emergency Management Agency was called in 
after one storm and assessed millions of dollars in damages.
  In Alaska, there are over 213 communities that have been identified 
as being affected by erosion, 4 of which are in imminent danger and 
will be forced to relocate.
  Given the devastating impacts of erosion on Alaska Native villages, I 
held a full 2-day Appropriations field hearing in July of 2004. Senator 
Conrad Burns of Montana, Senator John Sununu of New Hampshire, and 
Senator Lisa Murkowski were all in attendance.
  Testifying at the hearing were witnesses from the Federal Government, 
State of Alaska, and representatives from the villages most affected by 
coastal erosion and flooding.
  These hearings examined the findings and recommendations from the 
Government Accounting Office, GAO, report on the severe flooding and 
erosion problems faced in many Native Alaska villages. Congress had 
previously directed GAO to study flooding and erosion of Alaska Native 
villages and to determine the extent to which these villages are 
affected, identify Federal and State flooding and erosion programs, 
determine the current status of efforts to respond to flooding and 
erosion in nine villages, and identify alternatives that Congress may 
wish to consider when providing assistance for flooding and erosion.
  This bill is a culmination of the GAO report and the field hearings I 
have mentioned. It will focus the efforts of the Federal agencies and 
the State of Alaska to better serve the impacted Native villages and 
rural residents. This bill is intended to provide relief for these 
communities. It is going to be a very difficult problem to solve.
  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. 49

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

[[Page 451]]



     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Alaska 
     Floodplain and Erosion Mitigation Commission Act of 2005''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

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

    TITLE I--JOINT FEDERAL-STATE FLOODPLAIN AND EROSION MITIGATION 
                         COMMISSION FOR ALASKA

Sec. 101. Establishment of commission.
Sec. 102. Duties.
Sec. 103. Administration.
Sec. 104. Commission personnel matters.
Sec. 105. Reports.
Sec. 106. Termination of commission.

           TITLE II--FLOOD AND EROSION CONTROL AND MITIGATION

Sec. 201. Evaluation and prioritization.
Sec. 202. Flood and erosion control and mitigation.
Sec. 203. Mitigation.
Sec. 204. Administration.

               TITLE III--AUTHORIZATION OF APPROPRIATIONS

Sec. 301. Authorization of appropriations.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Commission.--The term ``Commission'' means the Joint 
     Federal-State Floodplain and Erosion Mitigation Commission 
     for Alaska established by section 101(a).
       (2) Alaska native.--The term ``Alaska Native'' has the 
     meaning given the term in section 3 of the Alaska Native 
     Claims Settlement Act (43 U.S.C. 1602).
       (3) Alaska native village.--The term ``Alaska Native 
     village'' has the meaning given the term in section 3 of the 
     Alaska Native Claims Settlement Act (43 U.S.C. 1602).
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (5) State.--The term ``State'' means the State of Alaska.

    TITLE I--JOINT FEDERAL-STATE FLOODPLAIN AND EROSION MITIGATION 
                         COMMISSION FOR ALASKA

     SEC. 101. ESTABLISHMENT OF COMMISSION.

       (a) Establishment.--There is established a commission to be 
     known as the ``Joint Federal-State Floodplain and Erosion 
     Mitigation Commission for Alaska''.
       (b) Membership.--
       (1) Composition.--The Commission shall be composed of 7 
     members, of whom--
       (A) 1 member shall be the Governor of the State, who shall 
     serve as Cochairperson;
       (B) 3 members shall be appointed by the Governor of the 
     State, of whom--
       (i) 1 member shall be a nonvoting ex officio Alaska Native; 
     and
       (ii) at least 1 member shall represent city or borough 
     governments;
       (C) 1 shall be appointed by the Secretary, shall be an 
     employee of the Department of the Interior, and shall serve 
     as Cochairperson;
       (D) 1 member appointed by the Secretary of Agriculture 
     shall be an employee of the Natural Resources Conservation 
     Service of the Department of Agriculture; and
       (E) 1 member, appointed by the Secretary of Defense, shall 
     be an employee of--
       (i) the Department of Defense; or
       (ii) the Corps of Engineers.
       (2) Date of appointments.--The appointment of a member of 
     the Commission shall be made not later than 90 days after the 
     date of enactment of this Act.
       (c) Appointment; Vacancies.--
       (1) Appointment.--A member of the Commission shall serve at 
     the pleasure of the appointing authority.
       (2) Vacancies.--A vacancy on the Commission--
       (A) shall not affect the powers of the Commission; and
       (B) shall be filled in the same manner as the original 
     appointment was made.
       (d) Initial Meeting.--Not later than 30 days after the date 
     on which all members of the Commission have been appointed, 
     the Commission shall hold the initial meeting of the 
     Commission.
       (e) Meetings.--Subject to section 102(a), the Commission 
     shall meet at the call of the Cochairpersons.
       (f) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (g) Concurrence of Cochairpersons.--A decision of the 
     Commission shall require the concurrence of the 
     Cochairpersons.
       (h) Principal Office.--The principal office of the 
     Commission shall be in the State of Alaska.

     SEC. 102. DUTIES.

       (a) Meetings.--For the first 2 years following the date of 
     enactment of this Act, the Commission shall meet not less 
     than 2 times per year.
       (b) Study.--
       (1) In general.--The Commission shall conduct a study of 
     all matters relating to--
       (A) the feasibility of alternatives for flooding or erosion 
     assistance; and
       (B) the development of a policy to guide infrastructure 
     investments in the Alaska Native villages, cities, and 
     boroughs that are most affected by flooding or erosion.
       (2) Matters to be studied.--The matters to be studied by 
     the Commission include--
       (A) flood and erosion processes;
       (B) the planning needs associated with flood and erosion 
     processes, including identifying and making recommendations 
     concerning--
       (i) specific flood and erosion circumstances that affect 
     life and property in the State;
       (ii) land use regulations, including area standards for 
     designation of flood- and erosion-prone land;
       (iii) uses to be made of flood- and erosion-prone land, and 
     how State and Federal grants, loans, and capital improvements 
     shall be invested in designated areas; and
       (iv) how to regulate and implement the uses described in 
     clause (iii) on--

       (I) land designated as an allotment for Alaska Native 
     people;
       (II) land owned by an Alaska Native village corporation or 
     a regional village corporation under the Alaska Native Claims 
     Settlement Act (Public Law 92-203);
       (III) land owned by the Federal or State government;
       (IV) city and borough land; and
       (V) other private land; and

       (C) the establishment of procedures to obtain the view of 
     the public on land use planning needs, such as implementation 
     and enforcement of flood and erosion control and mitigation 
     solutions, including--
       (i) increased hydrologic and other specialized data 
     collection; and
       (ii) public hearings.
       (c) Evaluation.--Not later than 120 days after the date of 
     enactment of this Act and annually thereafter, the Commission 
     shall evaluate specific flood and erosion circumstances that 
     affect life and property in the State.
       (d) Recommendations.--The Commission shall develop 
     recommendations on--
       (1) the development and implementation of flood and erosion 
     control and mitigation solutions in villages and communities 
     identified by the Commission as being most in need of those 
     solutions;
       (2) programs and budgets of Federal and State agencies 
     responsible for administrating Federal and State floodplain 
     management authorities;
       (3) the establishment of State erosion management 
     responsibilities and authorities;
       (4) changes in law, policies, and programs that the 
     Commission determines are necessary or desirable to provide 
     an integrated Federal-State erosion and flood management 
     authority;
       (5) improving coordination and consultation between the 
     Federal and State governments in making resource allocation 
     and flood and erosion control and mitigation decisions;
       (6) ways to avoid conflict between the State and Alaska 
     Native people in the allocation of resources;
       (7) ensuring that higher priority is given to achieving 
     long-term sustainability of communities from debilitating 
     flood and erosion losses than to short-term project and 
     infrastructure development needs, if the flood and erosion 
     control and mitigation solution is publicly funded; and
       (8) ensuring that the economic and social well-being of 
     Alaska Native people and other residents of the State is not 
     compromised by a risk of erosion or flood that could be 
     avoided through long-term planning.

     SEC. 103. ADMINISTRATION.

       (a) Advisers.--To assist the Commission in carrying out 
     this Act, the Commission shall establish a committee of 
     technical advisers to the Commission with expertise in--
       (1) coastal engineering;
       (2) the adverse impact of flood and erosion management;
       (3) rural community planning in the State;
       (4) how city and borough governments are affected by 
     erosion;
       (5) the relationship between State and local governments 
     and Alaska Native villages; and
       (6) any other interest that the Commission determines is 
     appropriate.
       (b) Records.--
       (1) In general.--The Commission shall maintain complete 
     records of the activities of the Commission.
       (2) Public inspection.--Records maintained under paragraph 
     (1) shall be available for public inspection.
       (c) Hearings.--The Commission may hold such hearings, meet 
     and act at such times and places, take such testimony, and 
     receive such evidence as the Commission considers advisable 
     to carry out this title.
       (d) Information From Federal Agencies.--
       (1) In general.--The Commission may secure directly from a 
     Federal agency such information as the Commission considers 
     necessary to carry out this title.
       (2) Provision of information.--On request of a 
     Cochairperson of the Commission, the head of the agency shall 
     provide the information to the Commission.
       (e) Gifts.--The Commission may accept, use, and dispose of 
     gifts or donations of services or property to carry out the 
     duties of the Commission.

     SEC. 104. COMMISSION PERSONNEL MATTERS.

       (a) Compensation of Members.--
       (1) Non-federal employees.--A member of the Commission who 
     is not an officer or employee of the Federal Government shall 
     be compensated at a rate equal to the daily equivalent of the 
     annual rate of basic pay prescribed for level IV of the 
     Executive

[[Page 452]]

     Schedule under section 5315 of title 5, United States Code, 
     for each day (including travel time) during which the member 
     is engaged in the performance of the duties of the 
     Commission.
       (2) Federal or state employees.--A member of the Commission 
     who is an officer or employee of the Federal or State 
     government shall serve without compensation in addition to 
     the compensation received for the services of the member as 
     an officer or employee of the Federal or State Government.
       (b) Travel Expenses.--A member of the Commission shall be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for an employee of an agency 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from the home or regular place of business 
     of the member in the performance of the duties of the 
     Commission.
       (c) Staff.--
       (1) In general.--The Cochairpersons of the Commission may, 
     without regard to the civil service laws (including 
     regulations), appoint and terminate an executive director and 
     such other additional personnel as are necessary to enable 
     the Commission to perform the duties of the Commission.
       (2) Confirmation of executive director.--The employment of 
     an executive director shall be subject to confirmation by the 
     Commission.
       (3) Compensation.--
       (A) In general.--Except as provided in subparagraph (B), 
     the Cochairpersons of the Commission may fix the compensation 
     of the executive director and other personnel without regard 
     to the provisions of chapter 51 and subchapter III of chapter 
     53 of title 5, United States Code, relating to classification 
     of positions and General Schedule pay rates.
       (B) Maximum rate of pay.--The rate of pay for the executive 
     director and other personnel shall not exceed the rate 
     payable for level V of the Executive Schedule under section 
     5316 of title 5, United States Code.
       (d) Detail of Federal Government Employees.--
       (1) In general.--An employee of the Federal Government may 
     be detailed to the Commission without reimbursement.
       (2) Civil service status.--The detail of the employee shall 
     be without interruption or loss of civil service status or 
     privilege.
       (e) Procurement of Temporary and Intermittent Services.--
     The Cochairpersons of the Commission may procure temporary 
     and intermittent services in accordance with section 3109(b) 
     of title 5, United States Code, at rates for individuals that 
     do not exceed the daily equivalent of the annual rate of 
     basic pay prescribed for level V of the Executive Schedule 
     under section 5316 of that title.

     SEC. 105. REPORTS.

       (a) Interim Reports.--Not later than September 30 of each 
     year, the Commission shall submit to Congress, the Secretary, 
     and the legislature of the State--
       (1) a report that describes the activities of the 
     Commission in the preceding calendar year; and
       (2) a report that describes--
       (A) any immediate need of the Commission; and
       (B) any imminent threat action directive for the 
     coordinated response to erosion and flooding in the case of 
     an emergency.
       (b) Final Report.--Not later than September 30, 2011, the 
     Commission shall submit to Congress, the Secretary, and the 
     legislature of the State a final report that describes--
       (1) the activities and findings of the Commission; and
       (2) the recommendations of the Commission for legislation 
     and administrative actions the Commission considers 
     appropriate.

     SEC. 106. TERMINATION OF COMMISSION.

       The Commission shall terminate on September 30, 2011.

           TITLE II--FLOOD AND EROSION CONTROL AND MITIGATION

     SEC. 201. EVALUATION AND PRIORITIZATION.

       Not later than 120 days after the date of enactment of this 
     Act and annually thereafter, the Secretary, in consultation 
     with the Commission, shall evaluate and prioritize specific 
     flood and erosion circumstances that affect life and property 
     in the State.

     SEC. 202. FLOOD AND EROSION CONTROL AND MITIGATION.

       (a) In General.--Not later than September 15, 2006, the 
     Secretary, in consultation with the Commission, shall examine 
     the most cost-effective ways of carrying out flood and 
     erosion control and mitigation solutions devised by the 
     Commission for the 9 villages in the State identified in the 
     Government Accountability Office Report 04-142.
       (b) Cost-effective Technology.--The Secretary, in 
     consultation with the Commission, shall implement a solution 
     described in subsection (a) using the most cost-effective 
     technology to protect life and property in the State, 
     including--
       (1) movement of structures;
       (2) nonstructural land management of erosion-prone areas; 
     and
       (3) structural erosion control techniques.
       (c) Grants to State and Local Governments.--For any fiscal 
     year after fiscal year 2006, the Secretary may implement a 
     solution described in subsection (a) through the State 
     government or a local government by making a grant to a 
     government using the remainder of any funds appropriated to 
     the Secretary for appropriate flood and erosion control and 
     mitigation solutions.
       (d) Factors.--In implementing a solution under this 
     section, the Secretary, in consultation with the Commission, 
     shall consider--
       (1) the design life of structural erosion control projects;
       (2) the cost effectiveness of all erosion control projects; 
     and
       (3) the availability of a revolving loan fund administered 
     by the State for relocation, elevation, and flood proofing of 
     flood- or erosion-prone structures.
       (e) Federal Share.--The Federal share of the cost of 
     carrying out a project or activity under this section shall 
     be 75 percent.

     SEC. 203. MITIGATION.

       (a) In General.--The Secretary, in consultation with the 
     Commission, may take any action necessary to mitigate the 
     loss of structures and infrastructure from flood and erosion 
     using the most cost effective means practicable to provide 
     the longest-term benefit, including--
       (1) relocation;
       (2) elevation;
       (3) flood proofing; and
       (4) land management alternatives.

     SEC. 204. ADMINISTRATION.

       (a) Consultation.--The Secretary shall--
       (1) consult with the Commission and appropriate Federal and 
     State agencies; and
       (2) provide oversight authority, responsibility, and 
     directives to agencies developing relocation and flood and 
     erosion control and mitigation plans.
       (b) Valid Existing Rights.--This subsection does not limit 
     any right recognized under the Alaska Native Claims 
     Settlement Act (43 U.S.C. 1601 et seq.) that is in existence 
     at the time of the enactment of this Act.
       (c) Authority of the Secretary.--This title does not impair 
     the authority of the Secretary to make contracts and grant 
     leases, permits, rights-of-way, and easements.

               TITLE III--AUTHORIZATION OF APPROPRIATIONS

     SEC. 301. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There is authorized to be appropriated for 
     each of fiscal years 2006 through 2011 such sums as are 
     necessary to carry out this Act, to remain available until 
     expended.
       (b) Commission.--The Secretary may use not to exceed 
     $250,000 of the funds made available under subsection (a) for 
     the expenses of the Commission, including hiring any 
     necessary staff.
                                 ______
                                 
      By Mr. INOUYE (for himself, Mr. Stevens, Ms. Cantwell, Mr. Burns, 
        Mr. Lautenberg, Ms. Snowe, Mr. Akaka, Ms. Murkowski, Mrs. 
        Clinton, Mr. Smith, and Mrs. Murray):
  S. 50. A bill to authorize and strengthen the National Oceanic and 
Atmospheric Administration's tsunami detection, forecast, warning, and 
mitigation program, and for other purposes; to the Committee on 
Commerce, Science, and Transportation.
  Mr. INOUYE. Mr. President, today I introduce the Tsunami Preparedness 
Act with my friend and distinguished colleague, Senator Ted Stevens, in 
our new capacities as Co-Chair and Chair of the Commerce Committee. Our 
bill today provides a scientific and technological response to minimize 
the threats posed by tsunami to our own shores, and the coastal 
communities of the world, as exemplified by the appalling scope of the 
Indian Ocean tragedy. The bill builds on our work to establish a system 
in the Pacific that is a model for the world, and also provides for its 
expansion and improvement to repair gaps that have been identified 
recently.
  Protecting human life and property from natural disaster requires the 
ability to reliably detect and forecast, the capacity to broadcast 
warnings in a timely and informative manner, and the knowledge in 
communities of how to respond and evacuate to safety. Above all, 
however, it requires the willingness to invest resources to prepare for 
a threat that is largely unseen and unpredictable until the last 
moment, when a monstrous wave actually strikes.
  The people of Alaska and Hawaii have long memories of the threat of 
tsunami. Perhaps it is because Hawaii sits in a position of terrible 
vulnerability in the Pacific Ocean, which is the site of 85 percent of 
the world's tsunami activity, and because Alaska, perched on the 
northern edge of the Pacific's Ring of Fire, suffers frequent tsunami-
generating earthquakes.

[[Page 453]]

  In order to protect local communities, Hawaii established in 1949 a 
tsunami warning center, following a tragic Hilo tsunami. In response to 
the Good Friday earthquake and tsunami of 1964, which accounted for 90 
percent of the deaths in the state that year, Alaska followed suit by 
establishing an observatory in Palmer, Alaska, in 1967. Collaborations 
between the two centers and other partners led to a nascent capacity 
for predicting and warning coastal communities about potential tsunami 
in Alaska and Hawaii and beyond.
  As we came to understand the broader threat that tsunami posed, Ted 
Stevens and I worked together to pass legislation in 1994 to direct the 
National Oceanic and Atmospheric Administration (NOAA) to develop a 
Tsunami Hazard Mitigation Program.
  We are pleased to report that the program has laid the foundation for 
tsunami preparedness. Through its Pacific Marine Environmental 
Laboratory (PMEL), NOAA has developed Deep ocean Assessment and 
Reporting of Tsunami--or ``DART''--buoys, which accurately measure the 
subtle variations in the ocean's sea level caused by tsunami traveling 
over open water. With these measurements, as well as readings from 
coastal gauges, the mathematical models PMEL and others have developed 
can forecast tsunami direction, speed, and inundation with astonishing 
accuracy. Although the worldwide network of seismic sensors operated by 
the U.S. Geological Survey (USGS) provides excellent notice of 
earthquakes with the potential to generate tsunami, the DART buoys 
represent a next-generation approach to detection and forecasting of 
tsunami that will form the backbone of our domestic preparedness.
  Interpreting these data and issuing warnings are Hawaii's Pacific 
Tsunami Warning Center, and Alaska's West Coast/Alaska Tsunami Warning 
Center, which jointly have the capacity to cover our domestic shores, 
and, at the same time, to reach out to all cooperating nations of the 
world.
  Forecasting and warning networks, however, depend on ears who know 
how to respond, and so the Tsunami Hazard Mitigation Program has 
partnered with states and local authorities to produce inundation 
mapping, develop evacuation routes, and conduct tsunami education. As a 
result of much hard work, fifteen counties up and down the west coast, 
and in Alaska and Hawaii have become national and world leaders by 
becoming ``tsunami ready.''
  The appalling scope of the Indian Ocean tragedy illustrates the 
importance and necessity of our work of the past ten years, and with 
stark clarity, we can see that despite our best efforts, much remains 
to be done. Now, as before, Senator Stevens and I have come together to 
lead the charge toward national and international tsunami preparedness.
  Our legislation today formally authorizes NOAA to establish, operate, 
and maintain a dependable national tsunami warning system that would 
provide maximum tsunami detection capability for the nation. The system 
would build on the model established in the Pacific, and provide for 
its repair, expansion and modernization by the close of calendar year 
2007. The system would include four components: an expanded and 
upgraded detection and warning system, a federal-state tsunami hazard 
mitigation program, a tsunami research program, and a modernization and 
upgrade program. In addition, the bill would direct NOAA to provide any 
necessary technical or other assistance to international efforts to 
establish regional systems in other parts of the world, including the 
Indian Ocean.
  The detection and warning system established by the bill would cover 
the Pacific Ocean region, as well as the Atlantic-Caribbean-Gulf of 
Mexico region, and incorporate a variety of seismic and tsunami 
detection technologies, including deep ocean buoys, as well as 
encompass tsunami warning centers charged with collecting and analyzing 
the data and distributing warnings--including the existing Pacific 
Tsunami Warning Center in Hawaii and the West Coast/Alaska Tsunami 
Warning Center in Alaska, as well as any others deemed necessary by the 
NOAA Administrator.
  The bill also formally authorizes NOAA's Tsunami Hazard Mitigation 
Program and its community-based tsunami hazard mitigation program to 
improve tsunami preparedness of at-risk areas. The bill directs a 
Federal-State coordinating committee for the program, consisting 
(FEMA), the United States Geological Survey (USGS), the National 
Science Foundation (NSF), and affected coastal states and territories, 
to work together to improve inundation mapping, community outreach and 
education, and promote and integrate tsunami warning and mitigation 
measures, including rescue and recovery guidelines. The program would 
provide grants to states to ensure the program elements are implemented 
in coastal communities.
  The bill also requires NOAA to establish, along with other agencies 
and academic institutions, a tsunami research program to continuously 
improve detection, prediction, communication, and mitigation science 
and technology to support tsunami forecasts and warnings. This program 
would also focus on the potential for improved communications systems 
for tsunami and other hazard warnings, including telephones, wireless 
and satellite technology, the Internet, television and radio, and any 
innovative combination of these technologies.
  A critical component of the bill requires NOAA to upgrade and 
modernize the U.S. tsunami detection system by December 2007, as well 
as provide accountability for the long-term operation of the system. 
NOAA is required to repair and upgrade the system, ensuring deployment 
of existing deep ocean detection buoys and related detection equipment, 
as well as notify Congress upon any equipment or system failures that 
will impair regional detection, and of significant contractor failures 
or delays. In addition, the bill calls for the National Academy of 
Sciences to review the system for further modernization 
recommendations.
  The bill recognizes the need for global coordination on tsunami 
preparedness, requiring NOAA, and the interagency coordinating 
committee of the U.S. Tsunami Hazard Mitigation Program, to provide 
technical assistance and advice to international entities as part of an 
international effort to develop a fully functional global tsunami 
warning system.
  Finally, the bill authorizes $35 million annually for six years to 
support these activities. Through this legislation, the work Senator 
Stevens and I started over ten years ago will step up to the next 
level, and provide our nation with coverage and protection that it 
needs, while fulfilling our duties as citizens of the global community.
  I ask unanimous consent that the full 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. 50

       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 ``Tsunami Preparedness Act''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds the following:
       (1) Tsunami are a series of large waves of long wavelength 
     created by the displacement of water by violent undersea 
     disturbances such as earthquakes, volcanic eruptions, 
     landslides, explosions, and the impact of cosmic bodies.
       (2) Tsunami have caused, and can cause in the future, 
     enormous loss of human life, injury, destruction of property, 
     and economic and social disruption in coastal and island 
     communities.
       (3) While 85 percent of tsunami occur in the Pacific Ocean, 
     and coastal and island communities in this region are the 
     most vulnerable to the destructive results, tsunami can occur 
     at any point in any ocean or related body of water where 
     there are earthquakes, volcanoes, or any other activity that 
     displaces a large volume of water.
       (4) A number of States and territories are subject to the 
     threat of tsunamis, including Alaska, California, Hawaii, 
     Oregon, Washington, American Samoa, the Commonwealth of the 
     Northern Mariana Islands, Guam, Puerto Rico, and the U.S. 
     Virgin Islands.

[[Page 454]]

       (5) The National Oceanic and Atmospheric Administration is 
     responsible for maintaining a tsunami detection and warning 
     system for the Nation, issuing warnings to United States 
     communities at risk from tsunami, and preparing those 
     communities to respond appropriately, through--
       (A) the Pacific Tsunami Warning Center in Ewa Beach, 
     Hawaii, which serves as a warning center for Hawaii, all 
     other United States assets in the Pacific, and Puerto Rico;
       (B) the Alaska/West Coast Tsunami Warning Center in Palmer, 
     Alaska, which is responsible for issuing warnings for Alaska, 
     British Columbia, California, Oregon, and Washington;
       (C) the Federal-State national tsunami hazard mitigation 
     program;
       (D) a tsunami research and assessment program, including 
     programs conducted by the Pacific Marine Environmental 
     Laboratory;
       (E) the TsunamiReady Program, which educates and prepares 
     communities for survival before and during a tsunami; and
       (F) other related programs.
       (6) The National Oceanic and Atmospheric Administration 
     also represents the United States as a member of the 
     International Coordination Group for the Tsunami Warning 
     System in the Pacific, administered by the Intergovernmental 
     Oceanographic Commission of UNESCO, for which the Pacific 
     Tsunami Warning Center acts as the operational center and 
     shares seismic and water level information with 26 member 
     states, and maintains UNESCO's International Tsunami 
     Information Center, in Honolulu, Hawaii, which provides 
     technical and educational assistance to member states.
       (7) The Tsunami Warning Centers receive seismographic 
     information from the Global Seismic Network, an international 
     system of earthquake monitoring stations, from the United 
     States Geological Survey National Earthquake Information 
     Center, and from cooperative regional seismic networks, and 
     use these data to issue tsunami warnings and integrate the 
     information with data from their own tidal and deep ocean 
     monitoring stations, to cancel or verify the existence of a 
     damaging tsunami. Warnings are disseminated by the National 
     Oceanic and Atmospheric Administration to State emergency 
     operation centers.
       (8) Current gaps in the International Tsunami Warning 
     System, such as the lack of regional warning systems in the 
     Indian Ocean, the southwest Pacific Ocean, Central and South 
     America, the Mediterranean Sea, and Caribbean, pose risks for 
     coastal and island communities.
       (9) The tragic and extreme loss of life experienced by 
     countries in the Indian Ocean following the magnitude 9.0 
     earthquake and resulting tsunami in that region on December 
     26, 2004, illustrates the destructive consequences which can 
     occur in the absence of an effective tsunami warning and 
     notification system.
       (10) An effective tsunami warning and notification system 
     is part of a multi-hazard disaster warning and preparedness 
     program and requires near real-time seismic, sea level, and 
     oceanographic data, high-speed data analysis capabilities, a 
     high-speed tsunami warning communication system, a sustained 
     program of education and risk assessment, and an established 
     local communications infrastructure for timely and effective 
     dissemination of warnings to activate evacuation of tsunami 
     hazard zones.
       (11) The Tsunami Warning System for the Pacific is a model 
     for other regions of the world to adopt, and can be expanded 
     and modernized to increase detection, forecast, and warning 
     capabilities for vulnerable states and territories, reduce 
     the incidence of costly false alarms, improve reliability of 
     measurement and assessment technology, and increase community 
     preparedness.
       (12) Tsunami warning and preparedness capability can be 
     developed in other vulnerable areas of the world, such as the 
     Indian Ocean, by identifying tsunami hazard zones, educating 
     populations, developing alert and notification communications 
     infrastructure, and by deploying near real-time tsunami 
     detection sensors and gauges, establishing hazard 
     communication and warning networks, expanding global 
     monitoring of seismic activity, encouraging the increased 
     exchange of seismic and tidal data between nations, and 
     improving international coordination when a tsunami is 
     detected.
       (13) UNESCO has recognized the need to establish tsunami 
     warning systems for regions beyond the Pacific Basin that are 
     vulnerable to tsunami, including the Indian Ocean, and has 
     convened a working group to lead an effort to expand the 
     International Tsunami Warning System in the Pacific to such 
     vulnerable regions.
       (14) The international community and all vulnerable nations 
     should take coordinated efforts to establish and participate 
     in regional tsunami warning systems and other hazard warnings 
     systems developed to meet the goals of the United Nations 
     International Strategy for Disaster Reduction.
       (b) Purposes.--The purposes of this Act are--
       (1) to improve tsunami detection, forecast, warnings, 
     notification, preparedness, and mitigation in order to 
     protect life and property both in the United States and 
     elsewhere in the world;
       (2) to improve and modernize the existing Pacific Tsunami 
     Warning System to increase coverage, reduce false alarms and 
     increase accuracy of forecasts and warnings, and expand 
     detection and warning systems to include other vulnerable 
     States and United States territories, including the 
     Caribbean/Atlantic/Gulf region;
       (3) to increase and accelerate mapping, modeling, research, 
     assessment, education, and outreach efforts in order to 
     improve forecasting, preparedness, mitigation, response, and 
     recovery of tsunami and related coastal hazards;
       (4) to provide technical and other assistance to speed 
     international efforts to establish regional tsunami warning 
     systems in vulnerable areas worldwide, including the Indian 
     Ocean; and
       (5) to improve Federal, State, and international 
     coordination for tsunami and other coastal hazard warnings 
     and preparedness.

     SEC. 3. TSUNAMI DETECTION AND WARNING SYSTEM.

       (a) In General.--The Administrator of the National Oceanic 
     and Atmospheric Administration shall operate regional tsunami 
     detection and warning systems for the Pacific Ocean region 
     and for the Atlantic Ocean, Caribbean, and Gulf of Mexico 
     region that will provide maximum detection capability for 
     United States coastal tsunami.
       (b) System Requirements.--
       (1) Pacific system.--The Pacific tsunami warning system 
     shall cover the entire Pacific Ocean area, including the 
     Western Pacific, the Central Pacific, the North Pacific, the 
     South Pacific, and the East Pacific and Arctic areas.
       (2) Atlantic, caribbean, and gulf of mexico system.--The 
     Atlantic, Caribbean, and Gulf system shall cover areas of the 
     Atlantic Ocean, Caribbean Sea, and the Gulf of Mexico that 
     the Administrator determines--
       (A) to be geologically active, or to have significant 
     potential for geological activity; and
       (B) to pose measurable risks of tsunamis for States along 
     the coastal areas of the Atlantic Ocean or the Gulf of 
     Mexico.
       (3) Components.--The systems shall--
       (A) utilize an array of deep ocean detection buoys, 
     including redundant and spare buoys;
       (B) include an associated tide gauge and water level system 
     designed for long-term continuous operation tsunami 
     transmission capability;
       (C) provide for establishment of a cooperative effort 
     between the National Oceanic and Atmospheric Administration 
     and the United States Geological Survey under which the 
     Geological Survey provides rapid and reliable seismic 
     information to the Administration from international and 
     domestic seismic networks;
       (D) provide for information and data processing through the 
     tsunami warning centers established under subsection (c);
       (E) be integrated into United States and global ocean and 
     earth observing systems; and
       (F) provide a communications infrastructure for at-risk 
     tsunami communities that supports rapid and reliable alert 
     and notification to the public such as the National Oceanic 
     and Atmospheric Administration weather radio and the All 
     Hazard Alert Broadcasting Radio.
       (c) Tsunami Warning Centers.--
       (1) In general.--The Administrator shall establish tsunami 
     warning centers to provide a link between the detection and 
     warning system and the tsunami hazard mitigation program 
     established under section 4 including--
       (A) a Pacific Tsunami Warning Center in Hawaii;
       (B) a West Coast and Alaska Tsunami Warning Center in 
     Alaska; and
       (C) any additional warning centers determined by the 
     Administrator to be necessary.
       (2) Responsibilities.--The responsibilities of each tsunami 
     warning center shall include--
       (A) continuously monitoring data from seismological, deep 
     ocean, and tidal monitoring stations;
       (B) evaluating earthquakes that have the potential to 
     generate tsunami;
       (C) evaluating deep ocean buoy data and tidal monitoring 
     stations for indications of tsunami resulting from sources 
     other than earthquakes; and
       (D) disseminating information and warning bulletins 
     appropriate for local and distant tsunamis to government 
     agencies and the public and alerting potentially impacted 
     coastal areas for evacuation.
       (d) Transfer of Technology; Maintenance and Upgrades.--In 
     carrying out this section, the Administrator shall--
       (1) promulgate specifications and standards for forecast, 
     detection, and warning systems, including detection 
     equipment;
       (2) develop and execute a plan for the transfer of 
     technology from ongoing research to long-term operations;
       (3) ensure that detection equipment is maintained in 
     operational condition to fulfill the forecasting, detection 
     and warning requirements of the regional tsunami detection 
     and warning systems;
       (4) obtain, to the greatest extent practicable, priority 
     treatment in budgeting for, acquiring, transporting, and 
     maintaining weather sensors, tide gauges, water level

[[Page 455]]

     gauges, and tsunami buoys incorporated into the system 
     including obtaining ship time; and
       (5) ensure integration of the tsunami detection system with 
     other United States and global ocean and coastal observation 
     systems, the global earth observing system of systems, global 
     seismic networks, and the Advanced National Seismic System.
       (e) Certification.--Amounts appropriated for any fiscal 
     year pursuant to section 8 to carry out this section may not 
     be obligated or expended for the acquisition of services for 
     construction or deployment of tsunami detection equipment 
     unless the Administrator certifies in writing to the Senate 
     Committee on Commerce, Science, and Transportation and the 
     House of Representatives Committee on Science within 60 
     calendar days after the date on which the President submits 
     the Budget of the United States for that fiscal year to the 
     Congress that--
       (1) each contractor for such services has met the 
     requirements of the contract for such construction or 
     deployment;
       (2) the equipment to be constructed or deployed is capable 
     of becoming fully operational without the obligation or 
     expenditure of additional appropriated funds; and
       (3) the Administrator does not reasonably foresee 
     unanticipated delays in the deployment and operational 
     schedule specified in the contract.

     SEC. 4. TSUNAMI HAZARD MITIGATION PROGRAM.

       (a) In General.--The Administrator of the National Oceanic 
     and Atmospheric Administration is authorized to conduct a 
     community-based tsunami hazard mitigation program to improve 
     tsunami preparedness of at-risk areas.
       (b) Coordinating Committee.--In conducting the program, the 
     Administrator shall establish a coordinating committee 
     comprising representatives of--
       (1) the National Oceanic and Atmospheric Administration;
       (2) the United States Geological Survey;
       (3) the Federal Emergency Management Agency;
       (4) the National Science Foundation; and
       (5) affected coastal States and territories.
       (c) Program Components.--The program shall--
       (1) improve the quality and extent of inundation mapping, 
     including assessment of vulnerable inner coastal areas;
       (2) promote and improve community outreach and education 
     networks and programs to ensure community readiness, 
     including the development of multi-hazard risk and 
     vulnerability assessment training and decision support tools, 
     implementation of technical training and public education 
     programs, and provide for certification of prepared 
     communities;
       (3) integrate tsunami preparedness and mitigation programs 
     into ongoing hazard warning and risk management programs in 
     affected areas including the National Response Plan;
       (4) promote the adoption of tsunami warning and mitigation 
     measures by Federal, State, tribal, and local governments and 
     non-governmental entities through a grant program for 
     training, development of guidelines, and other purposes;
       (5) through the Federal Emergency Management Agency as the 
     lead agency, develop tsunami specific rescue and recovery 
     guidelines for the National Response Plan, including long-
     term mitigation measures, educational programs to discourage 
     development in high-risk areas, and use of remote sensing and 
     other technology in rescue and recovery operations;
       (6) require budget coordination, through the 
     Administration, to carry out the purposes of this Act and to 
     ensure that participating agencies provide necessary funds 
     for matters within their respective areas of authority and 
     expertise; and
       (7) provide for periodic external review of the program and 
     for inclusion of the results of such reviews in the report 
     required by section 6(c).

     SEC. 5. TSUNAMI RESEARCH PROGRAM.

       (a) Establishment.--The Administrator of the National 
     Oceanic and Atmospheric Administration shall, in coordination 
     with other agencies and academic institutions, establish a 
     tsunami research program to develop detection, prediction, 
     communication, and mitigation science and technology that 
     supports tsunami forecasts and warnings, including advanced 
     sensing techniques, information and communication technology, 
     data collection, analysis and assessment for tsunami tracking 
     and numerical forecast modeling that will--
       (1) help determine--
       (A) whether an earthquake or other seismic event will 
     result in a tsunami; and
       (B) the likely path, severity, duration, and travel time of 
     a tsunami;
       (2) develop techniques and technologies that may be used to 
     communicate tsunami forecasts and warnings as quickly and 
     effectively as possible to affected communities;
       (3) develop techniques and technologies to support 
     evacuation products, including real-time notice of the 
     condition of critical infrastructure along tsunami evacuation 
     routes for public officials and first responders; and
       (4) develop techniques for utilizing remote sensing 
     technologies in rescue and recovery operations.
       (b) Communications Technology.--The Administrator, in 
     consultation with in consultation with the Assistant 
     Secretary of Commerce for Communications and Information and 
     the Federal Communications Commission, shall investigate the 
     potential for improved communications systems for tsunami and 
     other hazard warnings by incorporating into the existing 
     network a full range of options for providing those warnings 
     to the public, including, as appropriate--
       (1) telephones, including special alert rings;
       (2) wireless and satellite technology, including cellular 
     telephones and pagers;
       (3) the Internet, including e-mail;
       (4) automatic alert televisions and radios;
       (5) innovative and low-cost combinations of such 
     technologies that may provide access to remote areas; and
       (6) other technologies that may be developed.

     SEC. 6. TSUNAMI SYSTEM UPGRADE AND MODERNIZATION.

       (a) System Upgrades.--The Administrator of the National 
     Oceanic and Atmospheric Administration shall--
       (1) authorize and direct the immediate repair of existing 
     deep ocean detection buoys and related components of the 
     system;
       (2) ensure the deployment of an array of deep ocean 
     detection buoys in the regions described in section 3(a) of 
     this Act;
       (3) ensure expansion or upgrade of the tide gauge network 
     in the regions described in section 3(a); and
       (4) complete the upgrades not later than December 31, 2007.
       (b) Congressional Notifications.--The Administrator shall 
     notify the Senate Committee on Commerce, Science, and 
     Transportation and the House of Representatives Committee on 
     Science of--
       (1) impaired regional detection coverage due to equipment 
     or system failures; and
       (2) significant contractor failures or delays in completing 
     work associated with the tsunami detection and warning 
     system.
       (c) Annual Report.--The Administrator shall transmit an 
     annual report to the Senate Committee on Commerce, Science, 
     and Transportation and the House of Representatives Committee 
     on Science the status of the tsunami detection and warning 
     system, including accuracy, false alarms, equipment failures, 
     improvements over the previous year, and goals for further 
     improvement (or plans for curing failures) of the system, as 
     well as progress and accomplishments of the national tsunami 
     hazard mitigation program.
       (d) External Review.--The National Academy of Science shall 
     review the tsunami detection, forecast, and warning system 
     operated by the National Oceanic and Atmospheric 
     Administration under this Act to assess further modernization 
     and coverage needs, as well as long-term operational 
     reliability issues, taking into account measures implemented 
     under this Act, and transmit a report containing its 
     recommendations, including an estimate of the costs of 
     implementing those recommendations, to the Senate Committee 
     on Commerce, Science, and Transportation and the House of 
     Representatives Committee on Science within 24 months after 
     the date of enactment of this Act.

     SEC. 7. GLOBAL TSUNAMI WARNING AND MITIGATION NETWORK.

       (a) International Tsunami Warning System.--The 
     Administrator of the National Oceanic and Atmospheric 
     Administration, in coordination with other members of the 
     United States Interagency Committee of the National Tsunami 
     Mitigation Program, shall provide technical assistance and 
     advice to the Intergovernmental Oceanographic Commission of 
     UNESCO, the World Meteorological Organization, and other 
     international entities, as part of international efforts to 
     develop a fully functional global tsunami warning system 
     comprised of regional tsunami warning networks, modeled on 
     the International Tsunami Warning System of the Pacific.
       (b) Detection Equipment; Technical Advice.--In carrying out 
     this section, the Administrator--
       (1) shall give priority to assisting nations in identifying 
     vulnerable coastal areas, creating inundation maps, obtaining 
     or designing real-time detection and reporting equipment, and 
     establishing communication and warning networks and contact 
     points in each vulnerable nation; and
       (2) may establish a process for transfer of detection and 
     communication technology to affected nations for the purposes 
     of establishing the international tsunami warning system.
       (c) Data-Sharing Requirement.--The Administrator may not 
     provide assistance under this section for any region unless 
     all affected nations in that region participating in the 
     tsunami warning network agree to share relevant data 
     associated with the development and operation of the network.
       (d) Receipt of International Reimbursement Authorized.--The 
     Administrator may accept payment to, or reimbursement of, the 
     National Oceanic and Atmospheric Administration in cash or in 
     kind from international organizations and foreign 
     authorities, or

[[Page 456]]

     payment or reimbursement made on behalf of such an authority, 
     for expenses incurred by the Administrator in carrying out 
     any activity under this Act. Any such payments or 
     reimbursements shall be considered a reimbursement to the 
     appropriated funds of the Administration.

     SEC. 8. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the 
     Administrator of the National Oceanic and Atmospheric 
     Administration $35,000,000 for each of fiscal years 2006 
     through 2012 to carry out this Act.
  Mr. STEVENS. Mr. President, the Tsunami Preparedness Act, S. 50, will 
authorize much of the work that Senator Inouye and I have done on the 
Appropriations Committee. It establishes a National Tsunami Hazard 
Mitigation Program in the National Oceanic and Atmospheric 
Administration. The recent events in Indonesia reminds us all how 
critical it is to have a strong detection network and warning system 
for coastal communities. Currently there are 15 communities from 
Alaska, the west coast and Hawaii that are ``Tsunami Ready'', a 
certification by NOAA that the community has a communication and 
coordination plan in case of a Tsunami event.
  The Tsunami Preparedness Act provides the essential component of any 
warning system--a program for outreach and education to inform 
potentially Tsunami-impacted communities and for these coastal areas to 
plan accordingly.
  I have worked closely with Senator Inouye on this legislation and it 
is an example of how we plan to coordinate on bills from the Commerce 
Committee. This legislation also represents the importance of tsunami 
detection and early warning for our States, both of which have 
experienced deadly tsunamis in the past and are ever vigilant to remain 
prepared for future possible events.
  The administration released its plan for an improved tsunami 
monitoring system on January 14, 2005, committing $37.5 million to 
improving early detection and warning of tsunami events. The 
administration's proposal is a good one and this bill will build on 
many of the commitments made in their plan. In addition, the bill 
improves the federal coordination and dissemination of tsunami 
information and research. It establishes a multi-agency task force 
consisting of representatives from NOAA, FEMA, USGS, NSF and 
potentially impacted coastal states and territories.
  The tsunami preparedness act will expand tsunami research, and 
consistently upgrade and maintain the improved system, which would 
cover the Pacific and Atlantic-Caribbean-Gulf of Mexico regions. In an 
effort to lend help internationally, the bill also directs NOAA to 
assist other countries that could be impacted by tsunamis and build on 
the United States efforts to establish an international earth observing 
system.
  It is a pleasure to work with my good friend from Hawaii on this 
important legislation.
                                 ______
                                 
      By Mr. INOUYE:
  S. 58. A bill to amend title 10, United States Code, to permit former 
members of the Armed Forces who have a service-connected disability 
rated as total to travel on military aircraft in the same manner and to 
the same extent as retired members of the Armed Forces are entitled to 
travel on such aircraft; to the Committee on Armed Services.
  Mr. INOUYE. Mr. President, today I am reintroducing a bill which is 
of great importance to a group of patriotic Americans. This legislation 
is designed to extend space-available travel privileges on military 
aircraft to those who have been totally disabled in the service of our 
country.
  Currently, retired members of the Armed Services are permitted to 
travel on a space-available basis on non-scheduled military flights 
within the continental United States, and on scheduled overseas flights 
operated by the Military Airlift Command. My bill would provide the 
same benefits for veterans with 100 percent service-connected 
disabilities.
  We owe these heroic men and women who have given so much to our 
country a debt of gratitude. Of course, we can never repay them for the 
sacrifices they have made on behalf of our Nation, but we can surely 
try to make their lives more pleasant and fulfilling. One way in which 
we can help is to extend military travel privileges to these 
distinguished American veterans. I have received numerous letters from 
all over the country attesting to the importance attached to this issue 
by veterans. Therefore, I ask that my colleagues show their concern and 
join me in saying ``thank you'' by supporting this legislation.
  I ask unanimous consent that the text of my bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 58

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

     SECTION 1. TRAVEL ON MILITARY AIRCRAFT OF CERTAIN DISABLED 
                   FORMER MEMBERS OF THE ARMED FORCES.

       (a) In General.--Chapter 53 of title 10, United States 
     Code, is amended by inserting after section 1060b the 
     following new section:

     ``Sec. 1060c. Travel on military aircraft: certain disabled 
       former members of the armed forces

       ``The Secretary of Defense shall permit any former member 
     of the armed forces who is entitled to compensation under the 
     laws administered by the Secretary of Veterans Affairs for a 
     service-connected disability rated as total to travel, in the 
     same manner and to the same extent as retired members of the 
     armed forces, on unscheduled military flights within the 
     continental United States and on scheduled overseas flights 
     operated by the Air Mobility Command. The Secretary of 
     Defense shall permit such travel on a space-available 
     basis.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by inserting after the 
     item relating to section 1060b the following new item:

``1060c. Travel on military aircraft: certain disabled former members 
              of the armed forces.''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 59. A bill to amend title 10, United States Code, to authorize 
certain disabled former prisoners of war to use Department of Defense 
commissary and exchange stores; to the Committee on Armed Services.
  Mr. INOUYE. Mr. President, today I am reintroducing legislation to 
enable those former prisoners of war who have been separated honorably 
from their respective services and who have been rated as having a 30 
percent service-connected disability to have the use of both the 
military commissary and post exchange privileges. While I realize it is 
impossible to adequately compensate one who has endured long periods of 
incarceration at the hands of our Nation's enemies, I do feel this 
gesture is both meaningful and important to those concerned because it 
serves as a reminder that our Nation has not forgotten their 
sacrifices.
  I ask unanimous consent that the text of my bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 59

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

     SECTION 1. USE OF COMMISSARY AND EXCHANGE STORES BY CERTAIN 
                   DISABLED FORMER PRISONERS OF WAR.

       (a) In General.--Chapter 54 of title 10, United States 
     Code, is amended by inserting after section 1064 the 
     following new section:

     ``Sec. 1064a. Use of commissary and exchange stores by 
       certain disabled former prisoners of war

       ``(a) In General.--Under regulations prescribed by the 
     Secretary of Defense, former prisoners of war described in 
     subsection (b) may use commissary and exchange stores.
       ``(b) Covered Individuals.--Subsection (a) applies to any 
     former prisoner of war who--
       ``(1) separated from active duty in the armed forces under 
     honorable conditions; and
       ``(2) has a service-connected disability rated by the 
     Secretary of Veterans Affairs at 30 percent or more.
       ``(c) Definitions.--In this section:
       ``(1) The term `former prisoner of war' has the meaning 
     given that term in section 101(32) of title 38.
       ``(2) The term `service-connected' has the meaning given 
     that term in section 101(16) of title 38.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by inserting after the 
     item relating to section 1064 the following new item:


[[Page 457]]


``1064a. Use of commissary and exchange stores by certain disabled 
              former prisoners of war.''.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 60. A bill to repeal the provision of law that provides automatic 
pay adjustments for Members of Congress; to the Committee on Homeland 
Security and Governmental Affairs.
  Mr. FEINGOLD. Mr. President, I am pleased to reintroduce legislation 
that would put an end to automatic cost-of-living adjustments for 
congressional pay.
  As I have noted when I raised this issue in past years, it is an 
unusual thing to have the power to raise our own pay. Most of our 
constituents do not have that power. And that this power is so unusual 
is good reason for the Congress to exercise that power openly, and to 
exercise it subject to regular procedures that include debate, 
amendment, and a vote on the record.
  I regret to say, that current law permits Congress to avoid that 
public debate and vote. All that is necessary for Congress to get a pay 
raise is that nothing be done to stop it. The annual pay raise takes 
effect unless Congress acts.
  This stealth pay raise mechanism began with a change Congress enacted 
in the Ethics Reform Act of 1989. In section 704 of that act, Members 
of Congress voted to make themselves entitled to an annual raise equal 
to half a percentage point less than the employment cost index, one 
measure of inflation.
  It is true, that on occasion Congress has voted to deny itself the 
raise, and the traditional vehicle for the pay raise vote is the 
Treasury appropriations bill. But that vehicle is not always made 
available to those who want a public debate and vote on the matter. 
Just last year, for example, the Treasury appropriations bill was 
slipped into the massive Omnibus Appropriations conference report, and 
thus it was completely shielded from amendment. Senators were 
effectively prevented from offering an amendment to force an up or down 
vote on the annual pay raise. And that situation was not unique.
  Getting a vote on the annual congressional pay raise is a haphazard 
affair at best, and it should not be that way. The burden should not be 
on those who seek a public debate and recorded vote on the Member pay 
raise. On the contrary, Congress should have to act if it decides to 
award itself a hike in pay. This process of pay raises without 
accountability must end.
  This issue is not a new question. It was something that our Founders 
considered from the beginning of our Nation. In August 1789, as part of 
the package of 12 amendments advocated by James Madison that included 
what has become our Bill of Rights, the House of Representatives passed 
an amendment to the Constitution providing that Congress could not 
raise its pay without an intervening election. On September 9, 1789, 
the Senate passed that amendment. In late September 1789, Congress 
submitted the amendments to the States.
  Although the amendment on pay raises languished for two centuries, in 
the 1980s, a campaign began to ratify it. While I was a member of the 
Wisconsin State Senate, I was proud to help ratify the amendment. Its 
approval by the Michigan Legislature on May 7, 1992, gave it the needed 
approval by three-fourths of the States.
  The 27th amendment to the Constitution now states: ``No law, varying 
the compensation for the services of the senators and representatives, 
shall take effect, until an election of representatives shall have 
intervened.''
  I try to honor that limitation in my own practices. In my own case, 
throughout my 6-year term, I accept only the rate of pay that Senators 
receive on the date on which I was sworn in as a Senator. And I return 
to the Treasury any additional income Senators get, whether from a 
cost-of-living adjustment or a pay raise we vote for ourselves. I don't 
take a raise until my bosses, the people of Wisconsin, give me one at 
the ballot box. That is the spirit of the 27th amendment. The stealth 
pay raises like the one that Congress allowed last year, at a minimum, 
certainly violate the spirit of that amendment.
  This practice must end. This bill will end it. Senators and 
Congressmen should have to vote up-or-down to raise congressional pay. 
My bill would simply require us to vote in the open. We owe our 
constituents nothing less.
  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. 60

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

     SECTION 1. ELIMINATION OF AUTOMATIC PAY ADJUSTMENTS FOR 
                   MEMBERS OF CONGRESS.

       (a) In General.--Paragraph (2) of section 601(a) of the 
     Legislative Reorganization Act of 1946 (2 U.S.C. 31) is 
     repealed.
       (b) Technical and Conforming Amendments.--Section 601(a)(1) 
     of such Act is amended--
       (1) by striking ``(a)(1)'' and inserting ``(a)'';
       (2) by redesignating subparagraphs (A), (B), and (C) as 
     paragraphs (1), (2), and (3), respectively; and
       (3) by striking ``as adjusted by paragraph (2) of this 
     subsection'' and inserting ``adjusted as provided by law''.
       (c) Effective Date.--This section shall take effect on 
     February 1, 2007.
                                 ______
                                 
      By Mr. INOUYE:
  S. 61. A bill to amend title XVIII of the Social Security Act to 
provide improved reimbursement for clinical social worker services 
under the medicare program; to the Committee on Finance.
  Mr. INOUYE. Mr. President, today I am introducing legislation to 
amend Title XVIII of the Social Security Act to correct discrepancies 
in the reimbursement of clinical social workers covered through 
Medicare, Part B. The three proposed changes contained in this 
legislation clarify the current payment process for clinical social 
workers and establish a reimbursement methodology for the profession 
that is similar to other health care professionals reimbursed through 
the Medicare program.
  First, this legislation sets payment for clinical social worker 
services according to a fee schedule established by the Secretary. 
Second, it explicitly states that services and supplies furnished by a 
clinical social worker are a covered Medicare expense, just as these 
services are covered for other mental health professionals in Medicare. 
Third, the bill allows clinical social workers to be reimbursed for 
services provided to a client who is hospitalized.
  Clinical social workers are valued members of our health care 
provider network. They are legally regulated in every state of the 
nation and are recognized as independent providers of mental health 
care throughout the health care system. It is time to correct the 
disparate reimbursement treatment of this profession under Medicare.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 61

       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 ``Equity for Clinical Social 
     Workers Act of 2005''.

     SEC. 2. IMPROVED REIMBURSEMENT FOR CLINICAL SOCIAL WORKER 
                   SERVICES UNDER MEDICARE.

       (a) In General.--Section 1833(a)(1)(F)(ii) of the Social 
     Security Act (42 U.S.C. 1395l(a)(1)(F)(ii)) is amended to 
     read as follows: ``(ii) the amount determined by a fee 
     schedule established by the Secretary,''.
       (b) Definition of Clinical Social Worker Services 
     Expanded.--Section 1861(hh)(2) of the Social Security Act (42 
     U.S.C. 1395x(hh)(2)) is amended by striking ``services 
     performed by a clinical social worker (as defined in 
     paragraph (1))'' and inserting ``such services and such 
     services and supplies furnished as an incident to such 
     services performed by a clinical social worker (as defined in 
     paragraph (1))''.
       (c) Clinical Social Worker Services Not To Be Included in 
     Inpatient Hospital Services.--Section 1861(b)(4) of the 
     Social Security Act (42 U.S.C. 1395x(b)(4)) is amended by 
     striking ``and services'' and inserting ``clinical social 
     worker services, and services''.
       (d) Treatment of Services Furnished in Inpatient Setting.--
     Section 1832(a)(2)(B)(iii)

[[Page 458]]

     of the Social Security Act (42 U.S.C. 1395k(a)(2)(B)(iii)) is 
     amended by striking ``and services'' and inserting ``clinical 
     social worker services, and services''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to payments made for clinical social worker 
     services furnished on or after January 1, 2006.
                                 ______
                                 
      By Mr. INOUYE:
  S. 62. A bill for the relief of Jim K. Yoshida; to the Committee on 
Veterans' Affairs.
  Mr. INOUYE. Mr. President, today I am introducing a private relief 
bill on behalf of Jim K. Yoshida, to obtain recognition of his service 
with the U.S. military in Korea so that he may obtain veteran's status.
  Mr. President, I ask unanimous consent that the text of my bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 62

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

     SECTION 1. VETERAN STATUS.

       (a) Entitlement to Status.--Notwithstanding any other 
     provision of law, Jim K. Yoshida of Honolulu, Hawaii, is 
     deemed to be a veteran for the purposes of all laws 
     administered by the Secretary of Veterans Affairs.
       (b) Treatment of Service.--Notwithstanding any other 
     provision of law, the service of Jim K. Yoshida of Honolulu, 
     Hawaii, as a volunteer member of the United States Army 
     during the period beginning on July 2, 1950, and ending on 
     January 17, 1951, shall be deemed to be active military 
     service from which Jim K. Yoshida was discharged under 
     honorable conditions for the purposes of all laws 
     administered by the Secretary of Veterans Affairs.
       (c) Prospective Applicability.--No benefits may be paid or 
     otherwise provided to Jim K. Yoshida of Honolulu, Hawaii, by 
     reason of the enactment of this Act with respect to any 
     period before the date of the enactment of this Act.
                                 ______
                                 
      By Mr. BINGAMAN (for himself and Mr. Domenici):
  S. 63. A bill to establish the Northern Rio Grande National Heritage 
Area in the State of New Mexico, and for other purposes; to the 
Committee on Energy and Natural Resources.
  Mr. BINGAMAN. Mr. President, I rise today to reintroduce legislation 
to establish the Northern Rio Grande National Heritage Area in northern 
New Mexico. I am pleased that Senator Domenici is again joining me in 
sponsoring this bill. The Northern Rio Grande National Heritage Area 
will be established as part of a collaborative effort between local 
residents, Indian tribes, businesses and local governments, who are 
working together to preserve the area.
  By establishing the Northern Rio Grande National Heritage Area, I 
hope to commemorate the significant but complex heritage of northern 
New Mexico communities and Indian tribes, from the pre-Spanish 
colonization period to present day. Establishing a National Heritage 
Area will benefit the northern New Mexico communities, local residents, 
students, and visitors, as well as help the local protection and 
interpretation of the unique cultural, historical, and natural 
resources of northern New Mexico.
  Last Congress, identical legislation passed the Senate by unanimous 
consent and again as part of a comprehensive heritage area bill. The 
House of Representatives amended the bill to add authorizations for 
other heritage areas but unfortunately the different versions were not 
able to be reconciled prior to the sine die adjournment of the 
Congress. However, I am encouraged that the Senate and House have each 
approved authorization for the Northern Rio Grande National Heritage 
Area, and it is my hope that since both Houses have now passed 
legislation that is essentially identical to the bill I am introducing 
today, it can be swiftly considered and enacted into law.
  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. 63

       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 ``Northern Rio Grande National 
     Heritage Area Act''.

     SEC. 2. CONGRESSIONAL FINDINGS.

       The Congress finds that--
       (1) northern New Mexico encompasses a mosaic of cultures 
     and history, including eight Pueblos and the descendants of 
     Spanish ancestors who settled in the area in 1598;
       (2) the combination of cultures, languages, folk arts, 
     customs, and architecture make northern New Mexico unique;
       (3) the area includes spectacular natural, scenic, and 
     recreational resources;
       (4) there is broad support from local governments and 
     interested individuals to establish a National Heritage Area 
     to coordinate and assist in the preservation and 
     interpretation of these resources;
       (5) in 1991, the National Park Service study Alternative 
     Concepts for Commemorating Spanish Colonization identified 
     several alternatives consistent with the establishment of a 
     National Heritage Area, including conducting a comprehensive 
     archaeological and historical research program, coordinating 
     a comprehensive interpretation program, and interpreting a 
     cultural heritage scene; and
       (6) establishment of a National Heritage Area in northern 
     New Mexico would assist local communities and residents in 
     preserving these unique cultural, historical and natural 
     resources.

     SEC. 3. DEFINITIONS.

       As used in this Act--
       (1) the term ``heritage area'' means the Northern Rio 
     Grande Heritage Area; and
       (2) the term ``Secretary'' means the Secretary of the 
     Interior.

     SEC. 4. NORTHERN RIO GRANDE NATIONAL HERITAGE AREA.

       (a) Establishment.--There is hereby established the 
     Northern Rio Grande National Heritage Area in the State of 
     New Mexico.
       (b) Boundaries.--The heritage area shall include the 
     counties of Santa Fe, Rio Arriba, and Taos.
       (c) Management Entity.--
       (1) The Northern Rio Grande National Heritage Area, Inc., a 
     non-profit corporation chartered in the State of New Mexico, 
     shall serve as the management entity for the heritage area.
       (2) The Board of Directors for the management entity shall 
     include representatives of the State of New Mexico, the 
     counties of Santa Fe, Rio Arriba and Taos, tribes and pueblos 
     within the heritage area, the cities of Santa Fe, Espanola 
     and Taos, and members of the general public. The total number 
     of Board members and the number of Directors representing 
     State, local and tribal governments and interested 
     communities shall be established to ensure that all parties 
     have appropriate representation on the Board.

     SEC. 5. AUTHORITY AND DUTIES OF THE MANAGEMENT ENTITY.

       (a) Management Plan.--
       (1) Not later than 3 years after the date of enactment of 
     this Act, the management entity shall develop and forward to 
     the Secretary a management plan for the heritage area.
       (2) The management entity shall develop and implement the 
     management plan in cooperation with affected communities, 
     tribal and local governments and shall provide for public 
     involvement in the development and implementation of the 
     management plan.
       (3) The management plan shall, at a minimum--
       (A) provide recommendations for the conservation, funding, 
     management, and development of the resources of the heritage 
     area;
       (B) identify sources of funding;
       (C) include an inventory of the cultural, historical, 
     archaeological, natural, and recreational resources of the 
     heritage area;
       (D) provide recommendations for educational and 
     interpretive programs to inform the public about the 
     resources of the heritage area; and
       (E) include an analysis of ways in which local, State, 
     Federal, and tribal programs may best be coordinated to 
     promote the purposes of this Act.
       (4) If the management entity fails to submit a management 
     plan to the secretary as provided in paragraph (1), the 
     heritage area shall no longer be eligible to receive Federal 
     funding under this Act until such time as a plan is submitted 
     to the Secretary.
       (5) The Secretary shall approve or disapprove the 
     management plan within 90 days after the date of submission. 
     If the Secretary disapproves the management plan, the 
     Secretary shall advise the management entity in writing of 
     the reasons therefore and shall make recommendations for 
     revisions to the plan.
       (6) The management entity shall periodically review the 
     management plan and submit to the Secretary any 
     recommendations for proposed revisions to the management 
     plan. Any major revisions to the management plan must be 
     approved by the Secretary.
       (b) Authority.--The management entity may make grants and 
     provide technical assistance to tribal and local governments, 
     and other public and private entities to carry out the 
     management plan.
       (c) Duties.--The management entity shall--
       (1) give priority in implementing actions set forth in the 
     management plan;
       (2) coordinate with tribal and local governments to better 
     enable them to adopt land

[[Page 459]]

     use policies consistent with the goals of the management 
     plan;
       (3) encourage by appropriate means economic viability in 
     the heritage area consistent with the goals of the management 
     plan; and
       (4) assist local and tribal governments and non-profit 
     organizations in--
       (A) establishing and maintaining interpretive exhibits in 
     the heritage area;
       (B) developing recreational resources in the heritage area;
       (C) increasing public awareness of, and appreciation for, 
     the cultural, historical, archaeological and natural 
     resources and sits in the heritage area;
       (D) the restoration of historic structures related to the 
     heritage area; and
       (E) carrying out other actions that the management entity 
     determines appropriate to fulfill the purposes of this Act, 
     consistent with the management plan.
       (d) Prohibition on Acquiring Real Property.--The management 
     entity may not use Federal funds received under this Act to 
     acquire real property or an interest in real property.
       (e) Public Meetings.--The management entity shall hold 
     public meetings at least annually regarding the 
     implementation of the management plan.
       (f) Annual Reports and Audits.--
       (1) For any year in which the management entity receives 
     Federal funds under this Act, the management entity shall 
     submit an annual report to the Secretary setting forth 
     accomplishments, expenses and income, and each entity to 
     which any grant was made by the management entity.
       (2) The management entity shall make available to the 
     Secretary for audit all records relating to the expenditure 
     of Federal funds and any matching funds. The management 
     entity shall also require, for all agreements authorizing 
     expenditure of Federal funds by other organizations, that the 
     receiving organization make available to the Secretary for 
     audit all records concerning the expenditure of those funds.

     SEC. 6. DUTIES OF THE SECRETARY.

       (a) Technical and Financial Assistance.--The Secretary may, 
     upon request of the management entity, provide technical and 
     financial assistance to develop and implement the management 
     plan.
       (b) Priority.--In providing assistance under subsection 
     (a), the Secretary shall give priority to actions that 
     facilitate--
       (1) the conservation of the significant natural, cultural, 
     historical, archaeological, scenic, and recreational 
     resources of the heritage area; and
       (2) the provision of educational, interpretive, and 
     recreational opportunities consistent with the resources and 
     associated values of the heritage area.

     SEC. 7. SAVINGS PROVISIONS.

       (a) No Effect on Private Property.--Nothing in this Act 
     shall be construed--
       (1) to modify, enlarge, or diminish any authority of 
     Federal, State, or local governments to regulate any use of 
     privately owned lands; or
       (2) to grant the management entity any authority to 
     regulate the use of privately owned lands.
       (b) Tribal Lands.--Nothing in this Act shall restrict or 
     limit a tribe from protecting cultural or religious sites on 
     tribal lands.
       (c) Authority of Governments.--Nothing in this Act shall--
       (1) modify, enlarge, or diminish any authority of Federal, 
     State, tribal, or local governments to manage or regulate any 
     use of land as provided for by law or regulation; or
       (2) authorize the management entity to assume any 
     management authorities over such lands.
       (d) Trust Responsibilities.--Nothing in this Act shall 
     diminish the Federal Government's trust responsibilities or 
     government-to-government obligations to any federally 
     recognized Indian tribe.

     SEC. 8. SUNSET.

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

     SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There are authorized to be appropriated to 
     carry out this Act $10,000,000, of which not more than 
     $1,000,000 may be authorized to be appropriated for any 
     fiscal year.
       (b) Cost-Sharing Requirement.--The Federal share of the 
     total cost of any activity assisted under this Act shall be 
     not more than 50 percent.
                                 ______
                                 
      By Mr. INHOFE (for himself, Mr. Stevens, and Mr. Burns):
  S. 65. A bill to amend the age restrictions for pilots; to the 
Committee on Commerce, Science, and Transportation.
  Mr. INHOFE. Mr. President, I rise today, as an experienced pilot over 
age 60, along with my colleagues, Senator Stevens and Senator Burns, to 
introduce a bill that will help end age discrimination among airline 
pilots. I also want to thank my colleague in the other chamber, 
Congressman Jim Gibbons, for his leadership on this issue and for 
introducing the companion version of this bill.
  This bill will abolish the Federal Aviation Administration's Age 60 
Rule-the regulation that for more than 40 years has forced the 
retirement of airline pilots the day they turn 60 and replace it with a 
rational plan that ties the commercial pilot retirement age to the 
Social Security retirement age currently 65.
  Most nations have abolished mandatory age 60 retirement rules. The 
United States is one of only two countries in the Joint Aviation 
Authority that requires its commercial pilots to retire at the age of 
60. Some countries, including Canada, Australia, and New Zealand have 
no upper age limit at all.
  The Age 60 Rule has no basis in science or safety and never did. FAA 
data shows that pilots over age 60 are as safe as, and in some cases 
safer than, their younger colleagues. There have been numerous studies 
and statements in support of abolishing the Age 60 Rule.
  In 1981, the National Institute of Aging stated that ``the Age 60 
Rule appears indefensible on medical grounds'' and ``there is no 
convincing medical evidence to support age 60, or any other specific 
age, for mandatory pilot retirement.''
  The FAA released the Hilton Study in 1993, which stated ``the data 
for all groups of pilots were remarkably consistent in showing a modest 
decrease in accident rate with age no hint of an increase in accident 
rates as pilots near age 60.''
  Furthermore, in May 1999, the Senate Appropriations Committee asked 
the FAA to report on why the US should not cautiously increase the age 
to 63, ``like other countries have for commercial aviation.''
  Airline Pilots magazine stated in a September 2003 article, ``If a 
permanent replacement for the 30 year Treasury bond rate is also 
applied to the calculation of lump-sum payments, we recommend a long 
transition period, similar to that proposed in H.R. 1776, the pension 
legislation introduced by Rep. Bob Portman. For pilots who must retire 
at age 60, this is particularly important. It would be unfair to pull 
the rug out from under employees who have carefully planned their 
retirement finances, especially pilots who can't fly longer to make up 
for the amounts lost because of a change in the basis used to calculate 
lump-sum payments.''
  As recently as September 14, 2004, in a hearing before the Senate 
Special Committee on Aging, Captain Joseph ``Ike'' Eichelkraut, 
President of Southwest Airlines Pilots' Association, testified:
  ``The 4400 plus pilots of the Southwest Airlines Pilots' Association, 
oppose the Age 60 Rule.
  ``Flying a commercial airliner is not the physically demanding 
environment I encountered 15 years ago in the 7 9 ``G'' world of the F-
16 I flew in the Air Force. Commercial piloting is, however, a job 
requiring key management skills and sound judgment. These are talents 
that I have found typically come with age and experience.
  ``The facts are that plain. The FAA has the ideal mechanisms for 
ensuring safe pilots at any age are already in place. To retain my 
license and fly as a pilot for Southwest Airlines, I must pass semi-
annual flight physicals administered by a qualified (FAA licensed) 
Aero-Medical Examiner (AME). When a pilot turns 40 years of age, he 
must undergo an EKG every other flight physical, which is 
electronically transmitted by the AME directly to FAA headquarters 
where a computer program alerts if parameters dictate.
  ``Pilots must also successfully pass semiannual simulator training 
and flight checks designed to evaluate the crewmember's ability to 
respond to various aircraft emergencies and/or competently handle 
advances in flight technology and the Air Traffic Control (ATC) 
environment. Captains must demonstrate, twice yearly, complete 
knowledge of systems and procedures, safe piloting skills and multi-
tasking by managing emergency and normal flight situations, typically 
in instrument flight conditions conducted in advanced simulators. There 
is no greater

[[Page 460]]

test of cognitive ability and mental dexterity than these simulator 
rides. Flight crews are also administered random inflight check rides 
by FAA inspectors and Southwest check airmen. Further, we are subject 
to random alcohol and drug testing at any time while on duty. There is 
no other profession examined to this level. The 59 year old Captain 
arrives at this point in his career having demonstrated successful 
performance following years of this kind of scrutiny. FAA studies have 
verified the superior level of safety exhibited by this senior Captain.
  ``At Southwest, our pilots are trained to fly the aircraft on 
instruments down to 50 above the ground in poor visibility conditions 
before acquiring the intended runway and landing visually. In 
simulators, both pilots must demonstrate the ability to immediately 
determine whether a safe landing can be made at this point and then 
either execute a ``go-around'' or land. The First Officer is trained to 
assume control of the aircraft and execute a ``go-around'' if the 
Captain fails to respond to procedures at this critical decision point. 
If either pilot should become incapacitated, even at touchdown, the 
other pilot is capable of assuming control in order to fly the airplane 
to a safe landing. The passengers would probably remain unaware that a 
pilot had become ill until the aircraft is met at the gate by Emergency 
Medical Technicians (EMT).
  ``Simulator failure rates among SWA pilots are low. Last year there 
were only 31 out of 4,200 simulator checkrides. But as pilots approach 
age 60 the failure numbers are at their lowest. The graph attached 
shows this and I believe that experience is the key. As pilots get 
older, they know how to better handle the extreme situations they may 
have encountered in simulator checks. The mean failure rate declines at 
an even rate from a pilot's thirties through his fifties. Of course, 
because of the Age 60 rule, I don't have data to show that this trend 
would continue throughout a pilot's sixties, but I suspect it would.''
  I urge the Commerce Committee to hold hearings along these lines.
  Furthermore, on September 29, 2004, thousands of people watched as 
63-year-old Michael Melvill made history by becoming the first civilian 
to pilot a craft into space. In doing so, he helped Paul Allen, the 
owner of Mojave Aerospace Ventures, which owns SpaceShipOne technology, 
along with the designer of SpaceShipOne, Burt Rutan, win the coveted 
$10 million Ansari X-Prize.
  Melvill took SpaceShipOne above the 62-mile altitude point, 
ultimately soaring to 337,500 feet. Despite rolling nearly 30 times, 
Melvill was able to gain control of the vehicle, re-enter the 
atmosphere, and glide to a landing. I attribute this recovery and 
subsequent landing to Melvill's years of extensive experience as a test 
pilot.
  This bill will allow our most experienced pilots, those like Michael 
Melvill demonstrably healthy, and fit for duty-to retain their jobs, a 
step that will benefit pilots, the financially burdened airlines, and 
most importantly, passengers. Now, more than ever before, we need to 
keep our best pilots flying.
  Again, there is no scientific justification for requiring pilots to 
retire at age 60. Our pilots, our airlines, and our passengers deserve 
our consideration. I urge the rest of my colleagues to support this 
important legislation.
                                 ______
                                 
      By Mr. INOUYE:
  S. 66. A bill to amend title XIX of the Social Security Act to 
provide for coverage of services provided by nursing school clinics 
under medicaid programs; to the Committee on Finance.
  Mr. INOUYE. Mr. President, today I introduce the Nursing School 
Clinics Act. This measure builds on our concerted efforts to provide 
access to quality health care for Americans by offering grants and 
incentives for nursing schools to establish primary care clinics in 
underserved areas where additional medical services are most needed. In 
addition, this measure provides the opportunity for nursing schools to 
enhance the scope of student training and education by providing 
firsthand clinical experience in primary care facilities.
  Primary care clinics administered by nursing schools are university 
or nonprofit primary care centers developed mainly in collaboration 
with university schools of nursing and the communities they serve. 
These centers are staffed by faculty and staff who are nurse 
practitioners and public health nurses. Students supplement patient 
care while receiving preceptorships provided by college of nursing 
faculty and primary care physicians, often associated with academic 
institutions, who serve as collaborators with nurse practitioners. To 
date, the comprehensive models of care provided by nursing clinics have 
yielded excellent results, including significantly fewer emergency room 
visits, fewer hospital inpatient days, and less use of specialists, as 
compared to conventional primary health care.
  This bill reinforces the principle of combining health care delivery 
in underserved areas with the education of advanced practice nurses. To 
accomplish these objectives, Title XIX of the Social Security Act would 
be amended to designate that the services provided in these nursing 
school clinics are reimbursable under Medicaid. The combination of 
grants and the provision of Medicaid reimbursement furnishes the 
financial incentives for clinic operators to establish the clinics.
  In order to meet the increasing challenges of bringing cost-effective 
and quality health care to all Americans, we must consider a wide range 
of proposals, both large and small. Most importantly, we must approach 
the issue of health care with creativity and determination, ensuring 
that all reasonable avenues are pursued. Nurses have always been an 
integral part of health care delivery. The Nursing School Clinics Act 
recognizes the central role nurses can perform as care givers to the 
medically underserved.
  I ask unanimous consent that the text of this bill be printed in the 
Record. 
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 66

       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 ``Nursing School Clinics Act 
     of 2005''.

     SEC. 2. MEDICAID COVERAGE OF SERVICES PROVIDED BY NURSING 
                   SCHOOL CLINICS.

       (a) In General.--Section 1905(a) of the Social Security Act 
     (42 U.S.C. 1396d(a)) is amended--
       (1) in paragraph (27), by striking ``and'' at the end;
       (2) by redesignating paragraph (28) as paragraph (29); and
       (3) by inserting after paragraph (27), the following new 
     paragraph:
       ``(28) nursing school clinic services (as defined in 
     subsection (x)) furnished by or under the supervision of a 
     nurse practitioner or a clinical nurse specialist (as defined 
     in section 1861(aa)(5)), whether or not the nurse 
     practitioner or clinical nurse specialist is under the 
     supervision of, or associated with, a physician or other 
     health care provider; and''.
       (b) Nursing School Clinic Services Defined.--Section 1905 
     of the Social Security Act (42 U.S.C. 1396d) is amended by 
     adding at the end the following new subsection:
       ``(y) The term `nursing school clinic services' means 
     services provided by a health care facility operated by an 
     accredited school of nursing which provides primary care, 
     long-term care, mental health counseling, home health 
     counseling, home health care, or other health care services 
     which are within the scope of practice of a registered 
     nurse.''.
       (c) Conforming Amendment.--Section 1902(a)(10)(C)(iv) of 
     the Social Security Act (42 U.S.C. 1396a(a)(10)(C)(iv)) is 
     amended by inserting ``and (28)'' after ``(24)''.
       (d) Effective Date.--The amendments made by this section 
     shall be effective with respect to payments made under a 
     State plan under title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) for calendar quarters commencing with 
     the first calendar quarter beginning after the date of 
     enactment of this Act.
                                 ______
                                 
      By Mr. INOUYE:
  S. 67. A bill to amend the Public Health Act to provide health care 
practitioners in rural areas with training in preventive health care, 
including both physical and mental care, and for other purposes; to the 
Committee on Health, Education, Labor, and Pensions.

[[Page 461]]


  Mr. INOUYE. Mr. President, I rise today to introduce the Rural 
Preventive Health Care Training Act, a bill that responds to the dire 
need of our rural communities for quality health care and disease 
prevention programs. Almost one fourth of Americans live in rural areas 
and frequently lack access to adequate physical and mental health care. 
As many as 21 million of the 34 million people living in underserved 
rural areas are without access to a primary care provider. Even in 
areas where providers do exist, there are numerous limits to access, 
such as geography, distance, lack of transportation, and lack of 
knowledge about available resources. Due to the diversity of rural 
populations, language and cultural obstacles are often a factor in the 
access to medical care.
  Compound these problems with limited financial resources, and the 
result is that many Americans living in rural communities go without 
vital health care, especially preventive care. Children fail to receive 
immunizations and routine checkups. Preventable illnesses and injuries 
occur needlessly, and lead to expensive hospitalizations. Early 
symptoms of emotional problems and substance abuse go undetected, and 
often develop into full-blown disorders.
  An Institute of Medicine IOM report entitled, ``Reducing Risks for 
Mental Disorders: Frontiers for Preventive Intervention Research,'' 
highlights the benefits of preventive care for all health problems. The 
training of health care providers in prevention is crucial in order to 
meet the demand for care in underserved areas. Currently, rural health 
care providers lack preventive care training opportunities.
  Interdisciplinary preventive training of rural health care providers 
must be encouraged. Through such training, rural health care providers 
can build a strong educational foundation from the behavioral, 
biological, and psychological sciences. Interdisciplinary team 
prevention training will also facilitate operations at sites with both 
health and mental health clinics by facilitating routine consultation 
between groups. Emphasizing the mental health disciplines and their 
services as part of the health care team will contribute to the overall 
health of rural communities.
  The Rural Preventive Health Care Training Act would implement the 
risk-reduction model described in the IOM study. This model is based on 
the identification of risk factors and targets specific interventions 
for those risk factors. The human suffering caused by poor health is 
immeasurable, and places a huge financial burden on communities, 
families, and individuals. By implementing preventive measures to 
reduce this suffering, the potential psychological and financial 
savings are enormous.
  Mr. President. I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 67

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Rural Preventive Health Care 
     Training Act of 2005''.

     SEC. 2. PREVENTIVE HEALTH CARE TRAINING.

       Part D of title VII of the Public Health Service Act (42 
     U.S.C. 294 et seq.) is amended by inserting after section 754 
     the following:

     ``SEC. 754A. PREVENTIVE HEALTH CARE TRAINING.

       ``(a) In General.--The Secretary may make grants to, and 
     enter into contracts with, eligible applicants to enable such 
     applicants to provide preventive health care training, in 
     accordance with subsection (c), to health care practitioners 
     practicing in rural areas. Such training shall, to the extent 
     practicable, include training in health care to prevent both 
     physical and mental disorders before the initial occurrence 
     of such disorders. In carrying out this subsection, the 
     Secretary shall encourage, but may not require, the use of 
     interdisciplinary training project applications.
       ``(b) Limitation.--To be eligible to receive training using 
     assistance provided under subsection (a), a health care 
     practitioner shall be determined by the eligible applicant 
     involved to be practicing, or desiring to practice, in a 
     rural area.
       ``(c) Use of Assistance.--Amounts received under a grant 
     made or contract entered into under this section shall be 
     used--
       ``(1) to provide student stipends to individuals attending 
     rural community colleges or other institutions that service 
     predominantly rural communities, for the purpose of enabling 
     the individuals to receive preventive health care training;
       ``(2) to increase staff support at rural community colleges 
     or other institutions that service predominantly rural 
     communities to facilitate the provision of preventive health 
     care training;
       ``(3) to provide training in appropriate research and 
     program evaluation skills in rural communities;
       ``(4) to create and implement innovative programs and 
     curricula with a specific prevention component; and
       ``(5) for other purposes as the Secretary determines to be 
     appropriate.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $5,000,000 for each of fiscal years 2006 through 2009.''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 68. A bill to amend title XIX of the Social Security Act to 
provide 100 percent reimbursement for medical assistance provided to a 
Native Hawaiian through a federally-qualified health center or a Native 
Hawaiian health care system; to the Committee on Finance.
  Mr. INOUYE. Mr. President, today I introduce the Native Hawaiian 
Medicaid Coverage Act. This legislation would authorize a Federal 
Medicaid Assistance Percent (FMAP) of 100 percent for the payment of 
health care costs of Native Hawaiians who receive health care from 
Federally Qualified Health Centers or the Native Hawaiian Health Care 
System.
  This bill was originally a provision within the Medicare Prescription 
Drug Bill, which the Senate passed by an overwhelming majority of 76 to 
21, but was dropped from the final Medicare Prescription Drug 
Conference Report.
  This bill is modeled on the Native Alaskan Health Care Act, which 
provides for a Federal Medicaid Assistance Percent (FMAP) of 100 
percent for payment of health care costs for Native Alaskans by the 
Indian Health Service, an Indian tribe, or a tribal organization.
  Community health centers serve as the ``safety net'' for uninsured 
and medically underserved Native Hawaiians and other United States 
citizens, providing comprehensive primary and preventive health 
services to the entire community. Outpatient services offered to the 
entire family include comprehensive primary care, preventive health 
maintenance, and education outreach in the local community. Community 
health centers, with their multidisciplinary approach, offer cost 
effective integration of health promotion and wellness with chronic 
disease management and primary care focused on serving vulnerable 
populations.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 68

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Native Hawaiian Medicaid 
     Coverage Act of 2005''.

     SEC. 2. 100 PERCENT FMAP FOR MEDICAL ASSISTANCE PROVIDED TO A 
                   NATIVE HAWAIIAN THROUGH A FEDERALLY-QUALIFIED 
                   HEALTH CENTER OR A NATIVE HAWAIIAN HEALTH CARE 
                   SYSTEM UNDER THE MEDICAID PROGRAM.

       (a) Medicaid.--The third sentence of section 1905(b) of the 
     Social Security Act (42 U.S.C. 1396d(b)) is amended by 
     inserting ``, and with respect to medical assistance provided 
     to a Native Hawaiian (as defined in section 12 of the Native 
     Hawaiian Health Care Improvement Act) through a federally-
     qualified health center or a Native Hawaiian health care 
     system (as so defined) whether directly, by referral, or 
     under contract or other arrangement between a federally-
     qualified health center or a Native Hawaiian health care 
     system and another health care provider'' before the period.
       (b) Effective Date.--The amendment made by this section 
     applies to medical assistance provided on or after the date 
     of enactment of this Act.
                                 ______
                                 
      By Mr. INOUYE:
  S. 69. A bill for the relief of Donald C. Pence; to the Committee on 
Armed Services.

[[Page 462]]


  Mr. INOUYE. Mr. President, today I am reintroducing a private relief 
mill on behalf of Donald C. Pence of Stanford, North Carolina, for 
compensation for the failure of the Department of Veterans Affairs to 
pay dependency and indemnity compensation to Kathryn E. Box, the now-
deceased mother of Donald C. Pence. It is rare that a federal agency 
admits a mistake. In this case, the Department of Veterans Affairs has 
admitted that a mistake was made and explored ways to permit payment 
under the law, including equitable relief, but has found no provision 
authorizing the Department to release the remaining benefits that were 
unpaid to Mrs. Box at the time of her death. My bill would correct this 
injustice, and I urge my colleagues to support this measure.
  Mr. President, I ask unanimous consent that the text of my bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 69

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

     SECTION 1. RELIEF OF DONALD C. PENCE.

       (a) Relief.--The Secretary of the Treasury shall pay, out 
     of any moneys in the Treasury not otherwise appropriated, to 
     Donald C. Pence, of Sanford, North Carolina, the sum of 
     $31,128 in compensation for the failure of the Department of 
     Veterans Affairs to pay dependency and indemnity compensation 
     to Kathryn E. Box, the now-deceased mother of Donald C. 
     Pence, for the period beginning on July 1, 1990, and ending 
     on March 31, 1993.
       (b) Limitation on Fees.--Not more than a total of 10 
     percent of the payment authorized by subsection (a) shall be 
     paid to or received by agents or attorneys for services 
     rendered in connection with obtaining such payment, any 
     contract to the contrary notwithstanding. Any person who 
     violates this subsection shall be fined not more than $1,000.
                                 ______
                                 
      By Mr. INOUYE:
  S. 70. A bill to amend title XVIII of the Social Security Act to 
remove the restriction that a clinical psychologist or a clinical 
social worker provide services in a comprehensive outpatient 
rehabilitation facility to a patient only under the care of a 
physician; to the Committee on Armed Services.
  Mr. INOUYE. Mr. President, today I introduce legislation to authorize 
the autonomous functioning of clinical psychologists and clinical 
social workers within the Medicare comprehensive outpatient 
rehabilitation facility program.
  In my judgment, it is unfortunate that Medicare requires clinical 
supervision of the services provided by certain health professionals 
and does not allow them to function to the full extent of their State 
practice licenses. Those who need the services of outpatient 
rehabilitation facilities should have access to a wide range of social 
and behavioral science expertise. Clinical psychologists and clinical 
social workers are recognized as independent providers of mental health 
care services under the Federal Employee Health Benefits Program, the 
TRICARE Military Health Program of the Uniformed Services, the Medicare 
(Part B) Program, and numerous private insurance plans. This 
legislation will ensure that these qualified professionals achieve the 
same recognition under the Medicare comprehensive outpatient 
rehabilitation facility program.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 70

       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 ``Autonomy for Psychologists 
     and Social Workers Act of 2005''.

     SEC. 2. REMOVAL OF RESTRICTION THAT A CLINICAL PSYCHOLOGIST 
                   OR CLINICAL SOCIAL WORKER PROVIDE SERVICES IN A 
                   COMPREHENSIVE OUTPATIENT REHABILITATION 
                   FACILITY TO A PATIENT ONLY UNDER THE CARE OF A 
                   PHYSICIAN.

       (a) In General.--Section 1861(cc)(2)(E) of the Social 
     Security Act (42 U.S.C. 1395x(cc)(2)(E)) is amended by 
     striking ``physician'' and inserting ``physician, except that 
     a patient receiving qualified psychologist services (as 
     defined in subsection (ii)) may be under the care of a 
     clinical psychologist with respect to such services to the 
     extent permitted under State law and except that a patient 
     receiving clinical social worker services (as defined in 
     subsection (hh)(2)) may be under the care of a clinical 
     social worker with respect to such services to the extent 
     permitted under State law''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to services provided on or after January 1, 2006.
                                 ______
                                 
      By Mr. INOUYE:
  S. 71. A bill to amend title XVIII of the Social Security Act to 
provide for patient protection by limiting the number of mandatory 
overtime hours a nurse may be required to work at certain medicare 
providers, and for other purposes; to the Committee on Finance.
  Mr. INOUYE. Mr. President, today I introduce the Registered Nurse 
Safe Staffing Act. I am introducing this bill on behalf of the American 
Nurses Association's Chief Executive Officer and President Linda 
Stierle, MSN, RN, CNAA and Barbara A. Blakeney, MS, APRN, BC, ANP, 
respectively. For over four decades I have been a committed supporter 
of nurses and the delivery of safe patient care. While enforceable 
regulations will help to ensure patient safety, the complexity and 
variability of today's hospitals require that staffing patterns be 
determined at the hospital and unit level, with the professional input 
of registered nurses. More than a decade of research demonstrates that 
nurse staff levels and the skill mix of nursing staff directly affect 
the clinical outcomes of hospitalized patients. Studies show that when 
there are more registered nurses, there are lower mortality rates, 
shorter lengths of stay, reduced costs, and fewer complications.
  A study published in the Journal of the American Medical Association 
found that the risks of patient mortality rose by 7 percent for every 
additional patient added to the average nurse's workload. In the midst 
of a nursing shortage and increasing financial pressures, hospitals 
often find it difficult to maintain adequate staffing. While nursing 
research indicates that adequate registered nurse staffing is vital to 
the health and safety of patients, there is no standardized public 
reporting mechanism, nor enforcement of adequate staffing plans. The 
only regulations addressing nursing staff exists vaguely in Medicare 
Conditions of Participation which states: ``The nursing service must 
have an adequate number of licensed registered nurses, licensed 
practice (vocational) nurse, and other personnel to provide nursing 
care to all patients as needed''.
  This bill will require Medicare Participating Hospitals to develop 
and maintain reliable and valid systems to determine sufficient 
registered nurse staffing. Given the demands that the healthcare 
industry faces today, it is our responsibility to ensure that patients 
have access to adequate nursing care. However, we must ensure that the 
decisions by which care is provided are made by the clinical experts, 
the registered nurses caring for these patients. Support of this bill 
supports our nation's nurses during a critical shortage, but more 
importantly, works to ensure the safety of their patients.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 71

       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 ``Registered Nurse Safe 
     Staffing Act of 2005''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) There are hospitals throughout the United States that 
     have inadequate staffing of registered nurses to protect the 
     well-being and health of the patients.
       (2) Studies show that the health of patients in hospitals 
     is directly proportionate to the number of registered nurses 
     working in the hospital.
       (3) There is a critical shortage of registered nurses in 
     the United States.
       (4) The effect of that shortage is revealed in unsafe 
     staffing levels in hospitals.
       (5) Patient safety is adversely affected by these unsafe 
     staffing levels, creating a public health crisis.

[[Page 463]]

       (6) Registered nurses are being required to perform 
     professional services under conditions that do not support 
     quality health care or a healthful work environment for 
     registered nurses.
       (7) As a payer for inpatient and outpatient hospital 
     services for individuals entitled to benefits under the 
     medicare program established under title XVIII of the Social 
     Security Act, the Federal Government has a compelling 
     interest in promoting the safety of such individuals by 
     requiring any hospital participating in such program to 
     establish minimum safe staffing levels for registered nurses.

     SEC. 3. ESTABLISHMENT OF MINIMUM STAFFING RATIOS BY MEDICARE 
                   PARTICIPATING HOSPITALS.

       (a) Requirement of Medicare Provider Agreement.--Section 
     1866(a)(1) of the Social Security Act (42 U.S.C. 
     1395cc(a)(1)) is amended--
       (1) in subparagraph (R), by striking ``and'' after the 
     comma at the end;
       (2) in subparagraph (S), by striking the period at the end 
     and inserting ``, and''; and
       (3) by inserting after subparagraph (S) the following new 
     subparagraph:
       ``(T) in the case of a hospital, to meet the requirements 
     of section 1889.''.
       (b) Requirements.--Part D of title XVIII of the Social 
     Security Act is amended by inserting after section 1888 the 
     following new section:


      ``STAFFING REQUIREMENTS FOR MEDICARE PARTICIPATING HOSPITALS

       ``Sec. 1889. (a) Establishment of Staffing System.--
       ``(1) In general.--Each participating hospital shall adopt 
     and implement a staffing system that ensures a number of 
     registered nurses on each shift and in each unit of the 
     hospital to ensure appropriate staffing levels for patient 
     care.
       ``(2) Staffing system requirements.--Subject to paragraph 
     (3), a staffing system adopted and implemented under this 
     section shall--
       ``(A) be based upon input from the direct care-giving 
     registered nurse staff or their exclusive representatives, as 
     well as the chief nurse executive;
       ``(B) be based upon the number of patients and the level 
     and variability of intensity of care to be provided, with 
     appropriate consideration given to admissions, discharges, 
     and transfers during each shift;
       ``(C) account for contextual issues affecting staffing and 
     the delivery of care, including architecture and geography of 
     the environment and available technology;
       ``(D) reflect the level of preparation and experience of 
     those providing care;
       ``(E) account for staffing level effectiveness or 
     deficiencies in related health care classifications, 
     including but not limited to, certified nurse assistants, 
     licensed vocational nurses, licensed psychiatric technicians, 
     nursing assistants, aides, and orderlies;
       ``(F) reflect staffing levels recommended by specialty 
     nursing organizations;
       ``(G) establish upwardly adjustable registered nurse-to-
     patient ratios based upon registered nurses' assessment of 
     patient acuity and existing conditions;
       ``(H) provide that a registered nurse shall not be assigned 
     to work in a particular unit without first having established 
     the ability to provide professional care in such unit; and
       ``(I) be based on methods that assure validity and 
     reliability.
       ``(3) Limitation.--A staffing system adopted and 
     implemented under paragraph (1) may not--
       ``(A) set registered-nurse levels below those required by 
     any Federal or State law or regulation; or
       ``(B) utilize any minimum registered nurse-to-patient ratio 
     established pursuant to paragraph (2)(G) as an upper limit on 
     the staffing of the hospital to which such ratio applies.
       ``(b) Reporting, and Release to Public, of Certain Staffing 
     Information.--
       ``(1) Requirements for hospitals.--Each participating 
     hospital shall--
       ``(A) post daily for each shift, in a clearly visible 
     place, a document that specifies in a uniform manner (as 
     prescribed by the Secretary) the current number of licensed 
     and unlicensed nursing staff directly responsible for patient 
     care in each unit of the hospital, identifying specifically 
     the number of registered nurses;
       ``(B) upon request, make available to the public--
       ``(i) the nursing staff information described in 
     subparagraph (A); and
       ``(ii) a detailed written description of the staffing 
     system established by the hospital pursuant to subsection 
     (a); and
       ``(C) submit to the Secretary in a uniform manner (as 
     prescribed by the Secretary) the nursing staff information 
     described in subparagraph (A) through electronic data 
     submission not less frequently than quarterly.
       ``(2) Secretarial responsibilities.--The Secretary shall--
       ``(A) make the information submitted pursuant to paragraph 
     (1)(C) publicly available, including by publication of such 
     information on the Internet site of the Department of Health 
     and Human Services; and
       ``(B) provide for the auditing of such information for 
     accuracy as a part of the process of determining whether an 
     institution is a hospital for purposes of this title.
       ``(c) Recordkeeping; Data Collection; Evaluation.--
       ``(1) Recordkeeping.--Each participating hospital shall 
     maintain for a period of at least 3 years (or, if longer, 
     until the conclusion of pending enforcement activities) such 
     records as the Secretary deems necessary to determine whether 
     the hospital has adopted and implemented a staffing system 
     pursuant to subsection (a).
       ``(2) Data collection on certain outcomes.--The Secretary 
     shall require the collection, maintenance, and submission of 
     data by each participating hospital sufficient to establish 
     the link between the staffing system established pursuant to 
     subsection (a) and--
       ``(A) patient acuity from maintenance of acuity data 
     through entries on patients' charts;
       ``(B) patient outcomes that are nursing sensitive, such as 
     patient falls, adverse drug events, injuries to patients, 
     skin breakdown, pneumonia, infection rates, upper 
     gastrointestinal bleeding, shock, cardiac arrest, length of 
     stay, and patient readmissions;
       ``(C) operational outcomes, such as work-related injury or 
     illness, vacancy and turnover rates, nursing care hours per 
     patient day, on-call use, overtime rates, and needle-stick 
     injuries; and
       ``(D) patient complaints related to staffing levels.
       ``(3) Evaluation.--Each participating hospital shall 
     annually evaluate its staffing system and establish minimum 
     registered nurse staffing ratios to assure ongoing 
     reliability and validity of the system and ratios. The 
     evaluation shall be conducted by a joint management-staff 
     committee comprised of at least 50 percent of registered 
     nurses who provide direct patient care.
       ``(d) Enforcement.--
       ``(1) Responsibility.--The Secretary shall enforce the 
     requirements and prohibitions of this section in accordance 
     with the succeeding provisions of this subsection.
       ``(2) Procedures for receiving and investigating 
     complaints.--The Secretary shall establish procedures under 
     which--
       ``(A) any person may file a complaint that a participating 
     hospital has violated a requirement or a prohibition of this 
     section; and
       ``(B) such complaints are investigated by the Secretary.
       ``(3) Remedies.--If the Secretary determines that a 
     participating hospital has violated a requirement of this 
     section, the Secretary--
       ``(A) shall require the facility to establish a corrective 
     action plan to prevent the recurrence of such violation; and
       ``(B) may impose civil money penalties under paragraph (4).
       ``(4) Civil money penalties.--
       ``(A) In general.--In addition to any other penalties 
     prescribed by law, the Secretary may impose a civil money 
     penalty of not more than $10,000 for each knowing violation 
     of a requirement of this section, except that the Secretary 
     shall impose a civil money penalty of more than $10,000 for 
     each such violation in the case of a participating hospital 
     that the Secretary determines has a pattern or practice of 
     such violations (with the amount of such additional penalties 
     being determined in accordance with a schedule or methodology 
     specified in regulations).
       ``(B) Procedures.--The provisions of section 1128A (other 
     than subsections (a) and (b)) shall apply to a civil money 
     penalty under this paragraph in the same manner as such 
     provisions apply to a penalty or proceeding under section 
     1128A.
       ``(C) Public notice of violations.--
       ``(i) Internet site.--The Secretary shall publish on the 
     Internet site of the Department of Health and Human Services 
     the names of participating hospitals on which civil money 
     penalties have been imposed under this section, the violation 
     for which the penalty was imposed, and such additional 
     information as the Secretary determines appropriate.
       ``(ii) Change of ownership.--With respect to a 
     participating hospital that had a change in ownership, as 
     determined by the Secretary, penalties imposed on the 
     hospital while under previous ownership shall no longer be 
     published by the Secretary of such Internet site after the 1-
     year period beginning on the date of change in ownership.
       ``(e) Whistleblower Protections.--
       ``(1) Prohibition of discrimination and retaliation.--A 
     participating hospital shall not discriminate or retaliate in 
     any manner against any patient or employee of the hospital 
     because that patient or employee, or any other person, has 
     presented a grievance or complaint, or has initiated or 
     cooperated in any investigation or proceeding of any kind, 
     relating to the staffing system or other requirements and 
     prohibitions of this section.
       ``(2) Relief for prevailing employees.--An employee of a 
     participating hospital who has been discriminated or 
     retaliated against in employment in violation of this 
     subsection may initiate judicial action in a United States 
     district court and shall be entitled to reinstatement, 
     reimbursement for lost wages, and work benefits caused by the 
     unlawful acts of the employing hospital. Prevailing employees 
     are entitled to reasonable

[[Page 464]]

     attorney's fees and costs associated with pursuing the case.
       ``(3) Relief for prevailing patients.--A patient who has 
     been discriminated or retaliated against in violation of this 
     subsection may initiate judicial action in a United States 
     district court. A prevailing patient shall be entitled to 
     liquidated damages of $5,000 for a violation of this statute 
     in addition to any other damages under other applicable 
     statutes, regulations, or common law. Prevailing patients are 
     entitled to reasonable attorney's fees and costs associated 
     with pursuing the case.
       ``(4) Limitation on actions.--No action may be brought 
     under paragraph (2) or (3) more than 2 years after the 
     discrimination or retaliation with respect to which the 
     action is brought.
       ``(5) Treatment of adverse employment actions.--For 
     purposes of this subsection--
       ``(A) an adverse employment action shall be treated as 
     retaliation or discrimination; and
       ``(B) the term `adverse employment action' includes--
       ``(i) the failure to promote an individual or provide any 
     other employment-related benefit for which the individual 
     would otherwise be eligible;
       ``(ii) an adverse evaluation or decision made in relation 
     to accreditation, certification, credentialing, or licensing 
     of the individual; and
       ``(iii) a personnel action that is adverse to the 
     individual concerned.
       ``(f) Relationship to State Laws.--Nothing in this section 
     shall be construed as exempting or relieving any person from 
     any liability, duty, penalty, or punishment provided by any 
     present or future law of any State or political subdivision 
     of a State, other than any such law which purports to require 
     or permit the doing of any act which would be an unlawful 
     practice under this title.
       ``(g) Relationship To Conduct Prohibited Under the National 
     Labor Relations Act or Other Collective Bargaining Laws.--
     Nothing in this section shall be construed as permitting 
     conduct prohibited under the National Labor Relations Act or 
     under any other Federal, State, or local collective 
     bargaining law.
       ``(h) Regulations.--The Secretary shall promulgate such 
     regulations as are appropriate and necessary to implement 
     this section.
       ``(i) Definitions.--In this section:
       ``(1) Participating hospital.--The term `participating 
     hospital' means a hospital that has entered into a provider 
     agreement under section 1866.
       ``(2) Registered nurse.--The term `registered nurse' means 
     an individual who has been granted a license to practice as a 
     registered nurse in at least 1 State.
       ``(3) Unit.--The term `unit' of a hospital is an 
     organizational department or separate geographic area of a 
     hospital, such as a burn unit, a labor and delivery room, a 
     post-anesthesia service area, an emergency department, an 
     operating room, a pediatric unit, a stepdown or intermediate 
     care unit, a specialty care unit, a telemetry unit, a general 
     medical care unit, a subacute care unit, and a transitional 
     inpatient care unit.
       ``(4) Shift.--The term `shift' means a scheduled set of 
     hours or duty period to be worked at a participating 
     hospital.
       ``(5) Person.--The term `person' means 1 or more 
     individuals, associations, corporations, unincorporated 
     organizations, or labor unions.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on January 1, 2006.
                                 ______
                                 
      By Mr. INOUYE:
  S. 72. A bill to amend title 5, United States Code, to require the 
issuance of a prisoner-of-war medal to civilian employees of the 
Federal Government who are forcibly detained or interned by an enemy 
government or a hostile force under wartime conditions; to the 
Committee on Homeland Security and Governmental Affairs.
  Mr. INOUYE. Mr. President, all too often we find that our Nation's 
civilian employees of the Federal Government who have been forcibly 
detained or interned by a hostile government do not receive the 
recognition they deserve. My bill would correct this inequity and 
provide a prisoner of war medal for such citizens.
  Mr. President, I ask unanimous consent that the text of my bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 72

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

     SECTION 1. PRISONER-OF-WAR MEDAL FOR CIVILIAN EMPLOYEES OF 
                   THE FEDERAL GOVERNMENT.

       (a) Authority To Issue Prisoner-of-War Medal.--(1) Subpart 
     A of part III of title 5, United States Code, is amended by 
     inserting after chapter 23 the following new chapter:

                   ``CHAPTER 25--MISCELLANEOUS AWARDS

``Sec.
``2501. Prisoner-of-war medal: issue.

     ``Sec. 2501. Prisoner-of-war medal: issue

       ``(a) The President shall issue a prisoner-of-war medal to 
     any person who, while serving in any capacity as an officer 
     or employee of the Federal Government, was forcibly detained 
     or interned, not as a result of such person's own willful 
     misconduct--
       ``(1) by an enemy government or its agents, or a hostile 
     force, during a period of war; or
       ``(2) by a foreign government or its agents, or a hostile 
     force, during a period other than a period of war in which 
     such person was held under circumstances which the President 
     finds to have been comparable to the circumstances under 
     which members of the armed forces have generally been 
     forcibly detained or interned by enemy governments during 
     periods of war.
       ``(b) The prisoner-of-war medal shall be of appropriate 
     design, with ribbons and appurtenances.
       ``(c) Not more than one prisoner-of-war medal may be issued 
     to a person under this section or section 1128 of title 10. 
     However, for each succeeding service that would otherwise 
     justify the issuance of such a medal, the President (in the 
     case of service referred to in subsection (a) of this 
     section) or the Secretary concerned (in the case of service 
     referred to in section 1128(a) of title 10) may issue a 
     suitable device to be worn as determined by the President or 
     the Secretary, as the case may be.
       ``(d) For a person to be eligible for issuance of a 
     prisoner-of-war medal, the person's conduct must have been 
     honorable for the period of captivity which serves as the 
     basis for the issuance.
       ``(e) If a person dies before the issuance of a prisoner-
     of-war medal to which the person is entitled, the medal may 
     be issued to that person's representative, as designated by 
     the President.
       ``(f) Under regulations prescribed by the President, a 
     prisoner-of-war medal that is lost, destroyed, or rendered 
     unfit for use without fault or neglect on the part of the 
     person to whom it was issued may be replaced without charge.
       ``(g) In this section, the term `period of war' has the 
     meaning given such term in section 101(11) of title 38.''.
       (2) The table of chapters at the beginning of part III of 
     such title is amended by inserting after the item relating to 
     chapter 23 the following new item:

``25. Miscellaneous Awards..................................2501''.....

       (b) Applicability.--Section 2501 of title 5, United States 
     Code, as added by subsection (a), applies with respect to any 
     person who, after April 5, 1917, is forcibly detained or 
     interned as described in subsection (a) of such section.
                                 ______
                                 
      By Ms. CANTWELL:
  S. 73. A bill to promote food safety and to protect the animal feed 
supply from bovine spongiform encephalopathy; to the Committee on 
Agriculture, Nutrition, and Forestry.
  Ms. CANTWELL. Mr. President, today I am introducing the Animal Feed 
Protection Act of 2005. It is similar to legislation that I introduced 
in the 108th Congress.
  Last week, during the Senate's consideration of the nomination of 
Governor Mike Johanns to be the Secretary of Agriculture, I spoke in 
favor of exercising caution with respect to re-opening the U.S.-
Canadian border to imports of live animals and processed beef products 
until the Animal Protective Health Inspection Service fully 
investigates the most recent case of Mad Cow in that country. This 
legislation is important to our ongoing efforts to eradicate the 
possibility that Mad Cow disease will infect U.S. cattle herds.
  My legislation provides necessary enhancements to current Federal 
feed regulations. It reduces the chance that the riskiest materials, 
those most likely to transmit Mad Cow disease, cross-contaminate cattle 
feed or are accidentally fed to cattle.
  Specifically, my legislation would ban the inclusion of specified 
risk materials, or SRM, in all animal feed. Currently these materials 
are only banned from ruminant feed.
  As we continue to negotiate the reopening of export markets to U.S. 
beef, a comprehensive SRM ban is a prudent step. It is necessary to 
assure our trading partners that we have secured our domestic feed, and 
eliminated the risk of spreading Mad Cow disease through feed.
  As our domestic beef producers continue to suffer from the closure of 
our largest export markets, I encourage my colleagues to join me by 
cosponsoring this legislation--a measure that will strengthen our Mad 
Cow firewalls and our assurances to foreign beef consumers. I also hope 
that as the Senate

[[Page 465]]

Agriculture Committee conducts hearings next month into the appropriate 
Federal response to the most recent Canadian Mad Cow case, the 
committee will consider examining this legislation as well. The Senate 
should move toward its swift passage. Mr. President, 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. 73

       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 ``Animal Feed Protection Act 
     of 2005''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) BSE.--The term ``BSE'' means bovine spongiform 
     encephalopathy.
       (2) Covered article.--
       (A) In general.--The term ``covered article'' means--
       (i) feed for an animal;
       (ii) a nutritional supplement for an animal;
       (iii) medicine for an animal; and
       (iv) any other article of a kind that is ordinarily 
     ingested, implanted, or otherwise taken into an animal.
       (B) Exclusions.--The term ``covered article'' does not 
     include--
       (i) an unprocessed agricultural commodity that is readily 
     identifiable as nonanimal in origin, such as a vegetable, 
     grain, or nut;
       (ii) an article described in subparagraph (A) that, based 
     on compelling scientific evidence, the Secretary determines 
     does not pose a risk of transmitting prion disease; or
       (iii) an article regulated by the Secretary that, as 
     determined by the Secretary--

       (I) poses a minimal risk of carrying prion disease; and
       (II) is necessary to protect animal health or public 
     health.

       (3) Specified risk material.--
       (A) In general.--The term ``specified risk material'' 
     means--
       (i) the skull, brain, trigeminal ganglia, eyes, tonsils, 
     spinal cord, vertebral column, or dorsal root ganglia of--

       (I) cattle and bison 30 months of age and older; or
       (II) sheep, goats, deer, and elk 12 months of age and 
     older;

       (ii) the intestinal tract of a ruminant of any age; and
       (iii) any other material of a ruminant that may carry a 
     prion disease, as determined by the Secretary, based on 
     scientifically credible research.
       (B) Modification.--The Secretary shall conduct an annual 
     review of scientific research and may modify the definition 
     of specified risk material based on scientifically credible 
     research (including the conduct of ante-mortem and post-
     mortem tests certified by the Secretary of Agriculture).
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.

     SEC. 3. PROTECTION OF ANIMAL FEED AND PUBLIC HEALTH.

       It shall be unlawful for any person to introduce into 
     interstate or foreign commerce a covered article if the 
     covered article contains--
       (1)(A) specified risk material from a ruminant; or
       (B) any material from a ruminant that--
       (i) was in any foreign country at a time at which there was 
     a risk of transmission of BSE in the country, as determined 
     by the Secretary of Agriculture; and
       (ii) may contain specified risk material from a ruminant; 
     or
       (2) any material from a ruminant exhibiting signs of a 
     neurological disease.

     SEC. 4. ENFORCEMENT.

       (a) Cooperation.--The Secretary and the heads of other 
     Federal agencies, as appropriate, shall cooperate with the 
     Attorney General in enforcing this Act.
       (b) Due Process.--Any person subject to enforcement action 
     under this section shall have the opportunity for an informal 
     hearing on the enforcement action as soon as practicable 
     after, but not later than 10 days after, the enforcement 
     action is taken.
       (c) Remedies.--In addition to any remedies available under 
     other provisions of law, the head of a Federal agency may 
     enforce this Act by--
       (1) seizing and destroying an article that is introduced 
     into interstate or foreign commerce in violation of this Act; 
     or
       (2) issuing an order requiring any person that introduces 
     an article into interstate or foreign commerce in violation 
     of this Act--
       (A) to cease the violation;
       (B)(i) to recall any article that is sold; and
       (ii) to refund the purchase price to the purchaser;
       (C) to destroy the article or forfeit the article to the 
     United States for destruction; or
       (D) to cease operations at the facility at which the 
     article is produced until the head of the appropriate Federal 
     agency determines that the operations are no longer in 
     violation of this Act.
       (d) Civil and Monetary Penalties.--Not later than 180 days 
     after the date of enactment of this Act, the Secretary shall 
     promulgate regulations establishing the appropriate level of 
     civil and monetary penalties necessary to carry out this Act.

     SEC. 5. TRAINING STANDARDS.

       The Secretary, in consultation with the Secretary of 
     Agriculture, shall issue training standards to industry for 
     the removal of specified risk materials.

     SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated $5,000,000 to carry 
     out this Act.

     SEC. 7. EFFECTIVE DATE.

       This Act takes effect on the date that is 180 days after 
     the date of enactment of this Act.
                                 ______
                                 
      By Ms. CANTWELL (for herself and Mrs. Murray):
  S. 74. A bill to designate a portion of the White Salmon River as a 
component of the National Wild and Scenic Rivers System; to the 
Committee on Energy and Natural Resources.
  Ms. CANTWELL. Mr. President, today I am introducing the White Salmon 
Wild and Scenic Rivers Act. I am pleased to be joined by the Senior 
Senator from Washington (Mrs. Murray), who has been a strong supporter 
of this legislation.
  This bill would designate some 20 miles of the main stem of the upper 
White Salmon River Salmon and one of its tributaries, Cascade Creek, 
all within the Gifford Pinchot National Forest, as components of the 
National Wild and Scenic Rivers System. By designating this upper third 
of the White Salmon, we can permanently protect this special river as a 
premiere recreational destination, a Southwest Washington economic 
resource, and an important wildlife habitat.
  I am happy to note that my delegation colleague, Congressman Baird, 
recently offered identical legislation in the House.
  The White Salmon River's remarkable beauty and pristine condition are 
not in question. In fact, the lower eight miles of the river received 
protection when Congress granted that stretch of the river Wild and 
Scenic status in 1986. As we saw then, its protected status hasn't 
prevented residents and visitors from taking advantage of the unique 
recreational opportunities the White Salmon River offers. Extending 
Wild and Scenic protection to the river's upper reaches today is an 
important step forward in protecting even more of its wild character 
for fishing, boating, and other recreational activities.
  As one of the best whitewater rivers in the Pacific Northwest, the 
White Salmon already supports a number of whitewater rafting companies. 
About 12,000 whitewater boaters visit the river each year. So I see 
this designation as not just protecting a pristine river, but also its 
beneficial impact on the local economy downstream.
  Protecting the White Salmon River will help increase opportunities 
for other outdoor sports, as well. This is an important sector of our 
state's economy. According to the Washington Department of Fish and 
Wildlife, fish and wildlife related recreation pumps nearly $2.2 
billion per year into our economy. And we rank first in the Northwest 
and eighth in the nation in spending by sport fishers.
  Safeguarding the White Salmon through this designation will also be 
an important step toward restoring wildlife habitat. Once the Condit 
Dam is removed from the lower reach of the river, the White Salmon will 
again become valuable spawning habitat for salmon and steelhead.
  I am proud that identical legislation to the measure I introduce 
today passed the Senate unanimously on October 10, 2004. While the bill 
narrowly missed clearing the House of Representatives, I am confident 
that because this bill has a broad range of support, and is a true win-
win proposal for local interests, that it will become law during the 
109th Congress.
  Mr. President, I look forward to working with my colleagues in the 
Senate, as well as other members of the Washington state congressional 
delegation, to ensure swift passage of this important legislation. I 
ask unanimous consent that the text of the legislation be printed in 
the Record at the conclusion of my remarks.

[[Page 466]]

  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 74

       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 ``Upper White Salmon Wild and 
     Scenic Rivers Act''.

     SEC. 2. UPPER WHITE SALMON WILD AND SCENIC RIVER.

       Section 3(a) of the Wild and Scenic Rivers Act (16 U.S.C. 
     1274(a)) is amended by adding at the end the following:
       `` ( ) White Salmon River, Washington.--The 20 miles of 
     river segments of the main stem of the White Salmon River and 
     Cascade Creek, Washington, to be administered by the 
     Secretary of Agriculture in the following classifications:
       ``(A) The approximately 1.6-mile segment of the main stem 
     of the White Salmon River from the headwaters on Mount Adams 
     in section 17, township 8 north, range 10 east, downstream to 
     the Mount Adams wilderness boundary as a wild river.
       ``(B) The approximately 5.1-mile segment of Cascade Creek 
     from its headwaters on Mount Adams in section 10, township 8 
     north, range 10 east, downstream to the Mount Adams 
     Wilderness boundary as a wild river.
       ``(C) The approximately 1.5-mile segment of Cascade Creek 
     from the Mount Adams Wilderness boundary downstream to its 
     confluence with the White Salmon River as a scenic river.
       ``(D) The approximately 11.8-mile segment of the main stem 
     of the White Salmon River from the Mount Adams Wilderness 
     boundary downstream to the Gifford Pinchot National Forest 
     boundary as a scenic river.''.

     SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as are 
     necessary to carry out this Act.
                                 ______
                                 
      By Ms. CANTWELL:
  S. 75. A bill to permanently increase the maximum annual contribution 
allowed to be made to Coverdell education savings accounts; to the 
Committee on Finance.
                                 ______
                                 
      By Ms. CANTWELL:
  S. 76. A bill to amend the Internal Revenue Code of 1986 to 
permanently increase the maximum annual contribution allowed to be made 
to Coverdell education savings accounts, and to provide for a deduction 
for contributions to education savings accounts; to the Committee on 
Finance.
  Ms. CANTWELL. Mr. President, today I am introducing two pieces of 
legislation to help families save for their children's education.
  In today's global marketplace, ensuring access to high-quality 
education--starting in early childhood and grade school, moving on to 
college and beyond--is central in maintaining America's competitive 
edge. To make paying for school easier, I am introducing two pieces of 
legislation that would expand Coverdell Education Savings Accounts or 
ESAs: The Education Savings for Students Act and College Savings Act.
  Coverdell ESAs are trusts created solely for the educational benefit 
of any child under the age of 18. Contributions to a Coverdell 
Education Savings account can be used toward a child's education from 
kindergarten through 12th grade, college, and even graduate school. All 
earnings in the account grow tax-free and can be withdrawn on a tax-
deferred basis, if used for educational expenses. Currently, annual 
contributions to each Coverdell ESA cannot exceed $2,000. But this 
particular provision will sunset on 12/31/2010 unless Congress takes 
action to extend it, otherwise the maximum contribution will drop back 
to a previously set stipulation of $500.
  My bill, the Education for Students Act would expand the existing 
Coverdell ESA by permanently increasing the maximum annual contribution 
from $2,000 to $5,000. This bill keeps the current Coverdell ESA 
provision that investment earnings accumulate tax-free and withdrawals 
from the account are tax-exempt when the child uses the funds for 
school.
  My other bill, the College Savings Act would also permanently 
increase the maximum annual contribution to a Coverdell ESA to $5,000. 
Instead of anticipating future earnings, families would be able to 
deduct the amount they contribute to their education savings account 
from income.
  Rather than putting away money ad-hoc, both bills provide a financial 
incentive to save for college or other educational expenses. And since 
there is no limit on the number of Coverdell ESAs that may be opened 
for a child under age 18, parents have the flexibility to set aside 
money now through deductible contributions or bank on projected savings 
through tax-deferred earnings and withdrawals, or even take on both 
options. The College Savings and Education Savings for Students Acts 
will help families plan for future educational expenses, paving a path 
to financial self-sufficiency.
  I understand that all families are different. Saving for college may 
be the last thing on a parent's mind, especially when their child is 
young and their family has significant financial needs. But just as 
fast as our children grow, so does the cost of tuition. Mounting prices 
for books and materials, plus room and board have made colleges and 
universities less affordable for most families.
  College is expensive. There are many parents whose children aim to go 
to college, but soon discover they can't afford it because the price of 
pursuing a higher education costs too much. If the College Savings and 
Education for Students Acts became law, families would have another 
powerful tool to help their children realize their educational dreams.
  By saving money early and often, families won't feel as hard hit by 
skyrocketing college prices because you'll know what's coming in and 
what's going out of these accounts.
  In 2002, the National Center for Public Policy and Higher Education 
reported on the national trends of rising college prices. The Center 
determined that if educational costs are unaddressed there will be 
adverse consequences for expanding students' opportunities to pursue a 
higher education and future career.
  This report found that over the last two decades, the cost of 
attending two- and four-year public and private colleges have not only 
grown more rapidly than inflation, but faster than family incomes, 
increasing the share of family income that is needed to pay for tuition 
and other college expenses. From 1991 through 2001, tuition at four-
year public colleges and universities rose faster than family income in 
41 states, including my home state of Washington.
  The Washington State Higher Education Coordinating Board reports 
that, over the last ten years, tuition and fees have far outpaced 
family income, increasing 89 percent compared to 51 percent in per 
capita personal income in my state. In comparison, the cost of most 
consumer goods increased an average of 20 percent during the same time. 
Per capita personal income in Washington increased 51 percent during 
this same period.
  As a result, more students and families at all income levels are 
borrowing more money than ever before to pay for college. According to 
a recent study by the College Board, nonfederal borrowing reached $11.3 
billion in 2003-04, up 39 percent over the previous year, and jumping 
nearly 150 percent in three years. Over $10 billion of these loans are 
private. Over the past five years, borrowing through banks and other 
private lenders has increased from 7 percent to 16 percent of education 
loan volume.
  Although borrowing is an acceptable way to pay for college, the 
financial consequences of high debt can still ensue, and students spend 
years paying back loans, undermining their ability to purchase a home 
or save for retirement. Additionally, college students on average 
graduate with about $3,300 in credit card debit alone. Concern about 
the increase in educational loan debt may cause students to spend more 
time working than attending class or to opt out of enrolling in college 
altogether.
  Moreover, the steepest increases in college and university tuition 
have been imposed during times of greatest economic hardship. Just in 
the past three years, our economy has experienced a loss of 1.8 million 
private sector jobs and 2.7 million manufacturing jobs. Preparing 
America's workforce and keeping up with the demand for skilled workers 
across all sectors of the 21st century economy is my priority. If

[[Page 467]]

we want to maintain our economic competitiveness, it is imperative that 
there are opportunities for individuals to fully take advantage of 
educational opportunities.
  The Bureau of Labor Statistics reports that six of the ten fastest-
growing occupations in the U.S. economy require an associate's degree 
or bachelor's degree, and that all ten of these careers will require 
some type of skills training. By 2010, 40 percent of all job growth 
will require some form of post-secondary education.
  On average, a college graduate earns nearly 73 percent more than a 
typical high school graduate. In 2003, the average worker in the U.S. 
with a four-year college degree earned just under $50,000, over 60 
percent more than the $30,800 earned by the average worker with a high 
school diploma, reports the College Board. Those with advanced degrees 
earn two to three times as much as high school graduates. In addition, 
society reaps the benefits of an educated workforce by improving 
quality of life and overall, the well-being of our communities.
  Affordability is key to expanding opportunities to go to college. 
Saving for college early and often will help lift the pressures off of 
parents who are feeling the financial squeeze of increased tuition and 
fees.
  Because my family qualified for financial aid, I was able to work my 
way through college using Pell grant funding. But there are many 
families who do not qualify for Pell or other sources of financial aid.
  For these families, Coverdell Education Savings plans provide 
necessary relief for the middle class. The purpose of education savings 
plans are to increase saving by increasing net returns. Today, parents 
can put up to $2,000 a year into a Coverdell Education Savings account. 
The actual contribution is not tax deductible, but all earnings in this 
account are free from taxes when they are withdrawn to pay for school.
  However, the current $2,000 annual limit on Coverdell contributions 
will be repealed in 2010 unless Congress acts to extend it. If we don't 
extend the contribution level, the maximum contribution will drop to 
$500.
  While the current tax benefit makes it easier to save for college, 
the Education Savings for Students Act would increase the annual 
contributions from $2,000 to $5,000; making this change permanent 
ensures greater savings for families. By increasing the amount parents 
can put aside for their children's college savings, middle-income 
parents will be able to save more easily for their child's college 
education.
  Say, for example, parents start saving when their child turns eight 
years old. If they put away just $100.00 a month--at an interest rate 
of savings of four percent--by the time their kid turns 18, their 
account would have earned more than $12,400 in interest. Parents will 
save over $3,100 in taxes when that child is old enough to go to 
school.
  In addition to projected savings, parents also have the option to 
save now. The College Savings Act would allow families to deduct 
Coverdell ESA contributions from their taxes each year.
  Mr. President, both of these bills, the College Savings Act and the 
Education Savings for Students Act are financial incentives for people 
to save by allowing families to deduct the amount they contribute and 
take tax-free earnings when their child is ready to go to school. These 
bills would further lessen the financial burden that parents bear by 
saving money early and often.
  Permanently expanding the Coverdell maximum contribution from its 
current threshold of $2,000 to $5,000 a year and allowing this 
contribution to be tax deductible is a common-sense savings vehicle 
that keeps future college costs from spinning out of control. 
Increasing contribution caps will make school more affordable at a time 
when a college education and advanced job training is becoming more and 
more important for economic success.
  I urge my colleagues to support these measures and I ask unanimous 
consent that the full text of these bills be printed in the Record.
  There being no objection, the bills was ordered to be printed in the 
Record, as follows:

                                 S. 75

       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 ``The Education Savings for 
     Students Act of 2005''.

     SEC. 2. INCREASE IN MAXIMUM ANNUAL CONTRIBUTION FOR COVERDELL 
                   EDUCATION SAVINGS ACCOUNTS.

       (a) In General.--Section 530(b)(1)(A)(iii) of the Internal 
     Revenue Code of 1986 (defining Coverdell education savings 
     account) is amended by striking ``$2,000'' and inserting 
     ``$5,000''.
       (b) Conforming Amendment.--Section 4973(e)(1)(A) of the 
     Internal Revenue Code of 1986 is amended by striking 
     ``$2,000'' and inserting ``$5,000''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.

                                 S. 76

       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 ``The College Savings Act of 
     2005''.

     SEC. 2. INCREASE IN MAXIMUM ANNUAL CONTRIBUTION FOR COVERDELL 
                   EDUCATION SAVINGS ACCOUNTS.

       (a) In General.--Section 530(b)(1)(A)(iii) of the Internal 
     Revenue Code of 1986 (defining Coverdell education savings 
     account) is amended by striking ``$2,000'' and inserting 
     ``$5,000''.
       (b) Conforming Amendment.--Section 4973(e)(1)(A) of the 
     Internal Revenue Code of 1986 is amended by striking 
     ``$2,000'' and inserting ``$5,000''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.

     SEC. 3. EDUCATION SAVINGS ACCOUNTS.

       (a) Deduction for Contributions.--Part VII of subchapter B 
     of chapter 1 of the Internal Revenue Code of 1986 (relating 
     to additional itemized deductions for individuals) is amended 
     by redesignating section 224 as section 225 and inserting 
     after section 223 the following new section:

     ``SEC. 224. EDUCATION SAVINGS.

       ``(a) Deduction Allowed.--In the case of an individual, 
     there shall be allowed as a deduction an amount equal to the 
     amount of contributions made by such individual to an 
     education savings account during the taxable year.
       ``(b) Definitions.--
       ``(1) Education savings account.--The term `education 
     savings account' means a trust created or organized in the 
     United States exclusively for the purpose of paying the 
     qualified education expenses of an individual who is the 
     designated beneficiary of the trust (and designated as an 
     education savings account at the time created or organized), 
     but only if the written governing instrument creating the 
     trust meets the following requirements:
       ``(A) No contribution will be accepted--
       ``(i) unless it is in cash,
       ``(ii) after the date on which such beneficiary attains age 
     18, or
       ``(iii) except in the case of rollover contributions 
     described in subsection (e)(4), if such contribution would 
     result in aggregate contributions for the taxable year 
     exceeding $5,000.
       ``(B) The trustee is a bank (as defined in section 408(n)) 
     or another person who demonstrates to the satisfaction of the 
     Secretary that the manner in which that person will 
     administer the trust will be consistent with the requirements 
     of this section or who has so demonstrated with respect to 
     any individual retirement plan or any Coverdell education 
     savings account.
       ``(C) No part of the trust assets will be invested in life 
     insurance contracts.
       ``(D) The assets of the trust shall not be commingled with 
     other property except in a common trust fund or common 
     investment fund.
       ``(E) Except as provided in subsection (e)(6), any balance 
     to the credit of the designated beneficiary on the date on 
     which the beneficiary attains age 30 shall be distributed 
     within 30 days after such date to the beneficiary or, if the 
     beneficiary dies before attaining age 30, shall be 
     distributed within 30 days after the date of death of such 
     beneficiary.
       ``(F) The age limitations in subparagraphs (A)(ii) and (E), 
     and paragraphs (4) and (5) of subsection (e), shall not apply 
     to any designated beneficiary with special needs (as 
     determined under regulations prescribed by the Secretary).
       ``(2) Qualified education expenses.--The term `qualified 
     education expenses' has the meaning given such term in 
     section 530(b)(2).
       ``(3) Certain rules to apply.--Rules similar to the 
     following rules shall apply for purposes of this section:
       ``(A) Section 219(d)(2) (relating to no deduction for 
     rollovers),
       ``(B) Section 530(b)(5) (relating to time when 
     contributions deemed made),
       ``(C) Section 530(f) (relating to community property laws),
       ``(D) Section 530(g) (relating to custodial accounts), and

[[Page 468]]

       ``(E) Section 530(h) (relating to reports).
       ``(c) Reduction in Permitted Contribution Based on Adjusted 
     Gross Income.--
       ``(1) In general.--The maximum amount which a contributor 
     could otherwise make to an account under this section shall 
     be reduced by an amount which bears the same ratio to such 
     maximum amount as--
       ``(A) the excess of--
       ``(i) the contributor's modified adjusted gross income for 
     such taxable year, over
       ``(ii) $95,000 ($190,000 in the case of a joint return), 
     bears to
       ``(B) $15,000 ($30,000 in the case of a joint return).
       ``(2) Modified adjusted gross income.--For purposes of 
     paragraph (1), the term `modified adjusted gross income' 
     means the adjusted gross income of the taxpayer for the 
     taxable year increased by any amount excluded from gross 
     income under section 911, 931, or 933.
       ``(d) Tax Treatment of Accounts.--
       ``(1) In general.--An education savings account is exempt 
     from taxation under this subtitle unless such account has 
     ceased to be an education savings account. Notwithstanding 
     the preceding sentence, any such account is subject to the 
     taxes imposed by section 511 (relating to imposition of tax 
     on unrelated business income of charitable, etc. 
     organizations).
       ``(2) Account terminations.--Rules similar to the rules of 
     paragraphs (2) and (4) of section 408(e) shall apply to 
     education savings accounts, and any amount treated as 
     distributed under such rules shall be treated as not used to 
     pay qualified education expenses.
       ``(e) Treatment of Distributions.--
       ``(1) In general.--Any distribution shall be includible in 
     the gross income of the distributee in the manner as provided 
     in section 72.
       ``(2) Special rules for applying estate and gift taxes with 
     respect to account.--Rules similar to the rules of paragraphs 
     (2), (4), and (5) of section 529(c) shall apply for purposes 
     of this section.
       ``(3) Additional tax for distributions not used for 
     educational expenses.--
       ``(A) In general.--The tax imposed by this chapter for any 
     taxable year on any taxpayer who receives a payment or 
     distribution from an education savings account which is in 
     excess of the qualified education expenses of the designated 
     beneficiary during the taxable year shall be increased by 10 
     percent of the amount of such excess.
       ``(B) Exceptions.--Subparagraph (A) shall not apply if the 
     payment or distribution is--
       ``(i) made to a beneficiary (or to the estate of the 
     designated beneficiary) on or after the death of the 
     designated beneficiary,
       ``(ii) attributable to the designated beneficiary's being 
     disabled (within the meaning of section 72(m)(7)),
       ``(iii) made on account of a scholarship, allowance, or 
     payment described in section 25A(g)(2) received by the 
     account holder to the extent the amount of the payment or 
     distribution does not exceed the amount of the scholarship, 
     allowance, or payment, or
       ``(iv) made on account of the attendance of the designated 
     beneficiary at the United States Military Academy, the United 
     States Naval Academy, the United States Air Force Academy, 
     the United States Coast Guard Academy, or the United States 
     Merchant Marine Academy, to the extent that the amount of the 
     payment or distribution does not exceed the costs of advanced 
     education (as defined by section 2005(e)(3) of title 10, 
     United States Code, as in effect on the date of the enactment 
     of this section) attributable to such attendance.
       ``(C) Contributions returned before certain date.--
     Subparagraph (A) shall not apply to the distribution of any 
     contribution made during a taxable year on behalf of the 
     designated beneficiary if--
       ``(i) such distribution is made before the first day of the 
     sixth month of the taxable year following the taxable year, 
     and
       ``(ii) such distribution is accompanied by the amount of 
     net income attributable to such excess contribution.

     Any net income described in clause (ii) shall be included in 
     gross income for the taxable year in which such excess 
     contribution was made.
       ``(4) Rollover contributions.--Paragraph (1) shall not 
     apply to any amount paid or distributed from an education 
     savings account to the extent that the amount received is 
     paid, not later than the 60th day after the date of such 
     payment or distribution, into another education savings 
     account for the benefit of the same beneficiary or a member 
     of the family (within the meaning of section 529(e)(2)) of 
     such beneficiary who has not attained age 30 as of such date. 
     The preceding sentence shall not apply to any payment or 
     distribution if it applied to any prior payment or 
     distribution during the 12-month period ending on the date of 
     the payment or distribution.
       ``(5) Change in beneficiary.--Any change in the beneficiary 
     of an education savings account shall not be treated as a 
     distribution for purposes of paragraph (1) if the new 
     beneficiary is a member of the family (as so defined) of the 
     old beneficiary and has not attained age 30 as of the date of 
     such change.
       ``(6) Special rules for death and divorce.--Rules similar 
     to the rules of paragraphs (7) and (8) of section 220(f) 
     shall apply. In applying the preceding sentence, members of 
     the family (as so defined) of the designated beneficiary 
     shall be treated in the same manner as the spouse under such 
     paragraph (8).
       ``(7) Deemed distribution on required distribution date.--
     In any case in which a distribution is required under 
     subsection (b)(1)(E), any balance to the credit of a 
     designated beneficiary as of the close of the 30-day period 
     referred to in such subsection for making such distribution 
     shall be deemed distributed at the close of such period.''.
       (b) Tax on Excess Contributions.--
       (1) In general.--Subsection (a) of section 4973 of the 
     Internal Revenue Code of 1986 (relating to tax on excess 
     contributions to certain tax-favored accounts and annuities) 
     is amended by striking ``or'' at the end of paragraph (4), by 
     inserting ``or'' at the end of paragraph (5), and by 
     inserting after paragraph (5) the following new paragraph:
       ``(6) an education savings account (as defined in section 
     224),''.
       (2) Excess contribution.--Section 4973 of such Code is 
     amended by adding at the end the following new subsection:
       ``(h) Excess Contributions to Education Savings Accounts.--
     For purposes of this section--
       ``(1) In general.--In the case of education savings 
     accounts maintained for the benefit of any one beneficiary, 
     the term `excess contributions' means the sum of--
       ``(A) the amount by which the amount contributed for the 
     taxable year to such accounts exceeds $5,000 (or, if less, 
     the sum of the maximum amounts permitted to be contributed 
     under section 224(c) by the contributors to such accounts for 
     such year); and
       ``(B) the amount determined under this subsection for the 
     preceding taxable year, reduced by the sum of--
       ``(i) the distributions out of the accounts for the taxable 
     year (other than distributions described in section 
     224(e)(4)); and
       ``(ii) the excess (if any) of the maximum amount which may 
     be contributed to the accounts for the taxable year over the 
     amount contributed to the accounts for the taxable year.
       ``(2) Special rules.--For purposes of paragraph (1), the 
     following contributions shall not be taken into account:
       ``(A) Any contribution which is distributed out of the 
     education savings account in a distribution to which section 
     224(e)(3)(C) applies.
       ``(B) Any rollover contribution.''.
       (c) Failure To Provide Reports on Education Savings 
     Accounts.--Paragraph (2) of section 6693(a) of the Internal 
     Revenue Code of 1986 (relating to failure to provide reports 
     on individual retirement accounts or annuities) is amended by 
     striking ``and'' at the end of subparagraph (D), by striking 
     the period at the end of subparagraph (E) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(F) section 224(b)(3)(E) (relating to education savings 
     accounts).''.
       (d) Clerical Amendment.--The table of section for part VII 
     of subchapter B of chapter 1 of the Internal Revenue Code of 
     1986 is amended by striking the item relating to section 224 
     and inserting the following new items:

``Sec. 224. Education savings.
``Sec. 225. Cross reference.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2004.
                                 ______
                                 
      By Mr. SESSIONS (for himself and Mr. Lieberman):
  S. 77. A bill to amend titles 10 and 38, United States Code, to 
improve death benefits for the families of deceased members of the 
Armed Forces, and for other purposes; to the Committee on Armed 
Services.
  Mr. SESSIONS. Mr. President, I want to take a few minutes to discuss 
legislation that I offer today along with Senator Lieberman and I 
believe 15 other cosponsors called the HEROES Act of 2005, the Honoring 
Every Requirement of Exemplary Service Act, that will increase 
substantially the death benefits provided to the families of our 
service personnel who lose their lives in service to their country. I 
see Senator Allen. I know he deeply cares about this issue. We are 
working together on this same idea.
  Fundamentally, this bill would raise the basic death benefit from 
$12,420 to $100,000. It will raise the servicemen's group life 
insurance payment from $250,000 to $400,000. Senator Lieberman and I, 
all of us in this body believe we need to make sure that our 
servicemen's families are well taken care of if something were to 
happen to them.
  I am very pleased that Senator Frist on Friday made this part of his 
leadership package and that Senator John Warner, chairman of the Armed 
Services Committee, promised quick action in the committee on the 
subject. And I am very pleased that the Defense Department has worked 
with us in helping to craft this legislation, actually

[[Page 469]]

supports it and the funding it will require.
  I asked last year about it when our defense bill moved. When no 
consensus was reached as that bill was moving, we put in the 
legislation a requirement that the DOD work with the Congress to 
develop a plan to improve death benefits, and they have done so. It is 
the right thing to do.
  Just last Monday, I was in Iraq. I had the ability to travel 
throughout that country, and we flew back from Baghdad to Kuwait about 
9 or 10 that night. On the C-130 in which we flew back, in the bay of 
that great aircraft were two flag-draped coffins of American service 
personnel who had given their life to their country. There should be no 
doubt in any soldier's mind that if something happens to them while in 
service to their country, their family will be well taken care of. The 
American people want that. I believe the people in this Congress will 
support that.
  This legislation needs to be passed promptly. I am proud that Senator 
Warner and Senator Frist have indicated they would accelerate it and do 
what they can to see that it does become law. I look forward to working 
with Senator Lieberman and my fellow Senators to move this bill to 
final passage.
  I see the chairman of Armed Services, Senator Warner. I express my 
appreciation to him for his commitment to do what he can to move this 
bill forward promptly.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. WARNER. Mr. President, I thank my colleague for his thoughtful 
remarks. I so commit to do that.
  Ms. SNOWE. Mr. President, America's finest citizens and the world's 
greatest military men and women continue to put themselves in harm's 
way in support of the establishment of freedom and democracy in Iraq 
and Afghanistan. They also are helping millions throughout South and 
Southeast Asia to recover from the devastating tsunami that destroyed 
so many lives.
  These great Americans have made a commitment to serve this country 
come what may. They are prepared to make the ultimate sacrifice with 
the knowledge that in doing so, they are defending the security of our 
Nation and advancing the very ideals upon which this great country was 
founded.
  Just as these men and women have agreed to make this commitment, so 
too must we commit to supporting the families of these soldiers who 
give the ``last full measure of devotion'' for us. It is the very least 
we can do to provide a greater degree of peace of mind to our service 
men and women, who should always know and trust that a grateful America 
will stand with and support their family members should tragedy strike.
  It is in recognition of their extraordinary selflessness that I join 
my colleagues, Mr. Sessions, Mr. Lieberman and others in cosponsoring 
the HEROES Act of 2005. Although Congress last year raised the amount 
offered to families following the death of a service man or woman for 
the first time in over a decade, I continue to believe that even that 
amount is an inadequate level of support in this day and age.
  For decades, we offered a nominal amount of between $800 and $3,000, 
depending upon rank, for immediate expenses to surviving family members 
upon the death of a member of our armed forces. In the wake of the 1991 
Gulf War, Congress raised this to a flat $6,000, of which half was 
subject to income tax. Finally, we raised that to $12,000, made the 
entire amount tax-free, and tied future increases to the annual 
increase in base pay.
  Of course, no amount of money can replace the loved ones that are 
lost in combat. It's an unimaginable loss which can never be 
ameliorated by financial comfort. However, despite the increase in the 
level of support last year, the amount that we currently offer the 
families of our soldiers remains woefully inadequate to try to begin to 
address the immediate costs of funeral arrangements, the loss of what 
may in most cases be the primary wage earner in the family and the 
additional costs associated with the loss of a mother, father, or 
spouse.
  When one considers how long it may take for a family to regain its 
footing, how surviving family members may need to move out of military-
provided housing and to secure private housing elsewhere, how a 
surviving spouse may need to search for employment to support his or 
her family, and how long it may take for insurance benefits to be paid 
out, this improvement in benefits is the very least we can do to 
alleviate the burdens and financial worry that come with such a loss.
  I strongly support raising the amount to $100,000, in addition to 
increasing the maximum benefit of the Servicemen's Group Life Insurance 
policy from $250,000 to $400,000, as this bill does.
  In acknowledgment of and appreciation for the sacrifices of our brave 
men and women in uniform, I hope that we can all agree on the need to 
help ensure that the futures of their children are secured should they 
sacrifice their lives in combat.
  It is for the sake of our brave servicemen and women and the families 
who depend on them that we introduce this legislation and for them that 
I urge full support.
                                 ______
                                 
      By Mrs. HUTCHISON (for herself, Mr. Brownback, Mr. Cornyn, Mr. 
        Bunning, Mr. Burns, Mr. Hagel, and Mr. Ensign):
  S. 78. A bill to make permanent marriage penalty relief; to the 
Committee on Finance.
  Ms. HUTCHISON. Mr. President I am pleased to introduce a bill to 
provide permanent tax relief from the marriage penalty--the most 
egregious, anti-family provision that has been in the tax code. One of 
my highest priorities in the U.S. Senate has been to relieve American 
taxpayers of this punitive burden.
  Over the past four years we have made important strides to eliminate 
this unfair tax and provide marriage penalty relief by raising the 
standard deduction and enlarging the 15 percent tax bracket for married 
joint filers to twice that of single filers. Before these provisions 
were changed, 44 million Americans, including 2.4 million Texas 
families, paid an average penalty of $1,480.
  Enacting marriage penalty relief has been a giant step for tax 
fairness, but it may be fleeting. Even as married couples use the money 
they now save to put food on the table and clothes on their children, a 
tax increase looms in the future. Since the 2001 tax relief bill was 
restricted, the marriage penalty provisions will only be in effect 
through 2010. In 2011, marriage will again be a taxable event and 43 
percent of married couples will again pay more in taxes unless we act 
decisively.
  Given the challenges many families face in making ends meet, we must 
make sure we do not backtrack on this important reform.
  The benefits of marriage are well established, yet, without marriage 
penalty relief, the tax code provides a significant disincentive for 
people to walk down the aisle. Marriage is a fundamental institution in 
our society and should not be discouraged by the IRS. Children living 
in a married household are far less likely to live in poverty or to 
suffer from child abuse. Research indicates they are less likely to be 
depressed or have developmental problems. Scourges such as adolescent 
drug use are less common in married families, and married mothers are 
less likely to be victims of domestic violence.
  We should celebrate marriage, not penalize it. The bill I am offering 
would make marriage penalty relief permanent, because we cannot be 
satisfied until couples never again must decide between love and money. 
Marriage should not be a taxable event.
  I call on the Senate to finish the job we started to make marriage 
penalty relief permanent today.
  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. 78

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

[[Page 470]]



     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Permanent Marriage Penalty 
     Relief Act of 2005''.

     SEC. 2. REPEAL OF SUNSET ON MARRIAGE PENALTY RELIEF.

       Title IX of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 (relating to sunset of provisions 
     of such Act) shall not apply to sections 301, 302, and 303 of 
     such Act (relating to marriage penalty relief).
                                 ______
                                 
      By Mr. INOUYE:
  S. 79. A bill to require the Secretary of the Army to determine the 
validity of the claims of certain Filipinos that they performed 
military service on behalf of the United States during World War II; to 
the Committee on Veterans' Affairs.
  Mr. INOUYE. Mr. President, I am reintroducing legislation today that 
would direct the Secretary of the Army to determine whether certain 
nationals of the Philippine Islands performed military service on 
behalf of the United States during World War II.
  Mr. President, our Filipino veterans fought side by side with 
Americans and sacrificed their lives on behalf of the United States. 
This legislation would confirm the validity of their claims and further 
allow qualified individuals the opportunity to apply for military and 
veterans benefits that, I believe, they are entitled to. As this 
population becomes older, it is important for our nation to extend its 
firm commitment to the Filipino veterans and their families who 
participated in making us the great nation that we are today.
  Mr. President, I ask unanimous consent that the text of my bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 79

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

     SECTION 1. DETERMINATIONS BY THE SECRETARY OF THE ARMY.

       (a) In General.--Upon the written application of any person 
     who is a national of the Philippine Islands, the Secretary of 
     the Army shall determine whether such person performed any 
     military service in the Philippine Islands in aid of the 
     Armed Forces of the United States during World War II which 
     qualifies such person to receive any military, veterans', or 
     other benefits under the laws of the United States.
       (b) Information To Be Considered.--In making a 
     determination for the purpose of subsection (a), the 
     Secretary shall consider all information and evidence 
     (relating to service referred to in subsection (a)) that is 
     available to the Secretary, including information and 
     evidence submitted by the applicant, if any.

     SEC. 2. CERTIFICATE OF SERVICE.

       (a) Issuance of Certificate of Service.--The Secretary of 
     the Army shall issue a certificate of service to each person 
     determined by the Secretary to have performed military 
     service described in section 1(a).
       (b) Effect of Certificate of Service.--A certificate of 
     service issued to any person under subsection (a) shall, for 
     the purpose of any law of the United States, conclusively 
     establish the period, nature, and character of the military 
     service described in the certificate.

     SEC. 3. APPLICATIONS BY SURVIVORS.

       An application submitted by a surviving spouse, child, or 
     parent of a deceased person described in section 1(a) shall 
     be treated as an application submitted by such person.

     SEC. 4. LIMITATION PERIOD.

       The Secretary of the Army may not consider for the purpose 
     of this Act any application received by the Secretary more 
     than two years after the date of the enactment of this Act.

     SEC. 5. PROSPECTIVE APPLICATION OF DETERMINATIONS BY THE 
                   SECRETARY OF THE ARMY.

       No benefits shall accrue to any person for any period 
     before the date of the enactment of this Act as a result of 
     the enactment of this Act.

     SEC. 6. REGULATIONS.

       The Secretary of the Army shall prescribe regulations to 
     carry out sections 1, 3, and 4.

     SEC. 7. RESPONSIBILITIES OF THE SECRETARY OF VETERANS 
                   AFFAIRS.

       Any entitlement of a person to receive veterans' benefits 
     by reason of this Act shall be administered by the Department 
     of Veterans Affairs pursuant to regulations prescribed by the 
     Secretary of Veterans Affairs.

     SEC. 8. DEFINITION.

       In this Act, the term ``World War II'' means the period 
     beginning on December 7, 1941, and ending on December 31, 
     1946.
                                 ______
                                 
      By Mr. INOUYE:
  S. 80. A bill to restore the traditional day of observance of 
Memorial Day, and for other purposes; to the Committee on the 
Judiciary.
  Mr. INOUYE. Mr. President, in our effort to accommodate many 
Americans by making Memorial Day the last Monday in May, we have lost 
sight of the significance of this day to our nation. My bill would 
restore Memorial Day to May 30 and authorize our flag to fly at half 
mast on that day. In addition, this legislation would authorize the 
President to issue a proclamation designating Memorial Day and Veterans 
Day as days for prayer and ceremonies. This legislation would help 
restore the recognition our veterans deserve for the sacrifices they 
have made on behalf of our Nation.
  Mr. President, I ask unanimous consent that the text of my bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 80

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

     SECTION 1. RESTORATION OF TRADITIONAL DAY OF OBSERVANCE OF 
                   MEMORIAL DAY.

       (a) Designation of Legal Public Holiday.--Section 6103(a) 
     of title 5, United States Code, is amended by striking 
     ``Memorial Day, the last Monday in May.'' and inserting the 
     following:
       ``Memorial Day, May 30.''.
       (b) Observances and Ceremonies.--Section 116 of title 36, 
     United States Code, is amended--
       (1) in subsection (a), by striking ``The last Monday in 
     May'' and inserting ``May 30''; and
       (2) in subsection (b)--
       (A) by striking ``and'' at the end of paragraph (3);
       (B) by redesignating paragraph (4) as paragraph (5); and
       (C) by inserting after paragraph (3) the following new 
     paragraph (4):
       ``(4) calling on the people of the United States to observe 
     Memorial Day as a day of ceremonies for showing respect for 
     American veterans of wars and other military conflicts; 
     and''.
       (c) Display of Flag.--Section 6(d) of title 4, United 
     States Code, is amended by striking ``the last Monday in 
     May;'' and inserting ``May 30;''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 83. A bill to amend the Internal Revenue Code of 1986 to provide 
tax relief for the conversion of cooperative housing corporations into 
condominiums; to the Committee on Finance.
  Mr. INOUYE. Mr. President, today I rise to introduce legislation 
which would amend the Internal Revenue Code of 1986 to allow 
Cooperative Housing Corporations (co-ops), to convert to condominium 
forms of ownership.
  Under current law, a conversion from cooperative shareholding to 
condominium ownership is taxable at a corporate level as well as an 
individual level. The conversion is treated as a corporate liquidation, 
and therefore taxed accordingly. In addition, a capital gains tax is 
levied on any increase between the owner's basis in the co-op share 
pre-conversion and the market value of the condominium interest post-
conversion. This double taxation dissuades condominium conversion 
because the owner is being taxed on the transaction which is nothing 
more than a change in the form of ownership. While the Internal Revenue 
Service concedes that there are no discernable advantages to society of 
the cooperative form of ownership, they do not view federal tax 
statutes as providing sufficient flexibility with which to address the 
obstacles of conversion.
  Cooperative housing organizes the ownership structure into a 
corporation, with shares of stock for each apartment unit, which are 
sold to buyers. The corporation then issues a proprietary lease 
entitling the owner of the stock to the use of the unit in perpetuity. 
Because the investment is in the form of a share of stock, investors 
sometimes lose their entire investment as a result of debt incurred by 
the corporation in construction and development. In addition, due to 
the structure of a cooperative housing corporation, a prospective 
purchaser of shares in the corporation from an existing tenant-
stockholders has difficulty obtaining mortgage financing for the 
purchase. Furthermore, tenant-stockholders of cooperative housing also 
encounter difficulties in securing bank loans for the full value of 
their investment.

[[Page 471]]

  As a result, owners of cooperative housing are increasingly looking 
toward conversion to the condominium structure of ownership. 
Condominium ownership permits the owner of a unit to own the unit 
itself, eliminating the cooperative housing dilemma of corporate debt 
that supercedes the investment of cooperative housing share owners, and 
other financial concerns.
  The legislation I introduce today will remove the penalty of double 
taxation from the conversion of cooperative housing to condominium 
ownership, and will greatly benefit co-op owners across the nation. The 
bill does not apply to cooperatives which have been or are now being 
financed by any federal, state, or local programs for the purpose of 
assisting in the construction of affordable housing cooperatives or the 
conversion of rental units to affordable housing cooperatives. I urge 
my colleagues' consideration and support for this measure.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 83

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

     SECTION 1. NONRECOGNITION OF GAIN OR LOSS ON DISTRIBUTIONS BY 
                   COOPERATIVE HOUSING CORPORATIONS.

       (a) In General.--Section 216(e) of the Internal Revenue 
     Code of 1986 (relating to distributions by cooperative 
     housing corporations) is amended to read as follows:
       ``(e) Distributions by Cooperative Housing Corporations.--
       ``(1) In general.--Except as provided in regulations--
       ``(A) no gain or loss shall be recognized to a cooperative 
     housing corporation on the distribution by such corporation 
     of a dwelling unit to a stockholder in such corporation if 
     such distribution is in exchange for the stockholder's stock 
     in such corporation, and
       ``(B) no gain or loss shall be recognized to a stockholder 
     of such corporation on the transfer of such stockholder's 
     stock in an exchange described in subparagraph (A).
       ``(2) Basis.--The basis of a dwelling unit acquired in a 
     distribution to which paragraph (1) applies shall be the same 
     as the basis of the stock in the cooperative housing 
     corporation for which it is exchanged, decreased in the 
     amount of any money received by the taxpayer in such 
     exchange.
       ``(3) Applicability.--This subsection shall not apply with 
     respect to any dwelling unit the basis of which includes 
     financing under any Federal, State, or local program for the 
     purpose of assisting the construction of affordable housing 
     cooperatives or the conversion of rental units to affordable 
     housing cooperatives.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distributions after the date of the enactment 
     of this Act.
                                 ______
                                 
      By Mr. INOUYE:
  S. 84. A bill to amend the Internal Revenue Code of 1986 to exempt 
certain sightseeing flights from taxes on air transportation; to the 
Committee on Finance.
  Mr. INOUYE. Mr. President, I rise to introduce a bill that would 
amend the Internal Revenue Code of 1986 to exempt certain sightseeing 
flights from the air transportation excise tax. A clarifying amendment 
to the Tax Code is needed due to a problem that exists in the 
application of the excise tax.
  In 1986, the Internal Revenue Service (IRS), issued a Private Letter 
Ruling in which it exempted one Hawaii-based air tour operator from 
paying the air passenger transportation excise tax, but has not applied 
equal treatment to other similarly situated aerial sightseeing tour 
operators. It is my belief that the IRS should be consistent in its 
application of this excise tax.
  Under current law, a variety of excise taxes on air transportation 
are imposed to finance the Airport and Airway Trust funds program that 
is administered by the Federal Aviation Administration. For example, an 
air passenger transportation excise tax is imposed on users of our 
nation's airports and airways. The Congress intended that the tax be 
levied on passengers traveling on scheduled commercial airlines. In 
addition, for the most part, the tax is imposed on each flight segment.
  The Congress did not intend to have the tax applied to air tour 
operators, who utilize our system of airways differently. Our national 
transportation system receives little or no benefit from aerial 
sightseeing operations. Air tour operations are not scheduled 
commercial airlines. They are for entertainment purposes and are 
circular, in that they begin and end at the same destination point.
  Hawaii is among a small handful of states where our citizens can 
enjoy aerial tours of sights that are remote or difficult to reach by 
land. Aerial sightseeing tours are also enjoyed in Alaska, California, 
Washington, Arizona, and even New York City. The imposition of the air 
transportation excise tax on aerial sightseeing flights will 
significantly raise the consumer price on air tours. Doing so will 
cause many small aerial sightseeing tour operators, especially in my 
home state, to lose customers. Many of these small companies have 
struggled to stay in business after incurring significant losses in the 
months following September 11, 2001, when our government imposed flight 
restrictions across the nation. Those flight restrictions prevented 
many flight operations in all segments of the general aviation industry 
for many months into early 2002.
  Accordingly, I urge my colleagues to support my bill, which would 
amend the Internal Revenue Code of 1986 to exempt certain sightseeing 
trips from the air transportation excise tax. Under my bill, air tour 
operations would still be subject to the aviation fuel excise tax.
  I ask unanimous consent that the text of my bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 84

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

     SECTION 1. CERTAIN SIGHTSEEING FLIGHTS EXEMPT FROM TAXES ON 
                   AIR TRANSPORTATION.

       (a) In General.--Section 4281 of the Internal Revenue Code 
     of 1986 (relating to small aircraft on nonestablished lines) 
     is amended by adding at the end the following new sentence: 
     ``For purposes of this section, an aircraft shall not be 
     considered as operated on an established line if such 
     aircraft is operated on a flight the sole purpose of which is 
     sightseeing.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to transportation beginning on or 
     after the date of the enactment of this Act, but shall not 
     apply to any amount paid before such date.
                                 ______
                                 
      By Mr. INOUYE:
  S. 87. A bill to recognize the organization known as the National 
Academies of Practice; to the Committee on the Judiciary.
  Mr. INOUYE. Mr. President today I am introducing legislation that 
would provide a federal charter for the National Academies of Practice. 
This organization represents outstanding health care professionals who 
have made significant contributions to the practice of applied 
psychology, medicine, dentistry, nursing, optometry, osteopathic 
medicine, pharmacy, podiatry, social work, and veterinary medicine. 
When fully established, each of the ten academies will possess 150 
distinguished practitioners selected by their peers. This umbrella 
organization will be able to provide the Congress of the United States 
and the executive branch with considerable health policy expertise, 
especially from the perspective of those individuals who are in the 
forefront of actually providing health care.
  As we continue to grapple with the many complex issues surrounding 
the delivery of health care services, it is clearly in our best 
interest to ensure that the Congress has direct and immediate access to 
the recommendations of an interdisciplinary body of health care 
practitioners.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 87

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``National Academies of 
     Practice Recognition Act of 2005''.

[[Page 472]]



     SEC. 2. CHARTER.

       The National Academies of Practice organized and 
     incorporated under the laws of the District of Columbia, is 
     hereby recognized as such and is granted a Federal charter.

     SEC. 3. CORPORATE POWERS.

       The National Academies of Practice (referred to in this Act 
     as the ``corporation'') shall have only those powers granted 
     to it through its bylaws and articles of incorporation filed 
     in the State in which it is incorporated and subject to the 
     laws of such State.

     SEC. 4. OBJECTIVES AND PURPOSES OF THE CORPORATION.

       The objectives and purposes for which the corporation is 
     organized shall be provided for in the articles of 
     incorporation and shall include the following:
       (1) Honoring persons who have made significant 
     contributions to the practice of applied dentistry, medicine, 
     nursing, optometry, osteopathy, pharmacy, podiatry, 
     psychology, social work, veterinary medicine, and other 
     health care professions.
       (2) Improving the effectiveness of such professions by 
     disseminating information about new techniques and 
     procedures, promoting interdisciplinary practices, and 
     stimulating multidisciplinary exchange of scientific and 
     professional information.
       (3) Upon request, advising the President, the members of 
     the President's Cabinet, Congress, Federal agencies, and 
     other relevant groups about practitioner issues in health 
     care and health care policy, from a multidisciplinary 
     perspective.

     SEC. 5. SERVICE OF PROCESS.

       With respect to service of process, the corporation shall 
     comply with the laws of the State in which it is incorporated 
     and those States in which it carries on its activities in 
     furtherance of its corporate purposes.

     SEC. 6. MEMBERSHIP.

       Eligibility for membership in the corporation and the 
     rights and privileges of members shall be as provided in the 
     bylaws of the corporation.

     SEC. 7. BOARD OF DIRECTORS; COMPOSITION; RESPONSIBILITIES.

       The composition and the responsibilities of the board of 
     directors of the corporation shall be as provided in the 
     articles of incorporation of the corporation and in 
     conformity with the laws of the State in which it is 
     incorporated.

     SEC. 8. OFFICERS OF THE CORPORATION.

       The officers of the corporation and the election of such 
     officers shall be as provided in the articles of 
     incorporation of the corporation and in conformity with the 
     laws of the State in which it is incorporated.

     SEC. 9. RESTRICTIONS.

       (a) Use of Income and Assets.--No part of the income or 
     assets of the corporation shall inure to any member, officer, 
     or director of the corporation or be distributed to any such 
     person during the life of the charter under this Act. Nothing 
     in this subsection shall be construed to prevent the payment 
     of reasonable compensation to the officers of the corporation 
     or reimbursement for actual necessary expenses in amounts 
     approved by the board of directors.
       (b) Loans.--The corporation shall not make any loan to any 
     officer, director, or employee of the corporation.
       (c) Political Activity.--The corporation, any officer, or 
     any director of the corporation, acting as such officer or 
     director, shall not contribute to, support, or otherwise 
     participate in any political activity or in any manner 
     attempt to influence legislation.
       (d) Issuance of Stock and Payment of Dividends.--The 
     corporation shall have no power to issue any shares of stock 
     nor to declare or pay any dividends.
       (e) Claims of Federal Approval.--The corporation shall not 
     claim congressional approval or Federal Government authority 
     for any of its activities.
       (f) Federal Advisory Activities.--While providing advice to 
     Federal agencies, the corporation shall be subject to the 
     Federal Advisory Committee Act (5 U.S.C. Appendix; 86 stat. 
     700).

     SEC. 10. LIABILITY.

       The corporation shall be liable for the acts of its 
     officers and agents when acting within the scope of their 
     authority.

     SEC. 11. MAINTENANCE AND INSPECTION OF BOOKS AND RECORDS.

       (a) Books and Records of Account.--The corporation shall 
     keep correct and complete books and records of account and 
     shall keep minutes of any proceeding of the corporation 
     involving any of its members, the board of directors, or any 
     committee having authority under the board of directors.
       (b) Names and Addresses of Members.--The corporation shall 
     keep at its principal office a record of the names and 
     addresses of all members having the right to vote in any 
     proceeding of the corporation.
       (c) Right to Inspect Books and Records.--All books and 
     records of the corporation may be inspected by any member 
     having the right to vote, or by any agent or attorney of such 
     member, for any proper purpose, at any reasonable time.
       (d) Application of State Law.--Nothing in this section 
     shall be construed to contravene any applicable State law.

     SEC. 12. ANNUAL REPORT.

       The corporation shall report annually to the Congress 
     concerning the activities of the corporation during the 
     preceding fiscal year. The report shall not be printed as a 
     public document.

     SEC. 13. RESERVATION OF RIGHT TO AMEND OR REPEAL CHARTER.

       The right to alter, amend, or repeal this Act is expressly 
     reserved to Congress.

     SEC. 14. DEFINITION.

       In this Act, the term ``State'' includes the District of 
     Columbia, the Commonwealth of Puerto Rico, and the 
     territories and possessions of the United States.

     SEC. 15. TAX-EXEMPT STATUS.

       The corporation shall maintain its status as an 
     organization exempt from taxation as provided in the Internal 
     Revenue Code of 1986 or any corresponding similar provision.

     SEC. 16. TERMINATION.

       If the corporation fails to comply with any of the 
     restrictions or provisions of this Act the charter granted by 
     this Act shall terminate.
                                 ______
                                 
      By Mr. INOUYE:
  S. 88. A bill to allow the psychiatric or psychological examinations 
required under chapter 313 of title 18, United States Code, relating to 
offenders with mental disease or defect, to be conducted by a clinical 
social worker; to the Committee on the Judiciary.
  Mr. INOUYE. Mr. President, today I introduce legislation to amend 
Title 18 of the United States Code to allow our Nation's clinical 
social workers to use their mental health expertise on behalf of the 
federal judiciary by conducting psychological and psychiatric exams.
  I feel that the time has come to allow our Nation's judicial system 
to have access to a wide range of behavioral science and mental health 
expertise. I am confident that the enactment of this legislation would 
be very much in our Nation's best interest.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 88

       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 ``Psychiatric and Psychlogical 
     Examinations Act of 2005''.

     SEC. 2. EXAMINATIONS BY CLINICAL SOCIAL WORKERS.

        Section 4247(b) of title 18, United States Code, is 
     amended, in the first sentence, by striking ``psychiatrist or 
     psychologist'' and inserting ``psychiatrist, psychologist, or 
     clinical social worker''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 89. A bill to amend title VII of the Public Health Service Act to 
make certain graduate programs in professional psychology eligible to 
participate in various health professions loan programs; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. INOUYE. Mr. President, I rise to introduce legislation today to 
modify Title VII of the Public Health Service Act in order to provide 
students enrolled in graduate psychology programs with the opportunity 
to participate in various health professions loan programs.
  Providing students enrolled in graduate psychology programs with 
eligibility for financial assistance in the form of loans, loan 
guarantees, and scholarships will facilitate a much-needed infusion of 
behavioral science expertise into our community of public health 
providers. There is a growing recognition of the valuable contribution 
being made by psychologists toward solving some of our Nation's most 
distressing problems.
  The participation of students from all backgrounds and clinical 
disciplines is vital to the success of health care training. The Title 
VII programs play a significant role in providing financial support for 
the recruitment of minorities, women, and individuals from economically 
disadvantaged backgrounds. Minority therapists have an advantage in the 
provision of critical services to minority populations because often 
they can communicate with clients in their own language and cultural 
framework. Minority therapists are more likely to work in community 
settings where ethnic minority and economically disadvantaged 
individuals are most likely to seek care. It is critical that continued 
support be provided for the training of individuals who provide

[[Page 473]]

health care services to underserved communities.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 89

       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 ``Strengthen the Public Health 
     Service Act''.

     SEC. 2. PARTICIPATION IN VARIOUS HEALTH PROFESSIONS LOAN 
                   PROGRAMS.

       (a) Loan Agreements.--Section 721 of the Public Health 
     Service Act (42 U.S.C. 292q) is amended--
       (1) in subsection (a), by inserting ``, or any public or 
     nonprofit school that offers a graduate program in 
     professional psychology'' after ``veterinary medicine'';
       (2) in subsection (b)(4), by inserting ``, or to a graduate 
     degree in professional psychology'' after ``or doctor of 
     veterinary medicine or an equivalent degree''; and
       (3) in subsection (c)(1), by inserting ``, or schools that 
     offer graduate programs in professional psychology'' after 
     ``veterinary medicine''.
       (b) Loan Provisions.--Section 722 of the Public Health 
     Service Act (42 U.S.C. 292r) is amended--
       (1) in subsection (b)(1), by inserting ``, or to a graduate 
     degree in professional psychology'' after ``or doctor of 
     veterinary medicine or an equivalent degree'';
       (2) in subsection (c), in the matter preceding paragraph 
     (1), by inserting ``, or at a school that offers a graduate 
     program in professional psychology'' after ``veterinary 
     medicine''; and
       (3) in subsection (k)--
       (A) in the matter preceding paragraph (1), by striking ``or 
     podiatry'' and inserting ``podiatry, or professional 
     psychology''; and
       (B) in paragraph (4), by striking ``or podiatric medicine'' 
     and inserting ``podiatric medicine, or professional 
     psychology''.

     SEC. 3. GENERAL PROVISIONS.

       (a) Health Professions Data.--Section 792(a) of the Public 
     Health Service Act (42 U.S.C. 295k(a)) is amended by striking 
     ``clinical'' and inserting ``professional''.
       (b) Prohibition Against Discrimination on Basis of Sex.--
     Section 794 of the Public Health Service Act (42 U.S.C. 295m) 
     is amended in the matter preceding paragraph (1) by striking 
     ``clinical'' and inserting ``professional''.
       (c) Definitions.--Section 799B(1)(B) of the Public Health 
     Service Act (42 U.S.C. 295p(1)(B)) is amended by striking 
     ``clinical'' each place the term appears and inserting 
     ``professional''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 90. A bill to amend the Public Health Service Act to provide for 
the establishment of a National Center for Social Work Research; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. INOUYE. Mr. President, I rise today to introduce legislation to 
amend the Public Health Service Act for the establishment of a National 
Center for Social Work Research. Social workers provide a multitude of 
health care delivery services throughout America to our children, 
families, the elderly, and persons suffering from various forms of 
abuse and neglect. The purpose of this center is to support and 
disseminate information about basic and clinical social work research, 
and training, with emphasis on service to underserved and rural 
populations.
  While the Federal Government provides funding for various social work 
research activities through the National Institutes of Health and other 
Federal agencies, there presently is no coordination or direction of 
these critical activities and no overall assessment of needs and 
opportunities for empirical knowledge development. The establishment of 
a Center for Social Work Research would result in improved behavioral 
and mental health care outcomes for our Nation's children, families, 
the elderly, and others.
  In order to meet the increasing challenges of bringing cost-
effective, research-based, quality health care to all Americans, we 
must recognize the important contributions of social work researchers 
to health care delivery and the central role that the Center for Social 
Work can provide in facilitating their work.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 90

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       This Act may be cited as the ``National Center for Social 
     Work Research Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) social workers focus on the improvement of individual 
     and family functioning and the creation of effective health 
     and mental health prevention and treatment interventions in 
     order for individuals to become more productive members of 
     society;
       (2) social workers provide front line prevention and 
     treatment services in the areas of school violence, aging, 
     teen pregnancy, child abuse, domestic violence, juvenile 
     crime, and substance abuse, particularly in rural and 
     underserved communities; and
       (3) social workers are in a unique position to provide 
     valuable research information on these complex social 
     concerns, taking into account a wide range of social, 
     medical, economic and community influences from an 
     interdisciplinary, family-centered and community-based 
     approach.

     SEC. 3. ESTABLISHMENT OF NATIONAL CENTER FOR SOCIAL WORK 
                   RESEARCH.

       (a) In General.--Section 401(b)(2) of the Public Health 
     Service Act (42 U.S.C. 281(b)(2)) is amended by adding at the 
     end the following:
       ``(H) The National Center for Social Work Research.''.
       (b) Establishment.--Part E of title IV of the Public Health 
     Service Act (42 U.S.C. 287 et seq.) is amended by adding at 
     the end the following:

         ``Subpart 7--National Center for Social Work Research

     ``SEC. 485J. PURPOSE OF CENTER.

       ``The general purpose of the National Center for Social 
     Work Research (referred to in this subpart as the `Center') 
     is the conduct and support of, and dissemination of targeted 
     research concerning social work methods and outcomes related 
     to problems of significant social concern. The Center shall--
       ``(1) promote research and training that is designed to 
     inform social work practices, thus increasing the knowledge 
     base which promotes a healthier America; and
       ``(2) provide policymakers with empirically-based research 
     information to enable such policymakers to better understand 
     complex social issues and make informed funding decisions 
     about service effectiveness and cost efficiency.

     ``SEC. 485K. SPECIFIC AUTHORITIES.

       ``(a) In General.--To carry out the purpose described in 
     section 485J, the Director of the Center may provide research 
     training and instruction and establish, in the Center and in 
     other nonprofit institutions, research traineeships and 
     fellowships in the study and investigation of the prevention 
     of disease, health promotion, the association of 
     socioeconomic status, gender, ethnicity, age and geographical 
     location and health, the social work care of individuals 
     with, and families of individuals with, acute and chronic 
     illnesses, child abuse, neglect, and youth violence, and 
     child and family care to address problems of significant 
     social concern especially in underserved populations and 
     underserved geographical areas.
       ``(b) Stipends and Allowances.--The Director of the Center 
     may provide individuals receiving training and instruction or 
     traineeships or fellowships under subsection (a) with such 
     stipends and allowances (including amounts for travel and 
     subsistence and dependency allowances) as the Director 
     determines necessary.
       ``(c) Grants.--The Director of the Center may make grants 
     to nonprofit institutions to provide training and instruction 
     and traineeships and fellowships under subsection (a).

     ``SEC. 485L. ADVISORY COUNCIL.

       ``(a) Duties.--
       ``(1) In general.--The Secretary shall establish an 
     advisory council for the Center that shall advise, assist, 
     consult with, and make recommendations to the Secretary and 
     the Director of the Center on matters related to the 
     activities carried out by and through the Center and the 
     policies with respect to such activities.
       ``(2) Gifts.--The advisory council for the Center may 
     recommend to the Secretary the acceptance, in accordance with 
     section 231, of conditional gifts for study, investigations, 
     and research and for the acquisition of grounds or 
     construction, equipment, or maintenance of facilities for the 
     Center.
       ``(3) Other duties and functions.--The advisory council for 
     the Center--
       ``(A)(i) may make recommendations to the Director of the 
     Center with respect to research to be conducted by the 
     Center;
       ``(ii) may review applications for grants and cooperative 
     agreements for research or training and recommend for 
     approval applications for projects that demonstrate the 
     probability of making valuable contributions to human 
     knowledge; and
       ``(iii) may review any grant, contract, or cooperative 
     agreement proposed to be made or entered into by the Center;
       ``(B) may collect, by correspondence or by personal 
     investigation, information relating

[[Page 474]]

     to studies that are being carried out in the United States or 
     any other country and, with the approval of the Director of 
     the Center, make such information available through 
     appropriate publications; and
       ``(C) may appoint subcommittees and convene workshops and 
     conferences.
       ``(b) Membership.--
       ``(1) In general.--The advisory council shall be composed 
     of the ex officio members described in paragraph (2) and not 
     more than 18 individuals to be appointed by the Secretary 
     under paragraph (3).
       ``(2) Ex officio members.--The ex officio members of the 
     advisory council shall include--
       ``(A) the Secretary of Health and Human Services, the 
     Director of NIH, the Director of the Center, the Chief Social 
     Work Officer of the Veterans' Administration, the Assistant 
     Secretary of Defense for Health Affairs, the Associate 
     Director of Prevention Research at the National Institute of 
     Mental Health, the Director of the Division of Epidemiology 
     and Services Research, the Assistant Secretary of Health and 
     Human Services for the Administration for Children and 
     Families, the Assistant Secretary of Education for the Office 
     of Educational Research and Improvement, the Assistant 
     Secretary of Housing and Urban Development for Community 
     Planning and Development, and the Assistant Attorney General 
     for Office of Justice Programs (or the designees of such 
     officers); and
       ``(B) such additional officers or employees of the United 
     States as the Secretary determines necessary for the advisory 
     council to effectively carry out its functions.
       ``(3) Appointed members.--The Secretary shall appoint not 
     to exceed 18 individuals to the advisory council, of which--
       ``(A) not more than two-thirds of such individual shall be 
     appointed from among the leading representatives of the 
     health and scientific disciplines (including public health 
     and the behavioral or social sciences) relevant to the 
     activities of the Center, and at least 7 such individuals 
     shall be professional social workers who are recognized 
     experts in the area of clinical practice, education, or 
     research; and
       ``(B) not more than one-third of such individuals shall be 
     appointed from the general public and shall include leaders 
     in fields of public policy, law, health policy, economics, 
     and management.

     The Secretary shall make appointments to the advisory council 
     in such a manner as to ensure that the terms of the members 
     do not all expire in the same year.
       ``(4) Compensation.--Members of the advisory council who 
     are officers or employees of the United States shall not 
     receive any compensation for service on the advisory council. 
     The remaining members shall receive, for each day (including 
     travel time) they are engaged in the performance of the 
     functions of the advisory council, compensation at rates not 
     to exceed the daily equivalent of the annual rate in effect 
     for an individual at grade GS-18 of the General Schedule.
       ``(c) Terms.--
       ``(1) In general.--The term of office of an individual 
     appointed to the advisory council under subsection (b)(3) 
     shall be 4 years, except that any individual appointed to 
     fill a vacancy on the advisory council shall serve for the 
     remainder of the unexpired term. A member may serve after the 
     expiration of the member's term until a successor has been 
     appointed.
       ``(2) Reappointments.--A member of the advisory council who 
     has been appointed under subsection (b)(3) for a term of 4 
     years may not be reappointed to the advisory council prior to 
     the expiration of the 2-year period beginning on the date on 
     which the prior term expired.
       ``(3) Vacancy.--If a vacancy occurs on the advisory council 
     among the members under subsection (b)(3), the Secretary 
     shall make an appointment to fill that vacancy not later than 
     90 days after the date on which the vacancy occurs.
       ``(d) Chairperson.--The chairperson of the advisory council 
     shall be selected by the Secretary from among the members 
     appointed under subsection (b)(3), except that the Secretary 
     may select the Director of the Center to be the chairperson 
     of the advisory council. The term of office of the 
     chairperson shall be 2 years.
       ``(e) Meetings.--The advisory council shall meet at the 
     call of the chairperson or upon the request of the Director 
     of the Center, but not less than 3 times each fiscal year. 
     The location of the meetings of the advisory council shall be 
     subject to the approval of the Director of the Center.
       ``(f) Administrative Provisions.--The Director of the 
     Center shall designate a member of the staff of the Center to 
     serve as the executive secretary of the advisory council. The 
     Director of the Center shall make available to the advisory 
     council such staff, information, and other assistance as the 
     council may require to carry out its functions. The Director 
     of the Center shall provide orientation and training for new 
     members of the advisory council to provide such members with 
     such information and training as may be appropriate for their 
     effective participation in the functions of the advisory 
     council.
       ``(g) Comments and Recommendations.--The advisory council 
     may prepare, for inclusion in the biennial report under 
     section 485M--
       ``(1) comments with respect to the activities of the 
     advisory council in the fiscal years for which the report is 
     prepared;
       ``(2) comments on the progress of the Center in meeting its 
     objectives; and
       ``(3) recommendations with respect to the future direction 
     and program and policy emphasis of the center.
     The advisory council may prepare such additional reports as 
     it may determine appropriate.

     ``SEC. 485M. BIENNIAL REPORT.

       ``The Director of the Center, after consultation with the 
     advisory council for the Center, shall prepare for inclusion 
     in the biennial report under section 403, a biennial report 
     that shall consist of a description of the activities of the 
     Center and program policies of the Director of the Center in 
     the fiscal years for which the report is prepared. The 
     Director of the Center may prepare such additional reports as 
     the Director determines appropriate. The Director of the 
     Center shall provide the advisory council of the Center an 
     opportunity for the submission of the written comments 
     described in section 485L(g).

     ``SEC. 485N. QUARTERLY REPORT.

       ``The Director of the Center shall prepare and submit to 
     Congress a quarterly report that contains a summary of 
     findings and policy implications derived from research 
     conducted or supported through the Center.''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 91. A bill to amend title VII of the Public Health Service Act to 
ensure that social work students or social work schools are eligible 
for support under certain programs to assist individuals in pursuing 
health careers and programs of grants for training projects in 
geriatrics, and to establish a social work training program; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. INOUYE. Mr. President, on behalf of our Nation's clinical social 
workers, I am introducing legislation to amend the Public Health 
Service Act. This legislation would (1) establish a new social work 
training program, (2) ensure that social work students are eligible for 
support under the Health Careers Opportunity Program, (3) provide 
social work schools with eligibility for support under the Minority 
Centers of Excellence programs, (4) permit schools offering degrees in 
social work to obtain grants for training projects in geriatrics, and 
(5) ensure that social work is recognized as a profession under the 
Public Health Maintenance Organization Act.
  Despite the impressive range of services social workers provide to 
people of this Nation, few Federal programs exist to provide 
opportunities for social work training in health and mental health 
care.
  Social workers have long provided quality mental health services to 
our citizens and continue to be at the forefront of establishing 
innovative programs to serve our disadvantaged populations. I believe 
it is important to ensure that the special expertise social workers 
possess continues to be available to the citizens of this Nation. This 
bill, by providing financial assistance to schools of social work and 
social work students, acknowledges the long history and critical 
importance of the services provided by social work professionals. I 
believe it is time to provide them with the recognition they deserve.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 91

       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 ``Strengthen Social Work 
     Training Act of 2005''.

     SEC. 2. SOCIAL WORK STUDENTS.

       (a) Health Professions Schools.--Section 736(g)(1)(A) of 
     the Public Health Service Act (42 U.S.C. 293(g)(1)(A)) is 
     amended by striking ``graduate program in behavioral or 
     mental health'' and inserting ``graduate program in 
     behavioral or mental health, including a school offering 
     graduate programs in clinical social work, or programs in 
     social work''.
       (b) Scholarships.--Section 737(d)(1)(A) of the Public 
     Health Service Act (42 U.S.C. 293a(d)(1)(A)) is amended by 
     striking ``mental health practice'' and inserting ``mental 
     health practice (including graduate programs in clinical 
     psychology, graduate programs in clinical social work, or 
     programs in social work)''.

[[Page 475]]

       (c) Faculty Positions.--Section 738(a)(3) of the Public 
     Health Service Act (42 U.S.C. 293b(a)(3)) is amended by 
     striking ``offering graduate programs in behavioral and 
     mental health'' and inserting ``offering graduate programs in 
     behavioral and mental health, including graduate programs in 
     clinical psychology, graduate programs in clinical social 
     work, or programs in social work''.

     SEC. 3. GERIATRICS TRAINING PROJECTS.

       Section 753(b)(1) of the Public Health Service Act (42 
     U.S.C. 294c(b)(1)) is amended by inserting ``schools offering 
     degrees in social work,'' after ``teaching hospitals,''.

     SEC. 4. SOCIAL WORK TRAINING PROGRAM.

       Subpart 2 of part E of title VII of the Public Health 
     Service Act (42 U.S.C. 295 et seq.) is amended--
       (1) by redesignating section 770 as section 770A;
       (2) by inserting after section 769, the following:

     ``SEC. 770. SOCIAL WORK TRAINING PROGRAM.

       ``(a) Training Generally.--The Secretary may make grants 
     to, or enter into contracts with, any public or nonprofit 
     private hospital, any school offering programs in social 
     work, or to or with a public or private nonprofit entity that 
     the Secretary has determined is capable of carrying out such 
     grant or contract--
       ``(1) to plan, develop, and operate, or participate in, an 
     approved social work training program (including an approved 
     residency or internship program) for students, interns, 
     residents, or practicing physicians;
       ``(2) to provide financial assistance (in the form of 
     traineeships and fellowships) to students, interns, 
     residents, practicing physicians, or other individuals, who--
       ``(A) are in need of such assistance;
       ``(B) are participants in any such program; and
       ``(C) plan to specialize or work in the practice of social 
     work;
       ``(3) to plan, develop, and operate a program for the 
     training of individuals who plan to teach in social work 
     training programs; and
       ``(4) to provide financial assistance (in the form of 
     traineeships and fellowships) to individuals who are 
     participants in any such program and who plan to teach in a 
     social work training program.
       ``(b) Academic Administrative Units.--
       ``(1) In general.--The Secretary may make grants to or 
     enter into contracts with schools offering programs in social 
     work to meet the costs of projects to establish, maintain, or 
     improve academic administrative units (which may be 
     departments, divisions, or other units) to provide clinical 
     instruction in social work.
       ``(2) Preference in making awards.--In making awards of 
     grants and contracts under paragraph (1), the Secretary shall 
     give preference to any qualified applicant for such an award 
     that agrees to expend the award for the purpose of--
       ``(A) establishing an academic administrative unit for 
     programs in social work; or
       ``(B) substantially expanding the programs of such a unit.
       ``(c) Duration of Award.--The period during which payments 
     are made to an entity from an award of a grant or contract 
     under subsection (a) may not exceed 5 years. The provision of 
     such payments shall be subject to annual approval by the 
     Secretary and subject to the availability of appropriations 
     for the fiscal year involved to make the payments.
       ``(d) Funding.--
       ``(1) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $10,000,000 for each of the fiscal years 2006 through 2008.
       ``(2) Allocation.--Of the amounts appropriated under 
     paragraph (1) for a fiscal year, the Secretary shall make 
     available not less than 20 percent for awards of grants and 
     contracts under subsection (b).''; and
       (3) in section 770A (as redesignated by paragraph (1)) by 
     inserting ``other than section 770,'' after ``carrying out 
     this subpart,''.

     SEC. 5. CLINICAL SOCIAL WORKER SERVICES.

       Section 1302 of the Public Health Service Act (42 U.S.C. 
     300e-1) is amended--
       (1) in paragraphs (1) and (2), by inserting ``clinical 
     social worker,'' after ``psychologist,'' each place the term 
     appears;
       (2) in paragraph (4)(A), by striking ``and psychologists'' 
     and inserting ``psychologists, and clinical social workers''; 
     and
       (3) in paragraph (5), by inserting ``clinical social 
     work,'' after ``psychology,''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 92. A bill to amend title VII of the Public Health Service Act to 
establish a psychology post-doctoral fellowship program, and for other 
purposes; to the Committee on Health, Education, Labor, and Pensions.
  Mr. INOUYE. Mr. President, I am introducing legislation today to 
amend Title VII of the Public Health Service Act to establish a 
psychology post-doctoral program. Psychologists have made a unique 
contribution in reaching out to the nation's medically underserved 
populations. Expertise in behavioral science is useful in addressing 
grave concerns such as violence, addiction, mental illness, adolescent 
and child behavioral disorders, and family disruption. Establishment of 
a psychology post-doctoral program could be an effective way to find 
solutions to these issues.
  Similar programs supporting additional, specialized training in 
traditionally underserved settings have been successful in retaining 
participants to serve the same populations. For example, mental health 
professionals who have participated in these specialized federally 
funded programs have tended not only to meet their repayment 
obligations, but have continued to work in the public sector or with 
the underserved.
  While a doctorate in psychology provides broad-based knowledge and 
mastery in a wide variety of clinical skills, specialized post-doctoral 
fellowship programs help to develop particular diagnostic and treatment 
skills required to respond effectively to underserved populations. For 
example, what appears to be poor academic motivation in a child 
recently relocated from Southeast Asia might actually reflect a 
cultural value of reserve rather than a disinterest in academic 
learning. Specialized assessment skills enable the clinician to 
initiate effective treatment.
  Domestic violence poses a significant public health problem and is 
not just a problem for the criminal justice system. Violence against 
women results in thousands of hospitalizations a year. Rates of child 
and spouse abuse in rural areas are particularly high, as are the rates 
of alcohol abuse and depression in adolescents. A post-doctoral 
fellowship program in the psychology of the rural populations could be 
of special benefit in addressing these problems.
  Given the demonstrated success and effectiveness of specialized 
training programs, it is incumbent upon us to encourage participation 
in post-doctoral fellowships that respond to the needs of the nation's 
underserved.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 92

       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 ``Psychologists in the Service 
     of the Public Act of 2005''.

     SEC. 2. GRANTS FOR FELLOWSHIPS IN PSYCHOLOGY.

       Part C of title VII of the Public Health Service Act (42 
     U.S.C. 293k et seq.) is amended by adding at the end the 
     following:

     ``SEC. 749. GRANTS FOR FELLOWSHIPS IN PSYCHOLOGY.

       ``(a) In General.--The Secretary shall establish a 
     psychology post-doctoral fellowship program to make grants to 
     and enter into contracts with eligible entities to encourage 
     the provision of psychological training and services in 
     underserved treatment areas.
       ``(b) Eligible Entities.--
       ``(1) Individuals.--In order to receive a grant under this 
     section an individual shall submit an application to the 
     Secretary at such time, in such form, and containing such 
     information as the Secretary shall require, including a 
     certification that such individual--
       ``(A) has received a doctoral degree through a graduate 
     program in psychology provided by an accredited institution 
     at the time such grant is awarded;
       ``(B) will provide services to a medically underserved 
     population during the period of such grant;
       ``(C) will comply with the provisions of subsection (c); 
     and
       ``(D) will provide any other information or assurances as 
     the Secretary determines appropriate.
       ``(2) Institutions.--In order to receive a grant or 
     contract under this section, an institution shall submit an 
     application to the Secretary at such time, in such form, and 
     containing such information as the Secretary shall require, 
     including a certification that such institution--
       ``(A) is an entity, approved by the State, that provides 
     psychological services in medically underserved areas or to 
     medically underserved populations (including entities that 
     care for the mentally retarded, mental health institutions, 
     and prisons);
       ``(B) will use amounts provided to such institution under 
     this section to provide financial assistance in the form of 
     fellowships to qualified individuals who meet the 
     requirements of subparagraphs (A) through (C) of paragraph 
     (1);

[[Page 476]]

       ``(C) will not use more than 10 percent of amounts provided 
     under this section to pay for the administrative costs of any 
     fellowship programs established with such funds; and
       ``(D) will provide any other information or assurances as 
     the Secretary determines appropriate.
       ``(c) Continued Provision of Services.--Any individual who 
     receives a grant or fellowship under this section shall 
     certify to the Secretary that such individual will continue 
     to provide the type of services for which such grant or 
     fellowship is awarded for not less than 1 year after the term 
     of the grant or fellowship has expired.
       ``(d) Regulations.--Not later than 180 days after the date 
     of enactment of this section, the Secretary shall promulgate 
     regulations necessary to carry out this section, including 
     regulations that define the terms `medically underserved 
     areas' and `medically underserved populations'.
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $5,000,000 for each of the fiscal years 2006 through 2008.''.
                                 ______
                                 
      By Mr. LUGAR (for himself, Mr. Leahy, Mrs. Lincoln, Mrs. Dole, 
        and Mr. Smith):
  S. 94. A bill to amend the Internal Revenue Code of 1986 to provide 
for a charitable deduction for contributions of food inventory; to the 
Committee on Finance.
  Mr. LUGAR. Mr. President, on behalf of myself and Senators Leahy, 
Lincoln, Dole, and Smith, I rise today to introduce the Good Samaritan 
Hunger Relief Tax Incentive Act of 2005. This important legislation 
allows for expanded charitable tax deductions for contributions of food 
inventory to our nation's food banks and would permit farmers and 
businesses of all sizes to take advantage of this tax deduction. Demand 
on food banks has been rising, and these tax deductions would be an 
important step in increasing private donations to the non-profit hunger 
relief charities playing a critical role in meeting America's 
nutritional needs.
  To a certain degree, donations have not diminished or have even 
modestly increased, but most areas surveyed report that donations 
cannot keep up with the growing demand. According to the U.S. 
Conference of Mayors and Sodexho USA ``Hunger and Homelessness Survey'' 
released in December 2004, requests for emergency food assistance has 
increased fourteen percent. Fifty-six percent of the people requesting 
emergency food assistance are either children or their parents. The 
number of elderly persons requesting food assistance has increased by 
twelve percent. The success of welfare reform legislation has moved 
many recipients off welfare and into jobs. Over the last decade, in 
many states, welfare roles have been reduced by more than one half. But 
we need to recognize that these individuals and their families are 
living on modest wages. As the states' unemployment rates have risen, 
so have the demands placed on the food banks and soup kitchens. The 
problem of hunger goes well beyond the unemployed. The Mayors' survey 
points out that thirty-four percent of people requesting food 
assistance were working. Due to increases in rent, underemployment, 
multigenerational residences, families have to make the tough financial 
decisions. As a result, food needs of families have been pushed further 
and further down the priority list. This is coupled with the 
nutritional value becoming less important to some families because fast 
food and ``junk'' food is more economical to those on a tight budget.
  Private food banks provide a key safety net against hunger. According 
to the 2002 report by U.S. Department of Agriculture, over 13 million 
children were hungry or at the risk of being hungry.
  America's Second Harvest, a nationwide umbrella group of over 200 
food banks and food rescue organization, released a 2001 report 
entitled ``Hunger in America'' stating that 23.3 million people sought 
and received emergency hunger relief from just their network of 
charitable organizations. That would be the equivalent of the 
populations of New York, Los Angeles, Chicago, Houston, Philadelphia, 
San Diego, Phoenix, San Antonio, Dallas, and Detroit combined. In 1997, 
the USDA estimated that up to 96 billion pounds of food goes to waste 
each year in the United States at a cost of an estimated $1 billion in 
increased disposal fees paid by municipalities. This is food and fresh 
produce that is left unharvested or in storage bins, discarded by 
wholesales, restaurants, and grocery stores, or reduced by the 
manufacturing or transportation process. If a small percentage of this 
wasted food could be redirected to food banks, we could make important 
strides in our fight against hunger. I believe the enactment of this 
legislation would be a great incentive in redirecting this food from 
being discarded to being distributed to hungry families.
  The Good Samaritan Hunger Relief Tax Incentive Act would allow 
farmers and small business owners to take a deduction when they donate 
food to their community food bank. Currently this reduction is 
available to large corporations but not for small businesses. This 
approach would stimulate private charitable giving to food banks at the 
community level. Each citizen can make an important contribution to the 
fight against hunger at a local level. Over the years, I have had the 
opportunity to visit numerous Hoosier food banks, and have been 
especially impressed by the remarkable work of these organizations. In 
many cases, they are partnered with churches and faith-based 
organizations and are making a tremendous difference in our 
communities. We should support this private sector activity, which not 
only feeds people, but also strengthens community bonds and 
demonstrates the power of faith, charity, and civic involvement.
  Thank you, Mr. President. I yield the floor.
                                 ______
                                 
      By Mr. LAUTENBERG (for himself and Mr. DeWine):
  S. 95. A bill to amend titles 23 and 49, United States Code, 
concerning length and weight limitations for vehicles operating on 
Federal-aid highways, and for other purposes; to the Committee on 
Environment and Public Works.
  Mr. LAUTENBERG. Today, I am proud to introduce, along with my 
colleague Senator DeWine, legislation which will make our roads safer 
and last longer. Our bill, the ``Safe Highways and Infrastructure 
Preservation Act,'' will extend the current limited freeze of current 
truck size and weight limits set by states, which only applies to our 
44,000-mile Interstate Highway System, to the entire 156,000-mile 
National Highway System (NHS). This extension will make more roads 
safer and will further reduce the wear and tear of our highways and 
bridges.
  Fifteen years ago, I got a provision into the ISTEA highway 
reauthorization bill to ban triple-trailer trucks and other so-called 
``longer combination vehicles'' (LCVs) from New Jersey and most other 
States. At that time and ever since, the trucking industry has fought 
to defeat and repeal this ban, under the guise of arguments for 
``states' rights'' and ``unfair re-distribution of business to 
railroads.'' But these are not rational arguments for allowing larger 
and heavier trucks as well as triple-trailer trucks on our roads. 
Additionally, the trucking industry's proclaimed hardships have not 
materialized. In fact, the trucking companies have survived the current 
laws quite well, and trucks have refined their role in our national 
freight transportation system.
  Anyone who has ever shared the road with a large tractor-trailer 
truck has probably wondered whether the truck driver is aware of the 
smaller vehicles around the truck. Anyone who has seen the third 
trailer on a triple-trailer truck swinging around in a 'crack the whip' 
fashion probably knows that these trucks are to be avoided.
  Moving to the use of even larger trucks is not safe. The U.S. 
Department of Transportation has determined that multi-trailer trucks 
are likely to be involved in more fatal crashes--11 percent more than 
today's single-trailer trucks. By expanding the limits on triples and 
other longer combination vehicles to the entire NHS including more than 
2,000 miles of highway in New Jersey the Safe Highways and 
Infrastructure Protection Act will save lives and prevent further 
deterioration of our roads and bridges.
  The State of New Jersey sees its share of the nation's truck traffic. 
And

[[Page 477]]

we are concerned about recent projections that show the amount of 
traffic increasing considerably over the next 10 to 20 years. We are 
concerned about these 53-foot, 80,000-pound vehicles on our highways 
and the pressure from other states to increase weight and length 
limitations to allow larger trucks to come through our State. This 
makes truck safety even more important to New Jersey drivers.
  Triple-trailers and other LCVs do more damage to our roads and 
bridges but don't come close to paying associated maintenance and 
repair costs. Currently, some 37 percent of bridges in New Jersey are 
considered structurally deficient or functionally obsolete. Their 
average age is 42 years old. But the fees, tolls, and gasoline taxes 
paid by the operator of a 100,000-pound truck only covers 40 percent of 
the cost of the damage that truck does to our roads and bridges; 
taxpayers make up the difference. I believe that motorists should not 
have to share the road with these dangerous behemoths and pay for the 
extra damage they cause.
  In the 108th Congress, the Senate passed portions of this legislation 
in the highway reauthorization legislation package. I believe that if 
we act to pass this legislation, we can make a big difference in the 
lives of people who share our highways with large truck traffic.
  I thank my colleague Senator DeWine for once again joining me in 
sponsoring this important legislation, and I look forward to working 
with my colleagues in the Congress to improve highway safety and 
increase the remaining life of our country's roads and bridges.
  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.
  (The bill will be printed in a future edition of the Record.)
                                 ______
                                 
      By Mr. INHOFE:
  S. 96. A bill to target Federal funding for research and development, 
to amend section 1928 of the Social Security Act to encourage the 
production of influenza vaccines by eliminating the price cap 
applicable to the purchase of such vaccines under contracts entered 
into by the Secretary of Health and Human Services, to amend the 
Internal Revenue Code of 1986 to establish a tax credit to encourage 
vaccine production capacity, and for other purposes; to the Committee 
on Finance.
  Mr. INHOFE. Mr. President, I have long been dedicated to quality 
healthcare for my constituents in Oklahoma and across America. I 
supported the Medicare bill of 2003 to give a voluntary prescription 
drug benefit to seniors. I have championed the rural health care 
providers, who received some of the greatest benefits of the Medicare 
bill. In 1997, I was one of few Republican to vote against the Balanced 
Budget Act because of its lack of support for rural hospitals. Back 
then, I made a commitment to not allow our rural hospitals to be 
closed, and I am pleased we finally addressed that important issue in 
the Medicare legislation. I also co-sponsored S. 816, the Health Care 
Access and Rural Equity Act, to protect and preserve access of Medicare 
beneficiaries to health care in rural regions.
  I am a strong advocate of medical liability reform and am an original 
cosponsor of S. 11, the Patients First Act, to protect patients' access 
to quality and affordable health care by reducing the effects of 
excessive liability costs. There are solutions to alleviate the burden 
placed on physicians and patients by excessive medical malpractice 
lawsuits, and I am committed to this vital reform.
  I have also worked with officials from the Center for Medicare and 
Medicaid Services to expand access to life-saving Implantable Cardiac 
Defibril-
lators. I supported legislation to increase the supply of pancreatic 
islet cells for research and co-sponsored a bill to take the abortion 
pill RU-486 off the market in the United States.
  The Federal Government invests in improving hospitals and healthcare 
initiatives, and I have fought hard to ensure that Oklahoma gets its 
fair share. Specifically, over the past three years, I have helped to 
secure $5.2 million in funding for the Oklahoma Medical Research 
Foundation, the Oklahoma State Department of Health planning initiative 
for a rural telemedicine system, the INTEGRIS Healthcare System, the 
University of Oklahoma Health Sciences Center, the Oklahoma Center for 
the Advancement of Science and Technology, St. Anthony's Heart 
Hospital, the Hillcrest Healthcare System, and the Morton Health 
Center.
  Mr. President, the unexpected influenza (flu) vaccine shortage 
beginning last month highlights the need to encourage the production of 
flu vaccine in America. As you know, on October 5, 2004, Chiron, a 
California-based biotechnology company, notified U.S. health officials 
that its plant in Liverpool, England had been shut down due to vaccine 
contamination. Almost 50,000 doses of flu vaccine were thrown away, 
which created a severe shortage for Americans just as the flu season 
began.
  In light of the current shortage, I have examined why America found 
itself unable to accommodate the public demand for the flu vaccine. As 
we have seen, once a vaccine shortage strikes, a rapid response is 
difficult and often impossible. Thirty years ago, more than a dozen 
American companies were in the flu vaccine business. Today, only two 
companies make the vaccine for America, and only one is an America-
based company. This is no coincidence. High liability costs, tedious 
production, price caps, and the complicated United States tax code have 
kept the market bare.
  In October, President Bush signed the JOBS bill, which curbed the 
billion-dollar lawsuits that have crippled the flu vaccination 
industry. By adding flu vaccine to the list of vaccines protected by 
the National Vaccine Injury Compensation Program (VICP), a no-fault 
alternative must be used for resolving vaccine injury claims. I am 
encouraged with this progress, but more can be done to prevent a 
shortage in the future.
  The FY2005 Omnibus bill provides $100 million to the Department of 
Health and Human Services (HHS) to ensure a year-round flu vaccine 
production capacity and for the development of rapidly expandable flu 
vaccine production technologies. The Omnibus language also permits HHS 
to purchase flu vaccine with these funds, if deemed necessary. Such 
costly purchasing is a waste of federal dollars that could otherwise be 
used for research through the National Institutes of Health to develop 
faster and safer vaccine production technology. My bill strikes the 
language that allows government purchasing of the flu vaccine with 
these funds.
  Optimizing the flu vaccine production process is imperative. The 
ever-changing nature of the flu virus results in a complicated 
production process. The dominant strain of the flu virus mutates each 
year, requiring a different vaccine for every flu season. Because 
harvesting the flu vaccine currently takes at least six months and 
requires tens of thousands of fertilized eggs susceptible to 
contamination, this process must begin nearly a year before the flu 
season begins.
  Research should be focused on developing new technologies to allow us 
to produce more vaccine--in the same season--when we encounter a 
shortage. For example, a company in Connecticut is developing a flu 
vaccine relying on cell lines from silk moths. Reverse genetics 
technology also holds potential that researchers should explore. These 
types of innovative research promise to shave at least one month off of 
production time and significantly reduce cost.
  Rather than temporarily masking problems through wasted spending on 
vaccine surpluses, my bill would ensure that the federal government 
invests in lasting solutions to the challenges of flu vaccine 
production. The encouragement of safer and faster flu vaccine 
production technology is a prudent use of federal research dollars 
through the National Institutes of Health.
  To invest in these new technologies, flu vaccine manufacturers will 
have to renovate existing facilities or construct new ones. My bill 
gives a tax

[[Page 478]]

 credit to companies, new and old, to assist them in this important 
venture.
  Currently, ten American companies produce the forty-seven FDA-
approved vaccines. An investment tax credit will encourage these 
existing companies to expand their production to cover the flu vaccine 
and will invite start-up companies to join the industry. This will 
better equip the United States market to prevent and deal with a 
shortage in the future.
  Furthermore, my bill removes the suffocating price controls that have 
discouraged companies from producing the flu vaccine. The Vaccines For 
Children program (VFC), enacted under the Clinton Administration, 
imposed a price cap on all vaccines purchased through federal 
contracts. From a shortsighted perspective, these regulated prices may 
expand access to vaccines. However, in the long run this policy 
devastates the vaccine production industry and decreases the 
availability of vaccines. This occurred in 1998 when manufacturers of 
Tetanus Diphtheria vaccine refused to bid on government contracts. 
Consequently, this vaccine is no longer available to children through 
the VFC program.
  Similarly, the CDC purchased nearly 12 percent of the flu vaccine 
this season, and significant quantities were purchased through the 
Department of Defense, the Veteran's Administration, and Medicare. The 
price controls imposed from federal government purchasing create a 
high-risk, low-reward business market. Price controls destroy any 
profit incentive. Manufacturers avoid this artificial environment and 
will continue to as long as the government over steps its bounds.
  The harmful effect of government price controls is especially 
pronounced in the flu vaccine market because the vaccine has a single-
season shelf life. The difficulty of predicting the demand for vaccines 
each year exposes companies great risk. A slight drop in demand can 
force them out of the market. Financial losses--from seven million 
extra doses in 2002 and 4.5 million extra in 2003--compelled Wyeth 
Pharmaceutical Company to end its flu vaccine manufacturing.
  Scientific experts consider vaccination to be the most effective 
medical intervention, and we live in an age of unprecedented vaccine 
development and implementation. We cannot continue to over-regulate the 
flu vaccine industry and hope companies will hang on and produce 
vaccines regardless of profit. The current national flu vaccine 
shortage reveals the need to act.
  My bill would steer NIH research dollars towards cutting-edge 
technology, remove suffocating price controls, and free American 
companies to enter the flu vaccine industry with an investment tax 
credit. I urge my colleagues to stand with me in supporting this vital 
legislation.
                                 ______
                                 
      By Mr. TALENT:
  S. 102. A bill to provide grants to States to combat methamphetamine 
abuse; to the Committee on the Judiciary.
  Mr. TALENT. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 102

       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 ``Exile Meth Act''.

     SEC. 2. ESTABLISHMENT OF GRANT PROGRAM FOR COMBATING 
                   METHAMPHETAMINE REPEAT OFFENDERS.

       The Attorney General shall establish a program that 
     provides grants to qualified States for combating the problem 
     of methamphetamine abuse, with a specific focus on the 
     prosecution of repeat offenders.

     SEC. 3. DEFINITION.

       As used in this Act, the term ``qualified State'' means a 
     State that--
       (1) had more than 200 methamphetamine lab seizures in 2004, 
     as reported by the National Clandestine Laboratory Database; 
     and
       (2) has a law that provides that a person who possesses or 
     distributes 5 grams or more of methamphetamine, its salts, 
     isomers, or salts of its isomers, or 50 grams or more of a 
     mixture or substance containing a detectable amount of 
     methamphetamine, its salts, isomers, or salts of its isomers, 
     qualifies for a mandatory minimum sentence, without the 
     possibility of probation or parole, of 5 to 40 years for a 
     first offense, 10 years to life for a second offense, and 
     life for a third offense.

     SEC. 4. DISTRIBUTION OF GRANT AMOUNTS.

       The Attorney General shall distribute grants authorized 
     under this Act to 2 States.

     SEC. 5. ADMINISTRATION.

       The Attorney General shall prescribe requirements, 
     including application requirements, for grants under the 
     program established under this Act.

     SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There are authorized to be appropriated 
     $10,000,000 for each of the fiscal years 2006 and 2007 to 
     carry out this Act.
       (b) Availability.--Amounts appropriated pursuant to the 
     authorization of appropriations in subsection (a) shall 
     remain available until expended.
                                  ____




      By Mr. TALENT (for himself, Mrs. Feinstein, Mr. Bayh, Mr. Nelson 
        of Nebraska, Mr. Dayton, Mr. Wyden, Mr. Salazar, Mr. Hagel, Mr. 
        Harkin, Mr. Smith, Mr. Coleman, and Mr. Grassley):
  S. 103. A bill to respond to the illegal production, distribution, 
and use of methamphetamine in the United States, and for other 
purposes; to the Committee on the Judiciary.
  Mr. TALENT. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill were ordered to be printed in the 
Record, as follows:

                                 S. 103

       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 ``Combat Meth Act of 2005''.

                          TITLE I--ENFORCEMENT

     SEC. 101. AUTHORIZATION OF APPROPRIATIONS RELATING TO COPS 
                   GRANTS.

       (a) In General.--In addition to any other funds authorized 
     to be appropriated for fiscal year 2006 for grants under part 
     Q of title I of the Omnibus Crime Control and Safe Streets 
     Act of 1968 (42 U.S.C. 3796dd et seq.), commonly known as the 
     COPS program, there are authorized to be appropriated 
     $15,000,000 for such purpose to provide training to State and 
     local prosecutors and law enforcement agents for the 
     investigation and prosecution of methamphetamine offenses.
       (b) Rural Set-Aside.--Of amounts made available under 
     subsection (a), $3,000,000 shall be available only for 
     prosecutors and law enforcement agents for rural communities.

     SEC. 102. EXPANSION OF METHAMPHETAMINE HOT SPOTS PROGRAM TO 
                   INCLUDE PERSONNEL AND EQUIPMENT FOR 
                   ENFORCEMENT, PROSECUTION, AND CLEANUP.

       Section 1701(d) of the Omnibus Crime Control and Safe 
     Streets Act of 1968 (42 U.S.C. 3796dd(d)) is amended--
       (1) in paragraph (11) by striking ``and'' at the end;
       (2) in paragraph (12) by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(13) hire personnel and purchase equipment to assist in 
     the enforcement and prosecution of methamphetamine offenses 
     and the cleanup of methamphetamine-affected areas.''.

     SEC. 103. SPECIAL UNITED STATES ATTORNEYS' PROGRAM.

       (a) In General.--The Attorney General shall allocate any 
     amounts appropriated pursuant to the authorization under 
     subsection (c) for the hiring and training of special 
     assistant United States attorneys.
       (b) Use of Funds.--The funds allocated under subsection (a) 
     shall be used to--
       (1) train local prosecutors in techniques used to prosecute 
     methamphetamine cases, including the presentation of evidence 
     related to the manufacture of methamphetamine;
       (2) train local prosecutors in Federal and State laws 
     involving methamphetamine manufacture or distribution;
       (3) cross-designate local prosecutors as special assistant 
     United States attorneys; and
       (4) hire additional local prosecutors who--
       (A) with the approval of the United States attorney, shall 
     be cross-designated to prosecute both Federal and State 
     methamphetamine cases;
       (B) shall be assigned a caseload, whether in State court or 
     Federal court, that gives the highest priority to cases in 
     which--
       (i) charges related to methamphetamine manufacture or 
     distribution are submitted by law enforcement for 
     consideration; and
       (ii) the defendant has been previously convicted of a crime 
     related to methamphetamine manufacture or distribution.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated $5,000,000 for each of the fiscal years 
     2006 and 2007 to carry out the provisions of this section.

[[Page 479]]



     SEC. 104. PSEUDOEPHEDRINE AMENDMENTS TO CONTROLLED SUBSTANCES 
                   ACT.

       (a) Addition of Pseudoephedrine to Schedule V.--Section 202 
     of the Controlled Substances Act (21 U.S.C. 812) is amended 
     by adding at the end the following:
       ``(6) Any detectable quantity of pseudoephedrine, its salts 
     or optical isomers, or salts of optical isomers.''.
       (b) Prescriptions.--Section 309(c) of the Controlled 
     Substances Act (21 U.S.C. 829(c)) is amended--
       (1) by inserting ``(1)'' before ``No controlled 
     substance''; and
       (2) by adding at the end the following:
       ``(2) If the substance described in paragraph (6) of 
     Schedule V of section 202 is dispensed, sold, or distributed 
     in a pharmacy--
       ``(A) the substance shall be dispensed, sold, or 
     distributed only by a licensed pharmacist or a licensed 
     pharmacy technician; and
       ``(B) any person purchasing, receiving, or otherwise 
     acquiring any such substance shall--
       ``(i) produce a photo identification showing the date of 
     birth of such person; and
       ``(ii) sign a written log or receipt showing--
       ``(I) the date of the transaction;
       ``(II) the name of the person; and
       ``(III) the name and the amount of the substance purchased, 
     received, or otherwise acquired.
       ``(3)(A) No person shall purchase, receive, or otherwise 
     acquire more than 9 grams of the substance described in 
     paragraph (6) of Schedule V of section 202 within any 30-day 
     period.
       ``(B) The limit described in subparagraph (A) shall not 
     apply to any quantity of such substance dispensed under a 
     valid prescription.
       ``(4)(A) The Director of the Federal Drug Administration, 
     by rule, may exempt a product from Schedule V of section 202 
     if the Director determines that the produce is not used in 
     the illegal manufacture of methamphetamine or other 
     controlled dangerous substance.
       ``(B) The Director of the Federal Drug Administration, upon 
     the application of a manufacturer of a drug product, may 
     exempt the product from Schedule V of section 202 if the 
     Director determines that the product has been formulated in 
     such a way as to effectively prevent the conversion of the 
     active ingredient into methamphetamine.
       ``(C) The Director of the Federal Drug Administration, by 
     rule, may authorize the sale of the substance described in 
     paragraph (6) of Schedule V of section 202 by persons other 
     than licensed pharmacists or licensed pharmacy technicians 
     if--
       ``(i) the Director finds evidence that the absence of a 
     pharmacy creates a hardship for a community; and
       ``(ii) the authorized personnel follow the procedure set 
     forth in this Act''.

             TITLE II--EDUCATION, PREVENTION, AND TREATMENT

     SEC. 201. GRANTS FOR SERVICES FOR CHILDREN OF SUBSTANCE 
                   ABUSERS.

       Section 519 of the Public Health Service Act (42 U.S.C. 
     290bb-25) is amended--
       (1) in subsection (b), by inserting after paragraph (8) the 
     following:
       ``(9) Development of drug endangered children rapid 
     response teams that will intervene on behalf of children 
     exposed to methamphetamine as a result of residing or being 
     present in a home-based clandestine drug laboratory.''; and
       (2) in subsection (o)--
       (A) by striking ``For the purpose'' and inserting the 
     following:
       ``(1) In general.--For the purpose''; and
       (B) by adding at the end the following:
       ``(2) Drug endangered children rapid response teams.--There 
     are authorized to be appropriated $2,500,000 for each of the 
     fiscal years 2006 and 2007 to carry out the provisions of 
     subsection (b)(9).''.

     SEC. 202. LOCAL GRANTS FOR TREATMENT OF METHAMPHETAMINE ABUSE 
                   AND RELATED CONDITIONS.

       Subpart 1 of part B of title V of the Public Health Service 
     Act (42 U.S.C. 290bb et seq.) is amended--
       (1) by redesignating the section 514 that relates to 
     methamphetamine and appears after section 514A as section 
     514B;
       (2) in section 514B, as redesignated--
       (A) by amending subsection (a)(1) to read as follows:
       ``(1) Grants authorized.--The Secretary may award grants to 
     States, political subdivisions of States, American Indian 
     Tribes, and private, nonprofit entities to provide treatment 
     for methamphetamine abuse.'';
       (B) by amending subsection (b) to read as follows:
       ``(b) Priority for Rural Areas.--In awarding grants under 
     subsection (a), the Secretary shall give priority to entities 
     that will serve rural areas experiencing an increase in 
     methamphetamine abuse.''; and
       (C) in subsection (d)(1), by striking ``2000'' and all that 
     follows and inserting ``2005 and such sums as may be 
     necessary for each of fiscal years 2006 through 2009''; and
       (3) by inserting after section 514B, as redesignated, the 
     following:

     ``SEC. 514C. METHAMPHETAMINE RESEARCH, TRAINING, AND 
                   TECHNICAL ASSISTANCE CENTER.

       ``(a) Program Authorized.--The Secretary, acting through 
     the Administrator, and in consultation with the Director of 
     the National Institutes of Health, shall award grants to, or 
     enter into contracts with, public or private, nonprofit 
     entities to establish a research, training, and technical 
     assistance center to carry out the activities described in 
     subsection (d).
       ``(b) Application.--A public or private, nonprofit entity 
     seeking a grant or contract under subsection (a) shall submit 
     an application to the Secretary at such time, in such manner, 
     and containing such information as the Secretary may require.
       ``(c) Condition.--In awarding grants or entering into 
     contracts under subsection (a), the Secretary shall ensure 
     that not less than 1 of the centers will focus on 
     methamphetamine abuse in rural areas.
       ``(d) Authorized Activities.--Each center established under 
     this section shall--
       ``(1) engage in research and evaluation of the 
     effectiveness of treatment modalities for the treatment of 
     methamphetamine abuse;
       ``(2) disseminate information to public and private 
     entities on effective treatments for methamphetamine abuse;
       ``(3) provide direct technical assistance to States, 
     political subdivisions of States, and private entities on how 
     to improve the treatment of methamphetamine abuse; and
       ``(4) provide training on the effects of methamphetamine 
     use and on effective ways of treating methamphetamine abuse 
     to substance abuse treatment professionals and community 
     leaders.
       ``(e) Reports.--Each grantee or contractor under this 
     section shall annually submit a report to the Administrator 
     that contains--
       ``(1) a description of the previous year's activities of 
     the center established under this section;
       ``(2) effective treatment modalities undertaken by the 
     center; and
       ``(3) evidence to demonstrate that such treatment 
     modalities were successful.
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $3,000,000 for fiscal year 2006 and such sums as may be 
     necessary for each of fiscal years 2007 and 2008.''.

     SEC. 203. METHAMPHETAMINE PRECURSOR MONITORING GRANTS.

       (a) Grants Authorized.--The Attorney General, acting 
     through the Bureau of Justice Assistance, may award grants to 
     States to establish methamphetamine precursor monitoring 
     programs.
       (b) Purpose.--The purpose of the grant program established 
     under this section is to--
       (1) prevent the sale of methamphetamine precursors, such as 
     pseudoephedrine, to individuals in quantities so large that 
     the only reasonable purpose of the purchase would be to 
     manufacture methamphetamine;
       (2) educate businesses that legally sell methamphetamine 
     precursors of the need to balance the legitimate need for 
     lawful access to medication with the risk that those 
     substances may be used to manufacture methamphetamine; and
       (3) recalibrate existing prescription drug monitoring 
     programs designed to track the sale of controlled substances 
     to also track the sale of pseudoephedrine in any amount 
     greater than 6 grams.
       (c) Use of Grant Funds.--Grant funds awarded to States 
     under this section may be used to--
       (1) implement a methamphetamine precursor monitoring 
     program, including hiring personnel and purchasing computer 
     hardware and software designed to monitor methamphetamine 
     precursor purchases;
       (2) expand existing methamphetamine precursor or 
     prescription drug monitoring programs to accomplish the 
     purposes described in subsection (b);
       (3) pay for training and technical assistance for law 
     enforcement personnel and employees of businesses that 
     lawfully sell substances, which may be used as 
     methamphetamine precursors;
       (4) improve information sharing between adjacent States 
     through enhanced connectivity; or
       (5) make grants to subdivisions of the State to implement 
     methamphetamine precursor monitoring programs.
       (d) Application.--Any State seeking a grant under this 
     section shall submit an application to the Attorney General 
     at such time, in such manner, and containing such information 
     as the Attorney General may require.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated $5,000,000 for each of the fiscal years 
     2006 and 2007 to carry out the provisions of this section.
                                 ______
                                 
      By Mr. TALENT (for himself, Mr. Wyden, Mr. Coleman, and Mr. 
        Corzine):
  S. 104. A bill to amend the Internal Revenue Code of 1986 to provide 
tax-exempt financing of highway projects and rail-truck transfer 
facilities; to the Committee on Finance.
  Mr. TALENT. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

[[Page 480]]



                                 S. 104

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

     SECTION 1. TAX-EXEMPT FINANCING OF HIGHWAY PROJECTS AND RAIL-
                   TRUCK TRANSFER FACILITIES.

       (a) Treatment as Exempt Facility Bond.--Subsection (a) of 
     section 142 of the Internal Revenue Code of 1986 (relating to 
     exempt facility bond) is amended by striking ``or'' at the 
     end of paragraph (13), by striking the period at the end of 
     paragraph (14), and by adding at the end the following:
       ``(15) qualified highway facilities, or
       ``(16) qualified surface freight transfer facilities.''.
       (b) Qualified Highway Facilities and Qualified Surface 
     Freight Transfer Facilities.--Section 142 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following:
       ``(m) Qualified Highway and Surface Freight Transfer 
     Facilities.--
       ``(1) Qualified highway facilities.--For purposes of 
     subsection (a)(15), the term `qualified highway facilities' 
     means--
       ``(A) any surface transportation project which receives 
     Federal assistance under title 23, United States Code (as in 
     effect on the date of the enactment of this subsection), or
       ``(B) any project for an international bridge or tunnel for 
     which an international entity authorized under Federal or 
     State law is responsible and which receives Federal 
     assistance under such title 23.
       ``(2) Qualified surface freight transfer facilities.--For 
     purposes of subsection (a)(16), the term `qualified surface 
     freight transfer facilities' means facilities for the 
     transfer of freight from truck to rail or rail to truck 
     (including any temporary storage facilities directly related 
     to such transfers) which receives Federal assistance under 
     either title 23 or title 49, United States Code (as in effect 
     on the date of the enactment of this subsection).
       ``(3) Aggregate face amount of tax-exempt financing for 
     facilities.--
       ``(A) In general.--An issue shall not be treated as an 
     issue described in subsection (a)(15) or (a)(16) if the 
     aggregate face amount of bonds issued by any State pursuant 
     thereto (when added to the aggregate face amount of bonds 
     previously so issued) exceeds $15,000,000,000.
       ``(B) Allocation by secretary of transportation.--The 
     Secretary of Transportation shall allocate the amount 
     described in subparagraph (A) among eligible projects 
     described in subsections (a)(15) and (a)(16) in such manner 
     as the Secretary determines appropriate.''.
       (c) Exemption From General State Volume Caps.--Paragraph 
     (3) of section 146(g) of the Internal Revenue Code of 1986 
     (relating to exception for certain bonds) is amended by 
     striking ``or (14)'' and all that follows through the end of 
     the paragraph and inserting ``(14), (15), or (16) of section 
     142(a), and''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.
                                 ______
                                 
      By Mr. TALENT (for himself, Mr. Sessions, and Mr. DeMint):
  S. 105. A bill to reauthorize and improve the program of block grants 
to States for temporary assistance for needy families, improve access 
to quality child care, and for other purposes; to the Committee on 
Finance.
  Mr. TALENT. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 105

       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 ``Personal Responsibility, 
     Work, and Family Promotion Act of 2005''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. References.
Sec. 4. Findings.

                             TITLE I--TANF

Sec. 101. Purposes.
Sec. 102. Family assistance grants.
Sec. 103. Promotion of family formation and healthy marriage.
Sec. 104. Supplemental grant for population increases in certain 
              States.
Sec. 105. Bonus to reward employment achievement.
Sec. 106. Contingency fund.
Sec. 107. Use of funds.
Sec. 108. Repeal of Federal loan for State welfare programs.
Sec. 109. Universal engagement and family self-sufficiency plan 
              requirements.
Sec. 110. Work participation requirements.
Sec. 111. Maintenance of effort.
Sec. 112. Performance improvement.
Sec. 113. Data collection and reporting.
Sec. 114. Direct funding and administration by Indian tribes.
Sec. 115. Research, evaluations, and national studies.
Sec. 116. Studies by the Census Bureau and the Government 
              Accountability Office.
Sec. 117. Definition of assistance.
Sec. 118. Technical corrections.
Sec. 119. Fatherhood program.
Sec. 120. State option to make TANF programs mandatory partners with 
              one-stop employment training centers.
Sec. 121. Sense of the Congress.
Sec. 122. Extension through fiscal year 2005.

                          TITLE II--CHILD CARE

Sec. 201. Short title.
Sec. 202. Goals.
Sec. 203. Authorization of appropriations.
Sec. 204. Application and plan.
Sec. 205. Activities to improve the quality of child care.
Sec. 206. Report by Secretary.
Sec. 207. Definitions.
Sec. 208. Entitlement funding.

                        TITLE III--CHILD SUPPORT

Sec. 301. Federal matching funds for limited pass through of child 
              support payments to families receiving TANF.
Sec. 302. State option to pass through all child support payments to 
              families that formerly received TANF.
Sec. 303. Mandatory review and adjustment of child support orders for 
              families receiving TANF.
Sec. 304. Mandatory fee for successful child support collection for 
              family that has never received TANF.
Sec. 305. Report on undistributed child support payments.
Sec. 306. Decrease in amount of child support arrearage triggering 
              passport denial.
Sec. 307. Use of tax refund intercept program to collect past-due child 
              support on behalf of children who are not minors.
Sec. 308. Garnishment of compensation paid to veterans for service-
              connected disabilities in order to enforce child support 
              obligations.
Sec. 309. Improving Federal debt collection practices.
Sec. 310. Maintenance of technical assistance funding.
Sec. 311. Maintenance of Federal Parent Locator Service funding.

                        TITLE IV--CHILD WELFARE

Sec. 401. Extension of authority to approve demonstration projects.
Sec. 402. Elimination of limitation on number of waivers.
Sec. 403. Elimination of limitation on number of States that may be 
              granted waivers to conduct demonstration projects on same 
              topic.
Sec. 404. Elimination of limitation on number of waivers that may be 
              granted to a single State for demonstration projects.
Sec. 405. Streamlined process for consideration of amendments to and 
              extensions of demonstration projects requiring waivers.
Sec. 406. Availability of reports.
Sec. 407. Technical correction.

                 TITLE V--SUPPLEMENTAL SECURITY INCOME

Sec. 501. Review of State agency blindness and disability 
              determinations.

                 TITLE VI--STATE AND LOCAL FLEXIBILITY

Sec. 601. Program coordination demonstration projects.
Sec. 602. State food assistance block grant demonstration project.

                    TITLE VII--ABSTINENCE EDUCATION

Sec. 701. Extension of abstinence education program.

              TITLE VIII--TRANSITIONAL MEDICAL ASSISTANCE

Sec. 801. Extension of medicaid transitional medical assistance program 
              through fiscal year 2006.
Sec. 802. Adjustment to payments for medicaid administrative costs to 
              prevent duplicative payments and to fund extension of 
              transitional medical assistance.

                        TITLE IX--EFFECTIVE DATE

Sec. 901. Effective date.

     SEC. 3. REFERENCES.

       Except as otherwise expressly provided, wherever in this 
     Act an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     amendment or repeal shall be considered to be made to a 
     section or other provision of the Social Security Act.

     SEC. 4. FINDINGS.

       The Congress makes the following findings:
       (1) The Temporary Assistance for Needy Families (TANF) 
     Program established by the Personal Responsibility and Work 
     Opportunity Reconciliation Act of 1996 (Public Law 104-193) 
     has succeeded in moving families from welfare to work and 
     reducing child poverty.

[[Page 481]]

       (A) There has been a dramatic increase in the employment of 
     current and former welfare recipients. The percentage of 
     working recipients reached an all-time high in fiscal year 
     1999 and continued steady in fiscal years 2000 and 2001. In 
     fiscal year 2003, 31.3 percent of adult recipients were 
     counted as meeting the work participation requirements. All 
     States but one met the overall participation rate standard in 
     fiscal year 2003, as did the District of Columbia and Puerto 
     Rico.
       (B) Earnings for welfare recipients remaining on the rolls 
     have also increased significantly, as have earnings for 
     female-headed households. The increases have been 
     particularly large for the bottom 2 income quintiles, that 
     is, those women who are most likely to be former or present 
     welfare recipients.
       (C) Welfare dependency has plummeted. As of June 2004, 
     1,969,909 families and 4,727,291 individuals were receiving 
     assistance. Accordingly, the number of families in the 
     welfare caseload and the number of individuals receiving cash 
     assistance declined 55 percent and 61 percent, respectively, 
     since the enactment of TANF.
       (D) The child poverty rate continued to decline between 
     1996 and 2003, falling 14 percent from 20.5 to 17.6 percent. 
     Child poverty rates for African-American and Hispanic 
     children have also fallen dramatically during the past 7 
     years.
       (2) As a Nation, we have made substantial progress in 
     reducing teen pregnancies and births, slowing increases in 
     nonmarital childbearing, and improving child support 
     collections and paternity establishment.
       (A) The birth rate to teenagers declined 30 percent from 
     its high in 1991 to 2002. The 2002 teenage birth rate of 43.0 
     per 1,000 women aged 15-19 is the lowest recorded birth rate 
     for teenagers.
       (B) During the period from 1991 through 2001, teenage birth 
     rates fell in all States and the District of Columbia, Puerto 
     Rico, Guam, and the Virgin Islands. Declines also have 
     spanned age, racial, and ethnic groups. There has been 
     success in lowering the birth rate for both younger and older 
     teens. The birth rate for those 15-17 years of age has 
     declined 40 percent since 1991, and the rate for those 18 and 
     19 has declined 23 percent. The rate for African American 
     teens--until recently the highest--has declined the most--42 
     percent from 1991 through 2002.
       (C) Since the enactment of the Personal Responsibility and 
     Work Opportunity Reconciliation Act of 1996, child support 
     collections within the child support enforcement system have 
     grown every year, increasing from $12,000,000,000 in fiscal 
     year 1996 to over $21,000,000,000 in fiscal year 2003. The 
     number of paternities established or acknowledged in fiscal 
     year 2003 (over 1,500,000) includes a more than 100 percent 
     increase through in-hospital acknowledgement programs--
     862,043 in 2003 compared to 324,652 in 1996. Child support 
     collections were made in nearly 8,000,000 cases in fiscal 
     year 2003, significantly more than the almost 4,000,000 cases 
     having a collection in 1996.
       (3) The Personal Responsibility and Work Opportunity 
     Reconciliation Act of 1996 gave States great flexibility in 
     the use of Federal funds to develop innovative programs to 
     help families leave welfare and begin employment and to 
     encourage the formation of 2-parent families.
       (A) Total Federal and State TANF expenditures in fiscal 
     year 2003 were $26,300,000,000, up from $25,400,000,000 in 
     fiscal year 2002 and $22,600,000,000 in fiscal year 1999. 
     This increased spending is attributable to significant new 
     investments in supportive services in the TANF program, such 
     as child care and activities to support work.
       (B) Since the welfare reform effort began there has been a 
     dramatic increase in work participation (including 
     employment, community service, and work experience) among 
     welfare recipients, as well as an unprecedented reduction in 
     the caseload because recipients have left welfare for work.
       (C) States are making policy choices and investment 
     decisions best suited to the needs of their citizens.
       (i) To expand aid to working families, almost all States 
     disregard a portion of a family's earned income when 
     determining benefit levels.
       (ii) Most States increased the limits on countable assets 
     above the former Aid to Families with Dependent Children 
     (AFDC) program. Every State has increased the vehicle asset 
     level above the prior AFDC limit for a family's primary 
     automobile.
       (iii) States are experimenting with programs to promote 
     marriage and paternal involvement. Over half of the States 
     have eliminated restrictions on 2-parent families. Many 
     States use TANF, child support, or State funds to support 
     community-based activities to help fathers become more 
     involved in their children's lives or strengthen 
     relationships between mothers and fathers.
       (4) However, despite this success, there is still progress 
     to be made. Policies that support and promote more work, 
     strengthen families, and enhance State flexibility are 
     necessary to continue to build on the success of welfare 
     reform.
       (A) Significant numbers of welfare recipients still are not 
     engaged in employment-related activities. While all States 
     have met the overall work participation rates required by 
     law, in an average month, only 41 percent of all families 
     with an adult participated in work activities that were 
     countable toward the State's participation rate. In fiscal 
     year 2003, four jurisdictions failed to meet the more 
     rigorous 2-parent work requirements, and 25 jurisdictions 
     (States and territories) are not subject to the 2-parent 
     requirements, most because they moved their 2-parent cases to 
     separate State programs where they are not subject to a 
     penalty for failing the 2-parent rates.
       (B) In 2002, 34 percent of all births in the U.S. were to 
     unmarried women. And, with fewer teens entering marriage, the 
     proportion of births to unmarried teens has increased 
     dramatically (80 percent in 2002 versus 30 percent in 1970). 
     The negative consequences of out-of-wedlock birth on the 
     mother, the child, the family, and society are well 
     documented. These include increased likelihood of welfare 
     dependency, increased risks of low birth weight, poor 
     cognitive development, child abuse and neglect, and teen 
     parenthood, and decreased likelihood of having an intact 
     marriage during adulthood.
       (C) There has been a dramatic rise in cohabitation as 
     marriages have declined. It is estimated that 40 percent of 
     children are expected to live in a cohabiting-parent family 
     at some point during their childhood. Children in single-
     parent households and cohabiting-parent households are at 
     much higher risk of child abuse than children in intact 
     married families.
       (D) Children who live apart from their biological fathers, 
     on average, are more likely to be poor, experience 
     educational, health, emotional, and psychological problems, 
     be victims of child abuse, engage in criminal behavior, and 
     become involved with the juvenile justice system than their 
     peers who live with their married, biological mother and 
     father. A child living with a single mother is nearly 5 times 
     as likely to be poor as a child living in a married-couple 
     family. In 2003, in married-couple families, the child 
     poverty rate was 8.6 percent, and in households headed by a 
     single mother the poverty rate was 41.7 percent.
       (5) Therefore, it is the sense of the Congress that 
     increasing success in moving families from welfare to work, 
     as well as in promoting healthy marriage and other means of 
     improving child well-being, are very important Government 
     interests and the policy contained in part A of title IV of 
     the Social Security Act (as amended by this Act) is intended 
     to serve those ends.

                             TITLE I--TANF

     SEC. 101. PURPOSES.

       Section 401(a) (42 U.S.C. 601(a)) is amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``increase'' and inserting ``improve child well-being by 
     increasing'';
       (2) in paragraph (1), by inserting ``and services'' after 
     ``assistance'';
       (3) in paragraph (2), by striking ``parents on government 
     benefits'' and inserting ``families on government benefits 
     and reduce poverty''; and
       (4) in paragraph (4), by striking ``two-parent families'' 
     and inserting ``healthy, 2-parent married families, and 
     encourage responsible fatherhood''.

     SEC. 102. FAMILY ASSISTANCE GRANTS.

       (a) Extension of Authority.--Section 403(a)(1)(A) (42 
     U.S.C. 603(a)(1)(A)) is amended--
       (1) by striking ``1996, 1997, 1998, 1999, 2000, 2001, 2002, 
     and 2003'' and inserting ``2006 through 2010''; and
       (2) by inserting ``payable to the State for the fiscal 
     year'' before the period.
       (b) State Family Assistance Grant.--Section 403(a)(1)(C) 
     (42 U.S.C. 603(a)(1)(C)) is amended by striking ``fiscal year 
     2003'' and inserting ``each of fiscal years 2006 through 
     2010''.
       (c) Matching Grants for the Territories.--Section 
     1108(b)(2) (42 U.S.C. 1308(b)(2)) is amended by striking 
     ``1997 through 2003'' and inserting ``2006 through 2010''.

     SEC. 103. PROMOTION OF FAMILY FORMATION AND HEALTHY MARRIAGE.

       (a) State Plans.--Section 402(a)(1)(A) (42 U.S.C. 
     602(a)(1)(A)) is amended by adding at the end the following:
       ``(vii) Encourage equitable treatment of married, 2-parent 
     families under the program referred to in clause (i).''.
       (b) Healthy Marriage Promotion Grants; Repeal of Bonus for 
     Reduction of Illegitimacy Ratio.--
       (1) In general.--Section 403(a)(2) (42 U.S.C. 603(a)(2)) is 
     amended to read as follows:
       ``(2) Healthy marriage promotion grants.--
       ``(A) Authority.--The Secretary shall award competitive 
     grants to States, territories, and tribal organizations for 
     not more than 50 percent of the cost of developing and 
     implementing innovative programs to promote and support 
     healthy, married, 2-parent families.
       ``(B) Healthy marriage promotion activities.--Funds 
     provided under subparagraph (A) shall be used to support any 
     of the following programs or activities:
       ``(i) Public advertising campaigns on the value of marriage 
     and the skills needed to increase marital stability and 
     health.

[[Page 482]]

       ``(ii) Education in high schools on the value of marriage, 
     relationship skills, and budgeting.
       ``(iii) Marriage education, marriage skills, and 
     relationship skills programs, that may include parenting 
     skills, financial management, conflict resolution, and job 
     and career advancement, for non-married pregnant women and 
     non-married expectant fathers.
       ``(iv) Pre-marital education and marriage skills training 
     for engaged couples and for couples or individuals interested 
     in marriage.
       ``(v) Marriage enhancement and marriage skills training 
     programs for married couples.
       ``(vi) Divorce reduction programs that teach relationship 
     skills.
       ``(vii) Marriage mentoring programs which use married 
     couples as role models and mentors in at-risk communities.
       ``(viii) Programs to reduce the disincentives to marriage 
     in means-tested aid programs, if offered in conjunction with 
     any activity described in this subparagraph.
       ``(C) Appropriation.--
       ``(i) In general.--Out of any money in the Treasury of the 
     United States not otherwise appropriated, there are 
     appropriated for each of fiscal years 2005 through 2010 
     $100,000,000 for grants under this paragraph.
       ``(ii) Extended availability of fy2005 funds.--Funds 
     appropriated under clause (i) for fiscal year 2005 shall 
     remain available to the Secretary through fiscal year 2006, 
     for grants under this paragraph for fiscal year 2005.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the date of the enactment of this Act.
       (c) Counting of Spending on Non-Eligible Families To 
     Prevent and Reduce Incidence of Out-Of-Wedlock Births, 
     Encourage Formation and Maintenance of Healthy, 2-Parent 
     Married Families, or Encourage Responsible Fatherhood.--
     Section 409(a)(7)(B)(i) (42 U.S.C. 609(a)(7)(B)(i)) is 
     amended by adding at the end the following:

       ``(V) Counting of spending on non-eligible families to 
     prevent and reduce incidence of out-of-wedlock births, 
     encourage formation and maintenance of healthy, 2-parent 
     married families, or encourage responsible fatherhood.--The 
     term `qualified State expenditures' includes the total 
     expenditures by the State during the fiscal year under all 
     State programs for a purpose described in paragraph (3) or 
     (4) of section 401(a).''.

     SEC. 104. SUPPLEMENTAL GRANT FOR POPULATION INCREASES IN 
                   CERTAIN STATES.

       Section 403(a)(3) (42 U.S.C. 603(a)(3)) is amended--
       (1) in subparagraph (E)--
       (A) by striking ``1998, 1999, 2000, and 2001'' and 
     inserting ``2006 through 2009''; and
       (B) by striking ``, in a total amount not to exceed 
     $800,000,000'';
       (2) in subparagraph (G), by striking ``2001'' and inserting 
     ``2009''; and
       (3) by striking subparagraph (H) and inserting the 
     following:
       ``(H) Further preservation of grant amounts.--A State that 
     was a qualifying State under this paragraph for fiscal year 
     2004 or any prior fiscal year shall be entitled to receive 
     from the Secretary for each of fiscal years 2006 through 2009 
     a grant in an amount equal to the amount required to be paid 
     to the State under this paragraph for the most recent fiscal 
     year for which the State was a qualifying State.''.

     SEC. 105. BONUS TO REWARD EMPLOYMENT ACHIEVEMENT.

       (a) In General.--Section 403(a)(4) (42 U.S.C. 603(a)(4)) is 
     amended--
       (1) in the paragraph heading, by striking ``high 
     performance states'' and inserting ``employment 
     achievement''; and
       (2) by striking subparagraphs (A) through (F) and inserting 
     the following:
       ``(A) In general.--The Secretary shall make a grant 
     pursuant to this paragraph to each State for each bonus year 
     for which the State is an employment achievement State.
       ``(B) Amount of grant.--
       ``(i) In general.--Subject to clause (ii) of this 
     subparagraph, the Secretary shall determine the amount of the 
     grant payable under this paragraph to an employment 
     achievement State for a bonus year, which shall be based on 
     the performance of the State as determined under subparagraph 
     (D)(i) for the fiscal year that immediately precedes the 
     bonus year.
       ``(ii) Limitation.--The amount payable to a State under 
     this paragraph for a bonus year shall not exceed 5 percent of 
     the State family assistance grant.
       ``(C) Formula for measuring state performance.--
       ``(i) In general.--Subject to clause (ii), not later than 
     October 1, 2006, the Secretary, in consultation with the 
     States, shall develop a formula for measuring State 
     performance in operating the State program funded under this 
     part so as to achieve the goals of employment entry, job 
     retention, and increased earnings from employment for 
     families receiving assistance under the program, as measured 
     on an absolute basis and on the basis of improvement in State 
     performance.
       ``(ii) Special rule for bonus year 2006.--For the purposes 
     of awarding a bonus under this paragraph for bonus year 2006, 
     the Secretary may measure the performance of a State in 
     fiscal year 2005 using the job entry rate, job retention 
     rate, and earnings gain rate components of the formula 
     developed under section 403(a)(4)(C) as in effect immediately 
     before the effective date of this paragraph.
       ``(D) Determination of state performance.--For each bonus 
     year, the Secretary shall--
       ``(i) use the formula developed under subparagraph (C) to 
     determine the performance of each eligible State for the 
     fiscal year that precedes the bonus year; and
       ``(ii) prescribe performance standards in such a manner so 
     as to ensure that--

       ``(I) the average annual total amount of grants to be made 
     under this paragraph for each bonus year equals $100,000,000; 
     and
       ``(II) the total amount of grants to be made under this 
     paragraph for all bonus years equals $600,000,000.

       ``(E) Definitions.--In this paragraph:
       ``(i) Bonus year.--The term `bonus year' means each of 
     fiscal years 2006 through 2011.
       ``(ii) Employment achievement state.--The term `employment 
     achievement State' means, with respect to a bonus year, an 
     eligible State whose performance determined pursuant to 
     subparagraph (D)(i) for the fiscal year preceding the bonus 
     year equals or exceeds the performance standards prescribed 
     under subparagraph (D)(ii) for such preceding fiscal year.
       ``(F) Appropriation.--
       ``(i) In general.--Out of any money in the Treasury of the 
     United States not otherwise appropriated, there are 
     appropriated for fiscal years 2006 through 2011 $600,000,000 
     for grants under this paragraph.
       ``(ii) Extended availability of prior appropriation.--
     Amounts appropriated under section 403(a)(4)(F) of the Social 
     Security Act (as in effect before the date of the enactment 
     of this clause) that have not been expended as of such date 
     of enactment shall remain available through fiscal year 2006 
     for grants under section 403(a)(4) of such Act (as in effect 
     before such date of enactment) for bonus year 2005.[needed?]
       ``(G) Grants for tribal organizations.--This paragraph 
     shall apply with respect to tribal organizations in the same 
     manner in which this paragraph applies with respect to 
     States. In determining the criteria under which to make 
     grants to tribal organizations under this paragraph, the 
     Secretary shall consult with tribal organizations.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on the date of the enactment of this Act.

     SEC. 106. CONTINGENCY FUND.

       (a) Deposits Into Fund.--Section 403(b)(2) (42 U.S.C. 
     603(b)(2)) is amended--
       (1) by striking ``1997, 1998, 1999, 2000, 2001, 2002, and 
     2003'' and inserting ``2006 through 2010''; and
       (2) by striking all that follows ``$2,000,000,000'' and 
     inserting a period.
       (b) Grants.--Section 403(b)(3)(C)(ii) (42 U.S.C. 
     603(b)(3)(C)(ii)) is amended by striking ``fiscal years 1997 
     through 2005'' and inserting ``fiscal years 2006 through 
     2010''.
       (c) Definition of Needy State.--Clauses (i) and (ii) of 
     section 403(b)(5)(B) (42 U.S.C. 603(b)(5)(B)) are amended by 
     inserting after ``1996'' the following: ``, and the Food 
     Stamp Act of 1977 as in effect during the corresponding 3-
     month period in the fiscal year preceding such most recently 
     concluded 3-month period,''.
       (d) Annual Reconciliation: Federal Matching of State 
     Expenditures Above ``Maintenance of Effort'' Level.--Section 
     403(b)(6) (42 U.S.C. 603(b)(6)) is amended--
       (1) in subparagraph (A)(ii)--
       (A) by adding ``and'' at the end of subclause (I);
       (B) by striking ``; and'' at the end of subclause (II) and 
     inserting a period; and
       (C) by striking subclause (III);
       (2) in subparagraph (B)(i)(II), by striking all that 
     follows ``section 409(a)(7)(B)(iii))'' and inserting a 
     period;
       (3) by amending subparagraph (B)(ii)(I) to read as follows:

       ``(I) the qualified State expenditures (as defined in 
     section 409(a)(7)(B)(i)) for the fiscal year; plus''; and

       (4) by striking subparagraph (C).
       (e) Consideration of Certain Child Care Expenditures in 
     Determining State Compliance With Contingency Fund 
     Maintenance of Effort Requirement.--Section 409(a)(10) (42 
     U.S.C. 609(a)(10)) is amended--
       (1) by striking ``(other than the expenditures described in 
     subclause (I)(bb) of that paragraph)) under the State program 
     funded under this part'' and inserting a close parenthesis; 
     and
       (2) by striking ``excluding any amount expended by the 
     State for child care under subsection (g) or (i) of section 
     402 (as in effect during fiscal year 1994) for fiscal year 
     1994,''.

     SEC. 107. USE OF FUNDS.

       (a) General Rules.--Section 404(a)(2) (42 U.S.C. 604(a)(2)) 
     is amended by striking ``in any manner that'' and inserting 
     ``for any purposes or activities for which''.
       (b) Treatment of Interstate Immigrants.--
       (1) State plan provision.--Section 402(a)(1)(B) (42 U.S.C. 
     602(a)(1)(B)) is amended by striking clause (i) and 
     redesignating clauses (ii) through (iv) as clauses (i) 
     through (iii), respectively.

[[Page 483]]

       (2) Use of funds.--Section 404 (42 U.S.C. 604) is amended 
     by striking subsection (c).
       (c) Increase in Amount Transferable to Child Care.--Section 
     404(d)(1) (42 U.S.C. 604(d)(1)) is amended by striking ``30'' 
     and inserting ``50''.
       (d) Increase in Amount Transferable to Title XX Programs.--
     Section 404(d)(2)(B) (42 U.S.C. 604(d)(2)(B)) is amended to 
     read as follows:
       ``(B) Applicable percent.--For purposes of subparagraph 
     (A), the applicable percent is 10 percent for fiscal year 
     2006 and each succeeding fiscal year.''.
       (e) Clarification of Authority of States to Use TANF Funds 
     Carried Over From Prior Years to Provide TANF Benefits and 
     Services.--Section 404(e) (42 U.S.C. 604(e)) is amended to 
     read as follows:
       ``(e) Authority to Carryover or Reserve Certain Amounts for 
     Benefits or Services or for Future Contingencies.--
       ``(1) Carryover.--A State or tribe may use a grant made to 
     the State or tribe under this part for any fiscal year to 
     provide, without fiscal year limitation, any benefit or 
     service that may be provided under the State or tribal 
     program funded under this part.
       ``(2) Contingency reserve.--A State or tribe may designate 
     any portion of a grant made to the State or tribe under this 
     part as a contingency reserve for future needs, and may use 
     any amount so designated to provide, without fiscal year 
     limitation, any benefit or service that may be provided under 
     the State or tribal program funded under this part. If a 
     State or tribe so designates a portion of such a grant, the 
     State shall, on an annual basis, include in its report under 
     section 411(a) the amount so designated.''.

     SEC. 108. REPEAL OF FEDERAL LOAN FOR STATE WELFARE PROGRAMS.

       (a) Repeal.--Section 406 (42 U.S.C. 606) is repealed.
       (b) Conforming Amendments.--
       (1) Section 409(a) (42 U.S.C. 609(a)) is amended by 
     striking paragraph (6).
       (2) Section 412 (42 U.S.C. 612) is amended by striking 
     subsection (f) and redesignating subsections (g) through (i) 
     as subsections (f) through (h), respectively.
       (3) Section 1108(a)(2) (42 U.S.C. 1308(a)(2)) is amended by 
     striking ``406,''.

     SEC. 109. UNIVERSAL ENGAGEMENT AND FAMILY SELF-SUFFICIENCY 
                   PLAN REQUIREMENTS.

       (a) Modification of State Plan Requirements.--Section 
     402(a)(1)(A) (42 U.S.C. 602(a)(1)(A)) is amended by striking 
     clauses (ii) and (iii) and inserting the following:
       ``(ii) Require a parent or caretaker receiving assistance 
     under the program to engage in work or alternative self-
     sufficiency activities (as defined by the State), consistent 
     with section 407(e)(2).
       ``(iii) Require families receiving assistance under the 
     program to engage in activities in accordance with family 
     self-sufficiency plans developed pursuant to section 
     408(b).''.
       (b) Establishment of Family Self-Sufficiency Plans.--
       (1) In general.--Section 408(b) (42 U.S.C. 608(b)) is 
     amended to read as follows:
       ``(b) Family Self-Sufficiency Plans.--
       ``(1) In general.--A State to which a grant is made under 
     section 403 shall--
       ``(A) assess, in the manner deemed appropriate by the 
     State, the skills, prior work experience, and employability 
     of each work-eligible individual (as defined in section 
     407(b)(2)(C)) receiving assistance under the State program 
     funded under this part;
       ``(B) establish for each family that includes such an 
     individual, in consultation as the State deems appropriate 
     with the individual, a self-sufficiency plan that specifies 
     appropriate activities described in the State plan submitted 
     pursuant to section 402, including direct work activities as 
     appropriate designed to assist the family in achieving their 
     maximum degree of self-sufficiency, and that provides for the 
     ongoing participation of the individual in the activities;
       ``(C) require, at a minimum, each such individual to 
     participate in activities in accordance with the self-
     sufficiency plan;
       ``(D) monitor the participation of each such individual in 
     the activities specified in the self sufficiency plan, and 
     regularly review the progress of the family toward self-
     sufficiency;
       ``(E) upon such a review, revise the self-sufficiency plan 
     and activities as the State deems appropriate.
       ``(2) Timing.--The State shall comply with paragraph (1) 
     with respect to a family--
       ``(A) in the case of a family that, as of October 1, 2005, 
     is not receiving assistance from the State program funded 
     under this part, not later than 60 days after the family 
     first receives assistance on the basis of the most recent 
     application for the assistance; or
       ``(B) in the case of a family that, as of such date, is 
     receiving the assistance, not later than 12 months after the 
     date of enactment of this subsection.
       ``(3) State discretion.--A State shall have sole 
     discretion, consistent with section 407, to define and design 
     activities for families for purposes of this subsection, to 
     develop methods for monitoring and reviewing progress 
     pursuant to this subsection, and to make modifications to the 
     plan as the State deems appropriate to assist the individual 
     in increasing their degree of self-sufficiency.
       ``(4) Rule of interpretation.--Nothing in this part shall 
     preclude a State from requiring participation in work and any 
     other activities the State deems appropriate for helping 
     families achieve self-sufficiency and improving child well-
     being.''.
       (2) Penalty for failure to establish family self-
     sufficiency plan.--Section 409(a)(3) (42 U.S.C. 609(a)(3)) is 
     amended--
       (A) in the paragraph heading, by inserting ``or establish 
     family self-sufficiency plan'' after ``rates''; and
       (B) in subparagraph (A), by inserting ``or 408(b)'' after 
     ``407(a)''.

     SEC. 110. WORK PARTICIPATION REQUIREMENTS.

       (a) Elimination of Separate Participation Rate Requirements 
     for 2-Parent Families.--
       (1) Section 407 (42 U.S.C. 607) is amended in each of 
     subsections (a) and (b) by striking paragraph (2).
       (2) Section 407(b)(4) (42 U.S.C. 607(b)(4)) is amended by 
     striking ``paragraphs (1)(B) and (2)(B)'' and inserting 
     ``paragraph (1)(B)''.
       (3) Section 407(c)(1) (42 U.S.C. 607(c)(1)) is amended by 
     striking subparagraph (B).
       (4) Section 407(c)(2)(D) (42 U.S.C. 607(c)(2)(D)) is 
     amended by striking ``paragraphs (1)(B)(i) and (2)(B) of 
     subsection (b)'' and inserting ``subsection (b)(1)(B)(i)''.
       (b) Work Participation Requirements.--Section 407 (42 
     U.S.C. 607) is amended by striking all that precedes 
     subsection (b)(3) and inserting the following:

     ``SEC. 407. WORK PARTICIPATION REQUIREMENTS.

       ``(a) Participation Rate Requirements.--
       ``(1) In general.--Subject to the succeeding provisions of 
     this section, a State to which a grant is made under section 
     403 for a fiscal year shall achieve a minimum participation 
     rate equal to not less than--
       ``(A) 50 percent for fiscal year 2006;
       ``(B) 55 percent for fiscal year 2007;
       ``(C) 60 percent for fiscal year 2008;
       ``(D) 65 percent for fiscal year 2009; and
       ``(E) 70 percent for fiscal year 2010 and each succeeding 
     fiscal year.
       ``(2) Minimum participation rate floor.--
       ``(A) In general.--A State to which a grant is made under 
     section 403 for a fiscal year shall achieve a minimum 
     participation rate floor, calculated in accordance with 
     subparagraph (B), that is not less than--
       ``(i) 10 percent for fiscal year 2006;
       ``(ii) 20 percent for fiscal year 2007;
       ``(iii) 30 percent for fiscal year 2008;
       ``(iv) 40 percent for fiscal year 2009; and
       ``(v) 55 percent for fiscal year 2010 and each succeeding 
     fiscal year.
       ``(B) Calculation of participation rates for determining 
     compliance with minimum participation rate floor.--
       ``(i) In general.--For purposes of determining compliance 
     with subparagraph (A), the provisions of subsection (b) shall 
     apply with respect to the calculation of the participation 
     rate of a State for a fiscal year except as provided in 
     clauses (ii) and (iii).
       ``(ii) Special rules.--For purposes of this paragraph--

       ``(I) a reduction under subsection (b)(3) shall not be 
     applied with respect to a State for a fiscal year to the 
     extent it would reduce the minimum participation rate the 
     State is otherwise required to meet below the level specified 
     in subparagraph (A) for such fiscal year;
       ``(II) the participation rate determined under paragraphs 
     (1) and (2) of subsection (b) for a State for a fiscal year 
     may not be increased as provided in subsection (b)(4) if the 
     State's participation rate (as so determined) is below the 
     level specified for such fiscal year in subparagraph (A); and
       ``(III) the options to exclude certain families for 
     purposes of determining monthly participation rates provided 
     in subsection (b)(2)(B)(ii) shall not apply.

       ``(iii) Definition of assistance.--For purposes of this 
     paragraph, the term `assistance' in subsection (b) shall be 
     deemed to mean assistance to a family that--

       ``(I) meets the definition of that term in section 419; and
       ``(II) is provided--

       ``(aa) under the State program funded under this part; or
       ``(bb) under a program funded with qualified State 
     expenditures (as defined in section 409(a)(7)(B)(i)).
       ``(C) No work requirement imposed for families with an 
     infant.--Nothing in this paragraph shall be construed as 
     requiring a State to require a family in which the youngest 
     child has not attained 12 months of age to engage in work or 
     other activities.
       ``(b) Calculation of Participation Rates.--
       ``(1) Average monthly rate.--For purposes of subsection 
     (a), the participation rate of a State for a fiscal year is 
     the average of the participation rates of the State for each 
     month in the fiscal year.
       ``(2) Monthly participation rates; incorporation of 40-hour 
     work week standard.--
       ``(A) In general.--For purposes of paragraph (1), the 
     participation rate of a State for a month is--
       ``(i) the total number of countable hours (as defined in 
     subsection (c)) with respect to the counted families for the 
     State for the month; divided by
       ``(ii) 160 multiplied by the number of counted families for 
     the State for the month.
       ``(B) Counted families defined.--
       ``(i) In general.--In subparagraph (A), the term `counted 
     family' means, with respect to

[[Page 484]]

     a State and a month, a family that includes a work-eligible 
     individual and that receives assistance in the month under 
     the State program funded under this part, subject to clause 
     (ii).
       ``(ii) State option to exclude certain families.--At the 
     option of a State, the term `counted family' shall not 
     include--

       ``(I) a family in the first month for which the family 
     receives assistance from a State program funded under this 
     part on the basis of the most recent application for such 
     assistance; or
       ``(II) on a case-by-case basis, a family in which the 
     youngest child has not attained 12 months of age.

       ``(iii) State option to include individuals receiving 
     assistance under a tribal family assistance plan or tribal 
     work program.--At the option of a State, the term `counted 
     family' may include families in the State that are receiving 
     assistance under a tribal family assistance plan approved 
     under section 412 or under a tribal work program to which 
     funds are provided under this part.
       ``(C) Work-eligible individual defined.--In this section, 
     the term `work-eligible individual' means an individual--
       ``(i) who is married or a single head of household; and
       ``(ii) whose needs are (or, but for sanctions under this 
     part that have been in effect for more than 3 months (whether 
     or not consecutive) in the preceding 12 months or under part 
     D, would be) included in determining the amount of cash 
     assistance to be provided to the family under the State 
     program funded under this part.''.
       (c) Recalibration of Caseload Reduction Credit.--
       (1) In general.--Section 407(b)(3)(A)(ii) (42 U.S.C. 
     607(b)(3)(A)(ii)) is amended to read as follows:
       ``(ii) the average monthly number of families that received 
     assistance under the State program funded under this part 
     during the base year.''.
       (2) Conforming amendment.--Section 407(b)(3)(B) (42 U.S.C. 
     607(b)(3)(B)) is amended by striking ``and eligibility 
     criteria'' and all that follows through the close parenthesis 
     and inserting ``and the eligibility criteria in effect during 
     the then applicable base year''.
       (3) Base year defined.--Section 407(b)(3) (42 U.S.C. 
     607(b)(3)) is amended by adding at the end the following:
       ``(C) Base year defined.--In this paragraph, the term `base 
     year' means, with respect to a fiscal year--
       ``(i) if the fiscal year is fiscal year 2006, fiscal year 
     1996;
       ``(ii) if the fiscal year is fiscal year 2007, fiscal year 
     1998;
       ``(iii) if the fiscal year is fiscal year 2008, fiscal year 
     2001; or
       ``(iv) if the fiscal year is fiscal year 2009 or any 
     succeeding fiscal year, the then 4th preceding fiscal 
     year.''.
       (d) Superachiever Credit.--Section 407(b) (42 U.S.C. 
     607(b)) is amended by striking paragraphs (4) and (5) and 
     inserting the following:
       ``(4) Superachiever credit.--
       ``(A) In general.--The participation rate, determined under 
     paragraphs (1) and (2) of this subsection, of a superachiever 
     State for a fiscal year shall be increased by the lesser of--
       ``(i) the amount (if any) of the superachiever credit 
     applicable to the State; or
       ``(ii) the number of percentage points (if any) by which 
     the minimum participation rate required by subsection (a) for 
     the fiscal year exceeds 50 percent.
       ``(B) Superachiever state.--For purposes of subparagraph 
     (A), a State is a superachiever State if the State caseload 
     for fiscal year 2001 has declined by at least 60 percent from 
     the State caseload for fiscal year 1995.
       ``(C) Amount of credit.--The superachiever credit 
     applicable to a State is the number of percentage points (if 
     any) by which the decline referred to in subparagraph (B) 
     exceeds 60 percent.
       ``(D) Definitions.--In this paragraph:
       ``(i) State caseload for fiscal year 2001.--The term `State 
     caseload for fiscal year 2001' means the average monthly 
     number of families that received assistance during fiscal 
     year 2001 under the State program funded under this part.
       ``(ii) State caseload for fiscal year 1995.--The term 
     `State caseload for fiscal year 1995' means the average 
     monthly number of families that received aid under the State 
     plan approved under part A (as in effect on September 30, 
     1995) during fiscal year 1995.''.
       (e) Countable Hours.--Section 407 of such Act (42 U.S.C. 
     607) is amended by striking subsections (c) and (d) and 
     inserting the following:
       ``(c) Countable Hours.--
       ``(1) Definition.--In subsection (b)(2), the term 
     `countable hours' means, with respect to a family for a 
     month, the total number of hours in the month in which any 
     member of the family who is a work-eligible individual is 
     engaged in a direct work activity or other activities 
     specified by the State (excluding an activity that does not 
     address a purpose specified in section 401(a)), subject to 
     the other provisions of this subsection.
       ``(2) Limitations.--Subject to such regulations as the 
     Secretary may prescribe:
       ``(A) Minimum weekly average of 24 hours of direct work 
     activities required.--If the work-eligible individuals in a 
     family are engaged in a direct work activity for an average 
     total of fewer than 24 hours per week in a month, then the 
     number of countable hours with respect to the family for the 
     month shall be zero.
       ``(B) Maximum weekly average of 16 hours of other 
     activities.--An average of not more than 16 hours per week of 
     activities specified by the State (subject to the exclusion 
     described in paragraph (1)) may be considered countable hours 
     in a month with respect to a family.
       ``(3) Special rules.--For purposes of paragraph (1):
       ``(A) Participation in qualified activities.--
       ``(i) In general.--If, with the approval of the State, the 
     work-eligible individuals in a family are engaged in 1 or 
     more qualified activities for an average total of at least 24 
     hours per week in a month, then all such engagement in the 
     month shall be considered engagement in a direct work 
     activity, subject to clause (iii).
       ``(ii) Qualified activity defined.--The term `qualified 
     activity' means an activity specified by the State (subject 
     to the exclusion described in paragraph (1)) that meets such 
     standards and criteria as the State may specify, including--

       ``(I) substance abuse counseling or treatment;
       ``(II) rehabilitation treatment and services;
       ``(III) work-related education or training directed at 
     enabling the family member to work;
       ``(IV) job search or job readiness assistance; and
       ``(V) any other activity that addresses a purpose specified 
     in section 401(a).

       ``(iii) Limitation.--

       ``(I) In general.--Except as provided in subclause (II), 
     clause (i) shall not apply to a family for more than 3 months 
     in any period of 24 consecutive months.
       ``(II) Special rule applicable to education and training.--
     A State may, on a case-by-case basis, apply clause (i) to a 
     work-eligible individual so that participation by the 
     individual in education or training, if needed to permit the 
     individual to complete a certificate program or other work-
     related education or training directed at enabling the 
     individual to fill a known job need in a local area, may be 
     considered countable hours with respect to the family of the 
     individual for not more than 4 months in any period of 24 
     consecutive months.

       ``(B) School attendance by teen head of household.--The 
     work-eligible members of a family shall be considered to be 
     engaged in a direct work activity for an average of 40 hours 
     per week in a month if the family includes an individual who 
     is married, or is a single head of household, who has not 
     attained 20 years of age, and the individual--
       ``(i) maintains satisfactory attendance at secondary school 
     or the equivalent in the month; or
       ``(ii) participates in education directly related to 
     employment for an average of at least 20 hours per week in 
     the month.
       ``(d) Direct Work Activity.--In this section, the term 
     `direct work activity' means--
       ``(1) unsubsidized employment;
       ``(2) subsidized private sector employment;
       ``(3) subsidized public sector employment;
       ``(4) on-the-job training;
       ``(5) supervised work experience; or
       ``(6) supervised community service.''.
       (f) Penalties Against Individuals.--Section 407(e)(1) (42 
     U.S.C. 607(e)(1)) is amended to read as follows:
       ``(1) Reduction or termination of assistance.--
       ``(A) In general.--Except as provided in paragraph (2), if 
     an individual in a family receiving assistance under a State 
     program funded under this part fails to engage in activities 
     required in accordance with this section, or other activities 
     required by the State under the program, and the family does 
     not otherwise engage in activities in accordance with the 
     self-sufficiency plan established for the family pursuant to 
     section 408(b), the State shall--
       ``(i) if the failure is partial or persists for not more 
     than 1 month--

       ``(I) reduce the amount of assistance otherwise payable to 
     the family pro rata (or more, at the option of the State) 
     with respect to any period during a month in which the 
     failure occurs; or
       ``(II) terminate all assistance to the family, subject to 
     such good cause exceptions as the State may establish; or

       ``(ii) if the failure is total and persists for at least 2 
     consecutive months, terminate all cash payments to the family 
     including qualified State expenditures (as defined in section 
     409(a)(7)(B)(i)) for at least 1 month and thereafter until 
     the State determines that the individual has resumed full 
     participation in the activities, subject to such good cause 
     exceptions as the State may establish.
       ``(B) Special rule.--
       ``(i) In general.--In the event of a conflict between a 
     requirement of clause (i)(II) or (ii) of subparagraph (A) and 
     a requirement of a State constitution, or of a State statute 
     that, before 1966, obligated local government to provide 
     assistance to needy parents and children, the State 
     constitutional or statutory requirement shall control.
       ``(ii) Limitation.--Clause (i) of this subparagraph shall 
     not apply after the 1-year

[[Page 485]]

     period that begins with the date of the enactment of this 
     subparagraph.''.
       (g) Conforming Amendments.--
       (1) Section 407(f) (42 U.S.C. 607(f)) is amended in each of 
     paragraphs (1) and (2) by striking ``work activity described 
     in subsection (d)'' and inserting ``direct work activity''.
       (2) The heading of section 409(a)(14) (42 U.S.C. 
     609(a)(14)) is amended by inserting ``or refusing to engage 
     in activities under a family self-sufficiency plan'' after 
     ``work''.

     SEC. 111. MAINTENANCE OF EFFORT.

       (a) In General.--Section 409(a)(7) (42 U.S.C. 609(a)(7)) is 
     amended--
       (1) in subparagraph (A), by striking ``fiscal year 1998, 
     1999, 2000, 2001, 2002, 2003, 2004, 2005, or 2006'' and 
     inserting ``fiscal year 2006, 2007, 2008, 2009, 2010, or 
     2011''; and
       (2) in subparagraph (B)(ii)--
       (A) by inserting ``preceding'' before ``fiscal year''; and
       (B) by striking ``for fiscal years 1997 through 2005,''.
       (b) State Spending on Promoting Healthy Marriage.--
       (1) In general.--Section 404 (42 U.S.C. 604) is amended by 
     adding at the end the following:
       ``(l) Marriage Promotion.--A State, territory, or tribal 
     organization to which a grant is made under section 403(a)(2) 
     may use a grant made to the State, territory, or tribal 
     organization under any other provision of section 403 for 
     marriage promotion activities, and the amount of any such 
     grant so used shall be considered State funds for purposes of 
     section 403(a)(2).''.
       (2) Federal tanf funds used for marriage promotion 
     disregarded for purposes of maintenance of effort 
     requirement.--Section 409(a)(7)(B)(i) (42 U.S.C. 
     609(a)(7)(B)(i)), as amended by section 103(c) of this Act, 
     is amended by adding at the end the following:

       ``(VI) Exclusion of federal tanf funds used for marriage 
     promotion activities.--Such term does not include the amount 
     of any grant made to the State under section 403 that is 
     expended for a marriage promotion activity.''.

     SEC. 112. PERFORMANCE IMPROVEMENT.

       (a) State Plans.--Section 402(a) (42 U.S.C. 602(a)) is 
     amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A)--
       (i) by redesignating clause (vi) and clause (vii) (as added 
     by section 103(a) of this Act) as clauses (vii) and (viii), 
     respectively; and
       (ii) by striking clause (v) and inserting the following:
       ``(v) The document shall--

       ``(I) describe how the State will pursue ending dependence 
     of needy families on government benefits and reducing poverty 
     by promoting job preparation and work;
       ``(II) describe how the State will encourage the formation 
     and maintenance of healthy 2-parent married families, 
     encourage responsible fatherhood, and prevent and reduce the 
     incidence of out-of-wedlock pregnancies;
       ``(III) include specific, numerical, and measurable 
     performance objectives for accomplishing subclauses (I) and 
     (II), and with respect to subclause (I), include objectives 
     consistent with the criteria used by the Secretary in 
     establishing performance targets under section 403(a)(4)(B) 
     if available; and
       ``(IV) describe the methodology that the State will use to 
     measure State performance in relation to each such objective.

       ``(vi) Describe any strategies and programs the State may 
     be undertaking to address--

       ``(I) employment retention and advancement for recipients 
     of assistance under the program, including placement into 
     high-demand jobs, and whether the jobs are identified using 
     labor market information;
       ``(II) efforts to reduce teen pregnancy;
       ``(III) services for struggling and noncompliant families, 
     and for clients with special problems; and
       ``(IV) program integration, including the extent to which 
     employment and training services under the program are 
     provided through the One-Stop delivery system created under 
     the Workforce Investment Act of 1998, and the extent to which 
     former recipients of such assistance have access to 
     additional core, intensive, or training services funded 
     through such Act.''; and

       (B) in subparagraph (B), by striking clause (iii) (as so 
     redesignated by section 107(b)(1) of this Act) and inserting 
     the following:
       ``(iii) The document shall describe strategies and programs 
     the State is undertaking to engage religious organizations in 
     the provision of services funded under this part and efforts 
     related to section 104 of the Personal Responsibility and 
     Work Opportunity Reconciliation Act of 1996.
       ``(iv) The document shall describe strategies to improve 
     program management and performance.''; and
       (2) in paragraph (4), by inserting ``and tribal'' after 
     ``that local''.
       (b) Consultation With State Regarding Plan and Design of 
     Tribal Programs.--Section 412(b)(1) (42 U.S.C. 612(b)(1)) is 
     amended--
       (1) by striking ``and'' at the end of subparagraph (E);
       (2) by striking the period at the end of subparagraph (F) 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(G) provides an assurance that the State in which the 
     tribe is located has been consulted regarding the plan and 
     its design.''.
       (c) Performance Measures.--Section 413 (42 U.S.C. 613) is 
     amended by adding at the end the following:
       ``(k) Performance Improvement.--The Secretary, in 
     consultation with the States, shall develop uniform 
     performance measures designed to assess the degree of 
     effectiveness, and the degree of improvement, of State 
     programs funded under this part in accomplishing the purposes 
     of this part.''.
       (d) Annual Ranking of States.--Section 413(d)(1) (42 U.S.C. 
     613(d)(1)) is amended by striking ``long-term private sector 
     jobs'' and inserting ``private sector jobs, the success of 
     the recipients in retaining employment, the ability of the 
     recipients to increase their wages''.

     SEC. 113. DATA COLLECTION AND REPORTING.

       (a) Contents of Report.--Section 411(a)(1)(A) (42 U.S.C. 
     611(a)(1)(A)) is amended--
       (1) in the matter preceding clause (i), by inserting ``and 
     on families receiving assistance under State programs funded 
     with other qualified State expenditures (as defined in 
     section 409(a)(7)(B))'' before the colon;
       (2) in clause (vii), by inserting ``and minor parent'' 
     after ``of each adult'';
       (3) in clause (viii), by striking ``and educational 
     level'';
       (4) in clause (ix), by striking ``, and if the latter 2, 
     the amount received'';
       (5) in clause (x)--
       (A) by striking ``each type of''; and
       (B) by inserting before the period ``and, if applicable, 
     the reason for receipt of the assistance for a total of more 
     than 60 months'';
       (6) in clause (xi), by striking the subclauses and 
     inserting the following:

       ``(I) Subsidized private sector employment.
       ``(II) Unsubsidized employment.
       ``(III) Public sector employment, supervised work 
     experience, or supervised community service.
       ``(IV) On-the-job training.
       ``(V) Job search and placement.
       ``(VI) Training.
       ``(VII) Education.
       ``(VIII) Other activities directed at the purposes of this 
     part, as specified in the State plan submitted pursuant to 
     section 402.'';

       (7) in clause (xii), by inserting ``and progress toward 
     universal engagement'' after ``participation rates'';
       (8) in clause (xiii), by striking ``type and'' before 
     ``amount of assistance'';
       (9) in clause (xvi), by striking subclause (II) and 
     redesignating subclauses (III) through (V) as subclauses (II) 
     through (IV), respectively; and
       (10) by adding at the end the following:
       ``(xviii) The date the family first received assistance 
     from the State program on the basis of the most recent 
     application for such assistance.
       ``(xix) Whether a self-sufficiency plan is established for 
     the family in accordance with section 408(b).
       ``(xx) With respect to any child in the family, the marital 
     status of the parents at the birth of the child, and if the 
     parents were not then married, whether the paternity of the 
     child has been established.''.
       (b) Use of Samples.--Section 411(a)(1)(B) (42 U.S.C. 
     611(a)(1)(B)) is amended--
       (1) in clause (i)--
       (A) by striking ``a sample'' and inserting ``samples''; and
       (B) by inserting before the period ``, except that the 
     Secretary may designate core data elements that must be 
     reported on all families''; and
       (2) in clause (ii), by striking ``funded under this part'' 
     and inserting ``described in subparagraph (A)''.
       (c) Report on Families That Become Ineligible to Receive 
     Assistance.--Section 411(a) (42 U.S.C. 611(a)) is amended--
       (1) by striking paragraph (5);
       (2) by redesignating paragraph (6) as paragraph (5); and
       (3) by inserting after paragraph (5) (as so redesignated) 
     the following:
       ``(6) Report on families that become ineligible to receive 
     assistance.--The report required by paragraph (1) for a 
     fiscal quarter shall include for each month in the quarter 
     the number of families and total number of individuals that, 
     during the month, became ineligible to receive assistance 
     under the State program funded under this part (broken down 
     by the number of families that become so ineligible due to 
     earnings, changes in family composition that result in 
     increased earnings, sanctions, time limits, or other 
     specified reasons).''.
       (d) Regulations.--Section 411(a)(7) (42 U.S.C. 611(a)(7)) 
     is amended--
       (1) by inserting ``and to collect the necessary data'' 
     before ``with respect to which reports'';
       (2) by striking ``subsection'' and inserting ``section''; 
     and
       (3) by striking ``in defining the data elements'' and all 
     that follows and inserting ``, the National Governors' 
     Association, the American Public Human Services Association, 
     the National Conference of State Legislatures, and others in 
     defining the data elements.''.
       (e) Additional Reports by States.--Section 411 (42 U.S.C. 
     611) is amended--
       (1) by redesignating subsection (b) as subsection (e); and

[[Page 486]]

       (2) by inserting after subsection (a) the following:
       ``(b) Annual Reports on Program Characteristics.--Not later 
     than 90 days after the end of fiscal year 2006 and each 
     succeeding fiscal year, each eligible State shall submit to 
     the Secretary a report on the characteristics of the State 
     program funded under this part and other State programs 
     funded with qualified State expenditures (as defined in 
     section 409(a)(7)(B)(i)). The report shall include, with 
     respect to each such program, the program name, a description 
     of program activities, the program purpose, the program 
     eligibility criteria, the sources of program funding, the 
     number of program beneficiaries, sanction policies, and any 
     program work requirements.
       ``(c) Monthly Reports on Caseload.--Not later than 3 months 
     after the end of a calendar month that begins 1 year or more 
     after the enactment of this subsection, each eligible State 
     shall submit to the Secretary a report on the number of 
     families and total number of individuals receiving assistance 
     in the calendar month under the State program funded under 
     this part.
       ``(d) Annual Report on Performance Improvement.--Beginning 
     with fiscal year 2007, not later than January 1 of each 
     fiscal year, each eligible State shall submit to the 
     Secretary a report on achievement and improvement during the 
     preceding fiscal year under the numerical performance goals 
     and measures under the State program funded under this part 
     with respect to each of the matters described in section 
     402(a)(1)(A)(v).''.
       (f) Annual Reports to Congress by the Secretary.--Section 
     411(e), as so redesignated by subsection (e) of this section, 
     is amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``and each fiscal year thereafter'' and inserting ``and by 
     July 1 of each fiscal year thereafter'';
       (2) in paragraph (2), by striking ``families applying for 
     assistance,'' and by striking the last comma; and
       (3) in paragraph (3), by inserting ``and other programs 
     funded with qualified State expenditures (as defined in 
     section 409(a)(7)(B)(i))'' before the semicolon.
       (g) Increased Analysis of State Single Audit Reports.--
     Section 411 (42 U.S.C. 611) is amended by adding at the end 
     the following:
       ``(f) Increased Analysis of State Single Audit Reports.--
       ``(1) In general.--Within 3 months after a State submits to 
     the Secretary a report pursuant to section 7502(a)(1)(A) of 
     title 31, United States Code, the Secretary shall analyze the 
     report for the purpose of identifying the extent and nature 
     of problems related to the oversight by the State of 
     nongovernmental entities with respect to contracts entered 
     into by such entities with the State program funded under 
     this part, and determining what additional actions may be 
     appropriate to help prevent and correct the problems.
       ``(2) Inclusion of program oversight section in annual 
     report to the congress.--The Secretary shall include in each 
     report under subsection (e) a section on oversight of State 
     programs funded under this part, including findings on the 
     extent and nature of the problems referred to in paragraph 
     (1), actions taken to resolve the problems, and to the extent 
     the Secretary deems appropriate make recommendations on 
     changes needed to resolve the problems.''.

     SEC. 114. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES.

       (a) Tribal Family Assistance Grant.--Section 412(a)(1)(A) 
     (42 U.S.C. 612(a)(1)(A)) is amended by striking ``1997, 1998, 
     1999, 2000, 2001, 2002, and 2003'' and inserting ``2006 
     through 2010''.
       (b) Grants for Indian Tribes That Received JOBS Funds.--
     Section 412(a)(2)(A) (42 U.S.C. 612(a)(2)(A)) is amended by 
     striking ``1997, 1998, 1999, 2000, 2001, 2002, and 2003'' and 
     inserting ``2006 through 2010''.

     SEC. 115. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.

       (a) Secretary's Fund for Research, Demonstrations, and 
     Technical Assistance.--
       (1) In general.--Section 413 (42 U.S.C. 613), as amended by 
     section 112(c) of this Act, is further amended by adding at 
     the end the following:
       ``(l) Funding for Research, Demonstrations, and Technical 
     Assistance.--
       ``(1) Appropriation.--
       ``(A) In general.--Out of any money in the Treasury of the 
     United States not otherwise appropriated, there are 
     appropriated $102,000,000 for each of fiscal years 2005 
     through 2010, which shall be available to the Secretary for 
     the purpose of conducting and supporting research and 
     demonstration projects by public or private entities, and 
     providing technical assistance to States, Indian tribal 
     organizations, and such other entities as the Secretary may 
     specify that are receiving a grant under this part, which 
     shall be expended primarily on activities described in 
     section 403(a)(2)(B), and which shall be in addition to any 
     other funds made available under this part.
       ``(B) Extended availability of fy 2005 funds.--Funds 
     appropriated under this paragraph for fiscal year 2005 shall 
     remain available to the Secretary through fiscal year 2006, 
     for use in accordance with this paragraph for fiscal year 
     2005.
       ``(2) Set aside for demonstration projects for coordination 
     of provision of child welfare and tanf services to tribal 
     families at risk of child abuse or neglect.--
       ``(A) In general.--Of the amounts made available under 
     paragraph (1) for a fiscal year, $2,000,000 shall be awarded 
     on a competitive basis to fund demonstration projects 
     designed to test the effectiveness of tribal governments or 
     tribal consortia in coordinating the provision to tribal 
     families at risk of child abuse or neglect of child welfare 
     services and services under tribal programs funded under this 
     part.
       ``(B) Use of funds.--A grant made to such a project shall 
     be used--
       ``(i) to improve case management for families eligible for 
     assistance from such a tribal program;
       ``(ii) for supportive services and assistance to tribal 
     children in out-of-home placements and the tribal families 
     caring for such children, including families who adopt such 
     children; and
       ``(iii) for prevention services and assistance to tribal 
     families at risk of child abuse and neglect.
       ``(C) Reports.--The Secretary may require a recipient of 
     funds awarded under this paragraph to provide the Secretary 
     with such information as the Secretary deems relevant to 
     enable the Secretary to facilitate and oversee the 
     administration of any project for which funds are provided 
     under this paragraph.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the date of the enactment of this Act.
       (b) Funding of Studies and Demonstrations.--Section 
     413(h)(1) (42 U.S.C. 613(h)(1)) is amended in the matter 
     preceding subparagraph (A) by striking ``1997 through 2002'' 
     and inserting ``2006 through 2010''.
       (c) Report on Enforcement of Certain Affidavits of Support 
     and Sponsor Deeming.--Not later than March 31, 2006, the 
     Secretary of Health and Human Services, in consultation with 
     the Attorney General, shall submit to the Congress a report 
     on the enforcement of affidavits of support and sponsor 
     deeming as required by section 421, 422, and 432 of the 
     Personal Responsibility and Work Opportunity Reconciliation 
     Act of 1996.
       (d) Report on Coordination.--Not later than 6 months after 
     the date of the enactment of this Act, the Secretary of 
     Health and Human Services and the Secretary of Labor shall 
     jointly submit a report to the Congress describing common or 
     conflicting data elements, definitions, performance measures, 
     and reporting requirements in the Workforce Investment Act of 
     1998 and part A of title IV of the Social Security Act, and, 
     to the degree each Secretary deems appropriate, at the 
     discretion of either Secretary, any other program 
     administered by the respective Secretary, to allow greater 
     coordination between the welfare and workforce development 
     systems.

     SEC. 116. STUDIES BY THE CENSUS BUREAU AND THE GOVERNMENT 
                   ACCOUNTABILITY OFFICE.

       (a) Census Bureau Study.--
       (1) In general.--Section 414(a) (42 U.S.C. 614(a)) is 
     amended to read as follows:
       ``(a) In General.--The Bureau of the Census shall implement 
     or enhance a longitudinal survey of program participation, 
     developed in consultation with the Secretary and made 
     available to interested parties, to allow for the assessment 
     of the outcomes of continued welfare reform on the economic 
     and child well-being of low-income families with children, 
     including those who received assistance or services from a 
     State program funded under this part, and, to the extent 
     possible, shall provide State representative samples. The 
     content of the survey should include such information as may 
     be necessary to examine the issues of out-of-wedlock 
     childbearing, marriage, welfare dependency and compliance 
     with work requirements, the beginning and ending of spells of 
     assistance, work, earnings and employment stability, and the 
     well-being of children.''.
       (2) Appropriation.--Section 414(b) (42 U.S.C. 614(b)) is 
     amended--
       (A) by striking ``1996,'' and all that follows through 
     ``2003'' and inserting ``2006 through 2010''; and
       (B) by adding at the end the following: ``Funds 
     appropriated under this subsection shall remain available 
     through fiscal year 2010 to carry out subsection (a).''.
       (b) GAO Study.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study to determine the combined effect 
     of the phase-out rates for Federal programs and policies 
     which provide support to low-income families and individuals 
     as they move from welfare to work, at all earning levels up 
     to $35,000 per year, for at least 5 States including 
     Wisconsin and California, and any potential disincentives the 
     combined phase-out rates create for families to achieve 
     independence or to marry.
       (2) Report.--Not later than 1 year after the date of the 
     enactment of this subsection, the Comptroller General shall 
     submit a report to Congress containing the results of the 
     study conducted under this section and, as appropriate, any 
     recommendations consistent with the results.

     SEC. 117. DEFINITION OF ASSISTANCE.

       (a) In General.--Section 419 (42 U.S.C. 619) is amended by 
     adding at the end the following:

[[Page 487]]

       ``(6) Assistance.--
       ``(A) In general.--The term `assistance' means payment, by 
     cash, voucher, or other means, to or for an individual or 
     family for the purpose of meeting a subsistence need of the 
     individual or family (including food, clothing, shelter, and 
     related items, but not including costs of transportation or 
     child care).
       ``(B) Exception.--The term `assistance' does not include a 
     payment described in subparagraph (A) to or for an individual 
     or family on a short-term, nonrecurring basis (as defined by 
     the State in accordance with regulations prescribed by the 
     Secretary).''.
       (b) Conforming Amendments.--
       (1) Section 404(a)(1) (42 U.S.C. 604(a)(1)) is amended by 
     striking ``assistance'' and inserting ``aid''.
       (2) Section 404(f) (42 U.S.C. 604(f)) is amended by 
     striking ``assistance'' and inserting ``benefits or 
     services''.
       (3) Section 408(a)(5)(B)(i) (42 U.S.C. 608(a)(5)(B)(i)) is 
     amended in the heading by striking ``assistance'' and 
     inserting ``aid''.
       (4) Section 413(d)(2) (42 U.S.C. 613(d)(2)) is amended by 
     striking ``assistance'' and inserting ``aid''.

     SEC. 118. TECHNICAL CORRECTIONS.

       (a) Section 409(c)(2) (42 U.S.C. 609(c)(2)) is amended by 
     inserting a comma after ``appropriate''.
       (b) Section 411(a)(1)(A)(ii)(III) (42 U.S.C. 
     611(a)(1)(A)(ii)(III)) is amended by striking the last close 
     parenthesis.
       (c) Section 413(j)(2)(A) (42 U.S.C. 613(j)(2)(A)) is 
     amended by striking ``section'' and inserting ``sections''.
       (d)(1) Section 413 (42 U.S.C. 613) is amended by striking 
     subsection (g) and redesignating subsections (h) through (j) 
     and subsections (k) and (l) (as added by sections 112(c) and 
     115(a) of this Act, respectively) as subsections (g) through 
     (k), respectively.
       (2) Each of the following provisions is amended by striking 
     ``413(j)'' and inserting ``413(i)'':
       (A) Section 403(a)(5)(A)(ii)(III) (42 U.S.C. 
     603(a)(5)(A)(ii)(III)).
       (B) Section 403(a)(5)(F) (42 U.S.C. 603(a)(5)(F)).
       (C) Section 403(a)(5)(G)(ii) (42 U.S.C. 603(a)(5)(G)(ii)).
       (D) Section 412(a)(3)(B)(iv) (42 U.S.C. 612(a)(3)(B)(iv)).

     SEC. 119. FATHERHOOD PROGRAM.

       (a) Short Title.--This section may be cited as the 
     ``Promotion and Support of Responsible Fatherhood and Healthy 
     Marriage Act of 2005''.
       (b) Fatherhood Program.--
       (1) In general.--Title I of the Personal Responsibility and 
     Work Opportunity Reconciliation Act of 1996 (Public Law 104-
     193) is amended by adding at the end the following:

     ``SEC. 117. FATHERHOOD PROGRAM.

       ``(a) In General.--Title IV (42 U.S.C. 601-679b) is amended 
     by inserting after part B the following:

                      `PART C--FATHERHOOD PROGRAM

     `SEC. 441. FINDINGS AND PURPOSES.

       `(a) Findings.--The Congress finds that there is 
     substantial evidence strongly indicating the urgent need to 
     promote and support involved, committed, and responsible 
     fatherhood, and to encourage and support healthy marriages 
     between parents raising children, including data 
     demonstrating the following:
       `(1) In approximately 84 percent of cases where a parent is 
     absent, that parent is the father.
       `(2) If current trends continue, half of all children born 
     today will live apart from one of their parents, usually 
     their father, at some point before they turn 18.
       `(3) Where families (whether intact or with a parent 
     absent) are living in poverty, a significant factor is the 
     father's lack of job skills.
       `(4) Committed and responsible fathering during infancy and 
     early childhood contributes to the development of emotional 
     security, curiosity, and math and verbal skills.
       `(5) An estimated 19,400,000 children (27 percent) live 
     apart from their biological father.
       `(6) Forty percent of children under age 18 not living with 
     their biological father had not seen their father even once 
     in the last 12 months, according to national survey data.
       `(b) Purposes.--The purposes of this part are:
       `(1) To provide for projects and activities by public 
     entities and by nonprofit community entities, including 
     religious organizations, designed to test promising 
     approaches to accomplishing the following objectives:
       `(A) Promoting responsible, caring, and effective parenting 
     through counseling, mentoring, and parenting education, 
     dissemination of educational materials and information on 
     parenting skills, encouragement of positive father 
     involvement, including the positive involvement of 
     nonresident fathers, and other methods.
       `(B) Enhancing the abilities and commitment of unemployed 
     or low-income fathers to provide material support for their 
     families and to avoid or leave welfare programs by assisting 
     them to take full advantage of education, job training, and 
     job search programs, to improve work habits and work skills, 
     to secure career advancement by activities such as outreach 
     and information dissemination, coordination, as appropriate, 
     with employment services and job training programs, including 
     the One-Stop delivery system established under title I of the 
     Workforce Investment Act of 1998, encouragement and support 
     of timely payment of current child support and regular 
     payment toward past due child support obligations in 
     appropriate cases, and other methods.
       `(C) Improving fathers' ability to effectively manage 
     family business affairs by means such as education, 
     counseling, and mentoring in matters including household 
     management, budgeting, banking, and handling of financial 
     transactions, time management, and home maintenance.
       `(D) Encouraging and supporting healthy marriages and 
     married fatherhood through such activities as premarital 
     education, including the use of premarital inventories, 
     marriage preparation programs, skills-based marriage 
     education programs, marital therapy, couples counseling, 
     divorce education and reduction programs, divorce mediation 
     and counseling, relationship skills enhancement programs, 
     including those designed to reduce child abuse and domestic 
     violence, and dissemination of information about the benefits 
     of marriage for both parents and children.
       `(2) Through the projects and activities described in 
     paragraph (1), to improve outcomes for children with respect 
     to measures such as increased family income and economic 
     security, improved school performance, better health, 
     improved emotional and behavioral stability and social 
     adjustment, and reduced risk of delinquency, crime, substance 
     abuse, child abuse and neglect, teen sexual activity, and 
     teen suicide.
       `(3) To evaluate the effectiveness of various approaches 
     and to disseminate findings concerning outcomes and other 
     information in order to encourage and facilitate the 
     replication of effective approaches to accomplishing these 
     objectives.

     `SEC. 442. DEFINITIONS.

       `In this part, the terms ``Indian tribe'' and ``tribal 
     organization'' have the meanings given them in subsections 
     (e) and (l), respectively, of section 4 of the Indian Self-
     Determination and Education Assistance Act.

     `SEC. 443. COMPETITIVE GRANTS FOR SERVICE PROJECTS.

       `(a) In General.--The Secretary may make grants for fiscal 
     years 2006 through 2010 to public and nonprofit community 
     entities, including religious organizations, and to Indian 
     tribes and tribal organizations, for demonstration service 
     projects and activities designed to test the effectiveness of 
     various approaches to accomplish the objectives specified in 
     section 441(b)(1).
       `(b) Eligibility Criteria for Full Service Grants.--In 
     order to be eligible for a grant under this section, except 
     as specified in subsection (c), an entity shall submit an 
     application to the Secretary containing the following:
       `(1) Project description.--A statement including--
       `(A) a description of the project and how it will be 
     carried out, including the geographical area to be covered 
     and the number and characteristics of clients to be served, 
     and how it will address each of the 4 objectives specified in 
     section 441(b)(1); and
       `(B) a description of the methods to be used by the entity 
     or its contractor to assess the extent to which the project 
     was successful in accomplishing its specific objectives and 
     the general objectives specified in section 441(b)(1).
       `(2) Experience and qualifications.--A demonstration of 
     ability to carry out the project, by means such as 
     demonstration of experience in successfully carrying out 
     projects of similar design and scope, and such other 
     information as the Secretary may find necessary to 
     demonstrate the entity's capacity to carry out the project, 
     including the entity's ability to provide the non-Federal 
     share of project resources.
       `(3) Addressing child abuse and neglect and domestic 
     violence.--A description of how the entity will assess for 
     the presence of, and intervene to resolve, domestic violence 
     and child abuse and neglect, including how the entity will 
     coordinate with State and local child protective service and 
     domestic violence programs.
       `(4) Addressing concerns relating to substance abuse and 
     sexual activity.--A commitment to make available to each 
     individual participating in the project education about 
     alcohol, tobacco, and other drugs, and about the health risks 
     associated with abusing such substances, and information 
     about diseases and conditions transmitted through substance 
     abuse and sexual contact, including HIV/AIDS, and to 
     coordinate with providers of services addressing such 
     problems, as appropriate.
       `(5) Coordination with specified programs.--An undertaking 
     to coordinate, as appropriate, with State and local entities 
     responsible for the programs under parts A, B, and D of this 
     title, including programs under title I of the Workforce 
     Investment Act of 1998 (including the One-Stop delivery 
     system), and such other programs as the Secretary may 
     require.
       `(6) Records, reports, and audits.--An agreement to 
     maintain such records, make such reports, and cooperate with 
     such reviews or audits as the Secretary may find necessary 
     for purposes of oversight of project activities and 
     expenditures.

[[Page 488]]

       `(7) Self-initiated evaluation.--If the entity elects to 
     contract for independent evaluation of the project (part or 
     all of the cost of which may be paid for using grant funds), 
     a commitment to submit to the Secretary a copy of the 
     evaluation report within 30 days after completion of the 
     report and not more than 1 year after completion of the 
     project.
       `(8) Cooperation with secretary's oversight and 
     evaluation.--An agreement to cooperate with the Secretary's 
     evaluation of projects assisted under this section, by means 
     including random assignment of clients to service recipient 
     and control groups, if determined by the Secretary to be 
     appropriate, and affording the Secretary access to the 
     project and to project-related records and documents, staff, 
     and clients.
       `(c) Eligibility Criteria for Limited Purpose Grants.--In 
     order to be eligible for a grant under this section in an 
     amount under $25,000 per fiscal year, an entity shall submit 
     an application to the Secretary containing the following:
       `(1) Project description.--A description of the project and 
     how it will be carried out, including the number and 
     characteristics of clients to be served, the proposed 
     duration of the project, and how it will address at least 1 
     of the 4 objectives specified in section 441(b)(1).
       `(2) Qualifications.--Such information as the Secretary may 
     require as to the capacity of the entity to carry out the 
     project, including any previous experience with similar 
     activities.
       `(3) Coordination with related programs.--As required by 
     the Secretary in appropriate cases, an undertaking to 
     coordinate and cooperate with State and local entities 
     responsible for specific programs relating to the objectives 
     of the project including, as appropriate, jobs programs and 
     programs serving children and families.
       `(4) Records, reports, and audits.--An agreement to 
     maintain such records, make such reports, and cooperate with 
     such reviews or audits as the Secretary may find necessary 
     for purposes of oversight of project activities and 
     expenditures.
       `(5) Cooperation with secretary's oversight and 
     evaluation.--An agreement to cooperate with the Secretary's 
     evaluation of projects assisted under this section, by means 
     including affording the Secretary access to the project and 
     to project-related records and documents, staff, and clients.
       `(d) Considerations in Awarding Grants.--
       `(1) Diversity of projects.--In awarding grants under this 
     section, the Secretary shall seek to achieve a balance among 
     entities of differing sizes, entities in differing geographic 
     areas, entities in urban and in rural areas, and entities 
     employing differing methods of achieving the purposes of this 
     section, including working with the State agency responsible 
     for the administration of part D to help fathers satisfy 
     child support arrearage obligations.
       `(2) Preference for projects serving low-income fathers.--
     In awarding grants under this section, the Secretary may give 
     preference to applications for projects in which a majority 
     of the clients to be served are low-income fathers.
       `(e) Federal Share.--
       `(1) In general.--Grants for a project under this section 
     for a fiscal year shall be available for a share of the cost 
     of such project in such fiscal year equal to--
       `(A) up to 80 percent (or up to 90 percent, if the entity 
     demonstrates to the Secretary's satisfaction circumstances 
     limiting the entity's ability to secure non-Federal 
     resources) in the case of a project under subsection (b); and
       `(B) up to 100 percent, in the case of a project under 
     subsection (c).
       `(2) Non-federal share.--The non-Federal share may be in 
     cash or in kind. In determining the amount of the non-Federal 
     share, the Secretary may attribute fair market value to 
     goods, services, and facilities contributed from non-Federal 
     sources.

     `SEC. 444. MULTICITY, MULTISTATE DEMONSTRATION PROJECTS.

       `(a) In General.--The Secretary may make grants under this 
     section for fiscal years 2006 through 2010 to eligible 
     entities (as specified in subsection (b)) for 2 multicity, 
     multistate projects demonstrating approaches to achieving the 
     objectives specified in section 441(b)(1). One of the 
     projects shall test the use of married couples to deliver 
     program services.
       `(b) Eligible Entities.--An entity eligible for a grant 
     under this section must be a national nonprofit fatherhood 
     promotion organization that meets the following requirements:
       `(1) Experience with fatherhood programs.--The organization 
     must have substantial experience in designing and 
     successfully conducting programs that meet the purposes 
     described in section 441.
       `(2) Experience with multicity, multistate programs and 
     government coordination.--The organization must have 
     experience in simultaneously conducting such programs in more 
     than 1 major metropolitan area in more than 1 State and in 
     coordinating such programs, where appropriate, with State and 
     local government agencies and private, nonprofit agencies 
     (including community-based and religious organizations), 
     including State or local agencies responsible for child 
     support enforcement and workforce development.
       `(c) Application Requirements.--In order to be eligible for 
     a grant under this section, an entity must submit to the 
     Secretary an application that includes the following:
       `(1) Qualifications.--
       `(A) Eligible entity.--A demonstration that the entity 
     meets the requirements of subsection (b).
       `(B) Other.--Such other information as the Secretary may 
     find necessary to demonstrate the entity's capacity to carry 
     out the project, including the entity's ability to provide 
     the non-Federal share of project resources.
       `(2) Project description.--A description of and commitments 
     concerning the project design, including the following:
       `(A) In general.--A detailed description of the proposed 
     project design and how it will be carried out, which shall--
       `(i) provide for the project to be conducted in at least 3 
     major metropolitan areas;
       `(ii) state how it will address each of the 4 objectives 
     specified in section 441(b)(1);
       `(iii) demonstrate that there is a sufficient number of 
     potential clients to allow for the random selection of 
     individuals to participate in the project and for comparisons 
     with appropriate control groups composed of individuals who 
     have not participated in such projects; and
       `(iv) demonstrate that the project is designed to direct a 
     majority of project resources to activities serving low-
     income fathers (but the project need not make services 
     available on a means-tested basis).
       `(B) Oversight, evaluation, and adjustment component.--An 
     agreement that the entity--
       `(i) in consultation with the evaluator selected pursuant 
     to section 445, and as required by the Secretary, will modify 
     the project design, initially and (if necessary) subsequently 
     throughout the duration of the project, in order to 
     facilitate ongoing and final oversight and evaluation of 
     project operation and outcomes (by means including, to the 
     maximum extent feasible, random assignment of clients to 
     service recipient and control groups), and to provide for 
     mid-course adjustments in project design indicated by interim 
     evaluations;
       `(ii) will submit to the Secretary revised descriptions of 
     the project design as modified in accordance with clause (i); 
     and
       `(iii) will cooperate fully with the Secretary's ongoing 
     oversight and ongoing and final evaluation of the project, by 
     means including affording the Secretary access to the project 
     and to project-related records and documents, staff, and 
     clients.
       `(3) Addressing child abuse and neglect and domestic 
     violence.--A description of how the entity will assess for 
     the presence of, and intervene to resolve, domestic violence 
     and child abuse and neglect, including how the entity will 
     coordinate with State and local child protective service and 
     domestic violence programs.
       `(4) Addressing concerns relating to substance abuse and 
     sexual activity.--A commitment to make available to each 
     individual participating in the project education about 
     alcohol, tobacco, and other drugs, and about the health risks 
     associated with abusing such substances, and information 
     about diseases and conditions transmitted through substance 
     abuse and sexual contact, including HIV/AIDS, and to 
     coordinate with providers of services addressing such 
     problems, as appropriate.
       `(5) Coordination with specified programs.--An undertaking 
     to coordinate, as appropriate, with State and local entities 
     responsible for the programs funded under parts A, B, and D 
     of this title, programs under title I of the Workforce 
     Investment Act of 1998 (including the One-Stop delivery 
     system), and such other programs as the Secretary may 
     require.
       `(6) Records, reports, and audits.--An agreement to 
     maintain such records, make such reports, and cooperate with 
     such reviews or audits (in addition to those required under 
     the preceding provisions of paragraph (2)) as the Secretary 
     may find necessary for purposes of oversight of project 
     activities and expenditures.
       `(d) Federal Share.--
       `(1) In general.--Grants for a project under this section 
     for a fiscal year shall be available for up to 80 percent of 
     the cost of such project in such fiscal year.
       `(2) Non-federal share.--The non-Federal share may be in 
     cash or in kind. In determining the amount of the non-Federal 
     share, the Secretary may attribute fair market value to 
     goods, services, and facilities contributed from non-Federal 
     sources.

     `SEC. 445. EVALUATION.

       `(a) In General.--The Secretary, directly or by contract or 
     cooperative agreement, shall evaluate the effectiveness of 
     service projects funded under sections 443 and 444 from the 
     standpoint of the purposes specified in section 441(b)(1).
       `(b) Evaluation Methodology.--Evaluations under this 
     section shall--
       `(1) include, to the maximum extent feasible, random 
     assignment of clients to service delivery and control groups 
     and other appropriate comparisons of groups of individuals 
     receiving and not receiving services;

[[Page 489]]

       `(2) describe and measure the effectiveness of the projects 
     in achieving their specific project goals; and
       `(3) describe and assess, as appropriate, the impact of 
     such projects on marriage, parenting, domestic violence, 
     child abuse and neglect, money management, employment and 
     earnings, payment of child support, and child well-being, 
     health, and education.
       `(c) Evaluation Reports.--The Secretary shall publish the 
     following reports on the results of the evaluation:
       `(1) An implementation evaluation report covering the first 
     24 months of the activities under this part to be completed 
     by 36 months after initiation of such activities.
       `(2) A final report on the evaluation to be completed by 
     September 30, 2013.

     `SEC. 446. PROJECTS OF NATIONAL SIGNIFICANCE.

       `The Secretary is authorized, by grant, contract, or 
     cooperative agreement, to carry out projects and activities 
     of national significance relating to fatherhood promotion, 
     including--
       `(1) Collection and dissemination of information.--
     Assisting States, communities, and private entities, 
     including religious organizations, in efforts to promote and 
     support marriage and responsible fatherhood by collecting, 
     evaluating, developing, and making available (through the 
     Internet and by other means) to all interested parties 
     information regarding approaches to accomplishing the 
     objectives specified in section 441(b)(1).
       `(2) Media campaign.--Developing, promoting, and 
     distributing to interested States, local governments, public 
     agencies, and private nonprofit organizations, including 
     charitable and religious organizations, a media campaign that 
     promotes and encourages involved, committed, and responsible 
     fatherhood and married fatherhood.
       `(3) Technical assistance.--Providing technical assistance, 
     including consultation and training, to public and private 
     entities, including community organizations and faith-based 
     organizations, in the implementation of local fatherhood 
     promotion programs.
       `(4) Research.--Conducting research related to the purposes 
     of this part.

     `SEC. 447. NONDISCRIMINATION.

       `The projects and activities assisted under this part shall 
     be available on the same basis to all fathers and expectant 
     fathers able to benefit from such projects and activities, 
     including married and unmarried fathers and custodial and 
     noncustodial fathers, with particular attention to low-income 
     fathers, and to mothers and expectant mothers on the same 
     basis as to fathers.

     `SEC. 448. AUTHORIZATION OF APPROPRIATIONS; RESERVATION FOR 
                   CERTAIN PURPOSE.

       `(a) Authorization.--There are authorized to be 
     appropriated $20,000,000 for each of fiscal years 2006 
     through 2010 to carry out the provisions of this part.
       `(b) Reservation.--Of the amount appropriated under this 
     section for each fiscal year, not more than 15 percent shall 
     be available for the costs of the multicity, multicounty, 
     multistate demonstration projects under section 444, 
     evaluations under section 445, and projects of national 
     significance under section 446.'.
       ``(b) Inapplicability of Effective Date Provisions.--
     Section 116 shall not apply to the amendment made by 
     subsection (a) of this section.''.
       (2) Clerical amendment.--Section 2 of such Act is amended 
     in the table of contents by inserting after the item relating 
     to section 116 the following new item:

``117. Fatherhood program.''.

     SEC. 120. STATE OPTION TO MAKE TANF PROGRAMS MANDATORY 
                   PARTNERS WITH ONE-STOP EMPLOYMENT TRAINING 
                   CENTERS.

       Section 408 of the Social Security Act (42 U.S.C. 608) is 
     amended by adding at the end the following:
       ``(h) State Option to Make TANF Programs Mandatory Partners 
     With One-Stop Employment Training Centers.--For purposes of 
     section 121(b) of the Workforce Investment Act of 1998, a 
     State program funded under part A of title IV of the Social 
     Security Act shall be considered a program referred to in 
     paragraph (1)(B) of such section, unless, after the date of 
     the enactment of this subsection, the Governor of the State 
     notifies the Secretaries of Health and Human Services and 
     Labor in writing of the decision of the Governor not to make 
     the State program a mandatory partner.''.

     SEC. 121. SENSE OF THE CONGRESS.

       It is the sense of the Congress that a State welfare-to-
     work program should include a mentoring program.

     SEC. 122. EXTENSION THROUGH FISCAL YEAR 2005.

       (a) In General.--Except as otherwise provided in this Act 
     and the amendments made by this Act, activities authorized by 
     part A of title IV of the Social Security Act, and by 
     sections 429A, 1108(b), and 1130(a) of such Act, shall 
     continue through September 30, 2005, in the manner authorized 
     for fiscal year 2004, and out of any money in the Treasury of 
     the United States not otherwise appropriated, there are 
     hereby appropriated such sums as may be necessary for such 
     purpose. Grants and payments may be made pursuant to this 
     authority through the fourth quarter of fiscal year 2005 at 
     the level provided for such activities through the fourth 
     quarter of fiscal year 2004, except that in the case of 
     section 403(a)(4) of such Act, the level shall be 
     $100,000,000.
       (b) Effective Date.--Subsection (a) shall take effect on 
     the date of the enactment of this Act.

                          TITLE II--CHILD CARE

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Caring for Children Act of 
     2005''.

     SEC. 202. GOALS.

       (a) Goals.--Section 658A(b) of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9801 note) is 
     amended--
       (1) in paragraph (3) by striking ``encourage'' and 
     inserting ``assist'',
       (2) by amending paragraph (4) to read as follows:
       ``(4) to assist States to provide child care to low-income 
     parents;'',
       (3) by redesignating paragraph (5) as paragraph (7), and
       (4) by inserting after paragraph (4) the following:
       ``(5) to encourage States to improve the quality of child 
     care available to families;
       ``(6) to promote school readiness by encouraging the 
     exposure of young children in child care to nurturing 
     environments and developmentally-appropriate activities, 
     including activities to foster early cognitive and literacy 
     development; and''.
       (b) Conforming Amendment.--Section 658E(c)(3)(B) of the 
     Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
     9858c(c)(3)(B)) is amended by striking ``through (5)'' and 
     inserting ``through (7)''.

     SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

       Section 658B of the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9858) is amended--
       (1) by striking ``is'' and inserting ``are'', and
       (2) by striking ``$1,000,000,000 for each of the fiscal 
     years 1996 through 2002'' and inserting ``$2,100,000,000 for 
     fiscal year 2005, $2,300,000,000 for fiscal year 2006, 
     $2,500,000,000 for fiscal year 2007, $2,700,000,000 for 
     fiscal year 2008, $2,900,000,000 for fiscal year 2009, and 
     $3,100,000,000 for fiscal year 2010''.

     SEC. 204. APPLICATION AND PLAN.

       Section 658E(c)(2) of the Child Care and Development Block 
     Grant Act of 1990 (42 U.S.C. 9858C(c)(2)) is amended--
       (1) by amending subparagraph (D) to read as follows:
       ``(D) Consumer and child care provider education 
     information.--Certify that the State will collect and 
     disseminate, through resource and referral services and other 
     means as determined by the State, to parents of eligible 
     children, child care providers, and the general public, 
     information regarding--
       ``(i) the promotion of informed child care choices, 
     including information about the quality and availability of 
     child care services;
       ``(ii) research and best practices on children's 
     development, including early cognitive development;
       ``(iii) the availability of assistance to obtain child care 
     services; and
       ``(iv) other programs for which families that receive child 
     care services for which financial assistance is provided 
     under this subchapter may be eligible, including the food 
     stamp program, the WIC program under section 17 of the Child 
     Nutrition Act of 1966, the child and adult care food program 
     under section 17 of the Richard B. Russell National School 
     Lunch Act, and the medicaid and SCHIP programs under titles 
     XIX and XXI of the Social Security Act.'', and
       (2) by inserting after subparagraph (H) the following:
       ``(I) Coordination with other early child care services and 
     early childhood education programs.--Demonstrate how the 
     State is coordinating child care services provided under this 
     subchapter with Head Start, Early Reading First, Even Start, 
     Ready-To-Learn Television, State pre-kindergarten programs, 
     and other early childhood education programs to expand 
     accessibility to and continuity of care and early education 
     without displacing services provided by the current early 
     care and education delivery system.
       ``(J) Public-private partnerships.--Demonstrate how the 
     State encourages partnerships with private and other public 
     entities to leverage existing service delivery systems of 
     early childhood education and increase the supply and quality 
     of child care services.
       ``(K) Child care service quality.--
       ``(i) Certification.--For each fiscal year after fiscal 
     year 2006, certify that during the then preceding fiscal year 
     the State was in compliance with section 658G and describe 
     how funds were used to comply with such section during such 
     preceding fiscal year.
       ``(ii) Strategy.--For each fiscal year after fiscal year 
     2006, contain an outline of the strategy the State will 
     implement during such fiscal year for which the State plan is 
     submitted, to address the quality of child care services in 
     the State available to low-income parents from eligible child 
     care providers, and include in such strategy--

[[Page 490]]

       ``(I) a statement specifying how the State will address the 
     activities described in paragraphs (1), (2), and (3) of 
     section 658G;
       ``(II) a description of quantifiable, objective measures 
     for evaluating the quality of child care services separately 
     with respect to the activities listed in each of such 
     paragraphs that the State will use to evaluate its progress 
     in improving the quality of such child care services;
       ``(III) a list of State-developed child care service 
     quality targets for such fiscal year quantified on the basis 
     of such measures; and
       ``(IV) for each fiscal year after fiscal year 2006, a 
     report on the progress made to achieve such targets during 
     the then preceding fiscal year.

       ``(iii) Rule of construction.--Nothing in this subparagraph 
     shall be construed to require that the State apply measures 
     for evaluating quality to specific types of child care 
     providers.
       ``(L) Access to care for certain populations.--Demonstrate 
     how the State is addressing the child care needs of parents 
     eligible for child care services for which financial 
     assistance is provided under this subchapter who have 
     children with special needs, work nontraditional hours, or 
     require child care services for infants or toddlers.''.

     SEC. 205. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.

       Section 658G of the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9858e) is amended to read as follows:

     ``SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE 
                   SERVICES.

       ``A State that receives funds to carry out this subchapter 
     for a fiscal year, shall use not less than 6 percent of the 
     amount of such funds for activities provided through resource 
     and referral services or other means, that are designed to 
     improve the quality of child care services in the State 
     available to low-income parents from eligible child care 
     providers. Such activities include--
       ``(1) programs that provide training, education, and other 
     professional development activities to enhance the skills of 
     the child care workforce, including training opportunities 
     for caregivers in informal care settings;
       ``(2) activities within child care settings to enhance 
     early learning for young children, to promote early literacy, 
     and to foster school readiness;
       ``(3) initiatives to increase the retention and 
     compensation of child care providers, including tiered 
     reimbursement rates for providers that meet quality standards 
     as defined by the State; or
       ``(4) other activities deemed by the State to improve the 
     quality of child care services provided in such State.''.

     SEC. 206. REPORT BY SECRETARY.

       Section 658L of the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9858j) is amended to read as follows:

     ``SEC. 658L. REPORT BY SECRETARY.

       ``(a) Report Required.--Not later than October 1, 2007, and 
     biennially thereafter, the Secretary shall prepare and submit 
     to the Committee on Education and the Workforce of the House 
     of Representatives and the Committee on Health, Education, 
     Labor and Pensions of the Senate a report that contains the 
     following:
       ``(1) A summary and analysis of the data and information 
     provided to the Secretary in the State reports submitted 
     under section 658K.
       ``(2) Aggregated statistics on the supply of, demand for, 
     and quality of child care, early education, and non-school-
     hours programs.
       ``(3) An assessment, and where appropriate, recommendations 
     for the Congress concerning efforts that should be undertaken 
     to improve the access of the public to quality and affordable 
     child care in the United States.
       ``(b) Collection of Information.--The Secretary may utilize 
     the national child care data system available through 
     resource and referral organizations at the local, State, and 
     national level to collect the information required by 
     subsection (a)(2).''

     SEC. 207. DEFINITIONS.

       Section 658P(4)(B) of the Child Care and Development Block 
     Grant Act of 1990 (42 U.S.C. 9858N(4)(B)) is amended by 
     striking ``85 percent of the State median income'' and 
     inserting ``income levels as established by the State, 
     prioritized by need,''.

     SEC. 208. ENTITLEMENT FUNDING.

       Section 418(a)(3) (42 U.S.C. 618(a)(3)) is amended--
       (1) by striking ``and'' at the end of subparagraph (E);
       (2) by striking the period at the end of subparagraph (F) 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(G) $2,917,000,000 for each of fiscal years 2006 through 
     2010.''.

                        TITLE III--CHILD SUPPORT

     SEC. 301. FEDERAL MATCHING FUNDS FOR LIMITED PASS THROUGH OF 
                   CHILD SUPPORT PAYMENTS TO FAMILIES RECEIVING 
                   TANF.

       (a) In General.--Section 457(a) (42 U.S.C. 657(a)) is 
     amended--
       (1) in paragraph (1)(A), by inserting ``subject to 
     paragraph (7)'' before the semicolon; and
       (2) by adding at the end the following:
       ``(7) Federal matching funds for limited pass through of 
     child support payments to families receiving tanf.--
     Notwithstanding paragraph (1), a State shall not be required 
     to pay to the Federal Government the Federal share of an 
     amount collected during a month on behalf of a family that is 
     a recipient of assistance under the State program funded 
     under part A, to the extent that--
       ``(A) the State distributes the amount to the family;
       ``(B) the total of the amounts so distributed to the family 
     during the month--
       ``(i) exceeds the amount (if any) that, as of December 31, 
     2001, was required under State law to be distributed to a 
     family under paragraph (1)(B); and
       ``(ii) does not exceed the greater of--

       ``(I) $100; or
       ``(II) $50 plus the amount described in clause (i); and

       ``(C) the amount is disregarded in determining the amount 
     and type of assistance provided to the family under the State 
     program funded under part A.''.
       (b) Applicability.--The amendments made by subsection (a) 
     shall apply to amounts distributed on or after October 1, 
     2007.

     SEC. 302. STATE OPTION TO PASS THROUGH ALL CHILD SUPPORT 
                   PAYMENTS TO FAMILIES THAT FORMERLY RECEIVED 
                   TANF.

       (a) In General.--Section 457(a) (42 U.S.C. 657(a)), as 
     amended by section 301(a) of this Act, is amended--
       (1) in paragraph (2)(B), in the matter preceding clause 
     (i), by inserting ``, except as provided in paragraph (8),'' 
     after ``shall''; and
       (2) by adding at the end the following:
       ``(8) State option to pass through all child support 
     payments to families that formerly received tanf.--In lieu of 
     applying paragraph (2) to any family described in paragraph 
     (2), a State may distribute to the family any amount 
     collected during a month on behalf of the family.''.
       (b) Applicability.--The amendments made by subsection (a) 
     shall apply to amounts distributed on or after October 1, 
     2007.

     SEC. 303. MANDATORY REVIEW AND ADJUSTMENT OF CHILD SUPPORT 
                   ORDERS FOR FAMILIES RECEIVING TANF.

       (a) In General.--Section 466(a)(10)(A)(i) (42 U.S.C. 
     666(a)(10)(A)(i)) is amended--
       (1) by striking ``parent, or,'' and inserting ``parent 
     or''; and
       (2) by striking ``upon the request of the State agency 
     under the State plan or of either parent,''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on October 1, 2007.

     SEC. 304. MANDATORY FEE FOR SUCCESSFUL CHILD SUPPORT 
                   COLLECTION FOR FAMILY THAT HAS NEVER RECEIVED 
                   TANF.

       (a) In General.--Section 454(6)(B) (42 U.S.C. 654(6)(B)) is 
     amended--
       (1) by inserting ``(i)'' after ``(B)'';
       (2) by redesignating clauses (i) and (ii) as subclauses (I) 
     and (II), respectively;
       (3) by adding ``and'' after the semicolon; and
       (4) by adding after and below the end the following new 
     clause:
       ``(ii) in the case of an individual who has never received 
     assistance under a State program funded under part A and for 
     whom the State has collected at least $500 of support, the 
     State shall impose an annual fee of $25 for each case in 
     which services are furnished, which shall be retained by the 
     State from support collected on behalf of the individual (but 
     not from the 1st $500 so collected), paid by the individual 
     applying for the services, recovered from the absent parent, 
     or paid by the State out of its own funds (the payment of 
     which from State funds shall not be considered as an 
     administrative cost of the State for the operation of the 
     plan, and such fees shall be considered income to the 
     program);''.
       (b) Conforming Amendment.--Section 457(a)(3) (42 U.S.C. 
     657(a)(3)) is amended to read as follows:
       ``(3) Families that never received assistance.--In the case 
     of any other family, the State shall distribute to the family 
     the portion of the amount so collected that remains after 
     withholding any fee pursuant to section 454(6)(B)(ii).''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2006.

     SEC. 305. REPORT ON UNDISTRIBUTED CHILD SUPPORT PAYMENTS.

       Not later than 6 months after the date of the enactment of 
     this Act, the Secretary of Health and Human Services shall 
     submit to the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate a 
     report on the procedures that the States use generally to 
     locate custodial parents for whom child support has been 
     collected but not yet distributed. The report shall include 
     an estimate of the total amount of undistributed child 
     support and the average length of time it takes undistributed 
     child support to be distributed. To the extent the Secretary 
     deems appropriate, the Secretary shall include in the report 
     recommendations as to whether additional procedures should be 
     established at the State or Federal level to expedite the 
     payment of undistributed child support.

[[Page 491]]



     SEC. 306. DECREASE IN AMOUNT OF CHILD SUPPORT ARREARAGE 
                   TRIGGERING PASSPORT DENIAL.

       (a) In General.--Section 452(k)(1) (42 U.S.C. 652(k)(1)) is 
     amended by striking ``$5,000'' and inserting ``$2,500''.
       (b) Conforming Amendment.--Section 454(31) (42 U.S.C. 
     654(31)) is amended by striking ``$5,000'' and inserting 
     ``$2,500''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2006.

     SEC. 307. USE OF TAX REFUND INTERCEPT PROGRAM TO COLLECT 
                   PAST-DUE CHILD SUPPORT ON BEHALF OF CHILDREN 
                   WHO ARE NOT MINORS.

       (a) In General.--Section 464 (42 U.S.C. 664) is amended--
       (1) in subsection (a)(2)(A), by striking ``(as that term is 
     defined for purposes of this paragraph under subsection 
     (c))''; and
       (2) in subsection (c)--
       (A) in paragraph (1)--
       (i) by striking ``(1) Except as provided in paragraph (2), 
     as used in'' and inserting ``In''; and
       (ii) by inserting ``(whether or not a minor)'' after ``a 
     child'' each place it appears; and
       (B) by striking paragraphs (2) and (3).
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on October 1, 2007.

     SEC. 308. GARNISHMENT OF COMPENSATION PAID TO VETERANS FOR 
                   SERVICE-CONNECTED DISABILITIES IN ORDER TO 
                   ENFORCE CHILD SUPPORT OBLIGATIONS.

       (a) In General.--Section 459(h) (42 U.S.C. 659(h)) is 
     amended--
       (1) in paragraph (1)(A)(ii)(V), by striking all that 
     follows ``Armed Forces'' and inserting a semicolon; and
       (2) by adding at the end the following:
       ``(3) Limitations with respect to compensation paid to 
     veterans for service-connected disabilities.--Notwithstanding 
     any other provision of this section:
       ``(A) Compensation described in paragraph (1)(A)(ii)(V) 
     shall not be subject to withholding pursuant to this 
     section--
       ``(i) for payment of alimony; or
       ``(ii) for payment of child support if the individual is 
     fewer than 60 days in arrears in payment of the support.
       ``(B) Not more than 50 percent of any payment of 
     compensation described in paragraph (1)(A)(ii)(V) may be 
     withheld pursuant to this section.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on October 1, 2007.

     SEC. 309. IMPROVING FEDERAL DEBT COLLECTION PRACTICES.

       (a) In General.--Section 3716(h)(3) of title 31, United 
     States Code, is amended to read as follows:
       ``(3) In applying this subsection with respect to any debt 
     owed to a State, other than past due support being enforced 
     by the State, subsection (c)(3)(A) shall not apply. 
     Subsection (c)(3)(A) shall apply with respect to past due 
     support being enforced by the State notwithstanding any other 
     provision of law, including sections 207 and 1631(d)(1) of 
     the Social Security Act (42 U.S.C. 407 and 1383(d)(1)), 
     section 413(b) of Public law 91-173 (30 U.S.C. 923(b)), and 
     section 14 of the Act of August 29, 1935 (45 U.S.C. 231m).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on October 1, 2006.

     SEC. 310. MAINTENANCE OF TECHNICAL ASSISTANCE FUNDING.

       Section 452(j) (42 U.S.C. 652(j)) is amended by inserting 
     ``or the amount appropriated under this paragraph for fiscal 
     year 2002, whichever is greater,'' before ``which shall be 
     available''.

     SEC. 311. MAINTENANCE OF FEDERAL PARENT LOCATOR SERVICE 
                   FUNDING.

       Section 453(o) (42 U.S.C. 653(o)) is amended--
       (1) in the 1st sentence, by inserting ``or the amount 
     appropriated under this paragraph for fiscal year 2002, 
     whichever is greater,'' before ``which shall be available''; 
     and
       (2) in the 2nd sentence, by striking ``for each of fiscal 
     years 1997 through 2001''.

                        TITLE IV--CHILD WELFARE

     SEC. 401. EXTENSION OF AUTHORITY TO APPROVE DEMONSTRATION 
                   PROJECTS.

       Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)) is amended by 
     striking ``2002'' and inserting ``2010''.

     SEC. 402. ELIMINATION OF LIMITATION ON NUMBER OF WAIVERS.

       Section 1130(a)(2) (42 U.S.C. 1320a-9(a)(2)) is amended by 
     striking ``not more than 10''.

     SEC. 403. ELIMINATION OF LIMITATION ON NUMBER OF STATES THAT 
                   MAY BE GRANTED WAIVERS TO CONDUCT DEMONSTRATION 
                   PROJECTS ON SAME TOPIC.

       Section 1130 (42 U.S.C. 1320a-9) is amended by adding at 
     the end the following:
       ``(h) No Limit on Number of States That May Be Granted 
     Waivers to Conduct Same or Similar Demonstration Projects.--
     The Secretary shall not refuse to grant a waiver to a State 
     under this section on the grounds that a purpose of the 
     waiver or of the demonstration project for which the waiver 
     is necessary would be the same as or similar to a purpose of 
     another waiver or project that is or may be conducted under 
     this section.''.

     SEC. 404. ELIMINATION OF LIMITATION ON NUMBER OF WAIVERS THAT 
                   MAY BE GRANTED TO A SINGLE STATE FOR 
                   DEMONSTRATION PROJECTS.

       Section 1130 (42 U.S.C. 1320a-9) is further amended by 
     adding at the end the following:
       ``(i) No Limit on Number of Waivers Granted to, or 
     Demonstration Projects That May Be Conducted by, a Single 
     State.--The Secretary shall not impose any limit on the 
     number of waivers that may be granted to a State, or the 
     number of demonstration projects that a State may be 
     authorized to conduct, under this section.''.

     SEC. 405. STREAMLINED PROCESS FOR CONSIDERATION OF AMENDMENTS 
                   TO AND EXTENSIONS OF DEMONSTRATION PROJECTS 
                   REQUIRING WAIVERS.

       Section 1130 (42 U.S.C. 1320a-9) is further amended by 
     adding at the end the following:
       ``(j) Streamlined Process for Consideration of Amendments 
     and Extensions.--The Secretary shall develop a streamlined 
     process for consideration of amendments and extensions 
     proposed by States to demonstration projects conducted under 
     this section.''.

     SEC. 406. AVAILABILITY OF REPORTS.

       Section 1130 (42 U.S.C. 1320a-9) is further amended by 
     adding at the end the following:
       ``(k) Availability of Reports.--The Secretary shall make 
     available to any State or other interested party any report 
     provided to the Secretary under subsection (f)(2), and any 
     evaluation or report made by the Secretary with respect to a 
     demonstration project conducted under this section, with a 
     focus on information that may promote best practices and 
     program improvements.''.

     SEC. 407. TECHNICAL CORRECTION.

       Section 1130(b)(1) (42 U.S.C. 1320a-9(b)(1)) is amended by 
     striking ``422(b)(9)'' and inserting ``422(b)(10)''.

                 TITLE V--SUPPLEMENTAL SECURITY INCOME

     SEC. 501. REVIEW OF STATE AGENCY BLINDNESS AND DISABILITY 
                   DETERMINATIONS.

       Section 1633 (42 U.S.C. 1383b) is amended by adding at the 
     end the following:
       ``(e)(1) The Commissioner of Social Security shall review 
     determinations, made by State agencies pursuant to subsection 
     (a) in connection with applications for benefits under this 
     title on the basis of blindness or disability, that 
     individuals who have attained 18 years of age are blind or 
     disabled as of a specified onset date. The Commissioner of 
     Social Security shall review such a determination before any 
     action is taken to implement the determination.
       ``(2)(A) In carrying out paragraph (1), the Commissioner of 
     Social Security shall review--
       ``(i) at least 20 percent of all determinations referred to 
     in paragraph (1) that are made in fiscal year 2006;
       ``(ii) at least 40 percent of all such determinations that 
     are made in fiscal year 2007; and
       ``(iii) at least 50 percent of all such determinations that 
     are made in fiscal year 2008 or thereafter.
       ``(B) In carrying out subparagraph (A), the Commissioner of 
     Social Security shall, to the extent feasible, select for 
     review the determinations which the Commissioner of Social 
     Security identifies as being the most likely to be 
     incorrect.''.

                 TITLE VI--STATE AND LOCAL FLEXIBILITY

     SEC. 601. PROGRAM COORDINATION DEMONSTRATION PROJECTS.

       (a) Purpose.--The purpose of this section is to establish a 
     program of demonstration projects in a State or portion of a 
     State to coordinate multiple public assistance, workforce 
     development, and other programs, for the purpose of 
     supporting working individuals and families, helping families 
     escape welfare dependency, promoting child well-being, or 
     helping build stronger families, using innovative approaches 
     to strengthen service systems and provide more coordinated 
     and effective service delivery.
       (b) Definitions.--In this section:
       (1) Administering secretary.--The term ``administering 
     Secretary'' means, with respect to a qualified program, the 
     head of the Federal agency responsible for administering the 
     program.
       (2) Qualified program.--The term ``qualified program'' 
     means--
       (A) a program under part A of title IV of the Social 
     Security Act;
       (B) the program under title XX of such Act;
       (C) activities funded under title I of the Workforce 
     Investment Act of 1998, except subtitle C of such title;
       (D) a demonstration project authorized under section 505 of 
     the Family Support Act of 1988;
       (E) activities funded under the Wagner-Peyser Act;
       (F) activities funded under the Adult Education and Family 
     Literacy Act;
       (G) activities funded under the Child Care and Development 
     Block Grant Act of 1990;
       (H) activities funded under the United States Housing Act 
     of 1937 (42 U.S.C. 1437 et seq.), except that such term shall 
     not include--
       (i) any program for rental assistance under section 8 of 
     such Act (42 U.S.C. 1437f); and
       (ii) the program under section 7 of such Act (42 U.S.C. 
     1437e) for designating public housing for occupancy by 
     certain populations;

[[Page 492]]

       (I) activities funded under title I, II, III, or IV of the 
     McKinney-Vento Homeless Assistance Act (42 U.S.C. 11301 et 
     seq.); or
       (J) the food stamp program as defined in section 3(h) of 
     the Food Stamp Act of 1977 (7 U.S.C. 2012(h)).
       (c) Application Requirements.--The head of a State entity 
     or of a sub-State entity administering 2 or more qualified 
     programs proposed to be included in a demonstration project 
     under this section shall (or, if the project is proposed to 
     include qualified programs administered by 2 or more such 
     entities, the heads of the administering entities (each of 
     whom shall be considered an applicant for purposes of this 
     section) shall jointly) submit to the administering Secretary 
     of each such program an application that contains the 
     following:
       (1) Programs included.--A statement identifying each 
     qualified program to be included in the project, and 
     describing how the purposes of each such program will be 
     achieved by the project.
       (2) Population served.--A statement identifying the 
     population to be served by the project and specifying the 
     eligibility criteria to be used.
       (3) Description and justification.--A detailed description 
     of the project, including--
       (A) a description of how the project is expected to improve 
     or enhance achievement of the purposes of the programs to be 
     included in the project, from the standpoint of quality, of 
     cost-effectiveness, or of both; and
       (B) a description of the performance objectives for the 
     project, including any proposed modifications to the 
     performance measures and reporting requirements used in the 
     programs.
       (4) Waivers requested.--A description of the statutory and 
     regulatory requirements with respect to which a waiver is 
     requested in order to carry out the project, and a 
     justification of the need for each such waiver.
       (5) Cost neutrality.--Such information and assurances as 
     necessary to establish to the satisfaction of the 
     administering Secretary, in consultation with the Director of 
     the Office of Management and Budget, that the proposed 
     project is reasonably expected to meet the applicable cost 
     neutrality requirements of subsection (d)(4).
       (6) Evaluation and reports.--An assurance that the 
     applicant will conduct ongoing and final evaluations of the 
     project, and make interim and final reports to the 
     administering Secretary, at such times and in such manner as 
     the administering Secretary may require.
       (7) Public housing agency plan.--In the case of an 
     application proposing a demonstration project that includes 
     activities referred to in subsection (b)(2)(H) of this 
     section--
       (A) a certification that the applicable annual public 
     housing agency plan of any agency affected by the project 
     that is approved under section 5A of the United States 
     Housing Act of 1937 (42 U.S.C. 1437c-1) by the Secretary 
     includes the information specified in paragraphs (1) through 
     (4) of this subsection; and
       (B) any resident advisory board recommendations, and other 
     information, relating to the project that, pursuant to 
     section 5A(e)(2) of the United States Housing Act of 1937 (42 
     U.S.C. 1437c-1(e)(2), is required to be included in the 
     public housing agency plan of any public housing agency 
     affected by the project.
       (8) Other information and assurances.--Such other 
     information and assurances as the administering Secretary may 
     require.
       (d) Approval of Applications.--
       (1) In general.--The administering Secretary with respect 
     to a qualified program that is identified in an application 
     submitted pursuant to subsection (c) may approve the 
     application and, except as provided in paragraph (2), waive 
     any requirement applicable to the program, to the extent 
     consistent with this section and necessary and appropriate 
     for the conduct of the demonstration project proposed in the 
     application, if the administering Secretary determines that 
     the project--
       (A) has a reasonable likelihood of achieving the objectives 
     of the programs to be included in the project;
       (B) may reasonably be expected to meet the applicable cost 
     neutrality requirements of paragraph (4), as determined by 
     the Director of the Office of Management and Budget; and
       (C) includes the coordination of 2 or more qualified 
     programs.
       (2) Provisions excluded from waiver authority.--A waiver 
     shall not be granted under paragraph (1)--
       (A) with respect to any provision of law relating to--
       (i) civil rights or prohibition of discrimination;
       (ii) purposes or goals of any program;
       (iii) maintenance of effort requirements;
       (iv) health or safety;
       (v) labor standards under the Fair Labor Standards Act of 
     1938; or
       (vi) environmental protection;
       (B) with respect to section 241(a) of the Adult Education 
     and Family Literacy Act;
       (C) in the case of a program under the United States 
     Housing Act of 1937 (42 U.S.C. 1437 et seq.), with respect to 
     any requirement under section 5A of such Act (42 U.S.C. 
     1437c-1; relating to public housing agency plans and resident 
     advisory boards);
       (D) in the case of a program under the Workforce Investment 
     Act, with respect to any requirement the waiver of which 
     would violate section 189(i)(4)(A)(i) of such Act;
       (E) in the case of the food stamp program (as defined in 
     section 3(h) of the Food Stamp Act of 1977 (7 U.S.C. 
     2012(h)), with respect to any requirement under--
       (i) section 6 (if waiving a requirement under such section 
     would have the effect of expanding eligibility for the 
     program), 7(b) or 16(c) of the Food Stamp Act of 1977 (7 
     U.S.C. 2011 et seq.); or
       (ii) title IV of the Personal Responsibility and Work 
     Opportunity Reconciliation Act of 1996 (8 U.S.C. 1601 et 
     seq.);
       (F) with respect to any requirement that a State pass 
     through to a sub-State entity part or all of an amount paid 
     to the State;
       (G) if the waiver would waive any funding restriction or 
     limitation provided in an appropriations Act, or would have 
     the effect of transferring appropriated funds from 1 
     appropriations account to another; or
       (H) except as otherwise provided by statute, if the waiver 
     would waive any funding restriction applicable to a program 
     authorized under an Act which is not an appropriations Act 
     (but not including program requirements such as application 
     procedures, performance standards, reporting requirements, or 
     eligibility standards), or would have the effect of 
     transferring funds from a program for which there is direct 
     spending (as defined in section 250(c)(8) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985) to another 
     program.
       (3) Agreement of each administering secretary required.--
       (A) In general.--An applicant may not conduct a 
     demonstration project under this section unless each 
     administering Secretary with respect to any program proposed 
     to be included in the project has approved the application to 
     conduct the project.
       (B) Agreement with respect to funding and implementation.--
     Before approving an application to conduct a demonstration 
     project under this section, an administering Secretary shall 
     have in place an agreement with the applicant with respect to 
     the payment of funds and responsibilities required of the 
     administering Secretary with respect to the project.
       (4) Cost-neutrality requirement.--
       (A) General rule.--Notwithstanding any other provision of 
     law (except subparagraph (B)), the total of the amounts that 
     may be paid by the Federal Government for a fiscal year with 
     respect to the programs in the State in which an entity 
     conducting a demonstration project under this section is 
     located that are affected by the project shall not exceed the 
     estimated total amount that the Federal Government would have 
     paid for the fiscal year with respect to the programs if the 
     project had not been conducted, as determined by the Director 
     of the Office of Management and Budget.
       (B) Special rule.--If an applicant submits to the Director 
     of the Office of Management and Budget a request to apply the 
     rules of this subparagraph to the programs in the State in 
     which the applicant is located that are affected by a 
     demonstration project proposed in an application submitted by 
     the applicant pursuant to this section, during such period of 
     not more than 5 consecutive fiscal years in which the project 
     is in effect, and the Director determines, on the basis of 
     supporting information provided by the applicant, to grant 
     the request, then, notwithstanding any other provision of 
     law, the total of the amounts that may be paid by the Federal 
     Government for the period with respect to the programs shall 
     not exceed the estimated total amount that the Federal 
     Government would have paid for the period with respect to the 
     programs if the project had not been conducted.
       (5) 90-day approval deadline.--
       (A) In general.--If an administering Secretary receives an 
     application to conduct a demonstration project under this 
     section and does not disapprove the application within 90 
     days after the receipt, then--
       (i) the administering Secretary is deemed to have approved 
     the application for such period as is requested in the 
     application, except to the extent inconsistent with 
     subsection (e); and
       (ii) any waiver requested in the application which applies 
     to a qualified program that is identified in the application 
     and is administered by the administering Secretary is deemed 
     to be granted, except to the extent inconsistent with 
     paragraph (2) or (4) of this subsection.
       (B) Deadline extended if additional information is 
     sought.--The 90-day period referred to in subparagraph (A) 
     shall not include any period that begins with the date the 
     Secretary requests the applicant to provide additional 
     information with respect to the application and ends with the 
     date the additional information is provided.
       (e) Duration of Projects.--A demonstration project under 
     this section may be approved for a term of not more than 5 
     years.
       (f) Reports to Congress.--
       (1) Report on disposition of applications.--Within 90 days 
     after an administering Secretary receives an application 
     submitted pursuant to this section, the administering 
     Secretary shall submit to each

[[Page 493]]

     Committee of the Congress which has jurisdiction over a 
     qualified program identified in the application notice of the 
     receipt, a description of the decision of the administering 
     Secretary with respect to the application, and the reasons 
     for approving or disapproving the application.
       (2) Reports on projects.--Each administering Secretary 
     shall provide annually to the Congress a report concerning 
     demonstration projects approved under this section, 
     including--
       (A) the projects approved for each applicant;
       (B) the number of waivers granted under this section, and 
     the specific statutory provisions waived;
       (C) how well each project for which a waiver is granted is 
     improving or enhancing program achievement from the 
     standpoint of quality, cost-effectiveness, or both;
       (D) how well each project for which a waiver is granted is 
     meeting the performance objectives specified in subsection 
     (c)(3)(B);
       (E) how each project for which a waiver is granted is 
     conforming with the cost-neutrality requirements of 
     subsection (d)(4); and
       (F) to the extent the administering Secretary deems 
     appropriate, recommendations for modification of programs 
     based on outcomes of the projects.
       (g) Amendment to United States Housing Act of 1937.--
     Section 5A(d) of the United States Housing Act of 1937 (42 
     U.S.C. 1437c-1(d)) is amended--
       (1) by redesignating paragraph (18) as paragraph (19); and
       (2) by inserting after paragraph (17) the following new 
     paragraph:
       ``(18) Program coordination demonstration projects.--In the 
     case of an agency that administers an activity referred to in 
     section 601(b)(2)(H) of the Personal Responsibility, Work, 
     and Family Promotion Act of 2005 that, during such fiscal 
     year, will be included in a demonstration project under 
     section 601 of such Act, the information that is required to 
     be included in the application for the project pursuant to 
     paragraphs (1) through (4) of section 601(b) of such Act.''.

     SEC. 602. STATE FOOD ASSISTANCE BLOCK GRANT DEMONSTRATION 
                   PROJECT.

       The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 28. STATE FOOD ASSISTANCE BLOCK GRANT DEMONSTRATION 
                   PROJECT.

       ``(a) Establishment.--The Secretary shall establish a 
     program to make grants to States in accordance with this 
     section to provide--
       ``(1) food assistance to needy individuals and families 
     residing in the State;
       ``(2) funds to operate an employment and training program 
     under subsection (g) for needy individuals under the program; 
     and
       ``(3) funds for administrative costs incurred in providing 
     the assistance.
       ``(b) Election.--
       ``(1) In general.--A State may elect to participate in the 
     program established under subsection (a).
       ``(2) Election revocable.--A State that elects to 
     participate in the program established under subsection (a) 
     may subsequently reverse the election of the State only once 
     thereafter. Following the reversal, the State shall only be 
     eligible to participate in the food stamp program in 
     accordance with the other sections of this Act and shall not 
     receive a block grant under this section.
       ``(3) Program exclusive.--A State that is participating in 
     the program established under subsection (a) shall not be 
     subject to, or receive any benefit under, this Act except as 
     provided in this section.
       ``(c) Lead Agency.--
       ``(1) Designation.--A State desiring to participate in the 
     program established under subsection (a) shall designate, in 
     an application submitted to the Secretary under subsection 
     (d)(1), an appropriate State agency that complies with 
     paragraph (2) to act as the lead agency for the State.
       ``(2) Duties.--The lead agency shall--
       ``(A) administer, either directly, through other State 
     agencies, or through local agencies, the assistance received 
     under this section by the State;
       ``(B) develop the State plan to be submitted to the 
     Secretary under subsection (d)(1); and
       ``(C) coordinate the provision of food assistance under 
     this section with other Federal, State, and local programs.
       ``(d) Application and Plan.--
       ``(1) Application.--To be eligible to receive assistance 
     under this section, a State shall prepare and submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary shall by 
     regulation require, including--
       ``(A) an assurance that the State will comply with the 
     requirements of this section;
       ``(B) a State plan that meets the requirements of paragraph 
     (2); and
       ``(C) an assurance that the State will comply with the 
     requirements of the State plan under paragraph (2).
       ``(2) Requirements of plan.--
       ``(A) Lead agency.--The State plan shall identify the lead 
     agency.
       ``(B) Use of block grant funds.--The State plan shall 
     provide that the State shall use the amounts provided to the 
     State for each fiscal year under this section--
       ``(i) to provide food assistance to needy individuals and 
     families residing in the State, other than residents of 
     institutions who are ineligible for food stamps under section 
     3(i);
       ``(ii) to administer an employment and training program 
     under subsection (g) for needy individuals under the program 
     and to provide reimbursements to needy individuals and 
     families as would be allowed under section 16(h)(3); and
       ``(iii) to pay administrative costs incurred in providing 
     the assistance.
       ``(C) Assistance for entire state.--The State plan shall 
     provide that benefits under this section shall be available 
     throughout the entire State.
       ``(D) Notice and hearings.--The State plan shall provide 
     that an individual or family who applies for, or receives, 
     assistance under this section shall be provided with notice 
     of, and an opportunity for a hearing on, any action under 
     this section that adversely affects the individual or family.
       ``(E) Other assistance.--
       ``(i) Coordination.--The State plan may coordinate 
     assistance received under this section with assistance 
     provided under the State program funded under part A of title 
     IV of the Social Security Act (42 U.S.C. 601 et seq.).
       ``(ii) Penalties.--If an individual or family is penalized 
     for violating part A of title IV of the Act, the State plan 
     may reduce the amount of assistance provided under this 
     section or otherwise penalize the individual or family.
       ``(F) Eligibility limitations.--The State plan shall 
     describe the income and resource eligibility limitations that 
     are established for the receipt of assistance under this 
     section.
       ``(G) Receiving benefits in more than 1 jurisdiction.--The 
     State plan shall establish a system to verify and otherwise 
     ensure that no individual or family shall receive benefits 
     under this section in more than 1 jurisdiction within the 
     State.
       ``(H) Privacy.--The State plan shall provide for 
     safeguarding and restricting the use and disclosure of 
     information about any individual or family receiving 
     assistance under this section.
       ``(I) Other information.--The State plan shall contain such 
     other information as may be required by the Secretary.
       ``(3) Approval of application and plan.--During fiscal 
     years 2006 through 2010, the Secretary may approve the 
     applications and State plans that satisfy the requirements of 
     this section of not more than 5 States for a term of not more 
     than 5 years.
       ``(e) Construction of Facilities.--No funds made available 
     under this section shall be expended for the purchase or 
     improvement of land, or for the purchase, construction, or 
     permanent improvement of any building or facility.
       ``(f) Benefits for Aliens.--No individual shall be eligible 
     to receive benefits under a State plan approved under 
     subsection (d)(3) if the individual is not eligible to 
     participate in the food stamp program under title IV of the 
     Personal Responsibility and Work Opportunity Reconciliation 
     Act of 1996 (8 U.S.C. 1601 et seq.).
       ``(g) Employment and Training.--Each State shall implement 
     an employment and training program for needy individuals 
     under the program.
       ``(h) Enforcement.--
       ``(1) Review of compliance with state plan.--The Secretary 
     shall review and monitor State compliance with this section 
     and the State plan approved under subsection (d)(3).
       ``(2) Noncompliance.--
       ``(A) In general.--If the Secretary, after reasonable 
     notice to a State and opportunity for a hearing, finds that--
       ``(i) there has been a failure by the State to comply 
     substantially with any provision or requirement set forth in 
     the State plan approved under subsection (d)(3); or
       ``(ii) in the operation of any program or activity for 
     which assistance is provided under this section, there is a 
     failure by the State to comply substantially with any 
     provision of this section, the Secretary shall notify the 
     State of the finding and that no further payments will be 
     made to the State under this section (or, in the case of 
     noncompliance in the operation of a program or activity, that 
     no further payments to the State will be made with respect to 
     the program or activity) until the Secretary is satisfied 
     that there is no longer any failure to comply or that the 
     noncompliance will be promptly corrected.
       ``(B) Other sanctions.--In the case of a finding of 
     noncompliance made pursuant to subparagraph (A), the 
     Secretary may, in addition to, or in lieu of, imposing the 
     sanctions described in subparagraph (A), impose other 
     appropriate sanctions, including recoupment of money 
     improperly expended for purposes prohibited or not authorized 
     by this section and disqualification from the receipt of 
     financial assistance under this section.
       ``(C) Notice.--The notice required under subparagraph (A) 
     shall include a specific identification of any additional 
     sanction being imposed under subparagraph (B).
       ``(3) Issuance of regulations.--The Secretary shall 
     establish by regulation procedures for--

[[Page 494]]

       ``(A) receiving, processing, and determining the validity 
     of complaints concerning any failure of a State to comply 
     with the State plan or any requirement of this section; and
       ``(B) imposing sanctions under this section.
       ``(i) Payments.--
       ``(1) In general.--For each fiscal year, the Secretary 
     shall pay to a State that has an application approved by the 
     Secretary under subsection (d)(3) an amount that is equal to 
     the allotment of the State under subsection (l)(2) for the 
     fiscal year.
       ``(2) Method of payment.--The Secretary shall make payments 
     to a State for a fiscal year under this section by issuing 1 
     or more letters of credit for the fiscal year, with necessary 
     adjustments on account of overpayments or underpayments, as 
     determined by the Secretary.
       ``(3) Spending of funds by state.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     payments to a State from an allotment under subsection (l)(2) 
     for a fiscal year may be expended by the State only in the 
     fiscal year.
       ``(B) Carryover.--The State may reserve up to 10 percent of 
     an allotment under subsection (l)(2) for a fiscal year to 
     provide assistance under this section in subsequent fiscal 
     years, except that the reserved funds may not exceed 30 
     percent of the total allotment received under this section 
     for a fiscal year.
       ``(4) Provision of food assistance.--A State may provide 
     food assistance under this section in any manner determined 
     appropriate by the State to provide food assistance to needy 
     individuals and families in the State, such as electronic 
     benefits transfer limited to food purchases, coupons limited 
     to food purchases, or direct provision of commodities.
       ``(5) Definition of food assistance.--In this section, the 
     term `food assistance' means assistance that may be used only 
     to obtain food, as defined in section 3(g).
       ``(j) Audits.--
       ``(1) Requirement.--After the close of each fiscal year, a 
     State shall arrange for an audit of the expenditures of the 
     State during the program period from amounts received under 
     this section.
       ``(2) Independent auditor.--An audit under this section 
     shall be conducted by an entity that is independent of any 
     agency administering activities that receive assistance under 
     this section and be in accordance with generally accepted 
     auditing principles.
       ``(3) Payment accuracy.--Each annual audit under this 
     section shall include an audit of payment accuracy under this 
     section that shall be based on a statistically valid sample 
     of the caseload in the State.
       ``(4) Submission.--Not later than 30 days after the 
     completion of an audit under this section, the State shall 
     submit a copy of the audit to the legislature of the State 
     and to the Secretary.
       ``(5) Repayment of amounts.--Each State shall repay to the 
     United States any amounts determined through an audit under 
     this section to have not been expended in accordance with 
     this section or to have not been expended in accordance with 
     the State plan, or the Secretary may offset the amounts 
     against any other amount paid to the State under this 
     section.
       ``(k) Nondiscrimination.--
       ``(1) In general.--The Secretary shall not provide 
     financial assistance for any program, project, or activity 
     under this section if any person with responsibilities for 
     the operation of the program, project, or activity 
     discriminates with respect to the program, project, or 
     activity because of race, religion, color, national origin, 
     sex, or disability.
       ``(2) Enforcement.--The powers, remedies, and procedures 
     set forth in title VI of the Civil Rights Act of 1964 (42 
     U.S.C. 2000d et seq.) may be used by the Secretary to enforce 
     paragraph (1).
       ``(l) Allotments.--
       ``(1) Definition of state.--In this section, the term 
     'State' means each of the 50 States, the District of 
     Columbia, Guam, and the Virgin Islands of the United States.
       ``(2) State allotment.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     from the amounts made available under section 18 of this Act 
     for each fiscal year, the Secretary shall allot to each State 
     participating in the program established under subsection (a) 
     an amount that is equal to the sum of--
       ``(i) the greater of, as determined by the Secretary--

       ``(I) the total dollar value of all benefits issued under 
     the food stamp program established under this Act by the 
     State during fiscal year 2005; or
       ``(II) the average per fiscal year of the total dollar 
     value of all benefits issued under the food stamp program by 
     the State during each of fiscal years 2003 through 2005; and

       ``(ii) the greater of, as determined by the Secretary--

       ``(I) the total amount received by the State for 
     administrative costs and the employment and training program 
     under subsections (a) and (h), respectively, of section 16 of 
     this Act for fiscal year 2005; or
       ``(II) the average per fiscal year of the total amount 
     received by the State for administrative costs and the 
     employment and training program under subsections (a) and 
     (h), respectively, of section 16 of this Act for each of 
     fiscal years 2003 through 2005.

       ``(B) Insufficient funds.--If the Secretary finds that the 
     total amount of allotments to which States would otherwise be 
     entitled for a fiscal year under subparagraph (A) will exceed 
     the amount of funds that will be made available to provide 
     the allotments for the fiscal year, the Secretary shall 
     reduce the allotments made to States under this subsection, 
     on a pro rata basis, to the extent necessary to allot under 
     this subsection a total amount that is equal to the funds 
     that will be made available.''.

                    TITLE VII--ABSTINENCE EDUCATION

     SEC. 701. EXTENSION OF ABSTINENCE EDUCATION PROGRAM.

       (a) Extension of Appropriations.--
       (1) In general.--Section 510(d) (42 U.S.C. 710(d)) is 
     amended in the first sentence by inserting before the period 
     the following: ``and for each of the fiscal years 2006 
     through 2010''.
       (2) Additional funds for fiscal year 2005.--
       (A) Additional funds.--Activities authorized by section 510 
     of the Social Security Act shall continue through September 
     30, 2005, in the manner authorized for fiscal year 2004, and 
     out of any money in the Treasury of the United States not 
     otherwise appropriated, there are hereby appropriated such 
     sums as may be necessary for such purpose, in addition to 
     other amounts appropriated for such purpose for fiscal year 
     2005. Grants and payments may be made pursuant to this 
     authority through the fourth quarter of fiscal year 2005 at 
     the level provided for such activities through the fourth 
     quarter of fiscal year 2004.
       (B) Effective date.--Subparagraph (A) takes effect upon the 
     date of the enactment of this Act.
       (b) Allotment of Funds.--Section 510(a) (42 U.S.C. 710(a)) 
     is amended--
       (1) in the matter preceding paragraph (1), by striking ``an 
     application for the fiscal year under section 505(a)'' and 
     inserting ``, for the fiscal year, an application under 
     section 505(a), and an application under this section (in 
     such form and meeting such terms and conditions as determined 
     appropriate by the Secretary),''; and
       (2) in paragraph (2), to read as follows:
       ``(2) the percentage that would be determined for the State 
     under section 502(c)(1)(B)(ii) if the calculation under such 
     section took into consideration only those States that 
     transmitted both such applications for such fiscal year.''.
       (c) Reallotment of Funds.--Section 510 (42 U.S.C. 710(a)) 
     is amended by adding at the end the following new subsection:
       ``(e)(1) With respect to allotments under subsection (a) 
     for fiscal year 2006 and subsequent fiscal years, the amount 
     of any allotment to a State for a fiscal year that the 
     Secretary determines will not be required to carry out a 
     program under this section during such fiscal year or the 
     succeeding fiscal year shall be available for reallotment 
     from time to time during such fiscal years on such dates as 
     the Secretary may fix, to other States that the Secretary 
     determines--
       ``(A) require amounts in excess of amounts previously 
     allotted under subsection (a) to carry out a program under 
     this section; and
       ``(B) will use such excess amounts during such fiscal 
     years.
       ``(2) Reallotments under paragraph (1) shall be made on the 
     basis of such States' applications under this section, after 
     taking into consideration the population of low-income 
     children in each such State as compared with the population 
     of low-income children in all such States with respect to 
     which a determination under paragraph (1) has been made by 
     the Secretary.
       ``(3) Any amount reallotted under paragraph (1) to a State 
     is deemed to be part of its allotment under subsection 
     (a).''.
       (d) Effective Date.--The amendments made by this section 
     shall be effective with respect to the program under section 
     510 of the Social Security Act for fiscal years 2006 and 
     succeeding fiscal years.

              TITLE VIII--TRANSITIONAL MEDICAL ASSISTANCE

     SEC. 801. EXTENSION OF MEDICAID TRANSITIONAL MEDICAL 
                   ASSISTANCE PROGRAM THROUGH FISCAL YEAR 2006.

       (a) In General.--Section 1925(f) (42 U.S.C. 1396r-6(f)) is 
     amended by striking ``2003'' and inserting ``2006''.
       (b) Conforming Amendment.--Section 1902(e)(1)(B) (42 U.S.C. 
     1396a(e)(1)(B)) is amended by striking ``September 30, 2003'' 
     and inserting ``the last date (if any) on which section 1925 
     applies under subsection (f) of that section''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on April 1, 2005.

     SEC. 802. ADJUSTMENT TO PAYMENTS FOR MEDICAID ADMINISTRATIVE 
                   COSTS TO PREVENT DUPLICATIVE PAYMENTS AND TO 
                   FUND EXTENSION OF TRANSITIONAL MEDICAL 
                   ASSISTANCE.

       (a) In General.--Section 1903 (42 U.S.C. 1396b) is 
     amended--
       (1) in subsection (a)(7), by striking ``section 
     1919(g)(3)(B)'' and inserting ``subsection (x) and section 
     1919(g)(3)(C)''; and
       (2) by adding at the end the following:

[[Page 495]]

       ``(x) Adjustments to Payments for Administrative Costs to 
     Fund Extension of Transitional Medical Assistance.--
       ``(1) Reductions in payments for administrative costs.--
     Effective for each of the last 2 calendar quarters in fiscal 
     year 2005 and for each calendar quarter in fiscal year 2006, 
     the Secretary shall reduce the amount paid under subsection 
     (a)(7) to each State by an amount equal to 45 percent for 
     calendar quarters in fiscal year 2005, and 80 percent for 
     calendar quarters in fiscal year 2006, of one-quarter of the 
     annualized amount determined for the medicaid program under 
     section 16(k)(2)(B) of the Food Stamp Act of 1977 (7 U.S.C. 
     2025(k)(2)(B)).
       ``(2) Allocation of administrative costs.--None of the 
     funds or expenditures described in section 16(k)(5)(B) of the 
     Food Stamp Act of 1977 (7 U.S.C. 2025(k)(5)(B)) may be used 
     to pay for costs--
       ``(A) eligible for reimbursement under subsection (a)(7) 
     (or costs that would have been eligible for reimbursement but 
     for this subsection); and
       ``(B) allocated for reimbursement to the program under this 
     title under a plan submitted by a State to the Secretary to 
     allocate administrative costs for public assistance programs;

     except that, for purposes of subparagraph (A), the reference 
     in clause (iii) of that section to `subsection (a)' is deemed 
     a reference to subsection (a)(7) and clause (iv)(II) of that 
     section shall be applied as if `medicaid program' were 
     substituted for `food stamp program'.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on April 1, 2005.

                        TITLE IX--EFFECTIVE DATE

     SEC. 901. EFFECTIVE DATE.

       (a) In General.--Except as otherwise provided in this Act, 
     this Act and the amendments made by this Act shall take 
     effect on October 1, 2005.
       (b) Exception.--In the case of a State plan under part A or 
     D of title IV of the Social Security Act which the Secretary 
     determines requires State legislation in order for the plan 
     to meet the additional requirements imposed by the amendments 
     made by this Act, the effective date of the amendments 
     imposing the additional requirements shall be 3 months after 
     the first day of the first calendar quarter beginning after 
     the close of the first regular session of the State 
     legislature that begins after the date of the enactment of 
     this Act. For purposes of the preceding sentence, in the case 
     of a State that has a 2-year legislative session, each year 
     of the session shall be considered to be a separate regular 
     session of the State legislature.
                                 ______
                                 
      By Mr. JOHNSON (for himself, Mr. Enzi, Mr. Bingaman, and Mr. 
        Dorgan):
  S. 108. A bill to prohibit the operation during a calendar year of 
the final rule issued by the Secretary of Agriculture to establish 
standards for the designation of minimal-risk regions for the 
introduction of bovine spongiform encephalopathy into the United 
States, including designation of Canada as a minimal-risk region, and 
the importation into the United States from Canada of certain bovine 
ruminant products during that calendar year, unless country of origin 
labeling is required for the retail sale of a covered commodity during 
that calendar year; to the Committee on Agriculture, Nutrition, and 
Forestry.
  Mr. DORGAN. Mr. President, I am an original cosponsor of legislation 
which was introduced today by Senators Johnson and Enzi. This 
legislation requires that a mandatory system of country of-origin 
labeling be in place before the U.S. Department of Agriculture can open 
the border to imports of live Canadian cattle.
  This legislation would not be necessary if USDA and this 
Administration were not furiously pushing to allow live Canadian cattle 
into this country. I am very concerned that they are doing this despite 
the most recent discovery, just a few weeks ago, of two more Canadian 
cows infected with BSE.
  I believe that the decision to open the border to live Canadian 
cattle should be made based on sound science, not politics. The border 
should be opened when science indicates that it is safe to do so, and 
not before.
  I also believe that it is necessary that this country have a system 
of country-of-origin labeling in place before the border is opened. 
That is the only way American consumers will be able to choose between 
beef raised in America and beef raised in Canada. Right now there is no 
way to tell the difference. We must have country-of-origin labeling in 
place before we allow Canadian cattle into this country, and that is 
why I am cosponsoring this legislation.
                                 ______
                                 
      By Mr. VITTER (for himself, Mr. Salazar, Mr. Thune, and Mr. 
        DeMint):
  S. 109. A bill entitled ``Pharmaceutical Market Access Act of 2005''; 
to the Committee on Health, Education, Labor, and Pensions.
  Mr. VITTER. 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. 109

       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 ``Pharmaceutical Market Access 
     Act of 2005''.

     SEC. 2. FINDINGS.

       Congress finds as follows:
       (1) Americans unjustly pay up to 1000 percent more to fill 
     their prescriptions than consumers in other countries.
       (2) The United States is the world's largest market for 
     pharmaceuticals yet consumers still pay the world's highest 
     prices.
       (3) An unaffordable drug is neither safe nor effective. 
     Allowing and structuring the importation of prescription 
     drugs ensures access to affordable drugs, thus providing a 
     level of safety to American consumers they do not currently 
     enjoy.
       (4) According to the Congressional Budget Office, American 
     seniors alone will spend $1,800,000,000,000 on 
     pharmaceuticals over the next 10 years.
       (5) Allowing open pharmaceutical markets could save 
     American consumers at least $635,000,000,000 of their own 
     money each year.

     SEC. 3. PURPOSES.

       The purposes of this Act are as follows:
       (1) To give all Americans immediate relief from the 
     outrageously high cost of pharmaceuticals.
       (2) To reverse the perverse economics of the American 
     pharmaceutical market.
       (3) To allow the importation of prescription drugs only if 
     the drugs and facilities where such drugs are manufactured 
     are approved by the Food and Drug Administration, and to 
     exclude pharmaceutical narcotics.
       (4) To require that imported prescription drugs be packaged 
     and shipped using counterfeit-resistant technologies.

     SEC. 4. AMENDMENTS TO SECTION 804 OF THE FEDERAL FOOD, DRUG, 
                   AND COSMETIC.

       (a) Definitions.--Section 804(a) of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 384(a)) is amended to read as 
     follows:
       ``(a) Definitions.--In this section:
       ``(1) Importer.--The term `importer' means a pharmacy, 
     group of pharmacies, pharmacist, or wholesaler.
       ``(2) Permitted country.--The term `permitted country' 
     means a country, union, or economic area that is listed in 
     subparagraph (A) of section 802(b)(1), except that the 
     Secretary--
       ``(A) may add a country, union, or economic area to such 
     list for purposes of this section if the Secretary determines 
     that the country, union, or economic area has a 
     pharmaceutical infrastructure that is substantially 
     equivalent or superior to the pharmaceutical infrastructure 
     of the United States, taking into consideration pharmacist 
     qualifications, pharmacy storage procedures, the drug 
     distribution system, the drug dispensing system, and market 
     regulation; and
       ``(B) may remove a country, union, or economic area from 
     such list for purposes of this section if the Secretary 
     determines that the country, union, or economic area does not 
     have such a pharmaceutical infrastructure.
       ``(3) Pharmacist.--The term `pharmacist' means a person 
     licensed by a State to practice pharmacy, including the 
     dispensing and selling of prescription drugs.
       ``(4) Pharmacy.--The term `pharmacy' means a person that is 
     licensed by a State to engage in the business of selling 
     prescription drugs at retail that employs 1 or more 
     pharmacists.
       ``(5) Prescription drug.--The term `prescription drug' 
     means a drug subject to section 503(b), other than--
       ``(A) a controlled substance (as defined in section 102 of 
     the Controlled Substances Act (21 U.S.C. 802));
       ``(B) a biological product (as defined in section 351 of 
     the Public Health Service Act (42 U.S.C. 262));
       ``(C) an infused drug (including a peritoneal dialysis 
     solution);
       ``(D) an intravenously injected drug;
       ``(E) a drug that is inhaled during surgery; or
       ``(F) a drug which is a parenteral drug, the importation of 
     which pursuant to subsection (b) is determined by the 
     Secretary to pose a threat to the public health, in which 
     case section 801(d)(1) shall continue to apply.
       ``(6) Qualifying drug.--The term `qualifying drug' means a 
     prescription drug that--
       ``(A) is approved under section 505(b)(1); and
       ``(B) is not--

[[Page 496]]

       ``(i) a drug manufactured through 1 or more biotechnology 
     processes;
       ``(ii) a drug that is required to be refrigerated; or
       ``(iii) a photoreactive drug.
       ``(7) Qualifying internet pharmacy.--The term `qualifying 
     Internet pharmacy' means a registered exporter that dispenses 
     qualifying drugs to individuals over an Internet website.
       ``(8) Qualifying laboratory.--The term `qualifying 
     laboratory' means a laboratory in the United States that has 
     been approved by the Secretary for the purposes of this 
     section.
       ``(9) Registered exporter.--The term `registered exporter' 
     means a person that is in the business of exporting a drug to 
     individuals in the United States (or that seeks to be in such 
     business), for which a registration under this section has 
     been approved and is in effect.
       ``(10) Wholesaler.--
       ``(A) In general.--The term `wholesaler' means a person 
     licensed as a wholesaler or distributor of prescription drugs 
     in the United States under section 503(e)(2)(A).
       ``(B) Exclusion.--The term `wholesaler' does not include a 
     person authorized to import drugs under section 801(d)(1).''.
       (b) Regulations.--Section 804(b) of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 384(b)) is amended to read as 
     follows:
       ``(b) Regulations.--Not later than 180 days after the date 
     of enactment of the Pharmaceutical Market Access Act of 2005, 
     the Secretary, after consultation with the United States 
     Trade Representative and the Commissioner of Customs, shall 
     promulgate regulations permitting pharmacists, pharmacies, 
     wholesalers, and individuals to import qualifying drugs from 
     permitted countries into the United States.''.
       (c) Limitation.--Section 804(c) of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 384(c)) is amended by striking 
     ``prescription drug'' each place it appears and inserting 
     ``qualifying drug''.
       (d) Information and Records.--Section 804(d)(1) of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 384(d)(1)) is 
     amended--
       (1) by striking subparagraph (G) and redesignating 
     subparagraphs (H) through (N) as subparagraphs (G) through 
     (M), respectively;
       (2) in subparagraph (H) (as so redesignated), by striking 
     ``telephone number, and professional license number (if 
     any)'' and inserting ``and telephone number''; and
       (3) in subparagraph (L) (as so redesignated), by striking 
     ``(J) and (L)'' and inserting ``(I) and (K)''.
       (e) Testing.--Section 804(e) of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 384(e)) is amended to read as 
     follows:
       ``(e) Testing.--The regulations under subsection (b) shall 
     require that the testing described under subparagraphs (I) 
     and (K) of subsection (d)(1) be conducted by the importer of 
     the qualifying drug, unless the qualifying drug is drug 
     subject to the requirements under subsection (l) for 
     counterfeit-resistant technologies.''.
       (f) Registration of Exporters; Inspections.--Section 804(f) 
     of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     384(f)) is amended to read as follows:
       ``(f) Registration of Exporters; Inspections.--
       ``(1) In general.--Any person that seeks to be a registered 
     exporter (referred to in this subsection as the `registrant') 
     shall submit to the Secretary a registration that includes 
     the following:
       ``(A) The name of the registrant and identification of all 
     places of business of the registrant that relate to 
     qualifying drugs, including each warehouse or other facility 
     owned or controlled by, or operated for, the registrant;
       ``(B) An agreement by the registrant to--
       ``(i) make its places of business that relate to qualifying 
     drugs (including warehouses and other facilities owned or 
     controlled by, or operated for, the exporter) and records 
     available to the Secretary for on-site inspections, without 
     prior notice, for the purpose of determining whether the 
     registrant is in compliance with this Act's requirements;
       ``(ii) export only qualifying drugs;
       ``(iii) export only to persons authorized to import the 
     drugs;
       ``(iv) notify the Secretary of a recall or withdrawal of a 
     qualifying drug distributed in a permitted country to or from 
     which the registrant has exported or imported, or intends to 
     export or import, to the United States;
       ``(v) monitor compliance with registration conditions and 
     report any noncompliance promptly;
       ``(vi) submit a compliance plan showing how the registrant 
     will correct violations, if any; and
       ``(vii) promptly notify Secretary of changes in the 
     registration information of the registrant.
       ``(2) Notice of approval or disapproval.--
       ``(A) In general.--Not later than 90 days after receiving a 
     completed registration from a registrant, the Secretary 
     shall--
       ``(i) notify such registrant of receipt of the 
     registration;
       ``(ii) assign such registrant a registration number; and
       ``(ii) approve or disapprove the application.
       ``(B) Disapproval of application.--
       ``(i) In general.--The Secretary shall disapprove a 
     registration, and notify the registrant of such disapproval, 
     if the Secretary has reason to believe that such registrant 
     is not in compliance with a registration condition.
       ``(ii) Subsequent approval.--The Secretary may subsequently 
     approve a registration that was denied under clause (i) if 
     the Secretary finds that the registrant is in compliance with 
     all registration conditions.
       ``(3) List.--The Secretary shall--
       ``(A) maintain an up-to-date list of registered exporters 
     (including qualifying Internet pharmacies that sell 
     qualifying drugs to individuals);
       ``(B) make such list available to the public on the 
     Internet site of the Food and Drug Administration and via a 
     toll-free telephone number; and
       ``(C) update such list promptly after the approval of a 
     registration under this subsection.
       ``(4) Education of consumers.--The Secretary shall carry 
     out activities, by use of the Internet website and toll-free 
     telephone number under paragraph (3), that educate consumers 
     with regard to the availability of qualifying drugs for 
     import for personal use under this section, including 
     information on how to verify whether an exporter is 
     registered.
       ``(5) Inspection of importers and registered exporters.--
     The Secretary shall inspect the warehouses, other facilities, 
     and records of importers and registered exporters as often as 
     the Secretary determines necessary to ensure that such 
     importers and registered exporters are in compliance with 
     this section.''.
       (g) Suspension of Importation.--Section 804(g) of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 384(g)) is 
     amended by--
       (1) striking ``and the Secretary determines that the public 
     is adequately protected from counterfeit and violative 
     prescription drugs being imported under subsection (b)''; and
       (2) by adding after the period at the end the following: 
     ``The Secretary shall reinstate the importation by a specific 
     importer upon a determination by the Secretary that the 
     violation has been corrected and that the importer has 
     demonstrated that further violations will not occur. This 
     subsection shall not apply to a prescription drug imported by 
     an individual, or to a prescription drug shipped to an 
     individual by a qualifying Internet pharmacy.''.
       (h) Waiver Authority for Individuals.--Section 804(j) of 
     the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 384(j)) 
     is amended to read as follows:
       ``(j) Importation by Individuals.--
       ``(1) In general.--Not later than 180 days after the 
     enactment of the Pharmaceutical Market Access Act of 2005, 
     the Secretary shall by regulation permit an individual to 
     import a drug from a permitted country to the United States 
     if the drug is--
       ``(A) a qualifying drug;
       ``(B) imported from a licensed pharmacy or qualifying 
     Internet pharmacy;
       ``(C) for personal use by an individual, or family member 
     of the individual, not for resale;
       ``(D) in a quantity that does not exceed a 90-day supply 
     during any 90-day period; and
       ``(E) accompanied by a copy of a prescription for the drug, 
     which--
       ``(i) is valid under applicable Federal and State laws and;
       ``(ii) was issued by a practitioner who is authorized 
     administer prescription drugs.
       ``(2) Drugs dispensed outside the United States.--An 
     individual may import a drug from a country that is not a 
     permitted country if--
       ``(A) the drug was dispensed to the individual while the 
     individual was in such country, and the drug was dispensed in 
     accordance with the laws and regulations of such country;
       ``(B) the individual is entering the United States and the 
     drug accompanies the individual at the time of entry;
       ``(C) the drug is approved for commercial distribution in 
     the country in which the drug was obtained;
       ``(D) the drug does not appear to be adulterated; and
       ``(E) the quantity of the drug does not exceed a 14-day 
     supply.''.
       (i) Repeal of Certain Provisions.--Section 804 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 384) is 
     amended by striking subsections (l) and (m).

     SEC. 5. REGISTRATION FEES.

       Subchapter C of chapter VII of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 397f et seq.) is amended by adding at 
     the end the following:

        ``PART 5--FEES RELATING TO PRESCRIPTION DRUG IMPORTATION

     ``SEC. 740A. FEES RELATING TO PRESCRIPTION DRUG IMPORTATION.

       ``(a) Registration Fee.--The Secretary shall establish a 
     registration fee program under which a registered exporter 
     under section 804 shall be required to pay an annual fee to 
     the Secretary in accordance with this subsection.
       ``(b) Collection.--
       ``(1) Collection on initial registration.--A fee under this 
     section shall be payable for the fiscal year in which the 
     registered exporter first submits a registration under 
     section 804 (or reregisters under that section if

[[Page 497]]

     that person has withdrawn its registration and subsequently 
     reregisters) in a amount of $10,000, due on the date the 
     exporter first submits a registration to the Secretary under 
     section 804.
       ``(2) Collection in subsequent years.--After the fee is 
     paid for the first fiscal year, the fee described under this 
     subsection shall be payable on or before October 1 of each 
     year.
       ``(3) One fee per facility.--The fee shall be paid only 
     once for each registered exporter for a fiscal year in which 
     the fee is payable.
       ``(c) Fee Amount.--
       ``(1) In general.--The amount of the fee shall be 
     determined each year by the Secretary and shall be based on 
     the anticipated costs to the Secretary of enforcing the 
     amendments made by the Pharmaceutical Market Access Act of 
     2005 in the subsequent fiscal year.
       ``(2) Limitation.--
       ``(A) In general.--The aggregate total of fees collected 
     under this section shall not exceed 1 percent of the total 
     price of drugs exported annually to the United States by 
     registered exporters under this section.
       ``(B) Reasonable estimate.--Subject to the limitation in 
     described in subparagraph (A), a fee under this subsection 
     for an exporter shall be an amount that is a reasonable 
     estimate by the Secretary of the annual share of the exporter 
     of the volume of drugs exported by exporters under this 
     section.
       ``(d) Use of Fees.--The fees collected under this section 
     shall be used for the sole purpose of administering this 
     section with respect to registered exporters, including the 
     costs associated with--
       ``(1) inspecting the facilities of registered exporters, 
     and of other entities in the chain of custody of a qualifying 
     drug;
       ``(2) developing, implementing, and maintaining a system to 
     determine registered exporters' compliance with the 
     registration conditions under the Pharmaceutical Market 
     Access Act of 2005, including when shipments of qualifying 
     drugs are offered for import into the United States; and
       ``(3) inspecting such shipments, as necessary, when offered 
     for import into the United States to determine if any such 
     shipment should be refused admission.
       ``(e) Annual Fee Setting.--The Secretary shall establish, 
     60 days before the beginning of each fiscal year beginning 
     after September 30, 2005, for that fiscal year, registration 
     fees.
       ``(f) Effect of Failure To Pay Fees.--
       ``(1) Due date.--A fee payable under this section shall be 
     paid by the date that is 30 days after the date on which the 
     fee is due.
       ``(2) Failure to pay.--If a registered exporter subject to 
     a fee under this section fails to pay the fee, the Secretary 
     shall not permit the registered exporter to engage in 
     exportation to the United States or offering for exportation 
     prescription drugs under this Act until all such fees owed by 
     that person are paid.
       ``(g) Reports.--
       ``(1) Fee establishment.--Not later than 60 days before the 
     beginning of each fiscal year, the Secretary shall--
       ``(A) publish registration fees under this section for that 
     fiscal year;
       ``(B) hold a meeting at which the public may comment on the 
     recommendations; and
       ``(C) provide for a period of 30 days for the public to 
     provide written comments on the recommendations.
       ``(2) Performance and fiscal report.--Beginning with fiscal 
     year 2005, not later than 60 days after the end of each 
     fiscal year during which fees are collected under this 
     section, the Secretary shall submit to the Committee on 
     Health, Education, Labor, and Pensions of the Senate and the 
     Committee on Energy and Commerce of the House of 
     Representatives a report that describes--
       ``(A) implementation of the registration fee authority 
     during the fiscal year; and
       ``(B) the use by the Secretary of the fees collected during 
     the fiscal year for which the report is made.''.

     SEC. 6. COUNTERFEIT-RESISTANT TECHNOLOGY.

       (a) Misbranding.--Section 502 of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 352; deeming drugs and devices to 
     be misbranded) is amended by adding at the end the following:
       ``(v) If it is a drug subject to section 503(b), unless the 
     packaging of such drug complies with the requirements of 
     section 505C for counterfeit-resistant technologies.''.
       (b) Requirements.--Title V of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 351 et seq.) is amended by inserting 
     after section 505B the following:

     ``SEC. 505C. COUNTERFEIT-RESISTANT TECHNOLOGIES.

       ``(a) Incorporation of Counterfeit-resistant Technologies 
     Into Prescription Drug Packaging.--The Secretary shall 
     require that the packaging of any drug subject to section 
     503(b) incorporate--
       ``(1) overt optically variable counterfeit-resistant 
     technologies that are described in subsection (b) and comply 
     with the standards of subsection (c); or
       ``(2) technologies that have an equivalent function of 
     security, as determined by the Secretary.
       ``(b) Eligible Technologies.--Technologies described in 
     this subsection--
       ``(1) shall be visible to the naked eye, providing for 
     visual identification of product authenticity without the 
     need for readers, microscopes, lighting devices, or scanners;
       ``(2) shall be similar to that used by the Bureau of 
     Engraving and Printing to secure United States currency;
       ``(3) shall be manufactured and distributed in a highly 
     secure, tightly controlled environment; and
       ``(4) should incorporate additional layers of non-visible 
     covert security features up to and including forensic 
     capability.
       ``(c) Standards for Packaging.--
       ``(1) Multiple elements.--For the purpose of making it more 
     difficult to counterfeit the packaging of drugs subject to 
     section 503(b), manufacturers of the drugs shall incorporate 
     the technologies described in subsection (b) into multiple 
     elements of the physical packaging of the drugs, including 
     blister packs, shrink wrap, package labels, package seals, 
     bottles, and boxes.
       ``(2) Labeling of shipping container.--Shipments of drugs 
     described in subsection (a) shall include a label on the 
     shipping container that incorporates the technologies 
     described in subsection (b), so that officials inspecting the 
     packages will be able to determine the authenticity of the 
     shipment. Chain of custody procedures shall apply to such 
     labels and shall include procedures applicable to contractual 
     agreements for the use and distribution of the labels, 
     methods to audit the use of the labels, and database access 
     for the relevant governmental agencies for audit or 
     verification of the use and distribution of the labels.
       ``(d) Effective Date.--This section shall take effect 180 
     days after the date of enactment of the Pharmaceutical Market 
     Access Act of 2005.''.

     SEC. 7. PROHIBITED ACTS.

       Section 301 of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 331) is amended by inserting after subsection (k) the 
     following:
       ``(l) The failure to register in accordance with section 
     804(f) or to import or offer to import a prescription drug in 
     violation of a suspension order under section 804(g).''.

     SEC. 8. PATENTS.

       Section 271 of title 35, United States Code, is amended--
       (1) by redesignating subsections (h) and (i) as subsections 
     (i) and (j), respectively; and
       (2) by inserting after subsection (g) the following:
       ``(h) It shall not be an act of infringement to use, offer 
     to sell, or sell within the United States or to import into 
     the United States any patented invention under section 804 
     (21 U.S.C. 384) of the Federal Food, Drug, and Cosmetic Act 
     that was first sold abroad by or under authority of the owner 
     or licensee of such patent.''.

     SEC. 9. OTHER ENFORCEMENT ACTIONS.

       (a) In general.--Section 804 of the Federal Food, Drug, and 
     Cosmetic Act (as amended in section 4) is amended by adding 
     at the end the following:
       ``(l) Unfair or Discriminatory Acts and Practices.--
       ``(1) In general.--It is unlawful for a manufacturer, 
     directly or indirectly (including by being a party to a 
     licensing or other agreement) to--
       ``(A) discriminate by charging a higher price for a 
     prescription drug sold to a person in a permitted country 
     that exports a prescription drug to the United States under 
     this section than the price that is charged to another person 
     that is in the same country and that does not export a 
     prescription drug into the United States under this section;
       ``(B) discriminate by charging a higher price for a 
     prescription drug sold to a person that distributes, sells, 
     or uses a prescription drug imported into the United States 
     under this section than the price that is charged to another 
     person in the United States that does not import a 
     prescription drug under this section, or that does not 
     distribute, sell, or use such a drug;
       ``(C) discriminate by denying supplies of a prescription 
     drug to a person in a permitted country that exports a 
     prescription drug to the United States under this section or 
     distributes, sells, or uses a prescription drug imported into 
     the United States under this section;
       ``(D) discriminate by publicly, privately, or otherwise 
     refusing to do business with a person in a permitted country 
     that exports a prescription drug to the United States under 
     this section or distributes, sells, or uses a prescription 
     drug imported into the United States under this section;
       ``(E) discriminate by specifically restricting or delaying 
     the supply of a prescription drug to a person in a permitted 
     country that exports a prescription drug to the United States 
     under this section or distributes, sells, or uses a 
     prescription drug imported into the United States under this 
     section;
       ``(F) cause there to be a difference (including a 
     difference in active ingredient, route of administration, 
     dosage form, strength, formulation, manufacturing 
     establishment, manufacturing process, or person that 
     manufactures the drug) between a prescription drug for 
     distribution in the United States and the drug for 
     distribution in a permitted country for the purpose of 
     restricting importation of the drug into the United States 
     under this section;
       ``(G) refuse to allow an inspection authorized under this 
     section of an establishment

[[Page 498]]

     that manufactures a prescription drug that may be imported or 
     offered for import under this section;
       ``(H) fail to conform to the methods used in, or the 
     facilities used for, the manufacturing, processing, packing, 
     or holding of a prescription drug that may be imported or 
     offered for import under this section to good manufacturing 
     practice under this Act;
       ``(I) become a party to a licensing or other agreement 
     related to a prescription drug that fails to provide for 
     compliance with all requirements of this section with respect 
     to such prescription drug or that has the effect of 
     prohibiting importation of the drug under this section; or
       ``(J) engage in any other action that the Federal Trade 
     Commission determines to discriminate against a person that 
     engages in, or to impede, delay, or block the process for, 
     the importation of a prescription drug under this section.
       ``(2) Affirmative defense.--It shall be an affirmative 
     defense to a charge that a person has discriminated under 
     subparagraph (A), (B), (C), (D), or (E) of paragraph (1) that 
     the higher price charged for a prescription drug sold to a 
     person, the denial of supplies of a prescription drug to a 
     person, the refusal to do business with a person, or the 
     specific restriction or delay of supplies to a person is not 
     based, in whole or in part, on--
       ``(A) the person exporting or importing a prescription drug 
     into the United States under this section; or
       ``(B) the person distributing, selling, or using a 
     prescription drug imported into the United States under this 
     section.
       ``(3) Presumption and affirmative defense.--
       ``(A) Presumption.--A difference (including a difference in 
     active ingredient, route of administration, dosage form, 
     strength, formulation, manufacturing establishment, 
     manufacturing process, or person that manufactures the drug) 
     created after January 1, 2005, between a prescription drug 
     for distribution in the United States and the drug for 
     distribution in a permitted country shall be presumed under 
     paragraph (1)(H) to be for the purpose of restricting 
     importation of the drug into the United States under this 
     section.
       ``(B) Affirmative defense.--It shall be an affirmative 
     defense to the presumption under subparagraph (A) that--
       ``(i) the difference was required by the country in which 
     the drug is distributed; or
       ``(ii) the Secretary has determined that the difference was 
     necessary to improve the safety or effectiveness of the drug.
       ``(4) Effect of subsection.--
       ``(A) Sales in other countries.--This subsection applies 
     only to the sale or distribution of a prescription drug in a 
     country if the manufacturer of the drug chooses to sell or 
     distribute the drug in the country. Nothing in this 
     subsection shall be construed to compel the manufacturer of a 
     drug to distribute or sell the drug in a country.
       ``(B) Discounts to insurers, health plans, pharmacy benefit 
     managers, and covered entities.--Nothing in this subsection 
     shall be construed to--
       ``(i) prevent or restrict a manufacturer of a prescription 
     drug from providing discounts to an insurer, health plan, 
     pharmacy benefit manager in the United States, or covered 
     entity in the drug discount program under section 340B in 
     return for inclusion of the drug on a formulary;
       ``(ii) require that such discounts be made available to 
     other purchasers of the prescription drug; or
       ``(iii) prevent or restrict any other measures taken by an 
     insurer, health plan, or pharmacy benefit manager to 
     encourage consumption of such prescription drug.
       ``(C) Charitable contributions.--Nothing in this subsection 
     shall be construed to--
       ``(i) prevent a manufacturer from donating a prescription 
     drug, or supplying a prescription drug at nominal cost, to a 
     charitable or humanitarian organization, including the United 
     Nations and affiliates, or to a government of a foreign 
     country; or
       ``(ii) apply to such donations or supplying of a 
     prescription drug.
       ``(5) Enforcement.--
       ``(A) Unfair or deceptive act or practice.--A violation of 
     this subsection shall be treated as a violation of a rule 
     defining an unfair or deceptive act or practice prescribed 
     under section 18(a)(1)(B) of the Federal Trade Commission 
     Act.
       ``(B) Actions by the commission.--The Federal Trade 
     Commission--
       ``(i) shall enforce this subsection in the same manner, by 
     the same means, and with the same jurisdiction, powers, and 
     duties as though all applicable terms and provisions of the 
     Federal Trade Commission Act were incorporated into and made 
     a part of this section; and
       ``(ii) may seek monetary relief threefold the damages 
     sustained.
       ``(6) Actions by states.--
       ``(A) In general.--
       ``(i) Civil actions.--The attorney general of a State may 
     bring a civil action on behalf of the residents of the State, 
     and persons doing business in the State, in a district court 
     of the United States of appropriate jurisdiction for a 
     violation of paragraph (1) to--

       ``(I) enjoin that practice;
       ``(II) enforce compliance with this subsection;
       ``(III) obtain damages, restitution, or other compensation 
     on behalf of residents of the State and persons doing 
     business in the State, including threefold the damages; or
       ``(IV) obtain such other relief as the court may consider 
     to be appropriate.

       ``(ii) Notice.--

       ``(I) In general.--Before filing an action under clause 
     (i), the attorney general of the State involved shall provide 
     to the Federal Trade Commission--

       ``(aa) written notice of that action; and
       ``(bb) a copy of the complaint for that action.

       ``(II) Exemption.--Subclause (I) shall not apply with 
     respect to the filing of an action by an attorney general of 
     a State under this paragraph, if the attorney general 
     determines that it is not feasible to provide the notice 
     described in that subclause before filing of the action. In 
     such case, the attorney general of a State shall provide 
     notice and a copy of the complaint to the Federal Trade 
     Commission at the same time as the attorney general files the 
     action.

       ``(B) Intervention.--
       ``(i) In general.--On receiving notice under subparagraph 
     (A)(ii), the Commission shall have the right to intervene in 
     the action that is the subject of the notice.
       ``(ii) Effect of intervention.--If the Commission 
     intervenes in an action under subparagraph (A), it shall have 
     the right--

       ``(I) to be heard with respect to any matter that arises in 
     that action; and
       ``(II) to file a petition for appeal.

       ``(C) Construction.--For purposes of bringing any civil 
     action under subparagraph (A), nothing in this subsection 
     shall be construed to prevent an attorney general of a State 
     from exercising the powers conferred on the attorney general 
     by the laws of that State to--
       ``(i) conduct investigations;
       ``(ii) administer oaths or affirmations; or
       ``(iii) compel the attendance of witnesses or the 
     production of documentary and other evidence.
       ``(D) Actions by the commission.--
       ``(i) In general.--In any case in which an action is 
     instituted by or on behalf of the Commission for a violation 
     of paragraph (1), a State may not, during the pendency of 
     that action, institute an action under subparagraph (A) for 
     the same violation against any defendant named in the 
     complaint in that action.
       ``(ii) Intervention.--An attorney general of a State may 
     intervene, on behalf of the residents of that State, in an 
     action instituted by the Commission.
       ``(iii) Effect of intervention.--If an attorney general of 
     a State intervenes in an action instituted by the Commission, 
     such attorney general shall have the right--

       ``(I) to be heard with respect to any matter that arises in 
     that action; and
       ``(II) to file a petition for appeal.

       ``(E) Venue.--Any action brought under subparagraph (A) may 
     be brought in the district court of the United States that 
     meets applicable requirements relating to venue under section 
     1391 of title 28, United States Code.
       ``(F) Service of process.--In an action brought under 
     subparagraph (A), process may be served in any district in 
     which the defendant--
       ``(i) is an inhabitant; or
       ``(ii) may be found.
       ``(G) Limitation of actions.--Any action under this 
     paragraph to enforce a cause of action under this subsection 
     by the Federal Trade Commission or the attorney general of a 
     State shall be forever barred unless commenced within 5 years 
     after the Federal Trade Commission, or the attorney general, 
     as the case may be, knew or should have known that the cause 
     of action accrued. No cause of action barred under existing 
     law on the effective date of this Act shall be revived by 
     this Act.
       ``(H) Measurement of damages.--In any action under this 
     paragraph to enforce a cause of action under this subsection 
     in which there has been a determination that a defendant has 
     violated a provision of this subsection, damages may be 
     proved and assessed in the aggregate by statistical or 
     sampling methods, by the computation of illegal overcharges 
     or by such other reasonable system of estimating aggregate 
     damages as the court in its discretion may permit without the 
     necessity of separately proving the individual claim of, or 
     amount of damage to, persons on whose behalf the suit was 
     brought.
       ``(I) Exclusion on duplicative relief.--The district court 
     shall exclude from the amount of monetary relief awarded in 
     an action under this paragraph brought by the attorney 
     general of a State any amount of monetary relief which 
     duplicates amounts which have been awarded for the same 
     injury.
       ``(7) Effect on antitrust laws.--Nothing in this subsection 
     shall be construed to modify, impair, or supersede the 
     operation of the antitrust laws. For the purpose of this 
     subsection, the term `antitrust laws' has the meaning given 
     it in the first section of the Clayton Act, except that it 
     includes section 5 of the Federal Trade Commission Act to the 
     extent that such section 5 applies to unfair methods of 
     competition.

[[Page 499]]

       ``(8) Manufacturer.--In this subsection, the term 
     `manufacturer' means any entity, including any affiliate or 
     licensee of that entity, that is engaged in--
       ``(A) the production, preparation, propagation, 
     compounding, conversion, or processing of a prescription 
     drug, either directly or indirectly by extraction from 
     substances of natural origin, or independently by means of 
     chemical synthesis, or by a combination of extraction and 
     chemical synthesis; or
       ``(B) the packaging, repackaging, labeling, relabeling, or 
     distribution of a prescription drug.''.
       (b) Regulations.--The Federal Trade Commission shall 
     promulgate regulations to carry out the enforcement program 
     under section 804(l) of the Federal Food, Drug, and Cosmetic 
     Act (as added by subsection (a)).
       (c) Suspension and Termination of Exporters.--Section 
     804(g) of the Federal Food, Drug, and Cosmetic Act (as 
     amended by section 4(g)) (21 U.S.C. 384(g)) is amended by--
       (1) striking ``Suspension of Importation.--The Secretary'' 
     and inserting ``Suspension of Importation.--
       ``(1) The Secretary--''; and
        (2) adding at the end the following:
       ``(2) Suspension and termination of exporters.--
       ``(A) Suspension.--With respect to the effectiveness of a 
     registration submitted under subsection (f) by a registered 
     exporter:
       ``(i) Subject to clause (ii), if the Secretary determines, 
     after notice and opportunity for a hearing, that the 
     registered exporter has failed to maintain substantial 
     compliance with all registration conditions, the Secretary 
     may suspend the registration.
       ``(ii) If the Secretary determines that, under color of the 
     registration, the registered exporter has exported a drug 
     that is not a qualifying drug, or a drug that does not meet 
     the criteria under this section, or has exported a qualifying 
     drug to an individual in violation of this section, the 
     Secretary shall immediately suspend the registration. A 
     suspension under the preceding sentence is not subject to the 
     provision by the Secretary of prior notice, and the Secretary 
     shall provide to the registered exporter involved an 
     opportunity for a hearing not later than 10 days after the 
     date on which the registration is suspended.
       ``(iii) The Secretary may reinstate the registration, 
     whether suspended under clause (i) or (ii), if the Secretary 
     determines that the registered exporter has demonstrated that 
     further violations of registration conditions will not occur.
       ``(B) Termination.--The Secretary, after notice and 
     opportunity for a hearing, may terminate the registration 
     under subsection (f) of a registered exporter if the 
     Secretary determines that the registered exporter has engaged 
     in a pattern or practice of violating 1 or more registration 
     conditions, or if on 1 or more occasions the Secretary has 
     under subparagraph (A)(ii) suspended the registration of the 
     registered exporter. The Secretary may make the termination 
     permanent, or for a fixed period of not less than 1 year. 
     During the period in which the registration of a registered 
     exporter is terminated, any registration submitted under 
     subsection (f) by such exporter or a person who is a partner 
     in the export enterprise or a principal officer in such 
     enterprise, and any registration prepared with the assistance 
     of such exporter or such a person, has no legal effect under 
     this section.''.

     SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as may be 
     necessary to carry out this Act (and the amendments made by 
     this Act).
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 110. A bill for the relief of Robert Liang and Alice Liang; to the 
Committee on the Judiciary.
  Mrs. FEINSTEIN. Mr. President, I offer today private relief 
legislation to provide lawful permanent residence status to Robert Kuan 
Liang and his wife, Chun-Mei (``Alice'') Hsu-Liang, foreign nationals 
who live in San Bruno, California.
  I have decided to offer private relief immigration bills on their 
behalf because I believe that, without it, this hardworking couple and 
their three United States citizen children would endure an immense and 
unfair hardship. Indeed, without this legislation, this family may not 
remain a family for much longer.
  The Liangs are foreign nationals facing deportation on account of 
their overstay of visitors visas and the failure of their previous 
attorney to timely file a suspension of deportation application before 
the immigration laws changed in 1996.
  Mr. Liang is a foreign national and refugee from Laos. His wife is a 
citizen of Taiwan. They entered the United States 22 years ago as 
tourists and established residency in the San Bruno, CA. Because they 
overstayed the terms of their temporary visas, they now face 
deportation from the United States.
  After living here for so many years, removal from the United States 
would not come easily or perhaps without tearing this family apart. The 
Liangs have three children born in this country: Wesley, 13 years old, 
Bruce, 10 years old, and Eva, 7 years old. Young Wesley suffers from 
asthma and has a history of social and emotional anxiety. The 
immigration judge who presided over the Liang's case in 1997 concluded 
that there was no question that the Liang children would be adversely 
impacted if they were required to leave their relatives and friends 
behind in California to follow their parents to Taiwan, a country whose 
language and culture is unfamiliar to them. And that was 7 years ago. I 
can only imagine how much more they would be adversely impacted now 
given the passage of 7 more years.
  The Liangs have filed annual income tax returns; established a 
successful business, Fong Yong Restaurant, in the United States; are 
home owners, and are financially successful. Since they arrived in the 
United States, they have pursued and, to a degree, achieved the 
American Dream.
  Mr. and Mrs. Liang's quest to legalize their immigration status began 
in 1993 when they filed for relief from deportation before an 
immigration judge. The Immigration and Naturalization Service, however, 
did not act on their application until nearly 5 years later, in 1997, 
after which time the immigration laws had significantly changed.
  According to the immigration judge, had the INS acted on their 
application for relief from deportation in a timely manner, they would 
have qualified for suspension of deportation, given that they were 
long-term residents of this country with US citizen children and other 
positive factors. By the time INS processed their application, however, 
Congress passed the Illegal Immigration Reform and Immigrant 
Responsibility Act of 1996, which changed the requirements for relief 
from removal to the Liangs' disadvantage.
  I supported the changes of the 1996 law, but I believe sometimes 
there are exceptions which merit special consideration. The Liangs are 
such a couple and family. Perhaps what distinguishes this family from 
many others is that through hard work and perseverance, Mr. Liang has 
achieved a significant degree of success in the United States while 
battling a severe form of Post Traumatic Stress Disorder. According to 
his psychologist, this disorder stems from the persecution he, his 
family and community experienced in his native country of Laos during 
the Vietnam War. Throughout his childhood and adolescence, Mr. Liang 
was exposed to numerous traumatic experiences, including the murder of 
his mother by the North Vietnamese and frequent episodes of wartime 
violence. He also routinely witnessed the brutal persecution and deaths 
of others in his village. In 1975, he was granted refugee status in 
Taiwan.
  The emotional impact of Mr. Liang's experiences in his war-torn 
native country have been profound and continue to haunt him. In 
addition to being diagnosed with Post Traumatic Stress Disorder, his 
psychologist has also indicated that he suffers from severe clinical 
depression, which has been exacerbated by the prospect of being 
deported to Taiwan, where on account of his nationality, he believes he 
and his family would be treated as second-class citizens. Moreover, Mr. 
Liang believes that the pursuit of further mental health treatment in 
Taiwan would only exacerbate the stigma of being an outsider in a 
country whose language he does not speak. Given those prospects, he 
also fears the impact such a stigma would have on the well-being and 
future of his children.
  Given these extraordinary and unique facts, I ask my colleagues to 
support this private relief bill on behalf of the Liangs.
  I also ask unanimous consent that the text of the legislation be 
printed in the Record and that the attached three letters of community 
support also be printed.
  There being no objection, the bill and letters were ordered to be 
printed in the Record, as follows:

                                 S. 110

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

[[Page 500]]



     SECTION 1. ADJUSTMENT OF STATUS.

       (a) In General.--Notwithstanding any other provision of law 
     or any order, for the purposes of the Immigration and 
     Nationality Act (8 U.S.C. 1101 et seq.), Robert Liang and 
     Alice Liang shall be deemed to have been lawfully admitted 
     to, and remained in, the United States, and shall be eligible 
     for issuance of an immigrant visa or for adjustment of status 
     under section 245 of the Immigration and Nationality Act (8 
     U.S.C. 1255).
       (b) Application and Payment of Fees.--Subsection (a) shall 
     apply only if the applications for issuance of immigrant 
     visas or the applications for adjustment of status are filed 
     with appropriate fees within 2 years after the date of 
     enactment of this Act.
       (c) Reduction of Immigrant Visa Numbers.--Upon the granting 
     of immigrant visas to Robert Liang and Alice Liang, the 
     Secretary of State shall instruct the proper officer to 
     reduce by 2, during the current or subsequent fiscal year, 
     the total number of immigrant visas that are made available 
     to natives of the country of the aliens' birth under section 
     202(e) or 203(a) of the Immigration and Nationality Act (8 
     U.S.C. 1152(e), 1153(a)), as applicable.

     Re the Liang Family.

     Hon. Dianne Feinstein,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Feinstein: Robert and Alice Liang and their 
     Fon Yong Restaurant at 1065 Holly Street are members in good 
     standing of the San Carlos Chamber of Commerce. As such they 
     have shown their commitment to be members in good standing of 
     the San Carlos business community. Chamber members tend to 
     reflect a desire for community involvement and support for 
     their city. The Liangs took the initiative to start a 
     business here and have maintained it beautifully. They have a 
     very loyal cadre of customers.
       The Chamber is always happy to see good small businesses 
     like Fon Yong thrive. The Chamber stands behind Alice and her 
     family in their quest for permanent residence in the United 
     States. Alice is well known to all who frequent her 
     restaurant as a warm, friendly business woman who even takes 
     the time to remember what her regulars' favorites are.
       The Liang family is a stable one and they contribute to the 
     community here. They have done good rather than harm as they 
     settled here. I hope you can respond positively to their 
     example and settle the immigration issue quickly.
           Sincerely,

                                              Sheryl Pomerenk,

     CEO, San Carlos Chamber of Commerce.
                                  ____

                                                 January 13, 2005.
     Hon. Dianne Feinstein,
     331 Hart Senate Office Building,
     Washington, DC.
       Dear Senator Feinstein: I am writing in support of a 
     private bill for Robert and Alice Liang, two outstanding 
     residents of our community for the past twenty-one years.
       Robert and Alice are two of the most caring and hardworking 
     people I have ever met. Despite the demands of running a 
     small business and taking care of their three children, they 
     are always trying to help others in need. Recently, Alice 
     heard about Chloe Chang, a young local girl who had acute 
     promyelocytic leukemia. Chloe had undergone chemotherapy, but 
     had a relapse. She needed a bone marrow transplant, and was 
     looking for a donor. Her family was facing mounting bills 
     from the donor search. Alice asked me if there was any way 
     she could help. I should point out that she had never met 
     this family, she just knew they were in need from newspaper 
     articles and TV broadcasts. We put together a fund-raising 
     dinner event at Stanford University in which I bought the 
     ingredients, and Robert and Alice worked all day cooking a 
     hundred dinners. Together, we raised almost a thousand 
     dollars to help Chloe's family.
       This is not the only time that Robert and Alice have gone 
     out of their way to help others, even while they themselves 
     face deportation. It amazes me that they can think of others 
     at such a time, but that's the kind of people they are. I am 
     so worried about Robert, especially, because he is still 
     suffering from all the things he saw as a child and a 
     teenager in Laos. People were dragged out and killed in front 
     of him, and his own mother was killed by the Communists 
     before the rest of the family escaped. After two decades 
     here, Robert has found a little peace, and I can't even think 
     what it will do to him to have that taken away. I want you as 
     my senator to do whatever it takes to make sure that these 
     two wonderful people can stay here where they belong. Please 
     sponsor a private bill and try to convince other members of 
     Congress to support it. If there's anything I can do to help, 
     please let me know.
           Sincerely,
     Sue Chow.
                                  ____

                                                 January 12, 2005.
     Senator Dianne Feinstein,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Feinstein: I am writing you as a friend and 
     customer of Robert and Alice Liang of San Bruno, because I 
     understand that you may be considering resubmitting a private 
     bill in their favor. I certainly hope that you do resubmit 
     and support this private bill. These are extraordinary people 
     in the way they and their business have enhanced our 
     community of San Carlos. Alice and Robert have really created 
     a special community of customers and friends with their 
     restaurant.
       It's hard to describe how much of an asset the Liangs are 
     to our community. They are good neighbors. They are welcoming 
     friends and hosts. They expect only good from people and they 
     reach out with friendship and aid to those around them.
       Robert and Alice have touched the hundreds of customers who 
     have walked in the doors of Fon Yong Restaurant by not only 
     preparing very good food, but by reaching us personally with 
     very caring, unsolicited acts of kindness and neighborliness. 
     A couple of examples include their bringing my husband's 
     favorite vegetarian meal to him at Sequoia Hospital, when he 
     was undergoing rehabilitation from a stroke, and regularly 
     assisting the disabled daughter of a customer as she works to 
     feed herself dinner in the restaurant. Their actions of 
     kindness remind all of us what it is to be a good neighbor. 
     These are the values and qualities we hope for in our 
     neighbors.
       The private bill you submitted in the last Congress did 
     help reduce Robert's anxiety level. (As you know, he is being 
     treated for Post Traumatic Stress Disorder.) I am very 
     concerned though, about what may happen to the family if they 
     are forced to leave the United States and relocate to a place 
     the children have never seen, is a half a life away for 
     Alice, and is certainly not Robert's home. I hope you will 
     resubmit your bill for the Liangs and encourage your fellow 
     members of the Senate to support the Liangs in their quest to 
     join us as citizens of the United States.
       Thank you so much for your support of the Liangs. Also, 
     please know that I am ready and willing to help you help 
     them.
           Sincerely,
                                                     Barbara Maas.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 111. A bill for the relief of Shigeru Yamada; to the Committee on 
the Judiciary.
  Mrs. FEINSTEIN. Mr. President, I offer today private relief 
legislation to provide lawful permanent residence status to Shigeru 
Yamada, a 22-year-old Japanese national who lives in Chula Vista, CA.
  I have decided to introduce a private bill on his behalf because I 
believe that Mr. Yamada represents a model American citizen, for whom 
removal from this country would represent an unfair hardship. Without 
this legislation, Mr. Yamada will be forced to return to a country in 
which he lacks any linguistic, cultural or family ties.
  Mr. Yamada legally entered the United States with his mother and two 
sisters in 1992 at the young age of 10. The family was fleeing from Mr. 
Yamada's alcoholic father, who had been physically abusive to his 
mother, the children and even his own parents. Since then, he has had 
no contact with his father and is unsure if he is even alive. 
Tragically, Mr. Yamada experienced further hardship when his mother was 
killed in a car crash in 1995. Orphaned at the age of 13, Mr. Yamada 
spent time living with his aunt before moving to Chula Vista to live 
with a close friend of his late mother.
  The death of his mother marked more than a personal tragedy for Mr. 
Yamada; it also served to impede the process for him to legalize his 
status. At the time of her death, Mr. Yamada's family was living 
legally in the United States. His mother had acquired a student visa 
for herself and her children qualified as her dependents. Her death 
revoked his legal status in the United States. In addition, Mr. 
Yamada's mother was engaged to an American citizen at the time of her 
death. Had she survived, her son would likely have become an American 
citizen through this marriage.
  Mr. Yamada has exhausted all administrative options under our current 
immigration system. Throughout high school, he contacted attorneys in 
the hopes of legalizing his status, but his attempts were unsuccessful. 
Unfortunately, time has run out and, for Mr. Yamada, the only option 
available to him today is private relief legislation.
  For several reasons, it would be tragic for Mr. Yamada to be deported 
from the United States and forced to return to Japan.
  First, since arriving in the United States, Mr. Yamada has lived as a 
model American. He graduated with honors from Eastlake High School in 
2000, where he excelled in both academics and athletics. Academically, 
he

[[Page 501]]

earned a number of awards including being named an ``Outstanding 
English Student'' his freshman year, an All-American Scholar, and 
earning the United States National Minority Leadership Award. His 
teacher and coach, Mr. John Inumerable, describes him as being 
``responsible, hard working, organized, honest, caring and very 
dependable.'' His role as the Vice-President of the Associated Student 
Body his senior year is an indication of Mr. Yamada's high level of 
leadership, as well as, his popularity and trustworthiness among his 
peers. As an athlete, Mr. Yamada was named the ``Most Inspirational 
Player of the Year'' in Junior Varsity baseball and football, as well 
as, Varsity football. His football coach, Mr. Jose Mendoza, expressed 
his admiration by saying that he has ``seen in Shigeru Yamada the 
responsibility, dedication and loyalty that the average American holds 
to be virtuous.''
  Second, Mr. Yamada has distinguished himself as a local volunteer. As 
a member of the Eastlake High School Link Crew, he helped freshman find 
their way around campus, offered tutoring and mentoring services, and 
set an example of how to be a successful member of the student body. 
After graduating from high school, he volunteered his time for 4 years 
as the coach of the Eastlake High School Girl's softball team. The 
former head coach, who has since retired, Dr. Charles Sorge, describes 
him as an individual full of ``integrity'' who understands that as a 
coach it is important to work as a ``team player.'' His level of 
commitment to the team was further illustrated to Dr. Sorge when he 
discovered, halfway through the season, that Mr. Yamada's commute to 
and from practice was 2 hours long each way. It takes an individual 
with character to volunteer his time to coach and never bring up the 
issue of how long his commute takes him each day. Dr. Sorge hopes that, 
once Mr. Yamada legalizes his immigration status, he will be formally 
hired to continue coaching the team.
  Third, sending Mr. Yamada back to Japan would be an immense hardship 
for him and his family here. Mr. Yamada does not speak Japanese. He is 
unaware of the nation's current cultural trends. And, he has no 
immediate family members that he knows of in Japan. Currently, both of 
his sisters are in the process of legalizing their immigration status 
in the United States. His older sister is married to a United States 
citizen and his younger sister is being adopted by a maternal aunt, who 
is a United States citizen. Since as all of his family lives in 
California, sending Mr. Yamada back to Japan would serve to split his 
family apart and separate him from everyone and everything that he 
knows. His sister contends that her younger brother would be ``lost'' 
if he had to return to live in Japan on his own. It is unlikely that he 
would be able to find any gainful employment in Japan due to his 
inability to speak or read the language.
  As a member of the Chula Vista community, Mr. Yamada has 
distinguished himself as an honorable individual. His teacher, Mr. 
Robert Hughes, describes him as being an ``upstanding `All-American' 
young man''. Until being picked up during a routine check of riders' 
immigration status on a city bus, he had never been arrested or 
convicted of any crime. Mr. Yamada is not, and has never been, a burden 
on the State. He has never received any Federal or State assistance.
  Currently, Mr. Yamada holds sophomore status at Southwestern 
Community College. However, he is taking this semester off in order to 
alleviate his financial burdens by working full time. He had hoped to 
pursue a career in law enforcement, but his plans have recently changed 
due to his current immigration status dilemma. Until he obtains 
citizenship, Mr. Yamada will be prohibited from pursuing a career in 
law enforcement. Due to the circumstances, Mr. Yamada has changed his 
career goal to that of becoming a high school teacher. Mr. Yamada's 
commitment to his education is admirable. He could have easily taken a 
different path but, through his own ``individual fortitude,'' he has 
dedicated himself to his studies so that he can live a better life.
  With his hard work and giving attitude, Shigeru Yamada represents the 
ideal American citizen. Although born in Japan, he is truly American in 
every other sense. I ask you to help right a wrong and grant Mr. Yamada 
lawful permanent resident status so that he can continue towards his 
bright future.
  Given these extraordinary and unique facts, I ask my colleagues to 
support this private relief bill on behalf of Mr. Yamada.
  I ask unanimous consent that the text of the bill be printed in the 
Record and that the three letters of community support be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 111

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

     SECTION 1. PERMANENT RESIDENT STATUS FOR SHIGERU YAMADA.

       (a) In General.--Notwithstanding subsections (a) and (b) of 
     section 201 of the Immigration and Nationality Act (8 U.S.C. 
     1151), Shigeru Yamada shall be eligible for issuance of an 
     immigrant visa or for adjustment of status to that of an 
     alien lawfully admitted for permanent residence upon filing 
     an application for issuance of an immigrant visa under 
     section 204 of that Act or for adjustment of status to lawful 
     permanent resident.
       (b) Adjustment of Status.--If Shigeru Yamada enters the 
     United States before the filing deadline specified in 
     subsection (c), Shigeru Yamada shall be considered to have 
     entered and remained lawfully and shall be eligible for 
     adjustment of status under section 245 of the Immigration and 
     Nationality Act (8 U.S.C. 1255) as of the date of enactment 
     of this Act.
       (c) Deadline for Application and Payment of Fees.--
     Subsections (a) and (b) shall apply only if the application 
     for issuance of an immigrant visa or the application for 
     adjustment of status is filed with appropriate fees within 2 
     years after the date of enactment of this Act.
       (d) Reduction of Immigrant Visa Numbers.--Upon the granting 
     of an immigrant visa or permanent residence to Shigeru 
     Yamada, the Secretary of State shall instruct the proper 
     officer to reduce by 1, during the current or next following 
     fiscal year, the total number of immigrant visas that are 
     made available to natives of the country of birth of Shigeru 
     Yamada under section 203(a) of the Immigration and 
     Nationality Act or, if applicable, the total number of 
     immigrant visas that are made available to natives of the 
     country of birth of Shigeru Yamada under section 202(e) of 
     that Act.

                                         Eastlake High School,

                                Chula Vista, CA, January 17, 2005.
     Senator Dianne Feinstein,
     U.S. Senate,
     Washington, DC.
       Dear Senator Feinstein: I am more than happy to write this 
     letter on behalf of Shigeru Yamada as he pursues his efforts 
     to stay in the United States. I was Shigeru's counselor while 
     he attended Eastlake High School. During that time he always 
     displayed exemplary behavior, academic focus, and personal 
     determination.
       Academically Shigeru was a model student. He earned a 3.84 
     grade point average; he made the National Honor Roll and was 
     nominated to Who's Who Among High School Students for three 
     straight years. Shigeru plans to attend a university to study 
     sports medicine and physical therapy so he has set high goals 
     for himself. He has the ability to not only handle college-
     level work, but to thrive on the challenge the university 
     will bring. His quiet determination has been an example to 
     his peers and was a joy to his instructors.
       Shigeru Yamada not only took the most from his high school 
     experience, but he has consistently ``given back'' his 
     talents, time, and effort to serve the school community. He 
     was elected ASB vice-president during his senior year. He 
     demonstrated leadership skills as president of the Inter-Club 
     Council on campus; he mentored incoming ninth-grade students 
     and worked on numerous service projects. In addition to his 
     involvement in student government, Shigeru participated in 
     football, baseball, and wrestling. He was named ``Most 
     Inspirational Player of the Year'' for both his junior 
     varsity baseball and football teams. He was also awarded the 
     J.T. Franks Memorial Award (most inspirational) from the 
     varsity football team. (This award carries a great deal of 
     respect amongst the players as it is named after a teammate 
     who died of cancer.) Shigeru was a role model for our 
     students when he attended our school: He earned good grades; 
     he was an athlete; and he was involved in a variety of 
     additional activities. He is the kind of student that 
     Eastlake High School has been proud to have.
       A further testimony to Shigeru's character is what he has 
     been doing since graduating. This young man has come back to 
     serve as an assistant football and wrestling coach for

[[Page 502]]

     our students. He gives his time and energy to working with 
     individual students during the week and on weekends; he not 
     only advises them on how to improve their athletic skills, 
     but he is also a wonderful role model and mentor. He is 
     someone to whom the young men can relate, a person whose 
     opinions are valued. I have personally seen Shigeru interact 
     with these boys; the respect he gives them and the respect 
     they give Shigeru is an absolute indication of the positive 
     influence he has in their lives.
       Shigeru is seeking permanent resident status in the United 
     States through a private bill that you have agreed to 
     sponsor. Were his mother still alive, his residency would not 
     be in question. However, since she died a few years ago in a 
     car accident, Shigeru has had to get through high school 
     without her guidance and support, and now his future in the 
     United States is in jeopardy. Shigeru Yamada has already 
     proven himself to be a hard-working, law-abiding, goal-
     oriented young man. He has already proven himself to be a 
     productive member of society. And, most importantly, Shigeru 
     wants to not only take the best this society has to offer, 
     but to also give back to the society to make it a better 
     place for those around him.
       Perhaps the best endorsement that I can give is that I 
     would be proud to claim Shigeru Yamada as my son. He embodies 
     all the qualities that I have tried to instill in my own 
     sons. Please, I urge you to submit the bill that would give 
     Shigeru Yamada permanent residency in the United States. He 
     will represent all of us well.
           Sincerely,
                                                   Ann M. Stevens,
     Asst. Principal.
                                  ____



                                         Eastlake High School,

                                Chula Vista, CA, January 13, 2005.
       Hon. Dianne Feinstein: I am writing to bring to your 
     attention the need to support a fine young man, Shigeru 
     Yamada. I am a teacher and coach at Eastlake High School; I 
     have known Shigeru for 8 years, both as a student and as a 
     volunteer coach during the last 5 years. What has singularly 
     impressed me about this young man is that he has created 
     himself and never complained about his life's struggles. His 
     mother died when he was young. He got little support from his 
     aunt--materially, emotionally, spiritually. Yet all the while 
     you would not have known that. He set goals for himself 
     academically and athletically; modeled himself on good ideals 
     of community service and service to his school. He was vice-
     president of the Associated Student Body at Eastlake High and 
     would have pursued an academic future at UCLA were it not for 
     his citizenship status. Instead, he did what he could do and 
     has gone to community college in an effort to pursue his 
     college degree.
       All the while, he volunteered his time during these past 5 
     years to help coach our school's softball team (as well as 
     other sports on campus). It was only recently that I had 
     discovered that it would take him 2 hours with bus transfers 
     just to get to softball practice.
       I provide this information to you as a testimonial to the 
     character of this young man. Exceptional in attitude and 
     determination. We need this kind of spirit and resolve in 
     America. We do not want to export it somewhere else. Please 
     help.
           Respectfully,

                                             Charles R. Sorge,

                                        Ed.D., English Teacher and
     Head Softball Coach.
                                  ____

                                             Eastlake High School,


                                      Associated Student Body,

                                Chula Vista, CA, January 14, 2005.
       Congressman Filner: Please consider the reintroduction of 
     the private bill for permanent residency on behalf of Shigeru 
     Yamada. He is a most outstanding person, with character 
     second to none. Shigeru Yamada has no ties, nor any cultural 
     background with Japan. Since he has been raised in the United 
     States for the past 12 years out of his 22 years, he is not 
     able to communicate in the Japanese language. Therefore, to 
     throw Shiguru back into a world of confusion will not only be 
     a tragic event for him, but a loss for the United States and 
     the Chula Vista community.
       Once again we cannot lose a strong member of this society. 
     Please consider his request for sponsorship.
       Sincerely,
                                                      Bob Barrett,
                                              Assistant Principal.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 112. A bill for the relief of Denes Fulop and Gyorgyi Fulop; to 
the Committee on the Judiciary.
  Mrs. FEINSTEIN. Mr. President, I offer today a private immigration 
relief bill to provide lawful permanent residence status to Denes and 
Gyorgyi Fulop, Hungarian nationals who have lived in California for 
more than 20 years. The Fulops are the parents of six U.S. citizen 
children. Today, they face deportation having exhausted all 
administrative remedies under our immigration system.
  The Fulop's story is a compelling one and one which I believe merits 
Congress' consideration for humanitarian relief.
  The most poignant tragedy to affect this family occurred in May 2000, 
when the Fulops eldest child, Robert ``Bobby'' Fulop, an accomplished 
15 year-old teenager, died suddenly of a heart aneurism. Bobby was 
considered the shining star of his family.
  That same year their six-year-old daughter, Elizabeth, was diagnosed 
with moderate pulmonary stenosis, a potentially life-threatening heart 
condition and a frightening situation similar to Bobby's. Not long ago, 
she successfully underwent heart surgery, but requires medical 
supervision to ensure her good health.
  The Fulop's youngest child, Matthew, was born seven weeks premature. 
He subsequently underwent several kidney surgeries and is still being 
closely monitored by physicians.
  Compounding these tragedies is the fact that today the Fulops face 
deportation. They face deportation, in part, because in 1995 the family 
traveled to Hungary and remained there for more than 90 days. Under the 
pre-1996 immigration law, prior to the Illegal Immigration Reform and 
Immigrant Responsibility Act of 1996, their stay in Hungary would not 
have been a factor in their immigration case and they would have been 
eligible for adjustment of status to lawful permanent residents.
  Indeed, in 1996, Mr. and Mrs. Fulop applied to the Immigration and 
Naturalization Service, INS, for permanent resident status. Due to 
large backlogs, the INS did not interview them until 1998. By the time 
their applications were considered, the new 1996 immigration law had 
taken effect. Given their one-time 90 day trip outside the United 
States, they were statutorily ineligible for relief pursuant to the 
cancellation of removal provisions of the Immigration and Nationality 
Act.
  One cannot help but conclude that had the INS acted on the Fulop's 
application for relief from deportation in a timelier manner, they 
would have qualified for suspension of deportation under the pre-1996 
law, given that they were long-term residents of the United States with 
U.S. Citizen children and many positive factors in their favor.
  The irony of this situation is that the Fulops were gone from the 
United States for nearly five months in 1995 because they traveled to 
Hungary to help Mr. Fulop's brother build his home. Mr. Fulop's brother 
is handicap and they went to help remodel his home.
  The Fulops are good and decent people. Mr. Fulop is a masonry 
contractor and the owner and president of his own construction 
company--Sumeg International. He has owned this business for 10 years 
and currently has three full-time employees.
  The couple are active in their church and community. As Pastor Peter 
Petrovic of the Apostolic Christian Church of San Diego says in his 
letter of support, ``[t]he family is an exceptional asset to their 
community.'' Mrs. Fulop has served as a Sunday school teacher and 
volunteers regularly at Heritage K-8 Charter School in Escondido. Mrs. 
Morris, a Heritage K-8 Charter School faculty member says in her letter 
of support that Mrs. Fulop is 
``. . . a valuable asset to our school and community.''
  Mr. President, this is a tragic situation. Essentially, as happened 
to many families under the Illegal Immigration Reform and Immigrant 
Responsibility Act of 1996, the rules of the game were changed in the 
middle. When the Fulops applied for relief from deportation they were 
eligible for suspension of deportation. By the time the INS got around 
to their application, nearly three years later, they were no longer 
eligible and in fact suspension of deportation as a form of relief 
ceased to exist.
  The Fulops today have been in the United States since the early 
1980s. Most harmful is the effect that their deportation will have on 
the children, all of whom were born here and who range from one year 
old to 17 years of age. Their eldest, Dennis, is a 4.0 honor student at 
Palomar Community College having graduated from high school one year 
early. His sister, Linda, has a 3.8 grade point average and is an honor 
student in high school.

[[Page 503]]

  It is my hope that Congress sees fit to provide an opportunity for 
this family to remain together in the United States given their many 
years here, the profound sadness they have already experienced and the 
harm that would come from their deportation to their six U.S. citizen 
children.
  Mr. President, I ask unanimous consent that the text of the bill and 
three letters be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 112

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

     SECTION 1. ADJUSTMENT OF STATUS.

       (a) In General.--Notwithstanding any other provision of law 
     or any order, for the purposes of the Immigration and 
     Nationality Act (8 U.S.C. 1101 et seq.), Denes Fulop and 
     Gyorgyi Fulop shall be deemed to have been lawfully admitted 
     to, and remained in, the United States, and shall be eligible 
     for issuance of an immigrant visa or for adjustment of status 
     under section 245 of the Immigration and Nationality Act (8 
     U.S.C. 1255).
       (b) Application and Payment of Fees.--Subsection (a) shall 
     apply only if the applications for issuance of immigrant 
     visas or the applications for adjustment of status are filed 
     with appropriate fees within 2 years after the date of 
     enactment of this Act.
       (c) Reduction of Immigrant Visa Numbers.--Upon the granting 
     of immigrant visas to Denes Fulop and Gyorgyi Fulop, the 
     Secretary of State shall instruct the proper officer to 
     reduce by 2, during the current or subsequent fiscal year, 
     the total number of immigrant visas that are made available 
     to natives of the country of the aliens' birth under section 
     202(e) or 203(a) of the Immigration and Nationality Act (8 
     U.S.C. 1152(e), 1153(a)), as applicable.

                                        Apostolic Christian Church


                                                 of San Diego,

                                  Escondido, CA, January 14, 2005.
     Re the Denes Fulop Family.

       To Whom It May Concern: My family and I have known Denes 
     and Joy Fulop for many years. They have been members in good 
     standing in our church for approximately 20 years. Denes has 
     served the congregation faithfully in many capacities. He was 
     a building committee member during the construction of our 
     church 10 years ago. He also served as church treasurer for 
     four years and Sunday School Superintendent for many years. 
     Presently he is a member on the board of trustees.
       Joy Fulop was a building sub-committee member during the 
     construction of the church and also served for a few years as 
     a Sunday school teacher. Joy is a devoted and committed 
     homemaker, and a wonderful example of a loving mother and 
     wife. Their three younger children, Elizabeth, Sarah and 
     Abigail are actively involved in Sunday school and in various 
     youth group activities. The two oldest, Denny and Linda, are 
     also active in the church. They are very diligent and 
     excellent students in High School and outstanding citizens.
       The family is an exceptional asset to their community. 
     Denes has been self-employed for many years and is a 
     knowledgeable and successful contractor. Their family has 
     never depended on any government aid, but rather contributes 
     and shares their blessings with others. Denes, Joy, and their 
     six children are truly an asset to our church and community.
       Should you have any further questions, please don't 
     hesitate to contact me.
           Respectfully submitted,
                                                   Peter Petrovic,
     Pastor.
                                  ____



                                  Heritage K-8 Charter School,

                                  Escondido, CA, January 14, 2005.
       Dear Members of Congress, I am writing this letter on 
     behalf of the Fulop Family. I want to express my deep 
     appreciation for Mrs. Fulop's involvement at our elementary 
     school.
       Abigail Fulop is a successful kindergarten student in my 
     class who performs above grade level. Sarah and Elizabeth 
     Fulop attend Heritage charter as well and are outstanding 
     students.
       Mrs. Fulop volunteers on a regular basis in my kindergarten 
     classroom helping students become better readers. She takes a 
     reading group and works on reading strategies that increase 
     student' learning. She also takes time to volunteer in her 
     daughter Sarah's class. Her time and effort fosters a 
     learning environment. Recently she participated in a cooking 
     demonstration for the class. She also takes time out of her 
     busy schedule to help her daughter's third grade teacher plan 
     and prepare for field trips.
       In all these things I have confidence that she is a 
     valuable asset to our school and community. Please consider 
     supporting their desire to remain with us. Please feel free 
     to contact me with any questions.
           Sincerely,
     Mrs. Morris.
                                  ____



                                  R. Rimmer Construction Inc.,

                                    Cardiff, CA, January 13, 2005.
       To Whom It May Concern: The purpose of this letter is to 
     describe my relationship with Dennis Fulop, whom I have known 
     for approximately twenty-two years.
       As a building contractor in the San Diego area I have been 
     fortunate to have worked with Dennis for most of those years. 
     He has constructed nearly all of the foundations for the room 
     additions and new houses that I have built. Dennis has also 
     constructed most of the driveways, sidewalks, retaining 
     walls, fireplaces and masonry on my projects. He has also 
     attended to much of my finish grading, drainage and backhoe 
     construction needs.
       Dennis has long been an invaluable member of my 
     construction ``team''. He is very knowledgeable in nearly all 
     construction matters. He has always been very reliable and 
     responsible in meeting deadlines and upholding high standards 
     of construction quality.
       Dennis is also a very successful small business owner. He 
     has his own credit accounts with all of the necessary 
     construction suppliers and to my knowledge has always paid 
     his bills in a timely manner. In fact, I have never been 
     contacted or liened by any of his suppliers to date. Dennis 
     is also very proficient at managing and providing work for 
     his employees.
       Dennis's wife Joy is a dedicated wife and mother to their 
     six children.
       I am very thankful to know the Fulop family personally and 
     I can attest that their values and deeply held convictions 
     make them valuable contributors to their local community and 
     society as a whole.
           Sincerely,
                                                       Ron Rimmer,
                                                        President.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 113. A bill to modify the date as of which certain tribal land of 
the Lytton Rancheria of California is deemed to be held in trust; to 
the Committee on Indian Affairs.
  Mr. President, I rise today to introduce legislation that would 
strike a small provision in the Omnibus Indian Advancement Act of 2000; 
language that circumvents the Indian Gaming Regulatory Act's common-
sense protections and safeguards against the inappropriate siting of 
Nevada-style casinos.
  In December 2000, a one-paragraph provision was attached to the 
Omnibus Indian Advancement Act taking land into trust for a single 
Indian tribe--the Lytton--with the aim of allowing the tribe to bypass 
the federal and state review process and expedite plans to establish a 
large, off-reservation gaming complex in an urban area near San 
Francisco. Most astoundingly, this provision included a clause which 
mandated that the Secretary of Interior backdate the acquisition of 
this land to October 17, 1988--despite the fact that the land was 
actually taken into trust in 2004. This backdating permitted the tribe 
to completely circumvent the Indian Gaming Regulatory Act's 
requirements for gaming on newly acquired lands and avoid an important 
consultative process prescribed in federal law.
  Today California is home to 110 federally recognized tribes. Sixty-
six tribes have gaming compacts with the state and there are 57 tribal 
casinos. With more than 50 tribes seeking federal recognition and 
approximately 25 recognized tribes seeking gaming compacts from the 
Governor, revenues from California's tribal gaming industry are 
expected to be the highest of any state's by the end of the decade. 
According to the latest statistics released by the National Indian 
Gaming Commission, in 2003 California by itself accounted for about 
half of the increase in gaming revenues nationwide.
  Mr. President, I have serious reservations about the expansion of 
Nevada-style gaming--with its slot machines and in-house banking--into 
urban areas, and I am particularly concerned about off-reservation 
gambling and ``reservation shopping''. Off-reservation casinos often 
cause counties additional costs in public and local services, intrude 
on residential areas, and are responsible for an increase of traffic 
and crime within local communities.
  That is why Section 20 of the Indian Gaming Regulatory Act requires 
that tribes complete a ``two-part determination'' process prior to 
engaging in Class III gaming on newly acquired, or off-reservation 
lands. Under this law, tribes seeking to game on lands acquired after 
October 17, 1988, must receive the approval of both the state

[[Page 504]]

Governor and the Secretary of the Interior. In addition, this process 
requires that the Secretary of the Interior consult with local 
communities and nearby tribes before making a final decision in these 
cases.
  In August 2004, the Lytton tribe and the Governor of my state reached 
an agreement on a compact that would have permitted the development of 
a 6-8 story casino housing 5,000 slot machines. Notably, this would be 
the largest inventory of slot machines found in any casino outside of 
Connecticut. After the State Legislature balked at approving this 
massive deal, the Governor and the tribe agreed to put forward a 
revised compact that would allow for a 2,500 slot casino, while 
permitting the tribe to negotiate for additional slots in 2008. This 
latest proposal remains unratified by the State Legislature.
  Mr. President, without this legislation, the Lytton tribe will be 
able to open a massive gambling complex in a metropolitan area outside 
the regulations set up by the Indian Gaming Regulatory Act. Allowing 
this to happen would set a dangerous precedent not only for California, 
but every state where tribal gaming is permitted.
  The changes I seek today are extremely limited. This legislation 
would not reverse restoration of the tribe. It would not infringe on 
Native American sovereignty. It does not affect the land acquisition or 
even block the casino proposal. It only seeks to give the State and the 
local communities a voice in the process and ensure that gaming 
continues to be organized within the framework of the Indian Gaming 
Regulatory Act.
  The Indian Gaming Regulatory Act has provided this Nation with a fair 
and balanced approach to Indian gaming by facilitating tribal plans for 
economic recovery without compromising a multitude of factors that 
should be taken into account when deciding on the siting of casinos. 
This law works. It is a fair process that should continue to be 
followed.
  It is simply not asking too much to require that Lytton be subject to 
the regulatory and approval processes applicable to newly acquired 
tribal lands by the Indian Gaming Regulatory Act.
  I hope my colleagues will support this legislation and I look forward 
to working with the Chairman and Ranking Member of the Indian Affairs 
Committee to pass this legislation quickly.
  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. 113

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

     SECTION 1. LYTTON RANCHERIA OF CALIFORNIA.

       Section 819 of the Omnibus Indian Advancement Act (114 
     Stat. 2919) is amended by striking the last sentence.
                                 ______
                                 
      By Mr. KERRY (for himself, Mr. Kennedy, Mrs. Murray, Mr. 
        Lautenberg, Mr. Corzine, and Ms. Cantwell):
  S. 114. A bill to amend titles XIX and XXI of the Social Security Act 
to ensure that every uninsured child in America has health insurance 
coverage, and for other purposes; to the Committee on Finance.
  Mr. KENNEDY. Mr. President, I'm honored to join my friend and 
colleague, Senator Kerry, in introducing this legislation to guarantee 
affordable health insurance for every child. We made a good start 
toward this goal in the 1990s, by enacting the Children's Health 
Insurance Program to cover more low-income children. Now it is time to 
finish the job.
  Twelve million Americans who are twenty-one years old or younger have 
no health insurance today. Seven million are already eligible for 
Medicaid or CHIP, but five million are not eligible for these current 
programs.
  Every uninsured child represents a national failure. Every uninsured 
child is at risk for losing the healthy start in life that should be 
birthright of every American. Every uninsured child is a potential 
source of heartbreak for parents and other loved ones. Every uninsured 
child is an American tragedy waiting to happen.
  This year, three hundred eighty thousand children suffering from 
asthma will never see a doctor. Five hundred thousand children with 
recurrent earaches will never see a doctor. Five hundred thousand 
children with severe sore throats will never see a doctor.
  Uninsured children pay for their lack of coverage in human suffering, 
unnecessary disability, and even death, and our society pays too. Sick 
children cannot learn. Every child whose education is limited or whose 
future potential is lost because of avoidable illness is a loss to 
America, because America's children are America's future.
  The legislation we are introducing today will guarantee coverage for 
every child twenty-one years of age or younger. It makes health 
insurance affordable for every family, but it also asks families to 
share the responsibility of covering their children, when they are able 
to do so.
  The bill expands Medicaid and CHIP up to 300 percent of poverty. 
Families of moderate means will be able to obtain subsidized coverage 
for their children. Families with incomes above 300 percent of poverty 
will be able to buy into Medicaid or CHIP for their children, and they 
will be guaranteed that the cost will not exceed 5 percent of their 
family income.
  The bill also lifts the cap on CHIP funding that has caused some 
States to limit enrollment. It assists States financially by shifting 
current State spending for children under 100 percent of poverty to the 
Federal government. It requires all States to adopt the proven methods 
that encourage families to enroll and stay enrolled--methods such as 
presumptive eligibility, the ability to apply on-line or by telephone 
for the coverage, and coverage for at least twelve months without 
eligibility redeterminations.
  This legislation is vitally important to all children. It is a pledge 
that they will have access to good health care without regard to their 
family's wealth. It is a commitment to a healthy start in life for 
every child.
  As important as those objectives are, the significance of this 
legislation goes beyond coverage of all children. It is a major step 
toward the day when the basic right to health care will be a reality 
for every American, whatever their age or income. We will not rest 
until that goal is achieved, and I commend Senator Kerry for leading 
this essential effort.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 115. A bill to require Federal agencies, and persons engaged in 
interstate commerce, in possession of electronic data containing 
personal information, to disclose any unauthorized acquisition of such 
information; to the Committee on the Judiciary.
  Mrs. FEINSTEIN. Mr. President, I rise to introduce the Notification 
of Risk to Personal Data Act of 2005. This legislation will require 
that individuals are notified when their most sensitive personal 
information is stolen from a corporate or government database. This is 
the second Congress in a row that I have introduced this legislation--
it is time for us to pass it to give Americans the notice they need to 
protect themselves from identity thieves.
  Specifically, the bill would require government or private entities 
to notify individuals if a data breach has compromised their Social 
Security number, driver's license number, credit card number, debit 
card number or financial account numbers.
  In most cases, if authorities know that someone is a victim of a 
crime, the victim is notified. But, that isn't the case if an 
individual's most sensitive personal information is stolen from an 
electronic database.
  Measuring the problem of security breaches is difficult, because many 
companies never report breaches of their systems for fear that their 
reputation for securing data would be harmed. But, in a survey 
conducted in 2004 by the FBI and the Computer Security Institute, 52 
percent of respondents reported some level of unauthorized use of their 
computer systems. (Source: 2004 CSI/FBI Computer Crime and Security 
Survey)
  Data breaches are becoming all too common. Consider the following 
incidents which have compromised the

[[Page 505]]

 records of hundreds of thousands of Americans.
  On January 10, 2005, George Mason University in Fairfax, Virginia 
notified 30,000 students that their names, photos and Social Security 
numbers were taken by an online intruder; (Source: Cnet news, ``Hackers 
Steal ID Info from Virginia University,'' Monday, January 11, 2005)
  On August 30, 2004, a University of California-Berkeley database 
containing the personal information of 600,000 people was penetrated. 
The computer contained names, addresses, telephone numbers, dates of 
birth and Social Security numbers; (Source: Associated Press, October 
21, 2004)
  Already in the new year, cell phone carrier T-Mobile announced that a 
hacker broke into its database and accessed the names and Social 
Security numbers of 400 customers. (Source: Cnet News, ``Hacker Had 
Limited Access'' January 12, 2004)
  Last year, San Diego State University reported that hackers broke 
into a server, gaining access to names and Social Security numbers for 
more than 178,000 former and current students, alumni and staff; 
(Source: San Francisco Chronicle, ``Colleges Leaking Confidential 
Data,'' April 5, 2004)
  At the Georgia Institute of Technology, a hacker downloaded 
information that could have included names, addresses, phone numbers 
and credit card numbers for about 57,775 people; (Source: San Francisco 
Chronicle, ``Colleges Leaking Confidential Data,'' April 5, 2004) and
  Finally, in 2004, a Florida man and his employees hacked into Acxiom 
Corp.'s computer system for 16 months and stole large amounts of 
personal information. Christopher Way, a U.S. assistant attorney 
general, said then that the case represents ``what may be the largest 
intrusion of personal data ever.'' (Source: Arkansas Democrat-Gazette, 
``Hacker Accesses Load of Data from Acxiom,'' July 22, 2004)
  My home State of California has a similar data notification law, on 
which my bill today is modeled. But this sort of protection needs to be 
extended to all Americans.
  I strongly believe Americans should be notified if a hacker gets 
access to their most personal data. This is both a matter of principle 
and a practical measure to curb identity theft.
  Let me take a moment to describe the proposed legislation.
  The Notification of Risk to Personal Data Act will set a national 
standard for notification of consumers when a data breach occurs.
  The legislation requires a business or government entity to notify an 
individual when there is a reasonable basis to conclude that a hacker 
or other criminal has obtained unencrypted personal data maintained by 
the entity.
  Personal data is defined by the bill as an individual's Social 
Security number, State identification number, driver's license number, 
financial account number, or credit card number.
  The legislation's notification scheme minimizes the burdens on 
companies or agencies that must report a data breach. In general, 
notice would have to be provided to each person whose data was 
compromised in writing or through e-mail.
  But there are important exceptions.
  First, companies that have developed their own reasonable 
notification policies are given a safe harbor under the bill and are 
exempted from its notification requirements.
  Second, encrypted data is exempted.
  Third, where it is too expensive or impractical (e.g., contact 
address information is incomplete) to notify every individual who is 
harmed, the bill allows entities to send out an alternative form of 
notice called ``substitute notice.'' Substitute notice includes posting 
notice on a website or notifying major media. Substitute notice would 
be triggered if any of the following factors exist:
  (i) the agency or person demonstrates that the cost of providing 
direct notice would exceed $250,000;
  (ii) the affected class of subject persons to be notified exceeds 
500,000; or
  (iii) the agency or person does not have sufficient contact 
information to notify people whose information is at risk.
  The bill has a tough, but fair enforcement regime. Entities that fail 
to comply with the bill will be subject to fines by the Federal Trade 
Commission of $5,000 per violation or up to $25,000 per day while the 
violation persists. State Attorneys General can also file suit to 
enforce the statute.
  Additionally, the bill would allow California's law to remain in 
effect, but preempt conflicting state laws. It is my understanding that 
legislators in a number of states are developing bills modeled after 
the California law. Reportedly, some of these bills have requirements 
that are inconsistent with the California legislation. It is not fair 
to put companies in a situation that forces them to comply with 
database notification laws of 50 different states.
  A year after California's landmark legislation went into effect, the 
law has raised overall awareness of the need to have strong privacy 
protections in place. Chris Jay Hoofnagle, associate director of the 
nonprofit Electronic Privacy Information Center, said: ``the California 
law has given the public a window into a very serious problem of 
information security.'' (Source: Associated Press, ``Authorities Probe 
U.C. Hacking Attack,'' October 21, 2004)
  As Beth Givens, director of the Privacy Rights Clearinghouse, points 
out ``if [California] didn't have this law, the vast majority of these 
situations would go unreported.'' (Source: The Orange County Register, 
``Ingram Micro Discloses Database Break-In,'' May 15, 2004)
  I strongly believe individuals have a right to be notified when their 
most sensitive information is compromised--because it is truly their 
information. Ask the ordinary person on the street if he or she would 
like to know if a criminal had illegally gained access to their 
personal information from a database--the answer will be a resounding 
yes.
  Enabling consumers to be notified in a timely manner of security 
breaches involving their personal data will help combat the growing 
scourge of identity theft. If individuals are informed of the theft of 
their Social Security numbers or other sensitive information, they can 
take immediate preventative action.
  They can place a fraud alert on their credit report to prevent crooks 
from obtaining credit cards in their name;
  They can monitor their credit reports to see if unauthorized activity 
has occurred;
  They can cancel any affected financial or consumer or utility 
accounts; and
  They can change their phone numbers if necessary.
  I look forward to working with my colleagues to pass this vitally 
needed legislation. This bill will give ordinary Americans more control 
and confidence about the safety of their personal information. 
Americans will have the security of knowing that should a breach occur, 
they will be notified and be able to take protective action. Thank you, 
Mr. President.
  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. 115

       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 ``Notification of Risk to 
     Personal Data Act''.

     SEC. 2. DEFINITIONS.

       In this Act, the following definitions shall apply:
       (1) Agency.--The term ``agency'' has the same meaning given 
     such term in section 551(1) of title 5, United States Code.
       (2) Breach of security of the system.--The term ``breach of 
     security of the system''--
       (A) means the compromise of the security, confidentiality, 
     or integrity of computerized data that results in, or there 
     is a reasonable basis to conclude has resulted in, the 
     unauthorized acquisition of and access to personal 
     information maintained by the person or business; and
       (B) does not include good faith acquisition of personal 
     information by an employee or agent of the person or business 
     for the purposes of the person or business, if the personal 
     information is not used or subject to further unauthorized 
     disclosure.

[[Page 506]]

       (3) Person.--The term ``person'' has the same meaning given 
     such term in section 551(2) of title 5, United States Code.
       (4) Personal information.--The term ``personal 
     information'' means an individual's last name in combination 
     with any 1 or more of the following data elements, when 
     either the name or the data elements are not encrypted:
       (A) Social security number.
       (B) Driver's license number or State identification number.
       (C) Account number, credit or debit card number, in 
     combination with any required security code, access code, or 
     password that would permit access to an individual's 
     financial account.
       (5) Substitute notice.--The term ``substitute notice'' 
     means--
       (A) e-mail notice, if the agency or person has an e-mail 
     address for the subject persons;
       (B) conspicuous posting of the notice on the Internet site 
     of the agency or person, if the agency or person maintains an 
     Internet site; or
       (C) notification to major media.

     SEC. 3. DATABASE SECURITY.

       (a) Disclosure of Security Breach.--
       (1) In general.--Any agency, or person engaged in 
     interstate commerce, that owns or licenses electronic data 
     containing personal information shall, following the 
     discovery of a breach of security of the system containing 
     such data, notify any resident of the United States whose 
     unencrypted personal information was, or is reasonably 
     believed to have been, acquired by an unauthorized person.
       (2) Notification of owner or licensee.--Any agency, or 
     person engaged in interstate commerce, in possession of 
     electronic data containing personal information that the 
     agency does not own or license shall notify the owner or 
     licensee of the information if the personal information was, 
     or is reasonably believed to have been, acquired by an 
     unauthorized person through a breach of security of the 
     system containing such data.
       (3) Timeliness of notification.--Except as provided in 
     paragraph (4), all notifications required under paragraph (1) 
     or (2) shall be made as expediently as possible and without 
     unreasonable delay following--
       (A) the discovery by the agency or person of a breach of 
     security of the system; and
       (B) any measures necessary to determine the scope of the 
     breach, prevent further disclosures, and restore the 
     reasonable integrity of the data system.
       (4) Delay of notification authorized for law enforcement 
     purposes.--If a law enforcement agency determines that the 
     notification required under this subsection would impede a 
     criminal investigation, such notification may be delayed 
     until such law enforcement agency determines that the 
     notification will no longer compromise such investigation.
       (5) Methods of notice.--An agency, or person engaged in 
     interstate commerce, shall be in compliance with this 
     subsection if it provides the resident, owner, or licensee, 
     as appropriate, with--
       (A) written notification;
       (B) e-mail notice, if the person or business has an e-mail 
     address for the subject person; or
       (C) substitute notice, if--
       (i) the agency or person demonstrates that the cost of 
     providing direct notice would exceed $250,000;
       (ii) the affected class of subject persons to be notified 
     exceeds 500,000; or
       (iii) the agency or person does not have sufficient contact 
     information for those to be notified.
       (6) Alternative notification procedures.--Notwithstanding 
     any other obligation under this subsection, an agency, or 
     person engaged in interstate commerce, shall be deemed to be 
     in compliance with this subsection if the agency or person--
       (A) maintains its own reasonable notification procedures as 
     part of an information security policy for the treatment of 
     personal information; and
       (B) notifies subject persons in accordance with its 
     information security policy in the event of a breach of 
     security of the system.
       (7) Reasonable notification procedures.--As used in 
     paragraph (6), with respect to a breach of security of the 
     system involving personal information described in section 
     2(4)(C), the term ``reasonable notification procedures'' 
     means procedures that--
       (A) use a security program reasonably designed to block 
     unauthorized transactions before they are charged to the 
     customer's account;
       (B) provide for notice to be given by the owner or licensee 
     of the database, or another party acting on behalf of such 
     owner or licensee, after the security program indicates that 
     the breach of security of the system has resulted in fraud or 
     unauthorized transactions, but does not necessarily require 
     notice in other circumstances; and
       (C) are subject to examination for compliance with the 
     requirements of this Act by 1 or more Federal functional 
     regulators (as defined in section 509 of the Gramm-Leach 
     Bliley Act (15 U.S.C. 6809)), with respect to the operation 
     of the security program and the notification procedures.
       (b) Civil Remedies.--
       (1) Penalties.--Any agency, or person engaged in interstate 
     commerce, that violates this section shall be subject to a 
     fine of not more than $5,000 per violation, to a maximum of 
     $25,000 per day while such violations persist.
       (2) Equitable relief.--Any person engaged in interstate 
     commerce that violates, proposes to violate, or has violated 
     this section may be enjoined from further violations by a 
     court of competent jurisdiction.
       (3) Other rights and remedies.--The rights and remedies 
     available under this subsection are cumulative and shall not 
     affect any other rights and remedies available under law.
       (c) Enforcement.--The Federal Trade Commission is 
     authorized to enforce compliance with this section, including 
     the assessment of fines under subsection (b)(1).

     SEC. 4. ENFORCEMENT BY STATE ATTORNEYS GENERAL.

       (a) In General.--
       (1) Civil actions.--In any case in which the attorney 
     general of a State has reason to believe that an interest of 
     the residents of that State has been or is threatened or 
     adversely affected by the engagement of any person in a 
     practice that is prohibited under this Act, the State, as 
     parens patriae, may bring a civil action on behalf of the 
     residents of the State in a district court of the United 
     States of appropriate jurisdiction to--
       (A) enjoin that practice;
       (B) enforce compliance with this Act;
       (C) obtain damage, restitution, or other compensation on 
     behalf of residents of the State; or
       (D) obtain such other relief as the court may consider to 
     be appropriate.
       (2) Notice.--
       (A) In general.--Before filing an action under paragraph 
     (1), the attorney general of the State involved shall provide 
     to the Attorney General--
       (i) written notice of the action; and
       (ii) a copy of the complaint for the action.
       (B) Exemption.--
       (i) In general.--Subparagraph (A) shall not apply with 
     respect to the filing of an action by an attorney general of 
     a State under this subsection, if the State attorney general 
     determines that it is not feasible to provide the notice 
     described in such subparagraph before the filing of the 
     action.
       (ii) Notification.--In an action described in clause (i), 
     the attorney general of a State shall provide notice and a 
     copy of the complaint to the Attorney General at the time the 
     State attorney general files the action.
       (b) Construction.--For purposes of bringing any civil 
     action under subsection (a), nothing in this Act shall be 
     construed to prevent an attorney general of a State from 
     exercising the powers conferred on such attorney general by 
     the laws of that State to--
       (1) conduct investigations;
       (2) administer oaths or affirmations; or
       (3) compel the attendance of witnesses or the production of 
     documentary and other evidence.
       (c) Venue; Service of Process.--
       (1) Venue.--Any action brought under subsection (a) may be 
     brought in the district court of the United States that meets 
     applicable requirements relating to venue under section 1391 
     of title 28, United States Code.
       (2) Service of process.--In an action brought under 
     subsection (a), process may be served in any district in 
     which the defendant--
       (A) is an inhabitant; or
       (B) may be found.

     SEC. 5. EFFECT ON STATE LAW.

       The provisions of this Act shall supersede any inconsistent 
     provisions of law of any State or unit of local government 
     relating to the notification of any resident of the United 
     States of any breach of security of an electronic database 
     containing such resident's personal information (as defined 
     in this Act), except as provided under sections 1798.82 and 
     1798.29 of the California Civil Code.

     SEC. 6. EFFECTIVE DATE.

       This Act shall take effect on the expiration of the date 
     which is 6 months after the date of enactment of this Act.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 116. A bill to require the consent of an individual prior to the 
sale and marketing of such individual's personally identifiable 
information, and for other purposes; to the Committee on the Judiciary.
  Mrs. FEINSTEIN. Mr. President, I am pleased to re-introduce the 
``Privacy Act of 2005.''
  This legislation would establish, for the first time, a comprehensive 
national system of privacy protection. This is the second Congress in a 
row that I have introduced this legislation. Every year that we wait, 
millions more Americans become victims of identity theft. It is time 
for us to act.
  As you know, Mr. President, I have ardently fought for years for 
legislation to hamper identity theft. Today, this legislation is one of 
three bills that I am introducing to continue that fight. I am also 
introducing the Social Security Number Misuse Prevention Act of 2005, 
and the Notification of

[[Page 507]]

Risk to Personal Data Act of 2005. I urge my colleagues to pass all of 
them, to protect Americans from those who would steal our very 
identities.
  At the heart of this bill is the requirement that companies may not 
sell consumers' most intimate personal information unless consumers 
affirmatively give their authorization. This is known as ``opt-in.'' 
Therefore, companies must obtain consumers' written consent prior to 
selling their personal health information, financial information, 
Social Security numbers, and drivers' license data (opt-in). For this 
sensitive data, the bill gives the individual ultimate control over 
whether or not his or her information is shared. If an individual does 
not actively decide to permit sharing of personal data, the data is not 
disclosed.
  The bill recognizes that different sorts of information deserve 
different levels of protection. For information that is still personal, 
but not as intimate, the bill allows businesses more flexibility. 
Therefore, for other personal information--names, physical addresses, 
e-mail addresses, telephones, photographs, birth dates, places of 
birth, and birth certificate numbers--companies can sell the 
information so long as consumers receive notice of the companies' 
intent, and an opportunity to object and prohibit the sale of their 
information. This is known as ``opt-out.''
  That is structure of the overall bill. Let me take a moment to go 
over some of the specifics.
  For financial data, the Privacy Act would tighten the information-
sharing provisions of the Gramm-Leach-Bliley Act. This legislation 
would modify that statute, to prohibit the sale or disclosure of 
sensitive personal financial information to third parties unless the 
consumer affirmatively consents or opts in. The legislation would also 
require that banks let consumers opt out of the sharing of their 
personal financial information with the bank's affiliates or joint 
partners. The bill makes exceptions for vital public safety concerns. 
The Privacy Act of 2005 also prohibits banks from denying a customer a 
financial product or financial service if the consumer withholds 
consent.
  For sensitive medical information, this legislation would expand on 
the Department of Health and Human Services privacy regulations, by 
extending the restrictions placed on ``covered entities'' (health 
insurers, health providers, and health care clearinghouses) to ``non-
covered entities'' (business associates, health researchers, schools or 
universities, and life insurers). All of those entities will be able to 
share information only with the patients' consent.
  For Social Security numbers, this bill will prohibit the sale or 
display of an individual's Social Security number to the general public 
without the individual's express consent, and prohibit federal, state, 
and local governments from displaying the numbers on the Internet, or 
from printing them on checks and drivers' licenses. This legislation 
also recognizes legitimate uses of Social Security numbers, by allowing 
the sale of Social Security numbers between businesses, or between the 
government and businesses, among other exceptions.
  This legislation protects the privacy of information regardless of 
the medium through which it is collected. Therefore, it recognizes that 
both paper and electronic records are important to protecting the 
identities of Americans.
  To minimize the regulatory burden of these privacy rules, the bill 
sets up a safe harbor so that industries that established approved 
policies will be exempt from some regulatory requirements of the 
legislation.
  To ensure uniformity of the laws across all 50 states, the bill 
preempts inconsistent state laws regarding the treatment of non-
sensitive information.
  I note that this legislation is modeled on the California Financial 
Information Privacy Act, which gives consumers the right to require 
their consent before financial companies share their most intimate 
data. The plan is a good one for Californians, and it is a good one for 
all Americans. The fact that the California law is under assault in the 
courts makes it all the more vital that the uniform, national standard 
I introduce today becomes law.
  I want to give a sense of why this legislation is so necessary. 
Recent statistics on the growth of identity theft show we have no time 
to waste in protecting personal privacy.
  For years, identity theft has topped the list of complaints reported 
to the Federal Trade Commission. In 2003, the Commission received over 
half a million such complaints, about 42 percent of the total. While 
the FTC will not report its numbers for 2004 until early February, I 
unfortunately expect to again see identity theft as the cause of the 
most complaints.
  According to a 2003 report from the FTC, 10 million Americans 
discovered that year their identities had been stolen. The report also 
stated that consumers have to spend an average of 30 hours to clear 
their name; The Identity Theft Resource Center puts the number at 175 
hours. And as Attorney General John Ashcroft said last August, 
``Identity theft costs the nation's businesses nearly $50 billion a 
year in fraudulent transactions and often involves coordinated criminal 
conduct.''
  My own State, California, has more victims of identity theft than any 
other state. The FTC recorded 39,452 complaints of identity theft cases 
in 2003 in California alone.
  But the numbers tell only part of the story. More important are the 
individual people whose lives have been devastated by identity theft. 
Let me tell just one story that I find particularly disturbing:
  Eric Drew was a patient in a hospital receiving a bone marrow 
transplant. Yet unbeknownst to him, a worker in the hospital had stolen 
Drew's identity, and had taken advantage of this sick patient. As the 
Associated Press reported, ``Drew said that while he was lying in a 
hospital bed, dying from cancer and weak from massive doses of 
chemotherapy, he began to get mail thanking him for opening accounts he 
knew nothing about.'' In this case, luckily, the criminal was caught 
and convicted.
  Since I introduced this legislation for the first time in the 108th 
Congress, there are millions more stories like this one.
  Indeed, there are also new common methods of identity theft. There 
has been a massive upswing in the phenomenon known as ``Phishing,'' in 
which criminals send emails to people, spoofed to fraudulently look 
like emails from banks and other financial institutions. These emails 
tell consumers to click on a Web page, and then to enter their name, 
account numbers, passwords, and other sensitive financial information. 
The criminals then use this information not only to steal from the 
unwitting consumers, but to literally lock them out of their own 
accounts. This one sort of identity theft has, according to a December 
study from e-mail security company MessageLabs, increased by almost 
tenfold over the last year.
  Given the grave risks that technology poses to our privacy, it is our 
responsibility to start taking action. This is especially the case for 
older Americans, who are disproportionately vulnerable to identity 
theft, as I tried to highlight last year by cosponsoring the 
``Protecting Older Americans From Fraud Month'' resolution last 
October.
  I would like to highlight some of the key provisions of the law.
  For financial information this legislation tightens the privacy 
provisions of the Financial Services Modernization Act, commonly known 
as the Gramm-Leach-Bliley Act. Under Gramm-Leach-Bliley, a bank can 
share a customer's personal information with other companies so long as 
it gives consumers notice and the right to opt-out of the data sharing.
  The problem with the prevailing opt-out is that most people throw 
away their privacy notices from banks along with the rest of the 
unrelenting pile of commercial solicitations they receive. Since the 
passage of Gramm-Leach-Bliley, banks have sent out over one billion 
privacy notices.
  According to available published information, fewer than 5 percent of 
bank customers have opted out of sharing their personal information, 
and for

[[Page 508]]

many financial institutions, the response rate has been less than one 
percent.
  Accordingly, this legislation prohibits the sale or disclosure of 
sensitive personal financial information to third parties unless the 
consumer affirmatively consents or opts in--the burden thus shifts off 
of the consumer.
  This legislation also toughens Federal financial privacy laws for 
affiliate-sharing and joint-marketing. An affiliate is a company that 
is linked by common ownership with another company. Under Federal law, 
a bank can share with affiliates or joint marketing partners regardless 
of whether the consumer wants this information shared.
  This legislation would require that banks give consumers the option 
of opting out of the sharing of their personal financial information 
with the bank's affiliates or joint partners.
  I would also like to describe several other key components of the 
financial privacy section.
  The bill prohibits banks from denying a customer a financial product 
or financial service just because the customer chooses to not disclose 
his personal information to third parties, affiliates, or joint venture 
partners. However, the bill does allow banks to offer incentives to 
customers to encourage them to permit the sharing of their personal 
information.
  Additionally, the bill permits banks to disclose, but not sell, 
personal information to third parties for vital public interest 
purposes such as identifying or locating missing and abducted children, 
witnesses, criminals and fugitives, parents delinquent in child support 
payments, organ and bone marrow donors, pension fund beneficiaries, and 
missing heirs.
  Just as with financial data, personal health and medical data 
deserves the most stringent privacy protections.
  The recently adopted Department of Health and Human Services privacy 
regulations set a basic opt-in framework for disclosure of health 
information. But more can be done to protect patient privacy.
  The regulations only prohibit ``covered entities''--namely health 
insurers, health providers, and health care clearinghouse--from selling 
a patient's health information without that patient's prior consent.
  Meanwhile, non-covered entities--such as business associates, health 
researchers, schools or universities, and life insurers--are not 
subject to this opt-in requirement, except through contractual 
arrangements.
  This legislation would preserve the privacy of health information 
wherever the information is sold. Any business associate, life insurer, 
school or non-covered entity trying to sell or market protected health 
information would, like covered entities, have to get the patient's 
prior consent. This is a crucial step to protect what is truly our most 
intimate information.
  Drivers' license data also are given the strongest level of 
protection under this bill.
  The Driver's Privacy Protection Act, DPPA was amended in 2000 to 
offer some meaningful protections for drivers' privacy.
  For example, under the DPPA, a State Department of Motor Vehicles 
must obtain the prior consent (opt-in) of the driver before ``highly 
sensitive information''--defined as a physical copy of the license, a 
Social Security number, medical or disability information, and other 
information can be disclosed to a third party.
  However, loopholes remain. Other sensitive information found on a 
driver's license deserves equal protection.
  This legislation would expand the definition of ``highly sensitive 
information'' to include a physical copy of a driver's license, the 
driver identification number, birth date, information on the driver's 
physical characteristics and any biometric identifiers, such as a 
fingerprint, that are found on the driver's license.
  Thus, this bill would ensure consumers have control over how their 
motor vehicle records and driver's license data are used.
  I would like to take a moment to highlight the Social Security number 
section of this legislation. I have also introduced this section as a 
stand-alone bill, the ``Social Security Number Misuse Prevention Act of 
2005.''
  It is crucial to protect Social Security numbers because Social 
Security numbers are the key to a person's identity. Many identity 
theft cases start with the theft of a Social Security number. Once a 
thief has access to a victim's Social Security number, it is only a 
short step to acquiring credit cards, driver's licenses, or other 
crucial identification documents.
  This legislation bars the sale or display of Social Security numbers 
to the public except in a very narrow set of circumstances. In general 
display or sale is permitted only if the Social Security number holder 
affirmatively consents or if there are compelling public safety needs. 
Government entities will have to redact Social Security numbers from 
electronic records that are readily available to the public on the 
Internet. State governments will no longer be permitted to use the 
Social Security number as the default driver's license number.
  The legislation, however, recognizes that some industries rely on 
Social Security numbers to exchange information for certain 
transactions.
  Thus, the bill directs the Attorney General to develop regulations 
allowing for the sale or purchase of Social Security Numbers to 
facilitate business-to-business and business-to-government 
transactions, so long as businesses put appropriate safeguards in place 
and do not permit public access to the number.
  This legislation codifies steps Congress can take to protect citizens 
from identity thieves and other predators of personal information.
  It restores to an individual more control over her most sensitive 
personal information, such as Social Security numbers, health 
information, and financial information. It also sets reasonable 
guidelines for businesses that handle our personal information every 
day. Every American has a fundamental right to privacy, no matter how 
fast our technology grows or changes.
  Last year, President Bush signed into law the Identity Theft Penalty 
Enhancement Act, legislation that I helped to write, to increase 
punishment on people who steal others' identities. I am proud of my 
work to make that bill into a law. But we all must realize that 
punishment is no substitute for prevention. My legislation today will 
make fewer suffer from identity theft in the first place.
  I look forward to working with my colleagues to enact this 
legislation.
  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. 116

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Privacy 
     Act of 2005''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents

   TITLE I--COMMERCIAL SALE AND MARKETING OF PERSONALLY IDENTIFIABLE 
                              INFORMATION

Sec. 101. Collection and distribution of personally identifiable 
              information
Sec. 102. Enforcement
Sec. 103. Safe harbor
Sec. 104. Definitions
Sec. 105. Preemption
Sec. 106. Effective Date

           TITLE II--SOCIAL SECURITY NUMBER MISUSE PREVENTION

Sec. 201. Findings
Sec. 202. Prohibition of the display, sale, or purchase of social 
              security numbers
Sec. 203. Application of prohibition of the display, sale, or purchase 
              of social security numbers to public records
Sec. 204. Rulemaking authority of the Attorney General
Sec. 205. Treatment of social security numbers on government documents
Sec. 206. Limits on personal disclosure of a social security number for 
              consumer transactions
Sec. 207. Extension of civil monetary penalties for misuse of a social 
              security number
Sec. 208. Criminal penalties for the misuse of a social security number

[[Page 509]]

Sec. 209. Civil actions and civil penalties
Sec. 210. Federal injunctive authority

   TITLE III--LIMITATIONS ON SALE AND SHARING OF NONPUBLIC PERSONAL 
                         FINANCIAL INFORMATION

Sec. 301. Definition of sale
Sec. 302. Rules applicable to sale of nonpublic personal information
Sec. 303. Exceptions to disclosure prohibition
Sec. 304. Conforming amendments
Sec. 305. Regulatory authority
Sec. 306. Effective date

 TITLE IV--LIMITATIONS ON THE PROVISION OF PROTECTED HEALTH INFORMATION

Sec. 401. Definitions
Sec. 402. Prohibition against selling protected health information
Sec. 403. Authorization for sale or marketing of protected health 
              information by noncovered entities
Sec. 404. Prohibition against retaliation
Sec. 405. Rule of construction
Sec. 406. Regulations
Sec. 407. Enforcement

                   TITLE V--DRIVER'S LICENSE PRIVACY

Sec. 501. Driver's license privacy

                        TITLE VI--MISCELLANEOUS

Sec. 601. Enforcement by State Attorneys General
Sec. 602. Federal injunctive authority

   TITLE I--COMMERCIAL SALE AND MARKETING OF PERSONALLY IDENTIFIABLE 
                              INFORMATION

     SEC. 101. COLLECTION AND DISTRIBUTION OF PERSONALLY 
                   IDENTIFIABLE INFORMATION.

       (a) Prohibition.--
       (1) In general.--It is unlawful for a commercial entity to 
     collect personally identifiable information and disclose such 
     information to any nonaffiliated third party for marketing 
     purposes or sell such information to any nonaffiliated third 
     party, unless the commercial entity provides--
       (A) notice to the individual to whom the information 
     relates in accordance with the requirements of subsection 
     (b); and
       (B) an opportunity for such individual to restrict the 
     disclosure or sale of such information.
       (2) Exception.--A commercial entity may collect personally 
     identifiable information and use such information to market 
     to potential customers such entity's product.
       (b) Notice.--
       (1) In general.--A notice under subsection (a) shall 
     contain statements describing the following:
       (A) The identity of the commercial entity collecting the 
     personally identifiable information.
       (B) The types of personally identifiable information that 
     are being collected on the individual.
       (C) How the commercial entity may use such information.
       (D) A description of the categories of potential recipients 
     of such personally identifiable information.
       (E) Whether the individual is required to provide 
     personally identifiable information in order to do business 
     with the commercial entity.
       (F) How an individual may decline to have such personally 
     identifiable information used or sold as described in 
     subsection (a).
       (2) Time of notice.--Notice shall be conveyed prior to the 
     sale or use of the personally identifiable information as 
     described in subsection (a) in such a manner as to allow the 
     individual a reasonable period of time to consider the notice 
     and limit such sale or use.
       (3) Medium of notice.--The medium for providing notice must 
     be--
       (A) the same medium in which the personally identifiable 
     information is or will be collected, or a medium approved by 
     the individual; or
       (B) in the case of oral communication, notice may be 
     conveyed orally or in writing.
       (4) Form of notice.--The notice shall be clear and 
     conspicuous.
       (c) Opt-out.--
       (1) Opportunity to opt-out of sale or marketing.--The 
     opportunity provided to limit the sale of personally 
     identifiable information to nonaffiliated third parties or 
     the disclosure of such information for marketing purposes, 
     shall be easy to use, accessible and available in the medium 
     the information is collected, or in a medium approved by the 
     individual.
       (2) Duration of limitation.--An individual's limitation on 
     the sale or marketing of personally identifiable information 
     shall be considered permanent, unless otherwise specified by 
     the individual.
       (3) Revocation of consent.--After an individual grants 
     consent to the use of that individual's personally 
     identifiable information, the individual may revoke the 
     consent at any time, except to the extent that the commercial 
     entity has taken action in reliance thereon. The commercial 
     entity shall provide the individual an opportunity to revoke 
     consent that is easy to use, accessible, and available in the 
     medium the information was or is collected.
       (4) Not applicable.--This section shall not apply to 
     disclosure of personally identifiable information--
       (A) that is necessary to facilitate a transaction 
     specifically requested by the consumer;
       (B) is used for the sole purpose of facilitating this 
     transaction; and
       (C) in which the entity receiving or obtaining such 
     information is limited, by contract, to use such formation 
     for the purpose of completing the transaction.

     SEC. 102. ENFORCEMENT.

       (a) In General.--In accordance with the provisions of this 
     section, the Federal Trade Commission shall have the 
     authority to enforce any violation of section 101 of this 
     Act.
       (b) Violations.--The Federal Trade Commission shall treat a 
     violation of section 101 as a violation of a rule under 
     section 18a(a)(1)(B) of the Federal Trade Commission Act (15 
     U.S.C. 57a(a)(1)(B)).
       (c) Transfer of Enforcement Authority.--The Federal Trade 
     Commission shall promulgate rules in accordance with section 
     553 of title 5, United States Code, allowing for the transfer 
     of enforcement authority from the Federal Trade Commission to 
     a Federal agency regarding section 101 of this Act. The 
     Federal Trade Commission may permit a Federal agency to 
     enforce any violation of section 101 if such agency submits a 
     written request to the Commission to enforce such violations 
     and includes in such request--
       (1) a description of the entities regulated by such agency 
     that will be subject to the provisions of section 101;
       (2) an assurance that such agency has sufficient authority 
     over the entities to enforce violations of section 101; and
       (3) a list of proposed rules that such agency shall use in 
     regulating such entities and enforcing section 101.
       (d) Actions by the Commission.--Absent transfer of 
     enforcement authority to a Federal agency under subsection 
     (c), the Federal Trade Commission shall prevent any person 
     from violating section 101 in the same manner, by the same 
     means, and with the same jurisdiction, powers, and duties as 
     provided to such Commission under the Federal Trade 
     Commission Act (15 U.S.C. 41 et seq.). Any entity that 
     violates section 101 is subject to the penalties and entitled 
     to the privileges and immunities provided in such Act in the 
     same manner, by the same means, and with the same 
     jurisdiction, power, and duties under such Act.
       (e) Relationship to Other Laws.--
       (1) Commission authority.--Nothing contained in this title 
     shall be construed to limit authority provided to the 
     Commission under any other law.
       (2) Communications act.--Nothing in section 101 requires an 
     operator of a website to take any action that is inconsistent 
     with the requirements of section 222 or 631 of the 
     Communications Act of 1934 (47 U.S.C. 222 and 5551).
       (3) Other acts.--Nothing in this title is intended to 
     affect the applicability or the enforceability of any 
     provision of, or any amendment made by--
       (A) the Children's Online Privacy Protection Act of 1998 
     (15 U.S.C. 6501 et seq.);
       (B) title V of the Gramm-Leach-Bliley Act;
       (C) the Health Insurance Portability and Accountability Act 
     of 1996; or
       (D) the Fair Credit Reporting Act.
       (f) Public Records.--Nothing in this title shall be 
     construed to restrict commercial entities from obtaining or 
     disclosing personally identifying information from public 
     records.
       (g) Civil Penalties.--In addition to any other penalty 
     applicable to a violation of section 101(a), a penalty of up 
     to $25,000 may be issued for each violation.
       (h) Enforcement Regarding Programs.--
       (1) In general.--A Federal agency or department providing 
     financial assistance to any entity required to comply with 
     section 101 of this Act shall issue regulations requiring 
     that such entity comply with such section or forfeit some or 
     all of such assistance. Such regulations shall prescribe 
     sanctions for noncompliance, require that such department or 
     agency provide notice of failure to comply with such section 
     prior to any action being taken against such recipient, and 
     require that a determination be made prior to any action 
     being taken against such recipient that compliance cannot be 
     secured by voluntary means.
       (2) Federal financial assistance.--The term ``Federal 
     financial assistance'' means assistance through a grant, 
     cooperative agreement, loan, or contract other than a 
     contract of insurance or guaranty.

     SEC. 103. SAFE HARBOR.

       A commercial entity may not be held to have violated any 
     provision of this title if such entity complies with self-
     regulatory guidelines that--
       (1) are issued by seal programs or representatives of the 
     marketing or online industries or by any other person; and
       (2) are approved by the Federal Trade Commission, after 
     public comment has been received on such guidelines by the 
     Commission, as meeting the requirements of this title.

     SEC. 104. DEFINITIONS.

       In this title:
       (1) Commercial entity.--The term ``commercial entity''--
       (A) means any person offering products or services 
     involving commerce--
       (i) among the several States or with 1 or more foreign 
     nations;

[[Page 510]]

       (ii) in any territory of the United States or in the 
     District of Columbia, or between any such territory and--

       (I) another such territory; or
       (II) any State or foreign nation; or

       (iii) between the District of Columbia and any State, 
     territory, or foreign nation; and
       (B) does not include--
       (i) any nonprofit entity that would otherwise be exempt 
     from coverage under section 5 of the Federal Trade Commission 
     Act (15 U.S.C. 45);
       (ii) any financial institution that is subject to title V 
     of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.); or
       (iii) any group health plan, health insurance issuer, or 
     other entity that is subject to the Health Insurance 
     Portability and Accountability Act of 1996 (42 U.S.C. 201 
     note).
       (2) Commission.--The term ``Commission'' means the Federal 
     Trade Commission.
       (3) Individual.--The term ``individual'' means a person 
     whose personally identifying information has been, is, or 
     will be collected by a commercial entity.
       (4) Marketing.--The term ``marketing'' means to make a 
     communication about a product or service a purpose of which 
     is to encourage recipients of the communication to purchase 
     or use the product or service.
       (5) Medium.--The term ``medium'' means any channel or 
     system of communication including oral, written, and online 
     communication.
       (6) Nonaffiliated third party.--The term ``nonaffiliated 
     third party'' means any entity that is not related by common 
     ownership or affiliated by corporate control with, the 
     commercial entity, but does not include a joint employee of 
     such institution.
       (7) Personally identifiable information.--The term 
     ``personally identifiable information'' means individually 
     identifiable information about the individual that is 
     collected including--
       (A) a first, middle, or last name, whether given at birth 
     or adoption, assumed, or legally changed;
       (B) a home or other physical address, including the street 
     name, zip code, and name of a city or town;
       (C) an e-mail address;
       (D) a telephone number;
       (E) a photograph or other form of visual identification;
       (F) a birth date, birth certificate number, or place of 
     birth for that person; or
       (G) information concerning the individual that is combined 
     with any other identifier in this paragraph.
       (8) Sale; sell; sold.--The terms ``sale'', ``sell'', and 
     ``sold'', with respect to personally identifiable 
     information, mean the exchanging of such information for any 
     thing of value, directly or indirectly, including the 
     licensing, bartering, or renting of such information.
       (9) Writing.--The term ``writing'' means writing in either 
     a paper-based or computer-based form, including electronic 
     and digital signatures.

     SEC. 105. PREEMPTION.

       The provisions of this title shall supersede any statutory 
     and common law of States and their political subdivisions 
     insofar as that law may now or hereafter relate to the--
       (1) collection and disclosure of personally identifiable 
     information for marketing purposes; and
       (2) collection and sale of personally identifiable 
     information.

     SEC. 106. EFFECTIVE DATE.

       This title and the amendments made by this title shall take 
     effect 1 year after the date of enactment of this Act.

           TITLE II--SOCIAL SECURITY NUMBER MISUSE PREVENTION

     SEC. 201. FINDINGS.

       Congress makes the following findings:
       (1) The inappropriate display, sale, or purchase of social 
     security numbers has contributed to a growing range of 
     illegal activities, including fraud, identity theft, and, in 
     some cases, stalking and other violent crimes.
       (2) While financial institutions, health care providers, 
     and other entities have often used social security numbers to 
     confirm the identity of an individual, the general display to 
     the public, sale, or purchase of these numbers has been used 
     to commit crimes, and also can result in serious invasions of 
     individual privacy.
       (3) The Federal Government requires virtually every 
     individual in the United States to obtain and maintain a 
     social security number in order to pay taxes, to qualify for 
     social security benefits, or to seek employment. An 
     unintended consequence of these requirements is that social 
     security numbers have become one of the tools that can be 
     used to facilitate crime, fraud, and invasions of the privacy 
     of the individuals to whom the numbers are assigned. Because 
     the Federal Government created and maintains this system, and 
     because the Federal Government does not permit individuals to 
     exempt themselves from those requirements, it is appropriate 
     for the Federal Government to take steps to stem the abuse of 
     social security numbers.
       (4) The display, sale, or purchase of social security 
     numbers in no way facilitates uninhibited, robust, and wide-
     open public debate, and restrictions on such display, sale, 
     or purchase would not affect public debate.
       (5) No one should seek to profit from the display, sale, or 
     purchase of social security numbers in circumstances that 
     create a substantial risk of physical, emotional, or 
     financial harm to the individuals to whom those numbers are 
     assigned.
       (6) Consequently, this title provides each individual that 
     has been assigned a social security number some degree of 
     protection from the display, sale, and purchase of that 
     number in any circumstance that might facilitate unlawful 
     conduct.

     SEC. 202. PROHIBITION OF THE DISPLAY, SALE, OR PURCHASE OF 
                   SOCIAL SECURITY NUMBERS.

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

     ``Sec. 1028A. Prohibition of the display, sale, or purchase 
       of social security numbers

       ``(a) Definitions.--In this section:
       ``(1) Display.--The term `display' means to intentionally 
     communicate or otherwise make available (on the Internet or 
     in any other manner) to the general public an individual's 
     social security number.
       ``(2) Person.--The term `person' means any individual, 
     partnership, corporation, trust, estate, cooperative, 
     association, or any other entity.
       ``(3) Purchase.--The term `purchase' means providing 
     directly or indirectly, anything of value in exchange for a 
     social security number.
       ``(4) Sale.--The term `sale' means obtaining, directly or 
     indirectly, anything of value in exchange for a social 
     security number.
       ``(5) State.--The term `State' means any State of the 
     United States, the District of Columbia, Puerto Rico, the 
     Northern Mariana Islands, the United States Virgin Islands, 
     Guam, American Samoa, and any territory or possession of the 
     United States.
       ``(b) Limitation on Display.--Except as provided in section 
     1028B, no person may display any individual's social security 
     number to the general public without the affirmatively 
     expressed consent of the individual.
       ``(c) Limitation on Sale or Purchase.--Except as otherwise 
     provided in this section, no person may sell or purchase any 
     individual's social security number without the affirmatively 
     expressed consent of the individual.
       ``(d) Prerequisites for Consent.--In order for consent to 
     exist under subsection (b) or (c), the person displaying or 
     seeking to display, selling or attempting to sell, or 
     purchasing or attempting to purchase, an individual's social 
     security number shall--
       ``(1) inform the individual of the general purpose for 
     which the number will be used, the types of persons to whom 
     the number may be available, and the scope of transactions 
     permitted by the consent; and
       ``(2) obtain the affirmatively expressed consent 
     (electronically or in writing) of the individual.
       ``(e) Exceptions.--Nothing in this section shall be 
     construed to prohibit or limit the display, sale, or purchase 
     of a social security number--
       ``(1) required, authorized, or excepted under any Federal 
     law;
       ``(2) for a public health purpose, including the protection 
     of the health or safety of an individual in an emergency 
     situation;
       ``(3) for a national security purpose;
       ``(4) for a law enforcement purpose, including the 
     investigation of fraud and the enforcement of a child support 
     obligation;
       ``(5) if the display, sale, or purchase of the number is 
     for a use occurring as a result of an interaction between 
     businesses, governments, or business and government 
     (regardless of which entity initiates the interaction), 
     including, but not limited to--
       ``(A) the prevention of fraud (including fraud in 
     protecting an employee's right to employment benefits);
       ``(B) the facilitation of credit checks or the facilitation 
     of background checks of employees, prospective employees, or 
     volunteers;
       ``(C) the retrieval of other information from other 
     businesses, commercial enterprises, government entities, or 
     private nonprofit organizations; or
       ``(D) when the transmission of the number is incidental to, 
     and in the course of, the sale, lease, franchising, or merger 
     of all, or a portion of, a business;
       ``(6) if the transfer of such a number is part of a data 
     matching program involving a Federal, State, or local agency; 
     or
       ``(7) if such number is required to be submitted as part of 
     the process for applying for any type of Federal, State, or 
     local government benefit or program;

     except that, nothing in this subsection shall be construed as 
     permitting a professional or commercial user to display or 
     sell a social security number to the general public.
       ``(f) Limitation.--Nothing in this section shall prohibit 
     or limit the display, sale, or purchase of social security 
     numbers as permitted under title V of the Gramm-Leach-Bliley 
     Act, or for the purpose of affiliate sharing as permitted 
     under the Fair Credit Reporting Act, except that no entity 
     regulated under such Acts may make social security numbers 
     available to the general public, as may be determined by the 
     appropriate regulators under such Acts. For purposes of

[[Page 511]]

     this subsection, the general public shall not include 
     affiliates or unaffiliated third-party business entities as 
     may be defined by the appropriate regulators.''.
       (2) Conforming amendment.--The chapter analysis for chapter 
     47 of title 18, United States Code, is amended by inserting 
     after the item relating to section 1028 the following:

``1028A. Prohibition of the display, sale, or purchase of social 
              security numbers''.

       (b) Study; Report.--
       (1) In general.--The Attorney General shall conduct a study 
     and prepare a report on all of the uses of social security 
     numbers permitted, required, authorized, or excepted under 
     any Federal law. The report shall include a detailed 
     description of the uses allowed as of the date of enactment 
     of this Act and shall evaluate whether such uses should be 
     continued or discontinued by appropriate legislative action.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Attorney General shall report to 
     Congress findings under this subsection. The report shall 
     include such recommendations for legislation based on 
     criteria the Attorney General determines to be appropriate.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date that is 30 days after the date 
     on which the final regulations promulgated under section 5 
     are published in the Federal Register.

     SEC. 203. APPLICATION OF PROHIBITION OF THE DISPLAY, SALE, OR 
                   PURCHASE OF SOCIAL SECURITY NUMBERS TO PUBLIC 
                   RECORDS.

       (a) Public Records Exception.--
       (1) In general.--Chapter 47 of title 18, United States Code 
     (as amended by section 3(a)(1)), is amended by inserting 
     after section 1028A the following:

     ``Sec. 1028B. Display, sale, or purchase of public records 
       containing social security numbers

       ``(a) Definition.--In this section, the term `public 
     record' means any governmental record that is made available 
     to the general public.
       ``(b) In General.--Except as provided in subsections (c), 
     (d), and (e), section 1028A shall not apply to a public 
     record.
       ``(c) Public Records on the Internet or in an Electronic 
     Medium.--
       ``(1) In general.--Section 1028A shall apply to any public 
     record first posted onto the Internet or provided in an 
     electronic medium by, or on behalf of a government entity 
     after the date of enactment of this section, except as 
     limited by the Attorney General in accordance with paragraph 
     (2).
       ``(2) Exception for government entities already placing 
     public records on the internet or in electronic form.--Not 
     later than 60 days after the date of enactment of this 
     section, the Attorney General shall issue regulations 
     regarding the applicability of section 1028A to any record of 
     a category of public records first posted onto the Internet 
     or provided in an electronic medium by, or on behalf of a 
     government entity prior to the date of enactment of this 
     section. The regulations will determine which individual 
     records within categories of records of these government 
     entities, if any, may continue to be posted on the Internet 
     or in electronic form after the effective date of this 
     section. In promulgating these regulations, the Attorney 
     General may include in the regulations a set of procedures 
     for implementing the regulations and shall consider the 
     following:
       ``(A) The cost and availability of technology available to 
     a governmental entity to redact social security numbers from 
     public records first provided in electronic form after the 
     effective date of this section.
       ``(B) The cost or burden to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments of complying with 
     section 1028A with respect to such records.
       ``(C) The benefit to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments if the Attorney General 
     were to determine that section 1028A should apply to such 
     records.

     Nothing in the regulation shall permit a public entity to 
     post a category of public records on the Internet or in 
     electronic form after the effective date of this section if 
     such category had not been placed on the Internet or in 
     electronic form prior to such effective date.
       ``(d) Harvested Social Security Numbers.--Section 1028A 
     shall apply to any public record of a government entity which 
     contains social security numbers extracted from other public 
     records for the purpose of displaying or selling such numbers 
     to the general public.
       ``(e) Attorney General Rulemaking on Paper Records.--
       ``(1) In general.--Not later than 60 days after the date of 
     enactment of this section, the Attorney General shall 
     determine the feasibility and advisability of applying 
     section 1028A to the records listed in paragraph (2) when 
     they appear on paper or on another nonelectronic medium. If 
     the Attorney General deems it appropriate, the Attorney 
     General may issue regulations applying section 1028A to such 
     records.
       ``(2) List of paper and other nonelectronic records.--The 
     records listed in this paragraph are as follows:
       ``(A) Professional or occupational licenses.
       ``(B) Marriage licenses.
       ``(C) Birth certificates.
       ``(D) Death certificates.
       ``(E) Other short public documents that display a social 
     security number in a routine and consistent manner on the 
     face of the document.
       ``(3) Criteria for attorney general review.--In determining 
     whether section 1028A should apply to the records listed in 
     paragraph (2), the Attorney General shall consider the 
     following:
       ``(A) The cost or burden to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments of complying with 
     section 1028A.
       ``(B) The benefit to the general public, businesses, 
     commercial enterprises, non-profit organizations, and to 
     Federal, State, and local governments if the Attorney General 
     were to determine that section 1028A should apply to such 
     records.''.
       (2) Conforming amendment.--The chapter analysis for chapter 
     47 of title 18, United States Code (as amended by section 
     202(a)(2)), is amended by inserting after the item relating 
     to section 1028A the following:

``1028B. Display, sale, or purchase of public records containing social 
              security numbers''.
       (b) Study and Report on Social Security Numbers in Public 
     Records.--
       (1) Study.--The Comptroller General of the United States 
     shall conduct a study and prepare a report on social security 
     numbers in public records. In developing the report, the 
     Comptroller General shall consult with the Administrative 
     Office of the United States Courts, State and local 
     governments that store, maintain, or disseminate public 
     records, and other stakeholders, including members of the 
     private sector who routinely use public records that contain 
     social security numbers.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Comptroller General of the United 
     States shall submit to Congress a report on the study 
     conducted under paragraph (1). The report shall include a 
     detailed description of the activities and results of the 
     study and recommendations for such legislative action as the 
     Comptroller General considers appropriate. The report, at a 
     minimum, shall include--
       (A) a review of the uses of social security numbers in non-
     federal public records;
       (B) a review of the manner in which public records are 
     stored (with separate reviews for both paper records and 
     electronic records);
       (C) a review of the advantages or utility of public records 
     that contain social security numbers, including the utility 
     for law enforcement, and for the promotion of homeland 
     security;
       (D) a review of the disadvantages or drawbacks of public 
     records that contain social security numbers, including 
     criminal activity, compromised personal privacy, or threats 
     to homeland security;
       (E) the costs and benefits for State and local governments 
     of removing social security numbers from public records, 
     including a review of current technologies and procedures for 
     removing social security numbers from public records; and
       (F) an assessment of the benefits and costs to businesses, 
     their customers, and the general public of prohibiting the 
     display of social security numbers on public records (with 
     separate assessments for both paper records and electronic 
     records).
       (c) Effective Date.--The prohibition with respect to 
     electronic versions of new classes of public records under 
     section 1028B(b) of title 18, United States Code (as added by 
     subsection (a)(1)) shall not take effect until the date that 
     is 60 days after the date of enactment of this Act.

     SEC. 204. RULEMAKING AUTHORITY OF THE ATTORNEY GENERAL.

       (a) In General.--Except as provided in subsection (b), the 
     Attorney General may prescribe such rules and regulations as 
     the Attorney General deems necessary to carry out the 
     provisions of section 1028A(e)(5) of title 18, United States 
     Code (as added by section 202(a)(1)).
       (b) Display, Sale, or Purchase Rulemaking With Respect to 
     Interactions Between Businesses, Governments, or Business and 
     Government.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Attorney General, in consultation 
     with the Commissioner of Social Security, the Chairman of the 
     Federal Trade Commission, and such other heads of Federal 
     agencies as the Attorney General determines appropriate, 
     shall conduct such rulemaking procedures in accordance with 
     subchapter II of chapter 5 of title 5, United States Code, as 
     are necessary to promulgate regulations to implement and 
     clarify the uses occurring as a result of an interaction 
     between businesses, governments, or business and government 
     (regardless of which entity initiates the interaction) 
     permitted under section 1028A(e)(5) of title 18, United 
     States Code (as added by section 202(a)(1)).
       (2) Factors to be considered.--In promulgating the 
     regulations required under paragraph (1), the Attorney 
     General shall, at a minimum, consider the following:

[[Page 512]]

       (A) The benefit to a particular business, to customers of 
     the business, and to the general public of the display, sale, 
     or purchase of an individual's social security number.
       (B) The costs that businesses, customers of businesses, and 
     the general public may incur as a result of prohibitions on 
     the display, sale, or purchase of social security numbers.
       (C) The risk that a particular business practice will 
     promote the use of a social security number to commit fraud, 
     deception, or crime.
       (D) The presence of adequate safeguards and procedures to 
     prevent--
       (i) misuse of social security numbers by employees within a 
     business; and
       (ii) misappropriation of social security numbers by the 
     general public, while permitting internal business uses of 
     such numbers.
       (E) The presence of procedures to prevent identity thieves, 
     stalkers, and other individuals with ill intent from posing 
     as legitimate businesses to obtain social security numbers.

     SEC. 205. TREATMENT OF SOCIAL SECURITY NUMBERS ON GOVERNMENT 
                   DOCUMENTS.

       (a) Prohibition of Use of Social Security Account Numbers 
     on Checks Issued for Payment by Governmental Agencies.--
       (1) In general.--Section 205(c)(2)(C) of the Social 
     Security Act (42 U.S.C. 405(c)(2)(C)) is amended by adding at 
     the end the following:
       ``(x) No Federal, State, or local agency may display the 
     social security account number of any individual, or any 
     derivative of such number, on any check issued for any 
     payment by the Federal, State, or local agency.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply with respect to violations of section 
     205(c)(2)(C)(x) of the Social Security Act (42 U.S.C. 
     405(c)(2)(C)(x)), as added by paragraph (1), occurring after 
     the date that is 3 years after the date of enactment of this 
     Act.
       (b) Prohibition of Appearance of Social Security Account 
     Numbers on Driver's Licenses or Motor Vehicle Registration.--
       (1) In general.--Section 205(c)(2)(C)(vi) of the Social 
     Security Act (42 U.S.C. 405(c)(2)(C)(vi)) is amended--
       (A) by inserting ``(I)'' after ``(vi)''; and
       (B) by adding at the end the following:
       ``(II)(aa) An agency of a State (or political subdivision 
     thereof), in the administration of any driver's license or 
     motor vehicle registration law within its jurisdiction, may 
     not display the social security account numbers issued by the 
     Commissioner of Social Security, or any derivative of such 
     numbers, on the face of any driver's license or motor vehicle 
     registration or any other document issued by such State (or 
     political subdivision thereof) to an individual for purposes 
     of identification of such individual.
       ``(bb) Nothing in this subclause shall be construed as 
     precluding an agency of a State (or political subdivision 
     thereof), in the administration of any driver's license or 
     motor vehicle registration law within its jurisdiction, from 
     using a social security account number for an internal use or 
     to link with the database of an agency of another State that 
     is responsible for the administration of any driver's license 
     or motor vehicle registration law.''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply with respect to licenses, registrations, and 
     other documents issued or reissued after the date that is 1 
     year after the date of enactment of this Act.
       (c) Prohibition of Inmate Access to Social Security Account 
     Numbers.--
       (1) In general.--Section 205(c)(2)(C) of the Social 
     Security Act (42 U.S.C. 405(c)(2)(C)) (as amended by 
     subsection (b)) is amended by adding at the end the 
     following:
       ``(xi) No Federal, State, or local agency may employ, or 
     enter into a contract for the use or employment of, prisoners 
     in any capacity that would allow such prisoners access to the 
     social security account numbers of other individuals. For 
     purposes of this clause, the term `prisoner' means an 
     individual confined in a jail, prison, or other penal 
     institution or correctional facility pursuant to such 
     individual's conviction of a criminal offense.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply with respect to employment of prisoners, or entry 
     into contract with prisoners, after the date that is 1 year 
     after the date of enactment of this Act.

     SEC. 206. LIMITS ON PERSONAL DISCLOSURE OF A SOCIAL SECURITY 
                   NUMBER FOR CONSUMER TRANSACTIONS.

       (a) In General.--Part A of title XI of the Social Security 
     Act (42 U.S.C. 1301 et seq.) is amended by adding at the end 
     the following:

     ``SEC. 1150A. LIMITS ON PERSONAL DISCLOSURE OF A SOCIAL 
                   SECURITY NUMBER FOR CONSUMER TRANSACTIONS.

       ``(a) In General.--A commercial entity may not require an 
     individual to provide the individual's social security number 
     when purchasing a commercial good or service or deny an 
     individual the good or service for refusing to provide that 
     number except--
       ``(1) for any purpose relating to--
       ``(A) obtaining a consumer report for any purpose permitted 
     under the Fair Credit Reporting Act;
       ``(B) a background check of the individual conducted by a 
     landlord, lessor, employer, voluntary service agency, or 
     other entity as determined by the Attorney General;
       ``(C) law enforcement; or
       ``(D) a Federal, State, or local law requirement; or
       ``(2) if the social security number is necessary to verify 
     the identity of the consumer to effect, administer, or 
     enforce the specific transaction requested or authorized by 
     the consumer, or to prevent fraud.
       ``(b) Application of Civil Money Penalties.--A violation of 
     this section shall be deemed to be a violation of section 
     1129(a)(3)(F).
       ``(c) Application of Criminal Penalties.--A violation of 
     this section shall be deemed to be a violation of section 
     208(a)(8).
       ``(d) Limitation on Class Actions.--No class action 
     alleging a violation of this section shall be maintained 
     under this section by an individual or any private party in 
     Federal or State court.
       ``(e) State Attorney General Enforcement.--
       ``(1) In general.--
       ``(A) Civil actions.--In any case in which the attorney 
     general of a State has reason to believe that an interest of 
     the residents of that State has been or is threatened or 
     adversely affected by the engagement of any person in a 
     practice that is prohibited under this section, the State, as 
     parens patriae, may bring a civil action on behalf of the 
     residents of the State in a district court of the United 
     States of appropriate jurisdiction to--
       ``(i) enjoin that practice;
       ``(ii) enforce compliance with such section;
       ``(iii) obtain damages, restitution, or other compensation 
     on behalf of residents of the State; or
       ``(iv) obtain such other relief as the court may consider 
     appropriate.
       ``(B) Notice.--
       ``(i) In general.--Before filing an action under 
     subparagraph (A), the attorney general of the State involved 
     shall provide to the Attorney General--

       ``(I) written notice of the action; and
       ``(II) a copy of the complaint for the action.

       ``(ii) Exemption.--

       ``(I) In general.--Clause (i) shall not apply with respect 
     to the filing of an action by an attorney general of a State 
     under this subsection, if the State attorney general 
     determines that it is not feasible to provide the notice 
     described in such subparagraph before the filing of the 
     action.
       ``(II) Notification.--With respect to an action described 
     in subclause (I), the attorney general of a State shall 
     provide notice and a copy of the complaint to the Attorney 
     General at the same time as the State attorney general files 
     the action.

       ``(2) Intervention.--
       ``(A) In general.--On receiving notice under paragraph 
     (1)(B), the Attorney General shall have the right to 
     intervene in the action that is the subject of the notice.
       ``(B) Effect of intervention.--If the Attorney General 
     intervenes in the action under paragraph (1), the Attorney 
     General shall have the right to be heard with respect to any 
     matter that arises in that action.
       ``(3) Construction.--For purposes of bringing any civil 
     action under paragraph (1), nothing in this section shall be 
     construed to prevent an attorney general of a State from 
     exercising the powers conferred on such attorney general by 
     the laws of that State to--
       ``(A) conduct investigations;
       ``(B) administer oaths or affirmations; or
       ``(C) compel the attendance of witnesses or the production 
     of documentary and other evidence.
       ``(4) Actions by the attorney general of the united 
     states.--In any case in which an action is instituted by or 
     on behalf of the Attorney General for violation of a practice 
     that is prohibited under this section, no State may, during 
     the pendency of that action, institute an action under 
     paragraph (1) against any defendant named in the complaint in 
     that action for violation of that practice.
       ``(5) Venue; service of process.--
       ``(A) Venue.--Any action brought under paragraph (1) may be 
     brought in the district court of the United States that meets 
     applicable requirements relating to venue under section 1391 
     of title 28, United States Code.
       ``(B) Service of process.--In an action brought under 
     paragraph (1), process may be served in any district in which 
     the defendant--
       ``(i) is an inhabitant; or
       ``(ii) may be found.
       ``(f) Sunset.--This section shall not apply on or after the 
     date that is 6 years after the effective date of this 
     section.''.
       (b) Evaluation and Report.--Not later than the date that is 
     6 years and 6 months after the date of enactment of this Act, 
     the Attorney General, in consultation with the chairman of 
     the Federal Trade Commission, shall issue a report evaluating 
     the effectiveness and efficiency of section 1150A of the 
     Social Security Act (as added by subsection (a)) and shall 
     make recommendations to Congress as to any legislative action 
     determined to be necessary or advisable with respect to such 
     section, including a recommendation regarding whether to 
     reauthorize such section.
       (c) Effective Date.--The amendment made by subsection (a) 
     shall apply to requests to provide a social security number

[[Page 513]]

     occurring after the date that is 1 year after the date of 
     enactment of this Act.

     SEC. 207. EXTENSION OF CIVIL MONETARY PENALTIES FOR MISUSE OF 
                   A SOCIAL SECURITY NUMBER.

       (a) Treatment of Withholding of Material Facts.--
       (1) Civil penalties.--The first sentence of section 
     1129(a)(1) of the Social Security Act (42 U.S.C. 1320a-
     8(a)(1)) is amended--
       (A) by striking ``who'' and inserting ``who--'';
       (B) by striking ``makes'' and all that follows through 
     ``shall be subject to'' and inserting the following:
       ``(A) makes, or causes to be made, a statement or 
     representation of a material fact, for use in determining any 
     initial or continuing right to or the amount of monthly 
     insurance benefits under title II or benefits or payments 
     under title VIII or XVI, that the person knows or should know 
     is false or misleading;
       ``(B) makes such a statement or representation for such use 
     with knowing disregard for the truth; or
       ``(C) omits from a statement or representation for such 
     use, or otherwise withholds disclosure of, a fact which the 
     individual knows or should know is material to the 
     determination of any initial or continuing right to or the 
     amount of monthly insurance benefits under title II or 
     benefits or payments under title VIII or XVI and the 
     individual knows, or should know, that the statement or 
     representation with such omission is false or misleading or 
     that the withholding of such disclosure is misleading, shall 
     be subject to'';
       (C) by inserting ``or each receipt of such benefits while 
     withholding disclosure of such fact'' after ``each such 
     statement or representation'';
       (D) by inserting ``or because of such withholding of 
     disclosure of a material fact'' after ``because of such 
     statement or representation''; and
       (E) by inserting ``or such a withholding of disclosure'' 
     after ``such a statement or representation''.
       (2) Administrative procedure for imposing penalties.--The 
     first sentence of section 1129A(a) of the Social Security Act 
     (42 U.S.C. 1320a-8a(a)) is amended--
       (A) by striking ``who'' and inserting ``who--''; and
       (B) by striking ``makes'' and all that follows through 
     ``shall be subject to'' and inserting the following:
       ``(1) makes, or causes to be made, a statement or 
     representation of a material fact, for use in determining any 
     initial or continuing right to or the amount of monthly 
     insurance benefits under title II or benefits or payments 
     under title VIII or XVI, that the person knows or should know 
     is false or misleading;
       ``(2) makes such a statement or representation for such use 
     with knowing disregard for the truth; or
       ``(3) omits from a statement or representation for such 
     use, or otherwise withholds disclosure of, a fact which the 
     individual knows or should know is material to the 
     determination of any initial or continuing right to or the 
     amount of monthly insurance benefits under title II or 
     benefits or payments under title VIII or XVI and the 
     individual knows, or should know, that the statement or 
     representation with such omission is false or misleading or 
     that the withholding of such disclosure is misleading, shall 
     be subject to''.
       (b) Application of Civil Money Penalties to Elements of 
     Criminal Violations.--Section 1129(a) of the Social Security 
     Act (42 U.S.C. 1320a-8(a)), as amended by subsection (a)(1), 
     is amended--
       (1) by redesignating paragraph (2) as paragraph (4);
       (2) by redesignating the last sentence of paragraph (1) as 
     paragraph (2) and inserting such paragraph after paragraph 
     (1); and
       (3) by inserting after paragraph (2) (as so redesignated) 
     the following:
       ``(3) Any person (including an organization, agency, or 
     other entity) who--
       ``(A) uses a social security account number that such 
     person knows or should know has been assigned by the 
     Commissioner of Social Security (in an exercise of authority 
     under section 205(c)(2) to establish and maintain records) on 
     the basis of false information furnished to the Commissioner 
     by any person;
       ``(B) falsely represents a number to be the social security 
     account number assigned by the Commissioner of Social 
     Security to any individual, when such person knows or should 
     know that such number is not the social security account 
     number assigned by the Commissioner to such individual;
       ``(C) knowingly alters a social security card issued by the 
     Commissioner of Social Security, or possesses such a card 
     with intent to alter it;
       ``(D) knowingly displays, sells, or purchases a card that 
     is, or purports to be, a card issued by the Commissioner of 
     Social Security, or possesses such a card with intent to 
     display, purchase, or sell it;
       ``(E) counterfeits a social security card, or possesses a 
     counterfeit social security card with intent to display, 
     sell, or purchase it;
       ``(F) discloses, uses, compels the disclosure of, or 
     knowingly displays, sells, or purchases the social security 
     account number of any person in violation of the laws of the 
     United States;
       ``(G) with intent to deceive the Commissioner of Social 
     Security as to such person's true identity (or the true 
     identity of any other person) furnishes or causes to be 
     furnished false information to the Commissioner with respect 
     to any information required by the Commissioner in connection 
     with the establishment and maintenance of the records 
     provided for in section 205(c)(2);
       ``(H) offers, for a fee, to acquire for any individual, or 
     to assist in acquiring for any individual, an additional 
     social security account number or a number which purports to 
     be a social security account number; or
       ``(I) being an officer or employee of a Federal, State, or 
     local agency in possession of any individual's social 
     security account number, willfully acts or fails to act so as 
     to cause a violation by such agency of clause (vi)(II) or (x) 
     of section 205(c)(2)(C), shall be subject to, in addition to 
     any other penalties that may be prescribed by law, a civil 
     money penalty of not more than $5,000 for each violation. 
     Such person shall also be subject to an assessment, in lieu 
     of damages sustained by the United States resulting from such 
     violation, of not more than twice the amount of any benefits 
     or payments paid as a result of such violation.''.
       (c) Clarification of Treatment of Recovered Amounts.--
     Section 1129(e)(2)(B) of the Social Security Act (42 U.S.C. 
     1320a-8(e)(2)(B)) is amended by striking ``In the case of 
     amounts recovered arising out of a determination relating to 
     title VIII or XVI,'' and inserting ``In the case of any other 
     amounts recovered under this section,''.
       (d) Conforming Amendments.--
       (1) Section 1129(b)(3)(A) of the Social Security Act (42 
     U.S.C. 1320a-8(b)(3)(A)) is amended by striking ``charging 
     fraud or false statements''.
       (2) Section 1129(c)(1) of the Social Security Act (42 
     U.S.C. 1320a-8(c)(1)) is amended by striking ``and 
     representations'' and inserting ``, representations, or 
     actions''.
       (3) Section 1129(e)(1)(A) of the Social Security Act (42 
     U.S.C. 1320a-8(e)(1)(A)) is amended by striking ``statement 
     or representation referred to in subsection (a) was made'' 
     and inserting ``violation occurred''.
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply with respect to 
     violations of sections 1129 and 1129A of the Social Security 
     Act (42 U.S.C. 1320-8 and 1320a-8a), as amended by this 
     section, committed after the date of enactment of this Act.
       (2) Violations by government agents in possession of social 
     security numbers.--Section 1129(a)(3)(I) of the Social 
     Security Act (42 U.S.C. 1320a-8(a)(3)(I)), as added by 
     subsection (b), shall apply with respect to violations of 
     that section occurring on or after the effective date 
     described in section 202(c).

     SEC. 208. CRIMINAL PENALTIES FOR THE MISUSE OF A SOCIAL 
                   SECURITY NUMBER.

       (a) Prohibition of Wrongful Use as Personal Identification 
     Number.--No person may obtain any individual's social 
     security number for purposes of locating or identifying an 
     individual with the intent to physically injure, harm, or use 
     the identity of the individual for any illegal purpose.
       (b) Criminal Sanctions.--Section 208(a) of the Social 
     Security Act (42 U.S.C. 408(a)) is amended--
       (1) in paragraph (8), by inserting ``or'' after the 
     semicolon; and
       (2) by inserting after paragraph (8) the following:
       ``(9) except as provided in subsections (e) and (f) of 
     section 1028A of title 18, United States Code, knowingly and 
     willfully displays, sells, or purchases (as those terms are 
     defined in section 1028A(a) of title 18, United States Code) 
     any individual's social security account number without 
     having met the prerequisites for consent under section 
     1028A(d) of title 18, United States Code; or
       ``(10) obtains any individual's social security number for 
     the purpose of locating or identifying the individual with 
     the intent to injure or to harm that individual, or to use 
     the identity of that individual for an illegal purpose;''.

     SEC. 209. CIVIL ACTIONS AND CIVIL PENALTIES.

       (a) Civil Action in State Courts.--
       (1) In general.--Any individual aggrieved by an act of any 
     person in violation of this title or any amendments made by 
     this title may, if otherwise permitted by the laws or rules 
     of the court of a State, bring in an appropriate court of 
     that State--
       (A) an action to enjoin such violation;
       (B) an action to recover for actual monetary loss from such 
     a violation, or to receive up to $500 in damages for each 
     such violation, whichever is greater; or
       (C) both such actions.

     It shall be an affirmative defense in any action brought 
     under this paragraph that the defendant has established and 
     implemented, with due care, reasonable practices and 
     procedures to effectively prevent violations of the 
     regulations prescribed under this title. If the court finds 
     that the defendant willfully or knowingly violated the 
     regulations prescribed under this subsection, the court may, 
     in its discretion, increase the amount of the award to an 
     amount equal to not more than 3 times the amount available 
     under subparagraph (B).

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       (2) Statute of limitations.--An action may be commenced 
     under this subsection not later than the earlier of--
       (A) 5 years after the date on which the alleged violation 
     occurred; or
       (B) 3 years after the date on which the alleged violation 
     was or should have been reasonably discovered by the 
     aggrieved individual.
       (3) Nonexclusive remedy.--The remedy provided under this 
     subsection shall be in addition to any other remedies 
     available to the individual.
       (b) Civil Penalties.--
       (1) In general.--Any person who the Attorney General 
     determines has violated any section of this title or of any 
     amendments made by this title shall be subject, in addition 
     to any other penalties that may be prescribed by law--
       (A) to a civil penalty of not more than $5,000 for each 
     such violation; and
       (B) to a civil penalty of not more than $50,000, if the 
     violations have occurred with such frequency as to constitute 
     a general business practice.
       (2) Determination of violations.--Any willful violation 
     committed contemporaneously with respect to the social 
     security numbers of 2 or more individuals by means of mail, 
     telecommunication, or otherwise, shall be treated as a 
     separate violation with respect to each such individual.
       (3) Enforcement procedures.--The provisions of section 
     1128A of the Social Security Act (42 U.S.C. 1320a-7a), other 
     than subsections (a), (b), (f), (h), (i), (j), (m), and (n) 
     and the first sentence of subsection (c) of such section, and 
     the provisions of subsections (d) and (e) of section 205 of 
     such Act (42 U.S.C. 405) shall apply to a civil penalty 
     action under this subsection in the same manner as such 
     provisions apply to a penalty or proceeding under section 
     1128A(a) of such Act (42 U.S.C. 1320a-7a(a)), except that, 
     for purposes of this paragraph, any reference in section 
     1128A of such Act (42 U.S.C. 1320a-7a) to the Secretary shall 
     be deemed to be a reference to the Attorney General.

     SEC. 210. FEDERAL INJUNCTIVE AUTHORITY.

       In addition to any other enforcement authority conferred 
     under this title or the amendments made by this title, the 
     Federal Government shall have injunctive authority with 
     respect to any violation by a public entity of any provision 
     of this title or of any amendments made by this title.

   TITLE III--LIMITATIONS ON SALE AND SHARING OF NONPUBLIC PERSONAL 
                         FINANCIAL INFORMATION

     SEC. 301. DEFINITION OF SALE.

       Section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809) 
     is amended by adding at the end the following:
       ``(12) Sale.--The terms `sale', `sell', and `sold', with 
     respect to nonpublic personal information, mean the exchange 
     of such information for any thing of value, directly or 
     indirectly, including the licensing, bartering, or renting of 
     such information.''.

     SEC. 302. RULES APPLICABLE TO SALE OF NONPUBLIC PERSONAL 
                   INFORMATION.

       Section 502 of the Gramm-Leach-Bliley Act (15 U.S.C. 6802) 
     is amended--
       (1) in the section heading, by inserting ``sales, and other 
     sharing'' after ``disclosures'';
       (2) in subsection (a), by striking ``disclose to'' and 
     inserting ``sell or otherwise disclose to an affiliate or'';
       (3) in subsection (b)--
       (A) in the subsection heading, by inserting ``for 
     Disclosures to Affiliates'' before the period;
       (B) by striking ``a nonaffiliated third party'' each place 
     that term appears and inserting ``an affiliate'';
       (C) by striking ``such third party'' each place that term 
     appears and inserting ``such affiliate'';
       (D) by striking ``may not disclose'' and inserting ``may 
     not sell or otherwise disclose''; and
       (E) by striking paragraph (2) and inserting the following:
       ``(2) Exception.--This subsection shall not prevent a 
     financial institution from providing nonpublic personal 
     information to an affiliated third party to perform services 
     for or functions on behalf of the financial institution, 
     including marketing of the financial institution's own 
     products or services, if the financial institution fully 
     discloses the provision of such information and requires the 
     affiliate to maintain the confidentiality of such 
     information.'';
       (4) in subsection (d), by striking ``disclose'' and 
     inserting ``sell or otherwise disclose'';
       (5) by striking subsection (e);
       (6) by redesignating subsections (c) and (d) as subsections 
     (e) and (f), respectively; and
       (7) by inserting after subsection (b) the following:
       ``(c) Opt in for Disclosures to Nonaffiliated Third 
     Parties.--
       ``(1) Affirmative consent required.--A financial 
     institution may not sell or otherwise disclose nonpublic 
     personal information to any nonaffiliated third party, unless 
     the consumer to whom the information pertains--
       ``(A) has affirmatively consented to the sale or disclosure 
     of such information; and
       ``(B) has not withdrawn the consent.
       ``(2) Exception.--This subsection shall not prevent a 
     financial institution from providing nonpublic personal 
     information to a nonaffiliated third party to perform 
     services for or functions on behalf of the financial 
     institution, including marketing of the financial 
     institution's own products or services (subject to subsection 
     (d) with respect to joint agreements between 2 or more 
     financial institutions), if the financial institution fully 
     discloses the provision of such information and enters into a 
     contractual agreement with the nonaffiliated third party that 
     requires that third party to maintain the confidentiality of 
     such information.
       ``(d) Opt Out for Joint Agreements.--A financial 
     institution may not sell or otherwise disclose nonpublic 
     personal information to a nonaffiliated third party for the 
     purpose of offering financial products or services pursuant 
     to a joint agreement between 2 or more financial 
     institutions, unless--
       ``(1) the financial institution clearly and conspicuously 
     discloses to the consumer to whom the information pertains, 
     in writing or in electronic form or other form permitted by 
     the regulations prescribed under section 504, that such 
     information may be disclosed to such nonaffiliated third 
     party;
       ``(2) the consumer is given the opportunity, before the 
     time that such information is initially disclosed, to direct 
     that such information not be disclosed to such nonaffiliated 
     third party;
       ``(3) the consumer is given an explanation of how the 
     consumer can exercise that nondisclosure option; and
       ``(4) the financial institution receiving the nonpublic 
     personal information signs a written agreement obliging it--
       ``(A) to maintain the confidentiality of the information; 
     and
       ``(B) to refrain from using, selling, or otherwise 
     disclosing the information other than to carry out the joint 
     offering or servicing of the financial product or financial 
     service that is the subject of the written agreement.''.

     SEC. 303. EXCEPTIONS TO DISCLOSURE PROHIBITION.

       (a) In General.--Section 502 of the Gramm-Leach-Bliley Act 
     (15 U.S.C. 6802), as amended by this title, is amended by 
     adding at the end the following:
       ``(g) General Exceptions.--Notwithstanding any other 
     provision of this section, this section does not prohibit--
       ``(1) the sale or other disclosure of nonpublic personal 
     information to an affiliate or a nonaffiliated third party--
       ``(A) as necessary to effect, administer, or enforce a 
     transaction requested or authorized by the consumer to whom 
     the information pertains, or in connection with--
       ``(i) servicing or processing a financial product or 
     service requested or authorized by the consumer;
       ``(ii) maintaining or servicing the account of the consumer 
     with the financial institution, or with another entity as 
     part of a private label credit card program or other 
     extension of credit on behalf of such entity; or
       ``(iii) a proposed or actual securitization, secondary 
     market sale (including sales of servicing rights), or similar 
     transaction related to a transaction of the consumer;
       ``(B) with the consent or at the direction of the consumer, 
     in accordance with applicable rules prescribed under this 
     subtitle;
       ``(C) to the extent specifically permitted or required 
     under other provisions of law and in accordance with the 
     Right to Financial Privacy Act of 1978; or
       ``(D) to law enforcement agencies (including a Federal 
     functional regulator, the Secretary of the Treasury, with 
     respect to subchapter II of chapter 53 of title 31, United 
     States Code, and chapter 2 of title I of Public Law 91-508 
     (12 U.S.C. 1951-1959), a State insurance authority, or the 
     Federal Trade Commission), self-regulatory organizations, or 
     for an investigation on a matter related to public safety;
       ``(2) the disclosure, other than the sale, of nonpublic 
     personal information to identify or locate missing and 
     abducted children, witnesses, criminals, and fugitives, 
     parties to lawsuits, parents, delinquents in child support 
     payments, organ and bone marrow donors, pension fund 
     beneficiaries, and missing heirs; or
       ``(3) the disclosure, other than the sale, of nonpublic 
     personal information--
       ``(A) to protect the confidentiality or security of the 
     records of the financial institution pertaining to the 
     consumer, the service or product, or the transaction therein;
       ``(B) to protect against or prevent actual or potential 
     fraud, unauthorized transactions, claims, or other liability;
       ``(C) for required institutional risk control, or for 
     resolving customer disputes or inquiries;
       ``(D) to persons holding a legal or beneficial interest 
     relating to the consumer;
       ``(E) to persons acting in a fiduciary or representative 
     capacity on behalf of the consumer;
       ``(F) to provide information to insurance rate advisory 
     organizations, guaranty funds or agencies, applicable rating 
     agencies of the financial institution, persons assessing the 
     compliance of the institution with industry standards, or the 
     attorneys, accountants, or auditors of the institution;
       ``(G) to a consumer reporting agency, in accordance with 
     the Fair Credit Reporting Act or from a consumer report 
     reported by a consumer reporting agency, as those terms are 
     defined in that Act;

[[Page 515]]

       ``(H) in connection with a proposed or actual sale, merger, 
     transfer, or exchange of all or a portion of a business or 
     operating unit if the disclosure of nonpublic personal 
     information concerns solely consumers of such business or 
     unit;
       ``(I) to comply with Federal, State, or local laws, rules, 
     or other applicable legal requirements, or with a properly 
     authorized civil, criminal, or regulatory investigation or 
     subpoena or summons by Federal, State, or local authorities; 
     or
       ``(J) to respond to judicial process or government 
     regulatory authorities having jurisdiction over the financial 
     institution for examination, compliance, or other purposes, 
     as authorized by law.
       ``(h) Denial of Service Prohibited.--A financial 
     institution may not deny any consumer a financial product or 
     a financial service as a result of the refusal by the 
     consumer to grant consent to disclosure under this section or 
     the exercise by the consumer of a nondisclosure option under 
     this section, except that nothing in this subsection may be 
     construed to prohibit a financial institution from offering 
     incentives to elicit consumer consent to the use of his or 
     her nonpublic personal information.''.
       (b) Repeal of Regulatory Exemption Authority.--Section 504 
     of the Gramm-Leach-Bliley Act (15 U.S.C. 6804) is amended--
       (1) by striking subsection (b);
       (2) by striking ``(a) Regulatory Authority.--'';
       (3) by redesignating paragraphs (1), (2), and (3) as 
     subsections (a), (b), and (c), respectively, and moving the 
     margins 2 ems to the left; and
       (4) by striking ``paragraph (1)'' and inserting 
     ``subsection (a)''.

     SEC. 304. CONFORMING AMENDMENTS.

       Title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et 
     seq.) is amended--
       (1) in section 503(b)(1) (15 U.S.C. 6803(b)(1))--
       (A) by inserting ``affiliates and'' before 
     ``nonaffiliated''; and
       (B) in subparagraph (A), by striking ``502(e)'' and 
     inserting ``502(g)''; and
       (2) in section 509(3)(D) (15 U.S.C. 6809(3)(D)), by 
     striking ``502(e)(1)(C)'' and inserting 
     ``502(g)(1)(A)(iii)''.

     SEC. 305. REGULATORY AUTHORITY.

       Not later than 6 months after the date of enactment of this 
     Act, the agencies referred to in section 504(a)(1) of the 
     Gramm-Leach-Bliley Act (15 U.S.C. 6804(a)(1)) shall 
     promulgate final regulations in accordance with that section 
     504 to carry out the amendments made by this Act.

     SEC. 306. EFFECTIVE DATE.

       This title and the amendments made by this title shall take 
     effect 6 months after the date of enactment of this Act.

 TITLE IV--LIMITATIONS ON THE PROVISION OF PROTECTED HEALTH INFORMATION

     SEC. 401. DEFINITIONS.

       In this title:
       (1) Business associate.--
       (A) In general.--Except as provided in subparagraph (B), 
     the term ``business associate'' means, with respect to a 
     covered entity, a person who--
       (i) on behalf of such covered entity or of an organized 
     health care arrangement in which the covered entity 
     participates, but other than in the capacity of a member of 
     the workforce of such covered entity or arrangement, 
     performs, or assists in the performance of--

       (I) a function or activity involving the use or disclosure 
     of individually identifiable health information, including 
     claims processing or administration, data analysis, 
     processing or administration, utilization review, quality 
     assurance, billing, benefit management, practice management, 
     and repricing; or
       (II) any other function or activity regulated under 
     subchapter C of title 45, Code of Federal Regulations; or

       (ii) provides, other than in the capacity of a member of 
     the workforce of such covered entity, legal, actuarial, 
     accounting, consulting, data aggregation (as defined in 
     section 164.501 of title 45, Code of Federal Regulations), 
     management, administrative, accreditation, or financial 
     services to or for such covered entity, or to or for an 
     organized health care arrangement in which the covered entity 
     participates, where the provision of the service involves the 
     disclosure of individually identifiable health information 
     from such covered entity or arrangement, or from another 
     business associate of such covered entity or arrangement, to 
     the person.
       (B) Limitations.--
       (i) In general.--A covered entity participating in an 
     organized health care arrangement that performs a function or 
     activity as described by subparagraph (A)(i) for or on behalf 
     of such organized health care arrangement, or that provides a 
     service as described in subparagraph (A)(ii) to or for such 
     organized health care arrangement, does not, simply through 
     the performance of such function or activity or the provision 
     of such service, become a business associate of other covered 
     entities participating in such organized health care 
     arrangement.
       (ii) Limitation.--A covered entity may be a business 
     associate of another covered entity.
       (2) Covered entity.--The term ``covered entity'' means--
       (A) a health plan;
       (B) a health care clearinghouse; and
       (C) a health care provider who transmits any health 
     information in electronic form in connection with a 
     transaction covered by parts 160 through 164 of title 45, 
     Code of Federal Regulations.
       (3) Disclosure.--The term ``disclosure'' means the release, 
     transfer, provision of access to, or divulging in any other 
     manner of information outside the entity holding the 
     information.
       (4) Employer.--The term ``employer'' has the meaning given 
     that term in section 3401(d) of the Internal Revenue Code of 
     1986.
       (5) Group health plan.--The term ``group health plan'' 
     means an employee welfare benefit plan (as defined in section 
     3(1) of the Employee Retirement Income and Security Act of 
     1974 (29 U.S.C. 1002(1)), including insured and self-insured 
     plans, to the extent that the plan provides medical care (as 
     defined in section 2791(a)(2) of the Public Health Service 
     Act, 42 U.S.C. 300gg-91(a)(2)), including items and services 
     paid for as medical care, to employees or their dependents 
     directly or through insurance, reimbursement, or otherwise, 
     that--
       (A) has 50 or more participants (as defined in section 3(7) 
     of Employee Retirement Income and Security Act of 1974, 29 
     U.S.C. 1002(7)); or
       (B) is administered by an entity other than the employer 
     that established and maintains the plan.
       (6) Health care.--The term ``health care'' includes, but is 
     not limited to, the following:
       (A) Preventive, diagnostic, therapeutic, rehabilitative, 
     maintenance, or palliative care and counseling, service, 
     assessment, or procedure with respect to the physical or 
     mental condition, or functional status, of an individual or 
     that affects the structure or function of the body.
       (B) The sale or dispensing of a drug, device, equipment, or 
     other item in accordance with a prescription.
       (7) Health care clearinghouse.--The term ``health care 
     clearinghouse'' means a public or private entity, including a 
     billing service, repricing company, community health 
     management information system or community health information 
     system, and value-added networks and switches, that--
       (A) processes or facilitates the processing of health 
     information received from another entity in a nonstandard 
     format or containing nonstandard data content into standard 
     data elements or a standard transaction; or
       (B) receives a standard transaction from another entity and 
     processes or facilitates the processing of health information 
     into nonstandard format or nonstandard data content for the 
     receiving entity.
       (8) Health care provider.--The term ``health care 
     provider'' has the meaning given the terms ``provider of 
     services'' and ``provider of medical or health services'' in 
     subsections (u) and (s) of section 1861 of the Social 
     Security Act (42 U.S.C. 1395x), respectively, and includes 
     any other person or organization who furnishes, bills, or is 
     paid for health care in the normal course of business.
       (9) Health information.--The term ``health information'' 
     means any information, whether oral or recorded in any form 
     or medium, that--
       (A) is created or received by a health care provider, 
     health plan, public health authority, employer, life insurer, 
     school or university, or health care clearinghouse; and
       (B) relates to the past, present, or future physical or 
     mental health or condition of an individual; the provision of 
     health care to an individual; or the past, present, or future 
     payment for the provision of health care to an individual.
       (10) Health insurance issuer.--The term ``health insurance 
     issuer'' means a health insurance issuer (as defined in 
     section 2791(b)(2) of the Public Health Service Act, 42 
     U.S.C. 300gg-91(b)(2)) and used in the definition of health 
     plan in this section and includes an insurance company, 
     insurance service, or insurance organization (including an 
     HMO) that is licensed to engage in the business of insurance 
     in a State and is subject to State law that regulates 
     insurance. Such term does not include a group health plan.
       (11) Health maintenance organization.--The term ``health 
     maintenance organization'' (HMO) (as defined in section 
     2791(b)(3) of the Public Health Service Act, 42 U.S.C. 300gg-
     91 (b)(3)) and used in the definition of health plan in this 
     section, means a federally qualified HMO, an organization 
     recognized as an HMO under State law, or a similar 
     organization regulated for solvency under State law in the 
     same manner and to the same extent as such an HMO.
       (12) Health oversight agency.--The term ``health oversight 
     agency'' means an agency or authority of the United States, a 
     State, a territory, a political subdivision of a State or 
     territory, or an Indian tribe, or a person or entity acting 
     under a grant of authority from or contract with such public 
     agency, including the employees or agents of such public 
     agency or its contractors or persons or entities to whom it 
     has granted authority, that is authorized by law to oversee 
     the health care system (whether public or private) or 
     government programs in which health information is necessary 
     to determine eligibility or compliance, or to enforce civil

[[Page 516]]

     rights laws for which health information is relevant.
       (13) Health plan.--The term ``health plan'' means an 
     individual or group plan that provides, or pays the cost of, 
     medical care, as defined in section 2791(a)(2) of the Public 
     Health Service Act (42 U.S.C. 300gg-91(a)(2))--
       (A) including, singly or in combination--
       (i) a group health plan;
       (ii) a health insurance issuer;
       (iii) an HMO;
       (iv) part A or B of the medicare program under title XVIII 
     of the Social Security Act (42 U.S.C. 1395 et seq.);
       (v) the medicaid program under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.);
       (vi) an issuer of a medicare supplemental policy (as 
     defined in section 1882(g)(1) of the Social Security Act, 42 
     U.S.C. 1395ss(g)(1));
       (vii) an issuer of a long-term care policy, excluding a 
     nursing home fixed-indemnity policy;
       (viii) an employee welfare benefit plan or any other 
     arrangement that is established or maintained for the purpose 
     of offering or providing health benefits to the employees of 
     2 or more employers;
       (ix) the health care program for active military personnel 
     under title 10, United States Code;
       (x) the veterans health care program under chapter 17 of 
     title 38, United States Code;
       (xi) the Civilian Health and Medical Program of the 
     Uniformed Services (CHAMPUS) (as defined in section 1072(4) 
     of title 10, United States Code);
       (xii) the Indian Health Service program under the Indian 
     Health Care Improvement Act (25 U.S.C. 1601 et seq.);
       (xiii) the Federal Employees Health Benefits Program under 
     chapter 89 of title 5, United States Code;
       (xiv) an approved State child health plan under title XXI 
     of the Social Security Act (42 U.S.C. 1397aa et seq.), 
     providing benefits for child health assistance that meet the 
     requirements of section 2103 of such Act (42 U.S.C. 1397cc);
       (xv) the Medicare+Choice program under part C of title 
     XVIII of the Social Security Act (42 U.S.C. 1395w-21 et 
     seq.);
       (xvi) a high risk pool that is a mechanism established 
     under State law to provide health insurance coverage or 
     comparable coverage to eligible individuals; and
       (xvii) any other individual or group plan, or combination 
     of individual or group plans, that provides or pays for the 
     cost of medical care (as defined in section 2791(a)(2) of the 
     Public Health Service Act (42 U.S.C. 300gg-91(a)(2)); and
       (B) excluding--
       (i) any policy, plan, or program to the extent that it 
     provides, or pays for the cost of, excepted benefits that are 
     listed in section 2791(c)(1) of the Public Health Service Act 
     (42 U.S.C. 300gg-91(c)(1)); and
       (ii) a government-funded program (other than 1 listed in 
     clause (i) through (xvi) of subparagraph (A)), whose 
     principal purpose is other than providing, or paying the cost 
     of, health care, or whose principal activity is the direct 
     provision of health care to persons, or the making of grants 
     to fund the direct provision of health care to persons.
       (14) Individually identifiable health information.--The 
     term ``individually identifiable health information'' means 
     information that is a subset of health information, including 
     demographic information collected from an individual, that--
       (A) is created or received by a covered entity or employer; 
     and
       (B)(i) relates to the past, present, or future physical or 
     mental health or condition of an individual, the provision of 
     health care to an individual, or the past, present, or future 
     payment for the provision of health care to an individual; 
     and
       (ii)(I) identifies an individual; or
       (II) with respect to which there is a reasonable basis to 
     believe that the information can be used to identify an 
     individual.
       (15) Law enforcement official.--The term ``law enforcement 
     official'' means an officer or employee of any agency or 
     authority of the United States, a State, a territory, a 
     political subdivision of a State or territory, or an Indian 
     tribe, who is empowered by law to--
       (A) investigate or conduct an official inquiry into a 
     potential violation of law; or
       (B) prosecute or otherwise conduct a criminal, civil, or 
     administrative proceeding arising from an alleged violation 
     of law.
       (16) Life insurer.--The term ``life insurer'' means a life 
     insurance company (as defined in section 816 of the Internal 
     Revenue Code of 1986), including the employees and agents of 
     such company.
       (17) Marketing.--The term ``marketing'' means to make a 
     communication about a product or service that encourages 
     recipients of the communication to purchase or use the 
     product or service.
       (18) Noncovered entity.--The term ``noncovered entity'' 
     means any person or public or private entity that is not a 
     covered entity, including but not limited to a business 
     associate of a covered entity, a covered entity if such 
     covered entity is acting as a business associate, a health 
     researcher, school or university, life insurer, employer, 
     public health authority, health oversight agency, or law 
     enforcement official, or any person acting as an agent of 
     such entities or persons.
       (19) Organized health care arrangement.--The term 
     ``organized health care arrangement'' means--
       (A) a clinically integrated care setting in which 
     individuals typically receive health care from more than 1 
     health care provider;
       (B) an organized system of health care in which more than 1 
     covered entity participates, and in which the participating 
     covered entities--
       (i) hold themselves out to the public as participating in a 
     joint arrangement; and
       (ii) participate in joint activities including at least--

       (I) utilization review, in which health care decisions by 
     participating covered entities are reviewed by other 
     participating covered entities or by a third party on their 
     behalf;
       (II) quality assessment and improvement activities, in 
     which treatment provided by participating covered entities is 
     assessed by other participating covered entities or by a 
     third party on their behalf; or
       (III) payment activities, if the financial risk for 
     delivering health care is shared, in part or in whole, by 
     participating covered entities through the joint arrangement 
     and if protected health information created or received by a 
     covered entity is reviewed by other participating covered 
     entities or by a third party on their behalf for the purpose 
     of administering the sharing of financial risk;

       (C) a group health plan and a health insurance issuer or 
     HMO with respect to such group health plan, but only with 
     respect to protected health information created or received 
     by such health insurance issuer or HMO that relates to 
     individuals who are or who have been participants or 
     beneficiaries in such group health plan;
       (D) a group health plan and 1 or more other group health 
     plans each of which are maintained by the same plan sponsor; 
     or
       (E) the group health plans described in subparagraph (D) 
     and health insurance issuers or HMOs with respect to such 
     group health plans, but only with respect to protected health 
     information created or received by such health insurance 
     issuers or HMOs that relates to individuals who are or have 
     been participants or beneficiaries in any of such group 
     health plans.
       (20) Protected health information.--
       (A) In general.--The term ``protected health information'' 
     means individually identifiable health information that, 
     except as provided in subparagraph (B), is--
       (i) transmitted by electronic media;
       (ii) maintained in any medium described in the definition 
     of electronic media in section 162.103 of title 45, Code of 
     Federal Regulations; or
       (iii) transmitted or maintained in any other form or 
     medium.
       (B) Exclusions.--Such term does not include individually 
     identifiable health information in--
       (i) education records covered by the Family Educational 
     Rights and Privacy Act of 1974 (section 444 of the General 
     Education Provisions Act (20 U.S.C. 1232g));
       (ii) records described in subsection (a)(4)(B)(iv) of that 
     Act; or
       (iii) employment records held by a covered entity in its 
     role as an employer.
       (21) Public health authority.--The term ``public health 
     authority'' means an agency or authority of the United 
     States, a State, a territory, a political subdivision of a 
     State or territory, or an Indian tribe, or a person or entity 
     acting under a grant of authority from or contract with such 
     public agency, including employees or agents of such public 
     agency or its contractors or persons or entities to whom it 
     has granted authority, that is responsible for public health 
     matters as part of its official mandate.
       (22) School or university.--The term ``school or 
     university'' means an institution or place for instruction or 
     education, including an elementary school, secondary school, 
     or institution of higher learning, a college, or an 
     assemblage of colleges united under 1 corporate organization 
     or government.
       (23) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (24) Sale; sell; sold.--The terms ``sale'', ``sell'', and 
     ``sold'', with respect to protected health information, mean 
     the exchange of such information for anything of value, 
     directly or indirectly, including the licensing, bartering, 
     or renting of such information.
       (25) Use.--The term ``use'' means, with respect to 
     individually identifiable health information, the sharing, 
     employment, application, utilization, examination, or 
     analysis of such information within an entity that maintains 
     such information.
       (26) Writing.--The term ``writing'' means writing in either 
     a paper-based or computer-based form, including electronic 
     and digital signatures.

     SEC. 402. PROHIBITION AGAINST SELLING PROTECTED HEALTH 
                   INFORMATION.

       (a) Valid Authorization Required.--
       (1) In general.--A noncovered entity shall not sell the 
     protected health information of an individual or use such 
     information for marketing purposes without an authorization 
     that is valid under section 403. When a noncovered entity 
     obtains or receives authorization to sell such information, 
     such sale must be consistent with such authorization.

[[Page 517]]

       (2) No duplicate authorization required.--Nothing in 
     paragraph (1) shall be construed as requiring a noncovered 
     entity that receives from a covered entity an authorization 
     that is valid under section 403 to obtain a separate 
     authorization from an individual before the sale or use of 
     the individual's protected health information so long as the 
     sale or use of the information is consistent with the terms 
     of the authorization.
       (b) Scope.--A sale of protected health information as 
     described under subsection (a) shall be limited to the 
     minimum amount of information necessary to accomplish the 
     purpose for which the sale is made.
       (c) Purpose.--A recipient of information sold pursuant to 
     this title may use or disclose such information solely to 
     carry out the purpose for which the information was sold.
       (d) Not Required.--Nothing in this title permitting the 
     sale of protected health information shall be construed to 
     require such sale.
       (e) Identification of Information as Protected Health 
     Information.--Information sold pursuant to this title shall 
     be clearly identified as protected health information.
       (f) No Waiver.--Except as provided in this title, an 
     individual's authorization to sell protected health 
     information shall not be construed as a waiver of any rights 
     that the individual has under other Federal or State laws, 
     the rules of evidence, or common law.

     SEC. 403. AUTHORIZATION FOR SALE OR MARKETING OF PROTECTED 
                   HEALTH INFORMATION BY NONCOVERED ENTITIES.

       (a) Valid Authorization.--A valid authorization is a 
     document that complies with all requirements of this section. 
     Such authorization may include additional information not 
     required under this section, provided that such information 
     is not inconsistent with the requirements of this section.
       (b) Defective Authorization.--An authorization is not 
     valid, if the document submitted has any of the following 
     defects:
       (1) The expiration date has passed or the expiration event 
     is known by the noncovered entity to have occurred.
       (2) The authorization has not been filled out completely, 
     with respect to an element described in subsections (e) and 
     (f).
       (3) The authorization is known by the noncovered entity to 
     have been revoked.
       (4) The authorization lacks an element required by 
     subsections (e) and (f).
       (5) Any material information in the authorization is known 
     by the noncovered entity to be false.
       (c) Revocation of Authorization.--An individual may revoke 
     an authorization provided under this section at any time 
     provided that the revocation is in writing, except to the 
     extent that the noncovered entity has taken action in 
     reliance thereon.
       (d) Documentation.--
       (1) In general.--A noncovered entity must document and 
     retain any signed authorization under this section as 
     required under paragraph (2).
       (2) Standard.--A noncovered entity shall, if a 
     communication is required by this title to be in writing, 
     maintain such writing, or an electronic copy, as 
     documentation.
       (3) Retention period.--A noncovered entity shall retain the 
     documentation required by this section for 6 years from the 
     date of its creation or the date when it last was in effect, 
     whichever is later.
       (e) Content of Authorization.--
       (1) Content.--An authorization described in subsection (a) 
     shall--
       (A) contain a description of the information to be sold 
     that identifies such information in a specific and meaningful 
     manner;
       (B) contain the name or other specific identification of 
     the person, or class of persons, authorized to sell the 
     information;
       (C) contain the name or other specific identification of 
     the person, or class of persons, to whom the information is 
     to be sold;
       (D) include an expiration date or an expiration event 
     relating to the selling of such information that signifies 
     that the authorization is valid until such date or event;
       (E) include a statement that the individual has a right to 
     revoke the authorization in writing and the exceptions to the 
     right to revoke, and a description of the procedure involved 
     in such revocation;
       (F) be in writing and include the signature of the 
     individual and the date, or if the authorization is signed by 
     a personal representative of the individual, a description of 
     such representative's authority to act for the individual; 
     and
       (G) include a statement explaining the purpose for which 
     such information is sold.
       (2) Plain language.--The authorization shall be written in 
     plain language.
       (f) Notice.--
       (1) In general.--The authorization shall include a 
     statement that the individual may--
       (A) inspect or copy the protected health information to be 
     sold; and
       (B) refuse to sign the authorization.
       (2) Copy to the individual.--A noncovered entity shall 
     provide the individual with a copy of the signed 
     authorization.
       (g) Model Authorizations.--The Secretary, after notice and 
     opportunity for public comment, shall develop and disseminate 
     model written authorizations of the type described in this 
     section and model statements of the limitations on such 
     authorizations. Any authorization obtained on a model 
     authorization form developed by the Secretary pursuant to the 
     preceding sentence shall be deemed to satisfy the 
     requirements of this section.
       (h) Noncoercion.--A covered entity or noncovered entity 
     shall not condition the purchase of a product or the 
     provision of a service to an individual based on whether such 
     individual provides an authorization to such entity as 
     described in this section.

     SEC. 404. PROHIBITION AGAINST RETALIATION.

       A noncovered entity that collects protected health 
     information, may not adversely affect another person, 
     directly or indirectly, because such person has exercised a 
     right under this title, disclosed information relating to a 
     possible violation of this title, or associated with, or 
     assisted, a person in the exercise of a right under this 
     title.

     SEC. 405. RULE OF CONSTRUCTION.

       The requirements of this title shall not be construed to 
     impose any additional requirements or in any way alter the 
     requirements imposed upon covered entities under parts 160 
     through 164 of title 45, Code of Federal Regulations.

     SEC. 406. REGULATIONS.

       (a) In General.--The Secretary shall promulgate regulations 
     implementing the provisions of this title.
       (b) Timeframe.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall publish proposed 
     regulations in the Federal Register. With regard to such 
     proposed regulations, the Secretary shall provide an 
     opportunity for submission of comments by interested persons 
     during a period of not less than 90 days. Not later than 2 
     years after the date of enactment of this Act, the Secretary 
     shall publish final regulations in the Federal Register.

     SEC. 407. ENFORCEMENT.

       (a) In General.--A covered entity or noncovered entity that 
     knowingly violates section 402 shall be subject to a civil 
     money penalty under this section.
       (b) Amount.--The civil money penalty described in 
     subsection (a) shall not exceed $100,000. In determining the 
     amount of any penalty to be assessed, the Secretary shall 
     take into account the previous record of compliance of the 
     entity being assessed with the applicable provisions of this 
     title and the gravity of the violation.
       (c) Administrative Review.--
       (1) Opportunity for hearing.--The entity assessed shall be 
     afforded an opportunity for a hearing by the Secretary upon 
     request made within 30 days after the date of the issuance of 
     a notice of assessment. In such hearing the decision shall be 
     made on the record pursuant to section 554 of title 5, United 
     States Code. If no hearing is requested, the assessment shall 
     constitute a final and unappealable order.
       (2) Hearing procedure.--If a hearing is requested, the 
     initial agency decision shall be made by an administrative 
     law judge, and such decision shall become the final order 
     unless the Secretary modifies or vacates the decision. Notice 
     of intent to modify or vacate the decision of the 
     administrative law judge shall be issued to the parties 
     within 30 days after the date of the decision of the judge. A 
     final order which takes effect under this paragraph shall be 
     subject to review only as provided under subsection (d).
       (d) Judicial Review.--
       (1) Filing of action for review.--Any entity against whom 
     an order imposing a civil money penalty has been entered 
     after an agency hearing under this section may obtain review 
     by the United States district court for any district in which 
     such entity is located or the United States District Court 
     for the District of Columbia by filing a notice of appeal in 
     such court within 30 days from the date of such order, and 
     simultaneously sending a copy of such notice by registered 
     mail to the Secretary.
       (2) Certification of administrative record.--The Secretary 
     shall promptly certify and file in such court the record upon 
     which the penalty was imposed.
       (3) Standard for review.--The findings of the Secretary 
     shall be set aside only if found to be unsupported by 
     substantial evidence as provided by section 706(2)(E) of 
     title 5, United States Code.
       (4) Appeal.--Any final decision, order, or judgment of the 
     district court concerning such review shall be subject to 
     appeal as provided in chapter 83 of title 28 of such Code.
       (e) Failure to Pay Assessment; Maintenance of Action.--
       (1) Failure to pay assessment.--If any entity fails to pay 
     an assessment after it has become a final and unappealable 
     order, or after the court has entered final judgment in favor 
     of the Secretary, the Secretary shall refer the matter to the 
     Attorney General who shall recover the amount assessed by 
     action in the appropriate United States district court.
       (2) Nonreviewability.--In such action the validity and 
     appropriateness of the final order imposing the penalty shall 
     not be subject to review.
       (f) Payment of Penalties.--Except as otherwise provided, 
     penalties collected under this section shall be paid to the 
     Secretary (or other officer) imposing the penalty and shall 
     be available without appropriation and

[[Page 518]]

     until expended for the purpose of enforcing the provisions 
     with respect to which the penalty was imposed.

                   TITLE V--DRIVER'S LICENSE PRIVACY

     SEC. 501. DRIVER'S LICENSE PRIVACY.

       Section 2725 of title 18, United States Code, is amended by 
     striking paragraphs (2) through (4) and adding the following:
       ``(2) `person' means an individual, organization, or 
     entity, but does not include a State or agency thereof;
       ``(3) `personal information' means information that 
     identifies an individual, including an individual's 
     photograph, social security number, driver identification 
     number, name, address (but not the 5-digit zip code), 
     telephone number, medical or disability information, any 
     physical copy of a driver's license, birth date, information 
     on physical characteristics, including height, weight, sex or 
     eye color, or any biometric identifiers on a license, 
     including a finger print, but not information on vehicular 
     accidents, driving violations, and driver's status;
       ``(4) `highly restricted personal information' means an 
     individual's photograph or image, social security number, 
     medical or disability information, any physical copy of a 
     driver's license, driver identification number, birth date, 
     information on physical characteristics, including height, 
     weight, sex, or eye color, or any biometric identifiers on a 
     license, including a finger print; and''.

                        TITLE VI--MISCELLANEOUS

     SEC. 601. ENFORCEMENT BY STATE ATTORNEYS GENERAL.

       (a) In General.--
       (1) Civil actions.--In any case in which the attorney 
     general of a State has reason to believe that an interest of 
     the residents of that State has been or is threatened or 
     adversely affected by the engagement of any person in a 
     practice that is prohibited under title I, II, or IV of this 
     Act or under any amendment made by such a title, the State, 
     as parens patriae, may bring a civil action on behalf of the 
     residents of the State in a district court of the United 
     States of appropriate jurisdiction to--
       (A) enjoin that practice;
       (B) enforce compliance with such titles or such amendments;
       (C) obtain damage, restitution, or other compensation on 
     behalf of residents of the State; or
       (D) obtain such other relief as the court may consider to 
     be appropriate.
       (2) Notice.--
       (A) In general.--Before filing an action under paragraph 
     (1), the attorney general of the State involved shall provide 
     to the Attorney General--
       (i) written notice of the action; and
       (ii) a copy of the complaint for the action.
       (B) Exemption.--
       (i) In general.--Subparagraph (A) shall not apply with 
     respect to the filing of an action by an attorney general of 
     a State under this subsection, if the State attorney general 
     determines that it is not feasible to provide the notice 
     described in such subparagraph before the filing of the 
     action.
       (ii) Notification.--In an action described in clause (i), 
     the attorney general of a State shall provide notice and a 
     copy of the complaint to the Attorney General at the same 
     time as the State attorney general files the action.
       (b) Intervention.--
       (1) In general.--On receiving notice under subsection 
     (a)(2), the Attorney General shall have the right to 
     intervene in the action that is the subject of the notice.
       (2) Effect of intervention.--If the Attorney General 
     intervenes in an action under subsection (a), the Attorney 
     General shall have the right to be heard with respect to any 
     matter that arises in that action.
       (c) Construction.--For purposes of bringing any civil 
     action under subsection (a), nothing in this Act shall be 
     construed to prevent an attorney general of a State from 
     exercising the powers conferred on such attorney general by 
     the laws of that State to--
       (1) conduct investigations;
       (2) administer oaths or affirmations; or
       (3) compel the attendance of witnesses or the production of 
     documentary and other evidence.
       (d) Actions by the Attorney General of the United States.--
     In any case in which an action is instituted by or on behalf 
     of the Attorney General for violation of a practice that is 
     prohibited under title I, II, IV, or V of this Act or under 
     any amendment made by such a title, no State may, during the 
     pendency of that action, institute an action under subsection 
     (a) against any defendant named in the complaint in that 
     action for violation of that practice.
       (e) Venue; Service of Process.--
       (1) Venue.--Any action brought under subsection (a) may be 
     brought in the district court of the United States that meets 
     applicable requirements relating to venue under section 1391 
     of title 28, United States Code.
       (2) Service of process.--In an action brought under 
     subsection (a), process may be served in any district in 
     which the defendant--
       (A) is an inhabitant; or
       (B) may be found.

     SEC. 602. FEDERAL INJUNCTIVE AUTHORITY.

       In addition to any other enforcement authority conferred 
     under this Act or under an amendment made by this Act, the 
     Federal Government shall have injunctive authority with 
     respect to any violation of any provision of title I, II, or 
     IV of this Act or of any amendment made by such a title, 
     without regard to whether a public or private entity violates 
     such provision.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself and Mr. Voinovich):
  S. 117. A bill to amend the Higher Education Act of 1965 to extend 
loan forgiveness for certain loans to Head Start teachers; to the 
Committee on Health, Education, Labor, and Pensions.
  Mrs. FEINSTEIN. Mr. President. I rise today with Senator Voinovich to 
introduce legislation to expand the federal loan forgiveness program to 
include Head Start teachers.
  Nationwide, only 30 percent of Head Start teachers have completed a 
baccalaureate or advanced degree program.
  In California, that number is even smaller: about eighteen percent of 
Head Start teachers have completed a bachelor's degree.
  To prepare Head Start children for elementary school, we must recruit 
highly qualified teachers who have demonstrated knowledge and teaching 
skills in reading, writing, early childhood development, and other 
areas of the preschool curriculum with a particular focus on cognitive 
learning.
  Recruiting and maintaining teachers with such qualifications is the 
only way to jump-start cognitive development and ensure that our 
children start elementary school ready to learn.
  A survey conducted by the U.S. Department of Health and Human 
Services called the Head Start Family and Child Experiences Survey 
(FACES) found a strong relationship between the education of Head Start 
teachers and classroom quality. Teachers with higher education levels 
were found to be more sensitive and responsive to their children, to 
have more high quality language activities, and more creative 
activities in their classrooms.
  Teachers with higher levels of education also had classes with higher 
quality language activities such as reading books for the children and 
provided more opportunities for children to develop skills in 
expressing thoughts.
  Head Start is the primary federal program that has the potential to 
reach out to low-income children early in their formative years when 
their cognitive skills are just developing.
  We know that poor children disproportionately start school behind 
their peers--they are less likely to count to 10 or to recite the 
alphabet.
  Many of our nation's youngsters enter elementary school without the 
basic skills necessary to succeed. Often these children lag behind 
their peers throughout their academic career.
  As taxpayers, we will spend millions on efforts to help these 
children catch up. Many of these children will never catch up. A recent 
national study by The High/Scope Perry Preschool confirms the 
importance of providing preschool children with the opportunity early 
on to gain the basic skills necessary for school.
  The study found that preschoolers were more likely to graduate from 
high school and be employed at age 40, earn more money a year, and were 
more likely to own a home and have a savings account.
  We can save millions by providing low-income children with access to 
quality preschool where they will gain the necessary skills to succeed 
in school and life.
  In order to give every child a head start in life, we must continue 
to recruit highly qualified teachers to the Head Start field and 
prevent the best teachers from leaving.
  Many Head Start programs across the country, including in California, 
are losing qualified teachers to local school districts in part because 
the pay is better.
  Nationally, the average Head Start teacher earns a salary of $21,287 
compared to $43,152 for an elementary school teacher.
  Head Start teachers are making half of what elementary school 
teachers are paid on average.
  Low pay, combined with increasing student debt, is a real deterrent 
to getting college graduates to become Head Start teachers.

[[Page 519]]

  And every teacher that Head Start loses impacts the quality and 
access to services for our nation's low-income children.
  One way to recruit and retain highly qualified Head Start teachers is 
to offer incentives to pursue a career in this field.
  Current law allows elementary and secondary school teachers to 
receive up to $5,000 in loan forgiveness in exchange for five years of 
service.
  We believe Head Start teachers should be given this same opportunity.
  The legislation we are introducing today is meant to encourage recent 
graduates, current Head Start teachers without a degree, and college 
students to enter and remain in the Head Start field.
  In exchange for 5 years of service, a Head Start teacher could 
receive up to $5,000 of their federal loans forgiven.
  We must continue to improve the Head Start program so that children 
will have the necessary cognitive skills when they leave the program, 
such as being able to count to ten, begin to recite the alphabet, and 
recognize sizes and colors.
  This is just the first step. To further ensure cognitive learning, we 
must also continue to raise the standards and pay for Head Start 
teachers.
  Providing our nation's low-income children with access to highly 
educated and qualified teachers so that they enter school ready to 
learn is critical to their future success and should be a priority of 
this Congress.
  I urge my colleagues to support this legislation. 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. 117

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

     SECTION 1. LOAN FORGIVENESS FOR HEAD START TEACHERS.

       (a) Short Title.--This section may be cited as the ``Loan 
     Forgiveness for Head Start Teachers Act of 2005''.
       (b) Head Start Teachers.--Section 428J of the Higher 
     Education Act of 1965 (20 U.S.C 1078-10) is amended--
       (1) in subsection (b), by striking paragraph (1) and 
     inserting the following:
       ``(1)(A) has been employed--
       ``(i) as a full-time teacher for 5 consecutive complete 
     school years in a school that qualifies under section 
     465(a)(2)(A) for loan cancellation for Perkins loan 
     recipients who teach in such a school; or
       ``(ii) as a Head Start teacher for 5 consecutive complete 
     program years under the Head Start Act; and
       ``(B)(i) if employed as an elementary school or secondary 
     school teacher, is highly qualified as defined in section 
     9101 of the Elementary and Secondary Education Act of 1965; 
     and
       ``(ii) if employed as a Head Start teacher, has 
     demonstrated knowledge and teaching skills in reading, 
     writing, early childhood development, and other areas of a 
     preschool curriculum, with a focus on cognitive learning; 
     and'';
       (2) in subsection (g), by adding at the end the following:
       ``(3) Head start.--An individual shall be eligible for loan 
     forgiveness under this section for service described in 
     clause (ii) of subsection (b)(1)(A) only if such individual 
     received a baccalaureate or graduate degree on or after the 
     date of enactment of the Loan Forgiveness for Head Start 
     Teachers Act of 2005.''; and
       (3) by adding at the end the following:
       ``(i) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     for fiscal year 2009 and succeeding fiscal years to carry out 
     loan repayment under this section for service described in 
     clause (ii) of subsection (b)(1)(A).''.
       (c) Direct Student Loan Forgiveness.--
       (1) In general.--Section 460 of the Higher Education Act of 
     1965 (20 U.S.C 1087j) is amended--
       (A) in subsection (b)(1), by striking subparagraph (A) and 
     inserting the following:
       ``(A)(i) has been employed--
       ``(I) as a full-time teacher for 5 consecutive complete 
     school years in a school that qualifies under section 
     465(a)(2)(A) for loan cancellation for Perkins loan 
     recipients who teach in such a school; or
       ``(II) as a Head Start teacher for 5 consecutive complete 
     program years under the Head Start Act; and
       ``(ii)(I) if employed as an elementary school or secondary 
     school teacher, is highly qualified as defined in section 
     9101 of the Elementary and Secondary Education Act of 1965; 
     and
       ``(II) if employed as a Head Start teacher, has 
     demonstrated knowledge and teaching skills in reading, 
     writing, early childhood development, and other areas of a 
     preschool curriculum, with a focus on cognitive learning; 
     and'';
       (B) in subsection (g), by adding at the end the following
       ``(3) Head start.--An individual shall be eligible for loan 
     forgiveness under this section for service described in 
     subclause (II) of subsection (b)(l)(A)(i) only if such 
     individual received a baccalaureate or graduate degree on or 
     after the date of enactment of the Loan Forgiveness for Head 
     Start Teachers Act of 2005.''; and
       (C) by adding at the end the following:
       ``(i) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     for fiscal year 2009 and succeeding fiscal years to carry out 
     loan repayment under this section for service described in 
     subclause (II) of subsection (b)(1)(A)(i).''.
       (d) Conforming Amendments.--
       (1) FFEL program.--Section 428J of the Higher Education Act 
     of 1965 (20 U.S.C. 1078-10) is amended--
       (A) in subsection (c)(1), by inserting ``or fifth complete 
     program year'' after ``fifth complete school year of 
     teaching'';
       (B) in subsection (f), by striking ``subsection (b)'' and 
     inserting ``subsection (b)(1)(A)(i)'';
       (C) in subsection (g)(1)(A), by striking ``subsection 
     (b)(1)(A)'' and inserting ``subsection (b)(1)(A)(i)''; and
       (D) in subsection (h), by inserting ``except as part of the 
     term `program year','' before ``where''.
       (2) Direct loan program.--Section 460 of the Higher 
     Education Act of 1965 (20 U.S.C. 1087j) is amended--
       (A) in subsection (c)(1), by inserting ``or fifth complete 
     program year'' after ``fifth complete school year of 
     teaching'';
       (B) in subsection (f), by striking ``subsection (b)'' and 
     inserting ``subsection (b)(1)(A)(i)(I)'';
       (C) in subsection (g)(1)(A), by striking ``subsection 
     (b)(1)(A)'' and inserting ``subsection (b)(1)(A)(i)(I)''; and
       (D) in subsection (h), by inserting ``except as part of the 
     term `program year','' before ``where''.

          loan forgiveness for head start teachers act of 2005

  Mr. VOINOVICH. Mr. President, I am pleased to join my friend and 
colleague from California, Senator Dianne Feinstein, in introducing 
very important legislation that I believe will encourage young teachers 
to go into early childhood education, improve the qualifications of 
current early educators, and lead to a better education for our 
Nation's youngest children.
  Study after study on human development has found that there is no 
more important time in a child's life than their earliest years. In 
fact, the learning opportunities in these years have a critical and 
decisive impact on the development of the brain and on the nature and 
extent of their adult capacities.
  To maximize their potential, we must begin to teach our children the 
necessary learning skills they will utilize throughout their lives as 
early as possible; well before they reach kindergarten.
  I know of few other programs that have the same potential to meet 
this goal as Head Start.
  When I was Governor of Ohio, we invested heavily in Head Start, 
increasing funding from $18 million in 1990, to $180 million in 1998.
  By the time I left office, there was a space available for every 
eligible child in Ohio whose parents wanted them in a Head Start or 
pre-school program, and because of our efforts, Ohio led the Nation in 
terms of children served by Head Start.
  Now that I am in the Senate, I continue to believe that it is 
absolutely critical that we do more to help our young people prepare to 
begin school ``ready to learn.''
  The results of a survey undertaken by the U.S. Department of Health 
and Human Services in 1999 and 2000 has shown a significant correlation 
between the quality of education a child receives and the amount of 
education that child's teacher possesses.
  Unfortunately, nationwide, just 30 percent of Head Start teachers 
have earned a baccalaureate or advanced degree.
  Under Ohio law, by 2007, all Head Start teachers must have at least 
an associate's degree. It is hoped that this requirement will encourage 
Head Start educators to pursue a bachelor's or even an advanced degree. 
After all, the more education our teachers have, the better off our 
children will be.

[[Page 520]]

  Unfortunately, as we all know, education can be expensive.
  The bill we are introducing is designed to encourage currently 
enrolled and incoming college students working on a bachelor's or a 
master's degree to pursue a career as a Head Start teacher. It is also 
intended to assist current Head Start teachers, who wish to pursue a 
degree, to remain in the field.
  In exchange for a 5-year teaching commitment in a qualified Head 
Start program, a college graduate with a minimum of a bachelor's degree 
could receive up to $5,000 in forgiveness for their Federal student 
loan. Current law already permits elementary and secondary educators to 
receive this type of loan forgiveness. It is time to give Head Start 
teachers this same opportunity.
  Recruiting and retaining Head Start and early childhood teachers 
continues to be a challenge for Ohio and other States. This is not 
surprising. On average, Head Start teachers earn about half of the 
average salary of kindergarten teachers. For Head Start providers, this 
financial difference combined with the growing cost of a college 
education and student debt makes it difficult to recruit quality 
teachers.
  This bill will help communities, schools and other funded Head Start 
providers to meet the challenge of recruiting and retaining high 
quality teachers. It is one of the best ways that I know of where we 
can make a real difference in the lives of our most precious resource, 
our children.
  One of the best uses of our Federal education resources is to target 
them toward our youngest citizens where they can have the most impact.
  I am pleased to have been able to work with my colleague Senator 
Feinstein on this legislation, and I ask for my colleagues' support.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 118. A bill for the relief of Maria Cristina DeGrassi; to the 
Committee on the Judiciary.
  Mrs. FEINSTEIN. Mr. President, I offer today private relief 
legislation to provide lawful permanent residence status to Maria 
Cristina Degrassi, a 37-year-old severely disabled Italian national 
currently living with her family in San Mateo, California.
  I have decided to offer private relief legislation on Ms. Degrassi's 
behalf because I believe that her removal from the United States would 
be tragically unfair not only to her, but to her sister and brother-in-
law, Daniela Degrassi and Luca Prasso, who reside legally in the United 
States and who are Ms. Degrassi's closest family and only willing 
caregivers.
  Ms. Degrassi has legally resided in the United States since 1997 on a 
non-immigrant tourist visa. However, she is not like an ordinary 
tourist. She cannot enjoy California's beautiful coastline or stunning 
mountain ranges. She cannot tour Hollywood movie studios or Napa Valley 
wineries. Ms. Degrassi was born premature in 1965 and, consequently, is 
severely mentally handicapped and autistic. Because of these 
disabilities, Ms. Degrassi has the mental capacity of a two-year old, 
cannot speak and understands only a few sentences in Italian.
  In addition to these challenges, Ms. Degrassi was diagnosed with 
diabetes in 2001 and now requires daily insulin shots and a carefully 
monitored diet.
  For Ms. Degrassi, the sum of these health problems means that she 
must have 24-hour-a-day, 7-day-a-week personal care and attention. 
Luckily, however, there are two people in Ms. Degrassi's life who are 
more than happy not only to care for her daily needs, but to love and 
nurture her.
  Ms. Degrassi's sister, Daniela, and her brother-in-law, Luca, are 
legal permanent residents of the United States. Mr. Prasso is a highly 
skilled and valued employee of PDI-DreamWorks, the world renowned movie 
production company. Serving as a Character Technical Supervisor and 
earning nearly $200,000 per year, Mr. Prasso has worked on such 
critically acclaimed films as ``Shrek'' and ``ANTZ.'' In the course of 
that work, Mr. Prasso has developed and patented new technologies and 
become a leader in his field. In a letter in support of this private 
legislation, DreamWorks referred to Mr. Prasso's skills as ``rar[e]'' 
and ``irreplaceable.''
  Daniela Degrassi has also excelled in the United States, starting a 
successful freelance photography career and business.
  Together, Mr. Prasso and Daniela Degrassi have provided Ms. Degrassi 
with the love, care and attention that she so desperately needs. When 
Ms. Degrassi's father and aunt died in 1997, the couple knew that they 
were the only family left who was willing to care for her. The choice 
for them was clear. Mr. Prasso wrote in a letter he sent me, ``My wife 
and I then faced a big decision. We refuse[d] completely to put her in 
an institution. We [could not] accept the idea of not being able to 
properly take care of her. No other relative was alive or came forward 
to offer help. We were the only and closest persons to Cristina. We 
decided to take care of her like a daughter.''
  For the past seven years, Mr. Prasso and Daniela Degrassi have done 
just that, organizing their lives around caring for and attending to 
Ms. Degrassi. They cook for her and clothe and bathe her on a daily 
basis. Because of the close monitoring Ms. Degrassi's diabetic 
condition requires, when the couple wants to go out to dinner or see a 
movie, they must do so separately so that one of them is always with 
Ms. Degrassi in case of an emergency.
  Despite the hardships that caring for Ms. Degrassi have imposed upon 
Mr. Prasso and Daniela Degrassi, the experience has deeply enriched 
their lives. In Mr. Prasso's letter, he wrote, ``despite my long work 
hours and my wife['s] new successful business as a photographer, we are 
able and fully committed to continue to take care [of Cristina] 24 
hours a day . . . The reward of a kiss, hug or smile from Cristina is 
an amazing thing and makes all the pain disappear.''
  Unfortunately, if this private relief bill is not approved, this 
wonderful family will face a tragic set of choices. Since 1997, Ms. 
Degrassi has applied for and always received six-month extensions of 
her non-immigrant tourist visa. The Degrassi's lawyer has informed the 
couple that approval of the current extension is unlikely and has 
recommended they withdraw their petition. This would leave Ms. Degrassi 
with nothing. There are no other avenues available for her to remain in 
the United States lawfully. In short, if this private relief 
legislation is not approved, Ms. Degrassi will be forced to return to 
Italy.
  However, Mr. Prasso and Daniela Degrassi's love for their sister will 
never allow her to return to Italy alone. Faced with Ms. Degrassi's 
removal, the couple will leave their lives in California and move back 
with her in order to continue to provide the care and attention on 
which Ms. Degrassi depends.
  The consequences of such a move will be tragic for this family. It 
will mean the end of Mr. Prasso's highly accomplished career with 
DreamWorks, as well as, the end of the photography career Daniela 
Degrassi has worked so hard to build. In addition, both Mr. Prasso and 
Daniela Degrassi are eligible to become United States citizens this 
year.
  I can think of no compelling reasons why the United States should not 
enable this family to continue as they have in California. Because of 
the substantial salary that Mr. Prasso and Daniela Degrassi earn and 
because of the monthly pension Ms. Degrassi receives, due to her 
disability, from the Italian government, there is almost no chance that 
Ms. Degrassi will become a burden on the state or federal government.
  In Mr. Prasso's letter to me, he made this simple request, ``We are 
looking forward to find[ing] a permanent solution to this dilemma that 
does not involve dismembering this family or giving up on a wonderful 
job. A solution that will allow us to live a normal life like a normal 
family.''
  We can make this solution a reality for Ms. Degrassi and this 
wonderful family. For that reason, I offer this private relief 
legislation and ask my colleagues to support it.
  Given these extraordinary and unique facts, I ask my colleagues to 
support this private relief bill on behalf of Ms. Degrassi.

[[Page 521]]

  I also 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. 118

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

     SECTION 1. ADJUSTMENT OF STATUS.

       (a) In General.--Notwithstanding any other provision of law 
     or any order, for the purposes of the Immigration and 
     Nationality Act (8 U.S.C. 1101 et seq.), Maria Cristina 
     DeGrassi shall be deemed to have been lawfully admitted to, 
     and remained in, the United States, and shall be eligible for 
     issuance of an immigrant visa or for adjustment of status 
     under section 245 of the Immigration and Nationality Act (8 
     U.S.C. 1255).
       (b) Application and Payment of Fees.--Subsection (a) shall 
     apply only if the application for issuance of an immigrant 
     visa or the application for adjustment of status is filed 
     with appropriate fees within 2 years after the date of 
     enactment of this Act.
       (c) Reduction of Immigrant Visa Numbers.--Upon the granting 
     of an immigrant visa to Maria Cristina DeGrassi, the 
     Secretary of State shall instruct the proper officer to 
     reduce by 1, during the current or subsequent fiscal year, 
     the total number of immigrant visas that are made available 
     to natives of the country of the alien's birth under section 
     202(e) or 203(a) of the Immigration and Nationality Act (8 
     U.S.C. 1152(e), 1153(a)), as applicable.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself, Ms. Collins, Mr. Schumer, Mr. 
        Hagel, Mr. Durbin, Mr. DeWine, Ms. Cantwell, Mr. Inouye, and 
        Mr. Feingold):
  S. 119. A bill to provide for the protection of unaccompanied alien 
children, and for other purposes; to the Committee on the Judiciary.
  Mrs. FEINSTEIN. Mr. President, I introduce today the ``Unaccompanied 
Alien Child Protection Act of 2005'', legislation to reform the way the 
federal government treats unaccompanied alien children who are 
apprehended by federal immigration officials at our borders or within 
the United States.
  I first introduced legislation similar to this bill during the 107th 
Congress and still strongly believe that its passage is necessary to 
ensure the proper treatment of unaccompanied alien children within our 
federal system. With each passing year, as members realize the 
necessity for this legislation, the bill has moved further along in the 
process.
  I am pleased to be joined by Senators Collins, Schumer, Hagel, 
Durbin, DeWine, Cantwell, Inouye and Feingold as original co-sponsors 
of this legislation.
  During the 108th Congress, the ``Unaccompanied Alien Child Protection 
Act'' passed the Senate by unanimous consent, after garnering no less 
than 34 co-sponsors. Unfortunately, the bill stalled in the House of 
Representatives.
  So today I re-introduce this legislation, and again, this will be one 
of my top legislative priorities because I believe we have a special 
obligation to ensure that every child that comes into contact with 
federal officials is afforded fair and humane treatment.
  In 2004, approximately 6,200 unaccompanied alien children were 
apprehended by Department of Homeland Security officials and 
transferred to the care of the Office of Refugee Resettlement within 
the Department of Health and Human Services. This number has grown over 
the years and shows no signs of abating.
  Thousands of foreign-born children under the age of 18 enter the 
United States each year unaccompanied by parents or other legal 
guardians. These children are among the most vulnerable of the 
immigrant population and these numbers are going to continue to grow 
given the greater emphasis on enforcement actions by immigration 
officials--which I support--and the relatively unchanged conditions 
bringing them here.
  These children are from all over the world, although the majority 
encountered by immigration officials today are from Honduras, Guatemala 
and El Salvador. Some are asylum seekers fleeing human rights abuses 
and armed conflict in their homelands. Others are fleeing abuses 
specific to children, such as forced recruitment of child soldiers, 
forced prostitution and servitude, sexual slavery and exploitation, 
child labor, abuse of street children, child brides and female genital 
mutilation. Yet other children come to the United States because they 
have been abused, abandoned or neglected by their parents or 
caregivers. And finally, some come seeking to reunify with family 
members already in the United States or seeking a better life.
  Historically, U.S. immigration law and policies have been developed 
and implemented without regard to their effect on children. This result 
has been similar to trying to fit a square peg in a round hole--it just 
doesn't work.
  Under current immigration law, these children are forced to struggle 
through a system designed for adults, even though they lack the 
capacity to understand nuanced legal principles or courtroom and 
administrative procedures. Because of this, children who may very well 
be eligible for relief are often vulnerable to being deported back to 
the very life-threatening situations from which they fled--before they 
are even able to make their cases before the Department of Homeland 
Security or an immigration judge.
  Prior to March 1, 2003, the Immigration and Naturalization Service 
had responsibility for the care, custody and treatment of unaccompanied 
alien children. Unfortunately, the Immigration and Naturalization 
Service fell short in fulfilling these responsibilities. The 
legislation that I am introducing today builds on Section 462 of Public 
Law 107-296, the Homeland Security Act of 2002, which provided for the 
transfer of responsibility for the care and placement of unaccompanied 
alien children from the now-abolished Immigration and Naturalization 
Service to the Office of Refugee Resettlement within the Department of 
Health and Human Services.
  Section 462 was based on S. 121, comprehensive legislation relating 
to unaccompanied alien children that I introduced during the 107th 
Congress.
  With the enactment of the Homeland Security Act of 2002, we set into 
motion the centralization of responsibility for the care and custody of 
unaccompanied alien children with the Office of Refugee Resettlement. 
The first phase of this transfer of responsibility occurred on March 1, 
2003. Once the transition was completed, we finally resolved the 
conflict of interest inherent in the former system which pitted the 
enforcement side of the Immigration and Naturalization Service against 
the benefits side of that same agency in the care of unaccompanied 
alien children.
  I am pleased that the provision transferring responsibility for the 
care and custody of unaccompanied alien children was contained in the 
Homeland Security Act and that by all accounts the transition in the 
care of children between the affected agencies has gone well.
  But, the transfer of authority to the Office of Refugee 
Resettlement--by itself--is not enough to ensure that these children 
are treated fairly and humanely. Congress now has a responsibility to 
go beyond the simple transfer to actually laying out the process and 
steps to ensure that unaccompanied alien children are treated fairly 
and humanely. We must provide the Office of Refugee Resettlement, the 
Department of Homeland Security and the Department of Justice with the 
tools they will need to succeed in their missions regarding the care of 
unaccompanied alien children after the transfer of jurisdiction took 
place.
  First of all, I want to stress that this bill is not about benefits, 
as it provides no new immigration benefit to unaccompanied alien 
children. Rather, this bill is about the process of how we treat these 
children.
  The ``Unaccompanied Alien Child Protection Act'' provides guidance 
and instruction to the Office of Refugee Resettlement, the Department 
of Homeland Security and the Department of Justice in the following 
areas:
  First, in the custody, release, family reunification and detention of 
unaccompanied alien children;
  Second, it provides access by unaccompanied alien children to 
guardians ad litem and pro bono counsel;
  Third, it streamlines the Special Immigrant Juvenile (SIJ) program 
and

[[Page 522]]

provides guidance on the training of federal government officials and 
private parties who come into contact with unaccompanied alien 
children;
  Fourth, it requires the issuance of guidelines specific to children's 
asylum claims;
  Fifth, it authorizes appropriations for the care of unaccompanied 
alien children; and
  Sixth, it amends the Homeland Security Act of 2002 to provide 
additional responsibilities and powers to the Office of Refugee 
Resettlement with respect to unaccompanied alien children.
  Central throughout the ``Unaccompanied Alien Child Protection Act'' 
are two concepts:
  The United States government has a fundamental responsibility to 
protect unaccompanied children in its custody; and in all proceedings 
and actions, the government should have as a priority protecting the 
interests of these children.
  I first became involved in this issue in 2000 when I heard about a 
young 15-year old Chinese girl who stood before a U.S. immigration 
court facing deportation proceedings with her hands chained to her 
waist, like a criminal. She had found her way to the United States as a 
stowaway in a container ship captured off of Guam, hoping to escape the 
repression she had experienced in her home country.
  She had been placed on a boat bound for the United States by her very 
own parents, fleeing China's rigid family planning laws. Under these 
laws, she was denied citizenship, education and medical care. She came 
to this country alone and desperate.
  And what did our immigration authorities do when they found her? The 
Immigration and Naturalization Service detained her in a juvenile jail 
in Portland, Oregon for eight months before her asylum hearing, and 
more than seven weeks after she was granted asylum.
  At her asylum hearing, the young girl stood before a judge, 
unrepresented by counsel, confused and unable to understand the 
proceedings against her. She could not wipe away the tears from her 
face because her hands were chained to her waist. According to a lawyer 
who later came to represent her, ``her only crime was that her parents 
had put her on a boat so she could get a better life over here.''
  While the young girl eventually received asylum in our country, she 
unnecessarily faced an ordeal no child should bear under our 
immigration system. This young Chinese girl represents only one of the 
more than 6,000 foreign-born children who, without parents or legal 
guardians to protect them, are discovered in the United States each 
year in need of protection.
  This is unacceptable treatment and we have a responsibility to do 
better than this.
  Imagine the fear of an unaccompanied alien child, in the United 
States alone, without a parent or guardian. Imagine that child being 
thrust into a system he or she does not understand, provided no access 
to pro bono counsel or guardians ad litem, placed in jail with adults 
or housed with juveniles with serious criminal convictions. I find it 
hard to believe that our country would allow children to be treated in 
such a manner.
  That is why I am introducing this legislation today. The 
``Unaccompanied Alien Child Protection Act'' will help our country 
fulfill the special obligation to these children to treat them fairly 
and humanely.
  I am proud to have the support of the United States Conference of 
Catholic Bishops, the Women's Commission on Refugee Women and Children, 
the Lutheran Immigration and Refugee Service, Amnesty International USA 
and the United Nations High Commissioner for Refugees, and many other 
organizations with whom I have worked closely to develop this 
legislation.
  I urge my colleagues to join with me by cosponsoring this important 
measure and ensuring that these reforms are finally enacted.
  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. 119

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Unaccompanied Alien Child Protection Act of 2005''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

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

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

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

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

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

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

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

             TITLE IV--CHILDREN REFUGEE AND ASYLUM SEEKERS

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

                TITLE V--AUTHORIZATION OF APPROPRIATIONS

Sec. 501. Authorization of appropriations

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

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

     SEC. 2. DEFINITIONS.

       (a) In General.--In this Act:
       (1) Competent.--The term ``competent'', in reference to 
     counsel, means an attorney who--
       (A) complies with the duties set forth in this Act;
       (B) is a member in good standing of the bar of the highest 
     court of any State, possession, territory, Commonwealth, or 
     the District of Columbia;
       (C) is not under any order of any court suspending, 
     enjoining, restraining, disbarring, or otherwise restricting 
     the attorney in the practice of law; and
       (D) is properly qualified to handle matters involving 
     unaccompanied immigrant children or is working under the 
     auspices of a qualified nonprofit organization that is 
     experienced in handling such matters.
       (2) Director.--The term ``Director'' means the Director of 
     the Office.
       (3) Directorate.--The term ``Directorate'' means the 
     Directorate of Border and Transportation Security established 
     by section 401 of the Homeland Security Act of 2002 (6 U.S.C. 
     201).
       (4) Office.--The term ``Office'' means the Office of 
     Refugee Resettlement established by section 411 of the 
     Immigration and Nationality Act (8 U.S.C. 1521).
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of Homeland Security.
       (6) Unaccompanied alien child.--The term ``unaccompanied 
     alien child'' has the meaning given the term in section 
     462(g)(2) of the Homeland Security Act of 2002 (6 U.S.C. 
     279(g)(2)).
       (7) Voluntary agency.--The term ``voluntary agency'' means 
     a private, nonprofit voluntary agency with expertise in 
     meeting the cultural, developmental, or psychological needs 
     of unaccompanied alien children, as certified by the 
     Director.
       (b) Amendments to the Immigration and Nationality Act.--
     Section 101(a) of the Immigration and Nationality Act (8 
     U.S.C. 1101(a)) is amended by adding at the end the 
     following:
       ``(51) The term `unaccompanied alien child' means a child 
     who--
       ``(A) has no lawful immigration status in the United 
     States;
       ``(B) has not attained the age of 18; and
       ``(C) with respect to whom--
       ``(i) there is no parent or legal guardian in the United 
     States; or
       ``(ii) no parent or legal guardian in the United States is 
     able to provide care and physical custody.
       ``(52) The term `unaccompanied refugee children' means 
     persons described in paragraph (42) who--

[[Page 523]]

       ``(A) have not attained the age of 18; and
       ``(B) with respect to whom there are no parents or legal 
     guardians available to provide care and physical custody.''.
       (c) Rule of Construction.--A department or agency of a 
     State, or an individual or entity appointed by a State court 
     or juvenile court located in the United States, acting in 
     loco parentis, shall not be considered a legal guardian for 
     purposes of section 462 of the Homeland Security Act of 2002 
     (6 U.S.C. 279) or this Act.

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

     SEC. 101. PROCEDURES WHEN ENCOUNTERING UNACCOMPANIED ALIEN 
                   CHILDREN.

       (a) Unaccompanied Children Found Along the United States 
     Border or at United States Ports of Entry.--
       (1) In general.--Subject to paragraph (2), if an 
     immigration officer finds an unaccompanied alien child who is 
     described in paragraph (2) at a land border or port of entry 
     of the United States and determines that such child is 
     inadmissible under the Immigration and Nationality Act (8 
     U.S.C. 1101 et seq.), the officer shall--
       (A) permit such child to withdraw the child's application 
     for admission pursuant to section 235(a)(4) of the 
     Immigration and Nationality Act (8 U.S.C. 1225(a)(4)); and
       (B) return such child to the child's country of nationality 
     or country of last habitual residence.
       (2) Special rule for contiguous countries.--
       (A) In general.--Any child who is a national or habitual 
     resident of a country that is contiguous with the United 
     States and that has an agreement in writing with the United 
     States providing for the safe return and orderly repatriation 
     of unaccompanied alien children who are nationals or habitual 
     residents of such country shall be treated in accordance with 
     paragraph (1), if a determination is made on a case-by-case 
     basis that--
       (i) such child is a national or habitual resident of a 
     country described in this subparagraph;
       (ii) such child does not have a fear of returning to the 
     child's country of nationality or country of last habitual 
     residence owing to a fear of persecution;
       (iii) the return of such child to the child's country of 
     nationality or country of last habitual residence would not 
     endanger the life or safety of such child; and
       (iv) the child is able to make an independent decision to 
     withdraw the child's application for admission due to age or 
     other lack of capacity.
       (B) Right of consultation.--Any child described in 
     subparagraph (A) shall have the right, and shall be informed 
     of that right in the child's native language--
       (i) to consult with a consular officer from the child's 
     country of nationality or country of last habitual residence 
     prior to repatriation; and
       (ii) to consult, telephonically, with the Office.
       (3) Rule for apprehensions at the border.--The custody of 
     unaccompanied alien children not described in paragraph (2) 
     who are apprehended at the border of the United States or at 
     a United States port of entry shall be treated in accordance 
     with subsection (b).
       (b) Care and Custody of Unaccompanied Alien Children Found 
     in the Interior of the United States.--
       (1) Establishment of jurisdiction.--
       (A) In general.--Except as otherwise provided under 
     subparagraphs (B) and (C) and subsection (a), the care and 
     custody of all unaccompanied alien children, including 
     responsibility for their detention, where appropriate, shall 
     be under the jurisdiction of the Office.
       (B) Exception for children who have committed crimes.--
     Notwithstanding subparagraph (A), the Directorate shall 
     retain or assume the custody and care of any unaccompanied 
     alien child who--
       (i) has been charged with any felony, excluding offenses 
     proscribed by the Immigration and Nationality Act (8 U.S.C. 
     1101 et seq.), while such charges are pending; or
       (ii) has been convicted of any such felony.
       (C) Exception for children who threaten national 
     security.--Notwithstanding subparagraph (A), the Directorate 
     shall retain or assume the custody and care of an 
     unaccompanied alien child if the Secretary has substantial 
     evidence, based on an individualized determination, that such 
     child could personally endanger the national security of the 
     United States.
       (D) Trafficking victims.--For purposes of section 462 of 
     the Homeland Security Act of 2002 (6 U.S.C. 279) and this 
     Act, an unaccompanied alien child who is eligible for 
     services authorized under the Victims of Trafficking and 
     Violence Protection Act of 2000 (Public Law 106-386), shall 
     be considered to be in the custody of the Office.
       (2) Notification.--
       (A) In general.--The Secretary shall promptly notify the 
     Office upon--
       (i) the apprehension of an unaccompanied alien child;
       (ii) the discovery that an alien in the custody of the 
     Directorate is an unaccompanied alien child;
       (iii) any claim by an alien in the custody of the 
     Directorate that such alien is under the age of 18; or
       (iv) any suspicion that an alien in the custody of the 
     Directorate who has claimed to be over the age of 18 is 
     actually under the age of 18.
       (B) Special rule.--In the case of an alien described in 
     clause (iii) or (iv) of subparagraph (A), the Director shall 
     make an age determination in accordance with section 105 and 
     take whatever other steps are necessary to determine whether 
     such alien is eligible for treatment under section 462 of the 
     Homeland Security Act of 2002 (6 U.S.C. 279) or this Act.
       (3) Transfer of unaccompanied alien children.--
       (A) Transfer to the office.--The care and custody of an 
     unaccompanied alien child shall be transferred to the 
     Office--
       (i) in the case of a child not described in subparagraph 
     (B) or (C) of paragraph (1), not later than 72 hours after a 
     determination is made that such child is an unaccompanied 
     alien child;
       (ii) in the case of a child whose custody and care has been 
     retained or assumed by the Directorate pursuant to 
     subparagraph (B) or (C) of paragraph (1), immediately 
     following a determination that the child no longer meets the 
     description set forth in such subparagraphs; or
       (iii) in the case of a child who was previously released to 
     an individual or entity described in section 102(a)(1), upon 
     a determination by the Director that such individual or 
     entity is no longer able to care for the child.
       (B) Transfer to the directorate.--Upon determining that a 
     child in the custody of the Office is described in 
     subparagraph (B) or (C) of paragraph (1), the Director shall 
     transfer the care and custody of such child to the 
     Directorate.
       (C) Promptness of transfer.--In the event of a need to 
     transfer a child under this paragraph, the sending office 
     shall make prompt arrangements to transfer such child and the 
     receiving office shall make prompt arrangements to receive 
     such child.
       (c) Age Determinations.--In any case in which the age of an 
     alien is in question and the resolution of questions about 
     the age of such alien would affect the alien's eligibility 
     for treatment under section 462 of the Homeland Security Act 
     of 2002 (6 U.S.C. 279) or this Act, a determination of 
     whether or not such alien meets such age requirements shall 
     be made by the Director in accordance with section 105.

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

       (a) Placement Authority.--
       (1) Order of preference.--Subject to the discretion of the 
     Director under paragraph (4), section 103(a)(2), and section 
     462(b)(2) of the Homeland Security Act of 2002 (6 U.S.C. 
     279(b)(2)), an unaccompanied alien child in the custody of 
     the Office shall be promptly placed with 1 of the following 
     individuals or entities in the following order of preference:
       (A) A parent who seeks to establish custody, as described 
     in paragraph (3)(A).
       (B) A legal guardian who seeks to establish custody, as 
     described in paragraph (3)(A).
       (C) An adult relative.
       (D) An individual or entity designated by the parent or 
     legal guardian that is capable and willing to care for the 
     well-being of the child.
       (E) A State-licensed juvenile shelter, group home, or 
     foster care program willing to accept physical custody of the 
     child.
       (F) A qualified adult or entity seeking custody of the 
     child when it appears that there is no other likely 
     alternative to long-term detention and family reunification 
     does not appear to be a reasonable alternative. For purposes 
     of this subparagraph, the Office shall decide who is a 
     qualified adult or entity and promulgate regulations in 
     accordance with such decision.
       (2) Suitability assessment.--Notwithstanding paragraph (1), 
     no unaccompanied alien child shall be placed with a person or 
     entity unless a valid suitability assessment conducted by an 
     agency of the State of the child's proposed residence, by an 
     agency authorized by that State to conduct such an 
     assessment, or by an appropriate voluntary agency contracted 
     with the Office to conduct such assessments, has found that 
     the person or entity is capable of providing for the child's 
     physical and mental well-being.
       (3) Right of parent or legal guardian to custody of 
     unaccompanied alien child.--
       (A) Placement with parent or legal guardian.--If an 
     unaccompanied alien child is placed with any person or entity 
     other than a parent or legal guardian, and subsequent to that 
     placement a parent or legal guardian seeks to establish 
     custody, the Director shall--
       (i) assess the suitability of placing the child with the 
     parent or legal guardian; and
       (ii) make a written determination on the child's placement 
     within 30 days.
       (B) Rule of construction.--Nothing in this Act shall be 
     construed to--
       (i) supersede obligations under any treaty or other 
     international agreement to which the United States is a 
     party, including The Hague Convention on the Civil Aspects of 
     International Child Abduction, the Vienna Declaration and 
     Program of Action, and the Declaration of the Rights of the 
     Child; or
       (ii) limit any right or remedy under such international 
     agreement.

[[Page 524]]

       (4) Protection from smugglers and traffickers.--
       (A) Policies and programs.--
       (i) In general.--The Director shall establish policies and 
     programs to ensure that unaccompanied alien children are 
     protected from smugglers, traffickers, or other persons 
     seeking to victimize or otherwise engage such children in 
     criminal, harmful, or exploitative activity.
       (ii) Witness protection programs included.--Programs 
     established pursuant to clause (i) may include witness 
     protection programs.
       (B) Criminal investigations and prosecutions.--Any officer 
     or employee of the Office or the Department of Homeland 
     Security, and any grantee or contractor of the Office, who 
     suspects any individual of involvement in any activity 
     described in subparagraph (A) shall report such individual to 
     Federal or State prosecutors for criminal investigation and 
     prosecution.
       (C) Disciplinary action.--Any officer or employee of the 
     Office or the Department of Homeland Security, and any 
     grantee or contractor of the Office, who suspects an attorney 
     of involvement in any activity described in subparagraph (A) 
     shall report the individual to the State bar association of 
     which the attorney is a member, or to other appropriate 
     disciplinary authorities, for appropriate disciplinary 
     action, which may include private or public admonition or 
     censure, suspension, or disbarment of the attorney from the 
     practice of law.
       (5) Grants and contracts.--The Director may award grants 
     to, and enter into contracts with, voluntary agencies to 
     carry out this section or section 462 of the Homeland 
     Security Act of 2002 (6 U.S.C. 279).
       (6) Reimbursement of state expenses.--The Director may 
     reimburse States for any expenses they incur in providing 
     assistance to unaccompanied alien children who are served 
     pursuant to this Act or section 462 of the Homeland Security 
     Act of 2002 (6 U.S.C. 279).
       (b) Confidentiality.--All information obtained by the 
     Office relating to the immigration status of a person 
     described in subparagraphs (A), (B), and (C) of subsection 
     (a)(1) shall remain confidential and may be used only for the 
     purposes of determining such person's qualifications under 
     subsection (a)(1).
       (c) Required Disclosure.--The Secretary of Health and Human 
     Services or the Secretary of Homeland Security shall provide 
     the information furnished under this section, and any other 
     information derived from such furnished information, to--
       (1) a duly recognized law enforcement entity in connection 
     with an investigation or prosecution of an offense described 
     in paragraph (2) or (3) of section 212(a) of the Immigration 
     and Nationality Act (8 U.S.C. 1182(a)), when such information 
     is requested in writing by such entity; or
       (2) an official coroner for purposes of affirmatively 
     identifying a deceased individual (whether or not such 
     individual is deceased as a result of a crime).
       (d) Penalty.--Whoever knowingly uses, publishes, or permits 
     information to be examined in violation of this section shall 
     be fined not more than $10,000.

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

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

     SEC. 104. REPATRIATED UNACCOMPANIED ALIEN CHILDREN.

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

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

       (a) Procedures.--
       (1) In general.--The Director shall develop procedures to 
     make a prompt determination of the age of an alien in the 
     custody of the Department of Homeland Security or the Office, 
     when the age of the alien is at issue.
       (2) Evidence.--The procedures developed under paragraph (1) 
     shall--
       (A) permit the presentation of multiple forms of evidence, 
     including testimony of the child, to determine the age of the 
     unaccompanied alien for purposes of placement, custody, 
     parole, and detention; and
       (B) allow the appeal of a determination to an immigration 
     judge.
       (3) Access to alien.--The Secretary of Homeland Security 
     shall permit the Office to have reasonable access to aliens 
     in the custody of the Secretary so as to ensure a prompt 
     determination of the age of such alien.
       (b) Prohibition on Sole Means of Determining Age.--
     Radiographs or the attestation of an alien shall not be used 
     as the sole means of determining age for the purposes of 
     determining an alien's eligibility for treatment under this 
     Act or section 462 of the Homeland Security Act of 2002 (6 
     U.S.C. 279).
       (c) Rule of Construction.--Nothing in this section shall be 
     construed to place the burden of proof in determining the age 
     of an alien on the government.

     SEC. 106. EFFECTIVE DATE.

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

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

     SEC. 201. GUARDIANS AD LITEM.

       (a) Establishment of Guardian Ad Litem Program.--
       (1) Appointment.--The Director may appoint a guardian ad 
     litem, who meets the qualifications described in paragraph 
     (2), for an unaccompanied alien child. The Director is 
     encouraged, wherever practicable, to contract with a 
     voluntary agency for the selection of an individual to be 
     appointed as a guardian ad litem under this paragraph.
       (2) Qualifications of guardian ad litem.--
       (A) In general.--No person shall serve as a guardian ad 
     litem unless such person--

[[Page 525]]

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

     SEC. 202. COUNSEL.

       (a) Access to Counsel.--
       (1) In general.--The Director should ensure that all 
     unaccompanied alien children in the custody of the Office or 
     the Directorate, who are not described in section 101(a)(2), 
     have competent counsel to represent them in immigration 
     proceedings or matters.
       (2) Pro bono representation.--To the maximum extent 
     practicable, the Director should--
       (A) make every effort to utilize the services of competent 
     pro bono counsel who agree to provide representation to such 
     children without charge; and
       (B) ensure that placements made under subparagraphs (D), 
     (E), and (F) of section 102(a)(1) are in cities where there 
     is a demonstrated capacity for competent pro bono 
     representation.
       (3) Development of necessary infrastructures and systems.--
     In ensuring that legal representation is provided to 
     unaccompanied alien children, the Director shall develop the 
     necessary mechanisms to identify entities available to 
     provide such legal assistance and representation and to 
     recruit such entities.
       (4) Contracting and grant making authority.--
       (A) In general.--The Director shall enter into contracts 
     with, or award grants to, nonprofit agencies with relevant 
     expertise in the delivery of immigration-related legal 
     services to children in order to carry out the 
     responsibilities of this Act, including providing legal 
     orientation, screening cases for referral, recruiting, 
     training, and overseeing pro bono attorneys.
       (B) Subcontracting.--Nonprofit agencies may enter into 
     subcontracts with, or award grants to, private voluntary 
     agencies with relevant expertise in the delivery of 
     immigration-related legal services to children in order to 
     carry out this subsection.
       (C) Considerations regarding grants and contracts.--In 
     awarding grants and entering into contracts with agencies 
     under this paragraph, the Director shall take into 
     consideration the capacity of the agencies in question to 
     properly administer the services covered by such grants or 
     contracts without an undue conflict of interest.
       (5) Model guidelines on legal representation of children.--
       (A) Development of guidelines.--The Executive Office for 
     Immigration Review, in consultation with voluntary agencies 
     and national experts, shall develop model guidelines for the 
     legal representation of alien children in immigration 
     proceedings. Such guidelines shall be based on the children's 
     asylum guidelines, the American Bar Association Model Rules 
     of Professional Conduct, and other relevant domestic or 
     international sources.
       (B) Purpose of guidelines.--The guidelines developed under 
     subparagraph (A) shall be designed to help protect each child 
     from any individual suspected of involvement in any criminal, 
     harmful, or exploitative activity associated with the 
     smuggling or trafficking of children, while ensuring the 
     fairness of the removal proceeding in which the child is 
     involved.
       (C) Implementation.--The Executive Office for Immigration 
     Review shall adopt the guidelines developed under 
     subparagraph (A) and submit the guidelines for adoption by 
     national, State, and local bar associations.
       (b) Duties.--Counsel shall--
       (1) represent the unaccompanied alien child in all 
     proceedings and matters relating to the immigration status of 
     the child or other actions involving the Directorate;
       (2) appear in person for all individual merits hearings 
     before the Executive Office for Immigration Review and 
     interviews involving the Directorate; and
       (3) owe the same duties of undivided loyalty, 
     confidentiality, and competent representation to the child as 
     is due an adult client.
       (c) Access to Child.--
       (1) In general.--Counsel shall have reasonable access to 
     the unaccompanied alien child, including access while the 
     child is being held in detention, in the care of a foster 
     family, or in any other setting that has been determined by 
     the Office.
       (2) Restriction on transfers.--Absent compelling and 
     unusual circumstances, no child who is represented by counsel 
     shall be transferred from the child's placement to another 
     placement unless advance notice of at least 24 hours is made 
     to counsel of such transfer.
       (d) Notice to Counsel During Immigration Proceedings.--
       (1) In general.--Except when otherwise required in an 
     emergency situation involving the physical safety of the 
     child, counsel shall be given prompt and adequate notice of 
     all immigration matters affecting or involving an 
     unaccompanied alien child, including adjudications, 
     proceedings, and processing, before such actions are taken.
       (2) Opportunity to consult with counsel.--An unaccompanied 
     alien child in the

[[Page 526]]

     custody of the Office may not give consent to any immigration 
     action, including consenting to voluntary departure, unless 
     first afforded an opportunity to consult with counsel.
       (e) Access to Recommendations of Guardian Ad Litem.--
     Counsel shall be given an opportunity to review the 
     recommendation by the guardian ad litem affecting or 
     involving a client who is an unaccompanied alien child.

     SEC. 203. EFFECTIVE DATE; APPLICABILITY.

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

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

     SEC. 301. SPECIAL IMMIGRANT JUVENILE VISA.

       (a) J Visa.--Section 101(a)(27)(J) of the Immigration and 
     Nationality Act (8 U.S.C. 1101(a)(27)(J)) is amended to read 
     as follows:
       ``(J) an immigrant, who is 18 years of age or younger on 
     the date of application and who is present in the United 
     States--
       ``(i) who by a court order, which shall be binding on the 
     Secretary of Homeland Security for purposes of adjudications 
     under this subparagraph, was declared dependent on a juvenile 
     court located in the United States or whom such a court has 
     legally committed to, or placed under the custody of, a 
     department or agency of a State, or an individual or entity 
     appointed by a State or juvenile court located in the United 
     States, due to abuse, neglect, abandonment, or a similar 
     basis found under State law;
       ``(ii) for whom it has been determined in administrative or 
     judicial proceedings that it would not be in the alien's best 
     interest to be returned to the alien's or parent's previous 
     country of nationality or country of last habitual residence; 
     and
       ``(iii) with respect to a child in Federal custody, for 
     whom the Office of Refugee Resettlement of the Department of 
     Health and Human Services has certified to the Director of 
     the Bureau of Citizenship and Immigration Services that the 
     classification of an alien as a special immigrant under this 
     subparagraph has not been made solely to provide an 
     immigration benefit to that alien,

     except that no natural parent or prior adoptive parent of any 
     alien provided special immigrant status under this 
     subparagraph shall thereafter, by virtue of such parentage, 
     be accorded any right, privilege, or status under this 
     Act;''.
       (b) Adjustment of Status.--Section 245(h)(2)(A) of the 
     Immigration and Nationality Act (8 U.S.C. 1255(h)(2)(A)) is 
     amended to read as follows:
       ``(A) paragraphs (4), (5)(A), (6)(A), and (7) of section 
     212(a) shall not apply; and''.
       (c) Eligibility for Assistance.--A child who has been 
     granted relief under section 101(a)(27)(J) of the Immigration 
     and Nationality Act (8 U.S.C. 1101(a)(27)(J)), shall be 
     eligible for all funds made available under section 412(d) of 
     that Act (8 U.S.C. 1522(d)) until such time as the child 
     attains the age designated in section 412(d)(2)(B) of that 
     Act (8 U.S.C. 1522(d)(2)(B)), or until the child is placed in 
     a permanent adoptive home, whichever occurs first.
       (d) Transition Rule.--Notwithstanding any other provision 
     of law, any child described in section 101(a)(27)(J) of the 
     Immigration and Nationality Act (8 U.S.C. 1101(a)(27)(J)) who 
     filed an application for a visa before the date of enactment 
     of this Act and who was 19, 20, or 21 years of age on the 
     date such application was filed shall not be denied a visa 
     after the date of enactment of this Act because of such 
     alien's age.

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

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

     SEC. 303. REPORT.

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

     SEC. 304. EFFECTIVE DATE.

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

             TITLE IV--CHILDREN REFUGEE AND ASYLUM SEEKERS

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

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

     SEC. 402. UNACCOMPANIED REFUGEE CHILDREN.

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

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

       (a) Placement in Removal Proceedings.--Any unaccompanied 
     alien child apprehended by the Directorate, except for an 
     unaccompanied alien child subject to exceptions under 
     paragraph (1)(A) or (2) of section (101)(a), shall be placed 
     in removal proceedings under section 240 of the Immigration 
     and Nationality Act (8 U.S.C. 1229a).
       (b) Exception From Time Limit for Filing Asylum 
     Application.--Section 208(a)(2) of the Immigration and 
     Nationality Act (8 U.S.C. 1158(a)(2)) is amended by adding at 
     the end the following:
       ``(E) Applicability.--Subparagraphs (A) and (B) shall not 
     apply to an unaccompanied alien child as defined in section 
     101(a)(51).''.

                TITLE V--AUTHORIZATION OF APPROPRIATIONS

     SEC. 501. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There are authorized to be appropriated to 
     the Department of Homeland Security, the Department of 
     Justice, and the Department of Health and Human Services, 
     such sums as may be necessary to carry out--
       (1) the provisions of section 462 of the Homeland Security 
     Act of 2002 (6 U.S.C. 279); and

[[Page 527]]

       (2) the provisions of this Act.
       (b) Availability of Funds.--Amounts appropriated pursuant 
     to subsection (a) shall remain available until expended.

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

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

       (a) Additional Responsibilities of the Director.--Section 
     462(b)(1) of the Homeland Security Act of 2002 (6 U.S.C. 
     279(b)(1)) is amended--
       (1) in subparagraph (K), by striking ``and'' at the end;
       (2) in subparagraph (L), by striking the period at the end 
     and inserting ``, including regular follow-up visits to such 
     facilities, placements, and other entities, to assess the 
     continued suitability of such placements; and''; and
       (3) by adding at the end the following:
       ``(M) ensuring minimum standards of care for all 
     unaccompanied alien children--
       ``(i) for whom detention is necessary; and
       ``(ii) who reside in settings that are alternative to 
     detention.''.
       (b) Additional Powers of the Director.--Section 462(b) of 
     the Homeland Security Act of 2002 (6 U.S.C. 279(b)) is 
     amended by adding at the end the following:
       ``(4) Authority.--In carrying out the duties under 
     paragraph (3), the Director is authorized to--
       ``(A) contract with service providers to perform the 
     services described in sections 102, 103, 201, and 202 of the 
     Unaccompanied Alien Child Protection Act of 2005; and
       ``(B) compel compliance with the terms and conditions set 
     forth in section 103 of the Unaccompanied Alien Child 
     Protection Act of 2005, including the power to--
       ``(i) declare providers to be in breach and seek damages 
     for noncompliance;
       ``(ii) terminate the contracts of providers that are not in 
     compliance with such conditions; and
       ``(iii) reassign any unaccompanied alien child to a similar 
     facility that is in compliance with such section.''.

     SEC. 602. TECHNICAL CORRECTIONS.

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

     SEC. 603. EFFECTIVE DATE.

       The amendments made by this title shall take effect as if 
     included in the Homeland Security Act of 2002 (6 U.S.C. 101 
     et seq.).
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 120. A bill for the relief of Esidronio Arreola-Saucedo, Maria 
Elna Cobian Arreola, Nayely Bibiana Arreola, and Cindy Jael Arreola; to 
the Committee on the Judiciary.
  Mrs. FEINSTEIN. Mr. President, I offer today private immigration 
relief legislation to provide lawful permanent residence status to 
Esidronio Arreola-Saucedo, Maria Elena Cobian Arreola, Nayely Bibiana 
Arreola and Cindy Jael Arreola, Mexican nationals living in the Fresno 
area of California.
  Mr. and Mrs. Arreola have lived in the United States for almost 20 
years. Two of their five children, Nayely, age 18, and Cindy, age 16, 
also stand to benefit from this legislation. Their other three 
children, Roberto, age 13, Daniel, age 9, and Saray, age 8, are United 
States citizens. Today, Mr. and Mrs. Arreola and their two eldest 
children face deportation.
  The story of the Arreola family is compelling and I believe they 
merit Congress's special consideration for such an extraordinary form 
of relief as a private bill.
  The Arreolas are in this uncertain situation in part because of 
grievous errors committed by their previous counsel, who has since been 
disbarred. In fact, the attorney's conduct was so egregious that it 
compelled an immigration judge to write the Executive Office of 
Immigration Review seeking his disbarment for the detriment he caused 
his immigration clients.
  Mr. Arreola has lived in the United States since 1986. He was an 
agricultural migrant worker in the fields of California for several 
years, and as such would have been eligible for permanent residence 
through the Seasonal Agricultural Workers, SAW, program had he known 
about it.
  Mrs. Arreola was living in the United States at the time she became 
pregnant with her daughter Cindy, but returned to Mexico to give birth 
so as to avoid any problems with the Immigration and Naturalization 
Service.
  Given the length of time that the Arreolas had, and have been, in the 
United States it is quite likely that they would have qualified for 
relief from deportation pursuant to the cancellation of removal 
provisions of the Immigration and Nationality Act, but for the conduct 
of their previous attorney.
  Perhaps one of the most compelling reasons for permitting the family 
to remain in the United States is the devastating impact their 
deportation would have on their children--three of whom are U.S. 
citizens, as I stated earlier, and the other two who have lived in the 
United States since they were toddlers. For these children, this 
country is the only country they really know.
  Nayely, the oldest, is a freshman at Fresno Pacific University. She 
was the first in her family to graduate from high school and the first 
to attend college. She attends Fresno Pacific University, a regionally 
ranked university, on a full tuition scholarship package and works 
part-time in the admissions office.
  At her young age, Nayely has demonstrated a strong commitment to the 
ideals of citizenship in her adopted country. She has worked hard to 
achieve her full potential both in her academic endeavors and through 
the service she provides her community. As the Associate Dean of 
Enrollment Services, Cary Templeton, at Fresno Pacific University 
states in a letter of support, ``[t]he leaders of Fresno Pacific 
University saw in Nayely, a young person who will become exemplary of 
all that is good in the American dream.''
  In high school, Nayely was a member of Advancement Via Individual 
Determination, AVID, a college preparatory program in which students 
commit to determining their own futures through achieving a college 
degree. Nayely was also president of the Key Club, a community service 
organization. She helped mentor freshmen and participates in several 
other student organizations in her school. Perhaps the greatest 
hardship to this family, if forced to return to Mexico, will be her 
lost opportunity to realize her dreams and further contribute to her 
community and to this country.
  It is clear to me that Nayely feels a strong sense of responsibility 
for her community and country. By all indications, this is the case as 
well for all of the members of her family.
  The Arreolas also have other family who are lawful permanent 
residents of this country or United States citizens. Mrs. Arreola has 
three brothers who are U.S. citizens and Mr. Arreola has a sister who 
is a U.S. citizen. It is also my understanding that they have no 
immediate family in Mexico.
  According to immigration authorities, this family has never had any 
problems with law enforcement. I am told that they have filed their 
taxes for every year from 1990 to the present. They have always worked 
hard to support themselves. As I previously mentioned, Mr. Arreola was 
previously employed as a farm worker, but now has his own business 
repairing electronics. His business has been successful enough to 
enable him to purchase a home for his family.
  It seems so clear to me that this family has embraced the American 
dream and their continued presence in our country would do so much to 
enhance the values we hold dear. Enactment of the legislation I have 
introduced today will enable the Arreolas to continue to make 
significant contributions to their community as well as the United 
States.
  I ask my colleagues to support this private bill. I also ask 
unanimous consent that the text of the legislation be printed in the 
Record and that the three letters of community support be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 120

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

     SECTION 1. ADJUSTMENT OF STATUS.

       (a) In General.--Notwithstanding any other provision of law 
     or any order, for the

[[Page 528]]

     purposes of the Immigration and Nationality Act (8 U.S.C. 
     1101 et seq.), Esidronio Arreola-Saucedo, Maria Elna Cobian 
     Arreola, Nayely Bibiana Arreola, and Cindy Jael Arreola shall 
     be deemed to have been lawfully admitted to, and remained in, 
     the United States, and shall be eligible for issuance of an 
     immigrant visa or for adjustment of status under section 245 
     of the Immigration and Nationality Act (8 U.S.C. 1255).
       (b) Application and Payment of Fees.--Subsection (a) shall 
     apply only if the applications for issuance of immigrant 
     visas or the applications for adjustment of status are filed 
     with appropriate fees within 2 years after the date of 
     enactment of this Act.
       (c) Reduction of Immigrant Visa Numbers.--Upon the granting 
     of immigrant visas to Esidronio Arreola-Saucedo, Maria Elna 
     Cobian Arreola, Nayely Bibiana Arreola, and Cindy Jael 
     Arreola, the Secretary of State shall instruct the proper 
     officer to reduce by 4, during the current or subsequent 
     fiscal year, the total number of immigrant visas that are 
     made available to natives of the country of the aliens' birth 
     under section 202(e) or 203(a) of the Immigration and 
     Nationality Act (8 U.S.C. 1152(e), 1153(a)), as applicable.

                                    Fresno Pacific University,

                                                       Fresno, CA.
     Hon. Dianne Feinstein,
     Washington, DC.
       Senator Feinstein: I am writing to ask you to continue your 
     support for the Arreola family of Porterville, CA. and to ask 
     you to reintroduce a private bill to grant the family 
     permanent residency. It is laudable that you came to this 
     families aid in May 2003 because of grievous errors committed 
     by their former immigration attorney. You recognized the 
     outstanding academic achievements of Nayely, Esidronio and 
     Maria Arreola's oldest daughter, as one of the most 
     compelling reasons to allow the family to remain in the 
     United States. You recognized that the ``Arreola family had 
     and continues to embrace the American dream and that their 
     continued presence in our country would enhance the values 
     that we as Americans hold dear.'' Unfortunately the private 
     bill you introduced was not passed into law and the family is 
     in need of your support again.
       You were right about Nayely!!! Nayely Arreola, the oldest 
     daughter, has continued in her outstanding academic 
     achievements and community service. The leaders at Fresno 
     Pacific University saw in Nayely, a young person who will 
     become exemplary of all that is good in the American dream. 
     She has heart in the face of tough times, desire leading to 
     solid community service, and leadership that our country 
     desperately needs. Nayely has become a role model of success 
     and hope that is so important to many young Hispanic students 
     in Central California. She works in the admission office and 
     often speaks to young people about the importance of a 
     college education. Fresno Pacific was so impressed with her 
     high school achievements that we offered her a full tuition 
     scholarship package to attend our fully accredited and 
     regionally ranked university.
       Nayely's sister Cindy, now 16, is following Nayely's 
     example. So are Roberto, now 13, Daniel, now 9, and Saray, 
     now 8 years old. Nayely's parents, Esidronio Arreola-Saucedo 
     and Maria Elena Cobian Arreola are continuing to be positive 
     role models to their children and no burden on our American 
     way of life. They would have been eligible for permanent 
     residence through the Seasonal Agricultural Workers (SAW) 
     program except for poor advice from their attorney who 
     government officials have since disbarred. Please reintroduce 
     a private bill seeking to grant this Porterville Family 
     permanent resident status. All of us at Fresno Pacific 
     University who have come to know and love this family would 
     be in your debt as you to continue your support of the 
     Arreola family.
           Sincerely,
                                                Cary W. Templeton,
     Associate Dean of Enrollment Services.
                                  ____



                                    Granite Hills High School,

                                Porterville, CA, January 14, 2005.
       Dear Senator Feinstein: This letter is in support of 
     Granite Hills High School graduate Nayely Arreola whom I have 
     had the pleasure of knowing for the past four and one-half 
     years. Nayely is a responsible, hard working and intelligent 
     young lady.
       Nayely was born in Mexico; English is her second language. 
     She came to the United States when she was approximately five 
     years old. When Nayely enrolled in high school at Granite 
     Hills High School she was enrolled in our AVID program. AVID, 
     ``Advancement via Individual Determination'', is a program 
     for students who have the ability and desire to go to college 
     but no one in their family has attended college.
       Nayely took our AVID program and Granite Hills High School 
     by storm. What a successful four year high school career she 
     had. Throughout high school she was still listed as an 
     ``English Language Learner''. Nayely successfully overcame 
     not only a language barrier but many other obstacles and 
     emerged as a respected scholar.
       Nayely graduated from Granite Hills High School with 
     honors, was a speaker at our graduation ceremony, and was and 
     is highly regarded and respected by her peers and our 
     teachers. Upon graduation, she earned The Good Samaratin 
     Scholarship a ``full ride'' scholarship to Fresno Pacific 
     University where she will excel as she did here I am sure. 
     She will be successful in any career she pursues. Her parents 
     did an excellent job: I wish I had done as well with my 
     children.
       Cindy Arreola, Nayely's younger sister, is currently a 
     student at Granite Hills High School.
       We need more families like the Arreolas in our country. 
     Thank you for supporting them in the past and I fervently 
     hope and pray the family will be allowed to remain in the 
     United States.
           Sincerely yours,
                                                 Veryl Ann Duncan,
     Principal.
                                  ____



                                    Granite Hills High School,

                                                  Porterville, CA.
       Dear Senator Feinstein: I am writing you this letter on 
     behalf of Nayely Arreola and her family. It is with a 
     grateful heart that I praise you for all you have done so far 
     for this family. I am urging that the Arreola bill be 
     reintroduced so that this great family can stay in our 
     country.
       While Nayely was at Granite Hills High School, she was my 
     prized pupil. I am the Speech and Debate teacher and Nayely 
     represented our school in the Optimist Speech contest and the 
     Lions Club Speech contest. In the Optimist contest she was a 
     Club and Zone winner and last year in the Lions Club contest 
     she was a club winner. Nayely was not only had my respect as 
     a speaker and a student in my program, she had my highest 
     opinion as the person she represented to her peers and 
     teachers. I can honestly say Nayely was the hardest working 
     student I have encountered in my tenure at Granite Hills 
     High. She graduated fourth in her class and was a C. S. F. 
     seal bearer at graduation. She was the president of the Key 
     Club where she assisted in food, coat and toy drives for the 
     needy of our community. She was a LINK, leader, which works 
     with freshmen and their orientation to our school.
       Nayely Arreola is more than a remarkable student, she is a 
     remarkable person. Everything she has done has been to 
     prepare her to go to a University in the United States. She 
     was accepted at Fresno Pacific University as a President's 
     Scholar. She is doing an outstanding job at Fresno Pacific 
     University as a freshman. She is America's dream-her 
     contribution to our country will be great. I have watched 
     with great pride as she has grown into a wonderful young 
     lady, ready to take on the world.
       Please, I urge you to reintroduce this bill and work to 
     have it passed.
                                               Christine L. Amann,
                            Reading Specialist/Speech Coordinator.
                                 ______
                                 
      By Mr. DeWINE (for himself, Mr. Durbin, Mr. Allen, Mr. Hagel, Mr. 
        Coleman, Mr. Johnson, Mr. Obama, and Mr. Leahy):
  S. 121. A bill to amend titles 10 and 38, United States Code, to 
improve the benefits provided for survivors of deceased members of the 
Armed Forces, and for other purposes; to the Committee on Armed 
Services.
  Mr. DeWINE. Mr. President, I rise today to honor the many families of 
our Nation's servicemen and women. We owe them a tremendous debt of 
gratitude for the services they have performed in supporting their 
family members in uniform. These families embody courage, patriotism, 
and dedication.
  Mr. President, we have all heard the saying, ``if the military wanted 
you to have a family, they would have issued you one at boot camp.'' 
But, the truth today is that more than 50% of America's men and women 
in uniform are married and about 50% of those families also have 
children. These families supply endless support for our servicemen and 
women in life and I believe we need to provide them that same support 
in the event of the death of the service member while serving on active 
duty. That is why I am joining my colleagues Senators Durbin, Allen, 
Hagel, Coleman, Johnson, Obama, and Leahy in introducing legislation 
today to improve critical survivor benefits for those families who have 
lost a loved one on active duty.
  Our legislation would amend four key benefit programs to improve the 
overall quality of life for survivors and dependent children. First, it 
would increase the death gratuity to $100,000 and create a death 
gratuity for each child under the age of 18 in the amount of $25,000. 
Currently, the gratuity for spouses is just $12,000, while no benefit 
exits for dependent children. This change would provide flexibility for 
the spouse in maintaining a home, paying off remaining debt, and 
providing immediate funds to transition the family to a life without 
the service member. Additionally, the dependent benefit

[[Page 529]]

would offer surviving children an initial investment that can be used 
to transition to adulthood, for example, as a down payment on a house 
or for college tuition.
  Second, our legislation would extend military health insurance, known 
as TRICARE Prime, to every dependent child of a deceased service member 
at no cost until the age of 21, or until 23 if the dependent attends 
college. The Department of Defense indicates that this important 
benefit would save dependents approximately $15,000 per year compared 
to the cost of private health insurance premiums. Expanded TRICARE 
coverage also guarantees that surviving dependents would continue to 
have access to some of the best doctors this country has to offer and 
would receive adequate health care and treatment.
  Third, our legislation would increase the dependency and indemnity 
compensation, or DIC, for a spouse to $1500 per month, as well as $750 
per month for each child. In July 2004, the Government Accountability 
Office released a report titled ``Military Personnel: Survivor Benefits 
for Service members and Federal, State, and City Employees.'' This 
report outlined hypothetical situations to demonstrate the benefits 
received at certain pay grades. This report indicated that an E-3, 
meaning a Private First Class or a Lance Corporal, with two dependents 
and three years of service would receive $1,182 per month from the 
Survivor Benefit Plan, SBP, and $1208 per month for DIC. This equals 
$28,680 per year for the family to live on if the surviving spouse is 
not employed.
  In 2003, the USDA Center for Nutrition Policy and Promotion released 
a report on the costs associated with raising children. The study 
indicated that, on average across the United States, families spent 
between $9,500 and $10,500 per child on expenses in a two child, 
husband-wife family. Further, this study indicated that families with a 
household income below $47,000 per year were only able to spend from 
$7000 to $8000 per year on expenses to raise a child. For the 
hypothetical family I just described, it would cost more than $18,000 
per year just to meet the expenses of raising the two dependents. 
However, since the household income, if the surviving spouse is not 
employed, would reach just $28,860, then it is likely that only about 
$14,000 will be spent for that purpose. Clearly, that's just not 
enough. Our bill would help ensure that the essential needs of the 
family can be met.
  Finally, our legislation would increase the benefits available from 
the Survivors' and Dependents' Educational Assistance Program. It would 
eliminate the current 45 month cap on benefit payments and establish an 
$80,000 lump sum that can be drawn down for any educational expenses, 
including tuition, fees, room, board, and books. Under current law, a 
survivor only has access to about $38,867 if he/she attends college or 
a trade school on a full-time basis. As we know, this amount would not 
even guarantee a survivor access to a college degree from a state 
university. In fact, let's use the Ohio State University as an example. 
This public institution will cost in-state students roughly $18,600 for 
the 2004-2005 school year. Now, if there were no cost increases over 
the course of a four year matriculation, which, in this day and age, is 
an unrealistic assumption, a degree from OSU would cost $75,600. That 
is $36,733 more than the current benefit available from the Department 
of Veterans Affairs. Clearly a gap exists.
  Mr. President, we owe the families of those who have lost loved ones 
in active duty our gratitude and support. The President's inauguration 
last week reminded me of something President Abraham Lincoln said in 
his second inaugural address. He said this: ``With malice toward none, 
with charity for all, with firmness in the right as God gives us to see 
the right, let us strive on to finish the work we are in, to bind up 
the nation's wounds, to care for him who shall have borne the battle 
and for his widow and his orphan. . . .'' It is time to do a better job 
of caring for these families. It is time to ensure that this Congress 
does what is right. I ask my colleagues to stand with me in support for 
these families and do our part, as they have done theirs.
  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. 121

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

     SECTION 1. DEATH GRATUITIES PAYABLE WITH RESPECT TO DECEASED 
                   MEMBERS OF THE ARMED FORCES.

       (a) Increased Amount of Death Gratuity.--Section 1478(a) of 
     title 10, United States Code, is amended by striking 
     ``$12,000'' in the first sentence and inserting ``$100,000''.
       (b) Additional Death Gratuity Payable to Child of 
     Deceased.--
       (1) Payment at age 21.--Section 1477 of such title is 
     amended by adding at the end the following new subsection:
       ``(e) Additional Death Gratuity for Dependent Children.--
     (1) If, in the case of a death for which a death gratuity is 
     payable under section 1475 or 1476 of this title, the 
     deceased is survived by one or more children described in 
     subsection (b) who are under 18 years of age on the date of 
     the death, the Secretary concerned shall pay an additional 
     death gratuity to each such child when that child attains 21 
     years of age.
       ``(2) A death gratuity payable to any person under this 
     subsection with respect to a death is in addition to any 
     death gratuity that is payable to that person under section 
     1475 or 1476 of this title with respect to such death 
     pursuant to subsection (a)(2).''.
       (2) Amount.--
       (A) Subsection (a) of section 1478 of such title, as 
     amended by subsection (a) of this section, is further amended 
     by inserting after the first sentence the following new 
     sentence: ``The death gratuity payable to a child of a 
     deceased person under section 1477(e) of this title shall be 
     $25,000.''.
       (B) Subsection (c) of such section is amended by striking 
     ``the amount'' and inserting ``each amount''.
       (3) Conforming amendments.--(A) Section 1477(d) of such 
     title is amended by striking ``he receives the death 
     gratuity,'' and inserting ``receiving payment of a death 
     gratuity under section 1475 or 1476 of this title,''.
       (B) Section 1479 of such title is amended--
       (i) by striking ``immediate''; and
       (ii) by inserting ``or 1477(e)'' after ``section 1475''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), this 
     section and the amendments made by this section shall take 
     effect as of October 1, 2001, and shall apply with respect to 
     deaths occurring on or after such date.
       (2) Exception.--The amendment made by subsection (b)(2)(B) 
     shall take effect as of October 28, 2004, immediately 
     following the enactment of Public Law 108-375.

     SEC. 2. INCREASED PERIOD OF CONTINUED TRICARE COVERAGE OF 
                   CHILDREN OF MEMBERS OF THE UNIFORMED SERVICES 
                   WHO DIE WHILE SERVING ON ACTIVE DUTY FOR A 
                   PERIOD OF MORE THAN 30 DAYS.

       (a) Period of Eligibility.--Section 1079(g) of title 10, 
     United States Code, is amended--
       (1) by inserting ``(1)'' after ``(g)'';
       (2) by striking the second sentence and inserting the 
     following:
       ``(2) In addition to any continuation of eligibility for 
     benefits under paragraph (1), when a member dies while on 
     active duty for a period of more than 30 days, the member's 
     dependents who are receiving benefits under a plan covered by 
     subsection (a) shall continue to be eligible for such 
     benefits during the three-year period beginning on the date 
     of the member's death, except that, in the case of such a 
     dependent who is a child of the deceased, the period of 
     continued eligibility shall be the longer of the following 
     periods beginning on such date:
       ``(A) Three years.
       ``(B) The period ending on the date on which the child 
     attains 21 years of age.
       ``(C) In the case of a child of the deceased who, at 21 
     years of age, is enrolled in a full-time course of study in a 
     secondary school or in a full-time course of study in an 
     institution of higher education approved by the administering 
     Secretary and was, at the time of the member's death, in fact 
     dependent on the member for over one-half of the child's 
     support, the period ending on the earlier of the following 
     dates:
       ``(i) The date on which the child ceases to pursue such a 
     course of study, as determined by the administering 
     Secretary.
       ``(ii) The date on which the child attains 23 years of age.
       ``(3) For the purposes of paragraph (2)(C), a child shall 
     be treated as being enrolled in a full-time course of study 
     in an institution of higher education during any reasonable 
     period of transition between the child's completion of a 
     full-time course of study in a secondary school and the 
     commencement of an enrollment in a full-time course of study 
     in an institution of higher education, as determined by the 
     administering Secretary.
       ``(4) No charge may be imposed for any benefits coverage 
     under this chapter that is

[[Page 530]]

     provided for a child for a period of continued eligibility 
     under paragraph (2), or for any benefits provided to such 
     child during such period under that coverage.''.
       (b) Effective Date.--This section and the amendments made 
     by this section shall take effect as of October 1, 2001, and 
     shall apply with respect to deaths occurring on or after such 
     date.

     SEC. 3. INCREASE AND ENHANCEMENT OF DEPENDENCY AND INDEMNITY 
                   COMPENSATION FOR SURVIVING SPOUSES.

       (a) In General.--Subsection (a) of section 1311 of title 
     38, United States Code, is amended--
       (1) in paragraph (1), by striking ``$967'' and inserting 
     ``$1,500'';
       (2) in paragraph (2), by inserting ``or (4)'' after 
     ``paragraph (1)''; and
       (3) by adding at the end the following new paragraph:
       ``(4) In the case of a surviving spouse who remarries, 
     dependency and indemnity compensation shall be paid to the 
     surviving spouse at a monthly rate equal to 50 percent of the 
     monthly rate otherwise provided under paragraph (1) for--
       ``(A) the first 60 months beginning after the date of such 
     remarriage; or
       ``(B) in the case of a surviving spouse with one or more 
     children below the age of 18, each month until the first 
     month beginning after the date on which each such child has 
     attained the age of 18.''.
       (b) Rates for Surviving Spouses With Dependent Children.--
     Such section is further amended--
       (1) by striking subsection (b) and inserting the following 
     new subsection (b):
       ``(b)(1) If there is a surviving spouse with one or more 
     children below the age of 18, the dependency and indemnity 
     compensation paid monthly to the surviving spouse shall be 
     increased by $750 for each such child.
       ``(2)(A) Except as provided in subparagraph (B), the 
     increase in dependency and indemnity compensation payable to 
     a surviving spouse under paragraph (1) shall cease beginning 
     with the first month commencing after the month in which all 
     children of the surviving spouse have attained the age of 18.
       ``(B) The cessation under subparagraph (A) of the increase 
     in dependency and indemnity compensation payable to a 
     surviving spouse under paragraph (1) shall not occur with 
     respect to any child of the surviving spouse who, before 
     attaining the age of 18, becomes permanently incapable of 
     support.''; and
       (2) by striking subsection (e), as added by section 301(a) 
     of the Veterans Benefits Improvements Act of 2004 (Public Law 
     104-454).
       (c) Effective Date.--(1) Except as provided in paragraph 
     (2), the amendments made by this section shall take effect on 
     October 1, 2001, and shall apply with respect to months 
     beginning on or after that date.
       (2) The amendment made by subsection (b)(2) shall take 
     effect on the date of the enactment of this Act.

     SEC. 4. EXPANSION AND ENHANCEMENT OF SURVIVORS' AND 
                   DEPENDENTS' EDUCATIONAL ASSISTANCE.

       (a) Termination of Durational Limitation on Use of 
     Educational Assistance.--
       (1) Termination of limitation and restatement of continuing 
     requirements.--Subsection (a) of section 3511 of title 38, 
     United States Code, is amended to read as follows:
       ``(a)(1) Notwithstanding any other provision of this 
     chapter or chapter 36 of this title, any payment of 
     educational assistance described in paragraph (2) shall not 
     be charged against the entitlement of any individual under 
     this chapter.
       ``(2) The payment of educational assistance referred to in 
     paragraph (1) is the payment of such assistance to an 
     individual for pursuit of a course or courses under this 
     chapter if the Secretary finds that the individual--
       ``(A) had to discontinue such course pursuit as a result of 
     being ordered to serve on active duty under section 688, 
     12301(a), 12301(d), 12301(g), 12302, or 12304 of title 10; 
     and
       ``(B) failed to receive credit or training time toward 
     completion of the individual's approved educational, 
     professional, or vocational objective as a result of having 
     to discontinue, as described in subparagraph (A), the course 
     pursuit.''.
       (2) Conforming amendments.--(A) The heading of section 3511 
     of such title is amended to read as follows:

     ``Sec. 3511. Treatment of certain interruptions in pursuit of 
       programs of education''.

       (B) Section 3532(g) of such title, as amended by section 
     106(b)(3) of the Veterans Earn and Learn Act of 2004 (title I 
     of Public Law 108-454), is further amended--
       (i) by striking paragraph (2); and
       (ii) by redesignating paragraph (3) as paragraph (2).
       (C) Section 3541 of such title is amended to read as 
     follows:

     ``Sec. 3541. Special restorative training

       ``(a) The Secretary may, at the request of an eligible 
     person--
       ``(1) determine whether such person is in need of special 
     restorative training; and
       ``(2) if such need is found to exist, prescribe a course 
     which is suitable to accomplish the purposes of this chapter.
       ``(b) A course of special restorative training under 
     subsection (a) may, at the discretion of the Secretary, 
     contain elements that would contribute toward an ultimate 
     objective of a program of education.''.
       (D) Section 3695(a)(4) of such title is amended by striking 
     ``35,''.
       (b) Extension of Delimiting Age of Eligibility for 
     Dependents.--Section 3512(a) of title 38, United States Code, 
     is amended by striking ``twenty-sixth birthday'' each place 
     it appears and inserting ``thirtieth birthday''.
       (c) Amount of Educational Assistance.--
       (1) In general.--Section 3532 of title 38, United States 
     Code, is amended to read as follows:

     ``Sec. 3532. Amount of educational assistance

       ``(a) The aggregate amount of educational assistance to 
     which an eligible person is entitled under this chapter is 
     $80,000, as increased from time to time under section 3564 of 
     this title.
       ``(b) Within the aggregate amount provided for in 
     subsection (a), educational assistance under this chapter may 
     be paid for any purpose, and in any amount, as follows:
       ``(1) A program of education consisting of institutional 
     courses.
       ``(2) A full-time program of education that consists of 
     institutional courses and alternate phases of training in a 
     business or industrial establishment with the training in the 
     business or industrial establishment being strictly 
     supplemental to the institutional portion.
       ``(3) A farm cooperative program consisting of 
     institutional agricultural courses prescheduled to fall 
     within forty-four weeks of any period of twelve consecutive 
     months that is pursued by an eligible person who is 
     concurrently engaged in agricultural employment which is 
     relevant to such institutional agricultural courses as 
     determined under standards prescribed by the Secretary.
       ``(4) A course or courses or other program of special 
     educational assistance as provided in section 3491(a) of this 
     title.
       ``(5) A program of apprenticeship or other on-job training 
     pursued in a State as provided in section 3687(a) of this 
     title.
       ``(6) In the case of an eligible spouse or surviving 
     spouse, a program of education exclusively by correspondence 
     as provided in section 3686 of this title.
       ``(7) A special training allowance for special restorative 
     training as provided in section 3542 of this title.
       ``(c) If a program of education is pursued by an eligible 
     person at an institution located in the Republic of the 
     Philippines, any educational assistance for such person under 
     this chapter shall be paid at the rate of $0.50 for each 
     dollar.
       ``(d)(1) Subject to paragraph (2), the amount of 
     educational assistance payable under this chapter for a 
     licensing or certification test described in section 
     3501(a)(5) of this title is the lesser of $2,000 or the fee 
     charged for the test.
       ``(2) In no event shall payment of educational assistance 
     under this subsection for such a test exceed the amount of 
     the individual's available entitlement under this chapter.''.
       (2) Conforming amendments.--(A) Section 3533 of such title 
     is amended to read as follows:

     ``Sec. 3533. Tutorial assistance

       ``An eligible person shall, without any charge to any 
     entitlement of such person to educational assistance under 
     section 3532(a) of this title be entitled to the benefits 
     provided an eligible veteran under section 3492 of this 
     title.''.
       (B) Section 3534 of such title is repealed.
       (C) Section 3542 of such title is amended--
       (i) in subsection (a), by striking ``computed at the basic 
     rate'' and all that follows through the end of the subsection 
     and inserting a period; and
       (ii) in subsection (b), by striking ``an educational 
     assistance allowance'' and inserting ``educational 
     assistance''.
       (D) Section 3543(c) of such title is amended--
       (i) in paragraph (1), by adding ``and'' at the end;
       (ii) by striking paragraph (2); and
       (iii) by redesignating paragraph (3) as paragraph (2).
       (E) Section 3564 of such title is amended by striking 
     ``rates payable under sections 3532, 3534(b), and 3542(a)'' 
     and inserting ``aggregate amount of educational assistance 
     payable under section 3532''.
       (F) Paragraph (1) of section 3565(b) of such title is 
     amended to read as follows:
       ``(1) educational assistance payable under section 3532 of 
     this title, including the special training allowance referred 
     to in subsection (b)(7) of such section, shall be paid at the 
     rate of $0.50 for each dollar; and''.
       (G) Section 3687 of such title is amended--
       (i) in subsection (a)--
       (I) in the matter preceding paragraph (1), by striking ``or 
     an eligible person (as defined in section 3501(a) of this 
     title)''; and
       (II) in the flush matter following paragraph (2), by 
     striking ``chapters 34 and 35'' and inserting ``chapter 34'';
       (ii) in subsection (c), by striking ``chapters 34 and 35'' 
     and inserting ``chapter 34''; and
       (iii) in subsection (e), as added by section 102(a) of the 
     Veterans Earn and Learn Act of 2004 (title I of Public Law 
     108-454), by striking paragraph (3) and inserting the 
     following new paragraph (3):

[[Page 531]]

       ``(3) In this subsection, the term `individual' means an 
     eligible veteran who is entitled to monthly educational 
     assistance allowances payable under section 3015(e) of this 
     title.''.
       (d) Other Conforming Amendments.--(1) Section 3524 of title 
     38, United States Code, is amended by striking ``allowance'' 
     each place it appears.
       (2)(A) Section 3531 of such title is amended--
       (i) in subsection (a), by striking ``an educational 
     assistance allowance'' and inserting ``educational 
     assistance''; and
       (ii) in subsection (b), by striking ``allowance''.
       (B) The heading of such section is amended by striking 
     ``allowance''.
       (3) Section 3537(a) of such title is amended by striking 
     ``additional''.
       (e) Clerical Amendments.--The table of sections at the 
     beginning of chapter 35 of title 38, United States Code, is 
     amended--
       (1) by striking the item relating to section 3511 and 
     inserting the following new item:

``3511. Treatment of certain interruptions in pursuit of programs of 
              education.'';

       (2) by striking the items relating to section 3531, 3532, 
     and 3533 and inserting the following new items:

``3531. Educational assistance.
``3532. Amount of educational assistance.
``3533. Tutorial assistance.'';

       (3) by striking the item relating to section 3534; and
       (4) by striking the item relating to section 3541 and 
     inserting the following new item:

``3541. Special restorative training.''.

       (f) Effective Dates.--(1) Except as provided in paragraph 
     (2), the amendments made by this section shall take effect on 
     October 1, 2001.
       (2) The amendments made by subsections (a)(2)(B) and 
     (c)(2)(G)(iii) shall take effect on the date of the enactment 
     of this Act.
       (3) Notwithstanding the effective date under paragraph (1) 
     of the amendment to section 3564 of title 38, United States 
     Code, made by subsection (c)(2)(E), the Secretary of Veterans 
     Affairs shall make the first increase in the aggregate amount 
     of educational assistance under section 3532 of such title as 
     required by such section 3564 (as so amended) for fiscal year 
     2006.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 122. A bill to abolish the death penalty under Federal law; to the 
Committee on the Judiciary.
  Mr. FEINGOLD. Mr. President, today I introduce the Federal Death 
Penalty Abolition Act of 2005. This bill would abolish the death 
penalty at the Federal level. It would put an immediate halt to 
executions and forbid the imposition of the death penalty as a sentence 
for violations of Federal law.
  Since 1976, when the death penalty was reinstated by the Supreme 
Court, there have been almost 1,000 executions across the country, 
including three at the Federal level. At the same time, over 100 people 
on death row were later found innocent and released from death row. 
Exonerated inmates are not only removed from death row, but they are 
usually released from prison altogether. Apparently, these people never 
should have been convicted in the first place. While death penalty 
proponents claim that the death penalty is fair, efficient, and a 
deterrent, the fact remains that our criminal justice system has failed 
and has resulted in at least 117 very grave mistakes.
  Nine hundred and forty-four executions, and 117 exonerations in the 
modern death penalty era. That is an embarrassing statistic, one that 
should have us all questioning the use of capital punishment in this 
country. And we continue to learn about more cases in which our justice 
system has failed. Since I first introduced this bill in November of 
1999, 36 death row inmates have been exonerated throughout the country, 
12 since I introduced this bill in the last Congress in February 2003. 
Since I last introduced this bill, 115 people have been executed 
nationwide. How many innocents are among them? We may never know.
  While executions continue and the death row population grows, the 
national debate on the death penalty intensifies and has become even 
more vigorous. The number of voices joining in to express doubt about 
the use of capital punishment in America is growing. As evidence of the 
flaws in our system mounts, it has created an awareness that has not 
escaped the attention of the American people. Layer after layer of 
confidence in the death penalty system has been gradually peeling away, 
and the voices of those questioning its fairness are growing louder and 
louder. Now they can be heard from college campuses and courtrooms and 
podiums across the Nation, to the Senate Judiciary Committee hearing 
room, to the Supreme Court. We must not ignore them.
  That our modern society relies on killing as punishment is disturbing 
enough. Even more disturbing, however, is that our States' and Federal 
Government's use of the death penalty is often not consistent with 
principles of due process, fairness, and justice. These principles are 
the foundation of our criminal justice system. It is clearer than ever 
before that we have put innocent people on death row. In addition, 
statistics show that those States that have the death penalty are more 
likely to put people to death for killing white victims than for 
killing black victims.
  After the death penalty was reinstated by the Supreme Court in 1976, 
the Federal Government first resumed death penalty prosecutions after 
enactment of a 1988 Federal law that provided for the death penalty for 
murder in the course of a drug-kingpin conspiracy. The Federal death 
penalty was then expanded significantly in 1994, when the omnibus crime 
bill allowed its use to apply to a total of some 60 Federal offenses. 
Since 1994, Federal prosecutions seeking the death penalty have now 
accelerated.
  A survey on the Federal death penalty system from 1988 to early 2000 
was released by the U.S. Department of Justice in September 2000. That 
report showed troubling racial and geographic disparities in the 
Federal Government's administration of the death penalty. In other 
words, who lives and who dies in the Federal system appears to relate 
to the color of the defendant's skin or the region of the country where 
the defendant is prosecuted. Attorney General Janet Reno was so 
disturbed by the results of that report that she ordered a further, in-
depth study of the results. Attorney General John Ashcroft pledged to 
continue that study, but we still await the results of that further 
study. The Federal Government must do all that it can to ensure that no 
person is ever subject to harsher penalties because of the color of the 
defendant's skin.
  I am certain that not one of my colleagues here in the Senate, not a 
single one, would defend racial discrimination in this ultimate 
punishment. The most fundamental guarantee of our Constitution is equal 
justice under law, and equal protection of the laws. Yet we have a 
system in place today that raises grave questions about whether that 
guarantee is being met.
  While the Federal death penalty system is clearly plagued by flaws, 
there are 38 States across our Nation that also authorize the use of 
capital punishment. And like the Federal system, those systems are not 
free from error.
  Five years ago, Governor George Ryan took the historic step of 
placing a moratorium on executions in Illinois and creating an 
independent, blue ribbon commission to review the State's death penalty 
system. The Commission conducted an extensive study of the death 
penalty in Illinois and released a report with 85 recommendations for 
reform of the death penalty system. The Commission concluded that the 
death penalty system is not fair, and that the risk of executing the 
innocent is alarmingly real. Governor Ryan later pardoned four death 
row inmates and commuted the sentences of all remaining Illinois death 
row inmates to life in prison before he left office in January 2003:
  Illinois is not alone. Four years ago, then Governor Parris 
Glendening learned of suspected racial disparities in the 
administration of the death penalty in Maryland. Governor Glendening 
did not look the other way. He commissioned the University of Maryland 
to conduct the most exhaustive study of Maryland's application of the 
death penalty in history. Then faced with the rapid approach of a 
scheduled execution, Governor Glendening acknowledged that it was 
unacceptable to allow executions to take place while the study he had 
ordered was not yet complete. So, in May 2002, he placed a moratorium 
on executions. Unfortunately, Governor Bob Ehrlich later lifted that 
moratorium and executions have resumed in Maryland.

[[Page 532]]

  The Maryland study was released in January 2003, and the findings 
should startle us all. The study found that blacks accused of killing 
whites are simply more likely to receive a death sentence than blacks 
who kill blacks, or than white killers. According to the report, black 
offenders who kill whites are four times as likely to be sentenced to 
death as blacks who kill blacks, and twice as likely to get a death 
sentence as whites who kill whites.
  Maryland and Illinois are not exceptions to a rule, nor anomalies in 
an otherwise perfect system. In fact, since reinstatement of the modern 
death penalty, 81 percent of capital cases across the country have 
involved white victims, even though only 50 percent of murder victims 
are white. Nationwide, more than half of the death row inmates are 
African Americans or Hispanic Americans.
  There is evidence of racial disparities, inadequate counsel, 
prosecutorial misconduct, and false scientific evidence in death 
penalty systems across the country. While the research done in Maryland 
and Illinois has yielded shocking results, there are 36 other States 
that authorize the use of the death penalty, most of them far more 
frequently. Twenty of the 38 States that authorize capital punishment 
have executed more inmates than Maryland, and 14 of those States have 
carried out more executions than Illinois. So while we are closer to 
uncovering the unthinkable truth about the flaws in the Maryland and 
Illinois death penalty systems, there are 36 other States with systems 
that are most likely plagued with the same flaws. And yet, the killing 
continues.
  At the beginning of 2005, I cannot help but believe that our progress 
has been tarnished by our Nation's not only continuing, but increasing 
use of the death penalty. We are a Nation that prides itself on the 
fundamental principles of justice, liberty, equality and due process. 
We are a Nation that scrutinizes the human rights records of other 
nations. Historically, we are one of the first nations to speak out 
against torture and killings by foreign governments. We should hold our 
own system of justice to the highest standard.
  Over the last few years, some prominent voices in our country have 
done just that. And they are not just voices of liberals, or of the 
faith community. They are the voices of Justice Sandra Day O'Connor, 
Reverend Pat Robertson, George Will, former FBI Director William 
Sessions, Republican Governor George Ryan, and Democratic Governor 
Parris Glendening. The voices of those questioning our application of 
the death penalty are growing in number, and they are growing louder.
  And while we examine the flaws in our death penalty system, we cannot 
help but note that our use of the death penalty stands in stark 
contrast to the majority of nations, which have abolished the death 
penalty in law or practice. There are now 117 countries that have 
abolished the death penalty in law or in practice. The European Union 
denies membership in the alliance to those nations that use the death 
penalty. In fact, it passed a resolution calling for the immediate and 
unconditional global abolition of the death penalty, and it 
specifically called on all States within the United States to abolish 
the death penalty. This is significant because it reflects the 
unanimous view of a group of nations with which the United States 
enjoys the closest of relationships and shares the deepest common 
values.
  What is even more troubling in the international context is that the 
United States is now one of only five countries that imposes the death 
penalty for crimes committed by juveniles. So, while a May 2002 Gallup 
poll found that 69 percent of Americans oppose the death penalty for 
those under the age of 18, we are one of only five nations on this 
earth that puts to death people who were under 18 years of age when 
they committed their crimes. The others are Iran, the Democratic 
Republic of the Congo, Nigeria, and Saudi Arabia. In the last decade, 
the United States has executed more juvenile offenders than all other 
nations combined.
  These are countries that we often criticize for human rights abuses. 
We should remove any basis for charges that human rights violations are 
taking place on our own soil by halting the execution of people who 
were not even adults when they committed the crimes for which they were 
sentenced to die. No one can reasonably argue that executing child 
offenders is a normal or acceptable practice in the world community. 
And I do not think that we should be proud that the United States is 
the world leader in the execution of child offenders.
  As we begin a new year and another Congress, our society is still far 
from fully just. The continued use of the death penalty shames us. The 
penalty is at odds with our best traditions. It is wrong and it is 
immoral. The adage ``two wrongs do not make a right,'' applies here in 
the most fundamental way. Our Nation has long ago done away with other 
barbaric punishments like whipping and cutting off the ears of 
criminals. Just as our Nation did away with these punishments as 
contrary to our humanity and ideals, it is time to abolish the death 
penalty as we seek justice in this new century. And it is not just a 
matter of morality. The continued viability of our justice system as a 
truly just system that deserves the respect of our own people and the 
world requires that we do so. Our Nation's striving to remain the 
leading defender of freedom, liberty and equality demands that we do 
so.
  Abolishing the death penalty will not be an easy task. It will take 
patience, persistence, and courage. As we work to move forward in a 
rapidly changing world, let us leave this archaic practice behind.
  I ask my colleagues to join me in taking the first step in abolishing 
the death penalty in our great Nation. I also call on each State that 
authorizes the use of the death penalty to cease this practice. Let us 
step away from the culture of violence and restore fairness and 
integrity to our criminal justice system.
  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. 122

       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 ``Federal Death Penalty 
     Abolition Act of 2005''.

     SEC. 2. REPEAL OF FEDERAL LAWS PROVIDING FOR THE DEATH 
                   PENALTY.

       (a) Homicide-Related Offenses.--
       (1) Murder related to the smuggling of aliens.--Section 
     274(a)(1)(B)(iv) of the Immigration and Nationality Act (8 
     U.S.C. 1324(a)(1)(B)(iv)) is amended by striking ``punished 
     by death or''.
       (2) Destruction of aircraft, motor vehicles, or related 
     facilities resulting in death.--Section 34 of title 18, 
     United States Code, is amended by striking ``to the death 
     penalty or''.
       (3) Murder committed during a drug-related drive-by 
     shooting.--Section 36(b)(2)(A) of title 18, United States 
     Code, is amended by striking ``death or''.
       (4) Murder committed at an airport serving international 
     civil aviation.--Section 37(a) of title 18, United States 
     Code, is amended, in the matter following paragraph (2), by 
     striking ``punished by death or''.
       (5) Civil rights offenses resulting in death.--Chapter 13 
     of title 18, United States Code, is amended--
       (A) in section 241, by striking ``, or may be sentenced to 
     death'';
       (B) in section 242, by striking ``, or may be sentenced to 
     death'';
       (C) in section 245(b), by striking ``, or may be sentenced 
     to death''; and
       (D) in section 247(d)(1), by striking ``, or may be 
     sentenced to death''.
       (6) Murder of a member of congress, an important executive 
     official, or a supreme court justice.--Section 351 of title 
     18, United States Code, is amended--
       (A) in subsection (b)(2), by striking ``death or''; and
       (B) in subsection (d)(2), by striking ``death or''.
       (7) Death resulting from offenses involving transportation 
     of explosives, destruction of government property, or 
     destruction of property related to foreign or interstate 
     commerce.--Section 844 of title 18, United States Code, is 
     amended--
       (A) in subsection (d), by striking ``or to the death 
     penalty'';
       (B) in subsection (f)(3), by striking ``subject to the 
     death penalty, or'';
       (C) in subsection (i), by striking ``or to the death 
     penalty''; and

[[Page 533]]

       (D) in subsection (n), by striking ``(other than the 
     penalty of death)''.
       (8) Murder committed by use of a firearm during commission 
     of a crime of violence or a drug trafficking crime.--Section 
     924(j)(1) of title 18, United States Code, is amended by 
     striking ``by death or''.
       (9) Genocide.--Section 1091(b)(1) of title 18, United 
     States Code, is amended by striking ``death or''.
       (10) First degree murder.--Section 1111(b) of title 18, 
     United States Code, is amended by striking ``by death or''.
       (11) Murder by a federal prisoner.--Section 1118 of title 
     18, United States Code, is amended--
       (A) in subsection (a), by striking ``by death or''; and
       (B) in subsection (b), in the third undesignated 
     paragraph--
       (i) by inserting ``or'' before ``an indeterminate''; and
       (ii) by striking ``, or an unexecuted sentence of death''.
       (12) Murder of a state or local law enforcement official or 
     other person aiding in a federal investigation; murder of a 
     state correctional officer.--Section 1121 of title 18, United 
     States Code, is amended--
       (A) in subsection (a), by striking ``by sentence of death 
     or''; and
       (B) in subsection (b)(1), by striking ``or death''.
       (13) Murder during a kidnaping.--Section 1201(a) of title 
     18, United States Code, is amended by striking ``death or''.
       (14) Murder during a hostage-taking.--Section 1203(a) of 
     title 18, United States Code, is amended by striking ``death 
     or''.
       (15) Murder with the intent of preventing testimony by a 
     witness, victim, or informant.--Section 1512(a)(2)(A) of 
     title 18, United States Code, is amended by striking ``the 
     death penalty or''.
       (16) Mailing of injurious articles with intent to kill or 
     resulting in death.--Section 1716(i) of title 18, United 
     States Code, is amended by striking ``to the death penalty 
     or''.
       (17) Assassination or kidnaping resulting in the death of 
     the president or vice president.--Section 1751 of title 18, 
     United States Code, is amended--
       (A) in subsection (b)(2), by striking ``death or''; and
       (B) in subsection (d)(2), by striking ``death or''.
       (18) Murder for hire.--Section 1958(a) of title 18, United 
     States Code, is amended by striking ``death or''.
       (19) Murder involved in a racketeering offense.--Section 
     1959(a)(1) of title 18, United States Code, is amended by 
     striking ``death or''.
       (20) Willful wrecking of a train resulting in death.--
     Section 1992(b) of title 18, United States Code, is amended 
     by striking ``to the death penalty or''.
       (21) Bank robbery-related murder or kidnaping.--Section 
     2113(e) of title 18, United States Code, is amended by 
     striking ``death or''.
       (22) Murder related to a carjacking.--Section 2119(3) of 
     title 18, United States Code, is amended by striking ``, or 
     sentenced to death''.
       (23) Murder related to aggravated child sexual abuse.--
     Section 2241(c) of title 18, United States Code, is amended 
     by striking ``unless the death penalty is imposed,''.
       (24) Murder related to sexual abuse.--Section 2245 of title 
     18, United States Code, is amended by striking ``punished by 
     death or''.
       (25) Murder related to sexual exploitation of children.--
     Section 2251(d) of title 18, United States Code, is amended 
     by striking ``punished by death or''.
       (26) Murder committed during an offense against maritime 
     navigation.--Section 2280(a)(1) of title 18, United States 
     Code, is amended by striking ``punished by death or''.
       (27) Murder committed during an offense against a maritime 
     fixed platform.--Section 2281(a)(1) of title 18, United 
     States Code, is amended by striking ``punished by death or''.
       (28) Terrorist murder of a united states national in 
     another country.--Section 2332(a)(1) of title 18, United 
     States Code, is amended by striking ``death or''.
       (29) Murder by the use of a weapon of mass destruction.--
     Section 2332a of title 18, United States Code, is amended--
       (A) in subsection (a), by striking ``punished by death 
     or''; and
       (B) in subsection (b), by striking ``by death, or''.
       (30) Murder by act of terrorism transcending national 
     boundaries.--Section 2332b(c)(1)(A) of title 18, United 
     States Code, is amended by striking ``by death, or''.
       (31) Murder involving torture.--Section 2340A(a) of title 
     18, United States Code, is amended by striking ``punished by 
     death or''.
       (32) Murder related to a continuing criminal enterprise or 
     related murder of a federal, state, or local law enforcement 
     officer.--Section 408 of the Controlled Substances Act (21 
     U.S.C. 848) is amended--
       (A) in each of subparagraphs (A) and (B) of subsection 
     (e)(1), by striking ``, or may be sentenced to death'';
       (B) by striking subsections (g) and (h) and inserting the 
     following:
       ``(g) [Reserved.]
       ``(h) [Reserved.]'';
       (C) in subsection (j), by striking ``and as to 
     appropriateness in that case of imposing a sentence of 
     death'';
       (D) in subsection (k), by striking ``, other than death,'' 
     and all that follows before the period at the end and 
     inserting ``authorized by law''; and
       (E) by striking subsections (l) and (m) and inserting the 
     following:
       ``(l) [Reserved.]
       ``(m) [Reserved.]''.
       (33) Death resulting from aircraft hijacking.--Section 
     46502 of title 49, United States Code, is amended--
       (A) in subsection (a)(2), by striking ``put to death or''; 
     and
       (B) in subsection (b)(1)(B), by striking ``put to death 
     or''.
       (b) Non-Homicide Related Offenses.--
       (1) Espionage.--Section 794(a) of title 18, United States 
     Code, is amended by striking ``punished by death or'' and all 
     that follows before the period and inserting ``imprisoned for 
     any term of years or for life''.
       (2) Treason.--Section 2381 of title 18, United States Code, 
     is amended by striking ``shall suffer death, or''.
       (c) Repeal of Criminal Procedures Relating to Imposition of 
     Death Sentence.--
       (1) In general.--Chapter 228 of title 18, United States 
     Code, is repealed.
       (2) Technical and conforming amendment.--The table of 
     chapters for part II of title 18, United States Code, is 
     amended by striking the item relating to chapter 228.

     SEC. 3. PROHIBITION ON IMPOSITION OF DEATH SENTENCE.

       (a) In General.--Notwithstanding any other provision of 
     law, no person may be sentenced to death or put to death on 
     or after the date of enactment of this Act for any violation 
     of Federal law.
       (b) Persons Sentenced Before Date of Enactment.--
     Notwithstanding any other provision of law, any person 
     sentenced to death before the date of enactment of this Act 
     for any violation of Federal law shall serve a sentence of 
     life imprisonment without the possibility of parole.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 123. A bill to amend part D of title XVIII of the Social Security 
Act to provide for negotiation of fair prices for Medicare prescription 
drugs; to the Committee on Finance.
  Mr. FEINGOLD. Mr. President, today I am introducing a bill that will 
fix one of the fundamental flaws of the Medicare prescription drug 
benefit signed into law last Congress. The ``Efficiency in Government 
Health Care Spending Act'' will remove language included in the 
Medicare Modernization Act that prohibits the Medicare program from 
negotiating prescription drug prices with manufacturers. I believe that 
the Medicare prescription drug benefit does far too little to bring 
down the prices of prescription drugs, and that there are not enough 
measures to keep the skyrocketing cost of the program in check. In 
fact, it actually takes away one of the best tools the Medicare program 
could use in bringing down prescription drug prices by denying the 
government the ability to negotiate price discounts on behalf of 
Medicare beneficiaries.
  My bill will allow the Federal Government to take advantage of the 
purchasing power of the Medicare program, saving taxpayers' dollars 
while reducing the costs of prescription drugs for Medicare 
beneficiaries. We need to act now to fix the flaws included in the 
Medicare prescription drug benefit, before the benefit begins next 
year.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 123

       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 ``Efficiency in Government 
     Health Care Spending Act''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Prohibiting the Federal Government from negotiating 
     prescription drug prices with manufacturers fails to take 
     advantage of the purchasing power of the Medicare program.
       (2) Negotiating prescription drug prices can reduce the 
     costs of prescription drugs for both the Medicare program and 
     taxpayers.
       (3) A 2002 study by the inspector general of the Department 
     of Health and Human Services found that--
       (A) both the Medicare program and the beneficiaries of the 
     Medicare program continually pay too much for medical 
     equipment and medical supplies; and
       (B) if the Medicare program paid the same prices for 16 
     health care supplies as the Department of Veterans Affairs, 
     which directly

[[Page 534]]

     negotiates prices with manufacturers, pays for those 
     supplies, the Federal Government could save $958,000,000 each 
     year.

     SEC. 3. SENSE OF THE SENATE REGARDING THE USE OF AUTHORITY TO 
                   NEGOTIATE PRICES FOR MEDICARE PRESCRIPTION 
                   DRUGS.

       It is the sense of the Senate that the Secretary of Health 
     and Human Services should exercise the authority under 
     section 1860D-11(i)(1) of the Social Security Act (42 U.S.C. 
     1395w-111(i)(1)), as amended by section 4, so as to assure an 
     affordable medicare drug benefit for medicare beneficiaries 
     and taxpayers.

     SEC. 4. NEGOTIATING FAIR PRICES FOR MEDICARE PRESCRIPTION 
                   DRUGS.

       (a) Negotiation.--Section 1860D-11 of the Social Security 
     Act (42 U.S.C. 1395w-111) is amended by striking subsection 
     (i) (relating to noninterference) and by inserting the 
     following:
       ``(i) Authority To Negotiate; No National Formulary.--
       ``(1) Authority to negotiate prices with manufacturers.--In 
     order to ensure that beneficiaries enrolled under 
     prescription drug plans and MA-PD plans pay the lowest 
     possible price, the Secretary shall have authority similar to 
     that of other Federal entities that purchase prescription 
     drugs in bulk to negotiate contracts with manufacturers of 
     covered part D drugs, consistent with the requirements and in 
     furtherance of the goals of providing quality care and 
     containing costs under this part.
       ``(2) No national formulary.--In order to promote 
     competition under this part and in carrying out this part, 
     the Secretary may not require a particular formulary for 
     covered part D drugs.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the enactment of section 
     101(a) of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2071).
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 124. A bill to amend title XVIII of the Social Security Act to 
repeal the MA Regional Plan Stabilization Fund; to the Committee on 
Finance.
  Mr. FEINGOLD. Mr. President, today I am introducing a bill that will 
remove the multi-billion dollar ``stabilization fund'' from the new 
Medicare prescription drug benefit. This stabilization fund is in 
essence a slush fund that gives billions of dollars to private 
insurance companies. This is not an efficient use of taxpayers' 
dollars. In fact, it's not clear why it's even necessary. If private 
managed care plans are successful in bringing costs down, as backers of 
the new Medicare bill expect, and if seniors supposedly want to choose 
private plans, as backers of the new Medicare bill believe, then why 
should American taxpayers pay private companies more money to get more 
people to enroll in them?
  We should not be subsidizing private health insurance companies in 
the name of Medicare reform. It is fiscally irresponsible, in a time of 
record deficits, to use taxpayers' dollars as a giveaway to private 
insurance companies. By removing this multi-billion slush fund, my bill 
will save the American taxpayers $10 billion. Many analysts, including 
the Administration's analysts, predict that the new Medicare 
prescription drug benefit will far surpass the $400 billion budgeted 
for it. We need to look carefully at how we spend Medicare dollars, so 
that we can ensure that the program remains solvent for future 
generations.
  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. 124

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

     SECTION 1. REPEAL OF MA REGIONAL PLAN STABILIZATION FUND.

       (a) Purpose of Section.--The purpose of this section is to 
     reduce the Federal budget deficit and to more efficiently use 
     taxpayer dollars in health care spending.
       (b) Repeal of MA Regional Plan Stabilization Fund.--Section 
     1858 of the Social Security Act (42 U.S.C. 1395w-27a) is 
     amended--
       (1) by striking subsection (e);
       (2) by redesignating subsections (f), (g), and (h) as 
     subsections (e), (f), and (g), respectively; and
       (3) in subsection (e), as so redesignated, by striking 
     ``subject to subsection (e),''.
       (c) Conforming Amendment.--Section 1851(i)(2) of the Social 
     Security Act (42 U.S.C. 1395w-21(i)(2)), as amended by 
     section 221(d)(5) of the Medicare Prescription Drug, 
     Improvement, and Modernization Act of 2003, is amended by 
     striking ``1858(h)'' and inserting ``1858(g)''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of the 
     Medicare Prescription Drug, Improvement, and Modernization 
     Act of 2003 (Public Law 108-173).
                                 ______
                                 
      By Mrs. BOXER (for herself, Mrs. Feinstein and Mr. Durbin):
  S. 125. A bill to designate the United States courthouse located at 
501 I Street in Sacramento, California, as the ``Robert T. Matsui 
United States Courthouse''; to the Committee on Environment and Public 
Works.
  Mrs. BOXER. Mr. President, I am introducing legislation today to name 
the courthouse in Sacramento, California, as the ``Robert T. Matsui 
United States Courthouse.'' I am pleased to be joined in this effort by 
Senators Feinstein and Durbin.
  Congressman Matsui's death on January 1, 2005 was shocking to all of 
us. Naming the Federal Courthouse in Sacramento in his honor would be a 
very appropriate memorial to his continual efforts toward a just and 
fair society.
  After his childhood internment, Bob Matsui could have chosen to dwell 
on the sadness of his early years. Instead, he chose to give his life 
to public service, working to improve the lives of those in his 
congressional district and all Americans. He was a true patriot.
  He was first elected to Congress in 1978, and spent the past 26 years 
representing the citizens of Sacramento with distinction and pride. He 
served as a senior member of the Committee on Ways and Means, and took 
a particular interest in complex public policy issues including tax, 
international trade, social security, healthcare, and welfare reform.
  Congressman Matsui's dedication to the well-being of America's 
children earned him the Congressional Advocate of the Year award from 
The Child Welfare League of America in 1992 and 1994. The Congressman 
was also honored with the Anti Defamation League's Lifetime Achievement 
Award for his commitment to human rights.
  Included in Congressman Matsui's long list of legislative 
achievements were his accomplishments to benefit the people of his 
district including flood control, transportation, and his success in 
obtaining $142 million in federal funding for the courthouse in 
Sacramento.
  A graduate of the University of California at Berkeley and Hastings 
College of Law, he founded his own law practice in 1967, and was 
elected to the Sacramento City Council in 1971. After winning 
reelection in 1975 he became vice mayor of Sacramento in 1977. 
Congressman Matsui is survived by his wife, Doris Matsui, their son 
Brian and his wife Amy, and granddaughter, Anna.
  Mrs. FEINSTEIN. Mr. President, I join Senators Boxer and Durbin in 
introducing legislation that would rename the federal courthouse in 
Sacramento, CA, in honor of recently deceased U.S. Representative 
Robert T. Matsui. This represents a fitting tribute to a great man and 
a dedicated public servant.
  On January 1, 2005, the people of the Sacramento area, the State of 
California, and the Nation suffered a great loss when Bob Matsui passed 
away. For 26 years in Congress and 7 years before that as a member of 
the Sacramento City Council, Bob was a reasoned and dependable voice. A 
problem solver, Bob was a thoughtful and constructive leader who 
brought people together to find solutions to public policy issues.
  I had the distinct pleasure of working with Bob on a number of issues 
relating to our home State of California. I will remember him as a 
great human being, as a trusted colleague, as a fine public servant, 
and someone in whom I was proud to place friendship, respect, and 
collegiality.
  Proud of his ideals, Bob never let disagreement lead to rancor. The 
sheer number of tributes paid from both sides of the aisle clearly 
demonstrates the enormous respect he inspired among his colleagues. 
Likewise, the tremendous outpouring of support shown at services held 
in his honor reminds us just how endeared he had become to those he 
represented over the years.
  Bob's path to public service was greatly fueled by experiences in his

[[Page 535]]

youth, especially his internment along with thousands of other Japanese 
Americans during World War II.
  When he was just six months old, Bob and his family were sent to an 
internment camp in Northern California, leaving behind their home and 
their livelihood. Bob would spend the first four years of his life 
there.
  I think this experience had a very sobering impact on his life. But 
rather than let it lead to resentment and hatred, I think it had an 
impact on his knowing what he wanted to do with his life, and that was 
public service.
  In fact, one of Bob's most significant legacies will be the work he 
did to help the Government make amends with the Japanese Americans who 
were interned like himself.
  As a member of Congress, Bob was successful in passing legislation 
that offered a formal apology from the Government for the internment 
program and provided compensation to victims. This is a great legacy 
and it will be remembered well.
  Bob also excelled in his knowledge and expertise of Social Security 
as well as tax and trade policy. He had an influential place on the 
House Ways and Means Committee, which will miss his leadership.
  The Sacramento area, where Bob was born and which he represented for 
over three decades in public office, shows numerous examples of Bob's 
achievements. From the light-rail train system to comprehensive flood 
protection, Bob's mark is everywhere.
  The renaming of this particular courthouse in Bob's honor is 
especially fitting. During his career in Congress, Bob was instrumental 
in obtaining more than $142 million in federal funding for the 
courthouse.
  Bob did what he did extraordinarily well. Throughout his career he 
showed that he was a skilled politician as well as a great policymaker. 
His constituents considered themselves lucky to have his 
representation, and I consider myself lucky to have known him.
  Through his many accomplishments, Bob Matsui secured his legacy of 
devoted public service. I offer my gratitude for his service and 
support this legislation in his honor.
                                 ______
                                 
      By Mr. INOUYE:
  S. 127. A bill to amend chapter 81 of title 5, United States Code, to 
authorize the use of clinical social workers to conduct evaluations to 
determine work-related emotional and mental illnesses; to the Committee 
on Homeland Security and Governmental Affairs.
  Mr. INOUYE. Mr. President, today I introduce the Clinical Social 
Workers' Recognition Act to correct a continuing problem in the Federal 
Employees Compensation Act. This bill will also provide clinical social 
workers the recognition they deserve as independent providers of 
quality mental health care services.
  Clinical social workers are authorized to independently diagnose and 
treat mental illnesses through public and private health insurance 
plans across the nation. However, Title V of the United States Code, 
does not permit the use of mental health evaluations conducted by 
clinical social workers for use as evidence in determining workers' 
compensation claims brought by federal employees. The bill I am 
introducing corrects this problem.
  It is a sad irony that Federal employees may select a clinical social 
worker through their health plans to provide mental health services, 
but may not go to this same professional for workers' compensation 
evaluations. The failure to recognize the validity of evaluations 
provided by clinical social workers unnecessarily limits federal 
employees' selection of a provider to conduct the workers' compensation 
mental health evaluations. Lack of this recognition may well impose an 
undue burden on federal employees where clinical social workers are the 
only available providers of mental health care.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 127

       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 ``Clinical Social Workers' 
     Recognition Act of 2005''.

     SEC. 2. EXAMINATIONS BY CLINICAL SOCIAL WORKERS FOR FEDERAL 
                   WORKER COMPENSATION CLAIMS.

       Section 8101 of title 5, United States Code, is amended--
       (1) in paragraph (2), by striking ``and osteopathic 
     practitioners'' and inserting ``osteopathic practitioners, 
     and clinical social workers''; and
       (2) in paragraph (3), by striking ``osteopathic 
     practitioners'' and inserting ``osteopathic practitioners, 
     clinical social workers,''.
                                 ______
                                 
      By Mrs. BOXER (for herself and Mrs. Feinstein):
  S. 128. A bill to designate certain public land in Humboldt, Del 
Norte, Mendocino, Lake, and Napa Counties in the State of California as 
wilderness, to designate certain segments of the Black Butte River in 
Mendocino County, California as a wild or scenic river, and for other 
purposes; to the Committee on Energy and Natural Resources.
  Mrs. BOXER. Mr. President, I am introducing a bill today that will 
protect hundreds of thousands of acres of wilderness in Northern 
California. The Northern California Coastal Wild Heritage Wilderness 
Act would designate over 300,000 acres in 14 areas as wilderness and 
would protect 21 miles of the Black Butte Creek as wild and scenic. The 
Senate passed this legislation during the 108th Congress, and I am 
hopeful this year that the bill will become law.
  California's natural treasures have always been one of the things 
that make California unique, drawing millions of people to them over 
the years to revel in their wild beauty. But that beauty must not be 
taken for granted. It is important that we move now to designate these 
special places in California as wilderness to protect them for the 
enjoyment of future generations.
  That is why I introduced the statewide California Wild Heritage Act 
during the 107th Congress and the 108th Congress, and I will soon be 
reintroducing it. The California Wild Heritage Act would protect more 
than 2.5 million acres of public land throughout the state of 
California, as well as the free-flowing portions of 23 rivers. Every 
acre of wild land is a treasure, but the areas protected in this bill 
are some of California's most precious.
  I am pleased to join Representative Mike Thompson of California in 
introducing this legislation, which protect those portions of my 
statewide bill that are located in California's First Congressional 
District. The areas protected under this legislation are some of the 
most magnificent wild places in our state. For example, in southwestern 
Humboldt and northwestern Mendocino counties, over 42,000 acres of the 
King Range will be protected as wilderness. This is the wildest portion 
of the California coast, boasting the longest stretch of undeveloped 
coastline in the United States outside of Alaska.
  This bill will protect watersheds that provide clean water to our 
cities and farms. This bill would also protect the precious plant and 
animal species that make their homes in these areas. Endangered and 
threatened species whose habitats will be protected by this bill 
include the bald eagle, California brown pelican, steelhead trout, coho 
salmon, bald eagle, peregrine falcon, northern spotted owl, and 
Roosevelt elk.
  During the last 20 years, 675,000 acres of unprotected wilderness 
lost their wilderness character due to activities such as logging and 
mining. As our population increases, and California becomes home to 
almost 50 million people by the middle of the century, development 
pressures threaten our remaining wild places. We must protect our 
precious wild lands and wild rivers before they are lost forever.
  Mr. President, those of us who live in the United States have a very 
special responsibility to protect our natural heritage. With this 
legislation, we are one step closer to protecting this legacy for our 
children's children, and their children.
                                 ______
                                 
      By Mr. TALENT:

[[Page 536]]

  S. 129. A bill to amend title 23, United States Code, to provide for 
HOV facilities; to the Committee on Environment and Public Works.
  Mr. TALENT. Mr. President, I am pleased to be introducing this bill, 
which will allow more owners of hybrid electric vehicles, or HEVs, to 
have access to HOV lanes on Federal highways. For all of us who have a 
desire to lessen our dependence on foreign oil and encourage the use of 
renewable energy, this bill represents a step forward towards achieving 
those goals.
  The language that is currently in the highway bills passed by the 
House and the Senate allows hybrid vehicles that achieve a 45 mile-per-
gallon fuel economy highway rating to use HOV lanes. Any hybrid that 
achieves that kind of fuel economy certainly deserves to get that 
status, because it is a very impressive fuel economy rating and 
represents a substantial improvement over non-hybrid vehicles. What the 
45 mile-per-gallon standard fails to take into account, however, is 
that many larger hybrid vehicles achieve a much larger fuel economy 
improvement over their internal combustion engine counterparts, and 
thus save more energy, than smaller vehicles which manage to meet the 
standard but are a less drastic improvement over their non-hybrid 
counterparts.
  To illustrate this, take the 2005 model Honda Civic HEV, which gets 
just over 45 miles-per-gallon. This represents less than a 40 percent 
improvement over the comparable internal combustion model. The 2005 
Ford Escape HEV, on the other hand, is a truck, so it gets fewer miles 
per gallon than a Civic, between 35 and 40. However, this is a 75 
percent improvement over its internal combustion engine counterpart, 
and in addition, the Escape HEV emits 3-4 tons fewer greenhouse gases 
every year than the non-hybrid.
  There is no reason to discriminate against these larger, American-
made hybrids like the Ford Escape. They are truly engineering marvels 
and are so clearly beneficial for the environment. The bill that I have 
sponsored will give States the discretion to open up their HOV lanes to 
hybrid vehicles that achieve a substantial increase in fuel economy 
relative to comparable gasoline vehicles, or achieve a substantial 
increase in lifetime fuel savings relative to comparable gasoline 
vehicles. It creates a minimum standard of improvement necessary for 
hybrids, but gives States the option of increasing the requirements. 
This bill also allows States to open HOV lanes to single occupancy 
advanced lean burn vehicles that achieve at least a 25 percent increase 
in fuel economy relative to comparable gasoline vehicles and that are 
certified to Clean Air Act Tier 2 standards.
  I am hopeful that my colleagues on both sides of the aisle can agree 
that we should do all we can to encourage the use of renewable energy 
in our country, and hybrid vehicles are an important part of that. The 
people who drive these vehicles are doing their part to help clean up 
the air and increase energy conservation, and we should give more 
people an incentive to buy these vehicles by giving them access to HOV 
lanes.
  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. 129

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

     SECTION 1. HOV FACILITIES.

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

     ``Sec. 165. HOV facilities

       ``(a) Definitions.--In this section:
       ``(1) Dedicated alternative fuel vehicle.--The term 
     `dedicated alternative fuel vehicle' means a vehicle that 
     operates solely on--
       ``(A) methanol, denatured ethanol, or other alcohols;
       ``(B) a mixture containing at least 85 percent of methanol, 
     denatured ethanol, or other alcohols by volume with gasoline 
     or other fuels;
       ``(C) natural gas;
       ``(D) liquefied petroleum gas;
       ``(E) hydrogen;
       ``(F) coal derived liquid fuels;
       ``(G) fuels (except alcohol) derived from biological 
     materials;
       ``(H) electricity, including electricity from solar energy; 
     or
       ``(I) any other fuel that the Secretary prescribes by 
     regulation that is not substantially petroleum and that would 
     yield substantial energy security and environmental benefits.
       ``(2) HOV facility.--The term `HOV facility' means a high 
     occupancy vehicle facility.
       ``(3) Low-emission and energy-efficient vehicle.--The term 
     `low-emission and energy-efficient vehicle' means a vehicle 
     that--
       ``(A) has been certified by the Administrator of the 
     Environmental Protection Agency as meeting the Tier II 
     emission level established in regulations prescribed by the 
     Administrator under section 202(i) of the Clean Air Act (42 
     U.S.C. 7521(i)) for that make and model year vehicle; and
       ``(B)(i) has propulsion energy drawn from onboard hybrid 
     sources of stored energy that are--
       ``(I) an internal combustion or heat engine using 
     consumable fuel;
       ``(II) a rechargeable energy storage system; and
       ``(III) certified by the manufacturer to have achieved 
     either a 10 percent or more increase in city fuel economy 
     relative to a comparable vehicle that is an internal 
     combustion gasoline fueled vehicle (other than a vehicle that 
     has propulsion energy from such onboard hybrid sources), or a 
     10 percent or more vehicle increase in lifetime fuel savings 
     relative to a comparable vehicle, determined in accordance 
     with guidelines prescribed by the Administrator of the 
     Environmental Protection Agency not later than 180 days after 
     the date of enactment of this section, specifying procedures 
     and methods for calculating either increase and making the 
     comparison, except that the State agency referred to in this 
     section may, subject to the guidelines, increase in 
     combination the percentage under this subclause in 
     furtherance of its responsibilities with respect to a HOV 
     facility specified in subsection (e); or
       ``(ii) is a dedicated alternative fuel vehicle.
       ``(4) Public transportation vehicle.--The term `public 
     transportation vehicle' means a vehicle that provides public 
     transportation (as defined in section 5302(a) of title 49).
       ``(5) State agency.--The term `State agency', as used with 
     respect to a HOV facility, means an agency of a State or 
     local government (including a State transportation 
     department) having jurisdiction over the operation of the 
     facility.
       ``(6) Advanced lean burn technology vehicle.--The term 
     `advanced lean burn technology vehicle' means a vehicle with 
     an internal combustion engine that--
       ``(A) is designed to operate primarily using more air than 
     is necessary for complete combustion of fuel;
       ``(B) incorporates direct injection;
       ``(C) achieves at least 125 percent of city fuel economy of 
     a comparable vehicle; and
       ``(D) has received a certificate that the vehicle meets or 
     exceeds--
       ``(i) in the case of a vehicle having a gross vehicle 
     weight rating of 6000 pounds or less, the Bin 5 II emission 
     standard established by regulations under section 202(i) of 
     the Clean Air Act (42 U.S.C. 7521(i)); and
       ``(ii) in the case of a vehicle having a gross vehicle 
     weight rating of more than 6,000 pounds but not more than 
     8,500 pounds, the Bin 8 Tier II emission standard established 
     by regulations under section 202(i) of the Clean Air Act (42 
     U.S.C. 7521(i)).
       ``(b) In General.--
       ``(1) Authority of state agencies.--A State agency that has 
     jurisdiction over the operation of a HOV facility shall 
     establish the occupancy requirements of vehicles operating on 
     the facility.
       ``(2) Occupancy requirement.--Except as otherwise provided 
     by this section, not fewer than 2 occupants per vehicle may 
     be required for use of a HOV facility.
       ``(c) Exceptions to Occupancy Requirement.--Notwithstanding 
     the occupancy requirements of subsection (b)(2), the 
     following exceptions shall apply with respect to a State 
     agency operating a HOV facility:
       ``(1) Motorcycles and bicycles.--
       ``(A) In general.--Subject to subparagraph (B), the State 
     agency shall allow motorcycles and bicycles to use the HOV 
     facility.
       ``(B) Safety exception.--
       ``(i) In general.--A State agency may restrict use of the 
     HOV facility by motorcycles or bicycles if the agency 
     certifies to the Secretary that such use would create a 
     safety hazard and the Secretary accepts the certification.
       ``(ii) Notice.--The Secretary may accept a certification 
     under clause (i) only after the Secretary publishes notice of 
     the certification in the Federal Register and provides an 
     opportunity for public comment.
       ``(2) Public transportation vehicles.--The State agency may 
     allow public transportation vehicles to use the HOV facility 
     if the agency--
       ``(A) establishes requirements for clearly identifying the 
     vehicles; and
       ``(B) establishes procedures for enforcing the restrictions 
     on the use of the facility by the vehicles.
       ``(3) High occupancy toll vehicles.--The State agency may 
     allow vehicles that are

[[Page 537]]

     not otherwise exempt under this subsection to use the HOV 
     facility if--
       ``(A) the operators of the vehicles pay a toll charged by 
     the agency for use of the facility; and
       ``(B) the agency--
       ``(i) establishes a program that addresses how motorists 
     can enroll and participate in the toll program;
       ``(ii) develops, manages, and maintains a system that will 
     automatically collect the toll; and
       ``(iii) establishes policies and procedures to--

       ``(I) manage the demand to use the facility by varying the 
     toll amount that is charged;
       ``(II) enforce violations of use of the facility; and
       ``(III) permit low-income individuals to pay reduced tolls.

       ``(4) Low-emission and energy-efficient vehicles.--
       ``(A) Inherently low-emission vehicles.--Before September 
     30, 2009, the State agency may allow vehicles that are 
     certified and labeled as inherently low-emission vehicles 
     under section 88.311-93 of title 40, Code of Federal 
     Regulations, to use the HOV facility if the agency 
     establishes procedures for enforcing restrictions on the use 
     of the facility by the vehicles.
       ``(B) Other low-emission and energy-efficient vehicles.--
     Before September 30, 2009, the State agency may allow 
     vehicles that are certified as and labeled low-emission and 
     energy-efficient vehicles under subsection (f) to use the HOV 
     facility if the agency--
       ``(i) establishes a program that addresses how the vehicles 
     are selected and certified;
       ``(ii) establishes requirements for labeling the vehicles 
     and procedures for enforcing those requirements;
       ``(iii) continuously monitors, evaluates, and reports to 
     the Secretary on the performance of the vehicles; and
       ``(iv) imposes on the use of the HOV facility by vehicles 
     that do not satisfy established occupancy requirements any 
     restrictions that are necessary to ensure that neither the 
     performance of an individual HOV facility nor the HOV 
     facility system are seriously degraded.
       ``(5) Advanced lean burn technology vehicles.--Before 
     September 30, 2009, the State agency may allow vehicles that 
     are certified and labeled as advanced lean burn technology 
     vehicles under subsection (f) to use the HOV facility if the 
     agency--
       ``(A) establishes a program that address how the vehicles 
     are selected and certified;
       ``(B) establishes requirements for labeling the vehicles 
     and procedures for enforcing those requirements;
       ``(C) continuously monitors, evaluates, and reports to the 
     Secretary on the performance of the vehicles; and
       ``(D) imposes on the use of HOV facilities by vehicles that 
     do not satisfy established occupancy requirements any 
     restrictions that are necessary to ensure that neither the 
     performance of individual HOV facilities nor the HOV facility 
     system are seriously degraded.
       ``(d) Requirements Applicable to Tolls.--
       ``(1) In general.--Notwithstanding section 301, tolls may 
     be charged under paragraphs (3) and (4) of subsection (c), 
     subject to the requirements of section 129.
       ``(2) HOV facilities on the interstate system.--
     Notwithstanding section 129, tolls may be charged under 
     paragraphs (3) and (4) of subsection (c) on a HOV facility on 
     the Interstate System.
       ``(3) Excess toll revenues.--If a State agency makes a 
     certification under the last sentence of section 129(a)(3) 
     concerning toll revenues collected under paragraphs (3) and 
     (4) of subsection (c), the State shall give priority 
     consideration to projects that develop alternatives to single 
     occupancy vehicle travel or improve highway safety in the use 
     of toll revenues under that sentence.
       ``(e) HOV Facility Management, Operation, Monitoring, and 
     Enforcement.--
       ``(1) In general.--A State agency that allows low-emission 
     and energy-efficient vehicles to use a HOV facility under 
     subsection (c)(4) in a fiscal year shall certify to the 
     Secretary that the agency will carry out the following 
     responsibilities with respect to the facility in the fiscal 
     year:
       ``(A) Establish, manage, and support a performance-
     monitoring, evaluation, and reporting program for the 
     facility that provides for continuous monitoring, assessment, 
     and reporting on the effects that low-emission and energy-
     efficient vehicles may have on the operation of the facility 
     and adjacent highways.
       ``(B) Establish, manage, and support an enforcement program 
     that ensures that the facility is operated in accordance with 
     this section.
       ``(C) Limit or discontinue the use of the facility by low-
     emission and energy-efficient vehicles if the presence of the 
     vehicles has degraded the operation of the facility.
       ``(2) Minimum average operating speed; degraded facility.--
       ``(A) Minimum average operating speed defined.--In this 
     paragraph, the term `minimum average operating speed' means--
       ``(i) 45 miles per hour, in the case of a HOV facility with 
     a speed limit of 50 miles per hour or greater; and
       ``(ii) not more than 10 miles per hour below the speed 
     limit, in the case of a HOV facility with a speed limit of 
     less than 50 miles per hour.
       ``(B) Standard for determining degradation.--For purposes 
     of paragraph (1), the operation of a HOV facility shall be 
     considered to be degraded if vehicles operating on the 
     facility fail to maintain a minimum average operating speed 
     90 percent of the time over a consecutive 180-day period 
     during morning or evening weekday peak hour periods.
       ``(f) Certification and Labeling of Low-Emission and 
     Energy-Efficient Vehicles and Advanced Lean Burn Technology 
     Vehicles.--Not later than 180 days after the date of 
     enactment of this section, the Administrator of the 
     Environmental Protection Agency shall promulgate a final rule 
     establishing requirements for--
       ``(1) certification of vehicles--
       ``(A) as low-emission and energy-efficient vehicles; and
       ``(B) as advance lean burn technology vehicles; and
       ``(2) labeling of the vehicles certified under paragraph 
     (1).''.
       (b) Technical Amendment.--Section 102(c) of title 23, 
     United States Code, is amended by striking from ``10 years'' 
     through ``after'' and inserting ``10 years (or any longer 
     period that the State requests and the Secretary determines 
     to be reasonable) after''.
       (c) Conforming Amendments.--
       (1) Program efficiencies.--Section 102 of title 23, United 
     States Code, is amended by striking subsection (a) and 
     redesignating subsections (b) and (c) as subsections (a) and 
     (b), respectively.
       (2) Chapter analysis.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code, is amended by 
     adding at the end the following:


``165. HOV facilities.''.
                                 ______
                                 
      By Mr. HAGEL (for himself and Mr. Nelson of Nebraska):
  S. 130. A bill to authorize an additional district judgeship for the 
district of Nebraska; to the Committee on the Judiciary.
  Mr. HAGEL. 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. 130

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

     SECTION 1. DISTRICT JUDGESHIP FOR THE DISTRICT OF NEBRASKA.

       (a) In General.--The President shall appoint, by and with 
     the advice and consent of the Senate, 1 additional district 
     judge for the district of Nebraska.
       (b) Technical and Conforming Amendment.--The table under 
     section 133(a) of title 28, United States Code, is amended by 
     striking the item relating to Nebraska and inserting the 
     following:

  ``Nebraska...................................................4''.....

                                 ______
                                 
      By Mr. INHOFE (for himself and Mr. Voinovich):
  S. 131. A bill to amend the Clean Air Act to reduce air pollution 
through expansion of cap and trade programs, to provide an alternative 
regulatory classification for units subject to the cap and trade 
program; to the Committee on Environment and Public Works.
  Mr. INHOFE. 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. 131

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Clear 
     Skies Act of 2005''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Emission reduction programs.

                ``TITLE IV--EMISSION REDUCTION PROGRAMS

                      ``Part A--General Provisions

``Sec. 401. (reserved)
``Sec. 402. Definitions.
``Sec. 403. Allowance system.
``Sec. 404. Permits and compliance plans.
``Sec. 405. Monitoring, reporting, and recordkeeping requirements.
``Sec. 406. Excess emissions penalty; general compliance with other 
              provisions; enforcement.
``Sec. 407. Election for additional units.
``Sec. 408. Clean coal technology regulatory incentives.
``Sec. 409. Electricity reliability.

              ``Part B--Sulfur Dioxide Emission Reductions


                     ``SUBPART 1--ACID RAIN PROGRAM

``Sec. 411. Definitions.

[[Page 538]]

``Sec. 412. Allowance allocation.
``Sec. 413. Phase I sulfur dioxide requirements.
``Sec. 414. Phase II sulfur dioxide requirements.
``Sec. 415. Allowances for States with emissions rates at or below 0.80 
              lbs/mmBtu.
``Sec. 416. Election for additional sources.
``Sec. 417. Auctions, reserve.
``Sec. 418. Industrial sulfur dioxide emissions.
``Sec. 419. Termination.


       ``SUBPART 2--CLEAR SKIES SULFUR DIOXIDE ALLOWANCE PROGRAM

``Sec. 421. Definitions.
``Sec. 422. Applicability.
``Sec. 423. Limitations on total emissions.
``Sec. 424. Egu allocations.
``Sec. 425. Disposition of sulfur dioxide allowances allocated under 
              subpart 1.
``Sec. 426. Incentives for sulfur dioxide emission control technology.


             ``SUBPART 3--WESTERN REGIONAL AIR PARTNERSHIP

``Sec. 431. Definitions.
``Sec. 432. Applicability.
``Sec. 433. Limitations on total emissions.
``Sec. 434. EGU allocations.

       ``Part C--Nitrogen Oxides Clear Skies Emission Reductions


                     ``SUBPART 1--ACID RAIN PROGRAM

``Sec. 441. Nitrogen oxides emission reduction program.
``Sec. 442. Termination.


       ``SUBPART 2--CLEAR SKIES NITROGEN OXIDES ALLOWANCE PROGRAM

``Sec. 451. Definitions.
``Sec. 452. Applicability.
``Sec. 453. Limitations on total emissions.
``Sec. 454. EGU allocations.
``Sec. 455. Nitrogen oxides early action reduction credits.


              ``SUBPART 3--OZONE SEASON NOx BUDGET PROGRAM

``Sec. 461. Definitions.
``Sec. 462. General provisions.
``Sec. 463. Applicable implementation plan.
``Sec. 464. Termination of Federal administration of NOx trading 
              program for EGUs.
``Sec. 465. Carryforward of pre-2008 nitrogen oxides allowances.
``Sec. 466. Non-ozone season voluntary action credits.

                 ``Part D--Mercury Emissions Reductions

``Sec. 471. Definitions.
``Sec. 472. Applicability.
``Sec. 473. Limitations on total emissions.
``Sec. 474. EGU allocations.
``Sec. 475. Mercury early action reduction credits.

    ``Part E--National Emission Standards; Research, Environmental 
Accountability; Major Source Preconstruction Review and Best Available 
                Retrofit Control Technology Requirements

``Sec. 481. National emission standards for affected units.
``Sec. 482. Research, environmental monitoring, and assessment.
``Sec. 483. Major source preconstruction review requirements and best 
              available retrofit control technology requirements; 
              applicability to affected units.
Sec. 3. Other amendments.

     SEC. 2. EMISSION REDUCTION PROGRAMS.

       Title IV of the Clean Air Act (relating to acid deposition 
     control) (42 U.S.C. 7651, et seq.) is amended to read as 
     follows:

                ``TITLE IV--EMISSION REDUCTION PROGRAMS

                      ``PART A--GENERAL PROVISIONS

     ``SEC. 401. (RESERVED)

     ``SEC. 402. DEFINITIONS.

       ``In this title:
       ``(1) Affected EGU.--The term `affected EGU' shall have the 
     meaning set forth in section 421, 430, 451, or 471, as 
     appropriate.
       ``(2) Affected facility.--The term `affected facility' or 
     `affected source' means a facility or source that includes 
     one or more affected units.
       ``(3) Affected unit.--The term `affected unit' means--
       ``(A) under this part, a unit that is subject to emission 
     reduction requirements or limitations under part B, C, or D 
     or, if applicable, under a specified part or subpart; or
       ``(B) under subpart 1 of part B or subpart 1 of part C, a 
     unit that is subject to emission reduction requirements or 
     limitations under that subpart.
       ``(4) Allowance.--The term `allowance' means--
       ``(A) an authorization, by the Administrator under this 
     title, to emit one ton of sulfur dioxide, one ton of nitrogen 
     oxides, or one ounce of mercury; or
       ``(B) under subpart 1 of part B, an authorization by the 
     Administrator under this title, to emit one ton of sulfur 
     dioxide.
       ``(5) Baseline heat input.--
       ``(A) In general.--The term `baseline heat input' means, 
     except under subpart 1 of part B and section 407, the average 
     annual heat input used by a unit during the three years in 
     which the unit had the highest heat input for the period 1998 
     through 2002.
       ``(B) Commencement of operation after january 1, 2001.--
     Notwithstanding subparagraph (A), if a unit commenced or 
     commences operation after January 1, 2001, then `baseline 
     heat input' means the manufacturer's design heat input 
     capacity for the unit multiplied by 80 percent for coal-fired 
     units, 50 percent for boilers that are not coal-fired, 80 
     percent for combustion turbine cogeneration units elected 
     under section 407, 50 percent for combustion turbines other 
     than simple cycle turbines, and 5 percent for simple cycle 
     combustion turbines.
       ``(C) Heat input determination.--A unit's heat input for a 
     year shall be the heat input--
       ``(i) required to be reported under section 405 for the 
     unit, if the unit was required to report heat input during 
     the year under that section;
       ``(ii) reported to the Energy Information Administration 
     for the unit, if the unit was not required to report heat 
     input under section 405;
       ``(iii) based on data for the unit reported to the State 
     where the unit is located as required by State law, if the 
     unit was not required to report heat input during the year 
     under section 405 and did not report to the Energy 
     Information Administration; or
       ``(iv) based on fuel use and fuel heat content data for the 
     unit from fuel purchase or use records, if the unit was not 
     required to report heat input during the year under section 
     405 and did not report to the Energy Information 
     Administration and the State.
       ``(D) Regulations.--Not later than three months after the 
     enactment of the Clear Skies Act of 2005, the Administrator 
     shall promulgate regulations, without notice and opportunity 
     for comment, specifying the format in which the information 
     under subparagraphs (B)(ii) and (C)(ii), (iii), or (iv) shall 
     be submitted. Not later than nine months after the enactment 
     of the Clear Skies Act of 2005, the owner or operator of any 
     unit under subparagraph (B)(ii) or (C)(ii), (iii), or (iv) to 
     which allowances may be allocated under section 424, 434, 
     454, or 474 shall submit to the Administrator such 
     information. The Administrator is not required to allocate 
     allowances under such sections to a unit for which the owner 
     or operator fails to submit information in accordance with 
     the regulations promulgated under this subparagraph.
       ``(6) Coal.--The term `coal' means any solid fuel 
     classified as anthracite, bituminous, subbituminous, or 
     lignite.
       ``(7) Coal-derived fuel.--The term `coal-derived fuel' 
     means any fuel (whether in a solid, liquid, or gaseous state) 
     produced by the mechanical, thermal, or chemical processing 
     of coal.
       ``(8) Coal-fired.--The term `coal-fired' with regard to a 
     unit means, except under subpart 1 of part B, subpart 1 of 
     part C, and sections 424 and 434, combusting coal or any 
     coal-derived fuel alone or in combination with any amount of 
     any other fuel in any year.
       ``(9) Cogeneration unit.--The term `cogeneration unit' 
     means, except under subpart 1 of part B and subpart 1 of part 
     C, a unit that produces through the sequential use of 
     energy--
       ``(A) electricity; and
       ``(B) useful thermal energy (such as heat or steam) for 
     industrial, commercial, heating, or cooling purposes.
       ``(10) Combustion turbine.--
       ``(A) In general.--The term `combustion turbine' means any 
     combustion turbine that is not self-propelled.
       ``(B) Inclusion.--The term `combustion turbine' includes a 
     simple cycle combustion turbine, a combined cycle combustion 
     turbine and any duct burner or heat recovery device used to 
     extract heat from the combustion turbine exhaust, and a 
     regenerative combustion turbine.
       ``(C) Exclusions.--The term `combustion turbine' does not 
     include a combined turbine in an integrated gasification 
     combined cycle plant.
       ``(11) Commence commercial operation.--The term `commence 
     commercial operation' with regard to a unit means the start 
     up of the unit's combustion chamber and the commencement of 
     the generation of electricity for sale.
       ``(12) Compliance plan.--The term `compliance plan' means 
     either--
       ``(A) a statement that the facility will comply with all 
     applicable requirements under this title; or
       ``(B) under subpart 1 of part B or subpart 1 of part C, 
     where applicable, a schedule and description of the method or 
     methods for compliance and certification by the owner or 
     operator that the facility is in compliance with the 
     requirements of that subpart.
       ``(13) Continuous emission monitoring system.--The term 
     `continuous emission monitoring system' (CEMS) means the 
     equipment as required by section 405, used to sample, 
     analyze, measure, and provide on a continuous basis a 
     permanent record of emissions and flow (expressed in pounds 
     per million British thermal units (lbs/mmBtu), pounds per 
     hour (lbs/hr) or such other form as the Administrator may 
     prescribe by regulations under section 405.

[[Page 539]]

       ``(14) Designated representative.--The term `designated 
     representative' means a responsible person or official 
     authorized by the owner or operator of a unit and the 
     facility that includes the unit to represent the owner or 
     operator in matters pertaining to the holding, transfer, or 
     disposition of allowances, and the submission of and 
     compliance with permits, permit applications, and compliance 
     plans.
       ``(15) Duct burner.--The term `duct burner' means a 
     combustion device that uses the exhaust from a combustion 
     turbine to burn fuel for heat recovery.
       ``(16) Facility.--The term `facility' means all buildings, 
     structures, or installations located on 1 or more contiguous 
     or adjacent properties under common control of the same 
     person or persons.
       ``(17) Fossil fuel.--The term `fossil fuel' means natural 
     gas, petroleum, coal, or any form of solid, liquid, or 
     gaseous fuel derived from such material.
       ``(18) Fossil fuel-fired.--The term `fossil fuel-fired', 
     with regard to a unit, means the combustion of fuel that is 
     composed of at least 10 percent fossil fuel.
       ``(19) Fuel oil.--The term `fuel oil' means a petroleum-
     based fuel, including diesel fuel or petroleum derivatives.
       ``(20) Gas-fired.--The term `gas-fired', with regard to a 
     unit, means, except under subpart 1 of part B and subpart 1 
     of part C, combusting only natural gas or fuel oil, with 
     natural gas comprising at least 90 percent, and fuel oil 
     comprising no more than 10 percent, of the unit's total heat 
     input in any year.
       ``(21) Gasify.--The term `gasify' means to convert carbon-
     containing material into a gas consisting primarily of carbon 
     monoxide and hydrogen.
       ``(22) Generator.--The term `generator' means a device that 
     produces electricity and, under subpart 1 of part B and 
     subpart 1 of part C, that is reported as a generating unit 
     pursuant to Department of Energy Form 860.
       ``(23) Heat input.--
       ``(A) In general.--The term `heat input', with regard to a 
     specific period of time, means the product (in mmBtu/time) 
     obtained by multiplying--
       ``(i) the gross calorific value of the fuel (in mmBtu/lb); 
     and
       ``(ii) the fuel feed rate into a unit (in lb of fuel/time).
       ``(B) Exclusions.--The term `heat input' does not include 
     the heat derived from preheated combustion air, recirculated 
     flue gases, or exhaust.
       ``(24) Integrated gasification combined cycle plant.--The 
     term `integrated gasification combined cycle plant' means any 
     combination of equipment used to gasify fossil fuels (with or 
     without other material) and then burn the gas in a combined 
     cycle combustion turbine.
       ``(25) Oil-fired.--The term `oil-fired', with regard to a 
     unit, means, except under sections 424 and 434, combusting 
     fuel oil for more than 10 percent the unit's total heat 
     input, and combusting no coal or coal-derived fuel, in any 
     year.
       ``(26) Owner or operator.--The term `owner or operator' 
     with regard to a unit or facility means, except for subpart 1 
     of part B and subpart 1 of part C, any person who owns, 
     leases, operates, controls, or supervises the unit or the 
     facility.
       ``(27) Permitting authority.--The term `permitting 
     authority' means the Administrator, or the State or local air 
     pollution control agency, with an approved permitting program 
     under title V of the Act.
       ``(28) Potential electrical output.--The term `potential 
     electrical output' with regard to a generator means the 
     nameplate capacity of the generator multiplied by 8,760 
     hours.
       ``(29) Simple cycle combustion turbine.--The term `simple 
     cycle combustion turbine' means a combustion turbine that 
     does not extract heat from the combustion turbine exhaust 
     gases.
       ``(30) Stationary source.--The term `stationary source' 
     means any building, structure, facility, or installation 
     located on one or more contiguous or adjacent properties 
     under common control or ownership of the same person or 
     persons which emits or may emit any air pollutant subject to 
     regulations under the Clear Skies Act of 2005.
       ``(31) State.--The term `State' means--
       ``(A) 1 of the 48 contiguous States, Alaska, Hawaii, the 
     District of Columbia, the Commonwealth of Puerto Rico, the 
     Virgin Islands, Guam, American Samoa, or the Commonwealth of 
     the Northern Mariana Islands; or
       ``(B) under subpart 1 of part B and subpart 1 of part C, 1 
     of the 48 contiguous States or the District of Columbia.
       ``(32) Unit.--The term `unit' means--
       ``(A) a fossil fuel-fired boiler, combustion turbine, or 
     integrated gasification combined cycle plant;
       ``(B) under subpart 1 of part B and subpart 1 of part C, a 
     fossil fuel-fired combustion device; and
       ``(C) a stationary source that--
       ``(i) emits nitrogen oxides, sulfur dioxide, mercury, or 
     any combination of those substances; and
       ``(ii) is elected under section 407.
       ``(33) Utility unit.--The term `utility unit' shall have 
     the meaning set forth in section 411.
       ``(34) Year.--The term `year' means a calendar year.

     ``SEC. 403. ALLOWANCE SYSTEM.

       ``(a) Allocations.--
       ``(1) In general.--For the emission limitation programs 
     under this title, the Administrator shall allocate annual 
     allowances for an affected unit, to be held or distributed by 
     the designated representative of the owner or operator in 
     accordance with this title as follows--
       ``(A) sulfur dioxide allowances in an amount equal to the 
     annual tonnage emission limitation calculated under section 
     413, 414, 415, or 416, except as otherwise specifically 
     provided elsewhere in subpart 1 of part B, or in an amount 
     calculated under section 424 or 434;
       ``(B) nitrogen oxides allowances in an amount calculated 
     under section 454; and
       ``(C) mercury allowances in an amount calculated under 
     section 474.
       ``(2) No judicial review.--Notwithstanding any other 
     provision of law to the contrary, the calculation of the 
     allocation for any unit or facility, and the determination of 
     any values used in such calculation, under sections 424, 434, 
     454, and 474 shall not be subject to judicial review.
       ``(3) Allocation without cost.--Allowances shall be 
     allocated by the Administrator without cost to the recipient, 
     in accordance with this title.
       ``(b) Allowance Transfer System.--Allowances allocated or 
     sold by the Administrator under this title may be transferred 
     among designated representatives of the owners or operators 
     of affected facilities under this title and any other person, 
     as provided by the allowance system regulations promulgated 
     by the Administrator. With regard to sulfur dioxide 
     allowances, the Administrator shall implement this subsection 
     under 40 CFR part 73 (2002), amended as appropriate by the 
     Administrator. With regard to nitrogen oxides allowances and 
     mercury allowances, the Administrator shall implement this 
     subsection by promulgating regulations not later than twenty-
     four months after the date of enactment of the Clear Skies 
     Act of 2005. The regulations under this subsection shall 
     establish the allowance system prescribed under this section, 
     including, but not limited to, requirements for the 
     allocation, transfer, and use of allowances under this title. 
     Such regulations shall prohibit the use of any allowance 
     prior to the calendar year for which the allowance was 
     allocated and shall provide, consistent with the purposes of 
     this title, for the identification of unused allowances, and 
     for such unused allowances to be carried forward and added to 
     allowances allocated in subsequent years. Such regulations 
     shall provide, or shall be amended to provide, that transfers 
     of allowances shall not be effective until certification of 
     the transfer, signed by a responsible official of the 
     transferor, is received and recorded by the Administrator.
       ``(c) Allowance Tracking System.--The Administrator shall 
     promulgate regulations establishing a system for issuing, 
     recording, and tracking allowances, which shall specify all 
     necessary procedures and requirements for an orderly and 
     competitive functioning of the allowance system. Such system 
     shall provide, by twenty-four months prior to the compliance 
     year, for one or more facility-wide accounts for holding 
     sulfur dioxide allowances, nitrogen oxides allowances, and, 
     if applicable, mercury allowances for all affected units at 
     an affected facility. With regard to sulfur dioxide 
     allowances, the Administrator shall implement this subsection 
     under 40 CFR part 73 (2002), amended as appropriate by the 
     Administrator. With regard to nitrogen oxides allowances and 
     mercury allowances, the Administrator shall implement this 
     subsection by promulgating regulations not later than twenty-
     four months after the date of enactment of the Clear Skies 
     Act of 2005. All allowance allocations and transfers shall, 
     upon recording by the Administrator, be deemed a part of each 
     unit's or facility's permit requirements pursuant to section 
     404, without any further permit review and revision.
       ``(d) Nature of Allowances.--A sulfur dioxide allowance, 
     nitrogen oxides allowance, or mercury allowance allocated or 
     sold by the Administrator under this title is a limited 
     authorization to emit one ton of sulfur dioxide, one ton of 
     nitrogen oxides, or one ounce of mercury, as the case may be, 
     in accordance with the provisions of this title. Such 
     allowance does not constitute a property right. Nothing in 
     this title or in any other provision of law shall be 
     construed to limit the authority of the United States to 
     terminate or limit such authorization. Nothing in this 
     section relating to allowances shall be construed as 
     affecting the application of, or compliance with, any other 
     provision of this Act to an affected unit or facility, 
     including the provisions related to applicable National 
     Ambient Air Quality Standards and State implementation plans. 
     Nothing in this section shall be construed as requiring a 
     change of any kind in any State law regulating electric 
     utility rates and charges or affecting any State law 
     regarding such State regulation or as limiting State 
     regulation (including any prudency review) under such a State 
     law. Nothing in this section shall be construed as modifying 
     the Federal Power Act or as affecting the authority

[[Page 540]]

     of the Federal Energy Regulatory Commission under that Act. 
     Nothing in this title shall be construed to interfere with or 
     impair any program for competitive bidding for power supply 
     in a State in which such program is established. Allowances, 
     once allocated or sold to a person by the Administrator, may 
     be received, held, and temporarily or permanently transferred 
     in accordance with this title and the regulations of the 
     Administrator without regard to whether or not a permit is in 
     effect under title V of the Clean Air Act or section 404 of 
     the Clear Skies Act of 2005 with respect to the unit for 
     which such allowance was originally allocated and recorded.
       ``(e) Prohibitions.--
       ``(1) In general.--It shall be unlawful for any person to 
     hold, use, or transfer any allowance allocated or sold by the 
     Administrator under this title, except in accordance with 
     regulations promulgated by the Administrator.
       ``(2) Emissions.--It shall be unlawful for any affected 
     unit or for the affected units at a facility to emit sulfur 
     dioxide, nitrogen oxides, and mercury, as the case may be, 
     during a year in excess of the number of allowances held for 
     that unit or facility for that year by the designated 
     representative as provided in sections 412(c), 422, 432, 452, 
     and 472.
       ``(3) Purchase of allowances.--The owner or operator of a 
     facility may purchase allowances directly from the 
     Administrator to be used only to meet the requirements of 
     sections 422, 432, 452, and 472, as the case may be, for the 
     year in which the purchase is made or the prior year. Not 
     later than thirty-six months after the date of enactment of 
     the Clear Skies Act of 2005, the Administrator shall 
     promulgate regulations providing for direct sales of sulfur 
     dioxide allowances, nitrogen oxides allowances, and mercury 
     allowances to an owner or operator of a facility. The 
     regulations shall provide that--
       ``(A) such allowances may be used only to meet the 
     requirements of section 422, 432, 452, and 472, as the case 
     may be, for such facility and for the year in which the 
     purchase is made or the prior year;
       ``(B) each such sulfur dioxide allowance shall be sold for 
     $2,000, each such nitrogen oxides allowance shall be sold for 
     $4,000, and each such mercury allowance shall be sold for 
     $2,187.50, with such prices adjusted for inflation based on 
     the Consumer Price Index on the date of enactment of the 
     Clear Skies Act of 2005 and annually thereafter;
       ``(C) the proceeds from any sales of allowances under 
     subparagraph (B) shall be, in accordance with paragraph (j), 
     deposited in the Compliance Assistance Account;
       ``(D) except for allowances subject to (E), the allowances 
     directly purchased for use for the year specified in 
     subparagraph (A) shall be, on a pro rata basis, taken from, 
     and reduce, the amount of sulfur dioxide allowances, nitrogen 
     oxides allowances, or mercury allowances, as the case may be, 
     that would otherwise be allocated under section 423, 453, or 
     473 starting for the second year after the specified year and 
     continuing for each subsequent year as necessary; and
       ``(E) if the designated representative does not use any 
     such allowance in accordance with paragraph (A) the 
     designated representative shall hold the allowance for 
     deduction by the Administrator. The Administrator shall 
     deduct the allowance without refund or other form of 
     recompense.
       ``(4) Use of allowances.--Allowances may not be used prior 
     to the calendar year for which they are allocated but may be 
     used in succeeding years. Nothing in this section or in the 
     allowance system regulations shall relieve the Administrator 
     of the Administrator's permitting, monitoring and enforcement 
     obligations under this Act, nor relieve affected facilities 
     of their requirements and liabilities under the Act.
       ``(f) Competitive Bidding for Power Supply.--Nothing in 
     this title shall be construed to interfere with or impair any 
     program for competitive bidding for power supply in a State 
     in which such program is established.
       ``(g) Applicability of the Antitrust Laws.--
       ``(1) In general.--Nothing in this section affects--
       ``(A) the applicability of the antitrust laws to the 
     transfer, use, or sale of allowances; or
       ``(B) the authority of the Federal Energy Regulatory 
     Commission under any provision of law respecting unfair 
     methods of competition or anticompetitive acts or practices.
       ``(2) Definition of antitrust laws.--In this section, the 
     term `antitrust laws' means those Acts set forth in section 1 
     of the Clayton Act (15 U.S.C. 12).
       ``(h) Public Utility Holding Company Act.--The acquisition 
     or disposition of allowances pursuant to this title including 
     the issuance of securities or the undertaking of any other 
     financing transaction in connection with such allowances 
     shall not be subject to the provisions of the Public Utility 
     Holding Company Act of 1935.
       ``(i) Interpollutant Trading.--Not later than July 1, 2009, 
     the Administrator shall furnish to the Congress a study 
     evaluating the environmental and economic consequences of 
     amending this title to permit trading sulfur dioxide 
     allowances for nitrogen oxides allowances and nitrogen oxides 
     allowances for sulfur dioxide allowances.
       ``(j) Compliance Assistance Account.--An account shall be 
     established by the Secretary of Energy in consultation with 
     the Administrator:
       ``(1) Use of amounts.--Payments or monies deposited in this 
     account in accordance with this title shall be used for the 
     purpose of developing emission control technologies through 
     direct grants to affected units that demonstrate new control 
     technologies regulated under this title.
       ``(2) Regulations.--The Secretary of Energy in consultation 
     with the Administrator shall promulgate regulations with 
     notice and opportunity for comment to establish criteria for 
     affected units to qualify for this subsection.

     ``SEC. 404. PERMITS AND COMPLIANCE PLANS.

       ``(a) Permit Program.--The provisions of this title shall 
     be implemented, subject to section 403, by permits issued to 
     units and facilities subject to this title and enforced in 
     accordance with the provisions of title V, as modified by 
     this title. Any such permit issued by the Administrator, or 
     by a State with an approved permit program, shall prohibit--
       ``(1) annual emissions of sulfur dioxide, nitrogen oxides, 
     and mercury in excess of the number of allowances required to 
     be held in accordance with sections 412(c), 422, 432, 452, 
     and 472;
       ``(2) exceeding applicable emissions rates under section 
     441;
       ``(3) the use of any allowance prior to the year for which 
     it was allocated; and
       ``(4) contravention of any other provision of the permit.

     No permit shall be issued that is inconsistent with the 
     requirements of this title, and title V as applicable.
       ``(b) Compliance Plan.--
       ``(1) In general.--Each initial permit application shall be 
     accompanied by a compliance plan for the facility to comply 
     with its requirements under this title. Where an affected 
     facility consists of more than one affected unit, such plan 
     shall cover all such units, and such facility shall be 
     considered a `facility' under section 502(c). Nothing in this 
     section regarding compliance plans or in title V shall be 
     construed as affecting allowances.
       ``(2) Statements.--
       ``(A) In general.--Submission of a statement by the owner 
     or operator, or the designated representative of the owners 
     and operators, of a unit subject to the emissions limitation 
     requirements of sections 412(c), 413, 414, and 441, that the 
     unit will meet the applicable emissions limitation 
     requirements of such sections in a timely manner or that, in 
     the case of the emissions limitation requirements of sections 
     412(c), 413, and 414, the owners and operators will hold 
     sulfur dioxide allowances in the amount required by section 
     412(c), shall be deemed to meet the proposed and approved 
     compliance planning requirements of this section and title V, 
     except that, for any unit that will meet the requirements of 
     this title by means of an alternative method of compliance 
     authorized under section 413 (b), (c), (d), or (f), section 
     416, and section 441 (d) or (e), the proposed and approved 
     compliance plan, permit application and permit shall include, 
     pursuant to regulations promulgated by the Administrator, for 
     each alternative method of compliance a comprehensive 
     description of the schedule and means by which the unit will 
     rely on one or more alternative methods of compliance in the 
     manner and time authorized under subpart 1 of part B or 
     subpart 1 of part C.
       ``(B) Other statements.--Submission of a statement by the 
     owner or operator, or the designated representative, of a 
     facility that includes a unit subject to the emissions 
     limitation requirements of sections 422, 432, 452, and 472 
     that the owner or operator will hold sulfur dioxide 
     allowances, nitrogen oxide allowances, and mercury 
     allowances, as the case may be, in the amount required by 
     such sections shall be deemed to meet the proposed and 
     approved compliance planning requirements of this section and 
     title V with regard to subparts A through D.
       ``(3) Recording of transfers.--Recording by the 
     Administrator of transfers of allowances shall amend 
     automatically, and will not reopen or require reopening of, 
     any or all applicable proposed or approved permit 
     applications, compliance plans, and permits.
       ``(c) Permits.--The owner or operator of each facility 
     under this title that includes an affected unit subject to 
     title V shall submit a permit application and compliance plan 
     with regard to the applicable requirements under sections 
     412(c), 422, 432, 441, 452, and 472 for sulfur dioxide 
     emissions, nitrogen oxide emissions, and mercury emissions 
     from such unit to the permitting authority in accordance with 
     the deadline for submission of permit applications and 
     compliance plans under title V. The permitting authority 
     shall issue a permit to such owner or operator, or the 
     designated representative of such owner or operator, that 
     satisfies the requirements of title V and this title.
       ``(d) Amendment of Application and Compliance Plan.--At any 
     time after the submission of an application and compliance 
     plan under this section, the applicant may submit a revised 
     application and compliance plan, in accordance with the 
     requirements of this section.

[[Page 541]]

       ``(e) Prohibition.--
       ``(1) In general.--It shall be unlawful for any person to 
     operate any facility subject to this title except in 
     compliance with the terms and requirements of a permit 
     application and compliance plan (including amendments 
     thereto) or permit issued by the Administrator or a State 
     with an approved permit program. For purposes of this 
     subsection, compliance, as provided in section 504(f), with a 
     permit issued under title V which complies with this title 
     for facilities subject to this title shall be deemed 
     compliance with this subsection as well as section 502(a).
       ``(2) No termination of operations.--In order to ensure 
     reliability of electric power, nothing in this title or title 
     V shall be construed as requiring termination of operations 
     of a unit serving a generator for failure to have an approved 
     permit or compliance plan under this section.
       ``(f) Certificate of Representation.--No permit shall be 
     issued under this section to an affected unit or facility 
     until the designated representative of the owners or 
     operators has filed a certificate of representation with 
     regard to matters under this title, including the holding and 
     distribution of allowances and the proceeds of transactions 
     involving allowances.
       ``(g) Multiple Owners.--
       ``(1) In general.--No permit shall be issued under this 
     section to an affected unit until the designated 
     representative of the owners or operators has filed a 
     certificate of representation with regard to matters under 
     this title, including the holding and distribution of 
     allowances and the proceeds of transactions involving 
     allowances. Where there are multiple holders of a legal or 
     equitable title to, or a leasehold interest in, such a unit, 
     or where a utility or industrial customer purchases power 
     from an affected unit (or units) under life-of-the-unit, firm 
     power contractual arrangements, the certificate shall state--
       ``(A) that allowances and the proceeds or transactions 
     involving allowance will be deemed to be held or distributed 
     in proportion to each holder's legal, equitable, leasehold, 
     or contractual reservation or entitlement, or
       ``(B) if such multiple holders have expressly provided for 
     a different distribution of allowances by contract, that 
     allowances and the proceeds of transactions involving 
     allowances will be deemed to be held or distributed in 
     accordance with the contract.
       ``(2) Passive lessor.--A passive lessor, of a person who 
     has an equitable interest through such lessor, whose rental 
     payments are not based, either directly or indirectly, upon 
     the revenues or income from the affected unit shall not be 
     deemed to be a holder of a legal, equitable, leasehold, or 
     contractual interest for the purposes of holding or 
     distributing allowances as provided in this subsection, 
     unless expressly provided for in the leasehold agreement. 
     Except as otherwise provided in this subsection, where all 
     legal or equitable title to or interest in an affected unit 
     is held by a single person, the certification shall state 
     that all allowances received by the unit are deemed to be 
     held for that person.

     ``SEC. 405. MONITORING, REPORTING, AND RECORDKEEPING 
                   REQUIREMENTS.

       ``(a) Requirements.--
       ``(1) Applicability.--
       ``(A) In general.--The owner and operator of any facility 
     subject to this title shall be required to install and 
     operate CEMS on each affected unit subject to subpart 1 of 
     part B or subpart 1 of part C at the facility, and to quality 
     assure the data, for sulfur dioxide, nitrogen oxides, 
     opacity, and volumetric flow at each such unit.
       ``(B) Specification of requirements.--The Administrator 
     shall, by regulation, specify the requirements for CEMS under 
     subparagraph (A), for any alternative monitoring system that 
     is demonstrated as providing information with the same 
     precision, reliability, accessibility, and time lines as that 
     provided by CEMS, and for recordkeeping and reporting of 
     information from such systems. Such regulations may include 
     limitations on the use of alternative compliance methods by 
     units equipped with an alternative monitoring system as may 
     be necessary to preserve the orderly functioning of the 
     allowance system, and which will ensure the emissions 
     reductions contemplated by this title. Where 2 or more units 
     utilize a single stack, a separate CEMS shall not be required 
     for each unit, and for such units the regulations shall 
     require that the owner or operator collect sufficient 
     information to permit reliable compliance determinations for 
     each such unit.
       ``(2) Installation and operation.--
       ``(A) In general.--The owner and operator of any facility 
     subject to this title shall be required to install and 
     operate CEMS to monitor the emissions from each affected unit 
     at the facility, and to quality assure the data for--
       ``(i) sulfur dioxide, opacity, and volumetric flow for all 
     affected units subject to subpart 2 of part B at the 
     facility,
       ``(ii) nitrogen oxides for all affected units subject to 
     subpart 2 of part C at the facility, and
       ``(iii) mercury for all affected units subject to part D at 
     the facility.
       ``(B) Alternative monitoring.--
       ``(i) In general.--The Administrator may specify an 
     alternative monitoring or compliance system for determining 
     mercury emissions. In specifying such alternative monitoring 
     or compliance systems, the lack of commercially available 
     appropriate and reasonable vendor guarantees shall constitute 
     a reasonable and permissible basis for specifying alternative 
     monitoring or compliance systems for mercury.
       ``(ii) Limitations.--The regulations under clause (iv) may 
     include limitations on the use of alternative compliance 
     methods by units equipped with an alternative monitoring 
     system as may be necessary to preserve the orderly 
     functioning of the allowance system, and which will ensure to 
     a reasonable extent the emissions reductions contemplated by 
     this title.
       ``(iii) No separate monitoring system.--The regulations 
     under clause (iv) shall not require a separate CEMS or other 
     monitoring system for each unit where two or more units 
     utilize a single stack and shall require that the owner or 
     operator collect sufficient information to permit reliable 
     compliance determinations for such units.
       ``(iv) Specification of requirements.--The Administrator 
     shall, by regulation, specify the requirements for CEMS under 
     subparagraph (A), for any alternative monitoring or 
     compliance system that is demonstrated as providing 
     information which is reasonably of the same precision, 
     reliability, accessibility, and timeliness as that provided 
     by CEMS, and for recordkeeping and reporting of information 
     from such systems. Such regulations may include limitations 
     on the use of alternative compliance methods by units 
     equipped with an alternative monitoring system as may be 
     necessary to preserve the orderly functioning of the 
     allowance system, and which will ensure to a reasonable 
     extent the emissions reductions contemplated by this title. 
     Where two or more units utilize a single stack, a separate 
     CEMS shall not be required for each unit, and for such units 
     the regulations shall require that the owner or operator 
     collect sufficient information to permit reliable compliance 
     determinations for each such unit.
       ``(b) Deadlines.--
       ``(1) New utility units.--Upon commencement of commercial 
     operation of each new utility unit under subpart I of part B, 
     the unit shall comply with the requirements of subsection 
     (a)(1).
       ``(2) Deadline for affected units under subpart 2 of part b 
     for installation and operation of cems.--By the later of the 
     date that is 1 year before the commencement date of the 
     sulfur dioxide allowance requirement of section 422, or the 
     date on which the unit commences operation, the owner or 
     operator of each affected unit under subpart 2 of part B 
     shall install and operate CEMS, quality assure the data, and 
     keep records and reports in accordance with the regulations 
     issued under paragraph (a)(2) with regard to sulfur dioxide, 
     opacity, and volumetric flow.
       ``(3) Deadline for affected units under subpart 3 of part b 
     for installation and operation of cems.--By the later of the 
     date that is 1 year before the first covered year, or the 
     date on which the unit commences commercial operation, the 
     owner or operator of each affected unit under subpart 3 of 
     part B shall install and operate CEMS, quality assure the 
     data, and keep records and reports in accordance with the 
     regulations issued under paragraph (a)(2) with regard to 
     sulfur dioxide and volumetric flow.
       ``(4) Deadline for affected units under subpart 2 of part c 
     for installation and operation of cems.--By the later of the 
     date that is 1 year before the commencement date of the 
     nitrogen oxides allowance requirement under section 452, or 
     the date on which the unit commences operation, the owner or 
     operator of each affected unit under subpart 2 of part C 
     shall install and operate CEMS, quality assure the data, and 
     keep records and reports in accordance with the regulations 
     issued under paragraph (a)(2) with regard to nitrogen oxides.
       ``(5) Deadline for affected units under part d for 
     installation and operation of cems.--By the later of the date 
     that is 1 year before the commencement date of the mercury 
     allowance requirement of section 472 applies to such unit and 
     commences commercial operation, or the date on which the unit 
     commences operation, the owner or operator of each affected 
     unit under part D shall install and operate CEMS, quality 
     assure the data, and keep records and reports in accordance 
     with the regulations issued under paragraph (a)(2) with 
     regard to mercury.
       ``(c) Unavailability of Emissions Data.--
       ``(1) Sulfur dioxide and nitrogen oxides.--With respect to 
     sulfur dioxide and nitrogen oxides, if CEMS data or data from 
     an alternative monitoring system approved by the 
     Administrator under subsection (a) is not available for any 
     affected unit during any period of a calendar year in which 
     such data is required under this title, and the owner or 
     operator cannot provide information, reasonably satisfactory 
     to the Administrator, on emissions during that period, the 
     Administrator, in coordination with the owner, shall 
     calculate emissions for that period pursuant to regulations 
     promulgated for such purpose. The owner or operator shall be 
     liable for excess emissions fees and offsets

[[Page 542]]

     under section 406 in accordance with such regulations. Any 
     fee due and payable under this subsection shall not diminish 
     the liability of the unit's owner or operator for any fine, 
     penalty, fee, or assessment against the unit for the same 
     violation under any other section of this Act.
       ``(2) Mercury.--With respect to mercury, if CEMS data or 
     data from an alternative monitoring system approved by the 
     Administrator under subsection (a) is not available for any 
     affected unit during any period of a calendar year in which 
     such data is required under this title, and the owner or 
     operator cannot provide information, reasonably satisfactory 
     to the Administrator, on emissions during that period, the 
     Administrator in coordination with the owner, shall calculate 
     emissions for that period pursuant to regulations promulgated 
     for such purpose. The owner or operator shall be liable for 
     excess emissions fees and offsets under section 406 in 
     accordance with such regulations. Any fee due and payable 
     under this subsection shall not diminish the liability of the 
     unit's owner or operator for any fine, penalty, fee, or 
     assessment against the unit for the same violation under any 
     other section of this Act.
       ``(d) Implementation.--With regard to sulfur dioxide, 
     nitrogen oxides, opacity, and volumetric flow, the 
     Administrator shall implement subsections (a) and (c) under 
     40 CFR part 75 (2002), amended, as appropriate by the 
     Administrator. With regard to mercury, the Administrator 
     shall implement subsections (a) and (c) by issuing proposed 
     regulations not later than 36 months before the commencement 
     date of the mercury allowance requirement under section 472 
     and final regulations not later than 24 months before that 
     commencement date.
       ``(e) Prohibition.--It shall be unlawful for the owner or 
     operator of any facility subject to this title to operate a 
     facility without complying with the requirements of this 
     section, and any regulations implementing this section.

     ``SEC. 406. EXCESS EMISSIONS PENALTY; GENERAL COMPLIANCE WITH 
                   OTHER PROVISIONS; ENFORCEMENT.

       ``(a) Excess Emissions Penalty.--
       ``(1) Amount for oxides of nitrogen.--The owner or operator 
     of any unit subject to the requirements of section 441 that 
     emits nitrogen oxides for any calendar year in excess of the 
     unit's emissions limitation requirement shall be liable for 
     the payment of an excess emissions penalty, except where such 
     emissions were authorized pursuant to section 110(f). That 
     penalty shall be calculated on the basis of the number of 
     tons emitted in excess of the unit's emissions limitation 
     requirement multiplied by $2,000.
       ``(2) Amount for sulfur dioxide before 2008.--The owner or 
     operator of any unit subject to the requirements of section 
     412(c) that emits sulfur dioxide for any calendar year before 
     2008 in excess of the sulfur dioxide allowances the owner or 
     operator holds for use for the unit for that calendar year 
     shall be liable for the payment of an excess emissions 
     penalty, except where such emissions were authorized pursuant 
     to section 110(f) or (g). That penalty shall be calculated as 
     follows:
       ``(A) The product of the unit's excess emissions (in tons) 
     multiplied by $2,000, if within 30 days after the date on 
     which the owner or operator was required to hold sulfur 
     dioxide allowances--
       ``(i) the owner or operator offsets the excess emissions in 
     accordance with paragraph (b)(1); and
       ``(ii) the Administrator receives the penalty payment 
     required under this subparagraph.
       ``(B) If the requirements of clause (A)(i) or (A)(ii) are 
     not met, the product of the unit's excess emissions (in tons) 
     multiplied by $3,000.
       ``(3) Amount for sulfur dioxide after 2007.--If the units 
     at a facility that are subject to the requirements of section 
     412(c) emit sulfur dioxide for any calendar year after 2007 
     in excess of the sulfur dioxide allowances that the owner or 
     operator of the facility holds for use for the facility for 
     that calendar year, the owner or operator shall be liable for 
     the payment of an excess emissions penalty, except where such 
     emissions were authorized pursuant to section 110(f). That 
     penalty shall be calculated under paragraph (4)(A) or (4)(B).
       ``(4) Units subject to sections 422, 432, 452, or 472.--If 
     the units at a facility that are subject to the requirements 
     of section 422, 432, 452, or 472 emit sulfur dioxide, 
     nitrogen oxides, or mercury for any calendar year in excess 
     of the sulfur dioxide allowances, nitrogen oxides allowances, 
     or mercury allowances, as the case may be, that the owner or 
     operator of the facility holds for use for the facility or 
     units for that calendar year, the owner or operator shall be 
     liable for the payment of an excess emissions penalty, except 
     where such emissions were authorized pursuant to section 
     110(f). That penalty shall be equal to--
       ``(A) the quantity of the units' excess emissions in tons 
     (or, for mercury emissions, in ounces) multiplied by $2,000 
     (in the case of sulfur dioxide), $4,000 (in the case of 
     nitrogen oxides), or $2187.50 (in the case of mercury) if, on 
     or before the date that is 30 days after the date on which 
     the owner or operator was required to hold sulfur dioxide, 
     nitrogen oxides allowance, or mercury allowances, as the case 
     may be--
       ``(i) the owner or operator offsets the excess emissions in 
     accordance with paragraph (2) or (3) of subsection (b), as 
     applicable; and
       ``(ii) the Administrator receives the penalty required 
     under this subparagraph; or
       ``(B) if a requirement under subparagraph (A) is not met, 
     the quantity of the units' excess emissions in tons (or, for 
     mercury emissions, in ounces) multiplied by the product 
     obtained by multiplying--
       ``(i) 1.5; and
       ``(ii) the respective amount for sulfur dioxide, nitrogen 
     oxides, or mercury specified in subparagraph (A).
       ``(5) Payment.--Any penalty under paragraph (1), (2), (3), 
     or (4) shall be due and payable without demand to the 
     Administrator as provided in regulations issued by the 
     Administrator. With regard to the penalty under paragraph 1, 
     the Administrator shall implement this paragraph under 40 CFR 
     part 77 (2002), amended as appropriate by the Administrator. 
     With regard to the penalty under paragraphs 2, 3, and 4, the 
     Administrator shall implement this paragraph by issuing 
     regulations no later than 24 months after the date of 
     enactment of the Clear Skies Act of 2005. Any such payment 
     shall be deposited in the Compliance Assistance Account.
       ``(b) Excess Emissions Offset.--
       ``(1) In general.--The owner or operator of any unit 
     subject to the requirements of section 412(c) that emits 
     sulfur dioxide during any calendar year before 2008 in excess 
     of the sulfur dioxide allowances held for the unit for the 
     calendar year shall be liable to offset the excess emissions 
     by an equal tonnage amount in the following calendar year, or 
     such longer period as the Administrator may prescribe. The 
     Administrator shall deduct sulfur dioxide allowances equal to 
     the excess tonnage from those held for the facility for the 
     calendar year, or succeeding years during which offsets are 
     required, following the year in which the excess emissions 
     occurred.
       ``(2) Excess emissions of sulfur dioxide.--If the units at 
     a facility that are subject to the requirements of section 
     412(c) emit sulfur dioxide for a year after 2007 in excess of 
     the sulfur dioxide allowances that the owner or operator of 
     the facility holds for use for the facility for that calendar 
     year, the owner or operator shall be liable to offset the 
     excess emissions by an equal amount of tons in the following 
     calendar year, or such longer period as the Administrator may 
     prescribe. The Administrator shall deduct sulfur dioxide 
     allowances equal to the excess emissions in tons from those 
     held for the facility for the year, or succeeding years 
     during which offsets are required, following the year in 
     which the excess emissions occurred.
       ``(3) Excess emissions of sulfur dioxide, nitrogen oxides, 
     or mercury.--If the units at a facility that are subject to 
     the requirements of section 422, 432, 452, or 472 emit sulfur 
     dioxide, nitrogen oxides, or mercury for any calendar year in 
     excess of the sulfur dioxide allowances, nitrogen oxides 
     allowances, or mercury allowances, as the case may be, that 
     the owner or operator of the facility holds for use for the 
     facility for that calendar year, the owner or operator shall 
     be liable to offset the excess emissions by an equal amount 
     of tons or, for mercury, ounces in the following calendar 
     year, or such longer period as the Administrator may 
     prescribe. The Administrator shall deduct sulfur dioxide 
     allowances, nitrogen oxide allowances, or mercury allowances, 
     as the case may be, equal to the excess emissions in tons or, 
     for mercury, ounces from those held for the facility for the 
     year, or succeeding years during which offsets are required, 
     following the year in which the excess emissions occurred.
       ``(c) Penalty Adjustment.--The Administrator shall, by 
     regulation, adjust the penalty specified in subsection (a)(1) 
     and (a)(2) for inflation, based on the Consumer Price Index, 
     on November 15, 1990, and annually thereafter.
       ``(d) Prohibition.--It shall be unlawful for the owner or 
     operator of any unit or facility liable for a penalty and 
     offset under this section to fail--
       ``(1) to pay the penalty under subsection (a); or
       ``(2) to offset excess emissions as required by subsection 
     (b).
       ``(e) Savings Provision.--Nothing in this title shall limit 
     or otherwise affect the application of section 113, 114, 120, 
     or 304 except as otherwise explicitly provided in this title.
       ``(f) Other Requirements.--Except as expressly provided, 
     compliance with the requirements of this title shall not 
     exempt or exclude the owner or operator of any facility 
     subject to this title from compliance with any other 
     applicable requirements of this Act. Notwithstanding any 
     other provision of this Act, no State or political 
     subdivision thereof shall restrict or interfere with the 
     transfer, sale, or purchase of allowances under this title.
       ``(g) Violations.--Violation by any person subject to this 
     title of any prohibition of, requirement of, or regulation 
     promulgated pursuant to this title shall be a violation of 
     this Act. In addition to the other requirements and 
     prohibitions provided for in this title,

[[Page 543]]

     the operation of any affected unit or the affected units at a 
     facility to emit sulfur dioxide, nitrogen oxides, or mercury 
     in violation of section 412(c), 422, 432, 452, and 472, as 
     the case may be, shall be deemed a violation, with each ton 
     or, in the case of mercury, each ounce emitted in excess of 
     allowances held constituting a separate violation.

     ``SEC. 407. ELECTION FOR ADDITIONAL UNITS.

       ``(a) Applicability.--
       ``(1) In general.--The owner or operator of any unit that 
     is not an affected EGU under subpart 2 of part B and subpart 
     2 of part C and whose emissions of sulfur dioxide and 
     nitrogen oxides are vented only through a stack or duct may 
     elect to designate the unit as an affected unit under subpart 
     2 of part B and subpart 2 of part C.
       ``(2) Effect of designation.--If the owner or operator 
     elects to designate a unit that is solid fuel-fired and emits 
     mercury vented only through a stack or duct, the owner or 
     operator shall also designate the unit as an affected unit 
     under part D. If an elected unit fires only gaseous fuels, 
     the unit may be designated under subpart 2 of part C only.
       ``(b) Application.--An owner or operator making an election 
     under subsection (a) shall submit an application for the 
     election to the Administrator for approval.
       ``(c) Approval.--Subject to subsections (d) through (m), if 
     the Administrator determines that an application for an 
     election under subsection (b) meets the requirements of 
     subsection (a), the Administrator shall approve the 
     designation as an affected unit under subpart 2 of part B and 
     subpart 2 of part C and, if applicable, under part D.
       ``(d) Establishment of Baseline.--
       ``(1) In general.--After approval of a designation under 
     subsection (c), an owner or operator shall install and 
     operate monitoring on the designated unit required under 
     paragraph (5), except that, in a case in which 2 or more 
     units use a single stack, separate monitoring shall be 
     required for each unit unless all units using the same stack 
     are designated as affected units.
       ``(2) Baselines.--
       ``(A) In general.--Units shall have baselines established 
     using heat input unless the unit qualifies for a product 
     output baseline under paragraph (4).
       ``(B) Heat input or product output.--The baselines for heat 
     input or product output and sulfur dioxide and nitrogen 
     oxides emission rates, as the case may be, for the unit shall 
     be the unit's heat input or product output and the emission 
     rates of sulfur dioxide and nitrogen oxides in accordance 
     with paragraphs (3) and (4).
       ``(C) Regulations.--The Administrator shall promulgate 
     regulations requiring the unit's baselines for heat input or 
     product output and for sulfur dioxide and nitrogen oxides 
     emission rates to be based on the same year and specifying 
     minimum data requirements consistent with paragraph (5) for 
     baseline determination.
       ``(3) Heat input and emissions baselines.--For the purposes 
     of this subsection, heat input and emissions baselines shall 
     be calculated, at the election of the owner or operator of 
     the relevant unit, as--
       ``(A)(i) for heat input, the average of the unit's highest 
     heat input for 3 of the 5 years before the year for which the 
     Administrator is determining the allocations; and
       ``(ii) for emissions baselines, the average of the relevant 
     emissions during those same 3 years; or
       ``(B)(i) for heat input, the average of any period of 24 
     consecutive months during the 10-year period immediately 
     prior to the date of submission of an application under 
     subsection (b), on the condition that the heat input does not 
     exceed 1.2 times the average of the 10-year period; and
       ``(ii) for emissions baselines, the average of the relevant 
     emissions for the 4-year period prior to the date of 
     enactment of the Clear Skies Act of 2005 (for units that 
     submit an application on or before January 1, 2009), or the 
     average of the relevant emissions for the 4 years before the 
     date of submission of the application under that Act (for 
     units that submit an application after January 1, 2009).
       ``(4) Designation for product output basis.--
       ``(A) In general.--The owner or operator of a unit that is 
     subject to new source performance standards or other measures 
     imposed by this Act on a product output basis rather than a 
     heat input basis may elect to designate the unit as an 
     affected unit under subpart 2 of part B and subpart 2 of part 
     C.
       ``(B) Baseline product output and emissions baselines.--For 
     the purposes of this paragraph, for those units using a 
     product output basis, the baseline product output and 
     emissions baselines in this subparagraph shall be calculated, 
     at the election of the owner or operator of the relevant 
     unit, as--
       ``(i)(I) for product input, the average of the unit's 
     highest product output for 3 of the 5 years preceding the 
     year for which the Administrator is determining the 
     allocations; and
       ``(II) for emissions baselines, the average of the relevant 
     emissions for the same years used to determine product 
     output; or
       ``(B)(i) for product input, the average of any period of 24 
     consecutive months during the 10-year period immediately 
     prior to the date of submission of an application under 
     subsection (b), on the condition that the product input does 
     not exceed 1.2 times the average of the 10-year period; and
       ``(ii) for emissions baselines, the average of the relevant 
     emissions for the 4-year period prior to the date of 
     enactment of the Clear Skies Act of 2005 (for units that 
     submit an application on or before January 1, 2009), or the 
     average of the relevant emissions for the 4 years before the 
     date of submission of the application under that Act (for 
     units that submit an application after January 1, 2009).
       ``(5) Baseline determinations.--
       ``(A) In general.--In making baseline determinations under 
     this section, the Administrator may accept any reliable data 
     on emissions of sulfur dioxide and nitrogen oxides in 
     addition to, and other than, data collected from CEMS.
       ``(B) Types of data.--Reliable data described in 
     subparagraph (A) includes--
       ``(i) alternative data that has been used to determine 
     compliance with a regulatory or monitoring requirement under 
     this Act or a comparable State law, if the data establishes a 
     reliable measure of heat input or product output and sulfur 
     dioxide and nitrogen oxides emissions over a simultaneous 
     period of time; or
       ``(ii) if that data is not available, such other 
     alternative reliable data as the Administrator may prescribe.
       ``(C) Use of cems for compliance monitoring.--The 
     Administrator--
       ``(i) shall not require the use of CEMS for compliance 
     monitoring by units of less than 250 mmBtu heat input or 
     equivalent product output capacity subject to this section 
     unless the Administrator concludes that a CEMS requirement is 
     necessary to generate reliable data for compliance 
     determinations;
       ``(ii) shall require the use of CEMS for compliance 
     monitoring by units of between 250 mmBtu and 750 mmBtu heat 
     input or equivalent product output capacity unless the 
     Administrator determines that a CEMS requirement is not 
     necessary to generate reliable data for compliance 
     determinations; and
       ``(iii) shall require the use of CEMS for compliance 
     monitoring for all units greater than 750 mmBtu heat input or 
     equivalent product output capacity.
       ``(D) Reliability.--In determining the reliability of data 
     for purposes of this subsection, the Administrator shall 
     consider the cost of generating more reliable data compared 
     to the quantitative importance of the resulting gain in 
     quantifying emissions.
       ``(e) Emission Limitations.--After approval of the 
     designation of the unit under subsection (c), the unit shall 
     become--
       ``(1) an affected unit under subpart 2 of part B, and shall 
     be allocated sulfur dioxide allowances under subsection (f), 
     beginning on the later of January 1, 2010, or January 1 of 
     the year after approval of the designation;
       ``(2) an affected unit under subpart 2 of part C, and shall 
     be allocated nitrogen oxides allowances under subsection (f), 
     beginning on the later of January 1, 2010, or January 1 of 
     the year after approval of the designation; and
       ``(3) if applicable, an affected unit under part D, and 
     shall be allocated mercury allowances, beginning on the later 
     of January l, 2010, or January 1 of the year after approval 
     of designation.
       ``(f) Allocations.--
       ``(1) Sulfur dioxide and nitrogen oxides.--
       ``(A) In general.--The Administrator shall promulgate 
     regulations determining the allocations of sulfur dioxide 
     allowances and nitrogen oxides allowances for each year 
     during which a unit is an affected unit under subsection (e).
       ``(B) Allocations.--The regulations shall provide for 
     allocations equal to 70 percent (beginning January 1, 2010) 
     and 50 percent (beginning January 1, 2018) of the unit's 
     baseline heat input or product output under subsection (d) 
     multiplied by the lesser of--
       ``(i) the unit's baseline sulfur dioxide emission rate or 
     nitrogen oxides emission rate, as the case may be; or
       ``(ii) the unit's most stringent Federal or State emission 
     limitation for sulfur dioxide or nitrogen oxides applicable 
     to the year on which the unit's baseline heat input or 
     product output is based under subsection (d).
       ``(2) Mercury.--
       ``(A) In general.--The Administrator shall promulgate 
     regulations providing for the allocation of mercury 
     allowances to solid fuel-fired units designated under this 
     section for each year after January 1, 2010, during which a 
     unit is a designated unit under this section.
       ``(B) Allocations.--The regulations shall provide for 
     allocations equal to the lesser of--
       ``(i) the product obtained by multiplying--

       ``(I) the unit's allowable emissions rate for mercury under 
     the national emissions standards for hazardous air pollutants 
     for boilers and process heaters, industrial furnaces, kilns, 
     or other stationary source; by
       ``(II) the unit's baseline heat input or product output; 
     and

       ``(i) the product obtained by multiplying--

       ``(I) the unit's most stringent Federal or State emission 
     limitation for mercury emissions rate; by
       ``(II) the unit's baseline heat input or product output.

       ``(3) Limitation.--Allowances allocated to electing units 
     under paragraphs (1) and (2)

[[Page 544]]

     shall comprise a separate limitation on emissions from 
     sections 423, 433, 453, 473, and other provisions of this 
     Act. These allowances for sulfur dioxide, nitrogen oxides, or 
     mercury, as the case may be, shall be tradable with 
     allowances allocated under sections 414, 424, 454, 474, as 
     applicable, on the conditions that--
       ``(A) electing units may only trade nitrogen oxides within 
     the respective zones established under section 452 within 
     which the electing unit is located; and
       ``(B) affected units within the WRAP States may only 
     purchase sulfur dioxide allowances allocated or otherwise 
     distributed by the Administrator to electing units within the 
     WRAP States, and will not be counted for purposes of the 
     affected unit's emissions within the meaning of the WRAP 
     Annex.
       ``(4) Incentives for early reductions.--
       ``(A) In general.--Not later than 180 months after the date 
     of enactment of this section, the Administrator shall 
     promulgate regulations authorizing the allocation of sulfur 
     dioxide, nitrogen oxides, and mercury allowances to units 
     designated under this section that install or modify 
     pollution control equipment or combustion technology 
     improvements identified in such regulations after the date of 
     enactment of this section and prior to January 1, 2010.
       ``(B) Prohibition on certain allocations.--No allowances 
     shall be allocated under this paragraph for emissions 
     reductions attributable to--
       ``(i) pollution control equipment or combustion technology 
     improvements that were operational or under construction at 
     any time prior to the date of enactment of this section;
       ``(ii) fuel switching; or
       ``(iii) compliance with any Federal regulation.
       ``(C) Allowances.--The allowances allocated to any unit 
     under this paragraph shall--
       ``(i) be in addition to the allowances allocated under 
     paragraphs (1) and (2) and sections 414, 424, 434, 454, and 
     474; and
       ``(ii) be allocated in an amount equal to 1 allowance of 
     sulfur dioxide and nitrogen oxides for each 1.05 tons of 
     reduction in emissions of sulfur dioxide and nitrogen oxides, 
     respectively, and 1.05 ounces of reduction in the emissions 
     of mercury, achieved by the pollution control equipment or 
     combustion technology improvements starting with the year in 
     which the equipment or improvement is implemented.
       ``(g) Withdrawal.--The Administrator shall promulgate 
     regulations withdrawing from the approved designation under 
     subsection (c) any unit that qualifies as an affected EGU 
     under subpart 2 of part B or subpart 2 of part C, or part D 
     after the approval of the designation of the unit under 
     subsection (c).
       ``(h) Regulations.--Not later than 18 months after the date 
     of enactment of the Clear Skies Act of 2005, the 
     Administrator shall promulgate regulations implementing this 
     section.
       ``(i) Application Period.--
       ``(1) In general.--Applications for designation of units 
     under this section shall be accepted by the Administrator 
     beginning not later than 180 days after the date of enactment 
     of this section.
       ``(2) Approval and disapproval.--Except as provided in 
     paragraph (30, not later than 270 days after accepting an 
     application under paragraph (1), the Administrator shall 
     approve or disapprove the application.
       ``(3) Determination of completion.--
       ``(A) In general.--Not later than 90 days after accepting 
     an application under paragraph (1), the Administrator shall 
     determine whether the application is complete.
       ``(B) Determination of completion.--Unless an application 
     accepted under paragraph (1) is determined to be incomplete 
     under subparagraph (A), the application shall be subject to 
     paragraph (2).
       ``(4) Stay of deadlines.--During the period beginning on 
     the date of acceptance by the Administrator of an application 
     under paragraph (1) and ending on the date on which the 
     Administrator acts on the petition, the applicable compliance 
     deadlines for NESHAPs under subsection (j) shall not apply to 
     the applicable unit that is the subject of the application.
       ``(j) NESHAP Applicability.--
       ``(1) Applicability.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     a unit that is designated as an affected unit under this 
     section shall not be subject to the national emissions 
     standards for hazardous air pollutants (NESHAP) promulgated 
     under section 112(d) for--
       ``(i) Industrial, Commercial, and Institutional Boilers and 
     Process Heaters (Fed. Reg. 69-55217);
       ``(ii) Plywood and Composite Wood Panel (Fed. Reg. 69-
     45943);
       ``(iii) Reciprocating Internal Combustion Engines (Fed. 
     Reg. 69-33473); or
       ``(iv) Stationary Combustion Turbines (Fed. Reg. 69-10511).
       ``(B) Exception.--Units that are boilers or process 
     heaters, industrial furnaces, kilns, or other stationary 
     sources shall be subject on and after January 1, 2010, to the 
     emissions limitation for mercury or the equivalent mercury 
     allocation under subsection (f)(2), along with associated 
     monitoring and compliance requirements, that would be 
     applicable to such units under the NESHAP for those sources 
     promulgated pursuant to section 112(d).
       ``(2) Reports.--
       ``(A) Preliminary report.--Not later than 18 months after 
     the date of enactment of this section, the Administrator 
     shall publish and make available for public comment a peer 
     reviewed preliminary report characterizing the emissions and 
     public health effects that may reasonably be anticipated to 
     occur from the implementation of subsection (j)(1) and 
     subsection (f).
       ``(B) Final report.--Not later than 30 months after the 
     date on which the preliminary report is published under 
     subparagraph (A), in accordance with section 112(n)(1)(A), 
     the Administrator shall publish a final report, including 
     responses to the comments received.
       ``(C) Requirements.--The requirements of section 
     112(n)(1)(A), for purposes of this paragraph, shall be 
     considered to be modified to ensure that the final report 
     under subparagraph (B) includes--
       ``(i) an estimate of the numbers and types of sources that 
     are expected to be designated under this section;
       ``(ii) an estimate of any increase or decrease in the 
     annual emissions of criteria pollutants and of those 
     hazardous air pollutants subject to emission limitations 
     under the NESHAPs identified in subsection (j)(1) from such 
     sources that may reasonably be expected to occur for each 
     year from 2010 through 2018;
       ``(iii) an estimate of any increase or decrease in the 
     annual emissions of criteria pollutants and of those 
     hazardous air pollutants subject to emission limitations 
     under the NESHAPs identified in subsection (j)(1) from such 
     sources that might reasonably be expected to occur for each 
     year from 2010 through 2018, if such sources estimated in 
     clause (i) are not designated under this section; and
       ``(iv) a description of the public health and environmental 
     impacts associated with the emissions increases and decreases 
     described in clauses (ii) and (iii).
       ``(D) Additional authority.--
       ``(i) In general.--Notwithstanding subsection (j)(1), the 
     Administrator may regulate emissions of hazardous air 
     pollutants listed under section 112(b), other than mercury 
     compounds, from sources designated under this section in 
     accordance with section 112(f)(2).
       ``(ii) Determination.--Not later than 2 years after the 
     date on which the final report under subparagraph (B) is 
     published, the Administrator shall make a determination based 
     on the study and other information satisfying the criteria of 
     the Data Quality Act whether to establish emissions 
     limitations under section 112(f) for sources designated under 
     this section.
       ``(iii) Treatment of determination.--The determination 
     shall be a final agency action subject to judicial review 
     under section 307 and the Administrative Procedures Act.
       ``(k) Exemption From Major Source Preconstruction Review 
     Requirements and Best Available Retrofit Control Technology 
     Requirements.--
       ``(1) Major source exemption.--
       ``(A) In general.--Subject to subparagraph (B), a unit 
     designated as an affected unit under this section shall not 
     be considered to be a major source, or a part of a major 
     emitting facility or major stationary source for purposes of 
     compliance with the requirements of parts C and D of title I, 
     for the 20-year period beginning on the date of enactment of 
     the Clear Skies Act of 2005.
       ``(B) Applicability.--Subparagraph (A) applies only if, 
     beginning on the date that is 8 years after the date of 
     enactment of this section or designation of a unit as an 
     affected unit--
       ``(i)(I) the designated unit either achieves in fact, or is 
     subject to a regulatory requirement to achieve, a limit on 
     the emissions of particulate matter from the affected unit to 
     the level not greater than the level applicable to the unit 
     either pursuant to subpart D of part 60 of title 40, Code of 
     Federal Regulations, or the national emissions standards for 
     hazardous air pollutants for industrial boilers and process 
     heaters issued pursuant to section 112; or
       ``(II) the owner or operator of the affected unit properly 
     operates, maintains, and repairs pollution control equipment 
     to limit emissions of particulate matter; and
       ``(ii) the owner or operator of the designated unit uses 
     good combustion practices to minimize emissions of carbon 
     monoxide.
       ``(2) Class i area protections.--Notwithstanding the 
     exemption in paragraph (1), an affected unit located within 
     50 kilometers of a Class I area on which construction 
     commences after the date of enactment of this section is 
     subject to those provisions under part C of title I to the 
     review of a new or modified major stationary source's impact 
     on a Class I area.
       ``(l) Limitation.--
       ``(1) In general.--No unit designated under this section 
     shall transfer or bank allowances produced as a result of 
     reduced utilization or shutdown, except that such allowances 
     may be transferred or carried forward for use in subsequent 
     years to the extent that--

[[Page 545]]

       ``(A) reduced utilization or shutdown results from the 
     replacement of the unit designated under this section, with 
     any other unit or units subject to the requirements of this 
     subpart; and
       ``(B) the designated unit's allowances are transferred or 
     carried forward for use at such other replacement unit or 
     units.
       ``(2) No greater allocation.--In no case may the 
     Administrator allocate to a source designated under this 
     section allowances in an amount greater than the emissions 
     resulting from operation of the source in full compliance 
     with the requirements of this Act.
       ``(3) No violation.--No allowances allocated under this Act 
     shall authorize operation of a unit in violation of any other 
     requirements of this Act.
       ``(m) Definition of Product Output.--In this section, the 
     term `product output' means the output of a stationary source 
     that produces a commercial product other than electricity, 
     heat, or steam which may be used to determine a baseline for 
     units for which heat input is not an appropriate baseline.''.

     ``SEC. 408. CLEAN COAL TECHNOLOGY REGULATORY INCENTIVES.

       ``(a) Definition.--For purposes of this section, the term 
     `clean coal technology' means any technology, including 
     technologies applied at the precombustion, combustion, or 
     post combustion stage, at a new or existing facility which 
     will achieve significant reductions in air emissions of 
     sulfur dioxide or oxides of nitrogen associated with the 
     utilization of coal in the generation of electricity, process 
     steam, or industrial products, which is not in widespread use 
     as of November 15, 1990.
       ``(b) Revised Regulations for Clean Coal Technology 
     Demonstrations.--
       ``(1) Applicability.--This subsection applies to physical 
     or operational changes to existing facilities for the sole 
     purpose of installation, operation, cessation, or removal of 
     a temporary or permanent clean coal technology demonstration 
     project. For the purposes of this section, a clean coal 
     technology demonstration project shall mean a project using 
     funds appropriated under the heading `Department of Energy--
     Clean Coal Technology', up to a total amount of 
     $2,500,000,000 for commercial demonstration of clean coal 
     technology, or similar projects funded through appropriations 
     for the Environmental Protection Agency. The Federal 
     contribution for qualifying project shall be at least twenty 
     percent of the total cost of the demonstration project.
       ``(2) Temporary projects.--Installation, operation, 
     cessation, or removal of a temporary clean coal technology 
     demonstration project that is operated for a period of 5 
     years or less, and which complies with the State 
     implementation plans for the State in which the project is 
     located and other requirements necessary to attain and 
     maintain the national ambient air quality standards during 
     and after the project is terminated, shall not subject such 
     facility to the requirements of section 111 or part C or D of 
     title I.
       ``(3) Permanent projects.--For permanent clean coal 
     technology demonstration projects that constitute repowering 
     as defined in section 411, any qualifying project shall not 
     be subject to standards of performance under section 111 or 
     to the review and permitting requirements of part C for any 
     pollutant the potential emissions of which will not increase 
     as a result of the demonstration project.
       ``(4) EPA regulations.--Not later than twelve months after 
     November 15, 1990, the Administrator shall promulgate 
     regulations or interpretive rulings to revise requirements 
     under section 111 and parts C and D, as appropriate, to 
     facilitate projects consistent in this subsection. With 
     respect to parts C and D, such regulations or rulings shall 
     apply to all areas in which EPA is the permitting authority. 
     In those instances in which the State is the permitting 
     authority under part C or D, any State may adopt and submit 
     to the Administrator for approval revisions to its 
     implementation plan to apply the regulations or rulings 
     promulgated under this subsection.
       ``(c) Exemption for Reactivation of Very Clean Units.--
     Physical changes or changes in the method of operation 
     associated with the commencement of commercial operations by 
     a coal-fired utility unit after a period of discontinued 
     operation shall not subject the unit to the requirements of 
     section 111 or part C of the Act where the unit--
       ``(1) has not been in operation for the two-year period 
     prior to November 15, 1990, and the emissions from such unit 
     continue to be carried in the permitting authority's 
     emissions inventory on November 15, 1990;
       ``(2) was equipped prior to shut-down with a continuous 
     system of emissions control that achieves a removal 
     efficiency for sulfur dioxide of no less than 85 percent and 
     a removal efficiency for particulates of no less than 98 
     percent;
       ``(3) is equipped with low-NOX burners prior to 
     the time of commencement; and
       ``(4) is otherwise in compliance with the requirements of 
     this Act.

     ``SEC. 409. ELECTRICITY RELIABILITY.

       ``(a) Reliability.--
       ``(1) Applicability.--At any time prior the applicability 
     of this Act under sections 422, 432, 452, and 472, in order 
     to ensure the reliability of an electric utility company or 
     system, including a system cooperatively or municipally 
     owned, for a specified geographic area or service territory, 
     as determined by the Department of Energy in consultation 
     with the Administrator, during the installation of sulfur 
     dioxide pollution control technology or scrubbers, nitrogen 
     oxides, mercury or particulate matter control technology, or 
     any combination thereof, the owner or operator of an affected 
     unit may meet the requirements of sections 422, 432, 452, and 
     472 by means of the compliance procedures of this subsection 
     (a).
       ``(2) Petition.--The owner or operator of an affected unit 
     that believes it may experience an adverse impact on the 
     reliability of the company or system as a result, in 
     substantial part, of the need to construct sulfur dioxide 
     pollution control equipment or scrubbers, nitrogen oxides, 
     mercury or particulate matter control technology, or any 
     combination thereof, may petition the Secretary of Energy, in 
     consultation with the Administrator, for a determination 
     that, to a reasonable degree of certainty, reliability will 
     likely be threatened. Upon such a determination, the owner or 
     operator may elect to adopt a compliance method meeting the 
     requirements of this subsection, as follows:
       ``(A) Regulations.--Within 12 months of enactment the 
     Secretary of Energy shall promulgate regulations describing 
     the requirements for a petition and the petition process, 
     which will include notice and public comment. The Secretary 
     of Energy, in consultation with the Administrator, shall make 
     a final determination on a petition within 180 days of the 
     submittal of a reasonably complete petition. Failure to act 
     within the 180-day period will extend the applicability by 12 
     months for all units subject to the petition.
       ``(B) Contents of petition.--The petition must contain--
       ``(i) a description of each affected unit, the estimated 
     outage time and a construction schedule;
       ``(ii) an estimate of demand from date of applicability 
     until 2018;
       ``(iii) the impacts on reliability associated with 
     constructing all of the pollution control projects, including 
     those for sulfur dioxide, nitrogen oxides, mercury, or 
     particulate matter, by the respective deadlines; and
       ``(iv) how the proposed compliance schedule would alleviate 
     detrimental impacts.
       ``(C) Failure to promulgate regulations.--If the Secretary 
     of Energy fails to promulgate final regulations or such 
     regulations are not effective for any reason, within the 
     prescribed time, petitions containing reasonably sufficient 
     information for a final determination may be submitted to the 
     Secretary of Energy and will be deemed complete.
       ``(3) Final determination.--In making a final determination 
     the Secretary of Energy, in consultation with the 
     Administrator, shall consider the following factors, provided 
     that not all factors need be present to make a determination 
     that, to a reasonable degree, reliability will be threatened:
       ``(A) Supply.--The ability of vendors to supply scrubbers; 
     scrubber system equipment, materials and scrubber affected 
     balance of plant equipment including fans, pumps, electric 
     motors, motor drives, dampers, electrical power supply 
     equipment; at fair prices with meaningful guarantees or 
     warranties as to availability, delivery dates and meeting 
     contracted pollution control reduction requirements or 
     emissions limitations; with similar considerations for 
     nitrogen oxides, mercury or particulate matter control 
     technology, or any combination thereof.
       ``(B) Design and construction resources.--The availability 
     and limitations of key sulfur dioxide, nitrogen oxides or 
     mercury controls design resources and North American 
     construction resources. The design resources shall include 
     Architect Engineering companies experienced in the design of 
     sulfur dioxide, nitrogen oxides, mercury or particulate 
     matter control technology. The construction resources shall 
     include construction companies with experience in the 
     construction of sulfur dioxide, nitrogen oxides, mercury, or 
     particulate matter control technology and trained and 
     experienced labor resources including but not limited to 
     boilermakers, iron workers, electricians, mechanics;
       ``(C) Feasibility of construction.--The feasibility to 
     complete the construction of all pollution control technology 
     projects by the relevant applicability compliance deadline;
       ``(D) Impact.--The impact in terms of unit outages and 
     construction schedules on a company or systems reliability 
     and whether such impact is unreasonable, which term shall be 
     presumed to be--
       ``(i) an increase in the price of purchase power of (10) 
     percent over the estimated cost in cents per kilowatt for the 
     company, system or State, utilized in the latest submissions 
     to a relevant State or Federal agency;
       ``(ii) a projected reduction in available generating 
     capacity such that adequate reserve margins for a company, 
     system or State do not exist, as determined by the Secretary 
     of Energy in coordination with the relevant Federal or State 
     utility agency or reliability council; or

[[Page 546]]

       ``(iii) a supply shortage of coal needed to meet emissions 
     control expectations for any proposed emissions control 
     device.
       ``(E) Positive determination.--A company or system which 
     submits a petition to install sulfur dioxide, nitrogen 
     oxides, mercury, or particulate matter control technology, or 
     any combination thereof, on affected units equaling 25 
     percent or more of its coal-fired capacity shall be presumed 
     to meet the requirements of a positive determination from the 
     Secretary of Energy.
       ``(4) Compliance.--Upon a positive determination by the 
     Secretary of Energy in accordance with paragraph (3)(E), such 
     affected units will be granted a 1-year extension from the 
     relevant applicability date under this title.
       ``(b) Submission of Petition.--During any year covered by 
     this title, an affected unit may submit a petition in 
     accordance with paragraph (a)(2) to allow use of sulfur 
     dioxide allowances, nitrogen oxides allowances, and mercury 
     allowances, as the case may be, allocated for the immediate 
     next year to meet the applicable requirement to hold such 
     allowances equal to the petitioned year's emissions.
       ``(c) Presidential Waiver.--Notwithstanding subsection (a) 
     or any other provision of this Act, The President of the 
     United States shall have authority to temporarily grant 
     waivers from emission limitations under sections 412, 422, 
     432, 452, and 472, as the case may be, if the President 
     determines that the reliability of any portion of national 
     electricity supply or national security is imperiled.

              ``PART B--SULFUR DIOXIDE EMISSION REDUCTIONS

                     ``Subpart 1--Acid Rain Program

     ``SEC. 411. DEFINITIONS.

       ``For purposes of this subpart and subpart 1 of part B:
       ``(1) Actual 1985 emission rate.--The term `actual 1985 
     emission rate', for electric utility units means the annual 
     sulfur dioxide or nitrogen oxides emission rate in pounds per 
     million Btu as reported in the 1985 National Acid 
     Precipitation Assessment Program (NAPAP) Emissions Inventory, 
     Version 2, National Utility Reference File (NURF). For 
     nonutility units, the term `actual 1985 emission rate' means 
     the annual sulfur dioxide or nitrogen oxides emission rate in 
     pounds per million Btu as reported in the NAPAP Emission 
     Inventory, Version 2.
       ``(2) Allowable 1985 emissions rate.--The term `allowable 
     1985 emissions rate' means a federally enforceable emissions 
     limitation for sulfur dioxide or oxides of nitrogen, 
     applicable to the unit in 1985 or the limitation applicable 
     in such other subsequent year as determined by the 
     Administrator if such a limitation for 1985 does not exist. 
     Where the emissions limitation for a unit is not expressed in 
     pounds of emissions per million Btu, or the averaging period 
     of that emissions limitation is not expressed on an annual 
     basis, the Administrator shall calculate the annual 
     equivalent of that emissions limitation.
       ``(3) Alternative method of compliance.--The term 
     `alternative method of compliance' means a method of 
     compliance in accordance with one or more of the following 
     authorities--
       ``(A) a substitution plan submitted and approved in 
     accordance with subsections 413(b) and (c); or
       ``(B) a phase I extension plan approved by the 
     Administrator under section 413(d), using qualifying phase I 
     technology as determined by the Administrator in accordance 
     with that section.
       ``(4) Baseline.--The term `baseline' means the annual 
     quantity of fossil fuel consumed by an affected unit, 
     measured in millions of British Thermal Units (`mmBtu's'), 
     calculated as follows:
       ``(A) For each utility unit that was in commercial 
     operation prior to January 1, 1985, the baseline shall be the 
     annual average quantity of mmBtu's consumed in fuel during 
     calendar years 1985, 1986, and 1987, as recorded by the 
     Department of Energy pursuant to Form 767. For any utility 
     unit for which such form was not filed, the baseline shall be 
     the level specified for such unit in the 1985 (NAPAP) 
     Emissions Inventory, Version 2 (NURF), or in a corrected data 
     base as established by the Administrator pursuant to 
     paragraph (3). For nonutility units, the baseline in the 
     NAPAP Emissions Inventory, Version 2. The Administrator, in 
     the Administrator's sole discretion, may exclude periods 
     during which a unit is shutdown for a continuous period of 4 
     calendar months or longer, and make appropriate adjustments 
     under this paragraph. Upon petition of the owner or operator 
     of any unit, the Administrator may make appropriate baseline 
     adjustments for accidents, strikes, disruptions of fuel 
     supplies, failure of equipment, other causes beyond the 
     reasonable control of the owner or operator of the unit that 
     caused prolonged outages.
       ``(B) For any other nonutility unit that is not included in 
     the NAPAP Emissions Inventory, Version 2, or a corrected data 
     base as established by the Administrator pursuant to 
     paragraph (3), the baseline shall be the annual average 
     quantity, in mmBtu consumed in fuel by that unit, as 
     calculated pursuant to a method which the Administrator shall 
     prescribe by regulation to be promulgated not later than 18 
     months after November 15, 1990.
       ``(C) The Administrator shall, upon application or on his 
     own motion, by December 31, 1991, supplement data needed in 
     support of this subpart and correct any factual errors in 
     data from which affected phase II units' baselines or actual 
     1985 emission rates have been calculated. Corrected data 
     shall be used for purposes of issuing allowances under this 
     subpart. Such corrections shall not be subject to judicial 
     review, nor shall the failure of the Administrator to correct 
     an alleged factual error in such reports be subject to 
     judicial review.
       ``(5) Basic phase II allowance allocations.--The term 
     `basic phase II allowance allocations' means:
       ``(A) For calendar years 2000 through 2009 inclusive, 
     allocations of allowances made by the Administrator pursuant 
     to section 412 and subsections (b)(1), (3), and (4); (c)(1), 
     (2), (3), and (5); (d)(1), (2), (4), and (5); (e); (f); 
     (g)(1), (2), (3), (4), and (5); (h)(1); (i); and (j) of 
     section 414.
       ``(B) For each calendar year beginning in 2010, allocations 
     of allowances made by the Administrator pursuant to section 
     412 and subsections (b)(1), (3), and (4); (c)(1), (2), (3), 
     and (5); (d)(1), (2), (4), and (5); (e); (f); (g)(1), (2), 
     (3), (4), and (5); (h)(1) and (3); (i); and (j) of section 
     414.
       ``(6) Capacity factor.--The term `capacity factor' means 
     the ratio between the actual electric output from a unit and 
     the potential electric output from that unit.
       ``(7) Commenced.--The term `commenced' as applied to 
     construction of any new electric utility unit means that an 
     owner or operator has undertaken a continuous program of 
     construction or that an owner or operator has entered into a 
     contractual obligation to undertake and complete, within a 
     reasonable time, a continuous program of construction.
       ``(8) Commenced commercial operation.--The term `commenced 
     commercial operation' with regard to a unit means the start 
     up of the unit's combustion chamber and commencement of the 
     generation of electricity for sale.
       ``(9) Construction.--The term `construction' means 
     fabrication, erection, or installation of an affected unit.
       ``(10) Existing unit.--The term `existing unit' means a 
     unit (including units subject to section 111) that commenced 
     commercial operation before November 15, 1990. Any unit that 
     commenced commercial operation before November 15, 1990, 
     which is modified, reconstructed, or repowered after November 
     15, 1990, shall continue to be an existing unit for the 
     purposes of this subpart. For the purposes of this subpart, 
     existing units shall not include simple combustion turbines, 
     or units which serve a generator with a nameplate capacity of 
     25 MWe or less.
       ``(11) Independent power producer.--The term `independent 
     power producer' means any person who owns or operates, in 
     whole or in part, one or more new independent power 
     production facilities.
       ``(12) New independent power production facility.--The term 
     `new independent power production facility' means a facility 
     that--
       ``(A) is used for the generation of electric energy, 80 
     percent or more of which is sold at wholesale;
       ``(B) in nonrecourse project-financed (as such term is 
     defined by the Secretary of Energy within 3 months of the 
     date of the enactment of the Clean Air Act Amendments of 
     1990); and
       ``(C) is a new unit required to hold allowances under this 
     subpart.
       ``(13) Industrial source.--The term `industrial source' 
     means a unit that does not serve a generator that produces 
     electricity, a `nonutility unit' as defined in this section, 
     or a process source.
       ``(14) Life-of-the-unit, firm power contractual 
     arrangement.--The term `life-of-the-unit, firm power 
     contractual arrangement' means a unit participation power 
     sales agreement under which a utility or industrial customer 
     reserves, or is entitled to receive, a specified amount or 
     percentage of capacity and associated energy generated by a 
     specified generating unit (or units) and pays its 
     proportional amount of such unit's total costs, pursuant to a 
     contract either--
       ``(A) for the life of the unit;
       ``(B) for a cumulative term of no less than 30 years, 
     including contracts that permit an election for early 
     termination; or
       ``(C) for a period equal to or greater than 25 years or 70 
     percent of the economic useful life of the unit determined as 
     of the time the unit was built, with option rights to 
     purchase or release some portion of the capacity and 
     associated energy generated by the unit (or units) at the end 
     of the period.
       ``(15) New unit.--The term `new unit' means a unit that 
     commences commercial operation on or after November 15, 1990.
       ``(16) Nonutility unit.--The term `nonutility unit' means a 
     unit other than a utility unit.
       ``(17) Phase II bonus allowance allocations.--The term 
     `phase II bonus allowance allocations' means, for calendar 
     year 2000 through 2009, inclusive, and only for such years, 
     allocations made by the Administrator pursuant to section 
     412, subsections (a)(2), (b)(2), (c)(4), (d)(3) (except as 
     otherwise provided therein), and (h)(2) of section 414, and 
     section 415.

[[Page 547]]

       ``(18) Qualifying phase I technology.--The term `qualifying 
     phase I technology' means a technological system of 
     continuous emission reduction which achieves a 90 percent 
     reduction in emissions of sulfur dioxide from the emissions 
     that would have resulted from the use of fuels which were not 
     subject to treatment prior to combustion.
       ``(19) Repowering.--The term `repowering' means replacement 
     of an existing coal-fired boiler with one of the following 
     clean coal technologies: atmospheric or pressurized fluidized 
     bed combustion, integrated gasification combined cycle, 
     magneto-hydrodynamics, direct and indirect coal-fired 
     turbines, integrated gasification fuel cells, or as 
     determined by the Administrator, in consultation with the 
     Secretary of Energy, a derivative of one or more of these 
     technologies, and any other technology capable of controlling 
     multiple combustion emissions simultaneously with improved 
     boiler or generation efficiency and with significantly 
     greater waste reduction relative to the performance of 
     technology in widespread commercial use as of November 15, 
     1990.
       ``(20) Reserve.--The term `reserve' means any bank of 
     allowances established by the Administrator under this 
     subpart.
       ``(21) Utility unit.--
       ``(A) In general.--The term `utility unit' means--
       ``(i) a unit that serves a generator located in any State 
     and that produces electricity for sale; or
       ``(ii) a unit that, during 1985, served a generator located 
     in any State and that produced electricity for sale.
       ``(B) Exclusions.--
       ``(i) In general.--Notwithstanding subparagraph (A), a unit 
     described in subparagraph (A) that--

       ``(I) was in commercial operation during 1985; but
       ``(II) did not during 1985, serve a generator in any State 
     that produced electricity for sale

     shall not be a utility unit for purposes of this subpart.
       ``(i) Units that cogenerate steam and electricity.--A unit 
     that cogenerates steam and electricity is not a `utility 
     unit' for purposes of this subpart unless the unit is 
     constructed for the purpose of supplying, or commences 
     construction after November 15, 1990 and supplies more than 
     one-third of its potential electric output capacity of more 
     than 25 megawatts electrical output to any utility power 
     distribution system for sale.

     ``SEC. 412. ALLOWANCE ALLOCATION.

       ``(a) In General.--Except as provided in sections 
     414(a)(2), 415(a)(3), and 416, beginning January 1, 2000, the 
     Administrator shall not allocate annual emission allowances 
     for sulfur dioxide from utility units in excess of 8.90 
     million tons except that the Administrator shall not take 
     into account unused allowances carried forward by owners and 
     operators of affected units or by other persons holding such 
     allowances, following the year for which they were allocated. 
     If necessary to meeting the restrictions imposed in the 
     preceding sentence, the Administrator shall reduce, pro rata, 
     the basic phase II allowance allocations for each unit 
     subject to the requirements of section 414. Subject to the 
     provisions of section 417, the Administrator shall allocate 
     allowances for each affected until at an affected source 
     annually, as provided in paragraphs (2) and (3) and section 
     404. Except as provided in sections 416, the removal of an 
     existing affected unit or source from commercial operation at 
     any time after November 15, 1990 (whether before or after 
     January 1, 1995, or January 1, 2000), shall not terminate or 
     otherwise affect the allocation of allowances pursuant to 
     section 413 or 414 to which the unit is entitled. Prior to 
     June 1, 1998, the Administrator shall publish a revised final 
     statement of allowance allocations, subject to the provisions 
     of section 414(a)(2).
       ``(b) New Utility Units.--
       ``(1) Prohibition of exceeding unit allowances.--After 
     January 1, 2000 and through December 31, 2007, it shall be 
     unlawful for a new utility unit to emit an annual tonnage of 
     sulfur dioxide in excess of the number of allowances to emit 
     held for the unit by the unit's owner or operator.
       ``(2) Prohibition of exceeding source allowances.--Starting 
     January 1, 2008, a new utility unit shall be subject to the 
     prohibition in subsection (c)(3).
       ``(3) Eligibility for allocation of sulfur dioxide 
     allowances.--New utility units shall not be eligible for an 
     allocation of sulfur dioxide allowances under subsection 
     (a)(1), unless the unit is subject to the provisions of 
     subsection (g)(2) or (3) of section 414. New utility units 
     may obtain allowances from any person, in accordance with 
     this title. The owner or operator of any new utility unit in 
     violation of subsection (b)(1) or subsection(c)(3) shall be 
     liable for fulfilling the obligations specified in section 
     406.
       ``(c) Prohibitions.--
       ``(1) In general.--It shall be unlawful for any person to 
     hold, use, or transfer any allowance allocated under this 
     subpart, except in accordance with regulations promulgated by 
     the Administrator.
       ``(2) Prohibition of exceeding unit allowances.--For any 
     year 1995 through 2007, it shall be unlawful for any affected 
     unit to emit sulfur dioxide in excess of the number of 
     allowances held for that unit for that year by the owner or 
     operator of the unit.
       ``(3) Prohibition of exceeding source allowances.--Starting 
     January 1, 2008, it shall be unlawful for the affected units 
     at a source to emit a total amount of sulfur dioxide during 
     the year in excess of the number of allowances held for the 
     source for that year by the owner or operator of the source.
       ``(4) Effect on other emission limitations.--Upon the 
     allocation of allowances under this subpart, the prohibition 
     in paragraphs (2) and (3) shall supersede any other emission 
     limitation applicable under this subpart to the units for 
     which such allowances are allocated.
       ``(d) Limitation on Regulations.--In order to ensure 
     electricity reliability, regulations establishing a system 
     for issuing, recording, and tracking allowances under section 
     403(b) and this subpart shall not prohibit or affect 
     temporary increases and decreases in emissions within utility 
     systems, power pools, or utilities entering into allowance 
     pool agreements, that result from their operations, including 
     emergencies and central dispatch, and such temporary 
     emissions increases and decreases shall not require transfer 
     of allowances among units nor shall it require recording. The 
     owners or operators of such units shall act through a 
     designated representative. Notwithstanding the preceding 
     sentence, the total tonnage of emissions in any calendar year 
     (calculated at the end thereof) from all units in such a 
     utility system, power pool, or allowance pool agreements 
     shall not exceed the total allowances for such units for the 
     calendar year concerned, including for calendar years after 
     2007, allowances held for such units by the owner or operator 
     of the sources where the units are located.
       ``(e) Interest in Affected Units.--Where there are multiple 
     holders of a legal or equitable title to, or a leasehold 
     interest in, an affected unit, or where a utility or 
     industrial customer purchases power from an affected unit (or 
     units) under life-of-the-unit, firm power contractual 
     arrangements, the certificate of representation required 
     under section 404(f) shall state--
       ``(1) that allowances under this subpart and the proceeds 
     of transactions involving such allowances will be deemed to 
     be held or distributed in proportion to each holder's legal, 
     equitable, leasehold, or contractual reservation or 
     entitlement; or
       ``(2) if such multiple holders have expressly provided for 
     a different distribution of allowances by contract, that 
     allowances under this subpart and the proceeds of 
     transactions involving such allowances will be deemed to be 
     held or distributed in accordance with the contract.

     A passive lessor, or a person who has an equitable interest 
     through such lessor, whose rental payments are not based, 
     either directly or indirectly, upon the revenues or income 
     from the affected unit shall not be deemed to be a holder of 
     a legal, equitable, leasehold, or contractual interest for 
     the purpose of holding or distributing allowances as provided 
     in this subsection, during either the term of such leasehold 
     or thereafter, unless expressly provided for in the leasehold 
     agreement. Except as otherwise provided in this subsection, 
     where all legal or equitable title to or interest in an 
     affected unit is held by a single person, the certification 
     shall state that all allowances under this subpart received 
     by the unit are deemed to be held for that person.

     ``SEC. 413. PHASE I SULFUR DIOXIDE REQUIREMENTS.

       ``(a) Emission Limitations.--
       ``(1) Allocation.--After January 1, 1995, each source that 
     includes one or more affected units listed in table A is an 
     affected source under this section. After January 1, 1995, it 
     shall be unlawful for any affected unit (other than an 
     eligible phase I unit under section 413(d)(2)) to emit sulfur 
     dioxide in excess of the tonnage limitation stated as a total 
     number of allowances in table A for phase 1; unless--
       ``(A) the emissions reduction requirements applicable to 
     such unit have been achieved pursuant to subsection (b) or 
     (d); or
       ``(B) the owner or operator of such unit holds allowances 
     to emit not less than the unit's total annual emissions, 
     except that, after January 1, 2000, the emissions limitations 
     established in this section shall be superseded by those 
     established in section 414. The owner or operator of any unit 
     in violation of this section be fully liable for such 
     violation including, but not limited to, liability for 
     fulfilling the obligations specified in section 406.
       ``(2) Determination.--Not later than December 31, 1991, the 
     Administrator shall determine the total tonnage of reductions 
     in the emissions of sulfur dioxide from all utility units in 
     calendar year 1995 that will occur as a result of compliance 
     with the emissions limitation requirements of this section, 
     and shall establish a reserve of allowances equal in amount 
     to the number of tons determined thereby not to exceed a 
     total of 3.50 million tons. In making such a determination, 
     the Administrator shall compute for each unit subject to the 
     emissions limitation requirements of this section the 
     difference between--
       ``(A) the product of its baseline multiplied by the lesser 
     of each unit's allowable 1985

[[Page 548]]

     emissions rate and its actual 1985 emissions rate, divided by 
     2,000; and
       ``(B) the product of each unit's baseline multiplied by 
     2.50 lbs/mmBtu divided by 2,000, and sum the computations. 
     The Administrator shall adjust the foregoing calculation to 
     reflect projected calendar year 1995 utilization of the units 
     subject to the emissions limitations of this subpart that the 
     Administrator finds would have occurred in the absence of the 
     imposition of such requirements. Pursuant to subsection (d), 
     the Administrator shall allocate allowances from the reserve 
     established hereunder until the earlier of such time as all 
     such allowances in the reserve are allocated or December 31, 
     1999.
       ``(3) Additional allocations.--In addition to allowances 
     allocated pursuant to paragraph (1), in each calendar year 
     beginning in 1995 and ending in 1999, inclusive, the 
     Administrator shall allocate for each unit on table A that is 
     located in the States of Illinois, Indiana, or Ohio (other 
     than units at Kyger Creek, Clifty Creek and Joppa Steam), 
     allowances in an amount equal to 200,000 multiplied by the 
     unit's pro rata share of the total number of allowances 
     allocated for all units on table A in the 3 States (other 
     than units at Kyger Creek, Clifty Creek, and Joppa Steam) 
     pursuant to paragraph (1). Such allowances shall be excluded 
     from the calculation of the reserve under paragraph (2).
       ``(b) Substitutions.--The owner or operator of an affected 
     unit under subsection (a) may include in its section 404 
     permit application and proposed compliance plan a proposal to 
     reassign, in whole or in part, the affected unit's sulfur 
     dioxide reduction requirements to any other unit(s) under the 
     control of such owner or operator. Such proposal shall 
     specify--
       ``(1) the designation of the substitute unit or units to 
     which any part of the reduction obligations of subsection (a) 
     shall be required, in addition to, or in lieu of, any 
     original affected units designated under such subsection;
       ``(2) the original affected unit's baseline, the actual and 
     allowable 1985 emissions rate for sulfur dioxide, and the 
     authorized annual allowance allocation stated in table A;
       ``(3) calculation of the annual average tonnage for 
     calendar years 1985, 1986, and 1987, emitted by the 
     substitute unit or units, based on the baseline for each 
     unit, as defined in section 411(4), multiplied by the lesser 
     of the unit's actual or allowable 1985 emissions rate;
       ``(4) the emissions rates and tonnage limitations that 
     would be applicable to the original and substitute affected 
     units under the substitution proposal;
       ``(5) documentation, to the satisfaction of the 
     Administrator, that the reassigned tonnage limits will, in 
     total, achieve the same or greater emissions reduction than 
     would have been achieved by the original affected unit and 
     the substitute unit or units without such substitution; and
       ``(6) such other information as the Administrator may 
     require.
       ``(c) Administrator's Action on Substitution Proposals.--
       ``(1) In general.--The Administrator shall take final 
     action on such substitution proposal in accordance with 
     section 404(c) if the substitution proposal fulfills the 
     requirements of this subsection. The Administrator may 
     approve a substitution proposal in whole or in part and with 
     such modifications or conditions as may be consistent with 
     the orderly functioning of the allowance system and which 
     will ensure the emissions reductions contemplated by this 
     title. If a proposal does not meet the requirements of 
     subsection (b), the Administrator shall disapprove it. The 
     owner or operator of a unit listed in table A shall not 
     substitute another unit or units without the prior approval 
     of the Administrator.
       ``(2) Issuance of permits.--Upon approval of a substitution 
     proposal, each substitute unit, and each source with such 
     unit, shall be deemed affected under this title, and the 
     Administrator shall issue a permit to the original and 
     substitute affected source and unit in accordance with the 
     approved substitution plan and section 404. The Administrator 
     shall allocate allowances for the original and substitute 
     affected units in accordance with the approved substitution 
     proposal pursuant to section 412. It shall be unlawful for 
     any source or unit that is allocated allowances pursuant to 
     this section to emit sulfur dioxide in excess of the 
     emissions limitation provided for in the approved 
     substitution permit and plan unless the owner or operator of 
     each unit governed by the permit and approved substitution 
     plan holds allowances to emit not less than the unit's total 
     annual emissions. The owner or operator of any original or 
     substitute affected unit operated in violation of this 
     subsection shall be fully liable for such violation, 
     including liability for fulfilling the obligations specified 
     in section 406. If a substitution proposal is disapproved, 
     the Administrator shall allocate allowances to the original 
     affected unit or units in accordance with subsection (a).
       ``(d) Eligible Phase I Extension Units.--
       ``(1) In general.--The owner or operator of any affected 
     unit subject to an emissions limitation requirement under 
     this section may petition the Administrator in its permit 
     application under section 404 for an extension of 2 years of 
     the deadline for meeting such requirement, provided that the 
     owner or operator of any such unit holds allowances to emit 
     not less than the unit's total annual emissions for each of 
     the 2 years of the period of extension. To qualify for such 
     an extension, the affected unit must either employ a 
     qualifying phase I technology, or transfer its phase I 
     emissions reduction obligation to a unit employing a 
     qualifying phase I technology. Such transfer shall be 
     accomplished in accordance with a compliance plan, submitted 
     and approved under section 404, that shall govern operations 
     at all units included in the transfer, and that specifies the 
     emissions reduction requirements imposed pursuant to this 
     title.
       ``(2) Requirements for extension proposals.--Such extension 
     proposal shall--
       ``(A) specify the unit or units proposed for designation as 
     an eligible phase I extension unit;
       ``(B) provide a copy of an executed contract, which may be 
     contingent upon the Administrator approving the proposal, for 
     the design engineering, and construction of the qualifying 
     phase I technology for the extension unit, or for the unit or 
     units to which the extension unit's emission reduction 
     obligation is to be transferred;
       ``(C) specify the unit's or units' baselines, actual 1985 
     emissions rates, allowable 1985 emissions rates, and 
     projected utilizations for calendar years 1995 through 1999;
       ``(D) require CEMS on both the eligible phase I extension 
     unit or units and the transfer unit or units beginning no 
     later than January 1, 1995; and
       ``(E) specify the emission limitation and number of 
     allowances expected to be necessary for annual operation 
     after the qualifying phase I technology has been installed.
       ``(3) Approval or disapproval.--The Administrator shall 
     review and take final action on each extension proposal in 
     order of receipt, consistent with section 404, and for an 
     approved proposal shall designate the unit or units as an 
     eligible phase I extension unit. The Administrator may 
     approve an extension proposal in whole or in part, and with 
     such modifications or conditions as may be necessary, 
     consistent with the orderly functioning of the allowance 
     system, and to ensure the emissions reductions contemplated 
     by the subpart.
       ``(4) Determining the availability of allocations.--In 
     order to determine the number of proposals eligible for 
     allocations from the reserve under subsection (a)(2) and the 
     number of the allowances remaining available after each 
     proposal is acted upon, the Administrator shall reduce the 
     total number of allowances remaining available in the reserve 
     by the number of allowances calculated according to 
     subparagraph (A), (B), and (C) until either no allowances 
     remain available in the reserve for further allocation or all 
     approved proposals have been acted upon. If no allowances 
     remain available in the reserve for further allocation before 
     all proposals have been acted upon by the Administrator, any 
     pending proposals shall be disapproved. The Administrator 
     shall calculate allowances equal to--
       ``(A) the difference between the lesser of the average 
     annual emissions in calendar years 1988 and 1989 or the 
     projected emissions tonnage for calendar year 1995 of each 
     eligible phase I extension unit, as designated under 
     paragraph (3), and the product of the unit's baseline 
     multiplied by an emission rate of 2.50 lbs/mmBtu, divided by 
     2,000;
       ``(B) the difference between the lesser of the average 
     annual emissions in calendar years 1988 and 1989 or the 
     projected emissions tonnage for calendar year 1996 of each 
     eligible phase I extension unit, as designated under 
     paragraph (3), and the product of the unit's baseline 
     multiplied by an emission rate of 2.50 lbs/mmBtu, divided by 
     2,000; and
       ``(C) the amount by which (i) the product of each unit's 
     baseline multiplied by an emission rate of 1.20 lbs/mmBtu, 
     divided by 2,000, exceeds (ii) the tonnage level specified 
     under subparagraph (E) of paragraph (2) of this subsection 
     multiplied by a factor of 3.
       ``(5) Allocation of initial allowances.--Each eligible 
     phase I extension unit shall receive allowances determined 
     under subsection (a)(1) or (c) of this section. In addition, 
     for calendar year 1995, the Administrator shall allocate to 
     each eligible phase I extension unit, from the allowance 
     reserve created pursuant to subsection (a)(2), allowances 
     equal to the difference between the lesser of the average 
     annual emissions in calendar years 1988 and 1989 or its 
     projected emission tonnage for calendar year 1995 and the 
     product of the unit's baseline multiplied by an emission rate 
     of 2.50 lbs/mmBtu, divided by 2,000. In calendar year 1996, 
     the Administrator shall allocate for each eligible unit, from 
     the allowance reserve created pursuant to subsection (a)(2), 
     allowances equal to the difference between the lesser of the 
     average annual emissions in calendar years 1988 and 1989 or 
     its projected emissions tonnage for calendar year 1996 and 
     the product of the unit's baseline multiplied by an emission 
     rate of 2.50 lbs/mmBtu, divided by 2,000. It shall be 
     unlawful for any source or unit subject to an approved 
     extension plan under this subsection to emit sulfur dioxide 
     in excess of the emissions limitations provided for in the 
     permit and approved extension plan, unless the owner or 
     operator of each

[[Page 549]]

     unit governed by the permit and approved plan holds 
     allowances to emit not less than the unit's total annual 
     emissions.
       ``(6) Allocation of additional allowances.--In addition to 
     allowances specified in paragraph (4), the Administrator 
     shall allocate for each eligible phase I extension unit 
     employing qualifying phase I technology, for calendar years 
     1997, 1998, and 1999, additional allowances, from any 
     remaining allowances in the reserve created pursuant to 
     subsection (a)(2), following the reduction in the reserve 
     provided for in paragraph (4), not to exceed the amount by 
     which (A) the product of each eligible unit's baseline times 
     an emission rate of 1.20 lbs/mmBtu, divided by 2,000 exceeds 
     (B) the tonnage level specified under subparagraph (E) of 
     paragraph (2) of this subsection.
       ``(7) Deduction from annual allowance allocations.--After 
     January 1, 1997, in addition to any liability under this Act, 
     including under section 406, if any eligible phase I 
     extension unit employing qualifying phase I technology or any 
     transfer unit under this subsection emits sulfur dioxide in 
     excess of the annual tonnage limitation specified in the 
     extension plan, as approved in paragraph (2) of this 
     subsection, the Administrator shall, in the calendar year 
     following such excess, deduct allowances equal to the amount 
     of such excess from such unit's annual allowance allocation.
       ``(e) Early Reductions.--
       ``(1) In general.--In the case of a unit that receives 
     authorization from the Governor of the State in which such 
     unit is located to make reductions in the emissions of sulfur 
     dioxide prior to calendar year 1995 and that is part of a 
     utility system that meets the following requirements--
       ``(A) the total coal-fired generation within the utility 
     system as a percentage of total system generation decreased 
     by more than 20 percent between January 1, 1980, and December 
     31, 1985; and
       ``(B) the weighted capacity factor of all coal-fired units 
     within the utility system averaged over the period from 
     January 1, 1985, through December 31, 1987, was below 50 
     percent, the Administrator shall allocate allowances under 
     this paragraph for the unit pursuant to this subsection. The 
     Administrator shall allocate allowances for a unit that is an 
     affected unit pursuant to section 414 (but is not also an 
     affected unit under this section) and part of a utility 
     system that includes one or more affected units under section 
     414 for reductions in the emissions of sulfur dioxide made 
     during the period 1995-1999 if the unit meets the 
     requirements of this subsection and the requirements of the 
     preceding sentence, except that for the purposes of applying 
     this subsection to any such unit, the prior year concerned as 
     specified below, shall be any year after January 1, 1995 but 
     prior to January 1, 2000.
       ``(2) Limitations.--In the case of an affected unit under 
     this section described in subparagraph (A), the allowances 
     allocated under this subsection for early reductions in any 
     prior year may not exceed the amount which (A) the product of 
     the unit's baseline multiplied by the unit's 1985 actual 
     sulfur dioxide emission rate (in lbs per mmBtu), divided by 
     2,000 exceeds (B) the allowances specified for such unit in 
     table A. In the case of an affected unit under section 414, 
     the allowances awarded under this subsection for early 
     reductions in any prior year may not exceed the amount by 
     which--
       ``(A) the product of--
       ``(i) the quantity of fossil fuel consumed by the unit (in 
     mmBtu) in the prior year multiplied by--
       ``(ii) the lesser of--

       ``(I) 2.50, or
       ``(II) the most stringent emission rate (in lbs per mmBtu) 
     applicable to the unit under the applicable implementation 
     plan--

     divided by 2,000 exceeds
       ``(B) the unit's actual tonnage of sulfur dioxide emission 
     for the prior year concerned.
     Allowances allocated under this subsection for units may be 
     allocated only for emission reductions achieved as a result 
     of physical changes or changes in the method of operation 
     made after November 15, 1990, including changes in the type 
     or quantity of fossil fuel consumed.
       ``(3) No basis for excused nonperformance.--In no event 
     shall the provisions of this paragraph be interpreted as an 
     event of force majeure or a commercial impracticability or in 
     any other way as a basis for excused nonperformance by a 
     utility system under a coal sales contract in effect before 
     November 15, 1990.

           ``TABLE A--AFFECTED SOURCES AND UNITS IN PHASE I AND THEIR SULFUR DIOXIDE ALLOWANCES (TONS)
----------------------------------------------------------------------------------------------------------------
                                                                                                       Phase I
                     State                                      Plant name                Generator   allowances
----------------------------------------------------------------------------------------------------------------
Alabama........................................  Colbert................................          1       13,570
                                                                                                  2       15,310
                                                                                                  3       15,400
                                                                                                  4       15,410
                                                                                                  5       37,180
                                                 E.C. Gaston............................          1       18,100
                                                                                                  2       18,540
                                                                                                  3       18,310
                                                                                                  4       19,280
                                                                                                  5       59,840
Florida........................................  Big Bend...............................          1       28,410
                                                                                                  2       27,100
                                                                                                  3       26,740
                                                 Crist..................................          6       19,200
                                                                                                  7       31,680
Georgia........................................  Bowen..................................          1       56,320
                                                                                                  2       54,770
                                                                                                  3       71,750
                                                                                                  4       71,740
                                                 Hammond................................          1        8,780
                                                                                                  2        9,220
                                                                                                  3        8,910
                                                                                                  4       37,640
                                                 J. McDonough...........................          1       19,910
                                                                                                  2       20,600
                                                 Wansley................................          1       70,770
                                                                                                  2       65,430
                                                 Yates..................................          1        7,210
                                                                                                  2        7,040
                                                                                                  3        6,950
                                                                                                  4        8,910
                                                                                                  5        9,410
                                                                                                  6       24,760
                                                                                                  7       21,480
Illinois.......................................  Baldwin................................          1       42,010
                                                                                                  2       44,420
                                                                                                  3       42,550
                                                 Coffeen................................          1       11,790
                                                                                                  2       35,670
                                                 Grand Tower............................          4        5,910
                                                 Hennepin...............................          2       18,410
                                                 Joppa Steam............................          1       12,590
                                                                                                  2       10,770
                                                                                                  3       12,270
                                                                                                  4       11,360
                                                                                                  5       11,420
                                                                                                  6       10,620
                                                 Kincaid................................          1       31,530
                                                                                                  2       33,810
                                                 Meredosia..............................          3       13,890
                                                 Vermilion..............................          2        8,880
Indiana........................................  Bailly.................................          7       11,180
                                                                                                  8       15,630
                                                 Breed..................................          1       18,500
                                                 Cayuga.................................          1       33,370
                                                                                                  2       34,130
                                                 Clifty Creek...........................          1       20,150

[[Page 550]]

 
                                                                                                  2       19,810
                                                                                                  3       20,410
                                                                                                  4       20,080
                                                                                                  5       19,360
                                                                                                  6       20,380
                                                 E.W. Stout.............................          5        3,880
                                                                                                  6        4,770
                                                                                                  7       23,610
                                                 F.B. Culley............................          2        4,290
                                                                                                  3       16,970
                                                 F.E. Ratts.............................          1        8,330
                                                                                                  2        8,480
                                                 Gibson.................................          1       40,400
                                                                                                  2       41,010
                                                                                                  3       41,080
                                                                                                  4       40,320
                                                 H.T. Pritchard.........................          6        5,770
                                                 Michigan City..........................         12       23,310
                                                 Petersburg.............................          1       16,430
                                                                                                  2       32,380
                                                 R. Gallagher...........................          1        6,490
                                                                                                  2        7,280
                                                                                                  3        6,530
                                                                                                  4        7,650
                                                 Tanners Creek..........................          4       24,820
                                                 Wabash River...........................          1        4,000
                                                                                                  2        2,860
                                                                                                  3        3,750
                                                                                                  5        3,670
                                                                                                  6       12,280
                                                 Warrick................................          4       26,980
Iowa...........................................  Burlington.............................          1       10,710
                                                 Des Moines.............................          7        2,320
                                                 George Neal............................          1        1,290
                                                 M.L. Kapp..............................          2       13,800
                                                 Prairie Creek..........................          4        8,180
                                                 Riverside..............................          5        3,990
Kansas.........................................  Quindaro...............................          2        4,220
Kentucky.......................................  Coleman................................          1       11,250
                                                                                                  2       12,840
                                                                                                  3       12,340
                                                 Cooper.................................          1        7,450
                                                                                                  2       15,320
                                                 E.W. Brown.............................          1        7,110
                                                                                                  2       10,910
                                                                                                  3       26,100
                                                 Elmer Smith............................          1        6,520
                                                                                                  2       14,410
                                                 Ghent..................................          1       28,410
                                                 Green River............................          4        7,820
                                                 H.L. Spurlock..........................          1       22,780
                                                 Henderson II...........................          1       13,340
                                                                                                  2       12,310
                                                 Paradise...............................          3       59,170
                                                 Shawnee................................         10       10,170
Maryland.......................................  Chalk Point............................          1       21,910
                                                                                                  2       24,330
                                                 C.P. Crane.............................          1       10,330
                                                                                                  2        9,230
                                                 Morgantown.............................          1       35,260
                                                                                                  2       38,480
Michigan.......................................  J.H. Campbell..........................          1       19,280
                                                                                                  2       23,060
Minnesota......................................  High Bridge............................          6        4,270
Mississippi....................................  Jack Watson............................          4       17,910
                                                                                                  5       36,700
Missouri.......................................  Asbury.................................          1       16,190
                                                 James River............................          5        4,850
                                                 Labadie................................          1       40,110
                                                                                                  2       37,710
                                                                                                  3       40,310
                                                                                                  4       35,940
                                                 Montrose...............................          1        7,390
                                                                                                  2        8,200
                                                                                                  3       10,090
                                                 New Madrid.............................          1       28,240
                                                                                                  2       32,480
                                                 Sibley.................................          3       15,580
                                                 Sioux..................................          1       22,570
                                                                                                  2       23,690
                                                 Thomas Hill............................          1       10,250
                                                                                                  2       19,390
New Hampshire..................................  Merrimack..............................          1       10,190
                                                                                                  2       22,000
New Jersey.....................................  B.L. England...........................          1        9,060
                                                                                                  2       11,720
New York.......................................  Dunkirk................................          3       12,600
                                                                                                  4       14,060
                                                 Greenidge..............................          4        7,540
                                                 Milliken...............................          1       11,170
                                                                                                  2       12,410
                                                 Northport..............................          1       19,810
                                                                                                  2       24,110
                                                                                                  3       26,480
                                                 Port Jefferson.........................          3       10,470
                                                                                                  4       12,330
Ohio...........................................  Ashtabula..............................          5       16,740
                                                 Avon Lake..............................          8       11,650
                                                                                                  9       30,480
                                                 Cardinal...............................          1       34,270
                                                                                                  2       38,320
                                                 Conesville.............................          1        4,210
                                                                                                  2        4,890
                                                                                                  3        5,500
                                                                                                  4       48,770
                                                 Eastlake...............................          1        7,800

[[Page 551]]

 
                                                                                                  2        8,640
                                                                                                  3       10,020
                                                                                                  4       14,510
                                                                                                  5       34,070
                                                 Edgewater..............................          4        5,050
                                                 Gen. J.M. Gavin........................          1       79,080
                                                                                                  2       80,560
                                                 Kyger Creek............................          1       19,280
                                                                                                  2       18,560
                                                                                                  3       17,910
                                                                                                  4       18,710
                                                                                                  5       18,740
                                                 Miami Fort.............................          5          760
                                                                                                  6       11,380
                                                                                                  7       38,510
                                                 Muskingum River........................          1       14,880
                                                                                                  2       14,170
                                                                                                  3       13,950
                                                                                                  4       11,780
                                                                                                  5       40,470
                                                 Niles..................................          1        6,940
                                                                                                  2        9,100
                                                 Picway.................................          5        4,930
                                                 R.E. Burger............................          3        6,150
                                                                                                  4       10,780
                                                                                                  5       12,430
                                                 W.H. Sammis............................          5       24,170
                                                                                                  6       39,930
                                                                                                  7       43,220
                                                 W.C. Beckjord..........................          5        8,950
                                                                                                  6       23,020
Pennsylvania...................................  Armstrong..............................          1       14,410
                                                                                                  2       15,430
                                                 Brunner Island.........................          1       27,760
                                                                                                  2       31,100
                                                                                                  3       53,820
                                                 Cheswick...............................          1       39,170
                                                 Conemaugh..............................          1       59,790
                                                                                                  2       66,450
                                                 Hatfield's Ferry.......................          1       37,830
                                                                                                  2       37,320
                                                                                                  3       40,270
                                                 Martins Creek..........................          1       12,660
                                                                                                  2       12,820
                                                 Portland...............................          1        5,940
                                                                                                  2       10,230
                                                 Shawville..............................          1       10,320
                                                                                                  2       10,320
                                                                                                  3       14,220
                                                                                                  4       14,070
                                                 Sunbury................................          3        8,760
                                                                                                  4       11,450
Tennessee......................................  Allen..................................          1       15,320
                                                                                                  2       16,770
                                                                                                  3       15,670
                                                 Cumberland.............................          1       86,700
                                                                                                  2       94,840
                                                 Gallatin...............................          1       17,870
                                                                                                  2       17,310
                                                                                                  3       20,020
                                                                                                  4       21,260
                                                 Johnsonville...........................          1        7,790
                                                                                                  2        8,040
                                                                                                  3        8,410
                                                                                                  4        7,990
                                                                                                  5        8,240
                                                                                                  6        7,890
                                                                                                  7        8,980
                                                                                                  8        8,700
                                                                                                  9        7,080
                                                                                                 10        7,550
West Virginia..................................  Albright...............................          3       12,000
                                                 Fort Martin............................          1       41,590
                                                                                                  2       41,200
                                                 Harrison...............................          1       48,620
                                                                                                  2       46,150
                                                                                                  3       41,500
                                                 Kammer.................................          1       18,740
                                                                                                  2       19,460
                                                                                                  3       17,390
                                                 Mitchell...............................          1       43,980
                                                                                                  2       45,510
                                                 Mount Storm............................          1       43,720
                                                                                                  2       35,580
                                                                                                  3       42,430
Wisconsin......................................  Edgewater..............................          4       24,750
                                                 La Crosse/Genoa........................          3       22,700
                                                 Nelson Dewey...........................          1        6,010
                                                                                                  2        6,680
                                                 N. Oak Creek...........................          1        5,220
                                                                                                  2        5,140
                                                                                                  3        5,370
                                                                                                  4        6,320
                                                 Pulliam................................          8        7,510
                                                 S. Oak Creek...........................          5        9,670
                                                                                                  6       12,040
                                                                                                  7       16,180
                                                                                                  8       15,790
----------------------------------------------------------------------------------------------------------------

       ``(f) Energy Conservation and Renewable Energy.--
       ``(1) Definitions.--As used in this subsection:
       ``(A) Qualified energy conservation measure.--The term 
     `qualified energy conservation measure' means a cost 
     effective measure, as identified by the Administrator in 
     consultation with the Secretary of Energy, that increases the 
     efficiency of the use of electricity provided by an electric 
     utility to its customers.

[[Page 552]]

       ``(B) Qualified renewable energy.--The term `qualified 
     renewable energy' means energy derived from biomass, solar, 
     geothermal, or wind as identified by the Administrator in 
     consultation with the Secretary of Energy.
       ``(C) Electric utility.--The term `electric utility' means 
     any person, State agency, or Federal agency, which sells 
     electric energy.
       ``(2) Allowances for emissions avoided through energy 
     conservation and renewable energy.--
       ``(A) In general.--The regulations under paragraph (4) of 
     this subsection shall provide that for each ton of sulfur 
     dioxide emissions avoided by an electric utility, during the 
     applicable period, through the use of qualified energy 
     conservation measures or qualified renewable energy, the 
     Administrator shall allocate a single allowance to such 
     electric utility, on a first-come-first-served basis from the 
     Conservation and Renewable Energy Reserve established under 
     subsection (g), up to a total of 300,000 allowances for 
     allocation from such Reserve.
       ``(B) Requirements for issuance.--The Administrator shall 
     allocate allowances to an electric utility under this 
     subsection only if all of the following requirements are met:
       ``(i) Such electric utility is paying for or participating 
     in the qualified energy conservation measures or qualified 
     renewable energy.
       ``(ii) The emissions of sulfur dioxide avoided through the 
     use of qualified energy conservation measures or qualified 
     renewable energy are quantified in accordance with 
     regulations promulgated by the Administrator under this 
     subsection.
       ``(iii)(I) Such electric utility has adopted and is 
     implementing a least cost energy conservation and electric 
     power plan which evaluates a range of resources, including 
     new power supplies, energy conservation, and renewable energy 
     resources, in order to meet expected future demand at the 
     lowest system cost.
       ``(II) The qualified energy conservation measures or 
     qualified renewable energy, or both, are consistent with that 
     plan.
       ``(III) In the case of electric utilities subject to the 
     jurisdiction of a State regulatory authority such plan shall 
     have been approved by such authority. For electric utilities 
     not subject to the jurisdiction of a State regulatory 
     authority such plan shall have been approved by the 
     Administrator.
       ``(iv) In the case of qualified energy conservation 
     measures undertaken by a State regulated electric utility, 
     the Secretary of Energy has certified that the State 
     regulatory authority with jurisdiction over the electric 
     rates of such electric utility has established rates and 
     charges which ensure that the net income of such electric 
     utility after implementation of specific cost effective 
     energy conservation measures is at least as high as such net 
     income would have been if the energy conservation measures 
     had not been implemented. Upon the date of any such 
     certification by the Secretary of Energy, all allowances 
     which, but for this paragraph, would have been allocated 
     under subparagraph (B) before such date, shall be allocated 
     to the electric utility. This clause is not a requirement for 
     qualified renewable energy.
       ``(v) Such utility or any subsidiary of the utility's 
     holding company owns or operates at least one affected unit.
       ``(C) Period of applicability.--Allowances under this 
     subsection shall be allocated only with respect to kilowatt 
     hours of electric energy saved by qualified energy 
     conservation measures or generated by qualified renewable 
     energy after January 1, 1992, and before the earlier of (i) 
     December 31, 2000, or (ii) the date on which any electric 
     utility steam generating unit owned or operated by the 
     electric utility to which the allowances are allocated 
     becomes subject to this subpart (including those sources that 
     elect to become affected by this title, pursuant to section 
     417).
       ``(D) Determination of avoided emissions.--
       ``(i) Application.--In order to receive allowances under 
     this subsection, an electric utility shall make an 
     application which--

       ``(I) designates the qualified energy conservation measures 
     implemented and the qualified renewable energy sources used 
     for purposes of avoiding emissions;
       ``(II) calculates, in accordance with subparagraphs (F) and 
     (G), the number of tons of emissions avoided by reason of the 
     implementation of such measures or the use of such renewable 
     energy sources; and
       ``(III) demonstrates that the requirements of subparagraph 
     (B) have been met.

       ``(ii) Approval.--Such application for allowances by a 
     State-regulated electric utility shall require approval by 
     the State regulatory authority with jurisdiction over such 
     electric utility. The authority shall review the application 
     for accuracy and compliance with this subsection and the 
     rules under this subsection. Electric utilities whose retail 
     rates are not subject to the jurisdiction of a State 
     regulatory authority shall apply directly to the 
     Administrator for such approval.
       ``(E) Avoided emissions from qualified energy conservation 
     measures.--For the purposes of this subsection, the emission 
     tonnage deemed avoided by reason of the implementation of 
     qualified energy conservation measures for any calendar year 
     shall be a tonnage equal to the product of multiplying--
       ``(i) the kilowatt hours that would otherwise have been 
     supplied by the utility during such year in the absence of 
     such qualified energy conservation measures; by
       ``(ii) 0.004, and dividing the product so derived by 2,000.
       ``(F) Avoided emissions from the use of qualified renewable 
     energy.--The emissions tonnage deemed avoided by reason of 
     the use of qualified renewable energy by an electric utility 
     for any calendar year shall be a tonnage equal to the product 
     of multiplying--
       ``(i) the actual kilowatt hours generated by, or purchased 
     from, qualified renewable energy; by
       ``(ii) 0.004, and dividing the product so derived by 2,000.
       ``(G) Prohibitions.--
       ``(i) No allowances shall be allocated under this 
     subsection for the implementation of programs that are 
     exclusively informational or educational in nature.
       ``(ii) No allowances shall be allocated for energy 
     conservation measures or renewable energy that were 
     operational before January 1, 1992.
       ``(3) Savings provision.--Nothing in this subsection 
     precludes a State or State regulatory authority from 
     providing additional incentives to utilities to encourage 
     investment in demand-side resources.
       ``(4) Regulations.--The Administrator shall implement this 
     subsection under 40 CFR part 73 (2002), amended as 
     appropriate by the Administrator. Such regulations shall list 
     energy conservation measures and renewable energy sources 
     which may be treated as qualified energy conservation 
     measures and qualified renewable energy for purposes of this 
     subsection. Allowances shall only be allocated if all 
     requirements of this subsection and the rules promulgated to 
     implement this subsection are complied with. The 
     Administrator shall review the determinations of each State 
     regulatory authority under this subsection to encourage 
     consistency from electric utility and from State-to-State in 
     accordance with the Administrator's rules. The Administrator 
     shall publish and make available to the public the findings 
     of this review no less than annually.
       ``(g) Conservation and Renewable Energy Reserve.--The 
     Administrator shall establish a Conservation and Renewable 
     Energy Reserve under this subsection. Beginning on January 1, 
     1995, the Administrator may allocate from the Conservation 
     and Renewable Energy Reserve an amount equal to a total of 
     300,000 allowances for emissions of sulfur dioxide pursuant 
     to section 411. In order to provide 300,000 allowances for 
     such reserve, in each year beginning in calendar year 2000 
     and until calendar year 2009, inclusive, the Administrator 
     shall reduce each unit's basic phase II allowance allocation 
     on the basis of its pro rata share of 30,000 allowances. 
     Notwithstanding the prior sentence, if allowances remain in 
     the reserve on January 1, 2010, the Administrator shall 
     allocate such allowances for affected units under section 414 
     on a pro rata basis. For purposes of this subsection, for any 
     unit subject to the emissions limitation requirements of 
     section 414, the term `pro rata basis' refers to the ratio 
     which the reductions made in such unit's allowances in order 
     to establish the reserve under this subsection bears to the 
     total of such reductions for all such units.
       ``(h) Alternative Allowance Allocation for Units in Certain 
     Utility Systems With Optional Baseline.--
       ``(1) Optional baseline for units in certain systems.--In 
     the case of a unit subject to the emissions limitation 
     requirements of this section which (as of November 15, 
     1990)--
       ``(A) has an emission rate below 1.0 lbs/mmBtu,
       ``(B) has decreased its sulfur dioxide emissions rate by 60 
     percent or greater since 1980, and
       ``(C) is part of a utility system which has a weighted 
     average sulfur dioxide emissions rate for all fossil fueled-
     fired units below 1.0 lbs/mmBtu, at the election to the owner 
     or operator of such unit, the unit's baseline may be 
     calculated--
       ``(i) as provided under section 411, or
       ``(ii) by utilizing the unit's average annual fuel 
     consumption at a 60 percent capacity factor. Such election 
     shall be made no later than March 1, 1991.
       ``(2) Allowance allocation.--Whenever a unit referred to in 
     paragraph (1) elects to calculate its baseline as provided in 
     clause (ii) of paragraph (1), the Administrator shall 
     allocate allowances for the unit pursuant to section 412(a), 
     this section, and section 414 (as basic phase II allowance 
     allocations) in an amount equal to the baseline selected 
     multiplied by the lower of the average annual emission rate 
     for such unit in 1989, or 1.0 lbs/mmBtu. Such allowance 
     allocation shall be in lieu of any allocation of allowances 
     under this section and section 414.

     ``SEC. 414. PHASE II SULFUR DIOXIDE REQUIREMENTS.

       ``(a) Applicability.--
       ``(1) Basic phase ii allowance allocations.--After January 
     l, 2000, each existing utility unit as provided below is 
     subject to the limitations or requirements of this section. 
     Each utility unit subject to an annual

[[Page 553]]

     sulfur dioxide tonnage emission limitation under this section 
     is an affected unit under this subpart. Each source that 
     includes one or more affected units is an affected source. In 
     the case of an existing unit that was not in operation during 
     calendar year 1985, the emission rate for a calendar year 
     after 1985, as determined by the Administrator, shall be used 
     in lieu of the 1985 rate.
       ``(2) Basic phase ii bonus allowance allocations.--In 
     addition to basic phase II allowance allocations, in each 
     year beginning in calendar year 2000 and ending in calendar 
     year 2009, inclusive, the Administrator shall allocate up to 
     530,000 phase II bonus allowances pursuant to subsections 
     (b)(2), (c)(4), (d)(3) (A) and (B), and (h)(2) of this 
     section and section 415.
       ``(3) Additional allowance allocations for certain affected 
     sources and units.--In addition to basic phase II allowances 
     allocations and phase II bonus allowance allocations, 
     beginning January 1, 2000, the Administrator shall allocate 
     for each unit listed on table A in section 413 (other than 
     units at Kyger Creek, Clifty Creek, and Joppa Stream) and 
     located in the States of Illinois, Indiana, Ohio, Georgia, 
     Alabama, Missouri, Pennsylvania, West Virginia, Kentucky, or 
     Tennessee allowances in an amount equal to 50,000 multiplied 
     by the unit's pro rata share of the total number of basic 
     allowances allocated for all units listed on table A (other 
     than units at Kyger Creek, Clifty Creek, and Joppa Stream). 
     Allowances allocated pursuant to this paragraph shall not be 
     subject to the 8,900,000 ton limitation in section 412(a).
       ``(b) Units Equal to, or Above, 75 MWe and 1.20 lbs/
     mmBtu.--
       ``(1) Basic phase ii allowance allocations.--Except as 
     otherwise provided in paragraph (3), after January 1, 2000, 
     it shall be unlawful for any existing utility unit that 
     serves a generator with nameplate capacity equal to, or 
     greater, than 75 MWe and an actual 1985 emission rate equal 
     to or greater than 1.20 lbs/mmBtu to exceed an annual sulfur 
     dioxide tonnage emission limitation equal to the product of 
     the unit's baseline multiplied by an emission rate equal to 
     1.20 lbs/mmBtu, divided by 2,000, unless the owner or 
     operator of such unit holds allowances to emit not less than 
     the unit's total annual emissions or, for a year after 2007, 
     unless the owner or operator of the source that includes such 
     unit holds allowances to emit not less than the total annual 
     emissions of all affected units at the source.
       ``(2) Reserve allowances.--In addition to allowances 
     allocated pursuant to paragraph (1) and section 412(a) as 
     basic phase II allowance allocations, beginning January 1, 
     2000, and for each calendar year thereafter until and 
     including 2009, the Administrator shall allocate annually for 
     each unit subject to the emissions limitation requirements of 
     paragraph (1) with an actual 1985 emissions rate greater than 
     1.20 lbs/mmBtu and less than 2.50 lbs/mmBtu and a baseline 
     capacity factor of less than 60 percent, allowances from the 
     reserve created pursuant to subsection (a)(2) in an amount 
     equal to 1.20 lbs/mmBtu multiplied by 50 percent of the 
     difference, on a Btu basis, between the unit's baseline and 
     the unit's fuel consumption at a 60 percent capacity factor.
       ``(3) Prohibition.--After January 1, 2000, it shall be 
     unlawful for any existing utility unit with an actual 1985 
     emissions rate equal to or greater than 1.20 lbs/mmBtu whose 
     annual average fuel consumption during 1985, 1986, and 1987 
     on a Btu basis exceeded 90 percent in the form of lignite 
     coal which is located in a State in which, as of July 1, 
     1989, no county or portion of a county was designated 
     nonattainment under section 107 of this Act for any pollutant 
     subject to the requirements of section 109 of this Act to 
     exceed an annual sulfur dioxide tonnage limitation equal to 
     the product of the unit's baseline multiplied by the lesser 
     of the unit's actual 1985 emissions rate or its allowable 
     1985 emissions rate, divided by 2,000, unless the owner or 
     operator of such unit holds allowances to emit not less than 
     the unit's total annual emissions or, for a year after 2007, 
     unless the owner or operator of the source that includes such 
     unit holds allowances to emit not less than the total annual 
     emissions of all affected units at the source.
       ``(4) Annual allowance allocations.--After January 1, 2000, 
     the Administrator shall allocate annually for each unit, 
     subject to the emissions limitation requirements of paragraph 
     (1), which is located in a State with an installed electrical 
     generating capacity of more than 30,000,000 kw in 1988 and 
     for which was issued a prohibition order or a proposed 
     prohibition order (from burning oil), which unit subsequently 
     converted to coal between January 1, 1980, and December 31, 
     1985, allowances equal to the difference between (A) the 
     product of the unit's annual fuel consumption, on a Btu 
     basis, at a 65 percent capacity factor multiplied by the 
     lesser of its actual or allowable emissions rate during the 
     first full calendar year after conversion, divided by 2,000, 
     and (B) the number of allowances allocated for the unit 
     pursuant to paragraph (1): Provided, That the number of 
     allowances allocated pursuant to this paragraph shall not 
     exceed an annual total of five thousand. If necessary to 
     meeting the restriction imposed in the preceding sentence the 
     Administrator shall reduce, pro rata, the annual allowances 
     allocated for each unit under this paragraph.
       ``(c) Coal or Oil-Fired Units Below 75 MWe and Above 1.20 
     lbs/mmBtu.--
       ``(1) Steam-electric capacity equal to or greater than 
     250mwe.--Except as otherwise provided in paragraph (3), after 
     January 1, 2000, it shall be unlawful for a coal or oil-fired 
     existing utility unit that serves a generator with nameplate 
     capacity of less than 75 MWe and an actual 1985 emission rate 
     equal to, or greater than, 1.20 lbs/mmBtu and which is a unit 
     owned by a utility operating company whose aggregate 
     nameplate fossil fuel steam-electric capacity is, as of 
     December 31, 1989, equal to, or greater than, 250 MWe to 
     exceed an annual sulfur dioxide emissions limitation equal to 
     the product of the unit's baseline multiplied by an emission 
     rate equal to 1.20 lbs/mmBtu, divided by 2,000 unless the 
     owner or operator of such unit holds allowances to emit not 
     less than the unit's total annual emissions for a year after 
     2007, or the owner or operator of the source that includes 
     such unit holds allowances to emit not less than the total 
     annual emissions of all affected units at the source.
       ``(2) Steam-electric capacity less than 250mwe.--After 
     January 1, 2000, it shall be unlawful for a coal or oil-fired 
     existing utility unit that serves a generator with nameplate 
     capacity of less than 75 MWe and an actual 1985 emission rate 
     equal to, or greater than, 1.20 lbs/mmBtu (excluding units 
     subject to section 111 of the Act or to a federally 
     enforceable emissions limitation for sulfur dioxide 
     equivalent to an annual rate of less than 1.20 lbs/mmBtu) and 
     which is a unit owned by a utility operating company whose 
     aggregate nameplate fossil fuel steam-electric capacity is, 
     as of December 31, 1989, less than 250 MWe, to exceed an 
     annual sulfur dioxide tonnage emissions limitation equal to 
     the product of the unit's baseline multiplied by the lesser 
     of its actual 1985 emissions rate or its allowable 1985 
     emissions rate, divided by 2,000, unless the owner or 
     operator of such unit holds allowances to emit not less than 
     the unit's total annual emissions, for a year after 2007, or 
     the owner or operator of the source that includes such unit 
     holds allowances to emit not less than the total annual 
     emissions of all affected units at the source.
       ``(3) Steam-electric capacity between 250 and 450 mwe.--
     After January 1, 2000 it shall be unlawful for any existing 
     utility unit with a nameplate capacity below 75 MWe and an 
     actual 1985 emissions rate equal to, or greater than, 1.20 
     lbs/mmBtu which became operational on or before December 31, 
     1965, which is owned by a utility operating company with, as 
     of December 31, 1989, a total fossil fuel steam-electric 
     generating capacity greater than 250 MWe, and less than 450 
     MWe which serves fewer than 78,000 electrical customers as of 
     November 15, 1990, to exceed an annual sulfur dioxide 
     emissions tonnage limitation equal to the product of its 
     baseline multiplied by the lesser of its actual or allowable 
     1985 emission rate, divided by 2,000, unless the owner or 
     operator holds allowances to emit not less than the units 
     total annual emissions or, for a year after 2007, unless the 
     owner or operator of the source that includes such unit holds 
     allowances to emit not less than the total annual emissions 
     of all affected units at the source. After January 1, 2010, 
     it shall be unlawful for each unit subject to the emissions 
     limitation requirements of this paragraph to exceed an annual 
     emissions tonnage limitation equal to the product of its 
     baseline multiplied by an emissions rate of 1.20 lbs/mmBtu, 
     divided by 2,000, unless the owner or operator holds 
     allowances to emit not less than the unit's total annual 
     emissions for a year after 2007, or the owner or operator of 
     the source that includes such unit holds allowances to emit 
     not less than the total annual emissions of all affected 
     units at the source.
       ``(4) Reserve allowances.--In addition to allowances 
     allocated pursuant to paragraph (1) and section 412(a) as 
     basic phase II allowance allocations, beginning January 1, 
     2000, and for each calendar year thereafter until and 
     including 2009, inclusive, the Administrator shall allocate 
     annually for each unit subject to the emissions limitation 
     requirements of paragraph (1) with an actual 1985 emissions 
     rate equal to, or greater than, 1.20 lbs/mmBtu and less than 
     2.50 lbs/mmBtu and a baseline capacity factor of less than 60 
     percent, allowances from the reserve created pursuant to 
     subsection (a)(2) in an amount equal to 1.20 lbs/mmBtu 
     multiplied by 50 percent of the difference, on a Btu basis, 
     between the unit's baseline and the unit's fuel consumption 
     at a 60 percent capacity factor.
       ``(5) Certain electric utility systems.--After January 1, 
     2000, it shall be unlawful for any existing unit with a 
     nameplate capacity below 75 MWe and an actual 1985 emissions 
     rate equal to, or greater than, 1.20 lbs/mmBtu which is part 
     of an electric utility system which, as of November 15, 
     1990--
       ``(A) has at least 20 percent of its fossil-fuel capacity 
     controlled by flue gas desulfurization devices;
       ``(B) has more than 10 percent of its fossil-fuel capacity 
     consisting of coal-fired units of less than 75 MWe; and
       ``(C) has large units (greater than 400 MWe) all of which 
     have difficult or very difficult FGD Retrofit Cost Factors 
     (according to the Emissions and the FGD Retrofit Feasibility 
     at the 200 Top Emitting Generating Stations, prepared for the 
     United States Environmental Protection Agency on January 10,

[[Page 554]]

     1986) to exceed an annual sulfur dioxide emissions tonnage 
     limitation equal to the product of its baseline multiplied by 
     an emissions rate of 2.5 lbs/mmBtu, divided by 2,000, unless 
     the owner or operator holds allowances to emit not less than 
     the unit's total annual emissions, for a year after 2007, or 
     the owner or operator of the source that includes such unit 
     holds allowances to emit not less than the total annual 
     emissions of all affected units at the source. After January 
     1, 2010, it shall be unlawful for each unit subject to the 
     emissions limitation requirements of this paragraph to exceed 
     an annual emissions tonnage limitation equal to the project 
     of its baseline multiplied by an emissions rate of 1.20 lbs/
     mmBtu, divided by 2,000, unless the owner or operator holds 
     for use allowances to emit not less than the unit's total 
     annual emissions for a year after 2007, or the owner or 
     operator of the source that includes such unit holds 
     allowances to emit not less than the total annual emissions 
     of all affected units at the source.
       ``(d) Coal-Fired Units Below 1.20 lbs/mmBtu.--
       ``(1) Rate less than 0.60 lbs/mmbtu.--After January 1, 
     2000, it shall be unlawful for any existing coal-fired 
     utility unit the lesser of whose actual or allowable 1985 
     sulfur dioxide emissions rate is less than 0.60 lbs/mmBtu to 
     exceed an annual sulfur dioxide tonnage emission limitation 
     equal to the product of the unit's baseline multiplied by--
       ``(A) the lesser of 0.60 lbs/mmBtu or the unit's allowable 
     1985 emissions rate; and
       ``(B) a numerical factor of 120 percent, divided by 2,000, 
     unless the owner or operator of such unit holds allowances to 
     emit not less than the unit's total annual emissions for a 
     year after 2007, or the owner or operator of the source that 
     includes such unit holds allowances to emit not less than the 
     total annual emissions of all affected units at the source.
       ``(2) Rate between 0.60 and 1.20 lbs/mmbtu.--After January 
     1, 2000, it shall be unlawful for any existing coal-fired 
     utility unit the lesser of whose actual or allowable 1985 
     sulfur dioxide emissions rate is equal to, or greater than, 
     0.60 lbs/mmBtu and less than 1.20 lbs/mmBtu to exceed an 
     annual sulfur dioxide tonnage emissions limitation equal to 
     the product of the unit's baseline multiplied by (A) the 
     lesser of its actual 1985 emissions rate or its allowable 
     1985 emissions rate, and (B) a numerical factor of 120 
     percent, divided by 2,000, unless the owner or operator of 
     such unit holds allowances to emit not less than the unit's 
     total annual emissions for a year after 2007, or the owner or 
     operator of the source that includes such unit holds 
     allowances to emit not less than the total annual emissions 
     of all affected units at the source.
       ``(3) Reserve allowance.--
       ``(A) In general.--In addition to allowances allocated 
     pursuant to paragraph (1) and section 412(a) as basic phase 
     II allowance allocations, at the election of the designated 
     representative of the operating company, beginning January 1, 
     2000, and for each calendar year thereafter until and 
     including 2009, the Administrator shall allocate annually for 
     each unit subject to the emissions limitation requirements of 
     paragraph (1) allowances from the reserve created pursuant to 
     subsection (a)(2) in an amount equal to the amount by which--
       ``(i) the product of the lesser of 0.60 lbs/mmBtu or the 
     unit's allowable 1985 emissions rate multiplied by the unit's 
     baseline adjusted to reflect operation at a 60 percent 
     capacity factor, divided by 2,000, exceeds
       ``(ii) the number of allowances allocated for the unit 
     pursuant to paragraph (1) and section 403(a)(1) as basic 
     phase II allowance allocations.
       ``(B) Units subject to certain limitations.--In addition to 
     allowances allocated pursuant to paragraph (2) and section 
     412(a) as basic phase II allowance allocations, at the 
     election of the designated representative of the operating 
     company, beginning January 1, 2000, and for each calendar 
     year thereafter until and including 2009, the Administrator 
     shall allocate annually for each unit subject to the 
     emissions limitation requirements of paragraph (2) allowances 
     from the reserve created pursuant to subsection (a)(2) in an 
     amount equal to the amount by which--
       ``(i) the product of the lesser of the unit's actual 1985 
     emissions rate or its allowable 1985 emissions rate 
     multiplied by the unit's baseline adjusted to reflect 
     operation at a 60 percent capacity factor, divided by 2,000; 
     exceeds
       ``(ii) the number of allowances allocated for the unit 
     pursuant to paragraph (2) and section 412(a) as basic phase 
     II allowance allocations.
       ``(C) Election by operating company.--An operating company 
     with units subject to the emissions limitation requirements 
     of this subsection may elect the allocation of allowances as 
     provided under subparagraphs (A) and (B). Such election shall 
     apply to the annual allowance allocation for each and every 
     unit in the operating company subject to the emissions 
     limitation requirements of this subsection. The Administrator 
     shall allocate allowances pursuant to subparagraphs (A) and 
     (B) only in accordance with this subparagraph.
       ``(4) Alternative allocation.--Notwithstanding any other 
     provision of this section, at the election of the owner or 
     operator, after January l, 2000, the Administrator shall 
     allocate in lieu of allocation, pursuant to paragraph (1), 
     (2), (3), (5), or (6), allowances for a unit subject to the 
     emissions limitation requirements of this subsection which 
     commenced commercial operation on or after January 1, 1981 
     and before December 31, 1985, which was subject to, and in 
     compliance with, section 111 of the Act in an amount equal to 
     the unit's annual fuel consumption, on a Btu basis, at a 65-
     percent-capacity factor multiplied by the unit's allowable 
     1985 emissions rate, divided by 2,000.
       ``(5) Clean coal technology demonstration grant.--For the 
     purposes of this section, in the case of an oil- and gas-
     fired unit which has been awarded a clean coal technology 
     demonstration grant as of January 1, 1991, by the United 
     States Department of Energy, beginning January 1, 2002, the 
     Administrator shall allocate for the unit allowances in an 
     amount equal to the unit's baseline multiplied by 1.20 lbs/
     mmBtu, divided by 2,000.
       ``(e) Oil and Gas-Fired Units Equal to or Greater Than 0.60 
     lbs/mmBtu and Less Than 1.20 lbs/mmBtu.--After January 1, 
     2000, it shall be unlawful for any existing oil and gas-fired 
     utility unit the lesser of whose actual or allowable 1985 
     sulfur dioxide emission rate is equal to, or greater than, 
     0.60 lbs/mmBtu, but less than 1.20 lbs/mmBtu to exceed an 
     annual sulfur dioxide tonnage limitation equal to the product 
     of the unit's baseline multiplied by (A) the lesser of the 
     unit's allowable 1985 emissions rate or its actual 1985 
     emissions rate and (B) a numerical factor of 120 percent 
     divided by 2,000, unless the owner or operator of such unit 
     holds allowances to emit not less than the unit's total 
     annual emissions for a year after 2007, or the owner or 
     operator of the source that includes such unit holds 
     allowances to emit not less than the total annual emissions 
     of all affected units at the source.
       ``(f) Oil and Gas-Fired Units Less Than 0.60 lbs/mmBtu.--
       ``(1) In general.--After January 1, 2000, it shall be 
     unlawful for any oil and gas-fired existing utility unit the 
     lesser of whose actual or allowance 1985 emission rate is 
     less than 0.60 lbs/mmBtu and whose average annual fuel 
     consumption during the period 1980 through 1989 on a Btu 
     basis was 90 percent or less in the form of natural gas to 
     exceed an annual sulfur dioxide tonnage emissions limitation 
     equal to the product of the unit's baseline multiplied by--
       ``(A) the lesser of 0.60 lbs/mmBtu or the unit's allowance 
     1985 emissions, and
       ``(B) a numerical factor of 120 percent, divided by 2,000, 
     unless the owner or operator of such unit holds allowances to 
     emit not less than the unit's total annual emissions, for a 
     year after 2007, or the owner or operator of the source that 
     includes such unit holds allowances to emit not less than the 
     total annual emissions of all affected units at the source.
       ``(2) Additional allocation.--In addition to allowances 
     allocated pursuant to paragraph (1) as basic phase II 
     allowance allocations and section 412(a), beginning January 
     1, 2000, the Administrator shall, in the case of any unit 
     operated by a utility that furnishes electricity, electric 
     energy, steam, and natural gas within an area consisting of a 
     city and 1 contiguous county, and in the case of any unit 
     owned by a State authority, the output of which unit is 
     furnished within that same area consisting of a city and 1 
     contiguous county, the Administrator shall allocate for each 
     unit in the utility its pro rata share of 7,000 allowances 
     and for each unit in the State authority its pro rata share 
     of 2,000 allowances.
       ``(g) Units That Commence Commercial Operation Between 1986 
     and December 31, 1995.--
       ``(1) In general.--After January 1, 2000, it shall be 
     unlawful for any utility unit that has commenced commercial 
     operation on or after January 1, 1986, but not later than 
     September 30, 1990 to exceed an annual tonnage emission 
     limitation equal to the product of the unit's annual fuel 
     consumption, on a Btu basis, at a 65-percent-capacity factor 
     multiplied by the unit's allowance 1985 sulfur dioxide 
     emission rate (converted, if necessary, to pounds per mmBtu), 
     divided by 2,000 unless the owner or operator of such unit 
     holds allowances to emit not less than the unit's total 
     annual emissions for a year after 2007, or the owner or 
     operator of the source that includes such unit holds 
     allowances to emit not less than the total annual emissions 
     of all affected units at the source.
       ``(2) Unit allowances.--After January 1, 2000, the 
     Administrator shall allocate allowances pursuant to section 
     411 to each unit which is listed in table B of this paragraph 
     in an annual amount equal to the amount specified in table B.

                                ``TABLE B
 
                            Unit                              Allowances
 
Brandon Shores.............................................        8,907
Miller 4...................................................        9,197
TNP One 2..................................................        4,000
Zimmer 1...................................................       18,458
Spruce 1...................................................        7,647
Clover 1...................................................        2,796
Clover 2...................................................        2,796
Twin Oak 2.................................................        1,760
Twin Oak 1.................................................        9,158
Cross 1....................................................        6,401
Malakoff 1.................................................        1,759
 


[[Page 555]]

     Notwithstanding any other paragraph of this subsection, for 
     units subject to this paragraph, the Administrator shall not 
     allocate allowances pursuant to any other paragraph of this 
     subsection, provided that the owner or operator of a unit 
     listed on table B may elect an allocation of allowances under 
     another paragraph of this subsection in lieu of an allocation 
     under this paragraph.
       ``(3) Units that commenced commercial operation between 
     october 1, 1990, and december 31, 1992.--Beginning January 1, 
     2000, the Administrator shall allocate to the owner or 
     operator of any utility unit that commences commercial 
     operation, or has commenced commercial operation, on or after 
     October 1, 1990, but not later than December 31, 1992, 
     allowances in an amount equal to the product of the unit's 
     annual fuel consumption, on a Btu basis, at a 65 percent 
     capacity factor multiplied by the lesser of 0.30 lbs/mmBtu or 
     the unit's allowable sulfur dioxide emission rate (converted, 
     if necessary, to pounds per mmBtu), divided by 2,000.
       ``(4) Units that commenced commercial operation between 
     january 1, 1993, and december 31, 1995.--Beginning January 1, 
     2000, the Administrator shall allocate to the owner or 
     operator of any utility unit that has commenced construction 
     before December 31, 1990 and that commences commercial 
     operation between January 1, 1993, and December 31, 1995, 
     allowances in an amount equal to the product of the unit's 
     annual fuel consumption, on a Btu basis, at a 65 percent 
     capacity factor multiplied by the lesser of 0.30 lbs/mmBtu or 
     the unit's allowable sulfur dioxide emission rate (converted, 
     if necessary, to pounds per mmBtu), divided by 2,000.
       ``(5) Units that converted to coal fired operation between 
     january 1, 1985, and december 31, 1987.--After January 1, 
     2000, it shall be unlawful for any existing utility unit that 
     has completed conversion from predominantly gas fired 
     existing operation to coal fired operation between January 1, 
     1985, and December 31, 1987, for which there has been 
     allocated a proposed or final prohibition order pursuant to 
     section 301(b) of the Powerplant and Industrial Fuel Use Act 
     of 1978 (42 U.S.C. 8301 et seq., repealed 1987) to exceed an 
     annual sulfur dioxide tonnage emissions limitation equal to 
     the product of the unit's annual fuel consumption, on a Btu 
     basis, at a 65 percent capacity factor multiplied by the 
     lesser of 1.20 lbs/mmBtu or the unit's allowable 1987 sulfur 
     dioxide emissions rate, divided by 2,000, unless the owner or 
     operator of such unit has obtained allowances equal to its 
     actual emissions for a year after 2007, or the owner or 
     operator of the source that includes such unit holds 
     allowances to emit not less than the total annual emissions 
     of all affected units at the source.
       ``(6) Applicability to qualifying small power production 
     facilities, qualifying cogeneration facilities, and new 
     independent power production facilities.--Unless the 
     Administrator has approved a designation of such facility 
     under section 417, the provisions of this subpart shall not 
     apply to a `qualifying small power production facility' or 
     `qualifying cogeneration facility' (within the meaning of 
     section 3(17)(C) or 3(18)(B) of the Federal Power Act) or to 
     a `new independent power production facility' if, as of 
     November 15, 1990--
       ``(A) an applicable power sales agreement has been 
     executed;
       ``(B) the facility is the subject of a State regulatory 
     authority order requiring an electric utility to enter into a 
     power sales agreement with, purchase capacity from, or (for 
     purposes of establishing terms and conditions of the electric 
     utility's purchase of power) enter into arbitration 
     concerning, the facility;
       ``(C) an electric utility has issued a letter of intent or 
     similar instrument committing to purchase power from the 
     facility at a previously offered or lower price and a power 
     sales agreement is executed within a reasonable period of 
     time; or
       ``(D) the facility has been selected as a winning bidder in 
     a utility competitive bid solicitation.
       ``(h) Oil- and Gas-Fired Units Less Than 10 Percent Oil 
     Consumed.--
       ``(1) In general.--After January 1, 2000, it shall be 
     unlawful for any oil- and gas-fired utility unit whose 
     average annual fuel consumption during the period 1980 
     through 1989 on a Btu basis exceeded 90 percent in the form 
     of natural gas to exceed an annual sulfur dioxide tonnage 
     limitation equal to the product of the unit's baseline 
     multiplied by the unit's actual 1985 emissions rate divided 
     by 2,000 unless the owner or operator of such unit holds 
     allowances to emit not less than the unit's total annual 
     emissions for a year after 2007, or the owner or operator of 
     the source that includes such unit holds allowances to emit 
     not less than the total annual emissions of all affected 
     units at the source.
       ``(2) Reserve allowances.--In addition to allowances 
     allocated pursuant to paragraph (1) and section 412(a) as 
     basic phase II allowance allocations, beginning January 1, 
     2000, and for each calendar year thereafter until and 
     including 2009, the Administrator shall allocate annually for 
     each unit subject to the emissions limitation requirements of 
     paragraph (1) allowances from the reserve created pursuant to 
     subsection (a)(2) in an amount equal to the unit's baseline 
     multiplied by 0.050 lbs/mmBtu, divided by 2,000.
       ``(3) Additional allowances.--In addition to allowances 
     allocated pursuant to paragraph (1) and section 412(a), 
     beginning January 1, 2010, the Administrator shall allocate 
     annually for each unit subject to the emissions limitation 
     requirements of paragraph (1) allowances in an amount equal 
     to the unit's baseline multiplied by 0.050 lbs/mmBtu, divided 
     by 2,000.
       ``(i) Units in High Growth States.--
       ``(1) Annual allocations.--In addition to allowances 
     allocated pursuant to this section and section 412(a) as 
     basic phase II allowance allocations, beginning January 1, 
     2000, the Administrator shall allocate annually allowances 
     for each unit, subject to an emissions limitation requirement 
     under this section, and located in a State that--
       ``(A) has experienced a growth in population in excess of 
     25 percent between 1980 and 1988 according to State 
     Population and Household Estimates, With Age, Sex, and 
     Components of Change: 1981-1988 allocated by the United 
     States Department of Commerce, and
       ``(B) had an installed electrical generating capacity of 
     more than 30,000,000 kw in 1988, in an amount equal to the 
     difference between--
       ``(i) the number of allowances that would be allocated for 
     the unit pursuant to the emissions limitation requirements of 
     this section applicable to the unit adjusted to reflect the 
     unit's annual average fuel consumption on a Btu basis of any 
     three consecutive calendar years between 1980 and 1989 
     (inclusive) as elected by the owner or operator; and

       ``(ii) the number of allowances allocated for the unit 
     pursuant to the emissions limitation requirements of this 
     section:

     Provided, That the number of allowances allocated pursuant to 
     this subsection shall not exceed an annual total of 40,000. 
     If necessary to meeting the 40,000 allowance restriction 
     imposed under this subsection the Administrator shall reduce, 
     pro rata, the additional annual allowances allocated to each 
     unit under this subsection.
       ``(2) Additional allocations.--Beginning January 1, 2000, 
     in addition to allowances allocated pursuant to this section 
     and section 403(a)(1) as basic phase II allowance 
     allocations, the Administrator shall allocate annually for 
     each unit subject to the emissions limitation requirements of 
     subsection (b)(1)--
       ``(A) the lesser of whose actual or allowable 1980 
     emissions rate has declined by 50 percent or more as of 
     November 15, 1990;
       ``(B) whose actual emissions rate is less than 1.2 lbs/
     mmBtu as of January 1, 2000;
       ``(C) which commenced operation after January 1, 1970;
       ``(D) which is owned by a utility company whose combined 
     commercial and industrial kilowatt-hour sales have increased 
     by more than 20 percent between calendar year 1980 and 
     November 15, 1990; and
       ``(E) whose company-wide fossil-fuel sulfur dioxide 
     emissions rate has declined 40 percent or more from 1980 to 
     1988, allowances in an amount equal to the difference 
     between--
       ``(i) the number of allowances that would be allocated for 
     the unit pursuant to the emissions limitation requirements of 
     subsection (b)(1) adjusted to reflect the unit's annual 
     average fuel consumption on a Btu basis for any three 
     consecutive years between 1980 and 1989 (inclusive) as 
     elected by the owner or operator; and
       ``(ii) the number of allowances allocated for the unit 
     pursuant to the emissions limitation requirements of 
     subsection (b)(1):

     Provided, That the number of allowances allocated pursuant to 
     this paragraph shall not exceed an annual total of 5,000. If 
     necessary to meeting the 5,000 allowance restriction imposed 
     in the last clause of the preceding sentence the 
     Administrator shall reduce, pro rata, the additional 
     allowances allocated to each unit pursuant to this paragraph.
       ``(j) Certain Municipally Owned Power Plants.--Beginning 
     January 1, 2000, in addition to allowances allocated pursuant 
     to this section and section 412(a) as basic phase II 
     allowance allocations, the Administrator shall allocate 
     annually for each existing municipally owned oil and gas-
     fired utility unit with nameplate capacity equal to, or less 
     than, 40 MWe, the lesser of whose actual or allowable 1985 
     sulfur dioxide emission rate is less than 1.20 lbs/mmBtu, 
     allowances in an amount equal to the product of the unit's 
     annual fuel consumption on a Btu basis at a 60 percent 
     capacity factor multiplied by the lesser of its allowable 
     1985 emission rate or its actual 1985 emission rate, divided 
     by 2,000.

     ``SEC. 415. ALLOWANCES FOR STATES WITH EMISSIONS RATES AT OR 
                   BELOW 0.80 LBS/MMBTU.

       ``(a) Election of Governor.--In addition to basic phase II 
     allowance allocations, upon the election of the Governor of 
     any State, with a 1985 statewide annual sulfur dioxide 
     emissions rate equal to or less than, 0.80 lbs/mmBtu, 
     averaged over all fossil fuel-fired utility steam generating 
     units, beginning January 1, 2000, and for each calendar year 
     thereafter until and including 2009, the Administrator shall 
     allocate, in lieu of other phase 11 bonus allowance 
     allocations, allowances from the reserve created pursuant to 
     section 414(a)(2) to all such units in the State in an amount 
     equal to 125,000 multiplied by

[[Page 556]]

     the unit's pro rata share of electricity generated in 
     calendar year 1985 at fossil fuel-fired utility steam units 
     in all States eligible for the election.
       ``(b) Notification of Administrator.--Pursuant to section 
     412(a), each Governor of a State eligible to make an election 
     under paragraph (a) shall notify the Administrator of such 
     election. In the event that the Governor of any such State 
     fails to notify the Administrator of the Governor's 
     elections, the Administrator shall allocate allowances 
     pursuant to section 414.
       ``(c) Allowances After January 1, 2010.--After January 1, 
     2010, the Administrator shall allocate allowances to units 
     subject to the provisions of this section pursuant to section 
     414.

     ``SEC. 416. ELECTION FOR ADDITIONAL SOURCES.

       ``(a) Applicability.--The owner or operator of any unit 
     that is not, nor will become, an affected unit under section 
     412(b), 413, or 414, that emits sulfur dioxide, may elect to 
     designate that unit or source to become an affected unit and 
     to receive allowances under this subpart. An election shall 
     be submitted to the Administrator for approval, along with a 
     permit application and proposed compliance plan in accordance 
     with section 404. The Administrator shall approve a 
     designation that meets the requirements of this section, and 
     such designated unit shall be allocated allowances, and be an 
     affected unit for purposes of this subpart.
       ``(b) Establishment of Baseline.--The baseline for a unit 
     designated under this section shall be established by the 
     Administrator by regulation, based on fuel consumption and 
     operating data for the unit for calendar years 1985, 1986, 
     and 1987, or if such data is not available, the Administrator 
     may prescribe a baseline based on alternative representative 
     data.
       ``(c) Emission Limitations.--
       ``(1) Elections submitted before january 1, 2002.--For a 
     unit for which an election, along with a permit application 
     and compliance plan, is submitted to the Administrator under 
     paragraph (a) before January 1, 2002, annual emissions 
     limitations for sulfur dioxide shall be equal to the product 
     of the baseline multiplied by the lesser of the unit's 1985 
     actual or allowable emission rate in lbs/mmBtu, or, if the 
     unit did not operate in 1985, by the lesser of the unit's 
     actual or allowable emission rate for a calendar year after 
     1985 (as determined by the Administrator); divided by 2,000.
       ``(2) Elections submitted after january 1, 2002.--For a 
     unit for which an election, along with a permit application 
     and compliance plan, is submitted to the Administrator under 
     paragraph (a) on or after January 1, 2002, annual emissions 
     limitations for sulfur dioxide shall be equal to the product 
     of the baseline multiplied by the lesser of the unit's 1985 
     actual or allowable emission rate in lbs/mmBtu, or, if the 
     unit did not operate in 1985, by the lesser of the unit's 
     actual or allowable emission rate for a calendar year after 
     1985 (as determined by the Administrator); divided by 4,000.
       ``(d) Allowances and Permits.--The Administrator shall 
     issue allowances to an affected unit under this section in an 
     amount equal to the emissions limitation calculated under 
     subsection (c), in accordance with section 412. Such 
     allowance may be used in accordance with, and shall be 
     subject to, the provisions of section 412. Affected sources 
     under this section shall be subject to the requirements of 
     sections 404, 405, 406, and 412.
       ``(e) Limitation.--Any unit designated under this section 
     shall not transfer or bank allowances produced as a result of 
     reduced utilization or shutdown, except that, such allowances 
     may be transferred or carried forward for use in subsequent 
     years to the extent that the reduced utilization or shutdown 
     results from the replacement of thermal energy from the unit 
     designated under this section, with thermal energy generated 
     by any other unit or units subject to the requirements of 
     this subpart, and the designated unit's allowances are 
     transferred or carried forward for use at such other 
     replacement unit or units. In no case may the Administrator 
     allocate to a source designated under this section allowances 
     in an amount greater than the emissions resulting from 
     operation of the source in full compliance with the 
     requirements of this Act. No such allowances shall authorize 
     operation of a unit in violation of any other requirements of 
     this Act.
       ``(f) Implementation.--The Administrator shall implement 
     this section under 40 CFR part 74 (2002), amended as 
     appropriate by the Administrator.

     ``SEC. 417. AUCTIONS, RESERVE.

       ``(a) Special Reserve of Allowances.--For purposes of 
     establishing the Special Allowance Reserve, the Administrator 
     shall withhold--
       ``(1) 2.8 percent of the allocation of allowances for each 
     year from 1995 through 1999 inclusive; and
       ``(2) 2.8 percent of the basic phase 11 allowance 
     allocation of allowances for each year beginning in the year 
     2000;

     which would (but for this subsection) be issued for each 
     affected unit at an affected source. The Administrator shall 
     record such withholding for purposes of transferring the 
     proceeds of the allowance sales under this subsection. The 
     allowances so withheld shall be deposited in the Reserve 
     under this section.
       ``(b) Auction Sales.--
       ``(1) Subaccount for auctions.--The Administrator shall 
     establish an Auction Subaccount in the Special Reserve 
     established under this section. The Auction Subaccount shall 
     contain allowances to be sold at auction under this section 
     in the amount of 150,000 tons per year for each year from 
     1995 through 1999, inclusive and 250,000 tons per year for 
     each year from 2000 through 2009, inclusive.
       ``(2) Annual auctions.--Commencing in 1993 and in each year 
     thereafter until 2010, the Administrator shall conduct 
     auctions at which the allowances referred to in paragraph (1) 
     shall be offered for sale in accordance with regulations 
     promulgated by the Administrator. The allowances referred to 
     in paragraph (1) shall be offered for sale at auction in the 
     amounts specified in table C. The auction shall be open to 
     any person. A person wishing to bid for such allowances shall 
     submit (by a date set by the Administrator) to the 
     Administrator (on a sealed bid schedule provided by the 
     Administrator) offers to purchase specified numbers of 
     allowances at specified prices. Such regulations shall 
     specify that the auctioned allowances shall be allocated and 
     sold on the basis of bid price, starting with the highest-
     priced bid and continuing until all allowances for sale at 
     such auction have been allocated. The regulations shall not 
     permit that a minimum price be set for the purchase of 
     withheld allowances. Allowances purchased at the auction may 
     be used for any purpose and at any time after the auction, 
     subject to the provisions of this subpart and subpart 2.

           TABLE C--NUMBER OF ALLOWANCES AVAILABLE FOR AUCTION
------------------------------------------------------------------------
                                                    Spot
                 Year of sale                     auction      Advance
                                                (same year)    auction
------------------------------------------------------------------------
1993..........................................       50,000      100,000
1994..........................................       50,000      100,000
1995..........................................       50,000      100,000
1996..........................................      150,000      100,000
1997..........................................      150,000      100,000
1998..........................................      150,000      100,000
1999..........................................      150,000      100,000
2000..........................................      125,000      125,000
2001..........................................      125,000      125,000
2002..........................................      125,000      125,000
2003..........................................      125,000            0
2004-2009.....................................      125,000            0
------------------------------------------------------------------------

       ``(3) Proceeds.--
       ``(A) Transfer.--Notwithstanding section 3302 of title 31 
     of the United States Code or any other provision of law, 
     within 90 days of receipt, the Administrator shall transfer 
     the proceeds from the auction under this section, on a pro 
     rata basis, to the owners or operators of the affected units 
     at an affected source from whom allowances were withheld 
     under subsection (b). No funds transferred from a purchaser 
     to a seller of allowances under this paragraph shall be held 
     by any officer or employee of the United States or treated 
     for any purpose as revenue to the United States or the 
     Administrator.
       ``(B) Return.--At the end of each year, any allowances 
     offered for sale but not sold at the auction shall be 
     returned without charge, on a pro rata basis, to the owner or 
     operator of the affected units from whose allocation the 
     allowances were withheld. With 170 days after the date of 
     enactment of the Clear Skies Act of 2005, any allowance 
     withheld under paragraph (a)(2) but not offered for sale at 
     an auction shall be returned without charge, on a pro rata 
     basis, to the owner or operator of the affected units from 
     whose allocation the allowances were withheld.
       ``(4) Recording by EPA.--The Administrator shall record and 
     publicly report the nature, prices and results of each 
     auction under this subsection, including the prices of 
     successful bids, and shall record the transfers of allowances 
     as a result of each auction in accordance with the 
     requirements of this section. The transfer of allowances at 
     such auction shall be recorded in accordance with the 
     regulations promulgated by the Administrator under this 
     subpart.
       ``(c) Changes in Auctions and Withholding.--Pursuant to 
     rulemaking after public notice and comment the Administrator 
     may at any time after the year 1998 (in the case of advance 
     auctions) and 2005 (in the case of spot auctions) decrease 
     the number of allowances withheld and sold under this 
     section.
       ``(d) Termination of Auctions.--Not later than the 
     commencement date of the sulfur dioxide allowance requirement 
     under section 422, the Administrator shall terminate the 
     withholding of allowances and the auction sales under this 
     section. Pursuant to regulations under this section, the 
     Administrator may by delegation or contract provide for the 
     conduct of sales or auctions under the Administrator's 
     supervision by other departments or agencies of the United 
     States Government or by nongovernmental agencies, groups, or 
     organizations.
       ``(e) Applicable Law.--The Administrator shall implement 
     this section under 40 CFR part 73 (2002), amended as 
     appropriate by the Administrator.

[[Page 557]]



     ``SEC. 418. INDUSTRIAL SULFUR DIOXIDE EMISSIONS.

       ``(a) Report.--Not later than January 1, 1995 and every 5 
     years thereafter, the Administrator shall transmit to the 
     Congress a report containing an inventory of national annual 
     sulfur dioxide emissions from industrial sources (as defined 
     in section 411(11)), including units subject to section 
     414(g)(2), for all years for which data are available, as 
     well as the likely trend in such emission over the following 
     twenty-year period. The reports shall also contain estimates 
     of the actual emission reduction in each year resulting from 
     promulgation of the diesel fuel desulfurization regulations 
     under section 214.
       ``(b) 5.60 Million Ton Cap.--Whenever the inventory 
     required by this section indicates that sulfur dioxide 
     emissions from industrial sources, including units subject to 
     section 414(g)(2), and may reasonably be expected to reach 
     levels greater than 5.60 million tons per year, the 
     Administrator shall take such actions under the Act as may be 
     appropriate to ensure that such emissions do not exceed 5.60 
     million tons per year. Such actions may include the 
     promulgation of new and revised standards of performance for 
     new sources, including units subject to section 414(g)(2), 
     under section 111(b), as well as promulgation of standards of 
     performance for existing sources, including units subject to 
     section 414(g)(2), under authority of this section. For an 
     existing source regulated under this section, `standard of 
     performance' means a standard which the Administrator 
     determines is applicable to that source and which reflects 
     the degree of emission reduction achievable through the 
     application of the best system of continuous emission 
     reduction which (taking into consideration the cost of 
     achieving such emission reduction, and any nonair quality 
     health and environmental impact and energy requirements) the 
     Administrator determines has been adequately demonstrated for 
     that category of sources.
       ``(c) Election.--Regulations promulgated under section 
     414(b) shall not prohibit a source from electing to become an 
     affected unit under section 417.

     ``SEC. 419. TERMINATION.

       ``Starting January l, 2010, the owners or operators of 
     affected units and affected facilities under sections 412(b) 
     and (c) and 416 and shall no longer be subject to the 
     requirements of sections 412 through 417.

       ``Subpart 2--Clear Skies Sulfur Dioxide Allowance Program

     ``SEC. 421. DEFINITIONS.

       ``For purposes of this subpart--
       ``(1) Affected EGU.--The term `affected EGU' means--
       ``(A) for a unit serving a generator before the date of 
     enactment of the Clear Skies Act of 2005, a unit in a State 
     serving a generator with a nameplate capacity of greater than 
     twenty-five megawatts that produced or produces electricity 
     for sale during 2002 or any year thereafter, except for a 
     cogeneration unit that meets the criteria for qualifying 
     cogeneration facilities codified in section 292.205 of title 
     18 of the Code of Federal Regulations as issued on April 1, 
     2002 during 2002 and each year thereafter; and
       ``(B) for a unit commencing service of a generator on or 
     after the date of enactment of the Clear Skies Act of 2005, a 
     unit in a State serving a generator that produces electricity 
     for sale during any year starting with the year the unit 
     commences service of a generator, except for a unit serving 
     one or more generators with total nameplate capacity of 
     twenty-five megawatts or less, or a cogeneration unit that 
     meets the criteria for qualifying cogeneration facilities 
     codified in section 292.205 of title 18 of the Code of 
     Federal Regulations as issued on April 1, 2002, during each 
     year starting with the year the unit commences services of a 
     generator.

     Notwithstanding paragraphs (A) and (B), the term `affected 
     EGU' does not include a solid waste incineration unit subject 
     to section 129 or a unit for the treatment, storage, or 
     disposal of hazardous waste subject to section 3005 of the 
     Solid Waste Disposal Act.
       ``(2) Coal-fired.--The term `coal-fired' with regard to a 
     unit means, for purposes of section 424, combusting coal or 
     any coal-derived fuel alone or in combination with any amount 
     of any other fuel in any year during 1998 through 2002 or, 
     for a unit that commenced operation on or after January 1, 
     2003, a unit designed to combust coal or any coal derived 
     fuel alone or in combination with any other fuel.
       ``(3) Eastern bituminous.--The term `Eastern bituminous' 
     means bituminous that is from a mine located in a State east 
     of the Mississippi River.
       ``(4) General account.--The term `general account' means an 
     account in the Allowance Tracking System under section 403(c) 
     established by the Administrator for any person under 40 CFR 
     part 73.31(c) (2002), amended as appropriate by the 
     Administrator.
       ``(5) Oil-fired.--The term `oil-fired' with regard to a 
     unit means, for purposes of section 424, combusting fuel oil 
     for more than 10 percent of the unit's total heat input, and 
     combusting no coal or coal-derived fuel, in any year during 
     1998 through 2002 or, for a unit that commenced operation on 
     or after January 1, 2003, a unit designed to combust oil for 
     more than 10 percent of the unit's total heat input and not 
     to combust any coal or coal-derived fuel.
       ``(6) Unit account.--The term `unit account' means an 
     account in the Allowance Tracking System under section 403(c) 
     established by the Administrator for any unit under 40 CFR 
     section 73.31 (a) and (b) (2002), amended as appropriate by 
     the Administrator.

     ``SEC. 422. APPLICABILITY.

       ``(a) Prohibition.--Starting January 1, 2010, it shall be 
     unlawful for the affected EGUs at a facility to emit a total 
     amount of sulfur dioxide during the year in excess of the 
     number of sulfur dioxide allowances held for such facility 
     for that year by the owner or operator of the facility.
       ``(b) Allowances Held.--Only sulfur dioxide allowances 
     under section 423 shall be held in order to meet the 
     requirements of subsection (a).

     ``SEC. 423. LIMITATIONS ON TOTAL EMISSIONS.

       ``For affected EGUs for 2010 and each year thereafter, the 
     Administrator shall allocate sulfur dioxide allowances under 
     section 424.

     ``TABLE A--TOTAL SO2 ALLOWANCES ALLOCATED FOR EGUs

Year                                SO2 allowances allocated
  2010.......................................................4,416,666 
  2011-2012..................................................4,416,667 
  2013-2017..................................................4,500,000 
  2018 and thereafter........................................3,000,000.

     ``SEC. 424. EGU ALLOCATIONS.

       ``(a) In General.--Not later than 3 years before the 
     commencement date of the sulfur dioxide allowance requirement 
     of section 422, the Administrator shall promulgate 
     regulations determining allocations of sulfur dioxide 
     allowances for affected EGUs for each year during 2010 and 
     thereafter. The regulations shall provide that:
       ``(1) 93 percent of the total amount of sulfur dioxide 
     allowances shall be allocated to fossil-fuel-fired affected 
     EGUs under section 424 shall be allocated by the 
     Administrator to individual EGUs as follows:
       ``(A) For each unit account and each general account in the 
     Allowance Tracking System, the Administrator shall determine 
     the total amount of sulfur dioxide allowances allocated under 
     subpart 1 for 2010 and thereafter that are recorded, as of 
     12:00 noon, Eastern Standard time, on the date 180 days after 
     enactment of the Clear Skies Act of 2005. The Administrator 
     shall determine this amount in accordance with 40 CFR part 73 
     (2002), amended as appropriate by the Administrator, except 
     that the Administrator shall apply a discount rate of 7 
     percent for each year after 2010 to the amounts of sulfur 
     dioxide allowances allocated for 2011 or later.
       ``(B) For each unit account and each general account in the 
     Allowance Tracking System, the Administrator shall determine 
     an amount of sulfur dioxide allowances equal to the 
     allocation amount under subparagraph (A) multiplied by the 
     ratio of the amount of sulfur dioxide allowances determined 
     to be recorded in that account under clause (i) to the total 
     amount of sulfur dioxide allowances determined to be recorded 
     in all unit accounts and general accounts in the Allowance 
     Tracking System under clause (i).
       ``(C) The Administrator shall allocate to each facility's 
     account in the Allowance Tracking System an amount of sulfur 
     dioxide allowances equal to the total amount of sulfur 
     dioxide allowances determined under clause (ii) for the unit 
     accounts of the units at the facility and shall allocate to 
     each general account in the Allowance Tracking System the 
     amount of sulfur dioxide allowances determined under clause 
     (ii) for that general account.
       ``(2)(A) 7 percent of the total amount of sulfur dioxide 
     allowances allocated each year under section 423 shall be 
     allocated for units at a facility that are affected EGUs, but 
     did not receive sulfur dioxide allocations under subpart 1 of 
     this title.
       ``(B) The Administrator shall allocate each year for the 
     units under subparagraph (A) that commenced operation before 
     January 1, 2001, an amount of sulfur dioxide allowances 
     determined by:
       ``(i) For such units at the facility that are coal-fired, 
     multiplying 0.40 lb/mmBtu by the total baseline heat input of 
     such units and converting to tons.
       ``(ii) For such units at the facility that are oil-fired, 
     multiplying 0.20 lb/mmBtu by the total baseline heat input of 
     such units and converting to tons.
       ``(iii) For all such other units at the facility that are 
     not covered by clause (i) or (ii), multiplying 0.05 lb/mmBtu 
     by the total baseline heat input of such units and converting 
     to tons.
       ``(iv) If the total of the amounts for all facilities under 
     clauses (i), (ii), and (iii) exceeds the allocation amount 
     under subparagraph (A), multiplying the allocation amount 
     under subparagraph (A) by the ratio of the total of the 
     amounts for the facility under clauses (i), (ii), and (iii) 
     to the total of the amounts for all facilities under clause 
     (i), (ii), and (iii).
       ``(v) Allocating to each facility the lesser of the total 
     of the amounts for the facility under clauses (i), (ii), and 
     (iii) or, if the total of the amounts for all facilities 
     under clauses (i), (ii), and (iii) exceeds the allocation 
     amount under subparagraph (A), the amount under clause (iv).
       ``(C) The Administrator shall allocate each year for units 
     under subparagraph (A) that

[[Page 558]]

     commence commercial operation on or after January l, 2001 and 
     before January 1, 2005, an amount of sulfur dioxide 
     allowances determined by:
       ``(i) For such units at the facility that are coal-fired or 
     oil-fired, multiplying 0.19 lb/mmBtu by the total baseline 
     heat input of such units and converting to tons.
       ``(ii) For all such other units at the facility that are 
     not covered by clause (i), multiplying .005 lb/mmBtu by the 
     total baseline heat input of such units and converting to 
     tons.
       ``(iii) If the total of the amounts for all facilities 
     under clauses (i) and (ii) exceeds the allocation amount 
     under subparagraph (A), multiplying the allocation amount 
     under subparagraph (A) by the ratio of the total of the 
     amounts for the facility under clauses (i) and (ii) to the 
     total of the amounts for all facilities under clauses (i) and 
     (ii).
       ``(iv) Allocating to each facility the lesser of the total 
     of the amounts for the facility under clauses (i) and (ii) 
     or, if the total of the amounts for all facilities under 
     clauses (i) and (ii) exceeds the allocation amount under 
     subparagraph (A), the amount under clause (iv). The 
     Administrator shall allocate to the facilities under 
     paragraph (1) and this paragraph on a pro rata basis (based 
     on the allocations under those paragraphs) any allowances not 
     allocated under this paragraph.
       ``(D) The Administrator shall allocate each year for units 
     under subparagraph (A) that commence commercial operation on 
     or after January 1, 2005, an amount of sulfur dioxide 
     allowances determined for each such unit at the facility by 
     multiplying the applicable National Emissions Standard under 
     section 481 by the applicable ``baseline heat input,'' 
     considering fuel and combustion type, as defined in section 
     402(5)(B) and converting to tons.
       ``(E) In the event that allocation demand exceeds supply, 
     the Administrator shall allocate allowances under 
     subparagraph (A) giving first priority to units qualifying 
     under subparagraph (B), second priority to units qualifying 
     under subparagraph (C), and third priority to units 
     qualifying under subparagraph (D). Allowances allocated under 
     subparagraph (D) shall be allocated to units on a first come 
     basis determined by date of unit commencement of 
     construction, provided that such unit actually commences 
     operation. As such, allocations to units under sub-paragraph 
     (D) will not be reduced as a result of new units commencing 
     commercial operation.
       ``(b) Failure To Promulgate.--
       ``(1) Annual notice.--For each year 2010 and thereafter, if 
     the Administrator has not promulgated regulations, 
     determining allocations under subsection (a), each affected 
     EGU shall comply with section 422 by providing annual notice 
     to the permitting authority. Such notice shall indicate the 
     amount of allowances the affected EGU believes it has for the 
     relevant year and the amount of sulfur dioxide emissions for 
     such year. The amount of sulfur dioxide emissions shall be 
     determined using reasonable industry accepted methods unless 
     the Administrator has promulgated applicable monitoring and 
     alternative monitoring requirements.
       ``(2) Reconciliation.--Upon promulgation of regulations 
     under subsection (a) determining the allocations for 2010 and 
     thereafter, and promulgating regulations under section 403(b) 
     providing for the transfer of sulfur dioxides and section 
     403(c) establishing an Allowance Transfer System for sulfur 
     dioxide allowances, each unit's emissions shall be compared 
     to and reconciled to its actual allocations under the 
     promulgated regulations. Each unit will have nine (9) months 
     to purchase any allowance shortfall through allowances 
     purchased from other allowance holders or through direct 
     sale.

     ``SEC. 425. DISPOSITION OF SULFUR DIOXIDE ALLOWANCES 
                   ALLOCATED UNDER SUBPART 1.

       ``(a) Removal From Accounts.--After allocating allowances 
     under section 424(a)(1), the Administrator shall remove from 
     the unit accounts and general accounts in the Allowance 
     Tracking System under section 403(c) and from the Special 
     Allowances Reserve under section 418 all sulfur dioxide 
     allowances allocated or deposited under subpart 1 for 2010 or 
     later.
       ``(b) Regulations.--The Administrator shall promulgate 
     regulations as necessary to assure that the requirement to 
     hold allowances under section 422 may be met using sulfur 
     dioxide allowances allocated under subpart 1 for 1995 through 
     2009. No part of this Act shall be construed to prevent use 
     of unused pre-2010 allowances to meet the requirements of 
     section 422.

     ``SEC. 426. INCENTIVES FOR SULFUR DIOXIDE EMISSION CONTROL 
                   TECHNOLOGY.

       ``(a) Reserve.--The Administrator shall establish a reserve 
     of 250,000 sulfur dioxide allowances comprising 83,334 sulfur 
     dioxide allowances for 2010, 83,333 sulfur dioxide allowances 
     for 2011, and 83,333 sulfur dioxide allowances for 2012.
       ``(b) Application.--Not later than 18 months after the 
     enactment of the Clear Skies Act of 2005, an owner or 
     operator of an affected EGU that commenced operation before 
     2001 and that during 2001 combusted Eastern bituminous may 
     submit an application to the Administrator for sulfur dioxide 
     allowances from the reserve under subsection (a). The 
     application shall include each of the following:
       ``(1) A statement that the owner or operator will install 
     and commence commercial operation of specified sulfur dioxide 
     control technology at the unit within 24 months after 
     approval of the application under subsection (c) if the unit 
     is allocated the sulfur dioxide allowances requested under 
     paragraph (4). The owner or operator shall provide 
     description of the control technology.
       ``(2) A statement that, during the period starting with the 
     commencement of operation of sulfur dioxide technology under 
     paragraph (1) through 2009, the unit will combust Eastern 
     bituminous at a percentage of the unit's total heat input 
     equal to or exceeding the percentage of total heat input 
     combusted by the unit in 2001 if the unit is allocated the 
     sulfur dioxide allowances requested under paragraph (4).
       ``(3) A demonstration that the unit will achieve, while 
     combusting fuel in accordance with paragraph (2) and 
     operating the sulfur dioxide control technology specified in 
     paragraph (1), a specified tonnage of sulfur dioxide emission 
     reductions during the period starting with the commencement 
     of operation of sulfur dioxide control technology under 
     subparagraph (1) through 2009. The tonnage of emission 
     reductions shall be the difference between emissions 
     monitored at a location at the unit upstream of the control 
     technology described in paragraph (1) and emissions monitored 
     at a location at the unit downstream of such control 
     technology, while the unit is combusting fuel in accordance 
     with paragraph (2).
       ``(4) A request that the Administrator allocate for the 
     unit a specified number of sulfur dioxide allowances from the 
     reserve under subsection (a) for the period starting with the 
     commencement of operation of the sulfur dioxide technology 
     under paragraph (1) through 2009.
       ``(5) A statement of the ratio of the number of sulfur 
     dioxide allowances requested under paragraph (4) to the 
     tonnage of sulfur dioxide emissions reductions under 
     paragraph (3).
       ``(c) Approval or Disapproval.--By order subject to notice 
     and opportunity for comment, the Administrator shall--
       ``(1) determine whether each application meets the 
     requirements of subsection (b);
       ``(2) list the applications meeting the requirements of 
     subsection (b) and their respective allowance-to-emission-
     reduction ratios under paragraph (b)(5) in order, from lowest 
     to highest, of such ratios;
       ``(3) for each application listed under paragraph (2), 
     multiply the amount of sulfur dioxide emission reductions 
     requested by each allowance-to-emission-reduction ratio on 
     the list that equals or is less than the ratio for the 
     application;
       ``(4) sum, for each allowance-to-emission-reduction ratio 
     in the list under paragraph (2), the amounts of sulfur 
     dioxide allowances determined under paragraph (3);
       ``(5) based on the calculations in paragraph (4), determine 
     which allowance-to-emission-reduction ratio on the list under 
     paragraph (2) results in the highest total amount of 
     allowances that does not exceed 250,000 allowances; and
       ``(6) approve each application listed under paragraph (2) 
     with a ratio equal to or less than the allowance-to-emission-
     reduction ratio determined under paragraph (5) and disapprove 
     all the other applications.
       ``(d) Monitoring.--An owner or operator whose application 
     is approved under subsection (c) shall install and operate a 
     CEMS for monitoring sulfur dioxide and to quality assure the 
     data. The installation of the CEMS and the quality assurance 
     of data shall be in accordance with subparagraph (a)(2)(B) 
     and subsections (c) through (e) of section 405, except that, 
     where two or more units utilize a single stack, and one or 
     more units are not subject to such standards, separate 
     monitoring shall be required for each unit.
       ``(e) Allocations.--Not later than 6 months after the 
     commencement date of the sulfur dioxide allowance requirement 
     of section 422, for the units for which applications are 
     approved under subsection (c), the Administrator shall 
     allocate sulfur dioxide allowances as follows:
       ``(1) For each unit, the Administrator shall multiply the 
     allowance-to-emission-reduction ratio of the last application 
     that the Administrator approved under subsection (c) by the 
     lesser of--
       ``(A) the total tonnage of sulfur dioxide emissions 
     reductions achieved by the unit, during the period starting 
     with the commencement of operation of the sulfur dioxide 
     control technology under subparagraph (b)(1) through 2009, 
     through use of such control technology; or
       ``(B) the tonnage of sulfur dioxide emission reductions 
     under paragraph (b)(3).
       ``(2) If the total amount of sulfur dioxide allowances 
     determined for all units under paragraph (1) exceeds 250,000 
     sulfur dioxide allowances, the Administrator shall multiply 
     250,000 sulfur dioxide allowances by the ratio of the amount 
     of sulfur dioxide allowances determined for each unit under 
     paragraph (1) to the total amount of sulfur dioxide 
     allowances determined for all units under paragraph (1).

[[Page 559]]

       ``(3) The Administrator shall allocate to each unit the 
     lesser of the amount determined for that unit under paragraph 
     (1) or, if the total amount of sulfur dioxide allowances 
     determined for all units under paragraph (1) exceeds 250,000 
     sulfur dioxide allowances, under paragraph (2). The 
     Administrator shall allocate to the facilities under section 
     424 paragraphs (1) and (2) on a pro rata basis (based on the 
     allocations under those paragraphs) any unallocated 
     allowances under this paragraph.

             ``Subpart 3--Western Regional Air Partnership

     ``SEC. 431. DEFINITIONS.

       ``For purposes of this subpart--
       ``(1) Adjusted baseline heat input.--The term `adjusted 
     baseline heat input' means the average annual heat input used 
     by a unit during the three years in which the unit had the 
     highest heat input for the period from the eighth through the 
     fourth year before the first covered year.
       ``(A) Notwithstanding paragraph (1), if a unit commences 
     operation during such period and--
       ``(i) on or after January 1 of the fifth year before the 
     first covered year, then `adjusted baseline heat input' shall 
     mean the average annual heat input used by the unit during 
     the fifth and fourth years before the first covered year; and
       ``(ii) on or after January 1 of the fourth year before the 
     first covered year, then `adjusted baseline heat input' shall 
     mean the annual heat input used by the unit during the fourth 
     year before the first covered year.
       ``(B) A unit's heat input for a year shall be the heat 
     input--
       ``(i) required to be reported under section 405 for the 
     unit, if the unit was required to report heat input during 
     the year under that section;
       ``(ii) reported to the Energy Information Administrator for 
     the unit, if the unit was not required to report heat input 
     under section 405;
       ``(iii) based on data for the unit reported to the WRAP 
     State where the unit is located as required by State law, if 
     the unit was not required to report heat input during the 
     year under section 405 and did not report to the Energy 
     Information Administration; or
       ``(iv) based on fuel use and fuel heat content data for the 
     unit from fuel purchase or use records, if the unit was not 
     required to report heat input during the year under section 
     405 and did not report to the Energy Information 
     Administration and the WRAP State.
       ``(2) Affected EGU.--The term `affected EGU' means an 
     affected EGU under subpart 2 that is in a WRAP State and 
     that--
       ``(A) in 2000, emitted 100 tons or more of sulfur dioxide 
     and was used to produce electricity for sale; or
       ``(B) in any year after 2000, emits 100 tons or more of 
     sulfur dioxide and is used to produce electricity for sale.
       ``(3) Coal-fired.--The term `coal-fired' with regard to a 
     unit means, for purposes of section 434, a unit combusting 
     coal or any coal-derived fuel alone or in combination with 
     any amount of any other fuel in any year during the period 
     from the eighth through the fourth year before the first 
     covered year.
       ``(4) Covered year.--The term `covered year' means--
       ``(A)(i) the third year after the year 2018 or later when 
     the total annual sulfur dioxide emissions of all affected 
     EGUs in the WRAP States first exceed 271,000 tons; or
       ``(ii) the third year after the year 2013 or later when the 
     Administrator determines by regulation that the total annual 
     sulfur dioxide emissions of all affected EGUs in the WRAP 
     States are reasonably projected to exceed 271,000 tons in 
     2018 or any year thereafter. The Administrator may make such 
     determination only if all the WRAP States submit to the 
     Administrator a petition requesting that the Administrator 
     issue such determination and make all affected EGUs in the 
     WRAP States subject to the requirements of sections 432 
     through 434; and
       ``(B) each year after the `covered year' under subparagraph 
     (A).
       ``(5) Oil-fired.--The term `oil-fired' with regard to a 
     unit means, for purposes of section 434, a unit combusting 
     fuel oil for more than 10 percent of the unit's total heat 
     input, and combusting no coal or coal-derived fuel, and any 
     year during the period from the eighth through the fourth 
     year before the first covered year.
       ``(6) WRAP state.--The term `WRAP State' means Arizona, 
     California, Colorado, Idaho, Nevada, New Mexico, Oregon, 
     Utah, and Wyoming.

     ``SEC. 432. APPLICABILITY.

       ``(a) Prohibition.--Starting January 1 of the first covered 
     year, it shall be unlawful for the affected EGUs at a 
     facility to emit a total amount of sulfur dioxide during the 
     year in excess of the number of sulfur dioxide allowances 
     held for such facility for that year by the owner or operator 
     of the facility.
       ``(b) Allowances Held.--Only sulfur dioxide allowances 
     under section 433 shall be held in order to meet the 
     requirements of subsection (a).

     ``SEC. 433. LIMITATIONS ON TOTAL EMISSIONS.

       For affected EGUs, the total amount of sulfur dioxide 
     allowances that the Administrator shall allocate for each 
     covered year under section 434 shall equal 271,000 tons.

     ``SEC. 434. EGU ALLOCATIONS.

       ``(a) In General.--By January 1 of the year before the 
     first covered year, the Administrator shall promulgate 
     regulations determining, for each covered year, the 
     allocations of sulfur dioxide allowances for the units at a 
     facility that are affected EGUs as of December 31 of the 
     fourth year before the covered year by--
       ``(1) for such units at the facility that are coal-fired, 
     multiplying 0.40 lb/mmBtu by the total adjusted baseline heat 
     input of such units and converting to tons;
       ``(2) for such units at the facility that are oil-fired, 
     multiplying 0.20 lb/mmBtu by the total adjusted baseline heat 
     input of such units and converting to tons;
       ``(3) for all such other units at the facility that are not 
     covered by paragraph (1) or (2) multiplying 0.05 lb/mmBtu by 
     the total adjusted baseline heat input of such units and 
     converting to tons; and
       ``(4) multiplying by 0.95 the allocation amount under 
     section 433 by the ratio of the total of the amounts for the 
     facility under paragraphs (1), (2), and (3) to the total of 
     the amounts for all facilities under paragraphs (1), (2), and 
     (3); and
       ``(5)(A) 5 percent of the total amount of sulfur dioxide 
     allowances allocated each year under section 433 shall be 
     allocated for units at a facility that are affected EGUs, but 
     did not receive sulfur dioxide allocations under paragraph 
     (4). These units shall be allocated allowances in accordance 
     with paragraphs (1), (2), and (3).
       ``(B) Allowances allocated under subparagraph (A) shall be 
     allocated to units on a first come basis determined by date 
     of unit commencement of construction, provided that such unit 
     actually commences operation. As such, allocations to units 
     under paragraph (A) will not be reduced as a result of new 
     units commencing commercial operation.
       ``(C) Allowances not allocated under subparagraph (B) shall 
     be allocated to units in paragraphs (A) and (B) on a pro rata 
     basis.
       ``(b) Failure To Promulgate.--
       ``(1) In general.--For each year 2010 and thereafter, if 
     the Administrator has not promulgated regulations, 
     determining allocations under paragraph (a), each affected 
     EGU shall comply with section 422 by provided annual notice 
     to the permitting authority. Such notice shall indicate the 
     amount of allowances the affected EGU believes it has for the 
     relevant year and the amount of sulfur dioxide emissions for 
     such year. The amount of sulfur dioxide emissions shall be 
     determined using reasonable industry accepted methods unless 
     the Administrator has promulgated applicable monitoring and 
     alternative monitoring requirements.
       ``(2) Reconciliation.--Upon promulgation of regulations 
     under subsection (a) determining the allocations for 2010 and 
     thereafter, and promulgating regulations under section 403(b) 
     providing for the transfer of sulfur dioxides and section 
     403(c) establishing an Allowance Transfer System for sulfur 
     dioxide allowances, each unit's emissions shall be compared 
     to and reconciled to its actual allocations under the 
     promulgated regulations. Each unit will have nine (9) months 
     to purchase any allowance shortfall through allowances 
     purchased from other allowance holders or through direct 
     sale.

       ``PART C--NITROGEN OXIDES CLEAR SKIES EMISSION REDUCTIONS

                     ``Subpart 1--Acid Rain Program

     ``SEC. 441. NITROGEN OXIDES EMISSION REDUCTION PROGRAM.

       ``(a) Applicability.--On the date that a coal-fired utility 
     unit becomes an affected unit pursuant to sections 413 or 
     414, or on the date a unit subject to the provisions of 
     section 413(d), must meet the NOX reduction 
     requirements, each such unit shall become an affected unit 
     for purposes of this section and shall be subject to the 
     emission limitations for nitrogen oxides set forth herein.
       ``(b) Emission Limitations.--
       (1) In general.--The Administrator shall by regulation 
     establish annual allowable emission limitations for nitrogen 
     oxides for the types of utility boilers listed below, which 
     limitations shall not exceed the rates listed below: 
     Provided, That the Administrator may set a rate higher than 
     that listed for any type of utility boiler if the 
     Administrator finds that the maximum listed rate for that 
     boiler type cannot be achieved using low NOX 
     burner technology. The Administrator shall implement this 
     paragraph under 40 CFR part 76.5 (2002). The maximum 
     allowable emission rates are as follows:
       ``(A) for tangentially fired boilers, 0.45 lb/mmBtu; and
       ``(B) for dry bottom wall-fired boilers (other than units 
     applying cell burner technology), 0.50 lb/mmBtu. After 
     January 1, 1995, it shall be unlawful for any unit that is an 
     affected unit on that date and is of the type listed in this 
     paragraph to emit nitrogen oxides in excess of the emission 
     rates set by the Administrator pursuant to this paragraph.
       ``(2) Utility boilers.--The Administrator shall, by 
     regulation, establish allowable emission limitations on a lb/
     mmBtu, annual average basis, for nitrogen oxides for the 
     following types of utility boilers:
       ``(A) wet bottom wall-fired boilers;

[[Page 560]]

       ``(B) cyclones;
       ``(C) units applying cell burner technology; and
       ``(D) all other types of utility boilers.
       ``(3) Basis of rates.--The Administrator shall base such 
     rates on the degree of reduction achievable through the 
     retrofit application of the best system of continuous 
     emission reduction, taking into account available technology, 
     costs and energy and environmental impacts; and which is 
     comparable to the costs of nitrogen oxides controls set 
     pursuant to subsection (b)(1). The Administrator may revise 
     the applicable emission limitations for tangentially fired 
     and dry bottom, wall-fired boilers (other than cell burners) 
     to be more stringent if the Administrator determines that 
     more effective low NOX burned technology is 
     available: Provided, That, no unit that is an affected unit 
     pursuant to section 413 and that is subject to the 
     requirements of subsection (b)(1), shall be subject to the 
     revised emission limitations, if any. The Administrator shall 
     implement that paragraph under 40 CFR parts 76.6 and 76.7 
     (2002).
       ``(c) Alternative Emission Limitations.--(1) The permitting 
     authority shall, upon request of an owner or operator of a 
     unit subject to this section, authorize an emission 
     limitation less stringent than the applicable limitation 
     established under subsection (b)(1) or (b)(2) upon a 
     determination that--
       ``(A) a unit subject to subsection (b)(1) cannot meet the 
     applicable limitation using low NOX burner 
     technology; or
       ``(B) a unit subject to subsection (b)(2) cannot meet the 
     applicable rate using the technology on which the 
     Administrator based the applicable emission limitation.
       ``(2) Eligibility for alternative emission limitations.--
     The permitting authority shall base such determination upon a 
     reasonable showing satisfactory to the permitting authority, 
     in accordance with regulations established by the 
     Administrator, that the owner or operator--
       ``(A) has properly installed appropriate control equipment 
     designed to meet the applicable emission rate;
       ``(B) has properly operated such equipment for a period of 
     15 months (or such other period of time as the Administrator 
     determines through the regulations), and provides operating 
     and monitoring data for such period demonstrating that the 
     unit cannot meet the applicable emission rate; and
       ``(C) has specified an emission rate that such unit can 
     meet on an annual average basis. The permitting authority 
     shall issue an operating permit for the unit in question, in 
     accordance with section 404 and title V--
       ``(i) that permits the unit during the demonstration period 
     referred to in subparagraph (B), to emit at a rate in excess 
     of the applicable emission rate;
       ``(ii) at the conclusion of the demonstration period to 
     revise the operating permit to reflect the alternative 
     emission rate demonstrated in subparagraphs (B) and (C).
       ``(3) Additional control technology.--Units subject to 
     subsection (b)(1) for which an alternative emission 
     limitation is established shall not be required to install 
     any additional control technology beyond low NOX 
     burners. Nothing in this section shall preclude an owner or 
     operator from installing and operating an alternative 
     NOX control technology capable of achieving the 
     applicable emission limitation. The Administrator shall 
     implement this subsection under 40 CFR part 76 (2002), 
     amended as appropriate by the Administrator.
       ``(d) Emissions Averaging.--
       ``(1) Alernative contemporaneous emission limitations.--In 
     lieu of complying with the applicable emission limitations 
     under subsection (b)(1), (2), or (c), the owner or operator 
     of two or more units subject to one or more of the applicable 
     emission limitations set pursuant to these sections, may 
     petition the permitting authority for alternative 
     contemporaneous annual emission limitations for such units 
     that ensure that--
       ``(A) the actual annual emission rate in pounds of nitrogen 
     oxides per million Btu averaged over the units in question is 
     a rate that is less than; or equal to
       ``(B) the Btu-weighted average annual emission rate for the 
     same units if they had been operated, during the same period 
     of time, in compliance with limitations set in accordance 
     with the applicable emission rates set pursuant to 
     subsections (b)(1) and (2).
       ``(2) Operating permits.--If the permitting authority 
     determines, in accordance with regulations issued by the 
     Administrator that the conditions in paragraph (1) can be 
     met, the permitting authority shall issue operating permits 
     for such units, in accordance with section 404 and title V, 
     that allow alternative contemporaneous annual emission 
     limitations. Such emission limitations shall only remain in 
     effect while both units continue operation under the 
     conditions specified in their respective operating permits. 
     The Administrator shall implement this subsection under 40 
     CFR part 76 (2002), amended as appropriate by the 
     Administrator.

     ``SEC. 442. TERMINATION.

       ``Starting January 1, 2008, the owner or operator of 
     affected units and affected facilities under section 441 
     shall no longer be subject to the requirements of that 
     section.

       ``Subpart 2--Clear Skies Nitrogen Oxides Allowance Program

     ``SEC. 451. DEFINITIONS.

       ``For purposes of this subpart:
       ``(1) Affected egu.--The term `affected EGU' means--
       ``(A) for a unit serving a generator before the date of 
     enactment of the Clear Skies Act of 2005, a unit in a State 
     serving a generator with a nameplate capacity of greater than 
     25 megawatts that produced or produces electricity for sale 
     during 2002 or any year thereafter, except for a cogeneration 
     unit that meets the criteria for qualifying for a 
     cogeneration facilities codified in section 292.205 of title 
     18 of the Code of Federal Regulations as issued on April 1, 
     2002 during 2002 and each year thereafter; and
       ``(B) for a unit commencing service of a generator on or 
     after the date of enactment of the Clear Skies Act of 2005, a 
     unit in a State serving a generator that produces electricity 
     for sale during any year starting with the year the unit 
     commences service of a generator, except for a gas-fired unit 
     serving one or more generators with total nameplate capacity 
     of 25 megawatts or less, or a cogeneration unit that meets 
     the criteria for qualifying for a cogeneration facilities 
     codified in section 292.205 of title 18 of the Code of 
     Federal Regulations as issued on April 1, 2002, during each 
     year starting with the unit commences service of a generator.
       ``(C) Exclusion.--Notwithstanding paragraphs (A) and (B), 
     the term `affected EGU' does not include a solid waste 
     incineration unit subject to section 129 or a unit for the 
     treatment, storage, or disposal of hazardous waste subject to 
     section 3005 of the Solid Waste Disposal Act.
       ``(2) Adjusted baseline heat input.--The term `adjusted 
     baseline heat input' with regard to a unit means, for 
     purposes of allocating nitrogen oxides allowances in a 
     particular year under this subpart, the units baseline 
     multiplied by--
       ``(A) 1.0 for affected coal-fired units for 2008 and each 
     year thereafter;
       ``(B) 0.55 for affected oil- and gas-fired units located in 
     a Zone 1 State for years 2008 through 2017 inclusive;
       ``(C) 0.8 for affected oil- and gas-fired units located in 
     a Zone 1 State for 2018 and each year thereafter; and
       ``(D) 0.4 for affected oil- and gas-fired units located in 
     a Zone 2 State for 2008 and each year thereafter.
       ``(3) Allowable nitrogen oxides emissions rate.--The term 
     `allowable nitrogen oxides emissions rate' means the most 
     stringent Federal or State emissions limitation for nitrogen 
     oxides that applies to the unit as of date of enactment of 
     this subpart. If the emissions limitation for a unit is not 
     expressed in pounds of emissions per million Btu, or the 
     averaging period of that emissions limitation is not 
     expressed on an annual basis, the Administrator shall 
     calculate the annual equivalent of that emissions limitation 
     to establish the allowable rate. Such limitation shall not 
     include any requirement to hold nitrogen oxides allowances 
     under the Federal NOX Budget Trading Program as 
     codified at 40 CFR part 97 (2002), or any State program 
     adopted to meet the requirements of the NOX SIP 
     Call as codified at 40 CFR 51.121 (2002).
       ``(4) Zone 1 state.--The term `Zone 1 State' means Alabama, 
     Arkansas, Connecticut, Delaware, the District of Columbia, 
     Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, 
     Louisiana, Maine, Maryland, Massachusetts, Michigan, 
     Mississippi, the fine grid portion (as defined in section 
     51.121 of title 40, Code of Federal Regulations (as in effect 
     for 2002)) of Missouri, New Hampshire, New Jersey, New York, 
     North Carolina, Ohio, Pennsylvania, Rhode Island, South 
     Carolina, Tennessee, Texas east of Interstate 35, Vermont, 
     Virginia, West Virginia, and Wisconsin.
       ``(5) Zone 2 state.--The term `Zone 2 State' means Alaska, 
     American Samoa, Arizona, California, Colorado, the 
     Commonwealth of the Northern Mariana Islands, the 
     Commonwealth of Puerto Rico, Guam, Hawaii, Idaho, Kansas, 
     Minnesota, the coarse grid portion (as defined in section 
     51.121 of title 40, Code of Federal Regulations (as in effect 
     for 2002)) of Missouri, Montana, Nebraska, North Dakota, New 
     Mexico, Nevada, Oklahoma, Oregon, South Dakota, Texas west of 
     Interstate 35, Utah, the Virgin Islands, Washington, and 
     Wyoming.

     ``SEC. 452. APPLICABILITY.

       ``(a) Zone 1 Prohibition.--
       (1) In general.--Starting January 1, 2008, it shall be 
     unlawful for the affected EGUs at a facility in a Zone 1 
     State to emit a total amount of nitrogen oxides during a year 
     in excess of the number of nitrogen oxides allowances held 
     for such facility for that year by the owner or operator of 
     the facility.
       ``(2) Limitation.--Only nitrogen oxides allowances under 
     section 453(a) shall be held in order to meet the 
     requirements of paragraph (1), except as provided under 
     section 465.
       ``(b) Zone 2 Prohibition.--
       (1) In general.--Starting January 1, 2008, it shall be 
     unlawful for the affected EGUs at a facility in a Zone 2 
     State to emit a total amount of nitrogen oxides during a year 
     in excess of the number of nitrogen oxides allowances held 
     for such facility for that year by the owner or operator of 
     the facility.
       ``(2) Limitation.--Only nitrogen oxides allowances under 
     section 453(b) shall be held in order to meet the 
     requirements of paragraph (1).

[[Page 561]]



     ``SEC. 453. LIMITATIONS ON TOTAL EMISSIONS.

       ``(a) Zone 1 Allocations.--For affected EGUs in the Zone 1 
     States for 2008 and each year thereafter, the Administrator 
     shall allocate nitrogen oxides allowances under section 
     454(a) as specified in table A.

``TABLE A--TOTAL NOX ALLOWANCES ALLOCATED FOR EGUS IN ZONE 1

Year                                NOX allowances allocated
  2008-2017...................................................1,473,603
  2018 and thereafter.........................................1,073,603

       ``(b) Zone 2 Allocations.--For affected EGUs in the Zone 2 
     States for 2008 and each year thereafter, the Administrator 
     shall allocate nitrogen oxides allowances under section 
     454(b) as specified in table B.

``TABLE B--TOTAL NOX ALLOWANCES ALLOCATED FOR EGUS IN ZONE 2

Year                                 NOX allowance allocated
  2008 and thereafter...........................................714,794

     ``SEC. 454. EGU ALLOCATIONS.

       ``(a) EGU Allocations in the Zone 1 States.--
       ``(1) EPA regulations.--Not later than 18 months before the 
     date on which the nitrogen oxides allowance requirement under 
     section 452 takes effect, the Administrator shall promulgate 
     regulations determining the allocation of nitrogen oxide 
     allowances for 2008 and each subsequent year for units at a 
     facility in a Zone 1 State that are affected EGUs as of the 
     date of enactment of this section.
       ``(2) Formula for allocation.--
       ``(A) In general.--Subject to subparagraph (B) and 
     paragraph (3), the regulations shall specify that the 
     allocation of nitrogen oxide allowances for each unit 
     referred to in paragraph (1) for each year shall be the 
     product obtained by multiplying--
       ``(i) the product of 0.95 and the allocation amount under 
     section 453(a); and
       ``(ii) the ratio that--

       ``(I) the total quantity of the adjusted baseline heat 
     input of the units at the facility; bears to
       ``(II) the total quantity of adjusted baseline heat input 
     to all affected EGUs in the Zone 1 States; and

       ``(B) Maximum allocation.--Notwithstanding subparagraph (A) 
     and paragraph (3), no unit shall receive an allocation in 
     excess of the product obtained by multiplying--
       ``(i) the baseline heat input of the unit; and
       ``(ii) the quotient obtained by dividing the allowable 
     nitrogen oxides emissions rate of the unit by 2000.
       ``(3) Distribution of remaining allowances.--
       ``(A) In general.--Subject to paragraph (2)(B), any 
     nitrogen oxide allowances remaining after the allocation of 
     allowances under paragraph (2) shall be distributed on a pro 
     rata basis among the units that received nitrogen oxide 
     allowances under that paragraph.
       ``(B) Additional remaining allowances.--Allowances 
     remaining after each iteration of the calculation under 
     subparagraph (A) as a result of the limitation under 
     paragraph (2)(B) shall be allocated in accordance with 
     subparagraph (A).
       ``(4) Set-aside for new units.--
       ``(A) In general.--5 percent of the total amount of 
     nitrogen oxide allowances allocated each year under section 
     453 shall be allocated for units at a facility that are 
     affected EGUs, but did not receive nitrogen oxide allocations 
     under paragraph (2).
       ``(B) Formula for allocation.--
       ``(i) In general.--Subject to clause (ii) and subparagraph 
     (E), the regulations promulgated under paragraph (1) shall 
     specify that the allocation of nitrogen oxide allowances for 
     each unit referred to in subparagraph (A) for each year shall 
     be the product obtained by multiplying--

       ``(I) the product of 0.05 and the allocation amount under 
     section 453(a); and
       ``(II) the ratio that--

       ``(aa) the total quantity of the adjusted baseline heat 
     input of the units at the facility; bears to
       ``(bb) the total quantity of adjusted baseline heat input 
     to all affected EGUs in the Zone 1 States, including those 
     affected EGUs that receive allowances under paragraph (2).
       ``(ii) Additional allowances.--Notwithstanding clause (i) 
     and subparagraph (E), no unit shall receive an allocation 
     under this paragraph in excess of the product obtained by 
     multiplying--

       ``(I) the baseline heat input of the unit; and
       ``(II) the quotient obtained by dividing the allowable 
     nitrogen oxides emissions rate of the unit by 2000.

       ``(C) Method of allocation.--Allowances allocated under 
     this paragraph shall be allocated to each unit on a first-
     come basis determined by the date on which the unit commences 
     operation.
       ``(D) No reduction in allocations.--Allocations to units 
     under this paragraph shall not be reduced as a result of new 
     units commencing commercial operation.
       ``(E) Distribution of remaining allowances.--Any nitrogen 
     oxide allowances remaining after the allocation of allowances 
     under subparagraph (B) shall be distributed on a pro rata 
     basis among the units that received nitrogen oxide allowances 
     under that subparagraph and paragraphs (2) and (3).
       ``(5) Failure to promulgate regulations.--For calendar year 
     2008 and each calendar year thereafter, if the Administrator 
     has not promulgated the regulations determining the 
     allocations under this subsection--
       ``(A) each affected unit shall comply with section 452 by 
     providing an annual notice to the permitting authority that 
     indicates the amount of allowances the affected unit believes 
     the affected unit has for the relevant year (including the 
     quantity of nitrogen oxide emissions of the affected unit for 
     that year);
       ``(B) the amount of nitrogen oxide emissions of an affected 
     unit described in subparagraph (A) shall be determined using 
     reasonable industry accepted methods unless the Administrator 
     has promulgated applicable monitoring and alternative 
     monitoring requirements; and
       ``(C) upon promulgation of regulations under this 
     subsection for Zone 1 determining the allocations for 2008 
     and each year thereafter, and promulgation of regulations 
     under section 403(b) providing for the transfer of nitrogen 
     oxides and regulations under section 403(c) establishing an 
     Allowance Transfer System for nitrogen oxide allowances--
       ``(i) the emissions of each unit shall be compared to and 
     reconciled with actual allocations to the unit under the 
     regulations; and
       ``(ii) each unit shall have not more than 270 days to 
     submit allowances to the Administrator, without recompense, 
     for any allowance shortfall (including submitted allowances 
     obtained and held by any mechanism consistent with this Act, 
     including direct sale).
       ``(b) EGU Allocations in the Zone 2 States.--
       ``(1) EPA regulations.--Not later than 18 months before the 
     date on which the nitrogen oxides allowance requirement under 
     section 452 takes effect, the Administrator shall promulgate 
     regulations determining the allocation of nitrogen oxide 
     allowances for 2008 and each subsequent year for units at a 
     facility in a Zone 2 State that are affected EGUs as of the 
     date of enactment of this section.
       ``(2) Formula for allocation.--
       ``(A) In general.--Subject to subparagraph (B) and 
     paragraph (3), the regulations shall specify that the 
     allocation of nitrogen oxide allowances for each unit 
     referred to in paragraph (1) for each year shall be the 
     product obtained by multiplying--
       ``(i) the product of 0.95 and the allocation amount under 
     section 453(b); and
       ``(ii) the ratio that--

       ``(I) the total quantity of the adjusted baseline heat 
     input of the units at the facility; bears to
       ``(II) the total quantity of adjusted baseline heat input 
     to all affected EGUs in the Zone 2 States.

       ``(B) Maximum allocation.--Notwithstanding subparagraph (A) 
     and paragraph (3), no unit shall receive an allocation in 
     excess of the product obtained by multiplying--
       ``(i) the baseline heat input of the unit; and
       ``(ii) the quotient obtained by dividing the allowable 
     nitrogen oxides emissions rate of the unit by 2000.
       ``(3) Distribution of remaining allowances.--
       ``(A) In general.--Subject to paragraph (2)(B), any 
     nitrogen oxide allowances remaining after the allocation of 
     allowances under paragraph (2) shall be distributed on a pro 
     rata basis among the units that received nitrogen oxide 
     allowances under that paragraph.
       ``(B) Additional remaining allowances.--Allowances 
     remaining after each iteration of the calculation under 
     subparagraph (A) as a result of the limitation under 
     paragraph (2)(B) shall be allocated in accordance with 
     subparagraph (A).
       ``(4) Set-aside for new units.--
       ``(A) In general.--5 percent of the total amount of 
     nitrogen oxide allowances allocated each year under section 
     453 shall be allocated for units at a facility that are 
     affected EGUs, but did not receive nitrogen oxide allocations 
     under paragraph (2).
       ``(B) Formula for allocation.--
       ``(i) In general.--Subject to clause (ii) and subparagraph 
     (E), the regulations promulgated under paragraph (1) shall 
     specify that the allocation of nitrogen oxide allowances for 
     each unit referred to in subparagraph (A) for each year shall 
     be the product obtained by multiplying--

       ``(I) the product of 0.05 and the allocation amount under 
     section 453(a); and
       ``(II) the ratio that--

       ``(aa) the total quantity of the adjusted baseline heat 
     input of the units at the facility; bears to
       ``(bb) the total quantity of adjusted baseline heat input 
     to all affected EGUs in the Zone 2 States, including those 
     affected EGUs that receive allowances under paragraph (2).
       ``(ii) Additional allowances.--Notwithstanding clause (i) 
     and subparagraph (E), no unit shall receive an allocation 
     under this paragraph in excess of the product obtained by 
     multiplying--

       ``(I) the baseline heat input of the unit; and
       ``(II) the quotient obtained by dividing the allowable 
     nitrogen oxides emissions rate of the unit by 2000.

       ``(C) Method of allocation.--Allowances allocated under 
     this paragraph shall be allocated to each unit on a first-
     come basis determined by the date on which the unit commences 
     operation.

[[Page 562]]

       ``(D) No reduction in allocations.--Allocations to units 
     under this paragraph shall not be reduced as a result of new 
     units commencing commercial operation.
       ``(E) Distribution of remaining allowances.--Any nitrogen 
     oxide allowances remaining after the allocation of allowances 
     under subparagraph (B) shall be distributed on a pro rata 
     basis among the units that received nitrogen oxide allowances 
     under that subparagraph and paragraphs (2) and (3).
       ``(5) Failure to promulgate regulations.--For calendar year 
     2008 and each calendar year thereafter, if the Administrator 
     has not promulgated the regulations determining the 
     allocations under this subsection--
       ``(A) each affected unit shall comply with section 452 by 
     providing an annual notice to the permitting authority that 
     indicates the amount of allowances the affected unit believes 
     the affected unit has for the relevant year (including the 
     quantity of nitrogen oxide emissions of the affected unit for 
     that year);
       ``(B) the amount of nitrogen oxide emissions of an affected 
     unit described in subparagraph (A) shall be determined using 
     reasonable industry accepted methods unless the Administrator 
     has promulgated applicable monitoring and alternative 
     monitoring requirements; and
       ``(C) upon promulgation of regulations under this 
     subsection for Zone 2 determining the allocations for 2008 
     and each year thereafter, and promulgation of regulations 
     under section 403(b) providing for the transfer of nitrogen 
     oxides and regulations under section 403(c) establishing an 
     Allowance Transfer System for nitrogen oxide allowances--
       ``(i) the emissions of each unit shall be compared to and 
     reconciled with actual allocations to the unit under the 
     regulations; and
       ``(ii) each unit shall have not more than 270 days to 
     submit allowances to the Administrator, without recompense, 
     for any allowance shortfall (including submitted allowances 
     obtained and held by any mechanism consistent with this Act, 
     including direct sale).

     ``SEC. 455 NITROGEN OXIDES EARLY ACTION REDUCTION CREDITS.

       ``(a) Credits.--Except as provided in subsection (e), the 
     Administrator shall promulgate regulations within 18 months 
     authorizing the allocation of nitrogen oxides allowances to 
     units designated under this section that install or modify 
     pollution control equipment or combustion technology 
     improvements identified in such regulations after the date of 
     enactment of this section and prior to January 1, 2008.
       ``(b) Emissions reductions.--No allowances shall be 
     allocated under this section for emissions reductions that 
     are--
       ``(1) attributable to pollution control equipment or 
     combustion technology improvements that were operational at 
     any time prior to the date of enactment of this section;
       ``(2) attributable to fuel switching;
       ``(3) required under any Federal or State regulation for 
     the applicable year; or
       ``(4) made by a unit, subject to--
       ``(A) subpart 1 of part C, that are necessary for 
     compliance with the limitation on the Btu-weighted average 
     annual emission rate of the unit and 1 or more other units 
     under section 441(d); or
       ``(B) the requirements in the applicable implementation 
     plan of a NOX SIP Call State (as defined in 
     section 461(3)) that meet the requirements under sections 
     51.121 and 51.122 of title 40, Code of Federal Regulations 
     (as in effect for calendar year 2004) during the period 
     beginning on May 1 and ending on September 30.
       ``(c) Allocation.--The allowances allocated to any unit 
     under this section shall be in addition to the allowances 
     allocated under section 454 and shall be allocated in an 
     amount equal to one allowance of nitrogen oxides for each 
     1.05 tons of reduction in emissions of nitrogen oxides 
     achieved by the pollution control equipment or combustion 
     technology improvements starting with the year in which the 
     equipment or improvement is implemented. The early compliance 
     reduction allowances available under this section shall be 
     used and tradable in the same manner as allowances under 
     section 454.
       ``(d) Early compliance allowance credit.--The Administrator 
     shall promulgate regulations as necessary to ensure affected 
     units receive early compliance allowance credit. Early 
     compliance allowances shall be allocated at the end of an 
     early compliance year. Should the Administrator fail to 
     promulgate allocation regulations by the end of a given year, 
     early compliance allowances for each year shall be allocated 
     at the earliest possible time after allocation regulations 
     are promulgated.
       ``(e) Exception.--This section shall not apply to 
     reductions that are--
       ``(1) made during the period beginning on May 1 and ending 
     on September 30 of a year by units that are subject to an 
     applicable implementation plan for a NOX SIP Call 
     State (as defined in section 461(3)) required under section 
     51.121 of title 40, Code of Federal Regulations (as in effect 
     for calendar year 2004); or
       ``(2) necessary to comply with subpart 1 of part C for the 
     applicable year.

        ``Subpart 3--Ozone Season NOX Budget Program

     ``SEC. 461. DEFINITIONS.

       ``For purposes of this subpart:
       ``(1) Ozone season.--The term `ozone season' means--
       ``(A) with regard to Connecticut, Delaware, the District of 
     Columbia, Maryland, Massachusetts, New Jersey, New York, 
     Pennsylvania, and Rhode Island, the period May 1 through 
     September 30 for each year starting in 2003; and
       ``(B) with regard to all other States, the period May 1 
     through September 30, for each year starting in 2004 and 
     thereafter.
       ``(2) Non-ozone season.--The term `non-ozone season' 
     means--
       ``(A) with regard to Connecticut, Delaware, the District of 
     Columbia, Maryland, Massachusetts, New Jersey, New York, 
     Pennsylvania, and Rhode Island, the period October 1 through 
     April 30; and
       ``(B) with regard to all other States, the period October 
     1, 2003, through May 29, 2004 and the period October 1 
     through April 30 beginning in the year 2004 and for each year 
     thereafter.
       ``(3) NOX sip call state.--The term 
     `NOX SIP Call State' means Connecticut, Delaware, 
     the District of Columbia, Illinois, Indiana, Kentucky, 
     Maryland, Massachusetts, New Jersey, New York, North 
     Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, 
     Tennessee, Virginia, and West Virginia and the fine grid 
     portions of Alabama, Georgia, Michigan, and Missouri.
       ``(4) Fine grid portions of Alabama, Georgia, Michigan, and 
     Missouri.--The term `fine grid portions of Alabama, Georgia, 
     Michigan, and Missouri' means the areas in Alabama, Georgia, 
     Michigan, and Missouri subject to 40 CFR part 51.121 (2001).

     ``SEC. 462. GENERAL PROVISIONS.

       ``The provisions of sections 402 through 406 shall not 
     apply to this subpart.

     ``SEC. 463. APPLICABLE IMPLEMENTATION PLAN.

       ``(a) SIPS.--Except as provided in subsection (b), the 
     applicable implementation plan for each NOX SIP 
     Call State shall be consistent with the requirements, 
     including the NOX SIP Call State's nitrogen oxides 
     budget and compliance supplement pool, in sections 51.121 and 
     51.122 of title 40, Code of Federal Regulations (as in effect 
     for calendar year 2004).
       ``(b) Requirements.--Notwithstanding any provision to the 
     contrary in section 51.121 or 51.122 of title 40, Code of 
     Federal Regulations (as in effect for calendar year 2004):
       ``(1) Implementation plan.--The applicable implementation 
     plan for each NOX SIP Call State shall require 
     full implementation of the required emission control measures 
     starting no later than the first ozone season.
       ``(2) Exemption.--Starting January 1, 2008--
       ``(A) the owners and operators of a boiler, combustion 
     turbine, or integrated gasification combined cycle plant 
     subject to emission reduction requirements or limitations 
     under part B, C, or D shall no longer be subject to the 
     requirements in a NOX SIP Call State's applicable 
     implementation plan that meet the requirements of subsection 
     (a) and paragraph (1); and
       ``(B) notwithstanding subparagraph (A), if the 
     Administrator determines, by December 31, 2007, that a 
     NOX SIP Call State's applicable implementation 
     plan meets the requirements of subsection (a) and paragraph 
     (1), such applicable implementation plan shall be deemed to 
     continue to meet such requirements.
       ``(c) Savings Provision.--Nothing in this section or 
     section 464 shall preclude or deny the right of any State or 
     political subdivision thereof to adopt or enforce any 
     regulation, requirement, limitation, or standard, relating to 
     a boiler, combustion turbine, or integrated gasification 
     combined cycle plant subject to emission reduction 
     requirements or limitations under part B, C, or D, that is 
     more stringent than a regulation, requirement, limitation, or 
     standard in effect under this section or under any other 
     provision of this Act.

     ``SEC. 464. TERMINATION OF FEDERAL ADMINISTRATION OF 
                   NOX TRADING PROGRAM FOR EGUS.

       ``Starting January 1, 2008, with regard to any boiler, 
     combustion turbine, or integrated gasification combined cycle 
     plant subject to emission reduction requirements or 
     limitations under part B, C, or D, the Administrator shall 
     not administer any nitrogen oxides trading program included 
     in any NOX SIP Call State's applicable 
     implementation plan and meeting the requirements of section 
     463(a) and (b)(1).

     ``SEC. 465. CARRYFORWARD OF PRE-2008 NITROGEN OXIDES 
                   ALLOWANCES.

       ``The Administrator shall promulgate regulations as 
     necessary to assure that the requirement to hold allowances 
     under section 452(a)(1) may be met using nitrogen oxides 
     allowances allocated for an ozone season before 2008 under a 
     nitrogen oxides trading program that the Administrator 
     administers, is included in a NOX SIP Call State's 
     applicable implementation plan, and meets the requirements of 
     section 463 (a) and (b)(1).

     ``SEC. 466. NON-OZONE SEASON VOLUNTARY ACTION CREDITS.

       ``An affected facility that voluntarily elects to operate 
     selective catalytic reduction (SCR) units, installed prior to 
     enactment of this title, during the non-ozone season under 
     section 461(2) shall be credited 0.5

[[Page 563]]

     allowances per ton of NOX emissions avoided as a 
     result of operating these controls. The amount avoided will 
     equal every ton of nitrogen oxides reduction below the 
     allowable emission rate. The Administrator shall determine if 
     any other existing NOX emission control devices 
     are generally uneconomic to operate unless EGUs are provided 
     incentives to control NOX emissions during the 
     non-ozone season. If the Administrator finds that incentives 
     using different control equipment are necessary to make the 
     operation of these devices economic, the Administrator shall 
     specify these types of control devices and, for an affected 
     facility with these specified devices, installed prior to 
     enactment of this title, that voluntarily elects to operate 
     these devices during the nonozone season under section 461(2) 
     shall be credited 0.5 allowances per ton of emissions avoided 
     as a result of operating these controls. The Administrator 
     shall promulgate regulations as necessary to establish this 
     NOX allowance credit program. Failure of the 
     Administrator to promulgate implementing regulations prior to 
     voluntary reductions being undertaken by affected facilities 
     shall not in any manner reduce the number of allowances an 
     otherwise qualifying facility shall be credited upon 
     promulgation of the regulations.

                 ``PART D--MERCURY EMISSIONS REDUCTIONS

     ``SEC. 471. DEFINITIONS.

       ``For purposes of this part:
       ``(1) Adjusted baseline heat input.--The term `adjusted 
     baseline heat input' with regard to a unit means the unit's 
     baseline heat input multiplied by--
       ``(A) 1.0, for the portion of the baseline heat input that 
     is the unit's average annual combustion of bituminous during 
     the years on which the unit's baseline heat input is based;
       ``(B) 3.0, for the portion of the baseline heat input that 
     is the unit's average annual combustion of lignite during the 
     years on which the unit's baseline heat input is based;
       ``(C) 1.25, for the portion of the baseline heat input that 
     is the unit's average annual combustion of subbituminous 
     during the years on which the unit's baseline heat input is 
     based; and
       ``(D) 1.0, for the portion of the baseline heat input that 
     is not covered by subparagraph (A), (B), or (C) or for the 
     entire baseline heat input if such baseline heat input is not 
     based on the unit's heat input in specified years.
       ``(2) Affected EGU.--The term `affected EGU' means--
       ``(A) for a unit serving a generator before the date of 
     enactment of the Clear Skies Act of 2005, a coal-fired unit 
     in a State serving a generator with a nameplate capacity of 
     greater than 25 megawatts that produced or produces 
     electricity for sale during 2002 or any year thereafter, 
     except for a cogeneration unit meets the criteria for 
     qualifying for a cogeneration facilities codified in section 
     292.205 of title 18 of the Code of Federal Regulations as 
     issued on April 1, 2002, during 2002 and each year 
     thereafter; and
       ``(B) for a unit commencing service of a generator on or 
     after the date of enactment of the Clear Skies Act of 2005, a 
     coal-fired unit in a State serving a generator that produces 
     electricity for sale during any year starting with the year 
     the unit commences service of a generator, except for a 
     cogeneration unit that meets the criteria for qualifying for 
     a cogeneration facilities codified in section 292.205 of 
     title 18 of the Code of Federal Regulations as issued on 
     April 1, 2002, during each year starting with the year the 
     unit commences service of a generator.
       ``(C) Exclusion.--Notwithstanding paragraphs (A) and (B), 
     the term `affected EGU' does not include--
       ``(i) a solid waste incineration unit subject to section 
     129;
       ``(ii) a unit for the treatment, storage, or disposal of 
     hazardous waste subject to section 3005 of the Solid Waste 
     Disposal Act; or
       ``(iii) a unit with de minimis emissions equal to or less 
     than 50 pounds on an average annual basis, as calculated by 
     the Administrator for a 3-year period using--

       ``(I) for calendar year 2010, the emissions data for a 
     facility for calendar years 2006 through 2009; and
       ``(II) for calendar year 2011 and subsequent calendar 
     years, the 3 most recent calendar years for which emissions 
     data are available.

     ``SEC. 472. APPLICABILITY.

       ``Starting January 1, 2010, it shall be unlawful for the 
     affected EGUs at a facility in a State to emit a total amount 
     of mercury during the year in excess of the number of mercury 
     allowances held for such facility for that year by the owner 
     or operator of the facility.

     ``SEC. 473. LIMITATIONS ON TOTAL EMISSIONS.

       ``For affected EGUs for 2010 and each year thereafter, the 
     Administrator shall allocate mercury allowances pursuant to 
     section 474.

          TABLE A.--TOTAL MERCURY ALLOWANCES ALLOCATED FOR EGUS
------------------------------------------------------------------------
                                                               Mercury
                            Year                              allowances
                                                              allocated
------------------------------------------------------------------------
2010-2017..................................................    1,088,000
2018 and thereafter........................................      480,000
------------------------------------------------------------------------

     ``SEC. 474. EGU ALLOCATIONS.

       ``(a) In General.--Not later than 24 months before the 
     commencement date of the mercury allowance requirement of 
     section 472, the Administrator shall promulgate regulations 
     determining allocations of mercury allowances for 2010 and 
     thereafter for units at a facility that commence commercial 
     operation by and are affected EGUs as of date of enactment. 
     The regulations shall provide that the Administrator shall 
     allocate each year for such units an amount determined by 
     multiplying by 0.95 the allocation amount in section 473 by 
     the ratio of the total amount of the adjusted baseline heat 
     input of such units at the facility to the total amount of 
     adjusted baseline heat input of all affected EGUs.
       ``(b) New Facilities.--5 percent of the total amount of 
     nitrogen oxides allowances allocated each year under section 
     473 shall be allocated for units at a facility that commence 
     commercial operation and are affected EGUs after the date of 
     enactment. These units shall be allocated allowances for each 
     year by multiplying the allocation amount under section 473 
     by the ratio of the total amount of the adjusted baseline 
     heat input of such units at the facility to the total amount 
     of adjusted baseline heat input to all affected EGUs, 
     including those covered in subsection (a). However, the 
     regulations shall not allocate allowances to any affected 
     unit in excess of the product of the unit's baseline heat 
     input multiplied by the unit's allowable mercury emissions 
     rate, divided by 2000.
       ``(c) Allocation.--Allowances allocated under subsection 
     (b) shall be allocated to units on a first come basis 
     determined by date of unit commencement of construction, 
     provided that such unit actually commences commercial 
     operation. As such, allocations to units under subsection (b) 
     will not be reduced as a result of new units commencing 
     commercial operation.
       ``(d) Unallocated Allowances.--Allowances not allocated 
     under paragraph (2) shall be allocated to units in 
     subsections (a) and (b) on a pro rata basis.
       ``(e) Amount of Allowances.--For each year 2010 and 
     thereafter, if the Administrator has not promulgated the 
     regulations determining allocation under subsection (a)--
       ``(1) each affected unit shall comply with section 472 by 
     providing annual notice to the permitting authority. Such 
     notice shall indicate the amount of allowances the affected 
     unit believes it has for the relevant year and the amount of 
     mercury emissions for such year. The amount of mercury 
     emissions shall be determined using reasonable industry 
     accepted methods unless the Administrator has promulgated 
     applicable monitoring and alternative monitoring 
     requirements; and
       ``(2) upon promulgation of regulations under subsection (a) 
     determining the allocations for 2010 and thereafter, and 
     promulgating regulations under section 403(b) providing for 
     the transfer of mercury allowances and section 403(c) 
     establishing an Allowance Transfer System for mercury 
     allowances, each unit's emissions shall be compared to and 
     reconcile with its actual allocations under the promulgated 
     regulation. Each unit will have nine (9) months to submit 
     allowances to the Administrator, without recompense, for any 
     allowances shortfall. The submitted allowances may have been 
     obtained and held by any mechanism consistent with the Act 
     including, but not limited to, direct sale.

     ``SEC. 475. MERCURY EARLY ACTION REDUCTION CREDITS.

       ``(a) In General.--The Administrator shall promulgate 
     regulations within 18 months authorizing the allocation of 
     mercury allowances to units designated under this section 
     that install or modify pollution control equipment or 
     combustion technology improvements identified in such 
     regulations after the date of enactment of this section and 
     prior to January 1, 2010.
       ``(b) Nonallocation of Allowances.--No allowances shall be 
     allocated under this paragraph for emissions reductions: 
     attributable to pollution control equipment or combustion 
     technology improvements that were operational or under 
     construction at any time prior to the date of enactment of 
     this section; attributable to fuel switching; or required 
     under any Federal regulation.
       ``(c) Amount of Allowances.--The allowances allocated to 
     any unit under this paragraph shall be in addition to the 
     allowances allocated under section 474 and shall be allocated 
     in an amount equal to 1 allowance of mercury for each 1.05 
     ounces of reduction in emissions of mercury achieved by the 
     pollution control equipment or combustion technology 
     improvements starting with the year in which the equipment or 
     improvement is implemented. The early compliance reduction 
     allowances available under this section shall be used and 
     tradable in the same manner as allowances under section 474.
       ``(d) Early Compliance Allowance Credit.--The Administrator 
     shall promulgate regulations as necessary to ensure affected 
     units receive early compliance allowance credit. Early 
     compliance allowances shall be allocated at the end of an 
     early compliance year. Should the Administrator fail to 
     promulgate allocation regulations by the end of a given year, 
     early compliance allowances for each year shall be allocated 
     at the earliest possible time after allocation regulations 
     are promulgated.

[[Page 564]]



    ``PART E--NATIONAL EMISSION STANDARDS; RESEARCH, ENVIRONMENTAL 
ACCOUNTABILITY; MAJOR SOURCE PRECONSTRUCTION REVIEW AND BEST AVAILABLE 
                RETROFIT CONTROL TECHNOLOGY REQUIREMENTS

     ``SEC. 481. NATIONAL EMISSION STANDARDS FOR AFFECTED UNITS.

       ``(a) Definitions.--For purposes of this section:
       ``(1) Commenced.--The term `commenced', with regard to 
     construction, means that an owner or operator has either 
     undertaken a continuous program of construction or has 
     entered into a contractual obligation to undertake and 
     complete, within a reasonable time, a continuous program of 
     construction. For boilers and integrated gasification 
     combined cycle plants, this term does not include undertaking 
     such a program or entering into such an obligation more than 
     36 months prior to the date on which the unit begins 
     operation. For combustion turbines, this term does not 
     include undertaking such a program or entering into such an 
     obligation more than 18 months prior to the date on which the 
     unit begins operation.
       ``(2) Construction.--The term `construction' means 
     fabrication, erection, or installation of an affected unit.
       ``(3) Affected unit.--The term `affected unit' means any 
     unit that is subject to emission limitations under subpart 2 
     of part B, subpart 2 of part C, or part D.
       ``(4) Existing affected unit.--The term `existing affected 
     unit' means any affected unit that is not a new affected 
     unit.
       ``(5) New affected unit.--The term `new affected unit;' 
     means any affected unit, the construction or reconstruction 
     of which is commenced after the date of enactment of the 
     Clear Skies Act of 2005, except that for the purpose of any 
     revision of a standard pursuant to subsection (e), `new 
     affected unit' means any affected unit, the construction or 
     reconstruction of which is commenced after the publication of 
     regulations (or, if earlier, proposed regulations) 
     prescribing a standard under this section that will apply to 
     such unit.
       ``(6) Reconstruction.--The term `reconstruction' means the 
     replacement of components of a unit to such an extent that--
       ``(A) the fixed capital cost of the new components exceeds 
     50 percent of the fixed capital cost that would be required 
     to construct a comparable entirely new unit; and
       ``(B) it is technologically and economically feasible to 
     meet the applicable standards set forth in this section.
       ``(b) Emission Standards.--
       ``(1) In general.--No later than 12 months after the date 
     of enactment of the Clear Skies Act of 2005, the 
     Administrator shall promulgate regulations prescribing the 
     standards in subsections (c) through (d) for the specified 
     affected units and establishing requirements to ensure 
     compliance with these standards, including monitoring, 
     recordkeeping, and reporting requirements.
       ``(2) Monitoring.--
       ``(A) In general.--The owner or operator of any affected 
     unit subject to the standards for sulfur dioxide, nitrogen 
     oxides, or mercury under this section shall meet the 
     requirements of section 405, except that, where two or more 
     units utilize a single stack, separate monitoring shall be 
     required for each affected unit for the pollutants for which 
     the unit is subject to such standards.
       ``(B) Requirements.--The Administrator shall, by 
     regulation, require--
       ``(i) the owner or operator of any affected unit subject to 
     the standards for sulfur dioxide, nitrogen oxides, or mercury 
     under this section to--

       ``(I) install and operate CEMS for monitoring output, 
     including electricity and useful thermal energy, on the 
     affected unit and to quality assure the data; and
       ``(II) comply with recordkeeping and reporting 
     requirements, including provisions for reporting output data 
     in megawatt hours.

       ``(ii) the owner or operator of any affected unit subject 
     to the standards for particulate matter under this section 
     to--

       ``(I) install and operate CEMS for monitoring particulate 
     matter on the affected unit and to quality assure the data;
       ``(II) comply with recordkeeping and reporting 
     requirements; and
       ``(III) comply with alternative monitoring, quality 
     assurance, recordkeeping, and reporting requirements for any 
     period of time for which the Administrator determines that 
     CEMS with appropriate vendor guarantees are not commercially 
     available for particulate matter.

       ``(3) Compliance.--For boilers, integrated gasification 
     combined cycle plants, and coal fired or gas-fired combustion 
     turbines the Administrator shall require that the owner or 
     operator demonstrate compliance with the standards daily, 
     using a 30-day rolling average, except that in the case of 
     mercury, the compliance period shall be the calendar year. 
     For combustion turbines that are oil-fired the Administrator 
     shall require that the owner or operator demonstrate 
     compliance with the standards hourly, using a 4-hour rolling 
     average.
       ``(c) Boilers and Integrated Gasification Combined Cycle 
     Plants.--
       ``(1) In general.--After the effective date of standards 
     promulgated under subsection (b), no owner or operator shall 
     cause any boiler or integrated gasification combined cycle 
     plant that is a new affected unit to discharge into the 
     atmosphere any gases which contain--
       ``(A) sulfur dioxide in excess of 2.0 lb/MWh;
       ``(B) nitrogen oxides in excess of 1.0 lb/MWh;
       ``(C) particulate matter in excess of 0.20 lb/MWh; or
       ``(D) if the unit is coal-fired, mercury in excess of 0.015 
     lb/GWh, unless--
       ``(i) mercury emissions from the unit, determined assuming 
     no use of on-site or off-site pre-combustion treatment of 
     coal and no use of technology that captures mercury, are 
     reduced by 80 percent;
       ``(ii) flue gas desulfurization (FGD) and selective 
     catalytic reduction (SCR) are applied to the unit; or
       ``(iii) a technology is applied to the unit and the 
     permitting authority determines that the technology is 
     equivalent in terms of mercury capture to the application of 
     FGD and SCR.
       ``(2) Exemption.--Notwithstanding subparagraph (1)(D), 
     integrated gasification combined cycle plants with a combined 
     capacity of less than 5 GW are exempt from the mercury 
     requirement under subparagraph (1)(D) if they are constructed 
     as part of a demonstration project under the Secretary of 
     Energy that will include a demonstration of removal of 
     significant amounts of mercury as determined by the Secretary 
     of Energy in conjunction with the Administrator as part of 
     the solicitation process.
       ``(3) Discharges.--After the effective date of standards 
     promulgated under subsection (b), no owner or operator shall 
     cause any oil-fired boiler that is an existing affected unit 
     to discharge into the atmosphere any gases which contain 
     particulate matter in excess of 0.30 lb/MWh.
       ``(d) Combustion Turbines.--
       ``(1) Gas-fired combustion turbines.--After the effective 
     date of standards promulgated under subsection (b), no owner 
     or operator shall cause any gas-fired combustion turbine that 
     is a new affected unit to discharge into the atmosphere any 
     gases which contain nitrogen oxides in excess of--
       ``(A) 0.56 lb/MWh (15 ppm at 15 percent oxygen), if the 
     unit is a simple cycle combustion turbine;
       ``(B) 0.084 lb/MWh (3.5 ppm at 15 percent oxygen), if the 
     unit is not a simple cycle combustion turbine and either uses 
     add-on controls or is located within 50 km of a class I area; 
     or
       ``(C) 0.21 lb/MWh (9 ppm at 15 percent oxygen), if the unit 
     is not a simple cycle turbine and neither uses add-on 
     controls nor is located within 50 km of a class I area.
       ``(2) Coal-fired combustion turbines.--After the effective 
     date of standards promulgated under subsection (b), no owner 
     or operator shall cause any coal-fired combustion turbine 
     that is a new affected unit to discharge into the atmosphere 
     any gases which contain sulfur dioxide, nitrogen oxides, 
     particulate matter, or mercury in excess of the emission 
     limits under subparagraphs (c)(1) (A) through (D).
       ``(3) Combustion turbines that are not gas-fired or coal-
     fired.--After the effective date of standards promulgated 
     under subsection (b), no owner or operator shall cause any 
     combustion turbine that is not gas-fired or coal-fired and 
     that is a new affected unit to discharge into the atmosphere 
     any gases which contain--
       ``(A) sulfur dioxide in excess of 2.0 lb/MWh;
       ``(B) nitrogen oxides in excess of--
       ``(i) 0.289 lb/MWh (12 ppm at 15 percent oxygen), if the 
     unit is not a simple cycle combustion turbine, is dual-fuel 
     capable, and uses add-on controls; or is not a simple cycle 
     combustion turbine and is located within 50 km of a class I 
     area; and
       ``(ii) 1.01 lb/MWh (42 ppm at 15 percent oxygen), if the 
     unit is a simple cycle combustion turbine; is not a simple 
     cycle combustion turbine and is not dual-fuel capable; or is 
     not a simple cycle combustion turbine, is dual-fuel capable, 
     and does not use add-on controls.
       ``(C) particulate matter in excess of 0.20 lb/MWh.
       ``(e) Periodic Review and Revision.--
       ``(1) In general.--The Administrator shall, at least every 
     eight years following the promulgation of standards under 
     subsection (b), review and, if appropriate, revise such 
     standards to reflect the degree of emission limitation 
     demonstrated by substantial evidence to be achievable through 
     the application of the best system of emission reduction 
     which (taking into account the cost of achieving such 
     reduction and any nonair quality health and environmental 
     impacts and energy requirements). When implementation and 
     enforcement of any requirement of this Act indicate that 
     emission limitations and percent reductions beyond those 
     required by the standards promulgated under this section are 
     achieved in practice, the Administrator shall, when revising 
     standards promulgated under this section, consider the 
     emission limitations and percent reductions achieved in 
     practice.
       ``(2) Exception.--Notwithstanding the requirements of 
     paragraph (1) the Administrator need not review any standard 
     promulgated under subsection (b) if the Administrator 
     determines that such review is not appropriate in light of 
     readily available information on the efficacy of such 
     standard.

[[Page 565]]

       ``(f) Effective Date.--The standard promulgated pursuant to 
     this section shall become effective upon promulgation.
       ``(g) Delegation.--
       ``(1) In general.--Each State may develop and submit to the 
     Administration a procedure for implementing and enforcing 
     standards promulgated under this section for affected units 
     located in such State. If the Administrator finds the State 
     procedure is adequate, the Administrator shall delegate to 
     such State any authority the Administrator has under this Act 
     to implement and enforce such standards.
       ``(2) Enforcement.--Nothing in this subsection shall 
     prohibit the Administrator from enforcing any applicable 
     standard under this section.
       ``(h) Violations.--After the effective date of standards 
     promulgated under this section, it shall be unlawful for any 
     owner or operator of any affected unit to operate such unit 
     in violation of any standard, established by this section 
     applicable to such unit.
       ``(i) Coordination With Other Authorities.--For purposes of 
     sections III(e), 113, 114, 116, 120, 303, 304, 307, and other 
     provisions for the enforcement of this Act, each standard 
     established pursuant to this section shall be treated in the 
     same manner as a standard of performance under section 111, 
     and each affected unit subject to standards under this 
     section shall be treated in the same manner as a stationary 
     source under section 111.
       ``(j) State Authority.--Nothing in this section shall 
     preclude or deny the right of any State or political 
     subdivision thereof to adopt or enforce any regulation, 
     requirement, limitation, or standard relating to affected 
     units, or other EGUs, that is more stringent than a 
     regulation, requirement, limitation, or standard in effect 
     under this section or under any other provision of this Act.
       ``(k) Other Authority Under This Act.--Nothing in this 
     section shall diminish the authority of the Administrator or 
     a State to establish any other requirements applicable to 
     affected units under any other authority of law, including 
     the authority to establish for any air pollutant a national 
     ambient air quality standard, except that no new affected 
     unit subject to standards under this section shall be subject 
     to standards under section 111 of this Act.

     ``SEC. 482. RESEARCH, ENVIRONMENTAL MONITORING, AND 
                   ASSESSMENT.

       ``(a) Purposes.--The Administrator, in collaboration with 
     the Secretary of Energy and the Secretary of the Interior, 
     shall conduct a comprehensive program of research, 
     environmental monitoring, and assessment to enhance 
     scientific understanding of the human health and 
     environmental effects of particulate matter and mercury and 
     to demonstrate the efficacy of emission reductions under this 
     title for purposes of reporting to Congress under (e)(2). The 
     purposes of such a program are to--
       ``(1) expand current research and knowledge of the 
     contribution of emissions from electricity generation to 
     exposure and health effects associated with particulate 
     matter and mercury;
       ``(2) enhance current research and development of promising 
     multi-pollutant control strategies and CEMS for mercury;
       ``(3) produce peer-reviewed scientific and technology 
     information;
       ``(4) improve environmental monitoring and assessment of 
     sulfur dioxide, nitrogen oxides and mercury, and their 
     transformation products, to track changes in human health and 
     the environment attributable to emission reductions under 
     this title; and
       ``(5) periodically provide peer-reviewed reports on the 
     costs, benefits, and effectiveness of emission reductions 
     achieved under this title.
       ``(b) Research.--The Administrator shall enhance planned 
     and ongoing laboratory and field research and modeling 
     analyses, and conduct new research and analyses to produce 
     peer-reviewed information concerning the human health and 
     environmental effects of mercury and particulate matter and 
     the contribution of United States electrical generating units 
     to those effects. Such information shall be included in the 
     report under subsection (d). In addition, such research and 
     analyses shall--
       ``(1) improve understanding of the rates and processes 
     governing chemical and physical transformations of mercury in 
     the atmosphere, including speciation of emissions from 
     electricity generation and the transport of these species;
       ``(2) improve understanding of the contribution of mercury 
     emissions from electricity generation to mercury in fish and 
     other biota, including--
       ``(A) the response of and contribution to mercury in the 
     biota owing to atmospheric deposition of mercury from U.S. 
     electricity generation on both local and regional scales;
       ``(B) long-term contributions of mercury from U.S. 
     electricity generation on mercury accumulations in 
     ecosystems, and the effects of mercury reductions in that 
     sector on the environment and public health;
       ``(C) the role and contribution of mercury, from U.S. 
     electricity generating facilities and anthropogenic and 
     natural sources to fish contamination and to human exposure, 
     particularly with respect to sensitive populations;
       ``(D) the contribution of U.S. electricity generation to 
     population exposure to mercury in freshwater fish and seafood 
     and quantification of linkages between U.S. mercury emissions 
     and domestic mercury exposure and its health effects; and
       ``(E) the contribution of mercury from U.S. electricity 
     generation in the context of other domestic and international 
     sources of mercury, including transport of global 
     anthropogenic and natural background levels;
       ``(3) improve understanding of the health effects of fine 
     particulate matter components related to electricity 
     generation emissions (as distinct from other fine particle 
     fractions and indoor air exposures) and the contribution of 
     U.S. electrical generating units to those effects including--
       ``(A) the chronic effects of fine particulate matter from 
     electricity generation in sensitive population groups; and
       ``(B) personal exposure to fine particulate matter from 
     electricity generation; and
       ``(4) improve understanding, by way of a review of the 
     literature, of methods for valuing human health and 
     environmental benefits associated with fine particulate 
     matter and mercury.
       ``(c) Innovative Control Technologies.--The Administrator 
     shall collaborate with the Secretary of Energy to enhance 
     research and development, and conduct new research that 
     facilitates research into and development of innovative 
     technologies to control sulfur dioxide, nitrogen oxides, 
     mercury, and particulate matter at a lower cost than existing 
     technologies. Such research and development shall provide 
     updated information on the cost and feasibility of 
     technologies. Such information shall be included in the 
     report under subsection (d). In addition, the research and 
     development shall--
       ``(1) upgrade cost and performance models to include 
     results from ongoing and future electricity generation and 
     pollution control demonstrations by the Administrator and the 
     Secretary of Energy;
       ``(2) evaluate the overall environmental implications of 
     the various technologies tested including the impact on the 
     characteristics of coal combustion residues;
       ``(3) evaluate the impact of the use of selective catalytic 
     reduction on mercury emissions from the combustion of all 
     coal types;
       ``(4) evaluate the potential of integrated gasification 
     combined cycle to adequately control mercury;
       ``(5) expand current programs by the Administrator to 
     conduct research and promote, lower cost CEMS capable of 
     providing real-time measurements of both speciated and total 
     mercury and integrated compact CEMS that provide cost-
     effective real-time measurements of sulfur dioxide, nitrogen 
     oxides, and mercury;
       ``(6) expand lab- and pilot-scale mercury and multi-
     pollutant control programs by the Secretary of Energy and the 
     Administrator, including development of enhanced sorbents and 
     scrubbers for use on all coal types;
       ``(7) characterize mercury emissions from low-rank coals, 
     for a range of traditional control technologies, like 
     scrubbers and selective catalytic reduction; and
       ``(8) improve low cost combustion modifications and 
     controls for dry-bottom boilers.
       ``(d) Environmental Accountability.--
       ``(1) Monitoring and assessment.--The Administrator shall 
     conduct a program of environmental monitoring and assessment 
     to track on a continuing basis, changes in human health and 
     the environment attributable to the emission reductions 
     required under this title. Such a program shall--
       ``(A) develop and employ methods to routinely monitor, 
     collect, and compile data on the status and trends of mercury 
     and its transformation products in emissions from affected 
     facilities, atmospheric deposition, surface water quality, 
     and biological systems. Emphasis shall be placed on those 
     methods that--
       ``(i) improve the ability to routinely measure mercury in 
     dry deposition processes;
       ``(ii) improve understanding of the spatial and temporal 
     distribution of mercury deposition in order to determine 
     source-receptor relationships and patterns of long-range, 
     regional, and local deposition;
       ``(iii) improve understanding of aggregate exposures and 
     additive effects of methylmercury and other pollutants; and
       ``(iv) improve understanding of the effectiveness and cost 
     of mercury emissions controls;
       ``(B) modernize and enhance the national air quality and 
     atmospheric deposition monitoring networks in order to cost-
     effectively expand and integrate, where appropriate, 
     monitoring capabilities for sulfur, nitrogen, and mercury to 
     meet the assessment and reporting requirements of this 
     section;
       ``(C) perform and enhance long-term monitoring of sulfur, 
     nitrogen, and mercury, and parameters related to 
     acidification, nutrient enrichment, and mercury 
     bioaccumulation in freshwater and marine biota;
       ``(D) maintain and upgrade models that describe the 
     interactions of emissions with the atmosphere and resulting 
     air quality implications and models that describe the 
     response of ecosystems to atmospheric deposition; and
       ``(E) assess indicators of ecosystems health related to 
     sulfur, nitrogen, and mercury, including characterization of 
     the causes and

[[Page 566]]

     effects of episodic exposure to air pollutants and evaluation 
     of recovery.
       ``(2) Reporting requirements.--Not later than January 1, 
     2008, and not later than every 4 years thereafter, the 
     Administrator shall provide a peer reviewed report to the 
     Congress on the costs, benefits, and effectiveness of 
     emission reduction programs under this title.
       ``(A) The report under this subparagraph shall address the 
     relative contribution of emission reductions from U.S. 
     electricity generation under this title compared to the 
     emission reductions achieved under other titles of the Clean 
     Air Act with respect to--
       ``(i) actual and projected emissions of sulfur dioxide, 
     nitrogen oxides, and mercury;
       ``(ii) average ambient concentrations of sulfur dioxide and 
     nitrogen oxides transformation products, related air quality 
     parameters, and indicators of reductions in human exposure;
       ``(iii) status and trends in total atmospheric deposition 
     of sulfur, nitrogen, and mercury, including regional 
     estimates of total atmospheric deposition;
       ``(iv) status and trends in visibility;
       ``(v) status of terrestrial and aquatic ecosystems 
     (including forests and forested watersheds, streams, lakes, 
     rivers, estuaries, and nearcoastal waters);
       ``(vi) status of mercury and its transformation products in 
     fish;
       ``(vii) causes and effects of atmospheric deposition, 
     including changes in surface water quality, forest and soil 
     conditions;
       ``(viii) occurrence and effects of coastal eutrophication 
     and episodic acidification, particularly with respect to high 
     elevation watersheds; and
       ``(ix) reduction in atmospheric deposition rates that 
     should be achieved to prevent or reduce adverse ecological 
     effects.
       ``(B) The report under this subparagraph shall address the 
     relative contribution of the United States to world-wide 
     emissions as well as a comparison of the stringency of fossil 
     fuel-fired requirements under the Act to other countries.

     ``SEC. 483. MAJOR SOURCE PRECONSTRUCTION REVIEW REQUIREMENTS 
                   AND BEST AVAILABLE RETROFIT CONTROL TECHNOLOGY 
                   REQUIREMENTS; APPLICABILITY TO AFFECTED UNITS.

       ``(a) Major Source Exemption.--An affected unit shall be 
     considered neither a major emitting facility or major 
     stationary source nor a part of a major emitting facility or 
     major stationary source, for purposes of compliance with the 
     requirements of parts C and part D of title I, and shall not 
     otherwise be subject to the requirements of section 169A or 
     169B, for a period of 20 years after the date of enactment of 
     this section. This applicability provision only applies to 
     affected units that are either subject to the performance 
     standards of section 481 or meet the following requirements 
     within 3 years after the date of enactment of the Clear Skies 
     Act of 2005:
       ``(1) The owner or operator of the affected unit properly 
     operates, maintains and repairs pollution control equipment 
     to limit emissions of particulate matter, or the owner or 
     operator of the affected unit is subject to an enforceable 
     permit issued pursuant to title V or a permit program 
     approved or promulgated as part of an applicable 
     implementation plan to limit the emissions of particulate 
     matter from the affected unit to 0.03 lb/mmBtu within eight 
     years after the date of enactment of the Clear Skies Act of 
     2005, and
       ``(2) The owner or operator of the affected unit uses good 
     combustion practices to minimize emissions of carbon 
     monoxide. Good combustion practices may be accomplished 
     through control technology, combustion technology 
     improvements, or workplace practices.
       ``(b) Class I Area Protections.--Notwithstanding the 
     provisions of subsection (a), an affected unit located within 
     50 km of a Class I area on which construction commences after 
     the date of enactment of the Clear Skies Act of 2005 is 
     subject to those provisions under part C of title I 
     pertaining to the review of a new or reconstructed major 
     stationary source's impact on a Class I area.
       ``(c) Preconstruction Requirements.--Each State shall 
     include in its plan under section 110, as program to provide 
     for the regulation of the construction of an affected unit 
     that ensures that the following requirements are met prior to 
     the commencement of construction of an affected unit--
       ``(1) in an area designated as attainment or unclassifiable 
     under section 107(d), the owner or operator of the affected 
     unit must demonstrate to the State that the emissions 
     increase from the construction or operation of such unit will 
     not cause, or contribute to, air pollution in excess of any 
     national ambient air quality standard;
       ``(2) in an area designated as nonattainment under section 
     107(d), the State must determine that the emissions increase 
     from the construction or operation of such unit will not 
     interfere with any program to assure that the national 
     ambient air quality standards are achieved provided that 
     interference with any program will be deemed not to occur, 
     with respect to each nonattainment area located wholly or 
     partially within the State, if on the date of submission of a 
     complete permit application and throughout a continuous 
     period of three years immediately preceding such date, the 
     nonattainment area was in full compliance with all 
     requirements of this Act, including but not limited to 
     requirements for State Implementation Plans;
       ``(3) for a reconstructed unit, prior to beginning 
     operation, the unit must comply with either the performance 
     standards of section 481 or best available control technology 
     as defined in part C of title I for the pollutants whose 
     hourly emissions will increase at the unit's maximum 
     capacity; and
       ``(4) the State must provide for an opportunity for 
     interested persons to comment on the Class I area protections 
     and preconstruction requirements as set forth in this 
     section.
       ``(d) Definitions.--For purposes of this section:
       ``(1) Affected unit.--The term `affected unit' means any 
     unit that is subject to emission limitations under subpart 2 
     of part B, subpart 2 of part C, or part D.
       ``(2) Construction.--The term `construction' includes the 
     construction of a new affected unit and the modification of 
     any affected unit.
       ``(3) Modification.--The term `modification' means any 
     physical change in, or change in the method of operation of, 
     an affected unit that increases the maximum hourly emissions 
     of any pollutant regulated under this Act above the maximum 
     hourly emissions achievable at that unit during the five 
     years prior to the change or that results in the emission of 
     any pollutant regulated under this Act and not previously 
     emitted.
       ``(e) Savings Clause.--Nothing in this section shall 
     preclude or deny the right of any State or political 
     subdivision thereof to adopt to enforce any regulation, 
     requirement, limitation, or standard relating to affected 
     units that is more stringent than a regulation, requirement, 
     limitation, or standard in effect under this section or under 
     any other provision of this Act.''.

     SEC. 3. OTHER AMENDMENTS.

       (a) Title I.--Title I of the Clean Air Act is amended as 
     follows:
       (1) In section 103 by repealing subparagraphs (E) and (F).
       (2) In section 107(d)(1)(A)--
       (i) by striking ``or'' at the end of clause (ii);
       (ii) by striking the period at the end of clause (iii) and 
     inserting ``, or''; and
       (iii) by adding at the end the following:
       ``(iv) notwithstanding clauses (i) through (iii) and 
     subsection (d)(3), if requested by a State, an area may be 
     redesignated as transitional for the PM 2.5 national primary 
     or secondary ambient air quality standards or the 8-hour 
     ozone national primary or secondary ambient air quality 
     standard if--

       ``(I) the Administrator has performed air quality modeling 
     and, in the case of an area that needs additional local 
     control measures, the State has performed supplemental air 
     quality modeling, demonstrating that the area will attain the 
     applicable standard or standards not later than December 31, 
     2015;
       ``(II) such modeling demonstration and all necessary local 
     controls have been approved into the State implementation 
     plan not later than 1 year after the date of enactment of the 
     Clear Skies Act of 2005; and
       ``(III) the redesignation is made not later than 180 days 
     after the date of that approval.''

       (3) In section 110 as follows:
       (A) By amending clause (i) of subsection (a)(2)(D) by 
     inserting ``except as provided in subsection (q),'' before 
     the word ``prohibiting''.
       (B) By adding the following new subsections at the end 
     thereof:
       ``(q) Review of Certain Plans.--
       ``(1) In general.--The Administrator shall, in reviewing, 
     under subsection (a)(2)(D)(i), any plan with respect to 
     affected units, within the meaning of section 126(d)(l)--
       ``(A) consider, among other relevant factors, emissions 
     reductions required to occur by the attainment date or dates 
     of any relevant nonattainment areas in the other State or 
     States;
       ``(B) not require submission of plan provisions mandating 
     emissions reductions from such affected units, unless the 
     Administrator determines that--
       ``(i) emissions from such units may be reduced at least as 
     cost-effectively as emissions reductions in the State or each 
     other State from each other principal category of sources of 
     the relevant pollutant, pollutants, or pre-cursors thereof, 
     including industrial boilers, on-road mobile sources, and 
     off-road mobile sources, and any other category of sources 
     that the Administrator may identify, and
       ``(ii) reductions in such emissions will improve air 
     quality in the other State's or States' nonattainment areas 
     at least as cost-effectively as reductions in emissions in 
     the State or each other State from each other principal 
     category of sources of the relevant pollutant, pollutants, or 
     pre-cursors thereof, to the maximum extent that a methodology 
     is reasonably available to make such a determination;
       ``(C) develop an appropriate peer reviewed methodology for 
     making determinations under subparagraph (B) by December 31, 
     2006; and
       ``(D) not require submission of plan provisions subjecting 
     affected units, within the

[[Page 567]]

     meaning of section 126(d)(1), to requirements with an 
     effective date prior to December 31, 2014.
       ``(2) Proximity.--In making the determination under clause 
     (ii) of subparagraph (B) of paragraph (1), the Administrator 
     will use the best available peer-reviewed models and 
     methodology that consider the proximity of the source or 
     sources to the other State or States and incorporate other 
     source characteristics.
       ``(3) Effect on regulations.--Nothing in paragraph (1) 
     shall be interpreted to require revisions to the provisions 
     of 40 CFR parts 51.121 and 51.122 (2001).
       ``(r) Transitional Areas.--
       ``(1) Maintenance.--
       ``(A) Submission of inventory and analysis.--By December 
     31, 2011, each area designated as transitional pursuant to 
     section 107(d)(1) shall submit an updated emission inventory 
     and an analysis of whether growth in emissions, including 
     growth in vehicle miles traveled, will interfere with 
     attainment by December 31, 2014.
       ``(B) Review.--No later than December 31, 2011, the 
     Administrator shall review each transitional area's 
     maintenance analysis, and, if the Administrator determines 
     that growth in emissions will interfere with attainment by 
     December 31, 2014, the Administrator shall consult with the 
     State and determine what action, if any, is necessary to 
     assure that attainment will be achieved by December 31, 2014.
       ``(2) Prevention of significant deterioration.--Each area 
     designated as transitional pursuant to section 107(d)(1) 
     shall be treated as an attainment or unclassifiable area for 
     purposes of the prevention of significant deterioration 
     provisions of part C of this title.
       ``(3) Consequences of failure to attain by 2015.--No later 
     than June 30, 2016, the Administrator shall determine whether 
     each area designated as transitional for the 8-hour ozone 
     standard or for the PM 2.5 standard has attained that 
     standard. If the Administrator determines that a transitional 
     area has not attained the standard, the area shall be 
     redesignated as nonattainment within one year of the 
     determination and the State shall be required to submit a 
     State implementation plan revision satisfying the provisions 
     of section 172 within three years of redesignation as 
     nonattainment.''.
       (4) In section 111(b)(1) by adding the following new 
     subparagraph (C) after subparagraph (B):
       ``(C) No standards of performance promulgated under this 
     section shall apply to units subject to regulations 
     promulgated pursuant to section 481.''.
       (5) In section 112:
       (A) By amending paragraph (1) of subsection (c) to read as 
     follows:
       ``(1) In general.--Not later than 12 months after November 
     15, 1990, the Administrator shall publish, and shall from 
     time to time, but not less often than every eight years, 
     revise, if appropriate, in response to public comment or new 
     information, a list of all categories and subcategories of 
     major sources and area sources (listed under paragraph (3)) 
     of the air pollutants listed pursuant to subsection (b). 
     Electric utility steam generating units not subject to 
     section 3005 of the Solid Waste Disposal Act shall not be 
     included in any category or subcategory listed under this 
     subsection. The Administrator shall have the authority to 
     regulate the emission of hazardous air pollutants listed 
     under section 112(b), other than mercury compounds, by 
     electric utility steam generating units, provided that any 
     determination shall be based on public health concerns and, 
     on an individual source basis shall: consider the effects of 
     emissions controls installed or anticipated to be installed 
     in order to meet other emission reduction requirements under 
     this Act by 2018; and, be based on a peer reviewed study with 
     notice and opportunity to comment, to be completed not before 
     January 2015. Any such regulations shall be promulgated 
     within, and shall not take effect before, the date eight 
     years after the commencement date of the requirements set 
     forth in section 472. To the extent practicable, the 
     categories and subcategories listed under this subsection 
     shall be consistent with the list of source categories 
     established pursuant to section 111 and part C. Nothing in 
     the preceding sentence limits the Administrator's authority 
     to establish subcategories under this section, as 
     appropriate.''.
       (B) By amending subparagraph (A) of subsection (n)(1) to 
     read as follows:
       ``(A) Study.--The Administrator shall perform a study of 
     the hazards to public health reasonably anticipated to occur 
     as a result of emissions by electric utility steam generating 
     units of pollutants listed under subsection (b) after 
     imposition of the requirements of this Act. The Administrator 
     shall report the results of this study to the Congress within 
     three years after November 15, 1990.''
       (6) Section 126 is amended as follows:
       (A) By replacing ``section 110(a)(2)(D)(ii) or this 
     section'' in subsection (b) with ``section 110(a)(2)(D)(i)''.
       (B) In the language at end of subsection (c) by striking 
     ``section 110(a)(2)(D)(ii)'' and inserting ``section 
     110(a)(2)(D)(i)'' and deleting the last sentence.
       (D) By adding at the end the following:
       ``(d) Definition of Affected Unit.--
       ``(1) In general.--For purposes of this subsection, the 
     term `affected unit' means any unit that is subject to 
     emission limitations under subpart 2 of part B, subpart 2 of 
     part C, or part D, or is a designated unit under section 407.
       ``(2) Finding for affected units.--To the extent that any 
     petition submitted under subsection (b) after the date of 
     enactment of the Clear Skies Act of 2005 seeks a finding for 
     any affected unit, then, notwithstanding any provision in 
     subsections (a) through (c) to the contrary:
       ``(A) In determining whether to make a finding under 
     subsection (b) for any affected unit, the Administrator shall 
     consider, among other relevant factors, emissions reductions 
     required to occur by the attainment date or dates of any 
     relevant nonattainment areas in the petitioning State or 
     political subdivision.
       ``(B) The Administrator may not determine that affected 
     units emit, or would emit, any air pollutant in violation of 
     the prohibition of section 110(a)(2)(D)(i) unless that 
     Administrator determines that--
       ``(i) such emissions may be reduced at least as cost-
     effectively as emissions from each other principal category 
     of sources of sulfur dioxide or nitrogen oxides, including 
     industrial boilers, on-road mobile sources, and off-road 
     mobile sources, and any other category of sources that the 
     Administrator may identify; and
       ``(ii) reductions in such emissions will improve air 
     quality in the petitioning State's nonattainment area or 
     areas at least as cost-effectively as reductions in emissions 
     from each other principal category of sources of sulfur 
     dioxide or nitrogen oxides to the maximum extent that a 
     methodology is reasonably available to make such a 
     determination.

     In making the determination under clause (ii), the 
     Administrator shall use the best available peer-reviewed 
     models and methodology that consider the proximity of the 
     source or sources to the petitioning State or political 
     subdivision and incorporate other sources characteristics.
       ``(C) The Administrator shall develop an appropriate peer 
     reviewed methodology for making determinations under 
     subparagraph (B) by December 31, 2006.
       ``(D) The Administrator shall not make any findings with 
     respect to an affected unit under this section prior to 
     December 1, 2011. For any petition submitted prior to January 
     1, 2010, the Administrator shall make a finding or deny the 
     petition by the December 31, 2011.
       ``(E) The Administrator, by rulemaking, shall extend the 
     compliance and implementation deadlines in subsection (c) to 
     the extent necessary to assure that no affected unit shall be 
     subject to any such deadline prior to January 1, 2014.''.
       (b) Title III.--Section 307(d)(1)(G) of title III of the 
     Clean Air Act is amended to read as follows:
       ``(G) the promulgation or revision of any regulation under 
     title IV,''.
       (c) Noise Pollution.--Title IV of the Clean Air Act 
     (relating to noise pollution) (42 U.S.C. 7641 et seq.) is 
     redesignated as title VII and amended by renumbering sections 
     401 through 403 as sections 701 through 703, respectively, 
     and conforming all cross-references thereto accordingly.
       (d) Section 406.--Title IV of the Clean Air Act Amendments 
     of 1990 (relating to acid deposition control) is amended by 
     repealing section 406 (industrial sulfur dioxide emissions).
       (e) Monitoring.--Section 821 (a) of title VIII of the Clean 
     Air Act Amendments of 1990 (miscellaneous provisions) is 
     amended to read as follows:
       ``(a) Monitoring.--The Administrator shall promulgate 
     regulations within eighteen months after November 15, 1990, 
     to require that all affected sources subject to subpart 1 of 
     part B of title IV of the Clean Air Act as of December 31, 
     2009, shall also monitor carbon dioxide emissions according 
     to the same timetable as in section 405(b). The regulations 
     shall require that such data be reported to the 
     Administrator. The provisions of section 405(e) of title IV 
     of the Clean Air Act shall apply for purposes of this section 
     in the same manner and to the same extent as such provision 
     applies to the monitoring and data referred to in section 
     405. The Administrator shall implement this subsection under 
     40 CFR part 75 (2002), amended as appropriate by the 
     Administrator.''.
                                 ______
                                 
      By Mr. SMITH (for himself and Mrs. Lincoln):
  S. 132. A bill to amend the Internal Revenue Code of 1986 to allow a 
deduction for premiums on mortgage insurance; to the Committee on 
Finance.
  Mr. SMITH. Mr. President, today, I am reintroducing important 
legislation to help more Americans realize the dream of homeownership. 
The Mortgage Insurance Fairness Act would make mortgage insurance 
payment premiums tax deductible. In doing so, it will help more lower-
income Americans purchase homes for their families.
  It is widely recognized that homeownership helps to create stable and

[[Page 568]]

safe communities. As such, the Federal Government has long sought to 
increase homeownership. President Bush has announced a goal of 5.5 
million new homeowners by the year 2010. Achieving that goal requires 
helping those that have typically had difficulty purchasing homes--
young people, low-income families, members of minority groups.
  Government and private mortgage insurance programs help first-time, 
low-income and veteran borrowers afford to purchase homes. The Veterans 
Affairs (VA), Federal Housing Authority (FHA), Regional Housing 
Authority (RHA) and Private Mortgage Insurance (PMI) programs allow 
buyers to make a down payment of 3 percent or less of the appraised 
value. For many lower- and middle-income families, mortgage insurance 
makes it possible for them to buy their first home.
  In Oregon, more than 137,000 families held mortgages with either FHA 
or private mortgage insurance in 2002. In 2001, 62 percent of the 
insured home purchases in Oregon were low-income borrowers, and insured 
mortgages covered 25 percent of all home purchase loans that year.
  Nationwide, mortgage insurance covers over half of home loans made to 
African American and Hispanic borrowers. Similarly, over half of the 
loans to borrowers with incomes below the median income were covered by 
mortgage insurance. The people who use mortgage insurance are regular 
working families who live in every community throughout the country. In 
all, more than twelve million American families pay mortgage insurance.
  Currently, these borrowers are not allowed to deduct the cost of 
their mortgage insurance from their Federal taxes. If these payments 
were made deductible, the cost of homeownership would go down and more 
families would be able to buy homes. It is estimated that the Mortgage 
Insurance Fairness Act would increase the number of homeowners by 
300,000 per year.
  Extending tax deductions to mortgage insurance will help to make the 
dream of owning a home attainable for more Americans. We came very 
close to enacting this legislation last year when it was included in 
the Senate version of the JOBS Act. Unfortunately, in the end we were 
not able to complete action on this bill. I look forward to again 
working with my colleagues to see this legislation is passed and signed 
into law. I thank you for the opportunity to speak today, and I urge my 
colleagues to support this important bi-partisan legislation. I ask 
unanimous consent that the text of this legislation be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 132

       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 ``Mortgage Insurance Fairness 
     Act''.

     SEC. 2. PREMIUMS FOR MORTGAGE INSURANCE.

       (a) In General.--Paragraph (3) of section 163(h) of the 
     Internal Revenue Code of 1986 (relating to qualified 
     residence interest) is amended by adding after subparagraph 
     (D) the following new subparagraph:
       ``(E) Mortgage insurance premiums treated as interest.--
       ``(i) In general.--Premiums paid or accrued for qualified 
     mortgage insurance by a taxpayer during the taxable year in 
     connection with acquisition indebtedness with respect to a 
     qualified residence of the taxpayer shall be treated for 
     purposes of this subsection as qualified residence interest.
       ``(ii) Phaseout.--The amount otherwise allowable as a 
     deduction under clause (i) shall be reduced (but not below 
     zero) by 10 percent of such amount for each $1,000 ($500 in 
     the case of a married individual filing a separate return) 
     (or fraction thereof) that the taxpayer's adjusted gross 
     income for the taxable year exceeds $100,000 ($50,000 in the 
     case of a married individual filing a separate return).''.
       (b) Definition and Special Rules.--Paragraph (4) of section 
     163(h) of the Internal Revenue Code of 1986 (relating to 
     other definitions and special rules) is amended by adding at 
     the end the following new subparagraphs:
       ``(E) Qualified mortgage insurance.--The term `qualified 
     mortgage insurance' means--
       ``(i) mortgage insurance provided by the Veterans 
     Administration, the Federal Housing Administration, or the 
     Rural Housing Administration, and
       ``(ii) private mortgage insurance (as defined by section 2 
     of the Homeowners Protection Act of 1998 (12 U.S.C. 4901), as 
     in effect on the date of the enactment of this subparagraph).
       ``(F) Special rules for prepaid qualified mortgage 
     insurance.--Any amount paid by the taxpayer for qualified 
     mortgage insurance that is properly allocable to any mortgage 
     the payment of which extends to periods that are after the 
     close of the taxable year in which such amount is paid shall 
     be chargeable to capital account and shall be treated as paid 
     in such periods to which so allocated. No deduction shall be 
     allowed for the unamortized balance of such account if such 
     mortgage is satisfied before the end of its term. The 
     preceding sentences shall not apply to amounts paid for 
     qualified mortgage insurance provided by the Veterans 
     Administration or the Rural Housing Administration.''.

     SEC. 3. INFORMATION RETURNS RELATING TO MORTGAGE INSURANCE.

       Section 6050H of the Internal Revenue Code of 1986 
     (relating to returns relating to mortgage interest received 
     in trade or business from individuals) is amended by adding 
     at the end the following new subsection:
       ``(h) Returns Relating to Mortgage Insurance Premiums.--
       ``(1) In general.--The Secretary may prescribe, by 
     regulations, that any person who, in the course of a trade or 
     business, receives from any individual premiums for mortgage 
     insurance aggregating $600 or more for any calendar year, 
     shall make a return with respect to each such individual. 
     Such return shall be in such form, shall be made at such 
     time, and shall contain such information as the Secretary may 
     prescribe.
       ``(2) Statement to be furnished to individuals with respect 
     to whom information is required.--Every person required to 
     make a return under paragraph (1) shall furnish to each 
     individual with respect to whom a return is made a written 
     statement showing such information as the Secretary may 
     prescribe. Such written statement shall be furnished on or 
     before January 31 of the year following the calendar year for 
     which the return under paragraph (1) was required to be made.
       ``(3) Special rules.--For purposes of this subsection--
       ``(A) rules similar to the rules of subsection (c) shall 
     apply, and
       ``(B) the term `mortgage insurance' means--
       ``(i) mortgage insurance provided by the Veterans 
     Administration, the Federal Housing Administration, or the 
     Rural Housing Administration, and
       ``(ii) private mortgage insurance (as defined by section 2 
     of the Homeowners Protection Act of 1998 (12 U.S.C. 4901), as 
     in effect on the date of the enactment of this 
     subsection).''.

     SEC. 4. EFFECTIVE DATE.

       The amendments made by this Act shall apply to amounts paid 
     or accrued after the date of enactment of this Act in taxable 
     years ending after such date.
                                 ______
                                 
      By Mr. TALENT (for himself and Mr. Feingold):
  S. 133. A bill to amend section 302 of the PROTECT Act to modify the 
standards for the issuance of alerts through the AMBER Alert 
communications network; to the Committee on the Judiciary.
  Mr. TALENT. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 133

       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 ``Tory Jo's AMBER Response 
     Act''.

     SEC. 2. MINIMUM STANDARDS FOR ISSUANCE AND DISSEMINATION OF 
                   ALERTS THROUGH AMBER ALERT COMMUNICATIONS 
                   NETWORK.

       Section 302(b) of the PROTECT Act (42 U.S.C. 5791a(b)) is 
     amended by adding at the end the following:
       ``(5) The minimum standards shall, to the maximum extent 
     practicable (as determined by the Coordinator in consultation 
     with State and local law enforcement agencies), allow local 
     law enforcement officials to issue, and to provide for the 
     dissemination of, an alert through the AMBER Alert 
     communications network to facilitate the recovery of an 
     abducted newborn.''.

     SEC. 3. DEFINITION.

       Title III of the PROTECT Act (42 U.S.C. 5791 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 306. DEFINITION.

       ``For purposes of this title, the term `child' means--
       ``(1) an individual under 18 years of age; or
       ``(2) a newborn.''.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself and Mrs. Boxer):

[[Page 569]]

  S. 134. A bill to adjust the boundary of Redwood National Park in the 
State of California; to the Committee on Energy and Natural Resources.
  Mrs. FEINSTEIN. Mr. President, I am pleased to introduce legislation 
cosponsored by Senator Boxer to adjust the boundary of Redwood National 
Park in the State of California to include the addition of the Mill 
Creek property. This continues the effort initiated in the last 
Congress with the leadership of Congressman Mike Thompson, to solidify 
and expand the co-operative management relationship between the United 
States Government and the State of California, working together to 
protect forever the ancient majesty of the redwood forest.
  In 2002, the California Department of Parks and Recreation acquired 
from the Save-the-Redwoods League 25,000 acres of forest land known as 
the Mill Creek property in Del Norte County, which is contiguous with 
the Redwood National and State parks boundary. This bill would include 
within the park boundary the Mill Creek acquisition and about 900 acres 
of land acquired and added to the State redwood parks since the 1978 
expansion of the Redwood National Park boundary. There would be no 
Federal costs for land acquisition or development resulting from this 
legislation.
  Approval of the expansion of the boundary of Redwood National Park to 
include the headwaters of Mill Creek will complete the vision of the 
Redwood Park embraced by Senator Kuchel in S.1370 that he introduced in 
1967, a vision dating back to the McLaughlin-Cook report issued by the 
National Park Service in 1937. Protection of the headwaters of Mill 
Creek will secure the long term viability of the ancient redwoods 
already within Redwood National and State Park. It would permanently 
safeguard the coho salmon who return to spawn in the clear, cold waters 
of this forest.
  These lands will be managed by the same cooperative management 
agreement between the National Park Service and the California 
Department of Parks and Recreation. This partnership is viewed as a 
model of interagency cooperative management efforts and will provide 
for more efficient and costeffective management of an ecologically 
significant resource.
  This bill enjoys strong support from local and Federal officials, 
including Del Norte County and the Department of the Interior. Given 
this support and lack of controversy, I believe this legislation to be 
of great importance to ensure that our Redwood National Park is further 
protected.
  I have long held a deep interest in protecting California's 
magnificent Redwoods. The coast redwood, the sequoia sempervirens, is 
native only to the West Coast where it stands in a narrow band from the 
tip of the Big Sur Coast to the Chetco River, just north of the 
California-Oregon border. The redwood stands taller than any other tree 
in the world and traces its lineage to among the oldest of living 
things. The cathedrals formed by these ancient trees inspire the best 
in us as a people. The redwood forests of California are a national and 
worldwide treasure that is ours to protect and preserve.
  In 1966, the Headwaters Agreement was negotiated in part in my 
offices to protect approximately 7,500 acres of old growth redwoods, 
which was the largest grove of redwoods held in private ownership at 
the time. It is my great pleasure today to introduce this legislation 
to extend our national commitment to collaboration in preservation of 
the redwoods and the watersheds they anchor.
  I applaud Congressman Mike Thompson's commitment to this issue and 
urge my colleagues to support this legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 134

       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 ``Redwood National Park 
     Boundary Adjustment Act of 2005''.

     SEC. 2. REDWOOD NATIONAL PARK BOUNDARY ADJUSTMENT.

       Section 2(a) of the Act of Public Law 90-545 (16 U.S.C. 
     79b(a)) is amended--
       (1) in the first sentence, by striking ``(a) The area'' and 
     all that follows through the period at the end and inserting 
     the following: ``(a)(1) The Redwood National Park consists of 
     the land generally depicted on the map entitled `Redwood 
     National Park, Revised Boundary', numbered 167/60502, and 
     dated February, 2003.'';
       (2) by inserting after paragraph (1) (as designated by 
     paragraph (1)) the following:
       ``(2) The map referred to in paragraph (1) shall be--
       ``(A) on file and available for public inspection in the 
     appropriate offices of the National Park Service; and
       ``(B) provided by the Secretary of the Interior to the 
     appropriate officers of Del Norte and Humboldt Counties, 
     California.''; and
       (3) in the second sentence--
       (A) by striking ``The Secretary'' and inserting the 
     following:
       ``(3) The Secretary;'' and
       (B) by striking ``one hundred and six thousand acres'' and 
     inserting ``133,000 acres''.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 136. A bill to authorize the Secretary of the Interior to provide 
supplemental funding and other services that are necessary to assist 
certain local school districts in the State of California in providing 
education services for students attending schools located within 
Yosemite National Park, to authorize the Secretary of the Interior to 
adjust the boundaries of the Golden Gate National Recreation Area; to 
the Committee on Energy and Natural Resources.
  Mrs. FEINSTEIN. I rise today to introduce a bill that combines needed 
help for small Yosemite schools, and an addition to the beautiful 
Golden Gate National Recreation Area. Each of these bills individually 
has passed both the House and Senate in previous Congresses.
  The first title of this legislation provides critical funds to three 
small schools nestled in the heart of Yosemite National Park and 
authorizes the Yosemite Regional Transportation System to shuttle 
visitors in and out of the park.
  Approximately 130 children of park service employees are taught in 
the three elementary small schools located in Yosemite National Park--
Wawona, El Portal, and Yosemite Valley elementary schools.
  These schools represent a dying breed of education models; they are 
small schools that teach children who live in remote communities and 
are taught by one or a group of teachers. At El Portal, three teachers 
instruct 53 students in seven grades. Wawona has 17 students in 7 
grades who are taught by one teacher/principal.
  And Yosemite Valley serves 60 students in 8 grades who are taught by 
two teachers.
  The remote location of these schools, their small sizes and 
California's unique method for funding education, have all contributed 
to the schools amassing a combined deficit of $290,000. In their 
efforts to continue to provide basic educational services to students, 
the schools have had to cut supplemental instruction that would 
normally be available to students taught outside of the park.
  Some have suggested that these schools consolidate into one to pool 
their limited resources. While this may seem to solve the problem, you 
must understand that many of these students already travel many miles 
on treacherous mountainous roads to attend their current schools. If 
the three schools were to consolidate, this problem would be 
exacerbated, requiring many students to make a 2 hour commute to their 
new schools.
  I do not believe this is a viable option and that is why I support 
this legislation.
  Last year, Senator Bingaman, Congressman Radanovich and I worked out 
a compromise on this legislation that would help the schools while 
protecting the National Park Service's budget. The compromise includes 
the following terms:
  For fiscal year 2006 through 2009, the Secretary of the Interior may 
provide up to $400,000 in funds to the Bass Lake Union Elementary 
School District and the Mariposa Unified School District

[[Page 570]]

for educational services to students who are dependents of persons 
engaged in the administration, operation, and maintenance of the Park 
or students who live at or near the Park; the Secretary can only 
provide the funds if the State of California and local agencies 
maintain 2005 per-student funding levels to the schools, and the 
Secretary also must make sure that the assistance to the schools does 
not reduce the remaining funding available to Yosemite National Park 
below fiscal year 2005 levels.
  Furthermore, this legislation allows the Park Service to allot 
federal funds for the continuing operation of a bus service that 
shuttles visitors through Yosemite National Park--the Yosemite Area 
Regional Transportation System.
  The federally funded demonstration project that allowed YARTS to 
offer services on a temporary basis expired in May 2002 and since then, 
YARTS has leveraged local funds to ensure that services were not 
discontinued.
  Both the Park Service and YARTS are supportive of continuing their 
mutually beneficial agreement. This legislation would do just that by 
taking the burden off local entities and providing the necessary 
assistance that this service needs.
  I am also pleased to introduce today a second title in this 
legislation to allow the National Park Service to extend the boundaries 
of the Golden Gate National Recreation Area, GGNRA, by acquiring 
critical natural landscapes and scenic vistas.
  This bill meets several distinct needs in California and national 
needs of all National Park System visitors by adding 4,600 acres of 
pristine natural land to the boundary of the Golden Gate Recreation 
Area. It will protect four major watersheds, preserve the home of 
numerous threatened, rare and endangered plant and animal species in 
the region, allow potential access to valuable future trail links to 
contiguous State and county parks, and establish a dramatic and logical 
southern entrance to the park.
  A key component of this legislation is its three-way, local-state-
federal partnership. Half of the total purchase price of these lands 
has already been donated by local and State sources. Additionally, this 
legislation specifically provides that all land transactions involve a 
willing seller and willing buyer.
  Furthermore, this bill has the strong support of local community 
groups, the former Golden Gate National Recreation Area Advisory 
Commission, the San Mateo County Board of Supervisors, the National 
Park Service, and the California State Farm Bureau. It also has the 
endorsement of the San Francisco Chronicle and the San Jose Mercury 
News. I know of no opposition to this bill.
  Expanding the boundary of the Golden Gate National Recreation Area to 
include Rancho Corral de Tierra through such a beneficial partnership 
is an opportunity not to be missed. A vast land within a major 
metropolitan area that offers extraordinary scenic views of the Pacific 
coastline and the greater Bay Area, a place with plants found nowhere 
else on earth find refuge, a home for rare and endangered animals, is 
available now for protection and enjoyment. We have the chance to enjoy 
this special land and to leave a lasting legacy for our children and 
our grandchildren.
  California's national parks are truly invaluable and the park that 
this bill supports offers an opportunity for visitors and residents to 
enjoy unique national habitats and offers a unique chance for the 
National Park Service and the community to work together, not only to 
protect the environment, but also the interests of the nearby 
communities and national and international visitors.
  This bill enjoys strong support from local and State officials and I 
hope that it will have as much strong bipartisan support this Congress, 
as it did last Congress. Congressman Tom Lantos plans to introduce 
companion legislation for this bill in the House and I applaud his 
leadership on this issue.
  I urge my colleagues to support this bill. I ask unanimous consent 
that the text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 136

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

     SECTION 1. TABLE OF CONTENTS.

       The table of contents of this Act is as follows:
Sec. 1. Table of contents.

          TITLE I--YOSEMITE NATIONAL PARK AUTHORIZED PAYMENTS

Sec. 102. Payments for educational services.
Sec. 103. Authorization for park facilities to be located outside the 
              boundaries of Yosemite National Park.

TITLE II--RANCHO CORRAL DE TIERRA GOLDEN GATE NATIONAL RECREATION AREA 
                          BOUNDARY ADJUSTMENT.

Sec. 201. Short title.
Sec. 202. Golden Gate National Recreation Area, California.

          TITLE I--YOSEMITE NATIONAL PARK AUTHORIZED PAYMENTS

     SEC. 101. PAYMENTS FOR EDUCATIONAL SERVICES.

       (a) In General.--(1) For fiscal years 2006 through 2009, 
     the Secretary of the Interior may provide funds to the Bass 
     Lake Joint Union Elementary School District and the Mariposa 
     Unified School District in the State of California for 
     educational services to students--
       (A) who are dependents of persons engaged in the 
     administration, operation, and maintenance of Yosemite 
     National Park; or
       (B) who live within or near the park upon real property 
     owned by the United States.
       (2) The Secretary's authority to make payments under this 
     section shall terminate if the State of California or local 
     education agencies do not continue to provide funding to the 
     schools referred to in subsection (a) at per student levels 
     that are no less than the amount provided in fiscal year 
     2005.
       (b) Limitation on Use of Funds.--Payments made under this 
     section shall only be used to pay public employees for 
     educational services provided in accordance with subsection 
     (a). Payments may not be used for construction, construction 
     contracts, or major capital improvements.
       (c) Limitation on Amount of Funds.--Payments made under 
     this section shall not exceed the lesser of--
       (1) $400,000 in any fiscal year; or
       (2) the amount necessary to provide students described in 
     subsection (a) with educational services that are normally 
     provided and generally available to students who attend 
     public schools elsewhere in the State of California.
       (d) Source of Payments.--(1) Except as otherwise provided 
     in this subsection, the Secretary may use funds available to 
     the National Park Service from appropriations, donations, or 
     fees.
       (2) Funds from the following sources shall not be used to 
     make payments under this section:
       (A) Any law authorizing the collection or expenditure of 
     entrance or use fees at units of the National Park System, 
     including the Land and Water Conservation Fund Act of 1965 
     (16 U.S.C. 460l-4 et seq.); the recreational fee 
     demonstration program established under section 315 of the 
     Department of the Interior and Related Agencies 
     Appropriations Act, 1996 (16 U.S.C. 460l-6a note); and the 
     National Park Passport Program established under section 602 
     of the National Parks Omnibus Management Act of 1998 (16 
     U.S.C. 5992).
       (B) Emergency appropriations for flood recovery at Yosemite 
     National Park.
       (3)(A) The Secretary may use an authorized funding source 
     to make payments under this section only if the funding 
     available to Yosemite National Park from such source (after 
     subtracting any payments to the school districts authorized 
     under this section) is greater than or equal to the amount 
     made available to the park for the prior fiscal year, or in 
     fiscal year 2005, whichever is greater.
       (B) It is the sense of Congress that any payments made 
     under this section should not result in a reduction of funds 
     to Yosemite National Park from any specific funding source, 
     and that with respect to appropriated funds, funding levels 
     should reflect annual increases in the park's operating base 
     funds that are generally made to units of the National Park 
     System.

     SEC. 102. AUTHORIZATION FOR PARK FACILITIES TO BE LOCATED 
                   OUTSIDE THE BOUNDARIES OF YOSEMITE NATIONAL 
                   PARK.

       (a) Funding Authority for Transportation Systems and 
     External Facilities.--Section 814(c) of the Omnibus Parks and 
     Public Lands Management Act of 1996 (16 U.S.C. 346e) is 
     amended--
       (1) in the heading by inserting ``and Yosemite National 
     Park'' after ``Zion National Park'';
       (2) in the first sentence--
       (A) by inserting ``and Yosemite National Park'' after 
     ``Zion National Park''; and
       (B) by inserting ``for transportation systems or'' after 
     ``appropriated funds''; and
       (3) in the second sentence by striking ``facilities'' and 
     inserting ``systems or facilities''.

[[Page 571]]

       (b) Clarifying Amendment for Transportation Fee 
     Authority.--Section 501 of the National Parks Omnibus 
     Management Act of 1998 (16 U.S.C. 5981) is amended in the 
     first sentence by striking ``service contract'' and inserting 
     ``service contract, cooperative agreement, or other 
     contractual arrangement''.

TITLE II--RANCHO CORRAL DE TIERRA GOLDEN GATE NATIONAL RECREATION AREA 
                          BOUNDARY ADJUSTMENT

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Rancho Corral de Tierra 
     Golden Gate National Recreation Area Boundary Adjustment 
     Act''.

     SEC. 202. GOLDEN GATE NATIONAL RECREATION AREA, CALIFORNIA.

       (a) Section 2(a) of Public Law 92-589 (16 U.S.C. 460bb-
     1(a)) is amended--
       (1) by striking ``The recreation area shall comprise'' and 
     inserting the following:
       ``(1) Initial lands.--The recreation area shall comprise''; 
     and
       (2) by striking ``The following additional lands are also'' 
     and all that follows through the period at the end of the 
     subsection and inserting the following new paragraphs:
       ``(2) Additional lands.--In addition to the lands described 
     in paragraph (1), the recreation area shall include the 
     following:
       ``(A) The parcels numbered by the Assessor of Marin County, 
     California, 119-040-04, 119-040-05, 119-040-18, 166-202-03, 
     166-010-06, 166-010-07, 166-010-24, 166-010-25, 119-240-19, 
     166-010-10, 166-010-22, 119-240-03, 119-240-51, 119-240-52, 
     119-240-54, 166-010-12, 166-010-13, and 119-235-10.
       ``(B) Lands and waters in San Mateo County generally 
     depicted on the map entitled `Sweeney Ridge Addition, Golden 
     Gate National Recreation Area', numbered NRA GG-80,000-A, and 
     dated May 1980.
       ``(C) Lands acquired under the Golden Gate National 
     Recreation Area Addition Act of 1992 (16 U.S.C. 460bb-1 note; 
     Public Law 102-299).
       ``(D) Lands generally depicted on the map entitled 
     `Additions to Golden Gate National Recreation Area', numbered 
     NPS-80-076, and dated July 2000/PWR-PLRPC.
       ``(E) Lands generally depicted on the map entitled `Rancho 
     Corral de Tierra Additions to the Golden Gate National 
     Recreation Area', numbered NPS-80,079E, and dated March 2004.
       ``(3) Acquisition limitation.--The Secretary may acquire 
     land described in paragraph (2)(E) only from a willing 
     seller.''.
                                 ______
                                 
      By Mr. KERRY:
  S. 137. A bill to modify the contract consolidation requirements in 
the Small Business Act, and for other purposes; to the Committee on 
Small Business and Entrepreneurship.
                                 ______
                                 
      By Mr. KERRY (for himself and Mr. Bingaman):
  S. 138. A bill to make improvements to the microenterprise programs 
administered by the Small Business Administration; to the Committee on 
Small Business and Entrepreneurship.
                                 ______
                                 
      By Mr. KERRY:
  S. 139. A bill to amend the Small Business Act to direct the 
Administrator of the Small Business Administration to establish a 
vocational and technical entrepreneurship development program; to the 
Committee on Small Business and Entrepreneurship.
  Mr. KERRY. Mr. President, as Ranking Member of the Small Business and 
Entrepreneurship Committee, today I am introducing a package of bills 
that will help small business owners with access to loans, business 
counseling and Federal procurement opportunities. Each of the bills was 
previously introduced on its own or as part of the Committee's 
extensive Small Business Administration reauthorization proposal that 
passed the Senate unanimously last Congress. These are provisions that 
are necessary for enabling our nation's small businesses to continue to 
have the resources and tools they need to compete with larger 
companies. They will help America's budding entrepreneurs continue to 
seek out business opportunities and continue to start businesses. 
Enactment of this assistance will show that the Federal government is 
not there to make the road to success more difficult for small 
businesses, but to help them where the private sector will not.
  Mr. President, the first bill of this package is the Small Business 
Federal Contractor Safeguard Act. It includes essential contractor 
protections that were a part of the Small Business Administration 
reauthorization package that passed the Senate unanimously last 
Congress but was stalled during negotiations in the House of 
Representatives. These much-needed protections will help level the 
playing field for small firms and create a procurement atmosphere that 
fosters competition, fair access and equal opportunity for smaller 
entities.
  With Federal agencies awarding larger, more complex and more costly 
contracts, and with less staff at the Small Business Administration and 
within Agency contracting offices performing oversight, this nation's 
small businesses and its taxpayers are the ones shouldering the burden 
when small business goals continue to be unmet. In addition to helping 
small businesses obtain access to procurement opportunities, these 
goals are meant to help the government benefit from the cost-savings 
and innovations small business contractors can often provide.
  Significant steps were made during the last Congress to address the 
challenges of contract bundling; however, it is my belief that passing 
and implementing binding statutory requirements is the only long-term 
solution to the on-going problem of contract bundling, also called 
contract consolidation. The first section of the bill creates a two-
tiered approach to preventing unnecessary contract consolidation. 
Civilian agencies will be required to meet specific standards if they 
attempt to consolidate contracts above $2 million and additional 
requirements for those contracts above $5 million. The Department of 
Defense is required to meet two types of similar requirements for 
contracts above $5 million and $7 million. The bill also eliminates the 
use of the term ``contract bundling'' and expands the definition of 
``contract consolidation,'' closing a loophole that has been widely 
used to the detriment of many small businesses.
  In addition to increasing opportunities for prime contracts by 
eliminating unnecessary contract consolidation, this bill addresses 
another serious problem: the dishonest treatment of small business 
subcontractors by large business prime contractors. Small businesses 
have been severely hamstrung by the dishonest practices of some large 
business prime contracts that delay paying their subcontractors, 
falsely report their subcontracting plans and use ``bait and switch'' 
tactics.
  This bill holds prime contractors responsible for the validity of 
subcontracting data, requiring the CEO to certify to the accuracy of 
the subcontracting report under penalty of law. It also makes the 
penalties for falsifying data included in subcontracting reports match 
the current $500,000 penalty for businesses that falsify their status 
as a small and disadvantaged business. Under this bill, if one 
intentionally falsifies data as a part of a subcontracting report to a 
federal Agency, he is defrauding the United States government and will 
be punished to the full extent of the law.
  Finally, the bill requires contracting officers to maintain a 
database of contract performance that is made available to the small 
business subcontractor upon completion of the contract. This report can 
then be used as a record of past performance, building a history that 
will help successful small firms bid on future Federal prime contracts 
or subcontracts. Each contracting officer will be empowered to withhold 
a portion of the payment to the prime contractor until he also receives 
the completed and accurate performance report. Any material breach of 
contract that is found will be immediately reported to the Inspector 
General of that Agency for a complete investigation.
  The second bill of this small business legislative package is the SBA 
Microenterprise Improvements Act. It was also included as part of the 
Small Business Administration reauthorization package and passed by the 
Senate unanimously last Congress. I am reintroducing these provisions 
because they are vital to the microenterprise programs administered by 
the SBA: the Microloan Program and the Program for Investment in 
Microentrepreneurs (PRIME).
  As I have stated on numerous occasions, I disagree with the 
Administration's proposals to cut back funding for microloans and 
training assistance intended to encourage entrepreneurship and foster 
America's smallest small

[[Page 572]]

businesses. And I wholeheartedly disagree with the Administration's 
ill- founded argument that these borrowers are being, or will be, 
served through the SBA's 7(a) loan guarantee program. SBA's loan 
programs are not one-size fits all. The small borrower in the Microloan 
program is different, and therefore has different needs, than the small 
business borrower being served through the 7(a) loan program. Both 
lending vehicles are important, but they are different, and one is not 
a substitute for the other.
  Who are these borrowers being served through the microloan program? 
Thirty percent are African American; 11 percent are Hispanic; 37 
percent are women; and, anywhere from 30 percent to 40 percent go to 
small businesses in rural areas. Because of their size, the size of the 
loan they need and their relative inexperience, small businesses 
borrowers are turned away by banks, and yet the Administration proposed 
cutting the Microloan program by 36 percent in its fiscal year 2004 
budget, and cut all funding in its fiscal year 2005 budget. The SBA 
needs to fully fund these programs and put more resources into the 
office that manages the program. Four people are not enough to manage 
1,400 loans and 180 grants. To make matters worse, the SBA's long-time 
manager of micro-enterprise programs, Jody Raskind, is leaving the 
Agency. All those who support the good work of fostering SBA's 
Microloan program are sorry to see her go, not only because of her 
dedication and hard work, but also because they are concerned that the 
Administration will never really fill the job, letting the programs 
languish. I urge the Administration to move quickly to fill that 
position, just as the private sector would, by working with the 
Microloan community to identify someone who is competent, resourceful 
and dedicated to monitoring integrity of these programs and fostering 
their success.
  In addition, we need to finally enact some changes to the Microloan 
program that have passed the Senate several times over the last four 
years but have yet to pass the full Congress because of unrelated 
political fights. I urge my colleagues to let us move forward with 
making these provisions law, once and for all. The first part of the 
SBA Microenterprise Improvements Act includes many of the provisions 
passed as part of S. 174, a bill which Senator Snowe and I introduced 
in 2001 and the Committee and the full Senate voted to pass by 
unanimous consent in 2002. As I mentioned earlier, these provisions 
were also included as part of S.1375, the SBA reauthorization bill that 
passed the Senate unanimously in 2003. The updates and changes to the 
Microloan program included in this bill will improve the program in 
several ways.
  First, it will allow intermediaries to make revolving-term loans or 
longer fixed term loans to small businesses. Currently, intermediaries 
may only make ``short-term'' loans with fixed terms, which restrict the 
ability of microlenders to structure loans that meet the needs of 
certain small enterprises. This will benefit small businesses, the 
lenders, and the SBA because it will eliminate repeated paperwork and 
unnecessary administrative burdens. It will help small businesses, such 
as carpenters, who need revolving loans to finance the jobs as they 
come in, rather than taking multiple little, fixed-term loans. Second, 
this bill also contains a change to the Microlenders eligibility. 
Rather than tying eligibility to the expertise of the entity, this bill 
makes it possible for new entities to qualify as the SBA microlending 
intermediaries if they have staffs who are experienced in this unique 
or specialized lending and technical assistance. This bill also 
adjusts, reflecting changes in the market, the average smaller size of 
microloans from $7,500 to $10,000, to make it consistent with similar 
changes enacted in December 2000. This is important because microloan 
intermediaries that have a microloan portfolio with an average loan 
size of not more than $10,000 will now be eligible to receive an 
interest rate lower than the normal rate extended by the SBA to 
intermediaries. This bill also changes, from 25 percent to 30 percent, 
the amount of technical assistance (TA) funds an intermediary can 
contract with an outside expert and the amount of grants a lender can 
use to counsel prospective borrowers. In addition, the legislation 
requires the SBA to report annually on the requirement that states that 
Agency must contract out 7 percent of its loan dollars for intermediary 
training.
  Last, the SBA Microenterprise Improvements Act, like S.1375, requires 
the SBA to develop an improved subsidy rate model to determine the cost 
of microloans. The one the Agency has used since the program's 
inception does not reflect the performance of the program. For example, 
in Fiscal Year 2003, the administration's budget doubled the subsidy 
rate (which is the government's cost of the program) from 6.78 percent 
to 13.05 percent, even though the program had not experienced any loss 
of federal funds since the first loan was made in 1992. This broken 
method of calculating the cost of these loans is a waste of taxpayer 
money because Congress has to appropriate unnecessary funds to run the 
program. Now is the time to fix it.
  The second part of the SBA Microenterprise Improvements Act also 
comes from S.1375, but was not included in the small business 
reauthorization bill that passed Congress last session. It begins by 
reauthorizing the PRIME program through 2007 and transfers its 
legislative language from the Riegle Community Development and 
Regulatory Improvement Act of 1994 to section 37 of the Small Business 
Act. Additionally, it includes a provision that Senator Bingaman and I 
worked closely to develop that will expand PRIME with a separate $2 
million authorization to provide direct, in-depth technical assistance 
and counseling to disadvantaged Native American small business owners. 
The rationale for amending the PRIME Act, rather than creating a 
separate program, is that PRIME is currently operational and simply 
needs additional targeted efforts and funding so it can better address 
the needs of the Native American entrepreneurial community. The 
Bingaman-Kerry approach uses an existing program structure to help find 
a solution to the long-term economic handicap existing in Native 
American communities nationwide. There are a number of microenterprise 
organizations in states across the country that are willing and 
prepared to take on the additional challenge of assisting disadvantaged 
Native American entrepreneurs, and there are a number of Native 
American communities that are eager to explore a different path to 
economic development. However, there are currently a limited amount of 
funds to allow that to happen. Again, I commend Senator Bingaman for 
his continued attention to these needs, for his continued support of 
small business legislation to address them, and for his foresight and 
vision for Native Americans in New Mexico and across the country. The 
Native American communities of our nation will be better off with the 
assistance that this provision makes possible.
  Again, it is time to move forward. Out of 66 pages of Small Business 
Administration reauthorizations and improvements that were slipped into 
the Omnibus Appropriations bill that passed at the end of the 108th 
Congress, these non-controversial provisions were included. They should 
have been.
  The third part of the package that I'm introducing today is a 
reintroduction of the Vocational and Technical Entrepreneurship 
Development Act. Last Congress, I introduced this important piece of 
legislation as a companion to H.R. 1387, which bears the same name and 
was introduced in the House, in the 107th and 108th Congresses, by 
Congressman Robert Brady of Pennsylvania.
  Let me begin by reminding my colleagues that the Small Business 
Administration's Office of Advocacy states that only half of all small 
businesses survive past four years and that management and education 
remain two of the most important ingredients to small business success. 
We often think that small businesses only need money to succeed, but 
while adequate financing is vital, so too is careful planning and 
competent management. Often Americans who work in the trade sector--
construction, plumbing, electrical

[[Page 573]]

work, etc.--enter these professions with the goal of one day starting 
their own business; however many of these aspiring entrepreneurs who 
participate in career training or vocational training in certain 
trades, unfortunately, fail to obtain the necessary education and 
``back room'' management skills to grow and develop their fledgling 
business. This initiative would develop a program that allows workers 
within the trades industry to move toward starting a new business by 
giving them the entrepreneurial skills to successfully manage a small 
business. Many small businesses fail not because they don't know the 
industry or make low-quality products or have poor service, but because 
they don't know the ins and outs of running a successful business.
  The purpose of the Vocational and Technical Entrepreneurship 
Development Act is to assist in the development of curricula that will 
encourage the successful growth of small businesses. This legislation 
passed the House in each of the last Congresses, but was not taken up 
by the full Senate. I hope that the committee and full Senate will act 
quickly on it now.
  The bill, in a business-education partnership, establishes a 
``vocational entrepreneurship development demonstration program,'' 
under which the SBA would provide grants, through the Small Business 
Development Center network, to provide technical assistance to high 
school and technical career institutes, vo-tech schools, to promote 
small business ownership in their curriculum.
  The SBDC program is designed to deliver such up-to-date counseling, 
training and technical assistance in all aspects of small business 
management and is the ideal vehicle to provide such a program. Each 
grant awarded under this program will be worth at least $200,000--
which, in today's environment where vo-tech programs get shortchanged 
in government education budgets, can do a great deal to help rebuild a 
worker-strapped trades industry.
  There has been some concern that this legislation will duplicate 
programs such as those at the Department of Education's Office of 
Vocational and Adult Education, OVAE, which does provide valuable 
vocational education. The OVAE, and other such government programs, 
however, focus on helping workers gain new and updated skills so that 
they may find employment. In contrast, this legislation is targeted 
toward turning workers, not into better employees, but into potential 
employers. Traditional vocational education programs do not provide 
entrepreneurial training. This is a fundamental difference between this 
legislation's objective and that of the traditional vocation education 
provided by the Department of Education. Giving our trades industry 
professionals the skills to be successful business owners creates 
better employers and better, long-lasting businesses. This, in turn, 
will go a long way toward creating additional trade jobs across the 
country.
  I again want to commend Representative Brady for his years of hard 
work on behalf of entrepreneurs not just from his home State but on 
behalf of every trades industry worker who has ever thought of becoming 
his or her own boss by starting a business.
  Mr. President, I urge all of my colleagues to cosponsor and support 
these three bills.
  I ask unanimous consent that the text of the bills be printed in the 
Record.

                                 S. 137

       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 ``Small Business Federal 
     Contractor Safeguard Act of 2005''.

     SEC. 2. CONTRACT CONSOLIDATION.

       (a) Definitions.--Section 3(o) of the Small Business Act 
     (15 U.S.C. 632(o)) is amended to read as follows:
       ``(o) Definitions Relating to Consolidation of Contract 
     Requirements.--For purposes of this Act--
       ``(1) the terms `consolidation of contract requirements' 
     and `consolidation', with respect to contract requirements of 
     a military department, Defense Agency, Department of Defense 
     Field Activity, or any other Federal department or agency 
     having contracting authority mean a use of a solicitation to 
     obtain offers for a single contract or a multiple award 
     contract to satisfy 2 or more requirements of that 
     department, agency, or activity for goods or services that--
       ``(A) have previously been provided to or performed for 
     that department, agency, or activity under 2 or more separate 
     contracts that are smaller in cost than the total cost of the 
     contract for which the offers are solicited; or
       ``(B) are of a type capable of being provided or performed 
     by a small business concern for that department, agency, or 
     activity under 2 or more separate contracts that are smaller 
     in cost than the total cost of the contract for which the 
     offers are solicited;
       ``(2) the term `multiple award contract' means--
       ``(A) a contract that is entered into by the Administrator 
     of General Services under the multiple award schedule program 
     referred to in section 2302(2)(C) of title 10, United States 
     Code;
       ``(B) a multiple award task order contract or delivery 
     order contract that is entered into under the authority of 
     sections 2304a through 2304d of title 10, United States Code, 
     or sections 303H through 303K of the Federal Property and 
     Administrative Services Act of 1949 (41 U.S.C. 253h through 
     253k); and
       ``(C) any other indeterminate delivery, indeterminate 
     quantity contract that is entered into by the head of a 
     Federal agency with 2 or more sources pursuant to the same 
     solicitation; and
       ``(3) the term `senior procurement executive' means--
       ``(A) with respect to a military department, the official 
     designated under section 16(3) of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 414(3)) as the senior 
     procurement executive for the military department;
       ``(B) with respect to a Defense Agency or a Department of 
     Defense Field Activity, the official so designated for the 
     Department of Defense; and
       ``(C) with respect to a Federal department or agency other 
     than those referred to in subparagraphs (A) and (B), the 
     official so designated by that department or agency.''.
       (b) Procurement Strategies.--Section 15(e) of the Small 
     Business Act (15 U.S.C. 644(e)) is amended--
       (1) in paragraph (2)--
       (A) by striking ``.--
       ``(A) In general ''; and
       (B) by striking subparagraphs (B) and (C); and
       (2) by amending paragraph (3) to read as follows:
       ``(3) Limitation on use of acquisition strategies involving 
     consolidation.--
       ``(A) Certain defense contract requirements.--An official 
     of a military department, defense agency, or Department of 
     Defense Field Activity shall not execute an acquisition 
     strategy that includes a consolidation of contract 
     requirements of the military department, agency, or activity 
     with a total value in excess of $5,000,000, unless the senior 
     procurement executive first--
       ``(i) conducts market research;
       ``(ii) identifies any alternative contracting approaches 
     that would involve a lesser degree of consolidation of 
     contract requirements; and
       ``(iii) determines that the consolidation is necessary and 
     justified.
       ``(B) Certain civilian agency contract requirements.--The 
     head of a Federal agency not described in subparagraph (A) 
     that has contracting authority shall not execute an 
     acquisition strategy that includes a consolidation of 
     contract requirements of the agency with a total value in 
     excess of $2,000,000, unless the senior procurement executive 
     of the agency first--
       ``(i) conducts market research;
       ``(ii) identifies any alternative contracting approaches 
     that would involve a lesser degree of consolidation of 
     contract requirements; and
       ``(iii) determines that the consolidation is necessary and 
     justified.
       ``(C) Additional requirements for higher value consolidated 
     contracts.--In addition to meeting the requirements under 
     subparagraph (A) or (B), a procurement strategy by a civilian 
     agency that includes a consolidated contract valued at more 
     than $5,000,000, or by a defense agency that includes a 
     consolidated contract valued at more than $7,000,000 shall 
     include--
       ``(i) an assessment of the specific impediments to 
     participation by small business concerns as prime contractors 
     that will result from the consolidation;
       ``(ii) the identification of the alternative strategies 
     that would reduce or minimize the scope of the consolidation 
     and the rationale for not choosing those alternatives;
       ``(iii) actions designed to maximize small business 
     participation as prime contractors, including provisions that 
     encourage small business teaming for the consolidated 
     requirement; and
       ``(iv) actions designed to maximize small business 
     participation as subcontractors (including suppliers) at any 
     tier under the contract or contracts that may be awarded to 
     meet the requirements.
       ``(D) Necessary and justified.--A senior procurement 
     executive may determine that

[[Page 574]]

     an acquisition strategy involving a consolidation of contract 
     requirements is necessary and justified for purposes of 
     subparagraph (A), (B), or (C), if the benefits of the 
     acquisition strategy substantially exceed the benefits of 
     each of the possible alternative contracting approaches 
     identified under clause (ii) of any of those subparagraphs, 
     as applicable. Savings in administrative or personnel costs 
     alone shall not constitute, for such purpose, a sufficient 
     justification for a consolidation of contract requirements in 
     a procurement, unless the total amount of the cost savings is 
     expected to be substantial in relation to the total cost of 
     the procurement.
       ``(E) Benefits.--Benefits considered for purposes of this 
     paragraph may include cost and, regardless of whether 
     quantifiable in dollar amounts--
       ``(i) quality;
       ``(ii) acquisition cycle;
       ``(iii) terms and conditions; and
       ``(iv) any other benefit directly related to national 
     security or homeland defense.''.
       (c) Additional to Technical Advisers.--Section 15(k) of the 
     Small Business Act (15 U.S.C. 644(k)) is amended--
       (1) in paragraph (5), by striking ``bundled contract'' and 
     inserting ``consolidated contract''; and
       (2) in paragraph (8), by striking ``representative--'' and 
     inserting ``representative at each major procurement center 
     under subsection (l)(1)--''.
       (d) Procurement Center Representatives.--Section 15(l) of 
     the Small Business Act (15 U.S.C. 644(l)) is amended--
       (1) by redesignating paragraphs (2) through (7) as 
     paragraphs (3) through (8), respectively;
       (2) by striking ``(l)(1)'' and inserting ``(2)'';
       (3) by inserting before paragraph (2), as redesignated, the 
     following:
       ``(l)(1) The Administration shall assign not fewer than 1 
     procurement center representative at each major procurement 
     center, in addition to not fewer than 1 for each State.'';
       (4) in paragraph (2), as redesignated, by striking ``to the 
     representative referred to in subsection (k)(6)'' and 
     inserting ``to the traditional procurement center 
     representative and the commercial market representative, with 
     each such position filled by a different individual, and each 
     such representative having separate and distinct duties and 
     responsibilities.''; and
       (5) by striking ``paragraph (2)'' each place that term 
     appears and inserting ``paragraph (3)''.
       (e) Report Requirements.--Section 15(p)(4)(B) of the Small 
     Business Act (15 U.S.C. 644(p)(4)(B)) is amended--
       (1) in clause (i), by striking ``and'' at the end;
       (2) in clause (ii), by striking the period at the end and 
     inserting the following: ``; and''; and
       (3) by adding at the end the following:
       ``(iii) a description of best practices for maximizing 
     small business prime and subcontracting opportunities.''.
       (f) Conforming Amendments.--Section 15(p) of the Small 
     Business Act (15 U.S.C. 644(p)) is amended--
       (1) in the subsection heading, by striking ``Bundled 
     Contracts'' and inserting ``Consolidated Contracts'';
       (2) in the heading to paragraph (1), by striking ``Bundled 
     contract'' and inserting ``Consolidated contract'';
       (3) in the heading to paragraph (4), by striking ``contract 
     bundling'' and inserting ``contract consolidation'';
       (4) by striking ``bundled contracts'' each place that term 
     appears and inserting ``consolidated contracts'';
       (5) by striking ``bundled contract'' each place that term 
     appears and inserting ``consolidated contract'';
       (6) by striking ``bundling of contract requirements'' each 
     place that term appears and inserting ``consolidation of 
     contract requirements'';
       (7) in paragraph (4)(B)(ii), by striking ``previously 
     bundled'' and inserting ``previously consolidated'';
       (8) in paragraph (4)(B)(ii)(I), by striking ``were 
     bundled'' and inserting ``were consolidated'';
       (9) in paragraph (4)(B)(ii)(II)(bb), by striking ``bundling 
     the contract requirements'' and inserting ``the consolidation 
     of contract requirements''; and
       (10) in paragraph (4)(B)(ii)(II)(cc), by striking ``bundled 
     status'' and inserting ``consolidated status''.

     SEC. 3. AGENCY ACCOUNTABILITY.

       (a) In General.--Each procurement employee--
       (1) shall communicate to their subordinates the importance 
     of achieving small business goals; and
       (2) shall have as an annual performance evaluation factor, 
     if appropriate, the success of that procurement employee in 
     small business utilization, in accordance with the goals 
     established under this section.
       (b) Definition.--As used in this section, the term 
     ``procurement employee'' means a senior procurement 
     executive, senior program manager, or small and disadvantaged 
     business utilization manager of a Federal agency having 
     contracting authority.

     SEC. 4. SMALL BUSINESS PARTICIPATION IN PRIME CONTRACTING.

       (a) Reserved Contracts.--Section 15(j) of the Small 
     Business Act (15 U.S.C. 644(j)) is amended by adding at the 
     end the following:
       ``(4) Any adjustment to the simplified acquisition 
     threshold (as defined in section 4(11) of the Office of 
     Federal Procurement Policy Act (41 U.S.C. 403(11))), shall be 
     immediately matched by an identical adjustment to the small 
     business reserve for purposes of this subsection.''.
       (b) Participation in Multiple Award Contracts.--Section 
     15(j) of the Small Business Act (15 U.S.C. 644(j)) is 
     amended--
       (1) in paragraph (2), by striking ``(2) In carrying out 
     paragraph (1)'' and inserting ``(3) In carrying out 
     paragraphs (1) and (2)'';
       (2) in paragraph (3), by striking ``(3) Nothing in 
     paragraph (1)'' and inserting ``(4) Nothing in this 
     subsection''; and
       (3) by inserting after paragraph (1) the following:
       ``(2)(A) In the case of orders under multiple award 
     contracts, including Federal Supply Schedule contracts and 
     multi-agency contracts, that are subject to the small 
     business reserve, contracting officers shall consider not 
     fewer than 2 small business concerns if such small business 
     concerns can offer the items sought by the contracting 
     officer on competitive terms, with respect to price, quality, 
     and delivery schedule, with the goods or services available 
     in the market.
       ``(B) If only 1 small business concern can satisfy the 
     requirement, the contracting officer shall include such small 
     business concern in their evaluation.''.
       (c) Report Requirement.--
       (1) In general.--Not less than once every 180 days, the 
     Comptroller General of the United States shall submit a 
     report on the level of participation in multiple award 
     contracts, including the Federal Supply Schedule to--
       (A) the Small Business Administration;
       (B) the Committee on Small Business and Entrepreneurship of 
     the Senate; and
       (C) the Committee on Small Business of the House of 
     Representatives.
       (2) Contents.--Each report submitted under paragraph (1) 
     shall contain, for the 6-month reporting period--
       (A) the total number of multiple award contracts;
       (B) the total number of small business concerns that 
     received multiple award contracts;
       (C) the total number of orders;
       (D) the total value of orders;
       (E) the number of orders received by small business 
     concerns;
       (F) the value of orders received by small business 
     concerns;
       (G) the number of small business concerns that received 
     orders; and
       (H) such other information that the Comptroller General 
     considers relevant.

     SEC. 5. SMALL BUSINESS PARTICIPATION IN SUBCONTRACTING.

       (a) Certifications Required.--Section 8(d)(6) of the Small 
     Business Act (15 U.S.C. 637(d)(6)) is amended--
       (1) in subparagraph (E), by striking ``and'' at the end;
       (2) in subparagraph (F), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(G) certification that the offeror or bidder will acquire 
     articles, equipment, supplies, services, or materials, or 
     obtain the performance of construction work from small 
     business concerns in the amount and quality used in preparing 
     the bid or proposal, unless such small business concerns are 
     no longer in business or can no longer meet the quality, 
     quantity, or delivery date.''.
       (b) Penalties for False Certifications.--Section 16(f) of 
     the Small Business Act (15 U.S.C. 645(f)) is amended by 
     striking ``of this Act'' and inserting ``or the reporting 
     requirements of section 8(d)(11)''.

     SEC. 6. EVALUATING SUBCONTRACT PARTICIPATION IN AWARDING 
                   CONTRACTS.

       (a) Significant Factors.--Section 8(d)(4)(G) of the Small 
     Business Act (15 U.S.C. 637(d)(4)(G)) is amended by striking 
     ``a bundled'' and inserting ``any''.
       (b) Evaluation Reports.--Section 8(d)(10) of the Small 
     Business Act (15 U.S.C. 637(d)(10)) is amended--
       (1) by striking ``is authorized to'' and inserting 
     ``shall'';
       (2) in subparagraph (B), by striking ``and'' at the end;
       (3) in subparagraph (C), by striking the period at the end 
     and inserting ``; and''; and
       (4) by adding at the end the following:
       ``(D) report the results of each evaluation under 
     subparagraph (C) to the appropriate contracting officers.''.
       (c) Centralized Database; Payments Pending Reports.--
     Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) is 
     amended--
       (1) by redesignating paragraph (11) as paragraph (14); and
       (2) by inserting after paragraph (10) the following:
       ``(11) Certification.--A report submitted by the prime 
     contractor pursuant to paragraph (6)(E) to determine the 
     attainment of a subcontract utilization goal under any 
     subcontracting plan entered into with a Federal agency under 
     this subsection shall contain the name and signature of the 
     president or chief executive officer of the contractor, 
     certifying that the subcontracting data provided in the 
     report are accurate and complete.

[[Page 575]]

       ``(12) Centralized database.--The results of an evaluation 
     under paragraph (10)(C) shall be included in a national 
     centralized governmentwide database.
       ``(13) Payments pending reports.--Each Federal agency 
     having contracting authority shall ensure that the terms of 
     each contract for goods and services includes a provision 
     allowing the contracting officer of an agency to withhold an 
     appropriate amount of payment with respect to a contract 
     (depending on the size of the contract) until the date of 
     receipt of complete, accurate, and timely subcontracting 
     reports in accordance with paragraph (11).''.
       (d) Referral of Material Breach to Inspectors General.--
     Section 8(d)(8) of the Small Business Act (15 U.S.C. 
     637(d)(8)) is amended by adding at the end the following: ``A 
     material breach described in this paragraph shall be referred 
     for investigation to the Inspector General (or the 
     equivalent) of the affected agency.''.

     SEC. 7. BUSINESSLINC REPORT TO CONGRESS.

       Section 8(n) of the Small Business Act (15 U.S.C. 637(n)) 
     is amended--
       (1) by redesignating paragraph (3) as paragraph (4); and
       (2) by adding after paragraph (2) the following:
       ``(3) Annual report.--
       ``(A) In general.--The Associate Administrator of Business 
     Development of the Administration shall collect data on the 
     BusinessLINC program and submit an annual report by April 30 
     of each year on the effectiveness of the program to the 
     Committee on Small Business and Entrepreneurship of the 
     Senate and the Committee on Small Business of the House of 
     Representatives.
       ``(B) Contents.--The report submitted under subparagraph 
     (A) shall include--
       ``(i) the number of programs administered in each State;
       ``(ii) the corresponding grant awards and the date of each 
     award;
       ``(iii) the dollar amount of the contracts in effect in 
     each State as a result of the BusinessLINC program; and
       ``(iv) the number of teaming arrangements or partnerships 
     created as a result of the BusinessLINC program.''.
                                 ______
                                 

                                 S. 138

       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 ``SBA Microenterprise 
     Improvements Act''.

     SEC. 2. MICROLOAN PROGRAM IMPROVEMENTS.

       (a) Intermediary Eligibility Requirements.--Section 7(m)(2) 
     of the Small Business Act (15 U.S.C. 636(m)(2)) is amended--
       (1) in subparagraph (A), by striking ``in paragraph (10); 
     and'' and inserting ``of the term `intermediary' under 
     paragraph (11);''; and
       (2) in subparagraph (B)--
       (A) by striking ``(B) has at least'' and inserting the 
     following:
       ``(B) has--
       ``(i) at least''; and
       (B) by striking the period at the end and inserting the 
     following: ``; or
       ``(ii) a full-time employee who has not less than 3 years 
     experience making microloans to startup, newly established, 
     or growing small business concerns; and
       ``(C) has at least 1 year experience providing, as an 
     integral part of its microloan program, intensive marketing, 
     management, and technical assistance to its borrowers.''.
       (b) Conforming Change in Average Smaller Loan Size.--
     Section 7(m)(3)(F)(iii) of the Small Business Act (15 U.S.C. 
     636(m)(3)(F)(iii)) is amended by striking ``$7,500'' and 
     inserting ``$10,000''.
       (c) Limitation on Third Party Technical Assistance.--
     Section 7(m)(4)(E)(ii) of the Small Business Act (15 U.S.C. 
     636(m)(4)(E)(ii)) is amended--
       (1) by striking ``Technical assistance'' and inserting 
     ``Third party technical assistance''; and
       (2) by striking ``25 percent'' and inserting ``30 
     percent''.
       (d) Loan Terms.--Section 7(m)(1)(B)(i) of the Small 
     Business Act (15 U.S.C. 636(m)(1)(B)(i)) is amended by 
     striking ``short-term''.
       (e) Report on Transferred Amounts.--Section 7(m)(9)(B) of 
     the Small Business Act (15 U.S.C. 636(m)(9)(B)) is amended--
       (1) by striking ``The Administration'' and inserting the 
     following:
       ``(i) In general.--The Administration'';
       (2) by striking the period after ``financing''; and
       (3) by adding at the end the following:
       ``(ii) Report.--The Administration shall report, in its 
     annual budget request and performance plan to Congress, on 
     the performance by the Administration of the requirements of 
     clause (i).''.
       (f) Accurate Subsidy Model.--Section 7(m) of the Small 
     Business Act (15 U.S.C. 636(m)) is amended by adding at the 
     end the following:
       ``(14) Improved subsidy model.--The Administrator shall 
     develop a subsidy model for the microloan program under this 
     subsection, to be used in the fiscal year 2006 budget, that 
     is more accurate than the subsidy model in effect on the day 
     before the date of enactment of this paragraph.''.
       (g) Increased Flexibility for Providing Technical 
     Assistance to Potential Borrowers.--Section 7(m)(4)(E)(i) of 
     the Small Business Act (15 U.S.C. 636(m)(4)(E)(i)) is amended 
     by striking ``25 percent'' and inserting ``30 percent''.

     SEC. 3. PRIME REAUTHORIZATION AND TRANSFER TO THE SMALL 
                   BUSINESS ACT.

       (a) Program Reauthorization.--Subtitle C of title I of the 
     Riegle Community Development and Regulatory Improvement Act 
     of 1994 (15 U.S.C. 6901 note) is amended to read as follows:

     ``SEC. 37. PROGRAM FOR INVESTMENT IN MICROENTREPRENEURS.

       ``(a) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Administration.--The term `Administration' means the 
     Small Business Administration.
       ``(2) Administrator.--The term `Administrator' means the 
     Administrator of the Small Business Administration.
       ``(3) Capacity building services.--The term `capacity 
     building services' means services provided to an organization 
     that is, or that is in the process of becoming, a 
     microenterprise development organization or program, for the 
     purpose of enhancing its ability to provide training and 
     services to disadvantaged entrepreneurs.
       ``(4) Collaborative.--The term `collaborative' means 2 or 
     more nonprofit entities that agree to act jointly as a 
     qualified organization under this section.
       ``(5) Disadvantaged entrepreneur.--The term `disadvantaged 
     entrepreneur' means a microentrepreneur that--
       ``(A) is a low-income person;
       ``(B) is a very low-income person; or
       ``(C) lacks adequate access to capital or other resources 
     essential for business success, or is economically 
     disadvantaged, as determined by the Administrator.
       ``(6) Disadvantaged native american entrepreneur.--The term 
     `disadvantaged Native American entrepreneur' means a 
     disadvantaged entrepreneur who is also a member of an Indian 
     Tribe.
       ``(7) Indian tribe.--The term `Indian tribe' has the same 
     meaning as in section 4(a) of the Indian Self-Determination 
     and Education Assistance Act.
       ``(8) Intermediary.--The term `intermediary' means a 
     private, nonprofit entity that seeks to serve microenterprise 
     development organizations and programs, as authorized under 
     subsection (d).
       ``(9) Low-income person.--The term `low-income person' 
     means having an income, adjusted for family size, of not more 
     than--
       ``(A) for metropolitan areas, 80 percent of the area median 
     income; and
       ``(B) for nonmetropolitan areas, the greater of--
       ``(i) 80 percent of the area median income; or
       ``(ii) 80 percent of the statewide nonmetropolitan area 
     median income.
       ``(10) Microentrepreneur.--The term `microentrepreneur' 
     means the owner or developer of a microenterprise.
       ``(11) Microenterprise.--The term `microenterprise' means a 
     sole proprietorship, partnership, or corporation that--
       ``(A) has fewer than 5 employees; and
       ``(B) generally lacks access to conventional loans, equity, 
     or other banking services.
       ``(12) Microenterprise development organization or 
     program.--The term `microenterprise development organization 
     or program' means a nonprofit entity, or a program 
     administered by such an entity, including community 
     development corporations or other nonprofit development 
     organizations and social service organizations, that provides 
     services to disadvantaged entrepreneurs.
       ``(13) Training and technical assistance.--The term 
     `training and technical assistance' means services and 
     support provided to disadvantaged entrepreneurs, such as 
     assistance for the purpose of enhancing business planning, 
     marketing, management, financial management skills, and 
     assistance for the purpose of accessing financial services.
       ``(14) Very low-income person.--The term `very low-income 
     person' means having an income, adjusted for family size, of 
     not more than 150 percent of the poverty line (as defined in 
     section 673(2) of the Community Services Block Grant Act (42 
     U.S.C. 9902(2)), including any revision required by that 
     section).
       ``(b) Establishment of Program.--The Administrator shall 
     establish a microenterprise technical assistance and capacity 
     building grant program to provide assistance from the 
     Administration in the form of grants to qualified 
     organizations in accordance with this section.
       ``(c) Uses of Assistance.--A qualified organization shall 
     use grants made under this section--
       ``(1) to provide training and technical assistance to 
     disadvantaged entrepreneurs;
       ``(2) to provide training and capacity building services to 
     microenterprise development organizations and programs and 
     groups of such organizations to assist such organizations and 
     programs in developing microenterprise training and services;
       ``(3) to aid in researching and developing the best 
     practices in the field of microenterprise and technical 
     assistance programs for disadvantaged entrepreneurs;

[[Page 576]]

       ``(4) to provide training and technical assistance to 
     disadvantaged Native American entrepreneurs and prospective 
     entrepreneurs; and
       ``(5) for such other activities as the Administrator 
     determines are consistent with the purposes of this section.
       ``(d) Qualified Organizations.--For purposes of eligibility 
     for assistance under this section, a qualified organization 
     shall be--
       ``(1) a nonprofit microenterprise development organization 
     or program (or a group or collaborative thereof) that has a 
     demonstrated record of delivering microenterprise services to 
     disadvantaged entrepreneurs;
       ``(2) an intermediary;
       ``(3) a microenterprise development organization or program 
     that is accountable to a local community, working in 
     conjunction with a State or local government or Indian tribe; 
     or
       ``(4) an Indian tribe acting on its own, if the Indian 
     tribe can certify that no private organization or program 
     referred to in this subsection exists within its 
     jurisdiction.
       ``(e) Allocation of Assistance; Subgrants.--
       ``(1) Allocation of assistance.--
       ``(A) In general.--The Administrator shall allocate 
     assistance from the Administration under this section to 
     ensure that--
       ``(i) activities described in subsection (c)(1) are funded 
     using not less than 75 percent of amounts made available for 
     such assistance; and
       ``(ii) activities described in subsection (c)(2) are funded 
     using not less than 15 percent of amounts made available for 
     such assistance.
       ``(B) Limit on individual assistance.--No single person may 
     receive more than 10 percent of the total funds appropriated 
     under this section in a single fiscal year.
       ``(2) Targeted assistance.--The Administrator shall ensure 
     that not less than 50 percent of the grants made under this 
     section are used to benefit very low-income persons, 
     including those residing on Indian reservations.
       ``(3) Subgrants authorized.--
       ``(A) In general.--A qualified organization receiving 
     assistance under this section may provide grants using that 
     assistance to qualified small and emerging microenterprise 
     organizations and programs, subject to such rules and 
     regulations as the Administrator determines to be 
     appropriate.
       ``(B) Limit on administrative expenses.--Not more than 7.5 
     percent of assistance received by a qualified organization 
     under this section may be used for administrative expenses in 
     connection with the making of subgrants under subparagraph 
     (A).
       ``(4) Diversity.--In making grants under this section, the 
     Administrator shall ensure that grant recipients include both 
     large and small microenterprise organizations, serving urban, 
     rural, and Indian tribal communities serving diverse 
     populations.
       ``(5) Prohibition on preferential consideration of certain 
     sba program participants.--In making grants under this 
     section, the Administrator shall ensure that any application 
     made by a qualified organization that is a participant in the 
     program established under section 7(m) of the Small Business 
     Act does not receive preferential consideration over 
     applications from other qualified organizations that are not 
     participants in such program.
       ``(f) Matching Requirements.--
       ``(1) In general.--Financial assistance under this section 
     shall be matched with funds from sources other than the 
     Federal Government on the basis of not less than 50 percent 
     of each dollar provided by the Administration.
       ``(2) Sources of matching funds.--Fees, grants, gifts, 
     funds from loan sources, and in-kind resources of a grant 
     recipient from public or private sources may be used to 
     comply with the matching requirement in paragraph (1).
       ``(3) Exception.--
       ``(A) In general.--In the case of an applicant for 
     assistance under this section with severe constraints on 
     available sources of matching funds, the Administrator may 
     reduce or eliminate the matching requirements of paragraph 
     (1).
       ``(B) Limitation.--Not more than 10 percent of the total 
     funds made available from the Administration in any fiscal 
     year to carry out this section may be excepted from the 
     matching requirements of paragraph (1), as authorized by 
     subparagraph (A) of this paragraph.
       ``(g) Applications for Assistance.--An application for 
     assistance under this section shall be submitted in such form 
     and in accordance with such procedures as the Administrator 
     shall establish.
       ``(h) Recordkeeping and Reporting.--
       ``(1) In general.--Each organization that receives 
     assistance from the Administration in accordance with this 
     section shall--
       ``(A) submit to the Administration not less than once in 
     every 18-month period, financial statements audited by an 
     independent certified public accountant;
       ``(B) submit an annual report to the Administration on its 
     activities; and
       ``(C) keep such records as may be necessary to disclose the 
     manner in which any assistance under this section is used.
       ``(2) Access.--The Administration shall have access upon 
     request, for the purposes of determining compliance with this 
     section, to any records of any organization that receives 
     assistance from the Administration in accordance with this 
     section.
       ``(3) Data collection.--Each organization that receives 
     assistance from the Administration in accordance with this 
     section shall collect information relating to, as 
     applicable--
       ``(A) the number of individuals counseled or trained;
       ``(B) the number of hours of counseling provided;
       ``(C) the number of startup small business concerns formed;
       ``(D) the number of small business concerns expanded;
       ``(E) the number of low-income individuals counseled or 
     trained; and
       ``(F) the number of very low-income individuals counseled 
     or trained.
       ``(i) Authorization of Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     to the Administrator $15,000,000 for each of the fiscal years 
     2005 through 2007 to carry out the provisions of this 
     section, which shall remain available until expended.
       ``(2) Training for native american entrepreneurs.--In 
     addition to the amount authorized under subsection (i)(1), 
     there are authorized to be appropriated to the Administrator 
     $2,000,000 for each of the fiscal years 2005 through 2007 to 
     carry out the provisions of subsection (c)(4), which shall 
     remain available until expended.''.
       (b) Transfer Provisions.--
       (1) Small business act amendments.--The Small Business Act 
     (15 U.S.C. 631 et seq.) is amended by redesignating section 
     37 as section 38.
       (2) Transfer.--Section 37 of the Riegle Community 
     Development and Regulatory Improvement Act of 1994 (15 U.S.C. 
     6901 note), as so designated by subsection (a) of this 
     section, is transferred to, and inserted after, section 36 of 
     the Small Business Act.
       (c) References.--All references in Federal law to the 
     ``Program for Investment in Microentrepreneurs Act of 1999'' 
     or the ``PRIME Act'' shall be deemed to be references to 
     section 37 of the Small Business Act, as added by this 
     section.
       (d) Rule of Construction.--Nothing in this section or the 
     amendments made by this section shall affect any grant or 
     assistance provided under the Program for Investment in 
     Microentrepreneurs Act of 1999, before the date of enactment 
     of this Act, and any such grant or assistance shall be 
     subject to the Program for Investment in Microentrepreneurs 
     Act of 1999, as in effect on the day before the date of 
     enactment of this Act.
                                 ______
                                 

                                 S. 139

       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 ``Vocational and Technical 
     Entrepreneurship Development Act of 2005''.

     SEC. 2. VOCATIONAL AND TECHNICAL ENTREPRENEURSHIP DEVELOPMENT 
                   PROGRAM.

       The Small Business Act (15 U.S.C. 631 et seq.) is amended--
       (1) by redesignating section 37 as section 38; and
       (2) by inserting after section 36 the following:

     ``SEC. 37. VOCATIONAL AND TECHNICAL ENTREPRENEURSHIP 
                   DEVELOPMENT PROGRAM.

       ``(a) Definitions.--In this section, the following 
     definitions shall apply:
       ``(1) Administrator.--The term `Administrator' means the 
     Administrator of the Small Business Administration.
       ``(2) Association.--The term `Association' means the 
     association of small business development centers recognized 
     under section 21(a)(3)(A).
       ``(3) Program.--The term `program' means the program 
     established under subsection (b).
       ``(4) Small business development center.--The term `small 
     business development center' means a small business 
     development center described in section 21.
       ``(5) State small business development center.--The term 
     `State small business development center' means a small 
     business development center from each State selected by the 
     Administrator, in consultation with the Association and 
     giving substantial weight to the Association's 
     recommendations, to carry out the program on a statewide 
     basis in such State.
       ``(b) Establishment.--In accordance with this section, the 
     Administrator shall establish a program under which the 
     Administrator shall make grants to State small business 
     development centers to enable such centers to provide, on a 
     statewide basis, technical assistance to secondary schools, 
     or to postsecondary vocational or technical schools, for the 
     development and implementation of curricula designed to 
     promote vocational and technical entrepreneurship.
       ``(c) Minimum Grant.--Each grant awarded under the program 
     shall be in an amount equal to not less than $200,000.
       ``(d) Application.--Each State small business development 
     center seeking a grant

[[Page 577]]

     under the program shall submit to the Administrator an 
     application in such form as the Administrator may require. 
     The application shall include information regarding the goals 
     and objectives of the applicant for the educational programs 
     to be assisted.
       ``(e) Report to Administrator.--The Administrator shall 
     make as a condition of each grant under the program, that not 
     later than 18 months after the date of receipt of the grant, 
     the recipient shall transmit to the Administrator a report 
     describing how the grant funds were used.
       ``(f) Cooperative Agreements and Contracts.--The 
     Administrator may enter into a cooperative agreement or 
     contract with any State small business development center 
     receiving a grant under this section to provide additional 
     assistance that furthers the purposes of this section.
       ``(g) Evaluation of Program.--Not later than March 31, 
     2008, the Administrator shall transmit to Congress a report 
     containing an evaluation of the program.
       ``(h) Clearinghouse.--The Association shall act as a 
     clearinghouse of information and expertise regarding 
     vocational and technical entrepreneurship education programs. 
     In each fiscal year in which grants are made under the 
     program, the Administrator shall provide additional 
     assistance to the Association to carry out the functions 
     described in this subsection.
       ``(i) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $7,000,000 for each of the fiscal years 2006 through 2008. 
     Such sums shall remain available until expended.''.
                                 ______
                                 
      By Mrs. CLINTON (for herself and Mr. Schumer):
  S. 140. A bill to provide for a domestic defense fund to improve the 
Nation's homeland defense, and for other purposes; to the Committee on 
Homeland Security and Governmental Affairs.
  Mrs. CLINTON. 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. 140

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Domestic 
     Defense Fund Act of 2005''.
       (b) Table of Contents.--

Sec. 1. Short title; table of contents
Sec. 2. Findings
Sec. 3. Definitions
Sec. 4. Grants to States, units of general local government and Indian 
              tribes; authorizations
Sec. 5. Statement of activities and review
Sec. 6. Activities eligible for assistance
Sec. 7. Allocation and distribution of funds
Sec. 8. State and regional planning and communication systems
Sec. 9. Urban Area Security Initiative
Sec. 10. Flexible emergency assistance fund
Sec. 11. Federal preparedness, equipment, and training standards
Sec. 12. Nondiscrimination in programs and activities
Sec. 13. Remedies for noncompliance with requirements
Sec. 14. Reporting requirements
Sec. 15. Consultation by Attorney General
Sec. 16. Interstate agreements or compacts; purposes
Sec. 17. Matching requirements; suspension of requirements for 
              economically distressed areas

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Since the September 11, 2001, terrorist attacks on our 
     country, communities all across America have been on the 
     front lines in the war against terrorism on United States 
     soil.
       (2) Since September 11, 2001, communities have been forced 
     to bear a significant portion of the burden that goes along 
     with the war against terrorism, a burden that local 
     governments should not have to bear alone.
       (3) Our homeland defense will only be as strong as the 
     weakest link at the State and local level. By providing our 
     communities with the resources and tools they need to bolster 
     emergency response efforts and provide for other emergency 
     response initiatives, we will have a better-prepared home 
     front and a stronger America.
       (4) Homeland security experts have repeatedly called upon 
     Congress to allocate homeland security resources based on 
     threat- and risk-based factors. The National Commission on 
     Terrorist Attacks Upon the United States (referred to in this 
     Act as the ``9/11 Commission'') stated in its report: ``We 
     understand the contention that every State and city needs to 
     have some minimum infrastructure for emergency response. But 
     Federal homeland security assistance should not remain a 
     program for general revenue sharing. It should supplement 
     State and local resources based on the risks or vulnerability 
     that merit additional support. Congress should not use this 
     money as a pork barrel.'' The Commission made unequivocally 
     clear that the current method of allocating the majority of 
     Federal homeland security resources to states and local 
     communities, on a per capita basis alone, must be changed.
       (5) Not only did the 9/11 Commission recommend that such 
     changes be made in how Federal homeland security funds are 
     allocated, but commissions before it, such as the Homeland 
     Security Independent Task Force of the Council on Foreign 
     Relations, chaired by former Senators Gary Hart and Warren 
     Rudman, have strongly recommended it as well.
       (6) The Hart-Rudman Commission stated almost 2 years ago 
     that ``Congress should establish a system for allocating 
     scarce resources based less on dividing the spoils and more 
     on addressing identified threats and vulnerabilities. To do 
     this, the Federal Government should consider such factors as 
     population, population density, vulnerability assessment, and 
     presence of critical infrastructure within each State.''
       (7) In addition to the need for threat and risk-based 
     funding, direct funding to our major cities and counties 
     across the country is necessary if we are to ensure that 
     these communities, who are on the front lines of our nation's 
     homeland defense, receive critical Federal homeland security 
     resources quickly and efficiently. Numerous reports by 
     organizations such as the United States Conference of Mayors, 
     have clearly demonstrated that the current method of 
     distributing Federal homeland security resources intended for 
     local communities has not worked. Too often, too many 
     communities receive resources, if at all, years after 
     Congress appropriated the subject funds.

     SEC. 3. DEFINITIONS.

       (a) Definitions.--As used in this Act, the following 
     definitions shall apply:
       (1) City.--The term ``city'' means--
       (A) any unit of general local government that is classified 
     as a municipality by the United States Bureau of the Census; 
     or
       (B) any other unit of general local government that is a 
     town or township and which, in the determination of the 
     Secretary--
       (i) possesses powers and performs functions comparable to 
     those associated with municipalities;
       (ii) is closely settled; and
       (iii) does not contain within its boundaries any 
     incorporated place, as defined by the United States Bureau of 
     the Census, that has not entered into cooperation agreements 
     with such town or township to undertake or to assist in the 
     performance of homeland security objectives.
       (2) Federal grant-in-aid program.--The term ``Federal 
     grant-in-aid program'' means a program of Federal financial 
     assistance other than loans and other than the assistance 
     provided by this Act.
       (3) Indian tribe.--The term ``Indian tribe'' means any 
     Indian tribe, band, group, and nation, including Alaska 
     Indians, Aleuts, and Eskimos, and any Alaskan Native Village, 
     of the United States, which is considered an eligible 
     recipient under the Indian Self-Determination and Education 
     Assistance Act (Public Law 93-638) or was considered an 
     eligible recipient under chapter 67 of title 31, United 
     States Code, prior to the repeal of such chapter.
       (4) Metropolitan area.--The term ``metropolitan area'' 
     means a standard metropolitan statistical area as established 
     by the Office of Management and Budget.
       (5) Metropolitan city.--
       (A) In general.--The term ``metropolitan city'' means--
       (i) a city within a metropolitan area that is the central 
     city of such area, as defined and used by the Office of 
     Management and Budget; or
       (ii) any other city, within a metropolitan area, which has 
     a population of not less than 50,000.
       (B) Period of classification.--Any city that was classified 
     as a metropolitan city for at least 2 years pursuant to 
     subparagraph (A) shall remain classified as a metropolitan 
     city. Any unit of general local government that becomes 
     eligible to be classified as a metropolitan city, and was not 
     classified as a metropolitan city in the immediately 
     preceding fiscal year, may, upon submission of written 
     notification to the Secretary, defer its classification as a 
     metropolitan city for all purposes under this Act, if it 
     elects to have its population included in an urban county 
     under subsection (d).
       (C) Election by a city.--Notwithstanding subparagraph (B), 
     a city may elect not to retain its classification as a 
     metropolitan city. Any unit of general local government that 
     was classified as a metropolitan city in any year, may, upon 
     submission of written notification to the Secretary, 
     relinquish such classification for all purposes under this 
     Act if it elects to have its population included with the 
     population of a county for purposes of qualifying for 
     assistance (for such following fiscal year) under section 
     5(e) as an urban county.
       (6) Nonqualifying community.--The term ``nonqualifying 
     community'' means an area that is not a metropolitan city or 
     part of an urban county and does not include Indian tribes.
       (7) Population.--The term ``population'' means total 
     resident population based on data compiled by the United 
     States Bureau of the Census and referable to the same point 
     or period of time.

[[Page 578]]

       (8) Secretary.--The term ``Secretary'' means the Secretary 
     of the Department of Homeland Security.
       (9) State.--The term ``State'' means any State of the 
     United States, or any instrumentality thereof approved by the 
     Governor; and the Commonwealth of Puerto Rico, the United 
     States Virgin Islands, American Samoa, Guam, and the Northern 
     Mariana Islands.
       (10) Unit of general local government.--The term ``unit of 
     general local government'' means any city, county, town, 
     township, parish, village, or other general purpose political 
     subdivision of a State; a combination of such political 
     subdivisions is recognized by the Secretary; and the District 
     of Columbia.
       (11) Urban county.--The term ``urban county'' means any 
     county within a metropolitan area.
       (b) Basis and Modification of Definitions.--
       (1) Basis.--Where appropriate, the definitions listed in 
     subsection (a) shall be based, with respect to any fiscal 
     year, on the most recent data compiled by the United States 
     Bureau of the Census and the latest published reports of the 
     Office of Management and Budget available 90 days before the 
     beginning of such fiscal year.
       (2) Modification.--The Secretary may by regulation change 
     or otherwise modify the meaning of the terms defined in 
     subsection (a) in order to reflect any technical change or 
     modification thereof made subsequent to such date by the 
     United States Bureau of the Census or the Office of 
     Management and Budget.
       (c) Designation of Public Agencies.--The chief executive 
     officer of a State or a unit of general local government may 
     designate 1 or more public agencies, including existing local 
     public agencies, to undertake activities assisted under this 
     Act.
       (d) Inclusion of Local Governments in Urban County 
     Population.--With respect to program years beginning with the 
     program year for which grants are made available from amounts 
     appropriated for fiscal year 2005 under section 4, the 
     population of any unit of general local government which is 
     included in that of an urban county shall be included in the 
     population of such urban county for 3 program years beginning 
     with the program year in which its population was first so 
     included and shall not otherwise be eligible for a grant as a 
     separate entity, unless the urban county does not receive a 
     grant for any year during such 3-year period.
       (e) Exclusion of Local Governments From Urban County 
     Population.--
       (1) Notification by urban county.--Any county seeking 
     qualification as an urban county, including any urban county 
     seeking to continue such qualification, shall notify each 
     unit of general local government, located within its 
     geographical boundaries and eligible to elect to have its 
     population excluded from that of the urban county, of its 
     opportunity to make such an election. Such notification 
     shall, at a time and in a manner prescribed by the Secretary, 
     be provided so as to provide a reasonable period for response 
     prior to the period for which such qualification is sought.
       (2) Failure of local government to elect to be excluded.--
     The population of any unit of general local government which 
     is provided such notification and which does not inform, at a 
     time and in a manner prescribed by the Secretary, the county 
     of its election to exclude its population from that of the 
     county shall, if the county qualifies as an urban county, be 
     included in the population of such urban county as provided 
     under subsection (d).

     SEC. 4. GRANTS TO STATES, UNITS OF GENERAL LOCAL GOVERNMENT 
                   AND INDIAN TRIBES; AUTHORIZATIONS.

       (a) Authorization.--The Secretary may award grants to 
     States, units of general local government, and Indian tribes 
     to carry out activities in accordance with this Act.
       (b) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     carry out section 7--
       (A) $3,500,000 for each of the fiscal years 2006 through 
     2009; and
       (B) such sums as may be necessary for fiscal year 2010 and 
     each fiscal year thereafter.
       (2) State, regional, and local planning, training, and 
     communication systems.--There are authorized to be 
     appropriated to carry out section 8--
       (A) $1,000,000,000 for each of the fiscal years 2006 
     through 2009; and
       (B) such sums as may be necessary for fiscal year 2010 and 
     each fiscal year thereafter.
       (3) Urban area security initiative (uasi).--There are 
     authorized to be appropriated to carry out section 9--
       (A) $2,000,000,000 for each of the fiscal years 2006 
     through 2009; and
       (B) such sums as may be necessary for fiscal year 2010 and 
     each fiscal year thereafter.
       (4) Homeland security flexible emergency assistance.--There 
     are authorized to be appropriated to carry out section 10--
       (A) $500,000,000 for each of the fiscal years 2006 through 
     2009; and
       (B) such sums as may be necessary for fiscal year 2010 and 
     each fiscal year thereafter.
       (c) Supplement Not Supplant.--Funds appropriated pursuant 
     to the authority of this section shall be used to supplement 
     and not supplant full Federal funding for other first 
     responder programs, including--
       (1) the Community Oriented Policing Services Program, as 
     authorized under part Q of title I of the Omnibus Crime 
     Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd et 
     seq.);
       (2) the Local Law Enforcement Block Grant Program, as 
     authorized under the Violent Crime Control and Law 
     Enforcement Act of 1994 (Public Law 103-322) and described in 
     H.R. 728, as passed by the House of Representatives on 
     February 14, 1995;
       (3) the Edward Byrne Memorial State and Local Law 
     Enforcement Assistance Programs, as authorized under part E 
     of title I of the Omnibus Crime Control and Safe Streets Act 
     of 1968 (42 U.S.C. 3750 et seq.);
       (4) the Assistance to Firefighters Grant Program, as 
     authorized under section 33 of the Federal Fire Prevention 
     and Control Act of 1974 (15 U.S.C. 2229); and
       (5) section 34 of the Federal Fire Prevention and Control 
     Act of 1974 (15 U.S.C. 2229a).

     SEC. 5. STATEMENT OF ACTIVITIES AND REVIEW.

       (a) Application.--
       (1) In general.--A State, metropolitan city, urban county, 
     or unit of general local government desiring a grant under 
     subsection (b) or (i) of section 7 shall submit an 
     application to the Secretary that contains--
       (A) a statement of homeland security objectives and 
     projected use of grant funds; and
       (B) the certifications required under paragraph (2) and, if 
     appropriate, subsection (b).
       (2) Grantee statement.--
       (A) Contents.--
       (i) Local government.--In the case of metropolitan cities 
     or urban counties receiving grants under section 7(b) and 
     units of general local government receiving grants under 
     section 7(i)(3), the statement of projected use of funds 
     shall consist of proposed homeland security activities.
       (ii) States.--In the case of States receiving grants under 
     section 7, the statement of projected use of funds shall 
     consist of the method by which the States will distribute 
     funds to units of general local government.
       (B) Consultation.--In preparing the statement required 
     under this subsection, the grantee shall consult with 
     appropriate law enforcement agencies and emergency response 
     authorities.
       (C) Final statement.--A copy of the final statement and the 
     certifications required under paragraph (3) and, where 
     appropriate, subsection (b), shall be furnished to the 
     Secretary and the Attorney General.
       (D) Modifications.--Any final statement of activities may 
     be modified or amended from time to time by the grantee in 
     accordance with the same procedures required under this 
     paragraph for the preparation and submission of such 
     statement.
       (3) Certification of enumerated criteria by grantee to 
     secretary.--A grant under section 7 shall not be awarded 
     unless the grantee certifies to the satisfaction of the 
     Secretary that the grantee--
       (A) has developed a homeland security plan that identifies 
     both short- and long-term homeland security needs that have 
     been developed in accordance with the primary objective and 
     requirements of this Act; and
       (B) will comply with the other provisions of this Act and 
     with other applicable laws.
       (b) Submission of Annual Performance Reports, Audits, and 
     Adjustments.--
       (1) In general.--Each grantee shall submit to the 
     Secretary, at a time determined by the Secretary, a 
     performance and evaluation report concerning the use of funds 
     made available under section 7, together with an assessment 
     by the grantee of the relationship of such use to the 
     objectives identified in the grantee's statement under 
     subsection (a)(2).
       (2) Uniform reporting requirements.--
       (A) Recommendations by national associations.--The 
     Secretary shall encourage and assist national associations of 
     grantees eligible under section 7, national associations of 
     States, and national associations of units of general local 
     government in nonqualifying areas to develop and recommend to 
     the Secretary, not later than 1 year after the date of 
     enactment of this Act, uniform recordkeeping, performance 
     reporting, evaluation reporting, and auditing requirements 
     for such grantees, States, and units of general local 
     government, respectively.
       (B) Establishment of uniform reporting requirements.--Based 
     on the Secretary's approval of the recommendations submitted 
     pursuant to subparagraph (A), the Secretary shall establish 
     uniform reporting requirements for grantees, States, and 
     units of general local government.
       (3) Reviews and audits.--Not less than annually, the 
     Secretary shall make such reviews and audits as may be 
     necessary or appropriate to determine--
       (A) in the case of grants awarded under section 7(b), 
     whether the grantee--
       (i) has carried out its activities;
       (ii) where applicable, has carried out its activities and 
     its certifications in accordance with the requirements and 
     the primary objectives of this Act and with other applicable 
     laws; and
       (iii) has a continuing capacity to carry out those 
     activities in a timely manner; and
       (B) in the case of grants to States made under section 
     7(i), whether the State--
       (i) has distributed funds to units of general local 
     government in a timely manner and in conformance to the 
     method of distribution described in its statement;

[[Page 579]]

       (ii) has carried out its certifications in compliance with 
     the requirements of this Act and other applicable laws; and
       (iii) has made such reviews and audits of the units of 
     general local government as may be necessary or appropriate 
     to determine whether they have satisfied the applicable 
     performance criteria described in subparagraph (A).
       (4) Adjustments.--The Secretary may make appropriate 
     adjustments in the amount of the annual grants in accordance 
     with the Secretary's findings under this subsection. With 
     respect to assistance made available to units of general 
     local government under section 7(i)(3), the Secretary may 
     adjust, reduce, or withdraw such assistance, or take other 
     action as appropriate in accordance with the Secretary's 
     reviews and audits under this subsection, except that funds 
     already expended on eligible activities under this Act shall 
     not be recaptured or deducted from future assistance to such 
     units of general local government.
       (c) Audits.--Insofar as they relate to funds provided under 
     this Act, the financial transactions of recipients of such 
     funds may be audited by the General Accounting Office under 
     such rules and regulations as may be prescribed by the 
     Comptroller General of the United States. The representatives 
     of the General Accounting Office shall have access to all 
     books, accounts, records, reports, files, and other papers, 
     things, or property belonging to or in use by such recipients 
     pertaining to such financial transactions and necessary to 
     facilitate the audit.
       (d) Metropolitan City as Part of Urban County.--In any case 
     in which a metropolitan city is located, in whole or in part, 
     within an urban county, the Secretary may, upon the joint 
     request of such city and county, approve the inclusion of the 
     metropolitan city as part of the urban county for purposes of 
     submitting a statement under subsection (a) and carrying out 
     activities under this Act.

     SEC. 6. ACTIVITIES ELIGIBLE FOR ASSISTANCE.

       Activities assisted under this Act may include--
       (1) funding additional law enforcement, fire, and emergency 
     resources, including covering overtime expenses;
       (2) purchasing and refurbishing personal protective 
     equipment for fire, police, and emergency personnel and 
     acquire state-of-the-art technology to improve communication 
     and streamline efforts;
       (3) improving cyber and infrastructure security by 
     improving--
       (A) security for water treatment plants, distribution 
     systems, other water infrastructure, nuclear power plants, 
     electrical grids, and other energy infrastructure;
       (B) security for tunnels, bridges, locks, canals, railway 
     systems, airports, land and water ports, and other 
     transportation infrastructure;
       (C) security for oil and gas pipelines and storage 
     facilities;
       (D) security for chemical plants and transportation of 
     hazardous substances;
       (E) security for agriculture infrastructure; and
       (F) security for national icons and Federal facilities that 
     may be terrorist targets;
       (4) assisting local emergency planning committees so that 
     local public agencies can design, review, and improve 
     disaster response systems;
       (5) assisting communities in coordinating their efforts and 
     sharing information with all relevant agencies involved in 
     responding to terrorist attacks;
       (6) establishing timely notification systems that enable 
     communities to communicate with each other when a threat 
     emerges;
       (7) improving communication systems to provide information 
     to the public in a timely manner about the facts of any 
     threat and the precautions the public should take; and
       (8) devising a homeland security plan, including 
     determining long-term goals and short-term objectives, 
     evaluating the progress of the plan, and carrying out the 
     management, coordination, and monitoring of activities 
     necessary for effective planning implementation.

     SEC. 7. ALLOCATION AND DISTRIBUTION OF FUNDS.

       (a) Set-Aside for Indian Tribes.--
       (1) In general.--The Secretary shall reserve 1 percent of 
     the amount appropriated for each fiscal year for grants 
     pursuant to section 4(b)(1) (excluding the amounts for 
     activities described in section 6) for grants to Indian 
     tribes.
       (2) Selection of indian tribes.--
       (A) In general.--The Secretary shall distribute amounts 
     under this paragraph to Indian tribes on the basis of a 
     competition conducted pursuant to specific criteria for the 
     selection of Indian tribes to receive such amounts.
       (B) Rulemaking.--The Secretary, after notice and public 
     comment, shall promulgate regulations, which establish the 
     criteria described in subparagraph (A).
       (b) Allocation to Metropolitan Cities and Urban Counties.--
       (1) Allocation percentage.--Of the amount remaining after 
     allocations have been made to Indian tribes under subsection 
     (a), the Secretary shall, not later than 60 days after the 
     date on which such funds are appropriated, allocate and 
     directly transfer 70 percent to metropolitan cities and urban 
     counties.
       (2) Entitlement.--Except as otherwise specifically 
     authorized, each metropolitan city and urban county shall be 
     entitled to an annual grant, to the extent authorized beyond 
     fiscal year 2008, from such allocation in an amount not to 
     exceed its basic amount computed pursuant to subsections (c) 
     and (d).
       (c) Computation of Amount Allocated to Metropolitan 
     Cities.--
       (1) Vulnerability and threat factors.--The Secretary shall 
     calculate the amount to be allocated to each metropolitan 
     city, which shall bear the same ratio to the allocation for 
     all metropolitan cities as the weighted average of--
       (A) the population (including tourist, military, and 
     commuting populations) of the metropolitan city divided by 
     the population of all metropolitan cities;
       (B) the population density of the metropolitan city;
       (C) the proximity of the metropolitan city to international 
     borders;
       (D) the vulnerability of the metropolitan city as it 
     pertains to chemical security;
       (E) the vulnerability of the metropolitan city as it 
     pertains to nuclear security;
       (F) the vulnerability of the metropolitan city as it 
     pertains to land and water port security;
       (G) the vulnerability of the metropolitan city as it 
     pertains to the security of energy infrastructure;
       (H) the vulnerability of the metropolitan city as it 
     pertains to the security of inland waterway infrastructure;
       (I) the vulnerability of the metropolitan city as it 
     pertains to the security of freight and passenger rail 
     transportation infrastructure;
       (J) the vulnerability of the metropolitan city as it 
     pertains to the security of aviation infrastructure;
       (K) the vulnerability of the metropolitan city as it 
     pertains to the security of agriculture infrastructure;
       (L) the proximity of the metropolitan city to the nearest 
     national icons and Federal facilities that may be a terrorist 
     target, as determined by the Department of Homeland Security, 
     and the proximity of all metropolitan cities to the nearest 
     national icons and Federal buildings that may be a terrorist 
     target, as determined by the Department of Homeland Security; 
     and
       (M) the threat to the metropolitan city based upon 
     intelligence information from the Department of Homeland 
     Security;
       (2) Clarification of computation ratios.--
       (A) Relative weight of factors.--In determining the 
     weighted average of the ratios under paragraph (1)--
       (i) threat, as defined by paragraph (1)(M), shall 
     constitute 25 percent;
       (ii) population, as defined by paragraph (1)(A), shall 
     constitute 20 percent;
       (iii) population density, as defined by paragraph (1)(B), 
     shall constitute 15 percent; and
       (iv) the remaining factors shall be equally weighted.
       (B) Population density.--The metropolitan cities shall be 
     ranked according to the density of their populations in 
     calculating the weighted average of this factor. The 
     population density ratio shall be 1 divided by the total 
     number of metropolitan cities, not to exceed 100.
       (C) Proximity to international borders.--If a metropolitan 
     city is located within 50 miles of an international border, 
     the ratio under paragraph (1)(C) shall be 1 divided by the 
     total number of metropolitan cities, not to exceed 100, which 
     are located within 50 miles of an international border.
       (D) Vulnerability as it pertains to chemical security.--If 
     a metropolitan city is within the vulnerable zone of a worst-
     case chemical release (as specified in the most recent risk 
     management plans filed with the Environmental Protection 
     Agency or another instrument development by the Environmental 
     Protection Agency or the Department of Homeland Security that 
     captures the same information for the same facilities), the 
     ratio under paragraph (1)(D) shall be 1 divided by the total 
     number of metropolitan cities that are within such a zone, 
     not to exceed 100.
       (E) Vulnerability as it pertains to nuclear security.--If a 
     metropolitan city is located within 50 miles of an operating 
     nuclear power plant, as identified by the Nuclear Regulatory 
     Commission, the ratio under paragraph (1)(E) shall be 1 
     divided by the total number of metropolitan cities, not to 
     exceed 100, which are located within 50 miles of an operating 
     nuclear power plant.
       (F) Vulnerability as it pertains to port security.--If a 
     metropolitan city is located within 50 miles of--
       (i) one of the 75 largest United States ports, as stated by 
     the Department of Transportation, Bureau of Transportation 
     Statistics, United States Ports Report by All Land Modes; or
       (ii) one of the 25 largest United States water ports by 
     metric tons and value, as stated by the Department of 
     Transportation, Maritime Administration, United States 
     Foreign Waterborne Transportation Statistics,

     the ratio under paragraph (1)(F) shall be 1 divided by the 
     total number of metropolitan

[[Page 580]]

     cities that are located within 50 miles of a United States 
     land or water port, not to exceed 100.
       (G) Vulnerability as it pertains to energy infrastructure 
     security.--If a metropolitan city is among the 100 
     metropolitan cities that are closest to, or within 50 miles 
     of, non-nuclear power generating plants, compressors, and 
     other significant components of critical energy 
     infrastructure as identified by the Department of Energy or 
     the Department of Homeland Security, the ratio under 
     paragraph (1)(G) shall be 1 divided by the total number of 
     metropolitan cities that are located within 50 miles of 
     critical energy infrastructure, not to exceed 100.
       (H) Vulnerability as it pertains to inland waterway 
     infrastructure security.--If a metropolitan city is among the 
     100 metropolitan cities that are closest to, or within 50 
     miles of, the most significant locks, canals, and other 
     components of critical inland waterway system infrastructure 
     as identified by the Department of Transportation, the ratio 
     under paragraph (1)(H) shall be 1 divided by the total number 
     of metropolitan cities that are located within 50 miles of 
     critical inland water infrastructure, not to exceed 100.
       (I) Vulnerability as it pertains to rail transportation 
     infrastructure security.--If a metropolitan city is among the 
     100 metropolitan cities that are closest to, or within 50 
     miles of, the largest railroad hubs and other significant 
     components of critical freight and passenger rail 
     infrastructure, as identified by the Department of 
     Transportation, the ratio under paragraph (1)(I) shall be 1 
     divided by the total number of metropolitan cities that are 
     located within 50 miles of critical inland water 
     infrastructure, not to exceed 100.
       (J) Vulnerability as it pertains to aviation infrastructure 
     security.--If a metropolitan city is among the 100 
     metropolitan cities that are closest to, or within 50 miles 
     of, major passenger or cargo airports that are significant 
     components of the Nation's air transportation infrastructure 
     as identified by the Department of Transportation, the ratio 
     under paragraph (1)(J) shall be 1 divided by the total number 
     of metropolitan cities that are located within 50 miles of 
     critical aviation transportation infrastructure, not to 
     exceed 100.
       (K) Vulnerability as it pertains to agriculture 
     infrastructure security.--If a metropolitan city is among the 
     100 metropolitan cities that are closest to, or within 50 
     miles of, major feed yards, food processing facilities, and 
     other significant components of the nation's agriculture 
     infrastructure, as defined and determined by the Department 
     of Agriculture and the Department of Homeland Security, the 
     ratio under paragraph (1)(K) shall be 1 divided by the total 
     number of metropolitan cities that are located within 50 
     miles of critical agriculture infrastructure, not to exceed 
     100.
       (L) Proximity to national icons and federal buildings.--If 
     a metropolitan city is among the 100 metropolitan cities that 
     are closest to, or within 50 miles of, national icons and 
     Federal buildings that the Department of Homeland Security 
     determines are most vulnerable with respect to a terrorist 
     attack, the ratio under paragraph (1)(L) shall be 1 divided 
     by the total number of metropolitan cities that are located 
     within 50 miles of such icons or Federal buildings, not to 
     exceed 100.
       (M) Intelligence.--If a metropolitan city is among the 100 
     metropolitan cities that have been identified by the 
     Department of Homeland Security as being special alert or 
     heightened alert status for the longest periods of time, the 
     ratio under paragraph (1)(M) shall be 1 divided by the total 
     number of metropolitan cities that have been identified by 
     the Department of Homeland Security, not to exceed 100.
       (d) Computation of Amount Allocated to Urban Counties.--
       (1) Vulnerability and threat factors.--The Secretary shall 
     determine the amount to be allocated to each urban county, 
     which shall bear the same ratio to the allocation for all 
     urban counties as the weighted average of--
       (A) the population (including tourist, military, and 
     commuting populations) of the urban county divided by the 
     population of all urban counties;
       (B) the population density of the urban county;
       (C) the proximity of the urban county to international 
     borders;
       (D) the vulnerability of the urban county as it pertains to 
     chemical security;
       (E) the vulnerability of the urban county as it pertains to 
     nuclear security;
       (F) the vulnerability of the urban county as it pertains 
     land and water port security;
       (G) the vulnerability of the urban county as it pertains to 
     the security of energy infrastructure;
       (H) the vulnerability of the urban county as it pertains to 
     the security of inland waterway infrastructure;
       (I) the vulnerability of the urban county as it pertains to 
     the security of freight and passenger rail transportation 
     infrastructure;
       (J) the vulnerability of the urban county as it pertains to 
     the security of aviation infrastructure;
       (K) the vulnerability of the urban county as it pertains to 
     the security of agriculture infrastructure;
       (L) the proximity of the urban county to the nearest 
     national icons and Federal facilities that may be a terrorist 
     target, as determined by the Department of Homeland Security, 
     and the proximity of all urban counties to the nearest 
     national icons and Federal buildings that may be a terrorist 
     target, as determined by the Department of Homeland Security; 
     and
       (M) the threat to the urban county based upon intelligence 
     information from the Department of Homeland Security;
       (2) Clarification of computation ratios.--
       (A) Relative weight of factors.--In determining the 
     weighted average of the ratios under paragraph (1)--
       (i) threat, as defined in paragraph (1)(M), shall 
     constitute 25 percent;
       (ii) population, as defined in paragraph (1)(A), shall 
     constitute 20 percent;
       (iii) population density, as defined in paragraph (1)(B), 
     shall constitute 15 percent; and
       (iv) the remaining factors shall be equally weighted.
       (B) Population density.--The population density ratio shall 
     be 1 divided by the total number of urban counties, not to 
     exceed 100. The urban counties shall be ranked according to 
     the density of their populations in calculating the weighted 
     average of this factor.
       (C) Proximity to international borders.--If an urban county 
     is located within 50 miles of an international border, the 
     ratio under paragraph (1)(C) shall be 1 divided by the total 
     number of urban counties, not to exceed 100, which are 
     located within 50 miles of an international border.
       (D) Vulnerability as it pertains to chemical security.--If 
     an urban county is within the vulnerable zone of a worst-case 
     chemical release (as specified in the most recent risk 
     management plans filed with the Environmental Protection 
     Agency or another instrument development by the Environmental 
     Protection Agency or the Department of Homeland Security that 
     captures the same information for the same facilities), the 
     ratio under paragraph (1)(D) shall be 1 divided by the total 
     number of urban counties that are within such a zone, not to 
     exceed 100.
       (E) Vulnerability as it pertains to nuclear security.--If 
     an urban county is located within 50 miles of an operating 
     nuclear power plant, as identified by the Nuclear Regulatory 
     Commission, the ratio under paragraph (1)(E) shall be 1 
     divided by the total number of urban counties, not to exceed 
     100, which are located within 50 miles of an operating 
     nuclear power plant.
       (F) Vulnerability as it pertains to port security.--If an 
     urban county is located within 50 miles of--
       (i) one of the 75 largest United States ports, as stated by 
     the Department of Transportation, Bureau of Transportation 
     Statistics, United States Ports Report by All Land Modes; or
       (ii) one of the 25 largest United States water ports by 
     metric tons and value, as stated by the Department of 
     Transportation, Maritime Administration, United States 
     Foreign Waterborne Transportation Statistics, the ratio under 
     paragraph (1)(F) shall be 1 divided by the total number of 
     urban counties that are located within 50 miles of a United 
     States land or water port, not to exceed 100.
       (G) Vulnerability as it pertains to energy infrastructure 
     security.--If an urban county is among the 100 urban counties 
     that are closest to, or within 50 miles of, non-nuclear power 
     generating plants, compressors, and other significant 
     components of critical energy infrastructure as identified by 
     the Department of Energy or the Department of Homeland 
     Security, the ratio under paragraph (1)(G) shall be 1 divided 
     by the total number of urban counties that are located within 
     50 miles of critical energy infrastructure, not to exceed 
     100.
       (H) Vulnerability as it pertains to inland waterway 
     infrastructure security.--If an urban county is among the 100 
     urban counties that are closest to, or within 50 miles of, 
     the most significant locks, canals, and other components of 
     critical inland waterway system infrastructure as identified 
     by the Department of Transportation, the ratio under 
     paragraph (1)(H) shall be 1 divided by the total number of 
     urban counties that are located within 50 miles of critical 
     inland water infrastructure, not to exceed 100.
       (I) Vulnerability as it pertains to rail transportation 
     infrastructure security.--If an urban county is among the 100 
     urban counties that are closest to, or within 50 miles of, 
     the largest railroad hubs and other significant components of 
     critical freight and passenger rail infrastructure, as 
     identified by the Department of Transportation, the ratio 
     under paragraph (1)(I) shall be 1 divided by the total number 
     of urban counties that are located within 50 miles of 
     critical inland water infrastructure, not to exceed 100.
       (J) Vulnerability as it pertains to aviation infrastructure 
     security.--If an urban county is among the 100 urban counties 
     that are closest to, or within 50 miles of, major passenger 
     or cargo airports that are significant components of the 
     Nation's air transportation infrastructure as identified by 
     the

[[Page 581]]

     Department of Transportation, the ratio under paragraph 
     (1)(J) shall be 1 divided by the total number of urban 
     counties that are located within 50 miles of critical 
     aviation transportation infrastructure, not to exceed 100.
       (K) Vulnerability as it pertains to agriculture 
     infrastructure security.--If urban county is among the 100 
     urban counties that are closest to, or within 50 miles of, 
     major feed yards, food processing facilities, and other 
     significant components of the Nation's agriculture 
     infrastructure, as defined and determined by the Department 
     of Agriculture and the Department of Homeland Security, the 
     ratio under paragraph (1)(K) shall be 1 divided by the total 
     number of urban counties that are located within 50 miles of 
     critical agriculture infrastructure, not to exceed 100.
       (L) Proximity to national icons and federal buildings.--If 
     an urban county is among the 100 urban counties that are 
     closest to, or within 50 miles of, national icons and Federal 
     buildings that the Department of Homeland Security determines 
     are most vulnerable with respect to a terrorist attack, the 
     ratio under paragraph (1)(L) shall be 1 divided by the total 
     number of urban counties that are located within 50 miles of 
     such icons or Federal buildings, not to exceed 100.
       (M) Intelligence.--If an urban county is among the 100 
     urban counties that have been identified by the Department of 
     Homeland Security as being special alert or heightened alert 
     status for the longest periods of time, the ratio under 
     paragraph (1)(M) shall be 1 divided by the total number of 
     urban counties that have been identified by the Department of 
     Homeland Security, not to exceed 100.
       (e) Exclusions.--
       (1) In general.--In computing amounts or exclusions under 
     subsection (d) with respect to any urban county, units of 
     general local government located in the county that are not 
     included in the population of the county in determining the 
     eligibility of the county to receive a grant under this 
     subsection shall be excluded, except that any independent 
     city (as defined by the Bureau of the Census) shall be 
     included if it--
       (A) is not part of any county;
       (B) is not eligible for a grant;
       (C) is contiguous to the urban county;
       (D) has entered into cooperation agreements with the urban 
     county which provide that the urban county is to undertake or 
     to assist in the undertaking of essential community 
     development and housing assistance activities with respect to 
     such independent city; and
       (E) is not included as a part of any other unit of general 
     local government for purposes of this section.
       (2) Independent cities.--Any independent city that is 
     included in any fiscal year for purposes of computing amounts 
     pursuant to the preceding sentence shall not be eligible to 
     receive assistance under subsection (i) for that fiscal year.
       (f) Inclusions.--
       (1) Local government straddling county line.--In computing 
     amounts under subsection (d) with respect to any urban 
     county, there shall be included all of the area of any unit 
     of local government which is part of, but is not located 
     entirely within the boundaries of, such urban county if--
       (A) the part of such unit of local government that is 
     within the boundaries of such urban county would otherwise be 
     included in computing the amount for such urban county under 
     this section; and
       (B) the part of such unit of local government that is not 
     within the boundaries of such urban county is not included as 
     a part of any other unit of local government for the purpose 
     of this section.
       (2) Use of grant funds outside urban county.--Any amount 
     received under this section by an urban county described 
     under paragraph (1) may be used with respect to the part of 
     such unit of local government that is outside the boundaries 
     of such urban county.
       (g) Population.--
       (1) Effect of consolidation.--Where data are available, the 
     amount to be allocated to a metropolitan city that has been 
     formed by the consolidation of 1 or more metropolitan cities 
     within an urban county shall be equal to the sum of the 
     amounts that would have been allocated to the urban county or 
     cities and the balance of the consolidated government, if 
     such consolidation had not occurred.
       (2) Limitation.--Paragraph (1) shall apply only to a 
     consolidation that--
       (A) included all metropolitan cities that received grants 
     under this section for the fiscal year preceding such 
     consolidation and that were located within the urban county;
       (B) included the entire urban county that received a grant 
     under this section for the fiscal year preceding such 
     consolidation; and
       (C) took place on or after January 1, 2005.
       (3) Growth rate.--The population growth rate of all 
     metropolitan cities defined in section 3(a)(6) shall be based 
     on the population of--
       (A) metropolitan cities other than consolidated governments 
     the grant for which is determined under this paragraph; and
       (B) cities that were metropolitan cities before their 
     incorporation into consolidated governments.
       (4) Entitlement share.--For purposes of calculating the 
     entitlement share for the balance of the consolidated 
     government under this subsection, the entire balance shall be 
     considered to have been an urban county.
       (h) Reallocation.--
       (1) In general.--Except as provided under paragraph (2), 
     any amounts allocated to a metropolitan city or an urban 
     county under this section that are not received by the city 
     or county for a fiscal year because of failure to meet the 
     requirements of subsection (a) or (b) of section 5, or that 
     otherwise became available, shall be reallocated in the 
     succeeding fiscal year to the other metropolitan cities and 
     urban counties in the same metropolitan area that certify to 
     the satisfaction of the Secretary that they would be 
     adversely affected by the loss of such amounts from the 
     metropolitan area.
       (2) Ratio.--The amount of the share of funds reallocated 
     under this subsection for any metropolitan city or urban 
     county shall bear the same ratio to the total of such 
     reallocated funds in the metropolitan area as the amount of 
     funds awarded to the city or county for the fiscal year in 
     which the reallocated funds become available bears to the 
     total amount of funds awarded to all metropolitan cities and 
     urban counties in the same metropolitan area for that fiscal 
     year.
       (3) Transfer.--Notwithstanding paragraphs (1) and (2), the 
     Secretary may, upon request, transfer to any metropolitan 
     city the responsibility for the administration of any amounts 
     received, but not obligated, by the urban county in which 
     such city is located if--
       (A) such city was an included unit of general local 
     government in such county prior to the qualification of such 
     city as a metropolitan city;
       (B) such amounts were designated and received by such 
     county for use in such city prior to the qualification of 
     such city as a metropolitan city; and
       (C) such city and county agree to such transfer of 
     responsibility for the administration of such amounts.
       (i) Allocation to States on Behalf of Non-qualifying 
     Communities.--
       (1) In general.--Of the amount appropriated pursuant to 
     section 4 that remains after allocations under subsections 
     (a) and (b), the Secretary shall allocate 30 percent among 
     the States for use in nonqualifying communities.
       (2) Allocation formula.--
       (A) Factors.--The Secretary shall make the allocation for 
     each State based on factors such as threat, vulnerability, 
     population, population density, the presence of critical 
     infrastructure, and other factors considered appropriate by 
     the Secretary.
       (B) Pro-rata reduction.--The Secretary shall make a pro 
     rata reduction of each amount allocated to the nonqualifying 
     communities in each State under subparagraph (A) so that the 
     nonqualifying communities in each State will receive the same 
     percentage of the total amount available under this 
     subsection as the percentage that such communities would have 
     received if the total amount available had equaled the total 
     amount allocated under subparagraph (A).
       (3) Distribution.--
       (A) States.--A State shall distribute amounts it receives 
     under this subsection to units of general local government 
     located in nonqualifying areas of the State in such manner 
     and at such time as the Secretary shall prescribe, consistent 
     with the statement submitted under section 5(a), and not 
     later than 45 days after the date on which the State receives 
     such amounts from the Federal Government.
       (B) Certification.--Before a State may receive or 
     distribute amounts allocated under this subsection, the State 
     must certify that--
       (i) with respect to units of general local government in 
     nonqualifying areas, the State--

       (I) provides, or will provide, technical assistance to 
     units of general local government in connection with homeland 
     security initiatives;
       (II) will not refuse to distribute such amounts to any unit 
     of general local government on the basis of the particular 
     eligible activity selected by such unit of general local 
     government to meet its homeland security objectives, except 
     that this clause may not be considered to prevent a State 
     from establishing priorities in distributing such amounts on 
     the basis of the activities selected; and
       (III) has consulted with local elected officials from among 
     units of general local government located in nonqualifying 
     areas of that State in determining the method of distribution 
     of funds required by subparagraph (A); and

       (ii) each unit of general local government to be 
     distributed funds will be required to identify its homeland 
     security objectives, and the activities to be undertaken to 
     meet such objectives.
       (4) Minimum amount.--
       (A) In general.--Except as provided under subparagraph (B), 
     each State shall be allocated, for each fiscal year 
     authorized under this Act and under this section, the greater 
     of--

[[Page 582]]

       (i) 0.25 percent of the total amount appropriated in the 
     fiscal year for grants to States that are not located on an 
     international border under this section;
       (ii) 0.45 percent of the fatal amount appropriated in the 
     fiscal year for grants to States that are located on an 
     international border; or
       (iii) the amount the State would otherwise be allocated 
     under the formula set forth in this section.
       (B) Exception.--Notwithstanding subparagraph (A), the 
     United States Virgin Islands, American Samoa, Guam, and the 
     Northern Mariana Islands shall each be allocated 0.25 percent 
     of the total amount appropriated in each fiscal year for 
     grants to States under this section.
       (5) Administration.--
       (A) In general.--Each State shall be responsible for the 
     administration of all funds received and distributed under 
     paragraph (1). Except as provided under subparagraph (B), the 
     State shall pay for all administrative expenses incurred by 
     the State in carrying out its responsibilities under this 
     Act.
       (B) Federal share.--From the amounts received by each State 
     for distribution in nonqualifying areas, the State may deduct 
     an amount to pay--
       (i) the first $150,000 of its administrative expenses under 
     this subsection; and
       (ii) 50 percent of any State administrative expenses under 
     this subsection in excess of $150,000, which amount shall not 
     exceed 2 percent of the amount received by the State under 
     paragraph (1).
       (C) Distribution.--Any distribution by the Secretary under 
     paragraph (1) shall be made in accordance with--
       (i) determinations of the Secretary;
       (ii) statements submitted and the other requirements under 
     section 5 (except for subsection (c));
       (iii) regulations and procedures prescribed by the 
     Secretary.
       (D) Reallocation.--
       (i) Failure to comply.--Any amounts allocated for use in a 
     State under paragraph (1) that are not received by the State 
     for any fiscal year because of failure to meet the 
     requirements of subsection (a) or (b) of section 5 shall be 
     added to amounts allocated to all States under paragraph (1) 
     for the succeeding fiscal year.
       (ii) Closeout.--Any amounts allocated for use in a State 
     under paragraph (1) that become available as a result of the 
     closeout of a grant made by the Secretary under this section 
     in nonqualifying areas of the State shall be added to amounts 
     allocated to the State under paragraph (1) for the fiscal 
     year in which such amounts become available.
       (6) Single unit.--Any combination of units of general local 
     governments may not be required to obtain recognition by the 
     Secretary to be treated as a single unit of general local 
     government for purposes of this subsection.
       (7) Deduction.--From the amounts received under paragraph 
     (1) for distribution in nonqualifying areas, the State may 
     use not more than 1 percent to provide technical assistance 
     to local governments.
       (8) Applicability.--Any activities conducted with amounts 
     received by a unit of general local government under this 
     subsection shall be subject to the applicable provisions of 
     this Act and other Federal law in the same manner and to the 
     same extent as activities conducted with amounts received by 
     a unit of general local government under subsection (a).
       (j) Qualifications and Determinations.--The Secretary may 
     prescribe such qualification or submission dates as the 
     Secretary determines to be necessary to permit the 
     computations and determinations required by this section to 
     be made in a timely manner, and all such computations and 
     determinations shall be final and conclusive.
       (k) Pro Rata Reduction and Increase.--
       (1) Reduction.--If the total amount available for 
     distribution in any fiscal year to metropolitan cities and 
     urban counties under this section is insufficient to provide 
     the amounts to which metropolitan cities and urban counties 
     would be entitled under this section, and funds are not 
     otherwise appropriated to meet the deficiency, the Secretary 
     shall meet the deficiency through a pro rata reduction of all 
     amounts determined under this section.
       (2) Increase.--If the total amount available for 
     distribution in any fiscal year to metropolitan cities and 
     urban counties under this section exceeds the amounts to 
     which metropolitan cities and urban counties would be 
     entitled under this section, the Secretary shall distribute 
     the excess through a pro rata increase of all amounts 
     determined under this section.

     SEC. 8. STATE AND REGIONAL PLANNING AND COMMUNICATION 
                   SYSTEMS.

       (a) Allocations.--From the amounts appropriated pursuant to 
     section 4(b)(2), the Secretary shall allocate $1,000,000,000 
     to States, regional cooperations, and units of general local 
     government for--
       (1) homeland defense planning within the States;
       (2) providing increased security through additional first 
     responder personnel;
       (3) purchasing and refurbishing personal protective 
     equipment for first responder personnel;
       (4) homeland defense planning within the regions;
       (5) the development and maintenance of Statewide training 
     facilities and homeland security best-practices 
     clearinghouses; and
       (6) the development and maintenance of communications 
     systems that can be used between and among first responders, 
     including law enforcement, fire, and emergency medical 
     personnel.
       (b) Use of Funds.--Of the amount allocated under subsection 
     (a)--
       (1) $500,000,000 shall be used by the States for homeland 
     defense planning and coordination within each State;
       (2) $50,000,000 shall be used by regional cooperations and 
     regional, multistate, or intrastate authorities for homeland 
     defense planning and coordination within each region;
       (3) $50,000,000 shall be used by the States to develop and 
     maintain statewide training facilities and best-practices 
     clearinghouses; and
       (4) $400,000,000 shall be used by the States and units of 
     general local government to develop and maintain 
     communications systems that can be used between and among 
     first responders at the State and local level, including law 
     enforcement, fire, and emergency personnel.
       (c) Allocations to States.--
       (1) In general.--Amounts allocated to States under this 
     section shall be allocated among the States based on factors 
     such as threat, vulnerability, population, population 
     density, the presence of critical infrastructure, and other 
     factors considered appropriate by the Secretary.
       (2) Minimum amount provision.--The provision under section 
     7(i)(4) relating to a minimum amount shall apply to amounts 
     allocated to States under this section.
       (3) Local communications systems.--
       (A) In general.--Not less than 50 percent of the amounts 
     allocated under subsection (b)(4) shall be used for the 
     development and maintenance of local communications systems.
       (B) Distribution of funds.--Each State shall distribute 
     amounts reserved for local communications systems in that 
     State under subparagraph (A) to units of general local 
     government not later than 45 days after the State receives 
     such amounts from the Federal Government.
       (d) Allocations to Regional Cooperations.--Funds allocated 
     under subsection (b)(2) shall be allocated to regional 
     cooperations and regional, multistate, or intrastate 
     authorities, based upon the population of the areas covered 
     by each regional cooperative.

     SEC. 9. URBAN AREA SECURITY INITIATIVE.

       (a) Allocations.--
       (1) In general.--From the amounts appropriated pursuant to 
     section 4(b)(3), the Secretary shall allocate $2,000,000 for 
     discretionary grants made under the Urban Area Security 
     Initiative to high-threat, high-risk urban areas, as 
     determined by the Secretary, for rail security, port 
     security, inter-city bus security, trucking industry 
     security, and high-threat non-profit organizations.
       (2) Distribution.--Grant funds awarded under this section 
     shall be transferred directly to Urban Areas Security 
     Initiative recipients not later than 60 days after the date 
     on which funds are appropriated pursuant to section 4(b)(3).
       (b) Selection Criteria.--In selecting high-threat, high-
     risk urban area grantees under this section, the Secretary 
     shall consider--
       (1) credible threat;
       (2) vulnerability;
       (3) the presence of critical infrastructure, including 
     infrastructure described in section 7;
       (4) population;
       (5) population density;
       (6) identified needs of public agencies; and
       (7) other factors considered appropriate by the Secretary.
       (c) Homeland Security Plan.--Each grantee awarded a grant 
     under this section shall submit a homeland security plan to 
     the State in which it is located and to the Secretary that 
     describes the intended use of grant funds received under this 
     section.
       (d) Minimum Amount.--Section 1014(c)(3) of the USA PATRIOT 
     ACT (42 U.S.C. 3711(c)(3)) and section 7(i)(4) of this Act 
     shall not apply to funds awarded under this section.

     SEC. 10. FLEXIBLE EMERGENCY ASSISTANCE FUND.

       (a) In General.--From the amounts appropriated pursuant to 
     section 4(b)(4), $500,000,000 shall be used to create a 
     flexible emergency assistance fund, from which the Secretary 
     shall provide funds directly to State and units of local 
     government that incur extraordinary homeland security costs.
       (b) Release of Funds.--The Secretary may release emergency 
     assistance funds to a State or local community as the 
     Secretary determines to be appropriate, including--
       (1) when the Secretary determines that a State or local 
     community may be the specific target of a terrorist threat;
       (2) when a local community is the venue of a high profile 
     trial related to homeland security or terrorism;
       (3) when the State or local community has been asked to 
     assist in a Federal investigation concerning homeland 
     security or terrorism; and
       (4) when an agency of the Federal Government has requested 
     the State or local community to assist that agency in 
     performing homeland security functions.

[[Page 583]]

       (c) Reimbursements.--The Secretary may disburse flexible 
     emergency assistance funds to reimburse States and units of 
     general local government for increased personnel costs 
     associated with the activation of first responders who serve 
     in the Reserves or National Guard.
       (d) Minimum Amount.--Section 1014(c)(3) of the USA PATRIOT 
     ACT (42 U.S.C. 3711(c)(3)) and section 7(i)(4) of this Act 
     shall not apply to funds awarded under this section.

     SEC. 11. FEDERAL PREPAREDNESS, EQUIPMENT, AND TRAINING 
                   STANDARDS.

       (a) In General.--The Department of Homeland Security shall 
     develop national homeland security preparedness, first 
     responder training, and equipment standards, and best 
     practices to facilitate the most effective and efficient use 
     of funds authorized under this Act.
       (b) Consultation.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall develop the 
     standards described in subsection (a) in consultation with 
     first responders, States, local communities, nongovernmental 
     homeland security experts, and such other persons and 
     organizations as the Secretary determines to be appropriate.
       (c) Reports.--
       (1) Development of standards and best practices.--The 
     Secretary shall submit a report to Congress on the progress 
     made in developing the standards and best practices described 
     in subsection (a)--
       (A) not later than 90 days after the date of enactment of 
     this Act; and
       (B) not later than 180 days after the date of enactment of 
     this Act.
       (2) Allocation methods.--The Secretary shall submit a 
     report to Congress detailing the specific methods used to 
     make the allocations under section 9. The report shall be 
     submitted in unclassified form to the greatest extent 
     consistent with the protection of law enforcement-sensitive 
     information and classified information and the administration 
     of applicable law. The report may contain a classified annex, 
     if necessary.

     SEC. 12. NONDISCRIMINATION IN PROGRAMS AND ACTIVITIES.

       (a) In General.--No person in the United States shall on 
     the ground of race, color, national origin, religion, or sex 
     be excluded from participation in, be denied the benefits of, 
     or be subjected to discrimination under any program or 
     activity funded in whole or in part with funds made available 
     under this Act.
       (b) Age or Handicap.--Any prohibition against 
     discrimination on the basis of age under the Age 
     Discrimination Act of 1975 (42 U.S.C. 6101 et seq.) or with 
     respect to an otherwise qualified handicapped individual as 
     provided in section 504 of the Rehabilitation Act of 1973 (29 
     U.S.C. 794) shall also apply to any such program or activity.

     SEC. 13. REMEDIES FOR NONCOMPLIANCE WITH REQUIREMENTS.

       If the Secretary finds, after reasonable notice and 
     opportunity for a hearing, that a recipient of assistance 
     under this Act has failed to comply substantially with any 
     provision of this Act, the Secretary shall--
       (1) terminate payments to the recipient under this Act;
       (2) reduce payments to the recipient under this Act by an 
     amount equal to the amount of such payments which were not 
     expended in accordance with this Act; or
       (3) limit the availability of payments under this Act to 
     programs, projects, or activities not affected by such 
     failure to comply.

     SEC. 14. REPORTING REQUIREMENTS.

       (a) In General.--Not later than 180 days after the end of 
     each fiscal year in which assistance is awarded under this 
     Act, the Secretary shall submit to Congress a report 
     containing--
       (1) a description of the progress made in accomplishing the 
     objectives under this Act;
       (2) a summary of the use of such funds during the preceding 
     fiscal year; and
       (3) a description of the activities carried out under 
     section 7.
       (b) Reports to Secretary.--The Secretary may require 
     recipients of assistance under this Act to submit such 
     reports and other information as may be necessary in order 
     for the Secretary to comply with subsection (a).

     SEC. 15. CONSULTATION BY ATTORNEY GENERAL.

       In carrying out the provisions of this Act including the 
     issuance of regulations, the Secretary shall consult with the 
     Attorney General and other Federal departments and agencies 
     administering Federal grant-in-aid programs.

     SEC. 16. INTERSTATE AGREEMENTS OR COMPACTS; PURPOSES.

       The consent of Congress is hereby given to any 2 or more 
     States to enter into agreements or compacts, not in conflict 
     with any law of the United States--
       (1) for cooperative effort and mutual assistance in support 
     of homeland security planning and programs carried out under 
     this Act as they pertain to interstate areas and to 
     localities within such States; and
       (2) to establish such agencies, joint or otherwise, that 
     the States consider desirable for making such agreements and 
     compacts effective.

     SEC. 17. MATCHING REQUIREMENTS; SUSPENSION OF REQUIREMENTS 
                   FOR ECONOMICALLY DISTRESSED AREAS.

       (a) Matching Requirement.--Grant recipients shall 
     contribute, from funds other than those received under this 
     Act, an amount equal to 10 percent of the total funds 
     received under this Act, which shall be used in accordance 
     with the grantee's statement of homeland security objectives.
       (b) Waiver for Economic Distress.--The Secretary shall 
     waive the matching requirement under subsection (a) for grant 
     recipients that the Secretary determines to be economically 
     distressed.
                                 ______
                                 
      By Mr. LEVIN (for himself and Mr. Jeffords):
  S. 141. A bill to amend part A of title IV of the Social Security Act 
to allow up to 24 months of vocational educational training to be 
counted as a work activity under the temporary assistance to needy 
families program; to the Committee on Finance.
  I am pleased to be joined by Senator Jeffords in reintroducing 
legislation that seeks to add an important measure of flexibility to a 
provision of the Temporary Assistance for Needy Families program, TANF, 
under the Personal Responsibility and Work Opportunity Reconciliation 
Act of 1996. The legislation we are introducing increases the limit on 
the amount of vocational education training that a State can count 
towards meeting its work participation rate, from 12 to 24 months.
  This legislation enjoys the support of the American Association of 
University Women, with over 100,000 members; The Workforce Alliance, a 
coalition of experienced leaders nationwide from the field of workforce 
development, who know what works in preparing people for jobs; the 
National Association of State Directors of Career Technical Education 
Consortium; the Center for law and Social Policy and the American 
Association of Community Colleges. 
  Under the pre-1996 Aid to Families with Dependent Children program, 
recipients could participate in post-secondary vocational training or 
community college programs for up to 24 months. While I support TANF's 
emphasis on moving welfare recipients more quickly into jobs, I am 
troubled by the restriction on post-secondary education training, 
limiting it to 12 months. One year of vocational education is, under 
current law, an approved work activity, but the second year of post-
secondary education study is not.
  The limitation on post-secondary education and training raises a 
number of concerns, not the least of which is whether individuals may 
be forced into lower paying, short-term employment that will lead them 
back onto public assistance because they are unable to support 
themselves or their families. Well, according to recent studies, this 
is exactly what has happened in far too many cases.
  According to a findings of the Congressional Research Service, 
although the majority of recipients who have left the welfare rolls 
left because they became employed, most remained poor. The research 
also revealed that the hourly wage for these former welfare recipients 
ranged from $5.50 to $8.80 per hour.
  Study after study indicates that short-term training programs raise 
the income of workers only marginally, while completion of at least a 
2-year associate degree has the greater potential of breaking the cycle 
of poverty for welfare recipients. According to the U.S. Census Bureau, 
the mean earnings of adults with an associate degree are 20 percent 
higher than adults who have not achieved such a degree.
  In June of 2003, we were very pleased that our proposal was included 
in the Senate Finance Committee reported bill, which reauthorized TANF. 
However, the reauthorization bill was not considered by the full 
Senate. Rather the Temporary Assistance for Needy Families Act has been 
twice extended. It is our hope that the Senate will again act favorably 
and expeditiously on this legislation and that the House will support 
this much-needed State flexibility. We must do what is necessary to 
achieve TANF's intended goal of getting families permanently off of 
welfare and onto self-sufficiency.
  All citizens should have the opportunity to become productive and 
successful members of the workforce. Again, I urge my colleagues to act

[[Page 584]]

quickly on this legislation. This modification will give the States the 
flexibility they need to improve the economic status of families across 
America.
  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. 141

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

     SECTION 1. INCREASE IN NUMBER OF MONTHS OF VOCATIONAL 
                   EDUCATIONAL TRAINING COUNTED AS A WORK ACTIVITY 
                   UNDER THE TANF PROGRAM.

       Section 407(d)(8) of the Social Security Act (42 U.S.C. 
     607(d)(8)) is amended by striking ``12'' and inserting 
     ``24''.
                                 ______
                                 
      By Mr. DAYTON:
  S. 143. A bill to ensure that Members of Congress do not receive 
better prescription drug benefits than medicare beneficiaries; to the 
Committee on Homeland Security and Governmental Affairs.
  Mr. DAYTON. 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. 143

       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 ``Taste of Our Own Medicine 
     Act of 2005''.

     SEC. 2. LIMITATION ON PRESCRIPTION DRUG BENEFITS OF MEMBERS 
                   OF CONGRESS.

       (a) Limitation on Benefits.--Notwithstanding any other 
     provision of law, the actuarial value of the prescription 
     drug benefits of any Member of Congress enrolled in a health 
     benefits plan under chapter 89 of title 5, United States 
     Code, may not exceed the actuarial value of basic 
     prescription drug coverage (as defined in section 1860D-
     2(a)(3) of the Social Security Act (42 U.S.C. 1395w-
     102(a)(3)), as added by section 101(a) of the Medicare 
     Prescription Drug, Improvement, and Modernization Act of 2003 
     (Public Law 108-173; 117 Stat. 2071)).
       (b) Regulations.--The Director of the Office of Personnel 
     Management shall promulgate regulations to carry out this 
     section.
                                 ______
                                 
      By Mr. KOHL (for himself and Mr. Corzine):
  S. 144. A bill to change the date for regularly scheduled Federal 
elections and establish polling place hours; to the Committee on Rules 
and Administration.
  Mr. KOHL. Mr. President, today I am introducing the Weekend Voting 
Act. This legislation will change the day for Congressional and 
Presidential elections from the first Tuesday in November to the first 
weekend in November. This legislation is virtually identical to 
legislation that I first proposed in 1997 in the 105th Congress and 
most recently reintroduced in the 107th Congress.
  The last two elections have revealed a glaring need for us to rethink 
how we conduct elections in our Nation. The 2000 election galvanized 
Congress into passing major election reform legislation. The Help 
American Vote Act, which was enacted into law in 2002, was an important 
step forward in establishing minimum standards for states in the 
administration of federal elections and in providing funds to replace 
outdated voting systems and improve election administration. The HAVA 
legislation also created a new federal agency, the Election Assistance 
Commission, to serve as a clearinghouse for election administration 
information. That Commission is finally on its feet after a delayed 
start.
  However, as the 2004 election made clear, there is much that still 
needs to be done.
  With more and more voters needing to cast their ballots on Election 
Day, we need to build on the movement which already exists to make it 
easier for Americans to cast their ballots by providing alternatives to 
voting on just one election day. Twenty-six States, including my own 
state of Wisconsin, now permit any registered voter to vote by absentee 
ballot. These States constitute 45 percent of the voting age citizens 
of the United States. Twenty three states permit in-person early voting 
at election offices or at other satellite locations. The state of 
Oregon now conducts statewide elections completely by mail. These 
innovations are critical if we are to conduct fair elections for it has 
become unreasonable to expect that a nation of 294 million people can 
line up at the same time and cast their ballots at the same time. And 
if we continue to try to do so, we will encounter even more reports of 
broken machines and long lines in the rain and registration errors that 
create barriers to voting.
  That is why I have been a long-time advocate of moving our Federal 
election day from the first Tuesday after the first Monday in November 
to the first weekend in November. Holding our federal elections on a 
weekend will create more opportunities for voters to cast their ballots 
and will help end the gridlock at the polling places which threaten to 
undermine our elections.
  Under this bill, polls would be open nationwide for a uniform period 
of time from Saturday, 6 p.m. eastern time to Sunday, 6 p.m. eastern 
time. Polls in other time zones would also open and close at this time. 
Election officials would be permitted to close polls during the 
overnight hours if they determine it would be inefficient to keep them 
open. Because the polls are open from Saturday to Sunday, they also 
would not interfere with religious observances.
  Keeping polls open the same hours across the continental United 
States, also addresses the challenge of keeping results on one side of 
the country, or even a State, from influencing voting in places where 
polls are still open. Moving elections to the weekend will expand the 
pool of buildings available for polling stations and people available 
to work at the polls, addressing the critical shortage of poll workers.
  Most important, weekend voting has the potential to increase voter 
turnout by giving all voters ample opportunity to get to the polls 
without creating a national holiday. There is already evidence that 
holding elections on a non-working day can increase voter turnout. In 
one survey of 44 democracies, 29 held elections on holidays or weekends 
and in all these cases voter turnout surpassed our country's voter 
participation rates. Closer to home, weekend voting in some California 
counties resulted in increased voter turnout compared to comparable 
elections held on Tuesdays.
  In 2001, the National Commission on Federal Election Reform 
recommended that we move our federal election day to a national 
holiday, in particular Veterans Day. As expected, the proposal was not 
well received among veterans and I do not endorse such a move, but I 
share the Commission's goal of moving election day to a non-working 
day.
  Since the mid-19th century, election day has been on the first 
Tuesday of November. Ironically, this date was selected because it was 
convenient for voters. Tuesdays were traditionally court day, and land-
owning voters were often coming to town anyway.
  Just as the original selection of our national voting day was done 
for voter convenience, we must adapt to the changes in our society to 
make voting easier for the regular family. Sixty percent of all 
households have two working adults. Since most polls in the United 
States are open only 12 hours, from 7 a.m. to 7 p.m., voters often have 
only one or two hours to vote. As we saw in this last election, long 
lines in many polling places kept some waiting much longer than one or 
two hours. If voters have children, and are dropping them off at day 
care, or if they have a long work commute, there is just not enough 
time in a workday to vote.
  With long lines and chaotic polling places becoming the unacceptable 
norm in many communities, we have an obligation to reexamine how our 
Nation votes. In the last election, too many Americans had to confront 
a variety of obstacles to cast their ballots at their local polling 
places. We can do better by offering more flexible voting hours for 
Americans, especially working families.
  Serious allegations have been raised about voting irregularities in 
Ohio during the 2004 presidential election. I agree with many of my 
colleagues that these allegations must be investigated

[[Page 585]]

to the fullest extent possible because every eligible citizen in this 
nation must have an equal opportunity to exercise the constitutional 
right to cast a vote in federal elections.
  In the meantime, we have an obligation to do more than investigate. 
If we are to grant all Americans an equal opportunity to participate in 
the electoral process, and to elect our representatives in this great 
democracy, then we must be willing to reexamine all aspects of voting 
in America. Changing our election day to a weekend may seem like a 
change of great magnitude. Given the stakes--the integrity of future 
elections--I hope my colleagues will recognize it as a common sense 
proposal whose time has come.
  I ask unanimous consent that the text of the Weekend Voting Act be 
printed in the Record. 
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 144

       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 ``Weekend Voting Act''.

     SEC. 2. CHANGE IN CONGRESSIONAL ELECTION DAY TO SATURDAY AND 
                   SUNDAY.

       Section 25 of the Revised Statutes (2 U.S.C. 7) is amended 
     to read as follows:
       ``Sec. 25. The first Saturday and Sunday after the first 
     Friday in November, in every even numbered year, are 
     established as the days for the election, in each of the 
     States and Territories of the United States, of 
     Representatives and Delegates to the Congress commencing on 
     the 3d day of January thereafter.''.

     SEC. 3. CHANGE IN PRESIDENTIAL ELECTION DAY TO SATURDAY AND 
                   SUNDAY.

       Section 1 of title 3, United States Code, is amended by 
     striking ``Tuesday next after the first Monday'' and 
     inserting ``first Saturday and Sunday after the first 
     Friday''.

     SEC. 4. POLLING PLACE HOURS IN CONTINENTAL UNITED STATES.

       (a) In General.--
       (1) Presidential general election.--Chapter 1 of title 3, 
     United States Code, is amended--
       (A) by redesignating section 1 as section 1A; and
       (B) by inserting before section 1A the following:

     ``Sec. 1. Polling place hours in continental United States

       ``(a) Definitions.--In this section:
       ``(1) Continental united states.--The term `continental 
     United States' means a State (other than Alaska and Hawaii) 
     and the District of Columbia.
       ``(2) Presidential general election.--The term 
     `Presidential general election' means the election for 
     electors of President and Vice President.
       ``(b) Polling Place Hours.--
       ``(1) In general.--Each polling place in the continental 
     United States shall be open, with respect to a Presidential 
     general election, beginning on Saturday at 6:00 p.m. eastern 
     standard time and ending on Sunday at 6:00 p.m. eastern 
     standard time.
       ``(2) Early closing.--A polling place may close between the 
     hours of 12:00 p.m. (midnight) and 5:00 a.m. local time as 
     provided by the law of the State in which the polling place 
     is located.''.
       (2) Congressional general election.--Section 25 of the 
     Revised Statutes of the United States (2 U.S.C. 7) is 
     amended--
       (A) by redesignating section 25 as section 25A; and
       (B) by inserting before section 25A the following:

     ``SEC. 25. POLLING PLACE HOURS IN THE CONTINENTAL UNITED 
                   STATES.

       ``(a) Definitions.--In this section:
       ``(1) Continental united states.--The term `continental 
     United States' means a State (other than Alaska and Hawaii) 
     and the District of Columbia.
       ``(2) Congressional general election.--The term 
     `congressional general election' means the general election 
     for the office of Senator or Representative in, or Delegate 
     or Resident Commissioner to, the Congress.
       ``(b) Polling Place Hours.--
       ``(1) In general.--Each polling place in the continental 
     United States shall be open, with respect to a congressional 
     general election, beginning on Saturday at 6:00 p.m. eastern 
     standard time and ending on Sunday at 6:00 p.m. eastern 
     standard time.
       ``(2) Early closing.--A polling place may close between the 
     hours of 12:00 p.m. (midnight) and 5:00 a.m. local time as 
     provided by the law of the State in which the polling place 
     is located.''.
       (b) Conforming Amendments.--
       (1) The table of sections for chapter 1 of title 3, United 
     States Code, is amended by striking the item relating to 
     section 1 and inserting the following:

``1. Polling place hours in continental United States.
``1A. Time of appointing electors.''.

       (2) Sections 871(b) and 1751(f) of title 18, United States 
     Code, are each amended by striking ``title 3, United States 
     Code, sections 1 and 2'' and inserting ``sections 1A and 2 of 
     title 3''.
                                 ______
                                 
      By Mr. ALLARD (for himself, Mr. Inhofe, Mr. Lott, Mr. Enzi, Mr. 
        DeMint, Mr. Santorum, Mr. Crapo, Mr. Sessions, Mr. Vitter, Mr. 
        Thune, Mr. Alexander, Mr. Frist, Mr. Talent, Mr. Burr, Mrs. 
        Hutchison, Mr. Kyl, Mrs. Dole, Mr. Martinez, Mr. Isakson, Mr. 
        McConnell, Mr. Hatch, Mr. Roberts, and Mr. Cornyn):
  S.J. Res. 1. A joint resolution proposing an amendment to the 
Constitution of the United States relating to marriage; to the 
Committee on the Judiciary.
  Mr. ALLARD. Mr. President, I would like to first express my gratitude 
to the leadership for making the Marriage Protection Amendment a 
priority in this Congress. The Marriage Protection Amendment is a 
constitutional amendment that I have introduced today. It is S.J. Res. 
1. In the press conference earlier today I indicated I hoped that the 
designation of the number would reflect its priority with the 
leadership. I realize that was an overly optimistic request, but I am 
very pleased we have the support from leadership that we do and that it 
is among their priority items. We have the complete support of the 
leadership. They all signed as cosponsors on S.J. Res. 1.
  As of this very moment, we have a quarter of the Senate who have 
signed on as cosponsors. I think that is fabulous. It is certainly a 
better start than we had in the last session. In the last session, if 
my memory serves me correctly, I think we only had about 13 or so 
cosponsors on it, even after we had the debate in the Senate. So even 
before we have sent out a letter to our colleagues in the Senate, we 
have 25 original cosponsors. I am excited about that.
  So today we have reintroduced the Marriage Protection Amendment in 
the Senate. The intent and policy goals remain the same as last year. 
It is the same bill we debated on the floor of the Senate. What it does 
is define marriage as a union between a man and a woman.
  The amendment represents a democratic process: the voice of the 
American people following recent and widespread efforts by activist 
courts to change this ages-old definition of marriage.
  People say, well, what about the rights of the State legislature? 
What we are trying to do is protect the voice of the American people. 
The right place for this to be determined is in the legislative bodies 
of this country, in the Congress of the United States and each and 
every legislature in every State, and not in the Federal courts. The 
amendment does restrict the ability of the courts to define marriage. 
The Marriage Protection Amendment does not override State and local 
authority. Under the Marriage Protection Amendment, cities, States, and 
private companies would still be free to determine for themselves civil 
union, benefit, and partnership definitions.
  The Marriage Protection Amendment would not permit the redefining of 
marriage, a definition agreed upon by every civilization, culture, 
ethnicity, and religion around the world.
  The definition of marriage in itself is not discriminatory. Those who 
have been opposed to the amendment tried to make that argument in the 
last session. Even civil rights leaders, Hispanic and African 
Americans, have said this is not a civil rights issue.
  Congress does have a vital role to play in this debate. The policy 
goals are widely agreed upon. Recent election results illustrate broad 
support for the definition of marriage.
  Mr. President, 14 million voters in 11 States voted for 
constitutional amendments on November 2, 2004, with an average majority 
of 67 percent. This reflects great support throughout the country. Some 
13 States voted on the ballot issue in 2004.
  Mr. President, I ask unanimous consent to have the information on 
this chart printed in the Record, which illustrates what happened in 
each one of those elections.

[[Page 586]]

  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                                      2004 STATEWIDE BALLOT RESULTS ON MARRIAGE AMENDMENTS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Signatures turned
               State             Date of vote         Referred by      Vote in legislature  Signatures required           in           Certified by SOS     Outcome of vote       Percentages
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1       Arkansas...........  Nov. 2.............  People's Initiative  N/A................  80,570.............  200,000............  Certified.........  Passed............  Y: 75
                                                                                                                                                                              N: 25
2       Georgia............  Nov. 2.............  Legislature........  S: 40-14...........  N/A................  N/A................  N/A...............  Passed............  Y: 77
                                                                       H: 122-52-3-3......                                                                                    N: 23
3       Kentucky...........  Nov. 2.............  Legislature........  S: 33-4-1..........  N/A................  N/A................  N/A...............  Passed............  Y: 75
                                                                       H: 85-11...........                                                                                    N: 25
4       Louisiana..........  Sept. 18...........  Legislature........  S: 31-6............  N/A................  N/A................  N/A...............  Passed............  Y: 78
                                                                       H: 88-13...........                                                                                    N: 22
5       Michigan...........  Nov. 2.............  People's Initiative  N/A................  317,757............  500,000............  Certified.........  Passed............  Y: 59
                                                                                                                                                                              N: 41
6       Mississippi........  Nov. 2.............  Legislature........  S: 51-0-1..........  N/A................  N/A................  N/A...............  Passed............  Y: 86
                                                                       H: 97-17...........                                                                                    N: 14
7       Missouri...........  Aug. 3.............  Legislature........  S: 26-6............  N/A................  N/A................  N/A...............  Passed............  Y: 70.8
                                                                       H: 90-63...........                                                                                    N: 29.2
8       Montana............  Nov. 2.............  People's Initiative  N/A................  41,020.............  70,000.............  Certified.........  Passed............  Y: 66
                                                                                                                                                                              N: 34
9       North Dakota.......  Nov. 2.............  People's Initiative  N/A................  25,688.............  52,000.............  Certified.........  Passed............  Y: 73
                                                                                                                                                                              N: 27
10      Ohio...............  Nov. 2.............  People's Initiative  N/A................  322,899............  Waiting for........  Passed............  Y: 62.............
                                                                                            390,508............                                           N: 38.............
11      Oklahoma...........  Nov. 2.............  Legislature........  S: 38-7............  N/A................  N/A................  N/A...............  Passed............  Y: 76
                                                                       H: 92-4............                                                                                    N: 24
12      Oregon.............  Nov. 2.............  People's Initiative  N/A................  100,840............  204,360............  Certified.........  Passed............  Y: 57
                                                                                                                                                                              N: 43
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

  Mr. ALLARD. The emphasis here must be on the process, democratic, 
deliberative, and responsive to the electorate, not to just appointed 
judges and lawyers. We want the American public to have a say in this 
debate. Courtrooms are not the place for this important decision about 
the most fundamental institution of mankind, and that is the definition 
of marriage. Courts should interpret the law, not write it.
  So we are eager to begin to have hearings, to talk about the 
research, to debate and have constructive dialog on this very important 
issue. It is important to the American people. It is important we 
continue to move forward with the momentum that has evolved as a result 
of our debate last year and the momentum that has evolved as a result 
of the elections of this past fall.
  I am excited about introducing the Marriage Protection Amendment, 
which is exactly the same amendment we debated on the floor of the 
Senate last year.
  Mr. President, before I wrap up, I ask unanimous consent that Senator 
Coburn be added as an original cosponsor and Senator Stevens be added 
as an original cosponsor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ALLARD. Again, in conclusion, I thank the leadership for their 
support and my colleagues for their support on this particular 
amendment. We had a number of elections for Senate seats where this was 
a very important issue and critical to the election of many of our new 
Members in the Senate. We have at least five votes that have switched 
as a result of this election. I think that is the American people 
having an opportunity to speak their mind.
  I can say, this amendment is to protect the voice of the American 
people. The proper way to have this debate is in the legislative bodies 
of America. That includes the Congress and each and every legislature.
  Again, I thank the leader for his leadership on this particular 
issue. I also thank my colleagues who showed up at the press conference 
this morning to talk about this issue, particularly Senator Santorum, 
Senator Hutchison, Senator Sessions, and Senator Thune who joined me in 
the press conference. I thank them for their leadership this morning in 
that press conference.
  Mr. ALLARD. Mr. President, I ask unanimous consent that the text of 
the joint resolution be printed in the Record.
  There being no objection, the joint resolution was ordered to be 
printed in the Record, as follows:

                              S.J. Res. 1

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

                              ``Article --

       ``Section 1. This article may be cited as the `Marriage 
     Protection Amendment'.
       ``Section 2. Marriage in the United States shall consist 
     only of the union of a man and a woman. Neither this 
     Constitution, nor the constitution of any State, shall be 
     construed to require that marriage or the legal incidents 
     thereof be conferred upon any union other than the union of a 
     man and a woman.''.
                                 ______
                                 
      By Mr. CRAIG:
  S.J. Res. 2. A joint resolution proposing an amendment to the 
Constitution of the United States relative to require a balanced budget 
and protect Social Security surpluses; to the Committee on the 
Judiciary.
  Mr. CRAIG. Mr. President, today I am reintroducing the Balanced 
Budget Amendment to the Constitution of the United States. When we were 
in deficit and when we were in surplus, I have always said, if we could 
adopt one fundamental reform to the way the Federal Government does 
business, this is it. The fiscal events of the last few years have 
again demonstrated the need for this long-term, fundamental, permanent 
reform.
  For many Americans, one of the signs of our deep respect for the 
Constitution is our acknowledgment that, in exceptional cases, a 
problem rises to such a level that it can be adequately addressed only 
in the Constitution--by way of a constitutional amendment.
  From 1998 through 2001, Congress balanced the Federal budget. These 
four budget surpluses in a row, for the first time since the 1920s, set 
the modern record for balancing the Federal budget. The first 
Republican Congresses in 40 years made balancing the budget our top 
priority, and did what was necessary, reaching across the aisle and 
working on a bipartisan basis. We ran surpluses and began the process 
we needed to pay down the national debt. This in turn promised, among 
other things, to help us safeguard the future of Social Security.
  Then events intervened.
  A return to budget deficits was caused by an economic recession and a 
war begun by terrorist attacks. Even before taking office in 2001, 
President Bush correctly foresaw the coming recession and prescribed 
the right medicine--the tax relief that has bolstered the economy and 
has saved and created jobs. The current economic recovery, in turn, has 
prevented even worse Federal budget deficits.
  The return to deficit spending can and should be a temporary 
phenomenon. We are rebounding from the recession of 2001 and the body 
blow to the economy caused by the war with terrorism.
  We must do whatever it takes to win that war. Providing for the self-
defense

[[Page 587]]

and survival of our people and our Nation is the most fundamental 
responsibility of the Federal Government. That principle has been 
reflected in every significant version of the balanced budget 
constitutional amendment, in exceptions for war and imminent military 
threats. Historically, that principle was followed even when balancing 
the budget was the norm, because the U.S. Government always has 
borrowed when necessary to fight and win a war.
  Beyond that, we must keep all other Federal spending under control, 
so that we return, as soon as possible, to balancing the budget.
  In other words, the return to deficit spending will be a temporary 
problem only if we make a permanent commitment to the moral imperative 
of fiscal responsibility.
  We always did, and always will, need a balanced budget amendment to 
our Constitution.
  Even in the heady days of budget surpluses, I always maintained the 
only way to guarantee that the Federal Government would stay fiscally 
responsible was to add a balanced budget amendment to the Constitution.
  Before we balanced the budget in 1998, the Government was deficit 
spending for 28 years in a row and for 59 out of 67 years. The basic 
law of political temptation--to just say ``yes''--was not repealed in 
1998, but only restrained some, when we came together and briefly faced 
up to the great threat to the future posed by decades of debt.
  Now, the Government is back to borrowing. And for some, a return to 
deficit spending seems to have been liberating, as the demands for new 
spending only seem to be multiplying again.
  That is why, today, I am again introducing a balanced budget 
amendment to the Constitution and calling upon my colleagues to send it 
to the States for ratification.
  The amendment I introduce today is the same one I sponsored in the 
108th Congress. This is essentially the same as the amendment that came 
within a single vote of the two-thirds necessary for passage, twice in 
two previous Senates. In addition, this amendment would not count the 
Social Security surplus in its calculation of a balanced budget. Those 
annual surpluses would be set aside exclusively to meet the future 
needs of Social Security beneficiaries.
  It's a new day, a new year, and a new Senate. We have the opportunity 
of a fresh start and, hopefully, the wisdom of experience. Today, with 
the first piece of legislation I am introducing in the 109th Congress, 
I call on the Senate to safeguard the future, by considering and 
passing a balanced budget amendment to the Constitution--a bill of 
economic rights for our future and our children.
  I ask unanimous consent that a copy of this joint resolution, 
proposing a balanced budget amendment to the Constitution, be printed 
in the Record.
  There being no objection, the joint resolution was ordered to be 
printed in the Record, as follows:

                              S. J. Res. 2

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

                              ``Article --

       ``Section 1. Total outlays for any fiscal year shall not 
     exceed total receipts for that fiscal year, unless three-
     fifths of the whole number of each House of Congress shall 
     provide by law for a specific excess of outlays over receipts 
     by a rollcall vote.
       ``Section 2. Total receipts shall include all receipts of 
     the United States Government except those derived from 
     borrowing. Total outlays shall include all outlays of the 
     United States Government except for those for repayment of 
     debt principal.
       ``Section 3. Any surplus of receipts (including 
     attributable interest) over outlays of the Federal Old-Age 
     and Survivors Insurance and the Federal Disability Insurance 
     Trust Funds shall not be counted for purposes of this 
     article. Any deficit of receipts (including attributable 
     interest) relative to outlays of the Federal Old-Age and 
     Survivors Insurance and the Federal Disability Insurance 
     Trust Funds shall be counted for purposes of this article, 
     and must be completely offset by a surplus of all other 
     receipts over all other outlays.
       ``Section 4. The limit on the debt of the United States 
     held by the public shall not be increased, unless three-
     fifths of the whole number of each House shall provide by law 
     for such an increase by a rollcall vote.
       ``Section 5. Prior to each fiscal year, the President shall 
     transmit to the Congress a proposed budget for the United 
     States Government for that fiscal year, in which total 
     outlays do not exceed total receipts.
       ``Section 6. No bill to increase revenue shall become law 
     unless approved by a majority of the whole number of each 
     House by a rollcall vote.
       ``Section 7. The Congress may waive the provisions of this 
     article for any fiscal year in which a declaration of war is 
     in effect. The provisions of this article may be waived for 
     any fiscal year in which the United States is engaged in 
     military conflict which causes an imminent and serious 
     military threat to national security and is so declared by a 
     joint resolution, adopted by a majority of the whole number 
     of each House, which becomes law.
       ``Section 8. The Congress shall enforce and implement this 
     article by appropriate legislation, which may rely on 
     estimates of outlays and receipts.
       ``Section 9. This article shall take effect the second 
     fiscal year beginning after its ratification.''.

                          ____________________