[Congressional Record (Bound Edition), Volume 151 (2005), Part 2]
[Senate]
[Pages 2547-2593]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. LAUTENBERG (for himself, Mr. Kerry, Mrs. Boxer, and Mrs. 
        Clinton):
  S. 391. A bill to amend the Federal Election Campaign Act of 1971 to 
prohibit certain State election administration officials from actively 
participating in electoral campaigns; to the Committee on Rules and 
Administration.
  Mr. LAUTENBERG. Mr. President, I rise to introduce the Federal 
Election Integrity Act on behalf of myself and Senators Kerry, Boxer 
and Clinton. This bill creates a direct prohibition on chief State 
election officials from taking part in political campaigns by amending 
the Federal Campaign Act of 1971.
  Legislation is very much needed to eliminate an inherent conflict of 
interest that exists when a State's chief election administration 
official--the Secretary of State, the State Attorney General, or the 
Lieutenant Governor--is responsible for monitoring, supervising and 
certifying the results of a Federal election, while actively involved 
in the campaign of one of the candidates in that election.
  I know that this is a practice engaged in by both Democratic and 
Republican State officials on behalf of Federal candidates, but those 
officials in charge of certifying Federal elections must not allowed to 
serve two masters--the voters and the Federal candidate. It is not 
right and it undermines the faith and confidence that Americans in this 
Nation's election system, and impugns the integrity of the State 
election official and the Federal candidate. The will of voters must 
come before the personal partisan politics.
  In 2000 and again in 2004, we have witnessed two Secretaries of State 
capturing national press attention because of their involvement in 
elections where, literally, every single vote mattered.
  In the 2004 presidential election, Ohio Secretary of State Ken 
Blackwell was co-chairman of President Bush's re-election campaign in 
Ohio. On December 6th, 2004, Secretary of State Blackwell certified 
President Bush as the winner in Ohio with an 118,775-vote lead--closer 
than unofficial election night results, but not close enough to trigger 
a mandatory recount. Recount advocates have cited numerous Election Day 
problems in Ohio, including long lines, a shortage of voting machines 
in predominantly minority neighborhoods, and suspicious vote totals for 
candidates in scattered precincts.
  In the 2000 election, Florida Secretary of State Katherine Harris 
served as co-chair of President Bush's Florida campaign. President 
Bush's narrow victory in Florida gave him the State's 25 electoral 
votes necessary to win the presidency. A recount of thousands of 
Florida ballots and resulting court battles held up a resolution to the 
election for five weeks. There were reports of improprieties by 
Secretary of State Harris, including ballot tampering and the tampering 
of office computer files with Bush talking points and other supportive 
material.
  Just recently, California Secretary of State Kevin Shelley--a 
Democrat--resigned due to allegations that he improperly used Federal 
election funds for partisan activities.
  In all these cases, I am sure that the Secretaries of State were 
honorable public servants who made some very unpopular, difficult 
decisions under intense public scrutiny. But as far as the voters are 
considered, the Secretaries engaged in partisan political activity that 
tainted the results of the elections. This legislation fixes that.
  Secretaries of State and other State election officials with 
supervisory authority over the administration of Federal elections 
should not be actively involved in the political campaign or management 
of a candidate running for Federal office in their State. The Secretary 
of State is the primary election administration official in 39 States; 
despite that, history has shown numerous Secretaries of State chairing 
the political campaigns of Federal candidates in their State.
  There is a direct conflict of interest when an election official 
charged with supervising the administration of Federal elections and 
ensuring the fairness and accuracy of the results of Federal elections 
has a direct role in a Federal candidate's campaign.
  Again, this is not an issue of Democrats versus Republicans. Rather, 
this is an issue of preserving the American people's faith and 
confidence in the election process. Simply put, election officials 
responsible for ensuring fair and accurate Federal elections should not 
be actively cheering for and aiding a candidate in those elections.
  I ask unanimous consent that the text of the ``Federal Election 
Integrity Act'' be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 391

       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 Election Integrity 
     Act of 2005''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) chief State election administration officials have 
     served on political campaigns for Federal candidates whose 
     elections those officials will supervise;
       (2) such partisan activity by the chief State election 
     administration official, an individual charged with 
     certifying the validity of an election, represents a 
     fundamental conflict of interest that may prevent the 
     official from ensuring a fair and accurate election;
       (3) this conflict impedes the legal duty of chief State 
     election administration officials to supervise Federal 
     elections, undermines the integrity of Federal elections, and 
     diminishes the people's confidence in our electoral system by 
     casting doubt on the results of Federal elections;
       (4) the Supreme Court has long recognized that Congress's 
     power to regulate Congressional elections under Article I, 
     Section 4, Clause 1 of the Constitution is both plenary and 
     powerful; and
       (5) the Supreme Court and numerous appellate courts have 
     recognized that the broad power given to Congress over 
     Congressional elections extends to Presidential elections.

     SEC. 3. PROHIBITION ON CAMPAIGN ACTIVITIES BY ELECTION 
                   ADMINISTRATION OFFICIALS.

       (a) In General.--Title III of the Federal Election Campaign 
     Act of 1971 (2 U.S.C. 431 et seq.) is amended by inserting 
     after section 319 the following new section:


              ``CAMPAIGN ACTIVITIES BY ELECTION OFFICIALS

       ``Sec. 319A. (a) Prohibition.--It shall be unlawful for a 
     chief State election administration official to take an 
     active part in political management or in a political 
     campaign with respect to any election for Federal office over 
     which such official has supervisory authority.
       ``(b) Chief State Election Administration Official.--The 
     term `chief State election administration official' means the 
     highest State official with responsibility for the 
     administration of Federal elections under State law.
       ``(c) Active Part in Political Management or in a Political 
     Campaign.--The

[[Page 2548]]

     term `active part in political management or in a political 
     campaign' means--
       ``(1) serving as a member of an authorized committee of 
     candidate for Federal office;
       ``(2) the use of official authority or influence for the 
     purpose of interfering with or affecting the result of an 
     election for Federal office;
       ``(3) the solicitation, acceptance, or receipt of political 
     contributions from any person on behalf of a candidate for 
     Federal office;
       ``(4) the solicitation or discouragement of the 
     participation in any political activity of any person;
       ``(5) engaging in partisan political activity on behalf of 
     a candidate for Federal office; and
       ``(6) any other act prohibited under section 7323(b)(4) of 
     title 5, United States Code (other than any prohibition on 
     running for public office).''.
       (b) Enforcement.--Section 309 of the Federal Election 
     Campaign Act of 1971 (42 U.S.C. 437g) is amended by adding at 
     the end the following new subsection:
       ``(d)(1) Notwithstanding paragraphs (1) through (5) of 
     subsection (a), any person who has knowledge of a violation 
     of section 319A has occurred may file a complaint with the 
     Commission. Such complaint shall be in writing, signed and 
     sworn to by the person filing such complaint, shall be 
     notarized, and shall be made under penalty of perjury subject 
     to the provisions of section 1001 of title 18, United States 
     Code. The Commission shall promptly notify any person alleged 
     in the complaint and the candidate with respect to whom a 
     violation is alleged, and shall give such person and such 
     candidate an opportunity to respond. Not later than 14 days 
     after the date on which such a complaint is filed, the 
     Commission shall make a determination on such complaint.
       ``(2)(A) If the Commission determines by an affirmative 
     vote of a majority of the members voting that a person has 
     committed a violation of section 319A, the Commission shall 
     require the person to pay a civil money penalty in an amount 
     determined under a schedule of penalties which is established 
     and published by the Commission.
       ``(B) If the Commission determines by an affirmative vote 
     of a majority of the members voting that a person has 
     committed a violation of section 319A under subparagraph (A) 
     and that the candidate knew of the violation at the time such 
     violation occurred, the Commission may require such candidate 
     to pay a civil money penalty in an amount determined under a 
     schedule of penalties which is established and published by 
     the Commission.''.
                                 ______
                                 
      By Mr. LEVIN (for himself Mr. McCain, Ms. Stabenow, Mrs. Dole, 
        Mr. Obama, Mr. Graham, Mr. Pryor, Mr. Kennedy, Mr. Rockefeller, 
        Mr. Nelson of Florida, Ms. Landrieu, and Mr. Kerry):
  S. 392. A bill to authorize the President to award a gold medal on 
behalf of Congress, collectively, to the Tuskegee Airmen in recognition 
of their unique military record, which inspired revolutionary reform in 
the Armed Forces; to the Committee on Banking, Housing, and Urban 
Affairs.
  Mr. LEVIN. Mr. President, during the last Session of the 108th 
Congress, I informed my colleagues of my intention to introduce 
bipartisan legislation in the 109th Congress, to authorize the awarding 
of the Congressional Gold Medal, collectively, to the ``Tuskegee 
Airmen.''
  Congress has commissioned the gold medal as its highest expression of 
national appreciation for distinguished achievements and contributions. 
Today, I am pleased to be joined by Senators McCain, Stabenow, Dole, 
Obama, Graham, Rockefeller, Pryor, Ben Nelson, Landrieu and Kerry in 
introducing legislation, S. 392, that would bestow this great honor on 
the Tuskegee Airmen, in recognition of their extraordinary courage and 
unwavering determination to become America's first black military 
airmen.
  The Tuskegee Airmen were not only unique in their military record, 
but they inspired revolutionary reform in the armed forces, paving the 
way for integration of the Armed Services in the U.S. The largely 
college educated Tuskegee Airmen overcame the enormous challenges of 
prejudice and discrimination, succeeding, despite obstacles that 
threatened failure. What made these men exceptional was their 
willingness to leave their families and put their lives on the line to 
defend rights that were denied them here at home. Congresswoman Helen 
Gahagan Douglas of California, in remarks on the floor of the U.S. 
House of Representatives on February 1, 1946 summed it up this way:

       The Negro soldier made his contribution in World War II . . 
     . he has met the test of patriotism and heroism. We should be 
     especially mindful . . . remembering that he fought and shed 
     his blood for a freedom which he has not as yet been 
     permitted fully to share. I wish to pay him the respect and 
     to express the gratitude of the American people for his 
     contribution in the greatest battle of all time the battle 
     which decided whether or not we were to remain a free people. 
     The names of Negro heroes in this war are everlastingly 
     recorded among the living and the dead . . . in every combat 
     area, on land, on sea, in the air.

  Former Senator Bill Cohen, in remarks on the floor of the Senate 
decades later, in July of 1995, said: ``. . . I listened to the stories 
of the Tuskegee airmen and . . . the turmoil they experienced fighting 
in World War II, feeling they had to fight two enemies: one called 
Hitler, the other called racism in this country.''
  The superior record of the Tuskegee Airmen in World War II was 
accomplished by individuals who accepted the challenge and proudly 
displayed their skill and determination in the face of racism and 
bigotry at home, despite their distinguished war records. Prior to the 
1940s, many in the military held the sadly, mistaken view that black 
servicemen were unfit for most leadership roles and mentally incapable 
of combat aviation. Between 1924 and 1939, the Army War College 
commissioned a number of studies aimed at increasing the military role 
of blacks. According to The Air Force Magazine, Journal of the Air 
Force Association, March 1996, ``. . . these studies asserted that 
blacks possessed brains significantly smaller than those of white 
troops and were predisposed to lack physical courage. The reports 
maintained that the Army should increase opportunities for blacks to 
help meet manpower requirements but claimed that they should always be 
commanded by whites and should always serve in segregated units.''
  Overruling his top generals and to his credit, President Franklin 
Roosevelt in 1941 ordered the creation of an all black flight training 
program at Tuskegee Institute. He did so 1 day after Howard University 
student Yancy Williams filed suit in Federal Court to force the 
Department of Defense to accept black pilot trainees. Yancy Williams 
had a civilian pilot's license, and received an engineering degree. 
Years later, ``Major Yancy Williams,'' participated in an air 
surveillance project created by President Eisenhower.
  ``We proved that the antidote to racism is excellence in 
performance,'' said retired Lt. Col. Herbert Carter, who started his 
military career as a pilot and maintenance officer with the 99th 
Fighter Squadron. ``Can you imagine . . . with the war clouds as heavy 
as they were over Europe, a citizen of the United States having to sue 
his government to be accepted to training so he could fly and fight and 
die for his country?'' The government expected the experiment to fail 
and end the issue, said Carter. The mistake they made was that they 
forgot to tell us . . .''
  The first class of cadets began in July of 1941 with thirteen men, 
all of whom had college degrees, some with PhD's and all had pilot's 
licenses. Based on the aforementioned studies, the training of the 
Tuskegee Airmen was an experiment established to prove that 
``coloreds'' were incapable of operating expensive and complex combat 
aircraft.
  By 1943, the first of contingent of black airmen were sent to North 
Africa, Sicily and Europe. Their performance far exceeded anyone's 
expectation. They shot down six German aircraft on their first mission, 
and were also the first squad to sink a battleship with only machine 
guns. Overall, nearly 1,000 black pilots graduated from Tuskegee, 450 
of whom served in combat with the last class finishing in June of 1946. 
Sixty-six of the aviators died in combat, while another 33 were shot 
down and captured as prisoners of war. The Tuskegee Airmen were 
credited with 261 aircraft destroyed, 148 aircraft damaged, 15,553 
combat sorties and 1,578 missions over Italy and North Africa. They 
destroyed or damaged over 950 units of ground transportation and 
escorted more than 200 bombing missions. Clearly, the experiment, as it 
was called, was an unqualified success.

[[Page 2549]]

Black men could not only fly, they excelled at it, and were equal 
partners in America's victory.
  A number of Tuskegee Airmen have lived in Michigan, including 
Alexander Jefferson, Washington Ross, Wardell Polk, and Walter Downs, 
among others. Tuskegee Airmen also trained at Michigan's Selfridge and 
Oscoda air fields in the early 40's. In the early 1970's, the Airmen 
established their first chapter in Detroit. Today there are 42 chapters 
located in major cities of the U.S. The chapters support young people 
through scholarships, sponsorships to the military academies, and 
flight training programs. Detroit is also the location of The Tuskegee 
Airmen National Museum, which is on the grounds of historic Fort Wayne. 
The late Coleman Young, former Mayor of the City of Detroit was trained 
as a navigator bombardier for the 477th bombardment group of the 
Tuskegee Airmen. This group was still in training when World War II 
ended so they never saw combat. However, the important fact is that all 
of those receiving flight related training--nearly 1,000--were 
instrumental in breaking the segregation barrier. They all had a 
willingness to see combat, and committed themselves to the segregated 
training with a purpose to defend their country.
  The Tuskegee Airmen were awarded 3 Presidential Unit Citations, 150 
Distinguished Flying Crosses and Legions of Merit, along with The Red 
Star of Yugoslavia, 9 Purple Hearts, 14 Bronze Stars and more than 700 
Air medals and clusters. It goes without question that the Tuskegee 
Airmen are deserving of the Congressional Gold Medal. According to 
existing records, I am proud to say that 155 Tuskegee Airmen originated 
from my State of Michigan.
  In closing, I urge my colleagues in the Senate to swiftly act on this 
legislation, a most deserving honor and tribute to the Tuskegee Airmen. 
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. 392

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

     SECTION 1. FINDINGS.

       Congress finds the following:
       (1) In 1941, President Franklin D. Roosevelt overruled his 
     top generals and ordered the creation of an all Black flight 
     training program. President Roosevelt took this action one 
     day after the NAACP filed suit on behalf of Howard University 
     student Yancy Williams and others in Federal court to force 
     the Department of War to accept Black pilot trainees. Yancy 
     Williams had a civilian pilot's license and had earned an 
     engineering degree. Years later, Major Yancy Williams 
     participated in an air surveillance project created by 
     President Dwight D. Eisenhower.
       (2) Due to the rigid system of racial segregation that 
     prevailed in the United States during World War II, Black 
     military pilots were trained at a separate airfield built 
     near Tuskegee, Alabama. They became known as the ``Tuskegee 
     Airmen''.
       (3) The Tuskegee Airmen inspired revolutionary reform in 
     the Armed Forces, paving the way for full racial integration 
     in the Armed Forces. They overcame the enormous challenges of 
     prejudice and discrimination, succeeding, despite obstacles 
     that threatened failure.
       (4) From all accounts, the training of the Tuskegee Airmen 
     was an experiment established to prove that so-called 
     ``coloreds'' were incapable of operating expensive and 
     complex combat aircraft. Studies commissioned by the Army War 
     College between 1924 and 1939 concluded that Blacks were 
     unfit for leadership roles and incapable of aviation. 
     Instead, the Tuskegee Airmen excelled.
       (5) Overall, some 992 Black pilots graduated from the pilot 
     training program of the Tuskegee Army Air Field, with the 
     last class finishing in June 1946, 450 of whom served in 
     combat. The first class of cadets began in July 1941 with 13 
     airmen, all of whom had college degrees, some with Ph.D.'s, 
     and all of whom had pilot's licenses. One of the graduates 
     was Captain Benjamin O. Davis Jr., a United States Military 
     Academy graduate. Four aviation cadets were commissioned as 
     second lieutenants, and 5 received Army Air Corps silver 
     pilot wings.
       (6) That the experiment achieved success rather than the 
     expected failure is further evidenced by the eventual 
     promotion of 3 of these pioneers through the commissioned 
     officer ranks to flag rank, including the late General 
     Benjamin O. Davis, Jr., United States Air Force, the late 
     General Daniel ``Chappie'' James, United States Air Force, 
     our Nation's first Black 4-star general, and Major General 
     Lucius Theus, United States Air Force (retired).
       (7) Four hundred fifty Black fighter pilots under the 
     command of then Colonel Benjamin O. Davis, Jr., fought in 
     World War II aerial battles over North Africa, Sicily, and 
     Europe, flying, in succession, P-40, P-39, P-47, and P-51 
     aircraft. These gallant men flew 15,553 sorties and 1,578 
     missions with the 12th Tactical Air Force and the 15th 
     Strategic Air Force.
       (8) Colonel Davis later became the first Black flag officer 
     of the United States Air Force, retired as a 3-star general, 
     and was honored with a 4th star in retirement by President 
     William J. Clinton.
       (9) German pilots, who both feared and respected the 
     Tuskegee Airmen, called them the ``Schwartze Vogelmenshen'' 
     (or ``Black Birdmen''). White American bomber crews 
     reverently referred to them as the ``Black Redtail Angels'', 
     because of the bright red painted on the tail assemblies of 
     their fighter aircraft and because of their reputation for 
     not losing bombers to enemy fighters as they provided close 
     escort for bombing missions over strategic targets in Europe.
       (10) The 99th Fighter Squadron, after having distinguished 
     itself over North Africa, Sicily, and Italy, joined 3 other 
     Black squadrons, the 100th, the 301st, and the 302nd, 
     designated as the 332nd Fighter Group. They then comprised 
     the largest fighter unit in the 15th Air Force. From Italian 
     bases, they destroyed many enemy targets on the ground and at 
     sea, including a German destroyer in strafing attacks, and 
     they destroyed numerous enemy aircraft in the air and on the 
     ground.
       (11) Sixty-six of these pilots were killed in combat, while 
     another 32 were either forced down or shot down and captured 
     to become prisoners of war. These Black airmen came home with 
     150 Distinguished Flying Crosses, Bronze Stars, Silver Stars, 
     and Legions of Merit, one Presidential Unit Citation, and the 
     Red Star of Yugoslavia.
       (12) Other Black pilots, navigators, bombardiers and 
     crewman who were trained for medium bombardment duty as the 
     477th Bomber Group (Medium) were joined by veterans of the 
     332nd Fighter Group to form the 477th Composite Group, flying 
     the B-25 and P-47 aircraft. The demands of the members of the 
     477th Composite Group for parity in treatment and for 
     recognition as competent military professionals, combined 
     with the magnificent wartime records of the 99th Fighter 
     Squadron and the 332nd Fighter Group, led to a review of the 
     racial policies of the Department of War.
       (13) In September 1947, the United States Air Force, as a 
     separate service, reactivated the 332d Fighter Group under 
     the Tactical Air command. Members of the 332d Fighter Group 
     were ``Top Guns'' in the 1st annual Air Force Gunnery Meet in 
     1949.
       (14) For every Black pilot there were 12 other civilian or 
     military Black men and women performing ground support 
     duties. Many of these men and women remained in the military 
     service during the post-World War II era and spearheaded the 
     integration of the Armed Forces of the United States.
       (15) Major achievements are attributed to many of those who 
     returned to civilian life and earned leadership positions and 
     respect as businessmen, corporate executives, religious 
     leaders, lawyers, doctors, educators, bankers, and political 
     leaders.
       (16) A period of nearly 30 years of anonymity for the 
     Tuskegee Airmen was ended in 1972 with the founding of 
     Tuskegee Airmen, Inc., in Detroit, Michigan. Organized as a 
     non-military and nonprofit entity, Tuskegee Airmen, Inc., 
     exists primarily to motivate and inspire young Americans to 
     become participants in our Nation's society and its 
     democratic process, and to preserve the history of their 
     legacy.
       (17) The Tuskegee Airmen have several memorials in place to 
     perpetuate the memory of who they were and what they 
     accomplished, including--
       (A) the Tuskegee Airmen, Inc., National Scholarship Fund 
     for high school seniors who excel in mathematics, but need 
     financial assistance to begin a college program;
       (B) a museum in historic Fort Wayne in Detroit, Michigan;
       (C) Memorial Park at the Air Force Museum at Wright-
     Patterson Air Force Base in Dayton, Ohio;
       (D) a statue of a Tuskegee Airman in the Honor Park at the 
     United States Air Force Academy in Colorado Springs, 
     Colorado; and
       (E) a National Historic Site at Moton Field, where primary 
     flight training was performed under contract with the 
     Tuskegee Institute.

     SEC. 2. CONGRESSIONAL GOLD MEDAL.

       (a) Presentation Authorized.--The President is authorized 
     to award to the Tuskegee Airmen, on behalf of Congress, a 
     gold medal of appropriate design honoring the Tuskegee Airmen 
     in recognition of their unique military record, which 
     inspired revolutionary reform in the Armed Forces.
       (b) Design and Striking.--For the purposes of the award 
     referred to in subsection (a), the Secretary of the Treasury 
     (hereafter in this Act referred to as the ``Secretary'') 
     shall strike a gold medal with suitable emblems, devices, and 
     inscriptions, to be determined by the Secretary.

[[Page 2550]]



     SEC. 3. DUPLICATE MEDALS.

       Under such regulations as the Secretary may prescribe, the 
     Secretary may strike and sell duplicates in bronze of the 
     gold medal struck under section 2, at a price sufficient to 
     cover the costs of the medals, including labor, materials, 
     dies, use of machinery, and overhead expenses.

     SEC. 4. NATIONAL MEDALS.

       Medals struck pursuant to this Act are national medals for 
     purposes of chapter 51 of title 31, United States Code.

     SEC. 5. AUTHORIZATION OF APPROPRIATIONS; PROCEEDS OF SALE.

       (a) Authorization of Appropriations.--There is authorized 
     to be charged against the United States Mint Public 
     Enterprise Fund, an amount not to exceed $30,000 to pay for 
     the cost of the medals authorized under section 2.
       (b) Proceeds of Sale.--Amounts received from the sale of 
     duplicate bronze medals under section 3 shall be deposited in 
     the United States Mint Public Enterprise Fund.
                                 ______
                                 
      By Mr. AKAKA (for himself, Mr. Durbin, Mr. Leahy, Mr. Sarbanes, 
        and Mr. Schumer):
  S. 393. A bill to require enhanced disclosure to consumers regarding 
the consequences of making only minimum required payments in the 
repayment of credit card debt, and for other purposes; to the Committee 
on Banking, Housing, and Urban Affairs.
  Mr. AKAKA. Mr. President, I rise to introduce the Credit Card Minimum 
Payment Warning Act. I thank Senators Durbin, Leahy, Sarbanes, and 
Schumer for working with me on this legislation and for cosponsoring 
this bill.
  I am deeply concerned about the enormous debt burdens that Americans 
are currently carrying. I share the concern on debts we expect from the 
Social Security program. Revolving Debt, mostly comprised of credit 
card debt, has increased from $54 billion in January 1980 to more than 
$780 billion in November 2004. A U.S. Public Interest Research Group 
and Consumer Federation of America analysis of Federal Reserve data 
indicates that the average household with debt carries approximately 
$10,000 to $12,000 in total revolving debt and has nine credit cards.
  During all of 1980, only 287,570 consumers filed for bankruptcy. As 
consumer debt burdens have ballooned, the number of bankruptcies have 
increased significantly. From January through September of 2004, 
approximately 1.2 million consumers filed for bankruptcy, keeping pace 
with last year's record level.
  It is imperative that we make consumers more aware of the long-term 
effects of their financial decisions, particularly in managing their 
credit card debt, so that they can avoid financial pitfalls that may 
lead to bankruptcy.
  While it is relatively easy to obtain credit, not enough is done to 
ensure that credit is properly managed. Currently, credit card 
statements fail to include all of the information necessary to allow 
individuals to make fully informed financial decisions. Additional 
disclosure is needed to ensure that individuals completely understand 
the implications of their credit card use and costs of only making the 
minimum payments required by credit card companies.
  Our legislation will provide a wake up call for consumers. It will 
make it very clear what costs consumers will incur if they make only 
the minimum payments on their credit cards. The personalized 
information they will receive for each of their accounts will help them 
to make informed choices about the payments that they choose to make 
towards reducing their balance.
  This bill requires a minimum payment warning notification on monthly 
statements stating that making the minimum payment will increase the 
amount of interest that will be paid and extend the amount of time it 
will take to repay the outstanding balance. The bill also requires 
informing consumers of how many years and months it will take to repay 
their entire balance if they make only the minimum payments. In 
addition, the total cost in interest and principal, if the consumer 
pays only the minimum payment, would have to be disclosed. These 
provisions will make individuals much more aware of the true costs of 
their credit card debts. The bill also requires that credit card 
companies provide useful information so that people can develop 
strategies to free themselves of credit card debt. Consumers would have 
to be provided with the amount they need to pay to eliminate their 
outstanding balance within 36 months.
  Finally, the legislation would require that creditors establish a 
toll-free number so that consumers can access trustworthy credit 
counselors. In order to ensure that consumers are referred from the 
toll-free number to only trustworthy organizations, the agencies for 
referral would have to be approved by the Federal Trade Commission and 
the Federal Reserve Board as having met comprehensive quality 
standards. These standards are necessary because certain credit 
counseling agencies have abused their nonprofit, tax-exempt status and 
have taken advantage of people seeking assistance in managing their 
debts. Many people believe, sometimes mistakenly, that they can place 
blind trust in nonprofit organizations and that their fees will be 
lower than those of other credit counseling organizations. Too many 
individuals may not realize that the credit counseling industry does 
not deserve the trust that consumers often place in it.
  The Credit Card Minimum Payment Warning Act has been endorsed by the 
Consumer Federation of America, Consumers Union, U.S. Public Interest 
Research Group, and Consumer Action.
  I urge my colleagues to support this legislation that will empower 
consumers by providing them with detailed personalized information to 
assist them in making informed choices about their credit card use and 
repayment. This bill makes clear the adverse consequences of uninformed 
choices such as making only minimum payments and provides opportunities 
to locate assistance to eliminate credit card debts.
  I ask unanimous consent that a letter of support and fact sheet from 
organizations in support of the legislation be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                 January 28, 2005.
     Hon. Daniel K. Akaka,
     U.S. Senate,
     Washington, DC.
     Hon. Paul S. Sarbanes,
     U.S. Senate,
     Washington, DC.
     Hon. Richard J. Durbin
     U.S. Senate,
     Washington, DC.
       Dear Senators Akaka, Durbin and Sarbanes: The undersigned 
     national consumer organizations write to strongly support the 
     Credit Card Minimum Payment Warning Act. The Act would 
     require credit card issuers to disclose more information to 
     consumers about the costs associated with paying their bills 
     at ever-declining minimum payment rates. The Act provides a 
     personalized ``price tag'' so consumers can understand what 
     are the real costs of credit card debt and avoid financial 
     problems in the future.
       Undisputed evidence links the rise in bankruptcy in recent 
     years to the increase in consumer credit outstanding. These 
     numbers have moved in lockstep for more than 20 years. 
     Revolving credit, for example (most of which is credit card 
     debt) ballooned from $214 billion in January 1990 to over 
     $780 billion currently. As family debt increases, debt 
     service payments on items such as interest and late fees take 
     an ever-increasing piece of their budget. For some families, 
     this contributes to the collapse of their budget. Bankruptcy 
     becomes the only way out. (See the attached fact sheet for 
     more information about the scope and impact of credit card 
     debt.)
       Credit card issuers have exacerbated the financial problems 
     that many families have faced by lowering minimum payment 
     amounts, from around 4 percent of the balance owed, to about 
     2 percent currently. This decline in the typical minimum 
     payment is a significant reason for the rise in consumer 
     bankruptcies in recent years. A low minimum payment often 
     barely covers interest obligations. It convinces many 
     borrowers that they are financially sound as long as they can 
     meet all of their minimum payment obligations. However, those 
     that cannot afford to make these payments often carry so much 
     debt that bankruptcy is usually the only viable option.
       This bill will provide consumers several crucial pieces of 
     information on their monthly credit card statement:
       A ``minimum payment warning'' that paying at the minimum 
     rate will increase the amount of interest that is owed and 
     the time it will take to repay the balance.
       The number of years and months that it will take the 
     consumer to payoff the balance at the minimum rate.

[[Page 2551]]

       The total costs in interest and principal if the consumer 
     pays at the minimum rate.
       The monthly payment that would be required to pay the 
     balance off in three years.
       The bill also requires that credit card companies provide a 
     toll-free number that consumers can call to receive 
     information about credit counseling and debt management 
     assistance. In order to assure that consumers are referred to 
     honest, legitimate non-profit credit counselors, the bill 
     requires the Federal Reserve to screen these agencies to 
     ensure that they meet rigorous quality standards.
       Our groups commend you for offering this very important and 
     long-overdue piece of legislation. It provides the kind of 
     personalized, timely disclosure information that will help 
     debt-choked families make informed decisions and start to 
     work their way back to financial health.
           Sincerely,
     Travis B. Plunkett,
       Legislative Director, Consumer Federation of America.
     Susanna Montezemolo,
       Policy Analyst, Consumers Union.
     Edmund Mierzwinski,
        Consumer Programs Director, U.S. Public Interest Research 
     Group.
     Linda Sherry,
       Editorial Director, Consumer Action.
                                  ____


                      Facts About Credit Card Debt

     Revolving debt (most of which is credit card debt) has 
         ballooned from $54 billion in January 1980 to over $780 
         billion currently.


                                                                Billion
January 1980........................................................$54
January 1984.........................................................79
January 1990........................................................214
January 1994........................................................313
November 2004.....................................................780.1

Source: http://www.federalreserve.gov/Releases/G19/hist/cc hist 
sa.html.

       About one-twelfth of this debt is paid off before it incurs 
     interest, so Americans pay interest on an annual load of 
     about $690 billion in revolving debt.
       According to the Federal Reserve, the most recent average 
     credit card interest rate is 12.4% APR. At simple interest, 
     with no compounding, then, consumers pay at least $85 billion 
     annually in interest on credit card and other revolving debt.
       Just about 55 percent of consumers carry debt. The rest are 
     convenience users.
       From PIRG/CFA analysis of Federal Reserve data, the average 
     household with debt carries approximately $10,000-12,000 in 
     total revolving debt and has approximately nine cards.
                                  ____


           Facts About the Effect of Minimum Monthly Payments

       A household making the monthly minimum required payments on 
     this debt (usually the greater of 2 percent of the unpaid 
     balance or $20) at the very low average 12.4% APR (many 
     consumers pay much higher penalty rates than this FRB-
     reported average) would pay $1,175 in interest just in the 
     first year, even if these cards are cut up and not used 
     again.
       This household would pay a total of over $9,800 in interest 
     over a period of 25 years and three months. That fact is not 
     disclosed.
       A household or consumer who merely doubled their minimum 
     payment and paid 4% of the amount due would fare better. A 
     household or consumer that paid 10% of the balance each month 
     would fare much better. Here is a comparison.
     Minimum payment warnings would encourage larger payments and 
         save consumers thousands of dollars in high-priced credit 
         card debt.

------------------------------------------------------------------------
                                            Monthly Payment (% of unpaid
   Credit card debt of $10,000 at Modest              balance)
                 12.4% APR                 -----------------------------
                                               2%        4%        10%
------------------------------------------------------------------------
First Year Interest =.....................    $1,175    $1,054      $775
Total Interest Owed =.....................    $9,834    $3,345    $1,129
Months To Pay.............................       303       127        52
Years To Pay..............................      25.3      10.6       4.3
------------------------------------------------------------------------
Calculations by U.S. PIRG. Also see http://www.truthaboutcredit.org/
lowerapr.htm for additional comparisons and amortization tables.

       Giving consumers a minimum payment warning on their credit 
     card statements is the most powerful action Congress could 
     take to increase consumer understanding of the cost of credit 
     card debt.

                 Facts About Who Owes Credit Card Debt

       Credit card debt has risen fastest among lower-income 
     Americans. These families saw the largest increase--a 184 
     percent rise in their debt--but even very high-income 
     families had 28 percent more credit card debt in 2001 than 
     they did in 1989. Source: Demos.
       Thirty-nine percent of student loan borrowers now graduate 
     with unmanageable levels of debt, meaning that their monthly 
     payments are more than 8% of their monthly incomes. According 
     to PIRG analysis of the 1999-2000 NPSAS data, in 2001, 41% of 
     the graduating seniors carried a credit card balance, with an 
     average balance of $3,071. Student loan borrowers were even 
     more likely to carry credit card debt, with 48% of borrowers 
     carrying an average credit card balance of $3,176. See ``The 
     Burden of Borrowing,'' 2002, Tracey King, the State PIRGs, 
     http://www.pirg.org/highered/BurdenofBorrowing.pdf.
     While less likely to have credit cards than white families, 
         data show that African-American and Hispanic families are 
         more likely to carry debt.

------------------------------------------------------------------------
                                      % with    Cardholding    Average
                                      credit    % with debt  credit card
                                    cards 2001      2001      debt 2001
------------------------------------------------------------------------
All families.....................           76           55       $4,126
White families...................           82           51        4,381
Black families...................           59           84        2,950
Hispanic families................           53           75        3,691
------------------------------------------------------------------------
Demos calculations using 2001 Survey of Consumer Finances. See Borrowing
  To Make Ends Meet. Demos, http://www.demos2/3usa.org/pubs/
  borrowing_tomake_ends_meet.pdf.

                         Seniors (Over age 65)

       Credit card debt among older Americans increased by 89 
     percent from 1992 to 2001. Average balances among indebted 
     adults over 65 increased by 89 percent, to $4,041.
       Seniors between 65 and 69 years old, presumably the newly-
     retired, saw the most staggering rise in credit card debt--
     217 percent--to an average of $5,844.
       Female-headed senior households experienced a 48 percent 
     increase between 1992 and 2001, to an average of $2,319.
       Among seniors with incomes under $50,000 (70 percent of 
     seniors), about one in five families with credit card debt is 
     in debt hardhip--spending over 40 percent of their income on 
     debt payments, including mortgage debt.


                       Transitioners (ages 55-64)

       Transitioners experienced a 47 percent increase in credit 
     card debt between 1992 and 2001, to an average of $4,088.
       The average credit card-indebted family in this age group 
     now spends 31 percent of their income on debt payments, a 10 
     percent increase over the decade.

  Mr. AKAKA. I also ask unanimous consent that the text of the Credit 
Card Minimum Payment Warning Act be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 393

       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 ``Credit Card Minimum Payment 
     Warning Act of 2005''.

     SEC. 2. ENHANCED CONSUMER DISCLOSURES REGARDING MINIMUM 
                   PAYMENTS.

       Section 127(b) of the Truth in Lending Act (15 U.S.C. 
     1637(b)) is amended by adding at the end the following:
       ``(11)(A) Information regarding repayment of the 
     outstanding balance of the consumer under the account, 
     appearing in conspicuous type on the front of the first page 
     of each such billing statement, and accompanied by an 
     appropriate explanation, containing--
       ``(i) the words `Minimum Payment Warning: Making only the 
     minimum payment will increase the amount of interest that you 
     pay and the time it will take to repay your outstanding 
     balance.';
       ``(ii) the number of years and months (rounded to the 
     nearest month) that it would take for the consumer to pay the 
     entire amount of that balance, if the consumer pays only the 
     required minimum monthly payments;
       ``(iii) the total cost to the consumer, shown as the sum of 
     all principal and interest payments, and a breakdown of the 
     total costs in interest and principal, of paying that balance 
     in full if the consumer pays only the required minimum 
     monthly payments, and if no further advances are made;
       ``(iv) the monthly payment amount that would be required 
     for the consumer to eliminate the outstanding balance in 36 
     months if no further advances are made; and
       ``(v) a toll-free telephone number at which the consumer 
     may receive information about accessing credit counseling and 
     debt management services.
       ``(B)(i) Subject to clause (ii), in making the disclosures 
     under subparagraph (A) the creditor shall apply the interest 
     rate in effect on the date on which the disclosure is made.
       ``(ii) If the interest rate in effect on the date on which 
     the disclosure is made is a temporary rate that will change 
     under a contractual provision specifying a subsequent 
     interest rate or applying an index or formula for subsequent 
     interest rate adjustment, the creditor shall apply the 
     interest rate in effect on the date on which the disclosure 
     is made for as long as that interest rate will apply under 
     that contractual provision, and then shall apply the adjusted 
     interest rate, as specified in the contract. If the contract 
     applies a formula that uses an index that varies over time, 
     the value of such index on the date on which the disclosure 
     is made shall be used in the application of the formula.''.

     SEC. 3. ACCESS TO CREDIT COUNSELING AND DEBT MANAGEMENT 
                   INFORMATION.

       (a) Guidelines Required.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Board of Governors of the Federal 
     Reserve System and the Federal Trade Commission (in this 
     section referred to as the ``Board'' and the

[[Page 2552]]

     ``Commission'', respectively) shall jointly, by rule, 
     regulation, or order, issue guidelines for the establishment 
     and maintenance by creditors of a toll-free telephone number 
     for purposes of the disclosures required under section 
     127(b)(11) of the Truth in Lending Act, as added by this Act.
       (2) Approved agencies.--Guidelines issued under this 
     subsection shall ensure that referrals provided by the toll-
     free number include only those agencies approved by the Board 
     and the Commission as meeting the criteria under this 
     section.
       (b) Criteria.--The Board and the Commission shall only 
     approve a nonprofit budget and credit counseling agency for 
     purposes of this section that--
       (1) demonstrates that it will provide qualified counselors, 
     maintain adequate provision for safekeeping and payment of 
     client funds, provide adequate counseling with respect to 
     client credit problems, and deal responsibly and effectively 
     with other matters relating to the quality, effectiveness, 
     and financial security of the services it provides;
       (2) at a minimum--
       (A) is registered as a nonprofit entity under section 
     501(c) of the Internal Revenue Code of 1986;
       (B) has a board of directors, the majority of the members 
     of which--
       (i) are not employed by such agency; and
       (ii) will not directly or indirectly benefit financially 
     from the outcome of the counseling services provided by such 
     agency;
       (C) if a fee is charged for counseling services, charges a 
     reasonable and fair fee, and provides services without regard 
     to ability to pay the fee;
       (D) provides for safekeeping and payment of client funds, 
     including an annual audit of the trust accounts and 
     appropriate employee bonding;
       (E) provides full disclosures to clients, including funding 
     sources, counselor qualifications, possible impact on credit 
     reports, any costs of such program that will be paid by the 
     client, and how such costs will be paid;
       (F) provides adequate counseling with respect to the credit 
     problems of the client, including an analysis of the current 
     financial condition of the client, factors that caused such 
     financial condition, and how such client can develop a plan 
     to respond to the problems without incurring negative 
     amortization of debt;
       (G) provides trained counselors who--
       (i) receive no commissions or bonuses based on the outcome 
     of the counseling services provided;
       (ii) have adequate experience; and
       (iii) have been adequately trained to provide counseling 
     services to individuals in financial difficulty, including 
     the matters described in subparagraph (F);
       (H) demonstrates adequate experience and background in 
     providing credit counseling;
       (I) has adequate financial resources to provide continuing 
     support services for budgeting plans over the life of any 
     repayment plan; and
       (J) is accredited by an independent, nationally recognized 
     accrediting organization.
                                 ______
                                 
      By Mr. CORNYN (for himself and Mr. Leahy):
  S. 394. A bill to promote accessibility, accountability, and openness 
in Government by strengthening section 552 of title 5, United States 
Code (commonly referred to as the Freedom of Information Act), and for 
other purposes; to the Committee on the Judiciary.
  (See exhibit 1.)
  Mr. CORNYN. Mr. President, I rise today to introduce a bill, along 
with the Senator from Vermont who we will hear from shortly, that will 
help enhance the openness of the Federal Government. This bill is 
called the Open Government Act of 2005. It is a bipartisan effort to 
improve and update our public information laws--particularly the 
Freedom of Information Act.
  The purpose of the bill is to arm the American people with the 
information they need to make certain that ours remains a government 
whose legitimacy is derived from the consent of the governed. This 
legislation will significantly expand the accessibility, 
accountability, and openness of the Federal Government.
  Open government, of course, is one of the most basic requirements of 
a healthy democracy. It allows taxpayers to see where their money is 
going. It permits the honest exchange of information that ensures 
government accountability, and it upholds the ideal that government 
never rules without the consent of the governed. As is so often the 
case, Abraham Lincoln said it best:

       No man is good enough to govern another without that 
     person's consent.

  But achieving the true consent of the governed requires something 
more than just holding elections every couple of years. What we need is 
informed consent. Informed consent is impossible without open and 
accessible government.
  It has been nearly a decade since Congress has approved major reforms 
to the Freedom of Information Act. The Senate Judiciary Committee has 
not convened an oversight hearing to examine the Freedom of Information 
Act compliance issue since 1992. And at that time, I believe it is 
clear that the growth of technology and the Internet has created a real 
desire among the American people to achieve direct, efficient, and open 
access to government information.
  I thank my colleague from Vermont, the ranking member of the 
Judiciary Committee, who has long been a champion of these issues, for 
his hard work on this bill. Together our offices have spent a good deal 
of time meeting with open government advocates. I am proud to say this 
bill is supported by a broad coalition across the ideological spectrum, 
because I believe this legislation should not be a partisan or special 
interest bill. Indeed, it is not.
  I ask unanimous consent that these endorsement letters from dozens of 
watchdog groups across the political spectrum be printed in the Record 
at the close of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 2.)
  Mr. CORNYN. Mr. President, as the Senator from Vermont said at a 
recent Judiciary Committee hearing:

       I have always found that every administration, Republican 
     or Democrat, would love to keep a whole lot of things from 
     the public. They do something they are proud of, they will 
     send out a hundred press releases. Otherwise, they will hold 
     it back. We have the Freedom of Information Act, which is a 
     very good thing. It keeps both Democratic and Republican 
     administrations in line.

  I agree with that. Essentially, we are talking about human nature. It 
is only natural that elected officials and Government leaders want 
recognition for their successes but not their failures. But we, as a 
healthy democracy, need to know the good, the bad, and the ugly.
  The news media, of course, is the main way people get information 
about the Government. The media pushes Government entities and elected 
officials, bureaucrats, and agencies to release information that the 
people have the right to know, occasionally exposing waste, fraud, and 
abuse--and hopefully more often than that letting the American people 
know what a good job their public officials are doing.
  But we have also seen in recent years an expansion of other outlets 
for sharing information outside of the mainstream media to online 
communities, discussion groups, and blogs. I believe all these outlets 
can and do contribute to the health of our political democracy.
  Let me make this clear. This is not just a bill for the media, lest 
anybody be confused. This is a bill that will benefit every man, woman, 
and child in the United States of America who cares about the Federal 
Government, cares about how the Federal Government operates, and 
ultimately cares about the success of this great democracy.
  By reforming our information policies in order to guarantee true 
access by all citizens to Government records, we will revitalize the 
informed consent that keeps America free. The Open Government Act 
contains over a dozen substantive provisions, designed to achieve the 
following four objectives:
  First, it will strengthen the Freedom of Information Act and close 
loopholes.
  Secondly, it will help Freedom of Information Act requesters obtain 
timely responses to their requests.
  Third, it will ensure that agencies have strong incentives to comply 
with the law in a timely fashion.
  Fourth, it will provide Freedom of Information Act officials; that 
is, people within Government agencies, with all the tools, including 
the education, they need in order to ensure that our Government remains 
open and accessible.
  This legislation is not just pro-openness, pro-accountability and 
pro-accessibility; it is also pro-Internet. It contains important 
congressional findings to reiterate the presumption of openness. It 
includes a provision for a hotline that enables citizens to track the

[[Page 2553]]

requests and even allows tracking of those requests via the Internet. 
As a whole, the Open Government Act reiterates the principle that our 
Government is based not on the need to know but rather on the right to 
know.
  We all recognize that America's security should never take a back 
seat. But nor should the claim, without justification, of national 
security be used as a barrier against allowing taxpayers to know how 
their money is being spent.
  There is a broad consensus across the aisle, the political spectrum, 
that we currently overclassify Government documents, and that many 
documents and much information is placed beyond the public view without 
any real justification. I believe we need a system of classification 
that strikes the right balance between the need to classify documents 
in the interest of our national security and our national values of 
open government.
  Our default position of the U.S. Government must be one of openness. 
If records can be open, they should be open. If there is a good reason 
to keep something closed, it is the Government that should bear the 
burden, not the other way around.
  Open government is fundamentally an American issue. It is literally 
necessary to preserve our way of life as a self-governing people. 
Ensuring the accessibility, accountability, and openness of the Federal 
Government is a cause worthy of preservation, and I call on my 
colleagues to join the Senator from Vermont and I today in taking a 
meaningful step toward that goal.
  Finally, before I yield the floor to the Senator from Vermont, let me 
again express my appreciation to him and his staff. They have worked 
very closely with my staff. This is one of those good Government 
initiatives that knows no party affiliation, no ideological 
affiliation, but is really one that is essential to the preservation of 
our way of life as a self-governing democracy.

                               Exhibit 1

 Openness Promotes Effectiveness in our National Government Act of 2005

       Led by U.S. Senators John Cornyn and Patrick Leahy, the 
     OPEN Government Act of 2005 is a bipartisan effort to achieve 
     meaningful reforms to federal government information laws--
     including most notably the Freedom of Information Act of 1966 
     (``FOIA''). If enacted, the legislation would substantially 
     enhance and expand the accessibility, accountability, and 
     openness of the federal government. It has been nearly a 
     decade since Congress has approved major reforms to FOIA. 
     Moreover, the Senate Judiciary Committee has not convened an 
     oversight hearing to examine FOIA compliance issues since 
     April 30, 1992. (The Senate Homeland Security and 
     Governmental Affairs Committee, which shares jurisdiction 
     over federal government information laws with the Judiciary 
     Committee, has not held a FOIA oversight hearing since 1980.)
       This legislation is the culmination of months of extensive 
     discussions between the offices of Senators Cornyn and Leahy 
     and various members of the requestor community. The bill is 
     supported by Texas Attorney General Greg Abbott and a broad 
     coalition of organizations across the ideological spectrum, 
     including:

     American Association of Law Libraries
     American Civil Liberties Union
     American Library Association
     American Society of Newspaper Editors
     Associated Press Managing Editors
     Association of Health Care Journalists
     Center for Democracy & Technology
     Coalition of Journalists for Open Government
     Committee of Concerned Journalists
     Education Writers Association
     Electronic Privacy Information Center
     Federation of American Scientists/Project on Government 
         Secrecy
     Free Congress Foundation/Center for Privacy & Technology 
         Policy
     Freedom of Information Center, University of Missouri
     The Freedom of Information Foundation of Texas
     The Heritage Foundation/Center for Media and Public Policy
     Information Trust
     National Conference of Editorial Writers
     National Freedom of Information Coalition
     National Newspaper Association
     National Security Archive/George Washington University
     Newspaper Association of America
     People for the American Way
     Project on Government Oversight
     Radio-Television News Directors Association
     The Reporters Committee for Freedom of the Press
     Society of Environmental Journalists

       The Act contains important Congressional findings to 
     reiterate and reinforce the view that the Freedom of 
     Information Act establishes a presumption of openness, and 
     that our government is based not on the need to know, but 
     upon the fundamental right to know. The Act also contains 
     over a dozen substantive provisions, designed to achieve the 
     following four objectives:

     (1) Strengthen FOIA and close loopholes
     (2) Help FOIA requestors obtain timely responses to their 
         requests
     (3) Ensure that agencies-have strong incentives to act on 
         FOIA requests in a timely fashion
     (4) Provide FOIA officials with all of the tools they need to 
         ensure that our government remains open and accessible


                  strengthen foia and close loopholes

       Ensure that FOIA applies when agency recordkeeping 
     functions are outsourced
       Establish a new open government impact statement, by 
     requiring that any future Congressional attempt to create a 
     new FOIA exemption be expressly stated within the text of the 
     legislation
       Impose annual reporting requirement on usage of the DHS 
     disclosure exemption for critical infrastructure information
       Protect access to FOIA fee waivers for legitimate 
     journalists, regardless of institutional association--
     including bloggers and other Internet-based journalists
       Provide reliable reporting of FOIA performance, by 
     requiring agencies to distinguish between first person 
     requests for personal information and other kinds of requests


              help foia requestors obtain timely responses

       Establish FOIA hotline services, either by telephone or on 
     the Internet, to enable requestors to track the status of 
     their requests
       Create a new FOIA ombudsman, located at the Administrative 
     Conference of the United States, to review agency FOIA 
     compliance and provide alternatives to litigation
       Authorize reasonable recovery of attorney fees when 
     litigation is inevitable


ensure that agencies have strong incentives to act on foia requests in 
                             timely fashion

       Restore meaningful deadlines for agency action by ensuring 
     that the 20-day statutory clock runs immediately upon the 
     receipt of the request
       Impose real consequences on federal agencies for missing 
     statutory deadlines
       Enhance authority of the Office of Special Counsel to take 
     disciplinary action against government officials who 
     arbitrarily and capriciously deny disclosure
       Strengthen reporting requirements on FOIA compliance to 
     identify agencies plagued by excessive delay, and to identify 
     excessive delays in fee status determinations


  provide foia officials with the tools they need to ensure that our 
                 government remains open and accessible

       Improve personnel policies for FOIA officials to enhance 
     agency FOIA performance
       Examine the need for FOIA awareness training for federal 
     employees
       Determine appropriate funding levels needed to ensure 
     agency FOIA compliance

 Openness Promotes Effectiveness in our National Government Act of 2005

                      Section-by-Section Analysis

       Sec. 1. Short Title. The Open Government Act of 2005.
       Sec. 2. Findings. The findings reiterate the intent of 
     Congress upon enacting the Freedom of Information Act (FOIA), 
     5 D.S.C. 552 as amended, and restate FOIA's presumption in 
     favor of disclosure.
       Sec. 3. Protection of Fee Status for News Media. This 
     section amends 5 U.S.C. 552(a)(4)(A)(ii) to make clear that 
     independent journalists are not barred from obtaining fee 
     waivers solely because they lack an institutional affiliation 
     with a recognized news media entity. In determining whether 
     to grant a fee waiver, an agency shall consider the prior 
     publication history of the requestor. If the requestor has no 
     prior publication history and no current affiliation with a 
     news organization, the agency shall review the requestor's 
     plans for disseminating the requested material and whether 
     those plans include distributing the material to a reasonably 
     broad audience.
       Sec. 4. Recovery of Attorney Fees and Litigation Costs. 
     This section, the so-called Buckhannon fix, amends 5 U.S.C. 
     552(a)(4)(E) to clarify that a complainant has substantially 
     prevailed in a FOIA lawsuit, and is eligible to recover 
     attorney fees, if the complainant has obtained a substantial 
     part of his requested relief through a judicial or 
     administrative order or if the pursuit of a claim was the 
     catalyst for the voluntary or unilateral change in position 
     by the opposing party. The section responds to the Supreme 
     Court's ruling in Buckhannon Board and Care Home, Inc. v. 
     West Virginia Dep't of Health and Human Resources, 532 U.S. 
     598 (2001), which eliminated the ``catalyst theory'' of 
     attorney fee recovery under certain Federal civil rights 
     laws. FOIA requestors have raised concerns that the holding 
     in Buckhannon could be extended to FOIA cases. This section 
     preserves the ``catalyst theory'' in FOIA litigation.
       Sec. 5. Disciplinary Actions for Arbitrary and Capricious 
     Rejections of Requests. FOIA currently requires that when a 
     court finds

[[Page 2554]]

     that agency personnel have acted arbitrarily or capriciously 
     with respect to withholding documents, the Office of Special 
     Counsel shall determine whether disciplinary action against 
     the involved personnel is warranted. See 5 U.S.C. 
     552(a)(4)(F). This section of the bill amends FOIA to require 
     the Attorney General to notify the Office of Special Counsel 
     of any such court finding and to report the same to Congress. 
     It further requires the Office of Special Counsel to report 
     annually to Congress on any actions taken by the Special 
     Counsel to investigate cases of this type.
       Sec. 6. Time Limits for Agencies to Act on Requests. The 
     section clarifies that the 20-day time limit on responding to 
     a FOIA request commences on the date on which the request is 
     first received by the agency. Further, the section states 
     that if the agency fails to respond within the 20-day limit, 
     the agency may not then assert any FOIA exemption under 5 
     U.S.C. 552(b), except under limited circumstances such as 
     endangerment to national security or disclosure of personal 
     private information protected by the Privacy Act of 1974, 
     unless the agency can demonstrate, by clear and convincing 
     evidence, good cause for failure to comply with the time 
     limits.
       Sec. 7. Individualized Tracking Numbers for Requests and 
     Status Information. Requires agencies to establish tracking 
     systems by assigning a tracking number to each FOIA request: 
     notifying a requestor of the tracking number within ten days 
     of receiving a request; and establishing a telephone or 
     Internet tracking system to allow requestors to easily obtain 
     information on the status of their individual requests, 
     including an estimated date on which the agency will complete 
     action on the request.
       Sec. 8. Specific Citations in Exemptions. 5 U.S.C. 
     552(b)(3) states that records specifically exempted from 
     disclosure by statute are exempt from FOIA. This section of 
     the bill provides that Congress may not create new statutory 
     exemptions under this provision of FOIA unless it does so 
     explicitly. Accordingly, for any new statutory exemption to 
     have effect, the statute must cite directly to 5 U.S.C. 
     552(b)(3), thereby conveying congressional intent to create a 
     new (b)(3) exemption.
       Sec. 9. Reporting Requirements. This section adds to 
     current reporting requirements by mandating disclosure of 
     data on the 10 oldest active requests pending at each agency, 
     including the amount of time elapsed since each request was 
     originally filed. This section further requires agencies to 
     calculate and report on the average response times and range 
     of response times of FOIA requests. (Current requirements 
     mandate reporting on the median response time.) Finally, this 
     section requires reports on the number of fee status requests 
     that are granted and denied and the average number of days 
     for adjudicating fee status determinations by individual 
     agencies.
       Sec. 10. Openness of Agency Records Maintained by a Private 
     Entity. This section clarifies that agency records kept by 
     private contractors licensed by the government to undertake 
     recordkeeping functions remain subject to FOIA just as if 
     those records were maintained by the relevant government 
     agency.
       Sec. 11. Office of Government Services. This section 
     establishes an Office of Government Information Services 
     within the Administrative Conference of the U.S. Within that 
     office will be appointed a FOIA ombudsman to review agency 
     policies and procedures, audit agency performance, recommend 
     policy changes, and mediate disputes between FOIA requestors 
     and agencies. The establishment of an ombudsman will not 
     impact the ability of requestors to litigate FOIA claims, but 
     rather will serve to alleviate the need for litigation 
     whenever possible.
       Sec. 12. Accessibility of Critical Infrastructure 
     Information. This section requires reports on the 
     implementation of the Critical Infrastructure Information Act 
     of 2002, 6 U.S.C. 133. Reports shall be issued from the 
     Comptroller General to the Congress on the number of private 
     sector, state, and local agency submissions of CII data to 
     the Department of Homeland Security and the number of 
     requests for access to records. The Comptroller General will 
     also be required to report on whether the nondisclosure of 
     CII material has led to increased protection of critical 
     infrastructure.
       Sec. 13. Report on Personnel Policies Related to FOIA. This 
     section requires the Office of Personnel Management to 
     examine how FOIA can be better implemented at the agency 
     level, including an assessment of whether FOIA performance 
     should be considered as a factor in personnel performance 
     reviews, whether a job classification series specific to FOIA 
     and the Privacy Act should be considered, and whether FOIA 
     awareness training should be provided to federal employees.
                                  ____


                               Exhibit 2

                                                February 15, 2005.
     Hon. John Cornyn,
     Chairman, U.S. Senate Judiciary Subcommittee on the 
         Constitution, Civil Rights & Property Rights, Washington 
         DC.
       Dear Senator Cornyn: I strongly endorse the proposed OPEN 
     Government Act or 2005, which will strengthen the federal 
     Freedom of Information Act (FOIA) and advance government 
     openness.
       James Madison once observed that ``[k]nowledge will forever 
     govern ignorance; and a people who mean to be their own 
     governors must arm themselves with the power which knowledge 
     gives.'' The Father of the Constitution recognized that our 
     constitutional democracy, which is rooted in self-government, 
     requires the informed consent of the people. I share 
     Madison's belief, and yours, that a government of the people, 
     by the people, and for the people must operate in full view 
     of the people. Openness and accountability--not secrecy and 
     concealment--are what keep democracies strong and enduring.
       A commitment to open government underpins both FOIA and the 
     Texas Public Information Act, which you interpreted and 
     forcefully defended as the 49th Attorney General of Texas. As 
     your successor I am proud that Texas leads the nation in 
     promoting open government and privileged to build upon your 
     efforts to make sure the public's business is conducted in 
     full sunshine. As you know, the Texas Public Information Act 
     declares that ``government is the servant and not the master 
     of the people,'' and ``[t]he people do not give their public 
     servants the right to decide what is good for the people to 
     know and what is not good for them to know.''
       The OPEN Government Act of 2005 will bring similar benefits 
     to all Americans and ensure that FOIA finally lives up to its 
     noble ideals. By closing loopholes and enabling government to 
     be more responsive to requests for information, the OPEN 
     Govermnent Act of 2005 will modernize FOIA's nearly 40-year-
     old commitment to open and accessible government.
       Our system of self-government does not rest on the public's 
     need to know, but on its fundamental right to know. Your 
     proposed legislation will codify this venerable standard in 
     federal law and reinforce one of our nation's first 
     principles: open government leads inexorably to good 
     government.
       I cannot overstate my support for these important reforms 
     and commend you for your exceptional leadership on this 
     issue.
           Sincerely,
                                                      Greg Abbott,
     Attorney General of Texas.
                                  ____

         American Association of Law Libraries, Washington Affairs 
           Office,
                                Washington, DC, February 14, 2005.
     Hon. John Cornyn,
     U.S. Senate,
     Washington, DC.
       Dear Senator Cornyn: On behalf of the American Association 
     of Law Libraries, I commend you for your leadership in 
     promoting access to government information by introducing the 
     Openness Promotes Effectiveness in our National (OPEN) 
     Government Act of 2005. We share your belief that accessible 
     government information is both an essential principle of a 
     democratic society and a valuable public good.
       The American Association of Law Libraries (AALL) is a 
     nonprofit educational organization with over 5000 members 
     nationwide who respond to the legal information needs of 
     legislators, judges, and other public officials at all levels 
     of government, corporations and small businesses, law 
     professors and students, attorneys, and members of the 
     general public. Our mission is to promote and enhance the 
     value of law libraries, to foster law librarianship and to 
     provide leadership and advocacy in the field of legal 
     information and information policy.
       AALL believes that public inspection of government records, 
     including electronic records, under the Freedom of 
     Information Act (FOIA) is the foundation for citizen access 
     to government information. The OPEN Government Act of 2005 
     provides important and timely amendments to FOIA. AALL 
     supports this important legislation and we look forward to 
     working with you to ensure its prompt enactment.
           Sincerely,
                                                 Mary Alice Baish,
     Associate Washington Affairs Representative.
                                  ____



                               American Civil Liberties Union,

                                Washington, DC, February 14, 2005.
     Hon. John Cornyn,
     U.S. Senate,
     Washington, DC.
     Hon. Patrick Leahy,
     U.S. Senate,
     Washington, DC.
       Dear Senators Cornyn and Leahy: On behalf of the American 
     Civil Liberties Union and its more than 400,000 members, we 
     are pleased to endorse the Openness Promotes Effectiveness in 
     our National Government Act of 2005, the ``OPEN Government 
     Act of 2005.''
       As the Supreme Court has made clear, ``disclosure, not 
     secrecy, is the dominant objective of the Act,'' Department 
     of the Air Force v. Rose, 425 U.S. 352 (1976). Nevertheless, 
     secrecy, not openness, all too often seems to be the dominant 
     trend of agencies in recent times.
       The OPEN Government Act includes a series of much-needed 
     corrections to policies that have eroded the promise of the 
     Freedom

[[Page 2555]]

     of Information Act (FOIA). These include ensuring requesters 
     will have timely information on the status of their requests, 
     enforceable time limits for agencies to respond to requests, 
     news media status rules that recognize the reality of 
     freelance journalists and the Internet, and strong 
     incentives--including both carrots and sticks--for agency 
     employees to improve FOIA compliance. The OPEN Government Act 
     also includes a much needed review of the new exemption in 
     the Homeland Security Act for critical infrastructure 
     information.
       James Madison warned against ``a popular Government without 
     popular information,'' saying that ``a people who mean to be 
     their own Governors, must arm themselves with the power 
     knowledge gives.'' We strongly urge passage of the OPEN 
     Government Act of 2005 to help restore to the people some of 
     that power.
           Sincerely,
                                                  Laura W. Murphy,
                          Director, Washington Legislative Office.
                                                 Timothy H. Edgar,
     Legislative Counsel.
                                  ____

                                               American Society of


                                            Newspaper Editors,

                                     Reston, VA, February 9, 2005.
     Hon. John Cornyn,
     U.S. Senate,
     Washington, DC.
       Dear Senator Cornyn: On behalf of the American Society of 
     Newspaper Editors (ASNE), I am writing to congratulate you on 
     the Introduction of the ``Open Government Act.'' Since the 
     organization was founded in 1922, ASNE's membership of 
     directing editors of dally newspapers throughout the United 
     States has worked to assist journalists and provide an 
     unfettered and effective press in the service of the American 
     people.
       ASNE is proud to endorse the Open Government Act as 
     legislation that can help us achieve these ideals. As you 
     wrote in your recent article in the LBJ Journal of Public 
     Affairs, ``Our national commitment to democracy and freedom 
     is not merely some abstract notion. It is a very real and 
     continuing effort, and an essential element of that effort is 
     an open and accessible government'' The Open Government Act 
     is a ringing reminder that the Freedom of Information Act 
     (FOIA) is the cornerstone of this principle. Your bill comes 
     at a time when many executive agencies are able to shortcut 
     FOIA's guarantees of access to government documents while 
     avoiding any repercussion for their actions.
       We appreciate your desire to provide a meaningful 
     enforcement mechanism for those who see that FOIA is not 
     achieving its promise of open and accessible records for all. 
     The bill's pragmatic focus on procedural, rather than 
     substantive, change is noteworthy; instead of rewriting the 
     law in a way that would promote or disfavor certain special 
     interests, you wisely seek to bring government and citizenry 
     together to make FOIA more efficient and effective.
       ASNE applauds your efforts and joins you in urging passage 
     of this bill in the 109th Congress.
           Sincerely,
                                            Karla Garrett Harshaw,
     President.
                                  ____



                            Federation of American Scientists,

                                 Washington, DC, February 4, 2005.
     Senator John Cornyn,
     U.S. Senate,
     Washington, DC.
       Dear Senator Cornyn: I am writing to express the support of 
     the Federation of American Scientists for your continuing 
     efforts to promote openness in government, and specifically 
     for your proposed legislation to strengthen the Freedom of 
     Information Act (FOIA).
       It is our belief that openness generally, and the FOIA in 
     particular, have an importance that transcends the usual 
     political divides. By making information available to our 
     citizens, we advance the ideals of democratic self-governance 
     that we all share.
       Your proposed legislation would strengthen the FOIA in 
     several important ways: It would reverse recent trends to use 
     fee recovery as an impediment to FOIA processing; it would 
     strengthen the position of requesters who are forced to 
     pursue litigation to gain the records they seek; it would 
     enhance and clarify the administration of the FOIA; and it 
     would create an important new mechanism to audit agency 
     compliance with the FOIA, among other important provisions.
       Perhaps most fundamentally, your legislation marks a 
     hopeful new resurgence of congressional attention to these 
     fundamental issues.
       Thank you for your leadership.
           Sincerely,

                                             Steven Aftergood,

                                                 Project Director,
     FAS Project on Government Secrecy.
                                  ____



                                     Free Congress Foundation,

                                Washington, DC, February 11, 2005.
     Hon. John Cornyn,
     U.S. Senate,
     Washington, DC.
       Dear Senator Cornyn: We would like to commend your 
     introduction of the OPEN Government Act of 2005.
       Conservatives believe checks and balances are essential to 
     our system of government. One important check is to ensure 
     that citizens and the news media have access to what the 
     Federal Government's departments and agencies are doing. 
     Unfortunately, as noted by Austin American Statesman reporter 
     Chuck Lindell, too often the Federal Government's bureaucracy 
     demonstrates no interest in replying to such requests in a 
     timely and efficient manner. It prefers to operate in 
     darkness, not having their actions exposed to the sunlight of 
     public scrutiny.
       Citizens have a right to know what the Federal Government 
     is doing with their tax dollars. The fact that the Department 
     of Agriculture and the Environmental Protection Agency can 
     take years to answer requests for information should be 
     disturbing to conservatives who bemoan the arrogance and 
     unresponsiveness of Big Government. Every citizen and every 
     news reporter is entitled to a prompt answer to their request 
     for information.
       ``The buck stops here'' is a snappy soundbite, and may have 
     once represented a workable philosophy of governing in 
     simpler times. The reality is that in today's Washington it's 
     hard to tell where the buck is because it is simply obscured 
     by an unresponsive bureaucracy. Ironically, technology and 
     increasing expectations of transparency in government render 
     the mindset practiced by a recalcitrant bureaucracy obsolete. 
     A measure such as the OPEN Government Act of 2005 can help 
     level the playing field in favor of the citizenry.
           Sincerely,

                                             Steve Lilienthal,

                                                         Director,
     Center for Privacy & Technology Policy.
                                  ____

                                        The Freedom of Information


                                          Foundation of Texas,

                                     Dallas, TX, February 8, 2005.
     Ms. Katherine Garner,
     Executive Director.
       Dear Board Members: United States Senator John Cornyn will 
     introduce legislation to strengthen the Freedom of 
     Information Act next week. Among other things, the Open 
     Government Act of 2005 would provide meaningful deadlines for 
     federal agencies to act on Freedom of Information requests 
     and impose consequences on federal agencies for missing 
     statutory deadlines. In light of the fact that some federal 
     agencies have had requests for information pending for as 
     long as seventeen years, the Foundation believes Senator 
     Cornyn's proposals are much needed and overdue. The proposed 
     legislation would also make it easier for successful 
     litigants to recover their attorney's fees when litigation 
     becomes necessary, strengthen reporting requirements on 
     government agencies' FOIA compliance, establish an ombudsman 
     to resolve FOIA complaints without the need to resort to 
     litigation and enhance the authority of the Office of Special 
     Counsel to take disciplinary action against government 
     officials who arbitrarily and capriciously deny disclosure.
       The Foundation therefore enthusiastically endorses Senator 
     Cornyn's proposed legislation and encourages each of your 
     organizations to do the same.
           Sincerely,
     Joel R. White.
                                  ____

                                          The Heritage Foundation,


                           Center for Media and Public Policy,

                                Washington, DC, February 11, 2005.
     Sen. John Cornyn,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Cornyn: Insuring the continuance of our 
     Republican liberty depends upon maintaining the right of the 
     people to know as much as possible about what their 
     government is doing in order to hold the public officials and 
     employees accountable.
       Protecting this accountability tool grows ever more 
     important as the power of the federal government continues 
     its historic growth, with its attendant tendency continually 
     to become more and more resistant to genuine transparency. 
     That is why a healthy Freedom of Information Act is so vital.
       But while the federal government has grown exponentially 
     since passage of the FOIA in 1966, the law's effectiveness 
     has steadily declined as politicians and career bureaucrats 
     with a shared interest in avoiding accountability have become 
     increasingly skilled at exploiting loopholes, creatively 
     interpreting administrative provisions and relying upon the 
     paucity of legal resources available to many requestors to 
     avoid satisfying either the letter or spirit of the statute.
       Indeed, the National Security Archive's 2003 survey that 
     found an FOIA system ``in extreme disarray.'' The Archive 
     found that ``agency contact information on the web was often 
     inaccurate; response times largely failed to meet the 
     statutory standard; only a few agencies performed thorough 
     searches, including e-mail and meeting notes; and the lack of 
     central accountability at the agencies resulted in lost 
     requests and inability to track progress.''
       I believe the comprehensive package of reforms contained in 
     ``The Open Government Act of 2005'' would go far in restoring 
     the effectiveness of the FOIA as an accountability tool for 
     the people in dealing with their government.

[[Page 2556]]

       We must remember that transparency and accountability are 
     the strongest antidotes to the inevitable abuses of Big 
     Government and are thus essential guarantors of every 
     individual's liberty and prerequisites for the maintenance of 
     our common security.
           Sincerely,
                                                    Mark Tapscott,
     Director.
                                  ____

                                   National Newspaper Association,


                                          Washington Programs,

                                  Arlington, VA, February 9, 2005.
     Hon. John Cornyn,
     U.S. Senate,
     Washington DC.
       Dear Senator Cornyn: The National Newspaper Association, an 
     organization representing over 2,500 community newspapers 
     nationwide, supports your efforts to strengthen the Freedom 
     of Information Act. The OPEN Government Act of 2005 is a 
     sound step toward a better FOIA.
       Openness and transparency in government is vital to the 
     proper functioning of a democratic government. Ensuring 
     unhindered access to government information by the public is 
     the utmost responsibility of our elected leaders, for without 
     this access, it would be impossible for the consent of the 
     governed to be truly informed.
       The Freedom of Information Act is an important tool in 
     achieving this lofty goal, and it has proven to be useful to 
     community newspapers around the country. The Act requires 
     continual oversight from Congress to ensure the spirit of the 
     law remains intact. Congress has neglected this duty in 
     recent years, and we are pleased that you have undertaken 
     efforts to rectify this neglect.
       We want to emphasize that FOIA serves a function beyond 
     providing records to requesters filing written requests. It 
     also serves as a talisman for openness in similar state laws. 
     It provides a framework for releasing information that is 
     informally requested by journalists and others--a function of 
     particular importance to community newspapers.
       We will look forward to working with you as the bill is 
     considered by the Judiciary Committee.
           Sincerely,

                                               Matthew Paxton,

                                                         Chairman,
     Government Relations Committee.
                                  ____



                             Newspaper Association of America,

                                    Vienna, VA, February 10, 2005.
     Hon. John Cornyn,
     Chairman, Senate Judiciary Subcommittee on the Constitution, 
         Civil Rights, & Property Rights, Washington, DC.
       Dear Senator Cornyn: On behalf of the Newspaper Association 
     of America (NAA), a non-profit organization representing more 
     than 2,000 newspapers in the United States and Canada, I want 
     to thank you for introducing the Open Government Act of 2005.
       The Freedom of Information Act is premised on the belief 
     that an informed citizenry is essential to democracy. The 
     Open Government Act will strengthen the Freedom of 
     Information Act and send a clear message that the openness 
     and accessibility of the federal government is a vital part 
     of our democratic process.
       We commend you for your outstanding leadership, especially 
     with regard to the inclusion of the provisions that would 
     close current FOIA loopholes, prevent new ones, and restore 
     meaningful deadlines for agency action on FOIA requests. 
     Additionally, the legislation will make it easier for the 
     public to access information about their government through 
     the creation of a FOlA ombudsmen, agency FOIA hotlines, and 
     tracking systems for FOIA requests.
       Thank you again for your leadership on this important 
     issue. We look forward to working with you and your staff in 
     the coming months to ensure passage of the Open Government 
     Act of 2005 in the 109th Congress.
           Thanks for reading,
                                                    John F. Sturm,
     President and CEO.
                                  ____



                                  People for the American Way,

                                 Washington, DC, February 9, 2005.
     Hon. John Cornyn,
     U.S. Senate,
     Washington, DC.
     Hon. Patrick Leahy,
     U.S. Senate,
     Washington, DC.
       Dear Senators Cornyn and Leahy: On behalf of People For the 
     American Way (PFAW) and its more than 675,000 members and 
     supporters, I write in support of your efforts to strengthen 
     the Freedom of Information Act (FOIA) and promote greater 
     public access to government records through the proposed Open 
     Government Act of 2005 (OGA).
       Open government is a vital component of this country's 
     democratic framework, allowing citizens to learn about the 
     activities of their government and helping ensure government 
     accountability. FOIA, which permits public access to federal 
     records, has helped establish the public's right to obtain 
     government information and created a strong presumption in 
     favor of disclosure. Serious problems have arisen with full 
     and timely agency compliance with FOIA and its goals, 
     however, necessitating the types of important FOIA reforms 
     contemplated in the OGA.
       In particular, PFAW is supportive of the Act's use of 
     penalties to enforce compliance with FOIA deadlines, 
     particularly the provision imposing a presumptive waiver of 
     FOIA exemptions when an agency fails to meet the 20-day 
     production deadline, and the requirement that Congress be 
     explicit when it considers creating additional exemptions 
     under 5 U.S.C. 552(b)(3).
       We also support the provision in the bill that would permit 
     an award of attorney fees when a nonfrivolous lawsuit has 
     served as the catalyst for voluntary disclosure of a 
     substantial part of a FOIA request. It is imperative that a 
     requester--who must incur litigation costs to enforce agency 
     compliance with the law--be able to recover attorneys' fees 
     and litigation costs in such cases, particularly in order to 
     discourage arbitrary and unlawful agency rejections of 
     legitimate FOIA requests.
       Finally, we believe that the various recordkeeping and 
     monitoring provisions of the Open Government Act--including 
     monitoring of the Department of Homeland Security's use of 
     its ``critical infrastructure information'' exemption and 
     mandatory agency disclosure of the 10 oldest active 
     requests--are useful and necessary to ensure the integrity of 
     the open government process and to gather the information 
     needed to modify and adjust our open government laws going 
     forward.
       We applaud your efforts to reaffirm the vital importance of 
     open government in this country and believe that the Open 
     Government Act is an encouraging first step toward that goal.
           Sincerely,
                                                    Ralph G. Neas,
                                                        President.

  Mr. CORNYN. 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. 394

       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 ``Openness Promotes 
     Effectiveness in our National Government Act of 2005'' or the 
     ``OPEN Government Act of 2005''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the Freedom of Information Act was signed into law on 
     July 4, 1966, because the American people believe that--
       (A) our constitutional democracy, our system of self-
     government, and our commitment to popular sovereignty depends 
     upon the consent of the governed;
       (B) such consent is not meaningful unless it is informed 
     consent; and
       (C) as Justice Black noted in his concurring opinion in 
     Barr v. Matteo (360 U.S. 564 (1959)), ``The effective 
     functioning of a free government like ours depends largely on 
     the force of an informed public opinion. This calls for the 
     widest possible understanding of the quality of government 
     service rendered by all elective or appointed public 
     officials or employees.'';
       (2) the American people firmly believe that our system of 
     government must itself be governed by a presumption of 
     openness;
       (3) the Freedom of Information Act establishes a ``strong 
     presumption in favor of disclosure'' as noted by the United 
     States Supreme Court in United States Department of State v. 
     Ray (502 U.S. 164 (1991)), a presumption that applies to all 
     agencies governed by that Act;
       (4) ``disclosure, not secrecy, is the dominant objective of 
     the Act,'' as noted by the United States Supreme Court in 
     Department of Air Force v. Rose (425 U.S. 352 (1976));
       (5) in practice, the Freedom of Information Act has not 
     always lived up to the ideals of that Act; and
       (6) Congress should regularly review section 552 of title 
     5, United States Code (commonly referred to as the Freedom of 
     Information Act), in order to determine whether further 
     changes and improvements are necessary to ensure that the 
     Government remains open and accessible to the American people 
     and is always based not upon the ``need to know'' but upon 
     the fundamental ``right to know''.

     SEC. 3. PROTECTION OF FEE STATUS FOR NEWS MEDIA.

       Section 552(a)(4)(A)(ii) of title 5, United States Code, is 
     amended by adding at the end the following:

     ``In making a determination of a representative of the news 
     media under subclause (II), an agency may not deny that 
     status solely on the basis of the absence of institutional 
     associations of the requester, but shall consider the prior 
     publication history of the requester. Prior publication 
     history shall include books, magazine and newspaper articles, 
     newsletters, television and radio broadcasts, and Internet 
     publications. If the requestor has no prior publication 
     history or current affiliation, the agency shall consider the 
     requestor's stated intent at the time the request is made to 
     distribute information to a reasonably broad audience.''.

[[Page 2557]]



     SEC. 4. RECOVERY OF ATTORNEY FEES AND LITIGATION COSTS.

       Section 552(a)(4)(E) of title 5, United States Code, is 
     amended by adding at the end the following: ``For purposes of 
     this section, a complainant has `substantially prevailed' if 
     the complainant has obtained a substantial part of its 
     requested relief through a judicial or administrative order 
     or an enforceable written agreement, or if the complainant's 
     pursuit of a nonfrivolous claim or defense has been a 
     catalyst for a voluntary or unilateral change in position by 
     the opposing party that provides a substantial part of the 
     requested relief.''.

     SEC. 5. DISCIPLINARY ACTIONS FOR ARBITRARY AND CAPRICIOUS 
                   REJECTIONS OF REQUESTS.

       Section 552(a)(4)(F) of title 5, United States Code, is 
     amended--
       (1) by inserting ``(i)'' after ``(F)''; and
       (2) by adding at the end the following:
       ``(ii) The Attorney General shall--
       ``(I) notify the Special Counsel of each civil action 
     described under the first sentence of clause (i); and
       ``(II) annually submit a report to Congress on the number 
     of such civil actions in the preceding year.
       ``(iii) The Special Counsel shall annually submit a report 
     to Congress on the actions taken by the Special Counsel under 
     clause (i).''.

     SEC. 6. TIME LIMITS FOR AGENCIES TO ACT ON REQUESTS.

       (a) Time Limits.--
       (1) In general.--Section 552(a)(6)(A)(i) of title 5, United 
     States Code, is amended by inserting ``, and the 20-day 
     period shall commence on the date on which the request is 
     first received by the agency, and shall not be tolled without 
     the consent of the party filing the request'' after ``adverse 
     determination''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect 1 year after the date of enactment of this 
     Act.
       (b) Availability of Agency Exemptions.--
       (1) In general.--Section 552(a)(6) of title 5, United 
     States Code, is amended by adding at the end the following:
       ``(G)(i) If an agency fails to comply with the applicable 
     time limit provisions of this paragraph with respect to a 
     request, the agency may not assert any exemption under 
     subsection (b) to that request, unless disclosure--
       ``(I) would endanger the national security of the United 
     States;
       ``(II) would disclose personal private information 
     protected by section 552a or proprietary information; or
       ``(III) is otherwise prohibited by law.
       ``(ii) A court may waive the application of clause (i) if 
     the agency demonstrates by clear and convincing evidence that 
     there was good cause for the failure to comply with the 
     applicable time limit provisions.''.
       (2) Effective date and application.--The amendment made by 
     this subsection shall take effect 1 year after the date of 
     enactment of this Act and apply to requests for information 
     under section 552 of title 5, United States Code, filed on or 
     after that effective date.

     SEC. 7. INDIVIDUALIZED TRACKING NUMBERS FOR REQUESTS AND 
                   STATUS INFORMATION.

       (a) In General.--Section 552(a) of title 5, United States 
     Code, is amended by adding at the end the following:
       ``(7) Each agency shall--
       ``(A) establish a system to assign an individualized 
     tracking number for each request for information under this 
     section;
       ``(B) not later than 10 days after receiving a request, 
     provide each person making a request with the tracking number 
     assigned to the request; and
       ``(C) establish a telephone line or Internet service that 
     provides information about the status of a request to the 
     person making the request using the assigned tracking number, 
     including--
       ``(i) the date on which the agency originally received the 
     request; and
       ``(ii) an estimated date on which the agency will complete 
     action on the request.''.
       (b) Effective Date and Application.--The amendment made by 
     this section shall take effect 1 year after the date of 
     enactment of this Act and apply to requests for information 
     under section 552 of title 5, United States Code, filed on or 
     after that effective date.

     SEC. 8. SPECIFIC CITATIONS IN EXEMPTIONS.

       Section 552(b) of title 5, United States Code, is amended 
     by striking paragraph (3) and inserting the following:
       ``(3) specifically exempted from disclosure by statute 
     (other than section 552b of this title), provided that such 
     statute--
       ``(A) if enacted after the date of enactment of the 
     Openness Promotes Effectiveness in our National Government 
     Act of 2005, specifically cites to this section; and
       ``(B)(i) requires that the matters be withheld from the 
     public in such a manner as to leave no discretion on the 
     issue; or
       ``(ii) establishes particular criteria for withholding or 
     refers to particular types of matters to be withheld;''.

     SEC. 9. REPORTING REQUIREMENTS.

       Section 552(e)(1) of title 5, United States Code, is 
     amended--
       (1) in subparagraph (F), by striking ``and'' after the 
     semicolon;
       (2) in subparagraph (G), by striking the period and 
     inserting a semicolon; and
       (3) by adding at the end the following:
       ``(H) data on the 10 active requests with the earliest 
     filing dates pending at each agency, including the amount of 
     time that has elapsed since each request was originally 
     filed;
       ``(I) the average number of days for the agency to respond 
     to a request beginning the date on which the request was 
     originally filed, the median number of days for the agency to 
     respond to such requests, and the range in number of days for 
     the agency to respond to such requests; and
       ``(J) the number of fee status requests that are granted 
     and denied, and the average number of days for adjudicating 
     fee status determinations.

     When reporting the total number of requests filed, agencies 
     shall distinguish between first person requests for personal 
     records and other kinds of requests, and shall provide a 
     total number for each category of requests.''.

     SEC. 10. OPENNESS OF AGENCY RECORDS MAINTAINED BY A PRIVATE 
                   ENTITY.

       Section 552(f) of title 5, United States Code, is amended 
     by striking paragraph (2) and inserting the following:
       ``(2) `record' and any other term used in this section in 
     reference to information includes--
       ``(A) any information that would be an agency record 
     subject to the requirements of this section when maintained 
     by an agency in any format, including an electronic format; 
     and
       ``(B) any information described under subparagraph (A) that 
     is maintained for an agency by an entity under a contract 
     between the agency and the entity.''.

     SEC. 11. OFFICE OF GOVERNMENT INFORMATION SERVICES.

       (a) In General.--Chapter 5 of title 5, United States Code, 
     is amended--
       (1) by redesignating section 596 as section 597; and
       (2) by inserting after section 595 the following:

     ``Sec. 596. Office of Government Information Services

       ``(a) There is established the Office of Government 
     Information Services within the Administrative Conference of 
     the United States.
       ``(b) The Office of Government Information Services shall--
       ``(1) review policies and procedures of administrative 
     agencies under section 552 and compliance with that section 
     by administrative agencies;
       ``(2) conduct audits of administrative agencies on such 
     policies and compliance and issue reports detailing the 
     results of such audits;
       ``(3) recommend policy changes to Congress and the 
     President to improve the administration of section 552, 
     including whether agencies are receiving and expending 
     adequate funds to ensure compliance with that section; and
       ``(4) offer mediation services between persons making 
     requests under section 552 and administrative agencies as a 
     non-exclusive alternative to litigation and, at the 
     discretion of the Office, issue advisory opinions if 
     mediation has not resolved the dispute.''.
       (b) Technical and Conforming Amendment.--The table of 
     sections for chapter 5 of title 5, United States Code, is 
     amended by striking the item relating to section 596 and 
     inserting the following:

``596. Office of Government Information Services.
``597. Authorization of appropriations.''.

       (c) Effective Date.--The amendments made by this section 
     shall take effect 1 year after the date of enactment of this 
     Act.

     SEC. 12. ACCESSIBILITY OF CRITICAL INFRASTRUCTURE 
                   INFORMATION.

       (a) In General.--Not later than January 1 of each of the 3 
     years following the date of the enactment of this Act, the 
     Comptroller General of the United States shall submit to 
     Congress a report on the implementation and use of section 
     214 of the Homeland Security Act of 2002 (6 U.S.C. 133), 
     including--
       (1) the number of persons in the private sector, and the 
     number of State and local agencies, that voluntarily 
     furnished records to the Department under this section;
       (2) the number of requests for access to records granted or 
     denied under this section;
       (3) such recommendations as the Comptroller General 
     considers appropriate regarding improvements in the 
     collection and analysis of sensitive information held by 
     persons in the private sector, or by State and local 
     agencies, relating to vulnerabilities of and threats to 
     critical infrastructure, including the response to such 
     vulnerabilities and threats; and
       (4) an examination of whether the nondisclosure of such 
     information has led to the increased protection of critical 
     infrastructure.
       (b) Form.--The report shall be submitted in unclassified 
     form, but may include a classified annex.

     SEC. 13. REPORT ON PERSONNEL POLICIES RELATED TO FOIA.

       Not later than 1 year after the date of enactment of this 
     Act, the Office of Personnel Management shall submit to 
     Congress a report that examines--

[[Page 2558]]

       (1) whether changes to executive branch personnel policies 
     could be made that would--
       (A) provide greater encouragement to all Federal employees 
     to fulfill their duties under section 552 of title 5, United 
     States Code; and
       (B) enhance the stature of officials administering that 
     section within the executive branch;
       (2) whether performance of compliance with section 552 of 
     title 5, United States Code, should be included as a factor 
     in personnel performance evaluations for any or all 
     categories of Federal employees and officers;
       (3) whether an employment classification series specific to 
     compliance with sections 552 and 552a of title 5, United 
     States Code, should be established;
       (4) whether the highest level officials in particular 
     agencies administering such sections should be paid at a rate 
     of pay equal to or greater than a particular minimum rate ; 
     and
       (5) whether other changes to personnel policies can be made 
     to ensure that there is a clear career advancement track for 
     individuals interested in devoting themselves to a career in 
     compliance with such sections; and
       (6) whether the executive branch should require any or all 
     categories of Federal employees to undertake awareness 
     training of such sections.

  Mr. LEAHY. Mr. President, I am pleased to join as a partner with the 
Senator from Texas in introducing the OPEN Government Act of 2005. I 
have devoted a considerable portion of my work in the Senate to 
improving Government oversight, Government openness and citizen 
``right-to-know'' laws to make Government work better for the American 
people, and at times it has been a lonely battle. Finding dedicated 
allies on the other side of the aisle has proven difficult. That is why 
I am delighted to have a partner in John Cornyn. Senator Cornyn has a 
distinguished record of supporting open government dating back to his 
days as Attorney General of Texas. In fact, some of the provisions in 
the bill we introduce today are modeled after sections of the Texas 
Public Information Act.
  I believe that we both see this effort as the first of many 
bipartisan steps we can take together in the new Congress. Senator 
Cornyn and I began to forge a partnership on improving public access to 
Government information well over a year ago when, during the 108th 
Congress, we worked with several other Senators and with the Library of 
Congress to improve the publicly accessible congressional information 
website, THOMAS. He and I also cooperated last fall in a successful 
effort to ensure that ``government information,'' including the 
application of the Freedom of Information Act, FOIA, be subject to the 
jurisdiction of both the Judiciary Committee and the newly constituted 
Homeland Security and Governmental Affairs Committee.
  The bill we introduce today is a collection of commonsense 
modifications designed to update FOIA and improve the timely processing 
of FOIA requests by Federal agencies. It was drafted after a long and 
thoughtful process of consultation with individuals and organizations 
that rely on FOIA to obtain information and share it with the public, 
including the news media, librarians, and public interest organizations 
representing all facets of the political spectrum.
  The OPEN Government Act reaffirms the fundamental premise of FOIA: 
Government information belongs to all Americans and should be subject 
to a presumption in favor of disclosure. James Madison said that ``a 
popular government, without popular information, or the means of 
acquiring it, is but a prologue to a farce or tragedy or perhaps 
both.'' His caution rings just as true today. The public's right to 
know what its government is doing promotes accountability, imbues trust 
and contributes to our system of checks and balances.
  First enacted in 1966, FOIA represents the foundation of our modern 
open Government laws. In 1996, I was the principal author of the 
Electronic Freedom of Information Act Amendments, which updated FOIA 
for the internet age. The bill we introduce today is the next step: a 
practical set of important modifications that respond to common 
complaints and limitations in the current system that we have heard, 
whether from frequent FOIA requestors, such as representatives of the 
press, or individual citizens who may only occasionally rely on FOIA, 
but who nonetheless deserve timely and comprehensive responses to their 
requests.
  Chief among the problems with FOIA implementation is agency delay. 
Following the successful model of the Texas Public Information Act, 
this legislation imposes penalties on agencies that miss statutory 
deadlines to release documents and strengthens reporting requirements 
on FOIA compliance.
  The OPEN Government Act responds to some confusion over the 
applicability of FOIA to agency records that are held by outside 
private contractors. It does this by clarifying that such records are 
subject to FOIA wherever they are located.
  Our legislation establishes an ombudsman to mediate FOIA disputes 
between agencies and requestors, a step that many FOIA requestors 
believe will help to ameliorate the need for FOIA litigation in the 
Federal courts. We hope that this mechanism will work to the benefit of 
all parties. However, where mediation fails to resolve disputes, our 
bill preserves the rights of requestors to litigate under FOIA.
  Our bill responds to recent Federal jurisprudence by explicitly 
providing for recovery of attorneys' fees under the so-called 
``catalyst theory.'' That is, where a FOIA lawsuit was the catalyst for 
an agency determination to release documents prior to a court's entry 
of judgment, the plaintiff may recover attorneys' fees.
  Finally, the bill requires reports on a controversial law, the 
Critical Infrastructure Information Act, enacted as part of the 
Homeland Security Act of 2002, and it protects fee-waiver status for 
journalists under FOIA.
  Letters of support for the OPEN Government Act have been submitted by 
the American Association of Law Libraries, American Civil Liberties 
Union, American Library Association, American Society of Newspaper 
Editors, Associated Press Managing Editors, Association of Health Care 
Journalists, Center for Democracy & Technology, Coalition of 
Journalists for Open Government, Committee of Concerned Journalists, 
Education Writers Association, Electronic Privacy Information Center, 
Federation of American Scientists/Project on Government Secrecy, Free 
Congress Foundation/Center for Privacy & Technology Policy, Freedom of 
Information Center/University of Missouri, The Freedom of Information 
Foundation of Texas, The Heritage Foundation/Center for Media and 
Public Policy, Information Trust, National Conference of Editorial 
Writers, National Freedom of Information Coalition, National Newspaper 
Association, National Security Archive/George Washington University, 
Newspaper Association of America, People for the American Way, Project 
on Government Oversight, Radio-Television News Directors Association, 
The Reporters Committee for Freedom of the Press, and the Society of 
Environmental Journalists.
  The Freedom of Information Act is an invigorating mechanism that 
helps keep our government more open and effective and closer to the 
American people. FOIA has had serious setbacks in recent years that 
endanger its effectiveness. This legislation is a rare chance to 
advance the public's right to know.
  I thank my colleague, the Senator from Texas, for the time and effort 
he has devoted to protecting the public's right to know, and I urge all 
members of the Senate to join us in supporting this important 
legislation.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 395. A bill to amend the Buy American Act to increase the 
requirement for American-made content, and to tighten the waiver 
provisions, and for other purposes; to the Committee on Homeland 
Security and Governmental Affairs.
  Mr. FEINGOLD. Mr. President, today I am introducing the second in a 
series of bills intended to support American companies and American 
workers. Yesterday, I submitted S. Con. Res. 12,

[[Page 2559]]

which would set some minimum standards for future trade agreements into 
which our country enters.
  The bill that I am introducing today, the Buy American Improvement 
Act, focuses on the Federal Government's responsibility to support 
domestic manufacturers and workers and on the role of Federal 
procurement policy in achieving this goal. The reintroduction of this 
bill, which I first introduced in 2003, is part of my ongoing effort to 
find ways to stem the flow of manufacturing jobs abroad.
  The Buy American Act of 1933 is the primary statute that governs 
Federal procurement. The name of this law accurately and succinctly 
describes its purpose: to ensure that the Federal Government supports 
domestic companies and domestic workers by buying American-made goods. 
This is an important law but, regrettably, it contains a number of 
loopholes that make it too easy for government agencies to buy foreign-
made goods.
  My bill, the Buy American Improvement Act, would strengthen the 
existing act by tightening its waiver provisions. Currently, the heads 
of Federal departments and agencies are given broad discretion to waive 
the Act and buy foreign goods. We should ensure that the Federal 
Government makes every effort to give Federal contracts to companies 
that will perform the work domestically. We should also ensure that 
certain types of industries do not leave the United States completely, 
thus making the Federal Government dependent on foreign sources for 
goods, such as plane or ship parts, that our military may need to 
acquire on short notice.
  I have often heard my colleagues say on this floor that American-made 
goods are the best in the world. I could not agree more. Regrettably, 
nearly 80,000 good-paying manufacturing jobs have left my state since 
2000. And the country has lost more than two-and-one-half million 
manufacturing jobs since January 2001, including more than 25,000 jobs 
last month alone. This hemorrhaging of jobs shows no signs of stopping. 
Congress should do more to support domestic manufacturers and their 
employees. One way to do this is to ensure that the Federal Government 
makes every effort to buy American-made goods.
  There are five primary waivers to the Buy American Act, and my bill 
addresses four of them The first of these waivers allows an agency head 
to buy foreign goods if complying with the Act would be ``inconsistent 
with the public interest.'' I am concerned that this waiver, which 
includes no definition for what is ``inconsistent with the public 
interest,'' is actually a gaping loophole that gives too much 
discretion to department secretaries and agency heads. My bill would 
modify this waiver provision to prohibit it from being invoked by an 
agency or department head after a request for proposals, or RFP, has 
been published in the Federal Register. Once the bidding process has 
begun, the Federal Government should not be able to pull an RFP by 
saying that it is in the ``public interest'' to do so. This 
determination, sometimes referred to as the Buy American Act's national 
security waiver, should be made well in advance of placing a 
procurement up for bid. To do otherwise pulls the rug out from under 
companies that are spending valuable time and resources to prepare a 
bid for a Federal contract.
  The Buy American Act may also be waived if the head of the agency 
determines that the cost of the lowest-priced domestic product is 
``unreasonable,'' and a system of price differentials is used to assist 
in making this determination. My bill would modify this waiver to 
require that preference be given to the American company if that 
company's bid is substantially similar to the lowest foreign bid or if 
the American company is the only domestic source for the item to be 
procured.
  I have a long record of supporting efforts to help taxpayers get the 
most bang for their buck and of opposing wasteful Federal spending. I 
don't think anyone can argue that supporting American jobs is 
``wasteful.'' We owe it to American manufacturers and their employees 
to make sure they get a fair shake. I would not support awarding a 
contract to an American company that is price gouging, but we should 
make every effort to ensure that domestic sources for goods needed by 
the Federal Government do not dry up because American companies have 
been slightly underbid by foreign competitors.
  The Buy American Act also includes a waiver for goods bought by the 
Federal Government that will be used outside of the United States. 
There is no question that there are occasions when the Federal 
Government needs to procure items quickly for use outside the United 
States, such as in a time of war. However, there may be items that are 
bought on a regular basis and used at foreign military bases or United 
States embassies, for example, that could reasonably be procured from 
domestic sources and shipped to the location where they will be used. 
My bill would require Federal agencies to compare the difference in 
cost for obtaining articles that are used on regular basis outside the 
U.S., or that are not needed immediately, between an overseas versus a 
domestic source--including the cost of shipping--before awarding the 
contract to the company that will do the work overseas.
  The Buy American Act's domestic source requirements may also be 
waived if the articles to be procured are not available from domestic 
sources ``in sufficient and reasonably available commercial quantities 
and of a satisfactory quality.'' My bill would require that an agency 
or department head, prior to issuing such a waiver, determine whether 
domestic production can be initiated to meet the procurement needs and 
whether a comparable article, material, or supply is available 
domestically.
  My bill would also strengthen the Buy American Act in four other 
ways. It would, for the first time, make the Buy American requirement 
applicable to the United States Congress. The current definition of a 
Federal agency in the Act specifically exempts the Senate, the House, 
and Architect of the Capitol, and activities under the direction of the 
Architect. I believe that Congress should lead by example and comply 
with the Buy American Act--a requirement that we have imposed on 
executive agencies.
  Secondly, my bill would increase the minimum American content 
standard qualification under the Act from the current 50 percent to 75 
percent. The definition of what qualifies as an American-made product 
has been a source of much debate. To me, it seems clear that American-
made means manufactured in this country. This classification is a 
source of pride for manufacturing workers around our country. The 
current 50 percent standard should be raised to a minimum of 75 
percent.
  In addition, my bill would make permanent the expanded reporting 
requirement that I authored which was first enacted as part of the 
fiscal year 2004 omnibus spending bill and was extended as part of the 
fiscal year 2005 omnibus spending bill. Prior to the enactment of these 
provisions, only the Department of Defense was required to report to 
Congress on its use of Buy American waivers and purchases of foreign 
goods. It is virtually impossible to get hard numbers on the Federal 
Government's purchases of foreign- and domestic-made goods and to 
ensure that there is disclosure and accountability in the waiver 
process.
  The annual report to be submitted by agency heads will be required to 
include the following information: the dollar value of any items 
purchased that were manufactured outside of the United States; an 
itemized list of all applicable waivers granted with respect to such 
items under the Buy American Act; and a summary of the total 
procurement funds spent by the Federal agency on goods manufactured in 
the United States versus on goods manufactured overseas. In addition, 
my bill also requires that the heads of all Federal agencies make these 
annual reports publicly available on the Internet.
  My bill also seeks to prevent dual-use technologies from falling into 
the hands of terrorists or countries of concern by prohibiting the 
awarding of

[[Page 2560]]

overseas contracts or sub-contracts that would require the transfer of 
information relating to any item that is classified as a dual-use item 
on the Commerce Control List unless approval for such a contract has 
been obtained through the Export Administration Act process. It only 
makes sense that we would not award contracts that require the transfer 
of sensitive technology without following our own export licensing 
process. It is possible that this technology could later be used by 
some countries to make their own products to sell to countries that 
cannot obtain such goods from the United States. This loophole in our 
export control laws should be closed.
  Finally, my bill would require the Government Accountability Office 
to report to Congress with recommendations for defining the terms 
``inconsistent with the public interest'' and ``unreasonable cost'' for 
purposes of invoking the corresponding waivers in the Act. I am 
concerned that both of these terms lack definitions, and that they can 
be very broadly interpreted by agency or department heads. GAO would 
require to make recommendations for statutory definitions of both of 
these terms, as well as for establishing a consistent waiver process 
that can be used by all federal agencies.
  I am pleased that my legislation is supported by a broad array of 
business and labor groups. The groups are committed to ensuring that we 
have a strong domestic manufacturing base that provides good-paying, 
stable jobs for American workers, and they include Save American 
Manufacturing, the national and Wisconsin AFL-CIO, the U.S. Business 
and Industry Council, the International Association of Machinists and 
Aerospace Workers, the International Brotherhood of Boilermakers, and 
the United Auto Workers.
  In addition to strengthening the Buy American Act, Congress should 
support trade agreements that do not undermine it. As I have repeatedly 
stated on this floor, Congress and Administrations of both parties have 
a dismal record of promoting trade agreements that send American jobs 
overseas. And many of those same flawed trade agreements have 
repeatedly weakened the Buy American Act and other domestic preference 
laws.
  Last year, the Ranking Member of the Homeland Security and 
Governmental Affairs Committee, Mr. Lieberman, and I asked the GAO to 
study the effect of trade agreements on domestic source requirements 
such as those contained in the Buy American Act. That study found that 
the United States government is required to give favorable treatment to 
certain goods from a total of 45 countries as a result of trade 
agreements and reciprocal defense procurement agreements. The report 
notes that the United States is a party to seven trade agreements, 
including the North American Free Trade Agreement (NAFTA) and the World 
Trade Organization's Government Procurement Agreement, that prevents 
the U.S. from applying domestic preference laws fully. The report also 
identifies 21 Department of Defense (DoD) Memoranda of Understanding 
that allow DoD to procure goods and services from foreign countries.
  The gaping loopholes in the Buy American Act and the trade agreements 
and defense procurement agreements that contain additional waivers of 
domestic source restrictions have combined to weaken our domestic 
manufacturing base by allowing--and sometimes actually encouraging--the 
Federal Government to buy foreign-made goods. Congress can and should 
do more to support American companies and American workers. We must 
strengthen the Buy American Act and we must stop entering into bad 
trade agreements that send our jobs overseas and undermine our own 
domestic preference laws.
  By strengthening Federal procurement policy, we can help to bolster 
our domestic manufacturers during these difficult times. As I have 
repeatedly noted, Congress cannot simply stand on the sidelines while 
tens of thousands of American manufacturing jobs have been and continue 
to be shipped overseas. While there may be no single solution to this 
problem, I believe that one way in which Congress should act is by 
strengthening the Buy American Act.
  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. 395

       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 ``Buy American Improvement Act 
     of 2005''.

     SEC. 2. REQUIREMENTS FOR WAIVERS.

       (a) In General.--Section 2 of the Buy American Act (41 
     U.S.C. 10a) is amended--
       (1) by striking ``Notwithstanding'' and inserting the 
     following:
        ``(a) In General.--Notwithstanding''; and
       (2) by adding at the end the following:
       ``(b) Special Rules.--The following rules shall apply in 
     carrying out the provisions of subsection (a):
       ``(1) Public interest waiver.--A determination that it is 
     not in the public interest to enter into a contract in 
     accordance with this Act may not be made after a notice of 
     solicitation of offers for the contract is published in 
     accordance with section 18 of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 416) and section 8(e) of 
     the Small Business Act (15 U.S.C. 637(e)).
       ``(2) Domestic bidder.--A Federal agency entering into a 
     contract shall give preference to a company submitting an 
     offer on the contract that manufactures in the United States 
     the article, material, or supply for which the offer is 
     solicited, if--
       ``(A) that company's offer is substantially the same as an 
     offer made by a company that does not manufacture the 
     article, material, or supply in the United States; or
       ``(B) that company is the only company that manufactures in 
     the United States the article, material, or supply for which 
     the offer is solicited.
       ``(3) Use outside the united states.--
       ``(A) In general.--Subsection (a) shall apply without 
     regard to whether the articles, materials, or supplies to be 
     acquired are for use outside the United States if the 
     articles, materials, or supplies are not needed on an urgent 
     basis or if they are acquired on a regular basis.
       ``(B) Cost analysis.--In any case where the articles, 
     materials, or supplies are to be acquired for use outside the 
     United States and are not needed on an urgent basis, before 
     entering into a contract an analysis shall be made of the 
     difference in the cost for acquiring the articles, materials, 
     or supplies from a company manufacturing the articles, 
     materials, or supplies in the United States (including the 
     cost of shipping) and the cost for acquiring the articles, 
     materials, or supplies from a company manufacturing the 
     articles, materials, or supplies outside the United States 
     (including the cost of shipping).
       ``(4) Domestic availability.--The head of a Federal agency 
     may not make a determination under subsection (a) that an 
     article, material, or supply is not mined, produced, or 
     manufactured, as the case may be, in the United States in 
     sufficient and reasonably available commercial quantities and 
     of satisfactory quality, unless the head of the agency has 
     conducted a study and, on the basis of such study, determined 
     that--
       ``(A) domestic production cannot be initiated to meet the 
     procurement needs; and
       ``(B) a comparable article, material, or supply is not 
     available from a company in the United States.
       ``(c) Reports.--
       ``(1) In general.--Not later than 180 days after the end of 
     each fiscal year, the head of each Federal agency shall 
     submit to Congress a report on the acquisitions that were 
     made of articles, materials, or supplies by the agency in 
     that fiscal year from entities that manufacture the articles, 
     materials, or supplies outside the United States.
       ``(2) Content of report.--The report for a fiscal year 
     under paragraph (1) shall separately indicate the following 
     information:
       ``(A) The dollar value of any articles, materials, or 
     supplies that were manufactured outside the United States.
       ``(B) An itemized list of all waivers granted with respect 
     to such articles, materials, or supplies under this Act.
       ``(C) A summary of--
       ``(i) the total procurement funds expended on articles, 
     materials, and supplies manufactured inside the United 
     States; and
       ``(ii) the total procurement funds expended on articles, 
     materials, and supplies manufactured outside the United 
     States.
       ``(3) Public availability.--The head of each Federal agency 
     submitting a report under paragraph (1) shall make the report 
     publicly available by posting on an Internet website.''.
       (b) Definitions.--Section 1 of the Buy American Act (41 
     U.S.C. 10c) is amended--
       (1) by striking subsection (c) and inserting the following:

[[Page 2561]]

       ``(c) Federal Agency.--The term `Federal agency' means any 
     executive agency (as defined in section 4(1) of the Federal 
     Procurement Policy Act (41 U.S.C. 403(1))) or any 
     establishment in the legislative or judicial branch of the 
     Government.''; and
       (2) by adding at the end the following:
       ``(d) Substantially All.--Articles, materials, or supplies 
     shall be treated as made substantially all from articles, 
     materials, or supplies mined, produced, or manufactured, as 
     the case may be, in the United States, if the cost of the 
     domestic components of such articles, materials, or supplies 
     exceeds 75 percent.''.
       (c) Conforming Amendments.--
       (1) Section 2 of the Buy American Act (41 U.S.C. 10a) is 
     amended by striking ``department or independent 
     establishment'' and inserting ``Federal agency''.
       (2) Section 3 of such Act (41 U.S.C. 10b) is amended--
       (A) by striking ``department or independent establishment'' 
     in subsection (a), and inserting ``Federal agency''; and
       (B) by striking ``department, bureau, agency, or 
     independent establishment'' in subsection (b) and inserting 
     ``Federal agency''.
       (3) Section 633 of the National Military Establishment 
     Appropriations Act, 1950 (41 U.S.C. 10d) is amended by 
     striking ``department or independent establishment'' and 
     inserting ``Federal agency''.

     SEC. 3. GAO REPORT AND RECOMMENDATIONS.

       (a) Scope of Waivers.--Not later than 6 months after the 
     date of enactment of this Act, the Comptroller General of the 
     United States shall report to Congress recommendations for 
     determining, for purposes of applying the waiver provision of 
     section 2(a) of the Buy American Act--
       (1) unreasonable cost; and
       (2) inconsistent with the public interest.

     The report shall include recommendations for a statutory 
     definition of unreasonable cost and standards for determining 
     inconsistency with the public interest.
       (b) Waiver Procedures.--The report described in subsection 
     (a) shall also include recommendations for establishing 
     procedures for applying the waiver provisions of the Buy 
     American Act that can be consistently applied.

     SEC. 4. DUAL-USE TECHNOLOGIES.

       The head of a Federal agency (as defined in section 1(c) of 
     the Buy American Act (as amended by section 2) may not enter 
     into a contract, nor permit a subcontract under a contract of 
     the Federal agency, with a foreign entity that involves 
     giving the foreign entity plans, manuals, or other 
     information pertaining to a dual-use item on the Commerce 
     Control List or that would facilitate the manufacture of a 
     dual-use item on the Commerce Control List unless approval 
     for providing such plans, manuals, or information has been 
     obtained in accordance with the provisions of the Export 
     Administration Act of 1979 (50 U.S.C. App. 2401 et seq.) and 
     the Export Administration Regulations (15 C.F.R. part 730 et 
     seq.).
                                 ______
                                 
      By Mr. CRAIG (for himself, Mr. Baucus, Mr. Alexander, Mr. 
        Bunning, Mr. Burns, Mr. Chambliss, Mr. Coburn, Ms. Collins, Mr. 
        Cornyn, Mr. Crapo, Mr. Domenici, Mr. Ensign, Mr. Enzi, Mrs. 
        Hutchison, Mr. Inhofe, Mr. Isakson, Mr. Johnson, Mr. Kyl, Mrs. 
        Lincoln, Ms. Murkowski, Mr. Nelson of Nebraska, Mr. Santorum, 
        Mr. Sessions, Ms. Snowe, Mr. Stevens, Mr. Thomas, Mr. Thune, 
        and Mr. Sununu):
  S. 397. A bill to prohibit civil liability actions from being brought 
or continued against manufacturers, distributors, dealers, or importers 
of firearms or ammunition for damages, injunctive or other relief 
resulting from the misuse of their products by others; read the first 
time.
  Mr. CRAIG. Mr. President, I am pleased to join with Senator Baucus in 
introducing the Protection of Lawful Commerce in Arms Act.
  This bill addresses the abuse of our Nation's courts through 
predatory lawsuits against the U.S. firearms industry--suits attempting 
to force law-abiding businesses to pay far criminal acts by individuals 
beyond their control.
  It's important for our colleagues to understand that the lawsuits 
we're talking about are not brought by victims seeing relief for same 
wrongs done to them by the firearms industry. Instead, they are part of 
a politically inspired initiative trying to force social goals through 
an end-run around the Congress and State legislatures.
  These lawsuits are based an the notion that even though a business 
complies with all laws and sells a legitimate product, it should be 
held responsible for the misuse or illegal use of the firearm by a 
criminal. This isn't a legal theory--it's just the latest twist in the 
gun controllers' notion that it's the gun, and not the criminal, that 
causes crime.
  The truth is that there are millions of firearms in this country 
today, only a tiny fraction of which have ever been used in the 
commission of a crime. The truth is that again and again, law-abiding 
firearm owners are using their guns, often without even firing a shot, 
to defend life and property. The truth is that the intent of the user, 
not the gun, determines whether that gun will be used in a crime. The 
trend of predatory litigation targeting the firearms industry not only 
defies common sense and concepts of fundamental fairness, but it would 
do nothing to curb criminal gun violence. The cost of these lawsuits 
threatens to drive a critical industry out of business, losing 
thousands of good-paying jobs in the process and jeopardizing 
Americans' constitutionally protected access to firearms for self 
defense and other lawful uses.
  The Protection of Lawful Commerce in Arms Act would stop these 
abusive lawsuits. However, it would not insulate the firearms industry 
from all lawsuits or deprive legitimate victims of their day in court. 
Indeed, it specifically provides that actions based on the wrongful 
conduct of those involved in the business of manufacturing and selling 
firearms would not be affected by this legislation. The bill is solely 
directed to stopping abusive, politically driven litigation against 
law-abiding individuals for the misbehavior of criminals over whom they 
had no control.
  This bill is virtually identical to legislation introduced and 
debated to length in the Senate during the last Congress. As my 
colleagues will recall, the addition of two unrelated poison pill 
amendments doomed final passage of that bill; however, it is worth 
noting that all amendments to the actual substance of that measure were 
defeated.
  The need for this legislation is every bit as serious today as it was 
in the last Congress. I am proud that a number of our colleagues on 
both sides of the aisle asked to sponsor this bill before it was even 
introduced: Mr. Alexander, Mr. Bunning, Mr. Burns, Mr. Chambliss, Mr. 
Coburn, Ms. Collins, Mr. Cornyn, Mr. Crapo, Mr. Domenici, Mr. Ensign, 
Mr. Enzi, Mrs. Hutchison, Mr. Inhofe, Mr. Isakson, Mr. Johnson, Mr. 
Kyl, Mrs. Lincoln, Ms. Murkowski, Mr. Nelson of Nebraska, Mr. Santorum, 
Mr. Sessions, Ms. Snowe, Mr. Stevens, Mr. Thomas, and Mr. Thune. I 
thank these original cosponsors for their support.
  The courts of our Nation are supposed to be forums for resolving 
controversies between citizens and providing relief where warranted, 
not a mechanism for achieving political ends that are rejected by the 
people's representatives in Congress and the State legislatures. I hope 
all our colleagues will join us in taking a measured, principled stand 
against this abusive litigation by supporting the Protection of Lawful 
Commerce in Arms Act.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 397

       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 ``Protection of Lawful 
     Commerce in Arms Act''.

     SEC. 2. FINDINGS; PURPOSES.

       (a) Findings.--Congress finds the following:
       (1) The Second Amendment to the United States Constitution 
     provides that the right of the people to keep and bear arms 
     shall not be infringed.
       (2) The Second Amendment to the United States Constitution 
     protects the rights of individuals, including those who are 
     not members of a militia or engaged in military service or 
     training, to keep and bear arms.
       (3) Lawsuits have been commenced against manufacturers, 
     distributors, dealers, and importers of firearms that operate 
     as designed and intended, which seek money damages and other 
     relief for the harm caused by the misuse of firearms by third 
     parties, including criminals.

[[Page 2562]]

       (4) The manufacture, importation, possession, sale, and use 
     of firearms and ammunition in the United States are heavily 
     regulated by Federal, State, and local laws. Such Federal 
     laws include the Gun Control Act of 1968, the National 
     Firearms Act, and the Arms Export Control Act.
       (5) Businesses in the United States that are engaged in 
     interstate and foreign commerce through the lawful design, 
     manufacture, marketing, distribution, importation, or sale to 
     the public of firearms or ammunition products that have been 
     shipped or transported in interstate or foreign commerce are 
     not, and should not, be liable for the harm caused by those 
     who criminally or unlawfully misuse firearm products or 
     ammunition products that function as designed and intended.
       (6) The possibility of imposing liability on an entire 
     industry for harm that is solely caused by others is an abuse 
     of the legal system, erodes public confidence in our Nation's 
     laws, threatens the diminution of a basic constitutional 
     right and civil liberty, invites the disassembly and 
     destabilization of other industries and economic sectors 
     lawfully competing in the free enterprise system of the 
     United States, and constitutes an unreasonable burden on 
     interstate and foreign commerce of the United States.
       (7) The liability actions commenced or contemplated by the 
     Federal Government, States, municipalities, and private 
     interest groups and others are based on theories without 
     foundation in hundreds of years of the common law and 
     jurisprudence of the United States and do not represent a 
     bona fide expansion of the common law. The possible 
     sustaining of these actions by a maverick judicial officer or 
     petit jury would expand civil liability in a manner never 
     contemplated by the framers of the Constitution, by Congress, 
     or by the legislatures of the several States. Such an 
     expansion of liability would constitute a deprivation of the 
     rights, privileges, and immunities guaranteed to a citizen of 
     the United States under the Fourteenth Amendment to the 
     United States Constitution.
       (8) The liability actions commenced or contemplated by the 
     Federal Government, States, municipalities, private interest 
     groups and others attempt to use the judicial branch to 
     circumvent the Legislative branch of government to regulate 
     interstate and foreign commerce through judgments and 
     judicial decrees thereby threatening the Separation of Powers 
     doctrine and weakening and undermining important principles 
     of federalism, State sovereignty and comity between the 
     sister States.
       (b) Purposes.--The purposes of this Act are as follows:
       (1) To prohibit causes of action against manufacturers, 
     distributors, dealers, and importers of firearms or 
     ammunition products, and their trade associations, for the 
     harm solely caused by the criminal or unlawful misuse of 
     firearm products or ammunition products by others when the 
     product functioned as designed and intended.
       (2) To preserve a citizen's access to a supply of firearms 
     and ammunition for all lawful purposes, including hunting, 
     self-defense, collecting, and competitive or recreational 
     shooting.
       (3) To guarantee a citizen's rights, privileges, and 
     immunities, as applied to the States, under the Fourteenth 
     Amendment to the United States Constitution, pursuant to 
     section 5 of that Amendment.
       (4) To prevent the use of such lawsuits to impose 
     unreasonable burdens on interstate and foreign commerce.
       (5) To protect the right, under the First Amendment to the 
     Constitution, of manufacturers, distributors, dealers, and 
     importers of firearms or ammunition products, and trade 
     associations, to speak freely, to assemble peaceably, and to 
     petition the Government for a redress of their grievances.
       (6) To preserve and protect the Separation of Powers 
     doctrine and important principles of federalism, State 
     sovereignty and comity between sister States.
       (7) To exercise congressional power under art. IV, section 
     1 (the Full Faith and Credit Clause) of the United States 
     Constitution.

     SEC. 3. PROHIBITION ON BRINGING OF QUALIFIED CIVIL LIABILITY 
                   ACTIONS IN FEDERAL OR STATE COURT.

       (a) In General.--A qualified civil liability action may not 
     be brought in any Federal or State court.
       (b) Dismissal of Pending Actions.--A qualified civil 
     liability action that is pending on the date of enactment of 
     this Act shall be immediately dismissed by the court in which 
     the action was brought or is currently pending.

     SEC. 4. DEFINITIONS.

       In this Act:
       (1) Engaged in the business.--The term ``engaged in the 
     business'' has the meaning given that term in section 
     921(a)(21) of title 18, United States Code, and, as applied 
     to a seller of ammunition, means a person who devotes, time, 
     attention, and labor to the sale of ammunition as a regular 
     course of trade or business with the principal objective of 
     livelihood and profit through the sale or distribution of 
     ammunition.
       (2) Manufacturer.--The term ``manufacturer'' means, with 
     respect to a qualified product, a person who is engaged in 
     the business of manufacturing the product in interstate or 
     foreign commerce and who is licensed to engage in business as 
     such a manufacturer under chapter 44 of title 18, United 
     States Code.
       (3) Person.--The term ``person'' means any individual, 
     corporation, company, association, firm, partnership, 
     society, joint stock company, or any other entity, including 
     any governmental entity.
       (4) Qualified product.--The term ``qualified product'' 
     means a firearm (as defined in subparagraph (A) or (B) of 
     section 921(a)(3) of title 18, United States Code), including 
     any antique firearm (as defined in section 921(a)(16) of such 
     title), or ammunition (as defined in section 921(a)(17)(A) of 
     such title), or a component part of a firearm or ammunition, 
     that has been shipped or transported in interstate or foreign 
     commerce.
       (5) Qualified civil liability action.--
       (A) In general.--The term ``qualified civil liability 
     action'' means a civil action or proceeding or an 
     administrative proceeding brought by any person against a 
     manufacturer or seller of a qualified product, or a trade 
     association, for damages, punitive damages, injunctive or 
     declaratory relief, abatement, restitution, fines, or 
     penalties, or other relief'' resulting from the criminal or 
     unlawful misuse of a qualified product by the person or a 
     third party, but shall not include--
       (i) an action brought against a transferor convicted under 
     section 924(h) of title 18, United States Code, or a 
     comparable or identical State felony law, by a party directly 
     harmed by the conduct of which the transferee is so 
     convicted;
       (ii) an action brought against a seller for negligent 
     entrustment or negligence per se;
       (iii) an action in which a manufacturer or seller of a 
     qualified product knowingly violated a State or Federal 
     statute applicable to the sale or marketing of the product, 
     and the violation was a proximate cause of the harm for which 
     relief is sought, including--

       (I) any case in which the manufacturer or seller knowingly 
     made any false entry in, or failed to make appropriate entry 
     in, any record required to be kept under Federal or State law 
     with respect to the qualified product, or aided, abetted, or 
     conspired with any person in making any false or fictitious 
     oral or written statement with respect to any fact material 
     to the lawfulness of the sale or other disposition of a 
     qualified product; or
       (II) any case in which the manufacturer or seller aided, 
     abetted, or conspired with any other person to sell or 
     otherwise dispose of a qualified product, knowing, or having 
     reasonable cause to believe, that the actual buyer of the 
     qualified product was prohibited from possessing or receiving 
     a firearm or ammunition under subsection (g) or (n) of 
     section 922 of title 18, United States Code;

       (iv) an action for breach of contract or warranty in 
     connection with the purchase of the product; or
       (v) an action for death, physical injuries or property 
     damage resulting directly from a defect in design or 
     manufacture of the product, when used as intended or in a 
     reasonably foreseeable manner, except that where the 
     discharge of the product was caused by a volitional act that 
     constituted a criminal offense then such act shall be 
     considered the sole proximate cause of any resulting death, 
     personal injuries or property damage.
       (B) Negligent entrustment.--As used in subparagraph 
     (A)(ii), the term `negligent entrustment' means the supplying 
     of a qualified product by a seller for use by another person 
     when the seller knows, or reasonably should know, the person 
     to whom the product is supplied is likely to, and does, use 
     the product in a manner involving unreasonable risk of 
     physical injury to the person or others.
       (C) Rule of construction.--The exceptions enumerated under 
     clauses (i) through (v) of subparagraph (A) shall be 
     construed so as not to be in conflict, and no provision of 
     this Act shall be construed to create a public or private 
     cause of action or remedy.
       (6) Seller.--The term ``seller'' means, with respect to a 
     qualified product--
       (A) an importer (as defined in section 921(a)(9) of title 
     18, United States Code) who is engaged in the business as 
     such an importer in interstate or foreign commerce and who is 
     licensed to engage in business as such an importer under 
     chapter 44 of title 18, United States Code;
       (B) a dealer (as defined in section 921(a)(11) of title 18, 
     United States Code) who is engaged in the business as such a 
     dealer in interstate or foreign commerce and who is licensed 
     to engage in business as such a dealer under chapter 44 of 
     title 18, United States Code; or
       (C) a person engaged in the business of selling ammunition 
     (as defined in section 921(a)(17)(A) of title 18, United 
     States Code) in interstate or foreign commerce at the 
     wholesale or retail level.
       (7) State.--The term ``State'' includes each of the several 
     States of the United States, the District of Columbia, the 
     Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
     American Samoa, and the Commonwealth of the Northern Mariana 
     Islands, and any other territory or possession of the United 
     States, and any political subdivision of any such place.
       (8) Trade association.--The term ``trade association'' 
     means--

[[Page 2563]]

       (A) any corporation, unincorporated association, 
     federation, business league, professional or business 
     organization not organized or operated for profit and no part 
     of the net earnings of which inures to the benefit of any 
     private shareholder or individual;
       (B) that is an organization described in section 501(c)(6) 
     of the Internal Revenue Code of 1986 and exempt from tax 
     under section 501(a) of such Code; and
       (C) 2 or more members of which are manufacturers or sellers 
     of a qualified product.
       (9) Unlawful misuse.--The term ``unlawful misuse'' means 
     conduct that violates a statute, ordinance, or regulation as 
     it relates to the use of a qualified product.
                                 ______
                                 
      By Mr. SANTORUM (for himself and Mr. Bayh):
  S. 398. A bill to amend the Internal Revenue Code of 1986 to expand 
the expensing of environmental remediation costs; to the Committee on 
Finance.
  Mr. SANTORUM. Mr. President, I am pleased to introduce with my 
colleague from Indiana, Senator Bayh, important legislation to 
encourage the cleanup of contaminated sites commonly known as 
``brownfields.'' I urge all my colleagues to join Senator Bayh and me 
as supporters of this legislation and ask that they actively work with 
us towards its enactment.
  The United States Environmental Protection Agency, EPA, defines 
brownfields as ``abandoned, idled, or under used industrial commercial 
sites where expansion or redevelopment is complicated by real or 
perceived environmental contamination that can add cost, time, or 
uncertainness to redevelopment projects.''
  Brownfields are not unique to my State of Pennsylvania, nor are they 
to Senator Bayh's State of Indiana. In every State in the Nation, there 
are areas blighted by run down, abandoned properties and unsightly 
vacant lots. They are the shut down manufacturing facilities, deserted 
warehouses and gas stations that are all too familiar to us. On these 
properties once stood vibrant and productive enterprises, but changing 
times and events have drained their vitality and they are now in 
desperate need of revitalization and redevelopment. Compounding the 
problem is that over the years, the activities on these sites have left 
the soil and water tables contaminated with environmental pollutants.
  The negative social and economic effects that these sites cause on 
their surrounding communities are significant. There are serious 
financial impacts not only to the market values of the brownfield 
properties themselves, but also to property values in the surrounding 
neighborhoods. As middle class citizens are working to gain assets and 
potentially be able to borrow against, or even sell their homes in the 
future, property values become a very serious issue. A reduction of 
property values in brownfield neighborhoods hits hardest the families 
who can least afford it.
  Brownfields have other serious repercussions, extending far beyond 
the pocketbook. The unsightliness of brownfields can lead to the 
characterization of entire neighborhoods as run-down and undesirable. 
The once vibrant spirit of these centrally located and thriving urban 
areas can be dampened as these eyesores drag down residents' morale and 
sense of connection with their community.
  The U.S. Conference of Mayors and the Government Accountability 
Office estimate that there are over 400,000 brownfield sites across the 
country. According to a recent U.S. Conference of Mayors survey of 187 
cities throughout the nation, redevelopment of their existing 
brownfields would bring additional tax revenues of up to $2 billion 
annually and could create hundreds of thousands of jobs.
  Many brownfields are located in prime business locations near 
critical infrastructure, including transportation, and close to an 
already productive workforce. Putting these sites back into use will 
generate good paying jobs and affordable housing in areas where they 
are most needed. Rehabilitating and reusing these sites also serves to 
help prevent urban sprawl. We should encourage the cleanup and use of 
these brownfield sites rather than abandon them and instead always look 
to develop at new locations. A powerful example from my State of a 
successful brownfield revitalization effort and how it can have 
substantial and positive effects on a community is the city of Chester.
  In the midst of a major revitalization, Chester is redeveloping its 
blighted and vacant waterfront district, including the former PECO 
power station. The city is striving to turn a former industrial site 
into a business center. Chester will be able to create new office 
space, and by working with a private developer Chester has received an 
initial commitment to move 2,000 jobs into the area. This initiative 
will help bring more business and infrastructure back to the community, 
adding to the area's prosperity and making Chester an even safer and 
more pleasant place to live.
  Unfortunately, a big reason that so many brownfield properties are 
languishing in a state of decay and disrepair is the substantial clean 
up costs associated with them and the unfavorable tax treatment of 
those costs.
  As part of the Community Renewal and Revitalization Act of 2000, 
Congress enacted section 198 of the Internal Revenue Code, which 
allowed cleanup costs to be expensed in the year they were incurred. 
Prior to that, these costs had to be capitalized to the land, 
postponing any recovery of these costs for tax purposes until the 
property was sold.
  This expedited writeoff of clean up expenses helps a redeveloper 
manage the cost of rehabilitating existing properties which typically 
is much more expensive than developing new sites. Brownfield cleanup 
costs can be an imposing obstacle to redevelopment. While the price tag 
varies with each site, it is not unreasonable for the cleanup of a 
major site to cost between $500,000 and $1 million.
  We in the Senate, and our colleagues in the House, were wise to enact 
section 198 and renew it for 2 years through the Working Families Tax 
Relief Act of 2004. That was a start, but more needs to be done in this 
area.
  The bill my colleague and I are introducing today has three 
provisions. First, it makes section 198 a permanent provision in the 
Tax Code. Second, it broadens the definition of ``hazardous 
substances'' in section 198 to include petroleum. Finally, it repeals 
the provision in the law requiring the recapture of the section 198 
deduction when the property is sold.
  The tax policy of allowing the expensing of clean up costs should be 
a permanent fixture in the Tax Code. Brownfields are a long-term 
problem and this solution will allow us to complete this important 
task.
  Furthermore, a shortcoming of the law passed in 2000 was the absence 
of petroleum as a contaminant that allowed a site to qualify as a 
brownfield under section 198. A large percentage of brownfields across 
the country are contaminated with petroleum. Extending the law to cover 
petroleum contamination makes much more sense and the law much more 
effective.
  Finally, the provision in section 198 that requires a taxpayer who 
uses the clean up deduction to pay income tax on that amount when he or 
she sells the property is illogical. This sends a message to 
developers, that if they undertake the worthy endeavor of remediation 
of brownfield sites they will be subjected to substantial tax penalties 
for doing so. This policy is counterproductive to the efforts we are 
trying to encourage and it should be repealed.
  The benefits of brownfields cleanup are obvious. Remediation of these 
sites revitalizes our neighborhoods and communities, and I urge my 
colleagues to support this legislation.
                                 ______
                                 
      By Mr. COLEMAN (for himself and Mrs. Feinstein):
  S. 399. A bill to amend the Federal Food, Drug, and Cosmetic Act with 
respect to the sale of prescription drugs through the Internet, and for 
other purposes; to the Committee on Health, Education, Labor, and 
Pensions.
                                 ______
                                 
      By Mr. COLEMAN:
  S. 400. A bill to prevent the illegal importation of controlled 
substances; to the Committee on the Judiciary.
  Mr. COLEMAN. Mr. President, I rise to introduce two bills that expand 
Federal authority to prevent controlled substances from flooding into 
the U.S.,

[[Page 2564]]

authorizing States to shut down illegitimate virtual pharmacies, and 
bar Internet drug stores from dispensing drugs to customers referred to 
on-line doctors for a prescription.
  Americans are increasingly turning to the Internet for access to 
affordable drugs. In 2003, consumer spending on drugs procured over the 
Internet exceeded $3.2 billion. Unfortunately, rogue Internet sites 
have proliferated and rake in millions of dollars by selling unproven, 
counterfeit, defective or otherwise inappropriate medications to 
unsuspecting consumers. Even more dangerously, these sites are 
profiting by selling addictive and potentially deadly controlled 
substances to consumers without a prescription or any physician 
oversight. This must stop before more individuals die or become 
addicted to easily obtainable narcotic drugs.
  The first bill I am introducing was developed in close consultation 
with Senator Feinstein, who is an original cosponsor. In appreciation 
for her role in helping write this legislation it is named after a 
young man from her state who died from an overdose of drugs purchased 
over the Internet. I am also pleased to announce that Congressmen Tom 
Davis and Henry Waxman are introducing this exact measure in the House 
today. The issue of rogue Internet sites and the availability of 
controlled substances on-line is indeed a bi-partisan and bi-cameral 
issue.
  Ryan Haight, a 17-year-old, of La Mesa, CA was an honor roll student, 
and avid baseball card collector about to enter college. As his mom 
says, ``he was a good kid.'' But in May of 2000 Ryan started hanging 
out with a different crowd of friends. He joined an online chat forum, 
which advocates the safe use of drugs, and he began buying prescription 
drugs from the Internet.
  He used the family computer late at night and a debit card his 
parents gave him to buy baseball cards on Ebay. You might wonder how 
did a healthy 17-year-old obtain prescriptions for painkillers without 
a medical exam. He got them from Dr. Robert Ogle an ``online'' 
physician based out of Texas. With the prescriptions from Dr. Ogle, 
Ryan was able to order hydrocodone, morphine, Valium and Oxazepam and 
have them shipped via U.S. mail right to his front door.
  In February 2001, Ryan overdosed on a combination of these 
prescription drugs. His mother found him dead on his bedroom floor.
  The Ryan Haight Internet Pharmacy Consumer Protection Act counters 
the growing sale of prescription drugs over the Internet without a 
valid prescription by one, providing new disclosure standards for 
Internet pharmacies; two, barring Internet sites from selling or 
dispensing prescription drugs to consumers who are provided a 
prescription solely on the basis of an online questionnaire; and three, 
allowing State Attorneys General to go to Federal court to shut down 
rogue sites.
  The bill is geared to counter domestic Internet pharmacies that sell 
drugs without a valid prescription, not international pharmacies that 
sell drugs at a low cost to individuals who have a valid prescription 
from their U.S. doctors.
  Under current law, purchasing drugs online without a valid 
prescription can be simple: a consumer just types the name of the drug 
into a search engine, quickly identifies a site selling the medication, 
fills in a brief questionnaire, and then clicks to purchase. The risks 
of self-medicating, however, can include potential adverse reactions 
from inappropriately prescribed medications, dangerous drug 
interactions, use of counterfeit or tainted products, and addiction to 
habit-forming substances. Several of these illegitimate sites fail to 
provide information about contraindications, potential adverse effects, 
and efficacy.
  Regulating these Internet pharmacies is difficult for Federal and 
State authorities. State medical and pharmacy boards have expressed the 
concern that they do not have adequate enforcement tools to regulate 
practice over the Internet. It can be virtually impossible for states 
to identify, investigate, and prosecute these illegal pharmacies 
because the consumer, prescriber, and seller of a drug may be located 
in different States.
  The Internet Pharmacy Consumer Protection Act amends the Federal 
Food, Drug, and Cosmetic Act to address this problem in three steps. 
First, it requires Internet pharmacy web sites to display information 
identifying the business, pharmacist, and physician associated with the 
website.
  Second, the bill bars the selling or dispensing of a prescription 
drug via the Internet when the website has referred the customer to a 
doctor who then writes a prescription without ever seeing the patient.
  Third, the bill provides States with new enforcement authority 
modeled on the Federal Telemarketing Sales Act that will allow a State 
attorney general to shut down a rogue site across the country, rather 
than only bar sales to consumers of his or her State.
  I am proud to say that the Ryan Haight Internet Pharmacy Consumer 
Protection Act is supported by the Federation of State Medical Boards, 
the National Community Pharmacists Association, and the American 
Pharmacists Association.
  The second bill I am introducing enables Customs and Border 
Protection to immediately seize and destroy any package containing a 
controlled substance that is illegally imported into the U.S. without 
having to fill out duplicative forms and other unnecessary 
administrative paperwork. The Act will allow Customs to focus on 
interdicting and destroying potentially addictive and deadly controlled 
substances. The Act is dedicated to Todd Rode, a young man who died 
after overdosing on imported drugs.
  Todd Rode had the heart and soul of a musician. He graduated from 
college magna cum laude with a major in psychology and a minor in 
music. The faculty named him the outstanding senior in the Psychology 
Department. He worked in this field for a number of years, but he 
constantly fought bouts of depression and anxiety.
  Unfortunately Todd ordered controlled drugs from a pharmacy and 
doctor in another country. These drugs included Venlafaxine, 
Propoxyphene, and Codeine. All were controlled substances and all were 
obtained from overseas pharmacies without any safeguards. To obtain 
these controlled substances all Todd had to do was to fill out an 
online questionnaire and with the click of a mouse they were shipped 
directly to his front door.
  In October of 1999, Todd's family found him dead in his apartment.
  A six-month investigation by the Permanent Subcommittee on 
Investigations has revealed that tens of thousands of dangerous and 
addictive controlled substances are streaming into the U.S. on a daily 
basis from overseas Internet pharmacies. For example, on March 15 and 
17, 2004, at JFK airport, home to the largest International Mail Branch 
in the U.S., at least 3,000 boxes from a single vendor in the 
Netherlands containing hydrocodone and Diazepam (Valium) were seized by 
Customs and Border Protection (Customs).
  In fact, senior Customs inspectors at JFK estimate that 40,000 
parcels containing drugs are imported on a daily basis. During last 
summer's FDN Customs blitz, 28 percent of the drugs tested were 
controlled substances. Extrapolating these figures, 11,200 drug parcels 
containing controlled substances are imported through JFK daily, 78,400 
weekly, 313,600 monthly and 3,763,200 annually. Top countries of origin 
include Brazil, India, Pakistan, Netherlands, Spain, Portugal, Canada, 
Mexico, and Romania.
  Likewise, as of March 2003, senior Customs officials at the Miami 
International Airport indicated that as much as 30,000 packages 
containing drugs were being imported on a daily basis. A large 
percentage of these are controlled substances as well. Customs is 
simply overwhelmed. At Mail facilities across the U.S., Customs 
regularly seizes shipments of oxycodone, hydroquinone, tranquilizers, 
steroids, codeine laced product, GHB, date rape drug, and morphine.
  In order to comply with paperwork requirements, Customs is forced to 
devote investigators solely to opening,

[[Page 2565]]

counting, and analyzing drug packages, filling out duplicative forms, 
and logging into a computer all of the seized controlled substances. It 
takes Customs at least one hour to process a single shipment of a 
controlled substance. This minimizes the availability of inspectors to 
screen incoming drug packages. In fact, last year at JFK, there were as 
many as 20,000 packages of seized controlled substances waiting 
processing. Customs acknowledges that, because of the sheer volume of 
product, bureaucratic regulations, and lack of manpower, the vast 
majority of controlled substances that are illegally imported are 
simply missed and allowed into the U.S. stream of commerce.
  The Act to Prevent the Illegal Importation of Controlled Substances 
is a simple bill to address this burgeoning and potentially lethal 
problem.
  I am confident that, if enacted as stand-alone measures, each of 
these bills will make on-line drug purchasing safer. However, I have 
worked with Senator Gregg to ensure these safety features are included 
in his comprehensive reimportation bill and urge my colleagues to help 
make sure that this important piece of legislation becomes law this 
year.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bills was ordered to be 
printed in the Record, as follows:

                                 S. 399

       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 ``Internet Pharmacy Consumer 
     Protection Act'' or the ``Ryan Haight Act''.

     SEC. 2. INTERNET SALES OF PRESCRIPTION DRUGS.

       (a) In General.--Chapter 5 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 351 et seq.) is amended by inserting 
     after section 503A the following section:

     ``SEC. 503B. INTERNET SALES OF PRESCRIPTION DRUGS.

       ``(a) Requirements Regarding Information on Internet 
     Site.--
       ``(1) In general.--A person may not dispense a prescription 
     drug pursuant to a sale of the drug by such person if--
       ``(A) the purchaser of the drug submitted the purchase 
     order for the drug, or conducted any other part of the sales 
     transaction for the drug, through an Internet site;
       ``(B) the person dispenses the drug to the purchaser by 
     mailing or shipping the drug to the purchaser; and
       ``(C) such site, or any other Internet site used by such 
     person for purposes of sales of a prescription drug, fails to 
     meet each of the requirements specified in paragraph (2), 
     other than a site or pages on a site that--
       ``(i) are not intended to be accessed by purchasers or 
     prospective purchasers; or
       ``(ii) provide an Internet information location tool within 
     the meaning of section 231(e)(5) of the Communications Act of 
     1934 (47 U.S.C. 231(e)(5)).
       ``(2) Requirements.--With respect to an Internet site, the 
     requirements referred to in subparagraph (C) of paragraph (1) 
     for a person to whom such paragraph applies are as follows:
       ``(A) Each page of the site shall include either the 
     following information or a link to a page that provides the 
     following information:
       ``(i) The name of such person.
       ``(ii) Each State in which the person is authorized by law 
     to dispense prescription drugs.
       ``(iii) The address and telephone number of each place of 
     business of the person with respect to sales of prescription 
     drugs through the Internet, other than a place of business 
     that does not mail or ship prescription drugs to purchasers.
       ``(iv) The name of each individual who serves as a 
     pharmacist for prescription drugs that are mailed or shipped 
     pursuant to the site, and each State in which the individual 
     is authorized by law to dispense prescription drugs.
       ``(v) If the person provides for medical consultations 
     through the site for purposes of providing prescriptions, the 
     name of each individual who provides such consultations; each 
     State in which the individual is licensed or otherwise 
     authorized by law to provide such consultations or practice 
     medicine; and the type or types of health professions for 
     which the individual holds such licenses or other 
     authorizations.
       ``(B) A link to which paragraph (1) applies shall be 
     displayed in a clear and prominent place and manner, and 
     shall include in the caption for the link the words 
     `licensing and contact information'.
       ``(b) Internet Sales Without Appropriate Medical 
     Relationships.--
       ``(1) In general.--Except as provided in paragraph (2), a 
     person may not dispense a prescription drug, or sell such a 
     drug, if--
       ``(A) for purposes of such dispensing or sale, the 
     purchaser communicated with the person through the Internet;
       ``(B) the patient for whom the drug was dispensed or 
     purchased did not, when such communications began, have a 
     prescription for the drug that is valid in the United States;
       ``(C) pursuant to such communications, the person provided 
     for the involvement of a practitioner, or an individual 
     represented by the person as a practitioner, and the 
     practitioner or such individual issued a prescription for the 
     drug that was purchased;
       ``(D) the person knew, or had reason to know, that the 
     practitioner or the individual referred to in subparagraph 
     (C) did not, when issuing the prescription, have a qualifying 
     medical relationship with the patient; and
       ``(E) the person received payment for the dispensing or 
     sale of the drug.
     For purposes of subparagraph (E), payment is received if 
     money or other valuable consideration is received.
       ``(2) Exceptions.--Paragraph (1) does not apply to--
       ``(A) the dispensing or selling of a prescription drug 
     pursuant to telemedicine practices sponsored by--
       ``(i) a hospital that has in effect a provider agreement 
     under title XVIII of the Social Security Act (relating to the 
     Medicare program); or
       ``(ii) a group practice that has not fewer than 100 
     physicians who have in effect provider agreements under such 
     title; or
       ``(B) the dispensing or selling of a prescription drug 
     pursuant to practices that promote the public health, as 
     determined by the Secretary by regulation.
       ``(3) Qualifying medical relationship.--
       ``(A) In general.--With respect to issuing a prescription 
     for a drug for a patient, a practitioner has a qualifying 
     medical relationship with the patient for purposes of this 
     section if--
       ``(i) at least one in-person medical evaluation of the 
     patient has been conducted by the practitioner; or
       ``(ii) the practitioner conducts a medical evaluation of 
     the patient as a covering practitioner.
       ``(B) In-person medical evaluation.--A medical evaluation 
     by a practitioner is an in-person medical evaluation for 
     purposes of this section if the practitioner is in the 
     physical presence of the patient as part of conducting the 
     evaluation, without regard to whether portions of the 
     evaluation are conducted by other health professionals.
       ``(C) Covering practitioner.--With respect to a patient, a 
     practitioner is a covering practitioner for purposes of this 
     section if the practitioner conducts a medical evaluation of 
     the patient at the request of a practitioner who has 
     conducted at least one in-person medical evaluation of the 
     patient and is temporarily unavailable to conduct the 
     evaluation of the patient. A practitioner is a covering 
     practitioner without regard to whether the practitioner has 
     conducted any in-person medical evaluation of the patient 
     involved.
       ``(4) Rules of construction.--
       ``(A) Individuals represented as practitioners.--A person 
     who is not a practitioner (as defined in subsection (d)(1)) 
     lacks legal capacity under this section to have a qualifying 
     medical relationship with any patient.
       ``(B) Standard practice of pharmacy.--Paragraph (1) may not 
     be construed as prohibiting any conduct that is a standard 
     practice in the practice of pharmacy.
       ``(C) Applicability of requirements.--Paragraph (3) may not 
     be construed as having any applicability beyond this section, 
     and does not affect any State law, or interpretation of State 
     law, concerning the practice of medicine.
       ``(c) Actions by States.--
       ``(1) In general.--Whenever an attorney general of any 
     State has reason to believe that the interests of the 
     residents of that State have been or are being threatened or 
     adversely affected because any person has engaged or is 
     engaging in a pattern or practice that violates section 
     301(l), the State may bring a civil action on behalf of its 
     residents in an appropriate district court of the United 
     States to enjoin such practice, to enforce compliance with 
     such section (including a nationwide injunction), to obtain 
     damages, restitution, or other compensation on behalf of 
     residents of such State, to obtain reasonable attorneys fees 
     and costs if the State prevails in the civil action, or to 
     obtain such further and other relief as the court may deem 
     appropriate.
       ``(2) Notice.--The State shall serve prior written notice 
     of any civil action under paragraph (1) or (5)(B) upon the 
     Secretary and provide the Secretary with a copy of its 
     complaint, except that if it is not feasible for the State to 
     provide such prior notice, the State shall serve such notice 
     immediately upon instituting such action. Upon receiving a 
     notice respecting a civil action, the Secretary shall have 
     the right--
       ``(A) to intervene in such action;
       ``(B) upon so intervening, to be heard on all matters 
     arising therein; and
       ``(C) to file petitions for appeal.
       ``(3) Construction.--For purposes of bringing any civil 
     action under paragraph (1), nothing in this chapter shall 
     prevent an attorney general of a State from exercising the

[[Page 2566]]

     powers conferred on the attorney general by the laws of such 
     State to conduct investigations or to administer oaths or 
     affirmations or to compel the attendance of witnesses or the 
     production of documentary and other evidence.
       ``(4) Venue; service of process.--Any civil action brought 
     under paragraph (1) in a district court of the United States 
     may be brought in the district in which the defendant is 
     found, is an inhabitant, or transacts business or wherever 
     venue is proper under section 1391 of title 28, United States 
     Code. Process in such an action may be served in any district 
     in which the defendant is an inhabitant or in which the 
     defendant may be found.
       ``(5) Actions by other state officials.--
       ``(A) Nothing contained in this section shall prohibit an 
     authorized State official from proceeding in State court on 
     the basis of an alleged violation of any civil or criminal 
     statute of such State.
       ``(B) In addition to actions brought by an attorney general 
     of a State under paragraph (1), such an action may be brought 
     by officers of such State who are authorized by the State to 
     bring actions in such State on behalf of its residents.
       ``(d) General Definitions.--For purposes of this section:
       ``(1) The term `practitioner' means a practitioner referred 
     to in section 503(b)(1) with respect to issuing a written or 
     oral prescription.
       ``(2) The term `prescription drug' means a drug that is 
     subject to section 503(b)(1).
       ``(3) The term `qualifying medical relationship', with 
     respect to a practitioner and a patient, has the meaning 
     indicated for such term in subsection (b).
       ``(e) Internet-related Definitions.--
       ``(1) In general.--For purposes of this section:
       ``(A) The term `Internet' means collectively the myriad of 
     computer and telecommunications facilities, including 
     equipment and operating software, which comprise the 
     interconnected world-wide network of networks that employ the 
     transmission control protocol/internet protocol, or any 
     predecessor or successor protocols to such protocol, to 
     communicate information of all kinds by wire or radio.
       ``(B) The term `link', with respect to the Internet, means 
     one or more letters, words, numbers, symbols, or graphic 
     items that appear on a page of an Internet site for the 
     purpose of serving, when activated, as a method for executing 
     an electronic command--
       ``(i) to move from viewing one portion of a page on such 
     site to another portion of the page;
       ``(ii) to move from viewing one page on such site to 
     another page on such site; or
       ``(iii) to move from viewing a page on one Internet site to 
     a page on another Internet site.
       ``(C) The term `page', with respect to the Internet, means 
     a document or other file accessed at an Internet site.
       ``(D)(i) The terms `site' and `address', with respect to 
     the Internet, mean a specific location on the Internet that 
     is determined by Internet Protocol numbers. Such term 
     includes the domain name, if any.
       ``(ii) The term `domain name' means a method of 
     representing an Internet address without direct reference to 
     the Internet Protocol numbers for the address, including 
     methods that use designations such as `.com', `.edu', `.gov', 
     `.net', or `.org'.
       ``(iii) The term `Internet Protocol numbers' includes any 
     successor protocol for determining a specific location on the 
     Internet.
       ``(2) Authority of secretary.--The Secretary may by 
     regulation modify any definition under paragraph (1) to take 
     into account changes in technology.
       ``(f) Interactive Computer Service; Advertising.--No 
     provider of an interactive computer service, as defined in 
     section 230(f)(2) of the Communications Act of 1934 (47 
     U.S.C. 230(f)(2)), or of advertising services shall be liable 
     under this section for dispensing or selling prescription 
     drugs in violation of this section on account of another 
     person's selling or dispensing such drugs, provided that the 
     provider of the interactive computer service or of 
     advertising services does not own or exercise corporate 
     control over such person.''.
       (b) Inclusion as Prohibited Act.--Section 301 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 331) is 
     amended by inserting after paragraph (k) the following:
       ``(l) The dispensing or selling of a prescription drug in 
     violation of section 503B.''.
       (c) Internet Sales of Prescription Drugs; Consideration by 
     Secretary of Practices and Procedures for Certification of 
     Legitimate Businesses.--In carrying out section 503B of the 
     Federal Food, Drug, and Cosmetic Act (as added by subsection 
     (a) of this section), the Secretary of Health and Human 
     Services shall take into consideration the practices and 
     procedures of public or private entities that certify that 
     businesses selling prescription drugs through Internet sites 
     are legitimate businesses, including practices and procedures 
     regarding disclosure formats and verification programs.
       (d) Reports Regarding Internet-related Violations of State 
     and Federal Laws on Dispensing of Drugs.--
       (1) In general.--The Secretary of Health and Human Services 
     (referred to in this subsection as the ``Secretary'') shall, 
     pursuant to the submission of an application meeting the 
     criteria of the Secretary, make an award of a grant or 
     contract to the National Clearinghouse on Internet 
     Prescribing (operated by the Federation of State Medical 
     Boards) for the purpose of--
       (A) identifying Internet sites that appear to be in 
     violation of State or Federal laws concerning the dispensing 
     of drugs;
       (B) reporting such sites to State medical licensing boards 
     and State pharmacy licensing boards, and to the Attorney 
     General and the Secretary, for further investigation; and
       (C) submitting, for each fiscal year for which the award 
     under this subsection is made, a report to the Secretary 
     describing investigations undertaken with respect to 
     violations described in subparagraph (A).
       (2) Authorization of appropriations.--For the purpose of 
     carrying out paragraph (1), there is authorized to be 
     appropriated $100,000 for each of the fiscal years 2005 
     through 2007.
       (e) Effective Date.--The amendments made by subsections (a) 
     and (b) take effect upon the expiration of the 60-day period 
     beginning on the date of the enactment of this Act, without 
     regard to whether a final rule to implement such amendments 
     has been promulgated by the Secretary of Health and Human 
     Services under section 701(a) of the Federal Food, Drug, and 
     Cosmetic Act. The preceding sentence may not be construed as 
     affecting the authority of such Secretary to promulgate such 
     a final rule.

                                 S. 400

       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 ``Prevention of Illegally 
     Imported Controlled Substances Act of 2005'' or ``Todd Rode 
     Act''.

     SEC. 2. DESTRUCTION OF CERTAIN IMPORTED SHIPMENTS.

       Part D of the Controlled Substances Act (21 U.S.C. 841 et 
     seq.) is amended by adding at the end the following:


              ``DESTRUCTION OF CERTAIN IMPORTED SHIPMENTS

       ``Sec. 424. (a) In General.--A shipment of controlled 
     substances that is imported or offered for import into the 
     United States in violation of section 401 and whose value is 
     less than $10,000 shall be seized and summarily forfeited to 
     the United States.
       ``(b) Destruction.--Controlled substances seized under 
     subsection (a) shall be destroyed, subject to subsection (d). 
     Section 801(b) of the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 381(b)) does not authorize the delivery of the 
     substances pursuant to the execution of a bond, and the 
     substances may not be exported.
       ``(c) Notice.--
       ``(1) Procedures.--The seizure and destruction of 
     controlled substances under subsections (a) and (b) may be 
     carried out without notice to the importer, owner, or 
     consignee of the controlled substances involved. Appraisement 
     of such substances is required only to the extent sufficient 
     to document that the substances are subject to subsection 
     (a).
       ``(2) Goals.--Procedures promulgated under paragraph (1) 
     shall be designed toward the goal of ensuring that, with 
     respect to efficiently utilizing Federal resources available 
     for carrying out this subsection, a substantial majority of 
     shipments of controlled substances subject to subsection (a) 
     are identified and seized under such paragraph and destroyed 
     under subsection (b).
       ``(d) Presentation of Evidence.--Controlled substances may 
     not be destroyed under subsection (b) to the extent that the 
     Attorney General of the United States determines that the 
     controlled substances should be preserved as evidence or 
     potential evidence with respect to an offense against the 
     United States.''.

  Mrs. FEINSTEIN. Mr. President, I am pleased to join Senator Coleman 
again this year to re-introduce the Ryan Haight Internet Pharmacy 
Consumer Protection Act. Our legislation will protect the safety of 
Americans who choose to purchase their prescription drugs legally over 
the Internet.
  This legislation is necessary because of a growing problem of illegal 
prescription drug diversion and abuse of prescription drugs. Coupled 
with the ease of access to the Internet, it has led to an environment 
where illegitimate pharmacy websites can bypass traditional regulations 
and established safeguards for the sale of prescription drugs. Internet 
websites that allow consumers to obtain prescriptions drugs without the 
existence of a bona fide physician-patient relationship pose an 
immediate threat to public health and safety.
  To address this problem, the Internet Pharmacy Consumer Protection 
Act makes several critical steps, to ensure safety and to assist 
regulatory authorities in shutting down ``rogue'' Internet pharmacies.

[[Page 2567]]

  First, this bill establishes disclosure standards for Internet 
pharmacies.
  Second, this bill prohibits the dispensing or sale of a prescription 
drug based solely on communications via the Internet such as the 
completion of an online medical questionnaire.
  Third, it allows a State Attorney General to bring a civil action in 
a Federal district court to enjoin a pharmacy operation and to enforce 
compliance with the provisions of this law.
  Under this bill, for a domestic Web site to sell prescription drugs 
legally, the web site would have to display identifying information 
such as the names, addresses, and medical licensing information for 
pharmacists and physicians associated with the Web site.
  In addition, if a person wants to use the Internet to purchase their 
prescription drugs he or she will not be prohibited from doing so under 
this bill but, in order to do so, must already have a prescription for 
the drug that is valid in the United States prior to making the 
Internet purchase.
  Reliance on the Internet for public health purposes and the expansion 
of telemedicine, particularly in rural areas, make it essential that 
there be at the very least a minimum standard for what qualifies as an 
acceptable medical relationship between patients and their physicians.
  According to the American Medical Association, a health care 
practitioner who offers a prescription for a patient he or she has 
never seen before, based solely on an online questionnaire, generally 
does not meet the appropriate medical standard of care.
  Let me illustrate the situation facing our country today. If a 
physician's office prescribed and dispensed prescription drugs the same 
way Internet pharmacies currently can do, it would look something like 
this: a physician opens a physical office, asks a patient to fill out a 
medical history questionnaire in the lobby and give his or her credit 
card information to the office manager. There is no nurse, and 
therefore no one to take the patients' height, weight, blood pressure, 
verify his or her medical history, and so forth and no one to answer 
the patient's questions regarding their health.
  The questionnaire is then slipped through a hole in the window; the 
office manager takes it to the physician, or person acting as the 
physician, who then writes the prescription and hands it to the 
pharmacist, or person acting as the pharmacist, in the next room. Once 
the patient signs his credit card, he is on his way out the door, drugs 
in hand.
  No examination is performed, no questions asked, and no verification 
or clarification of the answers provided on the medical history 
questionnaire.
  This illustration is not an exaggeration. It occurs everyday all 
across the United States. The National Association of Boards of 
Pharmacy estimates that there are around 500 identifiable rogue 
pharmacy Web sites operating on the Internet.
  According to the Federation of State Medical Boards, 31 States and 
the District of Columbia either have laws or medical board initiatives 
addressing Internet medical practice.
  Many States have already enacted laws defining acceptable practices 
for qualifying medical relationships between doctors and patients and 
this bill would not affect any existing State laws.
  For example, California law was changed in 2000 to say: ``no person 
or entity may prescribe, dispense, or furnish, or cause to be 
prescribed, dispensed, or furnished dangerous drugs or dangerous 
devices [defined as any drug or device unsafe for self-use] on the 
Internet for delivery to any person in this state, without a good faith 
prior examination and medical indication . . .''
  I believe California's law is a perfect example of why this 
legislation is needed. The law only applies to persons living in 
California. As we all know, however, the Internet is not bound by State 
or even country borders.
  This legislation makes a critical step forward by providing 
additional authority for State Attorneys General to file an injunction 
in Federal court to shut down an Internet site operating in another 
State that violates the provisions in the bill.
  Under current law, in order to close down an Internet website selling 
prescription drugs prosecutors must take enforcement actions in every 
State where the Internet pharmacy operates, requiring a tremendous 
amount of resources in an environment where the location of the website 
is difficult, if not impossible, to determine or keep track of.
  This bill will allow a State Attorney General to bring a civil action 
in a Federal district court to enjoin a pharmacy operation and to 
enforce compliance with the provisions of the law in every jurisdiction 
where the pharmacy is operating.
  While this legislation pertains to domestic Internet pharmacies, the 
practice of international pharmacies selling low-cost drugs to U.S. 
consumers who have valid prescriptions from their doctors deserves to 
be discussed and debated on the Senate floor. It is my hope that the 
Senate will act this year on prescription drug importation legislation.
  In closing, I want to share with you the story of Ryan T. Haight of 
La Mesa, California, in whose memory this bill is named.
  Ryan was an 18-year-old honor student from La Mesa, CA, when he died 
in his home on February 12, 2001.
  His parents found a bottle of Vicodin in his room with a label from 
an out-of-State pharmacy.
  It turns out that Ryan had been ordering addictive drugs online and 
paying with a debit card his parents gave him to buy baseball cards on 
eBay.
  Without a physical exam or his parents' consent, Ryan had been 
obtaining controlled substances, some from an Internet site in 
Oklahoma. It only took a few months before Ryan's life was ended by an 
overdose on a cocktail of painkillers.
  Ryan's story and others like it force us to ask why anyone in the 
U.S. would be able to access such highly addictive and dangerous drugs 
over the Internet with such ease?
  Why was there no physician or pharmacist on the other end of this 
teenager's computer verifying his age, his medical history and that 
there was a valid prescription?
  That is why I support this legislation. It makes sensible 
requirements of Internet pharmacy websites that will not impact access 
to convenient, oftentimes cost-saving drugs.
  With simple disclosure requirements for Internet sites such as names, 
addresses and medical or pharmacy licensing information, patients will 
be better off and State medica1 and pharmacy boards can ensure that 
pharmacists and doctors are properly licensed.
  Lastly, this bill will give State attorneys general the authority 
they need to shut down rogue Internet pharmacies operating in other 
states.
  I urge my colleagues to support this bill.
                                 ______
                                 
      By Mr. HARKIN (for himself, Mr. Specter, Mr. Kennedy, Mr. Kerry, 
        Mr. Biden, Mr. Dayton, Ms. Landrieu, Mr. Schumer, Mr. Corzine, 
        Mr. Lautenberg, Mr. Lieberman, and Mr. Dodd):
  S. 401. A bill to amend title XIX of the Social Security Act to 
provide individuals with disabilities and older Americans with equal 
access to community-based attendant services and supports, and for 
other purposes; to the Committee on Finance.
  Mr. HARKIN. Mr. President, today, Senator Specter and I and others 
introduce the Medicaid Community-Based Attendant Services and Supports 
Act of 2003 (MiCASSA). This legislation is needed to truly bring people 
with disabilities into the mainstream of society and provide equal 
opportunity for employment and community activities.
  We anticipate that there will be some discussions of so called 
``reform'' of the Medicaid system in this Congress. The Medicaid 
program is a critical source of services and supports for millions of 
Americans with disabilities. Any attempt to cap resources or decrease 
the availability of services under that program will meet strong 
opposition from myself and others.
  But there is one area where Medicaid should be improved. Services 
should be

[[Page 2568]]

expanded to increase access to personal attendant services. In order to 
work or live in their own homes, Americans with Disabilities and older 
Americans need access to community-based services and supports. 
Unfortunately, under current Federal Medicaid policy, the deck is 
stacked in favor of living in an institutional setting. Federal law 
requires that States cover nursing homes in their Medicaid programs. 
But there is no similar requirement for attendant services. The purpose 
of our bill is to level the playing field and give eligible individuals 
equal access to community-based services and supports they need.
  The Medicaid Community Attendant Services and Supports Act will 
accomplish four goals.
  First, the bill amends Title XIX of the Social Security Act to 
provide a new Medicaid plan benefit that would give individuals who are 
currently eligible for nursing home services or an intermediate care 
facility for the mentally retarded equal access to community-based 
attendant services and supports.
  Second, for a limited time, States would have the opportunity to 
receive additional funds to support community attendant services and 
supports and for certain administrative activities. Each State 
currently gets Federal money for their Medicaid program based on a set 
percentage. This percentage is the Medicaid match rate. This bill would 
increase that percentage to provide some additional funding to States 
to help them reform their long term care systems.
  Third, the bill provides States with financial assistance to support 
``real choice systems change initiatives'' that include specific action 
steps to increase the provision of home and community based services.
  Finally, the bill establishes a demonstration project to evaluate 
service coordination and cost sharing approaches with respect to the 
provision of services and supports for individuals with disabilities 
under the age of 65 who are dually eligible for Medicaid and Medicare.
  Although some States have already recognized the benefits of home and 
community based services, they are unevenly distributed and only reach 
a small percentage of eligible individuals. Every State offers services 
under home and community based waiver programs, but they only serve a 
capped number of individuals. Some States also are now providing the 
personal care optional benefit through their Medicaid program, but 
others do not.
  Those left behind are often needlessly institutionalized because they 
cannot access community alternatives. A person with a disability's 
civil right to be integrated into his or her community should not 
depend on his or her address. In Olmstead v. LC, the Supreme Court 
recognized that needless institutionalization is a form of 
discrimination under the Americans With Disabilities Act. We in 
Congress have a responsibility to help States meet their obligations 
under Olmstead.
  This MICASSA legislation is designed to do just that and make the 
promise of the ADA a reality. It will help rebalance the current 
Medicaid long term care system, which spends a disproportionate amount 
on institutional services. For example, in 2003, 67 percent of long 
term care Medicaid dollars were spent on institutional care, compared 
to 33 percent community based care.
  And that means that individuals do not have equal access to community 
based care throughout this country. An individual should not be asked 
to move to another state in order to avoid needless segregation. They 
also should not be moved away from family and friends because their 
only choice is an institution.
  Federal Medicaid policy should reflect the consensus reached in the 
ADA that Americans with Disabilities should have equal opportunity to 
contribute to our communities and participate in our society as full 
citizens. That means no one has to sacrifice their full participation 
in society because they need help getting out of the house in the 
morning or assistance with personal care or some other basic service.
  I applaud the President's New Freedom Initiative for People with 
Disabilities and believe that this legislation helps promote the goals 
of that initiative. I will be reintroducing the Money Follows the 
Person legislation that is part of the New Freedom Initiative and 
believe that MICASSA and Money Follows the Person complement each 
other. Together these two bills could substantially reform long term 
services in this country.
  Community based attendant services and supports allow people with 
disabilities to lead independent lives, have jobs, and participate in 
the community. Some will become taxpayers, some will get an education, 
and some will participate in recreational and civic activities. But all 
will experience a chance to make their own choices and govern their own 
lives.
  This bill will open the door to full participation by people with 
disabilities in our workplaces, our economy, and our American Dream, 
and I urge all my colleagues to support us on this issue. I want to 
thank Senator Specter for his leadership on this issue and his 
commitment to improving access to home and community based services for 
people with disabilities. I would also like to thank Senators Kennedy, 
Kerry, Biden, Dayton, Landrieu, Corzine, Schumer, Lautenberg, Lieberman 
and Dodd for joining me in this important initiative.
  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. 401

       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 ``Medicaid 
     Community-Based Attendant Services and Supports 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. Findings and purposes.

            TITLE I--ESTABLISHMENT OF MEDICAID PLAN BENEFIT

Sec. 101. Coverage of community-based attendant services and supports 
              under the medicaid program.
Sec. 102. Enhanced FMAP for ongoing activities of early coverage States 
              that enhance and promote the use of community-based 
              attendant services and supports.
Sec. 103. Increased Federal financial participation for certain 
              expenditures.

      TITLE II--PROMOTION OF SYSTEMS CHANGE AND CAPACITY BUILDING

Sec. 201. Grants to promote systems change and capacity building.
Sec. 202. Demonstration project to enhance coordination of care under 
              the medicare and medicaid programs for non-elderly dual 
              eligible individuals.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) Long-term services and supports provided under the 
     medicaid program established under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.) must meet the ability 
     and life choices of individuals with disabilities and older 
     Americans, including the choice to live in one's own home or 
     with one's own family and to become a productive member of 
     the community.
       (2) Research on the provision of long-term services and 
     supports under the medicaid program (conducted by and on 
     behalf of the Department of Health and Human Services) has 
     revealed a significant funding bias toward institutional 
     care. Only about 33 percent of long term care funds expended 
     under the medicaid program, and only about 11 percent of all 
     funds expended under that program, pay for services and 
     supports in home and community-based settings.
       (3) In the case of medicaid beneficiaries who need long 
     term care, the only long-term care service currently 
     guaranteed by Federal law in every State is nursing home 
     care. Only 30 States have adopted the benefit option of 
     providing personal care services under the medicaid program. 
     Although every State has chosen to provide certain services 
     under home and community-based waivers, these services are 
     unevenly available within and across States, and reach a 
     small percentage of eligible individuals. In fiscal year 
     2003, only 7 States spent 50 percent or more of their 
     medicaid long term care funds under the medicaid program on 
     home and community-based care.
       (4) The goals of the Nation properly include providing 
     families of children with disabilities, working-age adults 
     with disabilities, and older Americans with--

[[Page 2569]]

       (A) a meaningful choice of receiving long-term services and 
     supports in the most integrated setting appropriate to their 
     needs;
       (B) the greatest possible control over the services 
     received and, therefore, their own lives and futures; and
       (C) quality services that maximize independence in the home 
     and community, including in the workplace.
       (b) Purposes.--The purposes of this Act are the following:
       (1) To reform the medicaid program established under title 
     XIX of the Social Security Act (42 U.S.C. 1396 et seq.) to 
     provide equal access to community-based attendant services 
     and supports.
       (2) To provide financial assistance to States as they 
     reform their long-term care systems to provide comprehensive 
     statewide long-term services and supports, including 
     community-based attendant services and supports that provide 
     consumer choice and direction, in the most integrated setting 
     appropriate.

            TITLE I--ESTABLISHMENT OF MEDICAID PLAN BENEFIT

     SEC. 101. COVERAGE OF COMMUNITY-BASED ATTENDANT SERVICES AND 
                   SUPPORTS UNDER THE MEDICAID PROGRAM.

       (a) Mandatory Coverage.--Section 1902(a)(10)(D) of the 
     Social Security Act (42 U.S.C. 1396a(a)(10)(D)) is amended--
       (1) by inserting ``(i)'' after ``(D)'';
       (2) by adding ``and'' after the semicolon; and
       (3) by adding at the end the following new clause:
       ``(ii) subject to section 1936, for the inclusion of 
     community-based attendant services and supports for any 
     individual who--
       ``(I) is eligible for medical assistance under the State 
     plan;
       ``(II) with respect to whom there has been a determination 
     that the individual requires the level of care provided in a 
     nursing facility or an intermediate care facility for the 
     mentally retarded (whether or not coverage of such 
     intermediate care facility is provided under the State plan); 
     and
       ``(III) chooses to receive such services and supports;''.
       (b) Community-Based Attendant Services and Supports.--
       (1) In general.--Title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) is amended--
       (A) by redesignating section 1936 as section 1937; and
       (B) by inserting after section 1935 the following:


           ``COMMUNITY-BASED ATTENDANT SERVICES AND SUPPORTS

       ``Sec. 1936. (a) Required Coverage.--
       ``(1) In general.--Not later than October 1, 2009, a State 
     shall provide through a plan amendment for the inclusion of 
     community-based attendant services and supports (as defined 
     in subsection (g)(1)) for individuals described in section 
     1902(a)(10)(D)(ii) in accordance with this section.
       ``(2) Enhanced fmap and additional federal financial 
     support for earlier coverage.--Notwithstanding section 
     1905(b), during the period that begins on October 1, 2005, 
     and ends on September 30, 2009, in the case of a State with 
     an approved plan amendment under this section during that 
     period that also satisfies the requirements of subsection (c) 
     the Federal medical assistance percentage shall be equal to 
     the enhanced FMAP described in section 2105(b) with respect 
     to medical assistance in the form of community-based 
     attendant services and supports provided to individuals 
     described in section 1902(a)(10)(D)(ii) in accordance with 
     this section on or after the date of the approval of such 
     plan amendment.
       ``(b) Development and Implementation of Benefit.--In order 
     for a State plan amendment to be approved under this section, 
     a State shall provide the Secretary with the following 
     assurances:
       ``(1) Assurance of development and implementation 
     collaboration.--That the State has developed and shall 
     implement the provision of community-based attendant services 
     and supports under the State plan through active 
     collaboration with--
       ``(A) individuals with disabilities;
       ``(B) elderly individuals;
       ``(C) representatives of such individuals; and
       ``(D) providers of, and advocates for, services and 
     supports for such individuals.
       ``(2) Assurance of provision on a statewide basis and in 
     most integrated setting.--That community-based attendant 
     services and supports will be provided under the State plan 
     to individuals described in section 1902(a)(10)(D)(ii) on a 
     statewide basis and in a manner that provides such services 
     and supports in the most integrated setting appropriate for 
     each individual eligible for such services and supports.
       ``(3) Assurance of nondiscrimination.--That the State will 
     provide community-based attendant services and supports to an 
     individual described in section 1902(a)(10)(D)(ii) without 
     regard to the individual's age, type of disability, or the 
     form of community-based attendant services and supports that 
     the individual requires in order to lead an independent life.
       ``(4) Assurance of maintenance of effort.--That the level 
     of State expenditures for optional medical assistance that--
       ``(A) is described in a paragraph other than paragraphs (1) 
     through (5), (17) and (21) of section 1905(a) or that is 
     provided under a waiver under section 1915, section 1115, or 
     otherwise; and
       ``(B) is provided to individuals with disabilities or 
     elderly individuals for a fiscal year,
     shall not be less than the level of such expenditures for the 
     fiscal year preceding the fiscal year in which the State plan 
     amendment to provide community-based attendant services and 
     supports in accordance with this section is approved.
       ``(c) Requirements for Enhanced FMAP for Early Coverage.--
     In addition to satisfying the other requirements for an 
     approved plan amendment under this section, in order for a 
     State to be eligible under subsection (a)(2) during the 
     period described in that subsection for the enhanced FMAP for 
     early coverage under subsection (a)(2), the State shall 
     satisfy the following requirements:
       ``(1) Specifications.--With respect to a fiscal year, the 
     State shall provide the Secretary with the following 
     specifications regarding the provision of community-based 
     attendant services and supports under the plan for that 
     fiscal year:
       ``(A)(i) The number of individuals who are estimated to 
     receive community-based attendant services and supports under 
     the plan during the fiscal year.
       ``(ii) The number of individuals that received such 
     services and supports during the preceding fiscal year.
       ``(B) The maximum number of individuals who will receive 
     such services and supports under the plan during that fiscal 
     year.
       ``(C) The procedures the State will implement to ensure 
     that the models for delivery of such services and supports 
     are consumer controlled (as defined in subsection (g)(2)(B)).
       ``(D) The procedures the State will implement to inform all 
     potentially eligible individuals and relevant other 
     individuals of the availability of such services and supports 
     under this title, and of other items and services that may be 
     provided to the individual under this title or title XVIII.
       ``(E) The procedures the State will implement to ensure 
     that such services and supports are provided in accordance 
     with the requirements of subsection (b)(1).
       ``(F) The procedures the State will implement to actively 
     involve individuals with disabilities, elderly individuals, 
     and representatives of such individuals in the design, 
     delivery, administration, and evaluation of the provision of 
     such services and supports under this title.
       ``(2) Participation in evaluations.--The State shall 
     provide the Secretary with such substantive input into, and 
     participation in, the design and conduct of data collection, 
     analyses, and other qualitative or quantitative evaluations 
     of the provision of community-based attendant services and 
     supports under this section as the Secretary deems necessary 
     in order to determine the effectiveness of the provision of 
     such services and supports in allowing the individuals 
     receiving such services and supports to lead an independent 
     life to the maximum extent possible.
       ``(d) Quality Assurance Program.--
       ``(1) State responsibilities.--In order for a State plan 
     amendment to be approved under this section, a State shall 
     establish and maintain a quality assurance program with 
     respect to community-based attendant services and supports 
     that provides for the following:
       ``(A) The State shall establish requirements, as 
     appropriate, for agency-based and other delivery models that 
     include--
       ``(i) minimum qualifications and training requirements for 
     agency-based and other models;
       ``(ii) financial operating standards; and
       ``(iii) an appeals procedure for eligibility denials and a 
     procedure for resolving disagreements over the terms of an 
     individualized plan.
       ``(B) The State shall modify the quality assurance program, 
     as appropriate, to maximize consumer independence and 
     consumer control in both agency-provided and other delivery 
     models.
       ``(C) The State shall provide a system that allows for the 
     external monitoring of the quality of services and supports 
     by entities consisting of consumers and their 
     representatives, disability organizations, providers, 
     families of disabled or elderly individuals, members of the 
     community, and others.
       ``(D) The State shall provide for ongoing monitoring of the 
     health and well-being of each individual who receives 
     community-based attendant services and supports.
       ``(E) The State shall require that quality assurance 
     mechanisms appropriate for the individual be included in the 
     individual's written plan.
       ``(F) The State shall establish a process for the mandatory 
     reporting, investigation, and resolution of allegations of 
     neglect, abuse, or exploitation in connection with the 
     provision of such services and supports.
       ``(G) The State shall obtain meaningful consumer input, 
     including consumer surveys, that measure the extent to which 
     an individual receives the services and supports described in 
     the individual's plan and the individual's satisfaction with 
     such services and supports.

[[Page 2570]]

       ``(H) The State shall make available to the public the 
     findings of the quality assurance program.
       ``(I) The State shall establish an ongoing public process 
     for the development, implementation, and review of the 
     State's quality assurance program.
       ``(J) The State shall develop and implement a program of 
     sanctions for providers of community-based services and 
     supports that violate the terms or conditions for the 
     provision of such services and supports.
       ``(2) Federal responsibilities.--
       ``(A) Periodic evaluations.--The Secretary shall conduct a 
     periodic sample review of outcomes for individuals who 
     receive community-based attendant services and supports under 
     this title.
       ``(B) Investigations.--The Secretary may conduct targeted 
     reviews and investigations upon receipt of an allegation of 
     neglect, abuse, or exploitation of an individual receiving 
     community-based attendant services and supports under this 
     section.
       ``(C) Development of provider sanction guidelines.--The 
     Secretary shall develop guidelines for States to use in 
     developing the sanctions required under paragraph (1)(J).
       ``(e) Reports.--The Secretary shall submit to Congress 
     periodic reports on the provision of community-based 
     attendant services and supports under this section, 
     particularly with respect to the impact of the provision of 
     such services and supports on--
       ``(1) individuals eligible for medical assistance under 
     this title;
       ``(2) States; and
       ``(3) the Federal Government.
       ``(f) No Effect on Ability to Provide Coverage Under a 
     Waiver.--
       ``(1) In general.--Nothing in this section shall be 
     construed as affecting the ability of a State to provide 
     coverage under the State plan for community-based attendant 
     services and supports (or similar coverage) under a waiver 
     approved under section 1915, section 1115, or otherwise.
       ``(2) Eligibility for enhanced match.--In the case of a 
     State that provides coverage for such services and supports 
     under a waiver, the State shall not be eligible under 
     subsection (a)(2) for the enhanced FMAP for the early 
     provision of such coverage unless the State submits a plan 
     amendment to the Secretary that meets the requirements of 
     this section.
       ``(g) Definitions.--In this title:
       ``(1) Community-based attendant services and supports.--
       ``(A) In general.--The term `community-based attendant 
     services and supports' means attendant services and supports 
     furnished to an individual, as needed, to assist in 
     accomplishing activities of daily living, instrumental 
     activities of daily living, and health-related functions 
     through hands-on assistance, supervision, or cueing--
       ``(i) under a plan of services and supports that is based 
     on an assessment of functional need and that is agreed to by 
     the individual or, as appropriate, the individual's 
     representative;
       ``(ii) in a home or community setting, which may include a 
     school, workplace, or recreation or religious facility, but 
     does not include a nursing facility or an intermediate care 
     facility for the mentally retarded;
       ``(iii) under an agency-provider model or other model (as 
     defined in paragraph (2)(C)); and
       ``(iv) the furnishing of which is selected, managed, and 
     dismissed by the individual, or, as appropriate, with 
     assistance from the individual's representative.
       ``(B) Included services and supports.--Such term includes--
       ``(i) tasks necessary to assist an individual in 
     accomplishing activities of daily living, instrumental 
     activities of daily living, and health-related functions;
       ``(ii) the acquisition, maintenance, and enhancement of 
     skills necessary for the individual to accomplish activities 
     of daily living, instrumental activities of daily living, and 
     health-related functions;
       ``(iii) backup systems or mechanisms (such as the use of 
     beepers) to ensure continuity of services and supports; and
       ``(iv) voluntary training on how to select, manage, and 
     dismiss attendants.
       ``(C) Excluded services and supports.--Subject to 
     subparagraph (D), such term does not include--
       ``(i) the provision of room and board for the individual;
       ``(ii) special education and related services provided 
     under the Individuals with Disabilities Education Act and 
     vocational rehabilitation services provided under the 
     Rehabilitation Act of 1973;
       ``(iii) assistive technology devices and assistive 
     technology services;
       ``(iv) durable medical equipment; or
       ``(v) home modifications.
       ``(D) Flexibility in transition to community-based home 
     setting.--Such term may include expenditures for transitional 
     costs, such as rent and utility deposits, first month's rent 
     and utilities, bedding, basic kitchen supplies, and other 
     necessities required for an individual to make the transition 
     from a nursing facility or intermediate care facility for the 
     mentally retarded to a community-based home setting where the 
     individual resides.
       ``(2) Additional definitions.--
       ``(A) Activities of daily living.--The term `activities of 
     daily living' includes eating, toileting, grooming, dressing, 
     bathing, and transferring.
       ``(B) Consumer controlled.--The term `consumer controlled' 
     means a method of providing services and supports that allow 
     the individual, or where appropriate, the individual's 
     representative, maximum control of the community-based 
     attendant services and supports, regardless of who acts as 
     the employer of record.
       ``(C) Delivery models.--
       ``(i) Agency-provider model.--The term `agency-provider 
     model' means, with respect to the provision of community-
     based attendant services and supports for an individual, a 
     method of providing consumer controlled services and supports 
     under which entities contract for the provision of such 
     services and supports.
       ``(ii) Other models.--The term `other models' means 
     methods, other than an agency-provider model, for the 
     provision of consumer controlled services and supports. Such 
     models may include the provision of vouchers, direct cash 
     payments, or use of a fiscal agent to assist in obtaining 
     services.
       ``(D) Health-related functions.--The term `health-related 
     functions' means functions that can be delegated or assigned 
     by licensed health-care professionals under State law to be 
     performed by an attendant.
       ``(E) Instrumental activities of daily living.--The term 
     `instrumental activities of daily living' includes meal 
     planning and preparation, managing finances, shopping for 
     food, clothing, and other essential items, performing 
     essential household chores, communicating by phone and other 
     media, and traveling around and participating in the 
     community.
       ``(F) Individual's representative.--The term `individual's 
     representative' means a parent, a family member, a guardian, 
     an advocate, or an authorized representative of an 
     individual.''.
       (c) Conforming Amendments.--
       (1) Mandatory benefit.--Section 1902(a)(10)(A) of the 
     Social Security Act (42 U.S.C. 1396a(a)(10)(A)) is amended, 
     in the matter preceding clause (i), by striking ``(17) and 
     (21)'' and inserting ``(17), (21), and (28)''.
       (2) Definition of medical assistance.--Section 1905(a) of 
     the Social Security Act (42 U.S.C. 1396d) is amended--
       (A) by striking ``and'' at the end of paragraph (27);
       (B) by redesignating paragraph (28) as paragraph (29); and
       (C) by inserting after paragraph (27) the following:
       ``(28) community-based attendant services and supports (to 
     the extent allowed and as defined in section 1936); and''.
       (3) IMD/icfmr requirements.--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 Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section (other than the amendment 
     made by subsection (c)(1)) take effect on October 1, 2005, 
     and apply to medical assistance provided for community-based 
     attendant services and supports described in section 1936 of 
     the Social Security Act furnished on or after that date.
       (2) Mandatory benefit.--The amendment made by subsection 
     (c)(1) takes effect on October 1, 2009.

     SEC. 102. ENHANCED FMAP FOR ONGOING ACTIVITIES OF EARLY 
                   COVERAGE STATES THAT ENHANCE AND PROMOTE THE 
                   USE OF COMMUNITY-BASED ATTENDANT SERVICES AND 
                   SUPPORTS.

       (a) In General.--Section 1936 of the Social Security Act, 
     as added by section 101(b), is amended--
       (1) by redesignating subsections (d) through (g) as 
     subsections (f) through (i), respectively;
       (2) in subsection (a)(1), by striking ``subsection (g)(1)'' 
     and inserting ``subsection (i)(1)'';
       (3) in subsection (a)(2), by inserting ``, and with respect 
     to expenditures described in subsection (d), the Secretary 
     shall pay the State the amount described in subsection 
     (d)(1)'' before the period;
       (4) in subsection (c)(1)(C), by striking ``subsection 
     (g)(2)(B)'' and inserting ``subsection (i)(2)(B)''; and
       (5) by inserting after subsection (c), the following:
       ``(d) Increased Federal Financial Participation for Early 
     Coverage States That Meet Certain Benchmarks.--
       ``(1) In general.--Subject to paragraph (2), for purposes 
     of subsection (a)(2), the amount and expenditures described 
     in this subsection are an amount equal to the Federal medical 
     assistance percentage, increased by 10 percentage points, of 
     the expenditures incurred by the State for the provision or 
     conduct of the services or activities described in paragraph 
     (3).
       ``(2) Expenditure criteria.--A State shall--
       ``(A) develop criteria for determining the expenditures 
     described in paragraph (1) in collaboration with the 
     individuals and representatives described in subsection 
     (b)(1); and

[[Page 2571]]

       ``(B) submit such criteria for approval by the Secretary.
       ``(3) Services and activities described.--For purposes of 
     paragraph (1), the services and activities described in this 
     subparagraph are the following:
       ``(A) One-stop intake, referral, and institutional 
     diversion services.
       ``(B) Identifying and remedying gaps and inequities in the 
     State's current provision of long-term services, particularly 
     those services that are provided based on such factors as 
     age, disability type, ethnicity, income, institutional bias, 
     or other similar factors.
       ``(C) Establishment of consumer participation and consumer 
     governance mechanisms, such as cooperatives and regional 
     service authorities, that are managed and controlled by 
     individuals with significant disabilities who use community-
     based services and supports or their representatives.
       ``(D) Activities designed to enhance the skills, earnings, 
     benefits, supply, career, and future prospects of workers who 
     provide community-based attendant services and supports.
       ``(E) Continuous improvement activities that are designed 
     to ensure and enhance the health and well-being of 
     individuals who rely on community-based attendant services 
     and supports, particularly activities involving or initiated 
     by consumers of such services and supports or their 
     representatives.
       ``(F) Family support services to augment the efforts of 
     families and friends to enable individuals with disabilities 
     of all ages to live in their own homes and communities.
       ``(G) Health promotion and wellness services and 
     activities.
       ``(H) Provider recruitment and enhancement activities, 
     particularly such activities that encourage the development 
     and maintenance of consumer controlled cooperatives or other 
     small businesses or microenterprises that provide community-
     based attendant services and supports or related services.
       ``(I) Activities designed to ensure service and systems 
     coordination.
       ``(J) Any other services or activities that the Secretary 
     deems appropriate.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     take effect on October 1, 2005.

     SEC. 103. INCREASED FEDERAL FINANCIAL PARTICIPATION FOR 
                   CERTAIN EXPENDITURES.

       (a) In General.--Section 1936 of the Social Security Act, 
     as added by section 101(b) and amended by section 102, is 
     amended by inserting after subsection (d) the following:
       ``(e) Increased Federal Financial Participation for Certain 
     Expenditures.--
       ``(1) Eligibility for payment.--
       ``(A) In general.--In the case of a State that the 
     Secretary determines satisfies the requirements of 
     subparagraph (B), the Secretary shall pay the State the 
     amounts described in paragraph (2) in addition to any other 
     payments provided for under section 1903 or this section for 
     the provision of community-based attendant services and 
     supports.
       ``(B) Requirements.--The requirements of this subparagraph 
     are the following:
       ``(i) The State has an approved plan amendment under this 
     section.
       ``(ii) The State has incurred expenditures described in 
     paragraph (2).
       ``(iii) The State develops and submits to the Secretary 
     criteria to identify and select such expenditures in 
     accordance with the requirements of paragraph (3).
       ``(iv) The Secretary determines that payment of the 
     applicable percentage of such expenditures (as determined 
     under paragraph (2)(B)) would enable the State to provide a 
     meaningful choice of receiving community-based services and 
     supports to individuals with disabilities and elderly 
     individuals who would otherwise only have the option of 
     receiving institutional care.
       ``(2) Amounts and expenditures described.--
       ``(A) Expenditures in excess of 150 percent of baseline 
     amount.--The amounts and expenditures described in this 
     paragraph are an amount equal to the applicable percentage, 
     as determined by the Secretary in accordance with 
     subparagraph (B), of the expenditures incurred by the State 
     for the provision of community-based attendant services and 
     supports to an individual that exceed 150 percent of the 
     average cost of providing nursing facility services to an 
     individual who resides in the State and is eligible for such 
     services under this title, as determined in accordance with 
     criteria established by the Secretary.
       ``(B) Applicable percentage.--The Secretary shall establish 
     a payment scale for the expenditures described in 
     subparagraph (A) so that the Federal financial participation 
     for such expenditures gradually increases from 70 percent to 
     90 percent as such expenditures increase.
       ``(3) Specification of order of selection for 
     expenditures.--In order to receive the amounts described in 
     paragraph (2), a State shall--
       ``(A) develop, in collaboration with the individuals and 
     representatives described in subsection (b)(1) and pursuant 
     to guidelines established by the Secretary, criteria to 
     identify and select the expenditures submitted under that 
     paragraph; and
       ``(B) submit such criteria to the Secretary.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     takes effect on October 1, 2005.

      TITLE II--PROMOTION OF SYSTEMS CHANGE AND CAPACITY BUILDING

     SEC. 201. GRANTS TO PROMOTE SYSTEMS CHANGE AND CAPACITY 
                   BUILDING.

       (a) Authority to Award Grants.--
       (1) In general.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') shall 
     award grants to eligible States to carry out the activities 
     described in subsection (b).
       (2) Application.--In order to be eligible for a grant under 
     this section, a State shall submit to the Secretary an 
     application in such form and manner, and that contains such 
     information, as the Secretary may require.
       (b) Permissible Activities.--A State that receives a grant 
     under this section may use funds provided under the grant for 
     any of the following activities, focusing on areas of need 
     identified by the State and the Consumer Task Force 
     established under subsection (c):
       (1) The development and implementation of the provision of 
     community-based attendant services and supports under section 
     1936 of the Social Security Act (as added by section 101(b) 
     and amended by sections 102 and 103) through active 
     collaboration with--
       (A) individuals with disabilities;
       (B) elderly individuals;
       (C) representatives of such individuals; and
       (D) providers of, and advocates for, services and supports 
     for such individuals.
       (2) Substantially involving individuals with significant 
     disabilities and representatives of such individuals in 
     jointly developing, implementing, and continually improving a 
     mutually acceptable comprehensive, effectively working 
     statewide plan for preventing and alleviating unnecessary 
     institutionalization of such individuals.
       (3) Engaging in system change and other activities deemed 
     necessary to achieve any or all of the goals of such 
     statewide plan.
       (4) Identifying and remedying disparities and gaps in 
     services to classes of individuals with disabilities and 
     elderly individuals who are currently experiencing or who 
     face substantial risk of unnecessary institutionalization.
       (5) Building and expanding system capacity to offer quality 
     consumer controlled community-based services and supports to 
     individuals with disabilities and elderly individuals, 
     including by--
       (A) seeding the development and effective use of community-
     based attendant services and supports cooperatives, 
     independent living centers, small businesses, 
     microenterprises and similar joint ventures owned and 
     controlled by individuals with disabilities or 
     representatives of such individuals and community-based 
     attendant services and supports workers;
       (B) enhancing the choice and control individuals with 
     disabilities and elderly individuals exercise, including 
     through their representatives, with respect to the personal 
     assistance and supports they rely upon to lead independent, 
     self-directed lives;
       (C) enhancing the skills, earnings, benefits, supply, 
     career, and future prospects of workers who provide 
     community-based attendant services and supports;
       (D) engaging in a variety of needs assessment and data 
     gathering;
       (E) developing strategies for modifying policies, 
     practices, and procedures that result in unnecessary 
     institutional bias or the overmedicalization of long-term 
     services and supports;
       (F) engaging in interagency coordination and single point 
     of entry activities;
       (G) providing training and technical assistance with 
     respect to the provision of community-based attendant 
     services and supports;
       (H) engaging in--
       (i) public awareness campaigns;
       (ii) facility-to-community transitional activities; and
       (iii) demonstrations of new approaches; and
       (I) engaging in other systems change activities necessary 
     for developing, implementing, or evaluating a comprehensive 
     statewide system of community-based attendant services and 
     supports.
       (6) Ensuring that the activities funded by the grant are 
     coordinated with other efforts to increase personal attendant 
     services and supports, including--
       (A) programs funded under or amended by the Ticket to Work 
     and Work Incentives Improvement Act of 1999 (Public Law 106-
     170; 113 Stat. 1860);
       (B) grants funded under the Families of Children With 
     Disabilities Support Act of 2000 (42 U.S.C. 15091 et seq.); 
     and
       (C) other initiatives designed to enhance the delivery of 
     community-based services and supports to individuals with 
     disabilities and elderly individuals.
       (7) Engaging in transition partnership activities with 
     nursing facilities and intermediate care facilities for the 
     mentally retarded that utilize and build upon items and 
     services provided to individuals with disabilities or elderly 
     individuals under the medicaid program under title XIX of the 
     Social Security Act, or by Federal, State, or local housing 
     agencies, independent living centers, and other organizations 
     controlled by consumers or their representatives.

[[Page 2572]]

       (c) Consumer Task Force.--
       (1) Establishment and duties.--To be eligible to receive a 
     grant under this section, each State shall establish a 
     Consumer Task Force (referred to in this subsection as the 
     ``Task Force'') to assist the State in the development, 
     implementation, and evaluation of real choice systems change 
     initiatives.
       (2) Appointment.--Members of the Task Force shall be 
     appointed by the Chief Executive Officer of the State in 
     accordance with the requirements of paragraph (3), after the 
     solicitation of recommendations from representatives of 
     organizations representing a broad range of individuals with 
     disabilities, elderly individuals, representatives of such 
     individuals, and organizations interested in individuals with 
     disabilities and elderly individuals.
       (3) Composition.--
       (A) In general.--The Task Force shall represent a broad 
     range of individuals with disabilities from diverse 
     backgrounds and shall include representatives from 
     Developmental Disabilities Councils, Mental Health Councils, 
     State Independent Living Centers and Councils, Commissions on 
     Aging, organizations that provide services to individuals 
     with disabilities and consumers of long-term services and 
     supports.
       (B) Individuals with disabilities.--A majority of the 
     members of the Task Force shall be individuals with 
     disabilities or representatives of such individuals.
       (C) Limitation.--The Task Force shall not include employees 
     of any State agency providing services to individuals with 
     disabilities other than employees of entities described in 
     the Developmental Disabilities Assistance and Bill of Rights 
     Act of 2000 (42 U.S.C. 15001 et seq.).
       (d) Annual Report.--
       (1) States.--A State that receives a grant under this 
     section shall submit an annual report to the Secretary on the 
     use of funds provided under the grant in such form and manner 
     as the Secretary may require.
       (2) Secretary.--The Secretary shall submit to Congress an 
     annual report on the grants made under this section.
       (e) Authorization of Appropriations.--
       (1) In general.--There is authorized to be appropriated to 
     carry out this section, $50,000,000 for each of fiscal years 
     2006 through 2008.
       (2) Availability.--Amounts appropriated to carry out this 
     section shall remain available without fiscal year 
     limitation.

     SEC. 202. DEMONSTRATION PROJECT TO ENHANCE COORDINATION OF 
                   CARE UNDER THE MEDICARE AND MEDICAID PROGRAMS 
                   FOR NON-ELDERLY DUAL ELIGIBLE INDIVIDUALS.

       (a) Definitions.--In this section:
       (1) Non-elderly dually eligible individual.--The term 
     ``non-elderly dually eligible individual'' means an 
     individual who--
       (A) has not attained age 65; and
       (B) is enrolled in the medicare and medicaid programs 
     established under titles XVIII and XIX, respectively, of the 
     Social Security Act (42 U.S.C. 1395 et seq., 1396 et seq.).
       (2) Project.--The term ``project'' means the demonstration 
     project authorized to be conducted under this section.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (b) Authority to Conduct Project.--The Secretary shall 
     conduct a project under this section for the purpose of 
     evaluating service coordination and cost-sharing approaches 
     with respect to the provision of community-based services and 
     supports to non-elderly dually eligible individuals.
       (c) Requirements.--
       (1) Number of participants.--Not more than 5 States may 
     participate in the project.
       (2) Application.--A State that desires to participate in 
     the project shall submit an application to the Secretary, at 
     such time and in such form and manner as the Secretary shall 
     specify.
       (3) Duration.--The project shall be conducted for at least 
     5, but not more than 10 years.
       (d) Evaluation and Report.--
       (1) Evaluation.--Not later than 1 year prior to the 
     termination date of the project, the Secretary, in 
     consultation with States participating in the project, 
     representatives of non-elderly dually eligible individuals, 
     and others, shall evaluate the impact and effectiveness of 
     the project.
       (2) Report.--The Secretary shall submit a report to 
     Congress that contains the findings of the evaluation 
     conducted under paragraph (1) along with recommendations 
     regarding whether the project should be extended or expanded, 
     and any other legislative or administrative actions that the 
     Secretary considers appropriate as a result of the project.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.

  Mr. SPECTER. Mr. President, I have sought recognition to join Senator 
Tom Harkin, my colleague and distinguished ranking member of the 
Appropriations Subcommittee on Labor, Health and Human Services and 
Education, which I chair, in introducing the ``Medicaid Attendant Care 
Services and Supports Act of 2005.'' This creative proposal addresses a 
glaring gap in Federal health coverage, and assists one of our Nation's 
most vulnerable populations, persons with disabilities.
  In an effort to improve the delivery of care and the comfort of those 
with long-term disabilities, this vital legislation would allow for 
reimbursement for community-based attendant care services, in lieu of 
institutionalization, for eligible individuals who require such 
services based on functional need, without regard to the individual's 
age or the nature of the disability. Under this proposal, Medicaid 
would provide States funding to offer and allow individuals who are 
currently eligible for nursing home services or an intermediate care 
facility for the mentally retarded equal access to community-based 
attendants.
  The most recent data available tell us that 8.9 million individuals 
receive care for disabilities under the Medicaid program. The number of 
disabled who are currently enrolled in Medicaid and would apply for 
this improved benefit has been estimated at 2 million, a substantial 
number due largely to the preference of home and community-based care 
over institutional care. Currently, each State gets Federal money for 
their Medicaid program based on a Medicaid match rate. This bill would 
temporarily increase the Medicaid matching percentage providing States 
with additional funding to reform their long term care systems and 
implement this benefit.
  Let me speak briefly about why such a change in Medicaid law is so 
desperately needed. The Supreme Court held in Olmstead v. L.C., 119 S. 
Ct. 2176 (1999), that the Americans with Disabilities Act, ADA, 
requires States, under some circumstances, to provide community-based 
treatment to persons with mental disabilities rather than placing them 
in institutions. This decision and several lower court decisions have 
pointed to the need for a structured Medicaid attendant-care services 
benefit in order to meet obligations under the ADA. Disability 
advocates strongly support this legislation, arguing that the lack of 
Medicaid community-based services options is discriminatory and 
unhealthful for disabled individuals. Virtually every major disability 
advocacy group supports this bill, including ADAPT, the Arc, the 
National Council on Independent Living, Paralyzed Veterans of America, 
and the National Spinal Cord Injury Association.
  Senator Harkin and I recognize that such a shift in the Medicaid 
program is a huge undertaking--but feel that it is a vitally important 
one. We are introducing this legislation today in an attempt to move 
ahead with the consideration of crucial disability legislation and to 
provide a starting point for debate. The time has come for concerted 
action in this arena.
  I urge the congressional leadership, including the appropriate 
committee chairmen, to move forward in considering this legislation, 
and take the significant next step forward in achieving the objective 
of providing individuals with disabilities the freedom to live in their 
own communities.
                                 ______
                                 
      By Mr. REID:
  S. 404. A bill to make a technical correction relating to the land 
conveyance authorized by Public Law 108-67; to the Committee on Energy 
and Natural Resources.
  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. 404

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

     SECTION 1. WASHOE TRIBE OF NEVADA AND CALIFORNIA LAND 
                   CONVEYANCE.

       Section 2 of Public Law 108-67 (117 Stat. 880) is amended 
     by striking ``the parcel'' and all that follows and inserting 
     ``a portion of Lots 3 and 4, as shown on the United States 
     and Encumbrance Map revised January 10, 1991, for the Toiyabe 
     National Forest, Ranger District Carson -1, located in the 
     S\1/2\ of NW\1/4\ and N\1/2\ of SW\1/4\ of the SE\1/4\ of 
     sec. 27, T. 15N, R. 18E, Mt. Diablo Base and Meridian, 
     comprising 24.3 acres.''.
                                 ______
                                 
      By Mr. REID (for himself and Mr. Ensign):
  S. 405. A bill to provide for the conveyance of certain public land 
in Clark

[[Page 2573]]

County, Nevada, for use as a heliport; to the Committee on Energy and 
Natural Resources.
  Mr. REID. Mr. President, I rise today, for myself and Senator Ensign, 
to introduce legislation to establish a public heliport facility in 
Clark County, NY.
  The purpose of this bill is simple: It would convey about a third of 
a square mile of public land managed by the Bureau of Land Management 
to Clark County for dedicated use as a heliport. The land is located 
just south of the Henderson city limits and east of Interstate 15.
  The establishment of this heliport will help eliminate the ongoing 
conflict between air tour operators whose overflights of the Grand 
Canyon represent a classic component of the Las Vegas visitor 
experience and residents in the west-central and southwestern parts of 
the Las Vegas Valley whose every day lives are adversely affected by 
helicopter noise.
  Local officials are committed to establishing a heliport within the 
Las Vegas Valley. The county and local municipalities have previously 
considered a site, currently in use as a go-kart track, near Interstate 
15 near Henderson. The drawback of developing this site is that tours 
originating from this location would fly over the most sensitive parts 
of the Sloan Canyon National Conservation Area, with no restrictions on 
routing or elevation. Sloan Canyon itself--one of the richest 
petroglyph sites in the Mohave Desert--would be subject to regular 
overflights. That outcome would be entirely legal, entirely predictable 
and entirely regrettable.
  In 2002, I worked closely with Senator Ensign, Congresswoman Berkley, 
Congressman Gibbons and local advocates to protect the Sloan Canyon 
area and its unique cultural resources. Through our combined efforts we 
created the Sloan Canyon National Conservation Area and the McCullough 
Mountains Wilderness, I am proud of these efforts and today I offer 
this legislation as a further effort to protect the precious resources 
that we worked to safeguard in 2002.
  The bill I am introducing in the Senate today, and which I offered in 
the 108th Congress, would not prohibit helicopter overflights of the 
Sloan Canyon National Conservation Area. But it does ensure that such 
flights steer clear of the most sensitive and special cultural 
resources and minimize the impact on the majestic bighorn sheep and 
other wildlife that live in the McCullough Mountains.
  My legislation stipulates that any helicopter flight originating from 
and/or landing at this heliport would be required by law to fly within 
a set path--between 3 and 5 miles north of the southernmost boundary of 
the Sloan Canyon National Conservation Area--and at a minimum height--
at least 500 to 1,000 feet above ground level while in the NCA. 
Further, it requires that every such flight contribute 3 dollars per 
passenger to a special fund dedicated to the protection of the 
cultural, wilderness, and wildlife resources in Nevada.
  These provisions justify conveying the land to Clark County at no 
cost because they provide a stable, long-term source of funding in 
excess of the market value of the land and because the conveyance and 
use are in the public interest.
  It was my pleasure to introduce this bill during the last Congress. 
My fellow Senators, particularly the chairman and ranking member of the 
Senate Energy and Natural Resources Committee, were generous in their 
support of this measure, allowing us to hold a prompt hearing. I am 
hopeful that my distinguished colleagues will work with me to complete 
work on this important legislation during the current session.
  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. 405

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

     SECTION 1. CONVEYANCE OF PROPERTY TO CLARK COUNTY, NEVADA.

       (a) Findings.--Congress finds that--
       (1) the Las Vegas Valley in the State of Nevada is the 
     fastest growing community in the United States;
       (2) helicopter tour operations are conflicting with the 
     needs of long-established residential communities in the 
     Valley; and
       (3) the designation of a public heliport in the Valley that 
     would reduce conflicts between helicopter tour operators and 
     residential communities is in the public interest.
       (b) Purpose.--The purpose of this Act is to provide a 
     suitable location for the establishment of a commercial 
     service heliport facility to serve the Las Vegas Valley in 
     the State of Nevada while minimizing and mitigating the 
     impact of air tours on the Sloan Canyon National Conservation 
     Area and North McCullough Mountains Wilderness.
       (c) Definitions.--In this Act:
       (1) Conservation area.--The term ``Conservation Area'' 
     means the Sloan Canyon National Conservation Area established 
     by section 604(a) of the Clark County Conservation of Public 
     Land and Natural Resources Act of 2002 (116 Stat. 2010).
       (2) County.--The term ``County'' means Clark County, 
     Nevada.
       (3) Helicopter tour.--
       (A) In general.--The term ``helicopter tour'' means a 
     commercial helicopter tour operated for profit.
       (B) Exclusion.--The term ``helicopter tour'' does not 
     include a helicopter tour that is carried out to assist a 
     Federal, State, or local agency.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (5) Wilderness.--The term ``Wilderness'' means the North 
     McCullough Mountains Wilderness established by section 
     202(a)(13) of the Clark County Conservation of Public Land 
     and Natural Resources Act of 2002 (116 Stat. 2000).
       (d) Conveyance.--As soon as practicable after the date of 
     enactment of this Act, the Secretary shall convey to the 
     County, subject to valid existing rights, for no 
     consideration, all right, title, and interest of the United 
     States in and to the parcel of land described in subsection 
     (e).
       (e) Description of Land.--The parcel of land to be conveyed 
     under subsection (d) is the parcel of approximately 229 acres 
     of land depicted as tract A on the map entitled ``Clark 
     County Public Heliport Facility'' and dated May 3, 2004.
       (f) Use of Land.--
       (1) In general.--The parcel of land conveyed under 
     subsection (d)--
       (A) shall be used by the County for the operation of a 
     heliport facility under the conditions stated in paragraphs 
     (2) and (3); and
       (B) shall not be disposed of by the County.
       (2) Imposition of fees.--
       (A) In general.--Any operator of a helicopter tour 
     originating from or concluding at the parcel of land 
     described in subsection (e) shall pay to the Clark County 
     Department of Aviation a $3 conservation fee for each 
     passenger on the helicopter tour if any portion of the 
     helicopter tour occurs over the Conservation Area.
       (B) Disposition of funds.--Any amounts collected under 
     subparagraph (A) shall be deposited in a special account in 
     the Treasury of the United States, which shall be available 
     to the Secretary, without further appropriation, for the 
     management of cultural, wildlife, and wilderness resources on 
     public land in the State of Nevada.
       (3) Flight path.--Except for safety reasons, any helicopter 
     tour originating or concluding at the parcel of land 
     described in subsection (e) that flies over the Conservation 
     Area shall not fly--
       (A) over any area in the Conservation Area except the area 
     that is between 3 and 5 miles north of the latitude of the 
     southernmost boundary of the Conservation Area;
       (B) lower than 1,000 feet over the eastern segments of the 
     boundary of the Conservation Area; or
       (C) lower than 500 feet over the western segments of the 
     boundary of the Conservation Area.
       (4) Reversion.--If the County ceases to use any of the land 
     described in subsection (d) for the purpose described in 
     paragraph (1)(A) and under the conditions stated in 
     paragraphs (2) and (3)--
       (A) title to the parcel shall revert to the United States, 
     at the option of the United States; and
       (B) the County shall be responsible for any reclamation 
     necessary to revert the parcel to the United States.
       (g) Administrative Costs.--The Secretary shall require, as 
     a condition of the conveyance under subsection (d), that the 
     County pay the administrative costs of the conveyance, 
     including survey costs and any other costs associated with 
     the transfer of title.
                                 ______
                                 
      By Ms. SNOWE (for herself, Mr. Talent, Mr. Bond, Mr. Byrd, Mrs. 
        Dole, Mr. McCain, Mrs. Hutchison, Mr. Coleman, Mr. Vitter, and 
        Mr. Martinez):
  S. 406. A bill to amend title I of the Employee Retirement Security 
Act of 1974 to improve access and choice for entrepreneurs with small 
businesses with respect to medical care for their employees; to the 
Committee on

[[Page 2574]]

Health, Education, Labor, and Pensions.
  Ms. SNOWE. Mr. President, as Chair of the Committee on Small Business 
and Entrepreneurship, I rise to introduce the Small Business Health 
Fairness Act of 2005. I am joined in this bipartisan effort by Senators 
Talent, Bond, Byrd, Dole, McCain, Hutchison, Coleman, Vitter and 
Martinez.
  This bill creates Association Health Plans (AHPs), also called Small 
Business Health Plans, that give small businesses the same market based 
advantages and leverage that large employers and unions currently enjoy 
when providing health insurance to their employees.
  AHPs directly address one of the most critical issues facing small 
businesses nationwide: the crisis small businesses face trying to 
provide health insurance for their employees. No other issue has been 
mentioned so frequently or by so many of the small businesses with whom 
I have met since I became Chair. While the problem has been growing for 
years, the outcry has built so that now it is indeed a loud chorus of 
small businesses desperate for relief and demanding that something be 
done.
  Without exception, every small business person who has approached me 
has asked me to do something about the crushing burden from increased 
health insurance costs. The anecdotal accounts that I have heard have 
been confirmed by reports detailing how much health insurance costs are 
increasing across the board for all employers and especially for small 
businesses.
  The Kaiser Family Foundation has reported that health insurance 
premiums increased between the spring of 2003 and spring of 2004 by 
11.2 percent. This is the fourth such year of double digit increases 
and follows increases of 13.9 percent, 12.9 percent and 10.9 percent. 
In contrast, overall inflation during the last three years was 2.3 
percent, 2.2 percent and 1.6 percent, wage gains for non-supervisory 
workers were similarly stable at 2.2 percent, 3.1 percent and 3.2 
percent, respectively. This is an astonishing trend.
  Not only are the costs for employers increasing, but these are now 
being passed onto the employees. As a result, the amount of premium 
employees pay for family coverage has increased almost 64 percent over 
the past 4 years, from $1,619 to $2,661. As I have heard from many 
small businesses, increases in insurance costs often mean employees do 
not get the benefit of salary and wage increases. Employers are 
rewarding employees with raises and then requiring them to pay more of 
their health insurance. These employers are disheartened that they are 
giving a raise with one hand and then turning around and taking it away 
with the other.
  The Kaiser report also shows that this year, firms with 3 to 199 
workers had premium increases of 9.1 percent and the smallest firms 
with 3 to 9 workers averaged 12.4 percent increases. So we see that as 
bad as things have gotten they're worse for the smallest businesses who 
are the source of as much as 75 percent of our country's new jobs. In 
my meetings with small businesses, they invariably report increases far 
greater than even these percentages, generally 30 percent, 40 percent 
or more.
  The increase in these costs can not be dismissed as just another cost 
of doing business and absorbed or passed on to customers, because we 
know small businesses often have lower profit margins for their goods 
and services than other businesses. These skyrocketing costs often mean 
the difference between the business expanding or struggling to survive.
  The high cost of health insurance can even make the difference in 
whether a small business creates new jobs. Small businesses have told 
me that the high cost of providing health care is preventing small 
businesses from adding more employees because they can not afford the 
additional health insurance expenses. In other cases, employers are 
turning to temporary or part time employees, again to avoid paying 
outrageous health insurance costs.
  The result of these higher costs is that, according to the U.S. 
Census Bureau, in 2003 there were 45 million people without insurance, 
1.4 million more than the year before and 3.8 million since 2001. This 
is being attributed to a decrease in the number of people covered by 
insurance through their employers--down 61 percent in 2004. 
Disturbingly, the Kaiser study says that only 52 percent of firms with 
three to nine employees offer health benefits. Indeed, sometimes I 
wonder how small businesses can provide insurance at all. The fact that 
so many do is testimony to their recognition of how essential this is 
to their employees, and their determination to offer this benefit even 
in the face of constantly skyrocketing costs.
  Last year's Kaiser report suggests that the greater increase in 
premiums for traditionally insured plans of 15.6 percent versus self 
insured plans at 12.4 percent ``may indicate that part of the rise in 
health care premiums is due to insurers expanding their underwriting 
gains.'' They also say that one of the factors driving the high rate of 
premium growth appears to be ``insurers' efforts to emphasize 
profitability in their pricing.''
  What these statements really mean is that insurance companies are 
getting as much as they can out of their small business customers 
because they know these customers have no other options. Large 
employers, unlike small businesses, have competition for their business 
because they have many employees through whom to spread the risks. This 
makes them attractive to insurance companies who compete for their 
business.
  Large employers also have the option of self insuring under ERISA 
which is only practical for employers who are large enough to afford 
the costs. This approach, though, offers significant savings by 
eliminating the administrative costs of the middle man--the insurance 
companies. A study by SBA's Office of Advocacy has shown that these 
plans have administrative costs as much as 30 percent lower.
  Small businesses from my home state of Maine have made it clear that 
they have only one choice for their health care. Even when they band 
together in local purchasing pools, they are unable to attract any 
other insurance carriers to provide them with less expensive and more 
flexible options. Right after small businesses tell me how high their 
rates are they tell me how they have no choices and in some cases are 
even lucky to have anyone offering them any coverage at all.
  In response to this health care crisis facing the small business 
community, I am introducing the Small Business Health Fairness Act of 
2005.
  This bill creates national Association Health Plans which allow small 
businesses to pool their employees together under the auspices of their 
bona fide associations to get the same bulk purchasing and 
administrative efficiencies already enjoyed by large employers and 
unions with their health care plans. It builds on the success of the 
ERISA self insurance plans used by large employers and the Taft-Hartley 
plans available to union employers. These two types of plans currently 
provide health benefits for 72 million people, more than half of the 
130 million total people who get their health insurance through their 
employer.
  It is ludicrous that we have a two tiered health insurance system in 
this country where one group of employers--large ones and those who are 
union employers--get preferential treatment over those who create over 
75 percent of the new jobs. I am at a loss to understand why small 
businesses should be denied the same advantages that these other 
employers already have. This is a matter of basic fairness.
  AHPs will be able to offer less expensive plans, and also greater 
flexibility because they will be exempt from the myriad State benefit 
regulations. Associations will be able to design their plans to meet 
the needs of their members and their employees. By administering one 
national plan, it will further reduce the administrative costs instead 
of trying to administer a plan subject to the mandates of each state.
  Even though the benefit mandates will not be in effect, associations 
will

[[Page 2575]]

need to design their plans so that enough members participate in them 
to attract the necessary employees to make them work. This means that 
they will naturally provide a full range of benefits similar to what 
many states currently require. In many cases, the plans offered by 
large employers and unions, which are also exempt from the state 
benefit mandates, are the most generous plans available. People will 
often stay in those jobs specifically to keep their health care 
coverage.
  The bill would also provide extensive new protections to ensure that 
the health care coverage is there when employees need it. Associations 
sponsoring these plans would need to be established for at least 3 
years for purposes other than providing health insurance--this is 
intended to prevent the current epidemic of fraud and abuse that is 
occurring through sham associations who take money from unsuspecting 
small businesses and then cease to exist when someone files a claim.
  In addition, self-funded AHPs would be required to have sufficient 
funds in reserve, specific stop-loss insurances, indemnification 
insurance, and other funding and certification requirements to make 
sure the insurance coverage would be available when needed. None of 
these requirements apply to any of the plans currently regulated by the 
Department of Labor, either the large employer plans under the Employee 
Retirement Income Security Act (ERISA), or the union plans under the 
Taft-Hartley Act.
  Yet, the opponents of this bill have mischaracterized it in ways that 
make it sound like this would be the worst thing in the world for small 
businesses.
  They have said that this bill would lead to ``cherry picking''--where 
AHPs would only take young healthy people. There is language in the 
bill which explicitly states that an association which offers a plan 
must offer it to all of their members, and a member who participates in 
the plan must offer the plan to every employee. Violation of these 
requirements is subject to enforcement by the Department of Labor under 
ERISA.
  They have said that the Department of Labor would not be able to 
handle their responsibilities under this bill. The Department of Labor 
is already overseeing 275,000 similarly structured plans. We do not 
hear employees complain about these plans, or that they are failing and 
leaving subscribers without coverage. The additional plans from AHPs 
would not add that much of a burden to their operations and the 
Secretary of Labor has testified before the Small Business Committee 
that sufficient resources would be available to make sure the 
Department fulfilled its obligations.
  Opponents have claimed that AHPs would not be subject to any solvency 
protections or other insurance regulations. This is flat out not true. 
The bill specifies detailed solvency protections that self funded AHPs 
would have to implement which are far beyond anything current self 
funded large employer plans have to implement. In fact those plans are 
not required to have any solvency protections. Insurance companies that 
would provide the coverage for fully insured AHPs would continue to be 
subject to state solvency requirements, as well as other state 
protections in the same way as they are now.
  Opponents of this bill are basically saying that small businesses do 
not need more options and that they should be satisfied with the few 
that they have. They want to preserve the status quo which does nothing 
for small businesses. This bill would create competition in the small 
group market where there currently is none. If we expect our small 
employers to provide health insurance to their employees, we must pass 
AHP legislation to give them the same advantages enjoyed by large 
employers and union employers.
  Giving small businesses better and more affordable options for their 
health care will also have an impact on the larger problem of the 
uninsured. The latest Census Bureau figures indicate that in 2003 
approximately 45 million people had no health insurance. We also know 
that about 60 percent of these uninsured work for a small business, or 
are in a family of someone who works for a small business. The CBO has 
estimated that 600,000 people would go from being uninsured to being 
insured if AHPs were available. There are other studies that show this 
number could be more like 4.5 million and possibly as high as 8.5 
million. What is clear is that giving small businesses AHPs as an 
option will mean that more of them who currently do not offer health 
insurance will be able to provide this benefit to their employees and 
their families.
  This bill is supported by a large coalition of small business 
interests with approximately 12 million employers who represent about 
80 million employees. President Bush included AHPs in the State of the 
Union and has made this part of his agenda for providing more health 
care options and helping small businesses. During the campaign he 
called for passage of this bill on almost a daily basis. And he 
continues to call for its passage. Our Majority Leader has indicated 
his support for taking up this bill. The House has passed the bill 
several times with strong bipartisan support and will pass it again 
this year. Significantly, the Senate Task Force on the Uninsured 
included AHPs among its recommendation for increasing coverage. The 
time has come to get this bill through the Senate. We must pass AHPs 
this session.
  In the time I have been Chair of the Small Business Committee, I have 
come to understand even more that the entrepreneurial spirit burns 
bright throughout our nation. There are millions of people who seek a 
better life and personal satisfaction through starting and running 
small businesses. These folks are not looking for a handout, or 
preferential treatment. They are merely looking to us to recognize the 
absolutely essential role they play in our economy and to be treated 
accordingly and fairly. If we want more jobs, and better family lives, 
we must give small businesses the support they are seeking.
  While this bill has passed the House with bipartisan support on 
several occasions, it has not been considered in the Senate. I intend 
to change that. I will work with Senator Enzi as the new chair of the 
HELP Committee, Senate Leaders, and others to find ways and develop 
enhancements to get this bill through the Senate. If there are changes 
that can be made, I am willing to consider them.
  I believe we will see movement on this issue this Congress, and I 
look forward to working with my colleagues to bring relief and 
assistance to our nation's small businesses.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 406

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

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Small 
     Business Health Fairness Act of 2005''.
       (b) Table of Contents.--The table of contents is as 
     follows:

Sec. 1. Short title and table of contents.
Sec. 2. Rules governing association health plans.
Sec. 3. Clarification of treatment of single employer arrangements.
Sec. 4. Enforcement provisions relating to association health plans.
Sec. 5. Cooperation between Federal and State authorities.
Sec. 6. Effective date and transitional and other rules.

     SEC. 2. RULES GOVERNING ASSOCIATION HEALTH PLANS.

       (a) In General.--Subtitle B of title I of the Employee 
     Retirement Income Security Act of 1974 is amended by adding 
     after part 7 the following new part:

           ``PART 8--RULES GOVERNING ASSOCIATION HEALTH PLANS

     ``SEC. 801. ASSOCIATION HEALTH PLANS.

       ``(a) In General.--For purposes of this part, the term 
     `association health plan' means a group health plan whose 
     sponsor is (or is deemed under this part to be) described in 
     subsection (b).
       ``(b) Sponsorship.--The sponsor of a group health plan is 
     described in this subsection if such sponsor--
       ``(1) is organized and maintained in good faith, with a 
     constitution and bylaws specifically stating its purpose and 
     providing for

[[Page 2576]]

     periodic meetings on at least an annual basis, as a bona fide 
     trade association, a bona fide industry association 
     (including a rural electric cooperative association or a 
     rural telephone cooperative association), a bona fide 
     professional association, or a bona fide chamber of commerce 
     (or similar bona fide business association, including a 
     corporation or similar organization that operates on a 
     cooperative basis (within the meaning of section 1381 of the 
     Internal Revenue Code of 1986)), for substantial purposes 
     other than that of obtaining or providing medical care;
       ``(2) is established as a permanent entity which receives 
     the active support of its members and requires for membership 
     payment on a periodic basis of dues or payments necessary to 
     maintain eligibility for membership in the sponsor; and
       ``(3) does not condition membership, such dues or payments, 
     or coverage under the plan on the basis of health status-
     related factors with respect to the employees of its members 
     (or affiliated members), or the dependents of such employees, 
     and does not condition such dues or payments on the basis of 
     group health plan participation.

     Any sponsor consisting of an association of entities which 
     meet the requirements of paragraphs (1), (2), and (3) shall 
     be deemed to be a sponsor described in this subsection.

     ``SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.

       ``(a) In General.--The applicable authority shall prescribe 
     by regulation a procedure under which, subject to subsection 
     (b), the applicable authority shall certify association 
     health plans which apply for certification as meeting the 
     requirements of this part.
       ``(b) Standards.--Under the procedure prescribed pursuant 
     to subsection (a), in the case of an association health plan 
     that provides at least one benefit option which does not 
     consist of health insurance coverage, the applicable 
     authority shall certify such plan as meeting the requirements 
     of this part only if the applicable authority is satisfied 
     that the applicable requirements of this part are met (or, 
     upon the date on which the plan is to commence operations, 
     will be met) with respect to the plan.
       ``(c) Requirements Applicable to Certified Plans.--An 
     association health plan with respect to which certification 
     under this part is in effect shall meet the applicable 
     requirements of this part, effective on the date of 
     certification (or, if later, on the date on which the plan is 
     to commence operations).
       ``(d) Requirements for Continued Certification.--The 
     applicable authority may provide by regulation for continued 
     certification of association health plans under this part.
       ``(e) Class Certification for Fully Insured Plans.--The 
     applicable authority shall establish a class certification 
     procedure for association health plans under which all 
     benefits consist of health insurance coverage. Under such 
     procedure, the applicable authority shall provide for the 
     granting of certification under this part to the plans in 
     each class of such association health plans upon appropriate 
     filing under such procedure in connection with plans in such 
     class and payment of the prescribed fee under section 807(a).
       ``(f) Certification of Self-Insured Association Health 
     Plans.--An association health plan which offers one or more 
     benefit options which do not consist of health insurance 
     coverage may be certified under this part only if such plan 
     consists of any of the following:
       ``(1) A plan which offered such coverage on the date of the 
     enactment of the Small Business Health Fairness Act of 2005.
       ``(2) A plan under which the sponsor does not restrict 
     membership to one or more trades and businesses or industries 
     and whose eligible participating employers represent a broad 
     cross-section of trades and businesses or industries.
       ``(3) A plan whose eligible participating employers 
     represent one or more trades or businesses, or one or more 
     industries, consisting of any of the following: agriculture; 
     equipment and automobile dealerships; barbering and 
     cosmetology; certified public accounting practices; child 
     care; construction; dance, theatrical and orchestra 
     productions; disinfecting and pest control; financial 
     services; fishing; foodservice establishments; hospitals; 
     labor organizations; logging; manufacturing (metals); mining; 
     medical and dental practices; medical laboratories; 
     professional consulting services; sanitary services; 
     transportation (local and freight); warehousing; wholesaling/
     distributing; or any other trade or business or industry 
     which has been indicated as having average or above-average 
     risk or health claims experience by reason of State rate 
     filings, denials of coverage, proposed premium rate levels, 
     or other means demonstrated by such plan in accordance with 
     regulations.

     ``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF 
                   TRUSTEES.

       ``(a) Sponsor.--The requirements of this subsection are met 
     with respect to an association health plan if the sponsor has 
     met (or is deemed under this part to have met) the 
     requirements of section 801(b) for a continuous period of not 
     less than 3 years ending with the date of the application for 
     certification under this part.
       ``(b) Board of Trustees.--The requirements of this 
     subsection are met with respect to an association health plan 
     if the following requirements are met:
       ``(1) Fiscal control.--The plan is operated, pursuant to a 
     trust agreement, by a board of trustees which has complete 
     fiscal control over the plan and which is responsible for all 
     operations of the plan.
       ``(2) Rules of operation and financial controls.--The board 
     of trustees has in effect rules of operation and financial 
     controls, based on a 3-year plan of operation, adequate to 
     carry out the terms of the plan and to meet all requirements 
     of this title applicable to the plan.
       ``(3) Rules governing relationship to participating 
     employers and to contractors.--
       ``(A) Board membership.--
       ``(i) In general.--Except as provided in clauses (ii) and 
     (iii), the members of the board of trustees are individuals 
     selected from individuals who are the owners, officers, 
     directors, or employees of the participating employers or who 
     are partners in the participating employers and actively 
     participate in the business.
       ``(ii) Limitation.--

       ``(I) General rule.--Except as provided in subclauses (II) 
     and (III), no such member is an owner, officer, director, or 
     employee of, or partner in, a contract administrator or other 
     service provider to the plan.
       ``(II) Limited exception for providers of services solely 
     on behalf of the sponsor.--Officers or employees of a sponsor 
     which is a service provider (other than a contract 
     administrator) to the plan may be members of the board if 
     they constitute not more than 25 percent of the membership of 
     the board and they do not provide services to the plan other 
     than on behalf of the sponsor.
       ``(III) Treatment of providers of medical care.--In the 
     case of a sponsor which is an association whose membership 
     consists primarily of providers of medical care, subclause 
     (I) shall not apply in the case of any service provider 
     described in subclause (I) who is a provider of medical care 
     under the plan.

       ``(iii) Certain plans excluded.--Clause (i) shall not apply 
     to an association health plan which is in existence on the 
     date of the enactment of the Small Business Health Fairness 
     Act of 2005.
       ``(B) Sole authority.--The board has sole authority under 
     the plan to approve applications for participation in the 
     plan and to contract with a service provider to administer 
     the day-to-day affairs of the plan.
       ``(c) Treatment of Franchise Networks.--In the case of a 
     group health plan which is established and maintained by a 
     franchiser for a franchise network consisting of its 
     franchisees--
       ``(1) the requirements of subsection (a) and section 801(a) 
     shall be deemed met if such requirements would otherwise be 
     met if the franchiser were deemed to be the sponsor referred 
     to in section 801(b), such network were deemed to be an 
     association described in section 801(b), and each franchisee 
     were deemed to be a member (of the association and the 
     sponsor) referred to in section 801(b); and
       ``(2) the requirements of section 804(a)(1) shall be deemed 
     met.

     The Secretary may by regulation define for purposes of this 
     subsection the terms `franchiser', `franchise network', and 
     `franchisee'.

     ``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.

       ``(a) Covered Employers and Individuals.--The requirements 
     of this subsection are met with respect to an association 
     health plan if, under the terms of the plan--
       ``(1) each participating employer must be--
       ``(A) a member of the sponsor;
       ``(B) the sponsor; or
       ``(C) an affiliated member of the sponsor with respect to 
     which the requirements of subsection (b) are met, except 
     that, in the case of a sponsor which is a professional 
     association or other individual-based association, if at 
     least one of the officers, directors, or employees of an 
     employer, or at least one of the individuals who are partners 
     in an employer and who actively participates in the business, 
     is a member or such an affiliated member of the sponsor, 
     participating employers may also include such employer; and
       ``(2) all individuals commencing coverage under the plan 
     after certification under this part must be--
       ``(A) active or retired owners (including self-employed 
     individuals), officers, directors, or employees of, or 
     partners in, participating employers; or
       ``(B) the beneficiaries of individuals described in 
     subparagraph (A).
       ``(b) Coverage of Previously Uninsured Employees.--In the 
     case of an association health plan in existence on the date 
     of the enactment of the Small Business Health Fairness Act of 
     2005, an affiliated member of the sponsor of the plan may be 
     offered coverage under the plan as a participating employer 
     only if--
       ``(1) the affiliated member was an affiliated member on the 
     date of certification under this part; or
       ``(2) during the 12-month period preceding the date of the 
     offering of such coverage, the affiliated member has not 
     maintained or contributed to a group health plan with respect 
     to any of its employees who would otherwise be eligible to 
     participate in such association health plan.

[[Page 2577]]

       ``(c) Individual Market Unaffected.--The requirements of 
     this subsection are met with respect to an association health 
     plan if, under the terms of the plan, no participating 
     employer may provide health insurance coverage in the 
     individual market for any employee not covered under the plan 
     which is similar to the coverage contemporaneously provided 
     to employees of the employer under the plan, if such 
     exclusion of the employee from coverage under the plan is 
     based on a health status-related factor with respect to the 
     employee and such employee would, but for such exclusion on 
     such basis, be eligible for coverage under the plan.
       ``(d) Prohibition of Discrimination Against Employers and 
     Employees Eligible to Participate.--The requirements of this 
     subsection are met with respect to an association health plan 
     if--
       ``(1) under the terms of the plan, all employers meeting 
     the preceding requirements of this section are eligible to 
     qualify as participating employers for all geographically 
     available coverage options, unless, in the case of any such 
     employer, participation or contribution requirements of the 
     type referred to in section 2711 of the Public Health Service 
     Act are not met;
       ``(2) upon request, any employer eligible to participate is 
     furnished information regarding all coverage options 
     available under the plan; and
       ``(3) the applicable requirements of sections 701, 702, and 
     703 are met with respect to the plan.

     ``SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS, 
                   CONTRIBUTION RATES, AND BENEFIT OPTIONS.

       ``(a) In General.--The requirements of this section are met 
     with respect to an association health plan if the following 
     requirements are met:
       ``(1) Contents of governing instruments.--The instruments 
     governing the plan include a written instrument, meeting the 
     requirements of an instrument required under section 
     402(a)(1), which--
       ``(A) provides that the board of trustees serves as the 
     named fiduciary required for plans under section 402(a)(1) 
     and serves in the capacity of a plan administrator (referred 
     to in section 3(16)(A));
       ``(B) provides that the sponsor of the plan is to serve as 
     plan sponsor (referred to in section 3(16)(B)); and
       ``(C) incorporates the requirements of section 806.
       ``(2) Contribution rates must be nondiscriminatory.--
       ``(A) In general.--The contribution rates for any 
     participating small employer shall not vary on the basis of 
     any health status-related factor in relation to employees of 
     such employer or their beneficiaries and shall not vary on 
     the basis of the type of business or industry in which such 
     employer is engaged.
       ``(B) Effect of title.--Nothing in this title or any other 
     provision of law shall be construed to preclude an 
     association health plan, or a health insurance issuer 
     offering health insurance coverage in connection with an 
     association health plan, from--
       ``(i) setting contribution rates based on the claims 
     experience of the plan; or
       ``(ii) varying contribution rates for small employers in a 
     State to the extent that such rates could vary using the same 
     methodology employed in such State for regulating premium 
     rates in the small group market with respect to health 
     insurance coverage offered in connection with bona fide 
     associations (within the meaning of section 2791(d)(3) of the 
     Public Health Service Act), subject to the requirements of 
     section 702(b) relating to contribution rates.
       ``(3) Floor for number of covered individuals with respect 
     to certain plans.--If any benefit option under the plan does 
     not consist of health insurance coverage, the plan has as of 
     the beginning of the plan year not fewer than 1,000 
     participants and beneficiaries.
       ``(4) Marketing requirements.--
       ``(A) In general.--If a benefit option which consists of 
     health insurance coverage is offered under the plan, State-
     licensed insurance agents shall be used to distribute to 
     small employers coverage which does not consist of health 
     insurance coverage in a manner comparable to the manner in 
     which such agents are used to distribute health insurance 
     coverage.
       ``(B) State-licensed insurance agents.--For purposes of 
     subparagraph (A), the term `State-licensed insurance agents' 
     means one or more agents who are licensed in a State and are 
     subject to the laws of such State relating to licensure, 
     qualification, testing, examination, and continuing education 
     of persons authorized to offer, sell, or solicit health 
     insurance coverage in such State.
       ``(5) Regulatory requirements.--Such other requirements as 
     the applicable authority determines are necessary to carry 
     out the purposes of this part, which shall be prescribed by 
     the applicable authority by regulation.
       ``(b) Ability of Association Health Plans to Design Benefit 
     Options.--Subject to section 514(d), nothing in this part or 
     any provision of State law (as defined in section 514(c)(1)) 
     shall be construed to preclude an association health plan, or 
     a health insurance issuer offering health insurance coverage 
     in connection with an association health plan, from 
     exercising its sole discretion in selecting the specific 
     items and services consisting of medical care to be included 
     as benefits under such plan or coverage, except (subject to 
     section 514) in the case of (1) any law to the extent that it 
     is not preempted under section 731(a)(1) with respect to 
     matters governed by section 711, 712, or 713, or (2) any law 
     of the State with which filing and approval of a policy type 
     offered by the plan was initially obtained to the extent that 
     such law prohibits an exclusion of a specific disease from 
     such coverage.

     ``SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS FOR 
                   SOLVENCY FOR PLANS PROVIDING HEALTH BENEFITS IN 
                   ADDITION TO HEALTH INSURANCE COVERAGE.

       ``(a) In General.--The requirements of this section are met 
     with respect to an association health plan if--
       ``(1) the benefits under the plan consist solely of health 
     insurance coverage; or
       ``(2) the plan provides any additional benefit options 
     which do not consist of health insurance coverage, the plan--
       ``(A) establishes and maintains reserves with respect to 
     such additional benefit options, in amounts recommended by 
     the qualified actuary, consisting of--
       ``(i) a reserve sufficient for unearned contributions;
       ``(ii) a reserve sufficient for benefit liabilities which 
     have been incurred, which have not been satisfied, and for 
     which risk of loss has not yet been transferred, and for 
     expected administrative costs with respect to such benefit 
     liabilities;
       ``(iii) a reserve sufficient for any other obligations of 
     the plan; and
       ``(iv) a reserve sufficient for a margin of error and other 
     fluctuations, taking into account the specific circumstances 
     of the plan; and
       ``(B) establishes and maintains aggregate and specific 
     excess/stop loss insurance and solvency indemnification, with 
     respect to such additional benefit options for which risk of 
     loss has not yet been transferred, as follows:
       ``(i) The plan shall secure aggregate excess/stop loss 
     insurance for the plan with an attachment point which is not 
     greater than 125 percent of expected gross annual claims. The 
     applicable authority may by regulation provide for upward 
     adjustments in the amount of such percentage in specified 
     circumstances in which the plan specifically provides for and 
     maintains reserves in excess of the amounts required under 
     subparagraph (A).
       ``(ii) The plan shall secure specific excess/stop loss 
     insurance for the plan with an attachment point which is at 
     least equal to an amount recommended by the plan's qualified 
     actuary. The applicable authority may by regulation provide 
     for adjustments in the amount of such insurance in specified 
     circumstances in which the plan specifically provides for and 
     maintains reserves in excess of the amounts required under 
     subparagraph (A).
       ``(iii) The plan shall secure indemnification insurance for 
     any claims which the plan is unable to satisfy by reason of a 
     plan termination.

     Any person issuing to a plan insurance described in clause 
     (i), (ii), or (iii) of subparagraph (B) shall notify the 
     Secretary of any failure of premium payment meriting 
     cancellation of the policy prior to undertaking such a 
     cancellation. Any regulations prescribed by the applicable 
     authority pursuant to clause (i) or (ii) of subparagraph (B) 
     may allow for such adjustments in the required levels of 
     excess/stop loss insurance as the qualified actuary may 
     recommend, taking into account the specific circumstances of 
     the plan.
       ``(b) Minimum Surplus in Addition to Claims Reserves.--In 
     the case of any association health plan described in 
     subsection (a)(2), the requirements of this subsection are 
     met if the plan establishes and maintains surplus in an 
     amount at least equal to--
       ``(1) $500,000, or
       ``(2) such greater amount (but not greater than $2,000,000) 
     as may be set forth in regulations prescribed by the 
     applicable authority, considering the level of aggregate and 
     specific excess /stop loss insurance provided with respect to 
     such plan and other factors related to solvency risk, such as 
     the plan's projected levels of participation or claims, the 
     nature of the plan's liabilities, and the types of assets 
     available to assure that such liabilities are met.
       ``(c) Additional Requirements.--In the case of any 
     association health plan described in subsection (a)(2), the 
     applicable authority may provide such additional requirements 
     relating to reserves, excess /stop loss insurance, and 
     indemnification insurance as the applicable authority 
     considers appropriate. Such requirements may be provided by 
     regulation with respect to any such plan or any class of such 
     plans.
       ``(d) Adjustments for Excess /Stop Loss Insurance.--The 
     applicable authority may provide for adjustments to the 
     levels of reserves otherwise required under subsections (a) 
     and (b) with respect to any plan or class of plans to take 
     into account excess /stop loss insurance provided with 
     respect to such plan or plans.

[[Page 2578]]

       ``(e) Alternative Means of Compliance.--The applicable 
     authority may permit an association health plan described in 
     subsection (a)(2) to substitute, for all or part of the 
     requirements of this section (except subsection 
     (a)(2)(B)(iii)), such security, guarantee, hold-harmless 
     arrangement, or other financial arrangement as the applicable 
     authority determines to be adequate to enable the plan to 
     fully meet all its financial obligations on a timely basis 
     and is otherwise no less protective of the interests of 
     participants and beneficiaries than the requirements for 
     which it is substituted. The applicable authority may take 
     into account, for purposes of this subsection, evidence 
     provided by the plan or sponsor which demonstrates an 
     assumption of liability with respect to the plan. Such 
     evidence may be in the form of a contract of indemnification, 
     lien, bonding, insurance, letter of credit, recourse under 
     applicable terms of the plan in the form of assessments of 
     participating employers, security, or other financial 
     arrangement.
       ``(f) Measures to Ensure Continued Payment of Benefits by 
     Certain Plans in Distress.--
       ``(1) Payments by certain plans to association health plan 
     fund.--
       ``(A) In general.--In the case of an association health 
     plan described in subsection (a)(2), the requirements of this 
     subsection are met if the plan makes payments into the 
     Association Health Plan Fund under this subparagraph when 
     they are due. Such payments shall consist of annual payments 
     in the amount of $5,000, and, in addition to such annual 
     payments, such supplemental payments as the Secretary may 
     determine to be necessary under paragraph (2). Payments under 
     this paragraph are payable to the Fund at the time determined 
     by the Secretary. Initial payments are due in advance of 
     certification under this part. Payments shall continue to 
     accrue until a plan's assets are distributed pursuant to a 
     termination procedure.
       ``(B) Penalties for failure to make payments.--If any 
     payment is not made by a plan when it is due, a late payment 
     charge of not more than 100 percent of the payment which was 
     not timely paid shall be payable by the plan to the Fund.
       ``(C) Continued duty of the secretary.--The Secretary shall 
     not cease to carry out the provisions of paragraph (2) on 
     account of the failure of a plan to pay any payment when due.
       ``(2) Payments by secretary to continue excess /stop loss 
     insurance coverage and indemnification insurance coverage for 
     certain plans.--In any case in which the applicable authority 
     determines that there is, or that there is reason to believe 
     that there will be--
       ``(A) a failure to take necessary corrective actions under 
     section 809(a) with respect to an association health plan 
     described in subsection (a)(2); or
       ``(B) a termination of such a plan under section 809(b) or 
     810(b)(8) (and, if the applicable authority is not the 
     Secretary, certifies such determination to the Secretary)

     ,the Secretary shall determine the amounts necessary to make 
     payments to an insurer (designated by the Secretary) to 
     maintain in force excess /stop loss insurance coverage or 
     indemnification insurance coverage for such plan, if the 
     Secretary determines that there is a reasonable expectation 
     that, without such payments, claims would not be satisfied by 
     reason of termination of such coverage. The Secretary shall, 
     to the extent provided in advance in appropriation Acts, pay 
     such amounts so determined to the insurer designated by the 
     Secretary.
       ``(3) Association health plan fund.--
       ``(A) In general.--There is established on the books of the 
     Treasury a fund to be known as the `Association Health Plan 
     Fund'. The Fund shall be available for making payments 
     pursuant to paragraph (2). The Fund shall be credited with 
     payments received pursuant to paragraph (1)(A), penalties 
     received pursuant to paragraph (1)(B); and earnings on 
     investments of amounts of the Fund under subparagraph (B).
       ``(B) Investment.--Whenever the Secretary determines that 
     the moneys of the fund are in excess of current needs, the 
     Secretary may request the investment of such amounts as the 
     Secretary determines advisable by the Secretary of the 
     Treasury in obligations issued or guaranteed by the United 
     States.
       ``(g) Excess /Stop Loss Insurance.--For purposes of this 
     section--
       ``(1) Aggregate excess /stop loss insurance.--The term 
     `aggregate excess /stop loss insurance' means, in connection 
     with an association health plan, a contract--
       ``(A) under which an insurer (meeting such minimum 
     standards as the applicable authority may prescribe by 
     regulation) provides for payment to the plan with respect to 
     aggregate claims under the plan in excess of an amount or 
     amounts specified in such contract;
       ``(B) which is guaranteed renewable; and
       ``(C) which allows for payment of premiums by any third 
     party on behalf of the insured plan.
       ``(2) Specific excess /stop loss insurance.--The term 
     `specific excess /stop loss insurance' means, in connection 
     with an association health plan, a contract--
       ``(A) under which an insurer (meeting such minimum 
     standards as the applicable authority may prescribe by 
     regulation) provides for payment to the plan with respect to 
     claims under the plan in connection with a covered individual 
     in excess of an amount or amounts specified in such contract 
     in connection with such covered individual;
       ``(B) which is guaranteed renewable; and
       ``(C) which allows for payment of premiums by any third 
     party on behalf of the insured plan.
       ``(h) Indemnification Insurance.--For purposes of this 
     section, the term `indemnification insurance' means, in 
     connection with an association health plan, a contract--
       ``(1) under which an insurer (meeting such minimum 
     standards as the applicable authority may prescribe by 
     regulation) provides for payment to the plan with respect to 
     claims under the plan which the plan is unable to satisfy by 
     reason of a termination pursuant to section 809(b) (relating 
     to mandatory termination);
       ``(2) which is guaranteed renewable and noncancellable for 
     any reason (except as the applicable authority may prescribe 
     by regulation); and
       ``(3) which allows for payment of premiums by any third 
     party on behalf of the insured plan.
       ``(i) Reserves.--For purposes of this section, the term 
     `reserves' means, in connection with an association health 
     plan, plan assets which meet the fiduciary standards under 
     part 4 and such additional requirements regarding liquidity 
     as the applicable authority may prescribe by regulation.
       ``(j) Solvency Standards Working Group.--
       ``(1) In general.--Within 90 days after the date of the 
     enactment of the Small Business Health Fairness Act of 2005, 
     the applicable authority shall establish a Solvency Standards 
     Working Group. In prescribing the initial regulations under 
     this section, the applicable authority shall take into 
     account the recommendations of such Working Group.
       ``(2) Membership.--The Working Group shall consist of not 
     more than 15 members appointed by the applicable authority. 
     The applicable authority shall include among persons invited 
     to membership on the Working Group at least one of each of 
     the following:
       ``(A) A representative of the National Association of 
     Insurance Commissioners.
       ``(B) A representative of the American Academy of 
     Actuaries.
       ``(C) A representative of the State governments, or their 
     interests.
       ``(D) A representative of existing self-insured 
     arrangements, or their interests.
       ``(E) A representative of associations of the type referred 
     to in section 801(b)(1), or their interests.
       ``(F) A representative of multiemployer plans that are 
     group health plans, or their interests.

     ``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED 
                   REQUIREMENTS.

       ``(a) Filing Fee.--Under the procedure prescribed pursuant 
     to section 802(a), an association health plan shall pay to 
     the applicable authority at the time of filing an application 
     for certification under this part a filing fee in the amount 
     of $5,000, which shall be available in the case of the 
     Secretary, to the extent provided in appropriation Acts, for 
     the sole purpose of administering the certification 
     procedures applicable with respect to association health 
     plans.
       ``(b) Information to Be Included in Application for 
     Certification.--An application for certification under this 
     part meets the requirements of this section only if it 
     includes, in a manner and form which shall be prescribed by 
     the applicable authority by regulation, at least the 
     following information:
       ``(1) Identifying information.--The names and addresses 
     of--
       ``(A) the sponsor; and
       ``(B) the members of the board of trustees of the plan.
       ``(2) States in which plan intends to do business.--The 
     States in which participants and beneficiaries under the plan 
     are to be located and the number of them expected to be 
     located in each such State.
       ``(3) Bonding requirements.--Evidence provided by the board 
     of trustees that the bonding requirements of section 412 will 
     be met as of the date of the application or (if later) 
     commencement of operations.
       ``(4) Plan documents.--A copy of the documents governing 
     the plan (including any bylaws and trust agreements), the 
     summary plan description, and other material describing the 
     benefits that will be provided to participants and 
     beneficiaries under the plan.
       ``(5) Agreements with service providers.--A copy of any 
     agreements between the plan and contract administrators and 
     other service providers.
       ``(6) Funding report.--In the case of association health 
     plans providing benefits options in addition to health 
     insurance coverage, a report setting forth information with 
     respect to such additional benefit options determined as of a 
     date within the 120-day period ending with the date of the 
     application, including the following:

[[Page 2579]]

       ``(A) Reserves.--A statement, certified by the board of 
     trustees of the plan, and a statement of actuarial opinion, 
     signed by a qualified actuary, that all applicable 
     requirements of section 806 are or will be met in accordance 
     with regulations which the applicable authority shall 
     prescribe.
       ``(B) Adequacy of contribution rates.--A statement of 
     actuarial opinion, signed by a qualified actuary, which sets 
     forth a description of the extent to which contribution rates 
     are adequate to provide for the payment of all obligations 
     and the maintenance of required reserves under the plan for 
     the 12-month period beginning with such date within such 120-
     day period, taking into account the expected coverage and 
     experience of the plan. If the contribution rates are not 
     fully adequate, the statement of actuarial opinion shall 
     indicate the extent to which the rates are inadequate and the 
     changes needed to ensure adequacy.
       ``(C) Current and projected value of assets and 
     liabilities.--A statement of actuarial opinion signed by a 
     qualified actuary, which sets forth the current value of the 
     assets and liabilities accumulated under the plan and a 
     projection of the assets, liabilities, income, and expenses 
     of the plan for the 12-month period referred to in 
     subparagraph (B). The income statement shall identify 
     separately the plan's administrative expenses and claims.
       ``(D) Costs of coverage to be charged and other expenses.--
     A statement of the costs of coverage to be charged, including 
     an itemization of amounts for administration, reserves, and 
     other expenses associated with the operation of the plan.
       ``(E) Other information.--Any other information as may be 
     determined by the applicable authority, by regulation, as 
     necessary to carry out the purposes of this part.
       ``(c) Filing Notice of Certification With States.--A 
     certification granted under this part to an association 
     health plan shall not be effective unless written notice of 
     such certification is filed with the applicable State 
     authority of each State in which at least 25 percent of the 
     participants and beneficiaries under the plan are located. 
     For purposes of this subsection, an individual shall be 
     considered to be located in the State in which a known 
     address of such individual is located or in which such 
     individual is employed.
       ``(d) Notice of Material Changes.--In the case of any 
     association health plan certified under this part, 
     descriptions of material changes in any information which was 
     required to be submitted with the application for the 
     certification under this part shall be filed in such form and 
     manner as shall be prescribed by the applicable authority by 
     regulation. The applicable authority may require by 
     regulation prior notice of material changes with respect to 
     specified matters which might serve as the basis for 
     suspension or revocation of the certification.
       ``(e) Reporting Requirements for Certain Association Health 
     Plans.--An association health plan certified under this part 
     which provides benefit options in addition to health 
     insurance coverage for such plan year shall meet the 
     requirements of section 103 by filing an annual report under 
     such section which shall include information described in 
     subsection (b)(6) with respect to the plan year and, 
     notwithstanding section 104(a)(1)(A), shall be filed with the 
     applicable authority not later than 90 days after the close 
     of the plan year (or on such later date as may be prescribed 
     by the applicable authority). The applicable authority may 
     require by regulation such interim reports as it considers 
     appropriate.
       ``(f) Engagement of Qualified Actuary.--The board of 
     trustees of each association health plan which provides 
     benefits options in addition to health insurance coverage and 
     which is applying for certification under this part or is 
     certified under this part shall engage, on behalf of all 
     participants and beneficiaries, a qualified actuary who shall 
     be responsible for the preparation of the materials 
     comprising information necessary to be submitted by a 
     qualified actuary under this part. The qualified actuary 
     shall utilize such assumptions and techniques as are 
     necessary to enable such actuary to form an opinion as to 
     whether the contents of the matters reported under this 
     part--
       ``(1) are in the aggregate reasonably related to the 
     experience of the plan and to reasonable expectations; and
       ``(2) represent such actuary's best estimate of anticipated 
     experience under the plan.
     The opinion by the qualified actuary shall be made with 
     respect to, and shall be made a part of, the annual report.

     ``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.

       ``Except as provided in section 809(b), an association 
     health plan which is or has been certified under this part 
     may terminate (upon or at any time after cessation of 
     accruals in benefit liabilities) only if the board of 
     trustees, not less than 60 days before the proposed 
     termination date--
       ``(1) provides to the participants and beneficiaries a 
     written notice of intent to terminate stating that such 
     termination is intended and the proposed termination date;
       ``(2) develops a plan for winding up the affairs of the 
     plan in connection with such termination in a manner which 
     will result in timely payment of all benefits for which the 
     plan is obligated; and
       ``(3) submits such plan in writing to the applicable 
     authority.

     Actions required under this section shall be taken in such 
     form and manner as may be prescribed by the applicable 
     authority by regulation.

     ``SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMINATION.

       ``(a) Actions to Avoid Depletion of Reserves.--An 
     association health plan which is certified under this part 
     and which provides benefits other than health insurance 
     coverage shall continue to meet the requirements of section 
     806, irrespective of whether such certification continues in 
     effect. The board of trustees of such plan shall determine 
     quarterly whether the requirements of section 806 are met. In 
     any case in which the board determines that there is reason 
     to believe that there is or will be a failure to meet such 
     requirements, or the applicable authority makes such a 
     determination and so notifies the board, the board shall 
     immediately notify the qualified actuary engaged by the plan, 
     and such actuary shall, not later than the end of the next 
     following month, make such recommendations to the board for 
     corrective action as the actuary determines necessary to 
     ensure compliance with section 806. Not later than 30 days 
     after receiving from the actuary recommendations for 
     corrective actions, the board shall notify the applicable 
     authority (in such form and manner as the applicable 
     authority may prescribe by regulation) of such 
     recommendations of the actuary for corrective action, 
     together with a description of the actions (if any) that the 
     board has taken or plans to take in response to such 
     recommendations. The board shall thereafter report to the 
     applicable authority, in such form and frequency as the 
     applicable authority may specify to the board, regarding 
     corrective action taken by the board until the requirements 
     of section 806 are met.
       ``(b) Mandatory Termination.--In any case in which--
       ``(1) the applicable authority has been notified under 
     subsection (a) (or by an issuer of excess /stop loss 
     insurance or indemnity insurance pursuant to section 806(a)) 
     of a failure of an association health plan which is or has 
     been certified under this part and is described in section 
     806(a)(2) to meet the requirements of section 806 and has not 
     been notified by the board of trustees of the plan that 
     corrective action has restored compliance with such 
     requirements; and
       ``(2) the applicable authority determines that there is a 
     reasonable expectation that the plan will continue to fail to 
     meet the requirements of section 806, the board of trustees 
     of the plan shall, at the direction of the applicable 
     authority, terminate the plan and, in the course of the 
     termination, take such actions as the applicable authority 
     may require, including satisfying any claims referred to in 
     section 806(a)(2)(B)(iii) and recovering for the plan any 
     liability under subsection (a)(2)(B)(iii) or (e) of section 
     806, as necessary to ensure that the affairs of the plan will 
     be, to the maximum extent possible, wound up in a manner 
     which will result in timely provision of all benefits for 
     which the plan is obligated.

     ``SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOLVENT 
                   ASSOCIATION HEALTH PLANS PROVIDING HEALTH 
                   BENEFITS IN ADDITION TO HEALTH INSURANCE 
                   COVERAGE.

       ``(a) Appointment of Secretary as Trustee for Insolvent 
     Plans.--Whenever the Secretary determines that an association 
     health plan which is or has been certified under this part 
     and which is described in section 806(a)(2) will be unable to 
     provide benefits when due or is otherwise in a financially 
     hazardous condition, as shall be defined by the Secretary by 
     regulation, the Secretary shall, upon notice to the plan, 
     apply to the appropriate United States district court for 
     appointment of the Secretary as trustee to administer the 
     plan for the duration of the insolvency. The plan may appear 
     as a party and other interested persons may intervene in the 
     proceedings at the discretion of the court. The court shall 
     appoint such Secretary trustee if the court determines that 
     the trusteeship is necessary to protect the interests of the 
     participants and beneficiaries or providers of medical care 
     or to avoid any unreasonable deterioration of the financial 
     condition of the plan. The trusteeship of such Secretary 
     shall continue until the conditions described in the first 
     sentence of this subsection are remedied or the plan is 
     terminated.
       ``(b) Powers as Trustee.--The Secretary, upon appointment 
     as trustee under subsection (a), shall have the power--
       ``(1) to do any act authorized by the plan, this title, or 
     other applicable provisions of law to be done by the plan 
     administrator or any trustee of the plan;
       ``(2) to require the transfer of all (or any part) of the 
     assets and records of the plan to the Secretary as trustee;
       ``(3) to invest any assets of the plan which the Secretary 
     holds in accordance with the provisions of the plan, 
     regulations prescribed by the Secretary, and applicable 
     provisions of law;
       ``(4) to require the sponsor, the plan administrator, any 
     participating employer, and any employee organization 
     representing plan

[[Page 2580]]

     participants to furnish any information with respect to the 
     plan which the Secretary as trustee may reasonably need in 
     order to administer the plan;
       ``(5) to collect for the plan any amounts due the plan and 
     to recover reasonable expenses of the trusteeship;
       ``(6) to commence, prosecute, or defend on behalf of the 
     plan any suit or proceeding involving the plan;
       ``(7) to issue, publish, or file such notices, statements, 
     and reports as may be required by the Secretary by regulation 
     or required by any order of the court;
       ``(8) to terminate the plan (or provide for its termination 
     in accordance with section 809(b)) and liquidate the plan 
     assets, to restore the plan to the responsibility of the 
     sponsor, or to continue the trusteeship;
       ``(9) to provide for the enrollment of plan participants 
     and beneficiaries under appropriate coverage options; and
       ``(10) to do such other acts as may be necessary to comply 
     with this title or any order of the court and to protect the 
     interests of plan participants and beneficiaries and 
     providers of medical care.
       ``(c) Notice of Appointment.--As soon as practicable after 
     the Secretary's appointment as trustee, the Secretary shall 
     give notice of such appointment to--
       ``(1) the sponsor and plan administrator;
       ``(2) each participant;
       ``(3) each participating employer; and
       ``(4) if applicable, each employee organization which, for 
     purposes of collective bargaining, represents plan 
     participants.
       ``(d) Additional Duties.--Except to the extent inconsistent 
     with the provisions of this title, or as may be otherwise 
     ordered by the court, the Secretary, upon appointment as 
     trustee under this section, shall be subject to the same 
     duties as those of a trustee under section 704 of title 11, 
     United States Code, and shall have the duties of a fiduciary 
     for purposes of this title.
       ``(e) Other Proceedings.--An application by the Secretary 
     under this subsection may be filed notwithstanding the 
     pendency in the same or any other court of any bankruptcy, 
     mortgage foreclosure, or equity receivership proceeding, or 
     any proceeding to reorganize, conserve, or liquidate such 
     plan or its property, or any proceeding to enforce a lien 
     against property of the plan.
       ``(f) Jurisdiction of Court.--
       ``(1) In general.--Upon the filing of an application for 
     the appointment as trustee or the issuance of a decree under 
     this section, the court to which the application is made 
     shall have exclusive jurisdiction of the plan involved and 
     its property wherever located with the powers, to the extent 
     consistent with the purposes of this section, of a court of 
     the United States having jurisdiction over cases under 
     chapter 11 of title 11, United States Code. Pending an 
     adjudication under this section such court shall stay, and 
     upon appointment by it of the Secretary as trustee, such 
     court shall continue the stay of, any pending mortgage 
     foreclosure, equity receivership, or other proceeding to 
     reorganize, conserve, or liquidate the plan, the sponsor, or 
     property of such plan or sponsor, and any other suit against 
     any receiver, conservator, or trustee of the plan, the 
     sponsor, or property of the plan or sponsor. Pending such 
     adjudication and upon the appointment by it of the Secretary 
     as trustee, the court may stay any proceeding to enforce a 
     lien against property of the plan or the sponsor or any other 
     suit against the plan or the sponsor.
       ``(2) Venue.--An action under this section may be brought 
     in the judicial district where the sponsor or the plan 
     administrator resides or does business or where any asset of 
     the plan is situated. A district court in which such action 
     is brought may issue process with respect to such action in 
     any other judicial district.
       ``(g) Personnel.--In accordance with regulations which 
     shall be prescribed by the Secretary, the Secretary shall 
     appoint, retain, and compensate accountants, actuaries, and 
     other professional service personnel as may be necessary in 
     connection with the Secretary's service as trustee under this 
     section.

     ``SEC. 811. STATE ASSESSMENT AUTHORITY.

       ``(a) In General.--Notwithstanding section 514, a State may 
     impose by law a contribution tax on an association health 
     plan described in section 806(a)(2), if the plan commenced 
     operations in such State after the date of the enactment of 
     the Small Business Health Fairness Act of 2005.
       ``(b) Contribution Tax.--For purposes of this section, the 
     term `contribution tax' imposed by a State on an association 
     health plan means any tax imposed by such State if--
       ``(1) such tax is computed by applying a rate to the amount 
     of premiums or contributions, with respect to individuals 
     covered under the plan who are residents of such State, which 
     are received by the plan from participating employers located 
     in such State or from such individuals;
       ``(2) the rate of such tax does not exceed the rate of any 
     tax imposed by such State on premiums or contributions 
     received by insurers or health maintenance organizations for 
     health insurance coverage offered in such State in connection 
     with a group health plan;
       ``(3) such tax is otherwise nondiscriminatory; and
       ``(4) the amount of any such tax assessed on the plan is 
     reduced by the amount of any tax or assessment otherwise 
     imposed by the State on premiums, contributions, or both 
     received by insurers or health maintenance organizations for 
     health insurance coverage, aggregate excess /stop loss 
     insurance (as defined in section 806(g)(1)), specific excess 
     /stop loss insurance (as defined in section 806(g)(2)), other 
     insurance related to the provision of medical care under the 
     plan, or any combination thereof provided by such insurers or 
     health maintenance organizations in such State in connection 
     with such plan.

     ``SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION.

       ``(a) Definitions.--For purposes of this part--
       ``(1) Group health plan.--The term `group health plan' has 
     the meaning provided in section 733(a)(1) (after applying 
     subsection (b) of this section).
       ``(2) Medical care.--The term `medical care' has the 
     meaning provided in section 733(a)(2).
       ``(3) Health insurance coverage.--The term `health 
     insurance coverage' has the meaning provided in section 
     733(b)(1).
       ``(4) Health insurance issuer.--The term `health insurance 
     issuer' has the meaning provided in section 733(b)(2).
       ``(5) Applicable authority.--The term `applicable 
     authority' means the Secretary, except that, in connection 
     with any exercise of the Secretary's authority regarding 
     which the Secretary is required under section 506(d) to 
     consult with a State, such term means the Secretary, in 
     consultation with such State.
       ``(6) Health status-related factor.--The term `health 
     status-related factor' has the meaning provided in section 
     733(d)(2).
       ``(7) Individual market.--
       ``(A) In general.--The term `individual market' means the 
     market for health insurance coverage offered to individuals 
     other than in connection with a group health plan.
       ``(B) Treatment of very small groups.--
       ``(i) In general.--Subject to clause (ii), such term 
     includes coverage offered in connection with a group health 
     plan that has fewer than 2 participants as current employees 
     or participants described in section 732(d)(3) on the first 
     day of the plan year.
       ``(ii) State exception.--Clause (i) shall not apply in the 
     case of health insurance coverage offered in a State if such 
     State regulates the coverage described in such clause in the 
     same manner and to the same extent as coverage in the small 
     group market (as defined in section 2791(e)(5) of the Public 
     Health Service Act) is regulated by such State.
       ``(8) Participating employer.--The term `participating 
     employer' means, in connection with an association health 
     plan, any employer, if any individual who is an employee of 
     such employer, a partner in such employer, or a self-employed 
     individual who is such employer (or any dependent, as defined 
     under the terms of the plan, of such individual) is or was 
     covered under such plan in connection with the status of such 
     individual as such an employee, partner, or self-employed 
     individual in relation to the plan.
       ``(9) Applicable state authority.--The term `applicable 
     State authority' means, with respect to a health insurance 
     issuer in a State, the State insurance commissioner or 
     official or officials designated by the State to enforce the 
     requirements of title XXVII of the Public Health Service Act 
     for the State involved with respect to such issuer.
       ``(10) Qualified actuary.--The term `qualified actuary' 
     means an individual who is a member of the American Academy 
     of Actuaries.
       ``(11) Affiliated member.--The term `affiliated member' 
     means, in connection with a sponsor--
       ``(A) a person who is otherwise eligible to be a member of 
     the sponsor but who elects an affiliated status with the 
     sponsor,
       ``(B) in the case of a sponsor with members which consist 
     of associations, a person who is a member of any such 
     association and elects an affiliated status with the sponsor, 
     or
       ``(C) in the case of an association health plan in 
     existence on the date of the enactment of the Small Business 
     Health Fairness Act of 2005, a person eligible to be a member 
     of the sponsor or one of its member associations.
       ``(12) Large employer.--The term `large employer' means, in 
     connection with a group health plan with respect to a plan 
     year, an employer who employed an average of at least 51 
     employees on business days during the preceding calendar year 
     and who employs at least 2 employees on the first day of the 
     plan year.
       ``(13) Small employer.--The term `small employer' means, in 
     connection with a group health plan with respect to a plan 
     year, an employer who is not a large employer.
       ``(b) Rules of Construction.--
       ``(1) Employers and employees.--For purposes of determining 
     whether a plan, fund, or program is an employee welfare 
     benefit plan which is an association health plan, and for 
     purposes of applying this title in connection with such plan, 
     fund, or program so determined to be such an employee welfare 
     benefit plan--

[[Page 2581]]

       ``(A) in the case of a partnership, the term `employer' (as 
     defined in section 3(5)) includes the partnership in relation 
     to the partners, and the term `employee' (as defined in 
     section 3(6)) includes any partner in relation to the 
     partnership; and
       ``(B) in the case of a self-employed individual, the term 
     `employer' (as defined in section 3(5)) and the term 
     `employee' (as defined in section 3(6)) shall include such 
     individual.
       ``(2) Plans, funds, and programs treated as employee 
     welfare benefit plans.--In the case of any plan, fund, or 
     program which was established or is maintained for the 
     purpose of providing medical care (through the purchase of 
     insurance or otherwise) for employees (or their dependents) 
     covered thereunder and which demonstrates to the Secretary 
     that all requirements for certification under this part would 
     be met with respect to such plan, fund, or program if such 
     plan, fund, or program were a group health plan, such plan, 
     fund, or program shall be treated for purposes of this title 
     as an employee welfare benefit plan on and after the date of 
     such demonstration.''.
       (b) Conforming Amendments to Preemption Rules.--
       (1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is 
     amended by adding at the end the following new subparagraph:
       ``(E) The preceding subparagraphs of this paragraph do not 
     apply with respect to any State law in the case of an 
     association health plan which is certified under part 8.''.
       (2) Section 514 of such Act (29 U.S.C. 1144) is amended--
       (A) in subsection (b)(4), by striking ``Subsection (a)'' 
     and inserting ``Subsections (a) and (d)'';
       (B) in subsection (b)(5), by striking ``subsection (a)'' in 
     subparagraph (A) and inserting ``subsection (a) of this 
     section and subsections (a)(2)(B) and (b) of section 805'', 
     and by striking ``subsection (a)'' in subparagraph (B) and 
     inserting ``subsection (a) of this section or subsection 
     (a)(2)(B) or (b) of section 805'';
       (C) by redesignating subsection (d) as subsection (e); and
       (D) by inserting after subsection (c) the following new 
     subsection:
       ``(d)(1) Except as provided in subsection (b)(4), the 
     provisions of this title shall supersede any and all State 
     laws insofar as they may now or hereafter preclude, or have 
     the effect of precluding, a health insurance issuer from 
     offering health insurance coverage in connection with an 
     association health plan which is certified under part 8.
       ``(2) Except as provided in paragraphs (4) and (5) of 
     subsection (b) of this section--
       ``(A) In any case in which health insurance coverage of any 
     policy type is offered under an association health plan 
     certified under part 8 to a participating employer operating 
     in such State, the provisions of this title shall supersede 
     any and all laws of such State insofar as they may preclude a 
     health insurance issuer from offering health insurance 
     coverage of the same policy type to other employers operating 
     in the State which are eligible for coverage under such 
     association health plan, whether or not such other employers 
     are participating employers in such plan.
       ``(B) In any case in which health insurance coverage of any 
     policy type is offered in a State under an association health 
     plan certified under part 8 and the filing, with the 
     applicable State authority (as defined in section 812(a)(9)), 
     of the policy form in connection with such policy type is 
     approved by such State authority, the provisions of this 
     title shall supersede any and all laws of any other State in 
     which health insurance coverage of such type is offered, 
     insofar as they may preclude, upon the filing in the same 
     form and manner of such policy form with the applicable State 
     authority in such other State, the approval of the filing in 
     such other State.
       ``(3) Nothing in subsection (b)(6)(E) or the preceding 
     provisions of this subsection shall be construed, with 
     respect to health insurance issuers or health insurance 
     coverage, to supersede or impair the law of any State--
       ``(A) providing solvency standards or similar standards 
     regarding the adequacy of insurer capital, surplus, reserves, 
     or contributions, or
       ``(B) relating to prompt payment of claims.
       ``(4) For additional provisions relating to association 
     health plans, see subsections (a)(2)(B) and (b) of section 
     805.
       ``(5) For purposes of this subsection, the term 
     `association health plan' has the meaning provided in section 
     801(a), and the terms `health insurance coverage', 
     `participating employer', and `health insurance issuer' have 
     the meanings provided such terms in section 812, 
     respectively.''.
       (3) Section 514(b)(6)(A) of such Act (29 U.S.C. 
     1144(b)(6)(A)) is amended--
       (A) in clause (i)(II), by striking ``and'' at the end;
       (B) in clause (ii), by inserting ``and which does not 
     provide medical care (within the meaning of section 
     733(a)(2)),'' after ``arrangement,'', and by striking 
     ``title.'' and inserting ``title, and''; and
       (C) by adding at the end the following new clause:
       ``(iii) subject to subparagraph (E), in the case of any 
     other employee welfare benefit plan which is a multiple 
     employer welfare arrangement and which provides medical care 
     (within the meaning of section 733(a)(2)), any law of any 
     State which regulates insurance may apply.''.
       (4) Section 514(e) of such Act (as redesignated by 
     paragraph (2)(C)) is amended--
       (A) by striking ``Nothing'' and inserting ``(1) Except as 
     provided in paragraph (2), nothing''; and
       (B) by adding at the end the following new paragraph:
       ``(2) Nothing in any other provision of law enacted on or 
     after the date of the enactment of the Small Business Health 
     Fairness Act of 2005 shall be construed to alter, amend, 
     modify, invalidate, impair, or supersede any provision of 
     this title, except by specific cross-reference to the 
     affected section.''.
       (c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C. 
     102(16)(B)) is amended by adding at the end the following new 
     sentence: ``Such term also includes a person serving as the 
     sponsor of an association health plan under part 8.''.
       (d) Disclosure of Solvency Protections Related to Self-
     Insured and Fully Insured Options Under Association Health 
     Plans.--Section 102(b) of such Act (29 U.S.C. 102(b)) is 
     amended by adding at the end the following: ``An association 
     health plan shall include in its summary plan description, in 
     connection with each benefit option, a description of the 
     form of solvency or guarantee fund protection secured 
     pursuant to this Act or applicable State law, if any.''.
       (e) Savings Clause.--Section 731(c) of such Act is amended 
     by inserting ``or part 8'' after ``this part''.
       (f) Report to Congress Regarding Certification of Self-
     Insured Association Health Plans.--Not later than January 1, 
     2010, the Secretary of Labor shall report 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 the effect association health plans have had, 
     if any, on reducing the number of uninsured individuals.
       (g) Clerical Amendment.--The table of contents in section 1 
     of the Employee Retirement Income Security Act of 1974 is 
     amended by inserting after the item relating to section 734 
     the following new items:

           ``Part 8--Rules Governing Association Health Plans

``801. Association health plans.
``802. Certification of association health plans.
``803. Requirements relating to sponsors and boards of trustees.
``804. Participation and coverage requirements.
``805. Other requirements relating to plan documents, contribution 
              rates, and benefit options.
``806. Maintenance of reserves and provisions for solvency for plans 
              providing health benefits in addition to health insurance 
              coverage.
``807. Requirements for application and related requirements.
``808. Notice requirements for voluntary termination.
``809. Corrective actions and mandatory termination.
``810. Trusteeship by the Secretary of insolvent association health 
              plans providing health benefits in addition to health 
              insurance coverage.
``811. State assessment authority.
``812. Definitions and rules of construction.''.

     SEC. 3. CLARIFICATION OF TREATMENT OF SINGLE EMPLOYER 
                   ARRANGEMENTS.

       Section 3(40)(B) of the Employee Retirement Income Security 
     Act of 1974 (29 U.S.C. 1002(40)(B)) is amended--
       (1) in clause (i), by inserting after ``control group,'' 
     the following: ``except that, in any case in which the 
     benefit referred to in subparagraph (A) consists of medical 
     care (as defined in section 812(a)(2)), 2 or more trades or 
     businesses, whether or not incorporated, shall be deemed a 
     single employer for any plan year of such plan, or any fiscal 
     year of such other arrangement, if such trades or businesses 
     are within the same control group during such year or at any 
     time during the preceding 1-year period,'';
       (2) in clause (iii), by striking ``(iii) the 
     determination'' and inserting the following:
       ``(iii)(I) in any case in which the benefit referred to in 
     subparagraph (A) consists of medical care (as defined in 
     section 812(a)(2)), the determination of whether a trade or 
     business is under `common control' with another trade or 
     business shall be determined under regulations of the 
     Secretary applying principles consistent and coextensive with 
     the principles applied in determining whether employees of 2 
     or more trades or businesses are treated as employed by a 
     single employer under section 4001(b), except that, for 
     purposes of this paragraph, an interest of greater than 25 
     percent may not be required as the minimum interest necessary 
     for common control, or
       ``(II) in any other case, the determination'';
       (3) by redesignating clauses (iv) and (v) as clauses (v) 
     and (vi), respectively; and
       (4) by inserting after clause (iii) the following new 
     clause:
       ``(iv) in any case in which the benefit referred to in 
     subparagraph (A) consists of

[[Page 2582]]

     medical care (as defined in section 812(a)(2)), in 
     determining, after the application of clause (i), whether 
     benefits are provided to employees of 2 or more employers, 
     the arrangement shall be treated as having only one 
     participating employer if, after the application of clause 
     (i), the number of individuals who are employees and former 
     employees of any one participating employer and who are 
     covered under the arrangement is greater than 75 percent of 
     the aggregate number of all individuals who are employees or 
     former employees of participating employers and who are 
     covered under the arrangement,''.

     SEC. 4. ENFORCEMENT PROVISIONS RELATING TO ASSOCIATION HEALTH 
                   PLANS.

       (a) Criminal Penalties for Certain Willful 
     Misrepresentations.--Section 501 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1131) is amended--
       (1) by inserting ``(a)'' after ``Sec. 501.''; and
       (2) by adding at the end the following new subsection:
       ``(b) Any person who willfully falsely represents, to any 
     employee, any employee's beneficiary, any employer, the 
     Secretary, or any State, a plan or other arrangement 
     established or maintained for the purpose of offering or 
     providing any benefit described in section 3(1) to employees 
     or their beneficiaries as--
       ``(1) being an association health plan which has been 
     certified under part 8;
       ``(2) having been established or maintained under or 
     pursuant to one or more collective bargaining agreements 
     which are reached pursuant to collective bargaining described 
     in section 8(d) of the National Labor Relations Act (29 
     U.S.C. 158(d)) or paragraph Fourth of section 2 of the 
     Railway Labor Act (45 U.S.C. 152, paragraph Fourth) or which 
     are reached pursuant to labor-management negotiations under 
     similar provisions of State public employee relations laws; 
     or
       ``(3) being a plan or arrangement described in section 
     3(40)(A)(i), shall, upon conviction, be imprisoned not more 
     than 5 years, be fined under title 18, United States Code, or 
     both.''.
       (b) Cease Activities Orders.--Section 502 of such Act (29 
     U.S.C. 1132) is amended by adding at the end the following 
     new subsection:
       ``(n) Association Health Plan Cease and Desist Orders.--
       ``(1) In general.--Subject to paragraph (2), upon 
     application by the Secretary showing the operation, 
     promotion, or marketing of an association health plan (or 
     similar arrangement providing benefits consisting of medical 
     care (as defined in section 733(a)(2))) that--
       ``(A) is not certified under part 8, is subject under 
     section 514(b)(6) to the insurance laws of any State in which 
     the plan or arrangement offers or provides benefits, and is 
     not licensed, registered, or otherwise approved under the 
     insurance laws of such State; or
       ``(B) is an association health plan certified under part 8 
     and is not operating in accordance with the requirements 
     under part 8 for such certification, a district court of the 
     United States shall enter an order requiring that the plan or 
     arrangement cease activities.
       ``(2) Exception.--Paragraph (1) shall not apply in the case 
     of an association health plan or other arrangement if the 
     plan or arrangement shows that--
       ``(A) all benefits under it referred to in paragraph (1) 
     consist of health insurance coverage; and
       ``(B) with respect to each State in which the plan or 
     arrangement offers or provides benefits, the plan or 
     arrangement is operating in accordance with applicable State 
     laws that are not superseded under section 514.
       ``(3) Additional equitable relief.--The court may grant 
     such additional equitable relief, including any relief 
     available under this title, as it deems necessary to protect 
     the interests of the public and of persons having claims for 
     benefits against the plan.''.
       (c) Responsibility for Claims Procedure.--Section 503 of 
     such Act (29 U.S.C. 1133) is amended by inserting ``(a) In 
     general.--'' before ``In accordance'', and by adding at the 
     end the following new subsection:
       ``(b) Association Health Plans.--The terms of each 
     association health plan which is or has been certified under 
     part 8 shall require the board of trustees or the named 
     fiduciary (as applicable) to ensure that the requirements of 
     this section are met in connection with claims filed under 
     the plan.''.

     SEC. 5. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

       Section 506 of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1136) is amended by adding at the end the 
     following new subsection:
       ``(d) Consultation With States With Respect to Association 
     Health Plans.--
       ``(1) Agreements with states.--The Secretary shall consult 
     with the State recognized under paragraph (2) with respect to 
     an association health plan regarding the exercise of--
       ``(A) the Secretary's authority under sections 502 and 504 
     to enforce the requirements for certification under part 8; 
     and
       ``(B) the Secretary's authority to certify association 
     health plans under part 8 in accordance with regulations of 
     the Secretary applicable to certification under part 8.
       ``(2) Recognition of primary domicile state.--In carrying 
     out paragraph (1), the Secretary shall ensure that only one 
     State will be recognized, with respect to any particular 
     association health plan, as the State with which consultation 
     is required. In carrying out this paragraph--
       ``(A) in the case of a plan which provides health insurance 
     coverage (as defined in section 812(a)(3)), such State shall 
     be the State with which filing and approval of a policy type 
     offered by the plan was initially obtained, and
       ``(B) in any other case, the Secretary shall take into 
     account the places of residence of the participants and 
     beneficiaries under the plan and the State in which the trust 
     is maintained.''.

     SEC. 6. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.

       (a) Effective Date.--The amendments made by this Act shall 
     take effect one year after the date of the enactment of this 
     Act. The Secretary of Labor shall first issue all regulations 
     necessary to carry out the amendments made by this Act within 
     one year after the date of the enactment of this Act.
       (b) Treatment of Certain Existing Health Benefits 
     Programs.--
       (1) In general.--In any case in which, as of the date of 
     the enactment of this Act, an arrangement is maintained in a 
     State for the purpose of providing benefits consisting of 
     medical care for the employees and beneficiaries of its 
     participating employers, at least 200 participating employers 
     make contributions to such arrangement, such arrangement has 
     been in existence for at least 10 years, and such arrangement 
     is licensed under the laws of one or more States to provide 
     such benefits to its participating employers, upon the filing 
     with the applicable authority (as defined in section 
     812(a)(5) of the Employee Retirement Income Security Act of 
     1974 (as amended by this subtitle)) by the arrangement of an 
     application for certification of the arrangement under part 8 
     of subtitle B of title I of such Act--
       (A) such arrangement shall be deemed to be a group health 
     plan for purposes of title I of such Act;
       (B) the requirements of sections 801(a) and 803(a) of the 
     Employee Retirement Income Security Act of 1974 shall be 
     deemed met with respect to such arrangement;
       (C) the requirements of section 803(b) of such Act shall be 
     deemed met, if the arrangement is operated by a board of 
     directors which--
       (i) is elected by the participating employers, with each 
     employer having one vote; and
       (ii) has complete fiscal control over the arrangement and 
     which is responsible for all operations of the arrangement;
       (D) the requirements of section 804(a) of such Act shall be 
     deemed met with respect to such arrangement; and
       (E) the arrangement may be certified by any applicable 
     authority with respect to its operations in any State only if 
     it operates in such State on the date of certification.
     The provisions of this subsection shall cease to apply with 
     respect to any such arrangement at such time after the date 
     of the enactment of this Act as the applicable requirements 
     of this subsection are not met with respect to such 
     arrangement.
       (2) Definitions.--For purposes of this subsection, the 
     terms ``group health plan'', ``medical care'', and 
     ``participating employer'' shall have the meanings provided 
     in section 812 of the Employee Retirement Income Security Act 
     of 1974, except that the reference in paragraph (7) of such 
     section to an ``association health plan'' shall be deemed a 
     reference to an arrangement referred to in this subsection.

  Mr. BOND. Mr. President, with approximately 45 million uninsured 
Americans, expanding access to quality, affordable health care should 
be a top priority for the Senate. We hear about the cost explosion that 
insurance companies are imposing on small businesses and how small 
business owners are now finding it virtually impossible to provide the 
health insurance coverage that they, as well as their employees, need. 
No one is harder hit by large premium increases than small business--
studies indicate more than 60 percent of these uninsured Americans 
either work for a small business or are dependent upon someone who 
does. As health care costs skyrocket and place more and more small 
business employees in jeopardy of losing their health benefits, it 
becomes more important that Congress turn its attention to the 
uninsured and act in a swift and bipartisan manner to address this 
problem.
  Today we are here to offer hope to the millions of uninsured. Today 
we are here to talk about a solution that can help millions of small 
business employees access the same type of health care that their 
counterparts in large corporations and unions already enjoy.
  The solution to this problem is to allow small businesses across the 
country to pool together and access health

[[Page 2583]]

insurance through their membership with a bona fide trade or 
professional organization. This will provide small businesses the same 
opportunities as other large insurance purchasers. These Association 
Health Plans, AHPs, would reduce costs through greater economies of 
scale to spread costs and risk, increase group bargaining power with 
large insurance companies, and generate more insurance options for 
small businesses.
  AHPs are not a new idea. They have been talked about, bandied about, 
argued about and compromised about for almost a decade. And during that 
period, what was once thought to be a manageable problem--became the 
crisis that we have today. Had we passed AHP legislation, we would not 
be seeing the problems we see today for small business.
  The principle underpinning AHPs is simple. This is the same principle 
that makes it cheaper to buy your soda by the case instead of by 
individual cans. Bulk purchasing is why large companies and unions can 
get better rates for their employees than small businesses and it is 
about time that we bring Fortune 500 style health benefits to the 
Nation's Main Street small businesses and their employees.
  In the words of President Bush, ``It makes no sense in America, to 
isolate small businesses as little health care islands unto 
themselves.'' AHPs will mean more coverage for the employees of these 
companies, especially their families and children.
  It is time that we take control and find a way to curtail the 
explosive costs of health care. Small businesses deserve a chance to 
channel these funds toward other needs, such as expanding and creating 
more jobs for the economy. Association Health Plans will level the 
playing field and break down the barriers that prevent small businesses 
from providing health insurance.
  I commend Senator Snowe for taking the lead on this critical issue 
and for using her position as chairwomen of the Small Business 
Committee to advance the number one health care priority of the small 
business community. With the support of President Bush, the Department 
of Labor, the Small Business Administration, and a broad and diverse 
coalition of over 100 groups, I hope that this bill will more quickly.
  For the sake of small businesses throughout this country, their 
employees, and their families we must pass AHP legislation. We must 
bring fortune 500 health care to small business. The time to act is 
now. I thank Senators Snowe and Talent for their leadership, dedication 
and commitment on behalf of small business, and I look forward to 
working with them to pass Association Health Plans legislation in the 
Senate.
                                 ______
                                 
      By Mr. DeWINE (for himself, Mr. Dodd, Mr. Hagel, Mr. Warner, Mr. 
        Corzine, Mr. Lieberman, Mr. Lautenberg, Ms. Landrieu, Mr. 
        Jeffords, and Mr. Salazar):
  S. 408. A bill to provide for programs and activities with respect to 
the prevention of underage drinking; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. DeWINE. Mr. President, I rise today, along with my good friend 
and colleague Senator Dodd, to reintroduce the Sober Truth on 
Preventing Underage Drinking Act--also known as the STOP Underage 
Drinking Act. I thank Senator Dodd for his commitment to this issue, as 
well as our colleagues on the House side--Representatives Roybal-
Allard, Wolf, Osborne, DeLauro, and Wamp for working so diligently with 
us to draft this bill. It is a good bill--a carefully crafted, bi-
partisan, bi-cameral piece of legislation.
  I also want to thank the additional Senate co-sponsors of this 
legislation--Senators Hagel, Warner, Lieberman, Lautenberg, Landrieu, 
Corzine, Jeffords, and Salazar. I thank them for their support. They 
know that underage drinking is a serious, and often deadly, problem for 
our Nation's children and youth and that we have to do something about 
it.
  In September 2003, I chaired a HELP Subcommittee hearing about 
underage drinking. As we discussed at that hearing, it is well known 
that underage drinking is a significant problem for youth in this 
country. We've known that for a very long time.
  We know that underage drinking often contributes to the four leading 
causes of deaths among 15 to 20 year olds--that 69 percent of youths 
who died in alcohol-related traffic fatalities in the year 2000 
involved young drinking drivers and that in 1999, nearly 40 percent of 
people under the age of 21 who were victims of drownings, burns, and 
falls tested positive for alcohol. We also know that alcohol has been 
reported to be involved in 36 percent of homicides, 12 percent of male 
suicides, and 8 percent of female suicides involving people under 21.
  How did we get here. These statistics are frightening. Too many 
American kids are drinking regularly, and they are drinking in 
quantities that can be of great, long-term harm. As a nation, we 
clearly haven't done enough to address this problem. We haven't done 
enough to acknowledge how prevalent and widespread teenage drinking is 
in this country. We haven't done enough to let parents know that they, 
too, are a part of this problem and can be a part of the solution.
  We talk about drugs and the dangers of drug use, as we should, but 
the reality is that we, as a society, have become complacent about the 
problem of underage drinking. This has to change. The culture has to 
change.
  One way to begin changing this culture is with the STOP Underage 
Drinking Act. Our legislation has four major areas of policy 
development:
  First, there is a federal coordination and reporting provision. This 
title would create an Interagency Coordinating Committee to coordinate 
the efforts and expertise of various federal agencies to combat 
underage drinking. It would be chaired by the Secretary of Health and 
Human Services and would include other agencies and departments, such 
as the Department of Education, the Office of Juvenile Justice and 
Delinquency Prevention, and the Federal Trade Commission. This title 
also would mandate an annual report to Congress from the Interagency 
Committee on their efforts to combat underage drinking, as well as an 
annual report card on State efforts to combat the problem. Two million 
dollars annually would be appropriated under this section.
  Second, the bill contains an authorization for an adult-oriented 
national media campaign against underage drinking. This title would 
provide $1 million in fiscal years 2006 and 2007 to authorize a 
national media campaign for which the Ad Council has received start up 
funding. The campaign is expected to launch in August of this year.
  Third, the bill would support new intervention programs to prevent 
underage drinking. This section of the bill would provide $5 million 
for enhancement grants to the Drug Free Communities program to be 
directed at the problem of underage drinking. This title also would 
create a program which would provide competitive grants to states, non-
profit entities, and institutions of higher education to create state-
wide coalitions to prevent underage drinking. These grants will work to 
change the culture of underage drinking at our Nation's institutions of 
higher education and their surrounding communities. This program would 
be funded at $5 million annually, as well.
  Finally, our bill contains a section devoted to research. This title 
would provide $6 million for increased federal research and data 
collection on underage drinking, including reporting on the types and 
brands of alcohol that kids use and the short-term and long-term 
impacts of underage drinking upon adolescent brain development.
  Again, I thank Senator Dodd for working with me on this issue here in 
the Senate, and I look forward to continuing to work with my colleagues 
in the House and Senate to pass this very important bill.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

[[Page 2584]]



                                 S. 408

       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 ``Sober 
     Truth on Preventing Underage Drinking Act'', or the ``STOP 
     Underage Drinking 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.
Sec. 3. Definitions.

                       TITLE I--SENSE OF CONGRESS

Sec. 101. Sense of Congress.

    TITLE II--INTERAGENCY COORDINATING COMMITTEE; ANNUAL REPORT CARD

Sec. 201. Establishment of interagency coordinating committee to 
              prevent underage drinking.
Sec. 202. Annual report card.
Sec. 203. Authorization of appropriations.

                   TITLE III--NATIONAL MEDIA CAMPAIGN

Sec. 301. National media campaign to prevent underage drinking.

                        TITLE IV--INTERVENTIONS

Sec. 401. Community-based coalition enhancement grants to prevent 
              underage drinking.
Sec. 402. Grants directed at reducing higher-education alcohol abuse.

                      TITLE V--ADDITIONAL RESEARCH

Sec. 501. Additional research on underage drinking.
Sec. 502. Authorization of appropriations.

     SEC. 2. FINDINGS.

       The Congress finds as follows:
       (1) Drinking alcohol under the age of 21 is illegal in each 
     of the 50 States and the District of Columbia. Enforcement of 
     current laws and regulations in States and communities, such 
     as minimum age drinking laws, zero tolerance laws, and laws 
     and regulations which restrict availability of alcohol, must 
     supplement other efforts to reduce underage drinking.
       (2) Data collected annually by the Department of Health and 
     Human Services shows that alcohol is the most heavily used 
     drug by children in the United States, and that--
       (A) more youths consume alcoholic beverages than use 
     tobacco products or illegal drugs;
       (B) by the end of the eighth grade, 45.6 percent of 
     children have engaged in alcohol use, and by the end of high 
     school, 76.6 percent have done so; and
       (C) the annual societal cost of underage drinking is 
     estimated at $53 to $58 billion.
       (3) Data collected by the Department of Health and Human 
     Services and the Department of Transportation indicate that 
     alcohol use by youth has many negative consequences, such as 
     immediate risk from acute impairment; traffic fatalities; 
     violence; suicide; and unprotected sex.
       (4) Research confirms that the harm caused by underage 
     drinking lasts beyond the underage years. Compared to persons 
     who wait until age 21 or older to start drinking, those who 
     start to drink before age 14 are, as adults, four times more 
     likely to become alcohol dependent; seven times more likely 
     to be in a motor vehicle crash because of drinking; and more 
     likely to suffer mental and physical damage from alcohol 
     abuse.
       (5) Alcohol abuse creates long-term risk developmentally 
     and is associated with negative physical impacts on the 
     brain.
       (6) Research indicates that adults greatly underestimate 
     the extent of alcohol use by youths, its negative 
     consequences, and its use by their own children. The IOM 
     report concluded that underage drinking cannot be 
     successfully addressed by focusing on youth alone. 
     Ultimately, adults are responsible for young people obtaining 
     alcohol by selling, providing, or otherwise making it 
     available to them. Parents are the most important channel of 
     influence on their children's underage drinking, according to 
     the IOM report, which also recommends a national adult-
     oriented media campaign.
       (7) Research shows that public service health messages, in 
     combination with community-based efforts, can reduce health-
     damaging behavior. The Department of Health and Human 
     Services and the Ad Council have undertaken a public health 
     campaign targeted at parents to combat underage alcohol 
     consumption. The Ad Council estimates that, for a typical 
     public health campaign, it receives an average of $28 million 
     per year in free media through its 28,000 media outlets 
     nationwide.
       (8) A significant percentage of the total alcohol 
     consumption in the United States each year is by underage 
     youth. The Substance Abuse and Mental Health Services 
     Administration reports that the percentage is over 11 
     percent.
       (9) Youth are exposed to a significant amount of alcohol 
     advertising through a variety of media. Some studies indicate 
     that youth awareness of alcohol advertising correlates to 
     their drinking behavior and beliefs.
       (10) According to the Center on Alcohol Marketing and 
     Youth, in 2002, the alcoholic beverage industry spent 
     $927,900,000 on product advertising on television, and 
     $24,700,000 on television advertising designed to promote the 
     responsible use of alcohol. For every one television ad 
     discouraging underage alcohol use, there were 215 product 
     ads.
       (11) Alcohol use occurs in 76 percent of movies rated G or 
     PG and 97 percent of movies rated PG-13. The Federal Trade 
     Commission has recommended restricting paid alcohol beverage 
     promotional placements to films rated R or NC-17.
       (12) Youth spend 9 to 11 hours per week listening to music, 
     and 17 percent of all lyrics contain alcohol references; 30 
     percent of those songs include brand-name mentions.
       (13) Studies show that adolescents watch 20 to 27 hours of 
     television each week, and 71 percent of prime-time television 
     episodes depict alcohol use and 77 percent contain some 
     reference to alcohol.
       (14) College and university presidents have cited alcohol 
     abuse as the number one health problem on college and 
     university campuses.
       (15) According to the National Institute on Alcohol Abuse 
     and Alcoholism, two of five college students are binge 
     drinkers; 1,400 college students die each year from alcohol-
     related injuries, a majority of which involve motor vehicle 
     crashes; more than 70,000 students are victims of alcohol-
     related sexual assault; and 500,000 students are injured 
     under the influence of alcohol each year.
       (16) According to the Center on Alcohol Marketing and 
     Youth, in 2002, alcohol producers spent a total of $58 
     million to place 6,251 commercials in college sports 
     programs, and spent $27.7 million advertising during the NCAA 
     men's basketball tournament, which had as many alcohol ads 
     (939) as the Super Bowl, World Series, College Bowl Games and 
     the National Football League's Monday Night Football 
     broadcasts combined (925).
       (17) The IOM report recommended that colleges and 
     universities ban alcohol advertising and promotion on campus 
     in order to demonstrate their commitment to discouraging 
     alcohol use among underage students.
       (18) According to the Government Accountability Office 
     (``GAO''), the Federal Government spends $1.8 billion 
     annually to combat youth drug use and $71 million to prevent 
     underage alcohol use.
       (19) The GAO concluded that there is a lack of reporting 
     about how these funds are specifically expended, inadequate 
     collaboration among the agencies, and no central coordinating 
     group or office to oversee how the funds are expended or to 
     determine the effectiveness of these efforts.
       (20) There are at least three major, annual, government 
     funded national surveys in the United States that include 
     underage drinking data: the National Household Survey on Drug 
     Use and Health, Monitoring the Future, and the Youth Risk 
     Behavior Survey. These surveys do not use common indicators 
     to allow for direct comparison of youth alcohol consumption 
     patterns. Analyses of recent years' data do, however, show 
     similar results.
       (21) Research shows that school-based and community-based 
     interventions can reduce underage drinking and associated 
     problems, and that positive outcomes can be achieved by 
     combining environmental and institutional change with theory-
     based health education--a comprehensive, community-based 
     approach.
       (22) Studies show that a minority of youth who need 
     treatment for their alcohol problems receive such services. 
     Further, insufficient information exists to properly assist 
     clinicians and other providers in their youth treatment 
     efforts.

     SEC. 3. DEFINITIONS.

       For purposes of this Act:
       (1) The term ``binge drinking'' means a pattern of drinking 
     alcohol that brings blood alcohol concentration (BAC) to 0.08 
     gm percent or above. For the typical adult, this pattern 
     corresponds to consuming 5 or more drinks (male), or 4 or 
     more drinks (female), in about 2 hours.
       (2) The term ``heavy drinking'' means five or more drinks 
     on the same occasion in the past 30 days.
       (3) The term ``frequent heavy drinking'' means five or more 
     drinks on at least five occasions in the last 30 days.
       (4) The term ``alcoholic beverage industry'' means the 
     brewers, vintners, distillers, importers, distributors, and 
     retail outlets that sell and serve beer, wine, and distilled 
     spirits.
       (5) The term ``school-based prevention'' means programs, 
     which are institutionalized, and run by staff members or 
     school-designated persons or organizations in every grade of 
     school, kindergarten through 12th grade.
       (6) The term ``youth'' means persons under the age of 21.
       (7) The term ``IOM report'' means the report released in 
     September 2003 by the National Research Council, Institute of 
     Medicine, and entitled ``Reducing Underage Drinking: A 
     Collective Responsibility''.

                       TITLE I--SENSE OF CONGRESS

     SEC. 101. SENSE OF CONGRESS.

       It is the sense of the Congress that:
       (1) A multi-faceted effort is needed to more successfully 
     address the problem of underage drinking in the United 
     States. A coordinated approach to prevention, intervention, 
     treatment, and research is key to making progress. This Act 
     recognizes the need for a focused national effort, and 
     addresses particulars of the Federal portion of that effort.

[[Page 2585]]

       (2) States and communities, including colleges and 
     universities, are encouraged to adopt comprehensive 
     prevention approaches, including--
       (A) evidence-based screening, programs and curricula;
       (B) brief intervention strategies;
       (C) consistent policy enforcement; and
       (D) environmental changes that limit underage access to 
     alcohol.
       (3) Public health and consumer groups have played an 
     important role in drawing the Nation's attention to the 
     health crisis of underage drinking. Working at the Federal, 
     State, and community levels, and motivated by grass-roots 
     support, they have initiated effective prevention programs 
     that have made significant progress in the battle against 
     underage drinking.
       (4) The alcohol beverage industry has developed and paid 
     for national education and awareness messages on illegal 
     underage drinking directed to parents as well as consumers 
     generally. According to the industry, it has also supported 
     the training of more than 1.6 million retail employees, 
     community-based prevention programs, point of sale education, 
     and enforcement programs. All of these efforts are aimed at 
     further reducing illegal underage drinking and preventing 
     sales of alcohol to persons under the age of 21. All sectors 
     of the alcohol beverage industry have also voluntarily 
     committed to placing advertisements in broadcast and 
     magazines where at least 70 percent of the audiences are 
     expected to be 21 years of age or older. The industry should 
     continue to monitor and tailor its advertising practices to 
     further limit underage exposure, including the use of 
     independent third party review. The industry should continue 
     and expand evidence-based efforts to prevent underage 
     drinking.
       (5) Public health and consumer groups, in collaboration 
     with the alcohol beverage industry, should explore 
     opportunities to reduce underage drinking.
       (6) The entertainment industries have a powerful impact on 
     youth, and they should use rating systems and marketing codes 
     to reduce the likelihood that underage audiences will be 
     exposed to movies, recordings, or television programs with 
     unsuitable alcohol content, even if adults are expected to 
     predominate in the viewing or listening audiences.
       (7) Objective scientific evidence and data should be 
     generated and made available to the general public and policy 
     makers at the local, state, and national levels to help them 
     make informed decisions, implement judicious policies, and 
     monitor progress in preventing childhood/adolescent alcohol 
     use.
       (8) The National Collegiate Athletic Association, its 
     member colleges and universities, and athletic conferences 
     should affirm a commitment to a policy of discouraging 
     alcohol use among underage students and other young fans by 
     ending all alcohol advertising during radio and television 
     broadcasts of collegiate sporting events.

    TITLE II--INTERAGENCY COORDINATING COMMITTEE; ANNUAL REPORT CARD

     SEC. 201. ESTABLISHMENT OF INTERAGENCY COORDINATING COMMITTEE 
                   TO PREVENT UNDERAGE DRINKING.

       (a) In General.--The Secretary of Health and Human 
     Services, in collaboration with the Federal officials 
     specified in subsection (b), shall establish an interagency 
     coordinating committee focusing on underage drinking 
     (referred to in this section as the ``Committee'').
       (b) Other Agencies.--The officials referred to in 
     subsection (a) are the Secretary of Education, the Attorney 
     General, the Secretary of Transportation, the Secretary of 
     the Treasury, the Secretary of Defense, the Surgeon General, 
     the Director of the Centers for Disease Control and 
     Prevention, the Director of the National Institute on Alcohol 
     Abuse and Alcoholism, the Administrator of the Substance 
     Abuse and Mental Health Services Administration, the Director 
     of the National Institute on Drug Abuse, the Assistant 
     Secretary for Children and Families, the Director of the 
     Office of National Drug Control Policy, the Administrator of 
     the National Highway Traffic Safety Administration, the 
     Administrator of the Office of Juvenile Justice and 
     Delinquency Prevention, the Chairman of the Federal Trade 
     Commission, and such other Federal officials as the Secretary 
     of Health and Human Services determines to be appropriate.
       (c) Chair.--The Secretary of Health and Human Services 
     shall serve as the chair of the Committee.
       (d) Duties.--The Committee shall guide policy and program 
     development across the Federal Government with respect to 
     underage drinking.
       (e) Consultations.--The Committee shall actively seek the 
     input of and shall consult with all appropriate and 
     interested parties, including public health research and 
     interest groups, foundations, and alcohol beverage industry 
     trade associations and companies.
       (f) Annual Report.--
       (1) In general.--The Secretary of Health and Human 
     Services, on behalf of the Committee, shall annually submit 
     to the Congress a report that summarizes--
       (A) all programs and policies of Federal agencies designed 
     to prevent underage drinking;
       (B) the extent of progress in reducing underage drinking 
     nationally;
       (C) data that the Secretary shall collect with respect to 
     the information specified in paragraph (2); and
       (D) such other information regarding underage drinking as 
     the Secretary determines to be appropriate.
       (2) Certain information.--The report under paragraph (1) 
     shall include information on the following:
       (A) Patterns and consequences of underage drinking.
       (B) Measures of the availability of alcohol to underage 
     populations and the exposure of this population to messages 
     regarding alcohol in advertising and the entertainment media.
       (C) Surveillance data, including information on the onset 
     and prevalence of underage drinking.
       (D) Any additional findings resulting from research 
     conducted or supported under section 501.
       (E) Evidence-based best practices to both prevent underage 
     drinking and provide treatment services to those youth who 
     need them.

     SEC. 202. ANNUAL REPORT CARD.

       (a) In General.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary'') shall, 
     with input and collaboration from other appropriate Federal 
     agencies, States, Indian tribes, territories, and public 
     health, consumer, and alcohol beverage industry groups, 
     annually issue a ``report card'' to accurately rate the 
     performance of each state in enacting, enforcing, and 
     creating laws, regulations, and programs to prevent or reduce 
     underage drinking. The report card shall include ratings on 
     outcome measures for categories related to the prevalence of 
     underage drinking in each State.
       (b) Outcome Measures.--
       (1) In general.--The Secretary shall develop, in 
     consultation with the Committee established in section 201, a 
     set of outcome measures to be used in preparing the report 
     card.
       (2) Categories.--In developing the outcome measures, the 
     Secretary shall develop measures for categories related to 
     the following:
       (A) The degree of strictness of the minimum drinking age 
     laws and dram shop liability statutes in each State.
       (B) The number of compliance checks within alcohol retail 
     outlets conducted measured against the number of total 
     alcohol retail outlets in each State, and the results of such 
     checks.
       (C) Whether or not the State mandates or otherwise provides 
     training on the proper selling and serving of alcohol for all 
     sellers and servers of alcohol as a condition of employment.
       (D) Whether or not the State has policies and regulations 
     with regard to Internet sales and home delivery of alcoholic 
     beverages.
       (E) The number of adults in the State targeted by State 
     programs to deter adults from purchasing alcohol for minors.
       (F) The number of youths, parents, and caregivers who are 
     targeted by State programs designed to deter underage 
     drinking.
       (G) Whether or not the State has enacted graduated drivers 
     licenses and the extent of those provisions.
       (H) The amount that the State invests, per youth capita, on 
     the prevention of underage drinking, further broken down by 
     the amount spent on--
       (i) compliance check programs in retail outlets, including 
     providing technology to prevent and detect the use of false 
     identification by minors to make alcohol purchases;
       (ii) checkpoints;
       (iii) community-based, school-based, and higher-education-
     based programs to prevent underage drinking;
       (iv) underage drinking prevention programs that target 
     youth within the juvenile justice and child welfare systems; 
     and
       (v) other State efforts or programs as deemed appropriate.

     SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out this 
     title $2,000,000 for fiscal year 2006, and such sums as may 
     be necessary for each of the fiscal years 2007 through 2010.

                   TITLE III--NATIONAL MEDIA CAMPAIGN

     SEC. 301. NATIONAL MEDIA CAMPAIGN TO PREVENT UNDERAGE 
                   DRINKING.

       (a) Scope of the Campaign.--The Secretary of Health and 
     Human Services shall continue to fund and oversee the 
     production, broadcasting, and evaluation of the Ad Council's 
     national adult-oriented media public service campaign.
       (b) Report.--The Secretary of Health and Human Services 
     shall provide a report to the Congress annually detailing the 
     production, broadcasting, and evaluation of the campaign 
     referred to in subsection (a), and to detail in the report 
     the effectiveness of the campaign in reducing underage 
     drinking, the need for and likely effectiveness of an 
     expanded adult-oriented media campaign, and the feasibility 
     and the likely effectiveness of a national youth-focused 
     media campaign to combat underage drinking.
       (c) Consultation Requirement.--In carrying out the media 
     campaign, the Secretary of Health and Human Services shall 
     direct the Ad Council to consult with interested parties 
     including both the alcohol beverage industry and public 
     health and consumer

[[Page 2586]]

     groups. The progress of this consultative process is to be 
     covered in the report under subsection (b).
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section, $1,000,000 for 
     each of the fiscal years 2006 and 2007, and such sums as may 
     be necessary for each subsequent fiscal year.

                        TITLE IV--INTERVENTIONS

     SEC. 401. COMMUNITY-BASED COALITION ENHANCEMENT GRANTS TO 
                   PREVENT UNDERAGE DRINKING.

       (a) Authorization of Program.--The Director of the Office 
     of National Drug Control Policy shall award ``enhancement 
     grants'' to eligible entities to design, test, evaluate and 
     disseminate strategies to maximize the effectiveness of 
     community-wide approaches to preventing and reducing underage 
     drinking.
       (b) Purposes.--The purposes of this section are, in 
     conjunction with the Drug-Free Communities Act of 1997 (21 
     U.S.C. 1521 et seq.), to--
       (1) reduce alcohol use among youth in communities 
     throughout the United States;
       (2) strengthen collaboration among communities, the Federal 
     Government, and State, local, and tribal governments;
       (3) enhance intergovernmental cooperation and coordination 
     on the issue of alcohol use among youth;
       (4) serve as a catalyst for increased citizen participation 
     and greater collaboration among all sectors and organizations 
     of a community that first demonstrates a long-term commitment 
     to reducing alcohol use among youth;
       (5) disseminate to communities timely information regarding 
     state-of-the-art practices and initiatives that have proven 
     to be effective in reducing alcohol use among youth; and
       (6) enhance, not supplant, local community initiatives for 
     reducing alcohol use among youth.
       (c) Application.--An eligible entity desiring an 
     enhancement grant under this section shall submit an 
     application to the Director at such time, and in such manner, 
     and accompanied by such information as the Director may 
     require. Each application shall include--
       (1) a complete description of the entity's current underage 
     alcohol use prevention initiatives and how the grant will 
     appropriately enhance the focus on underage drinking issues; 
     or
       (2) a complete description of the entity's current 
     initiatives, and how it will use this grant to enhance those 
     initiatives by adding a focus on underage drinking 
     prevention.
       (d) Uses of Funds.--Each eligible entity that receives a 
     grant under this section shall use the grant funds to carry 
     out the activities described in such entity's application 
     submitted pursuant to subsection (c). Grants under this 
     section shall not exceed $50,000 per year, and may be awarded 
     for each year the entity is funded as per subsection (f).
       (e) Supplement Not Supplant.--Grant funds provided under 
     this section shall be used to supplement, not supplant, 
     Federal and non-Federal funds available for carrying out the 
     activities described in this section.
       (f) Definitions.--For purposes of this section, the term 
     ``eligible entity'' means an organization that is currently 
     eligible to receive grant funds under the Drug-Free 
     Communities Act of 1997 (21 U.S.C. 1521 et seq.).
       (g) Administrative Expenses.--Not more than 6 percent of a 
     grant under this section may be expended for administrative 
     expenses.
       (h) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section $5,000,000 for 
     fiscal year 2006, and such sums as may be necessary for each 
     of the fiscal years 2007 through 2010.

     SEC. 402. GRANTS DIRECTED AT REDUCING HIGHER-EDUCATION 
                   ALCOHOL ABUSE.

       (a) Authorization of Program.--The Secretary shall award 
     grants to eligible entities to enable the entities to reduce 
     the rate of underage alcohol use and binge drinking among 
     students at institutions of higher education.
       (b) Applications.--An eligible entity that desires to 
     receive a grant under this Act shall submit an application to 
     the Secretary at such time, in such manner, and accompanied 
     by such information as the Secretary may require. Each 
     application shall include--
       (1) a description of how the eligible entity will work to 
     enhance an existing, or where none exists to build a, 
     statewide coalition;
       (2) a description of how the eligible entity will target 
     underage students in the State;
       (3) a description of how the eligible entity intends to 
     ensure that the statewide coalition is actually implementing 
     the purpose of this Act and moving toward indicators 
     described in section (d);
       (4) a list of the members of the statewide coalition or 
     interested parties involved in the work of the eligible 
     entity;
       (5) a description of how the eligible entity intends to 
     work with State agencies on substance abuse prevention and 
     education;
       (6) the anticipated impact of funds provided under this Act 
     in reducing the rates of underage alcohol use;
       (7) outreach strategies, including ways in which the 
     eligible entity proposes to--
       (A) reach out to students;
       (B) promote the purpose of this Act;
       (C) address the range of needs of the students and the 
     surrounding communities; and
       (D) address community norms for underage students regarding 
     alcohol use; and
       (8) such additional information as required by the 
     Secretary.
       (c) Uses of Funds.--Each eligible entity that receives a 
     grant under this section shall use the grant funds to carry 
     out the activities described in such entity's application 
     submitted pursuant to subsection (b).
       (d) Accountability.--On the date on which the Secretary 
     first publishes a notice in the Federal Register soliciting 
     applications for grants under this section, the Secretary 
     shall include in the notice achievement indicators for the 
     program authorized under this section. The achievement 
     indicators shall be designed--
       (1) to measure the impact that the statewide coalitions 
     assisted under this Act are having on the institutions of 
     higher education and the surrounding communities, including 
     changes in the number of alcohol incidents of any kind 
     (including violations, physical assaults, sexual assaults, 
     reports of intimidation, disruptions of school functions, 
     disruptions of student studies, mental health referrals, 
     illnesses, or deaths);
       (2) to measure the quality and accessibility of the 
     programs or information offered by the statewide coalitions; 
     and
       (3) to provide such other measures of program impact as the 
     Secretary determines appropriate.
       (e) Supplement Not Supplant.--Grant funds provided under 
     this Act shall be used to supplement, and not supplant, 
     Federal and non-Federal funds available for carrying out the 
     activities described in this section.
       (f) Definitions.--For purposes of this section:
       (1) Eligible entity.--The term ``eligible entity'' means a 
     State, institution of higher education, or nonprofit entity.
       (2) Institution of higher education.--The term 
     ``institution of higher education'' has the meaning given the 
     term in section 101(a) of the Higher Education Act of 1965 
     (20 U.S.C. 1001(a)).
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Education.
       (4) State.--The term ``State'' means each of the 50 States, 
     the District of Columbia, and the Commonwealth of Puerto 
     Rico.
       (5) Statewide coalition.--The term ``statewide coalition'' 
     means a coalition that--
       (A) includes--
       (i) institutions of higher education within a State; and
       (ii) a nonprofit group, a community underage drinking 
     prevention coalition, or another substance abuse prevention 
     group within a State; and
       (B) works toward lowering the alcohol abuse rate by 
     targeting underage students at institutions of higher 
     education throughout the State and in the surrounding 
     communities.
       (6) Surrounding community.--The term ``surrounding 
     community'' means the community--
       (A) that surrounds an institution of higher education 
     participating in a statewide coalition;
       (B) where the students from the institution of higher 
     education take part in the community; and
       (C) where students from the institution of higher education 
     live in off-campus housing.
       (g) Administrative Expenses.--Not more than 5 percent of a 
     grant under this section may be expended for administrative 
     expenses.
       (h) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section $5,000,000 for 
     fiscal year 2006, and such sums as may be necessary for each 
     of the fiscal years 2007 through 2010.

                      TITLE V--ADDITIONAL RESEARCH

     SEC. 501. ADDITIONAL RESEARCH ON UNDERAGE DRINKING.

       (a) In General.--The Secretary of Health and Human Services 
     shall collect data on, and conduct or support research on, 
     underage drinking with respect to the following:
       (1) The short and long-range impact of alcohol use and 
     abuse upon adolescent brain development and other organ 
     systems.
       (2) Comprehensive community-based programs or strategies 
     and statewide systems to prevent underage drinking, across 
     the underage years from early childhood to young adulthood, 
     including programs funded and implemented by government 
     entities, public health interest groups and foundations, and 
     alcohol beverage companies and trade associations.
       (3) Improved knowledge of the scope of the underage 
     drinking problem and progress in preventing and treating 
     underage drinking.
       (4) Annually obtain more precise information than is 
     currently collected on the type and quantity of alcoholic 
     beverages consumed by underage drinkers, as well as 
     information on brand preferences of these drinkers and their 
     exposure to alcohol advertising.
       (b) Certain Matters.--The Secretary of Health and Human 
     Services shall carry out activities toward the following 
     objectives with respect to underage drinking:
       (1) Testing every unnatural death of persons ages 12 to 20 
     in the United States for alcohol involvement, including 
     suicides, homicides, and unintentional injuries such as

[[Page 2587]]

     falls, drownings, burns, poisonings, and motor vehicle crash 
     deaths.
       (2) Obtaining new epidemiological data within the National 
     Epidemiological Study on Alcoholism and Related Conditions 
     and other national or targeted surveys that identify alcohol 
     use and attitudes about alcohol use during pre- and early 
     adolescence, including second-hand effects of adolescent 
     alcohol use such as date rapes, violence, risky sexual 
     behavior, and prenatal alcohol exposure.
       (3) Developing or identifying successful clinical 
     treatments for youth with alcohol problems.

     SEC. 502. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out 
     section 501 $6,000,000 for fiscal year 2006, and such sums as 
     may be necessary for each of the fiscal years 2007 through 
     2010.

  MR. DODD. Mr. President, I rise today with my colleague, Senator Mike 
DeWine, to reintroduce legislation designed to prevent our nation's 
children and youth from succumbing to the dangers associated with 
underage alcohol use. The legislation that we introduce today, the 
STOP, Sober Truth On Preventing, Underage Drinking Act, will greatly 
strengthen our Nation's ability to combat the too often deadly 
consequences associated with underage drinking.
  An initial examination, of the problems presented by underage 
drinking is truly alarming. Alcohol is the most commonly used drug 
among America's youth. More young people drink alcohol than smoke 
tobacco or use marijuana combined. In 2002, 20 percent of eighth 
graders had drunk alcohol in the previous 30 days. Forty-nine percent 
of high school seniors are drinkers, and 29 percent report having had 
five or more drinks in a row, or binged in the past two weeks.
  Tragically, we know that this year underage drinking will directly 
lead to more than 3,500 deaths, more than two million injuries, 1,200 
babies born with fetal alcohol syndrome and more than 50,000 youths 
treated for alcohol dependence. We also know that the social costs 
associated with underage drinking total close to $53 billion annually, 
including $19 billion from automobile accidents and $29 billion from 
associated violent crime.
  And while no one can argue with the tragic loss of life and 
significant financial costs associated with underage drinking, too few 
of us think of the equally devastating loss of potential that occurs 
when our children begin to drink. Research indicates that children who 
begin drinking do so at only 12 years of age. We also know that 
children that begin drinking at such an early age develop a 
predisposition for alcohol dependence later in life. Such early 
experimentation can have devastating consequences and derail a child's 
potential just as she or he is starting out on the path to adulthood. 
The consumption of alcohol by our children can literally rob them of 
their future.
  The truly alarming and devastating effects of underage alcohol use 
are what initially led Senator DeWine and I to begin work to address 
this important issue. Since that time we have worked extensively with 
Representatives Roybal-Allard, Wolf, DeLauro, Osbourne and Wamp to 
craft the broad legislative initiative that we introduce today.
  The STOP Underage Drinking Act creates the framework for a 
multifaceted, comprehensive national campaign to prevent underage 
drinking. Specifically, the legislation includes four major areas of 
policy development. First, the STOP Underage Drinking Act authorizes $2 
million to establish an Interagency Coordinating Committee to 
coordinate all federal agency efforts and expertise designed to prevent 
underage drinking. Chaired by the Secretary of Health and Human 
Services, this committee will be required to report to the Congress on 
an annual basis the extent to which federal efforts are addressing the 
urgent need to curb underage drinking.
  I am particularly pleased that one of the many items in this annual 
report to Congress will provide for the public health monitoring of the 
amount of alcohol advertising reaching our children. I have become 
increasingly concerned about the degree to which alcohol advertisements 
appear to target our Nation's children. It is my hope that the 
monitoring called for by this legislation will expose any unethical 
advertising practices that reach children. We must do all that we can 
to ensure that our children are not exposed to harmful and deceptive 
alcohol promotions.
  In addition to the Federal coordination of federal underage drinking 
prevention efforts, the STOP Underage Drinking Act additionally 
authorizes $1 million to fund an adult-oriented National Media Campaign 
against Underage Drinking. Research indicates that most children who 
drink obtain the alcohol from their parents or from other adults. The 
National Media Campaign against underage drinking will specifically 
seek to educate those who provide our children with alcohol about the 
dangers inherent in underage alcohol use. This media campaign will 
build upon the valuable underage drinking prevention efforts already 
underway by the Ad Council, whose campaigns average an estimated $28 
million in donated media from media outlets nationwide.
  The legislation additionally authorizes $10 million to provide 
States, not-for-profit groups and institutions of higher education the 
ability to create statewide coalitions to prevent underage drinking and 
alcohol abuse by college and university students. This section will 
also provide alcohol-specific enhancement grants through the Drug Free 
Communities program.
  Lastly, the STOP Underage Drinking Act authorizes $6 million to 
expand research to assess the health effects of underage drinking on 
adolescent development, including its effect on the brain. This effort 
will additionally increase federal data collection on underage 
drinking, including reporting on the types and brands of alcohol that 
kids consume.
  I want to convey my belief that this legislation truly offers a 
historical, first step toward addressing the national tragedy 
represented by underage drinking. I pledge to work strenuously toward 
passing the STOP Underage Drinking Act and building on its strong 
foundation and I ask for the support of my colleagues for this 
critically important initiative.
                                 ______
                                 
      By Mr. COLEMAN (for himself, Mr. DeWine, and Mr. Alexander):
  S. 409. A bill to establish a Federal Youth Development Council to 
improve the administration and coordination of Federal programs serving 
youth, and for other purposes; to the Committee on Health, Education, 
Labor, and Pensions.
  Mr. COLEMAN. Mr. President, today I am pleased to introduce the 
Federal Youth Coordination Act with my good friends, Senator Mike 
DeWine and Senator Lamar Alexander.
  The idea for this legislation emanated from the 2003 White House Task 
Force for Disadvantaged Youth report that indicated Federal youth 
programs were spread across 12 different departments and agencies. It 
identified 150 programs that served children and youth up to age 21, 
but also discovered several of these programs were no longer in 
existence.
  Today, there is a real need for strong role models in our communities 
to help at-risk youth. As a parent, I know there are a number of things 
that influence and shape our children's lives and unfortunately 
sometimes there are more negative things than positive. Youth programs 
help combat the negative influences and help restore hope, provide 
guidance, and help kids stay on the right track. While we have the 
resources to help our kids, a lack of coordination among youth programs 
has limited the full potential we have to change lives. Our bill will 
unleash that potential and bring our youth groups to full strength.
  The Federal Youth Coordination Act will bring efficiency and 
accountability to federal youth policy by developing a Federal Youth 
Development Council. Composed of Department Secretaries, youth serving 
organizations and youth themselves, the Council will coordinate 
existing Federal programs, research and other initiatives, enabling a 
more comprehensive approach to serving the nation's young people.
  The purpose of the Council is not to eliminate existing programs, nor 
to

[[Page 2588]]

create new ones. The Council will ensure communication among youth 
serving agencies, assess the needs of youth, set quantifiable goals and 
objectives for Federal youth programs and develop a coordinated plan to 
achieve those goals. This approach is also cost-effective. The Council 
will only cost about $1.5 million, and the cost-savings that will be 
achieved through improved efficiency and reduced duplication of efforts 
will easily recoup those costs.
  This legislation has bipartisan support and the strong support of our 
nation's youth serving organizations including the Boy Scouts of 
America, the Girl Scouts of America, the Boys & Girls Clubs of America, 
the YMCA and the Child Welfare League of America. I hope the Senate 
will be able to act on this important legislation early this year to 
ensure our kids have the support they need.
  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. 409

       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 Youth Coordination 
     Act''.

     SEC. 2. ESTABLISHMENT AND MEMBERSHIP.

       (a) Members and Terms.--There is established the Federal 
     Youth Development Council (in this Act referred to as the 
     ``Council'') composed of--
       (1) the Attorney General, the Secretary of Agriculture, the 
     Secretary of Labor, the Secretary of Health and Human 
     Services, Secretary of Housing and Urban Development, the 
     Secretary of Education, the Secretary of the Interior, the 
     Secretary of Commerce, the Secretary of Defense, the 
     Secretary of Homeland Security, the Director of National Drug 
     Control Policy, the Director of the Office of Management and 
     Budget, the Assistant to the President for Domestic Policy, 
     the Director of the U.S.A. Freedom Corps, the Deputy 
     Assistant to the President and Director of the Office of 
     Faith-Based and Community Initiatives, and the Chief 
     Executive Officer of the Corporation for National and 
     Community Service, and other Federal officials as directed by 
     the President, to serve for the life of the Council; and
       (2) such additional members as the President, in 
     consultation with the majority and minority leadership of the 
     House of Representatives and the Senate, shall appoint from 
     among representatives of faith-based organizations, community 
     based organizations, child and youth focused foundations, 
     universities, non-profit organizations, youth service 
     providers, State and local government, and youth in 
     disadvantaged situations, to serve for terms of 2 years and 
     who may be reappointed by the President for a second 2-year 
     term.
       (b) Chairperson.--The Chairperson of the Council shall be 
     designated by the President.
       (c) Meetings.--The Council shall meet at the call of the 
     Chairperson, not less frequently than 4 times each year. The 
     first meeting shall be not less than 6 months after the date 
     of enactment of this Act.

     SEC. 3. DUTIES OF THE COUNCIL.

       The duties of the Council shall be--
       (1) to ensure communication among agencies administering 
     programs designed to serve youth, especially those in 
     disadvantaged situations;
       (2) to assess the needs of youth, especially those in 
     disadvantaged situations, and those who work with youth, and 
     the quantity and quality of Federal programs offering 
     services, supports, and opportunities to help youth in their 
     educational, social, emotional, physical, vocational, and 
     civic development;
       (3) to set objectives and quantifiable 5-year goals for 
     such programs;
       (4) to make recommendations for the allocation of resources 
     in support of such goals and objectives;
       (5) to identify target populations of youth who are 
     disproportionately at risk and assist agencies in focusing 
     additional resources on them;
       (6) to develop a plan, including common indicators of youth 
     well-being, and assist agencies in coordinating to achieve 
     such goals and objectives;
       (7) to assist Federal agencies, at the request of one or 
     more such agency, in collaborating on model programs and 
     demonstration projects focusing on special populations, 
     including youth in foster care, migrant youth, projects to 
     promote parental involvement, and projects that work to 
     involve young people in service programs;
       (8) to solicit and document ongoing input and 
     recommendations from--
       (A) youth, especially those in disadvantaged situations, by 
     forming an advisory council of youth to work with the 
     Council;
       (B) national youth development experts, parents, faith and 
     community-based organizations, foundations, business leaders, 
     youth service providers, and teachers;
       (C) researchers; and
       (D) State and local government officials; and
       (9) to work with Federal agencies to conduct high-quality 
     research and evaluation, identify and replicate model 
     programs, and provide technical assistance, and, subject to 
     the availability of appropriations, to fund additional 
     research to fill identified needs.

     SEC. 4. ASSISTANCE OF STAFF.

       (a) Director and Staff.--The Chairperson, in consultation 
     with the Council, shall employ and set the rate of pay for a 
     Director and any necessary staff to assist in carrying out 
     its duties.
       (b) Staff of Federal Agencies.--Upon request of the 
     Council, the head of any Federal department or agency may 
     detail, on a reimbursable basis, any of the personnel of that 
     department or agency to the Council to assist it in carrying 
     out its duties under this Act.

     SEC. 5. POWERS OF THE COUNCIL.

       (a) Mails.--The Council may use the United States mails in 
     the same manner and under the same conditions as other 
     departments and agencies of the United States.
       (b) Administrative Support Services.--Upon the request of 
     the Council, the Administrator of General Services shall 
     provide to the Council, on a reimbursable basis, the 
     administrative support services necessary for the Council to 
     carry out its responsibilities under this Act.

     SEC. 6. ASSISTANCE TO STATES.

       (a) In General.--Subject to the availability of 
     appropriations, the Council may provide technical assistance 
     and make grants to States to support State councils for 
     coordinating State youth efforts.
       (b) Applications.--Applicants for grants must be States. 
     Applications for grants under this section shall be submitted 
     at such time and in such form as determined by the Council.
       (c) Priority.--Priority for grants will be given to States 
     that--
       (1) have already initiated an interagency coordination 
     effort focused on youth;
       (2) plan to work with at least 1 locality to support a 
     local youth council for coordinating local youth efforts;
       (3) demonstrate the inclusion of nonprofit organizations, 
     including faith-based and community-based organizations, in 
     the work of the State council; and
       (4) demonstrate the inclusion of young people, especially 
     those in disadvantaged situations, in the work of the State 
     council.

     SEC. 7. REPORT.

       Not later than 1 year after the Council holds its first 
     meeting, and on an annual basis for a period of 4 years 
     thereafter, the Council shall transmit to the President and 
     to Congress a report of the findings and recommendations of 
     the Council. The report shall--
       (1) include a comprehensive compilation of recent research 
     and statistical reporting by various Federal agencies on the 
     overall wellbeing of youth;
       (2) include the assessment of the needs of youth and those 
     who serve them, the goals and objectives, the target 
     populations of at-risk youth, and the plan called for in 
     section 3;
       (3) report on the link between quality of service 
     provision, technical assistance and successful youth outcomes 
     and recommend ways to coordinate and improve Federal training 
     and technical assistance, information sharing, and 
     communication among the various programs and agencies serving 
     youth;
       (4) include recommendations to better integrate and 
     coordinate policies across agencies at the Federal, State, 
     and local levels, including recommendations for legislation 
     and administrative actions;
       (5) include a summary of actions the Council has taken at 
     the request of Federal agencies to facilitate collaboration 
     and coordination on youth serving programs and the results of 
     those collaborations, if available; and
       (6) include a summary of the input and recommendations from 
     the groups identified in section 3(8).

     SEC. 8. TERMINATION.

       The Council shall terminate 60 days after transmitting its 
     fifth and final report pursuant to section 6.

     SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated for fiscal years 
     2005 through 2009 such sums as may be necessary to carry out 
     this Act.
                                 ______
                                 
      By Mr. McCAIN:
  S. 410. A bill to authorize the extension of nondiscriminatory 
treatment (normal trade relations treatment) to the products of 
Ukraine; to the Committee on Finance.
  Mr. McCAIN. Mr. President, the recent ``Orange Revolution'' in 
Ukraine marked a huge victory for the advancement of democracy in the 
world. The Ukrainian people made clear that they would not stand idle 
as a corrupt regime sought to deny them their democratic rights. Now 
that the people of Ukraine have seized control of their

[[Page 2589]]

destiny, the United States must stand ready to assist them as they do 
the hard work of consolidating democracy. The Jackson-Vanik amendment 
is, with respect to Ukraine, now anachronistic and inappropriate. 
Therefore, I am pleased to introduce legislation that would terminate 
it.
  The bill would authorize the President to terminate the application 
of Jackson-Vanik, Title IV of the Trade Act of 1974, to Ukraine. 
Ukraine would then be eligible to receive permanent normal trade 
relations (PNTR) tariff status in its trade with the United States. I 
am pleased to note that Representatives Hyde and Lantos will be 
introducing an identical bill in the House.
  Beyond any benefits to our bilateral trading relationship, lifting 
Jackson-Vanik for Ukraine constitutes an important symbol of Ukraine's 
new democracy and its relationship with the United States. I led a 
delegation of four Senators and six representatives to Kiev last week; 
where we met with President Yuschenko, Prime Minister Tymoshenko, and 
students who led protests in Independence Square. I was struck by the 
great enthusiasm for democracy and freedom that has taken hold in 
Ukraine, and I wish the new leaders all the best a they begin the 
challenge of governing. I pledged to them that I would work toward the 
lifting of Jackson-Vanik on Ukraine, and today I am happy to take the 
first step toward that end.
                                 ______
                                 
      By Mrs. MURRAY (for herself and Ms. Cantwell):
  S. 411. A bill to amend title XVIII of the Social Security Act to 
improve the provisions of items and services provided to Medicare 
beneficiaries residing in States with more cost-effective health care 
delivery systems; to the Committee on Finance.
  Mrs. MURRAY. Mr. President, I rise today to again join my colleague, 
Senator Cantwell, in introducing the MediFair Act of 2005. My bill will 
restore fairness to the Medicare program and provide greater equity for 
health providers participating in Medicare. Most importantly, it will 
open doors of care to more seniors and the disabled in my State.
  Today, in Washington State, unfair Medicare reimbursement rates are 
causing doctors to limit their care for Medicare beneficiaries. 
Throughout my State, seniors and the disabled are having a hard time 
finding a doctor who will accept new Medicare patients.
  Unfortunately, the Medicare Modernization Act, enacted in 2003, 
creates even greater inequities for my State. Prior to enactment, 
Washington State was 41st in per beneficiary reimbursement costs. When 
fully implemented, this legislation will push Washington State to 45th 
in per beneficiary costs. This growing inequity places health care 
providers in my State at an economic disadvantage and further limits 
access to health care for Washington patients.
  My bill will reduce the regional inequities that have resulted in 
vastly different levels of care and access to care by ensuring that 
every state receives at least the national average of per beneficiary 
spending. This measure will encourage more doctors to accept Medicare 
patients and will also guarantee that seniors are not penalized when 
they choose to retire in the State of Washington. The regional 
inequities in Medicare reimbursement have created a very different 
program for my seniors, one that offers them fewer benefits.
  In addition to ensuring that no State receives less than the national 
average, my legislation will encourage healthy outcomes and the 
efficient use of Medicare payments. The current Medicare structure 
punishes health care providers who practice efficient health care and 
who produce higher levels of healthy outcomes. Physicians and hospitals 
in my State are proud of the pioneering role they have played in 
providing high quality, cost-effective medicine. Unfortunately, instead 
of being rewarded for their exceptional service, they are being 
punished with unfair Medicare payments that only cover a fraction of 
their actual costs.
  I applaud recent efforts by the Centers for Medicare and Medicaid 
Services (CMS) to direct Medicare resources to performance-based 
medicine. I believe this effort to reward providers who practice 
performance-based health care is an important step forward. It's a wise 
investment to shift Medicare from a disease-based program, which 
rewards over utilization and medical errors, to a prevention-based 
program that encourages healthy outcomes based on performance. It will 
mean better care for seniors and will slow the hemorrhaging of Medicare 
dollars. I am hopeful that CMS will expand these efforts.
  Performance-based medicine will also begin to close the gap in 
Medicare reimbursement. We must invest in this new approach and begin 
to make changes system wide. In the 2003 Medicare Modernization Act, we 
worked to close the gap between rural and urban providers. I believe it 
is time to take the next step. When doctors and hospitals work to 
improve outcomes and lower utilization rates they should not be 
punished with unfair Medicare payments.
  I want to acknowledge the lead sponsor of the MediFair bill in the 
House, Congressman Adam Smith, as well as the other House cosponsors, 
Congressman Baird, Congressman McDermott, Congressman Dicks, 
Congressman Inslee, and Congressman Larsen.
  I ask unanimous consent that the text of bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 411

       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 ``MediFair Act of 2005''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Regional inequities in medicare reimbursement has 
     created barriers to care for seniors and the disabled.
       (2) The regional inequities in medicare reimbursement 
     penalize States that have cost-effective health care delivery 
     systems and rewards those States with high utilization rates 
     and that provide inefficient care.
       (3) Over a lifetime, those inequities can mean as much as a 
     $50,000 difference in the cost of care provided per 
     beneficiary.
       (4) Regional inequities have resulted in creating very 
     different medicare programs for seniors and the disabled 
     based on where they live.
       (5) Because the Medicare+Choice rate is based on the fee-
     for-service reimbursement rate, regional inequities have 
     allowed some medicare beneficiaries access to plans with 
     significantly more benefits including prescription drugs. 
     Beneficiaries in States with lower reimbursement rates have 
     not benefitted to the same degree as beneficiaries in other 
     parts of the country.
       (6) Regional inequities in medicare reimbursement have 
     created an unfair competitive advantage for hospitals and 
     other health care providers in States that receive above 
     average payments. Higher payments mean that those providers 
     can pay higher salaries in a tight, competitive market.
       (7) Regional inequities in medicare reimbursement can limit 
     timely access to new technology for beneficiaries in States 
     with lower reimbursement rates.
       (8) Regional inequities in medicare reimbursement, if left 
     unchecked, will reduce access to medicare services and impact 
     healthy outcomes for beneficiaries.
       (9) Regional inequities in medicare reimbursement are not 
     just a rural versus urban problem. Many States with large 
     urban centers are at the bottom of the national average for 
     per beneficiary costs.

     SEC. 3. IMPROVING FAIRNESS OF PAYMENTS TO PROVIDERS UNDER THE 
                   MEDICARE FEE-FOR-SERVICE PROGRAM.

       Title XVIII of the Social Security Act (42 U.S.C. 1395 et 
     seq.) is amended by adding at the end the following new 
     section:


``IMPROVING PAYMENT EQUITY UNDER THE ORIGINAL MEDICARE FEE-FOR-SERVICE 
                                PROGRAM

       ``Sec. 1898. (a) Establishment of System.--Notwithstanding 
     any other provision of law, the Secretary shall establish a 
     system for making adjustments to the amount of payment made 
     to entities and individuals for items and services provided 
     under the original medicare fee-for-service program under 
     parts A and B.
       ``(b) System Requirements.--
       ``(1) Increase for states below the national average.--
     Under the system established under subsection (a), if a State 
     average per beneficiary amount for a year is less than the 
     national average per beneficiary amount for such year, then 
     the Secretary (beginning in 2006) shall increase the amount 
     of applicable payments in such a manner as will result (as 
     estimated by the Secretary) in

[[Page 2590]]

     the State average per beneficiary amount for the subsequent 
     year being equal to the national average per beneficiary 
     amount for such subsequent year.
       ``(2) Reduction for certain states above the national 
     average to enhance quality care and maintain budget 
     neutrality.--
       ``(A) In general.--The Secretary shall ensure that the 
     increase in payments under paragraph (1) does not cause the 
     estimated amount of expenditures under this title for a year 
     to increase or decrease from the estimated amount of 
     expenditures under this title that would have been made in 
     such year if this section had not been enacted by reducing 
     the amount of applicable payments in each State that the 
     Secretary determines has--
       ``(i) a State average per beneficiary amount for a year 
     that is greater than the national average per beneficiary 
     amount for such year; and
       ``(ii) healthy outcome measurements or quality care 
     measurements that indicate that a reduction in applicable 
     payments would encourage more efficient use of, and reduce 
     overuse of, items and services for which payment is made 
     under this title.
       ``(B) Limitation.--The Secretary shall not reduce 
     applicable payments under subparagraph (A) to a State that--
       ``(i) has a State average per beneficiary amount for a year 
     that is greater than the national average per beneficiary 
     amount for such year; and
       ``(ii) has healthy outcome measurements or quality care 
     measurements that indicate that the applicable payments are 
     being used to improve the access of beneficiaries to quality 
     care.
       ``(3) Determination of averages.--
       ``(A) State average per beneficiary amount.--Each year 
     (beginning in 2005), the Secretary shall determine a State 
     average per beneficiary amount for each State which shall be 
     equal to the Secretary's estimate of the average amount of 
     expenditures under the original medicare fee-for-service 
     program under parts A and B for the year for a beneficiary 
     enrolled under such parts that resides in the State.
       ``(B) National average per beneficiary amount.--Each year 
     (beginning in 2005), the Secretary shall determine the 
     national average per beneficiary amount which shall be equal 
     to the average of the State average per beneficiary amount 
     determined under subparagraph (A) for the year.
       ``(4) Definitions.--In this section:
       ``(A) Applicable payments.--The term `applicable payments' 
     means payments made to entities and individuals for items and 
     services provided under the original medicare fee-for-service 
     program under parts A and B to beneficiaries enrolled under 
     such parts that reside in the State.
       ``(B) State.--The term `State' has the meaning given such 
     term in section 210(h).
       ``(c) Beneficiaries Held Harmless.--The provisions of this 
     section shall not affect--
       ``(1) the entitlement to items and services of a 
     beneficiary under this title, including the scope of such 
     items and services; or
       ``(2) any liability of the beneficiary with respect to such 
     items and services.
       ``(d) Regulations.--
       ``(1) In general.--The Secretary, in consultation with the 
     Medicare Payment Advisory Commission, shall promulgate 
     regulations to carry out this section.
       ``(2) Protecting rural communities.--In promulgating the 
     regulations pursuant to paragraph (1), the Secretary shall 
     give special consideration to rural areas.''.

     SEC. 4. MEDPAC RECOMMENDATIONS ON HEALTHY OUTCOMES AND 
                   QUALITY CARE.

       (a) Recommendations.--The Medicare Payment Advisory 
     Commission established under section 1805 of the Social 
     Security Act (42 U.S.C. 1395b-6) shall develop 
     recommendations on policies and practices that, if 
     implemented, would encourage--
       (1) healthy outcomes and quality care under the medicare 
     program in States with respect to which payments are reduced 
     under section 1898(b)(2) of such Act (as added by section 3); 
     and
       (2) the efficient use of payments made under the medicare 
     program in such States.
       (b) Submission.--Not later than the date that is 9 months 
     after the date of enactment of this Act, the Commission shall 
     submit to Congress the recommendations developed under 
     subsection (a).
                                 ______
                                 
      By Mr. DORGAN (for himself and Mr. Inouye):
  S. 412. A bill to reauthorize the Native American Programs Act of 
1974; to the Committee on Indian Affairs.
  Mr. DORGAN. Mr. President, I rise today to introduce a bill that 
would reauthorize the Native American Programs Act. This Act provides 
authority for the social and economic development grants that are so 
critical to Indian Country. Senator Inouye joins me in sponsoring this 
measure.
  The Native American Programs Act of 1974 is administered by the 
Administration for Native Americans (ANA) within the Department of 
Health and Human Services. The purpose of the Act is to promote 
economic and social self-sufficiency by assisting Native American 
institutions and tribal governments to exercise control and decision 
making over their own resources; to foster the development of stable, 
diversified local tribal economies and economic activities that provide 
jobs, promote economic well-being, and reduce dependency on public 
funds and social services; and to support access, control and 
coordination of services and programs that safeguard the health and 
well-being of native people that are essential to their communities.
  The ANA awards annual grants to tribal entities on a competitive 
basis and provides many native communities with critical startup funds 
for social, governance, economic, environmental, and cultural programs 
that are developed by the communities themselves. The program addresses 
key needs for native communities by helping them begin and expand 
businesses, enhancing tribal ability to promote natural environments, 
and preserving and restoring native languages. The Native American 
Programs Act supports Native American self-governance in the 
development of economic, social, and governance capacities of Native 
American communities.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 412

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

     SECTION 1. NATIVE AMERICAN PROGRAMS ACT OF 1974.

       (a) Intra-Departmental Council on Native American 
     Affairs.--Section 803B(d)(1) of the Native American Programs 
     Act of 1974 (42 U.S.C. 2991b-2(d)(1)) is amended by striking 
     ``There'' and all that follows and inserting the following: 
     ``There is established in the Office of the Secretary the 
     Intra-Departmental Council on Native American Affairs. The 
     Commissioner and the Director of the Indian Health Service 
     shall serve as co-chairpersons of the Council. The co-
     chairpersons shall advise the Secretary on all matters 
     affecting Native Americans that involve the Department.''.
       (b) Authorization of Appropriations.--Section 816 of the 
     Native American Programs Act of 1974 (42 U.S.C. 2992d) is 
     amended--
       (1) by striking subsections (a) through (c) and inserting 
     the following:
       ``(a) In General.--There are authorized to be 
     appropriated--
       ``(1) to carry out section 803(d), $8,000,000 for each of 
     fiscal years 2006 through 2010; and
       ``(2) to carry out provisions of this title other than 
     section 803(d) and any other provision having an express 
     authorization of appropriations, such sums as are necessary 
     for each of fiscal years 2006 through 2010.
       ``(b) Limitation.--Not less than 90 percent of the funds 
     made available to carry out this title for a fiscal year 
     (other than funds made available to carry out sections 
     803(d), 803A, 803C, and 804, and any other provision of this 
     title having an express authorization of appropriations) 
     shall be expended to carry out section 803(a).'';
       (2) by redesignating subsection (d) as subsection (c); and
       (3) by striking subsection (e).
       (c) Reports.--Section 811A of the Native American Programs 
     Act of 1974 (42 U.S.C. 2992-1) is amended--
       (1) by striking the section heading and all that follows 
     through ``each year,'' and inserting the following:

     ``SEC. 811A. REPORTS.

       ``Every 5 years, the Secretary shall''; and
       (2) by striking ``an annual report'' and inserting ``a 
     report''.

     SEC. 2. RESEARCH AND EDUCATIONAL ACTIVITIES.

       Section 7205(a)(3) of the Native Hawaiian Education Act (20 
     U.S.C. 7515(a)(3)) is amended--
       (1) by redesignating subparagraphs (K) and (L) as 
     subparagraphs (L) and (M), respectively; and
       (2) by inserting after subparagraph (J) the following:
       ``(K) research and educational activities relating to 
     Native Hawaiian law;''.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself, Ms. Snowe, Mr. McCain, Mr. 
        Chafee, Mrs. Murray, Mr. Jeffords, Mr. Durbin, Mr. Lieberman, 
        Mr. Leahy, Mr. Lautenberg, Mrs. Boxer, Ms. Cantwell, Mr. Akaka, 
        and Mr. Reed):
  S.J. Res. 5. A joint resolution expressing the sense of Congress that 
the

[[Page 2591]]

United States should act to reduce greenhouse gas emissions; to the 
Committee on Foreign Relations.
  Mrs. FEINSTEIN. Mr. President, I rise today to offer a resolution 
with Senators Snowe, McCain, Chafee, Murray, Jeffords, Durbin, 
Lieberman, Leahy, Lautenberg, Boxer, Cantwell, Akaka and Reed that 
urges the Administration to participate in international negotiations 
and actively reduce our greenhouse gas emissions that contribute to 
global warming.
  The Kyoto Protocol goes into effect today. More than 140 nations, 
including all 25 members of the European Union, Russia and China, have 
ratified the agreement to reduce man-made emissions of greenhouse 
gases.
  The United States, which accounts for about one-fourth of the 
greenhouse gases believed responsible for global warming, has refused 
to ratify the treaty.
  Thirty-five of the world's thirty-eight industrialized countries--
except for the United States, Australia, and Monaco--have ratified this 
important treaty.
  This means that industrialized nations are bound to cut their 
combined greenhouse gases by 5 percent below 1990 levels between 2008 
and 2012.
  The United States is missing an important opportunity to protect our 
planet's environment by not ratifying the Protocol.
  I believe this is a huge mistake.
  There is emerging consensus that global warming is real.
  According to the National Academy of Sciences, ``Since the 1900s 
global average temperature and atmospheric carbon dioxide concentration 
have increased dramatically, particularly compared to their levels in 
the 900 preceding years.''
  Scientists now agree on three main Facts about global warming.
  Fact 1: The Earth is warming.
  Fact 2: The primary cause of this warming is man-made activities, 
especially fossil fuel consumption.
  Fact 3: If we don't act now to reduce emissions, the problem will 
only get worse.
  We have already begun to see the impacts of climate change: four 
hurricanes of significant force pounded the State of Florida in a 6 
week period last fall. The storms formed over an area of the ocean 
where surface temperatures have increased an average of 17 degrees over 
the past decade.
  Eskimos are being forced inland in Alaska as their native homes on 
the coastline are melting into the sea.
  Glaciers are beginning to disappear in Glacier National Park in 
Montana. In 100 years, the Park has gone from having 150 glaciers to 
fewer than 30. And the 30 that remain are two-thirds smaller than they 
once were.
  In California, water supplies are threatened by smaller snowpacks in 
the Sierra Nevada. Record snowfalls this winter have provided hope for 
this summer but the region still could face drought or floods unless 
temperatures stay cold enough to maintain the snowpack and average 
snowfall continues for the rest of the precipitation season.
  If we take strong action to reduce greenhouse gas emissions, there 
will be 27 percent snowpack remaining in the Sierras at the end of the 
century.
  However, if we do nothing to reduce our greenhouse gas emissions, 
there will only be 11 percent snowpack left in the Sierras at the end 
of the century.
  The San Diego based Scripps Institution of Oceanography, a preeminent 
center for marine science research, will release a study later this 
week showing that global warming will likely have serious ramifications 
in the very near future, including: a water crisis in the western 
United States in the next 20 years due to smaller snowpacks.
  The disappearance of the glaciers in the Andes in Peru in as little 
as 10 years, leaving the population without an adequate water supply 
during the summer.
  The melting of two-thirds of the glaciers in western China by 2050, 
seriously diminishing the water supply for the region's 300 million 
inhabitants.
  Further, the UN Comprehensive Assessment of Freshwater Resources of 
the World estimates that by 2025, around 5 billion people, out of a 
total world population of 8 billion, will not have access to adequate 
water supplies.
  And concern about the effects of climate change is mounting around 
the world.
  Scientists fear that an ``ecological catastrophe'' is developing in 
Tibet with the melting of the region's glaciers as a result of global 
warming.
  Glaciers in West Antarctica are thinning twice as fast as they did in 
the 1990s
  The mean air temperature has risen 4-5 degrees in Alaska in the past 
three decades causing glaciers to melt and the coastline to recede.
  Peru's Quelccaya ice cap, the largest in the tropics, could be gone 
by 2100 if it continues to melt at its current rate--contracting more 
than 600 feet a year in some places.
  In addition, according to National Geographic, ``the famed snows of 
Kilimanjaro have melted more than 80 percent since 1912. Glaciers in 
the Garhwal Himalaya in India are retreating so fast that researchers 
believe that most central and eastern Himalayan glaciers could 
virtually disappear by 2035. Arctic sea ice has thinned significantly 
over the past half century, and its extent has declined by about 10 
percent in the past 30 years. Greenland's ice sheet is shrinking.''
  The Pew Center for Climate Change reports strong evidence of global 
warming in the United States. The findings included: the red fox has 
shifted its habitat northward, where it is encroaching on the Arctic 
fox's range.
  Southern, warm-water fish have begun to infiltrate waters off 
Monterey, California, which were previously dominated by colder-water 
species.
  The Alaskan tundra, which has for thousands of years been a 
depository for carbon dioxide, has begun to release more of the gas 
into the air than it removes because warmer winters are causing stored 
plant matter to decompose.
  There have been documented trends in which the natural timing of 
animal or insect life cycles changed and the plants on which they 
depended did not. Many Southern species of butterflies have disappeared 
entirely over the past century as their range contracted.
  According to the International Climate Change Taskforce, of which 
Senator Snowe is a Co-Chair, if the earth's average temperature 
increases by more than 2 degrees Celsius, or 3.6 degrees Fahrenheit, 
the world could face substantial agricultural losses, countless people 
at risk of water shortages, and widespread adverse health impacts such 
as malaria.
  Even more critically, if the temperature rises more than 3.6 degrees 
Fahrenheit, we could be at risk for catastrophic/weather events. For 
instance, we would risk losing the West Antarctic and Greenland ice 
sheets, which could raise sea levels, shut down the Gulf Stream, and 
destroy the world's forests.
  Climate change is real. Its impacts are already being felt. If 
emissions keep growing at projected levels, greenhouse gases in our 
atmosphere will reach levels unknown since the time of the dinosaurs 
during the lifetimes of children born today.
  That is why my colleagues and I have introduced this resolution that: 
Urges the Administration to engage in international discussions on 
post-Kyoto greenhouse gas reductions.
  Calls upon the administration to take action NOW to reduce emissions 
domestically.
  Encourages the United States to keep global average temperatures from 
increasing more than 3.6 degrees Fahrenheit over pre-industrial levels.
  As the world's largest emitter of greenhouse gases, it is the 
responsibility of the United States to lead by example. By not 
ratifying the Kyoto Protocol, we have sent a harsh message to the world 
that the largest emitter and contributor to global warming refuses to 
participate in a worldwide program aimed at reducing greenhouse gases.
  But fortunately, even though the federal government has refused to 
acknowledge global warming, many States have recognized that in spite 
of the Federal Government's inaction, action must be taken.

[[Page 2592]]

  Nearly 40 States have developed their own climate plans.
  A emission trading system is emerging in the Northeast that will 
require large power plants from Maine to Delaware to reduce their 
carbon emissions.
  Eighteen States and Washington, DC have enacted renewable portfolio 
standards. They include Arizona, California, Colorado, Connecticut, 
Hawaii, Iowa, Maine, Maryland, Massachusetts, Minnesota, Nevada, New 
Jersey, New Mexico, New York, Pennsylvania, Rhode Island, Texas, and 
Wisconsin.
  California has enacted legislation that will reduce greenhouse gas 
emissions from vehicle tailpipes--it is expected that the Northeastern 
States and Canada will also follow California's lead.
  Yet without concerted Federal action, the United States will not be 
able to achieve real, significant greenhouse gas reductions.
  As the world's largest greenhouse gas emitter, we must act now to 
reduce the impacts of climate change and save the environment for 
future generations.
  The Kyoto Protocol ends in 2012. Though the Protocol ends, the United 
States needs to lead and move to negotiate a post-Kyoto framework. 
There are many things we can do. For example, we can: use our forests 
and our farmland as a depository for carbon to prevent it from being 
released into the atmosphere; develop new technologies such as clean 
coal, renewable energy, and hydrogen vehicles; make better use of 
existing technologies such as hybrid vehicles and energy efficient 
buildings, appliances, and power generation; and use market-based 
programs, such as cap and trade, to reduce emissions with the least 
harm to economy.
  Being a responsible steward of the climate is more than just taking 
steps to pollute less. It also requires participating in international 
negotiations on the policies the world will need to achieve 
significant, long-term reductions in greenhouse gas emissions.
  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. 5

       Whereas in May 1992, the Senate gave advice and consent to 
     the ratification of the United Nations Framework Convention 
     on Climate Change with the intent of reducing global manmade 
     emissions of greenhouse gases, which committed the United 
     States (along with other developed countries) to a nonbinding 
     target of containing emissions levels at 1990 rates by 2000;
       Whereas the United Nations Framework Convention on Climate 
     Change was signed by President George Herbert Walker Bush and 
     took effect in March 1994;
       Whereas in December 1997, at the United Nations Framework 
     Convention on Climate Change conference of the parties, the 
     Kyoto Protocol, which set targets for reductions in the 
     greenhouse gas emissions of industrialized countries, was 
     established based on principles described in the 1992 
     framework agreement;
       Whereas on February 16, 2005, the Kyoto Protocol will take 
     effect, at which time more than 30 industrialized countries 
     will be legally bound to meet quantitative targets for 
     reducing or limiting the greenhouse gas emissions of those 
     countries, an international carbon trading market will be 
     established through an emissions trading program (which was 
     originally proposed by the United States and enables any 
     industrialized country to buy or sell emissions credits), and 
     the clean development mechanism, which provides opportunities 
     to invest in projects in developing countries that limit 
     emissions while promoting sustainable development, will begin 
     full operation;
       Whereas 141 nations (including Canada, China, the European 
     Union, India, Japan, and Russia) have ratified the Kyoto 
     Protocol;
       Whereas the United States is the only member of the Group 
     of 8 that has not ratified the Kyoto Protocol;
       Whereas, according to the National Academy of Sciences, 
     ``Greenhouse gases are accumulating in Earth's atmosphere as 
     a result of human activities, causing surface air 
     temperatures and subsurface ocean temperatures to rise . . . 
     Human-induced warming and associated sea level rises are 
     expected to continue through the 21st century.'';
       Whereas the Administrator of the Environmental Protection 
     Agency stated that ``Scientists know for certain that human 
     activities are changing the composition of Earth's 
     atmosphere. Increasing levels of greenhouse gases, like 
     carbon dioxide, in the atmosphere since pre-industrial times 
     have been well documented. There is no doubt this atmospheric 
     buildup of carbon dioxide and other greenhouse gases is 
     largely the result of human activities.'';
       Whereas major scientific organizations (including the 
     American Association for the Advancement of Science, the 
     American Meteorological Society, and the American Geophysical 
     Union) have issued statements acknowledging the compelling 
     scientific evidence of human modification of climate;
       Whereas in 2001, the Intergovernmental Panel on Climate 
     Change estimated that global average temperatures have risen 
     by approximately 1 degree Fahrenheit in the past century;
       Whereas the report entitled ``Our Changing Planet: The U.S. 
     Climate Change Science Program for Fiscal Years 2004 and 
     2005'' states that ``Atmospheric concentrations of carbon 
     dioxide and methane have been increasing for about two 
     centuries as a result of human activities and are now higher 
     than they have been for over 400,000 years.'';
       Whereas according to the Arctic climate impact assessment 
     published in November 2004, the Arctic is warming almost 
     twice as fast as the rest of the planet, and winter 
     temperatures in Alaska have increased approximately 5 to 7 
     degrees Fahrenheit over the past 50 years;
       Whereas scientists at the Hadley Centre for Climate 
     Prediction and Research in the United Kingdom have estimated 
     that manmade climate change has already doubled the risk of 
     heat waves, such as the heat wave that caused more than 
     15,000 deaths in Europe in 2003;
       Whereas scientists at the international conference entitled 
     ``Avoiding Dangerous Climate Change'', held in Exeter, 
     England, from February 1, 2005, through February 3, 2005, 
     predicted that an increase in temperature of 1.8 degrees 
     Fahrenheit (which could occur within 25 years) would cause a 
     decline in food production, water shortages, and a net loss 
     of gross domestic product in some developing countries;
       Whereas scientists at the international conference entitled 
     ``Avoiding Dangerous Climate Change'' predicted that an 
     increase in temperature of 3.6 degrees Fahrenheit (which 
     could occur before 2050) could cause a substantial loss of 
     Arctic Sea ice, widespread bleaching of coral reefs, an 
     increased frequency of forest fires, and rivers to become too 
     warm to support trout and salmon, and, in developing 
     countries, would cause an increased risk of hunger, water 
     shortages that would affect an additional 1,500,000,000 
     people, and significant losses of gross domestic product in 
     some countries;
       Whereas scientists at the international conference entitled 
     ``Avoiding Dangerous Climate Change'' predicted that an 
     increase in temperature of 5.4 degrees Fahrenheit (which 
     could occur before 2070) would cause irreversible damage to 
     the Amazon rainforest, destruction of many coral reefs, a 
     rapid increase in hunger, large losses in crop production in 
     certain regions, which could affect as many as 5,500,000,000 
     people, and water shortages that would affect an additional 
     3,000,000,000 people;
       Whereas scientists at the international conference entitled 
     ``Avoiding Dangerous Climate Change'' predicted that an 
     increase in temperature of greater than 5.4 degrees 
     Fahrenheit (which could occur after 2070) would cause certain 
     regions to become unsuitable for food production, and have a 
     substantial effect on the global gross domestic product;
       Whereas in the United States, multiple mechanisms 
     (including market cap and trade programs) exist to carry out 
     mitigation of climate change, sequestration activities in 
     agricultural sectors, and development of new technologies 
     such as clean coal and hydrogen vehicles; and
       Whereas, because the United States has critical economic 
     and other interests in international climate policy, it is in 
     the best interest of the United States to play an active role 
     in any international discussion on climate policy: Now, 
     therefore, be it
       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled,
       Section 1. That it is the sense of Congress that the United 
     States should demonstrate international leadership and 
     responsibility regarding reducing the health, environmental, 
     and economic risks posed by climate change by--
       (1) carrying out reasonable and responsible actions to 
     ensure significant and meaningful reductions in emissions of 
     all greenhouse gases;
       (2) generating climate-friendly technologies by enacting 
     and implementing policies and programs to address all 
     greenhouse gas emissions to promote sustained economic 
     growth;
       (3) participating in international negotiations under the 
     United Nations Framework Convention on Climate Change to 
     achieve significant, long-term, cost-effective reductions in 
     global greenhouse gas emissions; and
       (4) supporting the establishment of a long-term objective 
     to prevent the global average temperature from increasing by 
     greater than 3.6 degrees Fahrenheit above preindustrial 
     levels.
       Sec. 2. The Secretary of State is authorized to and shall 
     engage in efforts with other

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     federal agencies to lead international negotiations to 
     mitigate impacts of global warming.

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