[Congressional Record (Bound Edition), Volume 152 (2006), Part 17]
[Senate]
[Pages 22738-22761]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mrs. FEINSTEIN (for herself and Mrs. Boxer):
  S. 4084. A bill to authorize the implementation of the San Joaquin 
River Restoration Settlement; to the Committee on Energy and Natural 
Resources.
  Mrs. FEINSTEIN. Mr. President, I rise today to introduce--with my 
cosponsor Senator Boxer--a historic bill that will end 18 years of 
litigation between the Natural Resources Defense Council, the Friant 
Water Authority, and the U.S. Department of the Interior. The 
legislation will enact a settlement that accomplishes the restoration 
of California's second longest river, the San Joaquin, while 
maintaining a stable water supply for the farmers who have made the 
Valley bloom and have supplied low-cost agricultural products to 
Americans from coast to coast.
  The alternative to a consensus resolution to this long-running 
western water battle basis is to continue the fight. To my knowledge, 
every farmer and every environmentalist who has considered the 
possibility of continued litigation believes that an outcome imposed by 
a judge is likely to be worse for everyone on all counts: more costly, 
riskier for the farmers, and less beneficial for the environment.
  Because the settlement provides a framework that all interests can 
accept, this legislation has the strong support of the Bush 
administration, the Schwarzenegger administration, the environmental 
and fishing communities and numerous California farmers and water 
districts, including all 22 Friant water districts that have been part 
of the litigation.
  In announcing the signing of this San Joaquin River settlement in 
September, the Assistant Secretary of the Interior praised it as a 
``monumental agreement.'' And when the Federal court then approved the 
settlement in late October, Secretary of the Interior Dirk Kempthorne 
further praised settlement for launching ``one of the largest 
environmental restoration projects in California's history.'' The 
Secretary further observed that ``This Settlement closes a long chapter 
of conflict and uncertainty in California's San Joaquin Valley . . . 
and open[s] a new chapter of environmental restoration and water supply 
certainty for the farmers and their communities.''
  I share the Secretary's strong support for this balanced and historic 
agreement, and it is my honor to join with Senator Boxer and a 
bipartisan group of California House Members in introducing legislation 
to approve and authorize this settlement before we end the 109th 
Congress.
  The legislation indicates how the settlement agreement forged by the 
parties is going to be implemented. It involves the Departments of the 
Interior and Commerce, and essentially gives the Secretary of the 
Interior the additional authority to:

     take the actions to restore the San Joaquin River;

     reintroduce the California Central Valley Spring Run Chinook 
     Salmon;

     minimize water supply impacts on Friant water districts; and

     avoid reductions in water supply for third-party water 
     contractors.

  One of the major benefits of this settlement is the restoration of a 
long-lost salmon fishery. The return of one of California's most 
important salmon runs will create significant benefits for local 
communities in the San Joaquin Valley, helping to restore a beleaguered 
fishing industry while improving recreation and quality of life.
  The legislation provides for improvements to the San Joaquin River 
channel to allow salmon restoration to begin in 2014. Beginning in that 
year, the river would see an annual flow regime mandated by the 
settlement, with pulses of additional water in the spring and greater 
flows available in wetter years. There is flexibility to add or 
subtract up to 10 percent from the annual flows, as the best science 
dictates.
  A visitor to the revitalized river channel in a decade will find an 
entirely different place providing recreation and relaxation for 
residents of small towns like Mendota, and a refuge for residents of 
larger cities like Fresno.
  The legislation I am introducing today includes provisions to benefit 
the farmers of the San Joaquin Valley as well as the salmon: In wet 
years, Friant contractors can purchase surplus flows at $10 per acre-
foot for use in dry years, far less than the approximately $35 per 
acre-foot that they would otherwise pay for this water. The Secretary 
of the Interior is authorized to recirculate new restoration flows from 
the Delta via the California aqueduct and the Cross-Valley Canal to 
provide additional supply for Friant.
  Today's legislation also includes substantial protections for other 
water districts in California that were not party to the original 
settlement negotiations. These other water contractors will be able to 
avoid all but the smallest water impacts as a result of the settlement, 
except on a voluntary basis.
  In addition, the restoration of flows for over 150 miles below Friant 
Dam, and reconnecting the upper river to the critical San Joaquin-
Sacramento Delta, will be a welcome change for the more than 22 million 
Californians who rely on that crucial source for their drinking water.
  Finally, restoring the San Joaquin as a living salmon river may 
ultimately help struggling fishing communities on California's north 
coast--and even into southern Oregon. The restoration of the San 
Joaquin and the government's commitment to reintroduce and rebuild 
historic salmon populations provide a rare bright spot for these 
communities.

[[Page 22739]]

  In addition to congratulating the parties for making a settlement 
that will enable the long-sought restoration of the San Joaquin River, 
I am mindful of and remain committed to progress in implementing and 
funding the December 19, 2000, Trinity River restoration record of 
decision and the Hoopa Valley Tribe's comanagement of the decision's 
important goal of restoring the fishery resources that the United 
States holds in trust for the tribe.
  Support of this agreement is almost as far reaching as its benefits. 
This historic agreement would not have been possible without the 
participation of a remarkably broad group of agencies, stakeholders and 
legislators, reaching far beyond the settling parties. The Department 
of the Interior, the State of California, the Friant Water Users 
Authority, the Natural Resources Defense Council on behalf of 13 other 
environmental organizations and countless other stakeholders came 
together and spent countless hours with legislators in Washington to 
ensure that we found a solution that the large majority of those 
affected could support.
  Last month, California voters showed their support by approving 
Propositions 84 and 1E that will help pay for the settlement by 
committing at least $100 million and likely $200 million or more toward 
the restoration costs. Indeed, this legislation includes a diverse mix 
of approximately $200 million in direct Water User payments, new State 
payments, $240 million in dedicated Friant Central Valley Project 
capital repayments, and future Federal appropriations limited to $250 
million. This mix of funding sources is intended to ensure that the 
river restoration program will be sustainable over time and truly a 
joint effort of Federal, State and local agencies.
  I would like to emphasize that the Federal funding in the bill is for 
implementation of both the restoration goal to reestablish a salmon 
fishery in the river, and the water management goal to avoid or 
minimize water supply losses supplied by Friant Water Districts. It is 
important to recognize that these efforts are of equal importance.
  At the end of the day, I believe that this agreement is something 
that we can all feel very proud of, and I urge my colleagues in the 
Senate to move quickly to approve this legislation and provide the 
administration the authorization it needs to fully carry out its legal 
obligations and the extensive restoration opportunities under the 
settlement.
  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. 4084

       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 ``San Joaquin River 
     Restoration Settlement Act''.

     SEC. 2. PURPOSE.

       The purpose of this Act is to authorize implementation of 
     the Stipulation of Settlement dated September 13, 2006 
     (referred to in this Act as the ``Settlement''), in the 
     litigation entitled NATURAL RESOURCES DEFENSE COUNCIL, et al. 
     v. KIRK RODGERS, et al., United States District Court, 
     Eastern District of California, No. CIV. S-88-1658-LKK/GGH.

     SEC. 3. DEFINITIONS.

       In this Act, the terms ``Friant Division long-term 
     contractors'', ``Interim Flows'', ``Restoration Flows'', 
     ``Recovered Water Account'', ``Restoration Goal'', and 
     ``Water Management Goal'' have the meanings given the terms 
     in the Settlement.

     SEC. 4. IMPLEMENTATION OF SETTLEMENT.

       (a) In General.--The Secretary of the Interior (referred to 
     in this Act as the ``Secretary'') is hereby authorized and 
     directed to implement the terms and conditions of the 
     Settlement in cooperation with the State of California, 
     including the following measures as these measures are 
     prescribed in the Settlement:
       (1) Design and construct channel and structural 
     improvements as described in paragraph 11 of the Settlement, 
     provided, however, that the Secretary shall not make or fund 
     any such improvements to facilities or property of the State 
     of California without the approval of the State of California 
     and the State's agreement in 1 or more Memoranda of 
     Understanding to participate where appropriate.
       (2) Modify Friant Dam operations so as to provide 
     Restoration Flows and Interim Flows.
       (3) Acquire water, water rights, or options to acquire 
     water as described in paragraph 13 of the Settlement, 
     provided, however, such acquisitions shall only be made from 
     willing sellers and not through eminent domain.
       (4) Implement the terms and conditions of paragraph 16 of 
     the Settlement related to recirculation, recapture, reuse, 
     exchange, or transfer of water released for Restoration Flows 
     or Interim Flows, for the purpose of accomplishing the Water 
     Management Goal of the Settlement, subject to--
       (A) applicable provisions of California water law;
       (B) the Secretary's use of Central Valley Project 
     facilities to make Project water (other than water released 
     from Friant Dam pursuant to the Settlement) and water 
     acquired through transfers available to existing south-of-
     Delta Central Valley Project contractors; and
       (C) the Secretary's performance of the Agreement of 
     November 24, 1986, between the United States of America and 
     the Department of Water Resources of the State of California 
     for the coordinated operation of the Central Valley Project 
     and the State Water Project as authorized by Congress in 
     section 2(d) of the Act of August 26, 1937 (50 Stat. 850, 100 
     Stat. 3051), including any agreement to resolve conflicts 
     arising from said Agreement.
       (5) Develop and implement the Recovered Water Account as 
     specified in paragraph 16(b) of the Settlement, including the 
     pricing and payment crediting provisions described in 
     paragraph 16(b)(3) of the Settlement, provided that all other 
     provisions of Federal reclamation law shall remain 
     applicable.
       (b) Agreements.--
       (1) Agreements with the state.--In order to facilitate or 
     expedite implementation of the Settlement, the Secretary is 
     authorized and directed to enter into appropriate agreements, 
     including cost sharing agreements, with the State of 
     California.
       (2) Other agreements.--The Secretary is authorized to enter 
     into contracts, memoranda of understanding, financial 
     assistance agreements, cost sharing agreements, and other 
     appropriate agreements with State, tribal, and local 
     governmental agencies, and with private parties, including 
     agreements related to construction, improvement, and 
     operation and maintenance of facilities, subject to any terms 
     and conditions that the Secretary deems necessary to achieve 
     the purposes of the Settlement.
       (c) Acceptance and Expenditure of Non-Federal Funds.--The 
     Secretary is authorized to accept and expend non-Federal 
     funds in order to facilitate implementation of the 
     Settlement.
       (d) Mitigation of Impacts.--Prior to the implementation of 
     decisions or agreements to construct, improve, operate, or 
     maintain facilities that the Secretary determines are needed 
     to implement the Settlement, the Secretary shall identify--
       (1) the impacts associated with such actions; and
       (2) the measures which shall be implemented to mitigate 
     impacts on adjacent and downstream water users and 
     landowners.
       (e) Design and Engineering Studies.--The Secretary is 
     authorized to conduct any design or engineering studies that 
     are necessary to implement the Settlement.
       (f) Effect on Contract Water Allocations.--Except as 
     otherwise provided in this section, the implementation of the 
     Settlement and the reintroduction of California Central 
     Valley Spring Run Chinook salmon pursuant to the Settlement 
     and section 10, shall not result in the involuntary reduction 
     in contract water allocations to Central Valley Project long-
     term contractors, other than Friant Division long-term 
     contractors.
       (g) Effect on Existing Water Contracts.--Except as provided 
     in the Settlement and this Act, nothing in this Act shall 
     modify or amend the rights and obligations of the parties to 
     any existing water service, repayment, purchase or exchange 
     contract.

     SEC. 5. ACQUISITION AND DISPOSAL OF PROPERTY; TITLE TO 
                   FACILITIES.

       (a) Title to Facilities.--Unless acquired pursuant to 
     subsection (b), title to any facility or facilities, stream 
     channel, levees, or other real property modified or improved 
     in the course of implementing the Settlement authorized by 
     this Act, and title to any modifications or improvements of 
     such facility or facilities, stream channel, levees, or other 
     real property--
       (1) shall remain in the owner of the property; and
       (2) shall not be transferred to the United States on 
     account of such modifications or improvements.
       (b) Acquisition of Property.--
       (1) In general.--The Secretary is authorized to acquire 
     through purchase from willing sellers any property, interests 
     in property, or options to acquire real property needed to 
     implement the Settlement authorized by this Act.
       (2) Applicable law.--The Secretary is authorized, but not 
     required, to exercise all of the authorities provided in 
     section 2 of the Act of August 26, 1937 (50 Stat. 844, 
     chapter 832), to carry out the measures authorized in this 
     section and section 4.
       (c) Disposal of Property.--
       (1) In general.--Upon the Secretary's determination that 
     retention of title to property or interests in property 
     acquired pursuant to this Act is no longer needed to be held

[[Page 22740]]

     by the United States for the furtherance of the Settlement, 
     the Secretary is authorized to dispose of such property or 
     interest in property on such terms and conditions as the 
     Secretary deems appropriate and in the best interest of the 
     United States, including possible transfer of such property 
     to the State of California.
       (2) Right of first refusal.--In the event the Secretary 
     determines that property acquired pursuant to this Act 
     through the exercise of its eminent domain authority is no 
     longer necessary for implementation of the Settlement, the 
     Secretary shall provide a right of first refusal to the 
     property owner from whom the property was initially acquired, 
     or his or her successor in interest, on the same terms and 
     conditions as the property is being offered to other parties.
       (3) Disposition of proceeds.--Proceeds from the disposal by 
     sale or transfer of any such property or interests in such 
     property shall be deposited in the fund established by 
     section 9(c).

     SEC. 6. COMPLIANCE WITH APPLICABLE LAW.

       (a) Applicable Law.--
       (1) In general.--In undertaking the measures authorized by 
     this Act, the Secretary and the Secretary of Commerce shall 
     comply with all applicable Federal and State laws, rules, and 
     regulations, including the National Environmental Policy Act 
     of 1969 (42 U.S.C. 4321 et seq.) and the Endangered Species 
     Act of 1973 (16 U.S.C. 1531 et seq.), as necessary.
       (2) Environmental reviews.--The Secretary and the Secretary 
     of Commerce are authorized and directed to initiate and 
     expeditiously complete applicable environmental reviews and 
     consultations as may be necessary to effectuate the purposes 
     of the Settlement.
       (b) Effect on State Law.--Nothing in this Act shall preempt 
     State law or modify any existing obligation of the United 
     States under Federal reclamation law to operate the Central 
     Valley Project in conformity with State law.
       (c) Use of Funds for Environmental Reviews.--
       (1) Definition of environmental review.--For purposes of 
     this subsection, the term ``environmental review'' includes 
     any consultation and planning necessary to comply with 
     subsection (a).
       (2) Participation in environmental review process.--In 
     undertaking the measures authorized by section 4, and for 
     which environmental review is required, the Secretary may 
     provide funds made available under this Act to affected 
     Federal agencies, State agencies, local agencies, and Indian 
     tribes if the Secretary determines that such funds are 
     necessary to allow the Federal agencies, State agencies, 
     local agencies, or Indian tribes to effectively participate 
     in the environmental review process.
       (3) Limitation.--Funds may be provided under paragraph (2) 
     only to support activities that directly contribute to the 
     implementation of the terms and conditions of the Settlement.
       (d) Nonreimbursable Funds.--The United States' share of the 
     costs of implementing this Act shall be nonreimbursable under 
     Federal reclamation law, provided that nothing in this 
     subsection shall limit or be construed to limit the use of 
     the funds assessed and collected pursuant to sections 
     3406(c)(1) and 3407(d)(2) of the Reclamation Projects 
     Authorization and Adjustment Act of 1992 (Public Law 102-575; 
     106 Stat. 4721, 4727), for implementation of the Settlement, 
     nor shall it be construed to limit or modify existing or 
     future Central Valley Project Ratesetting Policies.

     SEC. 7. COMPLIANCE WITH CENTRAL VALLEY PROJECT IMPROVEMENT 
                   ACT.

       Congress hereby finds and declares that the Settlement 
     satisfies and discharges all of the obligations of the 
     Secretary contained in section 3406(c)(1) of the Reclamation 
     Projects Authorization and Adjustment Act of 1992 (Public Law 
     102-575; 106 Stat. 4721), provided, however, that--
       (1) the Secretary shall continue to assess and collect the 
     charges provided in section 3406(c)(1) of the Reclamation 
     Projects Authorization and Adjustment Act of 1992 (Public Law 
     102-575; 106 Stat. 4721), as provided in the Settlement and 
     section 9(d); and
       (2) those assessments and collections shall continue to be 
     counted towards the requirements of the Secretary contained 
     in section 3407(c)(2) of the Reclamation Projects 
     Authorization and Adjustment Act of 1992 (Public Law 102-575; 
     106 Stat. 4726).

     SEC. 8. NO PRIVATE RIGHT OF ACTION.

       (a) In General.--Nothing in this Act confers upon any 
     person or entity not a party to the Settlement a private 
     right of action or claim for relief to interpret or enforce 
     the provisions of this Act or the Settlement.
       (b) Applicable Law.--This section shall not alter or 
     curtail any right of action or claim for relief under any 
     other applicable law.

     SEC. 9. APPROPRIATIONS; SETTLEMENT FUND.

       (a) Implementation Costs.--
       (1) In general.--The costs of implementing the Settlement 
     shall be covered by payments or in kind contributions made by 
     Friant Division contractors and other non-Federal parties, 
     including the funds provided in paragraphs (1) through (5) of 
     subsection (c), estimated to total $440,000,000, of which the 
     non-Federal payments are estimated to total $200,000,000 (at 
     October 2006 price levels) and the amount from repaid Central 
     Valley Project capital obligations is estimated to total 
     $240,000,000, the additional Federal appropriation of 
     $250,000,000 authorized pursuant to subsection (b)(1), and 
     such additional funds authorized pursuant to subsection 
     (b)(2); provided however, that the costs of implementing the 
     provisions of section 4(a)(1) shall be shared by the State of 
     California pursuant to the terms of a Memorandum of 
     Understanding executed by the State of California and the 
     Parties to the Settlement on September 13, 2006, which 
     includes at least $110,000,000 of State funds.
       (2) Additional agreements.--
       (A) In general.--The Secretary shall enter into 1 or more 
     agreements to fund or implement improvements on a project-by-
     project basis with the State of California.
       (B) Requirements.--Any agreements entered into under 
     subparagraph (A) shall provide for recognition of either 
     monetary or in-kind contributions toward the State of 
     California's share of the cost of implementing the provisions 
     of section 4(a)(1).
       (3) Limitation.--Except as provided in the Settlement, to 
     the extent that costs incurred solely to implement this 
     Settlement would not otherwise have been incurred by any 
     entity or public or local agency or subdivision of the State 
     of California, such costs shall not be borne by any such 
     entity, agency, or subdivision of the State of California, 
     unless such costs are incurred on a voluntary basis.
       (b) Authorization of Appropriations.--
       (1) In general.--In addition to the funds provided in 
     paragraphs (1) through (5) of subsection (c), there are also 
     authorized to be appropriated not to exceed $250,000,000 (at 
     October 2006 price levels) to implement this Act and the 
     Settlement, to be available until expended; provided however, 
     that the Secretary is authorized to spend such additional 
     appropriations only in amounts equal to the amount of funds 
     deposited in the Fund (not including payments under 
     subsection (c)(2), proceeds under subsection (c)(3) other 
     than an amount equal to what would otherwise have been 
     deposited under subsection (c)(1) in the absence of issuance 
     of the bond, and proceeds under subsection (c)(4)), the 
     amount of in-kind contributions, and other non-Federal 
     payments actually committed to the implementation of this Act 
     or the Settlement.
       (2) Other funds.--The Secretary is authorized to use monies 
     from the Fund created under section 3407 of the Reclamation 
     Projects Authorization and Adjustment Act of 1992 (Public Law 
     102-575; 106 Stat. 4727) for purposes of this Act.
       (c) Fund.--There is hereby established within the Treasury 
     of the United States a fund, to be known as the ``San Joaquin 
     River Restoration Fund'', into which the following shall be 
     deposited and used solely for the purpose of implementing the 
     Settlement, to be available for expenditure without further 
     appropriation:
       (1) Subject to subsection (d), at the beginning of the 
     fiscal year following enactment of this Act, all payments 
     received pursuant to section 3406(c)(1) of the Reclamation 
     Projects Authorization and Adjustment Act of 1992 (Public Law 
     102-575; 106 Stat. 4721).
       (2) Subject to subsection (d), the capital component (not 
     otherwise needed to cover operation and maintenance costs) of 
     payments made by Friant Division long-term contractors 
     pursuant to long-term water service contracts beginning the 
     first fiscal year after the date of enactment of this Act. 
     The capital repayment obligation of such contractors under 
     such contracts shall be reduced by the amount paid pursuant 
     to this paragraph and the appropriate share of the existing 
     Federal investment in the Central Valley Project to be 
     recovered by the Secretary pursuant to Public Law 99-546 (100 
     Stat. 3050) shall be reduced by an equivalent sum.
       (3) Proceeds from a bond issue, federally-guaranteed loan, 
     or other appropriate financing instrument, to be issued or 
     entered into by an appropriate public agency or subdivision 
     of the State of California pursuant to subsection (d)(2).
       (4) Proceeds from the sale of water pursuant to the 
     Settlement, or from the sale of property or interests in 
     property as provided in section 5.
       (5) Any non-Federal funds, including State cost-sharing 
     funds, contributed to the United States for implementation of 
     the Settlement, which the Secretary may expend without 
     further appropriation for the purposes for which contributed.
       (d) Guaranteed Loans and Other Financing Instruments.--
       (1) In general.--The Secretary is authorized to enter into 
     agreements with appropriate agencies or subdivisions of the 
     State of California in order to facilitate a bond issue, 
     federally-guaranteed loan, or other appropriate financing 
     instrument, for the purpose of implementing this Settlement.
       (2) Requirements.--If the Secretary and an appropriate 
     agency or subdivision of the State of California enter into 
     such an agreement, and if such agency or subdivision issues 1 
     or more revenue bonds, procures a federally secured loan, or 
     other appropriate

[[Page 22741]]

     financing to fund implementation of the Settlement, and if 
     such agency deposits the proceeds received from such bonds, 
     loans, or financing into the Fund pursuant to subsection 
     (c)(3), monies specified in paragraphs (1) and (2) of 
     subsection (c) shall be provided by the Friant Division long-
     term contractors directly to such public agency or 
     subdivision of the State of California to repay the bond, 
     loan or financing rather than into the Fund.
       (3) Disposition of payments.--After the satisfaction of any 
     such bond, loan, or financing, the payments specified in 
     paragraphs (1) and (2) of subsection (c) shall be paid 
     directly into the Fund authorized by this section.
       (e) Limitation on Contributions.--Payments made by long-
     term contractors who receive water from the Friant Division 
     and Hidden and Buchanan Units of the Central Valley Project 
     pursuant to sections 3406(c)(1) and 3407(d)(2) of the 
     Reclamation Projects Authorization and Adjustment Act of 1992 
     (Public Law 102-575; 106 Stat. 4721, 4727) and payments made 
     pursuant to paragraph 16(b)(3) of the Settlement and 
     subsection (c)(2) shall be the limitation of such entities' 
     direct financial contribution to the Settlement, subject to 
     the terms and conditions of paragraph 21 of the Settlement.
       (f) No Additional Expenditures Required.--Nothing in this 
     Act shall be construed to require a Federal official to 
     expend Federal funds not appropriated by Congress, or to seek 
     the appropriation of additional funds by Congress, for the 
     implementation of the Settlement.
       (g) Reach 4B.--
       (1) Study.--
       (A) In general.--In accordance with the Settlement and the 
     Memorandum of Understanding executed pursuant to paragraph 6 
     of the Settlement, the Secretary shall conduct a study that 
     specifies--
       (i) the costs of undertaking any work required under 
     paragraph 11(a)(3) of the Settlement to increase the capacity 
     of Reach 4B prior to reinitiation of Restoration Flows;
       (ii) the impacts associated with reinitiation of such 
     flows; and
       (iii) measures that shall be implemented to mitigate 
     impacts.
       (B) Deadline.--The study under subparagraph (A) shall be 
     completed prior to restoration of any flows other than 
     Interim Flows.
       (2) Report.--
       (A) In general.--The Secretary shall file a report with 
     Congress not later than 90 days after issuing a 
     determination, as required by the Settlement, on whether to 
     expand channel conveyance capacity to 4500 cubic feet per 
     second in Reach 4B of the San Joaquin River, or use an 
     alternative route for pulse flows, that--
       (i) explains whether the Secretary has decided to expand 
     Reach 4B capacity to 4500 cubic feet per second; and
       (ii) addresses the following matters:

       (I) The basis for the Secretary's determination, whether 
     set out in environmental review documents or otherwise, as to 
     whether the expansion of Reach 4B would be the preferable 
     means to achieve the Restoration Goal as provided in the 
     Settlement, including how different factors were assessed 
     such as comparative biological and habitat benefits, 
     comparative costs, relative availability of State cost-
     sharing funds, and the comparative benefits and impacts on 
     water temperature, water supply, private property, and local 
     and downstream flood control.
       (II) The Secretary's final cost estimate for expanding 
     Reach 4B capacity to 4500 cubic feet per second, or any 
     alternative route selected, as well as the alternative cost 
     estimates provided by the State, by the Restoration 
     Administrator, and by the other parties to the Settlement.
       (III) The Secretary's plan for funding the costs of 
     expanding Reach 4B or any alternative route selected, whether 
     by existing Federal funds provided under this Act, by non-
     Federal funds, by future Federal appropriations, or some 
     combination of such sources.

       (B) Determination required.--The Secretary shall, to the 
     extent feasible, make the determination in subparagraph (A) 
     prior to undertaking any substantial construction work to 
     increase capacity in Reach 4B.
       (3) Costs.--If the Secretary's estimated Federal cost for 
     expanding Reach 4B in paragraph (2), in light of the 
     Secretary's funding plan set out in paragraph (2), would 
     exceed the remaining Federal funding authorized by this Act 
     (including all funds reallocated, all funds dedicated, and 
     all new funds authorized by this Act and separate from all 
     commitments of State and other non-Federal funds and in-kind 
     commitments), then before the Secretary commences actual 
     construction work in Reach 4B (other than planning, design, 
     feasibility, or other preliminary measures) to expand 
     capacity to 4500 cubic feet per second to implement this 
     Settlement, Congress must have increased the applicable 
     authorization ceiling provided by this Act in an amount at 
     least sufficient to cover the higher estimated Federal costs.

     SEC. 10. CALIFORNIA CENTRAL VALLEY SPRING RUN CHINOOK SALMON.

       (a) Finding.--Congress finds that the implementation of the 
     Settlement to resolve 18 years of contentious litigation 
     regarding restoration of the San Joaquin River and the 
     reintroduction of the California Central Valley Spring Run 
     Chinook salmon is a unique and unprecedented circumstance 
     that requires clear expressions of Congressional intent 
     regarding how the provisions of the Endangered Species Act of 
     1973 (16 U.S.C. 1531 et seq.) are utilized to achieve the 
     goals of restoration of the San Joaquin River and the 
     successful reintroduction of California Central Valley Spring 
     Run Chinook salmon.
       (b) Reintroduction in the San Joaquin River.--California 
     Central Valley Spring Run Chinook salmon shall be 
     reintroduced in the San Joaquin River below Friant Dam 
     pursuant to section 10(j) of the Endangered Species Act of 
     1973 (16 U.S.C. 1539(j)) and the Settlement, provided that 
     the Secretary of Commerce finds that a permit for the 
     reintroduction of California Central Valley Spring Run 
     Chinook salmon may be issued pursuant to section 10(a)(1)(A) 
     of the Endangered Species Act of 1973 (16 U.S.C. 
     1539(a)(1)(A)).
       (c) Final Rule.--
       (1) Definition of third party.--For the purpose of this 
     subsection, the term ``third party'' means persons or 
     entities diverting or receiving water pursuant to applicable 
     State and Federal law and shall include Central Valley 
     Project contractors outside of the Friant Division of the 
     Central Valley Project and the State Water Project.
       (2) Issuance.--The Secretary of Commerce shall issue a 
     final rule pursuant to section 4(d) of the Endangered Species 
     Act of 1973 (16 U.S.C. 1533(d)) governing the incidental take 
     of reintroduced California Central Valley Spring Run Chinook 
     salmon prior to the reintroduction.
       (3) Required components.--The rule issued under paragraph 
     (2) shall provide that the reintroduction will not impose 
     more than de minimis: water supply reductions, additional 
     storage releases, or bypass flows on unwilling third parties 
     due to such reintroduction.
       (4) Applicable law.--Nothing in this section--
       (A) diminishes the statutory or regulatory protections 
     provided in the Endangered Species Act for any species listed 
     pursuant to section 4 of the Endangered Species Act of 1973 
     (16 U.S.C. 1533) other than the reintroduced population of 
     California Central Valley Spring Run Chinook salmon, 
     including protections pursuant to existing biological 
     opinions or new biological opinions issued by the Secretary 
     or Secretary of Commerce; or
       (B) precludes the Secretary or Secretary of Commerce from 
     imposing protections under the Endangered Species Act of 1973 
     (16 U.S.C. 1531 et seq.) for other species listed pursuant to 
     section 4 of that Act (16 U.S.C. 1533) because those 
     protections provide incidental benefits to such reintroduced 
     California Central Valley Spring Run Chinook salmon.
       (d) Report.--
       (1) In general.--Not later than December 31, 2024, the 
     Secretary of Commerce shall report to Congress on the 
     progress made on the reintroduction set forth in this section 
     and the Secretary's plans for future implementation of this 
     section.
       (2) Inclusions.--The report under paragraph (1) shall 
     include--
       (A) an assessment of the major challenges, if any, to 
     successful reintroduction;
       (B) an evaluation of the effect, if any, of the 
     reintroduction on the existing population of California 
     Central Valley Spring Run Chinook salmon existing on the 
     Sacramento River or its tributaries; and
       (C) an assessment regarding the future of the 
     reintroduction.
       (e) FERC Projects.--
       (1) In general.--With regard to California Central Valley 
     Spring Run Chinook salmon reintroduced pursuant to the 
     Settlement, the Secretary of Commerce shall exercise its 
     authority under section 18 of the Federal Power Act (16 
     U.S.C. 811) by reserving its right to file prescriptions in 
     proceedings for projects licensed by the Federal Energy 
     Regulatory Commission on the Calaveras, Stanislaus, Tuolumne, 
     Merced, and San Joaquin rivers and otherwise consistent with 
     subsection (c) until after the expiration of the term of the 
     Settlement, December 31, 2025, or the expiration of the 
     designation made pursuant to subsection (b), whichever ends 
     first.
       (2) Effect of subsection.--Nothing in this subsection shall 
     preclude the Secretary of Commerce from imposing 
     prescriptions pursuant to section 18 of the Federal Power Act 
     (16 U.S.C. 811) solely for other anadromous fish species 
     because those prescriptions provide incidental benefits to 
     such reintroduced California Central Valley Spring Run 
     Chinook salmon.
       (f) Effect of Section.--Nothing in this section is intended 
     or shall be construed--
       (1) to modify the Endangered Species Act of 1973 (16 U.S.C. 
     1531 et seq.) or the Federal Power Act (16 U.S.C. 791a et 
     seq.); or
       (2) to establish a precedent with respect to any other 
     application of the Endangered Species Act of 1973 (16 U.S.C. 
     1531 et seq.) or the Federal Power Act (16 U.S.C. 791a et 
     seq.).
                                 ______
                                 
      By Mr. DeWINE:
  S. 4086. A bill to improve data collection efforts with respect to 
the safety of pregnant women and unborn children in motor vehicle 
crashes, provide for research and development of appropriate 
countermeasures, educate the

[[Page 22742]]

public regarding motor vehicle safety risks affecting pregnant women 
and unborn children, and for other purposes; to the Committee on 
Commerce, Science, and Transportation.
  Mr. DeWINE. Mr. President, during my 12 years in the Senate, I have 
always fought to increase our Nation's commitment to children's health 
and safety. One of the areas where I have had the privilege of working 
together with Democrats and Republicans on children's issues is highway 
safety. Whether the matter at hand was making school buses safer or 
enacting new motor vehicle safety standards that protect small children 
in crashes, I have always been fortunate to find fellow Senators 
committed to crafting legislation that will make a difference in 
children's lives.
  One of the things I have learned over the years is that the research, 
testing, and public awareness programs operated by the National Highway 
Traffic Safety Administration--NHTSA--play a major role helping prevent 
injuries and saving lives on our roads. We lose over 42,000 lives each 
year in motor vehicle crashes, but that total would be astronomically 
higher without the work done by NHTSA and its partners. As vehicles 
have changed, technologies have matured, and the safety challenges 
facing the driving public have shifted over time, NHTSA has responded 
by instituting new programs. Sometimes, however, it takes a little 
action by Congress to get NHTSA moving on these important safety 
objectives.
  Today, I rise to introduce a measure that I hope my colleagues will 
consider in the future as they continue to work on highway safety 
issues. I also hope that this bill might spur additional action by 
NHTSA.
  In speaking with leading safety advocates, I have come to understand 
just how significant the safety challenges are for pregnant women and 
their unborn children in motor vehicle crashes. Yet despite these great 
challenges and the importance we all place on ensuring maternal health 
and safety, we know very little about the way crash forces affect 
mothers and their unborn children over both the short-term and long-
term. While university researchers have begun to document some of the 
chief safety challenges facing pregnant mothers, we need to do more to 
fully understand these issues and to develop ways of applying what we 
have learned in manufacturing vehicles that are safer for pregnant 
women and their unborn children.
  Additionally, we need to do a better job communicating the immediate 
and lifelong safety risks associated with motor vehicle crashes to 
pregnant mothers so that they can do everything possible to ensure not 
only their own health, but that of their babies. Sometimes, these steps 
may be as simple as making sure that safety belts are worn and 
positioned properly. At some point, technologies may become available 
on the market designed specifically to cater to the motor vehicle 
safety needs of pregnant women.
  To achieve these goals and ultimately to prevent injuries and save 
lives, we need NHTSA to act and we need to provide new resources for 
research and testing. The bill I am introducing today does precisely 
that.
  The Maternal Motor Vehicle Crash Safety Act of 2006 addresses these 
issues in a number of ways. First, the bill presents findings defining 
the challenges facing pregnant women and their unborn children in motor 
vehicle crashes. I particularly want to thank Dr. Hank Weiss of the 
University of Pittsburgh for his assistance in bringing this important 
research to my attention.
  Second, the bill contains sections providing incentives for states to 
link various databases in a way that will lead to a better 
understanding of the number of mothers and babies that are impacted by 
motor vehicle crashes each year and what the long-term health impacts 
are for children who were involved in crashes before being born. 
Furthermore, the bill sets several high priority research areas for 
NHTSA, including an investigation into computer modeling systems and 
biofidelic crash-test dummies capable of simulating a pregnant woman 
and her child during dangerous crashes. Sadly, we have functional 
dummies that accurately simulate men, women, and children--but none for 
pregnant women.
  I strongly urge my colleagues to take up and pass this legislation 
during the 110th Congress. Members of the Senate and leaders at NHTSA 
work hard every year to do their best to improve highway safety here in 
the United States, and I believe the measures outlined in this bill 
have the potential to make a lasting contribution to those efforts in 
the years ahead.
  Mr. President, I ask unanimous consent that the text of the bill, the 
Maternal Motor Vehicle Crash Safety Act of 2006, be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 4086

       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 ``Maternal Motor Vehicle Crash 
     Safety Act of 2006''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the National Highway Traffic Safety 
     Administration.
       (2) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means the Committee 
     on Appropriations and Committee on Commerce, Science, and 
     Transportation of the Senate and the Committee on 
     Appropriations and the Committee on Energy and Commerce of 
     the House of Representatives.
       (3) Biofidelic.--The term ``biofidelic'' means having the 
     property of responding to and being impacted by crash and 
     other external forces in a manner directly consistent with 
     the way in which a live human being would respond to and be 
     impacted by such forces.
       (4) Data linkage system.--The term ``data linkage system'' 
     means an information system that is capable of accurately 
     tracking adverse health effects and birth outcomes for 
     pregnant women who are occupants of a motor vehicle that is 
     involved in a crash and the unborn children of such women, 
     through the connection and analysis of multiple data sources.
       (5) Unborn child.--The term ``unborn child'' means a member 
     of the species homo sapiens, at any stage of development, who 
     is carried in the womb.

     SEC. 3. FINDINGS.

       Congress makes the following findings:
       (1) Injuries are the leading cause of pregnancy-associated 
     deaths in the United States.
       (2) Motor vehicle crashes are the leading cause of injury 
     deaths in women of reproductive age and the leading cause of 
     injury hospitalizations among pregnant women.
       (3) Studies have indicated that motor vehicles are 
     estimated to account for up to 80 percent of injury related 
     deaths among unborn children.
       (4) Transportation Research Board publications indicate 
     that deaths among unborn children due to motor vehicle 
     crashes are more frequent than several notable fatal 
     childhood injuries, including bicycle related deaths in 
     children aged 0 through 15, firearm related deaths in 
     children aged 0 through 9, and motor vehicle crash related 
     deaths in children aged 0 through 1.
       (5) Studies suggest that approximately 3 percent of all 
     babies born in the United States are involved in a motor 
     vehicle crash while in utero.
       (6) Studies have shown that elevated risks of birth-related 
     threats and obstetric complications following crashes 
     involving pregnant women include--
       (A) premature childbirth;
       (B) low birth weight;
       (C) placental injury;
       (D) uterine rupture; and
       (E) amniotic rupture.
       (7) Despite advances in vehicle safety, pregnant women have 
     not received the special attention and consideration needed 
     to understand, reduce, and prevent the risks of adverse 
     pregnancy outcomes related to crashes.
       (8) There is a need for more research and application using 
     anthropometric test devices and computerized modeling systems 
     that represent pregnant women during all stages of pregnancy.
       (9) During pregnancy, the risks of traumatic injury to a 
     woman is shared by the woman's unborn child. Assessing the 
     magnitude and characteristics of those risks through data 
     linkage systems, comparing the risks to other injuries and 
     diseases, and reducing them, are important unmet challenges 
     for improving maternal and child health.
       (10) A better understanding is needed about what can happen 
     during, and after, a pregnant woman is involved in a motor 
     vehicle crash. This includes the effects of a crash on

[[Page 22743]]

     the mother, the unborn child, and the delicate physiological 
     balance between the mother and child that separates healthy 
     from unhealthy pregnancies, including the effects of maternal 
     physiologic adaptations to trauma, fluid loss and shock, 
     effects from maternal stress, effects from diagnostic 
     regimens, medical or surgical procedures, or the wide variety 
     of prescription medicines, and other medication taken by the 
     mother.
       (11) Despite the importance of the health of mothers and 
     unborn children involved in motor vehicle crashes, agencies 
     and data linkage systems responsible for tracking motor 
     vehicle injuries, deaths, and other measures of adverse 
     outcome rarely capture pregnancy status.
       (12) Existing data collection and analysis systems 
     generally do not count unborn children involved in motor 
     vehicle crashes and do not follow them after their birth to 
     ascertain the effects of the crash on long-term neuro-
     developmental and functional outcomes.

     SEC. 4. SENSE OF CONGRESS ON IMPROVEMENTS TO THE NATIONAL 
                   AUTOMOTIVE SAMPLING SYSTEM CRASHWORTHINESS DATA 
                   SYSTEM.

       It is the sense of Congress that the Administrator--
       (1) should continue to include in the National Automotive 
     Sampling System Crashworthiness Data System maintained by the 
     Administrator data related to motor vehicle crashes that 
     involved a pregnant women; and
       (2) should identify other means to advance the current 
     level of understanding regarding the number, nature, and 
     impact of motor vehicle crashes involving pregnant women and 
     their unborn children through data collection, data linkage 
     systems, and analysis systems.

     SEC. 5. GRANTS FOR DATA LINKAGE SYSTEMS PROGRAMS.

       (a) In General.--The Administrator shall, in consultation 
     with appropriate officials of State agencies or public health 
     organizations, carry out a program to provide grants and 
     other incentives, including technical assistance to eligible 
     entities for the purpose described in subsection (b).
       (b) Purpose.--A grant or other incentive provided under 
     this section shall be used to promote the development of data 
     linkage systems described in subsection (e).
       (c) Eligible Entity.--In this section, the term ``eligible 
     entity'' means an academic, public health, or transportation 
     safety organization or a State or local government agency 
     that the Administrator determines is appropriate to receive a 
     grant or incentive under this section.
       (d) Application and Award Process.--
       (1) Applications.--Each eligible entity seeking a grant 
     under this section shall submit an application to the 
     Administrator at such time and in such manner as the 
     Administrator may require.
       (2) Awards.--Not later than 180 days after the date of the 
     enactment of this Act, the Administrator shall establish--
       (A) the criteria for awarding a grant or incentive under 
     this section; and
       (B) a competitive, merit-based process to select 
     applications to receive a grant or incentive under this 
     section.
       (3) Publication.--Not later than 180 days after the date of 
     the enactment of this Act, the Administrator shall publish in 
     the Federal Register the criteria and process described in 
     paragraph (2).
       (e) Program Structure.--The data linkage systems eligible 
     to receive assistance under this section are systems that use 
     the following sources:
       (1) State and local vital statistics databases, including 
     birth, infant, and death records.
       (2) State and local crash and driver's license records.
       (3) Other computerized health records as available, 
     including emergency medical services reports and hospital and 
     emergency room admission and discharge records.
       (f) Existing Data Systems.--To the maximum extent possible, 
     the Administrator shall integrate the grant and incentive 
     program carried out under this section with the existing 
     State specific Crash Outcome Data Evaluation Systems carried 
     out by the Administrator to utilize the capabilities, linkage 
     expertise, and organizational relationships of such Systems 
     to provide a foundation for improving the tracking of adverse 
     health effects and birth outcomes for pregnant women who are 
     occupants of a motor vehicle at the time of a crash and their 
     unborn children.
       (g) Data Security and Privacy.--In carrying out this 
     section, the Administrator and any eligible entity selected 
     to receive a grant or incentive under this section for a data 
     linkage system shall ensure that personal identifiers and 
     other information utilized in that data linkage system 
     related to a specific individual is handled in a manner 
     consistent with all applicable Federal, State, and local laws 
     and regulations and to ensure the confidentiality of such 
     information, and in the manner necessary to prevent the 
     theft, manipulation, or other unlawful or unauthorized use of 
     personal information contained in data sources used for 
     linkage studies.
       (h) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated 
     $2,500,000 for each of the fiscal years 2007, 2008, 2009, and 
     2010 to carry out this section.
       (2) Availability of funds.--Funds appropriated pursuant to 
     the authorization of appropriations in paragraph (1) shall 
     remain available until expended.

     SEC. 6. SAFETY RESEARCH PROGRAM AND NATIONAL CONFERENCE.

       (a) Safety Research Program.--
       (1) Requirement to conduct.--The Administrator shall 
     conduct a research program as described in this section to 
     promote the health and safety of pregnant women who are 
     involved in motor vehicle crashes and of their unborn 
     children.
       (2) High priority research areas.--In carrying out the 
     research program under this section, the Administrator shall 
     place a high priority on conducting research to--
       (A) investigate methods to maximize the injury prevention 
     performance of standard 3-point safety belts for pregnant 
     women during all stages of pregnancy;
       (B) analyze the effectiveness of technologies designed to 
     modify or extend the safety performance of 3-point safety 
     belts for pregnant women across a range of pregnancy phases, 
     including technologies currently available in the 
     marketplace;
       (C) develop biofidelic, anthropometric test devices that 
     are representative of pregnant women during all stages of 
     pregnancy; and
       (D) develop biofidelic, computer models that are 
     representative of pregnant women during all stages of 
     pregnancy to aid in understanding crash forces relevant to 
     the safety of pregnant women and unborn children that may 
     include the utilization of existing modeling systems 
     developed by private and academic institutions, if 
     appropriate.
       (b) National Conference.--
       (1) Requirement to convene.--Not later than 18 months after 
     the date of the enactment of this Act, the Administrator, in 
     consultation with the heads of other appropriate Federal 
     agencies, shall convene a national research conference for 
     the purpose of identifying critical scientific issues for 
     research on the safety of pregnant women involved in motor 
     vehicle crashes and their unborn children.
       (2) Purpose of the conference.--The purpose of the 
     conference required by paragraph (1) shall be to establish 
     and prioritize a list of research questions to guide future 
     research related to the safety of pregnant women involved in 
     motor vehicle crashes and their unborn children.
       (3) Authority to partner with other organizations.--The 
     Administrator is authorized to carry out the conference 
     required by paragraph (1) in a partnership with organizations 
     recognized for expertise related to the research described in 
     paragraph (2).
       (c) Report Required.--Not later than 2 years after the date 
     of the enactment of this Act, the Administrator shall submit 
     to the appropriate congressional committees a report that 
     describes--
       (1) the research program carried out by the Administration 
     pursuant to subsection (a), including any findings or 
     conclusions associated with such research program; and
       (2) the priorities established at the national conference 
     required by subsection (b), plans for regulations or future 
     programs, or factors limiting the effectiveness of such 
     research.
       (d) Authorization of Appropriations.--
       (1) In general.--For each of the fiscal years 2007, 2008, 
     and 2009, there are authorized to be appropriated such sums 
     as necessary to carry out this section.
       (2) Availability of funds.--Funds appropriated pursuant to 
     the authorization of appropriations in paragraph (1) shall 
     remain available until expended.

     SEC. 7. PUBLIC OUTREACH AND EDUCATION.

       (a) In General.--The Administrator shall conduct a public 
     outreach and education program to increase awareness of the 
     unique safety risks associated with motor vehicle crashes for 
     pregnant women and the unborn children of such women and of 
     the methods available to reduce such risks. Such program 
     shall include making information regarding the injury-
     prevention value of proper safety belt and airbag use 
     available to the public.
       (b) Targeted Outreach.--The Administrator shall carry out 
     the program described in subsection (a) in a manner that 
     utilizes media and organizational partners to effectively 
     educate pregnant women, ensure an overall educational impact, 
     and efficiently utilize the program's resources.
       (c) Program Initiation and Duration.--The Administrator 
     shall initiate the program described in subsection (a) not 
     later than 12 months after the date of the enactment of this 
     Act, and shall maintain such program for not less than 24 
     months, subject to the availability of funds.

     SEC. 8. INCLUSION OF SAFETY DATA IN ANNUAL ASSESSMENT.

       (a) In General.--Subject to subsection (b), the 
     Administrator shall include a discussion of data regarding 
     the safety of pregnant women who are involved in motor 
     vehicle crashes and of their unborn children, including any 
     relevant trends in such data, in each of the Annual 
     Assessment of Motor Vehicle Crashes published by the National 
     Center for Statistics and Analysis of the National Highway 
     Traffic Safety Administration or an equivalent publication of 
     such Center.

[[Page 22744]]

       (b) Report to Congress.--If the Administrator determines 
     that including the information described in subsection (a) in 
     the Annual Assessment of Motor Vehicle Crashes or an 
     equivalent publication is not feasible, the Administrator 
     shall submit a report to the appropriate congressional 
     committees not later than 60 days after the date of the 
     release of such Annual Assessment or equivalent publication 
     that states the reasons that it was not feasible to include 
     such information and an analysis of the steps necessary to 
     make such information available in the future.
                                 ______
                                 
      By Mr. CRAPO (for himself, Mrs, Lincoln, Mr. Grassley, Mr. 
        Baucus, and Mr. Allard).
  S. 4087. A bill to amend the Internal Revenue Code to provide a tax 
credit to individuals who enter into agreements to protect the habitats 
of endangered and threatened species, and for other purposes; to the 
Committee on Finance.
  Mr. CRAPO. Mr. President, I rise today with my colleagues--Senator 
Lincoln from Arkansas, Senator Charles Grassley from Iowa, and Senator 
Max Baucus from Montana--to introduce the Endangered Species Recovery 
Act or ESRA. Nearly a year ago, Senator Lincoln and I introduced the 
Collaboration for the Recovery of the Endangered Species Act, or CRESA, 
an earlier bill to amend the Endangered Species Act or ESA. This new 
bill, which does not amend the current ESA, builds on ideas set forth 
in CRESA. It creates new policies that finance the recovery of 
endangered species by private landowners. ESRA makes it simpler for 
landowners to get involved in conservation and reduces the conflict 
often emanating from the ESA. It will be an important codification of 
much-needed incentives to help recover endangered species.
  Over 80 percent of endangered species live on private property. Under 
the current law, however, there are too few incentives and too many 
obstacles for private landowners to participate in conservation 
agreements to help recover species under the ESA. ESRA, like the 
voluntary farm bill conservation programs that inspired its creation, 
will make it more attractive for private landowners to contribute to 
the recovery of species under the ESA.
  This bill resulted from effective and inclusive collaboration among 
key stakeholders most affected by the implementation of the ESA. 
Landowner interests include farmers, ranchers, and those from the 
natural resource-using communities. For example, some current 
supporters of ESRA who contributed invaluable advice are the American 
Farm Bureau, the National Cattlemen's Beef Association, and the Society 
of American Foresters. This could not rightly be called a collaborative 
project without the vital and necessary input received from the 
Defenders of Wildlife, Environmental Defense and the National Wildlife 
Federation--key environmental groups that made significant 
contributions. And they further understand that landowners must be 
treated as allies to ensure success in the long-run for the 
conservation of habitat and species. Finally, while the genesis of this 
bill has many roots, a passionate catalyst was James Cummins of 
Mississippi Fish and Wildlife Foundation, whose passion for the 
outdoors provided inspiration to move these ideas forward.
  This collaborative expertise worked together to craft the ESRA, which 
provides new tax incentives for private landowners who voluntarily 
contribute to the recovery of endangered species. The tax credits will 
reimburse landowners for property rights affected by agreements that 
include conservation easements and costs incurred by species management 
plans. For landowners who limit their property rights through 
conservation easements, there will be 100 percent compensation of all 
costs. That percentage declines to 75 percent for 30-year easements and 
50 percent for cost-share agreements not encumbered by an easement.
  It is worth noting that this is the same formula that works 
successfully for farm bill programs such as the Wetlands Reserve 
Program. Private property owners are appropriately rewarded for crucial 
ecological services that they provide with their property. The public 
benefits from those actions which ensure biodiversity; instead of 
placing the financial burdens on the landowner, we ought to find 
appropriate ways to compensate them. While the primary returns from 
this investment are protection and recovery of endangered species, the 
public will also undoubtedly gain additional benefits such as 
aesthetically pleasing open space, combating invasive species and 
enhanced water quality.
  The legislation provides a list of options that give landowners a 
choice, and this is a crucial element for the success of this proposal. 
For some landowners, a conservation easement will be the most 
attractive option. Easements are flexible tools that can be tailored to 
each landowner and species' interests. An easement restricts certain 
activities, but it still works well with traditional rural activities 
such as ranching and farming. For agreements without easements, there 
is flexibility to do what is necessary for the concerned species 
without the need to sacrifice property rights into perpetuity.
  The tax credits provide essential funding that is necessary to 
respect private property rights. Wildlife should be an asset rather 
than a liability; which is how it has sometimes been viewed under the 
ESA. With wildlife becoming valuable to a landowner, those who may been 
reluctant to participate in recovery efforts in the past will be more 
likely to contribute with these incentives. When people want to take 
part in the process and do not fear it, the likelihood of conflict and 
litigation is reduced. For years, this type of conflict has proven 
costly not only in dollars to individuals and the government, but also 
in terms of relationships between people who share the land and natural 
resources. With a new trust and new model for finding conservation 
solutions, we can do more and better conservation work.
  Provisions have been made to accommodate landowners whose taxes may 
be less than the tax credit provides. Partnerships in the agreements 
will allow any party to an agreement to receive a credit as long as 
they pay or incur costs as a result of the agreement. This language 
will allow creative collaboration among governments, landowners, 
taxpayers and environmentalists, further increasing the number of 
people involved in finding new solutions for conservation.
  Furthermore, this bill also expands tax deductions for any landowner 
who takes part in the recovery plans approved under the ESA, and allows 
landowners to exclude from taxable income certain federal payments 
under conservation costshare programs. This will allow both individuals 
and businesses to deduct the cost of recovery work without bureaucratic 
obstacles.
  This bill not only sets forth the financing for private landowners, 
but it also makes it easier to implement the agreements. Landowners 
will receive technical assistance to implement the agreements. Also, to 
remove some legal disincentives to recover species, liability 
protection may be provided to protect the landowners from penalties 
under the ESA. This removes the fear of trying to help species; 
currently, more species usually just means more liability for a 
landowner.
  As a result of these incentives, I expect to see a phenomenal 
increase in the number of success stories. These stories will sound 
familiar to those creative collaborators working on the ground now 
where we have learned that the types of tools provided in this bill can 
work if consistently offered.
  The Endangered Species Recovery Act is very exciting to those of us 
who value protecting our natural resources. It provides collaborative, 
creative ways to balance resource conservation with economic uses of 
our natural resources and preserving rural ways of life. I look forward 
to working with my colleagues in the Senate and House to move ahead 
with this legislation which will allow better, more effective 
conservation work for future generations.
  I am deeply grateful to my colleagues from Arkansas, Iowa and Montana 
for their essential expertise and support to create ESRA. I ask 
unanimous consent that the text of the bill be printed in the Record.

[[Page 22745]]

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

                                S. 4087

       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 ``Endangered Species Recovery 
     Act of 2006''.

     SEC. 2. ENDANGERED SPECIES RECOVERY CREDIT.

       (a) In General.--Subpart B of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following new section:

     ``SEC. 30D. ENDANGERED SPECIES RECOVERY CREDIT.

       ``(a) In General.--In the case of an eligible taxpayer, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to the sum 
     of--
       ``(1) the habitat protection easement credit, plus
       ``(2) the habitat restoration credit.
       ``(b) Limitation.--
       ``(1) In general.--The credit allowed under subsection (a) 
     for any eligible taxpayer for any taxable year shall not 
     exceed the endangered species recovery credit limitation 
     allocated to the eligible taxpayer under subsection (f) for 
     the calendar year in which the taxpayer's taxable year ends.
       ``(2) Carryforwards.--
       ``(A) In general.--If the amount of the credit allowable 
     under subsection (a) for any taxpayer for any taxable year 
     exceeds the endangered species recovery credit limitation 
     allocated under subsection (f) to such taxpayer for the 
     calendar year in which the taxpayer's taxable year ends, such 
     excess may be carried forward to the next taxable year for 
     which such taxpayer is allocated a portion of the endangered 
     species recovery credit limitation.
       ``(B) Carryforward of allocation amount.--If the amount of 
     the endangered species recovery credit limitation allocated 
     to an eligible taxpayer for any calendar year under 
     subsection (f) exceeds the amount of the credit allowed to 
     the taxpayer under subsection (a) for the taxable year ending 
     in such calendar year, such excess may be carried forward to 
     the next taxable year of the taxpayer. For purposes of this 
     paragraph, any amount carried to another taxable year under 
     this subparagraph shall be treated as allocated to the 
     taxpayer for use in such taxable year under subsection (f).
       ``(c) Eligible Taxpayer.--For purposes of this section--
       ``(1) In general.--The term `eligible taxpayer' means--
       ``(A) a taxpayer who--
       ``(i) owns real property which contains the habitat of a 
     qualified species, and
       ``(ii) enters into a qualified perpetual habitat protection 
     agreement, a qualified 30-year habitat protection agreement, 
     or a qualified habitat protection agreement with the 
     appropriate Secretary with respect to such real property, and
       ``(B) any other taxpayer who--
       ``(i) is a party to a qualified perpetual habitat 
     protection agreement, a qualified 30-year habitat protection 
     agreement, or a qualified habitat protection agreement, and
       ``(ii) as part of any such agreement, agrees to assume 
     responsibility for costs paid or incurred in protecting or 
     preserving the habitat which is the subject of such 
     agreement.
       ``(2) Qualified perpetual habitat protection agreement.--
     The term `qualified perpetual habitat protection agreement' 
     means an agreement--
       ``(A) under which the taxpayer grants to the appropriate 
     Secretary, the Secretary of Agriculture, or a State an 
     easement in perpetuity for the protection of the habitat of a 
     qualified species, and
       ``(B) which meets the requirements of paragraph (5).
       ``(3) Qualified 30-year habitat protection agreement.--The 
     term `qualified 30-year habitat protection agreement' means 
     an agreement--
       ``(A) under which the taxpayer grants to the appropriate 
     Secretary, the Secretary of Agriculture, or a State an 
     easement for a period of not less than 30 years and less than 
     perpetuity for the protection of the habitat of a qualified 
     species, and
       ``(B) which meets the requirements of paragraph (5).
       ``(4) Qualified habitat protection agreement.--The term 
     `qualified habitat protection agreement' means an agreement--
       ``(A) under which the taxpayer enters into an agreement 
     with the appropriate Secretary, the Secretary of Agriculture, 
     or a State to protect the habitat of a qualified species for 
     a specified period of time, and
       ``(B) which meets the requirements of paragraph (5).
       ``(5) Requirements.--An agreement meets the requirements of 
     this paragraph if--
       ``(A) the agreement is not inconsistent with any recovery 
     plan which has been approved for a qualified species under 
     section 4 of the Endangered Species Act of 1973,
       ``(B) the appropriate Secretary and the eligible taxpayer 
     enter into a habitat management plan designed to--
       ``(i) restore or enhance the habitat of a qualified 
     species, or
       ``(ii) reduce threats to a qualified species through the 
     management of the habitat, and
       ``(C) the appropriate Secretary ensures that the eligible 
     taxpayer is provided with technical assistance in carrying 
     out the duties of the taxpayer under the terms of the 
     agreement.
       ``(d) Habitat Protection Easement Credit.--
       ``(1) In general.--For purposes of subsection (a)(1), the 
     habitat protection easement credit for any taxable year is an 
     amount equal to--
       ``(A) in the case of an eligible taxpayer who has entered 
     into a qualified perpetual habitat protection agreement 
     during such taxable year, 100 percent of the excess (if any) 
     of--
       ``(i) the fair market value of the real property with 
     respect to which the qualified perpetual habitat protection 
     agreement is made, determined on the day before such 
     agreement is entered into, over
       ``(ii) the fair market value of such property, determined 
     on the day after such agreement is entered into,
       ``(B) in the case of an eligible taxpayer who has entered 
     into a qualified 30-year habitat protection agreement during 
     such taxable year, 75 percent of such excess, and
       ``(C) in the case of any other eligible taxpayer, zero.
       ``(2) Reduction for amount received for easement.--The 
     credit allowed under subsection (a)(1) shall be reduced by 
     any amount received by the taxpayer in connection with the 
     easement.
       ``(3) Limitation based on amount of tax.--The credit 
     allowed under subsection (a)(1) for any taxable year shall 
     not exceed the sum of--
       ``(A) the taxpayer's regular tax liability for the taxable 
     year reduced by the sum of the credits allowable under 
     subpart A and sections 27, 30, 30B, and 30C, and
       ``(B) the tax imposed by section 55(a) for the taxable 
     year.
       ``(4) Carryforward of unused credit.--If the credit 
     allowable under subsection (a)(1) for any taxable year 
     exceeds the limitation imposed by paragraph (3) for such 
     taxable year, such excess shall be carried to the succeeding 
     taxable year and added to the credit allowable under 
     subsection (a)(1) for such succeeding taxable year.
       ``(5) Qualified appraisals required.--No amount shall be 
     taken into account under this subsection unless the eligible 
     taxpayer includes with the taxpayer's return for the taxable 
     year a qualified appraisal (within the meaning of section 
     170(f)(11)(E)) of the real property.
       ``(e) Habitat Restoration Credit.--
       ``(1) In general.--For purposes of subsection (a)(2), the 
     habitat restoration credit for any taxable year shall be an 
     amount equal to--
       ``(A) in the case of a qualified perpetual habitat 
     protection agreement, 100 percent of the costs paid or 
     incurred by an eligible taxpayer during such taxable year 
     pursuant to such agreement,
       ``(B) in the case of a qualified 30-year habitat protection 
     agreement, 75 percent of the costs paid or incurred by an 
     eligible taxpayer during such taxable year pursuant to such 
     agreement, and
       ``(C) in the case of a qualified habitat protection 
     agreement, 50 percent of the costs paid or incurred by an 
     eligible taxpayer during such taxable year pursuant to such 
     agreement.
       ``(2) Limitation based on amount of tax.--The credit 
     allowed under subsection (a)(2) for any taxable year shall 
     not exceed the excess (if any) of--
       ``(A) the regular tax liability for the taxable year 
     reduced by the sum of the credits allowable under subpart A 
     and sections 27, 30, 30B, and 30C, over
       ``(B) the tentative minimum tax for the taxable year.
       ``(3) Carryforward of unused credit.--If the credit 
     allowable under subsection (a)(2) for any taxable year 
     exceeds the limitation imposed by paragraph (2) for such 
     taxable year, such excess shall be carried to the succeeding 
     taxable year and added to the credit allowable under 
     subsection (a)(2) for such succeeding taxable year.
       ``(4) Special rules.--
       ``(A) Certain costs not included.--No credit shall be 
     allowed under subsection (a)(2) for any cost which is paid or 
     incurred by a taxpayer to comply with any requirement of a 
     Federal, State, or local government.
       ``(B) Subsidized financing.--For purposes of paragraph (1), 
     the amount of costs paid or incurred by an eligible taxpayer 
     pursuant to any agreement described in subsection (c) shall 
     be reduced by the amount of any financing provided under any 
     Federal or State program a principal purpose of which is to 
     subsidize financing for the conservation of the habitat of a 
     qualified species.
       ``(f) Endangered Species Recovery Credit Limitation.--
       ``(1) In general.--There is an endangered species recovery 
     credit limitation for each calendar year. Such limitation is 
     --
       ``(A) for 2007, 2008, 2009, 2010, and 2011--
       ``(i) $300,000,000 with respect to qualified perpetual 
     habitat protection agreements,
       ``(ii) $60,000,000 with respect to qualified 30-year 
     habitat protection agreements, and
       ``(iii) $40,000,000 with respect to qualified habitat 
     protection agreements, and

[[Page 22746]]

       ``(B) except as provided in paragraph (3), zero thereafter.
       ``(2) Allocation of limitation.--
       ``(A) In general.--The Secretary, in consultation with the 
     Secretary of the Interior and the Secretary of Commerce, 
     shall allocate the endangered species recovery credit 
     limitation to eligible taxpayers.
       ``(B) Considerations.--In making allocations to eligible 
     taxpayers under this section, priority shall be given to 
     taxpayers with agreements--
       ``(i) relating to habitats that will significantly increase 
     the likelihood of recovering and delisting a species as an 
     endangered species or a threatened species (as defined under 
     section 2 of the Endangered Species Act of 1973),
       ``(ii) that are cost-effective and maximize the benefits to 
     a qualified species per dollar expended,
       ``(iii) relating to habitats of species which have a 
     federally approved recovery plan pursuant to section 4 of the 
     Endangered Species Act of 1973,
       ``(iv) relating to habitats with the potential to 
     contribute significantly to the improvement of the status of 
     a qualified species,
       ``(v) relating to habitats with the potential to contribute 
     significantly to the eradication or control of invasive 
     species that are imperiling a qualified species,
       ``(vi) with habitat management plans that will manage 
     multiple qualified species,
       ``(vii) with habitat management plans that will create 
     adjacent or proximate habitat for the recovery of a qualified 
     species,
       ``(viii) relating to habitats for qualified species with an 
     urgent need for protection,
       ``(ix) with habitat management plans that assist in 
     preventing the listing of a species as endangered or 
     threatened under the Endangered Species Act of 1973 or a 
     similar State law,
       ``(x) with habitat management plans that may resolve 
     conflicts between the protection of qualified species and 
     otherwise lawful human activities, and
       ``(xi) with habitat management plans that may resolve 
     conflicts between the protection of a qualified species and 
     military training or other military operations.
       ``(3) Carryover of unused limitation.--If for any calendar 
     year the limitation under paragraph (1) (after the 
     application of this paragraph) exceeds the amount allocated 
     to all eligible taxpayers for such calendar year, the 
     limitation amount for the following calendar year shall be 
     increased by the amount of such excess.
       ``(g) Other Definitions and Special Rules.--
       ``(1) Appropriate secretary.--The term `appropriate 
     Secretary' has the meaning given to the term `Secretary' 
     under section 3(15) of the Endangered Species Act of 1973.
       ``(2) Habitat management plan.--The term `habitat 
     management plan' means, with respect to any habitat, a plan 
     which--
       ``(A) identifies one or more qualified species to which the 
     plan applies,
       ``(B) describes the management practices to be undertaken 
     by the taxpayer,
       ``(C) describes the technical assistance to be provided to 
     the taxpayer and identifies the entity that will provide such 
     assistance,
       ``(D) provides a schedule of deadlines for undertaking such 
     management practices, and
       ``(E) requires monitoring of the management practices and 
     the status of the qualified species.
       ``(3) Qualified species.--The term `qualified species' 
     means--
       ``(A) any species listed as an endangered species or 
     threatened species under the Endangered Species Act of 1973, 
     or
       ``(B) any species for which a finding has been made under 
     section 4(b)(3) of Endangered Species Act of 1973 that 
     listing under such Act may be warranted.
       ``(4) Taking.--The term `taking' has the meaning given to 
     such term under the Endangered Species Act of 1973.
       ``(5) Reduction in basis.--For purposes of this subtitle, 
     the basis of any property for which a credit is allowable 
     under subsection (a)(1) shall be reduced by the amount of the 
     credit so allowed.
       ``(6) Denial of double benefit.--No deduction shall be 
     allowed under this chapter for any amount with respect to 
     which a credit is allowed under subsection (a).
       ``(7) Certification.--No credit shall be allowed under 
     subsection (a) unless the appropriate Secretary certifies 
     that any agreement described in subsection (c) which is 
     entered into by an eligible taxpayer will contribute to the 
     recovery of a qualified species.
       ``(8) Request for authorization of incidental takings.--The 
     Secretary shall request the appropriate Secretary to consider 
     whether to authorize under the Endangered Species Act of 1973 
     takings by an eligible taxpayer of a qualified species to 
     which an agreement described in subsection (c) relates if the 
     takings are incidental to--
       ``(A) the restoration, enhancement, or management of the 
     habitat pursuant to the habitat management plan under the 
     agreement, or
       ``(B) the use of the property to which the agreement 
     pertains at any time after the expiration of the easement or 
     the specified period described in subsection (c)(4)(A), but 
     only if such use will leave the qualified species at least as 
     well off on the property as it was before the agreement was 
     made.
       ``(9) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit under any credit 
     allowable under subsection (a) if the Secretary, in 
     consultation with the appropriate Secretary, determines that 
     the eligible taxpayer has failed to carry out the duties of 
     the taxpayer under the terms of a qualified perpetual habitat 
     protection agreement, a qualified 30-year habitat protection 
     agreement, or a qualified habitat protection agreement.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a) of the Internal Revenue Code of 1986 is 
     amended by striking ``and'' at the end of paragraph (36), by 
     striking the period at the end of paragraph (37) and 
     inserting ``, and'', and by inserting after paragraph (37) 
     the following new paragraph:
       ``(38) to the extent provided in section 30D(g)(5).''.
       (2) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 of such Code is amended by 
     inserting after the item relating to section 30C the 
     following new item:

``Sec. 30D. Endangered species recovery credit.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2006.

     SEC. 3. DEDUCTION FOR ENDANGERED SPECIES RECOVERY 
                   EXPENDITURES.

       (a) Deduction for Endangered Species Recovery 
     Expenditures.--
       (1) In general.--Paragraph (1) of section 175(c) of the 
     Internal Revenue Code of 1986 (relating to definitions) is 
     amended by inserting after the first sentence the following 
     new sentence: ``Such term shall include expenditures paid or 
     incurred for the purpose of achieving specific actions 
     recommended in recovery plans approved pursuant to the 
     Endangered Species Act of 1973.''.
       (2) Conforming amendments.--
       (A) Section 175 of such Code is amended by inserting ``, or 
     for endangered species recovery'' after ``prevention of 
     erosion of land used in farming'' each place it appears in 
     subsections (a) and (c).
       (B) The heading of section 175 of such Code is amended by 
     inserting ``; ENDANGERED SPECIES RECOVERY EXPENDITURES'' 
     before the period.
       (C) The item relating to section 175 in the table of 
     sections for part VI of subchapter B of chapter 1 of such 
     Code is amended by inserting ``; ENDANGERED SPECIES RECOVERY 
     EXPENDITURES'' before the period.
       (b) Limitations.--Paragraph (3) of section 175(c) of the 
     Internal Revenue Code of 1986 (relating to additional 
     limitations) is amended--
       (1) in the heading, by inserting ``or endangered species 
     recovery plan'' after ``conservation plan'', and
       (2) in subparagraph (A)(i), by inserting ``or the recovery 
     plan approved pursuant to the Endangered Species Act of 
     1973'' after ``Department of Agriculture''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to expenditures paid or incurred after the date 
     of the enactment of this Act.

     SEC. 4. EXCLUSION FOR COST SHARING PAYMENTS UNDER THE 
                   PARTNERS FOR FISH AND WILDLIFE ACT AND CERTAIN 
                   OTHER PROGRAMS AUTHORIZED BY THE FISH AND 
                   WILDLIFE ACT OF 1956.

       (a) In General.--Subsection (a) of section 126 of the 
     Internal Revenue Code of 1986 (relating to certain cost-
     sharing payments) is amended by redesignating paragraph (10) 
     as paragraph (12) and by inserting after paragraph (9) the 
     following new paragraphs:
       ``(10) The Partners for Fish and Wildlife Program 
     authorized by the Partners for Fish and Wildlife Act.
       ``(11) The Landowner Incentive Program, the State Wildlife 
     Grants Program, and the Private Stewardship Grants Program 
     authorized by the Fish and Wildlife Act of 1956.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to payments received after the date of the 
     enactment of this Act.
                                 ______
                                 
      By Mr. McCAIN:
  S. 4089. A bill to modernize and expand the reporting requirements 
relating to child pornography, to expand cooperation in combating child 
pornography, to require convicted sex offenders to register online 
identifiers, and for other purposes; to the Committee on the Judiciary.
  Mr. McCAIN. Mr. President, today I am introducing the Stop the Online 
Exploitation of Our Children Act of 2006. This legislation would reduce 
the sexual exploitation of our children, and punish those who cause 
them physical and emotional harm through sex crimes.
  Twenty-two years ago, President Ronald Reagan inaugurated the opening 
of the National Center for Missing and Exploited Children, known as 
NCMEC. At a White House ceremony, he called on the center to ``wake up 
America and attack the crisis of child

[[Page 22747]]

victimization.'' Today, thanks to the efforts of NCMEC and many others 
in the public and private sectors, America is more conscious of the 
dangers of child exploitation, but our children still face significant 
threats from those who see their innocence as an opportunity to do 
harm. The continuing victimization of our children is readily and all 
too painfully apparent in the resurgence of child pornography in our 
world.
  In recent years, technology has contributed to the greater 
distribution and availability, and, some believe, desire for child 
pornography. I say child pornography, but that label does not describe 
accurately what is at issue. As emphasized by a recent Department of 
Justice report, ``child pornography'' does not come close to describing 
these images, which are nothing short of recorded images of child 
sexual abuse. These images are, quite literally, digital evidence of 
violent sexual crimes perpetrated against the most vulnerable among us.
  Experts are also finding that the images of child sexual exploitation 
produced and distributed today involve younger and younger children. As 
emphasized by NCMEC, 83 percent of offenders surveyed in a recent study 
were caught with images of children younger than 12 years old. Thirty-
nine percent had images of children younger than 6. Almost 20 percent 
had images of children younger than 3. These are not normal criminals, 
and I cannot fathom the extent of the physical and emotional harm they 
cause their victims.
  The violence of the images continues to increase as well. Dr. Sharon 
Cooper, a nationally recognized expert on this subject, stated before a 
September Senate Commerce Committee hearing that the images often 
depict ``sadistic gross sexual assault and sodomy.'' This view was 
underscored by Mike Brown, the sheriff of Bedford County, VA, and the 
director of the Blue Ridge Thunder Internet Crimes Against Children 
Task Force, who also testified to his direct experience with 
increasingly violent and disturbing images of child sexual 
exploitation.
  The Federal Government has in place a system for online companies 
such as Internet service providers to report these images to NCMEC. The 
center is directed by law to relay that information to Federal and 
State law enforcement agencies. This reporting system has been 
successful, but it is in need of several vital improvements.
  The bill would enhance the current reporting system by expanding the 
range of companies obligated to report child pornography to NCMEC; 
stating specifically what information must be reported to the center; 
moving the reporting obligations into the Federal criminal code; 
imposing higher penalties on companies that do not report child 
pornography to NCMEC in the manner required by law; and providing 
greater legal certainty around the child pornography reporting 
requirement.
  As suggested by NCMEC, the reporting of child pornography should be 
more widespread. To that end, the bill would expand and clarify the 
types of online companies that would be obligated to report child 
pornography to the center. Today, Federal law requires electronic 
communication service providers and providers of remote computing 
services to report child pornography they discover to NCMEC through the 
center's CyberTipline. However, what types of companies fall into each 
category is sometimes unclear. To better define and expand the types of 
online companies obligated to report child pornography, the legislation 
would require a broad range of online service providers--including Web 
hosting companies, domain name registrars, and social networking 
sites--to report child pornography to NCMEC.
  Another weakness in the current reporting system is that the law does 
not say exactly what information should be reported to NCMEC. This 
failure to set forth specific reporting requirements makes the current 
statute both difficult to comply with and tough to enforce, and this 
omission may have led to less effective prosecution of child 
pornographers. According to testimony submitted by the center to the 
Senate Commerce Committee, ``because there are no guidelines for the 
contents of these reports, some [companies] do not send customer 
information that allows NCMEC to identify a law enforcement 
jurisdiction. So potentially valuable investigative leads are left to 
sit in the CyberTipline database with no action taken.'' This is 
unacceptable.
  The bill would cure this problem by requiring that reporting 
companies convey to the center a defined set of information, which is 
in large part the information that is provided to NCMEC today by the 
Nation's leading Internet service providers. Among other things, the 
bill would require online service providers to report specific 
information about the individual involved in producing, distributing, 
or receiving child pornography such as that individual's e-mail 
address. In addition, it would require reporting companies to NCMEC 
geographic location of the involved individual such as the individual's 
physical address and the IP address from which the individual connected 
to the Internet.
  To ensure that law enforcement officials have better odds of 
prosecuting involved individuals, the bill would also require online 
service providers to preserve all data that they report to NCMEC for at 
least 180 days, and to not knowingly destroy any other information that 
they possess that relates to a child pornography incident reported to 
NCMEC.
  The legislation would help ensure greater compliance with the child 
pornography reporting requirements under Federal law by increasing 
threefold the penalties for knowing failure to report child pornography 
to NCMEC. It would also move the reporting requirement from title 42, 
which relates to the public's health and welfare, to title 18, our 
Federal Criminal Code. This is to underscore that a breach of the 
reporting obligations is a violation of criminal law. In addition, the 
act would eliminate the legal liability of online service providers for 
actions taken to comply with the child pornography reporting 
requirements.
  The bottom line is that this legislation should result in more 
thorough reporting of child pornography to NCMEC. I expect that more 
and better information provided to the center will lead to a greater 
number of prosecutions and enhanced protection of our children. As 
stated by NCMEC, with improvements to the reporting system there would 
be more reports that are actionable by law enforcement, which will lead 
to more prosecutions and convictions and, more importantly, to the 
rescue of more children.
  In addition to the provisions relating to child pornography, the bill 
also would ensure that sex offenders will register information relevant 
to their online activities on sex offender registries. Specifically, it 
would require sex offenders to register their e-mail addresses, as well 
as their instant messaging and chat room handles and any other online 
identifiers they use. If a sex offender failed to do so, he could be 
prosecuted, convicted, and thrown into jail for up to 10 years. The 
bill would also make the use of the Internet in the commission of a 
crime of child exploitation an aggravating factor that would add 10 
years to the offender's sentence.
  To help address the international nature of child pornography, the 
bill would permit NCMEC to share reports with foreign law enforcement 
agencies, subject to approval by the Department of Justice. In 
addition, the act would state the sense of Congress that the executive 
branch should make child pornography a priority when engaging in 
negotiations or talks with foreign countries.
  Finally, the act would authorize $20.3 million for our Nation's 
Internet Crimes Against Children Task Forces. This increase of $5 
million above that currently requested by the Administration is 
recommended by NCMEC, Sheriff Brown, and others who believe that the 
additional amount would significantly improve the efforts of these 
teams of Federal, State, and local law enforcement officials dedicated 
to identifying and prosecuting those who use the Internet to prey upon 
our Nation's children.
  Mr. President, protecting our children is a top priority for Members 
of

[[Page 22748]]

Congress, regardless of party affiliation. This legislation would help 
us achieve that goal. I look forward to working with my colleagues to 
debate and move this bill through the legislative process during the 
next Congress.
                                 ______
                                 
      By Ms. SNOWE (for herself, Mr. Kerry, Ms. Landrieu, and Mr. 
        Vitter):
  S. 4097. A bill to improve the disaster loan program of the Small 
Business Administration, and for other purposes; to the Committee on 
Small Business and Entrepreneurship.
  Ms. SNOWE. Mr. President, I rise today with Senators Kerry, Landrieu 
and Vitter to introduce The Small Business Disaster Response and Loan 
Improvements Act of 2006, a bill that would provide a comprehensive; 
package of reforms to improve the Small Business Administration's, SBA, 
disaster loan program.
  As you know, the entire gulf coast of the United States was ravaged 
in 2005 by Hurricanes Katrina and Rita. These natural disasters, 
unprecedented in scope and economic impact, presented a prime 
opportunity for the SBA to showcase its programs and resources for 
small businesses. Unfortunately, SBA's response was subpar at best, 
leaving some disaster victims waiting three months or more for disaster 
loans to be processed.
  As chair of the Senate Committee on Small Business and 
Entrepreneurship, I remain committed to doing everything in my power to 
provide small businesses and homeowners with the tools they need to 
recover from disasters. The SBA is and must be at the forefront of 
disaster relief efforts. We must ensure that victims of future 
disasters have access to the resources they need to restore their 
lives, their businesses, and their dreams.
  Many of the provisions in this bid have already passed unanimously 
through the Small Business Committee this year as part of the Small 
Business Reauthorization and Improvements Act of 2006 S. 3778, 
bipartisan legislation I authored that features sweeping reforms to 
help the SBA lead with the same dedication to excellence found in the 
entrepreneurs it serves. The committee unanimously approved this 
legislation and reported it to the full Senate, where it awaits 
consideration.
  This bill before the Senate today includes essential provisions that 
would better assist victims applying for SBA disaster loans. Among 
other items, this legislation would increase the maximum size of an SBA 
disaster loan from $1.5 million per loan to $5 million per loan and 
would make it possible for non-profit institutions to be eligible for 
disaster loans.
  Recognizing the increased demand disasters place on all small 
business lending programs, the legislation establishes a private 
disaster loan PDL program that allows for PDLs to be made to disaster 
victims by private banks, which would have to apply to the SBA for 
eligibility. A business would be eligible for a PDL if the county in 
which the business is located was declared a disaster area anytime in 
the last 24 months. The business would not have to show a nexus between 
its need for a loan, and the disaster that occurred. It would be enough 
to be located in that county. The SBA would provide an 85 percent 
guarantee for the loans.
  In addition, our legislation would provide authorization for the SBA 
to enter into agreements with qualified private contractors to process 
disaster loans. It also would require the SBA to provide Congress with 
a report on how the disaster loan application process can be improved, 
including methods to expedite loan processing and verification for 
sources vital to rebuilding efforts.
  This legislation would also require the SBA to promulgate rules 
within 6 months that would create a new ``expedited disaster assistance 
business loan program.'' These short-term loans would have low interest 
rates similar to regular disaster loans. The program is intended to 
respond to major disasters, but at the discretion of the SBA 
Administrator, it can be implemented in the event of any disaster.
  I firmly believe the product before us is the best package to aid 
families, businesses, and communities through challenging times 
following disasters. We must not forget their pain, their 
determination, and their resolute refusal to walk away from the 
communities and small businesses they cherish.
  When a disaster strikes, the spirit, determination, and will of 
America's small businesses help to create the firm economic foundation, 
propelling our nation's economic growth forward. Therefore, we in turn 
must create an atmosphere favorable for small businesses and provide 
this assistance package to the SBA. We must allow our Nation's small 
businesses to do what they do best--create jobs.
  I urge my colleagues to support this bill. Too much is at stake for 
small businesses, and the economy as a whole, to allow this critical 
legislation to languish. Clearly, if we strive for anything less, we 
fail to support the backbone of our economy, our hope for new 
innovation, and the entrepreneurs reach for the American dream.
  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. 4097

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Small 
     Business Disaster Response and Loan Improvements Act of 
     2006''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

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

                    TITLE I--PRIVATE DISASTER LOANS

Sec. 101. Private disaster loans.
Sec. 102. Technical and conforming amendments.

              TITLE II--DISASTER RELIEF AND RECONSTRUCTION

Sec. 201. Definition of disaster area.
Sec. 202. Disaster loans to nonprofits.
Sec. 203. Disaster loan amounts.
Sec. 204. Small business development center portability grants.
Sec. 205. Assistance to out-of-State businesses.
Sec. 206. Outreach programs.
Sec. 207. Small business bonding threshold.
Sec. 208. Contracting priority for local small businesses.
Sec. 209. Termination of program.
Sec. 210. Increasing collateral requirements.

                      TITLE III--DISASTER RESPONSE

Sec. 301. Definitions.
Sec. 302. Business expedited disaster assistance loan program.
Sec. 303. Catastrophic national disasters.
Sec. 304. Public awareness of disaster declaration and application 
              periods.
Sec. 305. Consistency between Administration regulations and standard 
              operating procedures.
Sec. 306. Processing disaster loans.
Sec. 307. Development and implementation of major disaster response 
              plan.
Sec. 308. Congressional oversight.

                      TITLE IV--ENERGY EMERGENCIES

Sec. 401. Findings.
Sec. 402. Small business energy emergency disaster loan program.
Sec. 403. Agricultural producer emergency loans.
Sec. 404. Guidelines and rulemaking.
Sec. 405. Reports.

     SEC. 2. DEFINITIONS.

       In this Act--
       (1) the terms ``Administration'' and ``Administrator'' mean 
     the Small Business Administration and the Administrator 
     thereof, respectively;
       (2) the term ``small business concern'' has the same 
     meaning as in section 3 of the Small Business Act (15 U.S.C. 
     632); and
       (3) the term ``small business concern owned and controlled 
     by socially and economically disadvantaged individuals'' has 
     the same meaning as in section 8 of the Small Business Act 
     (15 U.S.C. 637).

                    TITLE I--PRIVATE DISASTER LOANS

     SEC. 101. PRIVATE DISASTER LOANS.

       (a) In General.--Section 7 of the Small Business Act (15 
     U.S.C. 636) is amended--
       (1) by redesignating subsections (c) and (d) as subsections 
     (d) and (e), respectively; and
       (2) by inserting after subsection (b) the following:
       ``(c) Private Disaster Loans.--
       ``(1) Definitions.--In this subsection--
       ``(A) the term `disaster area' means a county, parish, or 
     similar unit of general local government in which a disaster 
     was declared under subsection (b);
       ``(B) the term `eligible small business concern' means a 
     business concern that is--
       ``(i) a small business concern, as defined in this Act; or

[[Page 22749]]

       ``(ii) a small business concern, as defined in section 103 
     of the Small Business Investment Act of 1958; and
       ``(C) the term `qualified private lender' means any 
     privately-owned bank or other lending institution that the 
     Administrator determines meets the criteria established under 
     paragraph (9).
       ``(2) Authorization.--The Administrator may guarantee 
     timely payment of principal and interest, as scheduled on any 
     loan issued by a qualified private lender to an eligible 
     small business concern located in a disaster area.
       ``(3) Use of loans.--A loan guaranteed by the Administrator 
     under this subsection may be used for any purpose authorized 
     under subsection (a) or (b).
       ``(4) Online applications.--
       ``(A) Establishment.--The Administrator may establish, 
     directly or through an agreement with another entity, an 
     online application process for loans guaranteed under this 
     subsection.
       ``(B) Other federal assistance.--The Administrator may 
     coordinate with the head of any other appropriate Federal 
     agency so that any application submitted through an online 
     application process established under this paragraph may be 
     considered for any other Federal assistance program for 
     disaster relief.
       ``(C) Consultation.--In establishing an online application 
     process under this paragraph, the Administrator shall consult 
     with appropriate persons from the public and private sectors, 
     including private lenders.
       ``(5) Maximum amounts.--
       ``(A) Guarantee percentage.--The Administrator may 
     guarantee not more than 85 percent of a loan under this 
     subsection.
       ``(B) Loan amounts.--The maximum amount of a loan 
     guaranteed under this subsection shall be $3,000,000.
       ``(6) Loan term.--The longest term of a loan for a loan 
     guaranteed under this subsection shall be--
       ``(A) 15 years for any loan that is issued without 
     collateral; and
       ``(B) 25 years for any loan that is issued with collateral.
       ``(7) Fees.--
       ``(A) In general.--The Administrator may not collect a 
     guarantee fee under this subsection.
       ``(B) Origination fee.--The Administrator may pay a 
     qualified private lender an origination fee for a loan 
     guaranteed under this subsection in an amount agreed upon in 
     advance between the qualified private lender and the 
     Administrator.
       ``(8) Documentation.--A qualified private lender may use 
     its own loan documentation for a loan guaranteed by the 
     Administrator, to the extent authorized by the Administrator. 
     The ability of a lender to use its own loan documentation for 
     a loan offered under this subsection shall not be considered 
     part of the criteria for becoming a qualified private lender 
     under the regulations promulgated under paragraph (9).
       ``(9) Implementation regulations.--
       ``(A) In general.--Not later than 1 year after the date of 
     enactment of the Small Business Disaster Response and Loan 
     Improvements Act of 2006, the Administrator shall issue final 
     regulations establishing permanent criteria for qualified 
     private lenders.
       ``(B) Report to congress.--Not later than 6 months after 
     the date of enactment of the Small Business Disaster Response 
     and Loan Improvements Act of 2006, the Administrator shall 
     submit a report on the progress of the regulations required 
     by subparagraph (A) to the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives.
       ``(10) Authorization of appropriations.--
       ``(A) In general.--Amounts necessary to carry out this 
     subsection shall be made available from amounts appropriated 
     to the Administration under subsection (b).
       ``(B) Authority to reduce interest rates.--Funds 
     appropriated to the Administration to carry out this 
     subsection, may be used by the Administrator, to the extent 
     available, to reduce the applicable rate of interest for a 
     loan guaranteed under this subsection by not more than 3 
     percentage points.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to disasters declared under section 7(b)(2) of 
     the Small Business Act (631 U.S.C. 636(b)(2)) before, on, or 
     after the date of enactment of this Act.

     SEC. 102. TECHNICAL AND CONFORMING AMENDMENTS.

       The Small Business Act (15 U.S.C. 631 et seq.) is amended--
       (1) in section 4(c)--
       (A) in paragraph (1), by striking ``7(c)(2)'' and inserting 
     ``7(d)(2)''; and
       (B) in paragraph (2)--
       (i) by striking ``7(c)(2)'' and inserting ``7(d)(2)''; and
       (ii) by striking ``7(e),''; and
       (2) in section 7(b), in the undesignated matter following 
     paragraph (3)--
       (A) by striking ``That the provisions of paragraph (1) of 
     subsection (c)'' and inserting ``That the provisions of 
     paragraph (1) of subsection (d)''; and
       (B) by striking ``Notwithstanding the provisions of any 
     other law the interest rate on the Administration's share of 
     any loan made under subsection (b) except as provided in 
     subsection (c),'' and inserting ``Notwithstanding any other 
     provision of law, and except as provided in subsection (d), 
     the interest rate on the Administration's share of any loan 
     made under subsection (b)''.

              TITLE II--DISASTER RELIEF AND RECONSTRUCTION

     SEC. 201. DEFINITION OF DISASTER AREA.

       In this title, the term ``disaster area'' means an area 
     affected by a natural or other disaster, as determined for 
     purposes of paragraph (1) or (2) of section 7(b) of the Small 
     Business Act (15 U.S.C. 636(b)), during the period of such 
     declaration.

     SEC. 202. DISASTER LOANS TO NONPROFITS.

       Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) 
     is amended by inserting immediately after paragraph (3) the 
     following:
       ``(4) Loans to nonprofits.--In addition to any other loan 
     authorized by this subsection, the Administrator may make 
     such loans (either directly or in cooperation with banks or 
     other lending institutions through agreements to participate 
     on an immediate or deferred basis) as the Administrator 
     determines appropriate to a nonprofit organization located or 
     operating in an area affected by a natural or other disaster, 
     as determined under paragraph (1) or (2), or providing 
     services to persons who have evacuated from any such area.''.

     SEC. 203. DISASTER LOAN AMOUNTS.

       (a) Increased Loan Caps.--Section 7(b) of the Small 
     Business Act (15 U.S.C. 636(b)) is amended by inserting 
     immediately after paragraph (4), as added by this title, the 
     following:
       ``(5) Increased loan caps.--
       ``(A) Aggregate loan amounts.--Except as provided in clause 
     (ii), and notwithstanding any other provision of law, the 
     aggregate loan amount outstanding and committed to a borrower 
     under this subsection may not exceed $5,000,000.
       ``(B) Waiver authority.--The Administrator may, at the 
     discretion of the Administrator, waive the aggregate loan 
     amount established under clause (i).''.
       (b) Disaster Mitigation.--
       (1) In general.--Section 7(b)(1)(A) of the Small Business 
     Act (15 U.S.C. 636(b)(1)(A)) is amended by inserting ``of the 
     aggregate costs of such damage or destruction (whether or not 
     compensated for by insurance or otherwise)'' after ``20 per 
     centum''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply with respect to a loan or guarantee made after 
     the date of enactment of this Act.
       (c) Technical Amendments.--Section 7(b) of the Small 
     Business Act (15 U.S.C. 636(b)) is amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``the, Administration'' and inserting ``the Administration'';
       (2) in paragraph (2)(A), by striking ``Disaster Relief and 
     Emergency Assistance Act'' and inserting ``Robert T. Stafford 
     Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 
     et seq.)''; and
       (3) in the undesignated matter at the end--
       (A) by striking ``, (2), and (4)'' and inserting ``and 
     (2)''; and
       (B) by striking ``, (2), or (4)'' and inserting ``(2)''.

     SEC. 204. SMALL BUSINESS DEVELOPMENT CENTER PORTABILITY 
                   GRANTS.

       Section 21(a)(4)(C)(viii) of the Small Business Act (15 
     U.S.C. 648(a)(4)(C)(viii)) is amended--
       (1) in the first sentence, by striking ``as a result of a 
     business or government facility down sizing or closing, which 
     has resulted in the loss of jobs or small business 
     instability'' and inserting ``due to events that have 
     resulted or will result in, business or government facility 
     downsizing or closing''; and
       (2) by adding at the end ``At the discretion of the 
     Administrator, the Administrator may make an award greater 
     than $100,000 to a recipient to accommodate extraordinary 
     occurrences having a catastrophic impact on the small 
     business concerns in a community.''.

     SEC. 205. ASSISTANCE TO OUT-OF-STATE BUSINESSES.

       Section 21(b)(3) of the Small Business Act (15 U.S.C. 
     648(b)(3)) is amended--
       (1) by striking ``At the discretion'' and inserting the 
     following: ``Small business development centers.--
       ``(A) In general.--At the discretion''; and
       (2) by adding at the end the following:
       ``(B) During disasters.--
       ``(i) In general.--At the discretion of the Administrator, 
     the Administrator may authorize a small business development 
     center to provide such assistance to small business concerns 
     located outside of the State, without regard to geographic 
     proximity, if the small business concerns are located in a 
     disaster area declared under section 7(b)(2)(A).
       ``(ii) Continuity of services.--A small business 
     development center that provides counselors to an area 
     described in clause (i) shall, to the maximum extent 
     practicable, ensure continuity of services in any State in 
     which such small business development center otherwise 
     provides services.
       ``(iii) Access to disaster recovery facilities.--For 
     purposes of providing disaster recovery assistance under this 
     subparagraph, the Administrator shall, to the maximum extent 
     practicable, permit small business development center 
     personnel to use any site

[[Page 22750]]

     or facility designated by the Administrator for use to 
     provide disaster recovery assistance.''.

     SEC. 206. OUTREACH PROGRAMS.

       (a) In General.--Not later than 30 days after the date of 
     the declaration of a disaster area, the Administrator may 
     establish a contracting outreach and technical assistance 
     program for small business concerns which have had a primary 
     place of business in, or other significant presence in, such 
     disaster area.
       (b) Administrator Action.--The Administrator may fulfill 
     the requirement of subsection (a) by acting through--
       (1) the Administration;
       (2) the Federal agency small business officials designated 
     under section 15(k)(1) of the Small Business Act (15 U.S.C. 
     644(k)(1)); or
       (3) any Federal, State, or local government entity, higher 
     education institution, procurement technical assistance 
     center, or private nonprofit organization that the 
     Administrator may determine appropriate, upon conclusion of a 
     memorandum of understanding or assistance agreement, as 
     appropriate, with the Administrator.

     SEC. 207. SMALL BUSINESS BONDING THRESHOLD.

       (a) In General.--Except as provided in subsection (b), and 
     notwithstanding any other provision of law, for any 
     procurement related to a major disaster (as that term is 
     defined in section 102 of the Robert T. Stafford Disaster 
     Relief and Emergency Assistance Act (42 U.S.C. 5122)), the 
     Administrator may, upon such terms and conditions as the 
     Administrator may prescribe, guarantee and enter into 
     commitments to guarantee any surety against loss resulting 
     from a breach of the terms of a bid bond, payment bond, 
     performance bond, or bonds ancillary thereto, by a principal 
     on any total work order or contract amount at the time of 
     bond execution that does not exceed $5,000,000.
       (b) Increase of Amount.--Upon request of the head of any 
     Federal agency other than the Administration involved in 
     reconstruction efforts in response to a major disaster, the 
     Administrator may guarantee and enter into a commitment to 
     guarantee any security against loss under subsection (a) on 
     any total work order or contract amount at the time of bond 
     execution that does not exceed $10,000,000.

     SEC. 208. CONTRACTING PRIORITY FOR LOCAL SMALL BUSINESSES.

       Section 15(d) of the Small Business Act (15 U.S.C. 644(d)) 
     is amended--
       (1) by striking ``(d) For purposes'' and inserting the 
     following:
       ``(d) Contracting Priorities.--
       ``(1) In general.--For purposes''; and
       (2) by adding at the end the following:
       ``(2) Disaster contracting priority in general.--The 
     Administrator shall designate any disaster area as an area of 
     concentrated unemployment or underemployment, or a labor 
     surplus area for purposes of paragraph (1).
       ``(3) Local small businesses.--
       ``(A) In general.--The head of each executive agency shall 
     give priority in the awarding of contracts and the placement 
     of subcontracts for disaster relief to local small business 
     concerns by using, as appropriate--
       ``(i) preferential factors in evaluations of contract bids 
     and proposals;
       ``(ii) competitions restricted to local small business 
     concerns, where there is a reasonable expectation of 
     receiving competitive, reasonably priced bids or proposals 
     from not fewer than 2 local small business concerns;
       ``(iii) requirements of preference for local small business 
     concerns in subcontracting plans; and
       ``(iv) assessments of liquidated damages and other 
     contractual penalties, including contract termination.
       ``(B) Other disaster assistance.--Priority shall be given 
     to local small business concerns in the awarding of contracts 
     and the placement of subcontracts for disaster relief in any 
     Federal procurement and any procurement by a State or local 
     government made with Federal disaster assistance funds.
       ``(4) Definitions.--In this subsection--
       ``(A) the term `declared disaster' means a disaster, as 
     designated by the Administrator;
       ``(B) the term `disaster area' means any State or area 
     affected by a declared disaster, as determined by the 
     Administrator;
       ``(C) the term `executive agency' has the same meaning as 
     in section 105 of title 5, United States Code; and
       ``(D) the term `local small business concern' means a small 
     business concern that--
       ``(i) on the date immediately preceding the date on which a 
     declared disaster occurred--

       ``(I) had a principal office in the disaster area for such 
     declared disaster; and
       ``(II) employed a majority of the workforce of such small 
     business concern in the disaster area for such declared 
     disaster; and

       ``(ii) is capable of performing a substantial proportion of 
     any contract or subcontract for disaster relief within the 
     disaster area for such declared disaster, as determined by 
     the Administrator.''.

     SEC. 209. TERMINATION OF PROGRAM.

       Section 711(c) of the Small Business Competitive 
     Demonstration Program Act of 1988 (15 U.S.C. 644 note) is 
     amended by inserting after ``January 1, 1989'' the following: 
     ``, and shall terminate on the date of enactment of the Small 
     Business Disaster Response and Loan Improvements Act of 
     2006''.

     SEC. 210. INCREASING COLLATERAL REQUIREMENTS.

       Section 7(d)(6) of the Small Business Act (15 U.S.C. 636), 
     as so designated by section 101, is amended by striking 
     ``$10,000 or less'' and inserting ``$14,000 or less (or such 
     higher amount as the Administrator determines appropriate in 
     the event of a catastrophic national disaster declared under 
     subsection (b)(6))''.

                      TITLE III--DISASTER RESPONSE

     SEC. 301. DEFINITIONS.

       In this title--
       (1) the term ``catastrophic national disaster'' has the 
     meaning given the term in section 7(b)(6) of the Small 
     Business Act (15 U.S.C. 636(b)), as added by this Act;
       (2) the term ``declared disaster'' means a major disaster 
     or a catastrophic national disaster;
       (3) the term ``disaster loan program of the 
     Administration'' means assistance under section 7(b) of the 
     Small Business Act (15 U.S.C. 636(b));
       (4) the term ``disaster update period'' means the period 
     beginning on the date on which the President declares a major 
     disaster or a catastrophic national disaster and ending on 
     the date on which such declaration terminates;
       (5) the term ``major disaster'' has the meaning given the 
     term in section 102 of the Robert T. Stafford Disaster Relief 
     and Emergency Assistance Act (42 U.S.C. 5122); and
       (6) the term ``State'' means any State of the United 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Northern Mariana Islands, the Virgin Islands, Guam, 
     American Samoa, and any territory or possession of the United 
     States.

     SEC. 302. BUSINESS EXPEDITED DISASTER ASSISTANCE LOAN 
                   PROGRAM.

       (a) Definitions.--In this section--
       (1) the term ``immediate disaster assistance'' means 
     assistance provided during the period beginning on the date 
     on which a disaster declaration is made and ending on the 
     date that an impacted small business concern is able to 
     secure funding through insurance claims, Federal assistance 
     programs, or other sources; and
       (2) the term ``program'' means the expedited disaster 
     assistance business loan program established under subsection 
     (b); and
       (b) Creation of Program.--The Administrator shall take such 
     administrative action as is necessary to establish and 
     implement an expedited disaster assistance business loan 
     program to provide small business concerns with immediate 
     disaster assistance under section 7(b) of the Small Business 
     Act (15 U.S.C. 636(b)).
       (c) Consultation Required.--In establishing the program, 
     the Administrator shall consult with--
       (1) appropriate personnel of the Administration (including 
     District Office personnel of the Administration);
       (2) appropriate technical assistance providers (including 
     small business development centers);
       (3) appropriate lenders and credit unions;
       (4) the Committee on Small Business and Entrepreneurship of 
     the Senate; and
       (5) the Committee on Small Business of the House of 
     Representatives.
       (d) Rules.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Administrator shall promulgate 
     rules establishing and implementing the program in accordance 
     with this section. Such rules shall apply as provided for in 
     this section, beginning 90 days after their issuance in final 
     form.
       (2) Contents.--The rules promulgated under paragraph (1) 
     shall--
       (A) identify whether appropriate uses of funds under the 
     program may include--
       (i) paying employees;
       (ii) paying bills and other financial obligations;
       (iii) making repairs;
       (iv) purchasing inventory;
       (v) restarting or operating a small business concern in the 
     community in which it was conducting operations prior to the 
     declared disaster, or to a neighboring area, county, or 
     parish in the disaster area; or
       (vi) covering additional costs until the small business 
     concern is able to obtain funding through insurance claims, 
     Federal assistance programs, or other sources; and
       (B) set the terms and conditions of any loan made under the 
     program, subject to paragraph (3).
       (3) Terms and conditions.--A loan made by the 
     Administration under this section--
       (A) shall be a short-term loan, not to exceed 180 days, 
     except that the Administrator may extend such term as the 
     Administrator determines necessary or appropriate on a case-
     by-case basis;
       (B) shall have an interest rate not to exceed 1 percentage 
     point above the prime rate of interest that a private lender 
     may charge;
       (C) shall have no prepayment penalty;
       (D) may be refinanced as part of any subsequent disaster 
     assistance provided under section 7(b) of the Small Business 
     Act; and
       (E) shall be subject to such additional terms as the 
     Administrator determines necessary or appropriate.
       (e) Report to Congress.--Not later than 5 months after the 
     date of enactment of this

[[Page 22751]]

     Act, the Administrator shall report to the Committee on Small 
     Business and Entrepreneurship of the Senate and the Committee 
     on Small Business of the House of Representatives on the 
     progress of the Administrator in establishing the program.
       (f) Authorization.--There are authorized to be appropriated 
     to the Administrator such sums as are necessary to carry out 
     this section.

     SEC. 303. CATASTROPHIC NATIONAL DISASTERS.

       Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) 
     is amended by inserting immediately after paragraph (5), as 
     added by this Act, the following:
       ``(6) Catastrophic national disasters.--
       ``(A) Definition.--In this paragraph the term `catastrophic 
     national disaster' means a disaster, natural or other, that 
     the President determines has caused significant adverse 
     economic conditions outside of the geographic reach of the 
     disaster.
       ``(B) Authorization.--The Administrator may make such loans 
     under this paragraph (either directly or in cooperation with 
     banks or other lending institutions through agreements to 
     participate on an immediate or deferred basis) as the 
     Administrator determines appropriate to small business 
     concerns located anywhere in the United States that are 
     economically adversely impacted as a result of a catastrophic 
     national disaster.
       ``(C) Loan terms.--A loan under this paragraph shall be 
     made on the same terms as a loan under paragraph (2).''.

     SEC. 304. PUBLIC AWARENESS OF DISASTER DECLARATION AND 
                   APPLICATION PERIODS.

       (a) In General.--Section 7(b) of the Small Business Act (15 
     U.S.C. 636(b)) is amended by inserting immediately after 
     paragraph (6), as added by this Act, the following:
       ``(7) Coordination with fema.--
       ``(A) In general.--Notwithstanding any other provision of 
     law, for any disaster (including a catastrophic national 
     disaster) declared under this subsection or major disaster 
     (as that term is defined in section 102 of the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act (42 
     U.S.C. 5122)), the Administrator, in consultation with the 
     Director of the Federal Emergency Management Agency, shall 
     ensure, to the maximum extent practicable, that all 
     application periods for disaster relief under this Act and 
     the Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act (42 U.S.C. 5121 et seq.) begin on the same 
     date and end on the same date.
       ``(B) Deadline extensions.--Notwithstanding any other 
     provision of law--
       ``(i) not later than 10 days before the closing date of an 
     application period for disaster relief under this Act for any 
     disaster (including a catastrophic national disaster) 
     declared under this subsection, the Administrator, in 
     consultation with the Director of the Federal Emergency 
     Management Agency, shall notify the Committee on Small 
     Business and Entrepreneurship of the Senate and the Committee 
     on Small Business of the House of Representatives as to 
     whether the Administrator intends to extend such application 
     period; and
       ``(ii) not later than 10 days before the closing date of an 
     application period for disaster relief under the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act for any 
     major disaster (as that term is defined in section 102 of the 
     Robert T. Stafford Disaster Relief and Emergency Assistance 
     Act (42 U.S.C. 5122)) for which the President has declared a 
     catastrophic national disaster under paragraph (6), the 
     Director of the Federal Emergency Management Agency, in 
     consultation with the Administrator, shall notify the 
     Committee on Small Business and Entrepreneurship of the 
     Senate and the Committee on Small Business of the House of 
     Representatives as to whether the Director intends to extend 
     such application period.
       ``(8) Public awareness of disasters.--If a disaster 
     (including a catastrophic national disaster) is declared 
     under this subsection, the Administrator shall make every 
     effort to communicate through radio, television, print, and 
     web-based outlets, all relevant information needed by 
     disaster loan applicants, including--
       ``(A) the date of such declaration;
       ``(B) cities and towns within the area of such declaration;
       ``(C) loan application deadlines related to such disaster;
       ``(D) all relevant contact information for victim services 
     available through the Administration (including links to 
     small business development center websites);
       ``(E) links to relevant Federal and State disaster 
     assistance websites;
       ``(F) information on eligibility criteria for Federal 
     Emergency Management Agency disaster assistance applications, 
     as well as for Administration loan programs, including where 
     such applications can be found; and
       ``(G) application materials that clearly state the function 
     of the Administration as the Federal source of disaster loans 
     for homeowners and renters.''.
       (b) Coordination of Agencies and Outreach.--Not later than 
     90 days after the date of enactment of this Act, the 
     Administrator and the Director of the Federal Emergency 
     Management Agency shall enter into a memorandum of 
     understanding that ensures, to the maximum extent 
     practicable, adequate lodging and transportation for 
     employees of the Administration, contract employees, and 
     volunteers during a major disaster, if such staff are needed 
     to assist businesses, homeowners, or renters in recovery.
       (c) Marketing and Outreach.--Not later than 90 days after 
     the date of enactment of this Act, the Administrator shall 
     create a marketing and outreach plan that--
       (1) encourages a proactive approach to the disaster relief 
     efforts of the Administration;
       (2) distinguishes between disaster services provided by the 
     Administration and disaster services provided by the Federal 
     Emergency Management Agency, including contact information, 
     application information, and timelines for submitting 
     applications, the review of applications, and the 
     disbursement of funds;
       (3) describes the different disaster loan programs of the 
     Administration, including how they are made available and 
     what eligibility requirements exist for each loan program;
       (4) provides for regional marketing, focusing on disasters 
     occurring in each region before the date of enactment of this 
     Act, and likely scenarios for disasters in each such region; 
     and
       (5) ensures that the marketing plan is made available at 
     small business development centers and on the website of the 
     Administration.

     SEC. 305. CONSISTENCY BETWEEN ADMINISTRATION REGULATIONS AND 
                   STANDARD OPERATING PROCEDURES.

       (a) In General.--The Administrator shall, promptly 
     following the date of enactment of this Act, conduct a study 
     of whether the standard operating procedures of the 
     Administration for loans offered under section 7(b) of the 
     Small Business Act (15 U.S.C. 636(b)) are consistent with the 
     regulations of the Administration for administering the 
     disaster loan program.
       (b) Report.--Not later than 180 days after the date of 
     enactment of this Act, the Administration shall submit to 
     Congress a report containing all findings and recommendations 
     of the study conducted under subsection (a).

     SEC. 306. PROCESSING DISASTER LOANS.

       (a) Authority for Qualified Private Contractors to Process 
     Disaster Loans.--Section 7(b) of the Small Business Act (15 
     U.S.C. 636(b)) is amended by inserting immediately after 
     paragraph (8), as added by this Act, the following:
       ``(9) Authority for qualified private contractors.--
       ``(A) Disaster loan processing.--The Administrator may 
     enter into an agreement with a qualified private contractor, 
     as determined by the Administrator, to process loans under 
     this subsection in the event of a major disaster (as defined 
     in section 102 of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5122)) or a catastrophic 
     national disaster declared under paragraph (6), under which 
     the Administrator shall pay the contractor a fee for each 
     loan processed.
       ``(B) Loan loss verification services.--The Administrator 
     may enter into an agreement with a qualified lender or loss 
     verification professional, as determined by the 
     Administrator, to verify losses for loans under this 
     subsection in the event of a major disaster (as defined in 
     section 102 of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5122)) or a catastrophic 
     national disaster declared under paragraph (6), under which 
     the Administrator shall pay the lender or verification 
     professional a fee for each loan for which such lender or 
     verification professional verifies losses.''.
       (b) Coordination of Efforts Between the Administrator and 
     the Internal Revenue Service To Expedite Loan Processing.--
     The Administrator and the Commissioner of Internal Revenue 
     shall, to the maximum extent practicable, ensure that all 
     relevant and allowable tax records for loan approval are 
     shared with loan processors in an expedited manner, upon 
     request by the Administrator.
       (c) Report on Loan Approval Rate.--
       (1) In general.--Not later than 6 months after the date of 
     enactment of this Act, the Administrator shall submit a 
     report to the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives detailing how the 
     Administration can improve the processing of applications 
     under the disaster loan program of the Administration.
       (2) Contents.--The report submitted under paragraph (1) 
     shall include--
       (A) recommendations, if any, regarding--
       (i) staffing levels during a major disaster;
       (ii) how to improve the process for processing, approving, 
     and disbursing loans under the disaster loan program of the 
     Administration, to ensure that the maximum assistance is 
     provided to victims in a timely manner;
       (iii) the viability of using alternative methods for 
     assessing the ability of an applicant to repay a loan, 
     including the credit score of the applicant on the day before 
     the date on which the disaster for which the applicant is 
     seeking assistance was declared;
       (iv) methods, if any, for the Administration to expedite 
     loss verification and loan processing of disaster loans 
     during a major

[[Page 22752]]

     disaster for businesses affected by, and located in the area 
     for which the President declared, the major disaster that are 
     a major source of employment in the area or are vital to 
     recovery efforts in the region (including providing debris 
     removal services, manufactured housing, or building 
     materials);
       (v) legislative changes, if any, needed to implement 
     findings from the Administration's Accelerated Disaster 
     Response Initiative; and
       (vi) a description of how the Administration plans to 
     integrate and coordinate the response to a major disaster 
     with the technical assistance programs of the Administration; 
     and
       (B) the plans of the Administrator for implementing any 
     recommendation made under subparagraph (A).

     SEC. 307. DEVELOPMENT AND IMPLEMENTATION OF MAJOR DISASTER 
                   RESPONSE PLAN.

       (a) In General.--Not later than March 15, 2007, the 
     Administrator shall--
       (1) by rule, amend the 2006 Atlantic hurricane season 
     disaster response plan of the Administration (in this section 
     referred to as the ``disaster response plan'') to apply to 
     major disasters and catastrophic national disasters, 
     consistent with this Act and the amendments made by this Act; 
     and
       (2) submit a report to the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives detailing the 
     amendments to the disaster response plan.
       (b) Contents.--The amended report required under subsection 
     (a)(2) shall include--
       (1) any updates or modifications made to the disaster 
     response plan since the report regarding the disaster 
     response plan submitted on July 14, 2006;
       (2) a description of how the Administrator plans to utilize 
     and integrate District Office personnel of the Administration 
     in the response to a major disaster, including information on 
     the utilization of personnel for loan processing and loan 
     disbursement;
       (3) a description of the disaster scalability model of the 
     Administration and on what basis or function the plan is 
     scaled;
       (4) a description of how the agency-wide Disaster Oversight 
     Council is structured, which offices comprise its membership, 
     and whether the Associate Deputy Administrator for 
     Entrepreneurial Development of the Administration is a 
     member;
       (5) a description of how the Administrator plans to 
     coordinate the disaster efforts of the Administration with 
     State and local government officials, including 
     recommendations on how to better incorporate State 
     initiatives or programs, such as State-administered bridge 
     loan programs, into the disaster response of the 
     Administration;
       (6) recommendations, if any, on how the Administrator can 
     better coordinate its disaster response operations with the 
     operations of other Federal, State, and local entities;
       (7) any surge plan for the system in effect on or after 
     August 29, 2005 (including surge plans for loss verification, 
     loan processing, mailroom, customer service or call center 
     operations, and a continuity of operations plan);
       (8) the number of full-time equivalent employees and job 
     descriptions for the planning and disaster response staff of 
     the Administration;
       (9) the in-service and preservice training procedures for 
     disaster response staff of the Administration;
       (10) information on the logistical support plans of the 
     Administration (including equipment and staffing needs, and 
     detailed information on how such plans will be scalable 
     depending on the size and scope of the major disaster;
       (11) a description of the findings and recommendations of 
     the Administrator, if any, based on a review of the response 
     of the Administration to Hurricane Katrina of 2005, Hurricane 
     Rita of 2005, and Hurricane Wilma of 2005; and
       (12) a plan for how the Administrator, in cooperation with 
     the Director of the Federal Emergency Management Agency, will 
     coordinate the provision of accommodations and necessary 
     resources for disaster assistance personnel to effectively 
     perform their responsibilities in the aftermath of a major 
     disaster.
       (c) Exercises.--Not later than May 31, 2007, the 
     Administrator shall develop and execute simulation exercises 
     to demonstrate the effectiveness of the amended disaster 
     response plan required under this section.

     SEC. 308. CONGRESSIONAL OVERSIGHT.

       (a) Monthly Accounting Report to Congress.--
       (1) Definition.--In this subsection the term ``applicable 
     period'' means the period beginning on the date on which the 
     President declares a major disaster and ending on the date 
     that is 30 days after the later of the closing date for 
     applications for physical disaster loans for such disaster 
     and the closing date for applications for economic injury 
     disaster loans for such disaster.
       (2) Reporting requirements.--Not later than the fifth 
     business day of each month during the applicable period for a 
     major disaster, the Administrator shall provide to the 
     Committee on Small Business and Entrepreneurship and the 
     Committee on Appropriations of the Senate and to the 
     Committee on Small Business and the Committee on 
     Appropriations of the House of Representatives a report on 
     the operation of the disaster loan program authorized under 
     section 7 of the Small Business Act (15 U.S.C. 636) for such 
     disaster during the preceding month.
       (3) Contents.--Each report under paragraph (2) shall 
     include--
       (A) the daily average lending volume, in number of loans 
     and dollars, and the percent by which each category has 
     increased or decreased since the previous report under 
     paragraph (2);
       (B) the weekly average lending volume, in number of loans 
     and dollars, and the percent by which each category has 
     increased or decreased since the previous report under 
     paragraph (2);
       (C) the amount of funding spent over the month for loans, 
     both in appropriations and program level, and the percent by 
     which each category has increased or decreased since the 
     previous report under paragraph (2);
       (D) the amount of funding available for loans, both in 
     appropriations and program level, and the percent by which 
     each category has increased or decreased, noting the source 
     of any additional funding;
       (E) an estimate of how long the available funding for such 
     loans will last, based on the spending rate;
       (F) the amount of funding spent over the month for staff, 
     along with the number of staff, and the percent by which each 
     category has increased or decreased since the previous report 
     under paragraph (2);
       (G) the amount of funding spent over the month for 
     administrative costs, and the percent by which such spending 
     has increased or decreased since the previous report under 
     paragraph (2);
       (H) the amount of funding available for salaries and 
     expenses combined, and the percent by which such funding has 
     increased or decreased, noting the source of any additional 
     funding; and
       (I) an estimate of how long the available funding for 
     salaries and expenses will last, based on the spending rate.
       (b) Daily Disaster Updates to Congress for Presidentially 
     Declared Disasters.--
       (1) In general.--Each day during a disaster update period, 
     excluding Federal holidays and weekends, the Administration 
     shall provide to the Committee on Small Business and 
     Entrepreneurship of the Senate and to the Committee on Small 
     Business of the House of Representatives a report on the 
     operation of the disaster loan program of the Administration 
     for the area in which the President declared a major disaster 
     or a catastrophic national disaster, as the case may be.
       (2) Contents.--Each report under paragraph (1) shall 
     include--
       (A) the number of Administration staff performing loan 
     processing, field inspection, and other duties for the 
     declared disaster, and the allocations of such staff in the 
     disaster field offices, disaster recovery centers, workshops, 
     and other Administration offices nationwide;
       (B) the daily number of applications received from 
     applicants in the relevant area, as well as a breakdown of 
     such figures by State;
       (C) the daily number of applications pending application 
     entry from applicants in the relevant area, as well as a 
     breakdown of such figures by State;
       (D) the daily number of applications withdrawn by 
     applicants in the relevant area, as well as a breakdown of 
     such figures by State;
       (E) the daily number of applications summarily declined by 
     the Administration from applicants in the relevant area, as 
     well as a breakdown of such figures by State;
       (F) the daily number of applications declined by the 
     Administration from applicants in the relevant area, as well 
     as a breakdown of such figures by State;
       (G) the daily number of applications in process from 
     applicants in the relevant area, as well as a breakdown of 
     such figures by State;
       (H) the daily number of applications approved by the 
     Administration from applicants in the relevant area, as well 
     as a breakdown of such figures by State;
       (I) the daily dollar amount of applications approved by the 
     Administration from applicants in the relevant area, as well 
     as a breakdown of such figures by State;
       (J) the daily amount of loans dispersed, both partially and 
     fully, by the Administration to applicants in the relevant 
     area, as well as a breakdown of such figures by State;
       (K) the daily dollar amount of loans dispersed, both 
     partially and fully, from the relevant area, as well as a 
     breakdown of such figures by State;
       (L) the number of applications approved, including dollar 
     amount approved, as well as applications partially and fully 
     dispersed, including dollar amounts, since the last report 
     under paragraph (1); and
       (M) the declaration date, physical damage closing date, 
     economic injury closing date, and number of counties included 
     in the declaration of a major disaster.
       (c) Notice of the Need for Supplemental Funds.--On the same 
     date that the Administrator notifies any committee of the 
     Senate

[[Page 22753]]

     or the House of Representatives that supplemental funding is 
     necessary for the disaster loan program of the Administration 
     in any fiscal year, the Administrator shall notify in writing 
     the Committee on Small Business and Entrepreneurship of the 
     Senate and to the Committee on Small Business of the House of 
     Representatives regarding the need for supplemental funds for 
     such loan program.
       (d) Report on Contracting.--
       (1) In general.--Not later than 6 months after the date on 
     which the President declares a declared disaster, and every 6 
     months thereafter until the date that is 18 months after the 
     date on which the declared disaster was declared, the 
     Administrator shall submit a report to the Committee on Small 
     Business and Entrepreneurship of the Senate and to the 
     Committee on Small Business of the House of Representatives 
     regarding Federal contracts awarded as a result of the 
     declared disaster.
       (2) Contents.--Each report submitted under paragraph (1) 
     shall include--
       (A) the total number of contracts awarded as a result of 
     the declared disaster;
       (B) the total number of contracts awarded to small business 
     concerns as a result of the declared disaster;
       (C) the total number of contracts awarded to women and 
     minority-owned businesses as a result of the declared 
     disaster; and
       (D) the total number of contracts awarded to local 
     businesses as a result of the declared disaster.

                      TITLE IV--ENERGY EMERGENCIES

     SEC. 401. FINDINGS.

       Congress finds that--
       (1) a significant number of small business concerns in the 
     United States, nonfarm as well as agricultural producers, use 
     heating oil, natural gas, propane, or kerosene to heat their 
     facilities and for other purposes;
       (2) a significant number of small business concerns in the 
     United States sell, distribute, market, or otherwise engage 
     in commerce directly related to heating oil, natural gas, 
     propane, and kerosene; and
       (3) significant increases in the price of heating oil, 
     natural gas, propane, or kerosene--
       (A) disproportionately harm small business concerns 
     dependent on those fuels or that use, sell, or distribute 
     those fuels in the ordinary course of their business, and can 
     cause them substantial economic injury;
       (B) can negatively affect the national economy and regional 
     economies;
       (C) have occurred in the winters of 1983 to 1984, 1988 to 
     1989, 1996 to 1997, 1999 to 2000, 2000 to 2001, and 2004 to 
     2005; and
       (D) can be caused by a host of factors, including 
     international conflicts, global or regional supply 
     difficulties, weather conditions, insufficient inventories, 
     refinery capacity, transportation, and competitive structures 
     in the markets, causes that are often unforeseeable to, and 
     beyond the control of, those who own and operate small 
     business concerns.

     SEC. 402. SMALL BUSINESS ENERGY EMERGENCY DISASTER LOAN 
                   PROGRAM.

       (a) In General.--Section 7(b) of the Small Business Act (15 
     U.S.C. 636(b)) is amended by inserting after paragraph (9), 
     as added by this Act, the following:
       ``(10) Energy emergencies.--
       ``(A) Definitions.--In this paragraph--
       ``(i) the term `base price index' means the moving average 
     of the closing unit price on the New York Mercantile Exchange 
     for heating oil, natural gas, or propane for the 10 days, in 
     each of the most recent 2 preceding years, which correspond 
     to the trading days described in clause (ii);
       ``(ii) the term `current price index' means the moving 
     average of the closing unit price on the New York Mercantile 
     Exchange, for the 10 most recent trading days, for contracts 
     to purchase heating oil, natural gas, or propane during the 
     subsequent calendar month, commonly known as the `front 
     month';
       ``(iii) the term `heating fuel' means heating oil, natural 
     gas, propane, or kerosene; and
       ``(iv) the term `significant increase' means--

       ``(I) with respect to the price of heating oil, natural 
     gas, or propane, any time the current price index exceeds the 
     base price index by not less than 40 percent; and
       ``(II) with respect to the price of kerosene, any increase 
     which the Administrator, in consultation with the Secretary 
     of Energy, determines to be significant.

       ``(B) Authorization.--The Administration may make such 
     loans, either directly or in cooperation with banks or other 
     lending institutions through agreements to participate on an 
     immediate or deferred basis, to assist a small business 
     concern that has suffered or that is likely to suffer 
     substantial economic injury as the result of a significant 
     increase in the price of heating fuel occurring on or after 
     October 1, 2004.
       ``(C) Interest rate.--Any loan or guarantee extended under 
     this paragraph shall be made at the same interest rate as 
     economic injury loans under paragraph (2).
       ``(D) Maximum amount.--No loan may be made under this 
     paragraph, either directly or in cooperation with banks or 
     other lending institutions through agreements to participate 
     on an immediate or deferred basis, if the total amount 
     outstanding and committed to the borrower under this 
     subsection would exceed $1,500,000, unless such borrower 
     constitutes a major source of employment in its surrounding 
     area, as determined by the Administrator, in which case the 
     Administrator, in the discretion of the Administrator, may 
     waive the $1,500,000 limitation.
       ``(E) Declarations.--For purposes of assistance under this 
     paragraph--
       ``(i) a declaration of a disaster area based on conditions 
     specified in this paragraph shall be required, and shall be 
     made by the President or the Administrator; or
       ``(ii) if no declaration has been made under clause (i), 
     the Governor of a State in which a significant increase in 
     the price of heating fuel has occurred may certify to the 
     Administration that small business concerns have suffered 
     economic injury as a result of such increase and are in need 
     of financial assistance which is not otherwise available on 
     reasonable terms in that State, and upon receipt of such 
     certification, the Administration may make such loans as 
     would have been available under this paragraph if a disaster 
     declaration had been issued.
       ``(F) Use of funds.--Notwithstanding any other provision of 
     law, loans made under this paragraph may be used by a small 
     business concern described in subparagraph (B) to convert 
     from the use of heating fuel to a renewable or alternative 
     energy source, including agriculture and urban waste, 
     geothermal energy, cogeneration, solar energy, wind energy, 
     or fuel cells.''.
       (b) Conforming Amendments Relating to Heating Fuel.--
     Section 3(k) of the Small Business Act (15 U.S.C. 632(k)) is 
     amended--
       (1) by inserting ``, significant increase in the price of 
     heating fuel'' after ``civil disorders''; and
       (2) by inserting ``other'' before ``economic''.
       (c) Effective Period.--The amendments made by this section 
     shall apply during the 4-year period beginning on the date on 
     which guidelines are published by the Administrator under 
     section 404.

     SEC. 403. AGRICULTURAL PRODUCER EMERGENCY LOANS.

       (a) In General.--Section 321(a) of the Consolidated Farm 
     and Rural Development Act (7 U.S.C. 1961(a)) is amended--
       (1) in the first sentence--
       (A) by striking ``operations have'' and inserting 
     ``operations (i) have''; and
       (B) by inserting before ``: Provided,'' the following: ``, 
     or (ii)(I) are owned or operated by such an applicant that is 
     also a small business concern (as defined in section 3 of the 
     Small Business Act (15 U.S.C. 632)), and (II) have suffered 
     or are likely to suffer substantial economic injury on or 
     after October 1, 2004, as the result of a significant 
     increase in energy costs or input costs from energy sources 
     occurring on or after October 1, 2004, in connection with an 
     energy emergency declared by the President or the 
     Secretary'';
       (2) in the third sentence, by inserting before the period 
     at the end the following: ``or by an energy emergency 
     declared by the President or the Secretary''; and
       (3) in the fourth sentence--
       (A) by inserting ``or energy emergency'' after ``natural 
     disaster'' each place that term appears; and
       (B) by inserting ``or declaration'' after ``emergency 
     designation''.
       (b) Funding.--Funds available on the date of enactment of 
     this Act for emergency loans under subtitle C of the 
     Consolidated Farm and Rural Development Act (7 U.S.C. 1961 et 
     seq.) shall be available to carry out the amendments made by 
     subsection (a) to meet the needs resulting from energy 
     emergencies.
       (c) Effective Period.--The amendments made by this section 
     shall apply during the 4-year period beginning on the date on 
     which guidelines are published by the Secretary of 
     Agriculture under section 404.

     SEC. 404. GUIDELINES AND RULEMAKING.

       (a) Guidelines.--Not later than 30 days after the date of 
     enactment of this Act, the Administrator and the Secretary of 
     Agriculture shall each issue such guidelines as the 
     Administrator or the Secretary, as applicable, determines to 
     be necessary to carry out this title and the amendments made 
     by this title.
       (b) Rulemaking.--Not later than 30 days after the date of 
     enactment of this Act, the Administrator, after consultation 
     with the Secretary of Energy, shall promulgate regulations 
     specifying the method for determining a significant increase 
     in the price of kerosene under section 7(b)(10)(A)(iv)(II) of 
     the Small Business Act, as added by this Act.

     SEC. 405. REPORTS.

       (a) Small Business Administration.--Not later than 12 
     months after the date on which the Administrator issues 
     guidelines under section 404, and annually thereafter until 
     the date that is 12 months after the end of the effective 
     period of section 7(b)(10) of the Small Business Act, as 
     added by this Act, the Administrator shall submit to the 
     Committee on Small Business and Entrepreneurship of the 
     Senate and the Committee on Small Business of the House of 
     Representatives, a report on the effectiveness of the 
     assistance made available under section 7(b)(10) of the Small 
     Business Act, as added by this Act, including--

[[Page 22754]]

       (1) the number of small business concerns that applied for 
     a loan under such section and the number of those that 
     received such loans;
       (2) the dollar value of those loans;
       (3) the States in which the small business concerns that 
     received such loans are located;
       (4) the type of heating fuel or energy that caused the 
     significant increase in the cost for the participating small 
     business concerns; and
       (5) recommendations for ways to improve the assistance 
     provided under such section 7(b)(10), if any.
       (b) Department of Agriculture.--Not later than 12 months 
     after the date on which the Secretary of Agriculture issues 
     guidelines under section 404, and annually thereafter until 
     the date that is 12 months after the end of the effective 
     period of the amendments made to section 321(a) of the 
     Consolidated Farm and Rural Development Act (7 U.S.C. 
     1961(a)) by this title, the Secretary shall submit to the 
     Committee on Small Business and Entrepreneurship and the 
     Committee on Agriculture, Nutrition, and Forestry of the 
     Senate and the Committee on Small Business and the Committee 
     on Agriculture of the House of Representatives, a report 
     that--
       (1) describes the effectiveness of the assistance made 
     available under section 321(a) of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 1961(a)); and
       (2) contains recommendations for ways to improve the 
     assistance provided under such section 321(a), if any.

  Mr. KERRY. Mr. President, in the 15 months since Hurricane Katrina 
decimated gulf coast communities, Senators Snowe, Landrieu, Vitter, and 
I have worked to produce a comprehensive package to reform the SBA's 
disaster loan program. The SBA's failed response in a time of unmatched 
need demonstrated to everyone that this program is broken and needs 
fixing.
  Immediately after Hurricane Katrina hit, I introduced an amendment 
with Senator Landrieu to the fiscal year 2006 Commerce, Justice and 
Science appropriations bill to address the needs of gulf region small 
business and homeowners. The amendment was adapted with input from 
Chair Snowe, and a subsequent bipartisan amendment passed the Senate 
with a vote of 96 to 0. Although the entire Senate supported the 
amendment, it was stripped out of the bill conference.
  On September 30, 2005, I again worked with Chair Snowe and Senators 
Landrieu and Vitter to introduce the Small Business Hurricane Relief 
and Reconstruction Act of 2006, S. 1807. Although this bill presented a 
bipartisan, comprehensive approach to hurricane relief, it stalled in 
the face of the Administration's opposition. In June, I introduced the 
Small Business Disaster Loan Reauthorization and Improvements Act of 
2006, S. 3487, which once again attempted to comprehensively address 
the shortcomings of this program. Finally, in August, and with 
continued opposition from the administration, the, committee 
unanimously reported S. 3778, the Small Business Reauthorization and 
Improvements Act of 2006, which again put forward a bipartisan, 
comprehensive fix for this program.
  Many of the provisions included in the bill we are introducing today 
were included in one or more of these previous proposals. The bill 
includes directives for the SBA to create a private disaster loan 
program, to allow for lenders to issue disaster loans. To ensure that 
these loans are borrower friendly, we provide authorization for 
appropriations so that the agency can subsidize the interest rates. In 
addition, the administrator is authorized to enter into agreements with 
private contractors in order to expedite loan application processing 
for direct disaster loans.
  The bill also includes language directing SBA to create an expedited 
disaster assistance loan program to provide businesses with short-term 
loans so that they may keep their doors open until they receive 
alternative forms of assistance. The days immediately following a 
disaster are crucial for business owners--statistics show that once 
they close their doors, they likely will not open them again. These 
short-term loans should help prevent those doors from closing.
  A Presidential declaration of catastrophic national disaster will 
allow the administrator to offer economic injury disaster loans to 
adversely affected business owners beyond the geographic reach of the 
disaster area.
  Nonprofit entities working to provide services to victims should be 
rewarded and given access to the capital they require to continue their 
services. To this end, the administrator is authorized to make disaster 
loans to nonprofit entities, including religious organizations.
  Construction and rebuilding contracts being awarded are likely to be 
larger than the current $2 million threshold currently applied to the 
SBA Surety Bond Program which helps small construction firms gain 
access to contracts. This bill increases the guarantee against loss for 
small business contracts up to $5 million and allows the administrator 
to increase that level to $10 million, if deemed necessary.
  The bill also provides for small business development centers to 
offer business counseling in disaster areas and to travel beyond 
traditional geographic boundaries to provide services during declared 
disasters. To encourage small business development centers located in 
disaster areas to keep their doors open, the maximum grant amount is 
waived.
  So that Congress may remain better aware of the status of the 
administration's disaster loan program, this bill directs the 
administration to report to the Committee on Small Business and 
Entrepreneurship of the Senate and to the Committee on Small Business 
of the House of Representatives regularly on the fiscal status of the 
disaster loan program as well as the need for supplemental funding. The 
administration is also directed to report on the number of Federal 
contracts awarded to small businesses, minority-owned small businesses, 
women-owned businesses, and local businesses during a disaster 
declaration.
  Finally, gas prices continue to fluctuate, and fuel-dependent small 
businesses are struggling with the cost of energy. This bill provides 
relief to small business owners during times of above average energy 
price increases, authorizing energy disaster loans through the Small 
Business Administration and the Department of Agriculture to companies 
that depend on fuel.
  Residents of the gulf coast continue to rebuild from last year's 
hurricane season. By all accounts, Administrator Preston has 
implemented policies that are helping gulf coast victims get back on 
their feet. However, the SBA needs the tools offered in this bill in 
order to comprehensively address the needs of business owners following 
a large-scale disaster. As the 109th Congress prepares to adjourn, it 
is unconscionable that we have not yet put in place the reforms needed 
for this program to function effectively. I urge my colleagues in the 
final days of this session to support this legislation, so that God 
forbid another region has to deal with a disaster the size and scope of 
the 2005 gulf coast hurricanes, the SBA will be fully able to provide 
the assistance that homeowners and business owners require.
  Ms. LANDRIEU. Mr. President, as we all know, there was a tremendous 
amount of criticism of the Federal Government's response to Hurricanes 
Katrina and Rita last year. Things are better now and the region is 
slowly recovering. But having just finished the 2006 Hurricane season, 
and with the 2007 season a few months away, we must be sure that if we 
have another disaster, the Federal Government's response will be better 
this time around. Disaster response agencies have to be better 
organized, more efficient, and more responsive in order to avoid the 
problems, the delays, mismanagement, and the seeming incompetence that 
occurred last year.
  Today, I am proud to be an original cosponsor of legislation to 
improve the disaster response of one agency that had a great deal of 
problems last year, the Small Business Administration, SBA. This bill, 
the Small Business Disaster Response and Loan Improvements Act, makes 
major improvements to the SBA's disaster response and provides them 
with essential tools to ensure that they are more efficient and better 
prepared for future disasters--big and small. I should also note that

[[Page 22755]]

this bill is a result of intensive bipartisan work over the past few 
months. As such, it is reflective of the priorities from Senators Snowe 
and Kerry, respectively chair and ranking member of the Senate Small 
Business Committee, as well as Senator Landrieu. For my part, I have 
heard loud and clear from our impacted businesses that SBA reforms 
should be implemented as soon as possible. That is why in September, I 
sent a letter to the new SBA Administrator Steve Preston, expressing 
concerns on the lack of progress on SBA Disaster reforms, which were 
included in S. 3778, the fiscal year 2007 SBA reauthorization bill 
reported out of the Senate Small Business Committee. In this letter, I 
requested his cooperation, along with our committee, to pass this 
important legislation before Congress adjourns at the end of the year. 
The introduction of this bill today, shows the progress that the 
committee made since September on this issue. I hope that this spirit 
of bipartisanship continues well into the 110th Congress and that I can 
continue to work with my colleagues on the Senate Small Business 
Committee to reform SBA.
  This legislation offers new tools to enhance SBA's disaster 
assistance programs. In every disaster, the SBA disaster loan program 
is a lifeline for businesses and homeowners who want to rebuild their 
lives after a catastrophe. When Katrina hit, our businesses and 
homeowners had to wait months for loan approvals. I do not know how 
many businesses we lost because help did not come in time. Because of 
the scale of this disaster, what these businesses needed was immediate, 
short-term assistance to hold them over until SBA was ready to process 
the tens of thousands of loan applications it received.
  That is why this legislation provides the SBA Administrator with the 
ability to set up an expedited disaster assistance business loan 
program to make short-term, low-interest loans to keep them afloat. 
These loans will allow businesses to make payroll, begin making 
repairs, and address other immediate needs while they are awaiting 
insurance payouts or regular SBA disaster loans. However, I realize 
that every disaster is different and could range from a disaster on the 
scale of Hurricane Katrina or 911, to an ice storm or drought. This 
legislation gives the SBA additional options and flexibility in the 
kinds of relief they can offer a community. When a tornado destroys 20 
businesses in a small town in the Midwest, SBA can get the regular 
disaster program up and running fairly quickly. You may not need short-
term loans in this instance. But if you know that SBA's resources would 
be overwhelmed by a storm--just as they were initially with Katrina--
these expedited business loans would be very helpful.
  This legislation also would direct SBA to study ways to expedite 
disaster loans for those businesses in a disaster area that have a 
good, solid track record with the SBA or can provide vital recovery 
efforts. We had many businesses in the gulf coast that had paid off 
previous SBA loans, were major sources of employment in their 
communities, but had to wait months for decisions on their SBA disaster 
loan applications. I do not want to get rid of the SBA's current 
practice of reviewing applications on a first-come- first-served basis, 
but there should be some mechanism in place for major disasters to get 
expedited loans out the door to specific businesses that has a positive 
record with SBA or those that could serve a vital role in the recovery 
efforts. Expedited loans would jump- start impacted economies, get 
vital capital out to businesses, and retain essential jobs following 
future disasters.
  This bill also makes an important modification to the collateral 
requirements for disaster loans. The SBA cannot disburse more than 
$10,000 for an approved loan without showing collateral. This is to 
limit the loss to the SBA in the event that a loan defaults. However, 
this disbursement amount has not been increased since 1998, and these 
days, $10,000 is not enough to get a business up and running. That is 
why this bill increases this collateral requirement to $14,000 and 
gives the Administrator the ability to increase that amount, in the 
event of another large-scale disaster. I believe this is a reasonable 
and fiscally responsible increase, and at the same time gives the 
Administrator flexibility for future disasters which will inevitably 
occur.
  As you may know, pushed to get language in the last hurricane 
supplemental appropriations bill in June 2006 to require SBA to develop 
a disaster plan and report to Congress on its contents by July 15, 
2006. SBA provided this status report in July, and I am pleased that, 
since then, SBA has been working on a comprehensive disaster response 
plan. That said, I believe that with the 2007 Atlantic hurricane season 
fast approaching, and other disasters possible before then, the SBA 
should be looking at additional ways to improve upon this plan. This 
legislation requires SBA to report to Congress, by March 15, 2007, on 
the current status of its response plan and to provide us with a 
snapshot of where they were with Katrina and where they are now. The 
report also requests SBA feedback on suggested improvements. These 
improvements include better incorporating State disaster assistance 
efforts into SBA's response, as well as better coordination with 
Federal response agencies like FEMA.
  The Small Business Disaster Response and Loan Improvements Act will 
provide essential tools to make the SBA more proactive, flexible, and 
most important, more efficient during future disasters. Again, I look 
forward to working with both Senator Snowe and Senator Kerry during the 
110th Congress to ensure that the SBA has everything it needs to meet 
these goals.
  I thank the Chair and ask that my entire statement appear in the 
Record. I also ask unanimous consent that a copy of my September 27, 
2006, letter to SBA be printed in the Record at the conclusion of my 
statement.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                                      U.S. Senate,
                               Washington, DC, September 27, 2006.
     Hon. Steven C. Preston,
     Administrator, U.S. Small Business Administration, 
         Washington, DC.
       Dear Administrator Preston: Let me take this opportunity to 
     again congratulate you on your confirmation as Administrator 
     of the U.S. Small Business Administration (SBA). Your 
     management experience and passion to serve will prove 
     extremely helpful to you in this challenging position.
       I write you today because, as member of the Senate 
     Committee on Small Business and Entrepreneurship, as well as 
     senator from a state hit hard by both Hurricanes Katrina and 
     Rita, I believe it is my duty to ensure that we implement 
     substantive changes to SBA's Disaster Assistance Program 
     during this session of Congress.
       The SBA's response to Katrina and Rita was too slow and 
     lacking in urgency--threatening the very survival of our 
     affected businesses. A year has passed since Hurricanes 
     Katrina and Rita, yet while Congress is currently acting on 
     extensive reforms for the Federal Emergency Management Agency 
     (FEMA), there has been only incremental changes to SBA's 
     Disaster Assistance Program. That is why I am pleased to 
     learn that you have recently created the Accelerated Disaster 
     Response Initiative to identify and help implement process 
     improvements to enable the SBA to respond more quickly in 
     assisting small businesses and homeowners in need of 
     assistance after a disaster. I applaud these efforts and your 
     leadership on this issue. But much more must be done to 
     address the systemic problems that led to delays and inaction 
     post-Katrina and Rita.
       For our part, the Senate is also attempting to address the 
     multiple problems that hampered SBA's ability to assist 
     impacted Gulf Coast small businesses and homeowners. Under 
     the leadership of the Chair and Ranking Member of the Senate 
     Committee on Small Business and Entrepreneurship, Senators 
     Snowe and Kerry, the committee voted unanimously to approve 
     S. 3778, the ``Small Business Reauthorization and 
     Improvements Act of 2006'' and sent it to the full Senate for 
     consideration. A copy of the bill is attached for your 
     convenience. This bipartisisan legislation re-authorizes SBA 
     programs, and also of great importance to me and my 
     constitutents, makes essential reforms to SBA's Disaster 
     Assistance Program. However, since S. 3778 was introduced on 
     August 2, 2006, almost nine weeks ago, it has been blocked 
     from consideration and the Committee is still waiting for 
     budget information so that it may file its report on the 
     bill. It is my understanding that the administration and SBA 
     has several concerns about this bill in its current form.
       I am very concerned at this apparent deadlock, a deadlock 
     which threatens our bipartisan efforts to implement 
     comprehensive

[[Page 22756]]

     SBA Diaster Assistance reforms before the end of the year. In 
     particular, I believe that there must be SBA reforms in the 
     following areas:
       Short-Term Assistance: Following Katrina and Rita small 
     businesses waited, on average, four to six months for 
     approvals and disbursements on SBA Disaster Loans, In order 
     to ensure the long-term survival of small businesses impacted 
     by a catastrophic disaster, SBA needs to be in the business 
     of short-term recovery--by providing either emergency bridge 
     loans or grants.
       Disaster Loan Process for Homeowners: While SBA's mission 
     is to ``aid, counsel, assist and protect, insofar as is 
     possible, the interests of small business concerns'' it also 
     has the added responsibility of helping affected homeowners 
     rebuild their housing post-disaster. Katrina and Rita 
     resulted in record numbers of SBA Disaster Loan applications, 
     from homeowners, which strained SBA's existing resources and 
     personnel. If the SBA must bear this responsibility, the 
     agency should improve the process as well as possibly seek 
     greater coordination and cooperation with the U.S. Department 
     of Housing and Urban Development on disaster housing 
     assistance.
       Expedited Disaster Loans to Businesses: The SBA currently 
     has no mechanism in place to expedite Disaster Loans to 
     impacted businesses that are either a major source of 
     employment or that can demonstrate a vital contribution to 
     recovery efforts in the area, such as businesses who 
     construct housing, provide building materials, or conduct 
     debris removal. The SBA needs the ability to fast-track loans 
     to these businesses, in order to jumpstart local economies 
     and recovery efforts.
       Economic Injury Disaster Loans: Although Katrina and Rita 
     directly affected businesses along the Gulf Coast, additional 
     businesses in the region, as well as the rest of the country, 
     were economically impacted by the storms. The SBA must have 
     the ability to provide nationwide, or perhaps regional, 
     economic injury disaster loans to businesses which can 
     demonstrate economic distress or disruption from a future 
     major disaster.
       Loss Verification and Loan Processing: Following the Gulf 
     Coast hurricanes, the SBA struggled for months to hire enough 
     staff to inspect losses and process loan applications. 
     Although SBA now has trained reserves to handle such surges 
     in demand, the SBA also needs the permanent authority to 
     enter into agreements with qualified private lenders and 
     credit unions to process Disaster Loans and provide loss 
     verification services.
       Administrator Preston, I was impressed by your expressed 
     willingness to be a bridge between Congress and the White 
     House. For the SBA truly bring its disaster capabilities to 
     the next level, I believe that it must work in concert with 
     the Congress. Together, we must remove layers of bureaucracy 
     and red tape, which, following Katrina and Rita, both 
     overwhelmed and frustrated dedicated SBA employees and those 
     affected by the hurricanes. We must also give the SBA new 
     tools to ensure that problems that occurred post-Katrina and 
     Rita never happen again.
       Last month we marked the 1-year anniversary of Hurricane 
     Katrina, and now mark the 1-year anniversary of hurricane 
     Rita. It is essential that we take action now to make 
     substantive reforms to the SBA Disaster Assistance Program. 
     We owe nothing less to our small businesses. I ask that you 
     continue working with my office on this important issue and 
     respond to our approach in writing no later than October 31, 
     2006. This will help us develop a proposal which can address 
     the concerns of the SBA as well as provide a better and more 
     responsive SBA Disaster Assistance Program for our small 
     businesses.
       Thank you in advance for your assistance with this request.
           Sincerely,
                                                 Mary L. Landrieu,
                                            United States Senator.
                                 ______
                                 
      By Mr. DODD (for himself and Mr. DeWine):
  S. 4098. A bill to improve the process for the development of needed 
pediatric medical devices; to the Committee on Health, Education, 
Labor, and Pensions.
  Mr. DODD. Mr. President, I rise today to introduce the Pediatric 
Medical Device Safety and Improvement Act of 2006. I want to begin by 
thanking Senator Mike DeWine for joining me in introducing this 
legislation and for his leadership on children's health. He has been my 
partner over the years as we fought to make drugs safer and more widely 
available for children. I believe the legislation we are introducing 
today will achieve a similar goal for pediatric medical devices. I 
would also like to especially thank the Elizabeth Glaser Pediatric AIDS 
Foundation, the American Academy of Pediatrics, the American Thoracic 
Society and the National Organization for Rare Disorders for their 
expertise in helping craft this legislation as well as their tireless 
support for making medical devices safer for use in children.
  This legislation provides a comprehensive approach to ensuring that 
children are not left behind as cutting-edge research and revolutionary 
technologies for medical devices advance. Like drugs, where for too 
long children were treated like small adults and could just be given 
reduced doses of adult products, many essential medical devices used 
extensively by pediatricians are not designed or sized for children. In 
fact, the development of new medical devices suitable for children's 
smaller and growing bodies can lag 5 or 10 years behind those for 
adults.
  While children and adults suffer from many of the same diseases and 
conditions, their device needs can vary considerably due to differences 
in size, rates of growth, critical development periods, anatomy, 
physiological differences such as breathing and heart rate, and 
physical activity levels. To date, because the pediatric market is so 
small and pediatric diseases relatively rare, there has been little 
incentive for device manufacturers to focus their attention on 
children. The result has been that pediatric providers must resort to 
``jerry-rigging'' or fashioning make-shift device solutions for 
pediatric use. When that is not an option, providers may be forced to 
use more invasive treatment or less effective therapies.
  For example, at present, left ventricular assist devices, LVADs, do 
not exist in the U.S. for children less than 5 years old. An LVAD is a 
mechanical pump that helps a heart that is too weak to pump blood 
through the body. So infants and children under 5 years of age who have 
critical failure of their left or right ventricles have to be supported 
through extracorporeal membrane oxygenation, ECMO. An ECMO consists of 
a pump, an artificial lung, a blood warmer and an arterial filter, 
which is installed by inserting tubes into large veins or arteries 
located in the right side of the neck or the groin. While ECMOs can 
help children for short periods of time, they are problematic. They can 
cause dangerous clots and the blood thinners that prevent these clots 
may lead to internal bleeding. In addition, children must remain 
bedridden while using the device.
  For young children needing to be on a ventilator to assist their 
breathing, the lack of non-invasive ventilators with masks that 
suitably fit babies has led to respiratory treatments that are 
inadequate or invasive treatment options such as placing a tube in the 
baby's throat.
  Children needing prosthetic heart valves face a disproportionately 
high failure rate. Because of the biochemistry of children's growing 
bodies, prosthetic heart valves implanted in children calcify and 
deteriorate much faster than in adults. Typically, children with a 
heart valve implant who survive to adulthood will need four or five 
operations. Additionally, devices currently available for children must 
be better able to expand and grow as the child grows.
  Over the past 2 years, several efforts have been launched to better 
identify barriers to the development of pediatric devices and to 
generate solutions for improving children's access to needed medical 
devices.
  Beginning in June 2004, the American Academy of Pediatrics, the 
Elizabeth Glaser Pediatric AIDS Foundation, the National Organization 
for Rare Disorders, NORD, the National Association of Children's 
Hospitals, and the Advanced Medical Technology Association, AdvaMed, 
hosted a series of stakeholders meetings that yielded recommendations 
for improving the availability of pediatric devices. In October 2004, 
in response to a directive in the Medical Devices Technical Corrections 
Act of 2004, the Food and Drug Administration, FDA, released a report 
that identified numerous barriers to the development and approval of 
devices for children. And in July 2005, the Institute of Medicine, IOM, 
issued a report on the adequacy of postmarket surveillance of pediatric 
medical devices, as mandated by the Medical Device User Fee and 
Modernization Act of 2002. The IOM found significant flaws in safety 
monitoring and recommended expanding the FDA's ability to require 
postmarket studies of certain products

[[Page 22757]]

and improving public access to information about postmarket pediatric 
studies.
  Our legislation seeks to address the equally important issues of 
pediatric medical device safety and availability. To begin with, the 
bill creates a mechanism to allow the FDA to track the number and types 
of medical devices approved specifically for children or for conditions 
that occur in children. It also allows the FDA to use adult data to 
support a determination of reasonable assurance of effectiveness in 
pediatric populations and to extrapolate data between pediatric 
subpopulations.
  The market for pediatric medical devices simply isn't what it is for 
adults. Therefore, many device manufacturers have been reluctant to 
make devices for children. Our bill creates an incentive for companies 
by modifying the existing humanitarian device exemption, HDE, provision 
to allow manufacturers to profit from devices that are specifically 
designed to meet a pediatric need.
  To prevent abuse, our bill reverts to current law which allows no 
profit on sales of devices that exceed the number estimated to be 
needed for the approved condition. This provision is modeled after the 
existing Orphan Products Division designation process. Under no 
circumstances can there be a profit on sales if the device is used to 
treat or diagnose diseases or conditions affecting more than 4,000 
individuals in the U.S. per year which is the same as under current 
law. Already approved adult HDEs upon date of enactment are eligible 
for the HDE profit modification but only if they are meet the 
conditions of the bill. The lifting of the profit restriction for new 
pediatric HDEs sunsets in 2012 and FDA is required to issue a report on 
its impact within 5 years.
  In order to encourage pediatric medical device research, our bill 
requires the National Institutes of Health, NIH, to designate a point 
of contact at the agency to help innovators and physicians access 
funding for pediatric medical device development. It also requires the 
NIH, the FDA, and the Agency for Healthcare Research and Quality, AHRQ, 
to submit a plan for pediatric medical device research that identifies 
gaps in such research and proposes a research agenda for addressing 
them. In identifying the gaps, the plan can include a survey of 
pediatric medical providers regarding unmet pediatric medical device 
needs.
  To better foster innovation in the private sector, our bill 
establishes demonstration grants for non-profit consortia to promote 
pediatric device development, including matchmaking between inventors 
and manufacturers and federal resources. These demonstration grants 
which are authorized for $6 million annually require that the federal 
government mentor and help manage pediatric device projects through the 
development process, including product identification, prototype 
design, device development and marketing. Under the bill, grantees must 
coordinate with the NIH's pediatric devices point of contact to 
identify research issues that require further study and with the FDA to 
help facilitate approval of pediatric indications.
  Finally, in its 2005 report on pediatric medical device safety, the 
IOM found serious flaws in the postmarket safety surveillance of these 
devices. Our legislation allows FDA to require postmarket studies as a 
condition of clearance for certain categories of devices. This includes 
``a class II or class III device the failure of which would be 
reasonably likely to have serious adverse health consequences or is 
intended to be (1) implanted in the human body for more than one year, 
or (2) a life sustaining or life supporting device used outside a 
device user facility.''
  The legislation also gives the FDA the ability to require studies 
longer than 3 years with respect to a device that is to have 
significant use in pediatric populations if such studies would be 
necessary to address longer term pediatric questions, such as the 
impact on growth and development. And, it establishes a publicly 
accessible database of postmarket study commitments that involve 
questions about device use in pediatric populations.
  The legislation we are introducing today has been many years in the 
making. In addition to the lead republican bill sponsor, Senator 
DeWine, and the public health organizations I mentioned earlier, I 
would like to thank the Advanced Medical Technology Association and its 
member company Johnson & Johnson, for their contributions to this 
legislation. The bill we are introducing today reflects many of the 
comments and suggestions they provided through the development of this 
legislation. Several device manufacturers including Respironics, 
Seleon, Breas Medical AB, and Stryker have submitted letters of support 
for this legislation and I ask unanimous consent that their letters as 
well as the letters of all organizations supporting this bill be 
entered in the record following my remarks.
  I look forward to working with patient groups, physicians, industry 
and my colleagues--including the chairman and ranking member of the 
Health, Education, Labor and Pensions Committee, Senators Enzi and 
Kennedy--to move this legislation next year when the committee 
considers medical device legislation. I urge my colleagues to support 
this legislation and I am hopeful that it will become law as soon as 
possible.
  I ask unanimous consent that the letters and the text of the bill be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                  Elizabeth Glaser


                                    Pediatric AIDS Foundation,

                                 Washington, DC, December 5, 2006.

     Hon. Christopher Dodd,
     Russell Senate Office Building,
     Washington, DC.

     Hon. Mike DeWine,
     Russell Senate Office Building,
     Washington, DC.
       Dear Senators Dodd and DeWine: On behalf of the Elizabeth 
     Glaser Pediatric AIDS Foundation, I would like to express our 
     strong support for the Pediatric Medical Device Safety and 
     Improvement Act of 2006. Your leadership on this issue has 
     been outstanding and I applaud your efforts to introduce 
     legislation that will improve the health and well-being of 
     children across the U.S.
       While cutting-edge research and revolutionary technologies 
     have led to the development of countless innovative medical 
     devices, as science and medicine move forward children are at 
     risk of being left behind. Physical differences such as 
     children's size, anatomy, and growth provide challenges that 
     limit children's access to safe and effective medical 
     devices. With very few devices available for pediatric use, 
     pediatric providers must resort to ``jury-rigging'' or 
     fashioning make-shift device solutions for their patients. 
     When that is not an option, providers may be forced to use 
     more invasive treatment or less effective therapies.
       This legislation recognizes the urgent need for improved 
     access to medical devices designed specifically for children 
     and provides a comprehensive approach to addressing this 
     issue that includes providing assistance to innovators, 
     streamlining regulatory processes, elevating pediatric device 
     issues at the FDA and NIH, and improving incentives for 
     devices for small markets--while still preserving the ability 
     to ensure the safety of new products.
       Thank you for your leadership and commitment to this issue. 
     We look forward to working closely with you to ensure that 
     children across the U.S. benefit from this important piece of 
     legislation.
           Sincerely,
                                                 Pamela W. Barnes,
     President and Chief Executive Officer.
                                  ____



                                    American Thoracic Society,

                                 New York, NY, September 11, 2006.

     Hon. Mike DeWine,
     U.S. Senate,
     Washington, DC.
       Dear Senator DeWine: On behalf of the American Thoracic 
     Society, I want to encourage you to continue your efforts to 
     improve access to medical devices for children by introducing 
     legislation this fall.
       The ATS represents over 13,000 physicians, researchers, and 
     allied health professionals, who are actively engaged in the 
     diagnosis, treatment and research of respiratory disease and 
     critical care medicine. Many of the patients we treat are 
     children suffering from respiratory diseases.
       You have long been a champion of the health needs of 
     children and you are well aware that children are not 
     ``little people.'' Children have specific health needs and 
     challenges. This is particularly true in the case of medical 
     equipment.
       The medical device industry has excelled in developing new 
     products that improve the

[[Page 22758]]

     care and well being for patients with respiratory diseases. 
     However, due to the reduced market size, many of these 
     breakthrough respiratory devices are not available to 
     children. Children do not have the same access to 
     ventilators, sleep apnea machines, masks and other 
     respiratory related equipment that adults enjoy. The device 
     access issue for children is a persistent problem in other 
     fields of medicine.
       The research and regulatory requirements for making 
     pediatric specific devices can be daunting and may outweigh 
     the business potential for entering the pediatric device 
     market.
       We have worked with our colleagues at the American Academy 
     of Pediatrics and members of your staff to develop a 
     legislative proposal that would remove many of the barriers 
     that exist to binging pediatric specific medical devices 
     products to the market. We strongly encourage you to 
     introduce this legislation this fall.
       The American Thoracic Society looks forward to working with 
     you to bring this legislative proposal to fruition.
           Sincerely,
                                                  John E. Heffner,
     President.
                                  ____



                               American Academy of Pediatrics,

                          Elk Grove Village, IL, December 4, 2006.
     Hon. Christopher J. Dodd,
     U.S. Senate, Washington, DC.
     Hon. Mike DeWine,
     U.S. Senate, Washington, DC.
       Dear Senators Dodd and DeWine: On behalf of the 60,000 
     primary care pediatricians, pediatric medical subspecialists, 
     and surgical specialists of the American Academy of 
     Pediatrics who are committed to the attainment of optimal 
     physical, mental and social health and well-being for all 
     infants, children, adolescents, and young adults, we write 
     today to express our gratitude and support for the 
     ``Pediatric Medical Device Safety and Improvement Act of 
     2006.'' This legislation is an important step towards 
     improving the process for the development of needed pediatric 
     medical devices.
       Children and adults often suffer from many of the same 
     diseases and conditions, however their medical device needs 
     vary considerable. Children are not just small adults and 
     medical device technologies manufactured for adults often do 
     not fit the needs of children. This problems forces 
     pediatricians to ``jury-rig'' adult medical devices that are 
     often too large in order to make them fit smaller bodies. 
     This practice, however, is not always effective and leaves 
     children without optimal treatment. Additionally, children's 
     device needs vary considerable, due not only to size, but 
     also to different rates of growth, anatomy, physiological 
     differences and physical activity levels.
       This legislation offers incentives to manufacturers to 
     create needed medical devices specifically designed to meet 
     the needs of pediatric patients and it gives the Food and 
     Drug Administration the authority to require post-market 
     studies to ensure continued efficacy and safety of these 
     devices. The need for pediatric medical devices to treat or 
     diagnose diseases and conditions affecting children is clear. 
     Hence, it is essential that medical devices be manufactured 
     with children's needs in mind.
       Thank you for your continued commitment to improving the 
     health and well-being of children. The American Academy of 
     Pediatrics looks forward to working with you as this 
     important legislation moves through Congress.
           Sincerely,
     American Academy of Pediatrics.
     The American Pediatric Society.
     The Association of Medical School Pediatric Department 
     Chairs.
     The Society for Pediatric Research.
                                  ____

                                 Murrysville, PA, August 16, 2006.
     Hon. Mike DeWine,
     Russell Senate Office Building,
     Washington, DC.
       Dear Senator DeWine, Respironics, Inc. is a global medical 
     device company based in Pittsburgh, Pennsylvania. We are the 
     worldwide leader at anticipating needs and providing valued 
     solutions to the sleep and respiratory markets. We employ 
     approximately 4,700 employees and have annual sales in excess 
     of one billion dollars.
       In our business, we often are called upon to work with 
     pediatric patients. Based on this work, it is clear that 
     changes are needed to facilitate an improvement in the 
     availability of diagnostic and therapeutic medical devices 
     for children.
       Currently, a draft of a bill entitled ``To improve the 
     process for the development of needed pediatric medical 
     devices'' is being circulated among some Senators for 
     discussion. After reviewing this bill, Respironics believes 
     that the changes contemplated by this bill could help improve 
     the availability of medical devices for children. Therefore, 
     Respironics supports enactment of the bill.
       We hope that you will join Respironics in supporting this 
     important legislation.
           Sincerely,
                                                   David P. White,
     Chief Medical Officer.
                                  ____



                                                 Seleon, Inc.,

                                Baltimore, MD, September 23, 2006.
     Hon. Mike DeWine,
     Russell Senate Office Building,
     Washington, DC.
       Dear Senator DeWine: On behalf of Seleon Inc., I want to 
     encourage you to continue your efforts to improve access to 
     medical therapies for children by introducing the bill, ``to 
     improve the process for the development of needed pediatric 
     medical devices'' this fall.
       Seleon Inc., a medical device manufacturing company, 
     strongly supports this bill. Thank you for your ongoing 
     support of children's health and this important issue.
           Sincerely,
                                                     Michael Lauk,
     President.
                                  ____



                                             Breas Medical AB,

                               Molnlycke, Sweden, August 17, 2006.
     Hon. Christopher J. Dodd,
     Hon. Mike DeWine,
     Russell Senate Office Building,
     Washington, DC.
       Dear Senators Dodd and DeWine, On behalf of Breas Medical, 
     I would like to thank you for your efforts to expand the 
     availability of medical devices for children. We appreciate 
     your long-standing leadership on behalf of children and 
     welcome your interest in ensuring that they are not left 
     behind when it comes to critical medical advances. Our 
     devices were developed in Europe and are available for home 
     use in the pediatric population there. We have partnered with 
     companies in the United States, including Sleep Services of 
     America, and now have FDA approval for device use in adults. 
     We are seeking approval for the use of our devices in 
     children where there is a great need.
       While children and adults suffer from many of the same 
     diseases and conditions, their device needs can vary 
     considerably. Cutting-edge research and revolutionary 
     technologies have led to the development of many innovative 
     medical products; however, very few are designed specifically 
     for children. We support your efforts to address the barriers 
     to pediatric device development through legislation, 
     particularly in the following areas:
       1. Improving the ability of the Food and Drug 
     Administration (FDA) to track how many and what types of 
     devices are approved for children each year;
       2. Streamlining pediatric device approvals by allowing the 
     extrapolation of adult data to support pediatric indications, 
     as appropriate;
       3. Encouraging device manufacturers to create products for 
     conditions that affect small numbers of children by removing 
     existing restrictions on profit;
       4. Improving federal support for pediatric device 
     development by creating a coordinated research agenda and 
     establishing a contact point at the National Institutes of 
     Health to help innovators access existing funding;
       5. Improving pediatric device availability by establishing 
     demonstration grants to promote pediatric device development, 
     including connecting inventors and manufacturers, product 
     identification, prototype development, and testing;
       6. Improving post-market safety of pediatric devices by 
     allowing FDA to call for postmarket pediatric studies, 
     establishing a publicly accessible database of postmarket 
     studies, and giving FDA the ability to require studies longer 
     than 3 years if needed to answer longer-term pediatric 
     questions.
       Thank you for your leadership and commitment to this issue. 
     We look forward to working closely with you toward passage of 
     legislation to improve children's access to medical devices.
           Sincerely,
                                                      Ulf Jonsson,
     President.
                                  ____



                                          Stryker Corporation,

                                 Washington, DC, December 4, 2006.
     Senator Christopher J. Dodd,
     Russell Senate Office Building, Washington, DC.
       Dear Senator Dodd: On behalf of Stryker Corporation 
     (``Stryker''), I am pleased to announce our support for your 
     legislation to improve the availability and safety of 
     pediatric medical devices--the Pediatric Medical Device 
     Safety and Improvement Act of 2006. Like you and your 
     colleagues, we want our children to have access to the 
     fullest and best range of possible medical treatments, even 
     if that means doing or inventing something new just for them.
       We view this as our responsibility both as the leading 
     manufacturer of orthopaedic oncology prostheses in the United 
     States and as a global medical technology company with a 
     significant presence in other medical specialties, including 
     craniofacial deformities such as cleft lip and palate. We 
     take pride in partnering with and sponsoring a range of 
     medical organizations, including one which last year was able 
     to provide free cleft lip surgeries to 8,531 children in 23 
     countries. The surgery took only about 45 minutes and cost 
     $750 per child, but the corrective surgery changed, in a 
     positive way, forevermore the lives of each and every child 
     and the lives of their families too.
       We sincerely appreciate your leadership role on children's 
     issues. We take very seriously not only our commitment to 
     children

[[Page 22759]]

     with cancer and craniofacial deformities but also our 
     responsibility to ensure that our devices are safe and 
     effective for use in pediatric patients.
       As you may know, there has been significant progress over 
     the past two decades in the management of patients with 
     musculoskeletal cancers that has improved both the survival 
     rates and quality of life of afflicted individuals. Twenty 
     years ago, the standard treatment for any primary malignant 
     bone and soft tissue sarcomas of the extremity was amputation 
     of the affected arm or leg. Since that time, Stryker is proud 
     to have partnered with leading pediatric oncology surgeons to 
     develop limb-sparing, surgical solutions, including the 
     implantation of a growing prosthesis that can be elongated to 
     account for children's growth.
       As with cancer, the treatment of craniofacial deformities 
     is an area in which Stryker has also significantly improved 
     and broadened its range of available medical products and 
     solutions. With continued innovation of new and improved 
     craniomaxillofacial technologies, Stryker hopes to continue 
     to transform the lives of children with craniofacial 
     deformities, such as craniosynostis and cleft lip and palate 
     too.
       It is our hope that your legislation will further spur the 
     evolution of novel health care solutions for children. The 
     bill's efforts to streamline approvals for devices with 
     pediatric indications, improve incentives for the development 
     of devices for small pediatric populations, and encourage the 
     establishment of non-profit consortia for pediatric device 
     development should be commended.
       Stryker stands ready to assist you in your drive to 
     stimulate the further development of child-centered medical 
     technologies while closely monitoring the safety of such 
     products after they have entered the market. Thank you again 
     for your leadership on this important issue, and we look 
     forward to working with you to advance your bill as medical 
     device reauthorization legislation moves forward in the 110th 
     Congress.
           Sincerely,

                                                  Ed Rozynski,

                                                   Vice President,
     Global Government Affairs.
                                  ____


                                S. 4098

       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 ``Pediatric Medical Device 
     Safety and Improvement Act of 2006''.

     SEC. 2. TRACKING PEDIATRIC DEVICE APPROVALS.

       Chapter V of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 351 et seq.) is amended by inserting after section 515 
     the following:

     ``SEC. 515A. PEDIATRIC USES OF DEVICES.

       ``(a) New Devices.--
       ``(1) In general.--A person that submits to the Secretary 
     an application under section 520(m), or an application (or 
     supplement to an application) or a product development 
     protocol under section 515, shall include in the application 
     or protocol the information described in paragraph (2).
       ``(2) Required information.--The application or protocol 
     described in paragraph (1) shall include, with respect to the 
     device for which approval is sought and if readily 
     available--
       ``(A) a description of any pediatric subpopulations that 
     suffer from the disease or condition that the device is 
     intended to treat, diagnose, or cure; and
       ``(B) the number of affected pediatric patients.
       ``(3) Annual report.--Not later than 18 months after the 
     date of enactment of this section, and annually thereafter, 
     the Secretary shall submit to the Committee on Health, 
     Education, Labor, and Pensions of the Senate and the 
     Committee on Energy and Commerce of the House of 
     Representatives a report that includes--
       ``(A) the number of devices approved in the year preceding 
     the year in which the report is submitted, for which there is 
     a pediatric subpopulation that suffers from the disease or 
     condition that the device is intended to treat, diagnose, or 
     cure;
       ``(B) the number of devices approved in the year preceding 
     the year in which the report is submitted, labeled for use in 
     pediatric patients;
       ``(C) the number of pediatric devices approved in the year 
     preceding the year in which the report is submitted, exempted 
     from a fee pursuant to section 738(a)(2)(B)(v); and
       ``(D) the review time for each device described in 
     subparagraphs (A), (B), and (C).
       ``(b) Determination of Pediatric Effectiveness Based on 
     Similar Course of Disease or Condition or Similar Effect of 
     Device on Adults.--
       ``(1) In general.--If the course of the disease or 
     condition and the effects of the device are sufficiently 
     similar in adults and pediatric patients, the Secretary may 
     conclude that adult data may be used to support a 
     determination of a reasonable assurance of effectiveness in 
     pediatric populations, as appropriate.
       ``(2) Extrapolation between subpopulations.--A study may 
     not be needed in each pediatric subpopulation if data from 
     one subpopulation can be extrapolated to another 
     subpopulation.''.

     SEC. 3. MODIFICATION TO HUMANITARIAN DEVICE EXEMPTION.

       (a) In General.--Section 520(m) of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 360j(m)) is amended--
       (1) in paragraph (3), by striking ``No'' and inserting 
     ``Except as provided in paragraph (6), no'';
       (2) in paragraph (5)--
       (A) by inserting ``, if the Secretary has reason to believe 
     that the requirements of paragraph (6) are no longer met,'' 
     after ``public health''; and
       (B) by adding at the end the following: ``If the person 
     granted an exemption under paragraph (2) fails to demonstrate 
     continued compliance with the requirements of this 
     subsection, the Secretary may suspend or withdraw the 
     exemption from the effectiveness requirements of sections 514 
     and 515 for a humanitarian device only after providing notice 
     and an opportunity for an informal hearing.'';
       (3) by striking paragraph (6) and inserting the following:
       ``(6)(A) Except as provided in subparagraph (D), the 
     prohibition in paragraph (3) shall not apply with respect to 
     a person granted an exemption under paragraph (2) if each of 
     the following conditions apply:
       ``(i)(I) The device with respect to which the exemption is 
     granted is intended for the treatment or diagnosis of a 
     disease or condition that occurs in pediatric patients or in 
     a pediatric subpopulation, and such device is labeled for use 
     in pediatric patients or in a pediatric subpopulation in 
     which the disease or condition occurs.
       ``(II) The device was not previously approved under this 
     subsection for the pediatric patients or the pediatric 
     subpopulation described in subclause (I) prior to the date of 
     enactment of the Pediatric Medical Device Safety and 
     Improvement Act of 2006.
       ``(ii) During any calendar year, the number of such devices 
     distributed during that year does not exceed the annual 
     distribution number specified by the Secretary when the 
     Secretary grants such exemption. The annual distribution 
     number shall be based on the number of individuals affected 
     by the disease or condition that such device is intended to 
     treat, diagnose, or cure, and of that number, the number of 
     individuals likely to use the device, and the number of 
     devices reasonably necessary to treat such individuals. In no 
     case shall the annual distribution number exceed the number 
     identified in paragraph (2)(A).
       ``(iii) Such person immediately notifies the Secretary if 
     the number of such devices distributed during any calendar 
     year exceeds the annual distribution number referred to in 
     clause (ii).
       ``(iv) The request for such exemption is submitted on or 
     before October 1, 2012.
       ``(B) The Secretary may inspect the records relating to the 
     number of devices distributed during any calendar year of a 
     person granted an exemption under paragraph (2) for which the 
     prohibition in paragraph (3) does not apply.
       ``(C) A person may petition the Secretary to modify the 
     annual distribution number specified by the Secretary under 
     subparagraph (A)(ii) with respect to a device if additional 
     information on the number of individuals affected by the 
     disease or condition arises, and the Secretary may modify 
     such number but in no case shall the annual distribution 
     number exceed the number identified in paragraph (2)(A).
       ``(D) If a person notifies the Secretary, or the Secretary 
     determines through an inspection under subparagraph (B), that 
     the number of devices distributed during any calendar year 
     exceeds the annual distribution number, as required under 
     subparagraph (A)(iii), and modified under subparagraph (C), 
     if applicable, then the prohibition in paragraph (3) shall 
     apply with respect to such person for such device for any 
     sales of such device after such notification.
       ``(E)(i) In this subsection, the term `pediatric patients' 
     means patients who are 21 years of age or younger at the time 
     of the diagnosis or treatment.
       ``(ii) In this subsection, the term `pediatric 
     subpopulation' means 1 of the following populations:
       ``(I) Neonates.
       ``(II) Infants.
       ``(III) Children.
       ``(IV) Adolescents.''; and
       (4) by adding at the end the following:
       ``(7) The Secretary shall refer any report of an adverse 
     event regarding a device for which the prohibition under 
     paragraph (3) does not apply pursuant to paragraph (6)(A) 
     that the Secretary receives to the Office of Pediatric 
     Therapeutics, established under section 6 of the Best 
     Pharmaceuticals for Children Act (Public Law 107-109)). In 
     considering the report, the Director of the Office of 
     Pediatric Therapeutics, in consultation with experts in the 
     Center for Devices and Radiological Health, shall provide for 
     periodic review of the report by the Pediatric Advisory 
     Committee, including obtaining any recommendations of such 
     committee regarding whether the Secretary should take action 
     under this Act in response to the report.''.

[[Page 22760]]

       (b) Report.--Not later than January 1, 2011, the 
     Comptroller General of the United States shall submit to the 
     Committee on Health, Education, Labor, and Pensions of the 
     Senate and the Committee on Energy and Commerce of the House 
     of Representatives a report on the impact of allowing persons 
     granted an exemption under section 520(m)(2) of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 360j(m)(2)) with 
     respect to a device to profit from such device pursuant to 
     section 520(m)(6) of such Act (21 U.S.C. 360j(m)(6)) (as 
     amended by subsection (a)), including--
       (1) an assessment of whether such section 520(m)(6) (as 
     amended by subsection (a)) has increased the availability of 
     pediatric devices for conditions that occur in small numbers 
     of children, including any increase or decrease in the number 
     of--
       (A) exemptions granted under such section 520(m)(2) for 
     pediatric devices; and
       (B) applications approved under section 515 of such Act (21 
     U.S.C. 360e) for devices intended to treat, diagnose, or cure 
     conditions that occur in pediatric patients or for devices 
     labeled for use in a pediatric population;
       (2) the conditions or diseases the pediatric devices were 
     intended to treat or diagnose and the estimated size of the 
     pediatric patient population for each condition or disease;
       (3) the costs of the pediatric devices, based on a survey 
     of children's hospitals;
       (4) the extent to which the costs of such devices are 
     covered by health insurance;
       (5) the impact, if any, of allowing profit on access to 
     such devices for patients;
       (6) the profits made by manufacturers for each device that 
     receives an exemption;
       (7) an estimate of the extent of the use of the pediatric 
     devices by both adults and pediatric populations for a 
     condition or disease other than the condition or disease on 
     the label of such devices;
       (8) recommendations of the Comptroller General of the 
     United States regarding the effectiveness of such section 
     520(m)(6) (as amended by subsection (a)) and whether any 
     modifications to such section 520(m)(6) (as amended by 
     subsection (a)) should be made;
       (9) existing obstacles to pediatric device development; and
       (10) an evaluation of the demonstration grants described in 
     section 5.
       (c) Guidance.--Not later than 180 days after the date of 
     enactment of this Act, the Commissioner of Food and Drugs 
     shall issue guidance for institutional review committees on 
     how to evaluate requests for approval for devices for which a 
     humanitarian device exemption under section 520(m)(2) of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360j(m)(2)) 
     has been granted.

     SEC. 4. ENCOURAGING PEDIATRIC MEDICAL DEVICE RESEARCH.

       (a) Access to Funding.--The Director of the National 
     Institutes of Health shall designate a contact point or 
     office at the National Institutes of Health to help 
     innovators and physicians access funding for pediatric 
     medical device development.
       (b) Plan for Pediatric Medical Device Research.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Commissioner of Food and Drugs, in 
     collaboration with the Director of the National Institutes of 
     Health and the Director of the Agency for Healthcare Research 
     and Quality, shall submit to the Committee on Health, 
     Education, Labor, and Pensions of the Senate and the 
     Committee on Energy and Commerce of the House of 
     Representatives a plan for expanding pediatric medical device 
     research and development. In developing such plan, the 
     Commissioner of Food and Drugs shall consult with individuals 
     and organizations with appropriate expertise in pediatric 
     medical devices.
       (2) Contents.--The plan under paragraph (1) shall include--
       (A) the current status of federally funded pediatric 
     medical device research;
       (B) any gaps in such research, which may include a survey 
     of pediatric medical providers regarding unmet pediatric 
     medical device needs, as needed; and
       (C) a research agenda for improving pediatric medical 
     device development and Food and Drug Administration clearance 
     or approval of pediatric medical devices, and for evaluating 
     the short- and long-term safety and effectiveness of 
     pediatric medical devices.

     SEC. 5. DEMONSTRATION GRANTS FOR IMPROVING PEDIATRIC DEVICE 
                   AVAILABILITY.

       (a) In General.--
       (1) Request for proposals.--Not later than 90 days after 
     the date of enactment of this Act, the Secretary of Health 
     and Human Services shall issue a request for proposals for 1 
     or more grants or contracts to nonprofit consortia for 
     demonstration projects to promote pediatric device 
     development.
       (2) Determination on grants or contracts.--Not later than 
     180 days after the date the Secretary of Health and Human 
     Services issues a request for proposals under paragraph (1), 
     the Secretary shall make a determination on the grants or 
     contracts under this section.
       (b) Application.--A nonprofit consortium that desires to 
     receive a grant or contract under this section shall submit 
     an application to the Secretary of Health and Human Services 
     at such time, in such manner, and containing such information 
     as the Secretary may require.
       (c) Use of Funds.--A nonprofit consortium that receives a 
     grant or contract under this section shall--
       (1) encourage innovation by connecting qualified 
     individuals with pediatric device ideas with potential 
     manufacturers;
       (2) mentor and manage pediatric device projects through the 
     development process, including product identification, 
     prototype design, device development, and marketing;
       (3) connect innovators and physicians to existing Federal 
     resources, including resources from the Food and Drug 
     Administration, the National Institutes of Health, the Small 
     Business Administration, the Department of Energy, the 
     Department of Education, the National Science Foundation, the 
     Department of Veterans Affairs, the Agency for Healthcare 
     Research and Quality, and the National Institute of Standards 
     and Technology;
       (4) assess the scientific and medical merit of proposed 
     pediatric device projects;
       (5) assess business feasibility and provide business 
     advice;
       (6) provide assistance with prototype development; and
       (7) provide assistance with postmarket needs, including 
     training, logistics, and reporting.
       (d) Coordination.--
       (1) National institutes of health.--Each consortium that 
     receives a grant or contract under this section shall--
       (A) coordinate with the National Institutes of Health's 
     pediatric device contact point or office, designated under 
     section 4; and
       (B) provide to the National Institutes of Health any 
     identified pediatric device needs that the consortium lacks 
     sufficient capacity to address or those needs in which the 
     consortium has been unable to stimulate manufacturer 
     interest.
       (2) Food and drug administration.--Each consortium that 
     receives a grant or contract under this section shall 
     coordinate with the Commissioner of Food and Drugs and device 
     companies to facilitate the application for approval or 
     clearance of devices labeled for pediatric use.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section $6,000,000 for 
     each of fiscal years 2007 through 2011.

     SEC. 6. AMENDMENTS TO OFFICE OF PEDIATRIC THERAPEUTICS AND 
                   PEDIATRIC ADVISORY COMMITTEE.

       (a) Office of Pediatric Therapeutics.--Section 6(b) of the 
     Best Pharmaceuticals for Children Act (21 U.S.C. 393a(b)) is 
     amended by inserting ``, including increasing pediatric 
     access to medical devices'' after ``pediatric issues''.
       (b) Pediatric Advisory Committee.--Section 14 of the Best 
     Pharmaceuticals for Children Act (42 U.S.C. 284m note) is 
     amended--
       (1) in subsection (a), by inserting ``(including drugs and 
     biological products) and medical devices'' after 
     ``therapeutics''; and
       (2) in subsection (b)--
       (A) in paragraph (1), by inserting ``(including drugs and 
     biological products) and medical devices'' after 
     ``therapeutics''; and
       (B) in paragraph (2)--
       (i) in subparagraph (A), by striking ``and 505B'' and 
     inserting ``505B, 510(k), 515, and 520(m)'';
       (ii) by striking subparagraph (B) and inserting the 
     following:
       ``(B) identification of research priorities related to 
     therapeutics (including drugs and biological products) and 
     medical devices for pediatric populations and the need for 
     additional diagnostics and treatments for specific pediatric 
     diseases or conditions; and''; and
       (iii) in subparagraph (C), by inserting ``(including drugs 
     and biological products) and medical devices'' after 
     ``therapeutics''.

     SEC. 7. STUDIES.

       (a) Postmarket Studies.--Section 522 of the Federal Food, 
     Drug, and Cosmetic Act (21 U.S.C. 360l) is amended--
       (1) in subsection (a)--
       (A) by inserting ``, or as a condition to approval of an 
     application (or a supplement to an application) or a product 
     development protocol under section 515 or as a condition to 
     clearance of a premarket notification report under section 
     510(k),'' after ``The Secretary may by order''; and
       (B) by inserting ``, that is expected to have significant 
     use in pediatric populations,'' after ``health 
     consequences''; and
       (2) in subsection (b)--
       (A) by striking ``(b) Surveillance Approval.--Each'' and 
     inserting the following:
       ``(b) Surveillance Approval.--
       ``(1) In general.--Each'';
       (B) by striking ``The Secretary, in consultation'' and 
     inserting ``Except as provided in paragraph (2), the 
     Secretary, in consultation'';
       (C) by striking ``Any determination'' and inserting 
     ``Except as provided in paragraph (2), any determination''; 
     and
       (D) by adding at the end the following:
       ``(2) Longer studies for pediatric devices.--The Secretary 
     may by order require a prospective surveillance period of 
     more than 36 months with respect to a device that

[[Page 22761]]

     is expected to have significant use in pediatric populations 
     if such period of more than 36 months is necessary in order 
     to assess the impact of the device on growth and development, 
     or the effects of growth, development, activity level, or 
     other factors on the safety or efficacy of the device.''.
       (b) Database.--
       (1) In general.--
       (A) Establishment.--The Secretary of Health and Human 
     Services, acting through the Commissioner of Food and Drugs, 
     shall establish a publicly accessible database of studies of 
     medical devices that includes all studies and surveillances, 
     described in paragraph (2)(A), that were in progress on the 
     date of enactment of this Act or that began after such date.
       (B) Accessibility.--Information included in the database 
     under subparagraph (A) shall be in language reasonably 
     accessible and understood by individuals without specific 
     expertise in the medical field.
       (2) Studies and surveillances.--
       (A) Included.--The database described in paragraph (1) 
     shall include--
       (i) all postmarket surveillances ordered under section 
     522(a) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     360l(a)) or agreed to by the manufacturer; and
       (ii) all other studies completed by the manufacturer with 
     respect to a medical device after--

       (I) the premarket approval of such device under section 515 
     of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360e);
       (II) the clearance of a premarket notification report under 
     section 510(k) of such Act (21 U.S.C. 360(k)) with respect to 
     such device; or
       (III) submission of an application under section 520(m) of 
     such Act (21 U.S.C. 360j(m)) with respect to such device.

       (B) Excluded.--The database described in paragraph (1) 
     shall not include any studies with respect to a medical 
     device that were completed prior to the initial approval of 
     such device.
       (3) Contents of study and surveillance.--For each study or 
     surveillance included in the database described in paragraph 
     (1), the database shall include--
       (A) information on the status of the study or surveillance;
       (B) basic information about the study or surveillance, 
     including the purpose, the primary and secondary outcomes, 
     and the population targeted;
       (C) the expected completion date of the study or 
     surveillance;
       (D) public health notifications, including safety alerts; 
     and
       (E) any other information the Secretary of Health and Human 
     Services determines appropriate to protect the public health.
       (4) Once completed or terminated.--In addition to the 
     information described in paragraph (3), once a study or 
     surveillance has been completed or if a study or surveillance 
     is terminated, the database shall also include--
       (A) the actual date of completion or termination;
       (B) if the study or surveillance was terminated, the reason 
     for termination;
       (C) if the study or surveillance was submitted but not 
     accepted by the Food and Drug Administration because the 
     study or surveillance did not meet the requirements for such 
     study or surveillance, an explanation of the reasons and any 
     follow-up action required;
       (D) information about any labeling changes made to the 
     device as a result of the study or surveillance findings;
       (E) information about any other decisions or actions of the 
     Food and Drug Administration that result from the study or 
     surveillance findings;
       (F) lay and technical summaries of the study or 
     surveillance results and key findings, or an explanation as 
     to why the results and key findings do not warrant public 
     availability;
       (G) a link to any peer reviewed articles on the study or 
     surveillance; and
       (H) any other information the Secretary of Health and Human 
     Services determines appropriate to protect the public health.
       (5) Public access.--The database described in paragraph (1) 
     shall be--
       (A) accessible to the general public; and
       (B) easily searchable by multiple criteria, including 
     whether the study or surveillance involves pediatric 
     populations.
       (c) Medical Device Coding.--The Secretary of Health and 
     Human Services, in consultation with the Commissioner of Food 
     and Drugs, shall adopt voluntary national standards for 
     medical device coding. In adopting voluntary national 
     standards for medical device coding, the Secretary of Health 
     and Human Services shall coordinate with other efforts by the 
     Secretary to adopt and implement standards for the electronic 
     exchange of health information.

  Mr. DeWINE. Mr. President, today I join my colleague Senator Dodd to 
introduce a bill designed to help protect our Nation's children. Simply 
put, our bill would help ensure that our children have access to 
lifesaving medical devices that are designed specifically for their 
small bodies. Since the beginning of my career, my No. 1 priority has 
been to ensure that our children are healthy and safe. There is no 
other issue more important to me.
  Today, many medical devices used by pediatricians are not designed 
for children. That means that doctors have to fit adult sized devices 
into children's bodies. This is not right. We need to encourage the 
development of devices that are sized appropriately for children. 
According to pediatricians, medical devices sized appropriately for 
children are developed sometimes 5 to 10 years behind those for adults. 
The Pediatric Medical Device Safety and Improvement Act takes a step 
towards fixing this problem by providing incentives for manufacturers 
to develop devices for children while also ensuring the safety of new 
products once on the market.
  By introducing this bill, we are saying that we care about our 
children. We are saying that we care that children have access to 
lifesaving medical devices that are designed specifically for their 
small bodies. We are saying that we know we can do better for our 
children and this bill will do just that.
  We all want to see better health care options for our sick children. 
I believe that with this bill we are taking the first step to resolve a 
serious national health problem. While this legislation obviously will 
not pass this year, I know that Senator Dodd will continue to work on 
it next year and encourage my Republican colleagues to take a close 
look at this bill and support it in the 110th Congress.
  I ask unanimous consent that the text of the bill be printed in the 
Record.

                          ____________________