[Congressional Record (Bound Edition), Volume 154 (2008), Part 16]
[Senate]
[Pages 21713-21738]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

                                 ______
                                 
      By Mr. LEVIN (for himself, Mr. Bingaman, and Mr. Harkin):
  S. 3577. A bill to amend the Commodity Exchange Act to prevent 
excessive price speculation with respect to energy and agricultural 
commodities, and for other purposes; to the Committee on Agriculture, 
Nutrition, and Forestry.
  Mr. LEVIN. Mr. President, energy prices are on a roller coaster, 
taking American consumers and the American economy on an unpredictable, 
expensive, and damaging ride. Just over a year ago, a barrel of crude 
oil sold for $70 a barrel. In less than a year, the price doubled to 
nearly $147. Last week, that same barrel of oil cost $91, a price drop 
of $56 over a few months. Just in the past week crude oil prices have 
jumped from about $96 per barrel to $130 per barrel and then back to 
$106 per barrel. No one knows whether, by the end of the year, the 
price of oil will stay around $100, drop lower, or climb back up. The 
huge price spikes we experienced can't be explained by changes in 
supply and demand; about half the trading in oil futures results from 
speculation as to whether oil prices will rise or fall by traders 
without any interest in actually using the oil they are buying and 
selling.
  The natural gas, gasoline, and heating oil markets have also seen 
huge price swings. The prices are up, they are down, they are 
unpredictable--making it impossible for many businesses and consumers 
to afford even basic goods and services.
  The sky-high oil and gasoline prices in effect for the last year are 
taking a tremendous toll on millions of American consumers and 
businesses. Speculation--not supply and demand--is keeping prices high, 
and our economy is forced to respond to erratic price changes. Unless 
we act to protect our energy markets from excessive speculation and 
price manipulation, the American economy will continue to be vulnerable 
to wild price swings affecting the prices of transportation, food, 
manufacturing and everything in between, endangering the economic 
security of our people, our businesses, and our Nation.
  Congress should act now to help tame rampant speculation and 
reinvigorate supply and demand as market forces.
  Today, I am introducing legislation, along with Senators Bingaman and 
Harkin, that represents our collective effort to enact the strongest 
and most workable measures to prevent excessive speculation and price 
manipulation in U.S. energy markets. It will close the loopholes in our 
commodities laws that now impede the policing of U.S. energy trades on 
foreign exchanges and in the unregulated over-the-counter market. It 
will ensure that large commodity traders cannot use these markets to 
hide from CFTC oversight or avoid limits on speculation. The bill will 
strengthen disclosure, oversight, and enforcement in U.S. energy 
markets, restoring the financial oversight that is crucial to protect 
American consumers, American businesses, and the U.S. economy from 
further energy shocks.
  More specifically, this legislation would make four sets of changes.
  It will require the CFTC to set limits on the holdings of traders in 
all of the energy futures contracts traded on regulated exchanges to 
prevent traders from engaging in excessive speculation or price 
manipulation. Since we closed the Enron loophole this year all futures 
contracts must be traded in regulated markets.
  It would close the ``London loophole'' by giving the CFTC the same 
authority to police traders in the United States who trade U.S. futures 
contracts on a foreign exchange and by requiring foreign exchanges that 
want to install trading terminals in the U.S. to impose comparable 
limits on speculative trading as the CFTC imposes on domestic exchanges 
to prevent excessive speculation and price manipulation.
  It will close the ``swaps loophole'' by requiring traders in the 
over-the-counter energy markets to report large trades to the CFTC, and 
it would authorize the CFTC to set limits on trading in the presently 
unregulated over-the-counter markets to prevent excessive speculation 
and price manipulation.
  It will require the CFTC to revise the standards that allow traders 
who use futures markets to hedge their holdings to exceed the 
speculation limits that apply to everyone else.
  My Permanent Subcommittee on Investigations' investigations have 
shown that one key factor in price spikes of energy is increased 
speculation in the energy markets. Traders are trading contracts for 
future delivery of oil in record amounts, creating a demand for paper 
contracts that gets translated into increases in prices and increasing 
price volatility.
  Much of this increase in trading of futures has been due to 
speculation. Speculators in the oil market do not intend to use oil; 
instead they buy and sell contracts for crude oil in the hope of making 
a profit from changing prices. According to the CFTC's data, the number 
of futures and options contracts held by speculators has gone from 
around 100,000 contracts in 2001, which was 20 percent of the total 
number of outstanding contracts, to almost 1.2 million contracts, which 
represents almost 40 percent of the outstanding futures and options 
contracts in oil on NYMEX Even this understates the increase in 
speculation, since the CFTC data classifies futures trading involving 
index funds as commercial trading rather than speculation, and the CFTC 
classifies all traders in commercial firms as commercial traders, 
regardless of whether any particular trader in that firm may in fact be 
speculating.
  There is now, as a result, 12 times as many speculative holdings as 
there was in 2001, while holdings of nonspeculative or commercial 
futures and options is up but three times. The greater the demand there 
is to buy futures contracts for the delivery of a commodity, the higher 
the price will be for those futures contracts.
  Not surprisingly, therefore, this massive speculation that the price 
of oil will increase, together with the increase in the amount of 
purchases of futures contracts, in fact, helped increase the price of 
oil to a level far above the price that is justified by the traditional 
forces of supply and demand.
  In June 2006, I released a subcommittee report, ``The Role of Market 
Speculation in Rising Oil and Gas Prices: A Need to Put a Cop on the 
Beat.'' This report found that the traditional forces of supply and 
demand didn't account for sustained price increases and price 
volatility in the oil and gasoline markets. The report concluded that, 
in 2006, a growing number of trades of contracts for future delivery of 
oil occurred without regulatory

[[Page 21714]]

oversight and that market speculation had contributed to rising oil and 
gasoline prices, perhaps accounting for $20 out of a then-priced $70 
barrel of oil.
  Oil industry executives and experts have arrived at a similar 
conclusion. Late last year, the President and CEO of Marathon Oil said, 
``$100 oil isn't justified by the physical demand in the market. It has 
to be speculation on the futures market that is fueling this.'' Mr. 
Fadel Gheit, oil analyst for Oppenheimer and Company describes the oil 
market as ``a farce.'' ``The speculators have seized control and it's 
basically a free-for-all, a global gambling hall, and it won't shut 
down unless and until responsible governments step in.'' In January of 
this year, when oil first hit $100 per barrel, Mr. Tim Evans, oil 
analyst for Citigroup, wrote ``the larger supply and demand 
fundamentals do not support a further rise and are, in fact, more 
consistent with lower price levels.'' At the joint hearing on the 
effects of speculation we held last December, Dr. Edward Krapels, a 
financial market analyst, testified, ``Of course financial trading, 
speculation affects the price of oil because it affects the price of 
everything we trade. . . . It would be amazing if oil somehow escaped 
this effect.'' Dr. Krapels added that as a result of this speculation 
``there is a bubble in oil prices.''
  The need to control speculation is urgent. The presidents and CEOs of 
major U.S. airlines recently warned about the disastrous effects of 
rampant speculation on the airline industry. The CEOs stated ``normal 
market forces are being dangerously amplified by poorly regulated 
market speculation.'' The CEOs wrote, ``For airlines, ultra-expensive 
fuel means thousands of lost jobs and severe reductions in air service 
to both large and small communities.''
  As to reining in speculation, the first step to take is to put a cop 
back on the beat in all our energy markets to prevent excessive 
speculation, price manipulation, and trading abuses.
  With respect to the futures markets, the legislation we are 
introducing today requires the CFTC to establish limits on the amount 
of futures contracts any trader can hold. Currently, the CFTC allows 
the futures exchanges themselves to set these limits. This bill would 
require the CFTC to set these limits to prevent excessive speculation 
and price manipulation. It would preserve, however, the exchanges' 
obligation and ability to police their traders to ensure they remain 
below these limits.
  This legislation would also require the CFTC to conduct a rulemaking 
to review and revise the criteria for allowing traders who are using 
the futures market to hedge their risks in a commodity to acquire 
holdings in excess of the limits on holdings for speculators.
  Another step is to give the CFTC authority to prevent excessive 
speculation in the over-the-counter markets. In 2007, my Subcommittee 
issued a report on the effects of speculation in the energy markets, 
entitled ``Excessive Speculation in the Natural Gas Market.'' This 
investigation showed that speculation by a hedge fund named Amaranth 
distorted natural gas prices during the summer of 2006 and drove up 
prices for average consumers. The report demonstrated how Amaranth had 
shifted its speculative activity to unregulated markets, under the 
``Enron loophole,'' to avoid the restrictions and oversight in the 
regulated markets, and how Amaranth's trading in the unregulated 
markets contributed to price increases.
  Following this investigation, I introduced a bill, S. 2058, to close 
the Enron loophole and regulate the unregulated electronic energy 
markets. Working with Senators Feinstein and Snowe, and with the 
members of the Agriculture Committee in a bipartisan effort, we 
included an amendment to close the Enron loophole in the farm bill, 
which Congress passed this past spring, overriding a veto by President 
Bush.
  The legislation to close the Enron loophole placed over-the-counter--
OTC--electronic exchanges under CFTC regulation. However, this 
legislation did not address the separate issue of trading in the rest 
of the OTC market, which includes bilateral trades through voice 
brokers, swap dealers, and direct party-to-party negotiations. In order 
to ensure there is a cop on the beat in all of the energy commodity 
markets, we need to address the rest of the OTC market as well.
  Previously, I introduced legislation, S. 3255, along with Senator 
Feinstein, the Over-the-Counter Speculation Act, to address the rest of 
the OTC market not covered by the farm bill. A large portion of this 
OTC market consists of the trading of swaps relating to the price of a 
commodity. Generally, commodity swaps are contracts between two parties 
where one party pays a fixed price to another party in return for some 
type of payment at a future time depending on the price of a commodity. 
Because some of these swap instruments look very much like futures 
contracts--except that they do not call for the actual delivery of the 
commodity--there is concern that the price of these swaps that are 
traded in the unregulated OTC market could affect the price of the very 
similar futures contracts that are traded on the regulated futures 
markets. We don't yet know for sure that this is the case, or that it 
is not, because we don't have any access to comprehensive data or 
reporting on the trading of these swaps in the OTC market.
  The legislation introduced today includes these same provisions to 
give the CFTC oversight authority to stop excessive speculation in the 
over-the-counter market. These provisions represent a practical, 
workable approach that will enable the CFTC to obtain key information 
about the OTC market to enable it to prevent excessive speculation and 
price manipulation. These provisions are also included in the 
legislation introduced by the majority leader and others, S. 3268, to 
stop excessive speculation.
  Under these provisions, the CFTC will have the authority to ensure 
that traders cannot avoid the CFTC reporting requirements by trading 
swaps in the unregulated OTC market instead of regulated exchanges. It 
will enable the CFTC to act, such as by requiring reductions in 
holdings of futures contracts or swaps, against traders with large 
positions in order to prevent excessive speculation or price 
manipulation regardless of whether the trader's position is on an 
exchange or in the OTC market.
  The bill we are introducing today, unlike S. 3255, gives the CFTC the 
authority to establish position limits in the over-the-counter market 
for energy and agricultural commodities in order to prevent excessive 
speculation and price manipulation. The CFTC needs this authority to 
ensure that large traders are not using the over-the-counter markets to 
evade the position limits in the futures markets.
  Earlier this year I introduced legislation with Senators Feinstein, 
Durbin, Dorgan and Bingaman, S.3129, to close the London loophole. This 
loophole has allowed crude oil traders in the U.S. to avoid the 
position limits that apply to trading on U.S. futures exchanges by 
directing their trades onto the ICE Futures Exchange in London. The 
legislation we introduced also was incorporated into the legislation to 
stop prevent excessive speculation introduced by the majority leader, 
S. 3268. These provisions are now included in the legislation we are 
introducing today.
  After this legislation was first introduced, the CFTC imposed more 
stringent requirements upon the ICE Futures Exchange's operations in 
the United States--for the first time requiring the London exchange to 
impose and enforce comparable position limits in order to be allowed to 
keep its trading terminals in the United States. This is the very 
action our legislation called for. However, the current CFTC position 
limits apply only to the nearest futures contract. Our legislation will 
ensure that foreign exchanges with trading terminals in the U.S. will 
apply position limits to other futures contracts once the CFTC 
establishes those limits for U.S. exchanges.
  Although the CFTC has taken these important steps that will go a long 
way towards closing the London loophole, Congress should still pass 
this legislation to make sure the London loophole stays closed. The 
legislation would put the conditions the CFTC has imposed

[[Page 21715]]

upon the London exchange into statute, and ensure that the CFTC has 
clear authority to take action against any U.S. trader who is 
manipulating the price of a commodity or excessively speculating 
through the London exchange, including requiring that trader to reduce 
positions.
  The legislation we are introducing today also includes a number of 
provisions in the majority leader's bill, S. 3248, that require a 
variety of studies, investigations, and reports designed to improve the 
transparency and regulation of the energy markets. It also provides 
authorization for the CFTC to hire an additional 100 employees to 
oversee the commodity markets it regulates.
  On September 11, the CFTC issued a ``Staff Report on Commodity Swap 
Dealers and Index Traders with Commission Recommendations.'' The 
legislation we have introduced embodies several of the CFTC's 
recommendations to improve the transparency and regulation of swap 
dealers and commodity index traders. These recommendations include: 
develop and regularly publish reports on the activity of swap dealers 
and commodity index traders; more accurately assess the type of trading 
activity in the CFTC's weekly reports on commercial and noncommercial 
trading; review whether to eliminate the bona fide hedge exemption for 
swap dealers and create new limited risk management exemption; provide 
additional staff and resources for the CFTC.
  Our legislation also is consistent with CFTC Commissioner Chilton's 
dissenting views on the CFTC's recommendations. In his dissent, 
Commissioner Chilton requested that Congress provide: ``specific 
statutory authorities to allow the Commission to obtain data regarding 
over-the-counter transactions that may impact exchange-traded markets; 
``specific statutory authorities to allow the Commission to address 
market disturbances or violations of the Commodity Exchange Act, based 
on the data received regarding over-the-counter transactions;'' and 
authorization and appropriation for 100 additional employees.
  Our bill provides the CFTC with the statutory authorities requested 
by Commissioner Chilton and authorizes the requested employees.
  In summary, the legislation we are introducing today will give the 
CFTC ability to police all of our energy commodity markets to prevent 
excessive speculation and price manipulation. This legislation is 
necessary to close all of the loopholes in current law that permit 
speculators to avoid trading limits designed to prevent the type of 
excessive speculation that has been contributing to high energy prices. 
We hope our colleagues will support this legislation.
  Mr. President, I ask unanimous consent that a bill summary be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

   The Levin-Bingaman-Harkin Prevent Excessive Speculation Act Bill 
                        Summary, Sept. 24, 2008

       The Levin-Bingaman-Harkin Prevent Excessive Speculation Act 
     would:
       Authorize Speculation Limits for all Energy and 
     Agricultural Commodities.
       Direct CFTC to impose position limits on energy and 
     agricultural futures contracts to prevent excessive 
     speculation and manipulation and to ensure sufficient market 
     liquidity. Similar to provisions in House-passed bill, H.R. 
     6604.
        Authorize CFTC to permit exchanges to impose and enforce 
     accountability levels that are lower than CFTC-established 
     speculation limits.
       Close London Loophole by Regulating Offshore Traders and 
     Increasing Transparency of Offshore Trades.
       Prohibit a foreign exchange from operating in the United 
     States unless it imposes comparable speculation limits and 
     reporting requirements as apply to U.S. exchanges. Similar to 
     Sec. 3 in S. 3268, with technical changes.
       Provide CFTC with same enforcement authority over U.S. 
     traders on foreign exchanges as it has over traders on U.S. 
     exchanges, including authority to require traders to reduce 
     their holdings to prevent excessive speculation or 
     manipulation. Similar to Sec. 4 in S. 3268.
       Require CFTC to invite non-U.S. regulators to form an 
     international working group to develop uniform regulatory and 
     reporting requirements to protect futures markets from 
     excessive speculation and manipulation. Similar to Sec. 5 in 
     S. 3268.
       Close the Swaps Loophole and Regulate Over-the-Counter 
     Transactions.
       Authorize CFTC to impose speculation limits on OTC 
     transactions to protect the integrity of prices in the 
     futures markets and cash markets.
       Require large OTC trades that affect futures prices to be 
     reported to CFTC. Allow one party to a transaction to 
     authorize the other party to file the report. Require CFTC 
     periodic review of reporting requirements to ensure key 
     trades are covered.
       Direct CFTC to revise bona fide hedge exemption to ensure 
     regulation of all speculators, and strengthen data analysis 
     and transparency of swap dealer and index trading.
       Clarify definition of OTC transactions to exclude spot 
     market transactions.
       Protect Both Energy and Agriculture Commodities.
       Cover trades in crude oil, natural gas, gasoline, heating 
     oil, coal, propane, electricity, other petroleum products and 
     sources of energy from fossil fuels, as well as ethanol, 
     biofuels, emission allowances for greenhouse gases, 
     SO2, NOx, and other air emissions.
       Cover trades in agricultural commodities listed in the 
     Commodity Exchange Act.
       Strengthen CFTC Oversight.
       Authorize CFTC to hire 100 new personnel to oversee 
     markets.
       Direct CFTC to issue proposed rules within 90 days and 
     final rules within 180 days.
       Authorize Reports and Studies.
       Require various investigations, studies, and reports. Same 
     as Sec. Sec. 8-15 in S. 3268.
                                 ______
                                 
      By Mr. ENSIGN:
  S. 3578. A bill to establish a commission to assess the nuclear 
activities of the Islamic Republic of Iran; to the Committee on Foreign 
Relations.
  Mr. ENSIGN. Mr. President, I rise today to address an issue of 
critical importance to the security of our Nation and the world. I want 
to talk about the future of Iran's nuclear capabilities and what it 
means for the United States.
  Too often here in Washington, we get caught up in the debate of the 
moment and fail to appreciate the larger picture. Too many are more 
concerned with petty blame games and not enough are concerned with the 
greater challenge of protecting Americans.
  General Michael Hayden, the Director of Central Intelligence, has 
said that he believes Iran is seeking nuclear weapons. Others, 
including the President of the United States and the leaders of France 
and Great Britain agree.
  I ask myself what would happen if the Ahmadinejad regime in Iran 
succeeded in acquiring a nuclear weapon. Among the possibilities, he 
could use that weapon. Iran could share it with terrorists or other 
rogue states. At a minimum, an Iranian nuke would prompt its neighbors 
in the Gulf, in Turkey, in Egypt and elsewhere to seek a similar 
ability in order to defend themselves against Iran's efforts to gain 
regional dominance.
  The stakes could not be higher, and I am concerned that we are not 
meeting the challenge. To the contrary, I believe we are being tested, 
and we are failing.
  Iran is the most active state sponsor of terrorism around the world. 
In addition to its long time support for groups like Hezbollah and 
Hamas, Iran is now active in directing aggression against our troops in 
Iraq, sponsoring not only Shiite extremists but even Sunni terror 
groups. According to General Petraeus, ``. . . Iran has played [a 
fundamental role] in funding, training, arming, and directing the so-
called Special Groups and generated renewed concern about Iran in the 
minds of many Iraqi leaders. Unchecked, the Special Groups pose the 
greatest long-term threat to the viability of a democratic Iraq.''
  In addition to its destabilizing sponsorship of violence across the 
Middle East, we also know that Iran is working on delivery vehicles for 
deadly weapons. The regime has continuously upgraded its missile 
capabilities, and now has delivery vehicles that can strike targets all 
over the Middle East and into Europe. Couple that knowledge with the 
evidence available that Iran has worked on fitting nuclear warheads 
onto these missiles, and we have even more practical reasons for 
concern.
  Iranian President Mahmoud Ahmadinejad has stated emphatically that 
his Nation ``will not give up one iota of its nuclear rights.''

[[Page 21716]]

  Where does this leave the United States, and the American people, in 
confronting this growing and multidimensional threat? Unfortunately, 
the answer appear, to be: confused.
  The clearest evidence that we have yet to focus on the exact nature 
of the Iranian threat--an understanding that is imperative if we are 
going to succeed in countering it--is last year's National Intelligence 
Estimate on Iran.
  Although leaders and intelligence agencies around the world believe 
that Iran is indeed pursuing nuclear weapons, the NIE drew confusing, 
misleading, and contradicting conclusions. In dramatic phrasing clearly 
designed to mislead, the NIE states that ``We judge with high 
confidence that in fall 2003, Tehran halted its nuclear weapons 
program.'' In a footnote that got short shrift from both the press and 
the jubilant Iranian regime, the analysts explain that what they say `` 
`nuclear weapons program' we mean Iran's nuclear weapon design and 
weaponization work and covert uranium conversion-related and uranium 
enrichment-related work; we do not mean Iran's declared civil work 
related to uranium conversion and enrichment.'' In other words, the 
work referred to that had ``halted'' was in fact work that this 
Congress had heretofore not been able to confirm, and that we were 
uncertain existed. What continued, according to the NIE, was Iran's 
attempts to use its licit nuclear program to develop nuclear weapons 
capability. Which is exactly what we have been worrying about all 
along.
  Since the NIE, the intelligence community has backed away from its 
original assessment. The Director of National Intelligence, Vice 
Admiral Mike McConnell said that Iran could ``probably'' produce the 
fissile material needed for a nuclear weapon by as early as 2010. He 
has also testified that he would ``change the way we described the 
nuclear program'' in the NIE.
  Both Hayden and McConnell have also admitted that the NIE was so 
quickly declassified and poorly focused that it confused people. 
Unfortunately, the damage is done. The notion that Iran has suspended 
its nuclear program--however false that may be--has derailed our 
diplomatic push to a great extent and caused more confusion. Whatever 
the intentions behind this misleading assessment, we now know that 
Iran, with some of its international supporters, used the opportunity 
to derail the diplomatic process and move ahead with its uranium 
enrichment. Iran is now on the verge of producing enough highly 
enriched uranium for one to three nuclear weapons a year.
  This is not good news. Diplomacy, and more serious sanctions, keep 
military action at bay. A lack of options is what forces nations to 
make military choices.
  I raise these points not to criticize the administration, advocate 
for one action course of action over another, or argue about the 
results of the recent NIE. I raise these points because our Nation 
cannot afford confusion about the threat at hand. We have 
underestimated our adversaries in the past, and missed important 
developments even in friendly nations. Saddam Hussein developed nuclear 
weapons while receiving U.S. aid. India detonated a nuclear device 
before the U.S. had any advance warning. More recently, Syria procured 
a nuclear reactor as the United States negotiated in good faith with 
its suppliers in North Korea.
  We need to get this right. A mistake, a botched timeline, a missed 
event, a faulty analysis--all or any of the above could result in the 
worst of all possible outcomes. It is for that reason, that I rise 
today to introduce the legislation to help us better assess the nuclear 
threat from Iran. This legislation will create an independent 
commission comprised of 12 private U.S. citizens with expertise in 
nuclear proliferation and experience on the question of Iran. They will 
be appointed by the Speaker of the House, the House Minority Leader, 
and the Senate Minority Leader. Together, they will lend their 
expertise on this critical issue.
  There is a venerable history to such bipartisan commissions, 
including the 9/11 Commission, the Commission to Assess the Ballistic 
Missile Threat to the United States, and the Commission on the 
Intelligence Capabilities of the United States. A commission can 
provide a set of fresh eyes to look without bias at the information at 
hand and make assessments upon which the American people and American 
policymakers can rely.
  Perhaps there are some among my colleagues or in the bureaucracy of 
the executive branch who believe that they need no help, and that such 
a commission is not necessary. To them, I suggest a brief review of 
history. Let us rely on the best our Nation has to offer, and bring 
bipartisan, fresh expertise to the question of the Iranian threat.
  I urge my colleagues to support me in this effort.
                                 ______
                                 
      By Mr. BOND:
  S. 3581. A bill to establish a Federal Mortgage Origination 
Commission, and for other purposes; to the Committee on Banking, 
Housing, and Urban Affairs.
  Mr. BOND. Mr. President, today I am introducing a bill that goes to 
the heart of one of the major problems in our loan operations. We have 
had a system develop where no longer are loans just made available by 
the State-regulated banks and thrifts. Too many loan offers come over 
the Internet or by fax. I have not been able to develop a good enough 
screening program on my computer to keep them out. I know what kinds of 
solicitations are being made. They are being made by unregulated 
entities, people not subject to any regulation. As we say back home: We 
regulate the bricks but not the clicks. We regulate the banks and the 
savings and loans but not the people who offer you loans too good to be 
true by fax or Internet.
  Congress has already taken some steps to address the mortgage 
origination problem by developing a mortgage licensing and registry 
system through the Secure and Fair Enforcement for Mortgage Licensing 
Act of 2008 and protecting consumers by requiring greater mortgage loan 
disclosure requirements. In addition, I have worked with Senator Dodd, 
last year and this year, to include more housing counseling funding to 
assist homeowners. I strongly believe the Mortgage Origination 
Commission, proposed by the Secretary of the Treasury, is an important 
element to complement these efforts.
  As many of us know, the root cause of the current financial crisis is 
traced to the breakdowns in the mortgage market, led by the high level 
of failures in subprime mortgages. These failures occurred due to many 
reasons, but one major reason was the loophole in the Government's 
oversight and regulatory system for mortgage origination. Specifically, 
many mortgage brokers with no or uneven regulatory oversight originated 
a substantial number of all housing mortgages and over half of all 
subprime mortgages.
  To help close regulatory loopholes in mortgage origination, my bill 
contains the key components recommended by the Treasury.
  First, this legislation creates a new Federal oversight entity called 
the Mortgage Origination Commission. The Commission would be led by a 
Presidentially appointed Director for a 5-year term who would chair a 
seven-member board comprised of the Federal Government's key financial 
regulators: the Federal Reserve, the Office of the Comptroller of the 
Currency, the Office of Thrift Supervision, the Federal Deposit 
Insurance Corporation, the National Credit Union Administration, and 
the Conference of State Bank Supervisors.
  Second, the Commission would be empowered to develop uniform minimum 
licensing qualification standards for State mortgage market 
participants. As laid out in the bill, these standards would include 
personal conduct and disciplinary history, minimum educational 
requirements, testing criteria and procedures, and appropriate license 
revocation standards. The Commission would also evaluate, rate, and 
report on the adequacy of each State's system for licensing and 
regulation.
  The bill retains State-level regulation of the mortgage origination 
process, but the new Federal Mortgage

[[Page 21717]]

Origination Commission would ensure that the States have adequate 
protections in place and improve transparency in the mortgage 
origination process by providing information on the strength of each 
State's standards. The Commission will also provide transparency in the 
securities market by providing evaluations and ratings on mortgages.
  Finally, the bill clarifies the Federal Government's enforcement and 
examination responsibilities over mortgage origination companies. 
Specifically, the Federal Reserve and the Office of Thrift Supervision 
would have clear authority over mortgage originators that are 
affiliates of depository institutions with a federally regulated 
holding company. States would have clear authority to enforce Federal 
mortgage laws governing mortgage transactions involving mortgage 
originators.
  In formulating this legislation, my goal was to develop a proposal to 
provide more effective regulation, transparency, and oversight in a 
streamlined manner. This bill enhances the current structure without 
creating a major new Federal entity. If enacted, the Commission could 
be up and running in a relatively short time.
  As I said, the legislation mirrors the Secretary of Treasury's 
proposal, and it is intended to be part of the overall response. I look 
forward to working with my colleagues to achieve this. I know time is 
running short. I hope they will carefully consider this proposal and 
perhaps include it in the bill coming to us or in separate legislation.
                                 ______
                                 
      By Mr. BINGAMAN:
  S. 3584. A bill to comprehensively prevent, treat, and decrease 
overweight and obesity in our Nation's populations; to the Committee on 
Health, Education, Labor, and Pensions.
  Mr. BINGAMAN. Mr. President, I rise today to introduce the Obesity 
Prevention, Treatment and Research Act of 2008. This legislation 
creates unprecedented collaborations and collective across agencies, 
and among private and public entities, individuals, and communities.
  The very high prevalence of individuals who are obese or overweight 
has resulted in an epidemic in the United States, affecting over 66 
percent of adults and 32 percent of children according to the CDC's 
National Center for Health Statistics. Over the last 30 years, the 
obesity rate has more than doubled in all ages. The United States now 
has the highest prevalence of obesity among the developed nations. In 
fact, the prevalence of obesity in U.S. in 2006, 34 percent is more 
than twice the average for other developed nations, 13 percent. The 
prevalence of obesity in the next closest country, the United Kingdom, 
is over 25 percent less than that of the U.S.
  The Obesity Prevention, Treatment and Research Act of 2008 
comprehensively addresses the obesity and overweight epidemic by 
focusing on coordinating and augmenting existing prevention and 
treatment activities. The legislation is based on the extensive work on 
obesity of the Institutes of Medicine, IOM, over the last few years.
  The legislation focuses on developing dynamic new collaborations and 
collective actions, which IOM recommends as essential to successfully 
addressing the problems of obese and overweight individuals throughout 
the nation. In addition, the legislation focuses on supporting 
interventions that will improve access to obesity prevention and 
treatment services in our federal healthcare programs in recognition 
that the high prevalence of overweight and obese individuals 
dramatically increases the costs in Medicare, Medicaid, SCHIP, and 
other public and private health insurance programs.
  I note that interventions aimed at significantly decreasing the 
prevalence of these illnesses are extremely cost effective and are 
critical to overall disease prevention and health promotion efforts. 
The Trust for America's Health recently reported that an investment of 
just $10 per person per year in proven community based disease 
prevention programs would yield a $2.8 billion annual health 
expenditure reduction. Put another way, our nation would recoup nearly 
$1 over and above the cost of a comprehensive disease prevention and 
health promotion program for every $1 invested in the first 1 to 2 
years of the program.
  The Obesity Prevention, Treatment and Research Act of 2008 
establishes the United States Council on Overweight & Obesity 
Prevention, USCO-OP, which is charged with creating a comprehensive 
strategy to prevent, treat and reduce the prevalence of overweight 
individuals and obesity. This advisory council will update Federal 
guidelines, identify best practices, conduct ongoing surveillance and 
monitoring of existing Federal programs, and make recommendations to 
coordinate budgets, policies and programs across Federal agencies in 
collaboration with private and public partners. In addition, the 
Council will provide guidance to the Federal Government for a new 
series of grant programs established by the legislation to combat 
obesity and the high prevalence of overweight individuals.
  It is important to note that in July the Journal of the American 
Medical Association reported that physical activity levels drop sharply 
as children age. Children should be engaging in 60 minutes of moderate 
to vigorous physical activity most days of the week. While 90 percent 
of children met the recommended activity at age 9, by age 15 only 31 
percent met the level on weekdays, and only 17 percent on weekends. 
Moreover, these behaviors become worse as they get older. I find these 
trends very disturbing.
  In addition, experts tell us that Americans want and need better and 
more accessible information about healthier foods, beverages and 
exercise programs. The Council will help develop and update the daily 
physical activity requirements in our schools, and identify activities 
that families can do together, involving parents and their children 
throughout the week, and as lifelong participants.
  My legislation also creates grant programs to provide funding to 
schools, community health centers, academic institutions, state medical 
societies, state health departments, and communities to reduce the 
prevalence and improve the prevention and treatment of individuals that 
are obese or overweight.
  It is also critical to point out that certain populations are more 
vulnerable than others to the obesity and overweight epidemic. In my 
home state of New Mexico, for example, the consequences are 
devastating. 74 percent of Native American adults in New Mexico are 
overweight or obese, as are 38 percent of Native American High School 
students. I take steps in this legislation to address populations more 
severely impacted by the obesity and overweight epidemic, including: 
prioritizing grants to these populations and requiring Federal 
reporting on research and data related to obesity in these populations.
  The legislation also doubles existing funding levels for the 
Department of Agriculture's Fresh Foods and Vegetables program to 
levels that will assure that most low-income children will have access 
to these foods within their schools.
  The legislation also requires the Secretary of Health and Human 
Services and the Secretary of Agriculture to consult with USCO-OP to 
update and reform Federal oversight of food and beverage labeling. Such 
reforms include improving the transparency of labeling with regard to 
nutritional and caloric value of food and beverages. These updates and 
reforms are critical. Research suggests that high-energy dense foods 
that are low in nutrients represent 30 percent of the average American 
total calorie intake. Research also suggests that these foods don't 
trigger the brain's normal pathways and responses to let the body know 
that it is full.
  My legislation also amends the Social Security Act to expand access 
to medical nutrition therapy and exercise counseling when determined 
cost effective by the Secretary of Health and Human Services. We have 
to figure out a way to prevent the development of end stages of morbid 
obesity, such as kidney failure, heart failure and disability from 
arthritis and other problems. My bill seeks to invest our Federal 
dollar more wisely. This is truly the case where an ounce of prevention 
is worth a pound of cure.

[[Page 21718]]

  I would like to thank Dr. Dan Derksen, who served as a Robert Wood 
Johnson Health Policy Fellow in my office this year, for his great work 
in developing this legislation. In addition, I would like to thank the 
Institutes of Medicine, the Campaign to End Obesity, and First Focus 
for their assistance in developing this legislation.
  The legislation has received the endorsement of: the Campaign to End 
Obesity, American College of Gastroenterology, First Focus, Shaping 
America's Health, YMCA of the USA, the National Coalition for Promoting 
Physical Activity, the Sporting Goods Manufacturers of America, and the 
New Mexico Medical Society.
  I urge my other Senate colleagues to join in supporting this critical 
legislation.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3584

       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 ``Obesity Prevention, 
     Treatment, and Research Act of 2008''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) In 2001, the United States Surgeon General released the 
     Call to Action to Prevent and Decrease Overweight and Obesity 
     to bring attention to the public health problems related to 
     obesity.
       (2) Since the Surgeon General's call to action, the 
     problems of obesity and overweight have become epidemic, 
     occurring in all ages, ethnicities and races, and individuals 
     in every State.
       (3) The United States now has the highest prevalence of 
     obesity among the developed nations, according to 2006 data 
     by the Organisation for Economic Co-operation and 
     Development. The prevalence of obesity in the United States 
     (34 percent) is more than twice the average for other 
     developed nations (13 percent). The closest nation in 
     prevalence of obesity is the United Kingdom (24 percent) 
     which is over 25 percent less than the United States.
       (4) The National Health and Nutrition Examination Survey in 
     2006 estimated that 32 percent of children and adolescents 
     aged 2 to 19 and an alarming 66 percent of adults are 
     overweight or obese.
       (5) More than 30 percent of young people in grades 9 
     through 12 do not regularly engage in vigorous intensity 
     physical activity, while almost 40 percent of adults are 
     sedentary and 70 percent report getting less than 20 minutes 
     of regular physical activity per day.
       (6) The Institute of Medicine, in their 2005 publication 
     ``Preventing Childhood Obesity: Health in the Balance'', 
     reported that over the last 3 decades, the rate of childhood 
     obesity has tripled for children aged 6 to 11 years, and 
     doubled for children aged 2 to 5 years old and in adolescents 
     aged 12 to 19 years old. In 2004, approximately 9,000,000 
     children over 6 years of age were obese. Only 2 percent of 
     children eat a healthy diet consistent with Federal nutrition 
     guidelines.
       (7) For children born in 2000, it is estimated the lifetime 
     risk of being diagnosed with type 2 diabetes is 40 percent 
     for females and 30 percent for males.
       (8) Overweight and obesity disproportionately affect 
     minority populations and women. According to the 2006 
     Behavioral Risk Factor Surveillance System of the Centers for 
     the Disease Control and Prevention, 61 percent of adults in 
     the United States are overweight or obese.
       (9) The Centers for the Disease Control and Prevention 
     estimates the annual expenditures related to overweight and 
     obesity in the United States to be $117,000,000,000 in 2001 
     and rising rapidly.
       (10) The Centers for the Disease Control and Prevention 
     estimates that the increase in the number of overweight and 
     obese Americans between 1987 and 2001 resulted in a 27 
     percent increase in per capita health costs, and that as many 
     as 112,000 deaths per year are associated with obesity.
       (11) Being overweight or obese increases the risk of 
     chronic diseases including diabetes, heart disease, stroke, 
     certain cancers, arthritis, and other health problems.
       (12) According to the National Institute of Diabetes and 
     Digestive and Kidney Diseases, individuals who are obese have 
     a 50 to 100 percent increased risk of premature death.
       (13) Healthy People 2010 goals identify overweight and 
     obesity as 1 of the Nation's leading health problems and 
     include objectives for increasing the proportion of adults 
     who are at a healthy weight, reducing the proportion of 
     adults who are obese, and reducing the proportion of children 
     and adolescents who are overweight or obese.
       (14) Another Healthy People 2010 goal is to eliminate 
     health disparities among different segments of the 
     population. Obesity is a health problem that 
     disproportionally impacts medically underserved populations.
       (15) Food and beverage advertisers are estimated to spend 
     $10,000,000 to $12,000,000,000 per year to target children 
     and youth.
       (16) The United States spends less than 2 percent of its 
     annual health expenditures on prevention.
       (17) Employer health promotion investments net a return of 
     $3 for every $1 invested.
       (18) High-energy dense and low-nutrient dense foods 
     represent 30 percent of American's total calorie intake. Fast 
     food company menus are twice the energy density of 
     recommended healthful diets.
       (19) Research suggests that individuals eat too much high-
     energy dense foods without feeling full because the brain's 
     pathways that regulate hunger and influence normal food 
     intake are not triggered by these foods.
       (20) Packaging, product placement, and high-energy dense 
     food content manipulation contribute to the overweight and 
     obesity epidemic in the United States.
       (21) Such marketing and content manipulation techniques 
     have been used by other industries to encourage consumption 
     at the expense of health. To help individuals make healthy 
     choices, education and information must be available with 
     clear, consistent, and accurate labeling.

         TITLE I--OBESITY TREATMENT, PREVENTION, AND REDUCTION

     SEC. 101. UNITED STATES COUNCIL ON OVERWEIGHT-OBESITY 
                   PREVENTION.

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

     ``SEC. 399R. UNITED STATES COUNCIL ON OVERWEIGHT-OBESITY 
                   PREVENTION.

       ``(a) Establishment.--The Secretary shall convene a United 
     States Council on Overweight-Obesity Prevention (referred to 
     in this section as `USCO-OP').
       ``(b) Membership.--
       ``(1) In general.--USCO-OP shall be composed of 20 members, 
     which shall consist of--
       ``(A) the Secretary;
       ``(B) the Secretary (or his or her designee) of--
       ``(i) the Department of Agriculture;
       ``(ii) the Department of Education;
       ``(iii) the Department of Housing and Urban Development;
       ``(iv) the Department of the Interior
       ``(v) the Federal Trade Commission;
       ``(vi) the Department of Transportation; and
       ``(vii) any other Federal agency that the Secretary of 
     Health and Human Services determines appropriate;
       ``(C) the Chairman (or his or her designee) of the Federal 
     Communications Commission;
       ``(D) the Director (or his or her designee) of the Centers 
     for Disease Control and Prevention, the National Institutes 
     of Health, and the Agency for Healthcare Research and 
     Quality;
       ``(E) the Administrator of the Centers for Medicare and 
     Medicaid Services (or his or her designee);
       ``(F) the Commissioner of Food and Drugs (or his or her 
     designee); and
       ``(G) a minimum of 5 representatives, appointed by the 
     Secretary, of expert organizations such as public health 
     associations, key healthcare provider groups, planning and 
     development organizations, education associations, advocacy 
     groups, relevant industries, State and local leadership, and 
     other entities as determined appropriate by the Secretary.
       ``(2) Appointments.--The Secretary shall accept nominations 
     for representation on USCO-OP through public comment before 
     the initial appointment of members of USCO-OP under paragraph 
     (1)(G), and on a regular basis for open positions thereafter, 
     but not less than every 2 years.
       ``(3) Chairperson.--The chairperson of USCO-OP shall be--
       ``(A) an individual appointed by the President; and
       ``(B) until the date that an individual is appointed under 
     subparagraph (A), the Secretary.
       ``(c) Meetings.--
       ``(1) In general.--USCO-OP shall meet--
       ``(A) not later than 180 days after the date of enactment 
     of the Obesity Prevention, Treatment, and Research Act of 
     2008; and
       ``(B) at the call of the chairperson thereafter, but in no 
     case less often than 2 times per year.
       ``(2) Meetings of federal agencies.--The representatives of 
     the Federal agencies on USCO-OP shall meet on a regular 
     basis, as determined by the Secretary, to develop strategies 
     to coordinate budgets and discuss other issues that are not 
     otherwise permitted to be discussed in a public forum. The 
     purpose of such meetings shall be to allow more rapid 
     interagency strategic planning and intervention 
     implementation to address the overweight and obesity 
     epidemic.
       ``(d) Duties of USCO-OP.--USCO-OP shall--
       ``(1) develop strategies to comprehensively prevent, treat, 
     and reduce overweight and obesity;
       ``(2) coordinate interagency cooperation and action related 
     to the prevention, treatment, and reduction of overweight and 
     obesity in the United States;

[[Page 21719]]

       ``(3) identify best practices in communities to address 
     overweight and obesity;
       ``(4) work with appropriate entities to evaluate the 
     effectiveness of obesity and overweight interventions;
       ``(5) update the National Institutes of Health 1998 
     `Clinical Guidelines on the Identification, Evaluation, and 
     Treatment of Overweight and Obesity in Adults: The Evidence 
     Report' and include sections on childhood obesity in such 
     updated report;
       ``(6) conduct ongoing surveillance and monitoring using 
     tools such as the National Health and Nutrition Examination 
     Survey and the Behavioral Risk Factor Surveillance System and 
     assure adequate and consistent funding to support data 
     collection and analysis to inform policy;
       ``(7) make recommendations to coordinate budgets, grant and 
     pilot programs, policies, and programs across Federal 
     agencies to cohesively address overweight and obesity, 
     including with respect to the grant programs carried out 
     under sections 306(n), 399S, and 1904(a)(1)(H);
       ``(8) make recommendations to update and improve the daily 
     physical activity requirements for students under the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6301 et seq.) and include recommendations about physical 
     activities that families can do together, and involving 
     parents in these activities;
       ``(9) make recommendations about coverage for obesity-
     related services and for an early and periodic screening, 
     diagnostic, and treatment services program under the State 
     Children's Health Insurance Program established under title 
     XXI of the Social Security Act; and
       ``(10) provide guidelines for childhood obesity health care 
     related treatment under the early and periodic screening, 
     diagnostic, and treatment services program under the Medicaid 
     program established under title XIX of the Social Security 
     Act and otherwise described in section 2103(c)(5) of such 
     Act.
       ``(e) Report.--Not later than 18 months after the date of 
     enactment of the Obesity Prevention, Treatment, and Research 
     Act of 2008, and on an annual basis thereafter, USCO-OP shall 
     submit to the President and to the relevant committees of 
     Congress, a report that--
       ``(1) summarizes the activities and efforts of USCO-OP 
     under this section to coordinate interagency prevention, 
     treatment, and reduction of obesity and overweight, including 
     a detailed strategic plan with recommendations for each 
     Federal agency;
       ``(2) evaluates the effectiveness of these coordinated 
     interventions and conducts interim assessments and reporting 
     of health outcomes, achievement of milestones, and 
     implementation of strategic plan goals starting with the 
     second report, and yearly thereafter; and
       ``(3) makes recommendations for the following year's 
     strategic plan based on data and findings from the previous 
     year.
       ``(f) Technical Assistance.--The Department of Health and 
     Human Services may provide technical assistance to USCO-OP to 
     carry out the activities under this section.
       ``(g) Permanence of Committee.--Section 14 of the Federal 
     Advisory Committee Act (5 U.S.C. App.) shall not apply to 
     USCO-OP.''.

     SEC. 102. GRANTS AND DEMONSTRATION PROGRAMS TO PROMOTE 
                   POSITIVE HEALTH BEHAVIORS IN POPULATIONS 
                   DISPROPORTIONATELY AFFECTED BY OBESITY AND 
                   OVERWEIGHT.

       Part P of title III of the Public Health Service Act (42 
     U.S.C. 280g et seq.), as amended by section 101, is amended 
     by adding at the end the following:

     ``SEC. 399S. GRANTS AND DEMONSTRATION PROGRAMS TO PROMOTE 
                   POSITIVE HEALTH BEHAVIORS IN POPULATIONS 
                   DISPROPORTIONATELY AFFECTED BY OBESITY AND 
                   OVERWEIGHT.

       ``(a) Eligible Entity.--For purposes of this section, the 
     term `eligible entity' means--
       ``(1) a city, county, Indian tribe, tribal organization, 
     territory, or State;
       ``(2) a local, tribal, or State educational agency;
       ``(3) a Federal medical facility, including a federally 
     qualified health center (as defined in section 1861(aa)(4) of 
     the Social Security Act), an Indian Health Service hospital 
     or clinic, any health facility or program operated by or 
     pursuant to a contractor grant from the Indian Health 
     Service, an Indian Health Service entity, an urban Indian 
     center, an Indian tribal clinic, a health care for the 
     homeless center, a rural health center, migrant health 
     center, and any other Federal medical facility;
       ``(4) any entity meeting the criteria for medical home 
     under section 204 of the Tax Relief and Health Care Act of 
     2006 (Public Law 109-432);
       ``(5) a nonprofit organization (such as an academic health 
     center or community health center);
       ``(6) a health department;
       ``(7) any licensed or certified health provider;
       ``(8) an accredited university or college;
       ``(9) a community-based organization;
       ``(10) a local city planning agency; and
       ``(11) any other entity determined appropriate by the 
     Secretary.
       ``(b) Application.--An eligible entity that desires a grant 
     under this section shall submit an application at such time, 
     in such manner, and containing such information as the 
     Secretary may require, including a plan for the use of funds 
     that may be awarded and an evaluation of any training that 
     will be provided under such grant.
       ``(c) Grant Demonstration and Pilot Program.--
       ``(1) In general.--The Secretary, acting through the 
     Director of the Centers for Disease Control and Prevention, 
     and in consultation with the United States Council on 
     Overweight-Obesity Prevention under section 399R, shall 
     establish and evaluate a grant demonstration and pilot 
     program for entities to--
       ``(A) prevent, treat, or otherwise reduce overweight and 
     obesity;
       ``(B) increase the number of children and adults who safely 
     walk or bike to school or work;
       ``(C) increase the availability and affordability of fresh 
     fruits and vegetables in the community;
       ``(D) expand safe and accessible walking paths and 
     recreational facilities to encourage physical activity, and 
     other interventions to create healthy communities;
       ``(E) create advertising, social marketing, and public 
     health campaigns promoting healthier food choices, increased 
     physical activity, and healthier lifestyles targeted to 
     individuals and to families;
       ``(F) promote increased rates and duration of 
     breastfeeding; and
       ``(G) increase worksite and employer promotion of and 
     involvement in community initiatives that prevent, treat, or 
     otherwise reduce overweight and obesity.
       ``(2) Special priority.--Special priority will be given to 
     grant proposals that target communities or populations 
     disproportionately affected by overweight or obesity, 
     including Native Americans, other minorities, and women.
       ``(d) Grants To Promote Positive Health Behaviors in 
     Populations Disproportionately Affected by Obesity and 
     Overweight.--
       ``(1) In general.--The Secretary, acting through the 
     Director of the Centers for Disease Control and Prevention, 
     may award grants to eligible entities to promote health 
     behaviors for women and children in target populations, 
     especially racial and ethnic minority populations in 
     medically underserved communities.
       ``(2) Use of funds.--An award under this section shall be 
     used to carry out any of the following:
       ``(A) To educate, promote, prevent, treat and determine 
     best practices in overweight and obese populations.
       ``(B) To address behavioral risk factors including 
     sedentary lifestyle, poor nutrition, being overweight or 
     obese, and use of tobacco, alcohol or other substances that 
     increase the risk of morbidity and mortality. Special 
     priority will be given to grant applications that--
       ``(i) propose interventions that address embedded levels of 
     influence on behavior, including the individual, family, 
     peers, community and society; and
       ``(ii) utilize techniques that promote community 
     involvement in the design and implementation of interventions 
     including community diagnosis and community-based 
     participatory research.
       ``(C) To develop and implement interventions to promote a 
     balance of energy consumption and expenditure, to attain 
     healthier weight, prevent obesity, and reduce morbidity and 
     mortality associated with overweight and obesity.
       ``(D)(i) To train primary care physicians and other 
     licensed or certified health professionals on how to 
     identify, treat, and prevent obesity or eating disorders and 
     aid individuals who are overweight, obese, or who suffer from 
     eating disorders.
       ``(ii) To use evidence-based findings or recommendations 
     that pertain to the prevention and treatment of obesity, 
     being overweight, and eating disorders to conduct educational 
     conferences, including Internet-based courses and 
     teleconferences, on--
       ``(I) how to treat or prevent obesity, being overweight, 
     and eating disorders;
       ``(II) the link between obesity, being overweight, eating 
     disorders and related serious and chronic medical conditions;
       ``(III) how to discuss varied strategies with patients from 
     at-risk and diverse populations to promote positive behavior 
     change and healthy lifestyles to avoid obesity, being 
     overweight, and eating disorders;
       ``(IV) how to identify overweight, obese, individuals with 
     eating disorders, and those who are at risk for obesity and 
     being overweight or suffer from eating disorders and, 
     therefore, at risk for related serious and chronic medical 
     conditions; and
       ``(V) how to conduct a comprehensive assessment of 
     individual and familial health risk factors and evaluate the 
     effectiveness of the training provided by such entity in 
     increasing knowledge and changing attitudes and behaviors of 
     trainees.
       ``(iii) In awarding a grant to carry out an activity under 
     this subparagraph, preference shall be given to an entity 
     described in subsection (a)(4).
       ``(e) Reporting to Congress.--Not later than 3 years after 
     the date of enactment of this section, the Director of the 
     Centers for

[[Page 21720]]

     Disease Control and Prevention shall submit to the Secretary 
     and Congress a report concerning the result of the activities 
     conducted through the grants awarded under this section.
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $50,000,000 for fiscal year 2009, and such sums as may be 
     necessary for each of fiscal years 2010 through 2012.''.

     SEC. 103. NATIONAL CENTER FOR HEALTH STATISTICS.

       Section 306 of the Public Health Service Act (42 U.S.C. 
     242k) is amended--
       (1) in subsection (m)(4)(B), by striking ``subsection (n)'' 
     each place it appears and inserting ``subsection (o)'';
       (2) by redesignating subsection (n) as subsection (o); and
       (3) by inserting after subsection (m) the following:
       ``(n)(1) The Secretary, acting through the Center, may 
     provide for the--
       ``(A) collection of data for determining the fitness levels 
     and energy expenditure of adults, children, and youth; and
       ``(B) analysis of data collected as part of the National 
     Health and Nutrition Examination Survey and other data 
     sources.
       ``(2) In carrying out paragraph (1), the Secretary, acting 
     through the Center, may make grants to States, public 
     entities, and nonprofit entities.
       ``(3) The Secretary, acting through the Center, may provide 
     technical assistance, standards, and methodologies to 
     grantees supported by this subsection in order to maximize 
     the data quality and comparability with other studies.''.

     SEC. 104. HEALTH DISPARITIES REPORT.

       Not later than 18 months after the date of enactment of 
     this Act, and annually thereafter, the Director of the Agency 
     for Healthcare Research and Quality shall review all research 
     that results from the activities carried out under this Act 
     (and the amendments made by this Act) and determine if 
     particular information may be important to the report on 
     health disparities required by section 903(c)(3) of the 
     Public Health Service Act (42 U.S.C. 299a-1(c)(3)).

     SEC. 105. PREVENTIVE HEALTH SERVICES BLOCK GRANT.

       Section 1904(a)(1) of the Public Health Service Act (42 
     U.S.C. 300w-3(a)(1)) is amended by adding at the end the 
     following:
       ``(H) Activities and community education programs designed 
     to address and prevent overweight, obesity, and eating 
     disorders through effective programs to promote healthy 
     eating, and exercise habits and behaviors.''.

     SEC. 106. REPORT ON OBESITY AND EATING DISORDERS RESEARCH.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services 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 
     research conducted on causes and health implications 
     (including mental health implications) of being overweight, 
     obesity, and eating disorders.
       (b) Content.--The report described in subsection (a) shall 
     contain--
       (1) descriptions on the status of relevant, current, 
     ongoing research being conducted in the Department of Health 
     and Human Services including research at the National 
     Institutes of Health, the Centers for Disease Control and 
     Prevention, the Agency for Healthcare Research and Quality, 
     the Health Resources and Services Administration, and other 
     offices and agencies;
       (2) information about what these studies have shown 
     regarding the causes, prevention, and treatment of, being 
     overweight, obesity, and eating disorders; and
       (3) recommendations on further research that is needed, 
     including research among diverse populations, the plan of the 
     Department of Health and Human Services for conducting such 
     research, and how current knowledge can be disseminated.

        TITLE II--FOOD AND BEVERAGE LABELING FOR HEALTHY CHOICES

     SEC. 201. FOOD AND BEVERAGE LABELING FOR HEALTHY CHOICES.

       (a) USCO-OP.--In this section, the term ``USCO-OP'' means 
     the United States Council on Overweight-Obesity Prevention 
     under section 399R of the Public Health Service Act (as added 
     by section 101).
       (b) Reform of Food and Beverage Labeling.--The Secretary of 
     Health and Human Services and the Secretary of Agriculture, 
     in consultation with the USCO-OP, shall, through regulation 
     or other appropriate action, update and reform Federal 
     oversight of food and beverage labeling. Such reform shall 
     include improving the transparency of such labeling with 
     regard to nutritional and caloric value of food and 
     beverages.

         TITLE III--HEALTHY CHOICES FOOD AND BEVERAGE PROGRAMS

     SEC. 301. FRESH FRUIT AND VEGETABLE PROGRAM.

       Section 19(i) of the Richard B. Russell National School 
     Lunch Act (42 U.S.C. 1769a(i)) is amended--
       (1) by redesignating paragraphs (3) through (7) as 
     paragraphs (4) through (8); and
       (2) by inserting after paragraph (2) the following:
       ``(3) Additional mandatory funding.--
       ``(A) In general.--Out of any funds in the Treasury not 
     otherwise appropriated, the Secretary of the Treasury shall 
     transfer to the Secretary of Agriculture to carry out and 
     expand the program under this section, to remain available 
     until expended--
       ``(i) on October 1, 2008, $80,000,000;
       ``(ii) on July 1, 2009, $130,000,000;
       ``(iii) on July 1, 2010, $202,000,000;
       ``(iv) on July 1, 2011, $300,000,000; and
       ``(v) on July 1, 2012, and on each July 1 thereafter, the 
     amount made available for the previous fiscal year, as 
     adjusted under subparagraph (B).
       ``(B) Adjustment.--On July 1, 2012, and on each July 1 
     thereafter the amount made available under subparagraph 
     (A)(v) shall be calculated by adjusting the amount made 
     available for the previous fiscal year to reflect changes in 
     the Consumer Price Index of the Bureau of Labor Statistics 
     for fresh fruits and vegetables, with the adjustment--
       ``(i) rounded down to the nearest dollar increment; and
       ``(ii) based on the unrounded amounts for the preceding 12-
     month period.
       ``(C) Allocation.--Funds made available under this 
     paragraph shall be allocated among the States and the 
     District of Columbia in the same manner as funds made 
     available under paragraph (1).''.

            TITLE IV--AMENDMENTS TO THE SOCIAL SECURITY ACT

     SEC. 401. COVERAGE OF EVIDENCE-BASED PREVENTIVE SERVICES 
                   UNDER MEDICARE, MEDICAID, AND SCHIP.

       (a) Medicare.--Section 1861(ddd) of the Social Security 
     Act, as added by section 101 of the Medicare Improvements for 
     Patients and Providers Act of 2008, is amended--
       (1) in paragraph (2), by striking ``paragraph (1)'' and 
     inserting ``paragraphs (1) and (3)''; and
       (2) by adding at the end the following new paragraph:
       ``(3) The term `additional preventive services' includes 
     any evidence-based preventive services which the Secretary 
     has determined are reasonable and necessary, including, as so 
     determined, smoking cessation and prevention services, diet 
     and exercise counseling, and healthy weight and obesity 
     counseling.''.
       (b) State Option to Provide Medical Assistance for 
     Evidence-Based Preventive Services.--
       (1) In general.--Section 1905 of the Social Security Act 
     (42 U.S.C. 1396d) is amended--
       (A) in subsection (a)--
       (i) in paragraph (27), by striking ``and'' at the end;
       (ii) by redesignating paragraph (28) as paragraph (29); and
       (iii) by inserting after paragraph (27) the following:
       ``(28) evidence-based preventive services described in 
     subsection (y); and''; and
       (B) by adding at the end the following:
       ``(y)(1) For purposes of subsection (a)(28), evidence-based 
     preventive services described in this subsection are any 
     preventive services which the Secretary has determined are 
     reasonable and necessary through the process for making 
     national coverage determinations (as defined in section 
     1869(f)(1)(B)) under title XVIII, including, as so 
     determined, smoking cessation and prevention services, diet 
     and exercise counseling, and healthy weight and obesity 
     counseling.''.
       (2) Conforming amendment.--Section 1902(a)(10)(C)(iv) of 
     such Act is amended by inserting ``and (28)'' after ``(24)''.
       (c) State Option to Provide Child Health Assistance for 
     Evidence-Based Preventive Services.--Section 2110(a) of the 
     Social Security Act (42 U.S.C. 1397jj(a)) is amended--
       (1) by redesignating paragraph (28) as paragraph (29); and
       (2) by inserting after paragraph (27) the following:
       ``(28) Evidence-based preventive services described in 
     section 1905(y).''.

     SEC. 402. COVERAGE OF MEDICAL NUTRITION COUNSELING UNDER 
                   MEDICARE, MEDICAID, AND SCHIP.

       (a) Medicare Coverage of Medical Nutrition Therapy Services 
     for People With Pre-Diabetes.--Section 1861(s)(2)(V) of the 
     Social Security Act (42 U.S.C. 1395x(s)(2)(V)) is amended by 
     inserting after ``beneficiary with diabetes'' the following 
     ``, pre-diabetes or its risk factors (including hypertension, 
     dyslipidemia, obesity, or overweight),''.
       (b) State Option to Provide Medical Assistance for Medical 
     Therapy Services.--
       (1) In general.--Section 1905(a) of the Social Security Act 
     (42 U.S.C. 1396d), as amended by section 401(b), is amended--
       (A) in paragraph (28), by striking ``and'' at the end;
       (B) by redesignating paragraph (29) as paragraph (30); and
       (C) by inserting after paragraph (28) the following:
       ``(29) medical nutrition therapy services (as defined in 
     section 1861(vv)(1)) for individuals with pre-diabetes or 
     obesity, or who are overweight (as defined by the Secretary); 
     and''.
       (2) Conforming amendment.--Section 1902(a)(10)(C)(iv) of 
     such Act, as amended by section 401(b)(2), is amended by 
     striking ``and (28)'' and inserting ``, (28) and (29)''.
       (c) State Option to Provide Child Health Assistance for 
     Medical Nutrition Therapy

[[Page 21721]]

     Services.--Section 2110(a) of the Social Security Act (42 
     U.S.C. 1397jj(a)), as amended by section 401(c), is amended--
       (1) by redesignating paragraph (29) as paragraph (30); and
       (2) by inserting after paragraph (28) the following:
       ``(29) Medical nutrition therapy services (as defined in 
     section 1861(vv)(1)) for individuals with pre-diabetes or 
     obesity, or who are overweight (as defined by the 
     Secretary).''.

     SEC. 403. AUTHORIZING EXPANSION OF MEDICARE COVERAGE OF 
                   MEDICAL NUTRITION THERAPY SERVICES.

       (a) Authorizing Expanded Eligible Population.--Section 
     1861(s)(2)(V) of the Social Security Act (42 U.S.C. 
     1395x(s)(2)(V)), as amended by section 402, is amended--
       (1) by redesignating clauses (i) through (iii) as 
     subclauses (I) through (III), respectively, and indenting 
     each such clause an additional 2 ems;
       (2) by striking ``in the case of a beneficiary with 
     diabetes, pre-diabetes or its risk factors (including 
     hypertension, dyslipidemia, obesity, overweight), or a renal 
     disease who--'' and inserting ``in the case of a 
     beneficiary--
       ``(i) with diabetes, pre-diabetes or its risk factors 
     (including hypertension, dyslipidemia, obesity, overweight), 
     or a renal disease who--'';
       (3) by adding ``or'' at the end of subclause (III) of 
     clause (i), as so redesignated; and
       (4) by adding at the end the following new clause:
       ``(ii) who is not described in clause (i) but who has 
     another disease, condition, or disorder for which the 
     Secretary has made a national coverage determination (as 
     defined in section 1869(f)(1)(B)) for the coverage of such 
     services;''.
       (b) Coverage of Services Furnished by Physicians.--Section 
     1861(vv)(1) of the Social Security Act (42 U.S.C. 
     1395x(vv)(1)) is amended by inserting ``or which are 
     furnished by a physician'' before the period at the end.
       (c) National Coverage Determination Process.--In making a 
     national coverage determination described in section 
     1861(s)(2)(V)(ii) of the Social Security Act, as added by 
     subsection (a)(4), the Secretary of Health and Human 
     Services, acting through the Administrator of the Centers for 
     Medicare & Medicaid Services, shall--
       (1) consult with dietetic and nutrition professional 
     organizations in determining appropriate protocols for 
     coverage of medical nutrition therapy services for 
     individuals with different diseases, conditions, and 
     disorders; and
       (2) consider the degree to which medical nutrition therapy 
     interventions prevent or help prevent the onset or 
     progression of more serious diseases, conditions, or 
     disorders.

     SEC. 404. CLARIFICATION OF EPSDT INCLUSION OF PREVENTION, 
                   SCREENING, AND TREATMENT SERVICES FOR OBESITY 
                   AND OVERWEIGHT; SCHIP COVERAGE.

       (a) In General.--Section 1905(r)(5) of the Social Security 
     Act (42 U.S.C. 1396d(r)(5)) is amended by inserting ``, 
     including weight and BMI measurement and monitoring, as well 
     as appropriate treatment services (including but not limited 
     to) medical nutrition therapy services (as defined in section 
     1861(vv)(1)), physical therapy or exercise training, and 
     behavioral health counseling, based on recommendations of the 
     United States Council on Overweight-Obesity Prevention under 
     section 399R of the Public Health Service Act and such other 
     expert recommendations and studies as determined by the 
     Secretary'' before the period.
       (b) SCHIP.--
       (1) Required coverage.--Section 2103 (42 U.S.C. 1397cc) is 
     amended--
       (A) in subsection (a), in the matter before paragraph (1), 
     by striking ``subsection (c)(5)'' and inserting ``paragraphs 
     (5) and (7) of subsection (c)''; and
       (B) in subsection (c)--
       (i) by redesignating paragraph (5) as paragraph (7); and
       (ii) by inserting after paragraph (4), the following:
       ``(5) Prevention, screening, and treatment services for 
     obesity and overweight.--The child health assistance provided 
     to a targeted low-income child shall include coverage of 
     weight and BMI measurement and monitoring, as well as 
     appropriate treatment services (including but not limited to) 
     medical nutrition therapy services (as defined in section 
     1861(vv)(1)), physical therapy or exercise training, and 
     behavioral health counseling, based on recommendations of the 
     United States Council on Overweight-Obesity Prevention under 
     section 399R of the Public Health Service Act and such other 
     expert recommendations and studies as determined by the 
     Secretary.''.
       (2) Conforming amendment.--Section 2102(a)(7)(B) (42 U.S.C. 
     1397bb(c)(2)) is amended by inserting ``and services 
     described in section 2103(c)(5)'' after ``emergency 
     services''.

     SEC. 405. INCLUSION OF PREVENTIVE SERVICES IN QUALITY 
                   MATERNAL AND CHILD HEALTH SERVICES.

       Section 501(b) of the Social Security Act (42 U.S.C. 
     701(b)) is amended by adding at the end the following new 
     paragraph:
       ``(5) The term `quality maternal and child health services' 
     includes the following:
       ``(A) Evidence-based preventive services described in 
     section 1905(y).
       ``(B) Medical nutrition counseling for individuals with 
     pre-diabetes or obesity, or who are overweight (as defined by 
     the Secretary).
       ``(C) Weight and BMI measurement and monitoring, as well as 
     appropriate treatment services (including but not limited to) 
     medical nutrition therapy services (as defined in section 
     1861(vv)(1)), physical therapy or exercise training, and 
     behavioral health counseling, based on recommendations of the 
     United States Council on Overweight-Obesity Prevention under 
     section 399R of the Public Health Service Act and such other 
     expert recommendations and studies as determined by the 
     Secretary.''.

     SEC. 406. EFFECTIVE DATE.

       (a) In General.--Except as provided in subsection (b), the 
     amendments made by this title take effect on October 1, 2009.
       (b) Extension of Effective Date for State Law Amendment.--
     In the case of a State plan under title XIX or XXI of the 
     Social Security Act (42 U.S.C. 1396 et seq., 1397aa et seq.) 
     which the Secretary of Health and Human Services determines 
     requires State legislation in order for the plan to meet the 
     additional requirements imposed by the amendments made by 
     this section, the State plan shall not be regarded as failing 
     to comply with the requirements of such title solely on the 
     basis of its failure to meet these additional requirements 
     before the first day of the first calendar quarter beginning 
     after the close of the first regular session of the State 
     legislature that begins after the date of enactment of this 
     Act. For purposes of the previous sentence, in the case of a 
     State that has a 2-year legislative session, each year of the 
     session is considered to be a separate regular session of the 
     State legislature.
                                 ______
                                 
      By Mr. REID:
  S. 3590. A bill to provide grants for use by rural local educational 
agencies in purchasing new school buses; to the Committee on Commerce, 
Science, and Transportation.
  Mr. REID. Mr. President, many years ago, when I attended school in 
Searchlight, I walked to school. When it was time for high school, I 
hitched a ride into a town 40 miles away and had to stay with family 
during the week. There weren't many options back then. That was how 
many kids got to school in rural Nevada--walk or hitchhike.
  Now, of course, in both urban and rural America, most children take 
school buses to school.
  Unfortunately, rural school districts across America are strapped. 
They can't afford to buy newer, safer buses. With gas near $4 a gallon, 
their budgets have been stretched to the limits. As a result, many 
rural areas have no choice but to operate outdated, unsafe school buses 
for as long as they can pass inspection.
  Over the years, I have met several times with the school 
superintendents in my State--all 17 of them. While each district has 
their own unique challenges, they all have an urgent need for safe and 
reliable school buses.
  In some rural Nevada counties, school buses must travel a million 
miles in a single school year. Last school year, the buses in one of 
Nevada's rural school districts traveled close to 5 million miles 
combined. I am fairly confident that many of my colleagues on both 
sides of the aisle would agree that the need for newer and safer school 
buses is not unique to Nevada's rural school districts.
  From my meetings with our State's superintendents, it was clear that 
our school districts needed assistance. In the 108th and 109th 
Congresses, I introduced legislation to help these and other rural 
districts transport children to school in a way that is safe, 
affordable, and environmentally sound.
  The Bus Utility and Safety in School Transportation Opportunity and 
Purchasing Act of 2008--or BUS STOP--allows school districts across 
rural America to be eligible for transit funding through the Department 
of Transportation, with the Federal Government contributing 75 percent 
of the cost.
  Some may wonder why we need such a program when the Environmental 
Protection Agency already has a cost-share grant program--the Clean 
School Bus USA program--to help school districts purchase new buses 
powered by natural gas or other alternative fuels.
  Unfortunately, most of the rural districts in my State, and, I would 
imagine, across the country, cannot apply for these grants because they 
don't have the infrastructure in place to support this technology.
  However, working in the spirit of a cleaner environment and healthy 
children, this bill will help rural school

[[Page 21722]]

districts buy newer buses that are better for our air, and safer for 
our children.
  There are many small, rural towns in America, like Searchlight, where 
kids travel to school in outdated buses. They deserve no less than 
safe, clean, economical buses to get them to school.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3590

       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 ``Bus Utility and Safety in 
     School Transportation Opportunity and Purchasing Act of 
     2008''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds that--
       (1) school transportation issues remain a concern for 
     parents, State and local educational agencies, lawmakers, the 
     National Highway Traffic Safety Administration, the National 
     Transportation Safety Board, and the Environmental Protection 
     Agency;
       (2) many rural local educational agencies are operating 
     outdated, unsafe school buses that are failing inspection, 
     resulting in a depletion of the school bus fleets of the 
     local educational agencies;
       (3) many rural local educational agencies are unable to 
     afford newer and safer buses;
       (4) the rising cost of fuel has further strained the 
     budgets of local educational agencies across the country; and
       (5) millions of children face potential future health 
     problems because of exposure to noxious fumes emitted from 
     older school buses.
       (b) Purpose.--The purpose of this Act is to establish 
     within the Department of Transportation a Federal cost-
     sharing program to assist rural local educational agencies 
     with older, unsafe school bus fleets in purchasing newer, 
     safer school buses.

     SEC. 3. DEFINITIONS.

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

     SEC. 4. GRANT PROGRAM.

       (a) In General.--From amounts made available under section 
     5311(j) of title 49, United States Code, for a fiscal year, 
     the Secretary, in consultation with the Secretary of 
     Education, shall provide grants, on a competitive basis, to 
     rural local educational agencies to pay the Federal share of 
     the cost of purchasing new school buses.
       (b) Application.--
       (1) In general.--Each rural local educational agency that 
     seeks to receive a grant under this Act shall submit to the 
     Secretary for approval an application at such time, in such 
     manner, and accompanied by such information (in addition to 
     information required under paragraph (2)) as the Secretary 
     may require.
       (2) Contents.--Each application submitted under paragraph 
     (1) shall include--
       (A) documentation that, of the total number of school buses 
     operated by the rural local educational agency, a majority of 
     these buses entered service prior to 1998;
       (B) documentation of the number of miles that each school 
     bus operated by the rural local educational agency traveled 
     in the most recent 9-month academic year;
       (C) documentation that the rural local educational agency 
     is operating with a strained fleet of school buses;
       (D) a certification from the rural local educational agency 
     that--
       (i) authorizes the application of the rural local 
     educational agency for a grant under this Act; and
       (ii) describes the dedication of the rural local 
     educational agency to school bus replacement programs and 
     school transportation needs (including the number of new 
     school buses needed by the rural local educational agency); 
     and
       (E) an assurance that the rural local educational agency or 
     state educational agency will pay the non-Federal share of 
     the cost of the purchase of new school buses under this Act 
     from non-Federal sources.
       (c) Priority.--
       (1) In general.--In providing grants under this Act, the 
     Secretary shall give priority to rural local educational 
     agencies that, as determined by the Secretary--
       (A) are transporting students in a bus manufactured before 
     1977;
       (B) have a strained fleet of school buses; or
       (C) serve a school that is required, under section 
     1116(b)(9) of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 6316(b)(9)), to provide transportation to 
     students to enable the students to transfer to another public 
     school served by the rural local educational agency.
       (d) Payments; Federal Share.--
       (1) Payments.--The Secretary shall pay to each rural local 
     educational agency having an application approved under this 
     section the Federal share described in paragraph (2) of the 
     cost of purchasing such number of new school buses as is 
     specified in the approved application.
       (2) Federal share.--The Federal share of the cost of 
     purchasing a new school bus under this Act shall be 75 
     percent.
       (e) Formula Grants Under SAFETEA-LU.--Section 5311 of title 
     49, United States Code, is amended by inserting at the end 
     the following:
       ``(j) Rural School Transportation.--The Secretary may 
     expand not to exceed 5 percent of amounts made available 
     under this section to carry out the Bus Utility and Safety in 
     School Transportation Opportunity and Purchasing Act of 
     2008.''.
                                 ______
                                 
      By Mr. REID (for himself and Mr. Ensign):
  S. 3595. A bill to direct the Secretary of the Interior to convey to 
the Nevada System of Higher Education certain Federal land located in 
Clark and Nye counties, Nevada, and for other purposes; to the 
Committee on Energy and Natural Resources.
  Mr. REID. Mr. President, I rise today with my good friend Senator 
Ensign to introduce the Southern Nevada Higher Education Land Act of 
2008. This bill will expand opportunities for higher education in one 
of the Nation's fastest growing areas, southern Nevada.
  In July 1862, President Abraham Lincoln signed the Land Grant College 
Act into law, creating a higher education legacy that continues to 
benefit our country today. That bill, now referred to as the Morrill 
Act, provided 30,000 acres of Federal land per Member of Congress to 
establish institutions of higher education in each State. Today, thanks 
in large part to the foresight of Senator Justin Smith Morrill from 
Vermont and others from his time, this Nation has one of the finest 
public university systems in the world.
  Among the many universities established as a result of this forward-
looking legislation was the University of Nevada. The State's first 
university was originally founded in Elko in 1874. Two years later, 
Nevada's State legislature voted to move the university to its current 
home in Reno. The University of Nevada remained the State's only higher 
education institution for 75 years.
  From these humble beginnings, the State of Nevada has expanded its 
higher education system to now include two research universities, one 
State college, one research institution, and four community colleges. 
The Nevada System of Higher Education, which was formed in 1968 and 
encompasses all 8 institutions, has grown to serve roughly 98,000 
degree-seeking students.
  As the State of Nevada continues to grow, so too must its university 
system. With over 2 million residents in 2007, greater Las Vegas is the 
fourth-largest metropolitan area in the Mountain West. In this decade 
alone, the area's population has grown by 31 percent, 5 times faster 
than the Nation as a whole. By the year 2040, the area's population is 
projected to double to nearly 4.3 million residents. We must expand 
higher education opportunities to meet the demands of this growing 
region.
  Consider the following--the University of Nevada, Las Vegas, with 
28,000 students and 3,300 faculty and staff, is the fourth fastest-
growing research university in the Nation. The College of Southern 
Nevada, also in Las Vegas, serves 39,000 students and its three urban 
campuses are at near capacity. The town of Pahrump, 60 miles from Las 
Vegas in rural Nye County, has grown by 20 percent since 2000. Great 
Basin College's small branch campus in Pahrump uses high school 
classrooms at night to serve the city's 41,000 residents.

[[Page 21723]]

  Our legislation will make selected parcels of Federal lands available 
for the future growth of the university system. Land will be provided 
for new campuses for the University of Nevada, Las Vegas; the College 
of Southern Nevada; and a Pahrump campus of Great Basin College. The 
current campuses for these three institutions comprise 1,150 acres in 
southern Nevada. With the passage of this legislation, an additional 
2,400 acres will be available for new classroom, research, and 
residential facilities to help further the missions of these three fine 
institutions.
  To establish these new campuses, three parcels of land would be 
conveyed from the Bureau of Land Management, BLM, to the Nevada System 
of Higher Education. Two of the parcels are located in Clark County, 
within the Southern Nevada Public Land Management Act, SNPLMA, disposal 
boundary. The third parcel is located in Pahrump, west of Las Vegas, in 
Nye County. BLM has designated all of these parcels for disposal 
because they are surrounded by development and are difficult to manage.
  It is important to point out that the land our legislation conveys 
for the University of Nevada, Las Vegas, borders Nellis Air Force Base. 
Nellis was once on the outskirts of town, but now development is on its 
doorstep. In order to protect the mission of the Nellis Air Force base, 
we have put a special provision in the legislation requiring that the 
university system and Air Force sign a common agreement regarding 
development plans for the campus before any land is conveyed. The 
university system and the Air Force have been in conversations about 
this agreement for at least 2 years and seem to have found a middle 
ground that will serve the interests of both parties. We greatly 
appreciate the efforts of the university system and the Air Force to 
make this work.
  This same land bordering Nellis was once used as a small arms range 
during World War II and will need to be cleaned up before it can be 
conveyed to the university system. Because it will take time to 
accomplish this, our legislation allows the land to be conveyed in 
phases, as the remediation is completed.
  This proposal to expand higher education opportunities in southern 
Nevada has been welcomed by area leaders. City and county officials 
have worked closely with the Nevada System of Higher Education to plan 
the development of world-class facilities in their communities. These 
facilities are critical to meeting the challenge of diversifying their 
economies and attracting and growing knowledge industries in the area.
  Just as the Morrill Act opened up Federal land to expand higher 
education across the Nation, I am hopeful that this important, though 
much more modest effort can do the same for the residents of southern 
Nevada. We look forward to working with Chairman Bingaman, Ranking 
Member Domenici and the other distinguished members of the Energy and 
Natural Resources Committee to move this legislation in an expeditious 
manner.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3595

       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 ``Southern Nevada Higher 
     Education Land Act of 2008''.

     SEC. 2. FINDINGS; PURPOSE.

       (a) Findings.--Congress finds that--
       (1) southern Nevada is 1 of the fastest growing regions in 
     the United States, with 750,000 new residents added since 
     2000 and 250,000 residents expected to be added by 2010;
       (2) the Nevada System of Higher Education serves more than 
     70,000 undergraduate and graduate students in southern 
     Nevada, with enrollment in the System expected to grow by 21 
     percent during the next 10 years, which would bring 
     enrollment to a total of 85,000 students in the System;
       (3) the Nevada System of Higher Education campuses in 
     southern Nevada comprise 1,200 acres, 1 of the smallest land 
     bases of any major higher education system in the western 
     United States;
       (4) the University of Nevada, Las Vegas, with 28,500 
     students and 3,300 faculty and staff, is the fourth fastest-
     growing research university in the United States;
       (5) the College of Southern Nevada--
       (A) serves 39,000 students each semester; and
       (B) is near capacity at each of the 3 urban campuses of the 
     College;
       (6) Pahrump, located in rural Nye County, Nevada--
       (A) has grown by 20 percent since 2000; and
       (B) has a small satellite campus of Great Basin College to 
     serve the 40,500 residents of Pahrump, Nevada; and
       (7) the Nevada System of Higher Education needs additional 
     land to provide for the future growth of the System, 
     particularly for the University of Nevada, Las Vegas, the 
     College of Southern Nevada, and the Pahrump campus of Great 
     Basin College.
       (b) Purposes.--The purposes of this Act are--
       (1) to provide additional land for a thriving higher 
     education system that serves the residents of fast-growing 
     southern Nevada;
       (2) to provide residents of the State with greater 
     opportunities to pursue higher education and the resulting 
     benefits, which include increased earnings, more employment 
     opportunities, and better health; and
       (3) to provide communities in southern Nevada the economic 
     and societal values of higher education, including economic 
     growth, lower crime rates, greater civic participation, and 
     less reliance on social services.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Board of regents.--The term ``Board of Regents'' means 
     the Board of Regents of the Nevada System of Higher 
     Education.
       (2) Campuses.--The term ``Campuses'' means the Great Basin 
     College, College of Southern Nevada, and University of Las 
     Vegas, Nevada, campuses.
       (3) Federal land.--The term ``Federal land'' means each of 
     the 3 parcels of Bureau of Land Management land identified on 
     the maps as ``Parcel to be Conveyed'', of which--
       (A) approximately 40 acres is to be conveyed for the 
     College of Southern Nevada;
       (B) approximately 2,085 acres is to be conveyed for the 
     University of Nevada, Las Vegas; and
       (C) approximately 285 acres is to be conveyed for the Great 
     Basin College.
       (4) Map.--The term ``Map'' means each of the 3 maps 
     entitled ``Southern Nevada Higher Education Land Act'', dated 
     July 11, 2008, and on file and available for public 
     inspection in the appropriate offices of the Bureau of Land 
     Management.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (6) State.--The term ``State'' means the State of Nevada.
       (7) System.--The term ``System'' means the Nevada System of 
     Higher Education.

     SEC. 4. CONVEYANCES OF FEDERAL LAND TO THE SYSTEM.

       (a) Conveyances.--
       (1) In general.--Notwithstanding section 202 of the Federal 
     Land Policy and Management Act of 1976 (43 U.S.C. 1712) and 
     section 1(c) of the Act of June 14, 1926 (commonly known as 
     the ``Recreation and Public Purposes Act'') (43 U.S.C. 
     869(c)) and subject to all valid existing rights, the 
     Secretary shall--
       (A) not later than 180 days after the date of enactment of 
     this Act, convey to the System, without consideration, all 
     right, title, and interest of the United States in and to the 
     Federal land for the Great Basin College and the College of 
     Southern Nevada; and
       (B) not later than 180 days after the receipt of 
     certification of acceptable remediation of environmental 
     conditions existing on the parcel to be conveyed for the 
     University of Nevada, Las Vegas, convey to the System, 
     without consideration, all right, title, and interest of the 
     United States in and to the Federal land for the University 
     of Nevada, Las Vegas.
       (2) Phases.--The Secretary may phase the conveyance of the 
     Federal land under paragraph (1)(B) as remediation is 
     completed.
       (b) Conditions.--
       (1) In general.--As a condition of the conveyance under 
     subsection (a)(1), the Board of Regents shall agree in 
     writing--
       (A) to pay any administrative costs associated with the 
     conveyance, including the costs of any environmental, 
     wildlife, cultural, or historical resources studies;
       (B) to use the Federal land conveyed for educational and 
     recreational purposes;
       (C) to release and indemnify the United States from any 
     claims or liabilities that may arise from uses carried out on 
     the Federal land on or before the date of enactment of this 
     Act by the United States or any person;
       (D) as soon as practicable after the date of the conveyance 
     under subsection (a)(1), to erect at each of the Campuses an 
     appropriate and centrally located monument that acknowledges 
     the conveyance of the Federal land by the United States for 
     the purpose of furthering the higher education of the 
     citizens in the State; and
       (E) to assist the Bureau of Land Management in providing 
     information to the students of the System and the citizens of 
     the State on--

[[Page 21724]]

       (i) public land (including the management of public land) 
     in the Nation; and
       (ii) the role of the Bureau of Land Management in managing, 
     preserving, and protecting the public land in the State.
       (2) Agreement with nellis air force base.--As a condition 
     of the conveyance of the Federal land for the University of 
     Nevada, Las Vegas under subsection (a)(1)(B), the Board of 
     Regents shall enter into a cooperative interlocal agreement 
     with Nellis Air Force Base that is consistent with the 
     missions of the System and the United States Air Force.
       (c) Use of Federal Land.--
       (1) In general.--The System may use the Federal land 
     conveyed under subsection (a)(1) for--
       (A) any purpose relating to the establishment, operation, 
     growth, and maintenance of the System; and
       (B) any uses relating to the purposes, including 
     residential and commercial development that would generally 
     be associated with an institution of higher education.
       (2) Other entities.--The System may--
       (A) consistent with Federal and State law, lease, or 
     otherwise provide property or space at, the Campuses, with or 
     without consideration, to religious, public interest, 
     community, or other groups for services and events that are 
     of interest to the System or to any community located in 
     southern Nevada;
       (B) allow any other communities in southern Nevada to use 
     facilities of the Campuses for educational and recreational 
     programs of the community; and
       (C) in conjunction with the city of Las Vegas, North Las 
     Vegas, or Pahrump or Clark or Nye County plan, finance 
     (including through the provision of cost-share assistance), 
     construct, and operate facilities for the city of Las Vegas, 
     North Las Vegas, or Pahrump or Clark or Nye County on the 
     Federal land conveyed for educational or recreational 
     purposes consistent with this section.
       (d) Reversion.--
       (1) In general.--If the Federal land or any portion of the 
     Federal land conveyed under subsection (a)(1) ceases to be 
     used for the System, the Federal land, or any portion of the 
     Federal land shall, at the discretion of the Secretary, 
     revert to the United States.
       (2) University of nevada, las vegas.--If the System fails 
     to complete the first building or show progression toward 
     development of the University of Nevada, Las Vegas campus on 
     the applicable parcels of Federal land by the date that is 50 
     years after the date of receipt of certification of 
     acceptable remediation of environmental conditions, the 
     parcels of the Federal land described in section 3(3)(B) 
     shall, at the discretion of the Secretary, revert to the 
     United States.
                                 ______
                                 
      By Mr. KERRY:
  S. 3596. A bill to stabilize the small business lending market, and 
for other purposes; to the Committee on Small Business and 
Entrepreneurship.
  Mr. KERRY. Mr. President, over the past several days the Federal 
Government has been called upon to bail out some of America's largest 
financial companies. While I recognize that swift action must be taken 
to prevent the collapse of our Nation's major financial institutions, 
like many other Americans, I believe we also should come to the aid of 
our Nation's small businesses, which are also imperiled by this 
financial crisis.
  Today the problems facing small firms and the banks that typically 
lend to them are not unlike those being faced by corporate America--
firms simply cannot access the capital they need to keep their small 
businesses afloat in the wake of this economic crisis. Although the 
Small Business Administration's loan programs were designed to reach 
these marginalized borrowers, there is ample evidence that the programs 
are failing to do so at this critical juncture.
  Last year, the SBA's 7(a) and 504 loan guarantee programs combined to 
provide over 100,000 American small businesses with essential 
financing, and they injected approximately $20 billion into our local 
businesses and communities. As a result of the financial crisis, 7(a) 
loans are down about 30 percent in terms of the number of loans made, 
and down about 11 percent in terms of dollars. Meanwhile, the number of 
504 loans has decreased about 16 percent and they are down 
approximately 15 percent in terms of dollars loaned for fiscal year 
2008. But these are more than just statistics; they are stark 
indications that the SBA's loan programs are not reaching enough of the 
small businesses that are now struggling to obtain affordable credit.
  The recent drop in SBA lending paints a picture of small business 
borrowers and lenders caught in a vicious cycle driven by the financial 
crises of the past year. On the lender side of the equation, struggling 
banks have become so concerned with risk that they have virtually cut 
off conventional small business borrowing, even to well-qualified 
firms. On the borrower side, the banks' extremely tight lending 
practices are preventing loans--SBA loans in particular--from serving 
small businesses that need capital to survive the current economic 
crisis. That is why I am introducing the Small Business Lending Market 
Stabilization Act of 2008--which will jump start SBA lending, helping 
thousands of American small businesses receive the financing they need 
to survive the current financial crisis.
  In April, as Chairman of the Senate Committee on Small Business and 
Entrepreneurship, I held a hearing to learn why the SBA loan programs 
were not reaching small businesses that were being squeezed out of the 
conventional loan markets by the credit crunch. Although the 
Administration refused to admit it at the time, virtually every other 
witness at the hearing told me that the SBA's increased fees played a 
significant role. The bill I have introduced today will address that 
problem by temporarily eliminating the fees that the SBA charges to 
borrowers, lenders, and ``Certified Development Companies'' for the 
7(a) and 504 loan guarantee programs. This will immediately reduce the 
cost of capital for SBA borrowers. With lower monthly loan payments, 
more money will be placed into the hands of small business owners--
money that will allow them to continue purchasing inventory and 
equipment. At the same time, the fee relief will also reduce the cost 
of lending for SBA's partners in the private sector, allowing them to 
make more small business loans through the programs.
  The bill also includes several provisions that will expand the 
universe of small businesses that can access the SBA's loan programs. 
For instance, one measure will permit certain borrowers to refinance a 
limited amount of their preexisting debt through a new 504 loan. This 
adjustment will allow 504 loans to reach small business owners who want 
to refinance their company's existing debt, but have been turned down 
by conventional lenders.
  The bill also contains measures that will give lenders greater 
flexibility in making SBA loans. One provision would allow the SBA to 
use ``weighted average rates'' when pooling loans for sale on the 
secondary market, making the secondary markets for SBA loans more 
efficient and improving liquidity among participating banks. Another 
provision would provide greater flexibility by directing the SBA to 
give lenders at least one alternative interest rate to the Wall Street 
prime rate, which will help reduce interest rate typically charged on 
7(a) loans.
  In short, the bill I am introducing today will provide much needed 
support for America's small businesses, helping them break free from 
the vicious cycle caused by the crisis in our financial markets. I will 
continue to work with my colleagues on both sides of the aisle to 
ensure that the massive Wall Street bailout proposal we have been asked 
to approve contains adequate protections for taxpayers. But I also urge 
my colleagues to join me in supporting this bill, which will provide a 
lifeline to hundreds of thousands of American small businesses along 
Main Street.
                                 ______
                                 
      By Mr. KYL:
  S. 3599. A bill to amend title 18, United States Code, to add crimes 
committed in Indian country or exclusive Federal jurisdiction as 
racketeering predicates; to the Committee on the Judiciary.
  Mr. KYL. Mr. President, I ask unanimous consent that the text of the 
bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3599

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

     SECTION 1. CRIMES COMMITTED IN INDIAN COUNTRY OR EXCLUSIVE 
                   FEDERAL JURISDICTION AS RACKETEERING 
                   PREDICATES.

       Section 1961(1)(A) of title 18, United States Code, is 
     amended by inserting ``, or would

[[Page 21725]]

     have been so chargeable if the act or threat (other than 
     gambling conducted pursuant to Federal law) had not been 
     committed in Indian country (as defined in section 1151) or 
     in any other area of exclusive Federal jurisdiction,'' after 
     ``chargeable under State law''.
                                 ______
                                 
      By Mr. KYL:
  S. 3600. A bill to amend title 35, United States Code, to provide for 
patent reform; to the Committee on the Judiciary.
  Mr. KYL. Mr. President, I ask unanimous consent that the text of the 
bill be printed in the Record.
  There being no objection, the text of the bill ordered to be printed 
in the Record, as follows:

                                S. 3600

       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 ``Patent 
     Reform Act of 2008''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Right of the first inventor to file.
Sec. 3. Inventor's oath or declaration.
Sec. 4. Damages.
Sec. 5. Post-grant review proceedings.
Sec. 6. Definition; patent trial and appeal board.
Sec. 7. Submissions by third parties and other quality enhancements.
Sec. 8. Venue.
Sec. 9. Patent and trademark office regulatory authority.
Sec. 10. Applicant quality submissions.
Sec. 11. Inequitable conduct and civil sanctions for misconduct before 
              the Office.
Sec. 12. Authority of the Director of the Patent and Trademark Office 
              to accept late filings.
Sec. 13. Limitation on damages and other remedies with respect to 
              patents for methods in compliance with check imaging 
              methods.
Sec. 14. Patent and trademark office funding.
Sec. 15. Technical amendments.
Sec. 16. Effective date; rule of construction.

     SEC. 2. RIGHT OF THE FIRST INVENTOR TO FILE.

       (a) Definitions.--Section 100 of title 35, United States 
     Code, is amended by adding at the end the following:
       ``(f) The term `inventor' means the individual or, if a 
     joint invention, the individuals collectively who invented or 
     discovered the subject matter of the invention.
       ``(g) The terms `joint inventor' and `coinventor' mean any 
     1 of the individuals who invented or discovered the subject 
     matter of a joint invention.
       ``(h) The `effective filing date of a claimed invention' 
     is--
       ``(1) the filing date of the patent or the application for 
     patent containing the claim to the invention; or
       ``(2) if the patent or application for patent is entitled 
     to a right of priority of any other application under section 
     119, 365(a), or 365(b) or to the benefit of an earlier filing 
     date in the United States under section 120, 121, or 365(c), 
     the filing date of the earliest such application in which the 
     claimed invention is disclosed in the manner provided by the 
     first paragraph of section 112.
       ``(i) The term `claimed invention' means the subject matter 
     defined by a claim in a patent or an application for a 
     patent.''.
       (b) Conditions for Patentability.--
       (1) In general.--Section 102 of title 35, United States 
     Code, is amended to read as follows:

     ``Sec. 102. Conditions for patentability; novelty

       ``(a) Novelty; Prior Art.--A patent for a claimed invention 
     may not be obtained if--
       ``(1) the claimed invention was patented, described in a 
     printed publication, or otherwise made available to the 
     public (other than through testing undertaken to reduce the 
     invention to practice)--
       ``(A) more than 1 year before the effective filing date of 
     the claimed invention; or
       ``(B) 1 year or less before the effective filing date of 
     the claimed invention, other than through disclosures made by 
     the inventor or a joint inventor or by others who obtained 
     the subject matter disclosed directly or indirectly from the 
     inventor or a joint inventor; or
       ``(2) the claimed invention was described in a patent 
     issued under section 151, or in an application for patent 
     published or deemed published under section 122(b), in which 
     the patent or application, as the case may be, names another 
     inventor and was effectively filed before the effective 
     filing date of the claimed invention.
       ``(b) Exceptions.--
       ``(1) Prior inventor disclosure exception.--Subject matter 
     that would otherwise qualify as prior art based upon a 
     disclosure under subparagraph (B) of subsection (a)(1) shall 
     not be prior art to a claimed invention under that 
     subparagraph if the subject matter had, before such 
     disclosure, been publicly disclosed by the inventor or a 
     joint inventor or others who obtained the subject matter 
     disclosed directly or indirectly from the inventor or a joint 
     inventor.
       ``(2) Derivation, prior disclosure, and common assignment 
     exceptions.--Subject matter that would otherwise qualify as 
     prior art only under subsection (a)(2), after taking into 
     account the exception under paragraph (1), shall not be prior 
     art to a claimed invention if--
       ``(A) the subject matter was obtained directly or 
     indirectly from the inventor or a joint inventor;
       ``(B) the subject matter had been publicly disclosed by the 
     inventor or a joint inventor or others who obtained the 
     subject matter disclosed, directly or indirectly, from the 
     inventor or a joint inventor before the effective filing date 
     of the application or patent set forth under subsection 
     (a)(2); or
       ``(C) the subject matter and the claimed invention, not 
     later than the effective filing date of the claimed 
     invention, were owned by the same person or subject to an 
     obligation of assignment to the same person.
       ``(3) Joint research agreement exception.--
       ``(A) In general.--Subject matter and a claimed invention 
     shall be deemed to have been owned by the same person or 
     subject to an obligation of assignment to the same person in 
     applying the provisions of paragraph (2) if--
       ``(i) the subject matter and the claimed invention were 
     made by or on behalf of 1 or more parties to a joint research 
     agreement that was in effect on or before the effective 
     filing date of the claimed invention;
       ``(ii) the claimed invention was made as a result of 
     activities undertaken within the scope of the joint research 
     agreement; and
       ``(iii) the application for patent for the claimed 
     invention discloses or is amended to disclose the names of 
     the parties to the joint research agreement.
       ``(B) For purposes of subparagraph (A), the term `joint 
     research agreement' means a written contract, grant, or 
     cooperative agreement entered into by 2 or more persons or 
     entities for the performance of experimental, developmental, 
     or research work in the field of the claimed invention.
       ``(4) Patents and published applications effectively 
     filed.--A patent or application for patent is effectively 
     filed under subsection (a)(2) with respect to any subject 
     matter described in the patent or application--
       ``(A) as of the filing date of the patent or the 
     application for patent; or
       ``(B) if the patent or application for patent is entitled 
     to claim a right of priority under section 119, 365(a), or 
     365(b) or to claim the benefit of an earlier filing date 
     under section 120, 121, or 365(c), based upon 1 or more prior 
     filed applications for patent, as of the filing date of the 
     earliest such application that describes the subject 
     matter.''.
       (2) Conforming amendment.--The item relating to section 102 
     in the table of sections for chapter 10 of title 35, United 
     States Code, is amended to read as follows:

``102. Conditions for patentability; novelty.''.

       (c) Conditions for Patentability; Nonobvious Subject 
     Matter.--Section 103 of title 35, United States Code, is 
     amended to read as follows:

     ``Sec. 103. Conditions for patentability; nonobvious subject 
       matter

       ``A patent for a claimed invention may not be obtained 
     though the claimed invention is not identically disclosed as 
     set forth in section 102, if the differences between the 
     claimed invention and the prior art are such that the claimed 
     invention as a whole would have been obvious before the 
     effective filing date of the claimed invention to a person 
     having ordinary skill in the art to which the claimed 
     invention pertains. Patentability shall not be negated by the 
     manner in which the invention was made.''.
       (d) Repeal of Requirements for Inventions Made Abroad.--
     Section 104 of title 35, United States Code, and the item 
     relating to that section in the table of sections for chapter 
     10 of title 35, United States Code, are repealed.
       (e) Repeal of Statutory Invention Registration.--
       (1) In general.--Section 157 of title 35, United States 
     Code, and the item relating to that section in the table of 
     sections for chapter 14 of title 35, United States Code, are 
     repealed.
       (2) Removal of cross references.--Section 111(b)(8) of 
     title 35, United States Code, is amended by striking 
     ``sections 115, 131, 135, and 157'' and inserting ``sections 
     131 and 135''.
       (f) Earlier Filing Date for Inventor and Joint Inventor.--
     Section 120 of title 35, United States Code, is amended by 
     striking ``which is filed by an inventor or inventors named'' 
     and inserting ``which names an inventor or joint inventor''.
       (g) Conforming Amendments.--
       (1) Right of priority.--Section 172 of title 35, United 
     States Code, is amended by striking ``and the time specified 
     in section 102(d)''.
       (2) Limitation on remedies.--Section 287(c)(4) of title 35, 
     United States Code, is amended by striking ``the earliest 
     effective filing date of which is prior to'' and inserting 
     ``which has an effective filing date before''.
       (3) International application designating the united 
     states: effect.--Section 363 of title 35, United States Code, 
     is amended by striking ``except as otherwise provided in 
     section 102(e) of this title''.

[[Page 21726]]

       (4) Publication of international application: effect.--
     Section 374 of title 35, United States Code, is amended by 
     striking ``sections 102(e) and 154(d)'' and inserting 
     ``section 154(d)''.
       (5) Patent issued on international application: effect.--
     The second sentence of section 375(a) of title 35, United 
     States Code, is amended by striking ``Subject to section 
     102(e) of this title, such'' and inserting ``Such''.
       (6) Limit on right of priority.--Section 119(a) of title 
     35, United States Code, is amended by striking ``; but no 
     patent shall be granted'' and all that follows through ``one 
     year prior to such filing''.
       (7) Inventions made with federal assistance.--Section 
     202(c) of title 35, United States Code, is amended--
       (A) in paragraph (2)--
       (i) by striking ``publication, on sale, or public use,'' 
     and all that follows through ``obtained in the United 
     States'' and inserting ``the 1-year period referred to in 
     section 102(a) would end before the end of that 2-year 
     period''; and
       (ii) by striking ``the statutory'' and inserting ``that 1-
     year''; and
       (B) in paragraph (3), by striking ``any statutory bar date 
     that may occur under this title due to publication, on sale, 
     or public use'' and inserting ``the expiration of the 1-year 
     period referred to in section 102(a)''.
       (h) Repeal of Interfering Patent Remedies.--Section 291 of 
     title 35, United States Code, and the item relating to that 
     section in the table of sections for chapter 29 of title 35, 
     United States Code, are repealed.
       (i) Action for Claim to Patent on Derived Invention.--
     Section 135(a) of title 35, United States Code, is amended to 
     read as follows:
       ``(a) Dispute Over Right to Patent.--
       ``(1) Institution of derivation proceeding.--An applicant 
     may request initiation of a derivation proceeding to 
     determine the right of the applicant to a patent by filing a 
     request which sets forth with particularity the basis for 
     finding that an earlier applicant derived the claimed 
     invention from the applicant requesting the proceeding and, 
     without authorization, filed an application claiming such 
     invention. Any such request may only be made within 1 year 
     after the date of first publication of an application or of 
     the issuance of a patent, whichever is earlier, containing a 
     claim that is the same or is substantially the same as the 
     claimed invention, must be made under oath, and must be 
     supported by substantial evidence. Whenever the Director 
     determines that patents or applications for patent naming 
     different individuals as the inventor interfere with one 
     another because of a dispute over the right to patent under 
     section 101, the Director shall institute a derivation 
     proceeding for the purpose of determining which applicant is 
     entitled to a patent.
       ``(2) Determination by patent trial and appeal board.--In 
     any proceeding under this subsection, the Patent Trial and 
     Appeal Board--
       ``(A) shall determine the question of the right to patent;
       ``(B) in appropriate circumstances, may correct the naming 
     of the inventor in any application or patent at issue; and
       ``(C) shall issue a final decision on the right to patent.
       ``(3) Derivation proceeding.--The Board may defer action on 
     a request to initiate a derivation proceeding until 3 months 
     after the date on which the Director issues a patent to the 
     applicant whose application has the earlier effective filing 
     date of the commonly claimed invention.
       ``(4) Effect of final decision.--The final decision of the 
     Patent Trial and Appeal Board, if adverse to the claim of an 
     applicant, shall constitute the final refusal by the United 
     States Patent and Trademark Office on the claims involved. 
     The Director may issue a patent to an applicant who is 
     determined by the Patent Trial and Appeal Board to have the 
     right to patent. The final decision of the Board, if adverse 
     to a patentee, shall, if no appeal or other review of the 
     decision has been or can be taken or had, constitute 
     cancellation of the claims involved in the patent, and notice 
     of such cancellation shall be endorsed on copies of the 
     patent distributed after such cancellation by the United 
     States Patent and Trademark Office.''.
       (j) Elimination of References to Interferences.--(1) 
     Sections 6, 41, 134, 141, 145, 146, 154, 305, and 314 of 
     title 35, United States Code, are each amended by striking 
     ``Board of Patent Appeals and Interferences'' each place it 
     appears and inserting ``Patent Trial and Appeal Board''.
       (2) Sections 141, 146, and 154 of title 35, United States 
     Code, are each amended--
       (A) by striking ``an interference'' each place it appears 
     and inserting ``a derivation proceeding''; and
       (B) by striking ``interference'' each additional place it 
     appears and inserting ``derivation proceeding''.
       (3) The section heading for section 134 of title 35, United 
     States Code, is amended to read as follows:

     ``Sec. 134. Appeal to the Patent Trial and Appeal Board''.

       (4) The section heading for section 135 of title 35, United 
     States Code, is amended to read as follows:

     ``Sec. 135. Derivation proceedings''.

       (5) The section heading for section 146 of title 35, United 
     States Code, is amended to read as follows:

     ``Sec. 146. Civil action in case of derivation proceeding''.

       (6) Section 154(b)(1)(C) of title 35, United States Code, 
     is amended by striking ``interferences'' and inserting 
     ``derivation proceedings''.
       (7) The item relating to section 6 in the table of sections 
     for chapter 1 of title 35, United States Code, is amended to 
     read as follows:

``6. Patent Trial and Appeal Board.''.

       (8) The items relating to sections 134 and 135 in the table 
     of sections for chapter 12 of title 35, United States Code, 
     are amended to read as follows:

``134. Appeal to the Patent Trial and Appeal Board.
``135. Derivation proceedings.''.

       (9) The item relating to section 146 in the table of 
     sections for chapter 13 of title 35, United States Code, is 
     amended to read as follows:

``146. Civil action in case of derivation proceeding.''.

       (10) Certain Appeals.--Section 1295(a)(4)(A) of title 28, 
     United States Code, is amended to read as follows:
       ``(A) the Patent Trial and Appeal Board of the United 
     States Patent and Trademark Office with respect to patent 
     applications, derivation proceedings, and post-grant review 
     proceedings, at the instance of an applicant for a patent or 
     any party to a patent interference (commenced before the 
     effective date of the Patent Reform Act of 2008), derivation 
     proceeding, or post-grant review proceeding, and any such 
     appeal shall waive any right of such applicant or party to 
     proceed under section 145 or 146 of title 35;''.

     SEC. 3. INVENTOR'S OATH OR DECLARATION.

       (a) Inventor's Oath or Declaration.--
       (1) In general.--Section 115 of title 35, United States 
     Code, is amended to read as follows:

     ``Sec. 115. Inventor's oath or declaration

       ``(a) Naming the Inventor; Inventor's Oath or 
     Declaration.--An application for patent that is filed under 
     section 111(a) or that commences the national stage under 
     section 371 (including an application under section 111 that 
     is filed by an inventor for an invention for which an 
     application has previously been filed under this title by 
     that inventor) shall include, or be amended to include, the 
     name of the inventor of any claimed invention in the 
     application. Except as otherwise provided in this section, an 
     individual who is the inventor or a joint inventor of a 
     claimed invention in an application for patent shall execute 
     an oath or declaration in connection with the application.
       ``(b) Required Statements.--An oath or declaration under 
     subsection (a) shall contain statements that--
       ``(1) the application was made or was authorized to be made 
     by the affiant or declarant; and
       ``(2) such individual believes himself or herself to be the 
     original inventor or an original joint inventor of a claimed 
     invention in the application.
       ``(c) Additional Requirements.--The Director may specify 
     additional information relating to the inventor and the 
     invention that is required to be included in an oath or 
     declaration under subsection (a).
       ``(d) Substitute Statement.--
       ``(1) In general.--In lieu of executing an oath or 
     declaration under subsection (a), the applicant for patent 
     may provide a substitute statement under the circumstances 
     described in paragraph (2) and such additional circumstances 
     that the Director may specify by regulation.
       ``(2) Permitted circumstances.--A substitute statement 
     under paragraph (1) is permitted with respect to any 
     individual who--
       ``(A) is unable to file the oath or declaration under 
     subsection (a) because the individual--
       ``(i) is deceased;
       ``(ii) is under legal incapacity; or
       ``(iii) cannot be found or reached after diligent effort; 
     or
       ``(B) is under an obligation to assign the invention but 
     has refused to make the oath or declaration required under 
     subsection (a).
       ``(3) Contents.--A substitute statement under this 
     subsection shall--
       ``(A) identify the individual with respect to whom the 
     statement applies;
       ``(B) set forth the circumstances representing the 
     permitted basis for the filing of the substitute statement in 
     lieu of the oath or declaration under subsection (a); and
       ``(C) contain any additional information, including any 
     showing, required by the Director.
       ``(e) Making Required Statements in Assignment of Record.--
     An individual who is under an obligation of assignment of an 
     application for patent may include the required statements 
     under subsections (b) and (c) in the assignment executed by 
     the individual, in lieu of filing such statements separately.
       ``(f) Time for Filing.--A notice of allowance under section 
     151 may be provided to an

[[Page 21727]]

     applicant for patent only if the applicant for patent has 
     filed each required oath or declaration under subsection (a) 
     or has filed a substitute statement under subsection (d) or 
     recorded an assignment meeting the requirements of subsection 
     (e).
       ``(g) Earlier-Filed Application Containing Required 
     Statements or Substitute Statement.--The requirements under 
     this section shall not apply to an individual with respect to 
     an application for patent in which the individual is named as 
     the inventor or a joint inventor and that claims the benefit 
     under section 120 or 365(c) of the filing of an earlier-filed 
     application, if--
       ``(1) an oath or declaration meeting the requirements of 
     subsection (a) was executed by the individual and was filed 
     in connection with the earlier-filed application;
       ``(2) a substitute statement meeting the requirements of 
     subsection (d) was filed in the earlier filed application 
     with respect to the individual; or
       ``(3) an assignment meeting the requirements of subsection 
     (e) was executed with respect to the earlier-filed 
     application by the individual and was recorded in connection 
     with the earlier-filed application.
       ``(h) Supplemental and Corrected Statements; Filing 
     Additional Statements.--
       ``(1) In general.--Any person making a statement required 
     under this section may withdraw, replace, or otherwise 
     correct the statement at any time. If a change is made in the 
     naming of the inventor requiring the filing of 1 or more 
     additional statements under this section, the Director shall 
     establish regulations under which such additional statements 
     may be filed.
       ``(2) Supplemental statements not required.--If an 
     individual has executed an oath or declaration under 
     subsection (a) or an assignment meeting the requirements of 
     subsection (e) with respect to an application for patent, the 
     Director may not thereafter require that individual to make 
     any additional oath, declaration, or other statement 
     equivalent to those required by this section in connection 
     with the application for patent or any patent issuing 
     thereon.
       ``(3) Savings clause.--No patent shall be invalid or 
     unenforceable based upon the failure to comply with a 
     requirement under this section if the failure is remedied as 
     provided under paragraph (1).
       ``(i) Acknowledgment of Penalties.--Any declaration or 
     statement filed pursuant to this section shall contain an 
     acknowledgment that any willful false statement made in such 
     declaration or statement is punishable under section 1001 of 
     title 18 by fine or imprisonment of not more than 5 years, or 
     both.''.
       (2) Relationship to divisional applications.--Section 121 
     of title 35, United States Code, is amended by striking ``If 
     a divisional application'' and all that follows through 
     ``inventor.''.
       (3) Requirements for nonprovisional applications.--Section 
     111(a) of title 35, United States Code, is amended--
       (A) in paragraph (2)(C), by striking ``by the applicant'' 
     and inserting ``or declaration'';
       (B) in the heading for paragraph (3), by striking ``and 
     oath''; and
       (C) by striking ``and oath'' each place it appears.
       (4) Conforming amendment.--The item relating to section 115 
     in the table of sections for chapter 10 of title 35, United 
     States Code, is amended to read as follows:

``115. Inventor's oath or declaration.''.

       (b) Filing by Other Than Inventor.--Section 118 of title 
     35, United States Code, is amended to read as follows:

     ``Sec. 118. Filing by other than inventor

       ``A person to whom the inventor has assigned or is under an 
     obligation to assign the invention may make an application 
     for patent. A person who otherwise shows sufficient 
     proprietary interest in the matter may make an application 
     for patent on behalf of and as agent for the inventor on 
     proof of the pertinent facts and a showing that such action 
     is appropriate to preserve the rights of the parties. If the 
     Director grants a patent on an application filed under this 
     section by a person other than the inventor, the patent shall 
     be granted to the real party in interest and upon such notice 
     to the inventor as the Director considers to be 
     sufficient.''.
       (c) Specification.--Section 112 of title 35, United States 
     Code, is amended--
       (1) in the first paragraph--
       (A) by striking ``The specification'' and inserting ``(a) 
     In General.--The specification''; and
       (B) by striking ``, and shall set forth'' and all that 
     follows through ``his invention''; and
       (2) in the second paragraph--
       (A) by striking ``The specifications'' and inserting ``(b) 
     Conclusion.--The specifications''; and
       (B) by striking ``applicant regards as his invention'' and 
     inserting ``inventor or a joint inventor regards as the 
     invention'';
       (3) in the third paragraph, by striking ``A claim'' and 
     inserting ``(c) Form.--A claim'';
       (4) in the fourth paragraph, by striking ``Subject to the 
     following paragraph,'' and inserting ``(d) Reference in 
     Dependent Forms.--Subject to subsection (e),'';
       (5) in the fifth paragraph, by striking ``A claim'' and 
     inserting ``(e) Reference in Multiple Dependent Form.--A 
     claim''; and
       (6) in the last paragraph, by striking ``An element'' and 
     inserting ``(f) Element in Claim for a Combination.--An 
     element''.

     SEC. 4. DAMAGES.

       (a) Damages.--Section 284 of title 35, United States Code, 
     is amended to read as follows:

     ``Sec. 284. Damages

       ``(a) In General.--
       ``(1) Compensatory damages.--Upon finding for a claimant, 
     the court shall award the claimant damages adequate to 
     compensate for the infringement, but in no event less than a 
     reasonable royalty for the use made of the invention by the 
     infringer, together with interest and costs as determined by 
     the court.
       ``(2) Increased damages.--When the damages are not found by 
     a jury, the court shall assess them. In either event the 
     court may increase the damages up to 3 times the amount found 
     or assessed. Increased damages under this paragraph shall not 
     apply to provisional rights under section 154(d) of this 
     title.
       ``(3) Limitation.--Subsections (b) through (i) of this 
     section apply only to the determination of the amount of 
     reasonable royalty and shall not apply to the determination 
     of other types of damages.
       ``(b) Hypothetical Negotiation.--For purposes of this 
     section, the term `reasonable royalty' means the amount that 
     the infringer would have agreed to pay and the claimant would 
     have agreed to accept if the infringer and claimant had 
     voluntarily negotiated a license for use of the invention at 
     the time just prior to when the infringement began. The court 
     or the jury, as the case may be, shall assume that the 
     infringer and claimant would have agreed that the patent is 
     valid, enforceable, and infringed.
       ``(c) Appropriate Factors.--The court or the jury, as the 
     case may be, may consider any factors that are relevant to 
     the determination of the amount of a reasonable royalty.
       ``(d) Standardized Measures.--The amount of a reasonable 
     royalty shall not be determined by the use of a standard or 
     average ratio for the division of profits, an industry 
     average rate for royalties, or other methods that are not 
     based on the particular benefits or advantages of the use of 
     the invention, unless the party asserting the propriety of 
     such a method demonstrates that--
       ``(1) the use made of the invention is the primary reason 
     for demand for the infringing product or process;
       ``(2) the method consists of the use of an established 
     royalty;
       ``(3) the method consists of the use of an industry average 
     range to confirm that an estimate of the amount of a 
     reasonable royalty that is produced by an independently 
     allowable method falls within a reasonable range; or
       ``(4) no other method is reasonably available to determine 
     the amount of a reasonable royalty and the use of the method 
     is otherwise appropriate.
       ``(e) Comparable Patents.--
       ``(1) In general.--The amount of a reasonable royalty shall 
     not be determined by comparison to royalties paid for patents 
     other than the patent in suit unless--
       ``(A) such other patents are used in the same or an 
     analogous technological field;
       ``(B) such other patents are found to be economically 
     comparable to the patent in suit; and
       ``(C) evidence of the value of such other patents is 
     presented in conjunction with or as confirmation of other 
     evidence for determining the amount of a reasonable royalty.
       ``(2) Factors.--Factors that may be considered to determine 
     whether another patent is economically comparable to the 
     patent in suit under paragraph (1)(A) include whether--
       ``(A) the other patent is comparable to the patent in suit 
     in terms of the overall significance of the other patent to 
     the product or process licensed under such other patent; and
       ``(B) the product or process that uses the other patent is 
     comparable to the infringing product or process based upon 
     its profitability or a like measure of value.
       ``(f) Financial Condition.--The financial condition of the 
     infringer as of the time of the trial shall not be relevant 
     to the determination of the amount of a reasonable royalty.
       ``(g) Sequencing.--Either party may request that a patent-
     infringement trial be sequenced so that the court or the 
     jury, as the case may be, decides questions of the patent's 
     infringement and validity before the issue of the amount of a 
     reasonable royalty is presented to the court or the jury, as 
     the case may be. The court shall grant such a request absent 
     good cause to reject the request, such as the absence of 
     issues of significant damages or infringement and validity. 
     The sequencing of a trial pursuant to this subsection shall 
     not affect other matters, such as the timing of discovery.
       ``(h) Experts.--In addition to the expert disclosure 
     requirements under rule 26(a)(2) of the Federal Rules of 
     Civil Procedure, a party that intends to present the 
     testimony of an expert relating to the amount of a reasonable 
     royalty shall provide--
       ``(1) to the other parties to that civil action, the expert 
     report relating to damages, including all data and other 
     information considered by the expert in forming the opinions 
     of the expert; and

[[Page 21728]]

       ``(2) to the court, at the same time as to the other 
     parties, the complete statement of all opinions that the 
     expert will express and the basis and reasons for those 
     opinions.
       ``(i) Jury Instructions.--On the motion of any party and 
     after allowing any other party to the civil action a 
     reasonable opportunity to be heard, the court shall determine 
     whether there is no legally sufficient evidence to support 1 
     or more of the contentions of a party relating to the amount 
     of a reasonable royalty. The court shall identify for the 
     record those factors that are supported by legally sufficient 
     evidence, and shall instruct the jury to consider only those 
     factors when determining the amount of a reasonable royalty. 
     The jury may not consider any factor for which legally 
     sufficient evidence has not been admitted at trial.''.
       (b) Testimony by Experts.--Chapter 29 of title 35, United 
     States Code, as amended by section 11, is further amended by 
     adding at the end the following:

     ``Sec. 299A. Testimony by experts

       ``(a) Federal Rule.--In a patent case, the court shall 
     ensure that the testimony of a witness qualified as an expert 
     by knowledge, skill, experience, training, or education meets 
     the requirements set forth in rule 702 of the Federal Rules 
     of Evidence.
       ``(b) Determination of Reliability.--To determine whether 
     an expert's principles and methods are reliable, the court 
     may consider, among other factors--
       ``(1) whether the expert's theory or technique can be or 
     has been tested;
       ``(2) whether the theory or technique has been subjected to 
     peer review and publication;
       ``(3) the known or potential error rate of the theory or 
     technique, and the existence and maintenance of standards 
     controlling the technique's operation;
       ``(4) the degree of acceptance of the theory or technique 
     within the relevant scientific or specialized community;
       ``(5) whether the theory or technique is employed 
     independently of litigation; or
       ``(6) whether the expert has adequately considered or 
     accounted for readily available alternative theories or 
     techniques.
       ``(c) Required Explanation.--The court shall explain its 
     reasons for allowing or barring the introduction of an 
     expert's proposed testimony under this section.''.

     SEC. 5. POST-GRANT REVIEW PROCEEDINGS.

       (a) Reexamination.--Section 303(a) of title 35, United 
     States Code, is amended to read as follows:
       ``(a) Within 3 months after the owner of a patent files a 
     request for reexamination under section 302, the Director 
     shall determine whether a substantial new question of 
     patentability affecting any claim of the patent concerned is 
     raised by the request, with or without consideration of other 
     patents or printed publications. The existence of a 
     substantial new question of patentability is not precluded by 
     the fact that a patent or printed publication was previously 
     cited by or to the Office or considered by the Office.''.
       (b) Repeal of Optional Inter Partes Reexamination 
     Procedures.--
       (1) In general.--Sections 311, 312, 313, 314, 315, 316, 
     317, and 318 of title 35, United States Code, and the items 
     relating to those sections in the table of sections, are 
     repealed.
       (2) Effective date.--Notwithstanding paragraph (1), the 
     provisions of sections 311, 312, 313, 314, 315, 316, 317, and 
     318 of title 35, United States Code, shall continue to apply 
     to any inter partes reexamination determination request filed 
     on or before the effective date of subsection (c).
       (c) Post-Grant Review Proceedings.--Part III of title 35, 
     United States Code, is amended by adding at the end the 
     following:

              ``CHAPTER 32--POST-GRANT REVIEW PROCEEDINGS

``Sec.
``321. Petition for post-grant review.
``322. Relation to other proceedings or actions.
``323. Requirements of petition.
``324. Publication and public availability of petition.
``325. Consolidation or stay of proceedings.
``326. Submission of additional information.
``327. Institution of post-grant review proceedings.
``328. Determination not appealable.
``329. Conduct of post-grant review proceedings.
``330. Patent owner response.
``331. Proof and evidentiary standards.
``332. Amendment of the patent.
``333. Settlement.
``334. Decision of the board.
``335. Effect of decision.
``336. Appeal.

     ``Sec. 321. Petition for post-grant review

       ``(a) In General.--Subject to the provisions of this 
     chapter, a person who has a substantial economic interest 
     adverse to a patent may file with the Office a petition to 
     institute a post-grant review proceeding for that patent. If 
     instituted, such a proceeding shall be deemed to be either a 
     first-period proceeding or a second-period proceeding. The 
     Director shall establish, by regulation, fees to be paid by 
     the person requesting the proceeding, in such amounts as the 
     Director determines to be reasonable, considering the 
     aggregate costs of the post-grant review proceeding and the 
     status of the petitioner.
       ``(b) First-Period Proceeding.--
       ``(1) Scope.--A petitioner in a first-period proceeding may 
     request to cancel as unpatentable 1 or more claims of a 
     patent on any ground that could be raised under paragraph (2) 
     or (3) of section 282(b) (relating to invalidity of the 
     patent or any claim).
       ``(2) Filing deadline.--A petition for a first-period 
     proceeding shall be filed not later than 9 months after the 
     grant of the patent or issuance of a reissue patent.
       ``(c) Second-Period Proceeding.--
       ``(1) Scope.--A petitioner in a second-period proceeding 
     may request to cancel as unpatentable 1 or more claims of a 
     patent only on a ground that could be raised under section 
     102 or 103 and only on the basis of prior art consisting of 
     patents or printed publications.
       ``(2) Filing deadline.--A petition for a second-period 
     proceeding shall be filed after the later of either--
       ``(A) 9 months after the grant of a patent or issuance of a 
     reissue of a patent; or
       ``(B) if a first-period proceeding is instituted under 
     section 327, the date of the termination of such first-period 
     proceeding.

     ``Sec. 322. Relation to other proceedings or actions

       ``(a) Early Actions.--A first-period proceeding may not be 
     instituted until after a civil action alleging infringement 
     of the patent is finally concluded if--
       ``(1) the infringement action is filed within 3 months 
     after the grant of the patent;
       ``(2) a stay of the proceeding is requested by the patent 
     owner;
       ``(3) the Director determines that the infringement action 
     is likely to address the same or substantially the same 
     questions of patentability that would be addressed in the 
     proceeding; and
       ``(4) the Director determines that a stay of the proceeding 
     would not be contrary to the interests of justice.
       ``(b) Pending Civil Actions.--
       ``(1) Infringer's action.--A post-grant review proceeding 
     may not be instituted or maintained if the petitioner or real 
     party in interest has filed a civil action challenging the 
     validity of a claim of the patent.
       ``(2) Patent owner's action.--A second-period proceeding 
     may not be instituted if the petition requesting the 
     proceeding is filed more than 3 months after the date on 
     which the petitioner, real party in interest, or his privy is 
     required to respond to a civil action alleging infringement 
     of the patent.
       ``(3) Stay or dismissal.--The Director may stay or dismiss 
     a second-period proceeding if the petitioner or real party in 
     interest challenges the validity of a claim of the patent in 
     a civil action.
       ``(c) Duplicative Proceedings.--A post-grant review or 
     reexamination proceeding may not be instituted if--
       ``(1) the petition requesting the proceeding identifies the 
     same petitioner or real party in interest and the same patent 
     as a previous petition requesting a post-grant review 
     proceeding; or
       ``(2) the petition requests cancellation of a claim in a 
     reissue patent that is identical to a claim in the original 
     patent from which the reissue patent was issued, and the time 
     limitations in section 321 would bar filing a post-grant 
     review petition for such original patent.
       ``(d) Estoppel.--The petitioner in any post-grant review 
     proceeding under this chapter may not request or maintain a 
     proceeding before the Office with respect to a claim, or 
     assert either in a civil action arising in whole or in part 
     under section 1338 of title 28 or in a proceeding before the 
     International Trade Commission that a claim in a patent is 
     invalid, on any ground that--
       ``(1) the petitioner, real party in interest, or his privy 
     raised during a post-grant review proceeding resulting in a 
     final decision under section 334; or
       ``(2) the petitioner, real party in interest, or his privy 
     could have raised during a second-period proceeding resulting 
     in a final decision under section 334.

     ``Sec. 323. Requirements of petition

       ``A petition filed under section 321 may be considered only 
     if--
       ``(1) the petition is accompanied by payment of the fee 
     established by the Director under section 321;
       ``(2) the petition identifies all real parties in interest;
       ``(3) the petition identifies, in writing and with 
     particularity, each claim challenged, the grounds on which 
     the challenge to each claim is based, and the evidence that 
     supports the grounds for each challenged claim, including--
       ``(A) copies of patents and printed publications that the 
     petitioner relies upon in support of the petition; and
       ``(B) affidavits or declarations of supporting evidence and 
     opinions, if the petitioner relies on other factual evidence 
     or on expert opinions;
       ``(4) the petition provides such other information as the 
     Director may require by regulation; and
       ``(5) the petitioner provides copies of any of the 
     documents required under paragraphs (3) and (4) to the patent 
     owner or, if applicable, the designated representative of the 
     patent owner.

[[Page 21729]]



     ``Sec. 324. Publication and public availability of petition

       ``(a) In General.--As soon as practicable after the receipt 
     of a petition under section 321, the Director shall--
       ``(1) publish the petition in the Federal Register; and
       ``(2) make that petition available on the website of the 
     United States Patent and Trademark Office.
       ``(b) Public Availability.--The file of any proceeding 
     under this chapter shall be made available to the public 
     except that any petition or document filed with the intent 
     that it be sealed shall be accompanied by a motion to seal. 
     Such petition or document shall be treated as sealed, pending 
     the outcome of the ruling on the motion. Failure to file a 
     motion to seal will result in the pleadings being placed in 
     the public record.

     ``Sec. 325. Consolidation or stay of proceedings

       ``(a) First-Period Proceedings.--If more than 1 petition 
     for a first-period proceeding is properly filed against the 
     same patent and the Director determines that more than 1 of 
     these petitions warrants the instituting of a first-period 
     proceeding under section 327, the Director shall consolidate 
     such proceedings into a single first-period proceeding.
       ``(b) Second-Period Proceedings.--If the Director 
     institutes a second-period proceeding, the Director, in his 
     discretion, may join as a party to that second-period 
     proceeding any person who properly files a petition under 
     section 321 that the Director, after receiving a preliminary 
     response under section 330 or the expiration of the time for 
     filing such a response, determines warrants the instituting 
     of a second-period proceeding under section 327.
       ``(c) Other Proceedings.--Notwithstanding sections 135(a), 
     251, and 252, and chapter 30, during the pendency of any 
     post-grant review proceeding the Director may determine the 
     manner in which any proceeding or matter involving the patent 
     that is before the Office may proceed, including providing 
     for stay, transfer, consolidation, or termination of any such 
     proceeding or matter.

     ``Sec. 326. Submission of additional information

       ``A petitioner under this chapter shall file such 
     additional information with respect to the petition as the 
     Director may require by regulation.

     ``Sec. 327. Institution of post-grant review proceedings

       ``(a) Threshold.--The Director may not authorize a post-
     grant review proceeding to commence unless the Director 
     determines that the information presented in the petition, if 
     such information is not rebutted, would provide a sufficient 
     basis to conclude that at least 1 of the claims challenged in 
     the petition is unpatentable.
       ``(b) Additional Grounds.--In the case of a petition for a 
     first-period proceeding, the determination required under 
     subsection (a) may be satisfied by a showing that the 
     petition raises a novel or unsettled legal question that is 
     important to other patents or patent applications.
       ``(c) Successive Petitions.--The Director may not institute 
     an additional second-period proceeding if a prior second-
     period proceeding has been instituted and the time period 
     established under section 329(b)(2) for requesting joinder 
     under section 325(b) has expired, unless the Director 
     determines that--
       ``(1) the additional petition satisfies the requirements 
     under subsection (a); and
       ``(2) either--
       ``(A) the additional petition presents exceptional 
     circumstances; or
       ``(B) such an additional proceeding is reasonably required 
     in the interests of justice.
       ``(d) Timing.--The Director shall determine whether to 
     institute a post-grant review proceeding under this chapter 
     within 3 months after receiving a preliminary response under 
     section 330 or the expiration of the time for filing such a 
     response.
       ``(e) Notice.--The Director shall notify the petitioner and 
     patent owner, in writing, of the Director's determination 
     under subsection (a). The Director shall publish each notice 
     of institution of a post-grant review proceeding in the 
     Federal Register and make such notice available on the 
     website of the United States Patent and Trademark Office. 
     Such notice shall list the date on which the proceeding shall 
     commence.

     ``Sec. 328. Determination not appealable

       ``The determination by the Director regarding whether to 
     institute a post-grant review proceeding under section 327 
     shall not be appealable.

     ``Sec. 329. Conduct of post-grant review proceedings

       ``(a) In General.--The Director shall prescribe 
     regulations--
       ``(1) in accordance with section 2(b)(2), establishing and 
     governing post-grant review proceedings under this chapter 
     and their relationship to other proceedings under this title;
       ``(2) for setting forth the standards for showings of 
     sufficient grounds to institute a proceeding under section 
     321(a) and subsections (a), (b), and (c) of section 327;
       ``(3) providing for the publication in the Federal Register 
     all requests for the institution of post-grant proceedings;
       ``(4) establishing procedures for the submission of 
     supplemental information after the petition is filed; and
       ``(5) setting forth procedures for discovery of relevant 
     evidence, including that such discovery shall be limited to 
     evidence directly related to factual assertions advanced by 
     either party in the proceeding.
       ``(b) Post-Grant Review Regulations.--The regulations 
     required under subsection (a)(1) shall--
       ``(1) require that the final determination in any post-
     grant review proceeding be issued not later than 1 year after 
     the date on which the Director notices the institution of a 
     post-grant proceeding under this chapter, except that the 
     Director may, for good cause shown, extend the 1-year period 
     by not more than 6 months, and may adjust the time periods in 
     this paragraph in the case of joinder under section 325(b);
       ``(2) set a time period for requesting joinder under 
     section 325(b);
       ``(3) allow for discovery upon order of the Director, 
     provided that in a second-period proceeding discovery shall 
     be limited to--
       ``(A) the deposition of witnesses submitting affidavits or 
     declarations; and
       ``(B) what is otherwise necessary in the interest of 
     justice;
       ``(4) prescribe sanctions for abuse of discovery, abuse of 
     process, or any other improper use of the proceeding, such as 
     to harass or to cause unnecessary delay or unnecessary 
     increase in the cost of the proceeding;
       ``(5) provide for protective orders governing the exchange 
     and submission of confidential information;
       ``(6) ensure that any information submitted by the patent 
     owner in support of any amendment entered under section 332 
     is made available to the public as part of the prosecution 
     history of the patent; and
       ``(7) provide either party with the right to an oral 
     hearing as part of the proceeding.
       ``(c) Considerations.--In prescribing regulations under 
     this section, the Director shall consider the effect on the 
     economy, the integrity of the patent system, and the 
     efficient administration of the Office.
       ``(d) Conduct of Proceeding.--The Patent Trial and Appeal 
     Board shall, in accordance with section 6(b), conduct each 
     proceeding authorized by the Director.

     ``Sec. 330. Patent owner response

       ``(a) Preliminary Response.--If a post-grant review 
     petition is filed under section 321, the patent owner shall 
     have the right to file a preliminary response--
       ``(1) in the case of a first-period proceeding, within 2 
     months of the expiration of the time for filing a petition 
     for a first-period proceeding; and
       ``(2) in the case of a second-period proceeding, within a 
     time period set by the Director.
       ``(b) Content of Response.--A preliminary response to a 
     petition for a post-grant review proceeding shall set forth 
     reasons why no post-grant review proceeding should be 
     instituted based upon the failure of the petition to meet any 
     requirement of this chapter.
       ``(c) Additional Response.--After a post-grant review 
     proceeding under this chapter has been instituted with 
     respect to a patent, the patent owner shall have the right to 
     file, within a time period set by the Director, a response to 
     the petition. The patent owner shall file with the response, 
     through affidavits or declarations, any additional factual 
     evidence and expert opinions on which the patent owner relies 
     in support of the response.

     ``Sec. 331. Proof and evidentiary standards

       ``(a) In General.--The presumption of validity set forth in 
     section 282 of this title shall apply in post-grant review 
     proceedings instituted under this chapter.
       ``(b) Burden of Proof.--The petitioner shall have the 
     burden of proving a proposition of invalidity by a 
     preponderance of the evidence in a first-period proceeding 
     and by clear and convincing evidence in a second-period 
     proceeding.

     ``Sec. 332. Amendment of the patent

       ``(a) In General.--During a post-grant review proceeding 
     instituted under this chapter, the patent owner may file 1 
     motion to amend the patent in 1 or more of the following 
     ways:
       ``(1) Cancel any challenged patent claim.
       ``(2) For each challenged claim, propose a reasonable 
     number of substitute claims.
       ``(b) Additional Motions.--Additional motions to amend may 
     be permitted upon the joint request of the petitioner and the 
     patent owner to materially advance the settlement of a 
     proceeding under section 333, or upon the request of the 
     patent owner for good cause shown.
       ``(c) Scope of Claims.--An amendment under this section may 
     not enlarge the scope of the claims of the patent or 
     introduce new matter.

     ``Sec. 333. Settlement

       ``(a) In General.--A post-grant review proceeding 
     instituted under this chapter shall be terminated with 
     respect to any petitioner upon the joint request of the 
     petitioner and the patent owner, unless the Office has 
     decided the matter before the request for termination is 
     filed. If the post-grant review proceeding is terminated with 
     respect to a petitioner under this section, no estoppel under 
     this chapter shall apply to that petitioner. If no petitioner 
     remains in the post-

[[Page 21730]]

     grant review proceeding, the Office may terminate the post-
     grant review proceeding or proceed to a final written 
     decision under section 334.
       ``(b) Agreements in Writing.--Any agreement or 
     understanding between the patent owner and a petitioner, 
     including any collateral agreements referred to in such 
     agreement or understanding, made in connection with, or in 
     contemplation of, the termination of a post-grant review 
     proceeding under this section shall be in writing and a true 
     copy of such agreement or understanding shall be filed in the 
     United States Patent and Trademark Office before the 
     termination of the post-grant review proceeding as between 
     the parties to the agreement or understanding. If any party 
     filing such agreement or understanding so requests, the copy 
     shall be kept separate from the file of the post-grant review 
     proceeding, and shall be made available only to Federal 
     Government agencies upon written request, or to any other 
     person on a showing of good cause.

     ``Sec. 334. Decision of the board

       ``If the post-grant review proceeding is instituted and not 
     dismissed under this chapter, the Patent Trial and Appeal 
     Board shall issue a final written decision with respect to 
     the patentability of any patent claim challenged and any new 
     claim added under section 332.

     ``Sec. 335. Effect of decision

       ``If the Patent Trial and Appeal Board issues a final 
     decision under section 334 and the time for appeal has 
     expired or any appeal proceeding has terminated, the Director 
     shall issue and publish a certificate canceling any claim of 
     the patent finally determined to be unpatentable and 
     incorporating in the patent by operation of the certificate 
     any new claim determined to be patentable.

     ``Sec. 336. Appeal

       ``A party dissatisfied with the final determination of the 
     Patent Trial and Appeal Board in a post-grant review 
     proceeding instituted under this chapter may appeal the 
     determination under sections 141 through 144. Any party to 
     the post-grant review proceeding shall have the right to be a 
     party to the appeal.''.
       (d) Technical and Conforming Amendment.--The table of 
     chapters for part III of title 35, United States Code, is 
     amended by adding at the end the following:

``32. Post-Grant Review Proceedings ...321''.

       (e) Regulations and Effective Date.--
       (1) Regulations.--The Under Secretary of Commerce for 
     Intellectual Property and the Director of the United States 
     Patent and Trademark Office (in this subsection referred to 
     as the ``Director'') shall, not later than the date that is 1 
     year after the date of the enactment of this Act, issue 
     regulations to carry out chapter 32 of title 35, United 
     States Code, as added by subsection (c) of this section.
       (2) Applicability.--The amendments made by subsection (c) 
     shall take effect on the date that is 1 year after the date 
     of the enactment of this Act and shall apply only to patents 
     issued on or after that date, except that, in the case of a 
     patent issued before the effective date of subsection (c) on 
     an application filed between September 15, 1999 and the 
     effective date of subsection (c), a petition for second-
     period review may be filed.
       (3) Pending interferences.--The Director shall determine 
     the procedures under which interferences commenced before the 
     effective date under paragraph (2) are to proceed, including 
     whether any such interference is to be dismissed without 
     prejudice to the filing of a petition for a post-grant review 
     proceeding under chapter 32 of title 35, United States Code, 
     or is to proceed as if this Act had not been enacted. The 
     Director shall include such procedures in regulations issued 
     under paragraph (1).

     SEC. 6. DEFINITION; PATENT TRIAL AND APPEAL BOARD.

       (a) Definition.--Section 100 of title 35, United States 
     Code, as amended by section 2 of this Act, is further amended 
     in subsection (e), by striking ``or inter partes 
     reexamination under section 311''.
       (b) Patent Trial and Appeal Board.--Section 6 of title 35, 
     United States Code, is amended to read as follows:

     ``Sec. 6. Patent trial and appeal board

       ``(a) Establishment and Composition.--There shall be in the 
     Office a Patent Trial and Appeal Board. The Director, the 
     Deputy Director, the Commissioner for Patents, the 
     Commissioner for Trademarks, and the administrative patent 
     judges shall constitute the Patent Trial and Appeal Board. 
     The administrative patent judges shall be persons of 
     competent legal knowledge and scientific ability who are 
     appointed by the Secretary. Any reference in any Federal law, 
     Executive order, rule, regulation, or delegation of 
     authority, or any document of or pertaining to the Board of 
     Patent Appeals and Interferences is deemed to refer to the 
     Patent Trial and Appeal Board.
       ``(b) Duties.--The Patent Trial and Appeal Board shall--
       ``(1) on written appeal of an applicant, review adverse 
     decisions of examiners upon application for patents;
       ``(2) on written appeal of a patent owner, review adverse 
     decisions of examiners upon patents in reexamination 
     proceedings under chapter 30;
       ``(3) determine priority and patentability of invention in 
     derivation proceedings under subsection 135(a); and
       ``(4) conduct post-grant review proceedings under chapter 
     32.
     Each appeal, derivation, and post-grant review proceeding 
     shall be heard by at least 3 members of the Patent Trial and 
     Appeal Board, who shall be designated by the Director. Only 
     the Patent Trial and Appeal Board may grant rehearings.''.

     SEC. 7. SUBMISSIONS BY THIRD PARTIES AND OTHER QUALITY 
                   ENHANCEMENTS.

       Section 122 of title 35, United States Code, is amended by 
     adding at the end the following:
       ``(e) Preissuance Submissions by Third Parties.--
       ``(1) In general.--Any person may submit for consideration 
     and inclusion in the record of a patent application, any 
     patent, published patent application, or other publication of 
     potential relevance to the examination of the application, if 
     such submission is made in writing before the earlier of--
       ``(A) the date a notice of allowance under section 151 is 
     mailed in the application for patent; or
       ``(B) either--
       ``(i) 6 months after the date on which the application for 
     patent is published under section 122, or
       ``(ii) the date of the first rejection under section 132 of 
     any claim by the examiner during the examination of the 
     application for patent,
     whichever occurs later.
       ``(2) Other requirements.--Any submission under paragraph 
     (1) shall--
       ``(A) set forth a concise description of the asserted 
     relevance of each submitted document;
       ``(B) be accompanied by such fee as the Director may 
     prescribe; and
       ``(C) include a statement by the person making such 
     submission affirming that the submission was made in 
     compliance with this section.''.

     SEC. 8. VENUE.

       (a) Venue for Patent Cases.--Section 1400 of title 28, 
     United States Code, is amended by striking subsection (b) and 
     inserting the following:
       ``(b) Notwithstanding subsections (b) and (c) of section 
     1391 of this title, any civil action for patent infringement 
     or any action for declaratory judgment arising under any Act 
     of Congress relating to patents may be brought only in a 
     judicial district--
       ``(1) where the defendant has its principal place of 
     business or is incorporated;
       ``(2) where the defendant has committed acts of 
     infringement and has a regular and established physical 
     facility;
       ``(3) where the defendant has agreed or consented to be 
     sued;
       ``(4) where the invention claimed in a patent in suit was 
     conceived or actually reduced to practice;
       ``(5) where significant research and development of an 
     invention claimed in a patent in suit occurred at a regular 
     and established physical facility;
       ``(6) where a party has a regular and established physical 
     facility that such party controls and operates and has--
       ``(A) engaged in management of significant research and 
     development of an invention claimed in a patent in suit;
       ``(B) manufactured a product that embodies an invention 
     claimed in a patent in suit; or
       ``(C) implemented a manufacturing process that embodies an 
     invention claimed in a patent in suit;
       ``(7) where a nonprofit organization whose function is the 
     management of inventions on behalf of an institution of 
     higher education (as that term is defined under section 
     101(a) of the Higher Education Act of 1965 (20 U.S.C. 
     1001(a))), including the patent in suit, has its principal 
     place of business; or
       ``(8) for foreign defendants that do not meet the 
     requirements of paragraphs (1) or (2), according to section 
     1391(d) of this title.''.
       (b) Technical Amendments Relating to Venue.--Sections 32, 
     145, 146, 154(b)(4)(A), and 293 of title 35, United States 
     Code, and section 1071(b)(4) of an Act entitled ``Act to 
     provide for the registration and protection of trademarks 
     used in commerce, to carry out the provisions of certain 
     international conventions, and for other purposes'', approved 
     July 5, 1946 (commonly referred to as the ``Trademark Act of 
     1946'' or the ``Lanham Act'') are each amended by striking 
     ``United States District Court for the District of Columbia'' 
     each place that term appears and inserting ``United States 
     District Court for the Eastern District of Virginia''.

     SEC. 9. PATENT AND TRADEMARK OFFICE REGULATORY AUTHORITY.

       (a) Fee Setting.--
       (1) In general.--The Director shall have authority to set 
     or adjust by rule any fee established or charged by the 
     Office under sections 41 and 376 of title 35, United States 
     Code or under section 31 of the Trademark Act of 1946 (15 
     U.S.C. 1113) for the filing or processing of any submission 
     to, and for all other services performed by or materials 
     furnished by, the Office, provided that such fee amounts are 
     set to reasonably compensate the Office for the services 
     performed.
       (2) Reduction of fees in certain fiscal years.--In any 
     fiscal year, the Director--

[[Page 21731]]

       (A) shall consult with the Patent Public Advisory Committee 
     and the Trademark Public Advisory Committee on the 
     advisability of reducing any fees described in paragraph (1); 
     and
       (B) after that consultation may reduce such fees.
       (3) Role of the public advisory committee.--The Director 
     shall--
       (A) submit to the Patent or Trademark Public Advisory 
     Committee, or both, as appropriate, any proposed fee under 
     paragraph (1) not less than 45 days before publishing any 
     proposed fee in the Federal Register;
       (B) provide the relevant advisory committee described in 
     subparagraph (A) a 30-day period following the submission of 
     any proposed fee, on which to deliberate, consider, and 
     comment on such proposal, and require that--
       (i) during such 30-day period, the relevant advisory 
     committee hold a public hearing related to such proposal; and
       (ii) the Director shall assist the relevant advisory 
     committee in carrying out such public hearing, including by 
     offering the use of Office resources to notify and promote 
     the hearing to the public and interested stakeholders;
       (C) require the relevant advisory committee to make 
     available to the public a written report detailing the 
     comments, advice, and recommendations of the committee 
     regarding any proposed fee;
       (D) consider and analyze any comments, advice, or 
     recommendations received from the relevant advisory committee 
     before setting or adjusting any fee; and
       (E) notify, through the Chair and Ranking Member of the 
     Senate and House Judiciary Committees, the Congress of any 
     final decision regarding proposed fees.
       (4) Publication in the federal register.--
       (A) In general.--Any rules prescribed under this subsection 
     shall be published in the Federal Register.
       (B) Rationale.--Any proposal for a change in fees under 
     this section shall--
       (i) be published in the Federal Register; and
       (ii) include, in such publication, the specific rationale 
     and purpose for the proposal, including the possible 
     expectations or benefits resulting from the proposed change.
       (C) Public comment period.--Following the publication of 
     any proposed fee in the Federal Register pursuant to 
     subparagraph (A), the Director shall seek public comment for 
     a period of not less than 45 days.
       (5) Congressional comment period.--Following the 
     notification described in paragraph (3)(E), Congress shall 
     have not more than 45 days to consider and comment on any 
     proposed fee under paragraph (1). No proposed fee shall be 
     effective prior to the end of such 45-day comment period.
       (6) Rule of construction.--No rules prescribed under this 
     subsection may diminish--
       (A) an applicant's rights under this title or the Trademark 
     Act of 1946; or
       (B) any rights under a ratified treaty.
       (b) Fees for Patent Services.--Division B of Public Law 
     108-447 is amended in title VIII of the Departments of 
     Commerce, Justice and State, the Judiciary, and Related 
     Agencies Appropriations Act, 2005, in section 801(a) by 
     striking ``During fiscal years 2005, 2006, and 2007,'', and 
     inserting ``Until such time as the Director sets or adjusts 
     the fees otherwise,''.
       (c) Adjustment of Trademark Fees.--Division B of Public Law 
     108-447 is amended in title VIII of the Departments of 
     Commerce, Justice and State, the Judiciary and Related 
     Agencies Appropriations Act, 2005, in section 802(a) by 
     striking ``During fiscal years 2005, 2006, and 2007,'', and 
     inserting ``Until such time as the Director sets or adjusts 
     the fees otherwise,''.
       (d) Effective Date, Applicability, and Transitional 
     Provision.--Division B of Public Law 108-447 is amended in 
     title VIII of the Departments of Commerce, Justice and State, 
     the Judiciary and Related Agencies Appropriations Act, 2005, 
     in section 803(a) by striking ``and shall apply only with 
     respect to the remaining portion of fiscal year 2005 and 
     fiscal year 2006.''.
       (e) Rule of Construction.--Nothing in this section shall be 
     construed to affect any other provision of Division B of 
     Public Law 108-447, including section 801(c) of title VII of 
     the Departments of Commerce, Justice and State, the Judiciary 
     and Related Agencies Appropriations Act, 2005.
       (f) Definitions.--In this section:
       (1) Director.--The term ``Director'' means the Director of 
     the United States Patent and Trademark Office.
       (2) Office.--The term ``Office'' means the United States 
     Patent and Trademark Office.
       (3) Trademark act of 1946.--The term ``Trademark Act of 
     1946'' means an Act entitled ``Act to provide for the 
     registration and protection of trademarks used in commerce, 
     to carry out the provisions of certain international 
     conventions, and for other purposes'', approved July 5, 1946 
     (15 U.S.C. 1051 et seq.) (commonly referred to as the 
     Trademark Act of 1946 or the Lanham Act).

     SEC. 10. APPLICANT QUALITY SUBMISSIONS.

       (a) In General.--Chapter 11 of title 35, United States 
     Code, is amended by adding at the end the following new 
     section:

     ``Sec. 123. Additional information

       ``(a) Incentives.--The Director may, by regulation, offer 
     incentives to applicants who submit a search report, a 
     patentability analysis, or other information relevant to 
     patentability. Such incentives may include prosecution 
     flexibility, modifications to requirements for adjustment of 
     a patent term pursuant to section 154(b) of this title, or 
     modifications to fees imposed pursuant to section 9 of the 
     Patent Reform Act of 2008.
       ``(b) Admissibility of Record.--If the Director certifies 
     that an applicant has satisfied the requirements of the 
     regulations issued pursuant to this section with regard to a 
     patent, the record made in a matter or proceeding before the 
     Office involving that patent or efforts to obtain the patent 
     shall not be admissible to construe the patent in a civil 
     action or in a proceeding before the International Trade 
     Commission, except that such record may be introduced to 
     demonstrate that the patent owner is estopped from asserting 
     that the patent is infringed under the doctrine of 
     equivalents. The Director may, by regulation, identify any 
     material submitted in an attempt to satisfy the requirements 
     of any regulations issued pursuant to this section that also 
     shall not be admissible to construe the patent in a civil 
     action or in a proceeding before the International Trade 
     Commission.''.
       (b) Rule of Construction.--Nothing in this section shall be 
     construed to imply that, prior to the date of enactment of 
     this section, the Director either lacked or possessed the 
     authority to offer incentives to applicants who submit a 
     search report, a patentability analysis, or other information 
     relevant to patentability.

     SEC. 11. INEQUITABLE CONDUCT AND CIVIL SANCTIONS FOR 
                   MISCONDUCT BEFORE THE OFFICE.

       (a) In General.--Chapter 29 of title 35, United States 
     Code, is amended by adding at the end the following new 
     sections:

     ``Sec. 298. Inequitable conduct

       ``(a) In General.--Except as provided under this section or 
     section 299, a patent shall not be held invalid or 
     unenforceable based upon misconduct before the Office. 
     Nothing in this section shall be construed to create a cause 
     of action or a defense in a civil action.
       ``(b) Order To Reissue Patent.--
       ``(1) Finding of the court.--
       ``(A) In general.--If a court in a civil action, upon 
     motion of a party to the action, finds that it is more likely 
     than not that a person who participated in a matter or 
     proceeding before the Office knowingly and intentionally 
     deceived the Office by concealing material information or by 
     submitting false material information in such matter or 
     proceeding, the court shall order the patent to be made the 
     subject of a reissue application under section 251. The 
     motion shall set forth any basis upon which the moving party 
     contends 1 or more claims of the patent are invalid in view 
     of information relating to the conduct at issue not 
     previously considered by the Director. The decision on a 
     motion filed under this paragraph shall not be subject to 
     appellate review.
       ``(B) Material information.--For purposes of this 
     paragraph, information is material if it is not part of the 
     record or cumulative to information in the record and either 
     establishes that a patent claim is not patentable or refutes 
     a position that the applicant or patent owner took in 
     response to a rejection of the claim as unpatentable.
       ``(2) Timing of motion.--A motion described under paragraph 
     (1) shall be filed promptly after discovery of the conduct at 
     issue by the moving party.
       ``(3) Required specificity in court order.--An order issued 
     by a court under paragraph (1) shall contain findings of fact 
     setting out with specificity the information relating to the 
     conduct at issue not previously considered by the Director 
     and upon which the court based its order. The findings of 
     fact shall not be used by a court except as provided under 
     this paragraph.
       ``(4) Stays.--A court shall not stay a civil action by 
     reason of commencement of a reissue proceeding that was 
     authorized to be filed under this section unless--
       ``(A) the Director in a notification under section 132 
     makes a rejection of 1 or more claims of the patent;
       ``(B) an allegation of infringement remains in the civil 
     action for at least 1 of the claims rejected; and
       ``(C) the court determines that the interests of justice 
     require a stay of the action.
       ``(5) Judgment that patent is unenforceable.--If a patentee 
     involved in a civil action in which an order under this 
     subsection is issued does not seek reissue of the patent 
     within 2 months of such order, the court shall enter judgment 
     that the patent is unenforceable.
       ``(c) Permitted Reissue by Patentee.--A patentee may 
     request reissue of a patent on the basis of information not 
     previously considered by the Director in connection with a 
     patent, or the efforts to obtain such patent, by filing an 
     application for reissue under section 251.
       ``(d) Required Statement, Amended Claims.--In any 
     application for reissue of a patent authorized to be filed 
     under this section, the patentee shall provide a statement

[[Page 21732]]

     to the Director containing the information described in 
     subsections (b) and (c). The reissue application may be filed 
     with the omission of 1 or more claims of the original patent 
     and with a single substitute claim of equivalent or narrower 
     scope replacing any omitted claim of the original patent. For 
     a reissue application authorized to be filed under subsection 
     (c), the statement shall identify with specificity the issues 
     of patentability arising from the information and the basis 
     upon which the claims in the reissue application are believed 
     by the applicant to be patentable notwithstanding the 
     information.
       ``(e) Conduct of Reissue Proceeding.--
       ``(1) Initial action.--The Director shall provide at least 
     1 of the notifications under section 132 or a notice of 
     allowance under section 151 not later than 3 months after the 
     filing date of an application for reissue authorized to be 
     filed under this section.
       ``(2) Scope of proceeding.--
       ``(A) In general.--A reissue proceeding authorized to be 
     filed under this section shall, unless substitute claims are 
     submitted, address only whether original claims continue to 
     be patentable after consideration of the additional 
     information provided by the applicant for reissue pursuant to 
     subsection (d) in combination with information already of 
     record in the original patent.
       ``(B) Issues of patentability.--If the Director determines 
     during a reissue proceeding authorized to be filed under this 
     section that 1 or more of the original claims of the patent 
     cannot be reissued and the time for appeal of such 
     determination has expired or any appeal proceeding related to 
     such determination has terminated, the Director shall notify 
     the patentee of the surrender of the patent in connection 
     with the termination of the reissue proceeding, subject to 
     the patentee's right to obtain a reissue for claims the 
     Director determines to be patentable.
       ``(3) Duration of proceeding.--For a reissue application 
     authorized to be filed under subsection (b), a final decision 
     on all issues of patentability shall be made by the Director 
     within 1 year from the date of the initial notification under 
     paragraph (1), subject to the right of the patentee to appeal 
     under section 134.
       ``(4) Termination of proceeding.--If the Director 
     determines that all of the original claims continue to be 
     patentable, the Director shall terminate the proceeding 
     without the surrender of the original patent.
       ``(5) Procedure and appeals.--
       ``(A) In general.--A reissue application authorized to be 
     filed under this section may not be abandoned by the 
     applicant or otherwise terminated without surrender of the 
     original patent, except as provided under this section, and 
     shall be conducted as an ex parte matter before the Office.
       ``(B) Special procedures.--Subject to subsection (d), no 
     amendments other than an amendment presenting a single 
     substitute claim of equivalent or narrower scope for each 
     canceled claim in the first reply to the first action under 
     section 132 may be made during the examination of a reissue 
     application authorized to be filed under this section. The 
     Director may amend pending claims at any time on agreement to 
     a change proposed by the Director to the applicant. The 
     Director may refuse to admit any paper filed after a second 
     notification under section 132.
       ``(C) Continuing applications barred.--No application shall 
     be entitled to the benefit of the filing date of an 
     application authorized to be filed under this section.
       ``(D) Expanded examination.--The Director may consider 
     additional information introduced by the Director if 
     substitute claims are presented.
       ``(E) Appeal.--An applicant in a reissue application 
     authorized to be filed by this section dissatisfied with a 
     decision by the Patent Trial and Appeal Board may appeal only 
     under the provisions of sections 141 though 144.
       ``(f) Limitation on Enlarging Scope of Claims.--No patent 
     may be reissued based upon the filing of a reissue 
     application authorized to be filed under this section that 
     enlarges the scope of the claims of the original patent.
       ``(g) Sanctions.--Except as provided under subsection (h), 
     if a reissue proceeding authorized under this section 
     concludes without the surrender of the original patent or 
     with the grant of 1 or more reissued patents, no further 
     sanctions may be imposed against the patentee in connection 
     with the original patent or the reissued patents based upon 
     misconduct arising from the concealment of information 
     subsequently provided, or the misrepresentation of 
     information subsequently corrected in the statement provided 
     under subsection (d).
       ``(h) Rule of Construction.--Nothing in this section shall 
     be construed--
       ``(1) to preclude the imposition of sanctions based upon 
     criminal or antitrust laws (including section 1001(a) of 
     title 18, the first section of the Clayton Act, and section 5 
     of the Federal Trade Commission Act to the extent that 
     section relates to unfair methods of competition);
       ``(2) to limit the authority of the Director to investigate 
     issues of possible misconduct and impose sanctions for 
     misconduct in connection with matters or proceedings before 
     the Office; or
       ``(3) to limit the authority of the Director to promulgate 
     regulations under chapter 3 relating to sanctions for 
     misconduct by representatives practicing before the Office.

     ``Sec. 299. Civil sanctions for misconduct before the Office

       ``(a) Information Relating to Possible Misconduct.--The 
     Director shall provide by regulation procedures for receiving 
     and reviewing information indicating that parties to a matter 
     or proceeding before the Office may have engaged in 
     misconduct in connection with such matter or proceeding.
       ``(b) Administrative Proceeding.--
       ``(1) Probable cause.--The Director shall determine, based 
     on information received and reviewed under subsection (a), if 
     there is probable cause to believe that 1 or more individuals 
     or parties engaged in misconduct consisting of intentionally 
     deceptive conduct of a material nature in connection with a 
     matter or proceeding before the Office. A determination of 
     probable cause by the Director under this paragraph shall be 
     final and shall not be reviewable on appeal or otherwise.
       ``(2) Determination.--If the Director finds probable cause 
     under paragraph (1), the Director shall, after notice and an 
     opportunity for a hearing, and not later than 1 year after 
     the date of such finding, determine whether misconduct 
     consisting of intentionally deceptive conduct of a material 
     nature in connection with the applicable matter or proceeding 
     before the Office has occurred. The proceeding to determine 
     whether such misconduct occurred shall be before an 
     individual designated by the Director.
       ``(3) Civil sanctions.--
       ``(A) In general.--If the Director determines under 
     paragraph (2) that misconduct has occurred, the Director may 
     levy a civil penalty against the party that committed such 
     misconduct.
       ``(B) Factors.--In establishing the amount of any civil 
     penalty to be levied under subparagraph (A), the Director 
     shall consider--
       ``(i) the materiality of the misconduct;
       ``(ii) the impact of the misconduct on a decision of the 
     Director regarding a patent, proceeding, or application; and
       ``(iii) the impact of the misconduct on the integrity of 
     matters or proceedings before the Office.
       ``(C) Sanctions.--A civil penalty levied under subparagraph 
     (A) may consist of--
       ``(i) a penalty of up to $150,000 for each act of 
     misconduct;
       ``(ii) in the case of a finding of a pattern of misconduct, 
     a penalty of up to $1,000,000; or
       ``(iii) in the case of a finding of exceptional misconduct 
     establishing that an application for a patent amounted to a 
     fraud practiced by or at the behest of a real party in 
     interest of the application--

       ``(I) a determination that 1 or more claims of the patent 
     is unenforceable; or
       ``(II) a penalty of up to $10,000,000.

       ``(D) Joint and several liability.--Any party found to have 
     been responsible for misconduct in connection with any matter 
     or proceeding before the Office under this section may be 
     jointly and severally liable for any civil penalty levied 
     under subparagraph (A).
       ``(E) Deposit with the treasury.--Any civil penalty levied 
     under subparagraph (A) shall--
       ``(i) accrue to the benefit of the United States 
     Government; and
       ``(ii) be deposited under `Miscellaneous Receipts' in the 
     United States Treasury.
       ``(F) Authority to bring action for recovery of 
     penalties.--
       ``(i) In general.--If any party refuses to pay or remit to 
     the United States Government a civil penalty levied under 
     this paragraph, the United States may recover such amounts in 
     a civil action brought by the United States Attorney General 
     on behalf of the Director in the United States District Court 
     for the Eastern District of Virginia.
       ``(ii) Injunctions.--In any action brought under clause 
     (i), the United States District Court for the Eastern 
     District of Virginia may, as the court determines 
     appropriate, issue a mandatory injunction incorporating the 
     relief sought by the Director.
       ``(4) Combined proceedings.--If the misconduct that is the 
     subject of a proceeding under this subsection is attributed 
     to a practitioner who practices before the Office, the 
     Director may combine such proceeding with any other 
     disciplinary proceeding under section 32 of this title.
       ``(c) Obtaining Evidence.--
       ``(1) In general.--During the period in which an 
     investigation for a finding of probable cause or for a 
     determination of whether misconduct occurred in connection 
     with any matter or proceeding before the Office is being 
     conducted, the Director may require, by subpoena issued by 
     the Director, persons to produce any relevant information, 
     documents, reports, answers, records, accounts, papers, and 
     other documentary or testimonial evidence.
       ``(2) Additional authority.--For the purposes of carrying 
     out this section, the Director--
       ``(A) shall have access to, and the right to copy, any 
     document, paper, or record, the Director determines pertinent 
     to any investigation or determination under this section, in 
     the possession of any person;

[[Page 21733]]

       ``(B) may summon witnesses, take testimony, and administer 
     oaths;
       ``(C) may require any person to produce books or papers 
     relating to any matter pertaining to such investigation or 
     determination; and
       ``(D) may require any person to furnish in writing, in such 
     detail and in such form as the Director may prescribe, 
     information in their possession pertaining to such 
     investigation or determination.
       ``(3) Witnesses and evidence.--
       ``(A) In general.--The Director may require the attendance 
     of any witness and the production of any documentary evidence 
     from any place in the United States at any designated place 
     of hearing.
       ``(B) Contumacy.--
       ``(i) Orders of the court.--In the case of contumacy or 
     failure to obey a subpoena issued under this subsection, any 
     appropriate United States district court or territorial court 
     of the United States may issue an order requiring such 
     person--

       ``(I) to appear before the Director;
       ``(II) to appear at any other designated place to testify; 
     and
       ``(III) to produce documentary or other evidence.

       ``(ii) Failure to obey.--Any failure to obey an order 
     issued under this subparagraph court may be punished by the 
     court as a contempt of that court.
       ``(4) Depositions.--
       ``(A) In general.--In any proceeding or investigation under 
     this section, the Director may order a person to give 
     testimony by deposition.
       ``(B) Requirements of deposition.--
       ``(i) Oath.--A deposition may be taken before an individual 
     designated by the Director and having the power to administer 
     oaths.
       ``(ii) Notice.--Before taking a deposition, the Director 
     shall give reasonable notice in writing to the person ordered 
     to give testimony by deposition under this paragraph. The 
     notice shall state the name of the witness and the time and 
     place of taking the deposition.
       ``(iii) Written transcript.--The testimony of a person 
     deposed under this paragraph shall be under oath. The person 
     taking the deposition shall prepare, or cause to be prepared, 
     a written transcript of the testimony taken. The transcript 
     shall be subscribed by the deponent. Each deposition shall be 
     filed promptly with the Director.
       ``(d) Appeal.--
       ``(1) In general.--A party may appeal a determination under 
     subsection (b)(2) that misconduct occurred in connection with 
     any matter or proceeding before the Office to the United 
     States Court of Appeals for the Federal Circuit.
       ``(2) Notice to uspto.--A party appealing under this 
     subsection shall file in the Office a written notice of 
     appeal directed to the Director, within such time after the 
     date of the determination from which the appeal is taken as 
     the Director prescribes, but in no case less than 60 days 
     after such date.
       ``(3) Required actions of the director.--In any appeal 
     under this subsection, the Director shall transmit to the 
     United States Court of Appeals for the Federal Circuit a 
     certified list of the documents comprising the record in the 
     determination proceeding. The court may request that the 
     Director forward the original or certified copies of such 
     documents during the pendency of the appeal. The court shall, 
     before hearing the appeal, give notice of the time and place 
     of the hearing to the Director and the parties in the appeal.
       ``(4) Authority of the court.--The United States Court of 
     Appeals for the Federal Circuit shall have power to enter, 
     upon the pleadings and evidence of record at the time the 
     determination was made, a judgment affirming, modifying, or 
     setting aside, in whole or in part, the determination, with 
     or without remanding the case for a rehearing. The court 
     shall not set aside or remand the determination made under 
     subsection (b)(2) unless there is not substantial evidence on 
     the record to support the findings or the determination is 
     not in accordance with law. Any sanction levied under 
     subsection (b)(3) shall not be set aside or remanded by the 
     court, unless the court determines that such sanction 
     constitutes an abuse of discretion of the Director.
       ``(e) Definition.--For purposes of this section, the term 
     `person' means any individual, partnership, corporation, 
     company, association, firm, partnership, society, trust, 
     estate, cooperative, association, or any other entity capable 
     of suing and being sued in a court of law.''.
       (b) Suspension or Exclusion From Practice.--Section 32 of 
     title 35, United States Code, is amended--
       (1) by striking ``The Director may'' and inserting the 
     following:
       ``(a) In General.--The Director may''; and
       (2) by adding at the end the following:
       ``(b) Tolling of Time Period.--The time period for 
     instituting a proceeding under subsection (a), as provided in 
     section 2462 of title 28, shall not begin to run where fraud, 
     concealment, or misconduct is involved until the information 
     regarding fraud, concealment, or misconduct is made known in 
     the manner set forth by regulation under section 2(b)(2)(D) 
     to an officer or employee of the United States Patent and 
     Trademark Office designated by the Director to receive such 
     information.''.
       (c) Effective Date.--
       (1) In general.--Except as otherwise provided under 
     paragraph (2), the amendments made by this section shall take 
     effect on the date of enactment of this Act.
       (2) Inapplicability to pending litigation.--Subsections (a) 
     and (b) of section 298 of title 35, United States Code (as 
     added by the amendment made by subsection (a) of this 
     section), shall apply to any civil action filed on or after 
     the date of the enactment of this Act.

     SEC. 12. AUTHORITY OF THE DIRECTOR OF THE PATENT AND 
                   TRADEMARK OFFICE TO ACCEPT LATE FILINGS.

       (a) Authority.--Section 2 of title 35, United States Code, 
     is amended by adding at the end the following:
       ``(e) Discretion To Accept Late Filings in Certain Cases of 
     Unintentional Delay.--
       ``(1) In general.--The Director may accept any application 
     or other filing made by--
       ``(A) an applicant for, or owner of, a patent after the 
     applicable deadline set forth in this title with respect to 
     the application or patent; or
       ``(B) an applicant for, or owner of, a mark after the 
     applicable deadline under the Trademark Act of 1946 with 
     respect to the registration or other filing of the mark,
     to the extent that the Director considers appropriate, if the 
     applicant or owner files a petition within 30 days after such 
     deadline showing, to the satisfaction of the Director, that 
     the delay was unintentional.
       ``(2) Treatment of director's actions on petition.--If the 
     Director has not made a determination on a petition filed 
     under paragraph (1) within 60 days after the date on which 
     the petition is filed, the petition shall be deemed to be 
     denied. A decision by the Director not to exercise, or a 
     failure to exercise, the discretion provided by this 
     subsection shall not be subject to judicial review.
       ``(3) Other provisions not affected.--This subsection shall 
     not apply to any other provision of this title, or to any 
     provision of the Trademark Act of 1946, that authorizes the 
     Director to accept, under certain circumstances, applications 
     or other filings made after a statutory deadline or to 
     statutory deadlines that are required by reason of the 
     obligations of the United States under any treaty.
       ``(4) Definition.--In this subsection, the term `Trademark 
     Act of 1946' means the Act entitled `An Act to provide for 
     the registration and protection of trademarks used in 
     commerce, to carry out the provisions of certain 
     international conventions, and for other purposes', approved 
     July 5, 1946 (15 U.S.C. 1051 et seq.) (commonly referred to 
     as the Trademark Act of 1946 or the Lanham Act).''.
       (b) Applicability.--
       (1) In general.--The amendment made by subsection (a) shall 
     apply to any application or other filing that--
       (A) is filed on or after the date of the enactment of this 
     Act; or
       (B) on such date of enactment, is pending before the 
     Director or is subject to judicial review.
       (2) Treatment of pending applications and filings.--In the 
     case of any application or filing described in paragraph 
     (1)(B), the 30-day period prescribed in section 2(e)(1) of 
     title 35, United States Code, as added by subsection (a) of 
     this section, shall be deemed to be the 30-day period 
     beginning on the date of the enactment of this Act.
       (c) Conversion of Day-Based Deadlines Into Month-Based 
     Deadlines.--
       (1) Sections 141, 156(d)(2)(A), 156(d)(2)(B)(ii), 
     156(d)(5)(C), and 282 of title 35, United States Code, are 
     each amended by striking ``30 days'' or ``thirty days'' each 
     place that term appears and inserting ``1 month''.
       (2) Sections 135(c), 142, 145, 146, 156(d)(2)(B)(ii), 
     156(d)(5)(C), and the matter preceding clause (i) of section 
     156(d)(2)(A) of title 35, United States Code, are each 
     amended by striking ``60 days'' or ``sixty days'' each place 
     that term appears and inserting ``2 months''.
       (3) The matter preceding subparagraph (A) of section 
     156(d)(1) and sections 156(d)(2)(B)(ii) and 156(d)(5)(E) of 
     title 35, United States Code, are each amended by striking 
     ``60-day'' or ``sixty-day'' each place that term appears and 
     inserting ``2-month''.
       (4) Sections 155 and 156(d)(2)(B)(i) of title 35, United 
     States Code, are each amended by striking ``90 days'' or 
     ``ninety days'' each place that term appears and inserting 
     ``3 months''.
       (5) Sections 154(b)(4)(A) and 156(d)(2)(B)(i) of title 35, 
     United States Code, are each amended by striking ``180 days'' 
     each place that term appears and inserting ``6 months''.

     SEC. 13. LIMITATION ON DAMAGES AND OTHER REMEDIES WITH 
                   RESPECT TO PATENTS FOR METHODS IN COMPLIANCE 
                   WITH CHECK IMAGING METHODS.

       (a) Limitation.--Section 287 of title 35, United States 
     Code, is amended by adding at the end the following:
       ``(d)(1) With respect to the use by a financial institution 
     of a check collection system that constitutes an infringement 
     under subsection (a) or (b) of section 271, the provisions of 
     sections 281, 283, 284, and 285 shall not apply against the 
     financial institution

[[Page 21734]]

     with respect to such a check collection system.
       ``(2) For the purposes of this subsection--
       ``(A) the term `check' has the meaning given under section 
     3(6) of the Check Clearing for the 21st Century Act (12 
     U.S.C. 5002(6));
       ``(B) the term `check collection system' means the use, 
     creation, transmission, receipt, storing, settling, or 
     archiving of truncated checks, substitute checks, check 
     images, or electronic check data associated with or related 
     to any method, system, or process that furthers or 
     effectuates, in whole or in part, any of the purposes of the 
     Check Clearing for the 21st Century Act (12 U.S.C. 5001 et 
     seq.);
       ``(C) the term `financial institution' has the meaning 
     given under section 509 of the Gramm-Leach-Bliley Act (15 
     U.S.C. 6809);
       ``(D) the term `substitute check' has the meaning given 
     under section 3(16) of the Check Clearing for the 21st 
     Century Act (12 U.S.C. 5002(16)); and
       ``(E) the term `truncate' has the meaning given under 
     section 3(18) of the Check Clearing for the 21st Century Act 
     (12 U.S.C. 5002(18)).
       ``(3) This subsection shall not limit or affect the 
     enforcement rights of the original owner of a patent where 
     such original owner--
       ``(A) is directly engaged in the commercial manufacture and 
     distribution of machinery or the commercial development of 
     software; and
       ``(B) has operated as a subsidiary of a bank holding 
     company, as such term is defined under section 2(a) of the 
     Bank Holding Company Act of 1956 (12 U.S.C. 1841(a)), prior 
     to July 19, 2007.
       ``(4) A party shall not manipulate its activities, or 
     conspire with others to manipulate its activities, for 
     purposes of establishing compliance with the requirements of 
     this subsection, including, without limitation, by granting 
     or conveying any rights in the patent, enforcement of the 
     patent, or the result of any such enforcement.''.
       (b) Takings.--If this section is found to establish a 
     taking of private property for public use without just 
     compensation, this section shall be null and void. The 
     exclusive remedy for such a finding shall be invalidation of 
     this section. In the event of such invalidation, for purposes 
     of application of the time limitation on damages in section 
     286 of title 35, United States Code, any action for patent 
     infringement or counterclaim for infringement that could have 
     been filed or continued but for this section, shall be 
     considered to have been filed on the date of enactment of 
     this Act or continued from such date of enactment.
       (c) Effective Date.--The amendment made by subsection (a) 
     shall apply to any civil action for patent infringement 
     pending or filed on or after the date of enactment of this 
     Act.

     SEC. 14. PATENT AND TRADEMARK OFFICE FUNDING.

       (a) Definitions.--In this section:
       (1) Director.--The term ``Director'' means the Director of 
     the United States Patent and Trademark Office.
       (2) Fund.--The term ``Fund'' means the public enterprise 
     revolving fund established under subsection (c).
       (3) Office.--The term ``Office'' means the United States 
     Patent and Trademark Office.
       (4) Trademark act of 1946.--The term ``Trademark Act of 
     1946'' means an Act entitled ``Act to provide for the 
     registration and protection of trademarks used in commerce, 
     to carry out the provisions of certain international 
     conventions, and for other purposes'', approved July 5, 1946 
     (15 U.S.C. 1051 et seq.) (commonly referred to as the 
     ``Trademark Act of 1946'' or the ``Lanham Act'').
       (5) Undersecretary.--The term ``Undersecretary'' means the 
     Under Secretary of Commerce for Intellectual Property.
       (b) Funding.--
       (1) In general.--Section 42 of title 35, United States 
     Code, is amended--
       (A) in subsection (b), by striking ``Patent and Trademark 
     Office Appropriation Account'' and inserting ``United States 
     Patent and Trademark Office Public Enterprise Fund''; and
       (B) in subsection (c), in the first sentence--
       (i) by striking ``To the extent'' and all that follows 
     through ``fees'' and inserting ``Fees''; and
       (ii) by striking ``shall be collected by and shall be 
     available to the Director'' and inserting ``shall be 
     collected by the Director and shall be available until 
     expended''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall take effect on the later of--
       (A) October 1, 2008; or
       (B) the date of enactment of this Act.
       (c) USPTO Revolving Fund.--
       (1) Establishment.--There is established in the Treasury of 
     the United States a revolving fund to be known as the 
     ``United States Patent and Trademark Office Public Enterprise 
     Fund''. Any amounts in the Fund shall be available for use by 
     the Director without fiscal year limitation.
       (2) Derivation of resources.--There shall be deposited into 
     the Fund--
       (A) any fees collected under sections 41, 42, and 376 of 
     title 35, United States Code, provided that notwithstanding 
     any other provision of law, if such fees are collected by, 
     and payable to, the Director, the Director shall transfer 
     such amounts to the Fund; and
       (B) any fees collected under section 31 of the Trademark 
     Act of 1946 (15 U.S.C. 1113).
       (3) Expenses.--Amounts deposited into the Fund under 
     paragraph (2) shall be available, without fiscal year 
     limitation, to cover--
       (A) all expenses to the extent consistent with the 
     limitation on the use of fees set forth in section 42(c) of 
     title 35, United States Code, including all administrative 
     and operating expenses, determined in the discretion of the 
     Under Secretary to be ordinary and reasonable, incurred by 
     the Under Secretary and the Director for the continued 
     operation of all services, programs, activities, and duties 
     of the Office, as such services, programs, activities, and 
     duties are described under--
       (i) title 35, United States Code; and
       (ii) the Trademark Act of 1946; and
       (B) all expenses incurred pursuant to any obligation, 
     representation, or other commitment of the Office.
       (4) Custodians of money.--Notwithstanding section 3302 of 
     title 31, United States Code, any funds received by the 
     Director and transferred to Fund, or any amounts directly 
     deposited into the Fund, may be used--
       (A) to cover the expenses described in paragraph (3); and
       (B) to purchase obligations of the United States, or any 
     obligations guaranteed by the United States.
       (d) Annual Report.--Not later than 60 days after the end of 
     each fiscal year, the Under Secretary and the Director shall 
     submit a report to Congress which shall--
       (1) summarize the operations of the Office for the 
     preceding fiscal year, including financial details and staff 
     levels broken down by each major activity of the Office;
       (2) detail the operating plan of the Office, including 
     specific expense and staff needs for the upcoming fiscal 
     year;
       (3) describe the long term modernization plans of the 
     Office;
       (4) set forth details of any progress towards such 
     modernization plans made in the previous fiscal year; and
       (5) include the results of the most recent audit carried 
     out under subsection (e).
       (e) Annual Spending Plan.--
       (1) In general.--Not later than 30 days after the beginning 
     of each fiscal year, the Director shall notify the Committees 
     on Appropriations of both Houses of Congress of the plan for 
     the obligation and expenditure of the total amount of the 
     funds for that fiscal year in accordance with section 605 of 
     the Science, State, Justice, Commerce, and Related Agencies 
     Appropriations Act, 2006 (Public Law 109-108; 119 Stat. 
     2334).
       (2) Contents.--Each plan under paragraph (1) shall--
       (A) summarize the operations of the Office for the current 
     fiscal year, including financial details and staff levels 
     with respect to major activities; and
       (B) detail the operating plan of the Office, including 
     specific expense and staff needs, for the current fiscal 
     year.
       (f) Audit.--The Under Secretary shall, on an annual basis, 
     provide for an independent audit of the financial statements 
     of the Office. Such audit shall be conducted in accordance 
     with generally acceptable accounting procedures.
       (g) Budget.--In accordance with section 9103 of title 31, 
     United States Code, the Fund shall prepare and submit each 
     year to the President a business-type budget in a way, and 
     before a date, the President prescribes by regulation for the 
     budget program.

     SEC. 15. TECHNICAL AMENDMENTS.

       (a) Joint Inventions.--Section 116 of title 35, United 
     States Code, is amended--
       (1) in the first paragraph, by striking ``When'' and 
     inserting ``(a) Joint Inventions.--When'';
       (2) in the second paragraph, by striking ``If a joint 
     inventor'' and inserting ``(b) Omitted Inventor.--If a joint 
     inventor''; and
       (3) in the third paragraph--
       (A) by striking ``Whenever'' and inserting ``(c) Correction 
     of Errors in Application.--Whenever''; and
       (B) by striking ``and such error arose without any 
     deceptive intent on his part,''.
       (b) Filing of Application in Foreign Country.--Section 184 
     of title 35, United States Code, is amended--
       (1) in the first paragraph--
       (A) by striking ``Except when'' and inserting ``(a) Filing 
     in Foreign Country.--Except when''; and
       (B) by striking ``and without deceptive intent'';
       (2) in the second paragraph, by striking ``The term'' and 
     inserting ``(b) Application.--The term''; and
       (3) in the third paragraph, by striking ``The scope'' and 
     inserting ``(c) Subsequent Modifications, Amendments, and 
     Supplements.--The scope''.
       (c) Filing Without a License.--Section 185 of title 35, 
     United States Code, is amended by striking ``and without 
     deceptive intent''.
       (d) Reissue of Defective Patents.--Section 251 of title 35, 
     United States Code, is amended--
       (1) in the first paragraph--
       (A) by striking ``Whenever'' and inserting ``(a) In 
     General.--Whenever reissue of any

[[Page 21735]]

     patent is authorized under section 298 or''; and
       (B) by striking ``without deceptive intention'';
       (2) in the second paragraph, by striking ``The Director'' 
     and inserting ``(b) Multiple Reissued Patents.--The 
     Director'';
       (3) in the third paragraph, by striking ``The provision'' 
     and inserting ``(c) Applicability of This Title.--The 
     provisions''; and
       (4) in the last paragraph, by striking ``No reissued 
     patent'' and inserting ``(d) Reissue Patent Enlarging Scope 
     of Claims.--No reissued patent''.
       (e) Effect of Reissue.--Section 253 of title 35, United 
     States Code, is amended--
       (1) in the first paragraph, by striking ``Whenever, without 
     deceptive intention'' and inserting ``(a) In General.--
     Whenever''; and
       (2) in the second paragraph, by striking ``in like manner'' 
     and inserting ``(b) Additional Disclaimer or Dedication.--In 
     the manner set forth in subsection (a),''.
       (f) Correction of Named Inventor.--Section 256 of title 35, 
     United States Code, is amended--
       (1) in the first paragraph, by striking ``Whenever'' and 
     inserting ``(a) Correction.--Whenever''; and
       (2) in the second paragraph, by striking ``The error'' and 
     inserting ``(b) Patent Valid if Error Corrected.--The 
     error''.
       (g) Presumption of Validity.--Section 282 of title 35, 
     United States Code, is amended--
       (1) in the first undesignated paragraph, by striking ``A 
     patent'' and inserting ``(a) In General.--A patent'';
       (2) in the second undesignated paragraph, by striking ``The 
     following'' and inserting ``(b) Defenses.--The following''; 
     and
       (3) in the third undesignated paragraph, by striking ``In 
     actions'' and inserting ``(c) Notice of Actions; Actions 
     During Extension of Patent Term.--In actions''.
       (h) Action for Infringement.--Section 288 of title 35, 
     United States Code, is amended by striking ``, without any 
     deceptive intention,''.

     SEC. 16. EFFECTIVE DATE; RULE OF CONSTRUCTION.

       (a) Effective Date.--Except as otherwise provided in this 
     Act, the provisions of this Act shall take effect 12 months 
     after the date of the enactment of this Act and shall apply 
     to any patent issued on or after that effective date.
       (b) Special Provisions Relating to Determinations of 
     Validity and Patentability.--
       (1) In general.--The amendments made by section 2 shall 
     apply to any application for a patent and any patent issued 
     pursuant to such an application that at any time--
       (A) contained a claim to a claimed invention that has an 
     effective filing date, as such date is defined under section 
     100(h) of title 35, United States Code, 1 year or more after 
     the date of the enactment of this Act;
       (B) asserted a claim to a right of priority under section 
     119, 365(a), or 365(b) of title 35, United States Code, to 
     any application that was filed 1 year or more after the date 
     of the enactment of this Act; or
       (C) made a specific reference under section 120, 121, or 
     365(c) of title 35, United States Code, to any application to 
     which the amendments made by section 2 otherwise apply under 
     this subsection.
       (2) Patentability.--For any application for patent and any 
     patent issued pursuant to such an application to which the 
     amendments made by section 2 apply, no claim asserted in such 
     application shall be patentable or valid unless such claim 
     meets the conditions of patentability specified in section 
     102(g) of title 35, United States Code, as such conditions 
     were in effect on the day prior to the date of enactment of 
     this Act, if the application at any time--
       (A) contained a claim to a claimed invention that has an 
     effective filing date as defined in section 100(h) of title 
     35, United States Code, earlier than 1 year after the date of 
     the enactment of this Act;
       (B) asserted a claim to a right of priority under section 
     119, 365(a), or 365(b) of title 35, United States Code, to 
     any application that was filed earlier than 1 year after the 
     date of the enactment of this Act; or
       (C) made a specific reference under section 120, 121, or 
     365(c) of title 35, United States Code, with respect to which 
     the requirements of section 102(g) applied.
       (3) Validity of patents.--For the purpose of determining 
     the validity of a claim in any patent or the patentability of 
     any claim in a nonprovisional application for patent that is 
     made before the effective date of the amendments made by 
     sections 2 and 3, other than in an action brought in a court 
     before the date of the enactment of this Act--
       (A) the provisions of subsections (c), (d), and (f) of 
     section 102 of title 35, United States Code, that were in 
     effect on the day prior to the date of enactment of this Act 
     shall be deemed to be repealed;
       (B) the amendments made by section 3 of this Act shall 
     apply, except that a claim in a patent that is otherwise 
     valid under the provisions of section 102(f) of title 35, 
     United States Code, as such provision was in effect on the 
     day prior to the date of enactment of this Act, shall not be 
     invalidated by reason of this paragraph; and
       (C) the term ``in public use or on sale'' as used in 
     section 102(b) of title 35, United States Code, as such 
     section was in effect on the day prior to the date of 
     enactment of this Act shall be deemed to exclude the use, 
     sale, or offer for sale of any subject matter that had not 
     become available to the public.
       (4) Continuity of intent under the create act.--The 
     enactment of section 102(b)(3) of title 35, United States 
     Code, under section (2)(b) of this Act is done with the same 
     intent to promote joint research activities that was 
     expressed, including in the legislative history, through the 
     enactment of the Cooperative Research and Technology 
     Enhancement Act of 2004 (Public Law 108-453; the ``CREATE 
     Act''), the amendments of which are stricken by section 2(c) 
     of this Act. The United States Patent and Trademark Office 
     shall administer section 102(b)(3) of title 35, United States 
     Code, in a manner consistent with the legislative history of 
     the CREATE Act that was relevant to its administration by the 
     United States Patent and Trademark Office.
                                 ______
                                 
      By Mr. KYL (for himself and Mr. Leahy):
  S. 3601. A bill to authorize funding for the National Crime Victim 
Law Institute to provide support for victims of crime under Crime 
Victims Legal Assistance Programs as a part of the Victims of Crime Act 
of 1984; to the Committee on the Judiciary.
  Mr. KYL. Mr. President, I ask unanimous consent that the text of the 
bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3601

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

     SECTION 1. REAUTHORIZATION.

       Section 103(b) of the Justice for All Act of 2004 (Public 
     Law 108-405; 118 Stat. 2264) is amended in paragraphs (1) 
     through (5) by striking ``2006, 2007, 2008, and 2009'' each 
     place it appears and inserting ``2010, 2011, 2012, and 
     2013''.
                                 ______
                                 
      By Mr. KYL:
  S. 3602. A bill to authorize funding for the National Crime Victim 
Law Institute to provide support for victims of crime under Crime 
Victims Legal Assistance Programs as a part of the Victims of Crime Act 
of 1984; to the Committee on the Judiciary.
  Mr. KYL. Mr. President, I ask unanimous consent that the text of the 
bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3602

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

     SECTION 1. REAUTHORIZATION.

       Section 103(b) of the Justice for All Act of 2004 (Public 
     Law 108-405; 118 Stat. 2264) is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) $5,000,000 for each of fiscal years 2010, 2011, 2012, 
     2013, and 2014 to the Office for Victims of Crime of the 
     Department of Justice for United States Attorneys Offices for 
     Victim/Witnesses Assistance Programs only for victim 
     advocates and their administrative support to provide direct 
     services to victims of crimes;''; and
       (2) by striking paragraphs (3) and (4) and inserting the 
     following:
       ``(3) $500,000 for each of the fiscal years 2010, 2011, 
     2012, 2013, and 2014 to the Office for Victims of Crime of 
     the Department of Justice for staff to administer the 
     appropriation for the support of organizations as designated 
     under paragraph (4);
       ``(4) $11,000,000 for each of the fiscal years 2010, 2011, 
     2012, 2013, and 2014, to the Office for Victims of Crime of 
     the Department of Justice, for the National Crime Victim Law 
     Institute to provide legal counsel and support services for 
     victims in criminal cases for the enforcement of crime 
     victims' rights in Federal jurisdictions, and in States and 
     tribal governments that have laws substantially equivalent to 
     the provisions of chapter 237 of title 18, United States 
     Code; and''.
                                 ______
                                 
      By Mr. REID (for himself and Mr. Ensign):
  S. 3603. A bill to promote conservation and provide sensible 
development in Carson City, Nevada, and for other purposes; to the 
Committee on Energy and Natural Resources.
  Mr. REID. Mr. President, I rise today to reintroduce the Carson City 
Vital Community Act of 2008 for myself and Senator Ensign. We 
originally introduced this bill on July 31, 2008. Since then we have 
sought and received important feedback on the legislation. Carson City, 
numerous citizens, our federal land agencies, and committee

[[Page 21736]]

staff have all brought important ideas to the table. We are 
reintroducing this legislation today so that anyone who has an interest 
in this legislation can see how the bill has improved as result of the 
input we have received.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3603

       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 ``Carson 
     City Vital Community Act of 2008''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

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

                      TITLE I--PUBLIC CONVEYANCES

Sec. 101. Conveyances of Federal land and City land.
Sec. 102. Transfer of administrative jurisdiction from the Forest 
              Service to the Bureau of Land Management.

                        TITLE II--LAND DISPOSAL

Sec. 201. Disposal of Carson City land.
Sec. 202. Disposition of proceeds.
Sec. 203. Urban interface.
Sec. 204. Availability of funds.

 TITLE III--TRANSFER OF LAND TO BE HELD IN TRUST FOR THE WASHOE TRIBE, 
   SKUNK HARBOR CONVEYANCE CORRECTION, FOREST SERVICE AGREEMENT, AND 
                          ARTIFACT COLLECTION

Sec. 301. Transfer of land to be held in trust for Washoe Tribe.
Sec. 302. Correction of Skunk Harbor conveyance.
Sec. 303. Agreement with Forest Service.
Sec. 304. Artifact collection.

               TITLE IV--AUTHORIZATION OF APPROPRIATIONS

Sec. 401. Authorization of appropriations.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) City.--The term ``City'' means Carson City Consolidated 
     Municipality, Nevada.
       (2) Map.--The term ``Map'' means the map entitled ``Carson 
     City, Nevada Area'', dated September 12, 2008, and on file 
     and available for public inspection in the appropriate 
     offices of--
       (A) the Bureau of Land Management;
       (B) the Forest Service; and
       (C) the City.
       (3) Secretary.--The term ``Secretary'' means--
       (A) with respect to land in the National Forest System, the 
     Secretary of Agriculture, acting through the Chief of the 
     Forest Service; and
       (B) with respect to other Federal land, the Secretary of 
     the Interior.
       (4) Secretaries.--The term ``Secretaries'' means the 
     Secretary of Agriculture and the Secretary of the Interior, 
     acting jointly.
       (5) Tribe.--The term ``Tribe'' means the Washoe Tribe of 
     Nevada and California, which is a federally recognized Indian 
     tribe.

                      TITLE I--PUBLIC CONVEYANCES

     SEC. 101. CONVEYANCES OF FEDERAL LAND AND CITY LAND.

       (a) In General.--Notwithstanding section 202 of the Federal 
     Land Policy and Management Act of 1976 (43 U.S.C. 1712), if 
     the City offers to convey to the United States title to the 
     non-Federal land described in subsection (b)(1) that is 
     acceptable to the Secretary of Agriculture--
       (1) the Secretary shall accept the offer; and
       (2) not later than 180 days after the date on which the 
     Secretary receive acceptable title to the non-Federal land 
     described in subsection (b)(1), the Secretaries shall convey 
     to the City, subject to valid existing rights and for no 
     consideration, except as provided in subsection (c)(1), all 
     right, title, and interest of the United States in and to the 
     Federal land (other than any easement reserved under 
     subsection (c)(2)) or interest in land described in 
     subsection (b)(2).
       (b) Description of Land.--
       (1) Non-federal land.--The non-Federal land referred to in 
     subsection (a) is the approximately 2,264 acres of land 
     administered by the City and identified on the Map as ``To 
     U.S. Forest Service''.
       (2) Federal land.--The Federal land referred to in 
     subsection (a)(2) is--
       (A) the approximately 935 acres of Forest Service land 
     identified on the Map as ``To Carson City for Natural 
     Areas'';
       (B) the approximately 3,604 acres of Bureau of Land 
     Management land identified on the Map as ``Silver Saddle 
     Ranch and Carson River Area'';
       (C) the approximately 1,862 acres of Bureau of Land 
     Management land identified on the Map as ``To Carson City for 
     Parks and Public Purposes''; and
       (D) the approximately 75 acres of City land in which the 
     Bureau of Land Management has a reversionary interest that is 
     identified on the Map as ``Reversionary Interest of the 
     United States Released''.
       (c) Conditions.--
       (1) Consideration.--Before the conveyance of the 62-acre 
     Bernhard parcel to the City, the City shall deposit in the 
     special account established by section 202(b)(1) an amount 
     equal to 25 percent of the difference between--
       (A) the amount for which the Bernhard parcel was purchased 
     by the City on July 18, 2001; and
       (B) the amount for which the Bernhard parcel was purchased 
     by the Secretary on March 24, 2006.
       (2) Conservation easement.--As a condition of the 
     conveyance of the land described in subsection (b)(2)(B), the 
     Secretary, in consultation with Carson City and affected 
     local interests, shall reserve a perpetual conservation 
     easement to the land to protect, preserve, and enhance the 
     conservation values of the land, consistent with subsection 
     (d)(2).
       (3) Costs.--Any costs relating to the conveyance under 
     subsection (a), including any costs for surveys and other 
     administrative costs, shall be paid by the recipient of the 
     land being conveyed.
       (d) Use of Land.--
       (1) Natural areas.--
       (A) In general.--Except as provided in subparagraph (B), 
     the land described in subsection (b)(2)(A) shall be managed 
     by the City to maintain undeveloped open space and to 
     preserve the natural characteristics of the land in 
     perpetuity.
       (B) Exception.--Notwithstanding subparagraph (A), the City 
     may--
       (i) conduct projects on the land to reduce fuels;
       (ii) construct and maintain trails, trailhead facilities, 
     and any infrastructure on the land that is required for 
     municipal water and flood management activities; and
       (iii) maintain or reconstruct any improvements on the land 
     that are in existence on the date of enactment of this Act.
       (2) Silver saddle ranch and carson river area.--
       (A) In general.--Except as provided in subparagraph (B), 
     the land described in subsection (b)(2)(B) shall--
       (i) be managed by the City to protect and enhance the 
     Carson River, the floodplain and surrounding upland, and 
     important wildlife habitat; and
       (ii) be used for undeveloped open space, passive 
     recreation, customary agricultural practices, and wildlife 
     protection.
       (B) Exception.--Notwithstanding subparagraph (A), the City 
     may--
       (i) construct and maintain trails and trailhead facilities 
     on the land;
       (ii) conduct projects on the land to reduce fuels;
       (iii) maintain or reconstruct any improvements on the land 
     that are in existence on the date of enactment of this Act; 
     and
       (iv) allow the use of motorized vehicles on designated 
     roads, trails, and areas in the south end of Prison Hill.
       (3) Parks and public purposes.--The land described in 
     subsection (b)(2)(C) shall be managed by the City for--
       (A) undeveloped open space; and
       (B) recreation or other public purposes consistent with the 
     Act of June 14, 1926 (commonly known as the ``Recreation and 
     Public Purposes Act'') (43 U.S.C. 869 et seq.).
       (4) Reversionary interest.--
       (A) Release.--The reversionary interest described in 
     subsection (b)(2)(D) shall terminate on the date of enactment 
     of this Act.
       (B) Conveyance by city.--
       (i) In general.--If the City sells, leases, or otherwise 
     conveys any portion of the land described in subsection 
     (b)(2)(D), the sale, lease, or conveyance of land shall be--

       (I) through a competitive bidding process; and
       (II) except as provided in clause (ii), for not less than 
     fair market value.

       (ii) Conveyance to government or nonprofit.--A sale, lease, 
     or conveyance of land described in subsection (b)(2)(D) to 
     the Federal Government, a State government, a unit of local 
     government, or a nonprofit organization shall be for 
     consideration in an amount equal to the price established by 
     the Secretary of the Interior under section 2741 of title 43, 
     Code of Federal Regulation (or successor regulations).
       (iii) Disposition of proceeds.--The gross proceeds from the 
     sale, lease, or conveyance of land under clause (i) shall be 
     distributed in accordance with section 202(a).
       (e) Reversion.--If land conveyed under subsection (a) is 
     used in a manner that is inconsistent with the uses described 
     in paragraph (1), (2), (3), or (4) of subsection (d), the 
     land shall, at the discretion of the Secretary, revert to the 
     United States.
       (f) Miscellaneous Provisions.--
       (1) In general.--On conveyance of the non-Federal land 
     under subsection (a) to the Secretary of Agriculture, the 
     non-Federal land shall--
       (A) become part of the Humboldt-Toiyabe National Forest; 
     and
       (B) be administered in accordance with the laws (including 
     the regulations) and rules generally applicable to the 
     National Forest System.
       (2) Management plan.--The Secretary of Agriculture, in 
     consultation with the City and other interested parties, may 
     develop and implement a management plan for National Forest 
     System land that ensures the

[[Page 21737]]

     protection and stabilization of the National Forest System 
     land to minimize the impacts of flooding on the City.
       (g) Conveyance to Bureau of Land Management.--
       (1) In general.--If the City offers to convey to the United 
     States title to the non-Federal land described in paragraph 
     (2) that is acceptable to the Secretary of the Interior, the 
     land shall, at the discretion of the Secretary, be conveyed 
     to the United States.
       (2) Description of land.--The non-Federal land referred to 
     in paragraph (1) is the approximately 136 acres of land 
     administered by the City and identified on the Map as ``To 
     Bureau of Land Management''.
       (3) Costs.--Any costs relating to the conveyance under 
     paragraph (1), including any costs for surveys and other 
     administrative costs, shall be paid by the Secretary of the 
     Interior.

     SEC. 102. TRANSFER OF ADMINISTRATIVE JURISDICTION FROM THE 
                   FOREST SERVICE TO THE BUREAU OF LAND 
                   MANAGEMENT.

       (a) In General.--Administrative jurisdiction over the 
     approximately 50 acres of Forest Service land identified on 
     the Map as ``Parcel #1'' is transferred, from the Secretary 
     of Agriculture to the Secretary of the Interior.
       (b) Costs.--Any costs relating to the transfer under 
     subsection (a), including any costs for surveys and other 
     administrative costs, shall be paid by the Secretary of the 
     Interior.
       (c) Use of Land.--
       (1) Right-of-way.--Not later than 120 days after the date 
     of enactment of this Act, the Secretary of the Interior shall 
     grant to the City a right-of-way for the maintenance of flood 
     management facilities located on the land.
       (2) Disposal.--The land referred to in subsection (a) shall 
     be disposed of in accordance with section 201.
       (3) Disposition of proceeds.--The gross proceeds from the 
     disposal of land under paragraph (2) shall be distributed in 
     accordance with section 202(a).

                        TITLE II--LAND DISPOSAL

     SEC. 201. DISPOSAL OF CARSON CITY LAND.

       (a) In General.--Notwithstanding sections 202 and 203 of 
     the Federal Land Policy and Management Act of 1976 (43 U.S.C. 
     1712, 1713), the Secretary of the Interior shall, in 
     accordance with that Act, this title, and other applicable 
     law, and subject to valid existing rights, conduct sales of 
     the Federal land described in subsection (b) to qualified 
     bidders.
       (b) Description of Land.--The Federal land referred to in 
     subsection (a) is--
       (1) the approximately 108 acres of Bureau of Land 
     Management land identified as ``Lands for Disposal'' on the 
     Map; and
       (2) the approximately 50 acres of land identified as 
     ``Parcel #1'' on the Map.
       (c) Compliance With Local Planning and Zoning Laws.--Before 
     a sale of Federal land under subsection (a), the City shall 
     submit to the Secretary a certification that qualified 
     bidders have agreed to comply with--
       (1) City zoning ordinances; and
       (2) any master plan for the area approved by the City.
       (d) Method of Sale; Consideration.--The sale of Federal 
     land under subsection (a) shall be--
       (1) consistent with subsections (d) and (f) of section 203 
     of the Federal Land Policy and Management Act of 1976 (43 
     U.S.C. 1713);
       (2) unless otherwise determined by the Secretary, through a 
     competitive bidding process; and
       (3) for not less than fair market value.
       (e) Withdrawal.--
       (1) In general.--Subject to valid existing rights and 
     except as provided in paragraph (2), the Federal land 
     described in subsection (b) is withdrawn from--
       (A) all forms of entry and appropriation under the public 
     land laws;
       (B) location, entry, and patent under the mining laws; and
       (C) operation of the mineral leasing and geothermal leasing 
     laws.
       (2) Exception.--Paragraph (1)(A) shall not apply to sales 
     made consistent with this section.
       (f) Deadline for Sale.--
       (1) In general.--Except as provided in paragraph (2), not 
     later than 1 year after the date of enactment of this Act, if 
     there is a qualified bidder for the land described in 
     paragraphs (1) and (2) of subsection (b), the Secretary of 
     the Interior shall offer the land for sale to the qualified 
     bidder.
       (2) Postponement; exclusion from sale.--
       (A) Request by carson city for postponement or exclusion.--
     At the request of the City, the Secretary shall postpone or 
     exclude from the sale under paragraph (1) all or a portion of 
     the land described in paragraphs (1) and (2) of subsection 
     (b).
       (B) Indefinite postponement.--Unless specifically requested 
     by the City, a postponement under subparagraph (A) shall not 
     be indefinite.

     SEC. 202. DISPOSITION OF PROCEEDS.

       (a) In General.--Of the proceeds from the sale of land 
     under sections 101(d)(4)(B) and 201(a)--
       (1) 5 percent shall be paid directly to the State for use 
     in the general education program of the State; and
       (2) the remainder shall be deposited in a special account 
     in the Treasury of the United States, to be known as the 
     ``Carson City Special Account'', and shall be available 
     without further appropriation to the Secretary until expended 
     to--
       (A) reimburse costs incurred by the Bureau of Land 
     Management for preparing for the sale of the Federal land 
     described in section 201(b), including the costs of--
       (i) surveys and appraisals; and
       (ii) compliance with--

       (I) the National Environmental Policy Act of 1969 (42 
     U.S.C. 4321 et seq.); and
       (II) sections 202 and 203 of the Federal Land Policy and 
     Management Act of 1976 (43 U.S.C. 1712, 1713);

       (B) reimburse costs incurred by the Bureau of Land 
     Management and Forest Service for preparing for, and carrying 
     out, the transfers of land to be held in trust by the United 
     States under section 301; and
       (C) acquire environmentally sensitive land or an interest 
     in environmentally sensitive land in the City.
       (b) Silver Saddle Endowment Account.--
       (1) Establishment.--There is established in the Treasury of 
     the United States a special account, to be known as the 
     ``Silver Saddle Endowment Account'', consisting of such 
     amounts as are deposited under section 101(c)(1).
       (2) Availability of amounts.--Amounts deposited in the 
     account established by paragraph (1) shall be available to 
     the Secretary, without further appropriation, for the 
     oversight and enforcement of the conservation easement 
     established under section 101(c)(2).

     SEC. 203. URBAN INTERFACE.

       (a) In General.--Except as otherwise provided in this Act 
     and subject to valid existing rights, the Federal land 
     described in subsection (b) is permanently withdrawn from--
       (1) all forms of entry and appropriation under the public 
     land laws and mining laws;
       (2) location and patent under the mining laws; and
       (3) operation of the mineral laws, geothermal leasing laws, 
     and mineral material laws.
       (b) Description of Land.--The land referred to in 
     subsection (a) consists of approximately 19,747 acres, which 
     is identified on the Map as ``Urban Interface Withdrawal''.
       (c) Incorporation of Acquired Land and Interests.--Any land 
     or interest in land within the boundaries of the land 
     described in subsection (b) that is acquired by the United 
     States after the date of enactment of this Act shall be 
     withdrawn in accordance with this section.
       (d) Off-Highway Vehicle Management.--Until the date on 
     which the Secretary, in consultation with the State, the 
     City, and any other interested persons, completes a 
     transportation plan for Federal land in the City, the use of 
     motorized and mechanical vehicles on Federal land within the 
     City shall be limited to roads and trails in existence on the 
     date of enactment of this Act unless the use of the vehicles 
     is needed--
       (1) for administrative purposes; or
       (2) to respond to an emergency.

     SEC. 204. AVAILABILITY OF FUNDS.

       Section 4(e) of the Southern Nevada Public Land Management 
     Act of 1998 (Public Law 105-263; 112 Stat. 2346; 116 Stat. 
     2007; 117 Stat. 1317; 118 Stat. 2414; 120 Stat. 3045) is 
     amended--
       (1) in paragraph (3)(A)(iv), by striking ``Clark, Lincoln, 
     and White Pine Counties and Washoe County (subject to 
     paragraph 4))'' and inserting ``Clark, Lincoln, and White 
     Pine Counties and Washoe County (subject to paragraph 4)) and 
     Carson City (subject to paragraph (5))'';
       (2) in paragraph (3)(A)(v), by striking ``Clark, Lincoln, 
     and White Pine Counties'' and inserting ``Clark, Lincoln, and 
     White Pine Counties and Carson City (subject to paragraph 
     (5))'';
       (3) in paragraph (4), by striking ``2011'' and inserting 
     ``2015''; and
       (4) by adding at the end the following:
       ``(5) Limitation for carson city.--Carson City shall be 
     eligible to nominate for expenditure amounts to acquire land 
     or an interest in land for parks or natural areas and for 
     conservation initiatives--
       ``(A) adjacent to the Carson River; or
       ``(B) within the floodplain of the Carson River.''.

 TITLE III--TRANSFER OF LAND TO BE HELD IN TRUST FOR THE WASHOE TRIBE, 
   SKUNK HARBOR CONVEYANCE CORRECTION, FOREST SERVICE AGREEMENT, AND 
                          ARTIFACT COLLECTION

     SEC. 301. TRANSFER OF LAND TO BE HELD IN TRUST FOR WASHOE 
                   TRIBE.

       (a) In General.--Subject to valid existing rights, all 
     right, title, and interest of the United States in and to the 
     land described in subsection (b)--
       (1) shall be held in trust by the United States for the 
     benefit and use of the Tribe; and
       (2) shall be part of the reservation of the Tribe.
       (b) Description of Land.--The land referred to in 
     subsection (a) consists of approximately 293 acres, which is 
     identified on the Map as ``To Washoe Tribe''.
       (c) Survey.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary of Agriculture shall 
     complete a survey of the boundary lines to establish the

[[Page 21738]]

     boundaries of the land taken into trust under subsection (a).
       (d) Use of Land.--
       (1) Gaming.--Land taken into trust under subsection (a) 
     shall not be eligible, or considered to have been taken into 
     trust, for class II gaming or class III gaming (as those 
     terms are defined in section 4 of the Indian Gaming 
     Regulatory Act (25 U.S.C. 2703)).
       (2) Trust land for ceremonial use and conservation.--With 
     respect to the use of the land taken into trust under 
     subsection (a) that is above the 5,200' elevation contour, 
     the Tribe--
       (A) shall limit the use of the land to--
       (i) traditional and customary uses; and
       (ii) stewardship conservation for the benefit of the Tribe; 
     and
       (B) shall not permit any--
       (i) permanent residential or recreational development on 
     the land; or
       (ii) commercial use of the land, including commercial 
     development or gaming.
       (3) Trust land for commercial and residential use.--With 
     respect to the use of the land taken into trust under 
     subsection (a), the Tribe shall limit the use of the land 
     below the 5,200' elevation to--
       (A) traditional and customary uses;
       (B) stewardship conservation for the benefit of the Tribe; 
     and
       (C)(i) residential or recreational development; or
       (ii) commercial use.
       (4) Thinning; landscape restoration.--With respect to the 
     land taken into trust under subsection (a), the Secretary of 
     Agriculture, in consultation and coordination with the Tribe, 
     may carry out any thinning and other landscape restoration 
     activities on the land that is beneficial to the Tribe and 
     the Forest Service.

     SEC. 302. CORRECTION OF SKUNK HARBOR CONVEYANCE.

       (a) Purpose.--The purpose of this section is to amend 
     Public Law 108-67 (117 Stat. 880) to make a technical 
     correction relating to the land conveyance authorized under 
     that Act.
       (b) Technical Correction.--Section 2 of Public Law 108-67 
     (117 Stat. 880) is amended--
       (1) by striking ``Subject to'' and inserting the following:
       ``(a) In General.--Subject to'';
       (2) in subsection (a) (as designated by paragraph (1)), by 
     striking ``the parcel'' and all that follows through the 
     period at the end and inserting the following: ``and to 
     approximately 23 acres of land identified as `Parcel A' on 
     the map entitled `Skunk Harbor Conveyance Correction' and 
     dated September 12, 2008, the western boundary of which is 
     the low water line of Lake Tahoe at elevation 6,223.0 (Lake 
     Tahoe Datum).''; and
       (3) by adding at the end the following:
       ``(b) Survey and Legal Description.--
       ``(1) In general.--Not later than 180 days after the date 
     of enactment of this subsection, the Secretary of Agriculture 
     shall complete a survey and legal description of the boundary 
     lines to establish the boundaries of the trust land.
       ``(2) Technical corrections.--The Secretary may correct any 
     technical errors in the survey or legal description completed 
     under paragraph (1).
       ``(c) Public Access and Use.--Nothing in this Act prohibits 
     any approved general public access (through existing 
     easements or by boat) to, or use of, land remaining within 
     the Lake Tahoe Basin Management Unit after the conveyance of 
     the land to the Secretary of the Interior, in trust for the 
     Tribe, under subsection (a), including access to, and use of, 
     the beach and shoreline areas adjacent to the portion of land 
     conveyed under that subsection.''.
       (c) Date of Trust Status.--The trust land described in 
     section 2(a) of Public Law 108-67 (117 Stat. 880) shall be 
     considered to be taken into trust as of August 1, 2003.
       (d) Transfer.--The Secretary of the Interior, acting on 
     behalf of and for the benefit of the Tribe, shall transfer to 
     the Secretary of Agriculture administrative jurisdiction over 
     the land identified as ``Parcel B'' on the map entitled 
     ``Skunk Harbor Conveyance Correction'' and dated September 
     12, 2008.

     SEC. 303. AGREEMENT WITH FOREST SERVICE.

       The Secretary of Agriculture, in consultation with the 
     Tribe, shall develop and implement a cooperative agreement 
     that ensures regular access by members of the Tribe and other 
     people in the community of the Tribe across National Forest 
     System land from the City to Lake Tahoe for cultural and 
     religious purposes.

     SEC. 304. ARTIFACT COLLECTION.

       (a) Notice.--At least 180 days before conducting any ground 
     disturbing activities on the land identified as ``Parcel #2'' 
     on the Map, the City shall notify the Tribe of the proposed 
     activities to provide the Tribe with adequate time to 
     inventory and collect any artifacts in the affected area.
       (b) Authorized Activities.--On receipt of notice under 
     subsection (a), the Tribe may collect and possess any 
     artifacts relating to the Tribe in the land identified as 
     ``Parcel #2'' on the Map.

               TITLE IV--AUTHORIZATION OF APPROPRIATIONS

     SEC. 401. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as are 
     necessary to carry out this Act.

                          ____________________