[Congressional Record (Bound Edition), Volume 155 (2009), Part 3]
[Senate]
[Pages 3608-3625]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. KYL (for himself and Mr. McCain):
  S. 409. A bill to secure Federal ownership and management of 
significant natural, scenic, and recreational resources, to provide for 
the protection of cultural resources, to facilitate the efficient 
extraction of mineral resources by authorizing and directing an 
exchange of Federal and non-Federal land, and for other purposes; to 
the Committee on Energy and Natural Resources.
  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 
placed in the Record, as follows:

                                 S. 409

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Southeast Arizona Land 
     Exchange and Conservation Act of 2009''.

[[Page 3609]]



     SEC. 2. PURPOSES.

       The purposes of this Act are--
       (1) to authorize, direct, facilitate, and expedite the 
     conveyance and exchange of land between the United States and 
     Resolution Copper;
       (2) to provide for the permanent protection of cultural 
     resources and uses of the Apache Leap escarpment located near 
     the town of Superior, Arizona; and
       (3) to secure Federal ownership and protection of land with 
     significant natural, scenic, recreational, water, riparian, 
     cultural and other resources.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Apache leap.--The term ``Apache Leap'' means the 
     approximately 822 acres of land (including the approximately 
     110 acres of land of Resolution Copper described in section 
     4(c)(1)(G)), as depicted on the map entitled ``Apache Leap'' 
     and dated January 2009.
       (2) Federal land.--The term ``Federal land'' means the 
     approximately 2,406 acres of land located in Pinal County, 
     Arizona, depicted on the map entitled ``Southeast Arizona 
     Land Exchange and Conservation Act of 2009-Federal Parcel-Oak 
     Flat'' and dated January 2009.
       (3) Non-federal land.--The term ``non-Federal land'' means 
     each parcel of land described in section 4(c).
       (4) Oak flat campground.--The term ``Oak Flat Campground'' 
     means the campground that is--
       (A) comprised of approximately 16 developed campsites and 
     adjacent acreage at a total of approximately 50 acres; and
       (B) depicted on the map entitled ``Oak Flat Campground'' 
     and dated January 2009.
       (5) Oak flat withdrawal area.--The term ``Oak Flat 
     Withdrawal Area'' means the approximately 760 acres of land 
     depicted on the map entitled ``Oak Flat Withdrawal Area'' and 
     dated January 2009.
       (6) Resolution copper.--The term ``Resolution Copper'' 
     means--
       (A) Resolution Copper Mining, LLC, a Delaware limited 
     liability company; and
       (B) any successor, assign, affiliate, member, or joint 
     venturer of Resolution Copper Mining, LLC.
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.
       (8) Secretary concerned.--The term ``Secretary concerned'' 
     means the Secretary of Agriculture or the Secretary of the 
     Interior, as applicable.
       (9) Town.--The term ``Town'' means the Town of Superior, 
     Arizona, an incorporated municipality.

     SEC. 4. LAND CONVEYANCES AND EXCHANGES.

       (a) Purposes.--The purposes of the land conveyances and 
     exchanges under this section are--
       (1) to secure Federal ownership and protection of 
     significant natural, scenic, and recreational resources; and
       (2) to facilitate efficient extraction of mineral 
     resources.
       (b) Offer by Resolution Copper.--
       (1) In general.--Subject to section 9(b)(1), if Resolution 
     Copper submits to the Secretary of Agriculture a written 
     offer, in accordance with paragraph (2), to convey to the 
     United States all right, title, and interest of Resolution 
     Copper in and to the non-Federal land, the Secretary shall--
       (A) accept the offer; and
       (B) convey to Resolution Copper all right, title, and 
     interest of the United States in and to the Federal land, 
     subject to--
       (i) section 10(c); and
       (ii) any valid existing right or title reservation, 
     easement, or other exception required by law or agreed to by 
     the Secretary concerned and Resolution Copper.
       (2) Requirements.--Title to any non-Federal land conveyed 
     by Resolution Copper to the United States under paragraph (1) 
     shall--
       (A) be in a form that is acceptable to the Secretary 
     concerned; and
       (B) conform to the title approval standards of the Attorney 
     General of the United States applicable to land acquisitions 
     by the Federal Government.
       (c) Resolution Copper Land Exchange.--On receipt of title 
     to the Federal land under subsection (b)(1)(B), Resolution 
     Copper shall simultaneously convey--
       (1) to the Secretary of Agriculture, all right, title, and 
     interest that the Secretary determines to be acceptable in 
     and to--
       (A) the approximately 147 acres of land located in Gila 
     County, Arizona, depicted on the map entitled ``Southeast 
     Arizona Land Exchange and Conservation Act of 2009-Non-
     Federal Parcel-Turkey Creek'' and dated January 2009;
       (B) the approximately 148 acres of land located in Yavapai 
     County Arizona, depicted on the map entitled ``Southeast 
     Arizona Land Exchange and Conservation Act of 2009-Non-
     Federal Parcel-Tangle Creek'' and dated January 2009;
       (C) the approximately 149 acres of land located in Maricopa 
     County, Arizona, depicted on the map entitled ``Southeast 
     Arizona Land Exchange and Conservation Act of 2009-Non-
     Federal Parcel-Cave Creek'' and dated January 2009;
       (D) the approximately 88 acres of land located in Pinal 
     County, Arizona, depicted on the map entitled ``Southeast 
     Arizona Land Exchange and Conservation Act of 2009-Non-
     Federal Parcel-J-I Ranch'' and dated January 2009;
       (E) the approximately 640 acres of land located in Coconino 
     County, Arizona, depicted on the map entitled ``Southeast 
     Arizona Land Exchange and Conservation Act of 2009-Non-
     Federal Parcel-East Clear Creek'' and dated January 2009;
       (F) the approximately 95 acres of land located in Pinal 
     County, Arizona, depicted on the map entitled ``Southeast 
     Arizona Land Exchange and Conservation Act of 2009-Non-
     Federal Parcel-The Pond'' and dated January 2009; and
       (G) subject to the retained rights under subsection (d)(2), 
     the approximately 110 acres of land located in Pinal County, 
     Arizona, depicted on the map entitled ``Southeast Arizona 
     Land Exchange and Conservation Act of 2009-Non-Federal 
     Parcel-Apache Leap South End'' and dated January 2009; and
       (2) to the Secretary of the Interior, all right, title, and 
     interest that the Secretary of the Interior determines to be 
     acceptable in and to--
       (A) the approximately 3,073 acres of land located in Pinal 
     County, Arizona, depicted on the map entitled ``Southeast 
     Arizona Land Exchange and Conservation Act of 2009-Non-
     Federal Parcel-Lower San Pedro River'' and dated January 
     2009;
       (B) the approximately 160 acres of land located in Gila and 
     Pinal Counties, Arizona, depicted on the map entitled 
     ``Southeast Arizona Land Exchange and Conservation Act of 
     2009-Non-Federal Parcel-Dripping Springs'' and dated January 
     2009; and
       (C) the approximately 956 acres of land located in Santa 
     Cruz County, Arizona, depicted on the map entitled 
     ``Southeast Arizona Land Exchange and Conservation Act of 
     2009-Non-Federal Parcel-Appleton Ranch'' and dated January 
     2009.
       (d) Additional Consideration to United States.--
       (1) Surrender of rights.--Subject to paragraph (2), in 
     addition to the non-Federal land to be conveyed to the United 
     States under subsection (c), and as a condition of the land 
     exchange under this section, Resolution Copper shall 
     surrender to the United States, without compensation, the 
     rights held by Resolution Copper under mining and other laws 
     of the United States--
       (A) to commercially extract minerals under--
       (i) Apache Leap; or
       (ii) the parcel identified in subsection (c)(1)(F); and
       (B) to disturb the surface of Apache Leap, except with 
     respect to such fences, signs, monitoring wells, and other 
     devices, instruments, or improvements as are necessary to 
     monitor the public health and safety or achieve other 
     appropriate administrative purposes, as determined by the 
     Secretary, in consultation with Resolution Copper.
       (2) Exploration activities.--Nothing in this Act prohibits 
     Resolution Copper from using any existing mining claim held 
     by Resolution Copper on Apache Leap, or from retaining any 
     right held by Resolution Copper to the parcel described in 
     subsection (c)(1)(G), to carry out any underground activities 
     under Apache Leap in a manner that the Secretary determines 
     will not adversely impact the surface of Apache Leap 
     (including drilling or locating any tunnels, shafts, or other 
     facilities relating to mining, monitoring, or collecting 
     geological or hydrological information) that do not involve 
     commercial mineral extraction under Apache Leap.
       (e) Use of Equalization Payment.--
       (1) Payment.--Resolution Copper shall pay into the Federal 
     Land Disposal Account established by section 206(a) of the 
     Federal Land Transaction Facilitation Act (43 U.S.C. 2305(a)) 
     (or any successor account) any cash equalization funds owed 
     by Resolution Copper to the United States under section 
     7(b)(1), to remain available until expended, without further 
     appropriation, to the Secretary and the Secretary of the 
     Interior, as the Secretaries jointly determine to be 
     appropriate, for--
       (A) the acquisition from willing sellers of land or 
     interests in land within the hydrographic boundary of the San 
     Pedro River and tributaries in the State of Arizona; and
       (B) the management and protection of endangered species and 
     other sensitive environmental values and land within the San 
     Pedro Riparian National Conservation Area established by 
     section 101(a) of the Arizona-Idaho Conservation Act of 1988 
     (16 U.S.C. 460xx(a)) (including any additions to the area), 
     including management under any cooperative management 
     agreement entered into by the Secretary of the Interior and a 
     State or local agency under section 103(c) of that Act (16 
     U.S.C. 460xx-2(c)).
       (2) Period of use.--To the maximum extent feasible, the 
     amount paid into the Federal Land Disposal Account by 
     Resolution Copper under paragraph (1) shall be used by the 
     Secretary and the Secretary of the Interior during the 2-year 
     period beginning on the date of payment.
       (3) Cooperative management agreements.--The Secretary of 
     the Interior may enter into such cooperative management 
     agreements with qualified organizations (as defined in 
     section 170(h) of the Internal Revenue Code of 1986) as the 
     Secretary of the Interior determines to be appropriate to 
     administer portions of the San Pedro Riparian National 
     Conservation Area.

[[Page 3610]]



     SEC. 5. TIMING AND PROCESSING OF EXCHANGE.

       (a) Sense of Congress Regarding Timing of Exchange.--It is 
     the sense of Congress that the land exchange directed by 
     section 4 should be consummated by not later than 1 year 
     after the date of enactment of this Act.
       (b) Exchange Processing.--Before the date of consummation 
     of the exchange under section 4, the Secretary concerned 
     shall complete any necessary land surveys and required 
     preexchange clearances, reviews, mitigation activities, and 
     approvals relating to--
       (1) threatened or endangered species;
       (2) cultural or historic resources;
       (3) wetland or floodplains; or
       (4) hazardous materials.
       (c) Post-Exchange Processing.--Before commencing production 
     in commercial quantities of any valuable mineral from the 
     Federal land conveyed to Resolution Copper under section 
     4(b)(1)(B) (except for any such production from any 
     exploration and mine development shafts, adits, and tunnels 
     needed to determine feasibility and pilot plant testing of 
     commercial production or to access the ore body and tailings 
     deposition areas), the Secretary shall publish an 
     environmental impact statement in accordance with section 
     102(2)(C) of the National Environmental Policy Act of 1969 
     (42 U.S.C. 4322(2)(C)) regarding any Federal agency action 
     carried out relating to the commercial production, including 
     an analysis of the impacts of the production.
       (d) Oak Flat Withdrawal Area Restriction.--
       (1) Mineral exploration.--To ensure the collection and 
     consideration of adequate information to analyze possible 
     commercial production of minerals by Resolution Copper from 
     the Oak Flat Withdrawal Area, notwithstanding any other 
     provision of law, Resolution Copper may carry out mineral 
     exploration activities under the Oak Flat Withdrawal Area 
     during the period beginning on the date of enactment of this 
     Act and ending on the date of conveyance of the Oak Flat 
     Withdrawal Area to Resolution Copper under section 4(b)(1)(B) 
     by directional drilling or any other method that will not 
     disturb the surface of the land.
       (2) Sense of congress regarding permit.--It is the sense of 
     Congress that the Secretary should issue to Resolution Copper 
     a permit to conduct appropriate directional drilling or other 
     nonsurface-disturbing exploration in the Oak Flat Withdrawal 
     Area as soon as practicable after the date of enactment of 
     this Act.
       (e) Exchange and Post-Exchange Costs.--In accordance with 
     sections 254.4 and 254.7 of title 36, Code of Federal 
     Regulations (or successor regulations), Resolution Copper 
     shall assume responsibility for--
       (1) hiring such contractors as are necessary for carrying 
     out any exchange or conveyance of land under this Act; and
       (2) paying, without compensation under section 254.7 of 
     title 36, Code of Federal Regulations (or a successor 
     regulation)--
       (A) the costs of any appraisal relating to an exchange or 
     conveyance under this Act, including any reasonable 
     reimbursements to the Secretary on request of the Secretary 
     for the cost of reviewing and approving an appraisal;
       (B) the costs of any clearances, reviews, mitigation 
     activities, and approvals under subsection (b), including any 
     necessary land surveys conducted by the Bureau of Land 
     Management Cadastral Survey program;
       (C) the costs of achieving compliance with the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) 
     under subsection (c); and
       (D) any other cost agreed to by Resolution Copper and the 
     Secretary concerned.
       (f) Contractor Work and Approvals.--
       (1) In general.--Any work relating to the exchange or 
     conveyance of land under this Act that is performed by a 
     contractor shall be subject to the mutual agreement of the 
     Secretary concerned and Resolution Copper, including any 
     agreement with respect to--
       (A) the selection of the contractor; and
       (B) the scope of work performed by the contractor.
       (2) Review and approval.--Any required review and approval 
     of work by a contractor shall be performed by the Secretary 
     concerned, in accordance with applicable law (including 
     regulations).
       (3) Lead actor agreement.--The Secretary of Agriculture and 
     the Secretary of the Interior may mutually agree to designate 
     the Secretary of Agriculture as the lead actor for any action 
     under this subsection.

     SEC. 6. CONVEYANCE OF LAND TO TOWN.

       (a) Conveyance Requirements.--
       (1) In general.--On receipt of a request from the Town 
     described in paragraph (2), the Secretary shall convey to the 
     Town each parcel requested.
       (2) Description of request.--A request referred to in 
     paragraph (1) is a request by the Town--
       (A) for the conveyance of 1 or more of the parcels 
     identified in subsection (b); and
       (B) that is submitted to the Secretary by not later than 90 
     days after the date of consummation of the land exchange 
     under section 4.
       (3) Price.--The Town shall pay to the Secretary a price 
     equal to the market value of any land conveyed under this 
     subsection, as appraised under section 7, less the amount of 
     any credit under section 7(b)(3).
       (b) Identification of Parcels.--The Town may request 
     conveyance of any of--
       (1) the approximately 30 acres of land located in Pinal 
     County, Arizona, occupied on the date of enactment of this 
     Act by the Fairview Cemetery and depicted on the map entitled 
     ``Southeast Arizona Land Exchange and Conservation Act of 
     2009-Federal Parcel-Fairview Cemetery'' and dated January 
     2009;
       (2) the reversionary interest, and any reserved mineral 
     interest, of the United States in the approximately 265 acres 
     of land located in Pinal County, Arizona, depicted on the map 
     entitled ``Southeast Arizona Land Exchange and Conservation 
     Act of 2009-Federal Reversionary Interest-Superior Airport'' 
     and dated January 2009; and
       (3) all or any portion of the approximately 250 acres of 
     land located in Pinal County, Arizona, depicted on the map 
     entitled ``Southeast Arizona Land Exchange and Conservation 
     Act of 2009-Federal Parcel-Superior Airport Contiguous 
     Parcels'' and dated January 2009.
       (c) Condition of Conveyance.--A conveyance of land under 
     this section shall be carried out in a manner that provides 
     the United States manageable boundaries on any parcel 
     retained by the Secretary, to the maximum extent practicable.

     SEC. 7. VALUATION OF LAND EXCHANGED OR CONVEYED.

       (a) Exchange Valuation.--
       (1) In general.--The value of the land to be exchanged 
     under section 4 or conveyed to the Town under section 6 shall 
     be determined by the Secretary through concurrent appraisals 
     conducted in accordance with paragraph (2).
       (2) Appraisals.--
       (A) In general.--An appraisal under this section shall be--
       (i) performed by an appraiser mutually agreed to by the 
     Secretary and Resolution Copper;
       (ii) performed in accordance with--

       (I) the Uniform Appraisal Standards for Federal Land 
     Acquisitions (Department of Justice, 5th Edition, December 
     20, 2000);
       (II) the Uniform Standards of Professional Appraisal 
     Practice; and
       (III) Forest Service appraisal instructions; and

       (iii) submitted to the Secretary for review and approval.
       (B) Reappraisals and updated appraised values.--After the 
     final appraised value of a parcel is determined and approved 
     under subparagraph (A), the Secretary shall not be required 
     to reappraise or update the final appraised value--
       (i) for a period of 3 years after the approval by the 
     Secretary of the final appraised value under subparagraph 
     (A)(iii); or
       (ii) at all, in accordance with section 254.14 of title 36, 
     Code of Federal Regulations (or a successor regulation), 
     after an exchange agreement is entered into by Resolution 
     Copper and the Secretary.
       (C) Public review.--Before consummating the land exchange 
     under section 4, the Secretary shall make available for 
     public review a summary of the appraisals of the land to be 
     exchanged.
       (3) Failure to agree.--If the Secretary and Resolution 
     Copper fail to agree on the value of a parcel to be 
     exchanged, the final value of the parcel shall be determined 
     in accordance with section 206(d) of the Federal Land Policy 
     and Management Act of 1976 (43 U.S.C. 1716(d)).
       (4) Federal land appraisal.--
       (A) In general.--The Federal land shall be appraised in 
     accordance with the standards and instructions referred to in 
     paragraph (2)(A)(ii) and other applicable requirements of 
     this section.
       (B) Treatment as unencumbered.--The value of the Federal 
     land outside the Oak Flat Withdrawal Area shall be determined 
     as if the land is unencumbered by any unpatented mining 
     claims of Resolution Copper.
       (C) Effect.--Nothing in this Act affects the validity of 
     any unpatented mining claim or right of Resolution Copper.
       (D) Additional appraisal information.--To provide 
     information necessary to calculate a value adjustment payment 
     for purposes of section 12, the appraiser under this 
     paragraph shall include in the appraisal report a detailed 
     royalty income approach analysis, in accordance with the 
     Uniform Appraisal Standards for Federal Land Acquisition, of 
     the market value of the Federal land, even if the royalty 
     income approach analysis is not the appraisal approach relied 
     on by the appraiser to determine the final market value of 
     the Federal land.
       (b) Equalization of Value.--
       (1) Surplus of federal land value.--
       (A) In general.--If the final appraised value of the 
     Federal land exceeds the value of the non-Federal land 
     involved in the exchange under section 4, Resolution Copper 
     shall make a cash equalization payment into the Federal Land 
     Disposal Account (as provided in subsection (e)) to equalize 
     the values of the Federal land and non-Federal land.
       (B) Amount of payment.--Notwithstanding section 206(b) of 
     the Federal Land Policy and Management Act of 1976 (43 U.S.C. 
     1716(b)), the United States may accept a cash equalization 
     payment under subparagraph (A) in

[[Page 3611]]

     an amount that is greater than 25 percent of the value of the 
     Federal land.
       (2) Surplus of non-federal land value.--If the final 
     appraised value of the non-Federal land exceeds the value of 
     the Federal land involved in the exchange under section 4--
       (A) the United States shall not make a payment to 
     Resolution Copper to equalize the values of the land; and
       (B) the surplus value of the non-Federal land shall be 
     considered to be a donation by Resolution Copper to the 
     United States.
       (3) Payment for land conveyed to town.--
       (A) In general.--The Town shall pay the Secretary market 
     value for any land acquired by the Town from the Secretary 
     under section 6, as determined by the Secretary through an 
     appraisal conducted in accordance with subsection (a)(2).
       (B) Credit.--If the final appraised value of the non-
     Federal land exceeds the value of the Federal land in the 
     exchange under section 4, the obligation of the Town to pay 
     the United States under subparagraph (A) shall be reduced by 
     an amount equal to the excess value of the non-Federal land 
     conveyed to the United States.
       (4) Disposition and use of proceeds.--
       (A) Cash equalization payments.--Any cash equalization 
     payment under paragraph (1)(A) shall be deposited, without 
     further appropriation, in the Federal Land Disposal Account 
     for use in accordance with section 4(e).
       (B) Payment for land conveyed to town.--Any payment 
     received by the Secretary from the Town under paragraph 
     (3)(A) shall be--
       (i) deposited in the fund established under Public Law 90-
     171 (commonly known as the ``Sisk Act'') (16 U.S.C. 484a); 
     and
       (ii) made available to the Secretary, without further 
     appropriation, for the acquisition of land for addition to 
     the National Forest System in the State of Arizona.

     SEC. 8. APACHE LEAP PROTECTION AND MANAGEMENT.

       (a) Apache Leap Protection and Management.--
       (1) In general.--To permanently protect the cultural, 
     historic, educational, and natural resource values of Apache 
     Leap, effective beginning on the date of enactment of this 
     Act, the Secretary shall--
       (A) manage Apache Leap in accordance with the laws 
     (including regulations) applicable to the National Forest 
     System; and
       (B) place special emphasis on preserving the natural 
     character of Apache Leap.
       (2) Withdrawal.--Subject to the valid existing rights of 
     Resolution Copper under section 4(d)(2), effective beginning 
     on the date of enactment of this Act, Apache Leap shall be 
     permanently withdrawn from all forms of entry and 
     appropriation under--
       (A) the public land laws (including the mining and mineral 
     leasing laws); and
       (B) the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et 
     seq.).
       (b) Additional Protections, Analysis, and Plan.--
       (1) Management plan.--Not later than 4 years after the date 
     of enactment of this Act, the Secretary, in consultation with 
     the Town, Resolution Copper, the Yavapai and Apache Indian 
     tribes, and other interested members of the public, shall 
     solicit public comment regarding, and initiate implementation 
     of, a management plan for Apache Leap.
       (2) Planning considerations.--The plan described in 
     paragraph (1) shall examine, among other matters, whether 
     Apache Leap should be managed to establish--
       (A) additional cultural and historical resource protections 
     or measures, including permanent or seasonal closures of any 
     portion of Apache Leap to protect cultural or archeological 
     resources;
       (B) additional or alternative public access routes, trails, 
     and trailheads to Apache Leap; or
       (C) additional opportunities (including appropriate access) 
     for rock climbing, with special emphasis on improved rock 
     climbing access to Apache Leap from the west.
       (c) Mining Activities.--Nothing in this section imposes any 
     restriction on any exploration or mining activity carried out 
     by Resolution Copper outside of Apache Leap after the date of 
     enactment of this Act.

     SEC. 9. INCORPORATION, MANAGEMENT, AND STATUS OF ACQUIRED 
                   LAND.

       (a) Land Acquired by Secretary.--
       (1) In general.--Land acquired by the Secretary under this 
     Act shall--
       (A) become part of the National Forest within which the 
     land is located; and
       (B) be administered in accordance with the laws (including 
     regulations) applicable to the National Forest System.
       (2) Boundaries.--For purposes of section 7 of the Land and 
     Water Conservation Fund Act of 1965 (16 U.S.C. 4601 et seq.), 
     the boundaries of a National Forest in which land acquired by 
     the Secretary is located shall be deemed to be the boundaries 
     of that forest as in existence on January 1, 1965.
       (3) Management of j-i ranch.--
       (A) In general.--On the date on which the Secretary 
     acquires the J-I Ranch parcel described in section 
     4(c)(1)(D), the Secretary shall manage the land to allow 
     Yavapai and Apache Indian tribes--
       (i) to access the land; and
       (ii) to undertake traditional activities relating to the 
     gathering of acorns.
       (B) Authority of secretary.--On receipt of a request from 
     the Yavapai or Apache Indian tribe, the Secretary may 
     temporarily or seasonally close to the public any portion of 
     the J-I Ranch during the period in which the Yavapai or 
     Apache Indian tribe carries out any activity described in 
     subparagraph (A)(ii).
       (b) Rock Climbing.--
       (1) In general.--Before consummating the land exchange 
     under section 4, Resolution Copper shall pay to the Secretary 
     $1,250,000.
       (2) Use of funds.--The Secretary shall use the amount 
     described in paragraph (1), without further appropriation, to 
     construct or improve road access, turnouts, trails, camping, 
     parking areas, or other facilities to promote and enhance 
     rock climbing, bouldering, and such other outdoor 
     recreational opportunities as the Secretary determines to be 
     appropriate--
       (A) in the general area north of Arizona State Highway 60 
     encompassing the parcel described in section 4(c)(1)(F) and 
     adjacent National Forest land to the north of that parcel 
     (commonly known as the ``upper Pond area''); or
       (B) in the areas commonly known as ``Inconceivables'' and 
     ``Chill Hill'' located in or adjacent to secs. 26, 35, and 
     36, T. 2 S., R. 12 E. , Gila and Salt River Meridian.
       (3) Timing.--To the maximum extent practicable, the 
     Secretary shall use the amount described in paragraph (1) 
     during the 2-year period beginning on the date of 
     consummation of the land exchange under section 4.
       (4) The pond parcel work.--
       (A) In general.--To improve rock climbing opportunities in 
     the parcel described in section 4(c)(1)(F) and the upper Pond 
     area, Resolution Copper, in consultation with the Secretary 
     and rock climbing interests, may construct roads or improve 
     road access to, construct trails, camping, parking areas, or 
     other facilities on, or provide other access to, the Pond 
     parcel described in section 4(c)(1)(F) before the date of the 
     conveyance under section 4(c).
       (B) Costs.--Resolution Copper shall pay the cost of any 
     activity carried out under subparagraph (A), in addition to 
     the amount specified in paragraph (1).
       (c) Land Acquired by Secretary of Interior.--
       (1) In general.--Land acquired by the Secretary of the 
     Interior under this Act shall--
       (A) become part of the Federal administrative area 
     (including the Las Cienegas National Conservation Area or 
     other national conservation area, if applicable) within which 
     the land is located or to which the land is adjacent; and
       (B) be managed in accordance with the laws (including 
     regulations) applicable to the Federal administrative area or 
     national conservation area within which the land is located 
     or to which the land is adjacent.
       (2) Lower san pedro river land.--To preserve and enhance 
     the natural character and conservation value of the lower San 
     Pedro River land described in section 4(c)(2)(A), on 
     acquisition of the land by the Secretary of the Interior, the 
     land shall be automatically incorporated in, and administered 
     as part of, the San Pedro Riparian National Conservation 
     Area.
       (d) Withdrawal.--On acquisition by the United States of any 
     land under this Act, subject to valid existing rights and 
     without further action by the Secretary concerned, the 
     acquired land is permanently withdrawn from all forms of 
     entry and appropriation under--
       (1) the public land laws (including the mining and mineral 
     leasing laws); and
       (2) the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et 
     seq.).

     SEC. 10. OAK FLAT CAMPGROUND.

       (a) Replacement Campgrounds.--
       (1) In general.--Not later than 4 years after the date of 
     enactment of this Act, the Secretary, in consultation with 
     Resolution Copper, the Town, and other interested parties, 
     shall design and construct in the Globe Ranger District of 
     the Tonto National Forest 1 or more replacement campgrounds 
     for the Oak Flat Campground (including appropriate access 
     routes to any replacement campgrounds).
       (2) Public facilities.--Any replacement campgrounds under 
     this subsection shall be designed and constructed in a manner 
     that adequately (as determined in the sole discretion of the 
     Secretary) replaces, or improves on, the facilities, 
     functions, and amenities available to the public at the Oak 
     Flat Campground.
       (b) Costs of Replacement.--Resolution Copper shall pay the 
     actual cost of designing, constructing, and providing access 
     to any replacement campgrounds under this subsection, not to 
     exceed $1,000,000.
       (c) Interim Oak Flat Campground Access.--The document 
     conveying the Federal land to Resolution Copper under section 
     4(b) shall specify that--
       (1) during the 4-year period beginning on the date of 
     enactment of this Act, the Secretary shall retain title to, 
     operate, and maintain the Oak Flat Campground; and
       (2) at the end of that 4-year period--
       (A) the withdrawal of the Oak Flat Campground shall be 
     revoked; and

[[Page 3612]]

       (B) title to the Oak Flat Campground shall be 
     simultaneously conveyed to Resolution Copper.
       (d) BoulderBlast Competition.--During the 5-year period 
     beginning on the date of enactment of this Act, the 
     Secretary, in consultation with Resolution Copper, may issue 
     not more than 1 special use permit per calendar year to 
     provide public access to the bouldering area on the Federal 
     land for purposes of the annual ``BoulderBlast'' competition.

     SEC. 11. TRADITIONAL ACORN GATHERING AND RELATED ACTIVITIES 
                   IN AND AROUND OAK FLAT CAMPGROUND.

       (a) Sense of Congress Regarding Acorn Gathering.--In 
     addition to the acorn gathering opportunities described in 
     section 9(a)(3)(A)(ii), it is the sense of Congress that, on 
     receipt of a request from the Apache or Yavapai Indian tribe 
     or any other Indian tribe during the 180-day period beginning 
     on the date of conveyance of the Federal land to Resolution 
     Copper under section 4, Resolution Copper should endeavor to 
     negotiate and execute a revocable authorization to each 
     applicable Indian tribe to use an area in and around the Oak 
     Flat Campground for traditional acorn gathering and related 
     activities.
       (b) Area and Terms.--The precise area and terms of use 
     described in subsection (a)--
       (1) shall be agreed to by Resolution Copper and the 
     applicable Indian tribes; and
       (2) may be modified or revoked by Resolution Copper if 
     Resolution Copper, in consultation with the Indian tribes, 
     determines that all or a portion of the authorized use area 
     needs to be closed on a temporary or permanent basis--
       (A) to protect the health or safety of users; or
       (B) to accommodate an exploration or mining plan of 
     Resolution Copper.

     SEC. 12. VALUE ADJUSTMENT PAYMENT TO UNITED STATES.

       (a) Annual Production Reporting.--
       (1) In general.--Beginning on February 15 of the first 
     calendar year beginning after the date of commencement of 
     production of valuable locatable minerals in commercial 
     quantities (as defined by applicable Federal laws (including 
     regulations)) from the Federal land conveyed to Resolution 
     Copper under section 4(b), and annually thereafter, 
     Resolution Copper shall file with the Secretary of the 
     Interior a report indicating the quantity of locatable 
     minerals in commercial quantities produced from the Federal 
     land during the preceding calendar year.
       (2) Report contents.--The reports under paragraph (1) shall 
     comply with all recordkeeping and reporting requirements of 
     applicable Federal laws (including regulations) in effect at 
     the time of production relating to the production of valuable 
     locatable minerals in commercial quantities on any federally 
     owned land.
       (b) Payment on Production.--If the cumulative production of 
     valuable locatable minerals in commercial quantities produced 
     from the Federal land conveyed to Resolution Copper under 
     section 4(b) exceeds the quantity of production of locatable 
     minerals from the Federal land used in the royalty income 
     approach analysis under the Uniform Appraisal Standards for 
     Federal Land Acquisitions prepared under section 7(a)(4)(D), 
     Resolution Copper shall pay to the United States, by not 
     later than March 15 of each applicable calendar year, a value 
     adjustment payment for the quantity of excess production at a 
     rate equal to--
       (1) the Federal royalty rate in effect for the production 
     of valuable locatable minerals from federally owned land, if 
     such a rate is enacted before December 31, 2012; or
       (2) if no Federal royalty rate is enacted by the date 
     described in paragraph (1), the royalty rate used for 
     purposes of the royalty income approach analysis prepared 
     under section 7(a)(4)(D).
       (c) State Law Unaffected.--Nothing in this Act modifies, 
     expands, diminishes, amends, or otherwise affects any State 
     law (including regulations) relating to the imposition, 
     application, timing, or collection of a State excise or 
     severance tax under Arizona Revised Statutes 42-5201-5206.
       (d) Use of Funds.--The funds paid to the United States 
     under this section shall--
       (1) be deposited in a special account of the Treasury; and
       (2) remain available, without further appropriation, to the 
     Secretary and the Secretary of the Interior, as the 
     Secretaries jointly determine to be appropriate, for the 
     acquisition of land or interests in land from willing sellers 
     in the State of Arizona.

     SEC. 13. MISCELLANEOUS PROVISIONS.

       (a) Revocation of Orders; Withdrawal.--
       (1) Revocation of orders.--Any public land order that 
     withdraws the Federal land from appropriation or disposal 
     under a public land law shall be revoked to the extent 
     necessary to permit disposal of the land.
       (2) Withdrawal.--On the date of enactment of this Act, if 
     the Federal land or any Federal interest in the non-Federal 
     land to be exchanged under section 4 is not withdrawn or 
     segregated from entry and appropriation under a public land 
     law (including mining and mineral leasing laws and the 
     Geothermal Steam Act of l970 (30 U.S.C. 1001 et seq.)), the 
     land or interest shall be withdrawn, without further action 
     required by the Secretary concerned, from entry and 
     appropriation, subject to the valid existing rights of 
     Resolution Copper, until the date of the conveyance of 
     Federal land under section 4(b).
       (b) Maps, Estimates, and Descriptions.--
       (1) Minor errors.--The Secretary concerned and Resolution 
     Copper, may correct, by mutual agreement, any minor errors in 
     any map, acreage estimate, or description of any land 
     conveyed or exchanged under this Act.
       (2) Conflict.--If there is a conflict between a map, an 
     acreage estimate, or a description of land under this Act, 
     the map shall control unless the Secretary concerned and 
     Resolution Copper mutually agree otherwise.
       (3) Availability.--On the date of enactment of this Act, 
     the Secretary shall file and make available for public 
     inspection in the Office of the Supervisor, Tonto National 
     Forest, each map referred to in this Act.
                                 ______
                                 
      By Mr. BENNETT (for himself and Mr. Hatch):
  S. 411. A bill to authorize the Secretary of Transportation to 
release restrictions on the use of certain property conveyed to the 
City of St. George, Utah for airport purposes; to the Committee on 
Commerce, Science, and Transportation.
  Mr. BENNETT. Mr. President, I, along with the senior senator from 
Utah, am introducing today legislation to authorize the Secretary of 
Transportation to release restrictions on the use of certain property 
conveyed to the city of St. George, Utah for airport purposes.
  On October 17, 2008, the City of St. George, UT, and the Federal 
Aviation Administration, FAA, broke ground on the construction of a new 
replacement airport, which will provide enhanced air service to the 
over 300,000 residents of southern Utah. The total project will cost 
$168 million and the start of operations at the replacement airport is 
scheduled for January 1, 2011.
  The project is being funded largely through Federal grants covered by 
a letter of intent from the FAA in the amount of $119 million.
  The City of St. George is financing its $44 million local share of 
the replacement airport through the sale of the existing airport 
property totaling 274 acres to Anderson Development Services Inc.
  Recently it was discovered that 40 acres of the existing airport site 
was acquired by the City of St. George under Section 16 of the Federal 
Airport Act of 1946 (60 Stat. 173; 49 U.S.C. 1115) and can only be used 
for airport purposes.
  The United States Secretary of the Interior issued a patent to the 
city of St. George in 1951 for the 40 acres and the city signed a deed 
to the land dated August 28, 1973, which contains a reverter deed 
restriction that if the land ceased to be used for airport purposes, 
the title would revert back to the United States Secretary of 
Transportation.
  Federal legislation is required to authorize the Secretary of 
Transportation to release this reverter deed restriction on the use of 
this 40 acre parcel so the sale of the entire 274 acre airport can go 
through. A similar legislation (Public Law 94-244) releasing identical 
deed restrictions was enacted for the City of Grand Junction, CO; in 
1976.
  The legislation requires that upon release from these restrictions, 
the City of St. George, UT, must sell the 40 acre parcel for fair 
market value, which is estimated at $5 million, and the proceeds must 
be given to the FAA for the development, improvement, operation, or 
maintenance of the replacement airport as part of St. George's local 
contribution.
  I urge my colleagues to support this straight-forward legislation. 
All funds will still be directed to the FAA. However, this minor 
correction will go a long way in assisting one of the fastest growing 
counties in the United States.
                                 ______
                                 
      By Mr. INHOFE:
  S. 412. A bill to establish the Federal Emergency Management Agency 
as an independent agency, and for other purposes; to the Committee on 
Homeland Security and Governmental Affairs.
  Mr. INHOFE. Mr. President, today I am reintroducing a bill I had 
introduced with then-Senator Hillary Clinton on two previous occasions. 
It is interesting, because this bill didn't have a lot of opposition in 
the Senate. It did, however, have some opposition from the Bush 
administration. What we were

[[Page 3613]]

attempting to do was to take the Federal Emergency Management Agency 
out from under where it was put, in the Department of Homeland 
Security, by the previous administration and give it independent 
status. This is something that has been talked about for a long period 
of time.
  We can draw from our experience in Oklahoma and the fact that we had 
a devastating tornado go through--as we did last night, although it was 
even worse--which killed many people. At that time, James Lee Witt was 
the FEMA Director. He was President Clinton's appointee. I will always 
remember when that happened. A matter of a few short hours after it 
happened, I called Mr. Witt and he met me in Oklahoma, and we got it 
done. At that time, FEMA was under the Environment and Public Works 
Committee. It was under the Stafford Act and virtually had independent 
status at that time.
  Contrast that with only a few months ago when GEN Russel Honore, the 
general placed in charge of the military's relief efforts following 
Hurricane Katrina, said that FEMA and the Department of Homeland 
Security should be separate agencies. In an interview reported in 
Politico, General Honore said of FEMA:

       I just think we've had some experience that demonstrates 
     that the best thing to do is separate it and make it a 
     separate agency.

  Most importantly, President Obama said in remarks he delivered in New 
Orleans in February of last year:

       If catastrophe comes, the American people must be able to 
     call on a competent government . . . the Director of FEMA 
     will report to me . . . and as soon as we take office, my 
     FEMA director will work with emergency management officials 
     in all 50 States to create a National Response Plan. Because 
     we need to know--before disaster comes--who will be in 
     charge; and how the Federal, State and local governments will 
     work together to respond.

  I talked to the President a few minutes ago. He still has these same 
feelings. I think it is very appropriate now to bring up something we 
had talked about before. I know the Democratic platform, for example, 
has a provision which states that the FEMA Director will report 
directly to the President, and I couldn't agree more. I don't agree 
with a lot of things from the Democratic platform, but I do agree with 
that.
  Oklahoma has had more than its share of natural disasters. Only last 
night, three confirmed tornadoes touched down throughout Oklahoma, 
impacting the communities of Oklahoma City, Edmond, Pawnee, and a small 
community called Lone Grove. In Lone Grove, this very tiny community, 
eight people were killed. There are 35 still missing, so I think the 
death toll, unfortunately, could rise above that. I had occasion to 
talk to civic leaders there--Gary Hicks and city manager Marianne 
Elfert--this morning, and the number of Lone Grove residents who are 
missing right now is still not determined. So I think it is a real 
disaster.
  It wasn't that long ago that we had the Eagle Picher area of Oklahoma 
hit by a tornado, and that was a very similar thing there, with seven 
deaths in that case. On May 1 of last year, I surveyed other tornado 
damage up there with Secretary Chertoff and FEMA Director Paulison, 
Governor Henry, and Congressman Boren. As I said, seven people were 
killed, but that didn't go quite as smoothly as we would have hoped.
  FEMA's integration into the Department of Homeland Security in 2003 
added an extra layer of bureaucracy and removed much of the autonomy 
that once kept the agency operating efficiently. We learned in the 
aftermath of Hurricane Katrina that the extra coordination required 
between the Department of Homeland Security and the Federal Emergency 
Management Agency was at least partly responsible for the shortcomings 
of the Federal response. I visited the area right after Katrina, and I 
think they did a much better job than the press portrayed, but I still 
think that extra level of bureaucracy created a problem in getting 
things done immediately.
  My legislation takes the necessary steps in giving the Director of 
FEMA Cabinet level status in the event of a natural disaster and acts 
of terrorism and makes that person the principal adviser to the 
President, Homeland Security Council, and the Secretary of Homeland 
Security. So we are kind of reversing it, and he is going to be in a 
Cabinet-level position. Obviously, things can then be done a lot faster 
and a lot better. Perhaps most importantly, the legislation defines the 
primary mission and specific activities of the Federal Emergency 
Management Agency and its Director, and places directly upon them the 
obligation to ensure FEMA's mission is carried out.
  Now, that is exactly what President Obama said while he was 
campaigning for President and what he reaffirmed to me today on the 
telephone.
  Let me explain some other events that originally led me to introduce 
this legislation. Oklahoma first encountered significant problems with 
FEMA when wildfires ravaged the State in 2005 and 2006. These 
devastating wildfires swept through the entire State, leading to 
declarations for public assistance, individual assistance, and hazard 
mitigation funding. In January of 2007, Oklahoma encountered severe 
winter storms with devastating results. These storms led to prolonged 
loss of power and extensive building damage for many of my 
constituents. One of my constituents happened to be my wife--we have 
been married 49 years--and she was without electricity for 9 days, so 
that does get your attention.
  Later this year, Oklahoma was hit by heavy rain, tornadoes, and 
flooding from May through September. The State made a number of 
disaster declarations during each of these periods, but each and every 
time, the process it took to obtain aid from FEMA became increasingly 
difficult, wrought with indecisiveness and an inability of Homeland 
Security to communicate with each other. Prior to the placement of FEMA 
under DHS, my State had not encountered nearly the same level of 
bureaucratic delays or communications as it has since that time.
  Oklahoma has also struggled with FEMA regarding the determination of 
dates of incident periods, which is why I put language in my bill to 
give deference to the State's documentation regarding the dates of such 
incidents. Now, some of you guys are not from States where you have the 
number of disasters we have had, so it is something you are not as 
familiar with. But we certainly are. I see the junior Senator from 
Oklahoma on the floor here, and he knows too that we live through these 
things on a regular basis. We have had tornadoes, ice storms, 
windstorms, and other things people haven't had.
  I think Senator Clinton and I were right when we introduced this the 
first time, and I believe it is consistent with what President Obama 
has reaffirmed to me as recently as today. It will be a better 
arrangement and I will be looking for supporters.
  We have introduced the bill. It is S. 412. Again, this bill takes 
FEMA out from under DHS and gives it more of an independent status so 
it can respond in a more rapid way as it did prior to 2003.
                                 ______
                                 
      By Mr. DODD (for himself, Mr. Levin, Mr. Menendez, Mr. Reed, Mr. 
        Akaka, Mr. Schumer, Mr. Tester, Mr. Brown, Mr. Merkley, Mr. 
        Kerry, Mr. Leahy, Mr. Durbin, Mr. Harkin, Mrs. McCaskill, Mr. 
        Whitehouse, and Mr. Casey):
  S. 414. A bill to amend the Consumer Credit Protection Act, to ban 
abusive credit practices, enhance consumer disclosures, protect 
underage consumers, and for other purposes; to the Committee on 
Banking, Housing, and Urban Affairs.
  Mr. DODD. Mr. President, I am pleased today to be reintroducing 
comprehensive credit card legislation that would reform credit card 
practices and prohibit card issuers from continuing policies that are 
threatening the financial security of American consumers and their 
families. The Credit Card Accountability, Responsibility and Disclosure 
Act, Credit CARD Act, will help to end the practices that cost American 
families billions of dollars each year.
  This is a time of serious hardship for American families. As losses 
mount as

[[Page 3614]]

a result of the economic crisis, lenders are squeezing consumers, often 
unfairly and without adequate notice, by raising credit card rates and 
tightening repayment terms. Credit card delinquency rates are inching 
higher, and repayment rates are dipping. At a time when Americans are 
becoming increasingly reliant on credit cards, credit card companies 
are being more aggressive about finding ways to charge their customers. 
Over $17 billion in credit card penalty fees were charged to Americans 
in 2006--a ten-fold increase from what was charged just ten years ago. 
These penalties are contributing to the avalanche of credit card debt 
under which many American consumers increasingly find themselves 
buried.
  In my travels around Connecticut, I hear frequently about the burden 
of these credit card practices from constituents. Connecticut has the 
third- highest median amount of credit card debt in the country--$2,094 
per person. Non-business bankruptcy filings in the State are 
increasing, and in the second quarter of last year, credit card 
delinquencies increased in 7 of the 8 counties in the State.
  In December, the Federal Reserve, Office of Thrift Supervision, and 
National Credit Union Administration finalized unfair and deceptive 
acts and practices rules aimed at curbing some of these practices. For 
example, for customers in good standing the new rules will prevent 
issuers from applying interest rate increases retroactively to credit 
card debt incurred prior to the interest rate increase. They will also 
help ensure that issuers apply payments fairly, and extend the time 
that consumers have to make their credit card payments. The rules are a 
good first step in providing needed consumer protections in some areas. 
They fall short in other important areas, however, failing to address 
issues including universal default, ``any time any reason'' repricing, 
multiple overlimit fees, and youth marketing, which I'll explain in a 
moment.
  In anticipation of rules going into effect in July of 2010, issuers 
are raising their interest rates and cutting lines of credit even on 
consumers with a long and unblemished history of good payment, thereby 
underscoring the need for this legislation.
  That is why I am reintroducing the Credit CARD Act. This bill will 
help to reform credit card practices that drag so many American 
families further and further into debt, and prevent banks from taking 
advantage of consumers through confusing, misleading, and unfair terms 
and procedures. It strengthens regulation and oversight of the credit 
card industry and prohibits the unfair and deceptive practices that in 
far too many instances keep consumers mired in debt.
  Among its other provisions, the CARD Act will eliminate imposition of 
excessive fees and penalties; universal default provisions that permit 
credit card issuers to increase interest rates on cardholders in good 
standing for reasons unrelated to the cardholder's behavior with 
respect to that card; ``Any time any reason'' changes to credit card 
agreements--the bill prevents issuers from unilaterally changing the 
terms of a credit card contract for the length of the card agreement; 
and retroactive interest rate increases, unfair payment allocation 
practices, and double-cycle billing.
  The Credit Card Act also contains additional critical consumer 
protections. Among other things, the bill would: allow customers who 
close their accounts to pay under the terms existing at the time the 
account is closed; ensure that cardholders receive sufficient 
information about the terms of their account; require issuers to lower 
penalty rates that have been imposed on a cardholder after 6 months if 
the cardholder meets the obligations of the credit card terms; and 
enhance regulators' ability to protect consumers against unfair credit 
card practices by giving each federal banking agency the authority to 
prescribe regulations governing unfair or deceptive practices by the 
institutions they regulate.
  The bill also reins in irresponsible lending through a number of 
provisions aimed at protecting young consumers who lack the ability to 
repay substantial credit card debt.
  This legislation incorporates several key concepts included in the 
legislative proposals put forth by some of my colleagues, notably 
Senators Levin, Menendez, Akaka, and Tester. Each is a cosponsor of 
this legislation, as are Senators Reed, Schumer, Brown, Merkley, Kerry, 
Leahy, Durbin, Harkin, McCaskill, Whitehouse, and Casey.
  This bill has the support of a wide array of consumer advocates and 
labor organizations, including the Center for Responsible Lending, 
Connecticut Public Interest Research Group, the Connecticut Association 
for Human Services, Consumer Action, Consumer Federation of America, 
Consumers Union, Demos, the Leadership Conference on Civil Rights, the 
NAACP, the National Association of Consumer Advocates, the National 
Consumer Law Center, the National Council of LaRaza, the Service 
Employees International Union, and the U.S. Public Interest Research 
Group. The bill also has the support of the National Small Business 
Association.
  As the U.S. economy tightens, financially vulnerable families need 
the protections of the Credit CARD Act more than ever. That is what the 
American people and the people of Connecticut are demanding. For this 
reason, I urge my colleagues to join me in cosponsoring, and eventually 
in enacting the Credit CARD Act.
  Mr. LEVIN. Mr. President, I am pleased today to join my friend and 
colleague Senator Dodd in reintroducing comprehensive legislation to 
combat credit card abuses that have been hurting American consumers for 
far too long. Our bill, which is supported and cosponsored by other 
Senate colleagues as well, is called the Credit Card Accountability 
Responsibility and Disclosure Act, or CARD Act of 2009. With the 
economic hardships facing Americans today, from falling home prices to 
rising unemployment, it is more important than ever for Congress to act 
now to stop credit card abuses and protect American families and 
businesses from unfair credit card practices.
  Every day the taxpayer is being asked to foot the bill for our 
biggest banks' irresponsible lending decisions. America's banking 
giants can't be allowed to dig themselves out of the hole they are in 
by loading up American families with unfair fees and interest charges. 
Even as the prime rate has plummeted, some credit card companies are 
hiking interest rates on millions of customers who play by the rules. 
In other words, the banks are punishing the very taxpayers that they 
have come to, hat in hand, for financial rescue. It can't be allowed to 
continue.
  Credit card companies regularly use a host of unfair practices. They 
hike the interest rates of cardholders who pay on time and comply with 
their credit card agreements. They impose interest rates as high as 32 
percent, charge interest for debt that was paid on time, and, in some 
cases, apply higher interest rates retroactively to existing credit 
card debt. They pile on excessive fees and then charge interest on 
those fees. And they engage in a number of other unfair practices that 
are burying American consumers in a mountain of debt. It's long past 
time to enact legislation to protect American consumers.
  In December, the Federal Reserve and other bank regulators finally 
issued a regulation to stop some of the most egregiously unfair 
practices. For example, the new credit card regulation stops banks from 
retroactively raising interest rates on cardholders who meet their 
obligations, requires banks to mail credit card bills at least 21 days 
before the payment due date, and forces banks to more fairly apply 
consumer payments. It is a good first step, and long overdue. But the 
regulation regrettably leaves in place many blatantly unfair credit 
card practices that mire families in debt. It fails to stop, for 
example, abuses such as charging interest on debt that was paid on 
time, charging folks a fee simply to pay their bills, and hiking 
interest rates on a credit card because of a misstep on another, 
unrelated debt, a practice known as universal default. Legislation is 
needed not only to end

[[Page 3615]]

those abusive practices--which are not prohibited by the Federal 
Reserve regulation--but also to provide a statutory foundation for that 
new regulation so that it cannot be weakened in the future.
  The bill we are introducing today will not only help protect 
consumers and ensure their fair treatment, but it will also make 
certain that credit card companies willing to do the right thing are 
not put at a competitive disadvantage by companies continuing unfair 
practices.
  Some argue that Congress doesn't need to ban unfair credit card 
practices; they contend that improved disclosure alone will empower 
consumers to seek out better deals. Sunlight can be a powerful 
disinfectant, but credit cards have become such complex financial 
products that even improved disclosure will frequently not be enough to 
curb the abuses. Some practices are so confusing that consumers can't 
easily understand them. Additionally, better disclosure does not always 
lead to greater market competition, especially when essentially an 
entire industry is using and benefiting from practices that unfairly 
hurt consumers.
  In 2006, Americans used 700 million credit cards to buy about $2 
trillion in goods and services. The average family now has 5 credit 
cards. Credit cards are being used to pay for groceries, mortgage 
payments, even taxes. And they are saddling U.S. consumers, from 
college students to seniors, with a mountain of debt. The latest 
figures show that U.S. credit card debt is now approaching $1 trillion. 
These consumers are routinely being subjected to unfair practices that 
squeeze them for ever more money, sinking them further and further into 
debt.
  Congress acted boldly and quickly to bail out the banks; now is time 
to do something for the consumer. Too many American families are being 
hurt by too many unfair credit card practices to delay action any 
longer. I commend Senator Dodd, Chairman of the Senate Banking 
Committee, for tackling credit card reform, and look forward to 
Congress promptly and urgently taking the steps needed to ban unfair 
practices that are causing so much pain and financial damage to 
American families.
  Abusive credit card practices are a concern that I have been tracking 
over the past several years through the Permanent Subcommittee on 
Investigations, which I chair. The Subcommittee held two investigative 
hearings in 2007, exposing those practices, and based on those 
hearings, I introduced legislation--the Stop Unfair Practices in Credit 
Cards Act, S. 1395--to ban the outrageous credit card abuses we 
documented. I am pleased that Senators McCaskill, Leahy, Durbin, 
Bingaman, Cantwell, Whitehouse, Kohl, Brown, Kennedy, and Sanders 
joined as cosponsors. The Dodd-Levin bill we are introducing today 
incorporates almost all of S. 1395, and adds other important 
protections as well. It is the strongest credit card bill yet.
  The Dodd-Levin bill includes, for example, the following provisions 
that also appeared in the bill I introduced with Senator McCaskill and 
others. It would:
  No Interest on Debt Paid on Time. Prohibit interest charges on any 
portion of a credit card debt which the card holder paid on time during 
a grace period.
  Prohibition on Universal Default. Prohibit credit card issuers from 
increasing interest rates on cardholders in good standing for reasons 
unrelated to the cardholder's behavior with respect to that card.
  Apply Interest Rate Increases Only to Future Debt. Require increased 
interest rates to apply only to future credit card debt, and not to 
debt incurred prior to the increase.
  No Interest on Fees. Prohibit the charging of interest on credit card 
transaction fees, such as late fees and over-the-limit fees.
  Restrictions on Over-Limit Fees. Prohibit the charging of repeated 
over-limit fees for a single instance of exceeding a credit card limit.
  Prompt and Fair Crediting of Card Holder Payments. Require payments 
to be applied first to the credit card balance with the highest rate of 
interest, and to minimize finance charges.
  Fixed Credit Limits. Require card issuers to offer consumers the 
option of operating under a fixed credit limit that cannot be exceeded.
  No Pay-to-Pay Fees. Prohibit charging a fee to allow a credit card 
holder to make a payment on a credit card debt, whether payment is by 
mail, telephone, electronic transfer, or otherwise.
  The Dodd-Levin bill also includes important additional protections. 
It would:
  Require issuers to lower penalty rates that have been imposed on a 
cardholder after 6 months if the cardholder commits no further 
violations.
  Enhance protection against unfair and deceptive practices by giving 
each federal banking agency the authority to prescribe regulations 
governing unfair or deceptive practices by banks or savings and loan 
institutions.
  Improve disclosure requirements by, for example, requiring issuers to 
provide individual consumer account information and to disclose the 
period of time and total interest it will take to pay off the card 
balance if only minimum monthly payments are made.
  Protect young consumers from credit card solicitations.
  To understand why these protections are needed, I would like to 
provide a brief overview of some of the most prevalent credit card 
abuses we uncovered and some of the stories that American consumers 
shared with us during the course of the inquiries carried out by my 
Permanent Subcommittee on Investigations.
  The first case history we examined illustrates the fact that major 
credit card issuers today impose a host of fees on their cardholders, 
including late fees and over-the-limit fees that are not only 
substantial in themselves but can contribute to years of debt for 
families unable to immediately pay them.
  Wesley Wannemacher of Lima, Ohio, testified at our March 2007 
hearing. In 2001 and 2002, Mr. Wannemacher used a new credit card to 
pay for expenses mostly related to his wedding. He charged a total of 
about $3,200, which exceeded the card's credit limit by $200. He spent 
the next six years trying to pay off the debt, averaging payments of 
about $1,000 per year. As of February 2007, he'd paid about $6,300 on 
his $3,200 debt, but his billing statement showed he still owed $4,400.
  How is it possible that a man pays $6,300 on a $3,200 credit card 
debt, but still owes $4,400? Here's how. On top of the $3,200 debt, Mr. 
Wannemacher was charged by the credit card issuer about $4,900 in 
interest, $1,100 in late fees, and $1,500 in over-the-limit fees. He 
was hit 47 times with over-limit fees, even though he went over the 
limit only 3 times and exceeded the limit by only $200. Altogether, 
these fees and the interest charges added up to $7,500, which, on top 
of the original $3,200 credit card debt, produced total charges to him 
of $10,700.
  In other words, the interest charges and fees more than tripled the 
original $3,200 credit card debt, despite payments by the cardholder 
averaging $1,000 per year. Unfair? Clearly, but our investigation has 
shown that sky-high interest charges and fees are not uncommon in the 
credit card industry. While the Wannemacher account happened to be at 
Chase, penalty interest rates and fees are also employed by other major 
credit card issuers.
  The week before our March hearing, Chase decided to forgive the 
remaining debt on the Wannemacher account, and while that was great 
news for the Wannemacher family, that decision didn't begin to resolve 
the problem of excessive credit card fees and sky-high interest rates 
that trap too many hard-working families in a downward spiral of debt.
  These high fees are made worse by the industry-wide practice of 
including all fees in a consumer's outstanding balance so that they 
also incur interest charges. Those interest charges magnify the cost of 
the fees and can quickly drive a family's credit card debt far beyond 
the cost of their initial purchases. It is one thing for a bank to 
charge interest on funds lent to a consumer; charging interest on 
penalty fees goes too far.

[[Page 3616]]

  A second troubling case history involves Charles McClune, a 51-year-
old Michigan resident who is married with one child. Mr. McClune has a 
credit card account which he closed in 1998, and has been trying to pay 
off for more than 10 years. Due to excessive fees and interest rates, 
and despite paying more than four times his original credit card debt 
of less than $4,000, Mr. McClune still owes thousands on his credit 
card, with no end in sight.
  Mr. McClune first opened his credit card account while in college, in 
1986, at Michigan National Bank through a student-targeted credit 
promotion. After leaving college, the credit limit on his card was 
increased to $4,000. By 1993, although he had not exceeded the credit 
limit through purchases, Mr. McClune had missed some payments and was 
assessed interest and fees that pushed his balance over the $4,000 
limit. From 1993 to 1996, he exceeded his limit again, on several 
occasions, due to interest and fee charges. He stopped making purchases 
on the credit card in 1995.
  In 1996, Mr. McClune's credit card account was purchased by Chase 
Bank. In 1998, Mr. McClune asked Chase to close the account, and Chase 
did so. Although he never made a single purchase on his credit card 
while the account was with Chase, Chase repeatedly increased the 
interest rate on his account, including after the account was closed. 
In 2002, for example, his interest rate was about 21 percent; by 
October 2005, it had climbed to 29.99 percent where it remained for 
more than two years until March 2008; it then dropped slightly to 29.24 
percent. The higher interest rates were applied retroactively to Mr. 
McClune's closed account balance, increasing the size of his minimum 
payments and his overall debt.
  Chase also assessed Mr. McClune repeated over-the-limit and late 
fees, which began at $29 and increased over time to $39 per fee. Chase 
cannot locate statements for Mr. McClune's account prior to February 
2001, so there is no record of all the fees he has paid. The records in 
existence show that, since February 2001, he has paid 64 over-the-limit 
fees totaling $2,200. Those fees stopped after the March 2007 hearing 
before my Subcommittee, in which Chase promised to stop charging more 
than three over-the-limit fees for a single violation of a credit card 
limit. In addition to the 64 over-the-limit fees, since February 2001, 
Chase has charged Mr. McClune nearly $2,000 in late fees.
  The records also show that since 2001, Mr. McClune was contacted by 
telephone on several occasions by Chase representatives seeking payment 
on his account. If he agreed to make a payment over the telephone, 
Chase charged him--without notifying him at the time--a fee of $12 to 
$15 per telephone payment. When asked about these fees, Chase told the 
Subcommittee that the fees were imposed, because on each occasion Mr. 
McClune had spoken with a ``live advisor.'' Since 2001, he has paid a 
total of $160 in these pay-to-pay fees.
  Altogether, since 2001, Mr. McClune has paid nearly $4,400 in fees on 
a debt of less than $4,000. If the more than four years of missing 
credit card bills were available from 1996 to 2000, this fee total 
would be even higher. In addition, each fee was added to Mr. McClune's 
outstanding credit card balance, and Chase charged him interest on the 
fee amounts, thereby increasing his debt by thousands of additional 
dollars.
  In February 2001, Chase records show that Mr. McClune's credit card 
debt totaled nearly $5,200. For the next 7 years, although he did not 
pay every month, Mr. McClune paid nearly $2,000 per year toward his 
credit card debt, but was unable to pay it off. At one time, he paid 
$150 every two weeks for several weeks. Those payments did not bring 
his debt under the $4,000 credit limit, or reduce his interest rate.
  In January 2007, Mr. McClune received a letter from Chase stating 
that if he made his next payment on time, he would receive a $50 credit 
on his debt. Mr. McClune cashed out his IRA and paid $4,000 on his 
credit card debt. Because he made this payment in February, however, he 
did not receive the $50 credit for an on-time payment. Instead, he was 
assessed a $39 late fee, a $39 over-the-limit fee, and a $14.95 payment 
fee for making the $4,000 payment over the telephone.
  Mr. McClune was never offered a payment plan or a reduced interest 
rate by Chase to help him pay down his debt. His credit card bills show 
that from February 2001 to June 2008, he paid Chase a total of $15,800. 
If the four years of missing credit card bills from 1996 to 2000 were 
available, his total payments would likely exceed $20,000. In June 
2008, his credit card bill showed he was charged 29 percent interest 
and a $39 late fee on a balance of $3,300.
  How could Mr. McClune pay $15,000 to $20,000 on credit card purchases 
of less than $4,000, and still owe $3,300? His credit card statements 
since 2001 show that he was socked with over $9,700 in interest 
charges, $2,200 in over-the-limit fees, $2,000 in late fees, and $160 
in pay-to-pay fees. All of these interest charges and fees were 
assessed by Chase while the account was closed and without a single 
purchase having been made since 1995. Despite his lack of purchases and 
payments totaling $15,800, Chase records show that, from February 2001 
until June 2008, Mr. McClune was able to reduce his credit card balance 
by only about $1,850.
  Mr. McClune is not trying to avoid his debt. He has made years of 
payments on a closed credit card account that he has not used to make a 
purchase in 13 years. He has paid thousands and thousands of dollars--
four and possibly five times what he originally owed--in an attempt to 
pay off his credit card account. He is still paying. But his thousands 
of dollars in payments are not enough for his credit card issuer which 
is squeezing him for every cent it can, fair or not, for years on end.
  Tragically, Mr. McClune and Mr. Wannemacher have a lot of company in 
their credit card experiences. The many case histories investigated by 
the Subcommittee show that responsible cardholders across the country 
are being squeezed by unfair credit card lending practices involving 
excessive fee and interest charges. The current regulatory regime--even 
with the new Federal Reserve regulation--is insufficient to prevent 
these ongoing credit card abuses. Legislation is badly needed.
  Another galling practice featured in our March hearing involves the 
fact that credit card debt that is paid on time routinely accrues 
interest charges, and credit card bills that are paid on time and in 
full are routinely inflated with what I call ``trailing interest.'' 
Every single credit card issuer contacted by the Subcommittee engaged 
in both of these unfair practices which squeeze additional interest 
charges from responsible cardholders.
  Here's how it works. Suppose a consumer who usually pays his account 
in full, and owes no money on December 1st, makes a lot of purchases in 
December, and gets a January 1 credit card bill for $5,020. That bill 
is due January 15. Suppose the consumer pays that bill on time, but 
pays $5,000 instead of the full amount owed. What do you think the 
consumer owes on the next bill?
  If you thought the bill would be the $20 past due plus interest on 
the $20, you would be wrong. In fact, under industry practice today, 
the bill would likely be twice as much. That's because the consumer 
would have to pay interest, not just on the $20 that wasn't paid on 
time, but also on the $5,000 that was paid on time. In other words, the 
consumer would have to pay interest on the entire $5,020 from the first 
day of the new billing month, January 1, until the day the bill was 
paid on January 15, compounded daily. So much for a grace period! In 
addition, the consumer would have to pay the $20 past due, plus 
interest on the $20 from January 15 to January 31, again compounded 
daily. In this example, using an interest rate of 17.99 percent (which 
is the interest rate charged to Mr. Wannamacher), the $20 debt would, 
in one month, rack up $35 in interest charges and balloon into a debt 
of $55.21.
  You might ask--hold on--why does the consumer have to pay any 
interest at all on the $5,000 that was paid on time? Why does anyone 
have to pay interest on the portion of a debt that was

[[Page 3617]]

paid by the date specified in the bill--in other words, on time? The 
answer is, because that's how the credit card industry has operated for 
years, and they have gotten away with it.
  There's more. You might think that once the consumer gets gouged in 
February, paying $55.21 on a $20 debt, and pays that bill on time and 
in full, without making any new purchases, that would be the end of it. 
But you would be wrong again. It's not over.
  Even though, on February 15, the consumer paid the February bill in 
full and on time--all $55.21--the next bill has an additional interest 
charge on it, for what we call ``trailing interest.'' In this case, the 
trailing interest is the interest that accumulated on the $55.21 from 
February 1 to 15, which is the time period from the day when the bill 
was sent to the day when it was paid. The total is 38 cents. While some 
issuers will waive trailing interest if the next month's bill is less 
than $1, if a consumer makes a new purchase, a common industry practice 
is to fold the 38 cents into the end-of-month bill reflecting the new 
purchase.
  Now 38 cents isn't much in the big scheme of things. That may be why 
many consumers don't notice these types of extra interest charges or 
try to fight them. Even if someone had questions about the amount of 
interest on a bill, most consumers would be hard pressed to understand 
how the amount was calculated, much less whether it was incorrect. But 
by nickel and diming tens of millions of consumer accounts, credit card 
issuers reap large profits. I think it is indefensible to make 
consumers pay interest on debt which they pay on time. It is also just 
plain wrong to charge trailing interest when a bill is paid on time and 
in full.
  My Subcommittee's second hearing focused on another set of unfair 
credit card practices involving unfair interest rate increases. 
Cardholders who had years-long records of paying their credit card 
bills on time, staying below their credit limits, and paying at least 
the minimum amount due, were nevertheless socked with substantial 
interest rate increases. Some saw their credit card interest rates 
double or even triple. At the hearing, three consumers described this 
experience.
  Janet Hard of Freeland, Michigan, had accrued over $8,000 in debt on 
her Discover card. Although she made payments on time and paid at least 
the minimum due for over two years, Discover increased her interest 
rate from 18 percent to 24 percent in 2006. At the same time, Discover 
applied the 24 percent rate retroactively to her existing credit card 
debt, increasing her minimum payments and increasing the amount that 
went to finance charges instead of the principal debt. The result was 
that, despite making steady payments totaling $2,400 in twelve months 
and keeping her purchases to less than $100 during that same year, 
Janet Hard's credit card debt went down by only $350. Sky-high interest 
charges, inexplicably increased and unfairly applied, ate up most of 
her payments.
  Millard Glasshof of Milwaukee, Wisconsin, a retired senior citizen on 
a fixed income, incurred a debt of about $5,000 on his Chase credit 
card, closed the account, and faithfully paid down his debt with a 
regular monthly payment of $119 for years. In December 2006, Chase 
increased his interest rate from 15 percent to 17 percent, and in 
February 2007, hiked it again to 27 percent. Retroactive application of 
the 27 percent rate to Mr. Glasshof's existing debt meant that, out of 
his $119 payment, about $114 went to pay finance charges and only $5 
went to reducing his principal debt. Despite his making payments 
totaling $1,300 over twelve months, Mr. Glasshof found that, due to 
high interest rates and excessive fees, his credit card debt did not go 
down at all. Later, after the Subcommittee asked about his account, 
Chase suddenly lowered the interest rate to 6 percent. That meant, over 
a one year period, Chase had applied four different interest rates to 
his closed credit card account: 15 percent, 17 percent, 27 percent, and 
6 percent, which shows how arbitrary those rates are.
  Then there is Bonnie Rushing of Naples, Florida. For years, she had 
paid her Bank of America credit card on time, providing at least the 
minimum amount specified on her bills. Despite her record of on-time 
payments, in 2007, Bank of America nearly tripled her interest rate 
from 8 to 23 percent. The Bank said that it took this sudden action 
because Ms. Rushing's FICO credit score had dropped. When we looked 
into why it had dropped, it was apparently because she had opened 
Macy's and J. Jill credit cards to get discounts on purchases. Despite 
paying both bills on time and in full, the automated FICO system had 
lowered her credit rating, and Bank of America had followed suit by 
raising her interest rate by a factor of three. Ms. Rushing closed her 
account and complained to the Florida Attorney General, my 
Subcommittee, and her card sponsor, the American Automobile 
Association. Bank of America eventually restored the 8 percent rate on 
her closed account.
  In addition to these three consumers who testified at the hearing, 
the Subcommittee presented case histories for five other consumers who 
experienced substantial interest rate increases despite complying with 
their credit card agreements.
  I'd also like to note that, in each of these cases, the credit card 
issuer told our Subcommittee that the cardholder had been given a 
chance to opt out of the increased interest rate by closing their 
account and paying off their debt at the prior rate. But each of these 
cardholders denied receiving an opt-out notice, and when several tried 
to close their account and pay their debt at the prior rate, they were 
told they had missed the opt-out deadline and had no choice but to pay 
the higher rate. Our Subcommittee examined copies of the opt-out 
notices and found that some were filled with legal jargon, were hard to 
understand, and contained procedures that were hard to follow. When we 
asked the major credit card issuers what percentage of persons offered 
an opt-out actually took it, they told the Subcommittee that 90 percent 
did not opt out of the higher interest rate--a percentage that is 
contrary to all logic and strong evidence that current opt-out 
procedures don't work.
  The case histories presented at our hearings illustrate only a small 
portion of the abusive credit card practices going on today. Since 
early 2007, the Subcommittee has received letters and emails from 
thousands of credit card cardholders describing unfair credit card 
practices and asking for help to stop them, more complaints than I have 
received in any investigation I've conducted in more than 25 years in 
Congress. The complaints stretch across all income levels, all ages, 
and all areas of the country. The bottom line is that these abuses have 
gone on for too long. In fact, these practices have been around for so 
many years that they have in many cases become the industry norm, and 
our investigation has shown that many of the practices are too 
entrenched, too profitable, and too immune to consumer pressure for the 
companies to change them on their own.
  For these reasons, I urge my colleagues to support enactment of the 
Dodd-Levin Credit CARD Act this year. Congress has already gone to bat 
for the banks that engage in abusive credit card practices; it's time 
we go to bat for the American family.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself, Mr. Leahy, Mr. Bingaman, Mrs. 
        Boxer, Mr. Brown, Mr. Cardin, Mr. Casey, Mr. Durbin, Mr. 
        Feingold, Mr. Kennedy, Ms. Mikulski, Mr. Menendez, Mr. Merkley, 
        Mr. Sanders, Ms. Stabenow, and Mr. Whitehouse):
  S. 416. A bill to limit the use of cluster munitions; to the 
Committee on Foreign Relations.
  Mrs. FEINSTEIN. Mr. President, I rise today with my friend and 
colleague from Vermont, Senator Leahy, to re-introduce the Cluster 
Munitions Civilian Protection Act.
  The bill is also co-sponsored by Senators Bingaman, Boxer, Brown, 
Cardin, Casey, Durbin, Feingold, Kennedy, Mikulski, Menendez, Merkley, 
Sanders, Stabenow, and Whitehouse.

[[Page 3618]]

  Our legislation places common sense restrictions on the use of 
cluster bombs. It prevents any funds from being spent to use cluster 
munitions that have a failure rate of more than one percent; and unless 
the rules of engagement specify: the cluster munitions will only be 
used against clearly defined military targets and; will not be used 
where civilians are known to be present or in areas normally inhabited 
by civilians.
  The bill also requires the President to submit a report to the 
appropriate Congressional committees on the plan to clean up unexploded 
cluster bombs.
  Finally, the bill includes a national security waiver that allows the 
President to waive the prohibition on the use of cluster bombs with a 
failure rate of more than one percent, if he determines it is vital to 
protect the security of the United States to do so.
  Cluster munitions are large bombs, rockets, or artillery shells that 
contain up to hundreds of small submunitions, or individual 
``bomblets.''
  They are intended for attacking enemy troop formations and armor 
covering over a half mile radius.
  Yet, in practice, they pose a real threat to the safety of civilians 
when used in populated areas because they leave hundreds of unexploded 
bombs over a very large area and they are often inaccurate.
  Indeed, the human toll of these weapons has been terrible:
  In Laos, approximately 11,000 people, 30 percent of them children, 
have been killed or injured by U.S. cluster munitions since the Vietnam 
War ended.
  In Afghanistan, between October 2001 and November 2002, 127 civilians 
lost their lives due to cluster munitions, 70 percent of them under the 
age of 18.
  An estimated 1,220 Kuwaitis and 400 Iraqi civilians have been killed 
by cluster munitions since 1991.
  In the 2006 war in Lebanon, Israeli cluster munitions, many of them 
manufactured in the U.S., injured and killed 200 civilians.
  During the 2003 invasion of Baghdad, the last time the U.S. used 
cluster munitions, these weapons killed more civilians than any other 
type of U.S. weapon.
  The U.S. 3rd Infantry Division described cluster munitions as 
``battlefield losers'' in Iraq, because they were often forced to 
advance through areas contaminated with unexploded duds.
  During the 1991 Gulf War, U.S. cluster munitions caused more U.S. 
troop casualties than any single Iraqi weapon system, killing 22 U.S. 
servicemen.
  Yet we have seen significant progress in the effort to protect 
innocent civilians from these deadly weapons since we first introduced 
this legislation in the 110th Congress.
  In December, 95 countries came together to sign the Oslo Convention 
on Cluster Munitions which would prohibit the production, use, and 
export of cluster bombs and requires signatories to eliminate their 
arsenals within 8 years.
  This group includes key NATO allies such as Canada, the United 
Kingdom, France, and Germany, who are fighting alongside our troops in 
Afghanistan.
  In 2007, Congress passed and President Bush signed into law a 
provision from our legislation contained in the fiscal year 2008 
Consolidated Appropriations Act prohibiting the sale and transfer of 
cluster bombs with a failure rate of more than one percent.
  In addition, the Senate Appropriations Committee approved the fiscal 
year 2009 State, Foreign Operations and Related Programs Appropriations 
bill renewing the ban for another year.
  I am confident this ban will be included in an fiscal year 2009 
Omnibus appropriations bill.
  These actions will help save lives. But much more work remains to be 
done and significant obstacles remain.
  For one, the United States chose not to participate in the Oslo 
process or sign the treaty.
  The Pentagon continues to believe that cluster munitions are 
``legitimate weapons with clear military utility in combat.'' It would 
prefer that the United States work within the Geneva-based Convention 
on Certain Conventional Weapons, CCW, to negotiate limits on the use of 
cluster munitions.
  Yet these efforts have been going on since 2001 and it was the 
inability of the CCW to come to any meaningful agreement which prompted 
other countries, led by Norway, to pursue an alternative treaty through 
the Oslo process.
  A lack of U.S. leadership in this area has given cover to other major 
cluster munitions producing nations--China, Russia, India, Pakistan, 
Israel, and Egypt--who have refused to sign the Oslo Convention as 
well.
  Recognizing the United States could not remain silent in the face of 
international efforts to restrict the use of cluster bombs, Secretary 
of Defense Robert Gates issued a new policy on cluster munitions in 
June 2008 stating that after 2018, the use, sale and transfer of 
cluster munitions with a failure rate of more than 1 percent would be 
prohibited.
  The policy is a step in the right direction, but under the terms of 
this new policy, the Pentagon will still have the authority to use 
cluster bombs with high failure rates for the next ten years.
  That is unacceptable and runs counter to our values.
  The United States maintains an arsenal of an estimated 5.5 million 
cluster munitions containing 728 million submunitions which have an 
estimated failure rate of between 5 and 15 percent.
  What does that say about us, that we are still prepared to use, sell 
and transfer these weapons with well known failure rates?
  The fact is, cluster munition technologies already exist, that meet 
the one percent standard. Why do we need to wait ten years?
  This delay is especially troubling given that in 2001, former 
Secretary of Defense William Cohen issued his own policy on cluster 
munitions stating that, beginning in fiscal year 2005, all new cluster 
munitions must have a failure rate of less than one percent.
  Unfortunately, the Pentagon was unable to meet this deadline and 
Secretary Gates' new policy essentially postpones any meaningful action 
for another ten years.
  That means, if we do nothing, by 2018 close to twenty years will have 
passed since the Pentagon first recognized the threat these deadly 
weapons pose to innocent civilians.
  We can do better.
  Our legislation simply moves up the Gates policy by ten years. For 
those of my colleagues who are concerned that it may be too soon to 
enact a ban on the use of cluster bombs with failure rates of more than 
one percent, I point out again that our bill allows the President to 
waive this restriction if he determines it is vital to protect the 
security of the United States to do so.
  I would also remind my colleagues that the United States has not used 
cluster bombs in Iraq since 2003 and has observed a moratorium on their 
use in Afghanistan since 2002.
  We introduced this legislation to make this moratorium permanent for 
the entire U.S. arsenal of cluster munitions.
  We introduced this legislation for children like Hassan Hammade.
  A 13-year-old Lebanese boy, Hassan lost four fingers and sustained 
injuries to his stomach and shoulder after he picked up an unexploded 
cluster bomb in front of an orange tree.
  He said:

       I started playing with it and it blew up. I didn't know it 
     was a cluster bomb--it just looked like a burned out piece of 
     metal.
       All the children are too scared to go out now, we just play 
     on the main roads or in our homes.

  I urge my colleagues to support this legislation. We should do 
whatever we can to protect more innocent children and other civilians 
from these dangerous weapons.
  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 
placed in the Record, as follows:

                                 S. 416

       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 ``Cluster Munitions Civilian 
     Protection Act of 2009''.

[[Page 3619]]



     SEC. 2. LIMITATION ON THE USE OF CLUSTER MUNITIONS.

       No funds appropriated or otherwise available to any Federal 
     department or agency may be obligated or expended to use any 
     cluster munitions unless--
       (1) the submunitions of the cluster munitions, after 
     arming, do not result in more than 1 percent unexploded 
     ordnance across the range of intended operational 
     environments; and
       (2) the policy applicable to the use of such cluster 
     munitions specifies that the cluster munitions will only be 
     used against clearly defined military targets and will not be 
     used where civilians are known to be present or in areas 
     normally inhabited by civilians.

     SEC. 3. PRESIDENTIAL WAIVER.

       The President may waive the requirement under section 2(1) 
     if, prior to the use of cluster munitions, the President--
       (1) certifies that it is vital to protect the security of 
     the United States; and
       (2) not later than 30 days after making such certification, 
     submits to the appropriate congressional committees a report, 
     in classified form if necessary, describing in detail--
       (A) the steps that will be taken to protect civilians; and
       (B) the failure rate of the cluster munitions that will be 
     used and whether such munitions are fitted with self-destruct 
     or self-deactivation devices.

     SEC. 4. CLEANUP PLAN.

       Not later than 90 days after any cluster munitions are used 
     by a Federal department or agency, the President shall submit 
     to the appropriate congressional committees a plan, prepared 
     by such Federal department or agency, for cleaning up any 
     such cluster munitions and submunitions which fail to explode 
     and continue to pose a hazard to civilians.

     SEC. 5. APPROPRIATE CONGRESSIONAL COMMITTEES DEFINED.

       In this Act, the term ``appropriate congressional 
     committees'' means the Committee on Foreign Relations, the 
     Committee on Armed Services, and the Committee on 
     Appropriations of the Senate and the Committee on Foreign 
     Affairs, the Committee on Armed Services, and the Committee 
     on Appropriations of the House of Representatives.

  Mr. LEAHY. Mr. President, I am pleased to join with my friend from 
California, Senator Feinstein, in introducing the Cluster Munitions 
Civilian Protection Act of 2009. This is a slightly revised version of 
a bill of the same name which we introduced in 2007.
  Since December 3, 2008, when the Convention on Cluster Munitions 
opened for signature in Dublin, 96 countries have signed the treaty 
including Great Britain, Germany, Canada, Norway, Australia and other 
allies of the United States.
  The treaty is the culmination of a year of negotiations, launched by 
Norway, among 107 governments that came together to prohibit the use of 
cluster munitions that cause unacceptable harm to civilians.
  The Bush administration did not participate in the negotiations, 
which I believe was a mistake. As the Nation with the world's most 
powerful military we should not be on the sidelines while others are 
trying to protect the lives and limbs of civilians who comprise the 
vast majority of war casualties today.
  The Pentagon continues to insist that cluster munitions have military 
utility, and that the U.S. should retain the ability to use millions of 
cluster munitions in its arsenal which have estimated failure rates of 
5 to 20 percent.
  Of course, any weapon, whether cluster munitions, landmines, or even 
poison gas, has some military utility. But anyone who has seen the 
indiscriminate devastation cluster munitions cause over a wide area 
understands the unacceptable threat they can pose to civilians. These 
are not the laser guided weapons the Pentagon showed destroying their 
targets during the invasion of Baghdad.
  There is the insidious problem of cluster munitions that fail to 
explode as designed and remain as active duds, like landmines, until 
they are triggered by whoever comes into contact with them. Often it is 
an unsuspecting child, or a farmer. We saw that recently in Lebanon, 
and in Laos people are still being killed and maimed by U.S. cluster 
munitions left from the Vietnam War.
  Current law prohibits U.S. sales, exports and transfers of cluster 
munitions that have a failure rate exceeding 1 percent. That law also 
requires any sale, export or transfer agreement to include a 
requirement that the cluster munitions will be used only against 
military targets and not in areas where civilians are known to be 
present.
  Last year, the Pentagon announced that it would meet the failure rate 
requirement for U.S. use of cluster munitions in 2018. While a step 
forward, I do not believe we can justify continuing to use weapons that 
so often fail, so often kill and injure civilians, and which many of 
our allies have renounced. That is not the kind of leadership the world 
needs and expects from the United States.
  Senator Feinstein's and my bill would apply similar restrictions to 
the use of cluster munitions beginning immediately on the date of 
enactment. However, the bill does permit the President to waive the 1 
percent requirement if he certifies that it is vital to protect the 
security of the United States. I urge the Pentagon to work with us by 
supporting this reasonable step.
  I want to express my appreciation to all nations that have signed the 
treaty, and urge the Obama administration to review its policy on 
cluster munitions with a view toward putting the U.S. on a path to join 
the treaty as soon as possible. In the meantime, our legislation would 
go a long way toward putting the United States on that path.
  There are some who dismissed the Cluster Munitions Convention as a 
pointless exercise, since it does not yet have the support of the 
United States and other major powers such as Russia, China, Pakistan, 
India, and Israel. These are some of the same critics of the Ottawa 
treaty banning antipersonnel landmines, which the U.S. and the other 
countries I named have also refused to sign. But that treaty has 
dramatically reduced the number of landmines produced, used, sold and 
stockpiled, and the number of mine victims has fallen sharply. Any 
government that contemplates using landmines today does so knowing that 
it will be condemned by the international community. I suspect it is 
only a matter of time before the same is true for cluster munitions.
  It is important to note that the U.S. today has the technological 
ability to produce cluster munitions that would not be prohibited by 
the treaty. What is lacking is the political will to expend the 
necessary resources. There is no other excuse for continuing to use 
cluster munitions that cause unacceptable harm to civilians. I am 
committed to working in the Defense Appropriations Subcommittee to help 
secure the resources needed to make this new technology available.
  I want to commend Senator Feinstein who has shown real passion and 
persistence in raising this issue and seeking every opportunity to 
protect civilians from these indiscriminate weapons.
                                 ______
                                 
      By Mr. LEAHY (for himself, Mr. Specter, Mr. Kennedy, Mr. 
        Feingold, Mr. Whitehouse, and Mrs. McCaskill):
  S. 417. A bill to enact a safe, fair, and responsible state secrets 
privilege Act; to the Committee on the Judiciary.
  Mr. LEAHY. Mr. President, today, I am introducing the bipartisan 
State Secrets Protection Act. I am pleased that Senator Kennedy, who 
had so much to do with developing this proposal last Congress is an 
original cosponsor of the bill along with Senators Specter, Feingold, 
Whitehouse and McCaskill. After a lengthy debate, this bill was 
reported by the Judiciary Committee last April.
  The State secrets privilege is a common law doctrine that the 
Government can claim in court to prevent evidence that could harm 
national security from being publicly revealed. During the Bush 
administration, the State secrets privilege was used to avoid judicial 
review and skirt accountability by ending cases without consideration 
of the merits. It was used to stymie litigation at its very inception 
in cases alleging egregious Government misconduct, such as 
extraordinary rendition and warrantless eavesdropping on the 
communications of Americans.
  The 2006 case of Khaled El-Masri, who was kidnapped and transported 
against his will to Afghanistan, where he was detained and tortured as 
part of the Bush administration's extraordinary

[[Page 3620]]

rendition program, is one such example. He sued the government alleging 
unlawful detention and treatment. A district court judge dismissed the 
entire lawsuit after the Government invoked the State secrets 
privilege, solely on the basis of an ex parte declaration from the 
Director of the Central Intelligence Agency, and despite the fact that 
the Government had admitted that the rendition program exists. Mr. El-
Masri has no other remedy. Our justice system is off limits to him, and 
no judge ever reviewed any of the actual evidence.
  The State secrets privilege serves important goals where properly 
invoked. But there are serious consequences for litigants and for the 
American public when the privilege is used to terminate litigation 
alleging serious Government misconduct. For the aggrieved parties, it 
means that the courthouse doors are closed forever regardless of the 
severity of their injury. They will never have their day in court. For 
the American public, it means less accountability, because there will 
be no judicial scrutiny of improper actions of the executive, and no 
check or balance.
  The State Secrets Protection Act will help guide the courts to 
balance the Government's interests in secrecy with accountability and 
the rights of citizens to seek judicial redress. The bill does not 
restrict the Government's ability to assert the privilege in 
appropriate cases. Rather, the bill would allow judges to look at the 
actual evidence the Government submits so that they, neutral judges, 
rather than self-interested executive branch officials, would render 
the ultimate decision whether the State secrets privilege should apply. 
This is consistent with the procedure for other privileges recognized 
in our courts.
  We held a Committee hearing on this issue last year, and the 
appropriate use of this privilege remains an area of concern for me and 
for the cosponsors of this bill. In light of the pending cases where 
this privilege has been invoked, involving issues including torture, 
rendition and warrantless wiretapping, we can ill-afford to delay 
consideration of this important legislation. I hope all Senators will 
join us in supporting this bill.
  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 
placed in the Record, as follows:

                                 S. 417

       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 ``State Secrets Protection 
     Act''.

     SEC. 2. STATE SECRETS PROTECTION.

       (a) In General.--Title 28 of the United States Code is 
     amended by adding after chapter 180, the following:

                ``CHAPTER 181--STATE SECRETS PROTECTION

``Sec.
``4051. Definitions.
``4052. Rules governing procedures related to this chapter.
``4053. Procedures for answering a complaint.
``4054. Procedures for determining whether evidence is protected from 
              disclosure by the state secrets privilege.
``4055. Procedures when evidence protected by the state secrets 
              privilege is necessary for adjudication of a claim or 
              counterclaim.
``4056. Interlocutory appeal.
``4057. Security procedures.
``4058. Reporting.
``4059. Rule of construction.

     ``Sec. 4051. Definitions

       ``In this chapter--
       ``(1) the term `evidence' means any document, witness 
     testimony, discovery response, affidavit, object, or other 
     material that could be admissible in court under the Federal 
     Rules of Evidence or discoverable under the Federal Rules of 
     Civil Procedure; and
       ``(2) the term `state secret' refers to any information 
     that, if disclosed publicly, would be reasonably likely to 
     cause significant harm to the national defense or foreign 
     relations of the United States.

     ``Sec. 4052. Rules governing procedures related to this 
       chapter

       ``(a) Documents.--A Federal court--
       ``(1) shall determine which filings, motions, and 
     affidavits, or portions thereof, submitted under this chapter 
     shall be submitted ex parte;
       ``(2) may order a party to provide a redacted, 
     unclassified, or summary substitute of a filing, motion, or 
     affidavit to other parties; and
       ``(3) shall make decisions under this subsection taking 
     into consideration the interests of justice and national 
     security.
       ``(b) Hearings.--
       ``(1) In camera hearings.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     all hearings under this chapter shall be conducted in camera.
       ``(B) Exception.--A court may not conduct a hearing under 
     this chapter in camera based on the assertion of the state 
     secrets privilege if the court determines that the hearing 
     relates only to a question of law and does not present a risk 
     of revealing state secrets.
       ``(2) Ex parte hearings.--A Federal court may conduct 
     hearings or portions thereof ex parte if the court 
     determines, following in camera review of the evidence, that 
     the interests of justice and national security cannot 
     adequately be protected through the measures described in 
     subsections (c) and (d).
       ``(3) Record of hearings.--The court shall preserve the 
     record of all hearings conducted under this chapter for use 
     in the event of an appeal. The court shall seal all records 
     to the extent necessary to protect national security.
       ``(c) Attorney Security Clearances.--
       ``(1) In general.--A Federal court shall, at the request of 
     the United States, limit participation in hearings conducted 
     under this chapter, or access to motions or affidavits 
     submitted under this chapter, to attorneys with appropriate 
     security clearances, if the court determines that limiting 
     participation in that manner would serve the interests of 
     national security. The court may also appoint a guardian ad 
     litem with the necessary security clearances to represent any 
     party for the purposes of any hearing conducted under this 
     chapter.
       ``(2) Stays.--During the pendency of an application for 
     security clearance by an attorney representing a party in a 
     hearing conducted under this chapter, the court may suspend 
     proceedings if the court determines that such a suspension 
     would serve the interests of justice.
       ``(3) Court oversight.--If the United States fails to 
     provide a security clearance necessary to conduct a hearing 
     under this chapter in a reasonable period of time, the court 
     may review in camera and ex parte the reasons of the United 
     States for denying or delaying the clearance to ensure that 
     the United States is not withholding a security clearance 
     from a particular attorney or class of attorneys for any 
     reason other than protection of national security.
       ``(d) Protective Orders.--A Federal court may issue a 
     protective order governing any information or evidence 
     disclosed or discussed at any hearing conducted under this 
     chapter if the court determines that issuing such an order is 
     necessary to protect national security.
       ``(e) Opinions and Orders.--Any opinions or orders issued 
     under this chapter may be issued under seal or in redacted 
     versions if, and to the extent that, the court determines 
     that such measure is necessary to protect national security.
       ``(f) Special Masters.--A Federal court may appoint a 
     special master or other independent advisor who holds the 
     necessary security clearances to assist the court in handling 
     a matter subject to this chapter.

     ``Sec. 4053. Procedures for answering a complaint

       ``(a) Intervention.--The United States may intervene in any 
     civil action in order to protect information the Government 
     determines may be subject to the state secrets privilege.
       ``(b) Impermissible as Grounds for Dismissal Prior to 
     Hearings.--Except as provided in section 4055, the state 
     secrets privilege shall not constitute grounds for dismissal 
     of a case or claim. If a motion to dismiss or for summary 
     judgment is based in whole or in part on the state secrets 
     privilege, or may be affected by the assertion of the state 
     secrets privilege, a ruling on that motion shall be deferred 
     pending completion of the hearings provided under this 
     chapter, unless the motion can be granted on grounds 
     unrelated to, and unaffected by, the assertion of the state 
     secrets privilege.
       ``(c) Pleading State Secrets.--In answering a complaint, if 
     the United States or an officer or agency of the United 
     States is a party to the litigation, the United States may 
     plead the state secrets privilege in response to any 
     allegation in any individual claim or counterclaim if the 
     admission or denial of that allegation in that individual 
     claim or counterclaim would itself divulge a state secret to 
     another party or the public. If the United States has 
     intervened in a civil action, it may assert the state secrets 
     privilege in response to any allegation in any individual 
     claim or counterclaim if the admission or denial by a party 
     of that allegation in that individual claim or counterclaim 
     would itself divulge a state secret to another party or the 
     public. No adverse inference or admission shall be drawn from 
     a pleading of state secrets in an answer to an item in a 
     complaint.
       ``(d) Supporting Affidavit.--In each instance in which the 
     United States asserts the state secrets privilege in response 
     to 1 or more claims, it shall provide the court with an 
     affidavit signed by the head of the executive branch agency 
     with responsibility for,

[[Page 3621]]

     and control over, the asserted state secrets explaining the 
     factual basis for the assertion of the privilege and 
     attesting that personal consideration was given to the 
     assertion of the privilege. The duties of the head of an 
     executive branch agency under this subsection may not be 
     delegated.

     ``Sec. 4054. Procedures for determining whether evidence is 
       protected from disclosure by the state secrets privilege

       ``(a) Asserting the State Secrets Privilege.--The United 
     States may, in any civil action to which the United States is 
     a party or in any other civil action before a Federal or 
     State court, assert the state secrets privilege as a ground 
     for withholding information or evidence in discovery or for 
     preventing the disclosure of information through court 
     filings or through the introduction of evidence.
       ``(b) Supporting Affidavit.--In each instance in which the 
     United States asserts the state secrets privilege with 
     respect to an item of information or evidence, the United 
     States shall provide the court with an affidavit signed by 
     the head of the executive branch agency with responsibility 
     for, and control over, the state secrets involved explaining 
     the factual basis for the claim of privilege. The United 
     States shall make public an unclassified version of the 
     affidavit.
       ``(c) Hearing.--A Federal court shall conduct a hearing, 
     consistent with the requirements of section 4052, to examine 
     the items of evidence that the United States asserts are 
     subject to the state secrets privilege, as well as any 
     affidavit submitted by the United States in support of any 
     assertion of the state secrets privilege, and to determine 
     the validity of any assertion of the state secrets privilege 
     made by the United States.
       ``(d) Review of Evidence.--
       ``(1) Submission of evidence.--In addition to the affidavit 
     provided under subsection (b), and except as provided in 
     paragraph (2) of this subsection, the United States shall 
     make all evidence the United States claims is subject to the 
     state secrets privilege available for the court to review, 
     consistent with the requirements of section 4052, before any 
     hearing conducted under this section.
       ``(2) Sampling in certain cases.--If the volume of evidence 
     the United States asserts is protected by the state secrets 
     privilege precludes a timely review of each item of evidence, 
     or the court otherwise determines that a review of all of 
     that evidence is not feasible, the court may substitute a 
     sufficient sampling of the evidence if the court determines 
     that there is no reasonable possibility that review of the 
     additional evidence would change the determination on the 
     privilege claim and the evidence reviewed is sufficient to 
     enable to court to make the determination required under this 
     section.
       ``(3) Index of materials.--The United States shall provide 
     the court with a manageable index of evidence it contends is 
     subject to the state secrets privilege by formulating a 
     system of itemizing and indexing that would correlate 
     statements made in the affidavit provided under subsection 
     (b) with portions of the evidence the United States asserts 
     is subject to the state secrets privilege. The index shall be 
     specific enough to afford the court an adequate foundation to 
     review the basis of the invocation of the privilege by the 
     United States.
       ``(e) Determinations as to Applicability of State Secrets 
     Privilege.--
       ``(1) In general.--Except as provided in subsection (d)(2), 
     as to each item of evidence that the United States asserts is 
     protected by the state secrets privilege, the court shall 
     review, consistent with the requirements of section 4052, the 
     specific item of evidence to determine whether the claim of 
     the United States is valid. An item of evidence is subject to 
     the state secrets privilege if it contains a state secret, or 
     there is no possible means of effectively segregating it from 
     other evidence that contains a state secret.
       ``(2) Admissibility and disclosure.--
       ``(A) Privileged evidence.--If the court agrees that an 
     item of evidence is subject to the state secrets privilege, 
     that item shall not be disclosed or admissible as evidence.
       ``(B) Non-privileged evidence.--If the court determines 
     that an item of evidence is not subject to the state secrets 
     privilege, the state secrets privilege does not prohibit the 
     disclosure of that item to the opposing party or the 
     admission of that item at trial, subject to the Federal Rules 
     of Civil Procedure and the Federal Rules of Evidence.
       ``(3) Standard of review.--The court shall give substantial 
     weight to an assertion by the United States relating to why 
     public disclosure of an item of evidence would be reasonably 
     likely to cause significant harm to the national defense or 
     foreign relations of the United States. The court shall weigh 
     the testimony of a Government expert in the same manner as 
     the court weighs, and along with, any other expert testimony 
     in the applicable case.
       ``(f) Non-Privileged Substitute.--If the court finds that 
     material evidence is subject to the state secrets privilege 
     and it is possible to craft a non-privileged substitute for 
     that privileged material evidence that provides a 
     substantially equivalent opportunity to litigate the claim or 
     defense as would that privileged material evidence, the court 
     shall order the United States to provide such a substitute, 
     which may consist of--
       ``(1) a summary of such privileged information;
       ``(2) a version of the evidence with privileged information 
     redacted;
       ``(3) a statement admitting relevant facts that the 
     privileged information would tend to prove; or
       ``(4) any other alternative as directed by the court in the 
     interests of justice and protecting national security.
       ``(g) Refusal To Provide Non-Privileged Substitute.--In a 
     suit against the United States or an officer or agent of the 
     Unites States acting in the official capacity of that officer 
     or agent, if the court orders the United States to provide a 
     non-privileged substitute for evidence in accordance with 
     this section, and the United States fails to comply, the 
     court shall resolve the disputed issue of fact or law to 
     which the evidence pertains in the non-government party's 
     favor.

     ``Sec. 4055. Procedures when evidence protected by the state 
       secrets privilege is necessary for adjudication of a claim 
       or counterclaim

       ``After reviewing all pertinent evidence, privileged and 
     non-privileged, a Federal court may dismiss a claim or 
     counterclaim on the basis of the state secrets privilege only 
     if the court determines that--
       ``(1) it is impossible to create for privileged material 
     evidence a non-privileged substitute under section 4054(f) 
     that provides a substantially equivalent opportunity to 
     litigate the claim or counterclaim as would that privileged 
     material evidence;
       ``(2) dismissal of the claim or counterclaim would not harm 
     national security; and
       ``(3) continuing with litigation of the claim or 
     counterclaim in the absence of the privileged material 
     evidence would substantially impair the ability of a party to 
     pursue a valid defense to the claim or counterclaim.

     ``Sec. 4056. Interlocutory appeal

       ``(a) In General.--The courts of appeal shall have 
     jurisdiction of an appeal by any party from any interlocutory 
     decision or order of a district court of the United States 
     under this chapter.
       ``(b) Appeal.--
       ``(1) In general.--An appeal taken under this section 
     either before or during trial shall be expedited by the court 
     of appeals.
       ``(2) During trial.--If an appeal is taken during trial, 
     the district court shall adjourn the trial until the appeal 
     is resolved and the court of appeals--
       ``(A) shall hear argument on appeal as expeditiously as 
     possible after adjournment of the trial by the district 
     court;
       ``(B) may dispense with written briefs other than the 
     supporting materials previously submitted to the trial court;
       ``(C) shall render its decision as expeditiously as 
     possible after argument on appeal; and
       ``(D) may dispense with the issuance of a written opinion 
     in rendering its decision.

     ``Sec. 4057. Security procedures

       ``(a) In General.--The security procedures established 
     under the Classified Information Procedures Act (18 U.S.C. 
     App.) by the Chief Justice of the United States for the 
     protection of classified information shall be used to protect 
     against unauthorized disclosure of evidence protected by the 
     state secrets privilege.
       ``(b) Rules.--The Chief Justice of the United States, in 
     consultation with the Attorney General, the Director of 
     National Intelligence, and the Secretary of Defense, may 
     create additional rules or amend the rules to implement this 
     chapter and shall submit any such additional rules or 
     amendments to the Permanent Select Committee on Intelligence 
     and the Committee on the Judiciary of the House of 
     Representatives and the Select Committee on Intelligence and 
     the Committee on the Judiciary of the Senate. Any such rules 
     or amendments shall become effective 90 days after such 
     submission, unless Congress provides otherwise. Rules and 
     amendments shall comply with the letter and spirit of this 
     chapter, and may include procedures concerning the role of 
     magistrate judges and special masters in assisting courts in 
     carrying out this chapter. The rules or amendments under this 
     subsection may include procedures to ensure that a sufficient 
     number of attorneys with appropriate security clearances are 
     available in each of the judicial districts of the United 
     States to serve as guardians ad litem under section 
     4052(c)(1).

     ``Sec. 4058. Reporting

       ``(a) Assertion of State Secrets Privilege.--
       ``(1) In general.--The Attorney General shall submit to the 
     Permanent Select Committee on Intelligence and the Committee 
     on the Judiciary of the House of Representatives and the 
     Select Committee on Intelligence and the Committee on the 
     Judiciary of the Senate a report on any case in which the 
     United States asserts the state secrets privilege, not later 
     than 30 calendar days after the date of such assertion.
       ``(2) Contents.--Each report submitted under this 
     subsection shall include any affidavit filed in support of 
     the assertion of the state secrets privilege and the index 
     required under section 4054(d)(2).
       ``(3) Evidence.--Upon a request by any member of the 
     Permanent Select Committee on Intelligence or the Committee 
     on the Judiciary of the House of Representatives or

[[Page 3622]]

     the Select Committee on Intelligence or the Committee on the 
     Judiciary of the Senate, the Attorney General shall provide 
     to that member any item of evidence relating to which the 
     United States has asserted the state secrets privilege.
       ``(4) Protection of information.--An affidavit, index, or 
     item of evidence provided under this subsection may be 
     included in a classified annex or provided under any other 
     appropriate security measures.
       ``(b) Operation and Effectiveness.--
       ``(1) In general.--The Attorney General shall deliver to 
     the committees of Congress described in subsection (a) a 
     report concerning the operation and effectiveness of this 
     chapter and including suggested amendments to this chapter.
       ``(2) Deadline.--The Attorney General shall submit a report 
     under paragraph (1) not later than 1 year after the date of 
     enactment of this chapter, and every year there after until 
     the date that is 3 years after that date of enactment. After 
     the date that is 3 years after that date of enactment, the 
     Attorney General shall submit a report under paragraph (1) as 
     necessary.

     ``Sec. 4059. Rule of construction

       ``Nothing in this chapter--
       ``(1) is intended to supersede any further or additional 
     limit on the state secrets privilege under any other 
     provision of law; or
       ``(2) may be construed to preclude a court from dismissing 
     a claim or counterclaim or entering judgment on grounds 
     unrelated to, and unaffected by, the assertion of the state 
     secrets privilege.''.
       (b) Technical and Conforming Amendment.--The table of 
     chapters for part VI of title 28, United States Code, is 
     amended by adding at the end the following:

181. State secrets protection..................................4051....

     SEC. 3. SEVERABILITY.

       If any provision of this Act, any amendment made by the 
     Act, or the application of such provision or amendment to any 
     person or circumstances is held to be invalid, the remainder 
     of this Act, the amendments made by the Act, and the 
     application of such provisions to persons or circumstances 
     other than those to which it is held invalid, shall not be 
     affected thereby.

     SEC. 4. APPLICATION TO PENDING CASES.

       The amendments made by this Act shall apply to any civil 
     case pending on or after the date of enactment of this Act.

  Mr. FEINGOLD. Mr. President, I am proud to join Senators Leahy, 
Specter, and Kennedy in introducing the State Secrets Protection Act of 
2009. This bill establishes uniform procedures for courts to use when 
evaluating governmental assertions of the state secrets privilege in 
civil litigation. It takes an important step toward restoring the rule 
of law by ensuring that the privilege will be used only to protect true 
state secrets, and not as a means for the Government to avoid 
accountability for its actions.
  In a democracy, the public should have the right to know what its 
government is doing. That should be the rule, and secrecy should be the 
rare exception, reserved for the very few cases in which the national 
security is truly at stake. Unfortunately, the Bush administration 
stood that presumption on its head, cloaking its actions in secrecy 
whenever possible and grudgingly submitting to public scrutiny only 
when it couldn't be avoided. The ``state secrets'' privilege was a 
favorite weapon in that administration's arsenal of secrecy.
  None of us disputes that information may properly be withheld as a 
``state secret'' when disclosing the information would cause grave 
damage to national security. The problem arises when the privilege is 
abused and invoked to shield Government wrongdoing. Indeed, that is 
exactly what happened the first time the Supreme Court recognized the 
privilege in 1953, in the case of United States v. Reynolds. The 
Government had been sued after a military aircraft crash killed nine 
people, and it invoked the ``state secrets'' privilege to shield an 
internal investigative report. Decades later, when the report was 
declassified, it revealed nothing that could fairly be characterized as 
a ``state secret'' but it did reveal faulty maintenance of the 
aircraft.
  Abuses like these can be prevented, but only if the courts fulfill 
their responsibility to carefully review claims of privilege. In the 
Reynolds case, no court actually looked at the supposedly privileged 
report. That simple step would have prevented the miscarriage of 
justice that ensued. Yet, despite the fact that courts have the 
acknowledged authority to order in camera review of the evidence, fewer 
than one third of courts have actually exercised that option when the 
Government has asserted the ``state secrets'' privilege. And a host of 
other tools available to the courts to evaluate and respond to claims 
of privilege have been employed inconsistently at best, resulting in a 
confused body of case law that preserves accountability in some cases 
while granting the government a ``get out of jail free'' card in 
others.
  In the last Congress, Senators Kennedy, Specter, and Leahy introduced 
the State Secrets Protection Act to standardize the procedures courts 
use in cases where the Government asserts the ``state secrets'' 
privilege and to ensure adequate scrutiny of such claims. The bill was 
reported by the Judiciary Committee last April after extensive debate. 
Much of the credit for this legislation goes to Senator Kennedy, whose 
unfailing commitment to the rule of law inspired both the concept and 
the particulars of this bill. I had the honor of working with him to 
develop this legislation, and it is a pleasure now to cosponsor its 
reintroduction, with Senator Leahy as the lead sponsor.
  The bill makes use of existing tools that are available to the courts 
when handling national security information. Perhaps the most 
fundamental of these is in camera review of the allegedly privileged 
evidence, which the bill requires. The idea here is simple: Determining 
what information the evidence contains is the threshold step in 
determining whether that evidence is privileged. This step is far too 
important to be left to a party with a built-in conflict of interest. 
Just as a court would never accept a private litigant's description of 
his or her evidence in lieu of the evidence itself, the court should 
not rely solely on the Government's description of the evidence when 
the Government has a clear interest in the outcome of the case.
  That courts may examine sensitive national security information in 
camera is beyond any serious dispute. Since 1974, the Freedom of 
Information Act has allowed courts to engage in in camera review of any 
records that the Government claims are exempt from disclosure under the 
Act. Courts have also reviewed the most sensitive national security 
information in criminal cases, pursuant to the Classified Information 
Procedures Act. In fact, courts handle highly classified information on 
a regular basis. There is no legitimate justification for skipping this 
crucial step.
  The bill also requires courts to hold in camera hearings on the 
question of whether the evidence is privileged. Based on the court's 
previous review of the evidence, the court may conduct the hearing ex 
parte i.e., without any participation by the plaintiff or the 
plaintiff's lawyers but only if the court finds that national security 
cannot adequately be protected through other means. For example, the 
court may limit attendance at the hearing to attorneys with the 
requisite clearances, or the court may appoint a guardian ad litem to 
represent the plaintiff's interests at the hearing. The bill thus 
preserves the adversarial process to the maximum extent consistent with 
protecting national security.
  That's important, for at least two reasons. First, our justice system 
is premised on the notion of fairness, and that principle of fairness 
is undermined any time a party to litigation is excluded from the 
proceedings. But fairness isn't the only principle at stake. For all 
its complications and occasional inefficiencies, the adversarial 
process remains the best system for getting to the truth. If only one 
party is present at the hearing, the court is more likely to reach the 
wrong result it's as simple as that.
  Taken together, the requirements of in camera review of the evidence 
and an in camera hearing ensure that the Government's claim of 
privilege is evaluated fairly and thoroughly. A fair, thorough review 
is necessary, because the bill makes absolutely clear that once 
evidence is found to be privileged, it cannot be disclosed, however 
great the plaintiff's need for the evidence may be. The interest of 
national security, once the court determines that interest is truly at 
stake, is given absolute protection.

[[Page 3623]]

  That may mean the end of the lawsuit but it may not. As Congress 
recognized when it passed the Classified Information Procedures Act, 
courts have many tools at their disposal to move litigation forward 
even when some of the evidence cannot be disclosed. For example, courts 
can require the Government to submit non-privileged substitutes for the 
privileged evidence, such as summaries of the evidence, redacted 
versions, or admissions of certain facts. Under the bill, where the 
court finds that it would be feasible for the Government to craft a 
non-privileged substitute for privileged evidence, it may order the 
Government to do so. Again, however, the court can never compel the 
production of privileged evidence. If the Government refuses to craft a 
non-privileged substitute, the remedy is the same one that exists in 
the CIPA: the court may resolve the relevant issue of fact or law 
against the Government.
  The bill does not allow courts to dismiss lawsuits at the pleadings 
stage based on a claim of ``subject matter privilege.'' As the Fourth 
Circuit has explained, ``subject matter privilege'' applies if the case 
is so pervaded with state secrets, it would be impossible to conduct 
the lawsuit without revealing them. Such cases undoubtedly exist. But 
until all of the relevant evidence is identified and the privilege 
determinations are made, any conclusion that a case will be pervaded 
with state secrets is simply a prediction. Only by proceeding through 
discovery and pre-trial hearings can that prediction be replaced with 
certainty. And this can be done without revealing a single state 
secret, since the bill allows privilege determinations to be made in 
camera and ex parte.
  The bill does not change the ordinary rules of summary judgment. If a 
court determines, after discovery and pre-trial hearings are completed, 
that the key evidence is privileged and the plaintiff cannot prove his 
or her case using non-privileged evidence, then the Government may move 
for summary judgment and prevail. The bill thus retains the concept of 
``subject matter privilege'' it simply requires a more thorough testing 
of the claim.
  Nor does the bill ever put the Government to the ``Hobson's choice'' 
of either revealing privileged evidence or conceding the lawsuit. Under 
the bill, even if the plaintiff has made out a prima facie case, the 
court can and must dismiss the lawsuit if the Government would need to 
disclose privileged evidence in order to present a valid defense. The 
Government's interests, as well as the national security, are thus 
scrupulously protected.
  Finally, the bill facilitates congressional oversight by requiring 
the executive branch to share with the Judiciary and Intelligence 
Committees the documents it makes available to the courts: the 
Government affidavit explaining why the evidence is privileged, the 
index of privileged evidence, and, where requested, the evidence 
itself. This information will help Congress monitor the Government's 
use of the privilege and assess the need for any further legislation.
  Perhaps even more important, it will provide a means of 
accountability in those cases where the privilege prevents a court from 
ruling on allegations of Government wrongdoing. The idea of simply 
letting such allegations go unaddressed should be profoundly troubling 
to anyone who respects the rule of law yet for eight years, the 
response of the Bush administration was little more than a shrug. This 
bill rejects such a cavalier attitude toward the rule of law. The 
citizens of this country should never again be told that there is 
simply no remedy for wrongs their Government has committed. In cases 
where the courts cannot provide that remedy, then Congress should step 
in and providing the necessary information to the relevant committees 
of Congress will enable that to happen.
  I am pleased that both the new Attorney General, Eric Holder, and the 
nominee for Associate Attorney General, Thomas Perrelli, have indicated 
a willingness to review this bill and work with us on it. I hope that 
it will be possible to fashion legislation that the Administration can 
support. The public deserves to have confidence that the state secrets 
privilege is not going to be used to cover up Government misconduct. 
This bill provides the courts a system for resolving claims of 
privilege that will inspire that confidence.
  A country where the Government need not answer to allegations of 
wrongdoing is a country that has strayed dangerously far from the rule 
of law. We must ensure that the ``state secrets'' privilege does not 
become a license for the Government to evade the laws that we pass. 
This bill accomplishes that goal, while simultaneously providing the 
strongest of protections to those items of evidence that truly qualify 
as state secrets. I urge all of my colleagues to support the rule of 
law by supporting this legislation.
                                 ______
                                 
      By Ms. KLOBUCHAR (for herself and Mr. Hatch):
  S. 418. A bill to require secondary metal recycling agents to keep 
records of their transactions in order to deter individuals and 
enterprises engaged in the theft and interstate sale of stolen 
secondary metal, and for other purposes; to the Committee on Commerce, 
Science, and Transportation.
  Mr. HATCH. Mr. President, I rise today to introduce with my friend 
from Minnesota, Senator Amy Klobuchar, the Secondary Metal Theft 
Prevention Act of 2009.
  Once again, I am partnering with Senator Klobuchar to combat metal 
theft in our country. Last Congress we introduced the Copper Theft 
Prevention Act of 2008, S. 3666, which focused solely on copper theft. 
Since then, after a series of meetings with industry stakeholders, we 
concluded that the bill would be more effective if it were expanded to 
address secondary metal thefts, including those involving copper.
  There is no doubt that we are living in difficult economic times. As 
we witness the unfortunate job losses spreading across the country, I 
am mindful of those who are struggling to make ends meet. Unfortunately 
some, motivated by quick profits and a variety of vulnerable targets, 
are engaging in the fast-growing crime of metal theft.
  On the surface, stealing precious metal, like copper, appears to be a 
relatively small theft. However, metal thieves compromise U.S. critical 
infrastructure by targeting electrical sub-stations, cellular towers, 
telephone land lines, railroads, water wells, construction sites, and 
vacant homes--all for fast cash.
  Some argue that there is no need for this legislation because metal 
is being traded at low prices. I disagree. As we know, the market 
shifts and prices will eventually increase as demand surges. Moreover, 
law enforcement officials confirm that thieves are only stealing more 
metal to offset current metal prices.
  On September 15, 2008, the Federal Bureau of Investigation released 
an unclassified intelligence assessment entitled, Copper Thefts 
Threaten U.S. Critical Infrastructure.
  This assessment states that ``thieves are typically individuals or 
organized groups who operate independently or in loose association with 
each other and commit thefts in conjunction with fencing activities and 
the sale of contraband. Organized groups of drug addicts, gang members, 
and metal thieves are conducting large scale thefts from electric 
utilities, warehouses, foreclosed and vacant properties, and oil well 
sites for tens of thousands of dollars in illicit proceeds per month.''
  I am mindful of the hardworking scrap metal dealers in my home state. 
Recycling secondary metal not only generates revenue but is 
environmentally friendly and saves energy, it takes a lot less energy 
to melt down secondary metal and recycle it than it does to produce new 
metal.
  Take for example the City Creek project in downtown Salt Lake City, 
Utah. It is my understanding that when the construction contractors 
tore down the downtown malls to make way for the 20-acre retail-office-
residential complex, more than half of what came down was reused either 
in the City Creek development or somewhere else. Steel frames were sold 
as scrap metal, which was recycled and used for other purposes.

[[Page 3624]]

  Utah metal recyclers deal with hundreds of people and thousands of 
pounds of metal on a regular basis. I imagine in some cases it is 
difficult to tell if the scrap metal is stolen, especially if a 
customer has, what appears to be, a legitimate story. I know that many 
of Utah's scrap metal dealers are not turning a blind eye to this 
problem. In fact, several metal recycling companies have partnered with 
local law enforcement and use a theft alert system to warn and watch 
for reported stolen items. I commend them for their efforts and hope 
that police, prosecutors, and members of the metal recycling industry 
continue to communicate and work together to combat metal theft along 
the Wasatch Front.
  Yet on the Federal level, we need a baseline from which all states 
must operate. This is important because many states in the Union do not 
have metal theft laws and lure thieves across State lines. It should be 
noted that the proposed bill does not preempt states from enacting 
their own laws.
  I believe the proposed legislation will help tighten-up how secondary 
metal transactions are performed across the country and, in return, 
send a clear message that metal theft will be met with serious 
consequences. The bill calls for enforcement by the Federal Trade 
Commission and gives state attorneys general the ability to bring a 
civil action to enforce the provisions of the legislation.
  This bill also contains a ``Do Not Buy'' provision wherein specific 
items listed cannot be purchased by scrap metal dealers unless sellers 
establish, by written documentation, that they are authorized to sell 
the secondary metal in question.
  Additionally, the bill requires scrap metal dealers to keep records 
of secondary metal purchases, including the name and address of the 
seller, the date of the transaction, the quantity and description of 
the secondary metal being purchased, an identifying number from a 
driver's license or other government-issued identification and, where 
possible, the make, model and tag number of the vehicle used to deliver 
the metal to the dealer.
  Secondary metal dealers must maintain these records for a minimum of 
two years from the date of the transaction and make them available to 
law enforcement agencies for use in tracking down and prosecuting 
secondary metal theft crimes.
  There is real concern about how easy it is to access cash in scrap 
metal transactions. For this reason, the bill requires that checks will 
be the method of payment for transactions over $75. While that may 
sound low for some, it is important to recognize that it takes a lot of 
secondary metal to obtain even $75 in return.
  To discourage multiple cash transactions from one seller, the bill 
limits metal dealers from paying cash to the same seller within a 48-
hour period. The intent of this provision is not to be a hardship on 
the honest seller. The purpose is to dissuade some sellers from going 
around the bill's check payment requirement by making multiple cash 
transactions. Again, we must remove the incentives for thieves to 
access fast cash.
  I am aware that some scrap metal dealers do not want to issue checks 
for fear of check fraud or additional transactional costs. Senator 
Klobuchar and I have given careful consideration to these concerns and 
have consulted law enforcement officials to determine how best to 
proceed. We believe that checks are a valuable benefit to law 
enforcement because they provide trace evidence by creating a paper 
trail, a signature, and possibly even a fingerprint.
  Let me conclude my remarks by saying that considering our country's 
serious economic situation, I believe we need to ensure that our 
critical infrastructure is not viewed as a treasure trove for desperate 
metal thieves.
  I am committed to moving this bill forward and hope that my 
colleagues will join me in perfecting this bill as it moves through the 
legislative process.
  Mr. President, I ask unanimous consent that the support material be 
printed in the Record.
  There being no objection, the material was ordered to be placed in 
the Record, as follows:

           Copper Thefts Threaten US Critical Infrastructure


                               Scope Note

       The assessment highlights copper theft and its impact on US 
     critical infrastructure. Copper thefts are occurring 
     throughout the United States and are perpetrated by 
     individuals and organized groups motivated by quick profits 
     and a variety of vulnerable targets. Information for the 
     assessment was developed through May 2008 from the following 
     sources: FBI and Open sources.


                    Source and Confidence Statement

       Reporting relative to the impact of copper thefts on US 
     critical infrastructure was derived from the FBI and open 
     sources. The FBI has high confidence that the FBI source 
     reporting used to prepare the assessment is reliable. The FBI 
     also has high confidence in the reliability of information 
     derived from open-source reporting.


                             Key Judgments

       Copper thieves are threatening US critical infrastructure 
     by targeting electrical substations, cellular towers, 
     telephone land lines, railroads, water wells, construction 
     sites, and vacant homes for lucrative profits. The theft of 
     copper from these targets disrupts the flow of electricity, 
     telecommunications, transportation, water supply, heating, 
     and security and emergency services and presents a risk to 
     both public safety and national security.
       Copper thieves are typically individuals or organized 
     groups who operate independently or in loose association with 
     each other and commit thefts in conjunction with fencing 
     activities and the sale of contraband. Organized groups of 
     drug addicts, gang members, and metal thieves are conducting 
     large scale thefts from electric utilities. warehouses, 
     foreclosed or vacant properties, and oil well sites for tens 
     of thousands of dollars in illicit proceeds per month.
       The demand for copper from developing nations such as China 
     and India is creating a robust international copper trade. 
     Copper thieves are exploiting this demand and the resulting 
     price surge by stealing and selling the metal for high 
     profits to recyclers across the United States. As the global 
     supply of copper continues to tighten, the market for illicit 
     copper will likely increase.


           Copper Thefts Threaten US Critical Infrastructure

       Copper thieves are threatening US critical infrastructure 
     by targeting electrical substations, cellular towers, 
     telephone land lines, railroads, water wells, construction 
     sites, and vacant homes for lucrative profits. Copper thefts 
     from these targets have increased since 2006; and they are 
     currently disrupting the flow of electricity, 
     telecommunications, transportation, water supply, heating, 
     and security and emergency services, and present a risk to 
     both public safety and national security.
       According to open-source reporting, on 4 April 2008, five 
     tornado warning sirens in the Jackson, Mississippi, area did 
     not warn residents of an approaching tornado because copper 
     thieves had stripped the sirens of copper wiring, thus 
     rendering them inoperable.
       According to open-source reporting, on 20 March 2008, 
     nearly 4,000 residents in Polk County, Florida, were left 
     without power after copper wire was stripped from an active 
     transformer at a Tampa Electric Company (TECO) power 
     facility. Monetary losses to TECO were approximately 
     $500,000.
       According to agricultural industry reporting, as of March 
     2007, farmers in Pinal County, Arizona, were experiencing a 
     copper theft epidemic as perpetrators stripped copper from 
     their water irrigation wells and pumps resulting in the loss 
     of crops and high replacement costs. Pinal County's 
     infrastructure loss due to copper theft was $10 million.


               Criminal Groups Involved in Copper Thefts

       Copper thieves are typically individuals or organized 
     groups who operate independently or in loose association with 
     each other and commit thefts in conjunction with fencing 
     activities and the sale of contraband. Organized groups of 
     drug addicts, gang members, and metal thieves are conducting 
     large scale thefts from electric utilities, warehouses, 
     foreclosed and vacant properties, and oil well sites for tens 
     of thousands of dollars in illicit proceeds per month.
       According to open sources, as recently as April 2008, 
     highly organized theft rings specializing in copper theft 
     from houses and warehouses were operating in Minneapolis, 
     Minnesota. These rings or gangs hit several houses per day, 
     yielding more than $20,000 in profits per month. The targets 
     were most often foreclosed homes.
       Open-source reporting from March 2008 indicates that an 
     organized copper theft ring used the Cuyahoga County 
     Sheriff's foreclosure lists to pinpoint targets in Cleveland, 
     Ohio. Perpetrators had 200 pounds of stolen copper in their 
     van, road maps, and tools. Three additional perpetrators were 
     found to be using the US Department of Housing and Urban 
     Development's list of mortgage and bank foreclosures to 
     target residences in Cleveland, South Euclid, Cleveland 
     Heights, and other cities in Ohio.


                        Global Demand Increasing

       China, India, and other developing nations are driving the 
     demand for raw materials

[[Page 3625]]

     such as copper and creating a robust international trade. 
     Copper thieves are receiving cash from recyclers who often 
     fill orders for commercial scrap dealers. Recycled copper 
     flows from these dealers to smelters, mills, foundries, ingot 
     makers, powder plants, and other industries to be re-used in 
     the United States or for supplying the international raw 
     materials demand. As the global supply of copper continues to 
     tighten, the market for illicit copper will likely increase.
       Open-source reporting from February 2007 indicates that the 
     global copper supply tightened due to a landslide at the 
     Freeport-McMoran Copper and Gold mine in Grasberg, Indonesia 
     in October 2003 and a worker's strike at the El Abra copper 
     mine in Clama, Chile in November 2004. These events 
     contributed to copper production shortfalls and led to an 
     increase in recycling, which in turn created a market for 
     copper.
       Open-source reporting from October 2006 indicated that the 
     demand for copper from China increased substantially due to 
     the construction of facilities for the 2008 Olympics.
       Open-source reporting indicated that from January 2001 to 
     March 2008, the price of copper increased more than 500 
     percent. This has prompted unscrupulous and sometimes 
     unwitting independent and commercial scrap metal dealers to 
     pay record prices for copper, regardless of its origin, 
     making the material a more attractive target for theft.


                                Outlook

       The global demand for copper, combined with the economic 
     and home foreclosure crisis, is creating numerous 
     opportunities for copper-theft perpetrators to exploit 
     copper-rich targets. Organized copper theft rings may 
     increasingly target vacant or foreclosed homes as they are a 
     lucrative source of unattended copper inventory. Current 
     economic conditions, such as the rising cost of gasoline, 
     food, and consumer goods, the declining housing market, the 
     ease through which copper is exchanged for cash, and the lack 
     of a significant deterrent effect, make it likely that copper 
     thefts will remain a lucrative financial resource for 
     criminals.
       Industry officials have taken some countermeasures to 
     address the copper theft problem. These include the 
     installment of physical and technological security measures, 
     increased collaboration among the various industry sectors, 
     and the development of law enforcement partnerships. Many 
     states are also taking countermeasures by enacting or 
     enhancing legislation regulating the scrap industry--to 
     include increased recordkeeping and penalties for copper 
     theft and noncompliant scrap dealers However, there are 
     limited resources available to enforce these laws, and a very 
     small percentage of perpetrators are arrested and convicted. 
     Additionally, as copper thefts are typically addressed as 
     misdemeanors, those individuals convicted pay relatively low 
     fines and serve short prison terms

                          ____________________