[Congressional Record (Bound Edition), Volume 156 (2010), Part 5]
[Senate]
[Pages 6249-6260]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. ENZI (for himself and Ms. Landrieu):
  S. 3257. A bill to authorize the Department of Labor's voluntary 
protection program and to expand the program to include more small 
businesses; to the Committee on Health, Education, Labor, and Pensions.
  Mr. ENZI. Mr. President, I rise today to introduce legislation with 
Senator Landrieu known as the Voluntary Protection Program Act. This 
bill will codify the Voluntary Protection Program, or VPP, expand it to 
include more small businesses, and incorporate recent GAO 
recommendations for program improvements.
  No program has been more successful in creating such a culture of 
safety in the workplace than VPP. Since it was created in 1982, 
Republican and Democrat administrations alike have fostered its growth 
to now 2,284 worksites, a quarter of which are unionized, and it covers 
almost a million employees. The bipartisan support for VPP continues 
into this Congress. Last week, the Senate Budget Committee unanimously 
approved an amendment to preserve VPP budget authority and Chairman 
Conrad noted that the program actually saves taxpayer dollars.
  Worksites that pass the rigorous evaluation process and become VPP 
sites have an average Days Away Restricted or Transferred, DART, case 
rate of 52 percent below the average for its industry. In recent years, 
smaller worksites have made significant strides in VPP, increasing from 
28 percent of VPP sites in 2003 to 39 percent in 2008.
  The innovative program doesn't just keep employees safer; as I have 
noted, it also saves both the VPP companies and the taxpayers money. In 
2007, Federal Agency VPP participants saved the government more than 
$59 million by avoiding injuries and private sector VPP participants 
saved more than $300 million. Additionally, when workplaces make the 
significant commitment to safety required by VPP, it allows OSHA to 
focus its resources where they are most needed. VPP Participant 
employers contribute a great deal to the VPP program expenditures. VPP 
participants have assigned approximately 1,200 of their own employees 
to act as OSHA Special Government Employees, SGEs, who conduct onsite 
evaluations for OSHA.
  Despite the strong bipartisan support for VPP and its very positive 
results, the need for this legislation has become painfully clear. The 
administration's fiscal year 2011 Budget Request proposed eliminating 
the small amount

[[Page 6250]]

it takes to administer VPP--$3.125 million and sought to transfer the 
35 FTEs it takes to run the program to other functions. The budget 
proposal stated that OSHA was seeking ``alternative non-federal forms 
of funding'' and working closely with stakeholders, but, to date, no 
plan to secure such funding has been offered by the administration or 
in either the House or Senate authorizing committee. To the extent such 
``alternative funding'' is bureaucratic code for a fee-based system 
such a proposal is simply not workable and completely 
counterproductive. Participating employers already voluntarily absorb 
significant costs to participate in the current program. Asking 
businesses--particularly small businesses, and particularly in the 
current economic environment--to take on more costs will only result in 
them dropping out of the program. Further still, a fee-based system 
simply destroys the credibility and integrity of VPP participation for 
employees.
  I would like to thank Senator Landrieu for working with me on this 
important legislation.
                                 ______
                                 
      By Mr. REED:
  S. 3258. A bill to amend the securities laws to modernize and 
strengthen investor protection, and for other purposes; to the 
Committee on Banking, Housing, and Urban Affairs.
  Mr. REED. Mr. President, the recent lawsuit by the Securities and 
Exchange Commission, SEC, against Goldman Sachs underscores that much 
still needs to be done to improve transparency and restore confidence 
in our financial system. Indeed, that is why we must have the debate on 
Wall Street reform. The nearly \1/2\ of all U.S. households that own 
securities deserve a strong cop on the beat that has the tools it needs 
to go after swindlers and scam artists, and pursue the difficult cases 
arising from our increasingly complex financial markets. Our economy's 
success depends in no small part on restoring confidence in our capital 
markets and a smoothly operating capital formation process.
  The bill I am introducing this afternoon, the Modernizing and 
Strengthening Investor Protection Act, would improve the ability of the 
SEC to protect investors by strengthening its ability to bring 
enforcement actions, addressing issues revealed by the recent Madoff 
fraud, and modernizing its ability to obtain critical information. In 
particular, it would enhance the ability of the SEC to hire market 
experts, strengthen oversight of fund custodians, modernize the SEC's 
ability to obtain information from the firms it oversees, and clarify 
and enhance SEC penalties and other authorities.
  This legislation mirrors a bill that Representative Kanjorski 
introduced and worked to include in the House version of Wall Street 
reform. I urge my colleagues to take a look at my legislation during 
the next few days, as I plan to introduce it as an amendment to the 
Wall Street reform bill that is about to be considered by the Senate.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3258

       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 ``Modernizing and 
     Strengthening Investor Protection Act of 2010''.

     SEC. 2. STRENGTHENING ENFORCEMENT BY THE COMMISSION.

       (a) Nationwide Service of Subpoenas.--
       (1) Securities act of 1933.--Section 22(a) of the 
     Securities Act of 1933 (15 U.S.C. 77v(a)) is amended by 
     inserting after the second sentence the following: ``In any 
     action or proceeding instituted by the Commission under this 
     title in a United States district court for any judicial 
     district, a subpoena issued to compel the attendance of a 
     witness or the production of documents or tangible things (or 
     both) at a hearing or trial may be served at any place within 
     the United States. Rule 45(c)(3)(A)(ii) of the Federal Rules 
     of Civil Procedure shall not apply to a subpoena issued under 
     the preceding sentence.''.
       (2) Securities exchange act of 1934.--Section 27 of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78aa) is amended 
     by inserting after the third sentence the following: ``In any 
     action or proceeding instituted by the Commission under this 
     title in a United States district court for any judicial 
     district, a subpoena issued to compel the attendance of a 
     witness or the production of documents or tangible things (or 
     both) at a hearing or trial may be served at any place within 
     the United States. Rule 45(c)(3)(A)(ii) of the Federal Rules 
     of Civil Procedure shall not apply to a subpoena issued under 
     the preceding sentence.''.
       (3) Investment company act of 1940.--Section 44 of the 
     Investment Company Act of 1940 (15 U.S.C. 80a-43) is amended 
     by inserting after the fourth sentence the following: ``In 
     any action or proceeding instituted by the Commission under 
     this title in a United States district court for any judicial 
     district, a subpoena issued to compel the attendance of a 
     witness or the production of documents or tangible things (or 
     both) at a hearing or trial may be served at any place within 
     the United States. Rule 45(c)(3)(A)(ii) of the Federal Rules 
     of Civil Procedure shall not apply to a subpoena issued under 
     the preceding sentence.''.
       (4) Investment advisers act of 1940.--Section 214 of the 
     Investment Advisers Act of 1940 (15 U.S.C. 80b-14) is amended 
     by inserting after the third sentence the following: ``In any 
     action or proceeding instituted by the Commission under this 
     title in a United States district court for any judicial 
     district, a subpoena issued to compel the attendance of a 
     witness or the production of documents or tangible things (or 
     both) at a hearing or trial may be served at any place within 
     the United States. Rule 45(c)(3)(A)(ii) of the Federal Rules 
     of Civil Procedure shall not apply to a subpoena issued under 
     the preceding sentence.''.
       (b) Authority to Impose Civil Penalties in Cease and Desist 
     Proceedings.--
       (1) Under the securities act of 1933.--Section 8A of the 
     Securities Act of 1933 (15 U.S.C. 77h-1) is amended by adding 
     at the end the following new subsection:
       ``(g) Authority to Impose Money Penalties.--
       ``(1) Grounds.--In any cease-and-desist proceeding under 
     subsection (a), the Commission may impose a civil penalty on 
     a person if the Commission finds, on the record, after notice 
     and opportunity for hearing, that--
       ``(A) such person--
       ``(i) is violating or has violated any provision of this 
     title, or any rule or regulation issued under this title; or
       ``(ii) is or was a cause of the violation of any provision 
     of this title, or any rule or regulation thereunder; and
       ``(B) such penalty is in the public interest.
       ``(2) Maximum amount of penalty.--
       ``(A) First tier.--The maximum amount of a penalty for each 
     act or omission described in paragraph (1) shall be $7,500 
     for a natural person or $75,000 for any other person.
       ``(B) Second tier.--Notwithstanding subparagraph (A), the 
     maximum amount of penalty for each such act or omission shall 
     be $75,000 for a natural person or $375,000 for any other 
     person, if the act or omission described in paragraph (1) 
     involved fraud, deceit, manipulation, or deliberate or 
     reckless disregard of a regulatory requirement.
       ``(C) Third tier.--Notwithstanding subparagraphs (A) and 
     (B), the maximum amount of penalty for each such act or 
     omission shall be $150,000 for a natural person or $725,000 
     for any other person, if--
       ``(i) the act or omission described in paragraph (1) 
     involved fraud, deceit, manipulation, or deliberate or 
     reckless disregard of a regulatory requirement; and
       ``(ii) such act or omission directly or indirectly resulted 
     in--

       ``(I) substantial losses or created a significant risk of 
     substantial losses to other persons; or
       ``(II) substantial pecuniary gain to the person who 
     committed the act or omission.

       ``(3) Evidence concerning ability to pay.--In any 
     proceeding in which the Commission may impose a penalty under 
     this section, a respondent may present evidence of the 
     ability of the respondent to pay such penalty. The Commission 
     may, in its discretion, consider such evidence in determining 
     whether such penalty is in the public interest. Such evidence 
     may relate to the extent of the ability of the respondent to 
     continue in business and the collectability of a penalty, 
     taking into account any other claims of the United States or 
     third parties upon the assets of the respondent and the 
     amount of the assets of the respondent.''.
       (2) Under the securities exchange act of 1934.--Section 
     21B(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78u-
     2(a)) is amended--
       (A) by striking the matter immediately following paragraph 
     (4);
       (B) in the matter preceding paragraph (1), by inserting 
     after ``opportunity for hearing,'' the following: ``that such 
     penalty is in the public interest and'';
       (C) by redesignating paragraphs (1) through (4) as 
     subparagraphs (A) through (D), respectively, and adjusting 
     the subparagraph margins accordingly;
       (D) by striking ``In any proceeding'' and inserting the 
     following:
       ``(1) In general.--In any proceeding''; and
       (E) by adding at the end the following:

[[Page 6251]]

       ``(2) Cease-and-desist proceedings.--In any proceeding 
     instituted under section 21C against any person, the 
     Commission may impose a civil penalty, if the Commission 
     finds, on the record after notice and opportunity for 
     hearing, that such person--
       ``(A) is violating or has violated any provision of this 
     title, or any rule or regulation issued under this title; or
       ``(B) is or was a cause of the violation of any provision 
     of this title, or any rule or regulation issued under this 
     title.''.
       (3) Under the investment company act of 1940.--Section 
     9(d)(1) of the Investment Company Act of 1940 (15 U.S.C. 80a-
     9(d)(1)) is amended--
       (A) by striking the matter immediately following 
     subparagraph (C);
       (B) in the matter preceding subparagraph (A), by inserting 
     after ``opportunity for hearing,'' the following: ``that such 
     penalty is in the public interest, and'';
       (C) by redesignating subparagraphs (A) through (C) as 
     clauses (i) through (iii), respectively, and adjusting the 
     clause margins accordingly;
       (D) by striking ``In any proceeding'' and inserting the 
     following:
       ``(A) In general.--In any proceeding''; and
       (E) by adding at the end the following:
       ``(B) Cease-and-desist proceedings.--In any proceeding 
     instituted pursuant to subsection (f) against any person, the 
     Commission may impose a civil penalty if the Commission 
     finds, on the record, after notice and opportunity for 
     hearing, that such person--
       ``(i) is violating or has violated any provision of this 
     title, or any rule or regulation issued under this title; or
       ``(ii) is or was a cause of the violation of any provision 
     of this title, or any rule or regulation issued under this 
     title.''.
       (4) Under the investment advisers act of 1940.--Section 
     203(i)(1) of the Investment Advisers Act of 1940 (15 U.S.C. 
     80b-3(i)(1)) is amended--
       (A) by striking the undesignated matter immediately 
     following subparagraph (D);
       (B) in the matter preceding subparagraph (A), by inserting 
     after ``opportunity for hearing,'' the following: ``that such 
     penalty is in the public interest and'';
       (C) by redesignating subparagraphs (A) through (D) as 
     clauses (i) through (iv), respectively, and adjusting the 
     clause margins accordingly;
       (D) by striking ``In any proceeding'' and inserting the 
     following:
       ``(A) In general.--In any proceeding''; and
       (E) by adding at the end the following new subparagraph:
       ``(B) Cease-and-desist proceedings.--In any proceeding 
     instituted pursuant to subsection (k) against any person, the 
     Commission may impose a civil penalty if the Commission 
     finds, on the record, after notice and opportunity for 
     hearing, that such person--
       ``(i) is violating or has violated any provision of this 
     title, or any rule or regulation issued under this title; or
       ``(ii) is or was a cause of the violation of any provision 
     of this title, or any rule or regulation issued under this 
     title.''.
       (c) Formerly Associated Persons.--
       (1) Member or employee of the municipal securities 
     rulemaking board.--Section 15B(c)(8) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78o-4(c)(8)) is amended by 
     striking ``any member or employee'' and inserting ``any 
     person who is, or at the time of the alleged violation or 
     abuse was, a member or employee''.
       (2) Person associated with a government securities broker 
     or dealer.--Section 15C(c) of the Securities Exchange Act of 
     1934 (15 U.S.C. 78o-5(c)) is amended--
       (A) in paragraph (1)(C), by striking ``any person 
     associated, or seeking to become associated,'' and inserting 
     ``any person who is, or at the time of the alleged misconduct 
     was, associated or seeking to become associated''; and
       (B) in paragraph (2)--
       (i) in subparagraph (A), by inserting ``, seeking to become 
     associated, or, at the time of the alleged misconduct, 
     associated or seeking to become associated'' after ``any 
     person associated''; and
       (ii) in subparagraph (B), by inserting ``, seeking to 
     become associated, or, at the time of the alleged misconduct, 
     associated or seeking to become associated'' after ``any 
     person associated''.
       (3) Person associated with a member of a national 
     securities exchange or registered securities association.--
     Section 21(a)(1) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78u(a)(1)) is amended, in the first sentence, by 
     inserting ``, or, as to any act or practice, or omission to 
     act, while associated with a member, formerly associated'' 
     after ``member or a person associated''.
       (4) Participant of a registered clearing agency.--Section 
     21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 
     78u(a)(1)) is amended, in the first sentence, by inserting 
     ``or, as to any act or practice, or omission to act, while a 
     participant, was a participant,'' after ``in which such 
     person is a participant,''.
       (5) Officer or director of a self-regulatory 
     organization.--Section 19(h)(4) of the Securities Exchange 
     Act of 1934 (15 U.S.C. 78s(h)(4)) is amended--
       (A) by striking ``any officer or director'' and inserting 
     ``any person who is, or at the time of the alleged misconduct 
     was, an officer or director''; and
       (B) by striking ``such officer or director'' and inserting 
     ``such person''.
       (6) Officer or director of an investment company.--Section 
     36(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-
     35(a)) is amended--
       (A) by striking ``a person serving or acting'' and 
     inserting ``a person who is, or at the time of the alleged 
     misconduct was, serving or acting''; and
       (B) by striking ``such person so serves or acts'' and 
     inserting ``such person so serves or acts, or at the time of 
     the alleged misconduct, so served or acted''.
       (7) Person associated with a public accounting firm.--
       (A) Sarbanes-oxley act of 2002 amendment.--Section 2(a)(9) 
     of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(9)) is 
     amended by adding at the end the following:
       ``(C) Investigative and enforcement authority.--For 
     purposes of sections 3(c), 101(c), 105, and 107(c) and the 
     rules of the Board and Commission issued thereunder, except 
     to the extent specifically excepted by such rules, the terms 
     defined in subparagraph (A) shall include any person 
     associated, seeking to become associated, or formerly 
     associated with a public accounting firm, except that--
       ``(i) the authority to conduct an investigation of such 
     person under section 105(b) shall apply only with respect to 
     any act or practice, or omission to act, by the person while 
     such person was associated or seeking to become associated 
     with a registered public accounting firm; and
       ``(ii) the authority to commence a disciplinary proceeding 
     under section 105(c)(1), or impose sanctions under section 
     105(c)(4), against such person shall apply only with respect 
     to--

       ``(I) conduct occurring while such person was associated or 
     seeking to become associated with a registered public 
     accounting firm; or
       ``(II) non-cooperation, as described in section 105(b)(3), 
     with respect to a demand in a Board investigation for 
     testimony, documents, or other information relating to a 
     period when such person was associated or seeking to become 
     associated with a registered public accounting firm.''.

       (B) Securities exchange act of 1934 amendment.--Section 
     21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 
     78u(a)(1)) is amended by striking ``or a person associated 
     with such a firm'' and inserting ``, a person associated with 
     such a firm, or, as to any act, practice, or omission to act, 
     while associated with such firm, a person formerly associated 
     with such a firm''.
       (8) Supervisory personnel of an audit firm.--Section 
     105(c)(6) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
     7215(c)(6)) is amended--
       (A) in subparagraph (A), by striking ``the supervisory 
     personnel'' and inserting ``any person who is, or at the time 
     of the alleged failure reasonably to supervise was, a 
     supervisory person''; and
       (B) in subparagraph (B)--
       (i) by striking ``No associated person'' and inserting ``No 
     current or former supervisory person''; and
       (ii) by striking ``any other person'' and inserting ``any 
     associated person''.
       (9) Member of the public company accounting oversight 
     board.--Section 107(d)(3) of the Sarbanes-Oxley Act of 2002 
     (15 U.S.C. 7217(d)(3)) is amended by striking ``any member'' 
     and inserting ``any person who is, or at the time of the 
     alleged misconduct was, a member''.
       (d) Extraterritorial Jurisdiction of the Antifraud 
     Provisions of the Federal Securities Laws.--
       (1) Under the securities act of 1933.--Section 22 of the 
     Securities Act of 1933 (15 U.S.C. 77v(a)) is amended by 
     adding at the end the following new subsection:
       ``(c) Extraterritorial Jurisdiction.--The district courts 
     of the United States and the United States courts of any 
     Territory shall have jurisdiction of an action or proceeding 
     brought or instituted by the Commission or the United States 
     alleging a violation of section 17(a) involving--
       ``(1) conduct within the United States that constitutes 
     significant steps in furtherance of the violation, even if 
     the securities transaction occurs outside the United States 
     and involves only foreign investors; or
       ``(2) conduct occurring outside the United States that has 
     a foreseeable substantial effect within the United States.''.
       (2) Under the securities exchange act of 1934.--Section 27 
     of the Securities Exchange Act of 1934 (15 U.S.C. 78aa) is 
     amended--
       (A) by striking ``The district'' and inserting the 
     following:
       ``(a) In General.--The district''; and
       (B) by adding at the end the following new subsection:
       ``(b) Extraterritorial Jurisdiction.--The district courts 
     of the United States and the United States courts of any 
     Territory shall have jurisdiction of an action or proceeding 
     brought or instituted by the Commission or the United States 
     alleging a violation of the antifraud provisions of this 
     title involving--
       ``(1) conduct within the United States that constitutes 
     significant steps in furtherance

[[Page 6252]]

     of the violation, even if the securities transaction occurs 
     outside the United States and involves only foreign 
     investors; or
       ``(2) conduct occurring outside the United States that has 
     a foreseeable substantial effect within the United States.''.
       (3) Under the investment advisers act of 1940.--Section 214 
     of the Investment Advisers Act of 1940 (15 U.S.C. 80b-14) is 
     amended--
       (A) by striking ``The district'' and inserting the 
     following:
       ``(a) In General.--The district''; and
       (B) by adding at the end the following new subsection:
       ``(b) Extraterritorial Jurisdiction.--The district courts 
     of the United States and the United States courts of any 
     Territory shall have jurisdiction of an action or proceeding 
     brought or instituted by the Commission or the United States 
     alleging a violation of section 206 involving--
       ``(1) conduct within the United States that constitutes 
     significant steps in furtherance of the violation, even if 
     the violation is committed by a foreign adviser and involves 
     only foreign investors; or
       ``(2) conduct occurring outside the United States that has 
     a foreseeable substantial effect within the United States.''.
       (e) Control Person Liability Under the Securities Exchange 
     Act of 1934.--Section 20(a) of the Securities Exchange Act of 
     1934 (15 U.S.C. 78t(a)) is amended by inserting after 
     ``controlled person is liable'' the following: ``(including 
     to the Commission in any action brought under paragraph (1) 
     or (3) of section 21(d))''.
       (f) Aiding and Abetting Under the Securities Laws.--
       (1) Under the securities act of 1933.--Section 15 of the 
     Securities Act of 1933 (15 U.S.C. 77o) is amended--
       (A) by striking ``Every person who'' and inserting ``(a) 
     Controlling Persons.--Every person who''; and
       (B) by adding at the end the following:
       ``(b) Prosecution of Persons Who Aid and Abet Violations.--
     For purposes of any action brought by the Commission under 
     subparagraph (b) or (d) of section 20, any person that 
     knowingly or recklessly provides substantial assistance to 
     another person in violation of a provision of this Act, or of 
     any rule or regulation issued under this Act, shall be deemed 
     to be in violation of such provision to the same extent as 
     the person to whom such assistance is provided.''.
       (2) Under the investment company act of 1940.--Section 48 
     of the Investment Company Act of 1940 (15 U.S.C. 80a-48) is 
     amended by redesignating subsection (b) as subsection (c) and 
     inserting after subsection (a) the following:
       ``(b) For purposes of any action brought by the Commission 
     under subsection (d) or (e) of section 42, any person that 
     knowingly or recklessly provides substantial assistance to 
     another person in violation of a provision of this Act, or of 
     any rule or regulation issued under this Act, shall be deemed 
     to be in violation of such provision to the same extent as 
     the person to whom such assistance is provided.''.
       (3) Under the investment advisers act.--Section 209 of the 
     Investment Advisers Act of 1940 (15 U.S.C. 80b-9) is amended 
     by inserting at the end the following new subsection:
       ``(f) Aiding and Abetting.--For purposes of any action 
     brought by the Commission under subsection (e), any person 
     that knowingly or recklessly has aided, abetted, counseled, 
     commanded, induced, or procured a violation of any provision 
     of this Act, or of any rule, regulation, or order hereunder, 
     shall be deemed to be in violation of such provision, rule, 
     regulation, or order to the same extent as the person that 
     committed such violation.''.
       (4) Under the securities exchange act of 1934.--Section 
     20(e) of the Securities Exchange Act of 1934 (15 U.S.C. 
     78t(e)) is amended by inserting ``or recklessly'' after 
     ``knowingly''.

     SEC. 3. ADDRESSING ISSUES REVEALED BY THE MADOFF FRAUD.

       (a) Revision to Recordkeeping Rule.--
       (1) Investment company act of 1940 amendments.--Section 31 
     of the Investment Company Act of 1940 (15 U.S.C. 80a-30) is 
     amended--
       (A) in subsection (a)(1), by adding at the end the 
     following: ``Each person having custody or use of the 
     securities, deposits, or credits of a registered investment 
     company shall maintain and preserve all records that relate 
     to the custody or use by such person of the securities, 
     deposits, or credits of the registered investment company for 
     such period or periods as the Commission, by rule or 
     regulation, may prescribe, as necessary or appropriate in the 
     public interest or for the protection of investors.''; and
       (B) in subsection (b), by adding at the end the following:
       ``(4) Records of persons with custody or use.--
       ``(A) In general.--Records of persons having custody or use 
     of the securities, deposits, or credits of a registered 
     investment company that relate to such custody or use, are 
     subject at any time, or from time to time, to such reasonable 
     periodic, special, or other examinations and other 
     information and document requests by representatives of the 
     Commission, as the Commission deems necessary or appropriate 
     in the public interest or for the protection of investors.
       ``(B) Certain persons subject to other regulation.--Any 
     person that is subject to regulation and examination by a 
     Federal financial institution regulatory agency (as such term 
     is defined under section 212(c)(2) of title 18, United States 
     Code) may satisfy any examination request, information 
     request, or document request described under subparagraph 
     (A), by providing to the Commission a detailed listing, in 
     writing, of the securities, deposits, or credits of the 
     registered investment company within the custody or use of 
     such person.''.
       (2) Investment advisers act of 1940 amendment.--Section 204 
     of the Investment Advisers Act of 1940 (15 U.S.C. 80b-4) is 
     amended by adding at the end the following new subsection:
       ``(d) Records of Persons With Custody or Use.--
       ``(1) In general.--Records of persons having custody or use 
     of the securities, deposits, or credits of a client, that 
     relate to such custody or use, are subject at any time, or 
     from time to time, to such reasonable periodic, special, or 
     other examinations and other information and document 
     requests by representatives of the Commission, as the 
     Commission deems necessary or appropriate in the public 
     interest or for the protection of investors.
       ``(2) Certain persons subject to other regulation.--Any 
     person that is subject to regulation and examination by a 
     Federal financial institution regulatory agency (as such term 
     is defined under section 212(c)(2) of title 18, United States 
     Code) may satisfy any examination request, information 
     request, or document request described under paragraph (1), 
     by providing the Commission with a detailed listing, in 
     writing, of the securities, deposits, or credits of the 
     client within the custody or use of such person.''.
       (b) Streamlined Hiring Authority for Market Specialists.--
       (1) Appointment authority.--Section 3114 of title 5, United 
     States Code, is amended by striking the section heading and 
     all that follows through the end of subsection (a) and 
     inserting the following:

     ``Sec. 3114. Appointment of candidates to certain positions 
       in the competitive service by the Securities and Exchange 
       Commission

       ``(a) Applicability.--This section applies with respect to 
     any position of accountant, economist, and securities 
     compliance examiner at the Commission that is in the 
     competitive service, and any position at the Commission in 
     the competitive service that requires specialized knowledge 
     of financial and capital market formation or regulation, 
     financial market structures or surveillance, or information 
     technology.''.
       (2) Clerical amendment.--The table of sections for chapter 
     31 of title 5, United States Code, is amended by striking the 
     item relating to section 3114 and inserting the following:

``3114. Appointment of candidates to positions in the competitive 
              service by the Securities and Exchange Commission.''.

       (3) Pay authority.--The Commission may set the rate of pay 
     for experts and consultants appointed under the authority of 
     section 3109 of title 5, United States Code, in the same 
     manner in which it sets the rate of pay for employees of the 
     Commission.
       (c) SIPC Reforms.--
       (1) Removing the distinction between claims for cash and 
     claims for securities.--The Securities Investor Protection 
     Act of 1970 (15 U.S.C. 78aaa et seq.) is amended--
       (A) in section 8(e)(4)(B) (15 U.S.C. 78fff-2(e)(4)(B)), by 
     striking ``for cash or securities'';
       (B) in section 9(a) (15 U.S.C. 78fff-3(a))--
       (i) by striking paragraph (1); and
       (ii) by redesignating paragraphs (2) through (5) as 
     paragraphs (1) through (4), respectively; and
       (C) in section 16(2)(B) (15 U.S.C. 78lll(2)(B)), by 
     striking ``for cash or securities''.
       (2) Liquidation of a carrying broker-dealer.--Section 
     5(a)(3) of the Securities Investor Protection Act of 1970 (15 
     U.S.C. 78eee(a)(3)) is amended--
       (A) by striking the undesignated matter immediately 
     following subparagraph (B);
       (B) in subparagraph (A), by striking ``any member of SIPC'' 
     and inserting ``the member'';
       (C) in subparagraph (B), by striking the comma at the end 
     and inserting a period;
       (D) by striking ``If SIPC'' and inserting the following:
       ``(A) In general.--SIPC may, upon notice to a member of 
     SIPC, file an application for a protective decree with any 
     court of competent jurisdiction specified in section 21(e) or 
     27 of the Securities Exchange Act of 1934, except that no 
     such application shall be filed with respect to a member, the 
     only customers of which are persons whose claims could not be 
     satisfied by SIPC advances pursuant to section 9, if SIPC''; 
     and
       (E) by adding at the end the following:
       ``(B) Consent required.--No member of SIPC that has a 
     customer may enter into an insolvency, receivership, or 
     bankruptcy proceeding, under Federal or State law, without 
     the specific consent of SIPC.''.

[[Page 6253]]



     SEC. 4. ENHANCED ABILITY OF COMMISSION TO OBTAIN NEEDED 
                   INFORMATION.

       (a)  Investment Company Examination.--Section 31(b)(1) of 
     the Investment Company Act of 1940 (15 U.S.C. 80a-30(b)(1)) 
     is amended to read as follows:
       ``(1) In general.--The following records shall be subject, 
     at any time, or from time to time, to such reasonable 
     periodic, special, or other examinations by representatives 
     of the Commission as the Commission deems necessary or 
     appropriate in the public interest or for the protection of 
     investors:
       ``(A) All records of a registered investment company.
       ``(B) All records of a underwriter, broker, dealer, or 
     investment adviser that is a majority-owned subsidiary of a 
     registered investment company.
       ``(C) All records required to be maintained and preserved 
     by a investment adviser that is not a majority-owned 
     subsidiary of a registered investment company.
       ``(D) All records required to be maintained and preserved 
     by a depositor of a registered investment company.
       ``(E) All records required to be maintained and preserved 
     by a principal underwriter for a registered investment 
     company (other than a closed-end company).''.
       (b) Expanded Access to Grand Jury Information.--Chapter 215 
     of title 18, United States Code, is amended by adding at the 
     end the following:

     ``Sec. 3323. Access to grand jury information

       ``(a) Disclosure.--
       ``(1) In general.--Upon motion of an attorney for the 
     government, a court may direct disclosure of matters 
     occurring before a grand jury during an investigation of 
     conduct that may constitute a violation of any provision of 
     the securities laws to the Securities and Exchange Commission 
     for use in relation to any matter within the jurisdiction of 
     the Commission.
       ``(2) Substantial need required.--A court may issue an 
     order under paragraph (1) only upon a finding of a 
     substantial need in the public interest.
       ``(b) Use of Matter.--A person to whom a matter has been 
     disclosed under this section shall not use such matter, other 
     than for the purpose for which such disclosure was 
     authorized.
       ``(c) Definitions.--As used in this section--
       ``(1) the terms `attorney for the government' and `grand 
     jury information' have the meanings given to those terms in 
     section 3322 of title 18, United States Code; and
       ``(2) the term `securities laws' has the same meaning as in 
     section 3(a)(47) of the Securities Exchange Act of 1934.''.
       (c) Enhanced Authority of the Securities and Exchange 
     Commission to Conduct Surveillance and Risk Assessment.--
       (1) Securities exchange act of 1934.--Section 17(b) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78q(b)) is amended 
     by adding at the end the following:
       ``(5) Surveillance and risk assessment.--All persons 
     described in subsection (a) are subject, at any time, or from 
     time to time, to such reasonable periodic, special, or other 
     information and document requests by representatives of the 
     Commission as the Commission, by rule or order, deems 
     necessary or appropriate to conduct surveillance or risk 
     assessments of the securities markets, persons registered 
     with the Commission under this title, or otherwise in 
     furtherance of the purposes of this title.''.
       (2) Investment company act of 1940.--Section 31(b) of the 
     Investment Company Act of 1940 (15 U.S.C. 80a-30(b)) is 
     amended by adding at the end the following:
       ``(5) Surveillance and risk assessment.--All persons 
     described in subsection (a) are subject at any time, or from 
     time to time, to such reasonable periodic, special, or other 
     information and document requests by representatives of the 
     Commission as the Commission, by rule or order, deems 
     necessary or appropriate to conduct surveillance or risk 
     assessments of the securities markets, persons registered 
     with the Commission under this title, or otherwise in 
     furtherance of the purposes of this title.''.
       (3) Document requests.--Section 204 of the Investment 
     Advisers Act of 1940 (15 U.S.C. 80b-4) is amended by adding 
     at the end the following:
       ``(e) Surveillance and Risk Assessment.--All persons 
     described in subsection (a) are subject at any time, or from 
     time to time, to such reasonable periodic, special, or other 
     information and document requests by representatives of the 
     Commission as the Commission, by rule or order, deems 
     necessary or appropriate to conduct surveillance or risk 
     assessments of the securities markets, persons registered 
     with the Commission under this title, or otherwise in 
     furtherance of the purposes of this title.''.
       (d) Protecting Confidentiality of Materials Submitted to 
     the Commission.--
       (1) Securities exchange act of 1934.--Section 24 of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78x) is amended--
       (A) in subsection (d), by striking ``subsection (e)'' and 
     inserting ``subsection (f)'';
       (B) by redesignating subsection (e) as subsection (f); and
       (C) by inserting after subsection (d) the following:
       ``(e) Records Obtained From Registered Persons.--
       ``(1) In general.--Except as provided in subsection (f), 
     the Commission shall not be compelled to disclose records or 
     information obtained pursuant to section 17(b), or records or 
     information based upon or derived from such records or 
     information, if such records or information have been 
     obtained by the Commission for use in furtherance of the 
     purposes of this title, including surveillance, risk 
     assessments, or other regulatory and oversight activities.
       ``(2) Treatment of information.--For purposes of section 
     552 of title 5, United States Code, this subsection shall be 
     considered a statute described in subsection (b)(3)(B) of 
     such section 552. Collection of information pursuant to 
     section 17 shall be an administrative action involving an 
     agency against specific individuals or agencies pursuant to 
     section 3518(c)(1) of title 44, United States Code.''.
       (2) Investment company act of 1940.--Section 31 of the 
     Investment Company Act of 1940 (15 U.S.C. 80a-30) is 
     amended--
       (A) by striking subsection (c) and inserting the following:
       ``(c) Limitations on Disclosure by Commission.--
     Notwithstanding any other provision of law, the Commission 
     shall not be compelled to disclose any records or information 
     provided to the Commission under this section, or records or 
     information based upon or derived from such records or 
     information, if such records or information have been 
     obtained by the Commission for use in furtherance of the 
     purposes of this title, including surveillance, risk 
     assessments, or other regulatory and oversight activities. 
     Nothing in this subsection authorizes the Commission to 
     withhold information from the Congress or prevent the 
     Commission from complying with a request for information from 
     any other Federal department or agency requesting the 
     information for purposes within the scope of jurisdiction of 
     that department or agency, or complying with an order of a 
     court of the United States in an action brought by the United 
     States or the Commission. For purposes of section 552 of 
     title 5, United States Code, this section shall be considered 
     a statute described in subsection (b)(3)(B) of such section 
     552. Collection of information pursuant to section 31 shall 
     be an administrative action involving an agency against 
     specific individuals or agencies pursuant to section 
     3518(c)(1) of title 44, United States Code.'';
       (B) by striking subsection (d); and
       (C) by redesignating subsections (e) and (f) as subsections 
     (d) and (e), respectively.
       (3) Investment advisers act of 1940.--Section 210 of the 
     Investment Advisers Act of 1940 (15 U.S.C. 80b-10) is amended 
     by adding at the end the following:
       ``(d) Limitations on Disclosure by the Commission.--
     Notwithstanding any other provision of law, the Commission 
     shall not be compelled to disclose any records or information 
     provided to the Commission under this section, or records or 
     information based upon or derived from such records or 
     information, if such records or information have been 
     obtained by the Commission for use in furtherance of the 
     purposes of this title, including surveillance, risk 
     assessments, or other regulatory and oversight activities. 
     Nothing in this subsection authorizes the Commission to 
     withhold information from the Congress or prevent the 
     Commission from complying with a request for information from 
     any other Federal department or agency requesting the 
     information for purposes within the scope of jurisdiction of 
     that department or agency, or complying with an order of a 
     court of the United States in an action brought by the United 
     States or the Commission. For purposes of section 552 of 
     title 5, United States Code, this section shall be considered 
     a statute described in subsection (b)(3)(B) of such section 
     552. Collection of information pursuant to section 31 shall 
     be an administrative action involving an agency against 
     specific individuals or agencies pursuant to section 
     3518(c)(1) of title 44, United States Code.''.
       (e) Expansion of Audit Information to Be Produced and 
     Exchanged.--Section 106 of the Sarbanes-Oxley Act of 2002 (15 
     U.S.C. 7216) is amended--
       (1) by striking subsection (b) and inserting the following:
       ``(b) Production of Documents.--
       ``(1) Production by foreign firms.--If a foreign public 
     accounting firm issues an audit report, performs audit work, 
     conducts interim reviews, or performs material services upon 
     which a registered public accounting firm relies in the 
     conduct of an audit or interim review, the foreign public 
     accounting firm shall--
       ``(A) produce its audit work papers and all other documents 
     related to any such audit work or interim review to the 
     Commission or the Board; and
       ``(B) be subject to the jurisdiction of the courts of the 
     United States for purposes of enforcement of any request for 
     such documents.
       ``(2) Other production.--Any registered public accounting 
     firm that relies, in whole or in part, on the work of a 
     foreign public accounting firm in issuing an audit report, 
     performing audit work, or conducting an interim review, 
     shall--
       ``(A) produce the audit work papers of the foreign public 
     accounting firm and all other

[[Page 6254]]

     documents related to any such work in response to a request 
     for production by the Commission or the Board; and
       ``(B) secure the agreement of any foreign public accounting 
     firm to such production, as a condition of the reliance by 
     the registered public accounting firm on the work of that 
     foreign public accounting firm.'';
       (2) by redesignating subsection (d) as subsection (g); and
       (3) by inserting after subsection (c) the following:
       ``(d) Service of Requests or Process.--
       ``(1) In general.--Any foreign public accounting firm that 
     performs work for a domestic registered public accounting 
     firm shall furnish to the domestic registered public 
     accounting firm a written irrevocable consent and power of 
     attorney that designates the domestic registered public 
     accounting firm as an agent upon whom may be served any 
     process, pleadings, or other papers in any action brought to 
     enforce this section.
       ``(2) Specific audit work.--Any foreign public accounting 
     firm that issues an audit report, performs audit work, 
     performs interim reviews, or performs material services upon 
     which a registered public accounting firm relies in the 
     conduct of an audit or interim review, shall designate to the 
     Commission or the Board an agent in the United States upon 
     whom may be served any process, pleading, or other papers in 
     any action brought to enforce this section or any request by 
     the Commission or the Board under this section.
       ``(e) Sanctions.--A willful refusal to comply, in whole in 
     or in part, with any request by the Commission or the Board 
     under this section, shall be deemed a violation of this Act.
       ``(f) Other Means of Satisfying Production Obligations.--
     Notwithstanding any other provisions of this section, the 
     staff of the Commission or the Board may allow a foreign 
     public accounting firm that is subject to this section to 
     meet production obligations under this section through 
     alternate means, such as through foreign counterparts of the 
     Commission or the Board.''.
       (f) Sharing Privileged Information With Other 
     Authorities.--Section 24 of the Securities Exchange Act of 
     1934 (15 U.S.C. 78x) is amended--
       (1) in subsection (d), as amended by subsection (d)(1)(A), 
     by striking ``subsection (f)'' and inserting ``subsection 
     (g)'';
       (2) in subsection (e), as added by subsection (d)(1)(C), by 
     striking ``subsection (f)'' and inserting ``subsection (g)'';
       (3) by redesignating subsection (f) as subsection (g); and
       (4) by inserting after subsection (e) the following:
       ``(f) Sharing Privileged Information With Other 
     Authorities.--
       ``(1) Privileged information provided by the commission.--
     The Commission shall not be deemed to have waived any 
     privilege applicable to any information by transferring that 
     information to or permitting that information to be used by--
       ``(A) any agency (as defined in section 6 of title 18, 
     United States Code);
       ``(B) the Public Company Accounting Oversight Board;
       ``(C) any self-regulatory organization;
       ``(D) any foreign securities authority;
       ``(E) any foreign law enforcement authority; or
       ``(F) any State securities or law enforcement authority.
       ``(2) Nondisclosure of privileged information provided to 
     the commission.--The Commission shall not be compelled to 
     disclose privileged information obtained from any foreign 
     securities authority, or foreign law enforcement authority, 
     if the authority has in good faith determined and represented 
     to the Commission that the information is privileged.
       ``(3) Nonwaiver of privileged information provided to the 
     commission.--
       ``(A) In general.--Federal agencies, State securities and 
     law enforcement authorities, self-regulatory organizations, 
     and the Public Company Accounting Oversight Board shall not 
     be deemed to have waived any privilege applicable to any 
     information by transferring that information to or permitting 
     that information to be used by the Commission.
       ``(B) Exception.--The provisions of subparagraph (A) shall 
     not apply to a self-regulatory organization or the Public 
     Company Accounting Oversight Board with respect to 
     information used by the Commission in an action against such 
     organization.
       ``(4) Definitions.--For purposes of this subsection--
       ``(A) the term `privilege' includes any work-product 
     privilege, attorney-client privilege, governmental privilege, 
     or other privilege recognized under Federal, State, or 
     foreign law;
       ``(B) the term `foreign law enforcement authority' means 
     any foreign authority that is empowered under foreign law to 
     detect, investigate or prosecute potential violations of law; 
     and
       ``(C) the term `State securities or law enforcement 
     authority' means the authority of any State or territory that 
     is empowered under State or territory law to detect, 
     investigate, or prosecute potential violations of law.''.

     SEC. 5. MODERNIZATION OF INVESTOR PROTECTIONS.

       (a) Municipal Securities.--Section 15B of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78o-4) is amended--
       (1) by striking ``(b)(1) Not later'' and all that follows 
     through ``succeed such initial members.'' and inserting the 
     following:
       ``(b) Municipal Securities Rulemaking Board.--
       ``(1) Composition of the municipal securities rulemaking 
     board.--Not later than October 1, 2010, the Municipal 
     Securities Rulemaking Board (hereinafter in this section 
     referred to as the `Board'), shall--
       ``(A) be composed of members who shall perform the duties 
     set forth in this section; and
       ``(B) shall consist of--
       ``(i) a majority of independent public representatives, at 
     least 1 of whom shall be representative of investors in 
     municipal securities and at least 1 of whom shall be 
     representative of issuers of municipal securities (which 
     members are hereinafter referred to as `public 
     representatives');
       ``(ii) at least 1 individual who is representative of 
     municipal securities brokers and municipal securities dealers 
     that are not banks or subsidiaries, departments or divisions 
     of banks (which members are hereinafter referred to as 
     `broker-dealer representatives'); and
       ``(iii) at least 1 individual who is representative of 
     municipal securities dealers that are banks or subsidiaries, 
     departments or divisions of banks (which members are 
     hereinafter referred to as `bank representatives').''; and
       (2) in paragraph (2), by amending subparagraph (B) to read 
     as follows:
       ``(B) establish fair procedures for the nomination and 
     election of members of the Board and assure fair 
     representation in such nominations and elections of municipal 
     securities brokers and municipal securities dealers. Such 
     rules--
       ``(i) shall establish requirements regarding the 
     independence of public representatives;
       ``(ii) shall provide that the number of public 
     representatives of the Board shall at all times exceed the 
     total number of broker-dealer representatives and bank 
     representatives;
       ``(iii) shall establish minimum knowledge, experience, and 
     other appropriate qualifications for individuals to serve as 
     public representatives, which may include prior work 
     experience in the securities, municipal finance, or municipal 
     securities industries;
       ``(iv) shall specify the term members shall serve; and
       ``(v) may increase or decrease the number of members which 
     shall constitute the whole Board, except that in no case may 
     the number of members of the whole Board be an even 
     number.''.
       (b) Beneficial Ownership and Short-Swing Profit 
     Reporting.--
       (1) Beneficial ownership reporting.--Section 13 of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended--
       (A) in subsection (d)--
       (i) in paragraph (1)--

       (I) by inserting after ``within ten days after such 
     acquisition,'' the following: ``or within such shorter period 
     as the Commission may establish, by rule,''; and
       (II) by striking ``send to the issuer of the security at 
     its principal executive office, by registered or certified 
     mail, send to each exchange on which the security is traded, 
     and''; and

       (ii) in paragraph (2)--

       (I) by striking ``in the statements to the issuer and the 
     exchange, and''; and
       (II) by striking ``shall be transmitted to the issuer and 
     the exchange and''; and

       (B) in subsection (g)--
       (i) in paragraph (1), by striking ``shall send to the 
     issuer of the security and''; and
       (ii) in paragraph (2)--

       (I) by striking ``sent to the issuer and''; and
       (II) by striking ``shall be transmitted to the issuer 
     and''.

       (2) Short-swing profit reporting.--Section 16(a) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78p(a)) is 
     amended--
       (A) in paragraph (1), by striking ``(and, if such security 
     is registered on a national securities exchange, also with 
     the exchange)''; and
       (B) in paragraph (2)(B), by inserting after ``officer'' the 
     following: ``, or within such shorter period as the 
     Commission may establish, by rule''.
       (c) Enhanced Application of Antifraud Provisions.--The 
     Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
     amended--
       (1) in section 9--
       (A) by striking ``registered on a national securities 
     exchange'' each place that term appears and inserting ``other 
     than a government security'';
       (B) in subsection (b), by striking ``by use of any facility 
     of a national securities exchange,''; and
       (C) in subsection (c), by inserting after ``unlawful for 
     any'' the following: ``broker, dealer, or'';
       (2) in section 10(a)(1), by striking ``registered on a 
     national securities exchange'' and inserting ``other than a 
     government security''; and
       (3) in section 15(c)(1)(A), by striking ``otherwise than on 
     a national securities exchange of which it is a member''.

[[Page 6255]]

       (d) Definition of ``Interested Person''.--Section 
     2(a)(19)(A) of the Investment Company Act of 1940 (15 U.S.C. 
     80a-2(a)(19)(A)) is amended--
       (1) by striking clause (v) and inserting the following:
       ``(v) any natural person who is a member of a class of 
     persons who the Commission, by rule or regulation, determines 
     are unlikely to exercise an appropriate degree of 
     independence as a result of--

       ``(I) a material business or professional relationship with 
     such company or any affiliated person of such company; or
       ``(II) a close familial relationship with any natural 
     person who is an affiliated person of such company,'';

       (2) by striking clause (vi);
       (3) by redesignating clause (vii) as clause (vi); and
       (4) in clause (vi), as so redesignated, by striking ``two'' 
     and inserting ``5''.
       (e) Lost and Stolen Securities.--Section 17(f)(1) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78q(f)(1)) is 
     amended--
       (1) in subparagraph (A), by striking ``missing, lost, 
     counterfeit, or stolen securities'' and inserting 
     ``securities that are missing, lost, counterfeit, stolen, 
     cancelled, or any other category of securities as the 
     Commission, by rule, may prescribe''; and
       (2) in subparagraph (B), by striking ``or stolen'' and 
     inserting ``stolen, cancelled, or reported in such other 
     manner as the Commission, by rule, may prescribe''.
       (f) Fingerprinting.--Section 17(f)(2) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78q(f)(2)) is amended--
       (1) in the first sentence, by striking ``and registered 
     clearing agency,'' and inserting ``registered clearing 
     agency, registered securities information processor, national 
     securities exchange, and national securities association''; 
     and
       (2) in the second sentence, by striking ``or clearing 
     agency,'' and inserting ``clearing agency, securities 
     information processor, national securities exchange, or 
     national securities association,''.

     SEC. 6. COMMISSION ORGANIZATIONAL STUDY AND REFORM.

       (a) Study Required.--
       (1) In general.--Not later than 90 days after the date of 
     the enactment of this Act, the Securities and Exchange 
     Commission (in this section referred to as the 
     ``Commission'') shall hire an independent consultant of high 
     caliber who has expertise in organizational restructuring and 
     the operations of capital markets to examine the internal 
     operations, structure, funding, and the need for 
     comprehensive reform of the Commission, as well as the 
     relationship of the Commission with and the reliance by the 
     Commission on self-regulatory organizations and other 
     entities relevant to the regulation of securities and the 
     protection of securities investors that are under the 
     oversight of the Commission.
       (2) Specific areas for study.--The study required under 
     paragraph (1) shall, at a minimum, include the study of--
       (A) the possible elimination of unnecessary or redundant 
     units at the Commission;
       (B) improving communications between offices and divisions 
     of the Commission;
       (C) the need to put in place a clear chain-of-command 
     structure, particularly for enforcement examinations and 
     compliance inspections;
       (D) the effect of high-frequency trading and other 
     technological advances on the market and what the Commission 
     requires to monitor the effect of such trading and advances 
     on the market;
       (E) the hiring authorities, workplace policies, and 
     personal practices of the Commission, including--
       (i) whether there is a need to further streamline hiring 
     authorities for those who are not lawyers, accountants, 
     compliance examiners, or economists;
       (ii) whether there is a need for further pay reforms;
       (iii) the diversity of skill sets of Commission employees 
     and whether the present skill set diversity efficiently and 
     effectively fosters the mission of the Commission of investor 
     protection; and
       (iv) the application of civil service laws by the 
     Commission;
       (F) whether the oversight by the Commission of, and 
     reliance by the Commission on, self-regulatory organizations 
     promotes efficient and effective governance for the 
     securities markets; and
       (G) whether adjusting the reliance by the Commission on 
     self-regulatory organizations is necessary to promote more 
     efficient and effective governance for the securities 
     markets.
       (b) Consultant Report.--Not later than 150 days after the 
     independent consultant is retained under subsection (a), the 
     independent consultant shall submit a report to the 
     Commission and to Congress containing--
       (1) a detailed description of any findings and conclusions 
     made while carrying out the study required under subsection 
     (a)(1); and
       (2) recommendations for legislative, regulatory, or 
     administrative action that the independent consultant 
     determines appropriate to enable the Commission and other 
     entities on which the independent consultant reports to 
     perform the missions of the Commission, whether mandated by 
     statute or otherwise.
       (c) Commission Report.--Not later than 6 months after the 
     date on which the consultant submits the report under 
     subsection (b), and every 6 months thereafter during the 2-
     year period following the date on which the consultant 
     submits the report under subsection (b), the Commission shall 
     submit a report to the Committee on Banking, Housing, and 
     Urban Affairs of the Senate and the Committee on Financial 
     Services of the House of Representatives describing the 
     implementation by the Commission of the regulatory and 
     administrative recommendations contained in the report of the 
     independent consultant under subsection (b).
                                 ______
                                 
      By Mr. KOHL (for himself, Mr. Leahy, and Mr. Hatch):
  S. 3259. A bill to amend subtitle A of the Antitrust Criminal Penalty 
Enhancement and Reform Act of 2004 to make the operation of such 
subtitle permanent law; to the Committee on the Judiciary.
  Mr. KOHL. Mr. President, I rise today to introduce the Antitrust 
Criminal Penalties Enforcement and Reform Act of 2004 Extension Act. 
This legislation makes permanent a critical component of the Antitrust 
Criminal Penalty Enforcement and Reform Act of 2004, set to expire on 
June 22, which encourages participation in the Antitrust Division's 
leniency program. As a result, the Justice Department will be able to 
continue to detect, investigate and aggressively prosecute price-fixing 
cartels which harm consumers.
  The Antitrust Division of the Department of Justice has long 
considered criminal cartel enforcement a top priority, and its 
Corporate Leniency Policy is an important tool in that enforcement. 
Criminal antitrust offenses are generally conspiracies among 
competitors to fix prices, rig bids, or allocate markets of customers. 
The Leniency Policy creates incentives for corporations to report their 
unlawful cartel conduct to the Division, by offering the possibility of 
immunity from criminal charges to the first-reporting corporation, as 
long as there is full cooperation. For more than 15 years, this policy 
has allowed the Division to uncover cartels affecting billions of 
dollars worth of commerce here in the United States, which has led to 
prosecutions resulting in record fines and jail sentences.
  An important part of the Division's Leniency Policy, added by the 
Antitrust Criminal Penalties Enforcement and Reform Act of 2004, limits 
the civil liability of leniency participants to the actual damages 
caused by that company--rather than triple the damages caused by the 
entire conspiracy, which is typical in civil antitrust lawsuits. This 
removed a significant disincentive to participation in the leniency 
program--the concern that, despite immunity from criminal charges, a 
participating corporation might still be on the hook for treble damages 
in any future antitrust lawsuits.
  Maintaining strong incentives to make use of the Leniency Policy 
provides important benefits to the victims of antitrust offenses, often 
consumers who paid artificially high prices. It makes it more likely 
that criminal antitrust violations will be reported and, as a result, 
consumers will be able to identify and recover their losses from paying 
illegally inflated prices. The policy also requires participants to 
cooperate with plaintiffs in any follow-on civil lawsuits, which makes 
it more likely that the plaintiff consumers will be able to build 
strong cases against all members of the conspiracy.
  Since the passage of ACPERA, the Antitrust Division has uncovered a 
number of significant cartel cases through its leniency program, 
including the air cargo investigation, which so far has yielded over a 
billion dollars in criminal fines. In that investigation, several 
airlines pled guilty to conspiring to fix international air cargo rates 
and international passenger fuel surcharges. Not only were criminal 
fines levied but one high-ranking executive pled guilty and agreed to 
serve 8 months in prison. In fiscal year 2004, before the passage of 
ACPERA, criminal antitrust fines totaled $350 million. Criminal 
antitrust fines in fiscal year 2009 surpassed $1 billion. Scott 
Hammond, the Deputy Assistant Attorney General for Criminal Enforcement 
in the Antitrust Division, has stated that the damages limitation has 
made its Corporate Leniency Program ``even

[[Page 6256]]

more effective'' at detecting and prosecuting cartels. In fact, in the 
first 5 years after passage, leniency applications increased by 25 
percent, and the Antitrust Division experienced ``unprecedented'' 
success in criminal enforcement.
  ACPERA's damages limitation is set to expire in June, so we must act 
quickly to extend it. Otherwise, the Justice Department will lose an 
important tool that it uses to investigate and prosecute criminal 
cartel activity. The strong evidence that this program works means it 
is time to make it permanent. Permanence will give all parties--the 
government, potential amnesty applicants, and potential private 
litigants--a clear sign that criminal cartel enforcement continues to 
be a top priority, and that the amnesty program is a key and continuing 
component of that enforcement program. This certainty is likely to lead 
to increased participation in the amnesty program, the discovery of 
more cases, the receipt of more criminal fines, and a higher likelihood 
of consumers being able to recover their losses in civil litigation.
  Some have raised questions about whether the leniency program could 
be made more effective by changing the requirements for leniency 
applicants to cooperate in private litigation, or by increasing the 
incentive for whistleblowing. Currently, there is insufficient evidence 
to show that changes are needed and the Department of Justice is 
concerned that any changes could have the unintended consequence of 
reducing the incentives to use the Leniency Program. Therefore, at this 
time we are hesitant to tinker with success. However, in response to 
the concerns, the Antitrust Criminal Penalties Enforcement and Reform 
Act of 2004 Extension Act of 2010 requires a GAO study to consider the 
effectiveness of the incentives for leniency applicants to cooperate in 
private litigation, and specifically whether such cooperation is made 
in a timely fashion. The Antitrust Criminal Penalties Enforcement and 
Reform Act of 2004 is meant to facilitate both government and private 
enforcement of the antitrust laws, and the GAO study will shed some 
light on whether it strikes the correct balance. When we receive the 
study, we will review it and act accordingly, changing the law if 
necessary.
  I urge my colleagues to support this important legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3259

       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 ``Antitrust Criminal Penalties 
     Enforcement and Reform Act of 2004 Extension Act of 2010''.

     SEC. 2. ELIMINATION OF SUNSET.

       The Antitrust Criminal Penalty Enhancement and Reform Act 
     of 2004 (15 U.S.C. 1 note) is amended by striking section 
     211.

     SEC. 3. EFFECTIVE DATE OF AMENDMENT.

       The amendment made by section 2 shall take effect 
     immediately before June 22, 2010.

     SEC. 4. GAO REPORT.

       Not later than 1 year after the date of enactment of this 
     Act, the Comptroller General shall submit a report to the 
     Committees on the Judiciary of the House of Representatives 
     and the Senate on the effectiveness of the Antitrust Criminal 
     Penalties Enforcement and Reform Act of 2004, both in 
     criminal investigation and enforcement by the Department of 
     Justice and in private civil actions. Such report shall 
     consider, inter alia, the effectiveness of incentives for 
     cooperation, and the timeliness of that cooperation, in 
     private civil actions.
                                 ______
                                 
      By Mr. HARKIN (for himself, Ms. Klobuchar, and Mr. Franken):
  S. 3260. A bill to enhance and further research into the prevention 
and treatment of eating disorders, to improve access to treatment of 
eating disorders, and for other purposes; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. HARKIN. Mr. President, today I am joining with Senator Klobuchar 
and Senator Franken to introduce the Federal Response to Eliminate 
Eating Disorders, FREED, Act. This important bill is the first 
comprehensive legislative effort to confront eating disorders in the 
U.S.
  Eating disorders such as anorexia nervosa and bulimia nervosa are 
widespread, insidious, and too often fatal diseases. Today, at least 5 
million Americans suffer from eating disorders. Because these diseases 
often go undiagnosed and uncounted, the actual number is closer to 11 
million Americans. Adolescent women are by no means the only people 
suffering from eating disorders; these diseases don't discriminate by 
gender, race, income, or age.
  Eating disorders are dangerous conditions, but their consequences are 
often underestimated. These diseases can lead to serious heart 
conditions, kidney failure, osteoporosis, infertility, gastrointestinal 
disorders, and even death. The National Institute of Mental Health 
estimates that one in 10 people with anorexia nervosa will die of 
starvation, cardiac arrest, or some other medical complication. One in 
10! That is deeply disturbing, and cries out for a much more aggressive 
Federal response. Moreover, fatalities resulting from eating disorders 
are grossly underreported, because deaths are typically recorded by 
listing the immediate cause of death, such as cardiac arrest, rather 
than the underlying cause, which is the eating disorder.
  But, despite their prevalence and very serious impacts on health, 
research funding for eating disorders has lagged behind funding for 
research into similar diseases. We simply don't know enough about the 
causes and consequences of eating disorders, or how to stop them from 
developing in the first place. We have research suggesting that there's 
a genetic component to eating disorders, but we have got to learn more 
so we can effectively prevent these diseases before they start.
  The good news is that eating disorders are treatable. With 
appropriate nutritional, medical, and psychotherapeutic interventions, 
they can be successfully and fully cured. But right now, only one in 10 
people receive treatment.
  The FREED Act takes a major step forward in promoting research, 
screening, treatment, and the prevention of eating disorders.
  First, the FREED Act expands research efforts at the National 
Institutes of Health to examine the causes and consequences of eating 
disorders. We need to understand these diseases to more effectively 
prevent and treat them. The FREED Act also improves surveillance and 
data collection systems at the Centers for Disease Control and 
Prevention so we'll have accurate information and epidemiological data 
on eating disorders.
  Second, the FREED Act expands access to treatment services and 
screening for eating disorders for Medicaid beneficiaries, and creates 
a patient advocacy network that will help individuals with eating 
disorders find treatment. Furthermore, the FREED Act improves the 
training and education of health care providers and educators so they 
know how to identify and treat individuals suffering from eating 
disorders.
  Finally, we need to step up efforts to prevent these diseases in the 
first place. As I have said so many times, we don't have a genuine 
health care system in America, we have a sick care system. In other 
words, if you get sick, you get treatment. But we can spend just 
pennies on the dollar to prevent disease and illness in the first place 
by placing a much more robust emphasis on wellness, nutrition, physical 
activity, and public health. With this in mind, the FREED Act 
authorizes grants to develop and implement evidence-based prevention 
programs and promote healthy eating behaviors in schools, athletic 
programs, and other community-based programs.
  Sadly, eating disorders are not rare. These diseases touch the lives 
of so many of our families and friends. Nearly half of all Americans 
personally know someone with an eating disorder. We have got to do a 
better job at the Federal level of investing in research, treatment, 
and prevention. The FREED Act builds on the investments we made in 
prevention, wellness, and

[[Page 6257]]

mental health in health reform and mental health parity.
  I thank Senator Klobuchar and Senator Franken for partnering with me 
on this bill, and urge our colleagues to join us in dramatically 
stepping up the federal response to eating disorders.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3260

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Federal Response to 
     Eliminate Eating Disorders Act''.

     SEC. 2. FINDINGS.

       Congress finds as follows:
       (1) Estimates, based on current research, indicate that at 
     least 5,000,000 people in the United States suffer from 
     eating disorders including anorexia nervosa, bulimia nervosa, 
     binge eating disorder, and eating disorders not otherwise 
     specified (referred to in this Act as ``EDNOS'').
       (2) Anecdotal evidence suggests that as many as 11,000,000 
     people in the United States, including 1,000,000 males, may 
     suffer from eating disorders.
       (3) Eating disorders occur in all nations and in all 
     populations, and among people of all ages and races and of 
     both genders.
       (4) Eating disorders are diseases with grave health 
     consequences and high rates of mortality.
       (5) Health consequences associated with eating disorders 
     include heart failure and other serious cardiac conditions, 
     electrolyte imbalance, kidney failure, osteoporosis, 
     debilitating tooth decay, and gastrointestinal disorders, 
     including esophageal inflammation and rupture, gastric 
     rupture, peptic ulcers, and pancreatitis.
       (6) Anorexia nervosa has one of the highest overall 
     mortality rates of any mental illness. According to the 
     National Institute of Mental Health, 1 in 10 people with 
     anorexia nervosa will die of starvation, cardiac arrest, or 
     another medical complication.
       (7) The risk of death among adolescents with anorexia 
     nervosa is 11 times greater than in disease-free adolescents.
       (8) Anorexia nervosa has the highest suicide rate of all 
     mental illnesses.
       (9) New research suggests that bulimia nervosa has a much 
     higher rate of mortality than is reflected in current 
     statistics, because of the failure to identify the underlying 
     eating disorder.
       (10) Binge eating disorder is the most common eating 
     disorder, with an estimated 3.5 percent of American women and 
     2 percent of American men expected to suffer from this 
     disorder in their lifetime. Binge eating disorder is 
     characterized by frequent episodes of uncontrolled overeating 
     and is associated with obesity, heart disease, gall bladder 
     disease, and diabetes.
       (11) Research demonstrates that there is a significant 
     genetic component to the development of eating disorders.
       (12) Certain populations, including adolescent females and 
     athletes of both genders, are at higher risk of developing an 
     eating disorder.
       (13) Different types of eating disorders may affect certain 
     races and genders disproportionately.
       (14) Despite the serious health consequences and the high 
     risk of death, Federal research funding for eating disorders 
     has lagged behind research concerning other diseases, when 
     compared by the number of individuals affected by, and the 
     relative health consequences of, the diseases.
       (15) The ability of individuals suffering from eating 
     disorders, particularly bulimia nervosa, binge eating 
     disorder, and EDNOS to access appropriate treatment is 
     unacceptably low.
       (16) The development of an eating disorder is frequently 
     preceded by unhealthy weight control behaviors commonly 
     identified as disordered eating, including skipping meals, 
     using diet pills, taking laxatives, self-induced vomiting, 
     and fasting. Such disordered eating behaviors should be 
     included in enhanced research prevention and training 
     efforts.

     SEC. 3. PURPOSES.

       The purposes of this Act are--
       (1) to expand research into the prevention of eating 
     disorders;
       (2) to expand research on effective treatment and 
     intervention of eating disorders and to support evidence-
     based programs designed to prevent eating disorders;
       (3) to expand research on the causes, courses, and outcomes 
     of eating disorders;
       (4) to increase the number of people properly screened and 
     diagnosed with an eating disorder;
       (5) to improve training and education of health care and 
     behavioral care providers and of school personnel at all 
     levels of elementary and secondary education;
       (6) to improve surveillance and data systems for tracking 
     the prevalence, severity, and economic costs of eating 
     disorders; and
       (7) to enhance access to comprehensive treatment for eating 
     disorders.

            TITLE I--EATING DISORDER DETECTION AND RESEARCH

     SEC. 101. EXPANSION AND COORDINATION OF THE ACTIVITIES OF THE 
                   NATIONAL INSTITUTE OF HEALTH AND THE NATIONAL 
                   INSTITUTE OF MENTAL HEALTH WITH RESPECT TO 
                   RESEARCH ON EATING DISORDERS.

       Part B of title IV of the Public Health Service Act (42 
     U.S.C. 284 et seq.), as amended by section 4305(b) of the 
     Patient Protection and Affordable Care Act (Public Law 111-
     148), is further amended by adding at the end the following:

     ``SEC. 409K. EXPANSION AND COORDINATION OF ACTIVITIES WITH 
                   RESPECT TO RESEARCH ON EATING DISORDERS.

       ``(a) In General.--The Director of NIH, pursuant to the 
     general authority of such director, shall expand, intensify, 
     and coordinate the activities of the National Institutes of 
     Health with respect to research on eating disorders.
       ``(b) Grants.--The Director of NIH may award grants to 
     public or private entities to pay all or part of the cost of 
     planning, establishing, improving, and providing basic 
     operating support for such entities to establish consortia in 
     eating disorder research and to carry out the activities 
     described in subsection (e).
       ``(c) Eligible Entities.--To be eligible to receive a grant 
     under this section, an entity shall--
       ``(1) be public or nonprofit private entity (including a 
     health department of a State, a political subdivision of a 
     State, or an institution of higher education); and
       ``(2) submit to the Secretary an application at such time, 
     in such manner, and containing such information as the 
     Secretary may require.
       ``(d) Requirements of Consortia.--
       ``(1) In general.--Each consortium established as described 
     in subsection (b) may use the facilities of a single lead 
     institution, or may be formed from several cooperating 
     institutions, meeting such requirements as may be prescribed 
     by the Director of NIH.
       ``(2) Coordination of consortia.--The Director of NIH--
       ``(A) may, as appropriate, provide for the coordination of 
     information among consortia established under subsection (b); 
     and
       ``(B) shall ensure regular communication between members of 
     the various consortia established using grants awarded under 
     this section.
       ``(3) Reports.--The Director of NIH shall require each 
     consortium to periodically prepare and submit to such 
     director reports on the activities of such consortium.
       ``(e) Activities.--Each consortium receiving a grant under 
     subsection (b) shall conduct basic, clinical, 
     epidemiological, population-based, or translational research 
     regarding eating disorders, which may include research 
     related to--
       ``(1) the identification and classification of eating 
     disorders and disordered eating;
       ``(2) the causes, diagnosis, and early detection of eating 
     disorders;
       ``(3) the treatment of eating disorders, including the 
     development and evaluation of new treatments and best 
     practices;
       ``(4) the conditions or diseases related to, or arising 
     from, an eating disorder; and
       ``(5) the evaluation of existing prevention programs and 
     the development of reliable prevention and screening 
     programs.
       ``(f) Collaboration.--The Secretary, acting through the 
     Director of NIH and the Director of the National Institute of 
     Mental Health, shall identify relevant Federal agencies 
     (including the other institutes and centers of the National 
     Institutes of Health, the Centers for Medicare & Medicaid 
     Services, the Centers for Disease Control and Prevention, the 
     Agency for Healthcare Research and Quality, the Substance 
     Abuse and Mental Health Services Administration, the Health 
     Resources and Services Administration, and the Office on 
     Women's Health) that shall collaborate with respect to 
     activities conducted under subsection (d).
       ``(g) Public Input.--The Director of NIH shall provide for 
     a mechanism--
       ``(1) to educate and disseminate information on the 
     existing and planned programs and research activities of the 
     National Institutes of Health with respect to eating 
     disorders; and
       ``(2) through which the Director of NIH may receive 
     comments from the public regarding such programs and 
     activities.
       ``(h) Dissemination of Information.--The Director of NIH 
     shall provide for a mechanism for making the results and 
     information generated by the consortia publicly available, 
     such as through the Internet.
       ``(i) Definition.--For purposes of this section, the term 
     `eating disorder' has the meaning given such term in section 
     399OO(e).
       ``(j) Authorization of Appropriations.--To carry out this 
     section, there are authorized to be appropriated such sums as 
     may be necessary for each of fiscal years 2011 through 
     2015.''.

     SEC. 102. INTERAGENCY COORDINATING COUNCIL; SURVEILLANCE AND 
                   RESEARCH PROGRAM; STUDY ON ECONOMIC COST.

       Title III of the Public Health Service Act (42 U.S.C. 241 
     et seq.), as amended by section 4303 of the Patient 
     Protection and Affordable Care Act (Public Law 111-148), is 
     further amended by adding at the end the following:

[[Page 6258]]



            ``PART W--PROGRAMS RELATING TO EATING DISORDERS

     ``SEC. 399OO. INTERAGENCY EATING DISORDERS COORDINATING 
                   COUNCIL.

       ``(a) Establishment.--There is established within the 
     Department of Health and Human Services the Interagency 
     Eating Disorders Coordinating Council (referred to in this 
     section as the `Coordinating Council').
       ``(b) Responsibilities.--The Coordinating Council shall--
       ``(1) develop and annually update a summary of advances in 
     eating disorder research concerning causes of, prevention of, 
     early screening for, treatment and access to services related 
     to, and supports for individuals affected by, eating 
     disorders;
       ``(2) monitor Federal activities with respect to eating 
     disorders;
       ``(3) make recommendations to the Secretary regarding any 
     appropriate changes to such activities, and to the Director 
     of NIH, with respect to the strategic plan developed under 
     paragraph (4);
       ``(4) develop and annually update a strategic plan for the 
     conduct of, and support for, eating disorder research, 
     including proposed budgetary recommendations; and
       ``(5) submit to Congress the strategic plan developed under 
     paragraph (4) and all updates to such plan.
       ``(c) Membership.--
       ``(1) Chairperson.--The Director of NIH shall serve as the 
     chairperson of the Coordinating Council and shall be 
     responsible for the leadership and oversight of the 
     activities of the Coordinating Council.
       ``(2) Members in general.--The Coordinating Council shall 
     be composed of--
       ``(A) representatives of--
       ``(i) the Agency for Healthcare Research and Quality;
       ``(ii) the Substance Abuse and Mental Health 
     Administration;
       ``(iii) the research institutes at the National Institutes 
     of Health, as the Director of NIH determines appropriate;
       ``(iv) the Health Resources and Services Administration;
       ``(v) the Centers for Medicare & Medicaid Services;
       ``(vi) the Office of Women's Health;
       ``(vii) the Centers for Disease Control and Prevention; and
       ``(viii) the Department of Education; and
       ``(B) the additional members appointed under paragraph (3).
       ``(3) Additional members.--Not fewer than \1/3\ of the 
     total membership of the Coordinating Council shall be 
     composed of non-Federal public members to be appointed by the 
     Secretary, including representatives of--
       ``(A) academic medical centers or schools of medicine, 
     nursing, or other health professions;
       ``(B) health care professionals who are actively involved 
     in the treatment of eating disorders;
       ``(C) researchers with expertise in eating disorders; and
       ``(D) at least 2 individuals with a past or present 
     diagnosis of an eating disorder or parents of individuals 
     with a past or present diagnosis of an eating disorder.
       ``(d) Administrative Support; Terms of Service; Other 
     Provisions.--
       ``(1) Administrative support.--The Coordinating Council 
     shall receive necessary and appropriate administrative 
     support from the Secretary.
       ``(2) Terms of service.--Members of the Coordinating 
     Council appointed under subsection (c)(2) shall serve for a 
     term of 4 years, and may be reappointed for one or more 
     additional 4 year-terms. Any member appointed to fill a 
     vacancy for an unexpired term shall be appointed for the 
     remainder of such term. A member may serve after the 
     expiration of the member's term until a successor has taken 
     office.
       ``(3) Meetings.--
       ``(A) In general.--The Coordinating Council shall meet at 
     the call of the chairperson or upon the request of the 
     Secretary. The Coordinating Council shall meet not fewer than 
     2 times each year.
       ``(B) Notice.--Notice of any upcoming meeting of the 
     Coordinating Council shall be published in the Federal 
     Register.
       ``(C) Public access.--Each meeting of the Coordinating 
     Council shall be open to the public and shall include 
     appropriate periods of time for questions by the public.
       ``(4) Subcommittees.--In carrying out its functions the 
     Coordinating Council may establish subcommittees and convene 
     workshops and conferences.
       ``(e) Eating Disorder.--In this part, the term `eating 
     disorder' includes anorexia nervosa, bulimia nervosa, binge 
     eating disorder, and eating disorders not otherwise 
     specified, as defined in the fourth edition of the Diagnostic 
     and Statistical Manual of Mental Disorders or any subsequent 
     edition.
       ``(f) Authorization of Appropriations.--To carry out this 
     section, there are authorized to be appropriated such sums as 
     may be necessary for each of fiscal years 2011 through 2015.

     ``SEC. 399OO-1. EATING DISORDER SURVEILLANCE AND RESEARCH 
                   PROGRAM.

       ``(a) In General.--The Secretary, acting through the 
     Director of the Centers for Disease Control and Prevention, 
     shall award grants or cooperative agreements to eligible 
     entities for the purpose of improving the collection, 
     analysis and reporting of State epidemiological data on 
     eating disorders.
       ``(b) Activities.--An eligible entity shall assist with the 
     development and coordination of eating disorder surveillance 
     efforts within a region and may--
       ``(1) provide for the collection, analysis, and reporting 
     of epidemiological data on eating disorders through the 
     existing surveillance programs;
       ``(2) develop recommendations to enhance existing 
     surveillance programs to more accurately collect 
     epidemiological data on disordered eating and eating 
     disorders, including the number, incidence, trends, 
     correlates, mortality, and causes of eating disorders and the 
     effects of eating disorders on quality of life;
       ``(3) develop recommendations to improve requirements for 
     ensuring that eating disorders are accurately recorded as 
     underlying and contributing causes of death; and
       ``(4) assist with the development and coordination of 
     surveillance efforts within a region.
       ``(c) Eligible Entities.--To be eligible to receive an 
     award under this section, an entity shall--
       ``(1) be a public or nonprofit private entity (including a 
     health department of a State, a political subdivision of a 
     State, or an institution of higher education); and
       ``(2) submit to the Secretary an application at such time, 
     in such manner, and containing such information as the 
     Secretary may require.
       ``(d) Technical Assistance.--In making awards under this 
     section, the Secretary may provide direct technical 
     assistance in lieu of cash.
       ``(e) Reports.--Each entity awarded a grant or cooperative 
     agreement under this section shall submit to the Secretary a 
     report describing the activities conducted using grant funds 
     and providing recommendations for improving the collection, 
     analysis, and reporting of epidemiological data on eating 
     disorders.
       ``(f) Authorization of Appropriations.--To carry out this 
     section, there are authorized to be appropriated such sums as 
     may be necessary for each of fiscal years 2011 through 2015.

     ``SEC. 399OO-2. STUDY REGARDING ECONOMIC COSTS OF EATING 
                   DISORDERS.

       ``The Secretary, acting through the Director of the Centers 
     for Disease Control and Prevention, shall conduct a study 
     evaluating the economic costs of eating disorders. Such study 
     may examine years of productive life lost, missed days of 
     work, reduced work productivity, costs of medical and mental 
     health treatment, costs to family, and costs to society as a 
     result of eating disorders.''.

 TITLE II--EATING DISORDER EDUCATION AND PREVENTION; STUDIES ON EATING 
      DISORDERS AND BODY MASS INDEX; PUBLIC SERVICE ANNOUNCEMENTS

     SEC. 201. GRANTS TO PREVENT EATING DISORDERS.

       Title III of the Public Health Service Act (42 U.S.C. 241 
     et seq.), as amended by section 102, is further amended by 
     adding at the end the following:

     ``SEC. 399OO-3. GRANTS TO PREVENT EATING DISORDERS.

       ``(a) In General.--The Secretary, acting through the 
     Director of the Centers for Disease Control and Prevention 
     and in coordination with the Administrator of the Health 
     Resources and Services Administration, shall award grants to 
     eligible entities to plan, implement, and evaluate programs 
     to prevent eating disorders and obesity and the acute and 
     chronic medical conditions that accompany such conditions, 
     and to promote healthy body image and appropriate nutrition-
     based eating behaviors.
       ``(b) Eligibility.--To be eligible to receive a grant under 
     this section, an entity shall--
       ``(1) be a State, local or tribal educational agency, an 
     accredited institution of higher education, a State or local 
     health department, or a community based organization; and
       ``(2) submit an application to the Secretary at such time, 
     in such manner, and containing such information as the 
     Secretary may require.
       ``(c) Use of Funds.--An entity receiving a grant under this 
     section shall fund development and testing of school-, 
     clinic-, community-, or health department-based programs 
     designed to promote healthy eating behaviors and to prevent 
     eating disorders including--
       ``(1) developing evidence-based interventions to prevent 
     eating disorders, including educational or intervention 
     programs regarding nutritional content, understanding and 
     responding to hunger and satiety, positive body image 
     development, positive self-esteem development, and life 
     skills, that take into account cultural and developmental 
     issues and the role of family, school, and community;
       ``(2) planning and implementing a healthy lifestyle 
     curriculum or program with an emphasis on healthy eating 
     behaviors, physical activity, and emotional wellness, the 
     connection between emotional and physical health, and the 
     prevention of bullying based on body size, shape, and weight;

[[Page 6259]]

       ``(3) forming partnerships with parents and caregivers to 
     educate adults about identifying unhealthy eating behaviors 
     and promoting healthy eating behaviors, physical activity, 
     and emotional wellness; and
       ``(4) integrating eating disorder prevention and awareness 
     in physical education, health, education, athletic training 
     programs, and after-school recreational sports programs, to 
     the extent possible.
       ``(d) Requirements of Grant Recipients.--
       ``(1) Limitation on administrative expenses.--A recipient 
     of a grant under this section shall not use more than 10 
     percent of the amounts received under a grant under this 
     section for administrative expenses.
       ``(2) Contribution of funds.--A recipient of a grant under 
     this section, and any entity receiving assistance under the 
     grant for training and education, shall contribute non-
     Federal funds, either directly or through in-kind 
     contributions, to the costs of the activities to be funded 
     under the grant in an amount that is not less than 10 percent 
     of the total cost of such activities.
       ``(3) Evaluation.--Each recipient of a grant under this 
     section shall provide to the Secretary, in such form and 
     manner as the Secretary shall specify, relevant data and an 
     evaluation of the activities of the grant recipient in 
     promoting healthy eating behaviors and preventing eating 
     disorders. Evaluation reports shall be made publicly 
     available, such as through the Internet.
       ``(e) Technical Assistance.--The Secretary may set aside an 
     amount not to exceed 1 percent of the total amount 
     appropriated for a fiscal year to provide grantees with 
     technical support in the development, implementation, and 
     evaluation of programs under this section and to disseminate 
     information about preventing and treating eating disorders 
     and obesity.

     ``SEC. 399OO-4. STUDY OF EATING DISORDERS IN ELEMENTARY 
                   SCHOOLS, SECONDARY SCHOOLS, AND INSTITUTIONS OF 
                   HIGHER EDUCATION.

       ``Not later than 18 months after the date of enactment of 
     the Federal Response to Eliminate Eating Disorders Act, the 
     National Center for Health Statistics of the Centers for 
     Disease Control and Prevention and the National Center for 
     Education Statistics of the Department of Education shall 
     conduct a joint study, or enter into a contract to have a 
     study conducted, on the impact eating disorders have on 
     educational advancement and achievement. The study shall--
       ``(1) determine the incidence of eating disorders and 
     disordered eating among students, and the morbidity and 
     mortality rates associated with eating disorders;
       ``(2) evaluate the extent to which students with eating 
     disorders are more likely to miss school, have delayed rates 
     of development, or have reduced cognitive skills;
       ``(3) report on current State and local programs to 
     increase awareness about the dangers of eating disorders 
     among youth and to prevent eating disorders and the risk 
     factors for eating disorders, and evaluate the value of such 
     programs; and
       ``(4) make recommendations on measures that could be 
     undertaken by Congress, the Department of Education, States, 
     and local educational agencies to strengthen eating disorder 
     prevention and awareness programs including development of 
     best practices.

     ``SEC. 399OO-5. STUDY OF THE SUITABILITY OF MANDATING BODY 
                   MASS INDEX REPORTING IN ELEMENTARY SCHOOLS AND 
                   SECONDARY SCHOOLS.

       ``Not later than 18 months after the date of enactment of 
     the Federal Response to Eliminate Eating Disorders Act, the 
     Director of the Centers for Disease Control and Prevention, 
     in consultation with the Secretary of Education, shall 
     conduct a study on mandatory reporting of body mass index, 
     including--
       ``(1) how many schools are currently conducting such 
     measuring; and
       ``(2) the impacts on students of such measures, which may 
     include student and parent reactions to such reports, 
     including changes in physical activity, a focus on nutrition, 
     a focus on body image, the use of weight control behaviors, 
     eating disorder symptoms, and the incidence of teasing or 
     bullying based on body size.

     ``SEC. 399OO-6. PUBLIC SERVICE ADVERTISEMENTS.

       ``The Secretary, in consultation with the Director of the 
     National Institutes of Health and the Secretary of Education, 
     shall carry out a program to develop, distribute, and promote 
     the broadcasting of public service announcements to improve 
     public awareness of, and to promote the identification and 
     prevention, of eating disorders.

     ``SEC. 399OO-7. AUTHORIZATION OF APPROPRIATIONS.

       ``To carry out sections 399OO-3, 399OO-4, 399OO-5, and 
     399OO-6, there are authorized to be appropriated such sums as 
     may be necessary for each of fiscal years 2011 through 
     2015.''.

     SEC. 202. SENSE OF THE SENATE.

       It is the sense of the Senate that critically necessary 
     programs to reduce obesity in children may also 
     unintentionally increase the unhealthy weight control 
     behaviors that can lead to development of eating disorders, 
     and that federally funded programs to combat obesity should 
     take this connection into consideration.

  TITLE III--IMPROVING TRAINING IN HEALTH PROFESSIONS, EDUCATION, AND 
                             RELATED FIELDS

     SEC. 301. GRANTS FOR HEALTH PROFESSIONALS.

       Part D of title VII of the Public Health Service Act (42 
     U.S.C. 294 et seq.), as amended by section 4305(c) of the 
     Patient Protection and Affordable Care Act (Public Law 111-
     148), is further amended by adding at the end the following:

     ``SEC. 760. GRANTS FOR HEALTH PROFESSIONALS.

       ``(a) Grants.--The Secretary, acting through the Director 
     of the Health Resources and Services Administration, shall 
     award grants under this section to develop interdisciplinary 
     training and education programs that provide undergraduate, 
     graduate, post-graduate medical, nursing (including advanced 
     practice nursing students), dental, mental and behavioral 
     health, pharmacy, and other health professions students or 
     residents with an understanding of, and clinical skills 
     pertinent to identifying and treating, eating disorders.
       ``(b) Eligibility.--To be eligible to receive a grant under 
     this section an entity shall--
       ``(1) be an accredited school of allopathic or osteopathic 
     medicine, or an accredited school of nursing, public health, 
     social work, dentistry, behavioral and mental health, or 
     pharmacy, or an accredited medical, dental, or nursing 
     residency program;
       ``(2) prepare and submit to the Secretary an application at 
     such time, in such manner, and containing such information as 
     the Secretary may require, including--
       ``(A) information to demonstrate that the applicant will 
     employ an evidence-based approach for training health 
     professionals on eating disorders;
       ``(B) strategies for the dissemination and sharing of 
     curricula and other educational materials developed under the 
     grant to other interested health professions schools, 
     national resource repositories for materials on eating 
     disorders, and health services continuing education 
     providers;
       ``(C) a plan for consulting with community-based 
     coalitions, treatment centers, or eating disorder research 
     experts who have experience and expertise in issues related 
     to eating disorders, for services provided under the program 
     carried out under the grant; and
       ``(D) a plan for making the information and curricula 
     publicly available to health professionals, such as through 
     the Internet.
       ``(c) Use of Funds.--
       ``(1) Required uses.--Amounts provided under a grant 
     awarded under this section shall be used to fund 
     interdisciplinary training and education projects that are 
     designed to train medical, nursing, and other health 
     professions students and residents to identify and provide 
     appropriate health care services (including mental or 
     behavioral health care services and referrals to appropriate 
     community services) to individuals who have eating disorders.
       ``(2) Permissive use.--Amounts provided under a grant under 
     this section may be used to offer community-based training 
     opportunities in rural areas for medical, nursing, and other 
     health professions students and residents on eating 
     disorders, which may include the use of distance learning 
     networks and other available technologies needed to reach 
     isolated rural areas.
       ``(d) Requirements of Grantees.--
       ``(1) Limitation on administrative expenses.--A grantee 
     shall not use more than 10 percent of the amounts received 
     under a grant under this section for administrative expenses.
       ``(2) Contribution of funds.--A grantee under this section, 
     and any entity receiving assistance under the grant for 
     training and education, shall contribute non-Federal funds, 
     either directly or through in-kind contributions, to the 
     costs of the activities to be funded under the grant in an 
     amount that is not less than 10 percent of the total cost of 
     such activities.
       ``(e) Eating Disorder.--In this section, the term `eating 
     disorder' has the meaning given such term in section 
     399OO(e).
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary for fiscal years 2011 through 
     2015.''.

     SEC. 302. TRAINING IN ELEMENTARY AND SECONDARY SCHOOLS.

       Section 5131(a) of the Elementary and Secondary Education 
     Act of 1965 (20 U.S.C. 7215(a)) is amended by adding at the 
     end the following:
       ``(28) Programs to improve the identification of students 
     with eating disorders (as defined in section 399OO of the 
     Public Health Service Act), increase awareness of such 
     disorders among parents and students, and train educators 
     (including teachers, school nurses, school social workers, 
     coaches, school counselors, and administrators) on effective 
     eating disorder prevention, screening, detection and 
     assistance methods.''.

        TITLE IV--IMPROVING AVAILABILITY AND ACCESS TO TREATMENT

     SEC. 401. MEDICAID COVERAGE FOR EATING DISORDER TREATMENT 
                   SERVICES.

       (a) In General.--Section 1905 of the Social Security Act 
     (42 U.S.C. 1396d(a)), as amended by section 2301(a)(1) of the 
     Patient Protection and Affordable Care Act (Public Law 111-
     148) and section 1202(b) of the Health

[[Page 6260]]

     Care and Education Reconciliation Act of 2010 (Public Law 
     111-152), is amended--
       (1) in subsection (a)--
       (A) in paragraph (28), by striking ``and'' at the end;
       (B) by redesignating paragraph (29) as paragraph (30); and
       (C) by inserting after paragraph (28) the following new 
     paragraph:
       ``(29) eating disorder treatment services (as defined in 
     subsection (ee)(1)); and''; and
       (2) by adding at the end the following new subsection:
       ``(ee) Eating Disorder Treatment Services.--
       ``(1) Definition.--The term `eating disorder treatment 
     services' means services relating to diagnosis and treatment 
     of an eating disorder (as defined in section 399OO of the 
     Public Health Service Act), including screening, counseling, 
     pharmacotherapy (including coverage of drugs described in 
     paragraph (2)), and other necessary health care services.
       ``(2) Coverage for pharmacological treatment of eating 
     disorders.--For purposes of paragraph (1), eating disorder 
     treatment services shall include drugs provided as part of 
     care in an inpatient setting, covered outpatient drugs (as 
     defined in section 1927(k)(2)), and non-prescription drugs 
     described in section 1927(d)(2)(A) that are prescribed, in 
     accordance with generally accepted medical guidelines, for 
     treatment of an eating disorder.''.
       (b) Increased FMAP for Eating Disorder Treatment 
     Services.--Section 1905(b) of the Social Security Act (42 
     U.S.C. 1396d(b)), as amended by section 4106(b) of the 
     Patient Protection and Affordable Care Act, is amended--
       (1) by striking ``and'' before ``(5)''; and
       (2) by inserting before the period at the end the 
     following: ``, and (6) the Federal medical assistance 
     percentage shall be equal to the enhanced FMAP described in 
     section 2105(b) with respect to medical assistance for eating 
     disorder treatment services (as defined in subsection 
     (ee)(1)) provided to an individual who is eligible for such 
     assistance and has an eating disorder (as defined in section 
     399OO of the Public Health Service Act)''.
       (c) Inclusion in EPSDT Services.--Section 1905(r)(1)(B) of 
     such Act (42 U.S.C. 1396d(r)(1)(B)) is amended--
       (1) in clause (iv), by striking ``and'' at the end;
       (2) in clause (v), by striking the period at the end and 
     inserting ``; and''; and
       (3) by inserting after clause (v) the following new clause:
       ``(vi) appropriate diagnostic services relating to eating 
     disorders (as defined in section 399OO of the Public Health 
     Service Act).''.
       (d) Exception From Optional Restriction Under Medicaid Drug 
     Coverage.--Section 1927(d)(2)(A) of such Act (42 U.S.C. 
     1396r-8(d)(2)(A)) is amended by inserting before the period 
     at the end the following: ``, except for drugs that are 
     prescribed, in accordance with generally accepted medical 
     guidelines, for the purpose of treatment of an individual who 
     is eligible for medical assistance under the State plan and 
     has an eating disorder (as defined in section 399OO of the 
     Public Health Service Act)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to drugs and services furnished on or after 
     October 1, 2010.

     SEC. 402. GRANTS TO SUPPORT PATIENT ADVOCACY.

       Subpart II of part D of title IX of the Public Health 
     Service Act, as amended by section 6301(b) of the Patient 
     Protection and Affordable Care Act (Public Law 111-148), is 
     further amended by adding at the end the following:

     ``SEC. 938. GRANTS TO SUPPORT PATIENT ADVOCACY.

       ``(a) Grants.--The Secretary, acting through the Director, 
     shall award grants under this section to develop and support 
     patient advocacy work to help individuals with eating 
     disorders obtain adequate health care services and insurance 
     coverage.
       ``(b) Eligibility.--To be eligible to receive a grant under 
     this section, an entity shall--
       ``(1) be a public or nonprofit private entity (including a 
     health department of a State or tribal agency, a community-
     based organization, or an institution of higher education);
       ``(2) prepare and submit to the Secretary an application at 
     such time, in such manner, and containing such information as 
     the Secretary may require, including--
       ``(A) comprehensive strategies for advocating on behalf of, 
     and working with, individuals with eating disorders or at 
     risk for developing eating disorders;
       ``(B) a plan for consulting with community-based 
     coalitions, treatment centers, or eating disorder research 
     experts who have experience and expertise in issues related 
     to eating disorders or patient advocacy in providing services 
     under a grant awarded under this section; and
       ``(C) a plan for financial sustainability involving State, 
     local, and private contributions.
       ``(c) Use of Funds.--Amounts provided under a grant awarded 
     under this section shall be used to support patient advocacy 
     work, including--
       ``(1) providing education and outreach in community 
     settings regarding eating disorders and associated health 
     problems, especially among low-income, minority, and 
     medically underserved populations;
       ``(2) facilitating access to appropriate, adequate, and 
     timely health care for individuals with eating disorders and 
     associated health problems;
       ``(3) assisting in communication and cooperation between 
     patients and providers;
       ``(4) representing the interests of patients in managing 
     health insurance claims and plans;
       ``(5) providing education and outreach regarding enrollment 
     in health insurance, including enrollment in the Medicare 
     program under title XVIII of the Social Security Act, the 
     Medicaid program under title XIX of such Act, and the 
     Children's Health Insurance Program under title XXI of such 
     Act;
       ``(6) identifying, referring, and enrolling underserved 
     populations in appropriate health care agencies and 
     community-based programs and organizations in order to 
     increase access to high-quality health care services;
       ``(7) providing technical assistance, training, and 
     organizational support for patient advocates; and
       ``(8) creating, operating, and participating in State or 
     regional networks of patient advocates.
       ``(d) Requirements of Grantees.--
       ``(1) Limitation on administrative expenses.--A grantee 
     shall not use more than 5 percent of the amounts received 
     under a grant under this section for administrative expenses.
       ``(2) Contribution of funds.--A grantee under this section, 
     and any entity receiving assistance under the grant for 
     training and education, shall contribute non-Federal funds, 
     either directly or through in-kind contributions, to the 
     costs of the activities to be funded under the grant in an 
     amount that is not less than 75 percent of the total cost of 
     such activities.
       ``(3) Reporting to secretary.--A grantee under this section 
     shall submit to the Secretary a report, at such time, in such 
     manner, and containing such information as the Secretary may 
     require, including a description and evaluation of the 
     activities described in subsection (c) carried out by such 
     entity.
       ``(e) Eating Disorder.--In this section, the term `eating 
     disorder' has the meaning given such term in section 
     399OO(e).
       ``(f) Authorization of Appropriations.--To carry out this 
     section, there are authorized to be appropriated such sums as 
     may be necessary for fiscal years 2011 through 2015.''.

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