[House Report 107-624]
[From the U.S. Government Publishing Office]



107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     107-624

======================================================================
 
                           TRADE ACT OF 2002

                                _______
                                

                 July 26, 2002.--Ordered to be printed

                                _______
                                

 Mr. Thomas, from the committee of conference, submitted the following

                           CONFERENCE REPORT

                        [To accompany H.R. 3009]

      The Committee of conference on the disagreeing votes of 
the two Houses on the amendment of the Senate to the bill (H.R. 
3009), to extend the Andean Trade Preference Act, to grant 
additional trade benefits under that Act, and for other 
purposes, having met, after full and free conference, have 
agreed to recommend and do recommend to their respective Houses 
as follows:
      That the House recede from its disagreement to the 
amendment of the Senate and agree to the same with an amendment 
as follows:
      In lieu of the matter proposed to be inserted by the 
Senate amendment, insert the following:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Trade Act of 2002''.

SEC. 2. ORGANIZATION OF ACT INTO DIVISIONS; TABLE OF CONTENTS.

    (a) Divisions.--This Act is organized into 5 divisions as 
follows:
            (1) Division a.--Trade Adjustment Assistance.
            (2) Division b.--Bipartisan Trade Promotion 
        Authority.
            (3) Division c.--Andean Trade Preference Act.
            (4) Division d.--Extension of Certain Preferential 
        Trade Treatment and Other Provisions.
            (5) Division e.--Miscellaneous Provisions.
    (b) Table of Contents.--The table of contents for this Act 
is as follows:

Sec. 1. Short title.
Sec. 2. Organization of Act into divisions; table of contents.

                 DIVISION A--TRADE ADJUSTMENT ASSISTANCE

Sec. 101. Short title.

              TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM

           Subtitle A--Trade Adjustment Assistance For Workers

Sec. 111. Reauthorization of trade adjustment assistance program.
Sec. 112. Filing of petitions and provision of rapid response 
          assistance; expedited review of petitions by secretary of 
          labor.
Sec. 113. Group eligibility requirements.
Sec. 114. Qualifying requirements for trade readjustment allowances.
Sec. 115. Waivers of training requirements.
Sec. 116. Amendments to limitations on trade readjustment allowances.
Sec. 117. Annual total amount of payments for training.
Sec. 118. Provision of employer-based training.
Sec. 119. Coordination with title I of the Workforce Investment Act of 
          1998.
Sec. 120. Expenditure period.
Sec. 121. Job search allowances.
Sec. 122. Relocation allowances.
Sec. 123. Repeal of NAFTA transitional adjustment assistance program.
Sec. 124. Demonstration project for alternative trade adjustment 
          assistance for older workers.
Sec. 125. Declaration of policy; sense of Congress.

            Subtitle B--Trade Adjustment Assistance For Firms

Sec. 131. Reauthorization of program.

           Subtitle C--Trade Adjustment Assistance For Farmers

Sec. 141. Trade adjustment assistance for farmers.
Sec. 142. Conforming amendments.
Sec. 143. Study on TAA for fishermen.

                       Subtitle D--Effective Date

Sec. 151. Effective date.

   TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS

Sec. 201. Credit for health insurance costs of individuals receiving a 
          trade readjustment allowance or a benefit from the Pension 
          Benefit Guaranty Corporation.
Sec. 202. Advance payment of credit for health insurance costs of 
          eligible individuals.
Sec. 203. Health insurance assistance for eligible individuals.

                   TITLE III--CUSTOMS REAUTHORIZATION

Sec. 301. Short title.

                Subtitle A--United States Customs Service

   Chapter 1--Drug Enforcement and Other Noncommercial and Commercial 
                               Operations

Sec. 311. Authorization of appropriations for noncommercial operations, 
          commercial operations, and air and marine interdiction.
Sec. 312. Antiterrorist and illicit narcotics detection equipment for 
          the United States-Mexico border, United States-Canada border, 
          and Florida and the Gulf Coast seaports.
Sec. 313. Compliance with performance plan requirements.

     Chapter 2--Child Cyber-smuggling Center of the Customs Service

Sec. 321. Authorization of appropriations for program to prevent child 
          pornography/child sexual exploitation.

                   Chapter 3--Miscellaneous Provisions

Sec. 331. Additional Customs Service officers for United States-Canada 
          Border.
Sec. 332. Study and report relating to personnel practices of the 
          Customs Service.
Sec. 333. Study and report relating to accounting and auditing 
          procedures of the Customs Service.
Sec. 334. Establishment and implementation of cost accounting system; 
          reports.
Sec. 335. Study and report relating to timeliness of prospective 
          rulings.
Sec. 336. Study and report relating to customs user fees.
Sec. 337. Fees for customs inspections at express courier facilities.
Sec. 338. National Customs Automation Program.
Sec. 339. Authorization of appropriations for customs staffing.

                   Chapter 4--Antiterrorism Provisions

Sec. 341. Immunity for United States officials that act in good faith.
Sec. 342. Emergency adjustments to offices, ports of entry, or staffing 
          of the customs service.
Sec. 343. Mandatory advanced electronic information for cargo and other 
          improved Customs reporting procedures.
Sec. 343A. Secure systems of transportation.
Sec. 344. Border search authority for certain contraband in outbound 
          mail.
Sec. 345. Authorization of appropriations for reestablishment of customs 
          operations in New York City.

               Chapter 5--Textile Transshipment Provisions

Sec. 351. GAO audit of textile transshipment monitoring by Customs 
          Service.
Sec. 352. Authorization of appropriations for textile transshipment 
          enforcement operations.
Sec. 353. Implementation of the African Growth and Opportunity Act.

      Subtitle B--Office of the United States Trade Representative

Sec. 361. Authorization of appropriations.

        Subtitle C--United States International Trade Commission

Sec. 371. Authorization of appropriations.

                   Subtitle D--Other Trade Provisions

Sec. 381. Increase in aggregate value of articles exempt from duty 
          acquired abroad by United States residents.
Sec. 382. Regulatory audit procedures.
Sec. 383. Payment of duties and fees.

            DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY

                  TITLE XXI--TRADE PROMOTION AUTHORITY

Sec. 2101. Short title and findings.
Sec. 2102. Trade negotiating objectives.
Sec. 2103. Trade agreements authority.
Sec. 2104. Consultations and assessment.
Sec. 2105. Implementation of trade agreements.
Sec. 2106. Treatment of certain trade agreements for which negotiations 
          have already begun.
Sec. 2107. Congressional Oversight Group.
Sec. 2108. Additional implementation and enforcement requirements.
Sec. 2109. Committee staff.
Sec. 2110. Conforming amendments.
Sec. 2111. Report on impact of trade promotion authority.
Sec. 2112. Interests of small business.
Sec. 2113. Definitions.

                 DIVISION C--ANDEAN TRADE PREFERENCE ACT

                   TITLE XXXI--ANDEAN TRADE PREFERENCE

Sec. 3101. Short title.
Sec. 3102. Findings.
Sec. 3103. Articles eligible for preferential treatment.
Sec. 3104. Termination.
Sec. 3105. Report on Free Trade Agreement with Israel.
Sec. 3106. Modification of duty treatment for tuna.
Sec. 3107. Trade benefits under the caribbean basin economic recovery 
          act.
Sec. 3108. Trade benefits under the African Growth and Opportunity Act.

      DIVISION D--EXTENSION OF CERTAIN PREFERENTIAL TRADE TREATMENT

        TITLE XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES

Sec. 4101. Extension of generalized system of preferences.
Sec. 4102. Amendments to generalized system of preferences.

                  DIVISION E--MISCELLANEOUS PROVISIONS

                  TITLE L--MISCELLANEOUS TRADE BENEFITS

                       Subtitle A--Wool Provisions

Sec. 5101. Wool provisions.
Sec. 5102. Duty suspension on wool.

                      Subtitle B--Other Provisions

Sec. 5201. Fund for WTO dispute settlements.
Sec. 5202. Certain steam or other vapor generating boilers used in 
          nuclear facilities.
Sec. 5203. Sugar tariff-rate quota circumvention.

                DIVISION A--TRADE ADJUSTMENT ASSISTANCE

SEC. 101. SHORT TITLE.

    This division may be cited as the ``Trade Adjustment 
Assistance Reform Act of 2002''.

              TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM

          Subtitle A--Trade Adjustment Assistance For Workers

SEC. 111. REAUTHORIZATION OF TRADE ADJUSTMENT ASSISTANCE PROGRAM.

    (a) Assistance for Workers.--Section 245 of the Trade Act 
of 1974 (19 U.S.C. 2317) is amended by striking ``October 1, 
1998, and ending September 30, 2001,'' each place it appears 
and inserting ``October 1, 2001, and ending September 30, 
2007,''.
    (b) Assistance for Firms.--Section 256(b) of the Trade Act 
of 1974 (19 U.S.C. 2346(b)) is amended by striking ``October 1, 
1998, and ending September 30, 2001'' and inserting ``October 
1, 2001, and ending September 30, 2007,''.
    (c) Termination.--Section 285 of the Trade Act of 1974 is 
amended to read as follows:

``SEC. 285. TERMINATION.

    ``(a) Assistance for Workers.--
            ``(1) In general.--Except as provided in paragraph 
        (2), trade adjustment assistance, vouchers, allowances, 
        and other payments or benefits may not be provided 
        under chapter 2 after September 30, 2007.
            ``(2) Exception.--Notwithstanding paragraph (1), a 
        worker shall continue to receive trade adjustment 
        assistance benefits and other benefits under chapter 2 
        for any week for which the worker meets the eligibility 
        requirements of that chapter, if on or before September 
        30, 2007, the worker is--
                    ``(A) certified as eligible for trade 
                adjustment assistance benefits under chapter 2 
                of this title; and
                    ``(B) otherwise eligible to receive trade 
                adjustment assistance benefits under chapter 2.
    ``(b) Other Assistance.--
            ``(1) Assistance for firms.--Technical assistance 
        may not be provided under chapter 3 after September 30, 
        2007.
            ``(2) Assistance for farmers.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), adjustment assistance, 
                vouchers, allowances, and other payments or 
                benefits may not be provided under chapter 6 
                after September 30, 2007.
                    ``(B) Exception.--Notwithstanding 
                subparagraph (A), an agricultural commodity 
                producer (as defined in section 291(2)) shall 
                continue to receive adjustment assistance 
                benefits and other benefits under chapter 6, 
                for any week for which the agricultural 
                commodity producer meets the eligibility 
                requirements of chapter 6, if on or before 
                September 30, 2007, the agricultural commodity 
                producer is--
                            ``(i) certified as eligible for 
                        adjustment assistance benefits under 
                        chapter 6; and
                            ``(ii) is otherwise eligible to 
                        receive adjustment assistance benefits 
                        under such chapter 6.''.

SEC. 112. FILING OF PETITIONS AND PROVISION OF RAPID RESPONSE 
                    ASSISTANCE; EXPEDITED REVIEW OF PETITIONS BY 
                    SECRETARY OF LABOR.

    (a) Filing of Petitions and Provision of Rapid Response 
Assistance.--Section 221(a) of the Trade Act of 1974 (19 U.S.C. 
2271(a)) is amended to read as follows:
    ``(a)(1) A petition for certification of eligibility to 
apply for adjustment assistance for a group of workers under 
this chapter may be filed simultaneously with the Secretary and 
with the Governor of the State in which such workers' firm or 
subdivision is located by any of the following:
            ``(A) The group of workers (including workers in an 
        agricultural firm or subdivision of any agricultural 
        firm).
            ``(B) The certified or recognized union or other 
        duly authorized representative of such workers.
            ``(C) Employers of such workers, one-stop operators 
        or one-stop partners (as defined in section 101 of the 
        Workforce Investment Act of 1998 (29 U.S.C. 2801)), 
        including State employment security agencies, or the 
        State dislocated worker unit established under title I 
        of such Act, on behalf of such workers.
    ``(2) Upon receipt of a petition filed under paragraph (1), 
the Governor shall--
            ``(A) ensure that rapid response assistance, and 
        appropriate core and intensive services (as described 
        in section 134 of the Workforce Investment Act of 1998 
        (29 U.S.C. 2864)) authorized under other Federal laws 
        are made available to the workers covered by the 
        petition to the extent authorized under such laws; and
            ``(B) assist the Secretary in the review of the 
        petition by verifying such information and providing 
        such other assistance as the Secretary may request.
    ``(3) Upon receipt of the petition, the Secretary shall 
promptly publish notice in the Federal Register that the 
Secretary has received the petition and initiated an 
investigation.''.
    (b) Expedited Review of Petitions by Secretary of Labor.--
Section 223(a) of such Act (19 U.S.C. 2273(a)) is amended in 
the first sentence by striking ``60 days'' and inserting ``40 
days''.

SEC. 113. GROUP ELIGIBILITY REQUIREMENTS.

    (a) Trade Adjustment Assistance Program.--
            (1) In general.--Section 222 of the Trade Act of 
        1974 (19 U.S.C. 2272) is amended--
                    (A) by amending subsection (a) to read as 
                follows:
    ``(a) In General.--A group of workers (including workers in 
any agricultural firm or subdivision of an agricultural firm) 
shall be certified by the Secretary as eligible to apply for 
adjustment assistance under this chapter pursuant to a petition 
filed under section 221 if the Secretary determines that--
            ``(1) a significant number or proportion of the 
        workers in such workers' firm, or an appropriate 
        subdivision of the firm, have become totally or 
        partially separated, or are threatened to become 
        totally or partially separated; and
            ``(2)(A)(i) the sales or production, or both, of 
        such firm or subdivision have decreased absolutely;
            ``(ii) imports of articles like or directly 
        competitive with articles produced by such firm or 
        subdivision have increased; and
            ``(iii) the increase in imports described in clause 
        (ii) contributed importantly to such workers' 
        separation or threat of separation and to the decline 
        in the sales or production of such firm or subdivision; 
        or
            ``(B)(i) there has been a shift in production by 
        such workers' firm or subdivision to a foreign country 
        of articles like or directly competitive with articles 
        which are produced by such firm or subdivision; and
            ``(ii)(I) the country to which the workers' firm 
        has shifted production of the articles is a party to a 
        free trade agreement with the United States;
            ``(II) the country to which the workers' firm has 
        shifted production of the articles is a beneficiary 
        country under the Andean Trade Preference Act, African 
        Growth and Opportunity Act, or the Caribbean Basin 
        Economic Recovery Act; or
            ``(III) there has been or is likely to be an 
        increase in imports of articles that are like or 
        directly competitive with articles which are or were 
        produced by such firm or subdivision.'';
                    (B) by redesignating subsection (b) as 
                subsection (c); and
                    (C) by inserting after subsection (a) the 
                following:
    ``(b) Adversely affected secondary workers.--A group of 
workers (including workers in any agricultural firm or 
subdivision of an agricultural firm) shall be certified by the 
Secretary as eligible to apply for trade adjustment assistance 
benefits under this chapter if the Secretary determines that--
            ``(1) a significant number or proportion of the 
        workers in the workers' firm or an appropriate 
        subdivision of the firm have become totally or 
        partially separated, or are threatened to become 
        totally or partially separated;
            ``(2) the workers' firm (or subdivision) is a 
        supplier or downstream producer to a firm (or 
        subdivision) that employed a group of workers who 
        received a certification of eligibility under 
        subsection (a), and such supply or production is 
        related to the article that was the basis for such 
        certification (as defined in subsection (c) (3) and 
        (4)); and
            ``(3) either--
                    ``(A) the workers' firm is a supplier and 
                the component parts it supplied to the firm (or 
                subdivision) described in paragraph (2) 
                accounted for at least 20 percent of the 
                production or sales of the workers' firm; or
                    ``(B) a loss of business by the workers' 
                firm with the firm (or subdivision) described 
                in paragraph (2) contributed importantly to the 
                workers' separation or threat of separation 
                determined under paragraph (1).''.
    (b) Definitions.--Section 222(c) of such Act, as 
redesignated by paragraph (1)(A), is amended--
            (1) in the matter preceding paragraph (1), by 
        striking ``subsection (a)(3)'' and inserting ``this 
        section''; and
            (2) by adding at the end the following:
            ``(3) Downstream producer.--The term `downstream 
        producer' means a firm that performs additional, value-
        added production processes for a firm or subdivision, 
        including a firm that performs final assembly or 
        finishing, directly for another firm (or subdivision), 
        for articles that were the basis for a certification of 
        eligibility under subsection (a) of a group of workers 
        employed by such other firm, if the certification of 
        eligibility under subsection (a) is based on an 
        increase in imports from, or a shift in production to, 
        Canada or Mexico.
            ``(4) Supplier.--The term `supplier' means a firm 
        that produces and supplies directly to another firm (or 
        subdivision) component parts for articles that were the 
        basis for a certification of eligibility under 
        subsection (a) of a group of workers employed by such 
        other firm.''.

SEC. 114. QUALIFYING REQUIREMENTS FOR TRADE READJUSTMENT ALLOWANCES.

    (a) Clarification of Certain Reductions.--Section 
231(a)(3)(B) of the Trade Act of 1974 (19 U.S.C. 2291(a)(3)(B)) 
is amended by inserting after ``any unemployment insurance'' 
the following: ``, except additional compensation that is 
funded by a State and is not reimbursed from any Federal 
funds,''.
    (b) Enrollment in Training Requirement.--Section 
231(a)(5)(A) of such Act (19 U.S.C. 2291(a)(5)(A)) is amended--
            (1) by inserting ``(i)'' after ``(A)'';
            (2) by adding ``and'' after the comma at the end; 
        and
            (3) by adding at the end the following:
                    ``(ii) the enrollment required under clause 
                (i) occurs no later than the latest of--
                            ``(I) the last day of the 16th week 
                        after the worker's most recent total 
                        separationfrom adversely affected 
employment which meets the requirements of paragraphs (1) and (2),
                            ``(II) the last day of the 8th week 
                        after the week in which the Secretary 
                        issues a certification covering the 
                        worker,
                            ``(III) 45 days after the later of 
                        the dates specified in subclause (I) or 
                        (II), if the Secretary determines there 
                        are extenuating circumstances that 
                        justify an extension in the enrollment 
                        period, or
                            ``(IV) the last day of a period 
                        determined by the Secretary to be 
                        approved for enrollment after the 
                        termination of a waiver issued pursuant 
                        to subsection (c),''.

SEC. 115. WAIVERS OF TRAINING REQUIREMENTS.

    (a) In General.--Section 231(c) of the Trade Act of 1974 
(19 U.S.C. 2291(c)) is amended to read as follows:
    ``(c) Waivers of Training Requirements.--
            ``(1) Issuance of waivers.--The Secretary may issue 
        a written statement to an adversely affected worker 
        waiving the requirement to be enrolled in training 
        described in subsection (a)(5)(A) if the Secretary 
        determines that it is not feasible or appropriate for 
        the worker, because of 1 or more of the following 
        reasons:
                    ``(A) Recall.--The worker has been notified 
                that the worker will be recalled by the firm 
                from which the separation occurred.
                    ``(B) Marketable skills.--The worker 
                possesses marketable skills for suitable 
                employment (as determined pursuant to an 
                assessment of the worker, which may include the 
                profiling system under section 303(j) of the 
                Social Security Act (42 U.S.C. 503(j)), carried 
                out in accordance with guidelines issued by the 
                Secretary) and there is a reasonable 
                expectation of employment at equivalent wages 
                in the foreseeable future.
                    ``(C) Retirement.--The worker is within 2 
                years of meeting all requirements for 
                entitlement to either--
                            ``(i) old-age insurance benefits 
                        under title II of the Social Security 
                        Act (42 U.S.C. 401 et seq.) (except for 
                        application therefor); or
                            ``(ii) a private pension sponsored 
                        by an employer or labor organization.
                    ``(D) Health.--The worker is unable to 
                participate in training due to the health of 
                the worker, except that a waiver under this 
                subparagraph shall not be construed to exempt a 
                worker from requirements relating to the 
                availability for work, active search for work, 
                or refusal to accept work under Federal or 
                State unemployment compensation laws.
                    ``(E) Enrollment unavailable.--The first 
                available enrollment date for the approved 
                training of the worker is within 60 days after 
                the date of the determination made under this 
                paragraph, or, if later, there are extenuating 
                circumstances for the delay in enrollment, as 
                determined pursuant to guidelines issued by the 
                Secretary.
                    ``(F) Training not available.--Training 
                approved by the Secretary is not reasonably 
                available to the worker from either 
                governmental agencies or private sources (which 
                may include area vocational education schools, 
                as defined in section 3 of the Carl D. Perkins 
                Vocational and Technical Education Act of 1998 
                (20 U.S.C. 2302), and employers), no training 
                that is suitable for the worker is available at 
                a reasonable cost, or no training funds are 
                available.
            ``(2) Duration of waivers.--
                    ``(A) In general.--A waiver issued under 
                paragraph (1) shall be effective for not more 
                than 6 months after the date on which the 
                waiver is issued, unless the Secretary 
                determines otherwise.
                    ``(B) Revocation.--The Secretary shall 
                revoke a waiver issued under paragraph (1) if 
                the Secretary determines that the basis of a 
                waiver is no longer applicable to the worker 
                and shall notify the worker in writing of the 
                revocation.
            ``(3) Agreements under section 239.--
                    ``(A) Issuance by cooperating states.--
                Pursuant to an agreement under section 239, the 
                Secretary may authorize a cooperating State to 
                issue waivers as described in paragraph (1).
                    ``(B) Submission of statements.--An 
                agreement under section 239 shall include a 
                requirement that the cooperating State submit 
                to the Secretary the written statements 
                provided under paragraph (1) and a statement of 
                the reasons for the waiver.''.
    (b) Conforming Amendment.--Section 231(a)(5)(C) of such Act 
(19 U.S.C. 2291(a)(5)(C)) is amended by striking ``certified''.

SEC. 116. AMENDMENTS TO LIMITATIONS ON TRADE READJUSTMENT ALLOWANCES.

    (a) Increase in Maximum Number of Weeks.--Section 233(a) of 
the Trade Act of 1974 (19 U.S.C. 2293(a)) is amended--
            (1) in paragraph (2), by inserting after ``104-week 
        period'' the following: ``(or, in the case of an 
        adversely affected worker who requires a program of 
        remedial education (as described in section 
        236(a)(5)(D)) in order to complete training approved 
        for the worker under section 236, the 130-week 
        period)''; and
            (2) in paragraph (3), by striking ``26'' each place 
        it appears and inserting ``52''.
    (b) Special Rule Relating to Break in Training.--Section 
233(f) of the Trade Act of 1974 (19 U.S.C. 2293(f)) is amended 
in the matter preceding paragraph (1) by striking ``14 days'' 
and inserting ``30 days''.
    (c) Additional Weeks for Individuals in Need of Remedial 
Education.--Section 233 of the Trade Act of 1974 (19 U.S.C. 
2293) is amended by adding at the end the following:
    ``(g) Notwithstanding any other provision of this section, 
in order to assist an adversely affected worker to complete 
training approved for the worker under section 236 which 
includes a program of remedial education (as described in 
section 236(a)(5)(D)), and in accordance with regulations 
prescribed by the Secretary, payments may be made as trade 
readjustment allowances for up to 26 additional weeks in the 
26-week period that follows the last week of entitlement to 
trade readjustment allowances otherwise payable under this 
chapter.''.

SEC. 117. ANNUAL TOTAL AMOUNT OF PAYMENTS FOR TRAINING.

    Section 236(a)(2)(A) of the Trade Act of 1974 (19 U.S.C. 
2296(a)(2)(A)) is amended by striking ``$80,000,000'' and all 
that follows through ``$70,000,000'' and inserting 
``$220,000,000''.

SEC. 118. PROVISION OF EMPLOYER-BASED TRAINING.

    (a) In General.--Section 236(a)(5)(A) of the Trade Act of 
1974 (19 U.S.C. 2296(a)(5)(A)) is amended to read as follows:
            ``(A) employer-based training, including--
                    ``(i) on-the-job training, and
                    ``(ii) customized training,''.
    (b) Reimbursement.--Section 236(c)(8) of such Act (19 
U.S.C. 2296(c)(8)) is amended to read as follows:
            ``(8) the employer is provided reimbursement of not 
        more than 50 percent of the wage rate of the 
        participant, for the cost of providing the training and 
        additional supervision related to the training,''.
    (c) Definition.--Section 236 of such Act (19 U.S.C. 2296) 
is amended by adding at the end the following new subsection:
    ``(f) For purposes of this section, the term `customized 
training' means training that is--
            ``(1) designed to meet the special requirements of 
        an employer or group of employers;
            ``(2) conducted with a commitment by the employer 
        or group of employers to employ an individual upon 
        successful completion of the training; and
            ``(3) for which the employer pays for a significant 
        portion (but in no case less than 50 percent) of the 
        cost of such training, as determined by the 
        Secretary.''.

SEC. 119. COORDINATION WITH TITLE I OF THE WORKFORCE INVESTMENT ACT OF 
                    1998.

    Section 235 of the Trade Act of 1974 (19 U.S.C. 2295) is 
amended by inserting before the period at the end of the first 
sentence the following: ``, including the services provided 
through one-stop delivery systems described in section 134(c) 
of the Workforce Investment Act of 1998 (29 U.S.C. 2864(c))''.

SEC. 120. EXPENDITURE PERIOD.

    Section 245 of the Trade Act of 1974 (19 U.S.C. 2317), as 
amended by section 111(a) of this Act, is further amended by 
amending subsection (b) to read as follows:
    ``(b) Period of Expenditure.--Funds obligated for any 
fiscal year to carry out activities under sections 235 through 
238 may be expended by each State receiving such funds during 
that fiscal year and the succeeding two fiscal years.''.

SEC. 121. JOB SEARCH ALLOWANCES.

    Section 237 of the Trade Act of 1974 (19 U.S.C. 2297) is 
amended to read as follows:

``SEC. 237. JOB SEARCH ALLOWANCES.

    ``(a) Job Search Allowance Authorized.--
            ``(1) In general.--An adversely affected worker 
        covered by a certification issued under subchapter A of 
        this chapter may file an application with the Secretary 
        for payment of a job search allowance.
            ``(2) Approval of applications.--The Secretary may 
        grant an allowance pursuant to an application filed 
        under paragraph (1) when all of the following apply:
                    ``(A) Assist adversely affected worker.--
                The allowance is paid to assist an adversely 
                affected worker who has been totally separated 
                in securing a job within the United States.
                    ``(B) Local employment not available.--The 
                Secretary determines that the worker cannot 
                reasonably be expected to secure suitable 
                employment in the commuting area in which the 
                worker resides.
                    ``(C) Application.--The worker has filed an 
                application for the allowance with the 
                Secretary before--
                            ``(i) the later of--
                                    ``(I) the 365th day after 
                                the date of the certification 
                                under which the worker is 
                                certified as eligible; or
                                    ``(II) the 365th day after 
                                the date of the worker's last 
                                total separation; or
                            ``(ii) the date that is the 182d 
                        day after the date on which the worker 
                        concluded training, unless the worker 
                        received a waiver under section 231(c).
    ``(b) Amount of Allowance.--
            ``(1) In general.--An allowance granted under 
        subsection (a) shall provide reimbursement to the 
        worker of 90 percent of the cost of necessary job 
        search expenses as prescribed by the Secretary in 
        regulations.
            ``(2) Maximum allowance.--Reimbursement under this 
        subsection may not exceed $1,250 for any worker.
            ``(3) Allowance for subsistence and 
        transportation.--Reimbursement under this subsection 
        may not be made for subsistence and transportation 
        expenses at levels exceeding those allowable under 
        section 236(b) (1) and (2).
    ``(c) Exception.--Notwithstanding subsection (b), the 
Secretary shall reimburse any adversely affected worker for 
necessary expenses incurred by the worker in participating in a 
job search program approved by the Secretary.''.

SEC. 122. RELOCATION ALLOWANCES.

    Section 238 of the Trade Act of 1974 (19 U.S.C. 2298) is 
amended to read as follows:

``SEC. 238. RELOCATION ALLOWANCES.

    ``(a) Relocation Allowance Authorized.--
            ``(1) In general.--Any adversely affected worker 
        covered by a certification issued under subchapter A of 
        this chapter may file an application for a relocation 
        allowance with the Secretary, and the Secretary may 
        grant the relocation allowance, subject to the terms 
        and conditions of this section.
            ``(2) Conditions for granting allowance.--A 
        relocation allowance may be granted if all of the 
        following terms and conditions are met:
                    ``(A) Assist an adversely affected 
                worker.--The relocation allowance will assist 
                an adversely affected worker in relocating 
                within the United States.
                    ``(B) Local employment not available.--The 
                Secretary determines that the worker cannot 
                reasonably be expected to secure suitable 
                employment in the commuting area in which the 
                worker resides.
                    ``(C) Total separation.--The worker is 
                totally separated from employment at the time 
                relocation commences.
                    ``(D) Suitable employment obtained.--The 
                worker--
                            ``(i) has obtained suitable 
                        employment affording a reasonable 
                        expectation of long-term duration in 
                        the area in which the worker wishes to 
                        relocate; or
                            ``(ii) has obtained a bona fide 
                        offer of such employment.
                    ``(E) Application.--The worker filed an 
                application with the Secretary before--
                            ``(i) the later of--
                                    ``(I) the 425th day after 
                                the date of the certification 
                                under subchapter A of this 
                                chapter; or
                                    ``(II) the 425th day after 
                                the date of the worker's last 
                                total separation; or
                            ``(ii) the date that is the 182d 
                        day after the date on which the worker 
                        concluded training, unless the worker 
                        received a waiver under section 231(c).
    ``(b) Amount of Allowance.--The relocation allowance 
granted to a worker under subsection (a) includes--
            ``(1) 90 percent of the reasonable and necessary 
        expenses (including, but not limited to, subsistence 
        and transportation expenses at levels not exceeding 
        those allowable under section 236(b) (1) and (2) 
        specified in regulations prescribed by the Secretary, 
        incurred in transporting the worker, the worker's 
        family, and household effects; and
            ``(2) a lump sum equivalent to 3 times the worker's 
        average weekly wage, up to a maximum payment of $1,250.
    ``(c) Limitations.--A relocation allowance may not be 
granted to a worker unless--
            ``(1) the relocation occurs within 182 days after 
        the filing of the application for relocation 
        assistance; or
            ``(2) the relocation occurs within 182 days after 
        the conclusion of training, if the worker entered a 
        training program approved by the Secretary under 
        section 236(b) (1) and (2).''.

SEC. 123. REPEAL OF NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE PROGRAM.

    (a) In General.--Subchapter D of chapter 2 of title II of 
such Act (19 U.S.C. 2331) is repealed.
    (b) Conforming Amendments.--
            (1) Section 225(b) (1) and (2) of the Trade Act of 
        1974 (19 U.S.C. 2275(b) (1) and (2)) is amended by 
        striking ``or subchapter D'' each place it appears.
            (2) Section 249A of such Act (19 U.S.C. 2322) is 
        repealed.
            (3) The table of contents of such Act is amended--
                    (A) by striking the item relating to 
                section 249A; and
                    (B) by striking the items relating to 
                subchapter D of chapter 2 of title II.
            (4) Section 284(a) of such Act is amended by 
        striking ``or section 250(c)''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this 
        section shall apply with respect to petitions filed 
        under chapter 2 of title II of the Trade Act of 1974, 
        on or after the date that is 90 days after the date of 
        enactment of this Act.
            (2) Workers certified as eligible before effective 
        date.--Notwithstanding subsection (a), a worker 
        receiving benefits under chapter 2 of title II of the 
        Trade Act of 1974 shall continue to receive (or be 
        eligible to receive) benefits and services under 
        chapter 2 of title II of the Trade Act of 1974, as in 
        effect on the day before the amendments made by this 
        section take effect under subsection (a), for any week 
        for which the worker meets the eligibility requirements 
        of such chapter 2 as in effect on such date.

SEC. 124. DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE ADJUSTMENT 
                    ASSISTANCE FOR OLDER WORKERS.

    (a) Demonstration Program.--Chapter 2 of title II of the 
Trade Act of 1974 (19 U.S.C. 2271 et seq.) is amended by 
striking section 246 and inserting the following new section:

``SEC. 246. DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE ADJUSTMENT 
                    ASSISTANCE FOR OLDER WORKERS.

    ``(a) In General.--
            ``(1) Establishment.--Not later than 1 year after 
        the date of enactment of the Trade Adjustment 
        Assistance Reform Act of 2002, the Secretary shall 
        establish an alternative trade adjustment assistance 
        program for older workers that provides the benefits 
        described in paragraph (2).
            ``(2) Benefits.--
                    ``(A) Payments.--A State shall use the 
                funds provided to the State under section 241 
                to pay, for a period not to exceed 2 years, to 
                a worker described in paragraph (3)(B), 50 
                percent of the difference between--
                            ``(i) the wages received by the 
                        worker from reemployment; and
                            ``(ii) the wages received by the 
                        worker at the time of separation.
                    ``(B) Health insurance.--A worker described 
                in paragraph (3)(B) participating in the 
                program established under paragraph (1) is 
                eligible to receive, for a period not to exceed 
                2 years, a credit for health insurance costs 
                under section 35 of the Internal Revenue Code 
                of 1986,as added by section 201 of the Trade 
Act of 2002.
            ``(3) Eligibility.--
                    ``(A) Firm eligibility.--
                            ``(i) In general.--The Secretary 
                        shall provide the opportunity for a 
                        group of workers on whose behalf a 
                        petition is filed under section 221 to 
                        request that the group of workers be 
                        certified for the alternative trade 
                        adjustment assistance program under 
                        this section at the time the petition 
                        is filed.
                            ``(ii) Criteria.--In determining 
                        whether to certify a group of workers 
                        as eligible for the alternative trade 
                        adjustment assistance program, the 
                        Secretary shall consider the following 
                        criteria:
                                    ``(I) Whether a significant 
                                number of workers in the 
                                workers' firm are 50 years of 
                                age or older.
                                    ``(II) Whether the workers 
                                in the workers' firm possess 
                                skills that are not easily 
                                transferable.
                                    ``(III) The competitive 
                                conditions within the workers' 
                                industry.
                            ``(iii) Deadline.--The Secretary 
                        shall determine whether the workers in 
                        the group are eligible for the 
                        alternative trade adjustment assistance 
                        program by the date specified in 
                        section 223(a).
                    ``(B) Individual eligibility.--A worker in 
                the group that the Secretary has certified as 
                eligible for the alternative trade adjustment 
                assistance program may elect to receive 
                benefits under the alternative trade adjustment 
                assistance program if the worker--
                            ``(i) is covered by a certification 
                        under subchapter A of this chapter;
                            ``(ii) obtains reemployment not 
                        more than 26 weeks after the date of 
                        separation from the adversely affected 
                        employment;
                            ``(iii) is at least 50 years of 
                        age; and
                            ``(iv) earns not more than $50,000 
                        a year in wages from reemployment;
                            ``(v) is employed on a full-time 
                        basis as defined by State law in the 
                        State in which the worker is employed; 
                        and
                            ``(vi) does not return to the 
                        employment from which the worker was 
                        separated.
            ``(4) Total amount of payments.--The payments 
        described in paragraph (2)(A) made to a worker may not 
        exceed $10,000 per worker during the 2-year eligibility 
        period.
            ``(5) Limitation on other benefits.--Except as 
        provided in section 238(a)(2)(B), if a worker is 
        receiving payments pursuant to the program established 
        under paragraph (1), the worker shall not be eligible 
        to receive any other benefits under this title.
    ``(b) Termination.--
            ``(1) In general.--Except as provided in paragraph 
        (2), no payments may be made by a State under the 
        program established under subsection (a)(1) after the 
        date that is 5 years after the date on which such 
        program is implemented by the State.
            ``(2) Exception.--Notwithstanding paragraph (1), a 
        worker receiving payments under the program established 
        under subsection (a)(1) on the termination date 
        described in paragraph (1) shall continue to receive 
        such payments provided that the worker meets the 
        criteria described in subsection (a)(3)(B).''.
    (b) Table of Contents.--The Trade Act of 1974 (U.S.C. et 
seq.) is amended in the table of contents by inserting after 
the item relating to section 245 the following new item:

``Sec. 246.  Demonstration project for alternative trade adjustment 
          assistance for older workers.''.

SEC. 125. DECLARATION OF POLICY; SENSE OF CONGRESS.

    (a) Declaration of Policy.--Congress reiterates that, under 
the trade adjustment assistance program under chapter 2 of 
title II of the Trade Act of 1974, workers are eligible for 
transportation, childcare, and healthcare assistance, as well 
as other related assistance under programs administered by the 
Department of Labor.
    (b) Sense of Congress.--It is the sense of Congress that 
the Secretary of Labor, working independently and in 
conjunction with the States, should, in accordance with section 
225 of the Trade Act of 1974, provide more specific information 
about benefit allowances, training, and other employment 
services, and the petition and application procedures 
(including appropriate filing dates) for such allowances, 
training, and services, under the trade adjustment assistance 
program under chapter 2 of title II of the Trade Act of 1974 to 
workers who are applying for, or are certified to receive, 
assistance under that program, including information on all 
other Federal assistance available to such workers.

           Subtitle B--Trade Adjustment Assistance For Firms

SEC. 131. REAUTHORIZATION OF PROGRAM.

    Section 256(b) of chapter 3 of title II of the Trade Act of 
1974 (19 U.S.C. 2346(b)) is amended to read as follows:
    ``(b) There are authorized to be appropriated to the 
Secretary $16,000,000 for each of fiscal years 2003 through 
2007, to carry out the Secretary's functions under this chapter 
in connection with furnishing adjustment assistance to firms. 
Amounts appropriated under this subsection shall remain 
available until expended.''.

          Subtitle C--Trade Adjustment Assistance For Farmers

SEC. 141. TRADE ADJUSTMENT ASSISTANCE FOR FARMERS.

    (a) In General.--Title II of the Trade Act of 1974 (19 
U.S.C. 2251 et seq.) is amended by adding at the end the 
following new chapter:

             ``CHAPTER 6--ADJUSTMENT ASSISTANCE FOR FARMERS

``SEC. 291. DEFINITIONS.

    ``In this chapter:
            ``(1) Agricultural commodity.--The term 
        `agricultural commodity' means any agricultural 
        commodity (including livestock) in its raw or natural 
        state.
            ``(2) Agricultural commodity producer.--The term 
        `agricultural commodity producer' has the same meaning 
        as the term `person' as prescribed by regulations 
        promulgated under section 1001(5) of the Food Security 
        Act of 1985 (7 U.S.C. 1308(5)).
            ``(3) Contributed importantly.--
                    ``(A) In general.--The term `contributed 
                importantly' means a cause which is important 
                but not necessarily more important than any 
                other cause.
                    ``(B) Determination of contributed 
                importantly.--The determination of whether 
                imports of articles like or directly 
                competitive with an agricultural commodity with 
                respect to which a petition under this chapter 
                was filed contributed importantly to a decline 
                in the price of the agricultural commodity 
                shall be made by the Secretary.
            ``(4) Duly authorized representative.--The term 
        `duly authorized representative' means an association 
        of agricultural commodity producers.
            ``(5) National average price.--The term `national 
        average price' means the national average price paid to 
        an agricultural commodity producer for an agricultural 
        commodity in a marketing year as determined by the 
        Secretary.
            ``(6) Secretary.--The term `Secretary' means the 
        Secretary of Agriculture.

``SEC. 292. PETITIONS; GROUP ELIGIBILITY.

    ``(a) In General.--A petition for a certification of 
eligibility to apply for adjustment assistance under this 
chapter may be filed with the Secretary by a group of 
agricultural commodity producers or by their duly authorized 
representative. Upon receipt of the petition, the Secretary 
shall promptly publish notice in the Federal Register that the 
Secretary has received the petition and initiated an 
investigation.
    ``(b) Hearings.--If the petitioner, or any other person 
found by the Secretary to have a substantial interest in the 
proceedings, submits not later than 10 days after the date of 
the Secretary's publication under subsection (a) a request for 
a hearing, the Secretary shall provide for a public hearing and 
afford such interested person an opportunity to be present, to 
produce evidence, and to be heard.
    ``(c) Group Eligibility Requirements.--The Secretary shall 
certify a group of agricultural commodity producers as eligible 
to apply for adjustment assistance under this chapter if the 
Secretary determines--
            ``(1) that the national average price for the 
        agricultural commodity, or a class of goods within the 
        agricultural commodity, produced by the group for the 
        most recent marketing year for which the national 
        average price is available is less than 80 percent of 
        the average of the national average price for such 
        agricultural commodity, or such class of goods, for the 
        5 marketing years preceding the most recent marketing 
        year; and
            ``(2) that increases in imports of articles like or 
        directly competitive with the agricultural commodity, 
        or class of goods within the agricultural commodity, 
        produced by the group contributed importantly to the 
        decline in price described in paragraph (1).
    ``(d) Special Rule for Qualified Subsequent Years.--A group 
of agricultural commodity producers certified as eligible under 
section 293 shall be eligible to apply for assistance under 
this chapter in any qualified year after the year the group is 
first certified, if the Secretary determines that--
            ``(1) the national average price for the 
        agricultural commodity, or class of goods within the 
        agricultural commodity, produced by the group for the 
        most recent marketing year for which the national 
        average price is available is equal to or less than the 
        price determined under subsection (c)(1); and
            ``(2) the requirements of subsection (c)(2) are 
        met.
    ``(e) Determination of Qualified Year and Commodity.--In 
this chapter:
            ``(1) Qualified year.--The term `qualified year', 
        with respect to a group of agricultural commodity 
        producers certified as eligible under section 293, 
        means each consecutive year after the year in which the 
        group is certified and in which the Secretary makes the 
        determination under subsection (c) or (d), as the case 
        may be.
            ``(2) Classes of goods within a commodity.--In any 
        case in which there are separate classes of goods 
        within an agricultural commodity, the Secretary shall 
        treat each class as a separate commodity in determining 
        group eligibility, the national average price, and 
        level of imports under this section and section 296.

``SEC. 293. DETERMINATIONS BY SECRETARY OF AGRICULTURE.

    ``(a) In General.--As soon as practicable after the date on 
which a petition is filed under section 292, but in any event 
not later than 40 days after that date, the Secretary shall 
determine whether the petitioning group meets the requirements 
of section 292 (c) or (d), as the case may be, and shall, if 
the group meets the requirements, issue a certification of 
eligibility to apply for assistance under this chapter covering 
agricultural commodity producers in any group that meets the 
requirements. Each certification shall specify the date on 
which eligibility under this chapter begins.
    ``(b) Notice.--Upon making a determination on a petition, 
the Secretary shall promptly publish a summary of the 
determination in the Federal Register, together with the 
Secretary's reasons for making the determination.
    ``(c) Termination of Certification.--Whenever the Secretary 
determines, with respect to any certification of eligibility 
under this chapter, that the decline in price for the 
agricultural commodity covered by the certification is no 
longer attributable to the conditions described in section 292, 
the Secretary shall terminate such certification and promptly 
cause notice of such termination to be published in the Federal 
Register, together with the Secretary's reasons for making such 
determination.

``SEC. 294. STUDY BY SECRETARY OF AGRICULTURE WHEN INTERNATIONAL TRADE 
                    COMMISSION BEGINS INVESTIGATION.

    ``(a) In General.--Whenever the International Trade 
Commission (in this chapter referred to as the `Commission') 
begins an investigation under section 202 with respect to an 
agricultural commodity, the Commission shall immediately notify 
the Secretary of the investigation. Upon receipt of the 
notification, the Secretary shall immediately conduct a study 
of--
            ``(1) the number of agricultural commodity 
        producers producing a like or directly competitive 
        agricultural commodity who have been or are likely to 
        be certified as eligible for adjustment assistance 
        under this chapter, and
            ``(2) the extent to which the adjustment of such 
        producers to the import competition may be facilitated 
        through the use of existing programs.
    ``(b) Report.--Not later than 15 days after the day on 
which the Commission makes its report under section 202(f), the 
Secretary shall submit a report to the President setting forth 
the findings of the study described in subsection (a). Upon 
making the report to the President, the Secretary shall also 
promptly make the report public (with the exception of 
information which the Secretary determines to be confidential) 
and shall have a summary of the report published in the Federal 
Register.

``SEC. 295. BENEFIT INFORMATION TO AGRICULTURAL COMMODITY PRODUCERS.

    ``(a) In General.--The Secretary shall provide full 
information to agricultural commodity producers about the 
benefit allowances, training, and other employment services 
available under this title and about the petition and 
application procedures, and the appropriate filing dates, for 
such allowances, training, and services. The Secretary shall 
provide whatever assistance is necessary to enable groups to 
prepare petitions or applications for program benefits under 
this title.
    ``(b) Notice of Benefits.--
            ``(1) In general.--The Secretary shall mail written 
        notice of the benefits available under this chapter to 
        each agricultural commodity producer that the Secretary 
        has reason to believe is covered by a certification 
        made under this chapter.
            ``(2) Other notice.--The Secretary shall publish 
        notice of the benefits available under this chapter to 
        agricultural commodity producers that are covered by 
        each certification made under this chapter in 
        newspapers of general circulation in the areas in which 
        such producers reside.
            ``(3) Other federal assistance.--The Secretary 
        shall also provide information concerning procedures 
        for applying for and receiving all other Federal 
        assistance and services available to workers facing 
        economic distress.

``SEC. 296. QUALIFYING REQUIREMENTS FOR AGRICULTURAL COMMODITY 
                    PRODUCERS.

    ``(a) In General.--
            ``(1) Requirements.--Payment of a trade adjustment 
        allowance shall be made to an adversely affected 
        agricultural commodity producer covered by a 
        certification under this chapter who files an 
        application for such allowance within 90 days after the 
        date on which the Secretary makes a determination and 
        issues a certification of eligibility under section 
        293, if the following conditions are met:
                    ``(A) The producer submits to the Secretary 
                sufficient information to establish the amount 
                of agricultural commodity covered by the 
                application filed under subsection (a) that was 
                produced by the producer in the most recent 
                year.
                    ``(B) The producer certifies that the 
                producer has not received cash benefits under 
                any provision of this title other than this 
                chapter.
                    ``(C) The producer's net farm income (as 
                determined by the Secretary) for the most 
                recent year is less than the producer's net 
                farm income for the latest year in which no 
                adjustment assistance was received by the 
                producer under this chapter.
                    ``(D) The producer certifies that the 
                producer has met with an Extension Service 
                employee or agent to obtain, at no cost to the 
                producer, information and technical assistance 
                that will assist the producer in adjusting to 
                import competition with respect to the 
                adversely affected agricultural commodity, 
                including--
                            ``(i) information regarding the 
                        feasibility and desirability of 
                        substituting 1 or more alternative 
                        commodities for the adversely affected 
                        agricultural commodity; and
                            ``(ii) technical assistance that 
                        will improve the competitiveness of the 
                        production and marketing of the 
                        adversely affected agricultural 
                        commodity by the producer, including 
                        yield and marketing improvements.
            ``(2) Limitations.--
                    ``(A) Adjusted gross income.--
                            ``(i) In general.--Notwithstanding 
                        any other provision of this chapter, an 
                        agricultural commodity producer shall 
                        not be eligible for assistance under 
                        this chapter in any year in which the 
                        average adjusted gross income of the 
                        producer exceeds the level set forth in 
                        section 1001D of the Food Security Act 
                        of 1985.
                            ``(ii) Certification.--To comply 
                        with the limitation under subparagraph 
                        (A), an individual or entity shall 
                        provide to the Secretary--
                                    ``(I) a certification by a 
                                certified public accountant or 
                                another third party that is 
                                acceptable to the Secretary 
                                that the average adjusted gross 
                                income of the producer does not 
                                exceed the level set forth in 
                                section 1001D of the Food 
                                Security Act of 1985; or
                                    ``(II) information and 
                                documentation regarding the 
                                adjusted gross income of the 
                                producer through other 
                                procedures established by the 
                                Secretary.
                    ``(B) Counter-cyclical payments.--The total 
                amount of payments made to an agricultural 
                producer under this chapter during any crop 
                year may not exceed the limitation on counter-
                cyclical payments set forth in section 1001(c) 
                of the Food Security Act of 1985.
                    ``(C) Definitions.--In this subsection:
                            ``(i) Adjusted gross income.--The 
                        term `adjusted gross income' means 
                        adjusted gross income of an 
                        agricultural commodity producer--
                                    ``(I) as defined in section 
                                62 of the Internal Revenue Code 
                                of 1986 and implemented in 
                                accordance with procedures 
                                established by the Secretary; 
                                and
                                    ``(II) that is earned 
                                directly or indirectly from all 
                                agricultural and 
                                nonagricultural sources of an 
                                individual or entity for a 
                                fiscal or corresponding crop 
                                year.
                            ``(ii) Average adjusted gross 
                        income.--
                                    ``(I) In general.--The term 
                                `average adjusted gross income' 
                                means the average adjusted 
                                gross income of a producer for 
                                each of the 3 preceding taxable 
                                years.
                                    ``(II) Effective adjusted 
                                gross income.--In the case of a 
                                producer that does not have an 
                                adjusted gross income for each 
                                of the 3 preceding taxable 
                                years, the Secretary shall 
                                establish rules that provide 
                                the producer with an effective 
                                adjusted gross income for the 
                                applicable year.
    ``(b) Amount of Cash Benefits.--
            ``(1) In general.--Subject to the provisions of 
        section 298, an adversely affected agricultural 
        commodity producer described in subsection (a) shall be 
        entitled to adjustment assistance under this chapter in 
        an amount equal to the product of--
                    ``(A) one-half of the difference between--
                            ``(i) an amount equal to 80 percent 
                        of the average of the national average 
                        price of the agricultural commodity 
                        covered by the application described in 
                        subsection (a) for the 5 marketing 
                        years preceding the most recent 
                        marketing year, and
                            ``(ii) the national average price 
                        of the agricultural commodity for the 
                        most recent marketing year, and
                    ``(B) the amount of the agricultural 
                commodity produced by the agricultural 
                commodity producer in the most recent marketing 
                year.
            ``(2) Special rule for subsequent qualified 
        years.--The amount of cash benefits for a qualified 
        year shall be determined in the same manner as cash 
        benefits are determined under paragraph (1) except that 
        the average national price of the agricultural 
        commodity shall be determined under paragraph (1)(A)(i) 
        by using the 5-marketing-year period used to determine 
        the amount of cash benefits for the first 
        certification.
    ``(c) Maximum Amount of Cash Assistance.--The maximum 
amount of cash benefits an agricultural commodity producer may 
receive in any 12-month period shall not exceed $10,000.
    ``(d) Limitations on Other Assistance.--An agricultural 
commodity producer entitled to receive a cash benefit under 
this chapter--
            ``(1) shall not be eligible for any other cash 
        benefit under this title, and
            ``(2) shall be entitled to employment services and 
        training benefits under part II of subchapter B of 
        chapter 2.

``SEC. 297. FRAUD AND RECOVERY OF OVERPAYMENTS.

    ``(a) In General.--
            ``(1) Repayment.--If the Secretary, or a court of 
        competent jurisdiction, determines that any person has 
        received any payment under this chapter to which the 
        person was not entitled, such person shall be liable to 
        repay such amount to the Secretary, except that the 
        Secretary may waive such repayment if the Secretary 
        determines, in accordance with guidelines prescribed by 
        the Secretary, that--
                    ``(A) the payment was made without fault on 
                the part of such person; and
                    ``(B) requiring such repayment would be 
                contrary to equity and good conscience.
            ``(2) Recovery of overpayment.--Unless an 
        overpayment is otherwise recovered, or waived under 
        paragraph (1), the Secretary shall recover the 
        overpayment by deductions from any sums payable to such 
        person under this chapter.
    ``(b) False Statement.--A person shall, in addition to any 
other penalty provided by law, be ineligible for any further 
payments under this chapter--
            ``(1) if the Secretary, or a court of competent 
        jurisdiction, determines that the person--
                    ``(A) knowingly has made, or caused another 
                to make, a false statement or representation of 
                a material fact; or
                    ``(B) knowingly has failed, or caused 
                another to fail, to disclose a material fact; 
                and
            ``(2) as a result of such false statement or 
        representation, or of such nondisclosure, such person 
        has received any payment under this chapter to which 
        the person was not entitled.
    ``(c) Notice and Determination.--Except for overpayments 
determined by a court of competent jurisdiction, no repayment 
may be required, and no deduction may be made, under this 
section until a determination under subsection (a)(1) by the 
Secretary has been made, notice of the determination and an 
opportunity for a fair hearing thereon has been given to the 
person concerned, and the determination has become final.
    ``(d) Payment to Treasury.--Any amount recovered under this 
section shall be returned to the Treasury of the United States.
    ``(e) Penalties.--Whoever makes a false statement of a 
material fact knowing it to be false, or knowingly fails to 
disclose a material fact, for the purpose of obtaining or 
increasing for himself or for any other person any payment 
authorized to be furnished under this chapter shall be fined 
not more than $10,000 or imprisoned for not more than 1 year, 
or both.

``SEC. 298. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There are authorized to be appropriated 
and there are appropriated to the Department of Agriculture not 
to exceed $90,000,000 for each of the fiscal years 2003 through 
2007 to carry out the purposes of this chapter.
    ``(b) Proportionate Reduction.--If in any year the amount 
appropriated under this chapter is insufficient to meet the 
requirements for adjustment assistance payable under this 
chapter, the amount of assistance payable under this chapter 
shall be reduced proportionately.''.
    (b) Effective Date.--The amendments made by this title 
shall take effect on the date that is 180 days after the date 
of enactment of this Act.

SEC. 142. CONFORMING AMENDMENTS.

    (a) Judicial Review.--
            (1) Section 284(a) of the Trade Act of 1974 (19 
        U.S.C. 2395(a)) is amended--
                    (A) by inserting ``an agricultural 
                commodity producer (as defined in section 
                291(2)) aggrieved by a determination of the 
                Secretary of Agriculture under section 293,'' 
                after ``section 251 of this title,''; and
                    (B) in the second sentence of subsection 
                (a) and in subsections (b) and (c), by striking 
                ``or the Secretary of Commerce'' each place it 
                appears and inserting ``, the Secretary of 
                Commerce, or the Secretary of Agriculture''.
    (b) Chapters 6.--The table of contents for title II of the 
Trade Act of 1974, as amended by subparagraph (A), is amended 
by inserting after the items relating to chapter 5 the 
following:

             ``Chapter 6--Adjustment Assistance for Farmers

``Sec. 291. Definitions.
``Sec. 292. Petitions; group eligibility.
``Sec. 293. Determinations by Secretary of Agriculture.
``Sec. 294. Study by Secretary of Agriculture when International Trade 
          Commission begins investigation.
``Sec. 295. Benefit information to agricultural commodity producers.
``Sec. 296. Qualifying requirements for agricultural commodity 
          producers.
``Sec. 297. Fraud and recovery of overpayments.
``Sec. 298. Authorization of appropriations.''.

SEC. 143. STUDY ON TAA FOR FISHERMEN.

    Not later than 1 year after the date of enactment of this 
Act, the Secretary of Commerce shall conduct a study and report 
to Congress regarding whether a trade adjustment assistance 
program is appropriate and feasible for fishermen. For purposes 
of the preceding sentence, the term ``fishermen'' means any 
person who is engaged in commercial fishing or is a United 
States fish processor.

                       Subtitle D--Effective Date

SEC. 151. EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in sections 
123(c) and 141(b), and subsections (b), (c), and (d) of this 
section, the amendments made by this division shall apply to 
petitions for certification filed under chapter 2 or 3 of title 
II of the Trade Act of 1974 on or after the date that is 90 
days after the date of enactment of this Act.
    (b) Workers Certified as Eligible Before Effective Date.--
Notwithstanding subsection (a), a worker shall continue to 
receive (or be eligible to receive) trade adjustment assistance 
and other benefits under chapter 2 of title II of the Trade Act 
of 1974, as in effect on September 30, 2001, for any week for 
which the worker meets the eligibility requirements of such 
chapter 2 as in effect on such date, if on or before such date, 
the worker--
            (1) was certified as eligible for trade adjustment 
        assistance benefits under such chapter as in effect on 
        such date; and
            (2) would otherwise be eligible to receive trade 
        adjustment assistance benefits under such chapter as in 
        effect on such date.
    (c) Workers Who Became Eligible During Qualified Period.--
            (1) In general.--Notwithstanding subsection (a) or 
        any other provision of law, including section 285 of 
        the Trade Act of 1974, any worker who would have been 
        eligible to receive trade adjustment assistance or 
        other benefits under chapter 2 of title II of the Trade 
        Act of 1974 during the qualified period if such chapter 
        2 had been in effect during such period, shall be 
        eligible to receive trade adjustment assistance and 
        other benefits under chapter 2 of title II of the Trade 
        Act of 1974, as in effect on September 30, 2001, for 
        any week during the qualified period for which the 
        worker meets the eligibility requirements of such 
        chapter 2 as in effect on September 30, 2001.
            (2) Qualified period.--For purposes of this 
        subsection, the term ``qualified period'' means the 
        period beginning on January 11, 2002, and ending on the 
        date that is 90 days after the date of enactment of 
        this Act.
    (d) Adjustment Assistance for Firms.--
            (1) In general.--Notwithstanding subsection (a) or 
        any other provision of law, including section 285 of 
        the Trade Act of 1974, and except as provided in 
        paragraph (2), any firm that would have been eligible 
        to receive adjustment assistance under chapter 3 of 
        title II of the Trade Act if 1974 during the qualified 
        period if such chapter 3 had been in effect during such 
        period, shall be eligible to receive adjustment 
        assistance under chapter 3 of title II of the Trade Act 
        of 1974, as in effect on September 30, 2001, for any 
        week during the qualified period for which the firm 
        meets the eligibility requirements of such chapter 3 as 
        in effect on September 30, 2001.
            (2) Qualified period.--For purposes of this 
        subsection, the term ``qualified period'' means the 
        period beginning on October 1, 2001, and ending on the 
        date that is 90 days after the date of enactment of 
        this Act.

  TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS

SEC. 201. CREDIT FOR HEALTH INSURANCE COSTS OF INDIVIDUALS RECEIVING A 
                    TRADE READJUSTMENT ALLOWANCE OR A BENEFIT FROM THE 
                    PENSION BENEFIT GUARANTY CORPORATION.

    (a) In General.--Subpart C of part IV of subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 (relating to 
refundable credits) is amended by redesignating section 35 as 
section 36 and inserting after section 34 the following new 
section:

``SEC. 35. HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS.

    ``(a) In General.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by 
subtitle A an amount equal to 65 percent of the amount paid by 
the taxpayer for coverage of the taxpayer and qualifying family 
members under qualified health insurance for eligible coverage 
months beginning in the taxable year.
    ``(b) Eligible Coverage Month.--For purposes of this 
section--
            ``(1) In general.--The term `eligible coverage 
        month' means any month if--
                    ``(A) as of the first day of such month, 
                the taxpayer--
                            ``(i) is an eligible individual,
                            ``(ii) is covered by qualified 
                        health insurance, the premium for which 
                        is paid by the taxpayer,
                            ``(iii) does not have other 
                        specified coverage, and
                            ``(iv) is not imprisoned under 
                        Federal, State, or local authority, and
                    ``(B) such month begins more than 90 days 
                after the date of the enactment of the Trade 
                Act of 2002.
            ``(2) Joint returns.--In the case of a joint 
        return, the requirements of paragraph (1)(A) shall be 
        treated as met with respect to any month if at least 1 
        spouse satisfies such requirements.
    ``(c) Eligible Individual.--For purposes of this section--
            ``(1) In general.--The term `eligible individual' 
        means--
                    ``(A) an eligible TAA recipient,
                    ``(B) an eligible alternative TAA 
                recipient, and
                    ``(C) an eligible PBGC pension recipient.
            ``(2) Eligible taa recipient.--The term `eligible 
        TAA recipient' means, with respect to any month, any 
        individual who is receiving for any day of such month a 
        trade readjustment allowance under chapter 2 of title 
        II of the Trade Act of 1974 or who would be eligible to 
        receive such allowance if section 231 of such Act were 
        applied without regard to subsection (a)(3)(B) of such 
        section. An individual shall continue to be treated as 
        an eligible TAA recipient during the first month that 
        such individual would otherwise cease to be an eligible 
        TAA recipient by reason of the preceding sentence.
            ``(3) Eligible alternative taa recipient.--The term 
        `eligible alternative TAA recipient' means, with 
        respect to any month, any individual who--
                    ``(A) is a worker described in section 
                246(a)(3)(B) of the Trade Act of 1974 who is 
                participating in the program established under 
                section 246(a)(1) of such Act, and
                    ``(B) is receiving a benefit for such month 
                under section 246(a)(2) of such Act.
        An individual shall continue to be treated as an 
        eligible alternative TAA recipient during the first 
        month that such individual would otherwise cease to be 
        an eligible alternative TAA recipient by reason of the 
        preceding sentence.
            ``(4) Eligible pbgc pension recipient.--The term 
        `eligible PBGC pension recipient' means, with respect 
        to any month, any individual who--
                    ``(A) has attained age 55 as of the first 
                day of such month, and
                    ``(B) is receiving a benefit for such month 
                any portion of which is paid by the Pension 
                Benefit Guaranty Corporation under title IV of 
                the Employee Retirement Income Security Act of 
                1974.
    ``(d) Qualifying Family Member.--For purposes of this 
section--
            ``(1) In general.--The term `qualifying family 
        member' means--
                    ``(A) the taxpayer's spouse, and
                    ``(B) any dependent of the taxpayer with 
                respect to whom the taxpayer is entitled to a 
                deduction under section 151(c).
        Such term does not include any individual who has other 
        specified coverage.
            ``(2) Special dependency test in case of divorced 
        parents, etc.--If paragraph (2) or (4) of section 
        152(e) applies to any child with respect to any 
        calendar year, in the case of any taxable year 
        beginning in such calendar year, such child shall be 
        treated as described in paragraph (1)(B) with respect 
        to the custodial parent (within the meaning of section 
        152(e)(1)) and not with respect to the noncustodial 
        parent.
    ``(e) Qualified Health Insurance.--For purposes of this 
section--
            ``(1) In general.--The term `qualified health 
        insurance' means any of the following:
                    ``(A) Coverage under a COBRA continuation 
                provision (as defined in section 9832(d)(1)).
                    ``(B) State-based continuation coverage 
                provided by the State under a State law that 
                requires such coverage.
                    ``(C) Coverage offered through a qualified 
                State high risk pool (as defined in section 
                2744(c)(2) of the Public Health Service Act).
                    ``(D) Coverage under a health insurance 
                program offered for State employees.
                    ``(E) Coverage under a State-based health 
                insurance program that is comparable to the 
                health insurance program offered for State 
                employees.
                    ``(F) Coverage through an arrangement 
                entered into by a State and--
                            ``(i) a group health plan 
                        (including such a plan which is a 
                        multiemployer plan as defined in 
                        section 3(37) of the Employee 
                        Retirement Income Security Act of 
                        1974),
                            ``(ii) an issuer of health 
                        insurance coverage,
                            ``(iii) an administrator, or
                            ``(iv) an employer.
                    ``(G) Coverage offered through a State 
                arrangement with a private sector health care 
                coverage purchasing pool.
                    ``(H) Coverage under a State-operated 
                health plan that does not receive any Federal 
                financial participation.
                    ``(I) Coverage under a group health plan 
                that is available through the employment of the 
                eligible individual's spouse.
                    ``(J) In the case of any eligible 
                individual and such individual's qualifying 
                family members, coverage under individual 
                health insurance if the eligible individual was 
                covered under individual health insurance 
                during the entire 30-day period that ends on 
                the date that such individual became separated 
                from the employment which qualified such 
                individual for--
                            ``(i) in the case of an eligible 
                        TAA recipient, the allowance described 
                        in subsection (c)(2),
                            ``(ii) in the case of an eligible 
                        alternative TAA recipient, the benefit 
                        described in subsection (c)(3)(B), or
                            ``(iii) in the case of any eligible 
                        PBGC pension recipient, the benefit 
                        described in subsection (c)(4)(B).
                For purposes of this subparagraph, the term 
                `individual health insurance' means any 
                insurance which constitutes medical care 
                offered to individuals other than in connection 
                with a group health plan and does not include 
                Federal- or State-based health insurance 
                coverage.
            ``(2) Requirements for state-based coverage.--
                    ``(A) In general.--The term `qualified 
                health insurance' does not include any coverage 
                described in subparagraphs (B) through (H) of 
                paragraph (1) unless the State involved has 
                elected to have such coverage treated as 
                qualified health insurance under this section 
                and such coverage meets the following 
                requirements:
                            ``(i) Guaranteed issue.--Each 
                        qualifying individual is guaranteed 
                        enrollment if the individual pays the 
                        premium for enrollment or provides a 
                        qualified health insurance costs credit 
                        eligibility certificate described in 
                        section 7527 and pays the remainder of 
                        such premium.
                            ``(ii) No imposition of preexisting 
                        condition exclusion.--No pre-existing 
                        condition limitations are imposed with 
                        respect to any qualifying individual.
                            ``(iii) Nondiscriminatory 
                        premium.--The total premium (as 
                        determined without regard to any 
                        subsidies) with respect to a qualifying 
                        individual may not be greater than the 
                        total premium (as so determined) for a 
                        similarly situated individual who is 
                        not a qualifying individual.
                            ``(iv) Same benefits.--Benefits 
                        under the coverage are the same as (or 
                        substantially similar to) the benefits 
                        provided to similarly situated 
                        individuals who are not qualifying 
                        individuals.
                    ``(B) Qualifying individual.--For purposes 
                of this paragraph, the term `qualifying 
                individual' means--
                            ``(i) an eligible individual for 
                        whom, as of the date on which the 
                        individual seeks to enroll in the 
                        coverage described in subparagraphs (B) 
                        through (H) of paragraph (1), the 
                        aggregate of the periods of creditable 
                        coverage (as defined in section 
                        9801(c)) is 3 months or longer and who, 
                        with respect to any month, meets the 
                        requirements of clauses (iii) and (iv) 
                        of subsection (b)(1)(A); and
                            ``(ii) the qualifying family 
                        members of such eligible individual.
            ``(3) Exception.--The term `qualified health 
        insurance' shall not include--
                    ``(A) a flexible spending or similar 
                arrangement, and
                    ``(B) any insurance if substantially all of 
                its coverage is of excepted benefits described 
                in section 9832(c).
    ``(f) Other Specified Coverage.--For purposes of this 
section, an individual has other specified coverage for any 
month if, as of the first day of such month--
            ``(1) Subsidized coverage.--
                    ``(A) In general.--Such individual is 
                covered under any insurance which constitutes 
                medical care (except insurance substantially 
                all of the coverage of which is of excepted 
                benefits described in section 9832(c)) under 
                any health plan maintained by any employer (or 
                former employer) of the taxpayer or the 
                taxpayer's spouse and at least 50 percent of 
                the cost of such coverage (determined under 
                section 4980B) is paid or incurred by the 
                employer.
                    ``(B) Eligible alternative taa 
                recipients.--In the case of an eligible 
                alternative TAA recipient, such individual is 
                either--
                            ``(i) eligible for coverage under 
                        any qualified health insurance (other 
                        than insurance described in 
                        subparagraph (A), (B), or (F) of 
                        subsection (e)(1)) under which at least 
                        50 percent of the cost of coverage 
                        (determined under section 4980B(f)(4)) 
                        is paid or incurred by an employer (or 
                        former employer) of the taxpayer or the 
                        taxpayer's spouse, or
                            ``(ii) covered under any such 
                        qualified health insurance under which 
                        any portion of the cost of coverage (as 
                        so determined) is paid or incurred by 
                        an employer (or former employer) of the 
                        taxpayer or the taxpayer's spouse.
                    ``(C) Treatment of cafeteria plans.--For 
                purposes of subparagraphs (A) and (B), the cost 
                of coverage shall be treated as paid or 
                incurred by an employer to the extent the 
                coverage is in lieu of a right to receive cash 
                or other qualified benefits under a cafeteria 
                plan (as defined in section 125(d)).
            ``(2) Coverage under medicare, medicaid, or 
        schip.--Such individual--
                    ``(A) is entitled to benefits under part A 
                of title XVIII of the Social Security Act or is 
                enrolled under part B of such title, or
                    ``(B) is enrolled in the program under 
                title XIX or XXI of such Act (other than under 
                section 1928 of such Act).
            ``(3) Certain other coverage.--Such individual--
                    ``(A) is enrolled in a health benefits plan 
                under chapter 89 of title 5, United States 
                Code, or
                    ``(B) is entitled to receive benefits under 
                chapter 55 of title 10, United States Code.
    ``(g) Special Rules.--
            ``(1) Coordination with advance payments of 
        credit.--With respect to any taxable year, the amount 
        which would (but for this subsection) be allowed as a 
        credit to the taxpayer under subsection (a) shall be 
        reduced (but not below zero) by the aggregate amount 
        paid on behalf of such taxpayer under section 7527 for 
        months beginning in such taxable year.
            ``(2) Coordination with other deductions.--Amounts 
        taken into account under subsection (a) shall not be 
        taken into account in determining any deduction allowed 
        under section 162(l) or 213.
            ``(3) MSA distributions.--Amounts distributed from 
        an Archer MSA (as defined in section 220(d)) shall not 
        be taken into account under subsection (a).
            ``(4) Denial of credit to dependents.--No credit 
        shall be allowed under this section to any individual 
        with respect to whom a deduction under section 151 is 
        allowable to another taxpayer for a taxable year 
        beginning in the calendar year in which such 
        individual's taxable year begins.
            ``(5) Both spouses eligible individuals.--The 
        spouse of the taxpayer shall not be treated as a 
        qualifying family member for purposes of subsection 
        (a), if--
                    ``(A) the taxpayer is married at the close 
                of the taxable year,
                    ``(B) the taxpayer and the taxpayer's 
                spouse are both eligible individuals during the 
                taxable year, and
                    ``(C) the taxpayer files a separate return 
                for the taxable year.
            ``(6) Marital status; certain married individuals 
        living apart.--Rules similar to the rules of paragraphs 
        (3) and (4) of section 21(e) shall apply for purposes 
        of this section.
            ``(7) Insurance which covers other individuals.--
        For purposes of this section, rules similar to the 
        rules of section 213(d)(6) shall apply with respect to 
        any contract for qualified health insurance under which 
        amounts are payable for coverage of an individual other 
        than the taxpayer and qualifying family members.
            ``(8) Treatment of payments.--For purposes of this 
        section--
                    ``(A) Payments by secretary.--Payments made 
                by the Secretary on behalf of any individual 
                under section 7527 (relating to advance payment 
                of credit for health insurance costs of 
                eligible individuals) shall be treated as 
                having been made by the taxpayer on the first 
                day of the month for which such payment was 
                made.
                    ``(B) Payments by taxpayer.--Payments made 
                by the taxpayer for eligible coverage months 
                shall be treated as having been made by the 
                taxpayer on the first day of the month for 
                which such payment was made.
            ``(9) Regulations.--The Secretary may prescribe 
        such regulations and other guidance as may be necessary 
        or appropriate to carry out this section, section 
        6050T, and section 7527.''.
    (b) Promotion of State High Risk Pools.--Title XXVII of the 
Public Health Service Act is amended by inserting after section 
2744 the following new section:

``SEC. 2745. PROMOTION OF QUALIFIED HIGH RISK POOLS.

    ``(a) Seed Grants to States.--The Secretary shall provide 
from the funds appropriated under subsection (c)(1) a grant of 
up to $1,000,000 to each State that has not created a qualified 
high risk pool as of the date of the enactment of this section 
for the State's costs of creation and initial operation of such 
a pool.
    ``(b) Matching Funds for Operation of Pools.--
            ``(1) In general.--In the case of a State that has 
        established a qualified high risk pool that--
                    ``(A) restricts premiums charged under the 
                pool to no more than 150 percent of the premium 
                for applicable standard risk rates;
                    ``(B) offers a choice of two or more 
                coverage options through the pool; and
                    ``(C) has in effect a mechanism reasonably 
                designed to ensure continued funding of losses 
                incurred by the State after the end of fiscal 
                year 2004 in connection with operation of the 
                pool;
        the Secretary shall provide, from the funds 
        appropriated under subsection (c)(2) and allotted to 
        the State under paragraph (2), a grant of up to 50 
        percent of the losses incurred by the State in 
        connection with the operation of the pool.
            ``(2) Allotment.--The amounts appropriated under 
        subsection (c)(2) for a fiscal year shall be made 
        available to the States in accordance with a formula 
        that is based upon the number of uninsured individuals 
        in the States.
    ``(c) Funding.--Out of any money in the Treasury of the 
United States not otherwise appropriated, there are authorized 
and appropriated--
            ``(1) $20,000,000 for fiscal year 2003 to carry out 
        subsection (a); and
            ``(2) $40,000,000 for each of fiscal years 2003 and 
        2004 to carry out subsection (b).
Funds appropriated under this subsection for a fiscal year 
shall remain available for obligation through the end of the 
following fiscal year. Nothing in this section shall be 
construed as providing a State with an entitlement to a grant 
under this section.
    ``(d) Qualified High Risk Pool and State Defined.--For 
purposes of this section, the term `qualified high risk pool' 
has the meaning given such term in section 2744(c)(2) and the 
term `State' means any of the 50 States and the District of 
Columbia.''.
    (c) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, 
        United States Code, is amended by inserting before the 
        period ``, or from section 35 of such Code''.
            (2) The table of sections for subpart C of part IV 
        of chapter 1 of the Internal Revenue Code of 1986 is 
        amended by striking the last item and inserting the 
        following new items:

        ``Sec. 35. Health insurance costs of eligible individuals.
        ``Sec. 36. Overpayments of tax.''.

    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph 
        (2), the amendments made by this section shall apply to 
        taxable years beginning after December 31, 2001.
            (2) State high risk pools.--The amendment made by 
        subsection (b) shall take effect on the date of the 
        enactment of this Act.

SEC. 202. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE COSTS OF 
                    ELIGIBLE INDIVIDUALS.

    (a) In General.--Chapter 77 of the Internal Revenue Code of 
1986 (relating to miscellaneous provisions) is amended by 
adding at the end the following new section:

``SEC. 7527. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE COSTS OF 
                    ELIGIBLE INDIVIDUALS.

    ``(a) General Rule.--Not later than August 1, 2003, the 
Secretary shall establish a program for making payments on 
behalf of certified individuals to providers of qualified 
health insurance (as defined in section 35(e)) for such 
individuals.
    ``(b) Limitation on Advance Payments During any Taxable 
Year.--The Secretary may make payments under subsection (a) 
only to the extent that the total amount of such payments made 
on behalf of any individual during the taxable year does not 
exceed 65 percent of the amount paid by the taxpayer for 
coverage of the taxpayer and qualifying family members under 
qualified health insurance for eligible coverage months 
beginning in the taxable year.
    ``(c) Certified Individual.--For purposes of this section, 
the term `certified individual' means any individual for whom a 
qualified health insurance costs credit eligibility certificate 
is in effect.
    ``(d) Qualified Health Insurance Costs Credit Eligibility 
Certificate.--For purposes of this section, the term `qualified 
health insurance costs credit eligibility certificate' means 
any written statement that an individual is an eligible 
individual (as defined in section 35(c)) if such statement 
provides such information as the Secretary may require for 
purposes of this section and--
            ``(1) in the case of an eligible TAA recipient (as 
        defined in section 35(c)(2)) or an eligible alternative 
        TAA recipient (as defined in section 35(c)(3)), is 
        certified by the Secretary of Labor (or by any other 
        person or entity designated by the Secretary), or
            ``(2) in the case of an eligible PBGC pension 
        recipient (as defined in section 35(c)(4)), is 
        certified by the Pension Benefit Guaranty Corporation 
        (or by any other person or entity designated by the 
        Secretary).''.
    (b) Disclosure of Return Information for Purposes of 
Carrying out a Program for Advance Payment of Credit for Health 
Insurance Costs of Eligible Individuals.--
            (1) In general.--Subsection (l) of section 6103 of 
        such Code (relating to disclosure of returns and return 
        information for purposes other than tax administration) 
        is amended by adding at the end the following new 
        paragraph:
            ``(18) Disclosure of return information for 
        purposes of carrying out a program for advance payment 
        of credit for health insurance costs of eligible 
        individuals.--The Secretary may disclose to providers 
        of health insurance for any certified individual (as 
        defined in section 7527(c)) return information with 
        respect to such certified individual only to the extent 
        necessary to carry out the program established by 
        section 7527 (relating to advance payment of credit for 
        health insurance costs of eligible individuals).''.
            (2) Procedures and recordkeeping related to 
        disclosures.--Subsection (p) of such section is 
        amended--
                    (A) in paragraph (3)(A) by striking ``or 
                (17)'' and inserting ``(17), or (18)'', and
                    (B) in paragraph (4) by inserting ``or 
                (17)'' after ``any other person described in 
                subsection (l)(16)'' each place it appears.
            (3) Unauthorized inspection of returns or return 
        information.--Section 7213A(a)(1)(B) of such Code is 
        amended by striking ``section 6103(n)'' and inserting 
        ``subsection (l)(18) or (n) of section 6103''.
    (c) Information Reporting.--
            (1) In general.--Subpart B of part III of 
        subchapter A of chapter 61 of the Internal Revenue Code 
        of 1986 (relating to information concerning 
        transactions with other persons) is amended by 
        inserting after section 6050S the following new 
        section:

``SEC. 6050T. RETURNS RELATING TO CREDIT FOR HEALTH INSURANCE COSTS OF 
                    ELIGIBLE INDIVIDUALS.

    ``(a) Requirement of Reporting.--Every person who is 
entitled to receive payments for any month of any calendar year 
under section 7527 (relating to advance payment of credit for 
health insurance costs of eligible individuals) with respect to 
any certified individual (as defined in section 7527(c)) shall, 
at such time as the Secretary may prescribe, make the return 
described in subsection (b) with respect to each such 
individual.
    ``(b) Form and Manner of Returns.--A return is described in 
this subsection if such return--
            ``(1) is in such form as the Secretary may 
        prescribe, and
            ``(2) contains--
                    ``(A) the name, address, and TIN of each 
                individual referred to in subsection (a),
                    ``(B) the number of months for which 
                amounts were entitled to be received with 
                respect to such individual under section 7527 
                (relating to advance payment of credit for 
                health insurance costs of eligible 
                individuals),
                    ``(C) the amount entitled to be received 
                for each such month, and
                    ``(D) such other information as the 
                Secretary may prescribe.
    ``(c) Statements To Be Furnished to Individuals With 
Respect to Whom Information Is Required.--Every person required 
to make a return under subsection (a) shall furnish to each 
individual whose name is required to be set forth in such 
return a written statement showing--
            ``(1) the name and address of the person required 
        to make such return and the phone number of the 
        information contact for such person, and
            ``(2) the information required to be shown on the 
        return with respect to such individual.
The written statement required under the preceding sentence 
shall be furnished on or before January 31 of the year 
following the calendar year for which the return under 
subsection (a) is required to be made.''.
            (2) Assessable penalties.--
                    (A) Subparagraph (B) of section 6724(d)(1) 
                of such Code (relating to definitions) is 
                amended by redesignating clauses (xi) through 
                (xvii) as clauses (xii) through (xviii), 
                respectively, and byinserting after clause (x) 
the following new clause:
                            ``(xi) section 6050T (relating to 
                        returns relating to credit for health 
                        insurance costs of eligible 
                        individuals),''.
                    (B) Paragraph (2) of section 6724(d) of 
                such Code is amended by striking ``or'' at the 
                end of subparagraph (Z), by striking the period 
                at the end of subparagraph (AA) and inserting 
                ``, or'', and by adding after subparagraph (AA) 
                the following new subparagraph:
                    ``(BB) section 6050T (relating to returns 
                relating to credit for health insurance costs 
                of eligible individuals).''.
    (d) Clerical Amendments.--
            (1) Advance payment.--The table of sections for 
        chapter 77 of the Internal Revenue Code of 1986 is 
        amended by adding at the end the following new item:

        ``Sec. 7527. Advance payment of credit for health insurance 
                  costs of eligible individuals.''.

            (2) Information reporting.--The table of sections 
        for subpart B of part III of subchapter A of chapter 61 
        of such Code is amended by inserting after the item 
        relating to section 6050S the following new item:

        ``Sec. 6050T. Returns relating to credit for health insurance 
                  costs of eligible individuals.''.

    (e) Effective Date.--The amendments made by this section 
shall take effect on the date of the enactment of this Act.

SEC. 203. HEALTH INSURANCE ASSISTANCE FOR ELIGIBLE INDIVIDUALS.

    (a) Eligibility for Grants.--Section 173(a) of the 
Workforce Investment Act of 1998 (29 U.S.C. 2918(a)) is 
amended--
            (1) in paragraph (2), by striking ``and'' at the 
        end;
            (2) in paragraph (3), by striking the period and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(4) from funds appropriated under section 
        174(c)--
                    ``(A) to a State or entity (as defined in 
                section 173(c)(1)(B)) to carry out subsection 
                (f), including providing assistance to eligible 
                individuals; and
                    ``(B) to a State or entity (as so defined) 
                to carry out subsection (g), including 
                providing assistance to eligible 
                individuals.''.
    (b) Use of Funds for Health Insurance Coverage.--Section 
173 of the Workforce Investment Act of 1998 (29 U.S.C. 2918) is 
amended by adding at the end the following:
    ``(f) Health Insurance Coverage Assistance for Eligible 
Individuals.--
            ``(1) In general.--Funds made available to a State 
        or entity under paragraph (4)(A) of subsection (a) may 
        be used by the State or entity for the following:
                    ``(A) Health insurance coverage.--To assist 
                an eligible individual and such individual's 
                qualifying family members in enrolling in 
                qualified health insurance.
                    ``(B) Administrative and start-up 
                expenses.--To pay the administrative expenses 
                related to the enrollment of eligible 
                individuals and such individuals' qualifying 
                family members in qualified health insurance, 
                including--
                            ``(i) eligibility verification 
                        activities;
                            ``(ii) the notification of eligible 
                        individuals of available qualified 
                        health insurance options;
                            ``(iii) processing qualified health 
                        insurance costs credit eligibility 
                        certificates provided for under section 
                        7527 of the Internal Revenue Code of 
                        1986;
                            ``(iv) providing assistance to 
                        eligible individuals in enrolling in 
                        qualified health insurance;
                            ``(v) the development or 
                        installation of necessary data 
                        management systems; and
                            ``(vi) any other expenses 
                        determined appropriate by the 
                        Secretary, including start-up costs and 
                        on going administrative expenses to 
                        carry out clauses (iv) through (ix) of 
                        paragraph (2)(A).
            ``(2) Qualified health insurance.--For purposes of 
        this subsection and subsection (g)--
                    ``(A) In general.--The term `qualified 
                health insurance' means any of the following:
                            ``(i) Coverage under a COBRA 
                        continuation provision (as defined in 
                        section 733(d)(1) of the Employee 
                        Retirement Income Security Act of 
                        1974).
                            ``(ii) State-based continuation 
                        coverage provided by the State under a 
                        State law that requires such coverage.
                            ``(iii) Coverage offered through a 
                        qualified State high risk pool (as 
                        defined in section 2744(c)(2) of the 
                        Public Health Service Act).
                            ``(iv) Coverage under a health 
                        insurance program offered for State 
                        employees.
                            ``(v) Coverage under a State-based 
                        health insurance program that is 
                        comparable to the health insurance 
                        program offered for State employees.
                            ``(vi) Coverage through an 
                        arrangement entered into by a State 
                        and--
                                    ``(I) a group health plan 
                                (including such a plan which is 
                                a multiemployer plan as defined 
                                in section 3(37) of the 
                                Employee Retirement Income 
                                Security Act of 1974),
                                    ``(II) an issuer of health 
                                insurance coverage,
                                    ``(III) an administrator, 
                                or
                                    ``(IV) an employer.
                            ``(vii) Coverage offered through a 
                        State arrangement with a private sector 
                        health care coverage purchasing pool.
                            ``(viii) Coverage under a State-
                        operated health plan that does not 
                        receive any Federal financial 
                        participation.
                            ``(ix) Coverage under a group 
                        health plan that is available through 
                        the employment of the eligible 
                        individual's spouse.
                            ``(x) In the case of any eligible 
                        individual and such individual's 
                        qualifying family members, coverage 
                        under individual health insurance if 
                        the eligible individual was covered 
                        under individual health insurance 
                        during the entire 30-day period that 
                        ends on the date that such individual 
                        became separated from the employment 
                        which qualified such individual for--
                                    ``(I) in the case of an 
                                eligible TAA recipient, the 
                                allowance described in section 
                                35(c)(2) of the Internal 
                                Revenue Code of 1986,
                                    ``(II) in the case of an 
                                eligible alternative TAA 
                                recipient, the benefit 
                                described in section 
                                35(c)(3)(B) of such Code, or
                                    ``(III) in the case of any 
                                eligible PBGC pension 
                                recipient, the benefit 
                                described in section 
                                35(c)(4)(B) of such Code.
                        For purposes of this clause, the term 
                        `individual health insurance' means any 
                        insurance which constitutes medical 
                        care offered to individuals other than 
                        in connection with a group health plan 
                        and does not include Federal- or State-
                        based health insurance coverage.
                    ``(B) Requirements for state-based 
                coverage.--
                            ``(i) In general.--The term 
                        `qualified health insurance' does not 
                        include any coverage described in 
                        clauses (ii) through (viii) of 
                        subparagraph (A) unless the State 
                        involved has elected to have such 
                        coverage treated as qualified health 
                        insurance under this paragraph and such 
                        coverage meets the following 
                        requirements:
                                    ``(I) Guaranteed issue.--
                                Each qualifying individual is 
                                guaranteed enrollment if the 
                                individual pays the premium for 
                                enrollment or provides a 
                                qualified health insurance 
                                costs credit eligibility 
                                certificate described in 
                                section 7527 of the Internal 
                                Revenue Code of 1986 and pays 
                                the remainder of such premium.
                                    ``(II) No imposition of 
                                preexisting condition 
                                exclusion.--No pre-existing 
                                condition limitations are 
                                imposed with respect to any 
                                qualifying individual.
                                    ``(III) Nondiscriminatory 
                                premium.--The total premium (as 
                                determined without regard to 
                                any subsidies) with respect to 
                                a qualifying individual may not 
                                be greater than the total 
                                premium (as so determined) for 
                                a similarly situated individual 
                                who is not a qualifying 
                                individual.
                                    ``(IV) Same benefits.--
                                Benefits under the coverage are 
                                the same as (or substantially 
                                similar to) the benefits 
                                provided to similarly situated 
                                individuals who are not 
                                qualifying individuals.
                            ``(ii) Qualifying individual.--For 
                        purposes of this subparagraph, the term 
                        `qualifying individual' means--
                                    ``(I) an eligible 
                                individual for whom, as of the 
                                date on which the individual 
                                seeks to enroll in clauses (ii) 
                                through (viii) of subparagraph 
                                (A), the aggregate of the 
                                periods of creditable coverage 
                                (as defined in section 9801(c) 
                                of the Internal Revenue Code of 
                                1986) is 3 months or longer and 
                                who, with respect to any month, 
                                meets the requirements of 
                                clauses (iii) and (iv) of 
                                section 35(b)(1)(A) of such 
                                Code; and
                                    ``(II) the qualifying 
                                family members of such eligible 
                                individual.
                    ``(C) Exception.--The term `qualified 
                health insurance' shall not include--
                            ``(i) a flexible spending or 
                        similar arrangement, and
                            ``(ii) any insurance if 
                        substantially all of its coverage is of 
                        excepted benefits described in section 
                        733(c) of the Employee Retirement 
                        Income Security Act of 1974.
            ``(3) Availability of funds.--
                    ``(A) Expedited procedures.--With respect 
                to applications submitted by States or entities 
                for grants under this subsection, the Secretary 
                shall--
                            ``(i) not later than 15 days after 
                        the date on which the Secretary 
                        receives a completed application from a 
                        State or entity, notify the State or 
                        entity of the determination of the 
                        Secretary with respect to the approval 
                        or disapproval of such application;
                            ``(ii) in the case of an 
                        application of a State or other entity 
                        that is disapproved by the Secretary, 
                        provide technical assistance, at the 
                        request of the State or entity, in a 
                        timely manner to enable the State or 
                        entity to submit an approved 
                        application; and
                            ``(iii) develop procedures to 
                        expedite the provision of funds to 
                        States and entities with approved 
                        applications.
                    ``(B) Availability and distribution of 
                funds.--The Secretary shall ensure that funds 
                made available under section 174(c)(1)(A) to 
                carry out subsection (a)(4)(A) are available to 
                States and entities throughout the period 
                described in section 174(c)(2)(A).
            ``(4) Eligible individual defined.--For purposes of 
        this subsection and subsection (g), the term `eligible 
        individual' means--
                    ``(A) an eligible TAA recipient (as defined 
                in section 35(c)(2) of the Internal Revenue 
                Code of 1986),
                    ``(B) an eligible alternative TAA recipient 
                (as defined in section 35(c)(3) of the Internal 
                Revenue Code of 1986), and
                    ``(C) an eligible PBGC pension recipient 
                (as defined in section 35(c)(4) of the Internal 
                Revenue Code of 1986),
        who, as of the first day of the month, does not have 
        other specified coverage and is not imprisoned under 
        Federal, State, or local authority.
            ``(5) Qualifying family member defined.--For 
        purposes of this subsection and subsection (g)--
                    ``(A) In general.--The term `qualifying 
                family member' means--
                            ``(i) the eligible individual's 
                        spouse, and
                            ``(ii) any dependent of the 
                        eligible individual with respect to 
                        whom the individual is entitled to a 
                        deduction under section 151(c) of the 
                        Internal Revenue Code of 1986.
                Such term does not include any individual who 
                has other specified coverage.
                    ``(B) Special dependency test in case of 
                divorced parents, etc.--If paragraph (2) or (4) 
                of section 152(e) of such Code applies to any 
                child with respect to any calendar year, in the 
                case of any taxable year beginning in such 
                calendar year, such child shall be treated as 
                described in subparagraph (A)(ii) with respect 
                to the custodial parent (within the meaning of 
                section 152(e)(1) of such Code) and not with 
                respect to the noncustodial parent.
            ``(6) State.--For purposes of this subsection and 
        subsection (g), the term `State' includes an entity as 
        defined in subsection (c)(1)(B).
            ``(7) Other specified coverage.--For purposes of 
        this subsection, an individual has other specified 
        coverage for any month if, as of the first day of such 
        month--
                    ``(A) Subsidized coverage.--
                            ``(i) In general.--Such individual 
                        is covered under any insurance which 
                        constitutes medical care (except 
                        insurance substantially all of the 
                        coverage of which is of excepted 
                        benefits described in section 9832(c) 
                        of the Internal Revenue Code of 1986) 
                        under any health plan maintained by any 
                        employer (or former employer) of the 
                        taxpayer or the taxpayer's spouse and 
                        at least 50 percent of the cost of such 
                        coverage (determined under section 
                        4980B of such Code) is paid or incurred 
                        by the employer.
                            ``(ii) Eligible alternative taa 
                        recipients.--In the case of an eligible 
                        alternative TAA recipient (as defined 
                        in section 35(c)(3) of the Internal 
                        Revenue Code of 1986), such individual 
                        is either--
                                    ``(I) eligible for coverage 
                                under any qualified health 
                                insurance (other than insurance 
                                described in clause (i), (ii), 
                                or (vi) of paragraph (2)(A)) 
                                under which at least 50 percent 
                                of the cost of coverage 
                                (determined under section 
                                4980B(f)(4) of such Code) is 
                                paid or incurred by an employer 
                                (or former employer) of the 
                                taxpayer or the taxpayer's 
                                spouse, or
                                    ``(II) covered under any 
                                such qualified health insurance 
                                under which any portion of the 
                                cost of coverage (as so 
                                determined) is paid or incurred 
                                by an employer (or former 
                                employer) of the taxpayer or 
                                the taxpayer's spouse.
                            ``(iii) Treatment of cafeteria 
                        plans.--For purposes of clauses (i) and 
                        (ii), the cost of coverage shall be 
                        treated as paid or incurred by an 
                        employer to the extent the coverage is 
                        in lieu of a right to receive cash or 
                        other qualified benefits under a 
                        cafeteria plan (as defined in section 
                        125(d) of the Internal Revenue Code of 
                        1986).
                    ``(B) Coverage under medicare, medicaid, or 
                schip.--Such individual--
                            ``(i) is entitled to benefits under 
                        part A of title XVIII of the Social 
                        Security Act or is enrolled under part 
                        B of such title, or
                            ``(ii) is enrolled in the program 
                        under title XIX or XXI of such Act 
                        (other than under section 1928 of such 
                        Act).
                    ``(C) Certain other coverage.--Such 
                individual--
                            ``(i) is enrolled in a health 
                        benefits plan under chapter 89 of title 
                        5, United States Code, or
                            ``(ii) is entitled to receive 
                        benefits under chapter 55 of title 10, 
                        United States Code.
    ``(g) Interim Health Insurance Coverage and Other 
Assistance.--
            ``(1) In general.--Funds made available to a State 
        or entity under paragraph (4)(B) of subsection (a) may 
        be used by the State or entity to provide assistance 
        and support services to eligible individuals, including 
        health care coverage to the extent provided under 
        subsection (f)(1)(A), transportation, child care, 
        dependent care, and income assistance.
            ``(2) Income support.--With respect to any income 
        assistance provided to an eligible individual with such 
        funds, such assistance shall supplement and not 
        supplant other income support or assistance provided 
        under chapter 2 of title II of the Trade Act of 1974 
        (19 U.S.C. 2271 et seq.) (as in effect on the day 
        before the effective date of the Trade Act of 2002) or 
        the unemployment compensation laws of the State where 
        the eligible individual resides.
            ``(3) Health insurance coverage.--With respect to 
        any assistance provided to an eligible individual with 
        such funds in enrolling in qualified health insurance, 
        the following rules shall apply:
                    ``(A) The State or entity may provide 
                assistance in obtaining such coverage to the 
                eligible individual and to such individual's 
                qualifying family members.
                    ``(B) Such assistance shall supplement and 
                may not supplant any other State or local funds 
                used to provide health care coverage and may 
                not be included in determining the amount of 
                non-Federal contributions required under any 
                program.
            ``(4) Availability of funds.--
                    ``(A) Expedited procedures.--With respect 
                to applications submitted by States or entities 
                for grants under this subsection, the Secretary 
                shall--
                            ``(i) not later than 15 days after 
                        the date on which the Secretary 
                        receives a completed application from a 
                        State or entity, notify the State or 
                        entity of the determination of the 
                        Secretary with respect to the approval 
                        or disapproval of such application;
                            ``(ii) in the case of an 
                        application of a State or entity that 
                        is disapproved by the Secretary, 
                        provide technical assistance, at the 
                        request of the State or entity, in a 
                        timely manner to enable the State or 
                        entity to submit an approved 
                        application; and
                            ``(iii) develop procedures to 
                        expedite the provision of funds to 
                        States and entities with approved 
                        applications.
                    ``(B) Availability and distribution of 
                funds.--The Secretary shall ensure that funds 
                made available under section 174(c)(1)(B) to 
                carry out subsection (a)(4)(B) are available to 
                States and entities throughout the period 
                described in section 174(c)(2)(B).
            ``(5) Inclusion of certain individuals as eligible 
        individuals.--For purposes of this subsection, the term 
        `eligible individual' includes an individual who is a 
        member of a group of workers certified after April 1, 
        2002, under chapter 2 of title II of the Trade Act of 
        1974 (as in effect on the day before the effective date 
        of the Trade Act of 2002) and is participating in the 
        trade readjustment allowance program under such chapter 
        (as so in effect) or who would be determined to be 
        participating in such program under such chapter (as so 
        in effect) if such chapter were applied without regard 
        to section 231(a)(3)(B) of the Trade Act of 1974 (as so 
        in effect).''.
    (c) Authorization of Appropriations.--Section 174 of the 
Workforce Investment Act of 1998 (29 U.S.C. 2919) is amended by 
adding at the end the following:
    ``(c) Assistance for Eligible Workers.--
            ``(1) Authorization and appropriation for fiscal 
        year 2002.--There are authorized to be appropriated and 
        appropriated--
                    ``(A) to carry out subsection (a)(4)(A) of 
                section 173, $10,000,000 for fiscal year 2002; 
                and
                    ``(B) to carry out subsection (a)(4)(B) of 
                section 173, $50,000,000 for fiscal year 2002.
            ``(2) Authorization of appropriations for 
        subsequent fiscal years.--There are authorized to be 
        appropriated--
                    ``(A) to carry out subsection (a)(4)(A) of 
                section 173, $60,000,000 for each of fiscal 
                years 2003 through 2007; and
                    ``(B) to carry out subsection (a)(4)(B) of 
                section 173--
                            ``(i) $100,000,000 for fiscal year 
                        2003; and
                            ``(ii) $50,000,000 for fiscal year 
                        2004.
            ``(3) Availability of funds.--Funds appropriated 
        pursuant to--
                    ``(A) paragraphs (1)(A) and (2)(A) for each 
                fiscal year shall, notwithstanding section 
                189(g), remain available for obligation during 
                the pendency of any outstanding claim under the 
                Trade Act of 1974, as amended by the Trade Act 
                of 2002; and
                    ``(B) paragraph (1)(B) and (2)(B), for each 
                fiscal year shall, notwithstanding section 
                189(g), remain available during the period that 
                begins on the date of enactment of the Trade 
                Act of 2002 and ends on September 30, 2004.''.
    (d) Conforming Amendment.--Section 132(a)(2)(A) of the 
Workforce Investment Act of 1998 (29 U.S.C. 2862(a)(2)(A)) is 
amended by inserting ``, other than under subsection (a)(4), 
(f), and (g)'' after ``grants''.
    (e) Temporary Extension of COBRA Election Period for 
Certain Individuals.--
            (1) ERISA amendments.--Section 605 of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1165) 
        is amended--
                    (A) by inserting ``(a) In General.--'' 
                before ``For purposes of this part''; and
                    (B) by adding at the end the following:
    ``(b) Temporary Extension of COBRA Election Period for 
Certain Individuals.--
            ``(1) In general.--In the case of a nonelecting 
        TAA-eligible individual and notwithstanding subsection 
        (a), such individual may elect continuation coverage 
        under this part during the 60-day period that begins on 
        the first day of the month in which the individual 
        becomes a TAA-eligible individual, but only if such 
        election is made not later than 6 months after the date 
        of the TAA-related loss of coverage.
            ``(2) Commencement of coverage; no reach-back.--Any 
        continuation coverage elected by a TAA-eligible 
        individual under paragraph (1) shall commence at the 
        beginning of the 60-day election period described in 
        such paragraph and shall not include any period prior 
        to such 60-day election period.
            ``(3) Preexisting conditions.--With respect to an 
        individual who elects continuation coverage pursuant to 
        paragraph (1), the period--
                    ``(A) beginning on the date of the TAA-
                related loss of coverage, and
                    ``(B) ending on the first day of the 60-day 
                election period described in paragraph (1),
        shall be disregarded for purposes of determining the 
        63-day periods referred to in section 701(c)(2), 
        section 2701(c)(2) of the Public Health Service Act, 
        and section 9801(c)(2) of the Internal Revenue Code of 
        1986.
            ``(4) Definitions.--For purposes of this 
        subsection:
                    ``(A) Nonelecting taa-eligible 
                individual.--The term `nonelecting TAA-eligible 
                individual' means a TAA-eligible individual 
                who--
                            ``(i) has a TAA-related loss of 
                        coverage; and
                            ``(ii) did not elect continuation 
                        coverage under this part during the 
                        TAA-related election period.
                    ``(B) TAA-eligible individual.--The term 
                `TAA-eligible individual' means--
                            ``(i) an eligible TAA recipient (as 
                        defined in paragraph (2) of section 
                        35(c) of the Internal Revenue Code of 
                        1986), and
                            ``(ii) an eligible alternative TAA 
                        recipient (as defined in paragraph (3) 
                        of such section).
                    ``(C) TAA-related election period.--The 
                term `TAA-related election period' means, with 
                respect to a TAA-related loss of coverage, the 
                60-day election period under this part which is 
                a direct consequence of such loss.
                    ``(D) TAA-related loss of coverage.--The 
                term `TAA-related loss of coverage' means, with 
                respect to an individual whose separation from 
                employment gives rise to being an TAA-eligible 
                individual, the loss of health benefits 
                coverage associated with such separation.''.
            (2) PHSA amendments.--Section 2205 of the Public 
        Health Service Act (42 U.S.C. 300bb-5) is amended--
                    (A) by inserting ``(a) In General.--'' 
                before ``For purposes of this title''; and
                    (B) by adding at the end the following:
    ``(b) Temporary Extension of COBRA Election Period for 
Certain Individuals.--
            ``(1) In general.--In the case of a nonelecting 
        TAA-eligible individual and notwithstanding subsection 
        (a), such individual may elect continuation coverage 
        under this title during the 60-day period that begins 
        on the first day of the month in which the individual 
        becomes a TAA-eligible individual, but only if such 
        election is made not later than 6 months after the date 
        of the TAA-related loss of coverage.
            ``(2) Commencement of coverage; no reach-back.--Any 
        continuation coverage elected by a TAA-eligible 
        individual under paragraph (1) shall commence at the 
        beginning of the 60-day election period described in 
        such paragraph and shall not include any period prior 
        to such 60-day election period.
            ``(3) Preexisting conditions.--With respect to an 
        individual who elects continuation coverage pursuant to 
        paragraph (1), the period--
                    ``(A) beginning on the date of the TAA-
                related loss of coverage, and
                    ``(B) ending on the first day of the 60-day 
                election period described in paragraph (1),
        shall be disregarded for purposes of determining the 
        63-day periods referred to in section 2701(c)(2), 
        section 701(c)(2) of the Employee Retirement Income 
        Security Act of 1974, and section 9801(c)(2) of the 
        Internal Revenue Code of 1986.
            ``(4) Definitions.--For purposes of this 
        subsection:
                    ``(A) Nonelecting taa-eligible 
                individual.--The term `nonelecting TAA-eligible 
                individual' means a TAA-eligible individual 
                who--
                            ``(i) has a TAA-related loss of 
                        coverage; and
                            ``(ii) did not elect continuation 
                        coverage under this part during the 
                        TAA-related election period.
                    ``(B) TAA-eligible individual.--The term 
                `TAA-eligible individual' means--
                            ``(i) an eligible TAA recipient (as 
                        defined in paragraph (2) of section 
                        35(c) of the Internal Revenue Code of 
                        1986), and
                            ``(ii) an eligible alternative TAA 
                        recipient (as defined in paragraph (3) 
                        of such section).
                    ``(C) TAA-related election period.--The 
                term `TAA-related election period' means, with 
                respect to a TAA-related loss of coverage, the 
                60-day election period under this part which is 
                a direct consequence of such loss.
                    ``(D) TAA-related loss of coverage.--The 
                term `TAA-related loss of coverage' means, with 
                respect to an individual whose separation from 
                employment gives rise to being an TAA-eligible 
                individual, the loss of health benefits 
                coverage associated with such separation.''.
            (3) IRC amendments.--Paragraph (5) of section 
        4980B(f) of the Internal Revenue Code of 1986 (relating 
        to election) is amended by adding at the end the 
        following:
                    ``(C) Temporary extension of cobra election 
                period for certain individuals.--
                            ``(i) In general.--In the case of a 
                        nonelecting TAA-eligible individual and 
                        notwithstanding subparagraph (A), such 
                        individual may elect continuation 
                        coverage under this subsection during 
                        the 60-day period that begins on the 
                        first day of the month in which the 
                        individual becomes a TAA-eligible 
                        individual, but only if such election 
                        is made not later than 6 months after 
                        the date of the TAA-related loss of 
                        coverage.
                            ``(ii) Commencement of coverage; no 
                        reach-back.--Any continuation coverage 
                        elected by a TAA-eligible individual 
                        under clause (i) shall commence at the 
                        beginning of the 60-day election period 
                        described in such paragraph and shall 
                        not include any period prior to such 
                        60-day election period.
                            ``(iii) Preexisting conditions.--
                        With respect to an individual who 
                        elects continuation coverage pursuant 
                        to clause (i), the period--
                                    ``(I) beginning on the date 
                                of the TAA-related loss of 
                                coverage, and
                                    ``(II) ending on the first 
                                day of the 60-day election 
                                period described in clause (i),
                        shall be disregarded for purposes of 
                        determining the 63-day periods referred 
                        to in section 9801(c)(2), section 
                        701(c)(2) of the Employee Retirement 
                        Income Security Act of 1974, and 
                        section 2701(c)(2) of the Public Health 
                        Service Act.
                            ``(iv) Definitions.--For purposes 
                        of this subsection:
                                    ``(I) Nonelecting taa-
                                eligible individual.--The term 
                                `nonelecting TAA-eligible 
                                individual' means a TAA-
                                eligible individual who has a 
                                TAA-related loss of coverage 
                                and did not elect continuation 
                                coverage under this subsection 
                                during the TAA-related election 
                                period.
                                    ``(II) TAA-eligible 
                                individual.--The term `TAA-
                                eligible individual' means an 
                                eligible TAA recipient (as 
                                defined in paragraph (2) of 
                                section 35(c)) and an eligible 
                                alternative TAA recipient (as 
                                defined in paragraph (3) of 
                                such section).
                                    ``(III) TAA-related 
                                election period.--The term 
                                `TAA-related election period' 
                                means, with respect to a TAA-
                                related loss of coverage, the 
                                60-day election period under 
                                this subsection which is a 
                                direct consequence of such 
                                loss.
                                    ``(IV) TAA-related loss of 
                                coverage.--The term `TAA-
                                related loss of coverage' 
                                means, with respect to an 
                                individual whose separation 
                                from employment gives rise to 
                                being an TAA-eligible 
                                individual, the loss of health 
                                benefits coverage associated 
                                with such separation.''.
    (f) Rule of Construction.--Nothing in this title (or the 
amendments made by this title), other than provisions relating 
to COBRA continuation coverage and reporting requirements, 
shall be construed as creating any new mandate on any party 
regarding health insurance coverage.

                   TITLE III--CUSTOMS REAUTHORIZATION

SEC. 301. SHORT TITLE.

    This Act may be cited as the ``Customs Border Security Act 
of 2002''.

               Subtitle A--United States Customs Service

  CHAPTER 1--DRUG ENFORCEMENT AND OTHER NONCOMMERCIAL AND COMMERCIAL 
                               OPERATIONS

SEC. 311. AUTHORIZATION OF APPROPRIATIONS FOR NONCOMMERCIAL OPERATIONS, 
                    COMMERCIAL OPERATIONS, AND AIR AND MARINE 
                    INTERDICTION.

    (a) Noncommercial Operations.--Section 301(b)(1) of the 
Customs Procedural Reform and Simplification Act of 1978 (19 
U.S.C. 2075(b)(1)) is amended--
            (1) by striking subparagraph (A), and inserting the 
        following:
                    ``(A) $1,365,456,000 for fiscal year 
                2003.''; and
            (2) by striking subparagraph (B), and inserting the 
        following:
                    ``(B) $1,399,592,400 for fiscal year 
                2004.''.
    (b) Commercial Operations.--
            (1) In general.--Section 301(b)(2)(A) of the 
        Customs Procedural Reform and Simplification Act of 
        1978 (19 U.S.C. 2075(b)(2)(A)) is amended--
                    (A) by striking clause (i), and inserting 
                the following:
                    ``(i) $1,642,602,000 for fiscal year 
                2003.''; and
                    (B) by striking clause (ii), and inserting 
                the following:
                    ``(ii) $1,683,667,050 for fiscal year 
                2004.''.
            (2) Automated commercial environment computer 
        system.--Of the amount made available for each of 
        fiscal years 2003 and 2004 under section 301(b)(2)(A) 
        of the Customs Procedural Reform and Simplification Act 
        of 1978 (19 U.S.C. 2075(b)(2)(A)), as amended by 
        paragraph (1), $308,000,000 shall be available until 
        expended for each such fiscal year for the development, 
        establishment, and implementation of the Automated 
        Commercial Environment computer system.
            (3) Reports.--Not later than 90 days after the date 
        of the enactment of this Act, and not later than the 
        end of each subsequent 90-day period, the Commissioner 
        of Customs shall prepare and submit to the Committee on 
        Ways and Means of the House of Representatives and the 
        Committee on Finance of the Senate a report 
        demonstrating that the development and establishment of 
        the Automated Commercial Environment computer system is 
        being carried out in a cost-effective manner and meets 
        the modernization requirements of title VI of the North 
        American Free Trade Agreement Implementation Act.
    (c) Air and Marine Interdiction.--Section 301(b)(3) of the 
Customs Procedural Reform and Simplification Act of 1978 (19 
U.S.C. 2075(b)(3)) is amended--
            (1) by striking subparagraph (A), and inserting the 
        following:
                    ``(A) $170,829,000 for fiscal year 2003.''; 
                and
            (2) by striking subparagraph (B), and inserting the 
        following:
                    ``(B) $175,099,725 for fiscal year 2004.''.
    (d) Submission of Out-Year Budget Projections.--Section 
301(a) of the Customs Procedural Reform and Simplification Act 
of 1978 (19 U.S.C. 2075(a)) is amended by adding at the end the 
following:
    ``(3) By not later than the date on which the President 
submits to Congress the budget of the United States Government 
for a fiscal year, the Commissioner of Customs shall submit to 
the Committee on Ways and Means of the House of Representatives 
and the Committee on Finance of the Senate the projected amount 
of funds for the succeeding fiscal year that will be necessary 
for the operations of the Customs Service as provided for in 
subsection (b).''.

SEC. 312. ANTITERRORIST AND ILLICIT NARCOTICS DETECTION EQUIPMENT FOR 
                    THE UNITED STATES-MEXICO BORDER, UNITED STATES-
                    CANADA BORDER, AND FLORIDA AND THE GULF COAST 
                    SEAPORTS.

    (a) Fiscal Year 2003.--Of the amounts made available for 
fiscal year 2003 under section 301(b)(1)(A) of the Customs 
Procedural Reform and Simplification Act of 1978 (19 U.S.C. 
2075(b)(1)(A)), as amended by section 311(a) of this Act, 
$90,244,000 shall be available until expended for acquisition 
and other expenses associated with implementation and 
deployment of antiterrorist and illicit narcotics detection 
equipment along the United States-Mexico border, the United 
States-Canada border, and Florida and the Gulf Coast seaports, 
as follows:
            (1) United states-mexico border.--For the United 
        States-Mexico border, the following:
                    (A) $6,000,000 for 8 Vehicle and Container 
                Inspection Systems (VACIS).
                    (B) $11,200,000 for 5 mobile truck x-rays 
                with transmission and backscatter imaging.
                    (C) $13,000,000 for the upgrade of 8 fixed-
                site truck x-rays from the present energy level 
                of 450,000 electron volts to 1,000,000 electron 
                volts (1-MeV).
                    (D) $7,200,000 for 8 1-MeV pallet x-rays.
                    (E) $1,000,000 for 200 portable contraband 
                detectors (busters) to be distributed among 
                ports where the current allocations are 
                inadequate.
                    (F) $600,000 for 50 contraband detection 
                kits to be distributed among all southwest 
                border ports based on traffic volume.
                    (G) $500,000 for 25 ultrasonic container 
                inspection units to be distributed among all 
                ports receiving liquid-filled cargo and to 
                ports with a hazardous material inspection 
                facility.
                    (H) $2,450,000 for 7 automated targeting 
                systems.
                    (I) $360,000 for 30 rapid tire deflator 
                systems to be distributed to those ports where 
                port runners are a threat.
                    (J) $480,000 for 20 portable Treasury 
                Enforcement Communications Systems (TECS) 
                terminals to be moved among ports as needed.
                    (K) $1,000,000 for 20 remote watch 
                surveillance camera systems at ports where 
                there are suspicious activities at loading 
                docks, vehicle queues, secondary inspection 
                lanes, or areas where visual surveillance or 
                observation is obscured.
                    (L) $1,254,000 for 57 weigh-in-motion 
                sensors to be distributed among the ports with 
                the greatest volume of outbound traffic.
                    (M) $180,000 for 36 AM traffic information 
                radio stations, with 1 station to be located at 
                each border crossing.
                    (N) $1,040,000 for 260 inbound vehicle 
                counters to be installed at every inbound 
                vehicle lane.
                    (O) $950,000 for 38 spotter camera systems 
                to counter the surveillance of customs 
                inspection activities by persons outside the 
                boundaries of ports where such surveillance 
                activities are occurring.
                    (P) $390,000 for 60 inbound commercial 
                truck transponders to be distributed to all 
                ports of entry.
                    (Q) $1,600,000 for 40 narcotics vapor and 
                particle detectors to be distributed to each 
                border crossing.
                    (R) $400,000 for license plate reader 
                automatic targeting software to be installed at 
                each port to target inbound vehicles.
            (2) United states-canada border.--For the United 
        States-Canada border, the following:
                    (A) $3,000,000 for 4 Vehicle and Container 
                Inspection Systems (VACIS).
                    (B) $8,800,000 for 4 mobile truck x-rays 
                with transmission and backscatter imaging.
                    (C) $3,600,000 for 4 1-MeV pallet x-rays.
                    (D) $250,000 for 50 portable contraband 
                detectors (busters) to be distributed among 
                ports where the current allocations are 
                inadequate.
                    (E) $300,000 for 25 contraband detection 
                kits to be distributed among ports based on 
                traffic volume.
                    (F) $240,000 for 10 portable Treasury 
                Enforcement Communications Systems (TECS) 
                terminals to be moved among ports as needed.
                    (G) $400,000 for 10 narcotics vapor and 
                particle detectors to be distributed to each 
                border crossing based on traffic volume.
            (3) Florida and gulf coast seaports.--For Florida 
        and the Gulf Coast seaports, the following:
                    (A) $4,500,000 for 6 Vehicle and Container 
                Inspection Systems (VACIS).
                    (B) $11,800,000 for 5 mobile truck x-rays 
                with transmission and backscatter imaging.
                    (C) $7,200,000 for 8 1-MeV pallet x-rays.
                    (D) $250,000 for 50 portable contraband 
                detectors (busters) to be distributed among 
                ports where the current allocations are 
                inadequate.
                    (E) $300,000 for 25 contraband detection 
                kits to be distributed among ports based on 
                traffic volume.
    (b) Fiscal Year 2004.--Of the amounts made available for 
fiscal year 2004 under section 301(b)(1)(B) of the Customs 
Procedural Reform and Simplification Act of 1978 (19 U.S.C. 
2075(b)(1)(B)), as amended by section 311(a) of this Act, 
$9,000,000 shall be available until expended for the 
maintenance and support of the equipment and training of 
personnel to maintain and support the equipment described in 
subsection (a).
    (c) Acquisition of Technologically Superior Equipment; 
Transfer of Funds.--
            (1) In general.--The Commissioner of Customs may 
        use amounts made available for fiscal year 2003 under 
        section 301(b)(1)(A) of the Customs Procedural Reform 
        and Simplification Act of 1978 (19 U.S.C. 
        2075(b)(1)(A)), as amended by section 311(a) of this 
        Act, for the acquisition of equipment other than the 
        equipment described in subsection (a) if such other 
        equipment--
                    (A)(i) is technologically superior to the 
                equipment described in subsection (a); and
                    (ii) will achieve at least the same results 
                at a cost that is the same or less than the 
                equipment described in subsection (a); or
                    (B) can be obtained at a lower cost than 
                the equipment described in subsection (a).
            (2) Transfer of funds.--Notwithstanding any other 
        provision of this section, the Commissioner of Customs 
        may reallocate an amount not to exceed 10 percent of--
                    (A) the amount specified in any of 
                subparagraphs (A) through (R) of subsection 
                (a)(1) for equipment specified in any other of 
                such subparagraphs (A) through (R);
                    (B) the amount specified in any of 
                subparagraphs (A) through (G) of subsection 
                (a)(2) for equipment specified in any other of 
                such subparagraphs (A) through (G); and
                    (C) the amount specified in any of 
                subparagraphs (A) through (E) of subsection 
                (a)(3) for equipment specified in any other of 
                such subparagraphs (A) through (E).

SEC. 313. COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS.

    As part of the annual performance plan for each of the 
fiscal years 2003 and 2004 covering each program activity set 
forth in the budget of the United States Customs Service, as 
required under section 1115 of title 31, United States Code, 
the Commissioner of Customs shall establish performance goals 
and performance indicators, and shall comply with all other 
requirements contained in paragraphs (1) through (6) of 
subsection (a) of such section with respect to each of the 
activities to be carried out pursuant to section 312.

     CHAPTER 2--CHILD CYBER-SMUGGLING CENTER OF THE CUSTOMS SERVICE

SEC. 321. AUTHORIZATION OF APPROPRIATIONS FOR PROGRAM TO PREVENT CHILD 
                    PORNOGRAPHY/CHILD SEXUAL EXPLOITATION.

    (a) Authorization of Appropriations.--There is authorized 
to be appropriated to the Customs Service $10,000,000 for 
fiscal year 2003 to carry out the program to prevent child 
pornography/child sexual exploitation established by the Child 
Cyber-Smuggling Center of the Customs Service.
    (b) Use of Amounts for Child Pornography Cyber Tipline.--Of 
the amount appropriated under subsection (a), the Customs 
Service shall provide 3.75 percent of such amount to the 
National Center for Missing and Exploited Children for the 
operation of the child pornography cyber tipline of the Center 
and for increased public awareness of the tipline.

                  CHAPTER 3--MISCELLANEOUS PROVISIONS

SEC. 331. ADDITIONAL CUSTOMS SERVICE OFFICERS FOR UNITED STATES-CANADA 
                    BORDER.

    Of the amount made available for fiscal year 2003 under 
paragraphs (1) and (2)(A) of section 301(b) of the Customs 
Procedural Reform and Simplification Act of 1978 (19 U.S.C. 
2075(b)), as amended by section 311 of this Act, $28,300,000 
shall be available until expended for the Customs Service to 
hire approximately 285 additional Customs Service officers to 
address the needs of the offices and ports along the United 
States-Canada border.

SEC. 332. STUDY AND REPORT RELATING TO PERSONNEL PRACTICES OF THE 
                    CUSTOMS SERVICE.

    (a) Study.--The Commissioner of Customs shall conduct a 
study of current personnel practices of the Customs Service, 
including an overview of performance standards and the effect 
and impact of the collective bargaining process on drug 
interdiction efforts of the Customs Service and a comparison of 
duty rotation policies of the Customs Service and other Federal 
agencies that employ similarly situated personnel.
    (b) Report.--Not later than 120 days after the date of the 
enactment of this Act, the Commissioner of Customs shall submit 
to the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate a 
report containing the results of the study conducted under 
subsection (a).

SEC. 333. STUDY AND REPORT RELATING TO ACCOUNTING AND AUDITING 
                    PROCEDURES OF THE CUSTOMS SERVICE.

    (a) Study.--(1) The Commissioner of Customs shall conduct a 
study of actions by the Customs Service to ensure that 
appropriate training is being provided to Customs Service 
personnel who are responsible for financial auditing of 
importers.
    (2) In conducting the study, the Commissioner--
            (A) shall specifically identify those actions taken 
        to comply with provisions of law that protect the 
        privacy and trade secrets of importers, such as section 
        552(b) of title 5, United States Code, and section 1905 
        of title 18, United States Code; and
            (B) shall provide for public notice and comment 
        relating to verification of the actions described in 
        subparagraph (A).
    (b) Report.--Not later than 6 months after the date of the 
enactment of this Act, the Commissioner of Customs shall submit 
to the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate a 
report containing the results of the study conducted under 
subsection (a).

SEC. 334. ESTABLISHMENT AND IMPLEMENTATION OF COST ACCOUNTING SYSTEM; 
                    REPORTS.

    (a) Establishment and Implementation.--
            (1) In general.--Not later than September 30, 2003, 
        the Commissioner of Customs shall, in accordance with 
        the audit of the Customs Service's fiscal years 2000 
        and 1999 financial statements (as contained in the 
        report of the Office of the Inspector General of the 
        Department of the Treasury issued on February 23, 
        2001), establish and implement a cost accounting system 
        for expenses incurred in both commercial and 
        noncommercial operations of the Customs Service.
            (2) Additional requirement.--The cost accounting 
        system described in paragraph (1) shall provide for an 
        identification of expenses based on the type of 
        operation, the port at which the operation took place, 
        the amount of time spent on the operation by personnel 
        of the Customs Service, and an identification of 
        expenses based on any other appropriate classification 
        necessary to provide for an accurate and complete 
        accounting of the expenses.
    (b) Reports.--Beginning on the date of the enactment of 
this Act and ending on the date on which the cost accounting 
system described in subsection (a) is fully implemented, the 
Commissioner of Customs shall prepare and submit to Congress on 
a quarterly basis a report on the progress of implementing the 
cost accounting system pursuant to subsection (a).

SEC. 335. STUDY AND REPORT RELATING TO TIMELINESS OF PROSPECTIVE 
                    RULINGS.

    (a) Study.--The Comptroller General shall conduct a study 
on the extent to which the Office of Regulations and Rulings of 
the Customs Service has made improvements to decrease the 
amount of time to issue prospective rulings from the date on 
which a request for the ruling is received by the Customs 
Service.
    (b) Report.--Not later than 1 year after the date of the 
enactment of this Act, the Comptroller General shall submit to 
the Committee on Ways and Means of the House of Representatives 
and the Committee on Finance of the Senate a report containing 
the results of the study conducted under subsection (a).
    (c) Definition.--In this section, the term ``prospective 
ruling'' means a ruling that is requested by an importer on 
goods that are proposed to be imported into the United States 
and that relates to the proper classification, valuation, or 
marking of such goods.

SEC. 336. STUDY AND REPORT RELATING TO CUSTOMS USER FEES.

    (a) Study.--The Comptroller General shall conduct a study 
on the extent to which the amount of each customsuser fee 
imposed under section 13031(a) of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 (19 U.S.C. 58c(a)) is commensurate with the 
level of services provided by the Customs Service relating to the fee 
so imposed.
    (b) Report.--Not later than 120 days after the date of the 
enactment of this Act, the Comptroller General shall submit to 
the Committee on Ways and Means of the House of Representatives 
and the Committee on Finance of the Senate a report in 
classified form containing--
            (1) the results of the study conducted under 
        subsection (a); and
            (2) recommendations for the appropriate amount of 
        the customs user fees if such results indicate that the 
        fees are not commensurate with the level of services 
        provided by the Customs Service.

SEC. 337. FEES FOR CUSTOMS INSPECTIONS AT EXPRESS COURIER FACILITIES.

    (a) In General.--Section 13031(b)(9) of the Consolidated 
Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(b)(9)) 
is amended as follows:
            (1) In subparagraph (A)--
                    (A) in the matter preceding clause (i), by 
                striking ``the processing of merchandise that 
                is informally entered or released'' and 
                inserting ``the processing of letters, 
                documents, records, shipments, merchandise, or 
                any other item that is valued at an amount that 
                is less than $2,000 (or such higher amount as 
                the Secretary of the Treasury may set by 
                regulation pursuant to section 498 of the 
                Tariff Act of 1930), except such items entered 
                for transportation and exportation or immediate 
                exportation''; and
                    (B) by striking clause (ii), and inserting 
                the following:
                            ``(ii) Subject to the provisions of 
                        subparagraph (B), in the case of an 
                        express consignment carrier facility or 
                        centralized hub facility, $.66 per 
                        individual airway bill or bill of 
                        lading.''.
            (2) By redesignating subparagraph (B) as 
        subparagraph (C) and inserting after subparagraph (A) 
        the following:
                    ``(B)(i) Beginning in fiscal year 2004, the 
                Secretary of the Treasury may adjust (not more 
                than once per fiscal year) the amount described 
                in subparagraph (A)(ii) to an amount that is 
                not less than $.35 and not more than $1.00 per 
                individual airway bill or bill of lading. The 
                Secretary shall provide notice in the Federal 
                Register of a proposed adjustment under the 
                preceding sentence and the reasons therefor and 
                shall allow for public comment on the proposed 
                adjustment.
                    ``(ii) Notwithstanding section 451 of the 
                Tariff Act of 1930, the payment required by 
                subparagraph (A)(ii) shall be the only payment 
                required for reimbursement of the Customs 
                Service in connection with the processing of an 
                individual airway bill or bill of lading in 
                accordance with such subparagraph and for 
                providing services at express consignment 
                carrier facilities or centralized hub 
                facilities, except that the Customs Service may 
                require such facilities to cover expenses of 
                the Customs Service for adequate office space, 
                equipment, furnishings, supplies, and security.
                    ``(iii)(I) The payment required by 
                subparagraph (A)(ii) and clause (ii) of this 
                subparagraph shall be paid on a quarterly basis 
                by the carrier using the facility to the 
                Customs Service in accordance with regulations 
                prescribed by the Secretary of the Treasury.
                    ``(II) 50 percent of the amount of payments 
                received under subparagraph (A)(ii) and clause 
                (ii) of this subparagraph shall, in accordance 
                with section 524 of the Tariff Act of 1930, be 
                deposited in the Customs User Fee Account and 
                shall be used to directly reimburse each 
                appropriation for the amount paid out of that 
                appropriation for the costs incurred in 
                providing services to express consignment 
                carrier facilities or centralized hub 
                facilities. Amounts deposited in accordance 
                with the preceding sentence shall be available 
                until expended for the provision of customs 
                services to express consignment carrier 
                facilities or centralized hub facilities.
                    ``(III) Notwithstanding section 524 of the 
                Tariff Act of 1930, the remaining 50 percent of 
                the amount of payments received under 
                subparagraph (A)(ii) and clause (ii) of this 
                subparagraph shall be paid to the Secretary of 
                the Treasury, which is in lieu of the payment 
                of fees under subsection (a)(10) of this 
                section.''.
    (b) Effective Date.--The amendments made by subsection (a) 
take effect on October 1, 2002.

SEC. 338. NATIONAL CUSTOMS AUTOMATION PROGRAM.

    Section 411(b) of the Tariff Act of 1930 (19 U.S.C. 
1411(b)) is amended by striking the second sentence and 
inserting the following: ``The Secretary may, by regulation, 
require the electronic submission of information described in 
subsection (a) or any other information required to be 
submitted to the Customs Service separately pursuant to this 
subpart.''.

SEC. 339. AUTHORIZATION OF APPROPRIATIONS FOR CUSTOMS STAFFING.

    There are authorized to be appropriated to the Department 
of Treasury such sums as may be necessary to provide an 
increase in the annual rate of basic pay--
            (1) for all journeyman Customs inspectors and 
        Canine Enforcement Officers who have completed at least 
        one year's service and are receiving an annual rate of 
        basic pay for positions at GS-9 of the General Schedule 
        under section 5332 of title 5, United States Code, from 
        the annual rate of basic pay payable for positions at 
        GS-9 of the General Schedule under such section 5332, 
        to an annual rate of basic pay payable for positions at 
        GS-11 of the General Schedule under such section 5332; 
        and
            (2) for the support staff associated with the 
        personnel described in subparagraph (A), at the 
        appropriate GS level of the General Schedule under such 
        section 5332.

                  CHAPTER 4--ANTITERRORISM PROVISIONS

SEC. 341. IMMUNITY FOR UNITED STATES OFFICIALS THAT ACT IN GOOD FAITH.

    (a) Immunity.--Section 3061 of the Revised Statutes (19 
U.S.C. 482) is amended--
            (1) by striking ``Any of the officers'' and 
        inserting ``(a) Any of the officers''; and
            (2) by adding at the end the following:
    ``(b) Any officer or employee of the United States 
conducting a search of a person pursuant to subsection (a) 
shall not be held liable for any civil damages as a result of 
such search if the officer or employee performed the search in 
good faith and used reasonable means while effectuating such 
search.''.
    (b) Requirement To Post Policy and Procedures for Searches 
of Passengers.--Not later than 30 days after the date of the 
enactment of this Act, the Commissioner of Customs shall ensure 
that at each Customs border facility appropriate notice is 
posted that provides a summary of the policy and procedures of 
the Customs Service for searching passengers, including a 
statement of the policy relating to the prohibition on the 
conduct of profiling of passengers based on gender, race, 
color, religion, or ethnic background.

SEC. 342. EMERGENCY ADJUSTMENTS TO OFFICES, PORTS OF ENTRY, OR STAFFING 
                    OF THE CUSTOMS SERVICE.

    Section 318 of the Tariff Act of 1930 (19 U.S.C. 1318) is 
amended--
            (1) by striking ``Whenever the President'' and 
        inserting ``(a) Whenever the President''; and
            (2) by adding at the end the following:
    ``(b)(1) Notwithstanding any other provision of law, the 
Secretary of the Treasury, when necessary to respond to a 
national emergency declared under the National Emergencies Act 
(50 U.S.C. 1601 et seq.) or to a specific threat to human life 
or national interests, is authorized to take the following 
actions on a temporary basis:
            ``(A) Eliminate, consolidate, or relocate any 
        office or port of entry of the Customs Service.
            ``(B) Modify hours of service, alter services 
        rendered at any location, or reduce the number of 
        employees at any location.
            ``(C) Take any other action that may be necessary 
        to respond directly to the national emergency or 
        specific threat.
    ``(2) Notwithstanding any other provision of law, the 
Commissioner of Customs, when necessary to respond to a 
specific threat to human life or national interests, is 
authorized to close temporarily any Customs office or port of 
entry or take any other lesser action that may be necessary to 
respond to the specific threat.
    ``(3) The Secretary of the Treasury or the Commissioner of 
Customs, as the case may be, shall notify the Committee on Ways 
and Means of the House of Representatives and the Committee on 
Finance of the Senate not later than 72 hours after taking any 
action under paragraph (1) or (2).''.

SEC. 343. MANDATORY ADVANCED ELECTRONIC INFORMATION FOR CARGO AND OTHER 
                    IMPROVED CUSTOMS REPORTING PROCEDURES.

    (a) Cargo Information.--
            (1) In general.--Subject to paragraphs (2) and (3), 
        not later than 1 year after the date of enactment of 
        this Act, the Secretary shall promulgate regulations 
        providing for the transmission to the Customs Service, 
        through an electronic data interchange system, of 
        information pertaining to cargo destined for 
        importation into the United States or exportation from 
        the United States, prior to such importation or 
        exportation.
            (2) Information required.--The information required 
        by the regulations promulgated pursuant to paragraph 
        (1) under the parameters set forth in paragraph (3) 
        shall be such information as the Secretary determines 
        to be reasonably necessary to ensure aviation, 
        maritime, and surface transportation safety and 
        security pursuant to those laws enforced and 
        administered by the Customs Service.
            (3) Parameters.--In developing regulations pursuant 
        to paragraph (1), the Secretary shall adhere to the 
        following parameters:
                    (A) The Secretary shall solicit comments 
                from and consult with a broad range of parties 
                likely to be affected by the regulations, 
                including importers, exporters, carriers, 
                customs brokers, and freight forwarders, among 
                other interested parties.
                    (B) In general, the requirement to provide 
                particular information shall be imposed on the 
                party most likely to have direct knowledge of 
                that information. Where requiring information 
                from the party with direct knowledge of that 
                information is not practicable, the regulations 
                shall take into account how, under ordinary 
                commercial practices, information is acquired 
                by the party on which the requirement is 
                imposed, and whether and how such party is able 
                to verify the information. Where information is 
                not reasonably verifiable by the party on which 
                a requirement is imposed, the regulations shall 
                permit that party to transmit information on 
                the basis of what it reasonably believes to be 
                true.
                    (C) The Secretary shall take into account 
                the existence of competitive relationships 
                among the parties on which requirements to 
                provide particular information are imposed.
                    (D) Where the regulations impose 
                requirements on carriers of cargo, they shall 
                take into account differences among different 
                modes of transportation, including differences 
                in commercial practices, operational 
                characteristics, and technological capacity to 
                collect and transmit information 
                electronically.
                    (E) The regulations shall take into account 
                the extent to which the technology necessary 
                for parties to transmit and the Customs Service 
                to receive and analyze data in a timely fashion 
                is available. To the extent that the Secretary 
                determines that the necessary technology will 
                not be widely available to particular modes of 
                transportation or other affected parties until 
                after promulgation of the regulations, the 
                regulations shall provide interim requirements 
                appropriatefor the technology that is available 
at the time of promulgation.
                    (F) The information collected pursuant to 
                the regulations shall be used exclusively for 
                ensuring aviation, maritime, and surface 
                transportation safety and security, and shall 
                not be used for determining entry or for any 
                other commercial enforcement purposes.
                    (G) The regulations shall protect the 
                privacy of business proprietary and any other 
                confidential information provided to the 
                Customs Service. However, this parameter does 
                not repeal, amend, or otherwise modify other 
                provisions of law relating to the public 
                disclosure of information transmitted to the 
                Customs Service.
                    (H) In determining the timing for 
                transmittal of any information, the Secretary 
                shall balance likely impact on flow of commerce 
                with impact on aviation, maritime, and surface 
                transportation safety and security. With 
                respect to requirements that may be imposed on 
                carriers of cargo, the timing for transmittal 
                of information shall take into account 
                differences among different modes of 
                transportation, as described in subparagraph 
                (D).
                    (I) Where practicable, the regulations 
                shall avoid imposing requirements that are 
                redundant with one another or that are 
                redundant with requirements in other provisions 
                of law.
                    (J) The Secretary shall determine whether 
                it is appropriate to provide transition periods 
                between promulgation of the regulations and the 
                effective date of the regulations and shall 
                prescribe such transition periods in the 
                regulations, as appropriate. The Secretary may 
                determine that different transition periods are 
                appropriate for different classes of affected 
                parties.
                    (K) With respect to requirements imposed on 
                carriers, the Secretary, in consultation with 
                the Postmaster General, shall determine whether 
                it is appropriate to impose the same or similar 
                requirements on shipments by the United States 
                Postal Service. If the Secretary determines 
                that such requirements are appropriate, then 
                they shall be set forth in the regulations.
                    (L) Not later than 15 days prior to 
                promulgation of the regulations, the Secretary 
                shall transmit to the Committees on Finance and 
                Commerce, Science, and Transportation of the 
                Senate and the Committees on Ways and Means and 
                Transportation and Infrastructure of the House 
                of Representatives a report setting forth--
                            (i) the proposed regulations;
                            (ii) an explanation of how 
                        particular requirements in the proposed 
                        regulations meet the needs of aviation, 
                        maritime, and surface transportation 
                        safety and security;
                            (iii) an explanation of how the 
                        Secretary expects the proposed 
                        regulations to affect the commercial 
                        practices of affected parties; and
                            (iv) an explanation of how the 
                        proposed regulations address particular 
                        comments received from interested 
                        parties.
    (b) Documentation of Waterborne Cargo.--Part II of title IV 
of the Tariff Act of 1930 is amended by inserting after section 
431 the following new section:

``SEC. 431A. DOCUMENTATION OF WATERBORNE CARGO.

    ``(a) Applicability.--This section shall apply to all cargo 
to be exported that is moved by a vessel carrier from a port in 
the United States.
    ``(b) Documentation Required.--(1) No shipper of cargo 
subject to this section (including an ocean transportation 
intermediary that is a non-vessel-operating common carrier (as 
defined in section 3(17)(B) of the Shipping Act of 1984 (46 
U.S.C. App. 1702(17)(B)) may tender or cause to be tendered to 
a vessel carrier cargo subject to this section for loading on a 
vessel in a United States port, unless such cargo is properly 
documented pursuant to this subsection.
    ``(2) For the purposes of this subsection, cargo shall be 
considered properly documented if the shipper submits to the 
vessel carrier or its agent a complete set of shipping 
documents no later than 24 hours after the cargo is delivered 
to the marine terminal operator, but under no circumstances 
later than 24 hours prior to departure of the vessel.
    ``(3) A complete set of shipping documents shall include--
            ``(A) for shipments for which a shipper's export 
        declaration is required, a copy of the export 
        declaration or, if the shipper files such declarations 
        electronically in the Automated Export System, the 
        complete bill of lading, and the master or equivalent 
        shipping instructions, including the Internal 
        Transaction Number (ITN); or
            ``(B) for shipments for which a shipper's export 
        declaration is not required, a shipper's export 
        declaration exemption statement and such other 
        documents or information as the Secretary may by 
        regulation prescribe.
    ``(4) The Secretary shall by regulation prescribe the time, 
manner, and form by which shippers shall transmit documents or 
information required under this subsection to the Customs 
Service.
    ``(c) Loading Undocumented Cargo Prohibited.--
            ``(1) No marine terminal operator (as defined in 
        section 3(14) of the Shipping Act of 1984 (46 U.S.C. 
        App. 1702(14))) may load, or cause to be loaded, any 
        cargo subject to this section on a vessel unless 
        instructed by the vessel carrier operating the vessel 
        that such cargo has been properly documented in 
        accordance with this section.
            ``(2) When cargo is booked by 1 vessel carrier to 
        be transported on the vessel of another vessel carrier, 
        the booking carrier shall notify the operator of the 
        vessel that the cargo has been properly documented in 
        accordance with this section. The operator of the 
        vessel may rely on such notification in releasing the 
        cargo for loading aboard the vessel.
    ``(d) Reporting of Undocumented Cargo.--A vessel carrier 
shall notify the Customs Service of any cargo tendered to such 
carrier that is not properly documented pursuant to this 
section and that has remained in the marine terminal for more 
than 48 hours after being deliveredto the marine terminal, and 
the location of the cargo in the marine terminal. For vessel carriers 
that are members of vessel sharing agreements (or any other arrangement 
whereby a carrier moves cargo on another carrier's vessel), the vessel 
carrier accepting the booking shall be responsible for reporting 
undocumented cargo, without regard to whether it operates the vessel on 
which the transportation is to be made.
    ``(e) Assessment of Penalties.--Whoever is found to have 
violated subsection (b) of this section shall be liable to the 
United States for civil penalties in a monetary amount up to 
the value of the cargo, or the actual cost of the 
transportation, whichever is greater.
    ``(f) Seizure of Undocumented Cargo.--
            ``(1) Any cargo that is not properly documented 
        pursuant to this section and has remained in the marine 
        terminal for more than 48 hours after being delivered 
        to the marine terminal operator shall be subject to 
        search, seizure, and forfeiture.
            ``(2) The shipper of any such cargo is liable to 
        the marine terminal operator and to the ocean carrier 
        for demurrage and other applicable charges for any 
        undocumented cargo which has been notified to or 
        searched or seized by the Customs Service for the 
        entire period the cargo remains under the order and 
        direction of the Customs Service. Unless the cargo is 
        seized by the Customs Service and forfeited, the marine 
        terminal operator and the ocean carrier shall have a 
        lien on the cargo for the amount of the demurrage and 
        other charges.
    ``(g) Effect on Other Provisions.--Nothing in this section 
shall be construed, interpreted, or applied to relieve or 
excuse any party from compliance with any obligation or 
requirement arising under any other law, regulation, or order 
with regard to the documentation or carriage of cargo.''.
    (c) Secretary.--For purposes of this section, the term 
``Secretary'' means the Secretary of the Treasury. If, at the 
time the regulations required by subsection (a)(1) are 
promulgated, the Customs Service is no longer located in the 
Department of the Treasury, then the Secretary of the Treasury 
shall exercise the authority under subsection (a) jointly with 
the Secretary of the Department in which the Customs Service is 
located.

SEC. 343A. SECURE SYSTEMS OF TRANSPORTATION.

    (a) Joint Task Force.--The Secretary of the Treasury shall 
establish a joint task force to evaluate, prototype, and 
certify secure systems of transportation. The joint task force 
shall be comprised of officials from the Department of 
Transportation and the Customs Service, and any other officials 
that the Secretary deems appropriate. The task force shall 
establish a program to evaluate and certify secure systems of 
international intermodal transport no later than 1 year after 
the date of enactment of this Act. The task force shall solicit 
and consider input from a broad range of interested parties.
    (b) Program Requirements.--At a minimum the program 
referred to in subsection (a) shall require certified systems 
of international intermodal transport to be significantly more 
secure than existing transportation programs, and the program 
shall--
            (1) establish standards and a process for screening 
        and evaluating cargo prior to import into or export 
        from the United States;
            (2) establish standards and a process for a system 
        of securing cargo and monitoring it while in transit;
            (3) establish standards and a process for allowing 
        the United States Government to ensure and validate 
        compliance with the program elements; and
            (4) include any other elements that the task force 
        deems necessary to ensure the security and integrity of 
        the international intermodal transport movements.
    (c) Recognition of Certified Systems.--
            (1) Secretary of the treasury.--The Secretary of 
        the Treasury shall recognize certified systems of 
        intermodal transport in the requirements of a national 
        security plan for United States seaports, and in the 
        provisions requiring planning to reopen United States 
        ports for commerce.
            (2) Commissioner of customs.--The Commissioner of 
        Customs shall recognize certified systems of intermodal 
        transport in the evaluation of cargo risk for purposes 
        of United States imports and exports.
    (d) Report.--Within 1 year after the program described in 
subsection (a) is implemented, the Secretary of the Treasury 
shall transmit a report to the Committees on Commerce, Science, 
and Transportation and Finance of the Senate and the Committees 
on Transportation and Infrastructure and Ways and Means of the 
House of Representatives that--
            (1) evaluates the program and its requirements;
            (2) states the Secretary's views as to whether any 
        procedure, system, or technology evaluated as part of 
        the program offers a higher level of security than 
        under existing procedures;
            (3) states the Secretary's views as to the 
        integrity of the procedures, technology, or systems 
        evaluated as part of the program; and
            (4) makes a recommendation with respect to whether 
        the program, or any procedure, system, or technology 
        should be incorporated in a nationwide system for 
        certified systems of intermodal transport.

SEC. 344. BORDER SEARCH AUTHORITY FOR CERTAIN CONTRABAND IN OUTBOUND 
                    MAIL.

    (a) In General.--The Tariff Act of 1930 is amended by 
inserting after section 582 the following:

``SEC. 583. EXAMINATION OF OUTBOUND MAIL.

    ``(a) Examination.--
            ``(1) In general.--For purposes of ensuring 
        compliance with the Customs laws of the United States 
        and other laws enforced by the Customs Service, 
        including the provisions of law described in paragraph 
        (2), a Customs officer may, subject to the provisions 
        of this section, stop and search at the border, without 
        a search warrant, mail of domestic origin transmitted 
        for export by the United States Postal Service and 
        foreign mail transiting the United States that is being 
        imported or exported by the United States Postal 
        Service.
            ``(2) Provisions of law described.--The provisions 
        of law described in this paragraph are the following:
                    ``(A) Section 5316 of title 31, United 
                States Code (relating to reports on exporting 
                and importing monetary instruments).
                    ``(B) Sections 1461, 1463, 1465, and 1466, 
                and chapter 110 of title 18, United States Code 
                (relating to obscenity and child pornography).
                    ``(C) Section 1003 of the Controlled 
                Substances Import and Export Act (relating to 
                exportation of controlled substances) (21 
                U.S.C. 953).
                    ``(D) The Export Administration Act of 1979 
                (50 U.S.C. App. 2401 et seq.).
                    ``(E) Section 38 of the Arms Export Control 
                Act (22 U.S.C. 2778).
                    ``(F) The International Emergency Economic 
                Powers Act (50 U.S.C. 1701 et seq.).
    ``(b) Search of Mail Not Sealed Against Inspection and 
Other Mail.--Mail not sealed against inspection under the 
postal laws and regulations of the United States, mail which 
bears a Customs declaration, and mail with respect to which the 
sender or addressee has consented in writing to search, may be 
searched by a Customs officer.
    ``(c) Search of Mail Sealed Against Inspection Weighing in 
Excess of 16 Ounces.--
    ``(1) In general.--Mail weighing in excess of 16 ounces 
sealed against inspection under the postal laws and regulations 
of the United States may be searched by a Customs officer, 
subject to paragraph (2), if there is reasonable cause to 
suspect that such mail contains one or more of the following:
            ``(A) Monetary instruments, as defined in section 
        1956 of title 18, United States Code.
            ``(B) A weapon of mass destruction, as defined in 
        section 2332a(b) of title 18, United States Code.
            ``(C) A drug or other substance listed in schedule 
        I, II, III, or IV in section 202 of the Controlled 
        Substances Act (21 U.S.C. 812).
            ``(D) National defense and related information 
        transmitted in violation of any of sections 793 through 
        798 of title 18, United States Code.
            ``(E) Merchandise mailed in violation of section 
        1715 or 1716 of title 18, United States Code.
            ``(F) Merchandise mailed in violation of any 
        provision of chapter 71 (relating to obscenity) or 
        chapter 110 (relating to sexual exploitation and other 
        abuse of children) of title 18, United States Code.
            ``(G) Merchandise mailed in violation of the Export 
        Administration Act of 1979 (50 U.S.C. App. 2401 et 
        seq.).
            ``(H) Merchandise mailed in violation of section 38 
        of the Arms Export Control Act (22 U.S.C. 2778).
            ``(I) Merchandise mailed in violation of the 
        International Emergency Economic Powers Act (50 U.S.C. 
        1701 et seq.).
            ``(J) Merchandise mailed in violation of the 
        Trading with the Enemy Act (50 U.S.C. App. 1 et seq.).
            ``(K) Merchandise subject to any other law enforced 
        by the Customs Service.
            ``(2) Limitation.--No person acting under the 
        authority of paragraph (1) shall read, or authorize any 
        other person to read, any correspondence contained in 
        mail sealed against inspection unless prior to so 
        reading--
                    ``(A) a search warrant has been issued 
                pursuant to rule 41 of the Federal Rules of 
                Criminal Procedure; or
                    ``(B) the sender or addressee has given 
                written authorization for such reading.
    ``(d) Search of Mail Sealed Against Inspection Weighing 16 
Ounces or Less.--Notwithstanding any other provision of this 
section, subsection (a)(1) shall not apply to mail weighing 16 
ounces or less sealed against inspection under the postal laws 
and regulations of the United States.''.
    (b) Certification by Secretary.--Not later than 3 months 
after the date of enactment of this section, the Secretary of 
State shall determine whether the application of section 583 of 
the Tariff Act of 1930 to foreign mail transiting the United 
States that is imported or exported by the United States Postal 
Service is being handled in a manner consistent with 
international law and any international obligation of the 
United States. Section 583 of such Act shall not apply to such 
foreign mail unless the Secretary certifies to Congress that 
the application of such section 583 is consistent with 
international law and any international obligation of the 
United States.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph 
        (2), this section and the amendments made by this 
        section shall take effect on the date of enactment of 
        this Act.
            (2) Certification with respect to foreign mail.--
        The provisions of section 583 of the Tariff Act of 1930 
        relating to foreign mail transiting the United States 
        that is imported or exported by the United States 
        Postal Service shall not take effect until the 
        Secretary of State certifies to Congress, pursuant to 
        subsection (b), that the application of such section 
        583 is consistent with international law and any 
        international obligation of the United States.

SEC. 345. AUTHORIZATION OF APPROPRIATIONS FOR REESTABLISHMENT OF 
                    CUSTOMS OPERATIONS IN NEW YORK CITY.

    (a) Authorization of Appropriations.--
            (1) In general.--There is authorized to be 
        appropriated for the reestablishment of operations of 
        the Customs Service in New York, New York, such sums as 
        may be necessary for fiscal year 2003.
            (2) Operations described.--The operations referred 
        to in paragraph (1) include, but are not limited to, 
        the following:
                    (A) Operations relating to the Port 
                Director of New York City, the New York Customs 
                Management Center (including the Director of 
                Field Operations), and the Special Agent-In-
                Charge for New York.
                    (B) Commercial operations, including 
                textile enforcement operations and salaries and 
                expenses of--
                            (i) trade specialists who determine 
                        the origin and value of merchandise;
                            (ii) analysts who monitor the entry 
                        data into the United States of textiles 
                        and textile products; and
                            (iii) Customs officials who work 
                        with foreign governments to examine 
                        textile makers and verify entry 
                        information.
    (b) Availability.--Amounts appropriated pursuant to the 
authorization of appropriations under subsection (a) are 
authorized to remain available until expended.

              CHAPTER 5--TEXTILE TRANSSHIPMENT PROVISIONS

SEC. 351. GAO AUDIT OF TEXTILE TRANSSHIPMENT MONITORING BY CUSTOMS 
                    SERVICE.

    (a) GAO Audit.--The Comptroller General of the United 
States shall conduct an audit of the system established and 
carried out by the Customs Service to monitor transshipment.
    (b) Report.--Not later than 9 months after the date of 
enactment of this Act, the Comptroller General shall submit to 
the Committee on Ways and Means of the House of Representatives 
and Committee on Finance of the Senate a report that contains 
the results of the study conducted under subsection (a), 
including recommendations for improvements to the transshipment 
monitoring system if applicable.
    (c) Transshipment Described.--Transshipment within the 
meaning of this section has occurred when preferential 
treatment under any provision of law has been claimed for a 
textile or apparel article on the basis of material false 
information concerning the country of origin, manufacture, 
processing, or assembly of the article or any of its 
components. For purposes of the preceding sentence, false 
information is material if disclosure of the true information 
would mean or would have meant that the article is or was 
ineligible for preferential treatment under the provision of 
law in question.

SEC. 352. AUTHORIZATION OF APPROPRIATIONS FOR TEXTILE TRANSSHIPMENT 
                    ENFORCEMENT OPERATIONS.

    (a) Authorization of Appropriations.--
            (1) In general.--There is authorized to be 
        appropriated for transshipment (as described in section 
        351(c)) enforcement operations, outreach, and education 
        of the Customs Service $9,500,000 for fiscal year 2003.
            (2) Availability.--Amounts appropriated pursuant to 
        the authorization of appropriations under paragraph (1) 
        are authorized to remain available until expended.
    (b) Use of Funds.--Of the amount appropriated pursuant to 
the authorization of appropriations under subsection (a), the 
following amounts are authorized to be made available for the 
following purposes:
            (1) Import specialists.--$1,463,000 for 21 Customs 
        import specialists to be assigned to selected ports for 
        documentation review to support detentions and 
        exclusions and 1 additional Customs import specialist 
        assigned to the Customs headquarters textile program to 
        administer the program and provide oversight.
            (2) Inspectors.--$652,080 for 10 Customs inspectors 
        to be assigned to selected ports to examine targeted 
        high-risk shipments.
            (3) Investigators.--(A) $1,165,380 for 10 
        investigators to be assigned to selected ports to 
        investigate instances of smuggling, quota and trade 
        agreement circumvention, and use of counterfeit visas 
        to enter inadmissible goods.
            (B) $149,603 for 1 investigator to be assigned to 
        the Customs headquarters textile program to coordinate 
        and ensure implementation of textile production 
        verification team results from an investigation 
        perspective.
            (4) International trade specialists.--$226,500 for 
        3 international trade specialists to be assigned to 
        Customs headquarters to be dedicated to illegal textile 
        transshipment policy issues, outreach, education, and 
        other free trade agreement enforcement issues.
            (5) Permanent import specialists for hong kong.--
        $500,000 for 2 permanent import specialist positions 
        and $500,000 for 2 investigators to be assigned to Hong 
        Kong to work with Hong Kong and other government 
        authorities in Southeast Asia to assist such 
        authorities in pursuing proactive enforcement of 
        bilateral trade agreements.
            (6) Various permanent trade positions.--$3,500,000 
        for the following:
                    (A) 2 permanent positions to be assigned to 
                the Customs attache office in Central America 
                to address trade enforcement issues for that 
                region.
                    (B) 2 permanent positions to be assigned to 
                the Customs attache office in South Africa to 
                address trade enforcement issues pursuant to 
                the African Growth and Opportunity Act (title I 
                of Public Law 106-200).
                    (C) 4 permanent positions to be assigned to 
                the Customs attache office in Mexico to address 
                the threat of illegal textile transshipment 
                through Mexico and other related issues under 
                the North American Free Trade Agreement Act.
                    (D) 2 permanent positions to be assigned to 
                the Customs attache office in Seoul, South 
                Korea, to address the trade issues in the 
                geographic region.
                    (E) 2 permanent positions to be assigned to 
                the proposed Customs attache office in New 
                Delhi, India, to address the threat of illegal 
                textile transshipment and other trade 
                enforcement issues.
                    (F) 2 permanent positions to be assigned to 
                the Customs attache office in Rome, Italy, to 
                address trade enforcement issues in the 
                geographic region, including issues under free 
                trade agreements with Jordan and Israel.
            (7) Attorneys.--$179,886 for 2 attorneys for the 
        Office of the Chief Counsel of the Customs Service to 
        pursue cases regarding illegal textile transshipment.
            (8) Auditors.--$510,000 for 6 Customs auditors to 
        perform internal control reviews and document and 
        record reviews of suspect importers.
            (9) Additional travel funds.--$250,000 for 
        deployment of additional textile production 
        verification teams to sub-Saharan Africa.
            (10) Training.--(A) $75,000 for training of Customs 
        personnel.
            (B) $200,000 for training for foreign counterparts 
        in risk management analytical techniques and for 
        teaching factory inspection techniques, model law 
        development, and enforcement techniques.
            (11) Outreach.--$60,000 for outreach efforts to 
        United States importers.

SEC. 353. IMPLEMENTATION OF THE AFRICAN GROWTH AND OPPORTUNITY ACT.

    Of the amount made available for fiscal year 2003 under 
section 301(b)(2)(A) of the Customs Procedural Reform and 
Simplification Act of 1978 (19 U.S.C. 2075(b)(2)(A)), as 
amended by section 311(b)(1) of this Act, $1,317,000 shall be 
available until expended for the Customs Service to provide 
technical assistance to help sub-Saharan African countries 
develop and implement effective visa and anti-transshipment 
systems as required by the African Growth and Opportunity Act 
(title I of Public Law 106-200), as follows:
            (1) Travel funds.--$600,000 for import specialists, 
        special agents, and other qualified Customs personnel 
        to travel to sub-Saharan African countries to provide 
        technical assistance in developing and implementing 
        effective visa and anti-transshipment systems.
            (2) Import specialists.--$266,000 for 4 import 
        specialists to be assigned to Customs headquarters to 
        be dedicated to providing technical assistance to sub-
        Saharan African countries for developing and 
        implementing effective visa and anti-transshipment 
        systems.
            (3) Data reconciliation analysts.--$151,000 for 2 
        data reconciliation analysts to review apparel 
        shipments.
            (4) Special agents.--$300,000 for 2 special agents 
        to be assigned to Customs headquarters to be available 
        to provide technical assistance to sub-Saharan African 
        countries in the performance of investigations and 
        other enforcement initiatives.

      Subtitle B--Office of the United States Trade Representative

SEC. 361. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--Section 141(g)(1) of the Trade Act of 1974 
(19 U.S.C. 2171(g)(1)) is amended--
            (1) in subparagraph (A)--
                    (A) in the matter preceding clause (i), by 
                striking ``not to exceed'';
                    (B) by striking clause (i), and inserting 
                the following:
            ``(i) $32,300,000 for fiscal year 2003.''; and
                    (C) by striking clause (ii), and inserting 
                the following:
            ``(ii) $33,108,000 for fiscal year 2004.''; and
            (2) in subparagraph (B)--
                    (A) in clause (i), by adding ``and'' at the 
                end;
                    (B) by striking clause (ii); and
                    (C) by redesignating clause (iii) as clause 
                (ii).
    (b) Submission of Out-Year Budget Projections.--Section 
141(g) of the Trade Act of 1974 (19 U.S.C. 2171(g)) is amended 
by adding at the end the following:
    ``(3) By not later than the date on which the President 
submits to Congress the budget of the United States Government 
for a fiscal year, the United States Trade Representative shall 
submit to the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate the 
projected amount of funds for the succeeding fiscal year that 
will be necessary for the Office to carry out its functions.''.
    (c) Additional Staff for Office of Assistant U.S. Trade 
Representative for Congressional Affairs.--
            (1) In general.--There is authorized to be 
        appropriated such sums as may be necessary for fiscal 
        year 2003 for the salaries and expenses of two 
        additional legislative specialist employee positions 
        within the Office of the Assistant United States Trade 
        Representative for Congressional Affairs.
            (2) Availability.--Amounts appropriated pursuant to 
        the authorization of appropriations under paragraph (1) 
        are authorized to remain available until expended.

        Subtitle C--United States International Trade Commission

SEC. 371. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--Section 330(e)(2)(A) of the Tariff Act of 
1930 (19 U.S.C. 1330(e)(2)(A)) is amended--
            (1) by striking clause (i), and inserting the 
        following:
            ``(i) $54,000,000 for fiscal year 2003.''; and
            (2) by striking clause (ii), and inserting the 
        following:
            ``(ii) $57,240,000 for fiscal year 2004.''.
    (b) Submission of Out-Year Budget Projections.--Section 
330(e) of the Tariff Act of 1930 (19 U.S.C. 1330(e)(2)) is 
amended by adding at the end the following:
    ``(4) By not later than the date on which the President 
submits to Congress the budget of the United States Government 
for a fiscal year, the Commission shall submit to the Committee 
on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate the projected amount of 
funds for the succeeding fiscal year that will be necessary for 
the Commission to carry out its functions.''.

                   Subtitle D--Other Trade Provisions

SEC. 381. INCREASE IN AGGREGATE VALUE OF ARTICLES EXEMPT FROM DUTY 
                    ACQUIRED ABROAD BY UNITED STATES RESIDENTS.

    (a) In General.--Subheading 9804.00.65 of the Harmonized 
Tariff Schedule of the United States is amended in the article 
description column by striking ``$400'' and inserting ``$800''.
    (b) Effective Date.--The amendment made by subsection (a) 
shall take effect 90 days after the date of the enactment of 
this Act.

SEC. 382. REGULATORY AUDIT PROCEDURES.

    Section 509(b) of the Tariff Act of 1930 (19 U.S.C. 
1509(b)) is amended by adding at the end the following:
            ``(6)(A) If during the course of any audit 
        concluded under this subsection, the Customs Service 
        identifies overpayments of duties or fees or over-
        declarations of quantities or values that are within 
        the time period and scope of the audit that the Customs 
        Service has defined, then in calculating the loss of 
        revenue or monetary penalties under section 592, the 
        Customs Service shall treat the overpayments or over-
        declarations on finally liquidated entries as an offset 
        to any underpayments or underdeclarations also 
        identified on finally liquidated entries, if such 
        overpayments or over-declarations were not made by the 
        person being audited for the purpose of violating any 
        provision of law.
            ``(B) Nothing in this paragraph shall be construed 
        to authorize a refund not otherwise authorized under 
        section 520.''.

SEC. 383. PAYMENT OF DUTIES AND FEES.

    Section 505(a) of the Tariff Act of 1930 (19 U.S.C. 
1505(a)) is amended to read as follows:
    ``(a) Deposit of Estimated Duties and Fees.--Unless the 
entry is subject to a periodic payment or the merchandise is 
entered for warehouse or transportation, or under bond, the 
importer of record shall deposit with the Customs Service at 
the time of entry, or at such later time as the Secretary may 
prescribe by regulation (but not later than 10 working days 
after entry or release) the amount of duties and fees estimated 
to be payable on such merchandise. As soon as a periodic 
payment module of the Automated Commercial Environment is 
developed, but no later than October 1, 2004, a participating 
importer of record, or the importer's filer, may deposit 
estimated duties and fees for entries of merchandise no later 
than the 15th day of the month following the month in which the 
merchandise is entered or released, whichever comes first.''.

            DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY

                  TITLE XXI--TRADE PROMOTION AUTHORITY

SEC. 2101. SHORT TITLE AND FINDINGS.

    (a) Short Title.--This title may be cited as the 
``Bipartisan Trade Promotion Authority Act of 2002''.
    (b) Findings.--The Congress makes the following findings:
            (1) The expansion of international trade is vital 
        to the national security of the United States. Trade is 
        critical to the economic growth and strength of the 
        United States and to its leadership in the world. 
        Stable trading relationships promote security and 
        prosperity. Trade agreements today serve the same 
        purposes that security pacts played during the Cold 
        War, binding nations together through a series of 
        mutual rights and obligations. Leadership by the United 
        States in international trade fosters open markets, 
        democracy, and peace throughout the world.
            (2) The national security of the United States 
        depends on its economic security, which in turn is 
        founded upon a vibrant and growing industrial base. 
        Trade expansion has been the engine of economic growth. 
        Trade agreements maximize opportunities for the 
        critical sectors and building blocks of the economy of 
        the United States, such as information technology, 
        telecommunications and other leading technologies, 
        basic industries, capital equipment, medical equipment, 
        services, agriculture, environmental technology, and 
        intellectual property. Trade will create new 
        opportunities for the United States and preserve the 
        unparalleled strength of the United States in economic, 
        political, and military affairs. The United States, 
        secured by expanding trade and economic opportunities, 
        will meet the challenges of the twenty-first century.
            (3) Support for continued trade expansion requires 
        that dispute settlement procedures under international 
        trade agreements not add to or diminish the rights and 
        obligations provided in such agreements. Therefore--
                    (A) the recent pattern of decisions by 
                dispute settlement panels of the WTO and the 
                Appellate Body to impose obligations and 
                restrictions on the use of antidumping, 
                countervailing, and safeguard measures by WTO 
                members under the Antidumping Agreement, the 
                Agreement on Subsidies and Countervailing 
                Measures, and the Agreement on Safeguards has 
                raised concerns; and
                    (B) the Congress is concerned that dispute 
                settlement panels of the WTO and the Appellate 
                Body appropriately apply the standard of review 
                contained in Article 17.6 of the Antidumping 
                Agreement, to provide deference to a 
                permissible interpretation by a WTO member of 
                provisions of that Agreement, and to the 
                evaluation by a WTO member of the facts where 
                that evaluation is unbiased and objective and 
                the establishment of the facts is proper.

SEC. 2102. TRADE NEGOTIATING OBJECTIVES.

    (a) Overall Trade Negotiating Objectives.--The overall 
trade negotiating objectives of the United States for 
agreements subject to the provisions of section 2103 are--
            (1) to obtain more open, equitable, and reciprocal 
        market access;
            (2) to obtain the reduction or elimination of 
        barriers and distortions that are directly related to 
        trade and that decrease market opportunities for United 
        States exports or otherwise distort United States 
        trade;
            (3) to further strengthen the system of 
        international trading disciplines and procedures, 
        including dispute settlement;
            (4) to foster economic growth, raise living 
        standards, and promote full employment in the United 
        States and to enhance the global economy;
            (5) to ensure that trade and environmental policies 
        are mutually supportive and to seek to protect and 
        preserve the environment and enhance the international 
        means of doing so, while optimizing the use of the 
        world's resources;
            (6) to promote respect for worker rights and the 
        rights of children consistent with core labor standards 
        of the ILO (as defined in section 2113(6)) and an 
        understanding of the relationship between trade and 
        worker rights;
            (7) to seek provisions in trade agreements under 
        which parties to those agreements strive to ensure that 
        they do not weaken or reduce the protections afforded 
        in domestic environmental and labor laws as an 
        encouragement for trade;
            (8) to ensure that trade agreements afford small 
        businesses equal access to international markets, 
        equitable trade benefits, and expanded export market 
        opportunities, and provide for the reduction or 
        elimination of trade barriers that disproportionately 
        impact small businesses; and
            (9) to promote universal ratification and full 
        compliance with ILO Convention No. 182 Concerning the 
        Prohibition and Immediate Action for the Elimination of 
        the Worst Forms of Child Labor.
    (b) Principal Trade Negotiating Objectives.--
            (1) Trade barriers and distortions.--The principal 
        negotiating objectives of the United States regarding 
        trade barriers and other trade distortions are--
                    (A) to expand competitive market 
                opportunities for United States exports and to 
                obtain fairer and more open conditions of trade 
                by reducing or eliminating tariff and nontariff 
                barriers and policies and practices of foreign 
                governments directly related to trade that 
                decrease market opportunities for United States 
                exports or otherwise distort United States 
                trade; and
                    (B) to obtain reciprocal tariff and 
                nontariff barrier elimination agreements, with 
                particular attention to those tariff categories 
                covered in section 111(b) of the Uruguay Round 
                Agreements Act (19 U.S.C. 3521(b)).
            (2) Trade in services.--The principal negotiating 
        objective of the United States regarding trade in 
        services is to reduce or eliminate barriers to 
        international trade in services, including regulatory 
        and other barriers that deny national treatment and 
        market access or unreasonably restrict the 
        establishment or operations of service suppliers.
            (3) Foreign investment.--Recognizing that United 
        States law on the whole provides a high level of 
        protection for investment, consistent with or greater 
        than the level required by international law, the 
        principal negotiating objectives of the United States 
        regarding foreign investment are to reduce or eliminate 
        artificial or trade-distorting barriers to foreign 
        investment, while ensuring that foreign investors in 
        the United States are not accorded greater substantive 
        rights with respect to investment protections than 
        United States investors in the United States, and to 
        secure for investors important rights comparable to 
        those that would be available under United States legal 
        principles and practice, by--
                    (A) reducing or eliminating exceptions to 
                the principle of national treatment;
                    (B) freeing the transfer of funds relating 
                to investments;
                    (C) reducing or eliminating performance 
                requirements, forced technology transfers, and 
                other unreasonable barriers to the 
                establishment and operation of investments;
                    (D) seeking to establish standards for 
                expropriation and compensation for 
                expropriation, consistent with United States 
                legal principles and practice;
                    (E) seeking to establish standards for fair 
                and equitable treatment consistent with United 
                States legal principles and practice, including 
                the principle of due process;
                    (F) providing meaningful procedures for 
                resolving investment disputes;
                    (G) seeking to improve mechanisms used to 
                resolve disputes between an investor and a 
                government through--
                            (i) mechanisms to eliminate 
                        frivolous claims and to deter the 
                        filing of frivolous claims;
                            (ii) procedures to ensure the 
                        efficient selection of arbitrators and 
                        the expeditious disposition of claims;
                            (iii) procedures to enhance 
                        opportunities for public input into the 
                        formulation of government positions; 
                        and
                            (iv) providing for an appellate 
                        body or similar mechanism to provide 
                        coherence to the interpretations of 
                        investment provisions in trade 
                        agreements; and
                    (H) ensuring the fullest measure of 
                transparency in the dispute settlement 
                mechanism, to the extent consistent with the 
                need to protect information that is classified 
                or business confidential, by--
                            (i) ensuring that all requests for 
                        dispute settlement are promptly made 
                        public;
                            (ii) ensuring that--
                                    (I) all proceedings, 
                                submissions, findings, and 
                                decisions are promptly made 
                                public; and
                                    (II) all hearings are open 
                                to the public; and
                            (iii) establishing a mechanism for 
                        acceptance of amicus curiae submissions 
                        from businesses, unions, and 
                        nongovernmental organizations.
            (4) Intellectual property.--The principal 
        negotiating objectives of the United States regarding 
        trade-related intellectual property are--
                    (A) to further promote adequate and 
                effective protection of intellectual property 
                rights, including through--
                            (i)(I) ensuring accelerated and 
                        full implementation of the Agreement on 
                        Trade-Related Aspects of Intellectual 
                        Property Rights referred to in section 
                        101(d)(15) of the Uruguay Round 
                        Agreements Act (19 U.S.C. 3511(d)(15)), 
                        particularly with respect to meeting 
                        enforcement obligations under that 
                        agreement; and
                            (II) ensuring that the provisions 
                        of any multilateral or bilateral trade 
                        agreement governing intellectual 
                        property rights that is entered into by 
                        the United States reflect a standard of 
                        protection similar to that found in 
                        United States law;
                            (ii) providing strong protection 
                        for new and emerging technologies and 
                        new methods of transmitting and 
                        distributing products embodying 
                        intellectual property;
                            (iii) preventing or eliminating 
                        discrimination with respect to matters 
                        affecting the availability, 
                        acquisition, scope, maintenance, use, 
                        and enforcement of intellectual 
                        property rights;
                            (iv) ensuring that standards of 
                        protection and enforcement keep pace 
                        with technological developments, and in 
                        particular ensuring that rightholders 
                        have the legal and technological means 
                        to control the use of their works 
                        through the Internet and other global 
                        communication media, and to prevent the 
                        unauthorized use of their works; and
                            (v) providing strong enforcement of 
                        intellectual property rights, including 
                        through accessible, expeditious, and 
                        effective civil, administrative, and 
                        criminal enforcement mechanisms;
                    (B) to secure fair, equitable, and 
                nondiscriminatory market access opportunities 
                for United States persons that rely upon 
                intellectual property protection; and
                    (C) to respect the Declaration on the TRIPS 
                Agreement and Public Health, adopted by the 
                World Trade Organization at the Fourth 
                Ministerial Conference at Doha, Qatar on 
                November 14, 2001.
            (5) Transparency.--The principal negotiating 
        objective of the United States with respect to 
        transparency is to obtain wider and broader application 
        of the principle of transparency through--
                    (A) increased and more timely public access 
                to information regarding trade issues and the 
                activities of international trade institutions;
                    (B) increased openness at the WTO and other 
                international trade fora by increasing public 
                access to appropriate meetings, proceedings, 
                and submissions, including with regard to 
                dispute settlement and investment; and
                    (C) increased and more timely public access 
                to all notifications and supporting 
                documentation submitted by parties to the WTO.
            (6) Anti-corruption.--The principal negotiating 
        objectives of the United States with respect to the use 
        of money or other things of value to influence acts, 
        decisions, or omissions of foreign governments or 
        officials or to secure any improper advantage in a 
        manner affecting trade are--
                    (A) to obtain high standards and 
                appropriate domestic enforcement mechanisms 
                applicable to persons from all countries 
                participating in the applicable trade agreement 
                that prohibit such attempts to influence acts, 
                decisions, or omissions of foreign governments; 
                and
                    (B) to ensure that such standards do not 
                place United States persons at a competitive 
                disadvantage in international trade.
            (7) Improvement of the wto and multilateral trade 
        agreements.--The principal negotiating objectives of 
        the United States regarding the improvement of the 
        World Trade Organization, the Uruguay Round Agreements, 
        and other multilateral and bilateral trade agreements 
        are--
                    (A) to achieve full implementation and 
                extend the coverage of the World Trade 
                Organization and such agreements to products, 
                sectors, and conditions of trade not adequately 
                covered; and
                    (B) to expand country participation in and 
                enhancement of the Information Technology 
                Agreement and other trade agreements.
            (8) Regulatory practices.--The principal 
        negotiating objectives of the United States regarding 
        the use of government regulation or other practices by 
        foreign governments to provide a competitive advantage 
        to their domestic producers, service providers, or 
        investors and thereby reduce market access for United 
        States goods, services, and investments are--
                    (A) to achieve increased transparency and 
                opportunity for the participation of affected 
                parties in the development of regulations;
                    (B) to require that proposed regulations be 
                based on sound science, cost-benefit analysis, 
                risk assessment, or other objective evidence;
                    (C) to establish consultative mechanisms 
                among parties to trade agreements to promote 
                increased transparency in developing 
                guidelines, rules, regulations, and laws for 
                government procurement and other regulatory 
                regimes; and
                    (D) to achieve the elimination of 
                government measures such as price controls and 
                reference pricing which deny full market access 
                for United States products.
            (9) Electronic commerce.--The principal negotiating 
        objectives of the United States with respect to 
        electronic commerce are--
                    (A) to ensure that current obligations, 
                rules, disciplines, and commitments under the 
                WorldTrade Organization apply to electronic 
commerce;
                    (B) to ensure that--
                            (i) electronically delivered goods 
                        and services receive no less favorable 
                        treatment under trade rules and 
                        commitments than like products 
                        delivered in physical form; and
                            (ii) the classification of such 
                        goods and services ensures the most 
                        liberal trade treatment possible;
                    (C) to ensure that governments refrain from 
                implementing trade-related measures that impede 
                electronic commerce;
                    (D) where legitimate policy objectives 
                require domestic regulations that affect 
                electronic commerce, to obtain commitments that 
                any such regulations are the least restrictive 
                on trade, nondiscriminatory, and transparent, 
                and promote an open market environment; and
                    (E) to extend the moratorium of the World 
                Trade Organization on duties on electronic 
                transmissions.
            (10) Reciprocal trade in agriculture.--(A) The 
        principal negotiating objective of the United States 
        with respect to agriculture is to obtain competitive 
        opportunities for United States exports of agricultural 
        commodities in foreign markets substantially equivalent 
        to the competitive opportunities afforded foreign 
        exports in United States markets and to achieve fairer 
        and more open conditions of trade in bulk, specialty 
        crop, and value-added commodities by--
                    (i) reducing or eliminating, by a date 
                certain, tariffs or other charges that decrease 
                market opportunities for United States 
                exports--
                            (I) giving priority to those 
                        products that are subject to 
                        significantly higher tariffs or subsidy 
                        regimes of major producing countries; 
                        and
                            (II) providing reasonable 
                        adjustment periods for United States 
                        import-sensitive products, in close 
                        consultation with the Congress on such 
                        products before initiating tariff 
                        reduction negotiations;
                    (ii) reducing tariffs to levels that are 
                the same as or lower than those in the United 
                States;
                    (iii) reducing or eliminating subsidies 
                that decrease market opportunities for United 
                States exports or unfairly distort agriculture 
                markets to the detriment of the United States;
                    (iv) allowing the preservation of programs 
                that support family farms and rural communities 
                but do not distort trade;
                    (v) developing disciplines for domestic 
                support programs, so that production that is in 
                excess of domestic food security needs is sold 
                at world prices;
                    (vi) eliminating government policies that 
                create price-depressing surpluses;
                    (vii) eliminating state trading enterprises 
                whenever possible;
                    (viii) developing, strengthening, and 
                clarifying rules and effective dispute 
                settlement mechanisms to eliminate practices 
                that unfairly decrease United States market 
                access opportunities or distort agricultural 
                markets to the detriment of the United States, 
                particularly with respect to import-sensitive 
                products, including--
                            (I) unfair or trade-distorting 
                        activities of state trading enterprises 
                        and other administrative mechanisms, 
                        with emphasis on requiring price 
                        transparency in the operation of state 
                        trading enterprises and such other 
                        mechanisms in order to end cross 
                        subsidization, price discrimination, 
                        and price undercutting;
                            (II) unjustified trade restrictions 
                        or commercial requirements, such as 
                        labeling, that affect new technologies, 
                        including biotechnology;
                            (III) unjustified sanitary or 
                        phytosanitary restrictions, including 
                        those not based on scientific 
                        principles in contravention of the 
                        Uruguay Round Agreements;
                            (IV) other unjustified technical 
                        barriers to trade; and
                            (V) restrictive rules in the 
                        administration of tariff rate quotas;
                    (ix) eliminating practices that adversely 
                affect trade in perishable or cyclical 
                products, while improving import relief 
                mechanisms to recognize the unique 
                characteristics of perishable and cyclical 
                agriculture;
                    (x) ensuring that import relief mechanisms 
                for perishable and cyclical agriculture are as 
                accessible and timely to growers in the United 
                States as those mechanisms that are used by 
                other countries;
                    (xi) taking into account whether a party to 
                the negotiations has failed to adhere to the 
                provisions of already existing trade agreements 
                with the United States or has circumvented 
                obligations under those agreements;
                    (xii) taking into account whether a product 
                is subject to market distortions by reason of a 
                failure of a major producing country to adhere 
                to the provisions of already existing trade 
                agreements with the United States or by the 
                circumvention by that country of its 
                obligations under those agreements;
                    (xiii) otherwise ensuring that countries 
                that accede to the World Trade Organization 
                have made meaningful market liberalization 
                commitments in agriculture;
                    (xiv) taking into account the impact that 
                agreements covering agriculture to which the 
                United States is a party, including the North 
                American Free Trade Agreement, have on the 
                United States agricultural industry;
                    (xv) maintaining bona fide food assistance 
                programs and preserving United States market 
                development and export credit programs; and
                    (xvi) striving to complete a general 
                multilateral round in the World Trade 
                Organization by January 1, 2005, and seeking 
                the broadest market access possible in 
                multilateral, regional, and bilateral 
                negotiations, recognizing the effect that 
                simultaneous sets of negotiations may have on 
                United States import-sensitive commodities 
                (including those subject to tariff-rate 
                quotas).
            (B)(i) Before commencing negotiations with respect 
        to agriculture, the United States Trade Representative, 
        in consultation with the Congress, shall seek to 
        develop a position on the treatment of seasonal and 
        perishable agricultural products to be employed in the 
        negotiations in order to develop an international 
        consensus on the treatment of seasonal or perishable 
        agricultural products in investigations relating to 
        dumping and safeguards and in any other relevant area.
            (ii) During any negotiations on agricultural 
        subsidies, the United States Trade Representative shall 
        seek to establish the common base year for calculating 
        the Aggregated Measurement of Support (as defined in 
        the Agreement on Agriculture) as the end of each 
        country's Uruguay Round implementation period, as 
        reported in each country's Uruguay Round market access 
        schedule.
            (iii) The negotiating objective provided in 
        subparagraph (A) applies with respect to agricultural 
        matters to be addressed in any trade agreement entered 
        into under section 2103(a) or (b), including any trade 
        agreement entered into under section 2103(a) or (b) 
        that provides for accession to a trade agreement to 
        which the United States is already a party, such as the 
        North American Free Trade Agreement and the United 
        States-Canada Free Trade Agreement.
            (11) Labor and the environment.--The principal 
        negotiating objectives of the United States with 
        respect to labor and the environment are--
                    (A) to ensure that a party to a trade 
                agreement with the United States does not fail 
                to effectively enforce its environmental or 
                labor laws, through a sustained or recurring 
                course of action or inaction, in a manner 
                affecting trade between the United States and 
                that party after entry into force of a trade 
                agreement between those countries;
                    (B) to recognize that parties to a trade 
                agreement retain the right to exercise 
                discretion with respect to investigatory, 
                prosecutorial, regulatory, and compliance 
                matters and to make decisions regarding the 
                allocation of resources to enforcement with 
                respect to other labor or environmental matters 
                determined to have higher priorities, and to 
                recognize that a country is effectively 
                enforcing its laws if a course of action or 
                inaction reflects a reasonable exercise of such 
                discretion, or results from a bona fide 
                decision regarding the allocation of resources, 
                and no retaliation may be authorized based on 
                the exercise of these rights or the right to 
                establish domestic labor standards and levels 
                of environmental protection;
                    (C) to strengthen the capacity of United 
                States trading partners to promote respect for 
                core labor standards (as defined in section 
                2113(6));
                    (D) to strengthen the capacity of United 
                States trading partners to protect the 
                environment through the promotion of 
                sustainable development;
                    (E) to reduce or eliminate government 
                practices or policies that unduly threaten 
                sustainable development;
                    (F) to seek market access, through the 
                elimination of tariffs and nontariff barriers, 
                for United States environmental technologies, 
                goods, and services; and
                    (G) to ensure that labor, environmental, 
                health, or safety policies and practices of the 
                parties to trade agreements with the United 
                States do not arbitrarily or unjustifiably 
                discriminate against United States exports or 
                serve as disguised barriers to trade.
            (12) Dispute settlement and enforcement.--The 
        principal negotiating objectives of the United States 
        with respect to dispute settlement and enforcement of 
        trade agreements are--
                    (A) to seek provisions in trade agreements 
                providing for resolution of disputes between 
                governments under those trade agreements in an 
                effective, timely, transparent, equitable, and 
                reasoned manner, requiring determinations based 
                on facts and the principles of the agreements, 
                with the goal of increasing compliance with the 
                agreements;
                    (B) to seek to strengthen the capacity of 
                the Trade Policy Review Mechanism of the World 
                Trade Organization to review compliance with 
                commitments;
                    (C) to seek adherence by panels convened 
                under the Dispute Settlement Understanding and 
                by the Appellate Body to the standard of review 
                applicable under the Uruguay Round Agreement 
                involved in the dispute, including greater 
                deference, where appropriate, to the fact-
                finding and technical expertise of national 
                investigating authorities;
                    (D) to seek provisions encouraging the 
                early identification and settlement of disputes 
                through consultation;
                    (E) to seek provisions to encourage the 
                provision of trade-expanding compensation if a 
                party to a dispute under the agreement does not 
                come into compliance with its obligations under 
                the agreement;
                    (F) to seek provisions to impose a penalty 
                upon a party to a dispute under the agreement 
                that--
                            (i) encourages compliance with the 
                        obligations of the agreement;
                            (ii) is appropriate to the parties, 
                        nature, subject matter, and scope of 
                        the violation; and
                            (iii) has the aim of not adversely 
                        affecting parties or interests not 
                        party to the dispute while maintaining 
                        the effectiveness of the enforcement 
                        mechanism; and
                    (G) to seek provisions that treat United 
                States principal negotiating objectives equally 
                with respect to--
                            (i) the ability to resort to 
                        dispute settlement under the applicable 
                        agreement;
                            (ii) the availability of equivalent 
                        dispute settlement procedures; and
                            (iii) the availability of 
                        equivalent remedies.
            (13) WTO extended negotiations.--The principal 
        negotiating objectives of the United States regarding 
        trade in civil aircraft are those set forth in section 
        135(c) of the Uruguay Round Agreements Act (19 U.S.C. 
        3355(c)) and regarding rules of origin are the 
        conclusion of an agreement described in section 132 of 
        that Act (19 U.S.C. 3552).
            (14) Trade remedy laws.--The principal negotiating 
        objectives of the United States with respect to trade 
        remedy laws are--
                    (A) to preserve the ability of the United 
                States to enforce rigorously its trade laws, 
                including the antidumping, countervailing duty, 
                and safeguard laws, and avoid agreements that 
                lessen the effectiveness of domestic and 
                international disciplines on unfair trade, 
                especially dumping and subsidies, or that 
                lessen the effectiveness of domestic and 
                international safeguard provisions, in order to 
                ensure that United States workers, agricultural 
                producers, and firms can compete fully on fair 
                terms and enjoy the benefits of reciprocal 
                trade concessions; and
                    (B) to address and remedy market 
                distortions that lead to dumping and 
                subsidization, including overcapacity, 
                cartelization, and market-access barriers.
            (15) Border taxes.--The principal negotiating 
        objective of the United States regarding border taxes 
        is to obtain a revision of the WTO rules with respect 
        to the treatment of border adjustments for internal 
        taxes to redress the disadvantage to countries relying 
        primarily on direct taxes for revenue rather than 
        indirect taxes.
            (16) Textile negotiations.--The principal 
        negotiating objectives of the United States with 
        respect to trade in textiles and apparel articles are 
        to obtain competitive opportunities for United States 
        exports of textiles and apparel in foreign markets 
        substantially equivalent to the competitive 
        opportunities afforded foreign exports in United States 
        markets and to achieve fairer and more open conditions 
        of trade in textiles and apparel.
            (17) Worst forms of child labor.--The principal 
        negotiating objective of the United States with respect 
        to the trade-related aspects of the worst forms of 
        child labor are to seek commitments by parties to trade 
        agreements to vigorously enforce their own laws 
        prohibiting the worst forms of child labor.
    (c) Promotion of Certain Priorities.--In order to address 
and maintain United States competitiveness in the global 
economy, the President shall--
            (1) seek greater cooperation between the WTO and 
        the ILO;
            (2) seek to establish consultative mechanisms among 
        parties to trade agreements to strengthen the capacity 
        of United States trading partners to promote respect 
        for core labor standards (as defined in section 
        2113(6)) and to promote compliance with ILO Convention 
        No. 182 Concerning the Prohibition and Immediate Action 
        for the Elimination of the Worst Forms of Child Labor, 
        and report to the Committee on Ways and Means of the 
        House of Representatives and the Committee on Finance 
        of the Senate on the content and operation of such 
        mechanisms;
            (3) seek to establish consultative mechanisms among 
        parties to trade agreements to strengthen the capacity 
        of United States trading partners to develop and 
        implement standards for the protection of the 
        environment and human health based on sound science, 
        and report to the Committee on Ways and Means of the 
        House of Representatives and the Committee on Finance 
        of the Senate on the content and operation of such 
        mechanisms;
            (4) conduct environmental reviews of future trade 
        and investment agreements, consistent with Executive 
        Order 13141 of November 16, 1999, and its relevant 
        guidelines, and report to the Committee on Ways and 
        Means of the House of Representatives and the Committee 
        on Finance of the Senate on such reviews;
            (5) review the impact of future trade agreements on 
        United States employment, including labor markets, 
        modeled after Executive Order 13141 to the extent 
        appropriate in establishing procedures and criteria, 
        report to the Committee on Ways and Means of the House 
        of Representatives and the Committee on Finance of the 
        Senate on such review, and make that report available 
        to the public;
            (6) take into account other legitimate United 
        States domestic objectives including, but not limited 
        to, the protection of legitimate health or safety, 
        essential security, and consumer interests and the law 
        and regulations related thereto;
            (7) direct the Secretary of Labor to consult with 
        any country seeking a trade agreement with the United 
        States concerning that country's labor laws and provide 
        technical assistance to that country if needed;
            (8) in connection with any trade negotiations 
        entered into under this Act, submit to the Committee on 
        Ways and Means of the House of Representatives and the 
        Committee on Finance of the Senate a meaningful labor 
        rights report of the country, or countries, with 
        respect to which the President is negotiating, ona time 
frame determined in accordance with section 2107(b)(2)(E);
            (9) with respect to any trade agreement which the 
        President seeks to implement under trade authorities 
        procedures, submit to the Congress a report describing 
        the extent to which the country or countries that are 
        parties to the agreement have in effect laws governing 
        exploitative child labor;
            (10) continue to promote consideration of 
        multilateral environmental agreements and consult with 
        parties to such agreements regarding the consistency of 
        any such agreement that includes trade measures with 
        existing environmental exceptions under Article XX of 
        the GATT 1994;
            (11) report to the Committee on Ways and Means of 
        the House of Representatives and the Committee on 
        Finance of the Senate, not later than 12 months after 
        the imposition of a penalty or remedy by the United 
        States permitted by a trade agreement to which this 
        title applies, on the effectiveness of the penalty or 
        remedy applied under United States law in enforcing 
        United States rights under the trade agreement; and
            (12) seek to establish consultative mechanisms 
        among parties to trade agreements to examine the trade 
        consequences of significant and unanticipated currency 
        movements and to scrutinize whether a foreign 
        government engaged in a pattern of manipulating its 
        currency to promote a competitive advantage in 
        international trade.
The report under paragraph (11) shall address whether the 
penalty or remedy was effective in changing the behavior of the 
targeted party and whether the penalty or remedy had any 
adverse impact on parties or interests not party to the 
dispute.
    (d) Consultations.--
            (1) Consultations with congressional advisers.--In 
        the course of negotiations conducted under this title, 
        the United States Trade Representative shall consult 
        closely and on a timely basis with, and keep fully 
        apprised of the negotiations, the Congressional 
        Oversight Group convened under section 2107 and all 
        committees of the House of Representatives and the 
        Senate with jurisdiction over laws that would be 
        affected by a trade agreement resulting from the 
        negotiations.
            (2) Consultation before agreement initialed.--In 
        the course of negotiations conducted under this title, 
        the United States Trade Representative shall--
                    (A) consult closely and on a timely basis 
                (including immediately before initialing an 
                agreement) with, and keep fully apprised of the 
                negotiations, the congressional advisers for 
                trade policy and negotiations appointed under 
                section 161 of the Trade Act of 1974 (19 U.S.C. 
                2211), the Committee on Ways and Means of the 
                House of Representatives, the Committee on 
                Finance of the Senate, and the Congressional 
                Oversight Group convened under section 2107; 
                and
                    (B) with regard to any negotiations and 
                agreement relating to agricultural trade, also 
                consult closely and on a timely basis 
                (including immediately before initialing an 
                agreement) with, and keep fully apprised of the 
                negotiations, the Committee on Agriculture of 
                the House of Representatives and the Committee 
                on Agriculture, Nutrition, and Forestry of the 
                Senate.
    (e) Adherence to Obligations Under Uruguay Round 
Agreements.--In determining whether to enter into negotiations 
with a particular country, the President shall take into 
account the extent to which that country has implemented, or 
has accelerated the implementation of, its obligations under 
the Uruguay Round Agreements.

SEC. 2103. TRADE AGREEMENTS AUTHORITY.

    (a) Agreements Regarding Tariff Barriers.--
            (1) In general.--Whenever the President determines 
        that one or more existing duties or other import 
        restrictions of any foreign country or the United 
        States are unduly burdening and restricting the foreign 
        trade of the United States and that the purposes, 
        policies, priorities, and objectives of this title will 
        be promoted thereby, the President--
                    (A) may enter into trade agreements with 
                foreign countries before--
                            (i) June 1, 2005; or
                            (ii) June 1, 2007, if trade 
                        authorities procedures are extended 
                        under subsection (c); and
                    (B) may, subject to paragraphs (2) and (3), 
                proclaim--
                            (i) such modification or 
                        continuance of any existing duty,
                            (ii) such continuance of existing 
                        duty-free or excise treatment, or
                            (iii) such additional duties,
                as the President determines to be required or 
                appropriate to carry out any such trade 
                agreement.
        The President shall notify the Congress of the 
        President's intention to enter into an agreement under 
        this subsection.
            (2) Limitations.--No proclamation may be made under 
        paragraph (1) that--
                    (A) reduces any rate of duty (other than a 
                rate of duty that does not exceed 5 percent ad 
                valorem on the date of the enactment of this 
                Act) to a rate of duty which is less than 50 
                percent of the rate of such duty that applies 
                on such date of enactment;
                    (B) reduces the rate of duty below that 
                applicable under the Uruguay Round Agreements, 
                on any import sensitive agricultural product; 
                or
                    (C) increases any rate of duty above the 
                rate that applied on the date of the enactment 
                of this Act.
            (3) Aggregate reduction; exemption from staging.--
                    (A) Aggregate reduction.--Except as 
                provided in subparagraph (B), the aggregate 
                reduction in the rate of duty on any article 
                which is in effect on any day pursuant to a 
                trade agreement entered into under paragraph 
                (1)shall not exceed the aggregate reduction 
which would have been in effect on such day if--
                            (i) a reduction of 3 percent ad 
                        valorem or a reduction of one-tenth of 
                        the total reduction, whichever is 
                        greater, had taken effect on the 
                        effective date of the first reduction 
                        proclaimed under paragraph (1) to carry 
                        out such agreement with respect to such 
                        article; and
                            (ii) a reduction equal to the 
                        amount applicable under clause (i) had 
                        taken effect at 1-year intervals after 
                        the effective date of such first 
                        reduction.
                    (B) Exemption from staging.--No staging is 
                required under subparagraph (A) with respect to 
                a duty reduction that is proclaimed under 
                paragraph (1) for an article of a kind that is 
                not produced in the United States. The United 
                States International Trade Commission shall 
                advise the President of the identity of 
                articles that may be exempted from staging 
                under this subparagraph.
            (4) Rounding.--If the President determines that 
        such action will simplify the computation of reductions 
        under paragraph (3), the President may round an annual 
        reduction by an amount equal to the lesser of--
                    (A) the difference between the reduction 
                without regard to this paragraph and the next 
                lower whole number; or
                    (B) one-half of 1 percent ad valorem.
            (5) Other limitations.--A rate of duty reduction 
        that may not be proclaimed by reason of paragraph (2) 
        may take effect only if a provision authorizing such 
        reduction is included within an implementing bill 
        provided for under section 2105 and that bill is 
        enacted into law.
            (6) Other tariff modifications.--Notwithstanding 
        paragraphs (1)(B), (2)(A), (2)(C), and (3) through (5), 
        and subject to the consultation and layover 
        requirements of section 115 of the Uruguay Round 
        Agreements Act, the President may proclaim the 
        modification of any duty or staged rate reduction of 
        any duty set forth in Schedule XX, as defined in 
        section 2(5) of that Act, if the United States agrees 
        to such modification or staged rate reduction in a 
        negotiation for the reciprocal elimination or 
        harmonization of duties under the auspices of the World 
        Trade Organization.
            (7) Authority under uruguay round agreements act 
        not affected.--Nothing in this subsection shall limit 
        the authority provided to the President under section 
        111(b) of the Uruguay Round Agreements Act (19 U.S.C. 
        3521(b)).
    (b) Agreements Regarding Tariff and Nontariff Barriers.--
            (1) In general.--(A) Whenever the President 
        determines that--
                    (i) one or more existing duties or any 
                other import restriction of any foreign country 
                or the United States or any other barrier to, 
                or other distortion of, international trade 
                unduly burdens or restricts the foreign trade 
                of the United States or adversely affects the 
                United States economy, or
                    (ii) the imposition of any such barrier or 
                distortion is likely to result in such a 
                burden, restriction, or effect,
        and that the purposes, policies, priorities, and 
        objectives of this title will be promoted thereby, the 
        President may enter into a trade agreement described in 
        subparagraph (B) during the period described in 
        subparagraph (C).
            (B) The President may enter into a trade agreement 
        under subparagraph (A) with foreign countries providing 
        for--
                    (i) the reduction or elimination of a duty, 
                restriction, barrier, or other distortion 
                described in subparagraph (A); or
                    (ii) the prohibition of, or limitation on 
                the imposition of, such barrier or other 
                distortion.
            (C) The President may enter into a trade agreement 
        under this paragraph before--
                    (i) June 1, 2005; or
                    (ii) June 1, 2007, if trade authorities 
                procedures are extended under subsection (c).
            (2) Conditions.--A trade agreement may be entered 
        into under this subsection only if such agreement makes 
        progress in meeting the applicable objectives described 
        in section 2102(a) and (b) and the President satisfies 
        the conditions set forth in section 2104.
            (3) Bills qualifying for trade authorities 
        procedures.--(A) The provisions of section 151 of the 
        Trade Act of 1974 (in this title referred to as ``trade 
        authorities procedures'') apply to a bill of either 
        House of Congress which contains provisions described 
        in subparagraph (B) to the same extent as such section 
        151 applies to implementing bills under that section. A 
        bill to which this paragraph applies shall hereafter in 
        this title be referred to as an ``implementing bill''.
            (B) The provisions referred to in subparagraph (A) 
        are--
                    (i) a provision approving a trade agreement 
                entered into under this subsection and 
                approving the statement of administrative 
                action, if any, proposed to implement such 
                trade agreement; and
                    (ii) if changes in existing laws or new 
                statutory authority are required to implement 
                such trade agreement or agreements, provisions, 
                necessary or appropriate to implement such 
                trade agreement or agreements, either repealing 
                or amending existing laws or providing new 
                statutory authority.
    (c) Extension Disapproval Process for Congressional Trade 
Authorities Procedures.--
            (1) In general.--Except as provided in section 
        2105(b)--
                    (A) the trade authorities procedures apply 
                to implementing bills submitted with respect 
totrade agreements entered into under subsection (b) before July 1, 
2005; and
                    (B) the trade authorities procedures shall 
                be extended to implementing bills submitted 
                with respect to trade agreements entered into 
                under subsection (b) after June 30, 2005, and 
                before July 1, 2007, if (and only if)--
                            (i) the President requests such 
                        extension under paragraph (2); and
                            (ii) neither House of the Congress 
                        adopts an extension disapproval 
                        resolution under paragraph (5) before 
                        June 1, 2005.
            (2) Report to congress by the president.--If the 
        President is of the opinion that the trade authorities 
        procedures should be extended to implementing bills 
        described in paragraph (1)(B), the President shall 
        submit to the Congress, not later than March 1, 2005, a 
        written report that contains a request for such 
        extension, together with--
                    (A) a description of all trade agreements 
                that have been negotiated under subsection (b) 
                and the anticipated schedule for submitting 
                such agreements to the Congress for approval;
                    (B) a description of the progress that has 
                been made in negotiations to achieve the 
                purposes, policies, priorities, and objectives 
                of this title, and a statement that such 
                progress justifies the continuation of 
                negotiations; and
                    (C) a statement of the reasons why the 
                extension is needed to complete the 
                negotiations.
            (3) Other reports to congress.--
                    (A) Report by the advisory committee.--The 
                President shall promptly inform the Advisory 
                Committee for Trade Policy and Negotiations 
                established under section 135 of the Trade Act 
                of 1974 (19 U.S.C. 2155) of the President's 
                decision to submit a report to the Congress 
                under paragraph (2). The Advisory Committee 
                shall submit to the Congress as soon as 
                practicable, but not later than May 1, 2005, a 
                written report that contains--
                            (i) its views regarding the 
                        progress that has been made in 
                        negotiations to achieve the purposes, 
                        policies, priorities, and objectives of 
                        this title; and
                            (ii) a statement of its views, and 
                        the reasons therefor, regarding whether 
                        the extension requested under paragraph 
                        (2) should be approved or disapproved.
                    (B) Report by itc.--The President shall 
                promptly inform the International Trade 
                Commission of the President's decision to 
                submit a report to the Congress under paragraph 
                (2). The International Trade Commission shall 
                submit to the Congress as soon as practicable, 
                but not later than May 1, 2005, a written 
                report that contains a review and analysis of 
                the economic impact on the United States of all 
                trade agreements implemented between the date 
                of enactment of this Act and the date on which 
                the President decides to seek an extension 
                requested under paragraph (2).
            (4) Status of reports.--The reports submitted to 
        the Congress under paragraphs (2) and (3), or any 
        portion of such reports, may be classified to the 
        extent the President determines appropriate.
            (5) Extension disapproval resolutions.--(A) For 
        purposes of paragraph (1), the term ``extension 
        disapproval resolution'' means a resolution of either 
        House of the Congress, the sole matter after the 
        resolving clause of which is as follows: ``That the 
        ____ disapproves the request of the President for the 
        extension, under section 2103(c)(1)(B)(i) of the 
        Bipartisan Trade Promotion Authority Act of 2002, of 
        the trade authorities procedures under that Act to any 
        implementing bill submitted with respect to any trade 
        agreement entered into under section 2103(b) of that 
        Act after June 30, 2005.'', with the blank space being 
        filled with the name of the resolving House of the 
        Congress.
            (B) Extension disapproval resolutions--
                    (i) may be introduced in either House of 
                the Congress by any member of such House; and
                    (ii) shall be referred, in the House of 
                Representatives, to the Committee on Ways and 
                Means and, in addition, to the Committee on 
                Rules.
            (C) The provisions of section 152(d) and (e) of the 
        Trade Act of 1974 (19 U.S.C. 2192(d) and (e)) (relating 
        to the floor consideration of certain resolutions in 
        the House and Senate) apply to extension disapproval 
        resolutions.
            (D) It is not in order for--
                    (i) the Senate to consider any extension 
                disapproval resolution not reported by the 
                Committee on Finance;
                    (ii) the House of Representatives to 
                consider any extension disapproval resolution 
                not reported by the Committee on Ways and Means 
                and, in addition, by the Committee on Rules; or
                    (iii) either House of the Congress to 
                consider an extension disapproval resolution 
                after June 30, 2005.
    (d) Commencement of Negotiations.--In order to contribute 
to the continued economic expansion of the United States, the 
President shall commence negotiations covering tariff and 
nontariff barriers affecting any industry, product, or service 
sector, and expand existing sectoral agreements to countries 
that are not parties to those agreements, in cases where the 
President determines that such negotiations are feasible and 
timely and would benefit the United States. Such sectors 
include agriculture, commercial services, intellectual property 
rights, industrial and capital goods, government procurement, 
information technology products, environmental technology and 
services, medical equipment and services, civil aircraft, and 
infrastructure products. In so doing, the President shall take 
into account all of the principal negotiating objectives set 
forth in section 2102(b).

SEC. 2104. CONSULTATIONS AND ASSESSMENT.

    (a) Notice and Consultation Before Negotiation.--The 
President, with respect to any agreement that is subject to the 
provisions of section 2103(b), shall--
            (1) provide, at least 90 calendar days before 
        initiating negotiations, written notice to the Congress 
        ofthe President's intention to enter into the 
negotiations and set forth therein the date the President intends to 
initiate such negotiations, the specific United States objectives for 
the negotiations, and whether the President intends to seek an 
agreement, or changes to an existing agreement;
            (2) before and after submission of the notice, 
        consult regarding the negotiations with the Committee 
        on Finance of the Senate and the Committee on Ways and 
        Means of the House of Representatives, such other 
        committees of the House and Senate as the President 
        deems appropriate, and the Congressional Oversight 
        group convened under section 2107; and
            (3) upon the request of a majority of the members 
        of the Congressional Oversight Group under section 
        2107(c), meet with the Congressional Oversight Group 
        before initiating the negotiations or at any other time 
        concerning the negotiations.
    (b) Negotiations Regarding Agriculture.--
            (1) In general.--Before initiating or continuing 
        negotiations the subject matter of which is directly 
        related to the subject matter under section 
        2102(b)(10)(A)(i) with any country, the President shall 
        assess whether United States tariffs on agricultural 
        products that were bound under the Uruguay Round 
        Agreements are lower than the tariffs bound by that 
        country. In addition, the President shall consider 
        whether the tariff levels bound and applied throughout 
        the world with respect to imports from the United 
        States are higher than United States tariffs and 
        whether the negotiation provides an opportunity to 
        address any such disparity. The President shall consult 
        with the Committee on Ways and Means and the Committee 
        on Agriculture of the House of Representatives and the 
        Committee on Finance and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate concerning the 
        results of the assessment, whether it is appropriate 
        for the United States to agree to further tariff 
        reductions based on the conclusions reached in the 
        assessment, and how all applicable negotiating 
        objectives will be met.
            (2) Special consultations on import sensitive 
        products.--(A) Before initiating negotiations with 
        regard to agriculture, and, with respect to the Free 
        Trade Area for the Americas and negotiations with 
        regard to agriculture under the auspices of the World 
        Trade Organization, as soon as practicable after the 
        enactment of this Act, the United States Trade 
        Representative shall--
                    (i) identify those agricultural products 
                subject to tariff-rate quotas on the date of 
                enactment of this Act, and agricultural 
                products subject to tariff reductions by the 
                United States as a result of the Uruguay Round 
                Agreements, for which the rate of duty was 
                reduced on January 1, 1995, to a rate which was 
                not less than 97.5 percent of the rate of duty 
                that applied to such article on December 31, 
                1994;
                    (ii) consult with the Committee on Ways and 
                Means and the Committee on Agriculture of the 
                House of Representatives and the Committee on 
                Finance and the Committee on Agriculture, 
                Nutrition, and Forestry of the Senate 
                concerning--
                            (I) whether any further tariff 
                        reductions on the products identified 
                        under clause (i) should be appropriate, 
                        taking into account the impact of any 
                        such tariff reduction on the United 
                        States industry producing the product 
                        concerned;
                            (II) whether the products so 
                        identified face unjustified sanitary or 
                        phytosanitary restrictions, including 
                        those not based on scientific 
                        principles in contravention of the 
                        Uruguay Round Agreements; and
                            (III) whether the countries 
                        participating in the negotiations 
                        maintain export subsidies or other 
                        programs, policies, or practices that 
                        distort world trade in such products 
                        and the impact of such programs, 
                        policies, and practices on United 
                        States producers of the products;
                    (iii) request that the International Trade 
                Commission prepare an assessment of the 
                probable economic effects of any such tariff 
                reduction on the United States industry 
                producing the product concerned and on the 
                United States economy as a whole; and
                    (iv) upon complying with clauses (i), (ii), 
                and (iii), notify the Committee on Ways and 
                Means and the Committee on Agriculture of the 
                House of Representatives and the Committee on 
                Finance and the Committee on Agriculture, 
                Nutrition, and Forestry of the Senate of those 
                products identified under clause (i) for which 
                the Trade Representative intends to seek tariff 
                liberalization in the negotiations and the 
                reasons for seeking such tariff liberalization.
            (B) If, after negotiations described in 
        subparagraph (A) are commenced--
                    (i) the United States Trade Representative 
                identifies any additional agricultural product 
                described in subparagraph (A)(i) for tariff 
                reductions which were not the subject of a 
                notification under subparagraph (A)(iv), or
                    (ii) any additional agricultural product 
                described in subparagraph (A)(i) is the subject 
                of a request for tariff reductions by a party 
                to the negotiations,
        the Trade Representative shall, as soon as practicable, 
        notify the committees referred to in subparagraph 
        (A)(iv) of those products and the reasons for seeking 
        such tariff reductions.
            (3) Negotiations regarding the fishing industry.--
        Before initiating, or continuing, negotiations which 
        directly relate to fish or shellfish trade with any 
        country, the President shall consult with the Committee 
        on Ways and Means and the Committee on Resources of the 
        House of Representatives, and the Committee on Finance 
        and the Committee on Commerce, Science, and 
        Transportation of the Senate, and shall keep the 
        Committees apprised of negotiations on an ongoing and 
        timely basis.
    (c) Negotiations Regarding Textiles.--Before initiating or 
continuing negotiations the subject matter of which is directly 
related to textiles and apparel products with any country, the 
President shall assess whether United States tariffs on textile 
and apparel products that were bound under the Uruguay Round 
Agreements are lower than the tariffs bound by that country and 
whether the negotiation provides an opportunity to address any 
such disparity. The President shall consult with the Committee 
on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate concerning the results of 
the assessment, whether it is appropriate for the United States 
to agree to further tariff reductions based on the conclusions 
reached in the assessment, and how all applicable negotiating 
objectives will be met.
    (d) Consultation With Congress Before Agreements Entered 
Into.--
            (1) Consultation.--Before entering into any trade 
        agreement under section 2103(b), the President shall 
        consult with--
                    (A) the Committee on Ways and Means of the 
                House of Representatives and the Committee on 
                Finance of the Senate;
                    (B) each other committee of the House and 
                the Senate, and each joint committee of the 
                Congress, which has jurisdiction over 
                legislation involving subject matters which 
                would be affected by the trade agreement; and
                    (C) the Congressional Oversight Group 
                convened under section 2107.
            (2) Scope.--The consultation described in paragraph 
        (1) shall include consultation with respect to--
                    (A) the nature of the agreement;
                    (B) how and to what extent the agreement 
                will achieve the applicable purposes, policies, 
                priorities, and objectives of this title; and
                    (C) the implementation of the agreement 
                under section 2105, including the general 
                effect of the agreement on existing laws.
            (3) Report regarding united states trade remedy 
        laws.--
                    (A) Changes in certain trade laws.--The 
                President, at least 180 calendar days before 
                the day on which the President enters into a 
                trade agreement under section 2103(b), shall 
                report to the Committee on Ways and Means of 
                the House of Representatives and the Committee 
                on Finance of the Senate--
                            (i) the range of proposals advanced 
                        in the negotiations with respect to 
                        that agreement, that may be in the 
                        final agreement, and that could require 
                        amendments to title VII of the Tariff 
                        Act of 1930 or to chapter 1 of title II 
                        of the Trade Act of 1974; and
                            (ii) how these proposals relate to 
                        the objectives described in section 
                        2102(b)(14).
                    (B) Certain agreements.--With respect to a 
                trade agreement entered into with Chile or 
                Singapore, the report referred to in 
                subparagraph (A) shall be submitted by the 
                President at least 90 calendar days before the 
                day on which the President enters into that 
                agreement.
                    (C) Resolutions.--(i) At any time after the 
                transmission of the report under subparagraph 
                (A), if a resolution is introduced with respect 
                to that report in either House of Congress, the 
                procedures set forth in clauses (iii) through 
                (vi) shall apply to that resolution if--
                            (I) no other resolution with 
                        respect to that report has previously 
                        been reported in that House of Congress 
                        by the Committee on Ways and Means or 
                        the Committee on Finance, as the case 
                        may be, pursuant to those procedures; 
                        and
                            (II) no procedural disapproval 
                        resolution under section 2105(b) 
                        introduced with respect to a trade 
                        agreement entered into pursuant to the 
                        negotiations to which the report under 
                        subparagraph (A) relates has previously 
                        been reported in that House of Congress 
                        by the Committee on Ways and Means or 
                        the Committee on Finance, as the case 
                        may be.
                    (ii) For purposes of this subparagraph, the 
                term ``resolution'' means only a resolution of 
                either House of Congress, the matter after the 
                resolving clause of which is as follows: ``That 
                the ____ finds that the proposed changes to 
                United States trade remedy laws contained in 
                the report of the President transmitted to the 
                Congress on ____ under section 2104(d)(3) of 
                the Bipartisan Trade Promotion Authority Act of 
                2002 with respect to ____, are inconsistent 
                with the negotiating objectives described in 
                section 2102(b)(14) of that Act.'', with the 
                first blank space being filled with the name of 
                the resolving House of Congress, the second 
                blank space being filled with the appropriate 
                date of the report, and the third blank space 
                being filled with the name of the country or 
                countries involved.
                    (iii) Resolutions in the House of 
                Representatives--
                            (I) may be introduced by any Member 
                        of the House;
                            (II) shall be referred to the 
                        Committee on Ways and Means and, in 
                        addition, to the Committee on Rules; 
                        and
                            (III) may not be amended by either 
                        Committee.
                    (iv) Resolutions in the Senate--
                            (I) may be introduced by any Member 
                        of the Senate;
                            (II) shall be referred to the 
                        Committee on Finance; and
                            (III) may not be amended.
                    (iv) It is not in order for the House of 
                Representatives to consider any resolution that 
                is not reported by the Committee on Ways and 
                Means and, in addition, by the Committee on 
                Rules.
                    (v) It is not in order for the Senate to 
                consider any resolution that is not reported by 
                the Committee on Finance.
                    (vi) The provisions of section 152(d) and 
                (e) of the Trade Act of 1974 (19 U.S.C. 2192(d) 
                and (e)) (relating to floor consideration of 
                certain resolutions in the House and Senate) 
                shall apply to resolutions.
    (e) Advisory Committee Reports.--The report required under 
section 135(e)(1) of the Trade Act of 1974 regarding any trade 
agreement entered into under section 2103(a) or (b) of this Act 
shall be provided to the President, the Congress, and the 
United States Trade Representative not later than 30 days after 
the date on which the President notifies the Congress under 
section 2103(a)(1) or 2105(a)(1)(A) of the President's 
intention to enter into the agreement.
    (f) ITC Assessment.--
            (1) In general.--The President, at least 90 
        calendar days before the day on which the President 
        enters into a trade agreement under section 2103(b), 
        shall provide the International Trade Commission 
        (referred to in this subsection as ``the Commission'') 
        with the details of the agreement as it exists at that 
        time and request the Commission to prepare and submit 
        an assessment of the agreement as described in 
        paragraph (2). Between the time the President makes the 
        request under this paragraph and the time the 
        Commission submits the assessment, the President shall 
        keep the Commission current with respect to the details 
        of the agreement.
            (2) ITC assessment.--Not later than 90 calendar 
        days after the President enters into the agreement, the 
        Commission shall submit to the President and the 
        Congress a report assessing the likely impact of the 
        agreement on the United States economy as a whole and 
        on specific industry sectors, including the impact the 
        agreement will have on the gross domestic product, 
        exports and imports, aggregate employment and 
        employment opportunities, the production, employment, 
        and competitive position of industries likely to be 
        significantly affected by the agreement, and the 
        interests of United States consumers.
            (3) Review of empirical literature.--In preparing 
        the assessment, the Commission shall review available 
        economic assessments regarding the agreement, including 
        literature regarding any substantially equivalent 
        proposed agreement, and shall provide in its assessment 
        a description of the analyses used and conclusions 
        drawn in such literature, and a discussion of areas of 
        consensus and divergence between the various analyses 
        and conclusions, including those of the Commission 
        regarding the agreement.

SEC. 2105. IMPLEMENTATION OF TRADE AGREEMENTS.

    (a) In General.--
            (1) Notification and submission.--Any agreement 
        entered into under section 2103(b) shall enter into 
        force with respect to the United States if (and only 
        if)--
                    (A) the President, at least 90 calendar 
                days before the day on which the President 
                enters into the trade agreement, notifies the 
                House of Representatives and the Senate of the 
                President's intention to enter into the 
                agreement, and promptly thereafter publishes 
                notice of such intention in the Federal 
                Register;
                    (B) within 60 days after entering into the 
                agreement, the President submits to the 
                Congress a description of those changes to 
                existing laws that the President considers 
                would be required in order to bring the United 
                States into compliance with the agreement;
                    (C) after entering into the agreement, the 
                President submits to the Congress, on a day on 
                which both Houses of Congress are in session, a 
                copy of the final legal text of the agreement, 
                together with--
                            (i) a draft of an implementing bill 
                        described in section 2103(b)(3);
                            (ii) a statement of any 
                        administrative action proposed to 
                        implement the trade agreement; and
                            (iii) the supporting information 
                        described in paragraph (2); and
                    (D) the implementing bill is enacted into 
                law.
            (2) Supporting information.--The supporting 
        information required under paragraph (1)(C)(iii) 
        consists of--
                    (A) an explanation as to how the 
                implementing bill and proposed administrative 
                action will change or affect existing law; and
                    (B) a statement--
                            (i) asserting that the agreement 
                        makes progress in achieving the 
                        applicable purposes, policies, 
                        priorities, and objectives of this 
                        title; and
                            (ii) setting forth the reasons of 
                        the President regarding--
                                    (I) how and to what extent 
                                the agreement makes progress in 
                                achieving the applicable 
                                purposes, policies, and 
                                objectives referred to in 
                                clause (i);
                                    (II) whether and how the 
                                agreement changes provisions of 
                                an agreement previously 
                                negotiated;
                                    (III) how the agreement 
                                serves the interests of United 
                                States commerce;
                                    (IV) how the implementing 
                                bill meets the standards set 
                                forth in section 2103(b)(3); 
                                and
                                    (V) how and to what extent 
                                the agreement makes progress in 
                                achieving the applicable 
                                purposes, policies, and 
                                objectives referred to in 
                                section 2102(c) regarding the 
                                promotion of certain 
                                priorities.
            (3) Reciprocal benefits.--In order to ensure that a 
        foreign country that is not a party to a trade 
        agreement entered into under section 2103(b) does not 
        receive benefits under the agreement unless the country 
        is also subject to the obligations under the agreement, 
        the implementing bill submitted with respect to the 
        agreement shall provide that the benefits and 
        obligations under the agreement apply only to the 
        parties to the agreement, if such application is 
        consistent with the terms of the agreement. The 
        implementing bill may also provide that the benefits 
        and obligationsunder the agreement do not apply 
uniformly to all parties to the agreement, if such application is 
consistent with the terms of the agreement.
            (4) Disclosure of commitments.--Any agreement or 
        other understanding with a foreign government or 
        governments (whether oral or in writing) that--
                    (A) relates to a trade agreement with 
                respect to which the Congress enacts an 
                implementing bill under trade authorities 
                procedures, and
                    (B) is not disclosed to the Congress before 
                an implementing bill with respect to that 
                agreement is introduced in either House of 
                Congress,
        shall not be considered to be part of the agreement 
        approved by the Congress and shall have no force and 
        effect under United States law or in any dispute 
        settlement body.
    (b) Limitations on Trade Authorities Procedures.--
            (1) For lack of notice or consultations.--
                    (A) In general.--The trade authorities 
                procedures shall not apply to any implementing 
                bill submitted with respect to a trade 
                agreement or trade agreements entered into 
                under section 2103(b) if during the 60-day 
                period beginning on the date that one House of 
                Congress agrees to a procedural disapproval 
                resolution for lack of notice or consultations 
                with respect to such trade agreement or 
                agreements, the other House separately agrees 
                to a procedural disapproval resolution with 
                respect to such trade agreement or agreements.
                    (B) Procedural disapproval resolution.--(i) 
                For purposes of this paragraph, the term 
                ``procedural disapproval resolution'' means a 
                resolution of either House of Congress, the 
                sole matter after the resolving clause of which 
                is as follows: ``That the President has failed 
                or refused to notify or consult in accordance 
                with the Bipartisan Trade Promotion Authority 
                Act of 2002 on negotiations with respect to 
                ____________ and, therefore, the trade 
                authorities procedures under that Act shall not 
                apply to any implementing bill submitted with 
                respect to such trade agreement or 
                agreements.'', with the blank space being 
                filled with a description of the trade 
                agreement or agreements with respect to which 
                the President is considered to have failed or 
                refused to notify or consult.
                    (ii) For purposes of clause (i), the 
                President has ``failed or refused to notify or 
                consult in accordance with the Bipartisan Trade 
                Promotion Authority Act of 2002'' on 
                negotiations with respect to a trade agreement 
                or trade agreements if--
                            (I) the President has failed or 
                        refused to consult (as the case may be) 
                        in accordance with section 2104 or 2105 
                        with respect to the negotiations, 
                        agreement, or agreements;
                            (II) guidelines under section 
                        2107(b) have not been developed or met 
                        with respect to the negotiations, 
                        agreement, or agreements;
                            (III) the President has not met 
                        with the Congressional Oversight Group 
                        pursuant to a request made under 
                        section 2107(c) with respect to the 
                        negotiations, agreement, or agreements; 
                        or
                            (IV) the agreement or agreements 
                        fail to make progress in achieving the 
                        purposes, policies, priorities, and 
                        objectives of this title.
            (2) Procedures for considering resolutions.--(A) 
        Procedural disapproval resolutions--
                    (i) in the House of Representatives--
                            (I) may be introduced by any Member 
                        of the House;
                            (II) shall be referred to the 
                        Committee on Ways and Means and, in 
                        addition, to the Committee on Rules; 
                        and
                            (III) may not be amended by either 
                        Committee; and
                    (ii) in the Senate--
                            (I) may be introduced by any Member 
                        of the Senate;
                            (II) shall be referred to the 
                        Committee on Finance; and
                            (III) may not be amended.
            (B) The provisions of section 152(d) and (e) of the 
        Trade Act of 1974 (19 U.S.C. 2192(d) and (e)) (relating 
        to the floor consideration of certain resolutions in 
        the House and Senate) apply to a procedural disapproval 
        resolution introduced with respect to a trade agreement 
        if no other procedural disapproval resolution with 
        respect to that trade agreement has previously been 
        reported in that House of Congress by the Committee on 
        Ways and Means or the Committee on Finance, as the case 
        may be, and if no resolution described in section 
        2104(d)(3)(C)(ii) with respect to that trade agreement 
        has been reported in that House of Congress by the 
        Committee on Ways and Means or the Committee on 
        Finance, as the case may be, pursuant to the procedures 
        set forth in clauses (iii) through (vi) of such section 
        2104(d)(3)(C).
            (C) It is not in order for the House of 
        Representatives to consider any procedural disapproval 
        resolution not reported by the Committee on Ways and 
        Means and, in addition, by the Committee on Rules.
            (D) It is not in order for the Senate to consider 
        any procedural disapproval resolution not reported by 
        the Committee on Finance.
            (3) For failure to meet other requirements.--Not 
        later than December 31, 2002, the Secretary of 
        Commerce, in consultation with the Secretary of State, 
        the Secretary of the Treasury, the Attorney General, 
        and the United States Trade Representative, shall 
        transmit to the Congress a report setting forth the 
        strategy of the executive branch to address concerns of 
        the Congress regarding whether dispute settlement 
        panels and the Appellate Body of the WTO have added to 
        obligations, or diminished rights, of the United 
        States, as described in section2101(b)(3). Trade 
authorities procedures shall not apply to any implementing bill with 
respect to an agreement negotiated under the auspices of the WTO unless 
the Secretary of Commerce has issued such report in a timely manner.
    (c) Rules of House of Representatives and Senate.--
Subsection (b) of this section, section 2103(c), and section 
2104(d)(3)(C) are enacted by the Congress--
            (1) as an exercise of the rulemaking power of the 
        House of Representatives and the Senate, respectively, 
        and as such are deemed a part of the rules of each 
        House, respectively, and such procedures supersede 
        other rules only to the extent that they are 
        inconsistent with such other rules; and
            (2) with the full recognition of the constitutional 
        right of either House to change the rules (so far as 
        relating to the procedures of that House) at any time, 
        in the same manner, and to the same extent as any other 
        rule of that House.

SEC. 2106. TREATMENT OF CERTAIN TRADE AGREEMENTS FOR WHICH NEGOTIATIONS 
                    HAVE ALREADY BEGUN.

    (a) Certain Agreements.--Notwithstanding the prenegotiation 
notification and consultation requirement described in section 
2104(a), if an agreement to which section 2103(b) applies--
            (1) is entered into under the auspices of the World 
        Trade Organization,
            (2) is entered into with Chile,
            (3) is entered into with Singapore, or
            (4) establishes a Free Trade Area for the Americas,
and results from negotiations that were commenced before the 
date of the enactment of this Act, subsection (b) shall apply.
    (b) Treatment of Agreements.--In the case of any agreement 
to which subsection (a) applies--
            (1) the applicability of the trade authorities 
        procedures to implementing bills shall be determined 
        without regard to the requirements of section 2104(a) 
        (relating only to 90 days notice prior to initiating 
        negotiations), and any procedural disapproval 
        resolution under section 2105(b)(1)(B) shall not be in 
        order on the basis of a failure or refusal to comply 
        with the provisions of section 2104(a); and
            (2) the President shall, as soon as feasible after 
        the enactment of this Act--
                    (A) notify the Congress of the negotiations 
                described in subsection (a), the specific 
                United States objectives in the negotiations, 
                and whether the President is seeking a new 
                agreement or changes to an existing agreement; 
                and
                    (B) before and after submission of the 
                notice, consult regarding the negotiations with 
                the committees referred to in section 
                2104(a)(2) and the Congressional Oversight 
                Group convened under section 2107.

SEC. 2107. CONGRESSIONAL OVERSIGHT GROUP.

    (a) Members and Functions.--
            (1) In general.--By not later than 60 days after 
        the date of the enactment of this Act, and not later 
        than 30 days after the convening of each Congress, the 
        chairman of the Committee on Ways and Means of the 
        House of Representatives and the chairman of the 
        Committee on Finance of the Senate shall convene the 
        Congressional Oversight Group.
            (2) Membership from the house.--In each Congress, 
        the Congressional Oversight Group shall be comprised of 
        the following Members of the House of Representatives:
                    (A) The chairman and ranking member of the 
                Committee on Ways and Means, and 3 additional 
                members of such Committee (not more than 2 of 
                whom are members of the same political party).
                    (B) The chairman and ranking member, or 
                their designees, of the committees of the House 
                of Representatives which would have, under the 
                Rules of the House of Representatives, 
                jurisdiction over provisions of law affected by 
                a trade agreement negotiations for which are 
                conducted at any time during that Congress and 
                to which this title would apply.
            (3) Membership from the senate.--In each Congress, 
        the Congressional Oversight Group shall also be 
        comprised of the following members of the Senate:
                    (A) The chairman and ranking member of the 
                Committee on Finance and 3 additional members 
                of such Committee (not more than 2 of whom are 
                members of the same political party).
                    (B) The chairman and ranking member, or 
                their designees, of the committees of the 
                Senate which would have, under the Rules of the 
                Senate, jurisdiction over provisions of law 
                affected by a trade agreement negotiations for 
                which are conducted at any time during that 
                Congress and to which this title would apply.
            (4) Accreditation.--Each member of the 
        Congressional Oversight Group described in paragraph 
        (2)(A) and (3)(A) shall be accredited by the United 
        States Trade Representative on behalf of the President 
        as an official adviser to the United States delegation 
        in negotiations for any trade agreement to which this 
        title applies. Each member of the Congressional 
        Oversight Group described in paragraph (2)(B) and 
        (3)(B) shall be accredited by the United States Trade 
        Representative on behalf of the President as an 
        official adviser to the United States delegation in the 
        negotiations by reason of which the member is in the 
        Congressional Oversight Group. The Congressional 
        Oversight Group shall consult with and provide advice 
        to the Trade Representative regarding the formulation 
        of specific objectives, negotiating strategies and 
        positions, the development of the applicable trade 
        agreement, and compliance and enforcement of the 
        negotiated commitments under the trade agreement.
            (5) Chair.--The Congressional Oversight Group shall 
        be chaired by the Chairman of the Committee on Ways and 
        Means of the House of Representatives and the Chairman 
        of the Committee on Finance of the Senate.
    (b) Guidelines.--
            (1) Purpose and revision.--The United States Trade 
        Representative, in consultation with the chairmen and 
        ranking minority members of the Committee on Ways and 
        Means of the House of Representatives and the Committee 
        on Finance of the Senate--
                    (A) shall, within 120 days after the date 
                of the enactment of this Act, develop written 
                guidelines to facilitate the useful and timely 
                exchange of information between the Trade 
                Representative and the Congressional Oversight 
                Group convened under this section; and
                    (B) may make such revisions to the 
                guidelines as may be necessary from time to 
                time.
            (2) Content.--The guidelines developed under 
        paragraph (1) shall provide for, among other things--
                    (A) regular, detailed briefings of the 
                Congressional Oversight Group regarding 
                negotiating objectives, including the promotion 
                of certain priorities referred to in section 
                2102(c), and positions and the status of the 
                applicable negotiations, beginning as soon as 
                practicable after the Congressional Oversight 
                Group is convened, with more frequent briefings 
                as trade negotiations enter the final stage;
                    (B) access by members of the Congressional 
                Oversight Group, and staff with proper security 
                clearances, to pertinent documents relating to 
                the negotiations, including classified 
                materials;
                    (C) the closest practicable coordination 
                between the Trade Representative and the 
                Congressional Oversight Group at all critical 
                periods during the negotiations, including at 
                negotiation sites;
                    (D) after the applicable trade agreement is 
                concluded, consultation regarding ongoing 
                compliance and enforcement of negotiated 
                commitments under the trade agreement; and
                    (E) the time frame for submitting the 
                report required under section 2102(c)(8).
    (c) Request for Meeting.--Upon the request of a majority of 
the Congressional Oversight Group, the President shall meet 
with the Congressional Oversight Group before initiating 
negotiations with respect to a trade agreement, or at any other 
time concerning the negotiations.

SEC. 2108. ADDITIONAL IMPLEMENTATION AND ENFORCEMENT REQUIREMENTS.

    (a) In General.--At the time the President submits to the 
Congress the final text of an agreement pursuant to section 
2105(a)(1)(C), the President shall also submit a plan for 
implementing and enforcing the agreement. The implementation 
and enforcement plan shall include the following:
            (1) Border personnel requirements.--A description 
        of additional personnel required at border entry 
        points, including a list of additional customs and 
        agricultural inspectors.
            (2) Agency staffing requirements.--A description of 
        additional personnel required by Federal agencies 
        responsible for monitoring and implementing the trade 
        agreement, including personnel required by the Office 
        of the United States Trade Representative, the 
        Department of Commerce, the Department of Agriculture 
        (including additional personnel required to implement 
        sanitary and phytosanitary measures in order to obtain 
        market access for United States exports), the 
        Department of the Treasury, and such other agencies as 
        may be necessary.
            (3) Customs infrastructure requirements.--A 
        description of the additional equipment and facilities 
        needed by the United States Customs Service.
            (4) Impact on state and local governments.--A 
        description of the impact the trade agreement will have 
        on State and local governments as a result of increases 
        in trade.
            (5) Cost analysis.--An analysis of the costs 
        associated with each of the items listed in paragraphs 
        (1) through (4).
    (b) Budget Submission.--The President shall include a 
request for the resources necessary to support the plan 
described in subsection (a) in the first budget that the 
President submits to the Congress after the submission of the 
plan.

SEC. 2109. COMMITTEE STAFF.

    The grant of trade promotion authority under this title is 
likely to increase the activities of the primary committees of 
jurisdiction in the area of international trade. In addition, 
the creation of the Congressional Oversight Group under section 
2107 will increase the participation of a broader number of 
Members of Congress in the formulation of United States trade 
policy and oversight of the international trade agenda for the 
United States. The primary committees of jurisdiction should 
have adequate staff to accommodate these increases in 
activities.

SEC. 2110. CONFORMING AMENDMENTS.

    (a) In General.--Title I of the Trade Act of 1974 (19 
U.S.C. 2111 et seq.) is amended as follows:
            (1) Implementing bill.--
                    (A) Section 151(b)(1) (19 U.S.C. 
                2191(b)(1)) is amended by striking ``section 
                1103(a)(1) of the Omnibus Trade and 
                Competitiveness Act of 1988, or section 282 of 
                the Uruguay Round Agreements Act'' and 
                inserting ``section 282 of the Uruguay Round 
                Agreements Act, or section 2105(a)(1) of the 
                Bipartisan Trade Promotion Authority Act of 
                2002''.
                    (B) Section 151(c)(1) (19 U.S.C. 
                2191(c)(1)) is amended by striking ``or section 
                282 of the Uruguay Round Agreements Act'' and 
                inserting ``, section 282 of the Uruguay Round 
                Agreements Act, or section 2105(a)(1) of the 
                Bipartisan Trade Promotion Authority Act of 
                2002''.
            (2) Advice from international trade commission.--
        Section 131 (19 U.S.C. 2151) is amended--
                    (A) in subsection (a)--
                            (i) in paragraph (1), by striking 
                        ``section 123 of this Act or section 
                        1102 (a) or (c) of the Omnibus Trade 
                        and Competitiveness Act of 1988,'' and 
                        inserting ``section 123 of this Act or 
                        section 2103(a) or (b) ofthe Bipartisan 
Trade Promotion Authority Act of 2002,''; and
                            (ii) in paragraph (2), by striking 
                        ``section 1102 (b) or (c) of the 
                        Omnibus Trade and Competitiveness Act 
                        of 1988'' and inserting ``section 
                        2103(b) of the Bipartisan Trade 
                        Promotion Authority Act of 2002'';
                    (B) in subsection (b), by striking 
                ``section 1102(a)(3)(A)'' and inserting 
                ``section 2103(a)(3)(A) of the Bipartisan Trade 
                Promotion Authority Act of 2002''; and
                    (C) in subsection (c), by striking 
                ``section 1102 of the Omnibus Trade and 
                Competitiveness Act of 1988,'' and inserting 
                ``section 2103 of the Bipartisan Trade 
                Promotion Authority Act of 2002,''.
            (3) Hearings and advice.--Sections 132, 133(a), and 
        134(a) (19 U.S.C. 2152, 2153(a), and 2154(a)) are each 
        amended by striking ``section 1102 of the Omnibus Trade 
        and Competitiveness Act of 1988,'' each place it 
        appears and inserting ``section 2103 of the Bipartisan 
        Trade Promotion Authority Act of 2002,''.
            (4) Prerequisites for offers.--Section 134(b) (19 
        U.S.C. 2154(b)) is amended by striking ``section 1102 
        of the Omnibus Trade and Competitiveness Act of 1988'' 
        and inserting ``section 2103 of the Bipartisan Trade 
        Promotion Authority Act of 2002''.
            (5) Advice from private and public sectors.--
        Section 135 (19 U.S.C. 2155) is amended--
                    (A) in subsection (a)(1)(A), by striking 
                ``section 1102 of the Omnibus Trade and 
                Competitiveness Act of 1988'' and inserting 
                ``section 2103 of the Bipartisan Trade 
                Promotion Authority Act of 2002'';
                    (B) in subsection (e)(1)--
                            (i) by striking ``section 1102 of 
                        the Omnibus Trade and Competitiveness 
                        Act of 1988'' each place it appears and 
                        inserting ``section 2103 of the 
                        Bipartisan Trade Promotion Authority 
                        Act of 2002''; and
                            (ii) by striking ``section 
                        1103(a)(1)(A) of such Act of 1988'' and 
                        inserting ``section 2105(a)(1)(A) of 
                        the Bipartisan Trade Promotion 
                        Authority Act of 2002''; and
                    (C) in subsection (e)(2), by striking 
                ``section 1101 of the Omnibus Trade and 
                Competitiveness Act of 1988'' and inserting 
                ``section 2102 of the Bipartisan Trade 
                Promotion Authority Act of 2002''.
            (6) Transmission of agreements to congress.--
        Section 162(a) (19 U.S.C. 2212(a)) is amended by 
        striking ``or under section 1102 of the Omnibus Trade 
        and Competitiveness Act of 1988'' and inserting ``or 
        under section 2103 of the Bipartisan Trade Promotion 
        Authority Act of 2002''.
    (b) Application of Certain Provisions.--For purposes of 
applying sections 125, 126, and 127 of the Trade Act of 1974 
(19 U.S.C. 2135, 2136(a), and 2137)--
            (1) any trade agreement entered into under section 
        2103 shall be treated as an agreement entered into 
        under section 101 or 102, as appropriate, of the Trade 
        Act of 1974 (19 U.S.C. 2111 or 2112); and
            (2) any proclamation or Executive order issued 
        pursuant to a trade agreement entered into under 
        section 2103 shall be treated as a proclamation or 
        Executive order issued pursuant to a trade agreement 
        entered into under section 102 of the Trade Act of 
        1974.

SEC. 2111. REPORT ON IMPACT OF TRADE PROMOTION AUTHORITY.

    (a) In General.--Not later than 1 year after the date of 
enactment of this Act, the International Trade Commission shall 
report to the Committee on Finance of the Senate and the 
Committee on Ways and Means of the House of Representatives 
regarding the economic impact on the United States of the trade 
agreements described in subsection (b).
    (b) Agreements.--The trade agreements described in this 
subsection are the following:
            (1) The United States-Israel Free Trade Agreement.
            (2) The United States-Canada Free Trade Agreement.
            (3) The North American Free Trade Agreement.
            (4) The Uruguay Round Agreements.
            (5) The Tokyo Round of Multilateral Trade 
        Negotiations.

SEC. 2112. INTERESTS OF SMALL BUSINESS.

    The Assistant United States Trade Representative for 
Industry and Telecommunications shall be responsible for 
ensuring that the interests of small business are considered in 
all trade negotiations in accordance with the objective 
described in section 2102(a)(8). It is the sense of the 
Congress that the small business functions should be reflected 
in the title of the Assistant United States Trade 
Representative assigned the responsibility for small business.

SEC. 2113. DEFINITIONS.

    In this title:
            (1) Agreement on agriculture.--The term ``Agreement 
        on Agriculture'' means the agreement referred to in 
        section 101(d)(2) of the Uruguay Round Agreements Act 
        (19 U.S.C. 3511(d)(2)).
            (2) Agreement on safeguards.--The term ``Agreement 
        on Safeguards means the agreement referred to in 
        section 101(d)(12) of the Uruguay Round Agreements Act 
        (19 U.S.C. 3511(d)(12)).
            (3) Agreement on subsidies and countervailing 
        measures.--The term ``Agreement on Subsidies and 
        Countervailing Measures'' means the agreement referred 
        to in section 101(d)(13) of the Uruguay Round 
        Agreements Act (19 U.S.C. 3511(d)(13)).
            (4) Antidumping agreement.--The term ``Antidumping 
        Agreement`` means the Agreement on Implementation of 
        Article VI of the General Agreement on Tariffs and 
        Trade 1994 referred to in section 101(d)(7) of the 
        Uruguay Round Agreements Act (19 U.S.C. 3511(d)(7)).
            (5) Appellate body.--The term ``Appellate Body'' 
        means the Appellate Body established under Article 17.1 
        of the Dispute Settlement Understanding.
            (6) Core labor standards.--The term ``core labor 
        standards'' means--
                    (A) the right of association;
                    (B) the right to organize and bargain 
                collectively;
                    (C) a prohibition on the use of any form of 
                forced or compulsory labor;
                    (D) a minimum age for the employment of 
                children; and
                    (E) acceptable conditions of work with 
                respect to minimum wages, hours of work, and 
                occupational safety and health.
            (7) Dispute settlement understanding.--The term 
        ``Dispute Settlement Understanding'' means the 
        Understanding on Rules and Procedures Governing the 
        Settlement of Disputes referred to in section 
        101(d)(16) of the Uruguay Round Agreements Act.
            (8) GATT 1994.--The term ``GATT 1994'' has the 
        meaning given that term in section 2 of the Uruguay 
        Round Agreements Act (19 U.S.C. 3501).
            (9) ILO.--The term ``ILO'' means the International 
        Labor Organization.
            (10) Import sensitive agricultural product.--The 
        term ``import sensitive agricultural product'' means an 
        agricultural product--
                    (A) with respect to which, as a result of 
                the Uruguay Round Agreements the rate of duty 
                was the subject of tariff reductions by the 
                United States and, pursuant to such Agreements, 
                was reduced on January 1, 1995, to a rate that 
                was not less than 97.5 percent of the rate of 
                duty that applied to such article on December 
                31, 1994; or
                    (B) which was subject to a tariff-rate 
                quota on the date of the enactment of this Act.
            (11) United states person.--The term ``United 
        States person'' means--
                    (A) a United States citizen;
                    (B) a partnership, corporation, or other 
                legal entity organized under the laws of the 
                United States; and
                    (C) a partnership, corporation, or other 
                legal entity that is organized under the laws 
                of a foreign country and is controlled by 
                entities described in subparagraph (B) or 
                United States citizens, or both.
            (12) Uruguay round agreements.--The term ``Uruguay 
        Round Agreements'' has the meaning given that term in 
        section 2(7) of the Uruguay Round Agreements Act (19 
        U.S.C. 3501(7)).
            (13) World trade organization; wto.--The terms 
        ``World Trade Organization'' and ``WTO'' mean the 
        organization established pursuant to the WTO Agreement.
            (14) WTO agreement.--The term ``WTO Agreement'' 
        means the Agreement Establishing the World Trade 
        Organization entered into on April 15, 1994.
            (15) WTO member.--The term ``WTO member'' has the 
        meaning given that term in section 2(10) of the Uruguay 
        Round Agreements Act (19 U.S.C. 3501(10)).

                DIVISION C--ANDEAN TRADE PREFERENCE ACT

                  TITLE XXXI--ANDEAN TRADE PREFERENCE

SEC. 3101. SHORT TITLE.

    This title may be cited as the ``Andean Trade Promotion and 
Drug Eradication Act''.

SEC. 3102. FINDINGS.

    Congress makes the following findings:
            (1) Since the Andean Trade Preference Act was 
        enacted in 1991, it has had a positive impact on United 
        States trade with Bolivia, Colombia, Ecuador, and Peru. 
        Two-way trade has doubled, with the United States 
        serving as the leading source of imports and leading 
        export market for each of the Andean beneficiary 
        countries. This has resulted in increased jobs and 
        expanded export opportunities in both the United States 
        and the Andean region.
            (2) The Andean Trade Preference Act has been a key 
        element in the United States counternarcotics strategy 
        in the Andean region, promoting export diversification 
        and broad-based economic development that provides 
        sustainable economic alternatives to drug-crop 
        production, strengthening the legitimate economies of 
        Andean countries and creating viable alternatives to 
        illicit trade in coca.
            (3) Notwithstanding the success of the Andean Trade 
        Preference Act, the Andean region remains threatened by 
        political and economic instability and fragility, 
        vulnerable to the consequences of the drug war and 
        fierce global competition for its legitimate trade.
            (4) The continuing instability in the Andean region 
        poses a threat to the security interests of the United 
        States and the world. This problem has been partially 
        addressed through foreign aid, such as Plan Colombia, 
        enacted by Congress in 2000. However, foreign aid alone 
        is not sufficient. Enhancement of legitimate trade with 
        the United States provides an alternative means for 
        reviving and stabilizing the economies in the Andean 
        region.
            (5) The Andean Trade Preference Act constitutes a 
        tangible commitment by the United States to the 
        promotion of prosperity, stability, and democracy in 
        the beneficiary countries.
            (6) Renewal and enhancement of the Andean Trade 
        Preference Act will bolster the confidence of domestic 
        private enterprise and foreign investors in the 
        economic prospects of the region, ensuring that 
        legitimate private enterprise can be the engine of 
        economic development and political stability in the 
        region.
            (7) Each of the Andean beneficiary countries is 
        committed to conclude negotiation of a Free Trade Area 
        of the Americas by the year 2005, as a means of 
        enhancing the economic security of the region.
            (8) Temporarily enhancing trade benefits for Andean 
        beneficiary countries will promote the growth of free 
        enterprise and economic opportunity in these countries 
        and serve the security interests of the United States, 
        the region, and the world.

SEC. 3103. ARTICLES ELIGIBLE FOR PREFERENTIAL TREATMENT.

    (a) Eligibility of Certain Articles.--Section 204 of the 
Andean Trade Preference Act (19 U.S.C. 3203) is amended--
            (1) by striking subsection (c) and redesignating 
        subsections (d) through (g) as subsections (c) through 
        (f), respectively; and
            (2) by amending subsection (b) to read as follows:
    ``(b) Exceptions and Special Rules.--
            ``(1) Certain articles that are not import-
        sensitive.--The President may proclaim duty-free 
        treatment under this title for any article described in 
        subparagraph (A), (B), (C), or (D) that is the growth, 
        product, or manufacture of an ATPDEA beneficiary 
        country, that is imported directly into the customs 
        territory of the United States from an ATPDEA 
        beneficiary country, and that meets the requirements of 
        this section, if the President determines that such 
        article is not import-sensitive in the context of 
        imports from ATPDEA beneficiary countries:
                    ``(A) Footwear not designated at the time 
                of the effective date of this title as eligible 
                for purposes of the generalized system of 
                preferences under title V of the Trade Act of 
                1974.
                    ``(B) Petroleum, or any product derived 
                from petroleum, provided for in headings 2709 
                and 2710 of the HTS.
                    ``(C) Watches and watch parts (including 
                cases, bracelets and straps), of whatever type 
                including, but not limited to, mechanical, 
                quartz digital or quartz analog, if such 
                watches or watch parts contain any material 
                which is the product of any country with 
                respect to which HTS column 2 rates of duty 
                apply.
                    ``(D) Handbags, luggage, flat goods, work 
                gloves, and leather wearing apparel that were 
                not designated on August 5, 1983, as eligible 
                articles for purposes of the generalized system 
                of preferences under title V of the Trade Act 
                of 1974.
            ``(2) Exclusions.--Subject to paragraph (3), duty-
        free treatment under this title may not be extended 
        to--
                    ``(A) textiles and apparel articles which 
                were not eligible articles for purposes of this 
                title on January 1, 1994, as this title was in 
                effect on that date;
                    ``(B) rum and tafia classified in 
                subheading 2208.40 of the HTS;
                    ``(C) sugars, syrups, and sugar-containing 
                products subject to over-quota duty rates under 
                applicable tariff-rate quotas; or
                    ``(D) tuna prepared or preserved in any 
                manner in airtight containers, except as 
                provided in paragraph (4).
            ``(3) Apparel articles and certain textile 
        articles.--
                    ``(A) In general.--Apparel articles that 
                are imported directly into the customs 
                territory of the United States from an ATPDEA 
                beneficiary country shall enter the United 
                States free of duty and free of any 
                quantitative restrictions, limitations, or 
                consultation levels, but only if such articles 
                are described in subparagraph (B).
                    ``(B) Covered articles.--The apparel 
                articles referred to in subparagraph (A) are 
                the following:
                            ``(i) Apparel articles assembled 
                        from products of the united states or 
                        atpdea beneficiary countries or 
                        products not available in commercial 
                        quantities.--Apparel articles sewn or 
                        otherwise assembled in 1 or more ATPDEA 
                        beneficiary countries, or the United 
                        States, or both, exclusively from any 
                        one or any combination of the 
                        following:
                                    ``(I) Fabrics or fabric 
                                components wholly formed, or 
                                components knit-to-shape, in 
                                the United States, from yarns 
                                wholly formed in the United 
                                States or 1 or more ATPDEA 
                                beneficiary countries 
                                (including fabrics not formed 
                                from yarns, if such fabrics are 
                                classifiable under heading 5602 
                                or 5603 of the HTS and are 
                                formed in the United States). 
                                Apparel articles shall qualify 
                                under this subclause only if 
                                all dyeing, printing, and 
                                finishing of the fabrics from 
                                which the articles are 
                                assembled, if the fabrics are 
                                knit fabrics, is carried out in 
                                the United States. Apparel 
                                articles shall qualify under 
                                this subclause only if all 
                                dyeing, printing, and finishing 
                                of the fabrics from which the 
                                articles are assembled, if the 
                                fabrics are woven fabrics, is 
                                carried out in the United 
                                States.
                                    ``(II) Fabrics or fabric 
                                components formed or components 
                                knit-to-shape, in 1 or more 
                                ATPDEA beneficiary countries, 
                                from yarns wholly formed in 1 
                                or more ATPDEA beneficiary 
                                countries, if such fabrics 
                                (including fabrics not formed 
                                from yarns, if such fabrics are 
                                classifiable under heading 5602 
                                or 5603 of the HTS and are 
                                formed in 1 or more ATPDEA 
                                beneficiary countries) or 
                                components are in chief value 
                                of llama, alpaca, or vicuna.
                                    ``(III) Fabrics or yarns, 
                                to the extent that apparel 
                                articles of such fabrics or 
                                yarns would be eligible for 
                                preferential treatment, without 
                                regard to the source of the 
                                fabrics or yarns, under Annex 
                                401 of the NAFTA.
                            ``(ii) Additional fabrics.--At the 
                        request of any interested party, the 
                        President is authorized to proclaim 
                        additional fabrics and yarns as 
                        eligible for preferential treatment 
                        under clause (i)(III) if--
                                    ``(I) the President 
                                determines that such fabrics or 
                                yarns cannot be supplied by the 
                                domestic industry in commercial 
                                quantities in a timely manner;
                                    ``(II) the President has 
                                obtained advice regarding the 
                                proposed action from the 
                                appropriate advisory committee 
                                established under section 135 
                                of the Trade Act of 1974 (19 
                                U.S.C.2155) and the United 
States International Trade Commission;
                                    ``(III) within 60 days 
                                after the request, the 
                                President has submitted a 
                                report to the Committee on Ways 
                                and Means of the House of 
                                Representatives and the 
                                Committee on Finance of the 
                                Senate that sets forth the 
                                action proposed to be 
                                proclaimed and the reasons for 
                                such action, and the advice 
                                obtained under subclause (II);
                                    ``(IV) a period of 60 
                                calendar days, beginning with 
                                the first day on which the 
                                President has met the 
                                requirements of subclause 
                                (III), has expired; and
                                    ``(V) the President has 
                                consulted with such committees 
                                regarding the proposed action 
                                during the period referred to 
                                in subclause (III).
                            ``(iii) Apparel articles assembled 
                        in 1 or more atpdea beneficiary 
                        countries from regional fabrics or 
                        regional components.--(I) Subject to 
                        the limitation set forth in subclause 
                        (II), apparel articles sewn or 
                        otherwise assembled in 1 or more ATPDEA 
                        beneficiary countries from fabrics or 
                        from fabric components formed or from 
                        components knit-to-shape, in 1 or more 
                        ATPDEA beneficiary countries, from 
                        yarns wholly formed in the United 
                        States or 1 or more ATPDEA beneficiary 
                        countries (including fabrics not formed 
                        from yarns, if such fabrics are 
                        classifiable under heading 5602 or 5603 
                        of the HTS and are formed in 1 or more 
                        ATPDEA beneficiary countries), whether 
                        or not the apparel articles are also 
                        made from any of the fabrics, fabric 
                        components formed, or components knit-
                        to-shape described in clause (i) 
                        (unless the apparel articles are made 
                        exclusively from any of the fabrics, 
                        fabric components formed, or components 
                        knit-to-shape described in clause (i)).
                            ``(II) The preferential treatment 
                        referred to in subclause (I) shall be 
                        extended in the 1-year period beginning 
                        October 1, 2002, and in each of the 4 
                        succeeding 1-year periods, to imports 
                        of apparel articles in an amount not to 
                        exceed the applicable percentage of the 
                        aggregate square meter equivalents of 
                        all apparel articles imported into the 
                        United States in the preceding 12-month 
                        period for which data are available.
                            ``(III) For purposes of subclause 
                        (II), the term `applicable percentage' 
                        means 2 percent for the 1-year period 
                        beginning October 1, 2002, increased in 
                        each of the 4 succeeding 1-year periods 
                        by equal increments, so that for the 
                        period beginning October 1, 2006, the 
                        applicable percentage does not exceed 5 
                        percent.
                            ``(iv) Handloomed, handmade, and 
                        folklore articles.--A handloomed, 
                        handmade, or folklore article of an 
                        ATPDEA beneficiary country identified 
                        under subparagraph (C) that is 
                        certified as such by the competent 
                        authority of such beneficiary country.
                            ``(v) Certain other apparel 
                        articles.--
                                    ``(I) General rule.--Any 
                                apparel article classifiable 
                                under subheading 6212.10 of the 
                                HTS, except for articles 
                                entered under clause (i), (ii), 
                                (iii), or (iv), if the article 
                                is both cut and sewn or 
                                otherwise assembled in the 
                                United States, or one or more 
                                ATPDEA beneficiary countries, 
                                or both.
                                    ``(II) Limitation.--During 
                                the 1-year period beginning on 
                                October 1, 2003, and during 
                                each of the 3 succeeding 1-year 
                                periods, apparel articles 
                                described in subclause (I) of a 
                                producer or an entity 
                                controlling production shall be 
                                eligible for preferential 
                                treatment under this paragraph 
                                only if the aggregate cost of 
                                fabrics (exclusive of all 
                                findings and trimmings) formed 
                                in the United States that are 
                                used in the production of all 
                                such articles of that producer 
                                or entity that are entered and 
                                eligible under this clause 
                                during the preceding 1-year 
                                period is at least 75 percent 
                                of the aggregate declared 
                                customs value of the fabric 
                                (exclusive of all findings and 
                                trimmings) contained in all 
                                such articles of that producer 
                                or entity that are entered and 
                                eligible under this clause 
                                during the preceding 1-year 
                                period.
                                    ``(III) Development of 
                                procedure to ensure 
                                compliance.--The United States 
                                Customs Service shall develop 
                                and implement methods and 
                                procedures to ensure ongoing 
                                compliance with the requirement 
                                set forth in subclause (II). If 
                                the Customs Service finds that 
                                a producer or an entity 
                                controlling production has not 
                                satisfied such requirement in a 
                                1-year period, then apparel 
                                articles described in subclause 
                                (I) of that producer or entity 
                                shall be ineligible for 
                                preferential treatment under 
                                this paragraph during any 
                                succeeding 1-year period until 
                                the aggregate cost of fabrics 
                                (exclusive of all findings and 
                                trimmings) formed in the United 
                                States that are used in the 
                                production of such articles of 
                                that producer or entity entered 
                                during the preceding 1-year 
                                period is at least 85 percent 
                                of the aggregate declared 
                                customsvalue of the fabric 
(exclusive of all findings and trimmings) contained in all such 
articles of that producer or entity that are entered and eligible under 
this clause during the preceding 1-year period.
                            ``(vi) Special rules.--
                                    ``(I) Exception for 
                                findings and trimmings.--An 
                                article otherwise eligible for 
                                preferential treatment under 
                                this paragraph shall not be 
                                ineligible for such treatment 
                                because the article contains 
                                findings or trimmings of 
                                foreign origin, if such 
                                findings and trimmings do not 
                                exceed 25 percent of the cost 
                                of the components of the 
                                assembled product. Examples of 
                                findings and trimmings are 
                                sewing thread, hooks and eyes, 
                                snaps, buttons, `bow buds', 
                                decorative lace, trim, elastic 
                                strips, zippers, including 
                                zipper tapes and labels, and 
                                other similar products.
                                    ``(II) Certain 
                                interlining.--(aa) An article 
                                otherwise eligible for 
                                preferential treatment under 
                                this paragraph shall not be 
                                ineligible for such treatment 
                                because the article contains 
                                certain interlinings of foreign 
                                origin, if the value of such 
                                interlinings (and any findings 
                                and trimmings) does not exceed 
                                25 percent of the cost of the 
                                components of the assembled 
                                article.
                                    ``(bb) Interlinings 
                                eligible for the treatment 
                                described in division (aa) 
                                include only a chest type 
                                plate, `hymo' piece, or `sleeve 
                                header', of woven or weft-
                                inserted warp knit construction 
                                and of coarse animal hair or 
                                man-made filaments.
                                    ``(cc) The treatment 
                                described in this subclause 
                                shall terminate if the 
                                President makes a determination 
                                that United States 
                                manufacturers are producing 
                                such interlinings in the United 
                                States in commercial 
                                quantities.
                                    ``(III) De minimis rule.--
                                An article that would otherwise 
                                be ineligible for preferential 
                                treatment under this 
                                subparagraph because the 
                                article contains yarns not 
                                wholly formed in the United 
                                States or in one or more ATPDEA 
                                beneficiary countries shall not 
                                be ineligible for such 
                                treatment if the total weight 
                                of all such yarns is not more 
                                than 7 percent of the total 
                                weight of the good.
                                    ``(IV) Special origin 
                                rule.--An article otherwise 
                                eligible for preferential 
                                treatment under clause (i) or 
                                (iii) shall not be ineligible 
                                for such treatment because the 
                                article contains nylon filament 
                                yarn (other than elastomeric 
                                yarn) that is classifiable 
                                under subheading 5402.10.30, 
                                5402.10.60, 5402.31.30, 
                                5402.31.60, 5402.32.30, 
                                5402.32.60, 5402.41.10, 
                                5402.41.90, 5402.51.00, or 
                                5402.61.00 of the HTS from a 
                                country that is a party to an 
                                agreement with the United 
                                States establishing a free 
                                trade area, which entered into 
                                force before January 1, 1995.
                            ``(vii) Textile luggage.--Textile 
                        luggage--
                                    ``(I) assembled in an 
                                ATPDEA beneficiary country from 
                                fabric wholly formed and cut in 
                                the United States, from yarns 
                                wholly formed in the United 
                                States, that is entered under 
                                subheading 9802.00.80 of the 
                                HTS; or
                                    ``(II) assembled from 
                                fabric cut in an ATPDEA 
                                beneficiary country from fabric 
                                wholly formed in the United 
                                States from yarns wholly formed 
                                in the United States.
                    ``(C) Handloomed, handmade, and folklore 
                articles.--For purposes of subparagraph 
                (B)(iv), the President shall consult with 
                representatives of the ATPDEA beneficiary 
                countries concerned for the purpose of 
                identifying particular textile and apparel 
                goods that are mutually agreed upon as being 
                handloomed, handmade, or folklore goods of a 
                kind described in section 2.3(a), (b), or (c) 
                of the Annex or Appendix 3.1.B.11 of the Annex.
                    ``(D) Penalties for transshipment.--
                            ``(i) Penalties for exporters.--If 
                        the President determines, based on 
                        sufficient evidence, that an exporter 
                        has engaged in transshipment with 
                        respect to apparel articles from an 
                        ATPDEA beneficiary country, then the 
                        President shall deny all benefits under 
                        this title to such exporter, and any 
                        successor of such exporter, for a 
                        period of 2 years.
                            ``(ii) Penalties for countries.--
                        Whenever the President finds, based on 
                        sufficient evidence, that transshipment 
                        has occurred, the President shall 
                        request that the ATPDEA beneficiary 
                        country or countries through whose 
                        territory the transshipment has 
                        occurred take all necessary and 
                        appropriate actions to prevent such 
                        transshipment. If the President 
                        determines that a country is not taking 
                        such actions, the President shall 
                        reduce the quantities of apparel 
                        articles that may be imported into the 
                        United States from such country by the 
                        quantity of the transshipped articles 
                        multiplied by 3, to the extent 
                        consistent with the obligations of the 
                        United States under the WTO.
                            ``(iii) Transshipment described.--
                        Transshipment within the meaning of 
                        thissubparagraph has occurred when 
preferential treatment under subparagraph (A) has been claimed for an 
apparel article on the basis of material false information concerning 
the country of origin, manufacture, processing, or assembly of the 
article or any of its components. For purposes of this clause, false 
information is material if disclosure of the true information would 
mean or would have meant that the article is or was ineligible for 
preferential treatment under subparagraph (A).
                    ``(E) Bilateral emergency actions.--
                            ``(i) In general.--The President 
                        may take bilateral emergency tariff 
                        actions of a kind described in section 
                        4 of the Annex with respect to any 
                        apparel article imported from an ATPDEA 
                        beneficiary country if the application 
                        of tariff treatment under subparagraph 
                        (A) to such article results in 
                        conditions that would be cause for the 
                        taking of such actions under such 
                        section 4 with respect to a like 
                        article described in the same 8-digit 
                        subheading of the HTS that is imported 
                        from Mexico.
                            ``(ii) Rules relating to bilateral 
                        emergency action.--For purposes of 
                        applying bilateral emergency action 
                        under this subparagraph--
                                    ``(I) the requirements of 
                                paragraph (5) of section 4 of 
                                the Annex (relating to 
                                providing compensation) shall 
                                not apply;
                                    ``(II) the term `transition 
                                period' in section 4 of the 
                                Annex shall mean the period 
                                ending December 31, 2006; and
                                    ``(III) the requirements to 
                                consult specified in section 4 
                                of the Annex shall be treated 
                                as satisfied if the President 
                                requests consultations with the 
                                ATPDEA beneficiary country in 
                                question and the country does 
                                not agree to consult within the 
                                time period specified under 
                                section 4 of the Annex.
            ``(4) Tuna.--
                    ``(A) General rule.--Tuna that is harvested 
                by United States vessels or ATPDEA beneficiary 
                country vessels, that is prepared or preserved 
                in any manner, in an ATPDEA beneficiary 
                country, in foil or other flexible airtight 
                containers weighing with their contents not 
                more than 6.8 kilograms each, and that is 
                imported directly into the customs territory of 
                the United States from an ATPDEA beneficiary 
                country, shall enter the United States free of 
                duty and free of any quantitative restrictions.
                    ``(B) Definitions.--In this paragraph--
                            ``(i) United states vessel.--A 
                        `United States vessel' is a vessel 
                        having a certificate of documentation 
                        with a fishery endorsement under 
                        chapter 121 of title 46, United States 
                        Code.
                            ``(ii) ATPDEA vessel.--An `ATPDEA 
                        vessel' is a vessel--
                                    ``(I) which is registered 
                                or recorded in an ATPDEA 
                                beneficiary country;
                                    ``(II) which sails under 
                                the flag of an ATPDEA 
                                beneficiary country;
                                    ``(III) which is at least 
                                75 percent owned by nationals 
                                of an ATPDEA beneficiary 
                                country or by a company having 
                                its principal place of business 
                                in an ATPDEA beneficiary 
                                country, of which the manager 
                                or managers, chairman of the 
                                board of directors or of the 
                                supervisory board, and the 
                                majority of the members of such 
                                boards are nationals of an 
                                ATPDEA beneficiary country and 
                                of which, in the case of a 
                                company, at least 50 percent of 
                                the capital is owned by an 
                                ATPDEA beneficiary country or 
                                by public bodies or nationals 
                                of an ATPDEA beneficiary 
                                country;
                                    ``(IV) of which the master 
                                and officers are nationals of 
                                an ATPDEA beneficiary country; 
                                and
                                    ``(V) of which at least 75 
                                percent of the crew are 
                                nationals of an ATPDEA 
                                beneficiary country.
            ``(5) Customs procedures.--
                    ``(A) In general.--
                            ``(i) Regulations.--Any importer 
                        that claims preferential treatment 
                        under paragraph (1), (3), or (4) shall 
                        comply with customs procedures similar 
                        in all material respects to the 
                        requirements of Article 502(1) of the 
                        NAFTA as implemented pursuant to United 
                        States law, in accordance with 
                        regulations promulgated by the 
                        Secretary of the Treasury.
                            ``(ii) Determination.--
                                    ``(I) In general.--In order 
                                to qualify for the preferential 
                                treatment under paragraph (1), 
                                (3), or (4) and for a 
                                Certificate of Origin to be 
                                valid with respect to any 
                                article for which such 
                                treatment is claimed, there 
                                shall be in effect a 
                                determination by the President 
                                that each country described in 
                                subclause (II)--
                                            ``(aa) has 
                                        implemented and 
                                        follows, or
                                            ``(bb) is making 
                                        substantial progress 
                                        toward implementing and 
                                        following,
                                procedures and requirements 
                                similar in all material 
                                respects to the relevant 
                                procedures and requirements 
                                under chapter 5 of the NAFTA.
                                    ``(II) Country described.--
                                A country is described in this 
                                subclause ifit is an ATPDEA 
beneficiary country--
                                            ``(aa) from which 
                                        the article is 
                                        exported; or
                                            ``(bb) in which 
                                        materials used in the 
                                        production of the 
                                        article originate or in 
                                        which the article or 
                                        such materials undergo 
                                        production that 
                                        contributes to a claim 
                                        that the article is 
                                        eligible for 
                                        preferential treatment 
                                        under paragraph (1), 
                                        (3), or (4).
                    ``(B) Certificate of origin.--The 
                Certificate of Origin that otherwise would be 
                required pursuant to the provisions of 
                subparagraph (A) shall not be required in the 
                case of an article imported under paragraph 
                (1), (3), or (4) if such Certificate of Origin 
                would not be required under Article 503 of the 
                NAFTA (as implemented pursuant to United States 
                law), if the article were imported from Mexico.
                    ``(C) Report on cooperation of atpdea 
                countries concerning circumvention.--The United 
                States Commissioner of Customs shall conduct a 
                study analyzing the extent to which each ATPDEA 
                beneficiary country--
                            ``(i) has cooperated fully with the 
                        United States, consistent with its 
                        domestic laws and procedures, in 
                        instances of circumvention or alleged 
                        circumvention of existing quotas on 
                        imports of textile and apparel goods, 
                        to establish necessary relevant facts 
                        in the places of import, export, and, 
                        where applicable, transshipment, 
                        including investigation of 
                        circumvention practices, exchanges of 
                        documents, correspondence, reports, and 
                        other relevant information, to the 
                        extent such information is available;
                            ``(ii) has taken appropriate 
                        measures, consistent with its domestic 
                        laws and procedures, against exporters 
                        and importers involved in instances of 
                        false declaration concerning 
                        quantities, description, 
                        classification, or origin of textile 
                        and apparel goods; and
                            ``(iii) has penalized the 
                        individuals and entities involved in 
                        any such circumvention, consistent with 
                        its domestic laws and procedures, and 
                        has worked closely to seek the 
                        cooperation of any third country to 
                        prevent such circumvention from taking 
                        place in that third country.
                The Commissioner of Customs shall submit to the 
                Congress, not later than October 1, 2003, a 
                report on the study conducted under this 
                subparagraph.
            ``(6) Definitions.--In this subsection--
                    ``(A) Annex.--The term `the Annex' means 
                Annex 300-B of the NAFTA.
                    ``(B) ATPDEA beneficiary country.--The term 
                `ATPDEA beneficiary country' means any 
                `beneficiary country', as defined in section 
                203(a)(1) of this title, which the President 
                designates as an ATPDEA beneficiary country, 
                taking into account the criteria contained in 
                subsections (c) and (d) of section 203 and 
                other appropriate criteria, including the 
                following:
                            ``(i) Whether the beneficiary 
                        country has demonstrated a commitment 
                        to--
                                    ``(I) undertake its 
                                obligations under the WTO, 
                                including those agreements 
                                listed in section 101(d) of the 
                                Uruguay Round Agreements Act, 
                                on or ahead of schedule; and
                                    ``(II) participate in 
                                negotiations toward the 
                                completion of the FTAA or 
                                another free trade agreement.
                            ``(ii) The extent to which the 
                        country provides protection of 
                        intellectual property rights consistent 
                        with or greater than the protection 
                        afforded under the Agreement on Trade-
                        Related Aspects of Intellectual 
                        Property Rights described in section 
                        101(d)(15) of the Uruguay Round 
                        Agreements Act.
                            ``(iii) The extent to which the 
                        country provides internationally 
                        recognized worker rights, including--
                                    ``(I) the right of 
                                association;
                                    ``(II) the right to 
                                organize and bargain 
                                collectively;
                                    ``(III) a prohibition on 
                                the use of any form of forced 
                                or compulsory labor;
                                    ``(IV) a minimum age for 
                                the employment of children; and
                                    ``(V) acceptable conditions 
                                of work with respect to minimum 
                                wages, hours of work, and 
                                occupational safety and health.
                            ``(iv) Whether the country has 
                        implemented its commitments to 
                        eliminate the worst forms of child 
                        labor, as defined in section 507(6) of 
                        the Trade Act of 1974.
                            ``(v) The extent to which the 
                        country has met the counternarcotics 
                        certification criteria set forth in 
                        section 490 of the Foreign Assistance 
                        Act of 1961 (22 U.S.C. 2291j) for 
                        eligibility for United States 
                        assistance.
                            ``(vi) The extent to which the 
                        country has taken steps to become a 
                        party to and implements the Inter-
                        American Convention Against Corruption.
                            ``(vii) The extent to which the 
                        country--
                                    ``(I) applies transparent, 
                                nondiscriminatory, and 
                                competitive procedures in 
                                government procurement 
                                equivalent to those contained 
                                in the Agreement on Government 
                                Procurement described in 
                                section 101(d)(17) of the 
                                Uruguay Round Agreements Act; 
                                and
                                    ``(II) contributes to 
                                efforts in international fora 
                                to develop and implement 
                                international rules in 
                                transparency in government 
                                procurement.
                            ``(viii) The extent to which the 
                        country has taken steps to support the 
                        efforts of the United States to combat 
                        terrorism.
                    ``(C) NAFTA.--The term `NAFTA' means the 
                North American Free Trade Agreement entered 
                into between the United States, Mexico, and 
                Canada on December 17, 1992.
                    ``(D) WTO.--The term `WTO' has the meaning 
                given that term in section 2 of the Uruguay 
                Round Agreements Act (19 U.S.C. 3501).
                    ``(E) ATPDEA.--The term `ATPDEA' means the 
                Andean Trade Promotion and Drug Eradication 
                Act.
                    ``(F) FTAA.--The term `FTAA' means the Free 
                Trade Area for the Americas.''.
    (b) Determination Regarding Retention of Designation.--
Section 203(e)(1) of the Andean Trade Preference Act (19 U.S.C. 
3202(e)(1)) is amended--
            (1) by redesignating subparagraphs (A) and (B) as 
        clauses (i) and (ii), respectively;
            (2) by inserting ``(A)'' after ``(1)''; and
            (3) by adding at the end the following:
    ``(B) The President may, after the requirements of 
paragraph (2) have been met--
            ``(i) withdraw or suspend the designation of any 
        country as an ATPDEA beneficiary country, or
            ``(ii) withdraw, suspend, or limit the application 
        of preferential treatment under section 204(b)(1), (3), 
        or (4) to any article of any country,
if, after such designation, the President determines that, as a 
result of changed circumstances, the performance of such 
country is not satisfactory under the criteria set forth in 
section 204(b)(6)(B).''.
    (c) Conforming Amendments.--(1) Section 202 of the Andean 
Trade Preference Act (19 U.S.C. 3201) is amended by inserting 
``(or other preferential treatment)'' after ``treatment''.
    (2) Section 204(a) of the Andean Trade Preference Act (19 
U.S.C. 3203(a)) is amended--
            (A) in paragraph (1)--
                    (i) by inserting ``(or otherwise provided 
                for)'' after ``eligibility''; and
                    (ii) by inserting ``(or preferential 
                treatment)'' after ``duty-free treatment''; and
            (B) in paragraph (2), by striking ``subsection 
        (a)'' and inserting ``paragraph (1)''.
    (d) Petitions for Review.--
            (1) In general.--Not later than 180 days after the 
        date of the enactment of this Act, the President shall 
        promulgate regulations regarding the review of 
        eligibility of articles and countries under the Andean 
        Trade Preference Act, consistent with section 203(e) of 
        such Act, as amended by this title.
            (2) Content of regulations.--The regulations shall 
        be similar to the regulations regarding eligibility 
        under the generalized system of preferences under title 
        V of the Trade Act of 1974 with respect to the 
        timetable for reviews and content, and shall include 
        procedures for requesting withdrawal, suspension, or 
        limitations of preferential duty treatment under the 
        Andean Trade Preference Act, conducting reviews of such 
        requests, and implementing the results of the reviews.
    (e) Reporting Requirements.--Section 203(f) of the Andean 
Trade Preference Act (19 U.S.C. 3202(f)) is amended to read as 
follows:
    ``(f) Reporting Requirements.--
            ``(1) In general.--Not later than April 30, 2003, 
        and every 2 years thereafter during the period this 
        title is in effect, the United States Trade 
        Representative shall submit to the Congress a report 
        regarding the operation of this title, including--
                    ``(A) with respect to subsections (c) and 
                (d), the results of a general review of 
                beneficiary countries based on the 
                considerations described in such subsections; 
                and
                    ``(B) the performance of each beneficiary 
                country or ATPEA beneficiary country, as the 
                case may be, under the criteria set forth in 
                section 204(b)(6)(B).
            ``(2) Public comment.--Before submitting the report 
        described in paragraph (1), the United States Trade 
        Representative shall publish a notice in the Federal 
        Register requesting public comments on whether 
        beneficiary countries are meeting the criteria listed 
        in section 204(b)(6)(B).''.

SEC. 3104. TERMINATION.

    (a) In General.--Section 208 of the Andean Trade Preference 
Act (19 U.S.C. 3206) is amended to read as follows:

``SEC. 208. TERMINATION OF PREFERENTIAL TREATMENT.

    ``No duty-free treatment or other preferential treatment 
extended to beneficiary countries under this title shall remain 
in effect after December 31, 2006.''.
    (b) Retroactive Application for Certain Liquidations and 
Reliquidations.--
            (1) In general.--Notwithstanding section 514 of the 
        Tariff Act of 1930 or any other provision of law, and 
        subject to paragraph (3), the entry--
                    (A) of any article to which duty-free 
                treatment (or preferential treatment) under the 
                Andean Trade Preference Act (19 U.S.C. 3201 et 
                seq.) would have applied if the entry had been 
                made on December 4, 2001, and
                    (B) that was made after December 4, 2001, 
                and before the date of the enactment of this 
                Act,
        shall be liquidated or reliquidated as if such duty-
        free treatment (or preferential treatment) applied, and 
        the Secretary of the Treasury shall refund any duty 
        paid with respect to such entry.
            (2) Entry.--As used in this subsection, the term 
        ``entry'' includes a withdrawal from warehouse for 
        consumption.
            (3) Requests.--Liquidation or reliquidation may be 
        made under paragraph (1) with respect to an entry only 
        if a request therefor is filed with the Customs 
        Service, within 180 days after the date of the 
        enactment of this Act, that contains sufficient 
        information to enable the Customs Service--
                    (A) to locate the entry; or
                    (B) to reconstruct the entry if it cannot 
                be located.

SEC. 3105. REPORT ON FREE TRADE AGREEMENT WITH ISRAEL.

    (a) Report to Congress.--The United States Trade 
Representative shall review the implementation of the United 
States-Israel Free Trade Agreement and shall submit to the 
Speaker of the House of Representatives, the President of the 
Senate, the Committee on Ways and Means of the House of 
Representatives, and the Committee on Finance of the Senate a 
report on the results of such review.
    (b) Contents of Report.--The report under subsection (a) 
shall include the following:
            (1) A review of the terms of the United States-
        Israel Free Trade Agreement, particularly the terms 
        with respect to market access commitments.
            (2) A review of subsequent agreements which may 
        have been reached between the parties to the Agreement 
        and of unilateral concessions of additional benefits 
        received by each party from the other.
            (3) A review of any current negotiations between 
        the parties to the Agreement with respect to 
        implementation of the Agreement and other pertinent 
        matters.
            (4) An assessment of the degree of fulfillment of 
        obligations under the Agreement by the United States 
        and Israel.
            (5) An assessment of improvements in structuring 
        future trade agreements that should be considered based 
        on the experience of the United States under the 
        Agreement.
    (c) Timing of Report.--The United States Trade 
Representative shall submit the report under subsection (a) not 
later than 6 months after the date of the enactment of this 
Act.
    (d) Definition.--In this section, the terms ``United 
States-Israel Free Trade Agreement'' and ``Agreement'' means 
the Agreement on the Establishment of a Free Trade Area between 
the Government of the United States of America and the 
Government of Israel entered into on April 22, 1985.

SEC. 3106. MODIFICATION OF DUTY TREATMENT FOR TUNA.

    Subheading 1604.14.20 of the Harmonized Tariff Schedule of 
the United States is amended--
            (1) in the article description, by striking ``20 
        percent of the United States pack of canned tuna'' and 
        inserting ``4.8 percent of apparent United States 
        consumption of tuna in airtight containers''; and
            (2) by redesignating such subheading as subheading 
        1604.14.22.

SEC. 3107. TRADE BENEFITS UNDER THE CARIBBEAN BASIN ECONOMIC RECOVERY 
                    ACT.

    (a) In General.--Section 213(b)(2)(A) of the Carribean 
Basin Economic Recovery Act (19 U.S.C. 2703(b)(2)(A)) is 
amended as follows:
            (1) Clause (i) is amended--
                    (A) by striking the matter preceding 
                subclause (I) and inserting the following:
                            ``(i) Apparel articles assembled in 
                        one or more cbtpa beneficiary 
                        countries.--Apparel articles sewn or 
                        otherwise assembled in one or more 
                        CBTPA beneficiary countries from 
                        fabrics wholly formed and cut, or from 
                        components knit-to-shape, in the United 
                        States from yarns wholly formed in the 
                        United States, (including fabrics not 
                        formed from yarns, if such fabrics are 
                        classifiable under heading 5602 or 5603 
                        of the HTS and are wholly formed and 
                        cut in the United States) that are--''; 
                        and
                    (B) by adding at the end the following:
                        ``Apparel articles entered on or after 
                        September 1, 2002, shall qualify under 
                        the preceding sentence only if all 
                        dyeing, printing, and finishing of the 
                        fabrics from which the articles are 
                        assembled, if the fabrics are knit 
                        fabrics, is carried out in the United 
                        States. Apparel articles entered on or 
                        after September 1, 2002, shall qualify 
                        under the first sentence of this clause 
                        only if all dyeing, printing, and 
                        finishing of the fabrics from which the 
                        articles are assembled, if the fabrics 
                        are woven fabrics, is carried out in 
                        the United States.''.
            (2) Clause (ii) is amended to read as follows:
                            ``(ii) Other apparel articles 
                        assembled in one or more cbtpa 
                        beneficiary countries.--Apparel 
                        articles sewn or otherwise assembled in 
                        one or more CBTPA beneficiary countries 
                        with thread formed in the United States 
                        from fabrics wholly formed in the 
                        United States and cut in one or more 
                        CBTPA beneficiary countries from yarns 
                        wholly formed in the United States, or 
                        from components knit-to-shape in the 
                        United States from yarns wholly formed 
                        in the United States, or both 
                        (including fabrics not formed from 
                        yarns, if such fabrics are classifiable 
                        under heading 5602 or 5603 of the HTS 
                        and are wholly formed in the United 
                        States). Apparel articles entered on or 
                        after September 1, 2002, shall qualify 
                        under the preceding sentence only if 
                        all dyeing, printing, and finishing of 
                        the fabrics from which the articles are 
                        assembled, if the fabrics are knit 
                        fabrics, is carried out in the United 
                        States. Apparel articles entered on or 
                        after September 1, 2002, shall qualify 
                        under the first sentence of this clause 
                        only if all dyeing, printing, and 
                        finishing of the fabrics from which the 
                        articles are assembled, if the fabrics 
                        are woven fabrics, is carried out in 
                        the United States.''.
            (3) Clause (iii)(II) is amended to read as follows:
                            ``(II) The amount referred to in 
                        subclause (I) is as follows:
                                    ``(aa) 500,000,000 square 
                                meter equivalents during the 1-
                                year period beginning on 
                                October 1, 2002.
                                    ``(bb) 850,000,000 square 
                                meter equivalents during the 1-
                                year period beginning on 
                                October 1, 2003.
                                    ``(cc) 970,000,000 square 
                                meter equivalents in each 
                                succeeding 1-year period 
                                through September 30, 2008.''.
            (4) Clause (iii)(IV) is amended to read as follows:
                            ``(IV) The amount referred to in 
                        subclause (III) is as follows:
                                    ``(aa) 4,872,000 dozen 
                                during the 1-year period 
                                beginning on October 1, 2001.
                                    ``(bb) 9,000,000 dozen 
                                during the 1-year period 
                                beginning on October 1, 2002.
                                    ``(cc) 10,000,000 dozen 
                                during the 1-year period 
                                beginning on October 1, 2003.
                                    ``(dd) 12,000,000 dozen in 
                                each succeeding 1-year period 
                                through September 30, 2008.''.
            (5) Clause (iv) is amended to read as follows:
                            ``(iv) Certain other apparel 
                        articles.--
                                    ``(I) General rule.--
                                Subject to subclause (II), any 
                                apparel article classifiable 
                                under subheading 6212.10 of the 
                                HTS, except for articles 
                                entered under clause (i), (ii), 
                                (iii), (v), or (vi), if the 
                                article is both cut and sewn or 
                                otherwise assembled in the 
                                United States, or one or more 
                                CBTPA beneficiary countries, or 
                                both.
                                    ``(II) Limitation.--During 
                                the 1-year period beginning on 
                                October 1, 2001, and during 
                                each of the 6 succeeding 1-year 
                                periods, apparel articles 
                                described in subclause (I) of a 
                                producer or an entity 
                                controlling production shall be 
                                eligible for preferential 
                                treatment under subparagraph 
                                (B) only if the aggregate cost 
                                of fabrics (exclusive of all 
                                findings and trimmings) formed 
                                in the United States that are 
                                used in the production of all 
                                such articles of that producer 
                                or entity that are entered and 
                                eligible under this clause 
                                during the preceding 1-year 
                                period is at least 75 percent 
                                of the aggregate declared 
                                customs value of the fabric 
                                (exclusive of all findings and 
                                trimmings) contained in all 
                                such articles of that producer 
                                or entity that are entered and 
                                eligible under this clause 
                                during the preceding 1-year 
                                period.
                                    ``(III) Development of 
                                procedure to ensure 
                                compliance.--The United States 
                                Customs Service shall develop 
                                and implement methods and 
                                procedures to ensure ongoing 
                                compliance with the requirement 
                                set forth in subclause (II). If 
                                the Customs Service finds that 
                                a producer or an entity 
                                controlling production has not 
                                satisfied such requirement in a 
                                1-year period, then apparel 
                                articles described in subclause 
                                (I) of that producer or entity 
                                shall be ineligible for 
                                preferential treatment under 
                                subparagraph (B) during any 
                                succeeding 1-year period until 
                                the aggregate cost of fabrics 
                                (exclusive of all findings and 
                                trimmings) formed in the United 
                                States that are used in the 
                                production of such articles of 
                                that producer or entity entered 
                                during the preceding 1-year 
                                period is at least 85 percent 
                                of the aggregate declared 
                                customs value of the fabric 
                                (exclusive of all findings and 
                                trimmings) contained in all 
                                such articles of that producer 
                                or entity that are entered and 
                                eligible under this clause 
                                during the preceding 1-year 
                                period.''.
            (6) Clause (vii) is amended by adding at the end 
        the following new subclause:
                                    ``(V) Thread.--An article 
                                otherwise eligible for 
                                preferential treatment under 
                                this paragraph shall not be 
                                ineligible for such treatment 
                                because the thread used to 
                                assemble the article is dyed, 
                                printed, or finished in one or 
                                more CBTPA beneficiary 
                                countries.''.
            (7) Section 213(b)(2)(A) of such Act is further 
        amended by adding at the end the following new clause:
                            ``(ix) Apparel articles assembled 
                        in one or more cbtpa beneficiary 
                        countries from united states and cbtpa 
                        beneficiary country components.--
                        Apparel articles sewn or otherwise 
                        assembled in one or more CBTPA 
                        beneficiary countries with thread 
                        formed in the United States from 
                        components cut in the United States and 
                        in one or more CBTPA beneficiary 
                        countries from fabric wholly formed in 
                        the United States from yarns wholly 
                        formed in the United States, or from 
                        components knit-to-shape in the United 
                        States and one or more CBTPA 
                        beneficiary countries from yarns wholly 
                        formed in the United States, or both 
                        (including fabrics not formed from 
                        yarns, if such fabrics are classifiable 
                        under heading 5602 or 5603 of the HTS). 
                        Apparel articles shall qualify under 
                        this clause only if they meet the 
                        requirements of clause (i) or (ii) (as 
                        the case may be) with respect to 
                        dyeing, printing, and finishing of knit 
                        and woven fabrics from which the 
                        articles are assembled.''.
    (b) Effective Date of Certain Provisions.--The amendment 
made by subsection (a)(3) shall take effect on October 1, 2002.

SEC. 3108. TRADE BENEFITS UNDER THE AFRICAN GROWTH AND OPPORTUNITY ACT.

    (a) In General.--Section 112(b) of the African Growth and 
Opportunity Act (19 U.S.C. 3721(b)) is amended as follows:
            (1) Paragraph (1) is amended by amending the matter 
        preceding subparagraph (A) to read as follows:
            ``(1) Apparel articles assembled in one or more 
        beneficiary sub-saharan african countries.--Apparel 
        articles sewn or otherwise assembled in one or more 
        beneficiary sub-Saharan African countries from fabrics 
        wholly formed and cut, or from components knit-to-
        shape, in the United States from yarns wholly formed in 
        the United States, (including fabrics not formed from 
        yarns, if such fabrics are classifiable under heading 
        5602 or 5603 of the Harmonized Tariff Schedule of the 
        United States and are wholly formed and cut in the 
        United States) that are--''.
            (2) Paragraph (2) is amended to read as follows:
            ``(2) Other apparel articles assembled in one or 
        more beneficiary sub-saharan african countries.--
        Apparel articles sewn or otherwise assembled in one or 
        more beneficiary sub-Saharan African countries with 
        thread formed in the United States from fabrics wholly 
        formed in the United States and cut in one or more 
        beneficiary sub-Saharan African countries from yarns 
        wholly formed in the United States, or from components 
        knit-to-shape in the United States from yarns wholly 
        formed in the United States, or both (including fabrics 
        not formed from yarns, if such fabrics are classifiable 
        under heading 5602 or 5603 of the Harmonized Tariff 
        Schedule of the United States and are wholly formed in 
        the United States).''.
            (3) Paragraph (3) is amended--
                    (A) by amending the matter preceding 
                subparagraph (A) to read as follows:
            ``(3) Apparel articles from regional fabric or 
        yarns.--Apparel articles wholly assembled in one or 
        more beneficiary sub-Saharan African countries from 
        fabric wholly formed in one or more beneficiary sub-
        Saharan African countries from yarns originating either 
        in the United States or one or more beneficiary sub-
        Saharan African countries (including fabrics not formed 
        from yarns, if such fabrics are classified under 
        heading 5602 or 5603 of the Harmonized Tariff Schedule 
        of the United States and are wholly formed in one or 
        more beneficiary sub-Saharan African countries), or 
        from components knit-to-shape in one or more 
        beneficiary sub-Saharan African countries from yarns 
        originating either in the United States or one or more 
        beneficiary sub-Saharan African countries, or apparel 
        articles wholly formed on seamless knitting machines in 
        a beneficiary sub-Saharan African country from yarns 
        originating either in the United States or one or more 
        beneficiary sub-Saharan African countries, subject to 
        the following:''; and
                    (B) by amending subparagraph (B) to read as 
                follows:
                    ``(B) Special rule for lesser developed 
                countries.--
                            ``(i) In general.--Subject to 
                        subparagraph (A), preferential 
                        treatment under this paragraph shall be 
                        extended through September 30, 2004, 
                        for apparel articles wholly assembled, 
                        or knit-to-shape and wholly assembled, 
                        or both, in one or more lesser 
                        developed beneficiary sub-Saharan 
                        African countries regardless of the 
                        country of origin of the fabric or the 
                        yarn used to make such articles.
                            ``(ii) Lesser developed beneficiary 
                        sub-saharan african country.--For 
                        purposes of clause (i), the term 
                        `lesser developed beneficiary sub-
                        Saharan African country' means--
                                    ``(I) a beneficiary sub-
                                Saharan African country that 
                                had a per capita gross national 
                                product of less than $1,500 in 
                                1998, as measured by the 
                                International Bank for 
                                Reconstruction and Development;
                                    ``(II) Botswana; and
                                    ``(III) Namibia.''.
            (4) Paragraph (4)(B) is amended by striking 
        ``18.5'' and inserting ``21.5''.
            (5) Section 112(b) of such Act is further amended 
        by adding at the end the following new paragraph:
            ``(7) Apparel articles assembled in one or more 
        beneficiary sub-saharan african countries from united 
        states and beneficiary sub-saharan african country 
        components.--Apparel articles sewn or otherwise 
        assembled in one or more beneficiary sub-Saharan 
        African countries with thread formed in the United 
        States from components cut in the United States and one 
        or more beneficiary sub-Saharan African countries from 
        fabric wholly formed in the United States from yarns 
        wholly formed in the United States, or from components 
        knit-to-shape in the United States and one or more 
        beneficiary sub-Saharan African countries from yarns 
        wholly formed in the United States, or both (including 
        fabrics not formed from yarns, if such fabrics are 
        classifiable under heading 5602 or 5603 of the 
        Harmonized Tariff Schedule of the United States).''.
    (b) Increase in Limitation on Certain Benefits.--The 
applicable percentage under clause (ii) of section 112(b)(3)(A) 
of the African Growth and Opportunity Act (19 U.S.C. 
3721(b)(3)(A)) shall be increased--
            (1) by 2.17 percent for the 1-year period beginning 
        on October 1, 2002, and
            (2) by equal increments in each succeeding 1-year 
        period provided for in such clause, so that for the 1-
        year period beginning October 1, 2007, the applicable 
        percentage is increased by 3.5 percent,
except that such increase shall not apply with respect to 
articles eligible under subparagraph (B) of section 112(b)(3) 
of that Act.

     DIVISION D--EXTENSION OF CERTAIN PREFERENTIAL TRADE TREATMENT

       TITLE XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES

SEC. 4101. EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES.

    (a) Extension of Duty-Free Treatment Under System.--Section 
505 of the Trade Act of 1974 (19 U.S.C. 2465(a)) is amended by 
striking ``September 30, 2001'' and inserting ``December 31, 
2006''.
    (b) Retroactive Application for Certain Liquidations and 
Reliquidations.--
            (1) In general.--Notwithstanding section 514 of the 
        Tariff Act of 1930 or any other provision of law, and 
        subject to paragraph (2), the entry--
                    (A) of any article to which duty-free 
                treatment under title V of the Trade Act of 
                1974 would have applied if the entry had been 
                made on September 30, 2001,
                    (B) that was made after September 30, 2001, 
                and before the date of the enactment of this 
                Act, and
                    (C) to which duty-free treatment under 
                title V of that Act did not apply,
        shall be liquidated or reliquidated as free of duty, 
        and the Secretary of the Treasury shall refund any duty 
        paid with respect to such entry.
            (2) Requests.--Liquidation or reliquidation may be 
        made under paragraph (1) with respect to an entry only 
        if a request therefor is filed with the Customs 
        Service, within 180 days after the date of the 
        enactment of this Act, that contains sufficient 
        information to enable the Customs Service--
                    (A) to locate the entry; or
                    (B) to reconstruct the entry if it cannot 
                be located.
            (3) Definition.--As used in this subsection, the 
        term ``entry'' includes a withdrawal from warehouse for 
        consumption.

SEC. 4102. AMENDMENTS TO GENERALIZED SYSTEM OF PREFERENCES.

    (a) Eligibility for Generalized System of Preferences.--
Section 502(b)(2)(F) of the Trade Act of 1974 (19 U.S.C. 
2462(b)(2)(F)) is amended by striking the period at the end and 
inserting ``or such country has not taken steps to support the 
efforts of the United States to combat terrorism.''.
    (b) Definition of Internationally Recognized Worker 
Rights.--Section 507(4) of the Trade Act of 1974 (19 U.S.C. 
2467(4)) is amended by amending subparagraph (D) to read as 
follows:
                    ``(D) a minimum age for the employment of 
                children, and a prohibition on the worst forms 
                of child labor, as defined in paragraph (6); 
                and''.

                  DIVISION E--MISCELLANEOUS PROVISIONS

                 TITLE L--MISCELLANEOUS TRADE BENEFITS

                      Subtitle A--Wool Provisions

SEC. 5101. WOOL PROVISIONS.

    (a) Short Title.--This section may be cited as the ``Wool 
Manufacturer Payment Clarification and Technical Corrections 
Act''.
    (b) Clarification of Temporary Duty Suspension.--Heading 
9902.51.13 of the Harmonized Tariff Schedule of the United 
States is amended by inserting ``average'' before 
``diameters''.
    (c) Payments to Manufacturers of Certain Wool Products.--
            (1) Payments.--Section 505 of the Trade and 
        Development Act of 2000 (Public Law 106-200; 114 Stat. 
        303) is amended as follows:
                    (A) Subsection (a) is amended--
                            (i) by striking ``In each of the 
                        calendar years'' and inserting ``For 
                        each of the calendar years''; and
                            (ii) by striking ``for a refund of 
                        duties'' and all that follows through 
                        the end of the subsection and inserting 
                        ``for a payment equal to an amount 
                        determined pursuant to subsection 
                        (d)(1).''.
                    (B) Subsection (b) is amended to read as 
                follows:
    ``(b) Wool Yarn.--
            ``(1) Importing manufacturers.--For each of the 
        calendar years 2000, 2001, and 2002, a manufacturer of 
        worsted wool fabrics who imports wool yarn of the kind 
        described in heading 5107.10 or 9902.51.13 of the 
        Harmonized Tariff Schedule of the United States shall 
        be eligible for a payment equal to an amount determined 
        pursuant to subsection (d)(2).
            ``(2) Nonimporting manufacturers.--For each of the 
        calendar years 2001 and 2002, any other manufacturer of 
        worsted wool fabrics of imported wool yarn of the kind 
        described in heading 5107.10 or 9902.51.13 of the 
        Harmonized Tariff Schedule of the United States shall 
        be eligible for a payment equal to an amount determined 
        pursuant to subsection (d)(2).''.
                    (C) Subsection (c) is amended to read as 
                follows:
    ``(c) Wool Fiber and Wool Top.--
            ``(1) Importing manufacturers.--For each of the 
        calendar years 2000, 2001, and 2002, a manufacturer of 
        wool yarn or wool fabric who imports wool fiber or wool 
        top of the kind described in heading 5101.11, 5101.19, 
        5101.21, 5101.29, 5101.30, 5103.10, 5103.20, 5104.00, 
        5105.21, 5105.29, or 9902.51.14 of the Harmonized 
        Tariff Schedule of the United States shall be eligible 
        for a payment equal to an amount determined pursuant to 
        subsection (d)(3).
            ``(2) Nonimporting manufacturers.--For each of the 
        calendar years 2001 and 2002, any other manufacturer of 
        wool yarn or wool fabric of imported wool fiber or wool 
        top of the kind described in heading 5101.11, 5101.19, 
        5101.21, 5101.29, 5101.30, 5103.10, 5103.20, 5104.00, 
        5105.21, 5105.29, or 9902.51.14 of the Harmonized 
        Tariff Schedule of the United States shall be eligible 
        for a payment equal to an amount determined pursuant to 
        subsection (d)(3).''.
                    (D) Section 505 is further amended by 
                striking subsection (d) and inserting the 
                following new subsections:
    ``(d) Amount of Annual Payments to Manufacturers.--
            ``(1) Manufacturers of men's suits, etc. of 
        imported worsted wool fabrics.--
                    ``(A) Eligible to receive more than 
                $5,000.--Each annual payment to manufacturers 
                described in subsection (a) who, according to 
                the records of the Customs Service as of 
                September 11, 2001, are eligible to receive 
                more than $5,000 for each of the calendar years 
                2000, 2001, and 2002, shall be in an amount 
                equal to one-third of the amount determined by 
                multiplying $30,124,000 by a fraction--
                            ``(i) the numerator of which is the 
                        amount attributable to the duties paid 
                        on eligible wool products imported in 
                        calendar year 1999 by the manufacturer 
                        making the claim, and
                            ``(ii) the denominator of which is 
                        the total amount attributable to the 
                        duties paid on eligible wool products 
                        imported in calendar year 1999 by all 
                        the manufacturers described in 
                        subsection (a) who, according to the 
                        records of the Customs Service as of 
                        September 11, 2001, are eligible to 
                        receive more than $5,000 for each such 
                        calendar year under this section as it 
                        was in effect on that date.
                    ``(B) Eligible wool products.--For purposes 
                of subparagraph (A), the term `eligible wool 
                products' refers to imported worsted wool 
                fabrics described in subsection (a).
                    ``(C) Others.--All manufacturers described 
                in subsection (a), other than the manufacturers 
                to which subparagraph (A) applies, shall each 
                receive an annual payment in an amount equal to 
                one-third of the amount determined by dividing 
                $1,665,000 by the number of all such other 
                manufacturers.
            ``(2) Manufacturers of worsted wool fabrics of 
        imported wool yarn.--
                    ``(A) Importing manufacturers.--Each annual 
                payment to an importing manufacturer described 
                in subsection (b)(1) shall be in an amount 
                equal to one-third of the amount determined by 
                multiplying $2,202,000 by a fraction--
                            ``(i) the numerator of which is the 
                        amount attributable to the duties paid 
                        on eligible wool products imported in 
                        calendar year 1999 by the importing 
                        manufacturer making the claim, and
                            ``(ii) the denominator of which is 
                        the total amount attributable to the 
                        duties paid on eligible wool products 
                        imported in calendar year 1999 by all 
                        the importing manufacturers described 
                        in subsection (b)(1).
                    ``(B) Eligible wool products.--For purposes 
                of subparagraph (A), the term `eligible wool 
                products' refers to imported wool yarn 
                described in subsection (b)(1).
                    ``(C) Nonimporting manufacturers.--Each 
                annual payment to a nonimporting manufacturer 
                described in subsection (b)(2) shall be in an 
                amount equal to one-half of the amount 
                determined by multiplying $141,000 by a 
                fraction--
                            ``(i) the numerator of which is the 
                        amount attributable to the purchases of 
                        imported eligible wool products in 
                        calendar year 1999 by the nonimporting 
                        manufacturer making the claim, and
                            ``(ii) the denominator of which is 
                        the total amount attributable to the 
                        purchases of imported eligible wool 
                        products in calendar year 1999 by all 
                        the nonimporting manufacturers 
                        described in subsection (b)(2).
            ``(3) Manufacturers of wool yarn or wool fabric of 
        imported wool fiber or wool top.--
                    ``(A) Importing manufacturers.--Each annual 
                payment to an importing manufacturer described 
                in subsection (c)(1) shall be in an amount 
                equal to one-third of the amount determined by 
                multiplying $1,522,000 by a fraction--
                            ``(i) the numerator of which is the 
                        amount attributable to the duties paid 
                        on eligible wool products imported in 
                        calendar year 1999 by the importing 
                        manufacturer making the claim, and
                            ``(ii) the denominator of which is 
                        the total amount attributable to the 
                        duties paid on eligible wool products 
                        imported in calendar year 1999 by all 
                        the importing manufacturers described 
                        in subsection (c)(1).
                    ``(B) Eligible wool products.--For purposes 
                of subparagraph (A), the term `eligible wool 
                products' refers to imported wool fiber or wool 
                top described in subsection (c)(1).
                    ``(C) Nonimporting manufacturers.--Each 
                annual payment to a nonimporting manufacturer 
                described in subsection (c)(2) shall be in an 
                amount equal to one-half of the amount 
                determined by multiplying $597,000 by a 
                fraction--
                            ``(i) the numerator of which is the 
                        amount attributable to the purchases of 
                        imported eligible wool products in 
                        calendar year 1999 by the nonimporting 
                        manufacturer making the claim, and
                            ``(ii) the denominator of which is 
                        the amount attributable to the 
                        purchases of imported eligible wool 
                        products in calendar year 1999 by all 
                        the nonimporting manufacturers 
                        described in subsection (c)(2).
            ``(4) Letters of intent.--Except for the 
        nonimporting manufacturers described in subsections 
        (b)(2) and (c)(2) who may make claims under this 
        section by virtue of the enactment of the Wool 
        Manufacturer Payment Clarification and Technical 
        Corrections Act, only manufacturers who, according to 
        therecords of the Customs Service, filed with the 
Customs Service before September 11, 2001, letters of intent to 
establish eligibility to be claimants are eligible to make a claim for 
a payment under this section.
            ``(5) Amount attributable to purchases by 
        nonimporting manufacturers.--
                    ``(A) Amount attributable.--For purposes of 
                paragraphs (2)(C) and (3)(C), the amount 
                attributable to the purchases of imported 
                eligible wool products in calendar year 1999 by 
                a nonimporting manufacturer shall be the amount 
                the nonimporting manufacturer paid for eligible 
                wool products in calendar year 1999, as 
                evidenced by invoices. The nonimporting 
                manufacturer shall make such calculation and 
                submit the resulting amount to the Customs 
                Service, within 45 days after the date of 
                enactment of the Wool Manufacturer Payment 
                Clarification and Technical Corrections Act, in 
                a signed affidavit that attests that the 
                information contained therein is true and 
                accurate to the best of the affiant's belief 
                and knowledge. The nonimporting manufacturer 
                shall retain the records upon which the 
                calculation is based for a period of five years 
                beginning on the date the affidavit is 
                submitted to the Customs Service.
                    ``(B) Eligible wool product.--For purposes 
                of subparagraph (A)--
                            ``(i) the eligible wool product for 
                        nonimporting manufacturers of worsted 
                        wool fabrics is wool yarn of the kind 
                        described in heading 5107.10 or 
                        9902.51.13 of the Harmonized Tariff 
                        Schedule of the United States purchased 
                        in calendar year 1999; and
                            ``(ii) the eligible wool products 
                        for nonimporting manufacturers of wool 
                        yarn or wool fabric are wool fiber or 
                        wool top of the kind described in 
                        heading 5101.11, 5101.19, 5101.21, 
                        5101.29, 5101.30, 5103.10, 5103.20, 
                        5104.00, 5105.21, 5105.29, or 
                        9902.51.14 of such Schedule purchased 
                        in calendar year 1999.
            ``(6) Amount attributable to duties paid.--For 
        purposes of paragraphs (1), (2)(A), and (3)(A), the 
        amount attributable to the duties paid by a 
        manufacturer shall be the amount shown on the records 
        of the Customs Service as of September 11, 2001, under 
        this section as then in effect.
            ``(7) Schedule of payments; reallocations.--
                    ``(A) Schedule.--Of the payments described 
                in paragraphs (1), (2)(A), and (3)(A), the 
                Customs Service shall make the first and second 
                installments on or before the date that is 45 
                days after the date of enactment of the Wool 
                Manufacturer Payment Clarification and 
                Technical Corrections Act, and the third 
                installment on or before April 15, 2003. Of the 
                payments described in paragraphs (2)(C) and 
                (3)(C), the Customs Service shall make the 
                first installment on or before the date that is 
                120 days after the date of enactment of the 
                Wool Manufacturer Payment Clarification and 
                Technical Corrections Act, and the second 
                installment on or before April 15, 2003.
                    ``(B) Reallocations.--In the event that a 
                manufacturer that would have received payment 
                under subparagraph (A) or (C) of paragraph (1), 
                (2), or (3) ceases to be qualified for such 
                payment as such a manufacturer, the amounts 
                otherwise payable to the remaining 
                manufacturers under such subparagraph shall be 
                increased on a pro rata basis by the amount of 
                the payment such manufacturer would have 
                received.
            ``(8) Reference.--For purposes of paragraphs (1)(A) 
        and (6), the `records of the Customs Service as of 
        September 11, 2001' are the records of the Wool Duty 
        Unit of the Customs Service on September 11, 2001, as 
        adjusted by the Customs Service to the extent necessary 
        to carry out this section. The amounts so adjusted are 
        not subject to administrative or judicial review.
    ``(e) Affidavits by Manufacturers.--
            ``(1) Affidavit required.--A manufacturer may not 
        receive a payment under this section for calendar year 
        2000, 2001, or 2002, as the case may be, unless that 
        manufacturer has submitted to the Customs Service for 
        that calendar year a signed affidavit that attests 
        that, during that calendar year, the affiant was a 
        manufacturer in the United States described in 
        subsection (a), (b), or (c).
            ``(2) Timing.--An affidavit under paragraph (1) 
        shall be valid--
                    ``(A) in the case of a manufacturer 
                described in paragraph (1), (2)(A), or (3)(A) 
                of subsection (d) filing a claim for a payment 
                for calendar year 2000 or 2001, or both, only 
                if the affidavit is postmarked no later than 15 
                days after the date of enactment of the Wool 
                Manufacturer Payment Clarification and 
                Technical Corrections Act; and
                    ``(B) in the case of a claim for a payment 
                for calendar year 2002, only if the affidavit 
                is postmarked no later than March 1, 2003.
    ``(f) Offsets.--Notwithstanding any other provision of this 
section, any amount otherwise payable under subsection (d) to a 
manufacturer in calendar year 2001 and, where applicable, in 
calendar years 2002 and 2003, shall be reduced by the amount of 
any payment received by that manufacturer under this section 
before the enactment of the Wool Manufacturer Payment 
Clarification and Technical Corrections Act.
    ``(g) Definition.--For purposes of this section, the 
manufacturer is the party that owns--
            ``(1) imported worsted wool fabric, of the kind 
        described in heading 9902.51.11 or 9902.51.12 of the 
        Harmonized Tariff Schedule of the United States, at the 
        time the fabric is cut and sewn in the United States 
        into men's or boys' suits, suit-type jackets, or 
        trousers;
            ``(2) imported wool yarn, of the kind described in 
        heading 5107.01 or 9902.51.13 of such Schedule, atthe 
time the yarn is processed in the United States into worsted wool 
fabric; or
            ``(3) imported wool fiber or wool top, of the kind 
        described in heading 5101.11, 5101.19, 5101.21, 
        5101.29, 5101.30, 5103.10, 5103.20, 5104.00, 5105.21, 
        5105.29, or 9902.51.14 of such Schedule, at the time 
        the wool fiber or wool top is processed in the United 
        States into wool yarn.''.
            (2) Funding.--There is authorized to be 
        appropriated and is hereby appropriated, out of amounts 
        in the General Fund of the Treasury not otherwise 
        appropriated, $36,251,000 to carry out the amendments 
        made by paragraph (1).

SEC. 5102. DUTY SUSPENSION ON WOOL.

    (a) Extension of Temporary Duty Reductions.--
            (1) Heading 9902.51.11.-- Heading 9902.51.11 of the 
        Harmonized Tariff Schedule of the United States is 
        amended by striking ``2003'' and inserting ``2005''.
            (2) Heading 9902.51.12.-- Heading 9902.51.12 of the 
        Harmonized Tariff Schedule of the United States is 
        amended--
                    (A) by striking ``2003'' and inserting 
                ``2005''; and
                    (B) by striking ``6%'' and inserting 
                ``Free''.
            (3) Heading 9902.51.13.--Heading 9902.51.13 of the 
        Harmonized Tariff Schedule of the United States is 
        amended by striking ``2003'' and inserting ``2005''.
            (4) Heading 9902.51.14.--Heading 9902.51.14 of the 
        Harmonized Tariff Schedule of the United States is 
        amended by striking ``2003'' and inserting ``2005''.
    (b) Limitation on Quantity of Imports.--
            (1) Note 15.--U.S. Note 15 to subchapter II of 
        chapter 99 of the Harmonized Tariff Schedule of the 
        United States is amended--
                    (A) by striking ``from January 1 to 
                December 31 of each year, inclusive''; and
                    (B) by striking ``, or such other'' and 
                inserting the following: ``in calendar year 
                2001, 3,500,000 square meter equivalents in 
                calendar year 2002, and 4,500,000 square meter 
                equivalents in calendar year 2003 and each 
                calendar year thereafter, or such greater''.
            (2) Note 16.--U.S. Note 16 to subchapter II of 
        chapter 99 of the Harmonized Tariff Schedule of the 
        United States is amended--
                    (A) by striking ``from January 1 to 
                December 31 of each year, inclusive''; and
                    (B) by striking ``, or such other'' and 
                inserting the following: ``in calendar year 
                2001, 2,500,000 square meter equivalents in 
                calendar year 2002, and 3,500,000 square meter 
                equivalents in calendar year 2003 and each 
                calendar year thereafter, or such greater''.
    (c) Extension of Duty Refunds and Wool Research Trust 
Fund.--
            (1) In general.--The United States Customs Service 
        shall pay each manufacturer that receives a payment 
        under section 505 of the Trade and Development Act of 
        2000 (Public Law 106-200) for calendar year 2002, and 
        that provides an affidavit that it remains a 
        manufacturer in the United States as of January 1 of 
        the year of the payment, 2 additional payments, each 
        payment equal to the payment received for calendar year 
        2002 as follows:
                    (A) The first payment to be made after 
                January 1, 2004, but on or before April 15, 
                2004.
                    (B) The second payment to be made after 
                January 1, 2005, but on or before April 15, 
                2005.
            (2) Conforming amendment.--Section 506(f) of the 
        Trade and Development Act of 2000 (Public Law 106-200) 
        is amended by striking ``2004'' and inserting ``2006''.
            (3) Authorization.--There is authorized to be 
        appropriated and is hereby appropriated out of amounts 
        in the general fund of the Treasury not otherwise 
        appropriated such sums as are necessary to carry out 
        the provisions of this subsection.
    (d) Effective Date.--The amendment made by subsection 
(a)(2)(B) applies to goods entered, or withdrawn from warehouse 
for consumption, on or after January 1, 2002.

                      Subtitle B--Other Provisions

SEC. 5201. FUND FOR WTO DISPUTE SETTLEMENTS.

    (a) Establishment of Fund.--There is established in the 
Treasury a fund for the payment of settlements under this 
section.
    (b) Authority of USTR to Pay Settlements.--Amounts in the 
fund established under subsection (a) shall be available, as 
provided in appropriations Acts, only for the payment by the 
United States Trade Representative of the amount of the total 
or partial settlement of any dispute pursuant to proceedings 
under the auspices of the World Trade Organization, if--
            (1) in the case of a total or partial settlement in 
        an amount of not more than $10,000,000, the Trade 
        Representative certifies to the Secretary of the 
        Treasury that the settlement is in the best interests 
        of the United States; and
            (2) in the case of a total or partial settlement in 
        an amount of more than $10,000,000, the Trade 
        Representative certifies to the Congress that the 
        settlement is in the best interests of the United 
        States.
    (c) Appropriations.--There are authorized to be 
appropriated to the fund established under subsection (a)--
            (1) $50,000,000; and
            (2) amounts equivalent to amounts recovered by the 
        United States pursuant to the settlement of disputes 
        pursuant to proceedings under the auspices of the World 
        Trade Organization.

Amounts appropriated to the fund are authorized to remain 
available until expended.
    (d) Management of Fund.--Sections 9601 and 9602(b) of the 
Internal Revenue Code of 1986 shall apply to the fund 
established under subsection (a) to the same extent as such 
provisions apply to trust funds established under subchapter A 
of chapter 98 of such Code.

SEC. 5202. CERTAIN STEAM OR OTHER VAPOR GENERATING BOILERS USED IN 
                    NUCLEAR FACILITIES.

    (a) In General.--Subheading 9902.84.02 of the Harmonized 
Tariff Schedule of the United States is amended--
            (1) by striking ``4.9%'' and inserting ``Free''; 
        and
            (2) by striking ``12/31/2003'' and inserting ``12/
        31/2006''.
    (b) Effective Date.--
            (1) In general.--The amendments made by subsection 
        (a) shall apply to goods entered, or withdrawn from 
        warehouse for consumption, on or after January 1, 2002.
            (2) Retroactive application.--Notwithstanding 
        section 514 of the Tariff Act of 1930 or any other 
        provision of law, and subject to paragraph (4), the 
        entry of any article--
                    (A) that was made on or after January 1, 
                2002, and
                    (B) to which duty-free treatment would have 
                applied if the amendment made by this section 
                had been in effect on the date of such entry,
        shall be liquidated or reliquidated as if such duty-
        free treatment applied, and the Secretary of the 
        Treasury shall refund any duty paid with respect to 
        such entry.
            (3) Entry.--As used in this subsection, the term 
        ``entry'' includes a withdrawal from warehouse for 
        consumption.
            (4) Requests.--Liquidation or reliquidation may be 
        made under paragraph (2) with respect to an entry only 
        if a request therefor is filed with the Customs 
        Service, within 180 days after the date of the 
        enactment of this Act, that contains sufficient 
        information to enable the Customs Service--
                    (A) to locate the entry; or
                    (B) to reconstruct the entry if it cannot 
                be located.

SEC. 5203. SUGAR TARIFF-RATE QUOTA CIRCUMVENTION.

    (a) In General.--Chapter 17 of the Harmonized Tariff 
Schedule of the United States is amended in the superior text 
to subheading 1702.90.05 by striking ``Containing'' and all 
that follows through ``solids:'' and inserting the following:
        ``Containing soluble non-sugar solids (excluding any 
        foreign substances, including but not limited to 
        molasses, that may have been added to or developed in 
        the product) equal to 6 percent or less by weight of 
        the total soluble solids:''.
    (b) Monitoring for Circumvention.--The Secretary of 
Agriculture and the Commissioner of Customs shall continuously 
monitor imports of sugar and sugar-containing products provided 
for in chapters 17, 18, 19, and 21 of the Harmonized Tariff 
Schedule of the United States, other than molasses imported for 
use in animal feed or the production of rum and articles 
prepared for marketing to the ultimate consumer in the form and 
package in which imported, for indications that an article is 
being used to circumvent a tariff-rate quota provided for in 
those chapters. The Secretary and Commissioner shall 
specifically examine imports of articles provided for in 
subheading 1703.10.30 of the Harmonized Tariff Schedule of the 
United States.
    (c) Reports and Recommendations.--The Secretary and the 
Commissioner shall report their findings to Congress and the 
President not later than 180 days after the date of enactment 
of this Act and every 6 months thereafter. The reports shall 
include data and a description of developments and trends in 
the composition of trade of articles provided for in the 
chapters of the Harmonized Tariff Schedule of the United States 
identified in subsection (b) and any indications of 
circumvention that may exist. The reports shall also include 
recommendations for ending such circumvention, including 
recommendations for legislation.
    And the Senate agree to the same.

                From the Committee on Ways and Means, for 
                consideration of the House amendment and the 
                Senate amendment, and modifications committed 
                to conference:
                                   William Thomas,
                                   Phillip M. Crane,
                From the Committee on Education and the 
                Workforce, for consideration of sec. 603 of the 
                Senate amendment, and modifications committed 
                to conference:
                                   John Boehner,
                                   Sam Johnson,
                From the Committee on Energy and Commerce, for 
                consideration of sec. 603 of the Senate 
                amendment, and modifications committed to 
                conference:
                                   Billy Tauzin,
                                   Michael Bilirakis,
                From the Committee on Government Reform, for 
                consideration of sec. 344 of the House 
                amendment, and sec. 1143 of the Senate 
                amendment, and modifications committed to 
                conference:
                                   Dan Burton,
                                   Bob Barr,
                From the Committee on the Judiciary, for 
                consideration of secs. 111, 601, and 701 of the 
                Senate amendment, and modifications committed 
                to conference:
                                   F. James Sensenbrenner,
                                   Howard Coble,
                From the Committee on Rules, for consideration 
                of secs. 2103, 2105, and 2106 of the House 
                amendment and secs. 2103, 2105, and 2106 of the 
                Senate amendment, and modifications committed 
                to conference:
                                   David Dreier,
                                   John Linder,
                                 Managers on the Part of the House.

                                   Max Baucus,
                                   John Breaux,
                                   Chuck Grassley,
                                   Orrin Hatch,
                                Managers on the Part of the Senate.
       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

      The managers on the part of the House and the Senate at 
the conference on the disagreeing votes of the two Houses on 
the amendment of the Senate to the bill (H.R. 3009), to extend 
the Andean Trade Preference Act, to grant additional trade 
benefits under that Act, and for other purposes, submit the 
following joint statement to the House and the Senate in 
explanation of the effect of the action agreed upon by the 
managers and recommended in the accompanying conference report:
      The Senate amendment struck all of the House bill after 
the enacting clause and inserted a substitute text.
      The House recedes from its disagreement to the amendment 
of the Senate with an amendment that is a substitute for the 
House bill and the Senate amendment. The differences between 
the House bill, the Senate amendment, and the substitute agreed 
to in conference are noted below, except for clerical 
corrections, conforming changes made necessary by agreements 
reached by the conferees, and minor drafting and clerical 
changes.

                DIVISION A--TRADE ADJUSTMENT ASSISTANCE

                         SEC. 101--SHORT TITLE

Present law
      No provision.
House amendment
      Section 101 of H.R. 3009 provides that Division A of the 
Act may be cited as the ``Trade Adjustment Assistance Reform 
Act of 2002.''
Senate amendment
      Section 101 of H.R. 3009 provides that Division A of the 
Act may be cited as the ``Trade Adjustment Assistance Reform 
Act of 2002.''
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

              TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM

          Subtitle A--Trade Adjustment Assistance for Workers

  SEC. 111--REAUTHORIZATION OF THE TRADE ADJUSTMENT ASSISTANCE PROGRAM

Present law
      Current section 245 authorizes to be appropriated to the 
Department of Labor such sums as may be necessary to carry out 
the purposes of the TAA and NAFTA-TAA for workers programs for 
the period October 1, 1998 through September 30, 2001. Current 
section 285 provides for termination of all Trade Adjustment 
Assistance programs on September 30, 2001, but provides that 
workers, and firms eligible to receive benefits on or before 
that date shall continue to be eligible to receive such 
benefits as though the programs were in effect.
House amendment
    The House Amendment reauthorized the Trade Adjustment 
Assistance programs through September 30, 2004.
Senate amendment
      Section 111 of the Senate bill creates a new section 248 
of the Trade Act of 1974 which authorizes to be appropriated to 
the Department of Labor such sums as may be necessary to carry 
out the purposes of the Trade Adjustment Assistance for workers 
program for the period October 1, 2001, through September 30, 
2007. Section 701 of the Senate bill amends current section 285 
to provide for termination of all Trade Adjustment Assistance 
programs on September 30, 2007, but provides that workers, and 
firms, communities, farmers, and fishermen eligible to receive 
benefits on or before that date shall continue to be eligible 
to receive such benefits as though the programs were in effect.
Conference agreement
      Conferees agree to extend the authorization of the Trade 
Adjustment Assistance programs through September 30, 2007, and 
to consolidate the NAFTA-TAA program with the regular TAA 
program.

     SEC. 112--FILING OF PETITIONS AND PROVISION OF RAPID RESPONSE 
    ASSISTANCE; EXPEDITED REVIEW OF PETITIONS BY SECRETARY OF LABOR

Present law
      Current sections 221 and 250 set forth requirements 
concerning who may file a petition for certification of 
eligibility to apply for TAA and NAFTA-TAA assistance, 
respectively. Under both programs, petitions may be filed by a 
group of workers or by their certified or recognized union or 
other duly authorized representative. TAA petitions are filed 
with the Secretary of Labor. NAFTA-TAA petitions are filed with 
the Governor of the relevant State and forwarded by him to the 
Secretary of Labor. Under section 223, the Secretary of Labor 
must rule on eligibility within 60 days after a TAA petition is 
filed. Under section 250, the Governor must make a preliminary 
eligibility determination within 10 days after a NAFTA-TAA 
petition is filed, and the Secretary of Labor must make a final 
eligibility determination within the next 30 days. Section 221 
also sets forth notice and hearing obligations of the Secretary 
of Labor upon receipt of a TAA petition. Section 250 provides 
that, in the event of preliminary certification of eligibility 
to apply for NAFTA-TAA benefits, the Governor immediately 
provide the affected workers with certain rapid response 
services.
House amendment
      The House Amendment provided for a shortened period for 
the Secretary of Labor to consider petitions from 60 days to 40 
days and for other rapid response assistance toworkers.
Senate amendment
      Section 111 of the Senate bill creates a new section 231 
of the Trade Act of 1974, which consolidates the TAA and NAFTA-
TAA programs by establishing a single program with a single set 
of group eligibility criteria and a single set of procedures 
and standards for filing and reviewing petitions, certifying 
eligibility, and terminating certifications of eligibility.
      Section 231 expands the list of entities that may file a 
petition for group certification of eligibility to include 
employers, one-stop operators or one-stop partners, State 
employment agencies, and any entity to which notice of a plant 
closing or mass layoff must be given under section 3 of the 
Worker Adjustment and Retaining Notification Act. Section 231 
also provides that the President, or the Committee on Finance 
of the Senate or the Committee on Ways and Means of the House 
of Representatives (by resolution), may direct the Secretary of 
Labor to initiate a certification process under this chapter to 
determine the eligibility for Trade Adjustment Assistance of a 
group of workers.
      Section 231 creates a single process for filing and 
reviewing petitions for Trade Adjustment Assistance for 
workers, under which all petitions are filed with both the 
Secretary of Labor and the Governor of the State. Upon filing 
of the petition, the Governor is required to fulfill the 
requirements of any agreement entered into with the Department 
of Labor under section 222, to provide certain rapid response 
services, and to notify workers on whose behalf a petition has 
been filed of their potential eligibility for certain existing 
federal health care, child care, transportation, and other 
assistance programs. Upon filing the petition, the Secretary of 
Labor must make his certification determination within 40 days 
and provide the notice required.
Conference agreement
      The Senate recedes to the House with a change providing 
for simultaneous filing of petitions with the Secretary of 
Labor and State Governor.

                SEC. 113--GROUP ELIGIBILITY REQUIREMENTS

Present law
      Current law sections 222 and 250 of Title II of the Trade 
Act of 1974 set forth group eligibility criteria. Under TAA, 
the Secretary must certify a group of workers as eligible to 
apply for Trade Adjustment Assistance if he determines (1) that 
a significant number or proportion of the workers in such 
workers' firm have become or are threatened to become totally 
or partially separated; (2) sales or production of such firm 
have decreased absolutely; and (3) imports of articles like or 
directly competitive with articles produced by such workers' 
firm contributed importantly to the total or partial separation 
or threat thereof, and to the decline in sales or production. 
Under NAFTA-TAA, group eligibility may be based on the same 
criteria set forth in section 222, but section 250 also 
provides for NAFTA-TAA eligibility where there has been a shift 
in production by the workers' firm to Mexico or Canada of 
articles like or directly competitive with articles which are 
produced by the firm. Section 222 also includes special 
eligibility provisions with respect to oil and natural gas 
producers.
House amendment
      The House Amendment at Section 113 expanded the Trade 
Adjustment Assistance programs to secondary workers that are 
suppliers to firms that were certified and which satisfied 
certain conditions.
Senate amendment
      Section 111 of the Senate Amendment creates a new section 
231 under which the eligibility criteria are revised. First, 
workers are eligible for TAA if the value or volume of imports 
of articles like or directly competitive with articles produced 
by that firm have increased and the increase in the value or 
volume of imports contributed importantly to the workers' 
separation or threat of separation. Second, eligibility is 
extended to workers who are separated due to shifts in 
production to any country, rather than only when the shift in 
production is to Mexico or Canada. Third, eligibility is 
extended to adversely affected secondary workers. Eligible 
secondary workers include workers in supplier firms and, with 
respect to trade with NAFTA countries, downstream firms. 
Fourth, a new special eligibility provision is added with 
respect to taconite pellets.
Conference agreement
      The Conferees agree to extend coverage of Trade 
Adjustment Assistance to new categories of workers: (1) 
secondary workers that supply directly to another firm 
component parts for articles that were the basis for a 
certification of eligibility, (2) downstream workers that were 
affected by trade with Mexico or Canada, and (3) certain 
workers that have been laid off because their firm has shifted 
its production to another country that has a free trade 
agreement with the United States, that has a unilaterally 
preferential trading arrangement with the United States, or 
when there has been or is likely to be an increase in imports 
of the relevant articles.

  SEC. 114--QUALIFYING REQUIREMENTS FOR TRADE READJUSTMENT ALLOWANCES

Present law
      Current section 231 establishes qualifying requirements 
that must be met in orderfor an individual worker within a 
certified group to receive Trade Adjustment Assistance. In order to 
receive trade readjustment allowances, a certified worker must have 
been separated on or after the eligibility date established in the 
certification but within 2 years of the date of the certification 
determination; been employed for at least 26 of the 52 weeks preceding 
the separation at wages of $30 or more a week; be eligible for and have 
exhausted unemployment insurance benefits; not be disqualified for 
extended compensation payable under the Federal-State Extended 
Unemployment Compensation Act of 1970 by reason of the work acceptance 
and job search requirements in section 202(a)(3) of that Act; and be 
enrolled in a training program approved by the Secretary of Labor or 
have received a training waiver.
House amendment
      The House Amendment at Section 114 provided for 
requirements and deadlines for workers to enroll in training.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
235 which maintains the individual eligibility requirements in 
current law, with the exception of revisions to provisions 
governing bases for granting training waivers.
Conference agreement
      The Senate recedes to the House, with a change to adopt a 
training enrollment deadline of 16 weeks after separation.

               SEC. 115--WAIVERS OF TRAINING REQUIREMENTS

Present law
      Section 231 sets forth permissible bases for granting a 
training waiver. Pursuant to section 250(d), training waivers 
are not available in the NAFTA-TAA program.
House amendment
      The House Amendment provides that all workers who are 
eligible to apply for Trade Adjustment Assistance may be 
considered for training waivers and codifies several bases on 
which the Secretary may grant a waiver.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
235 which provides that all workers who are eligible to apply 
for Trade Adjustment Assistance may be considered for training 
waivers and codifies several bases on which the Secretary may 
grant a waiver.
Conference agreement
      The House receded to the Senate with a change to delete 
the Senate provision giving the Secretary discretion to grant 
waivers for ``other'' reasons.

  SEC. 116--AMENDMENTS TO LIMITATIONS ON TRADE READJUSTMENT ALLOWANCES

Present law
      Current section 233 provides that each certified worker 
may receive trade readjustment allowances for a maximum of 52 
weeks. Current law also provides that, in most circumstances, a 
worker is treated as participating in training during any week 
which is part of a break in training that does not exceed 14 
days.
House amendment
      Section 116 of the House Amendment would add 26 weeks of 
trade adjustment allowances for those workers who were in 
training and required the extension of benefits for the purpose 
of completing training.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
237 which increases the maximum time period during which a 
worker may receive trade adjustment allowances to 78 weeks, 
extends the permissible duration of a break in training to 30 
days, and provides for an additional 26 weeks of income support 
for workers requiring remedial education. Section 237 also 
clarifies that the requirement that a worker exhaust 
unemployment insurance benefits prior to receiving trade 
adjustment allowances does not apply to any extension of 
unemployment insurance by a State using its own funds that 
extends beyond either the 26 week period mandated by Federal 
law or any additional period provided for under the Federal-
State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 
3304 note).
Conference agreement
      The Senate recedes to the House.

         SEC. 117--ANNUAL TOTAL AMOUNT OF PAYMENTS FOR TRAINING

Present law
      Current section 236 establishes the terms and conditions 
under which training isavailable to eligible workers; permits 
the Secretary of Labor to approve certain specified types of training 
programs and to pay the costs of approved training and certain 
supplemental costs, including subsistence and transportation costs, for 
eligible workers; and caps total annual funding for training under the 
TAA for workers program at $80 million. Section 250 separately caps 
training expenditures under the NAFTA-TAA program at $30 million 
annually.
House amendment
      The House provided $30 million additional funds for the 
Trade Adjustment Assistance program. Combined with NAFTA Trade 
Adjustment Assistance, the total training funds available were 
$140 million.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
240 which sets the total funds available for training 
expenditures under the unified TAA for workers program to $300 
million annually.
Conference agreement
      Conferees agreed to a combined training cap of $220 
million for Trade Adjustment Assistance training.

             SEC. 118--PROVISION OF EMPLOYER-BASED TRAINING

Present law
      No applicable section.
House amendment
      The House Amendment included provisions related to 
employer based training including on-the-job training and 
customized training with partial reimbursements provided to the 
employer.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
240 which revises the list of training programs which the 
Secretary may approve to include customized training. It also 
adds a new section 237, which clarifies that the prohibition on 
payment of trade adjustment allowances to a worker receiving 
on-the-job training does not apply to a worker enrolled in a 
non-paid customized training program.
Conference agreement
      The Senate recedes to the House.

SEC. 119--COORDINATION WITH TITLE I OF THE WORKFORCE INVESTMENT ACT OF 
                                  1998

Present law
      No provision.
House amendment
      The House Amendment provided multiple provisions related 
to coordinating efforts under the Trade Adjustment Assistance 
programs to provide information and benefits to workers under 
the Workforce Investment Act.
Senate amendment
      No provision.
Conference agreement
      Conferees agreed to drop House language with the 
exception of a provision related to coordinating the delivery 
of Trade Adjustment Assistance benefits and information at one-
stop delivery systems under the Workforce Investment Act.

                      SEC. 120--EXPENDITURE PERIOD

Present law
      No provision.
House amendment
      The House amendment provided that certain funds obligated 
for any fiscal year to carry out activities may be expended by 
each State in the succeeding two fiscal years.
Senate amendment
      No provision.
Conference agreement
      The Senate recedes to the House.

                    SEC. 121--JOB SEARCH ALLOWANCES

Present law
      Under current section 237, when the Secretary of Labor 
determines that local employment is not available, an adversely 
affected worker certified eligible for TAA benefits may receive 
reimbursement of 90 percent of the cost of necessary job search 
expenses up to $800.
House amendment
      No provision.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
241 which raises the maximum reimbursement for job search 
expenses to $1,250 per worker.
Conference agreement
      The House recedes to the Senate.

                    SEC. 122--RELOCATION ALLOWANCES

Present law
      Under current section 238, when the Secretary of Labor 
determines that local employment is not available, an adversely 
affected worker certified eligible for TAA benefits may receive 
a relocation allowance consisting of (1) 90 percent of the 
reasonable and necessary expenses incurred in transporting a 
worker and his family, if any, and household effects, and (2) a 
lump sum equivalent to three times the worker's average weekly 
wage, up to a maximum payment of $800.
House amendment
      No provision.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
242 which raises the maximum lump sum portion of the relocation 
allowance to $1,250.
Conference agreement
      The House recedes to the Senate.

  SEC. 123--REPEAL OF NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE PROGRAM

Present law
      Current law authorizes a Trade Adjustment Assistance 
Program for workers affected by NAFTA trade.
House amendment
      No provision.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
231 which combines the TAA and NAFTA-TAA programs, establishing 
a single program with a single set of group eligibility 
criteria and a single set of procedures and standards for 
filing and reviewing petitions, certifying eligibility, and 
terminating certification of eligibility.
Conference agreement
      The House recedes to the Senate to the extent of 
repealing the NAFTA Trade Adjustment Assistance program and 
creating a single, unified TAA program for workers.

   SEC. 124--DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE ADJUSTMENT 
                      ASSISTANCE FOR OLDER WORKERS

Present law
      No provision.
House amendment
      No provision.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
243 which directs the Secretary of Labor, within one year of 
enactment, to establish a two-year wage insurance pilot program 
under which a State uses the funds provided to the State for 
Trade Adjustment allowances to pay to an adversely affected 
worker certified under section 231, for a period not to exceed 
two years, a wage subsidy of up to 50 percent of the difference 
between the wages received by the adversely affected worker 
from reemployment and the wages received by the adversely 
affected worker at the time of separation. An adversely 
affected worker may be eligible to receive a wage subsidy if 
the worker obtains reemployment not more than 26 weeks after 
the date of separation from the adversely affected employment, 
is at least 50 years of age, earns not more than $50,000 a year 
in wages from reemployment, is employed at least 30 hours a 
week in the reemployment, and does not return to the employment 
from which the worker was separated. The wage subsidy available 
to workers in the wage insurance program is 50 percent of the 
difference between the amount of the wages received by the 
worker from reemployment and the amount of the wages received 
by the worker at the time of separation, if the wages the 
worker receives from reemployment are less than $40,000 a year. 
The wage subsidy is 25 percent if the wages received by the 
worker from reemployment are greater than $40,000 a year but 
not more than $50,000 a year. Total payments made to an 
adversely affected worker under the wage insurance program may 
not exceed $5,000 in each year of the 2-year period. A worker 
participating in the wage insurance program is not eligible to 
receive any other Trade Adjustment Assistance benefits, unless 
the Secretary of Labor determines that the worker has shown 
circumstances that warrant eligibility for training benefits 
under section 240.
Conference agreement
      The Conferees agree to create a new alternative Trade 
Adjustment Assistance program for older workers.

          SEC. 125--DECLARATIONS OF POLICY; SENSE OF CONGRESS

Present law
      No provision.
House amendment
      The House passed amendment included a declaration of 
policy and Sense of the Congress related to the responsibility 
of the Secretary of Labor to provide information to workers 
related to benefits available to them under the TAA and other 
federal programs.
Senate amendment
      Although certain supportive services are available to 
dislocated workers under WIA, current law makes no express 
linkage between these services and Trade Adjustment Assistance 
and TAA certified workers may not be able to access them. 
Section 111 of the Senate Amendment adds a new section 243 
which provides that States may apply for and the Secretary of 
Labor may make available to adversely affected workers 
certified under the Trade Adjustment Assistance program 
supportive services available under WIA, including 
transportation, child care, and dependent care, that are 
necessary to enable a worker to participate in or complete 
training. Section 243 requires the Comptroller General to 
conduct a study of all assistance provided by the Federal 
Government for workers facing job loss and economic distress; 
to submit a report to the Committee on Finance of the Senate 
and the Committee on Ways and Means of the House of 
Representatives on the study within one year of enactment of 
this Act; and to distribute the report to all WIA one-stop 
partners. Section 243 further provides that each State may 
conduct a study of its assistance programs for workers facing 
job loss and economic distress. Each State is eligible for a 
grant from the Secretary of Labor, not to exceed $50,000, to 
enable it to conduct the study. In the event that a grant is 
awarded, the State must, within one year of receiving the 
grant, provide its report to the Committee on Finance and the 
Committee on Ways and Means and distribute its report to one-
stop partners in the State.
Conference agreement
      The Senate recedes to the House.

           Subtitle B--Trade Adjustment Assistance for Firms

    SEC. 131--REAUTHORIZATION OF TRADE ADJUSTMENT FOR FIRMS PROGRAM

Present law
      The Trade Adjustment Assistance for Firms program 
provides technical assistance to qualifying firms. Current 
Title II, Chapter 3, section 251 of the Trade Act of 1974 
provides that a firm is eligible to receive Trade Adjustment 
Assistance under this program if (1) a significant number or 
proportion of its workers have become or are threatened to 
become totally or partially separated; (2) sales or production, 
or both, have decreased absolutely; and (3) increases of 
imports of articles like or directly competitive with articles 
which are produced by such firms contributed importantly to the 
total or partial separations or threat thereof.
      The authorization for the Trade Adjustment Assistance for 
Firms program expired on September 30, 2001. The TAA for Firms 
program is currently subject to annual appropriations and is 
funded as part of the budget of the Economic Development 
Administration in the Department of Commerce.
House amendment
      The House passed amendment included a 2-year 
reauthorization for Trade Adjustment Assistance for Firms.
Senate amendment
      Section 201 of the Senate Amendment reauthorizes the 
Trade Adjustment Assistance for Firms program for fiscal years 
2002 through 2007; expands the definition of qualifying firms 
to cover shifts in production; and authorizes appropriations to 
the Department of Commerce in the amount of $16 million 
annually for fiscal years 2002 through 2007 to carry out the 
purposes of the Trade Adjustment Assistance for Firms program.
Conference agreement
      The House recedes to the Senate on the issue of providing 
a $16 million authorization for Trade Adjustment Assistance for 
Firms and reauthorizing the program through September 30, 2007.

    Subtitle C--Trade Adjustment Assistance for Farmers and Ranchers

           SEC. 141--TRADE ADJUSTMENT ASSISTANCE FOR FARMERS

Present law
      No provision.
House amendment
      No provision.
Senate amendment
      Section 401 of the Senate Amendment adds new sections 
292-298 of the Trade Act of 1974 which create a Trade 
Adjustment Assistance program for farmers and ranchers in the 
Department of Agriculture. Under this section, a group of 
agricultural commodity producers may petition the Secretary of 
Agriculture for Trade Adjustment Assistance. The Secretary must 
certify the group as eligible for Trade Adjustment Assistance 
for farmers if it is determined that the national average price 
in the most recent marketing year for the commodity produced by 
the group is less than 80 percent of the national average price 
in the preceding 5 marketing years and that increases in 
imports of that commodity contributed importantly to the 
decline in price.
Conference agreement
      The House recedes to the Senate with changes. The 
Conferees agree to include limitations on eligibility based 
upon adjusted gross income and counter-cyclical payment 
limitations set forth in the Food Security Act of 1985.

                    SEC. 142--CONFORMING AMENDMENTS

Present law
      No applicable section.
House amendment
      No provision.
Senate amendment
      The Senate Amendment makes conforming amendments to the 
Trade Act of 1974 concerning the TAA for Farmers program.
Conference agreement
      Conferees agree to make conforming amendments to the 
Trade Act of 1974.

          SEC. 143--TRADE ADJUSTMENT ASSISTANCE FOR FISHERMEN

Present law
      No provision.
House amendment
      No provision.
Senate amendment
      Section 502 of the Senate Amendment adds new sections 
299-299(G) which create a Trade Adjustment Assistance program 
for fishermen in the Department of Commerce. Under this 
program, a group of fishermen may petition the Secretary of 
Commerce for Trade Adjustment Assistance. The Secretary must 
certify the group as eligible for Trade Adjustment Assistance 
for fishermen if it is determined that the national average 
price in the most recent marketing year for the fish produced 
by the group is less than 80 percent of the national average 
price in the proceeding five marketing years and that increases 
in imports of that fish contributed importantly to the decline 
in price.
Conference agreement
      Conferees agree to drop Senate Amendment and authorize a 
study by the Department of Labor to investigate applying TAA to 
fisherman.

                       Subtitle D--Effective Date

                        SEC. 151--EFFECTIVE DATE

Present law
      No applicable provision.
House amendment
      No provision.
Senate amendment
      Section 801 of the Senate Amendment provides that except 
as otherwise specified, the amendments to the TAA program shall 
be effective 90 days after enactment of the Trade Act of 2002. 
The Senate Amendment includes transitional provisions governing 
the period between expiration of the prior authorizations of 
TAA for workers and firms and the effective date of the 
amendments/
Conference agreement
      The House recedes to the Senate.

  TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS

 SEC. 201(A) AND 202--CREDIT FOR HEALTH INSURANCE COSTS OF INDIVIDUALS 
RECEIVING A TRADE READJUSTMENT ALLOWANCE OR A BENEFIT FROM THE PENSION 
  BENEFIT GUARANTY CORPORATION; ADVANCE PAYMENT OF CREDIT FOR HEALTH 
                INSURANCE COSTS OF ELIGIBLE INDIVIDUALS

Present law
      Under present law, the tax treatment of health insurance 
expenses depends on the individual's circumstances. In general, 
employer contributions to an accident or health plan are 
excludable from an employee's gross income (sec. 106).
      Self-employed individuals are entitled to deduct a 
portion of the amount paid for health insurance expenses for 
the individual and his or her spouse and dependents. The 
percentage of deductible expenses is 70 percent in 2002 and 100 
percent in 2003 and thereafter.
      Individuals other than self-employed individuals who 
purchase their own health insurance and itemize deductions may 
deduct their expenses to the extent that their total medical 
expenses exceed 7.5 percent of adjusted gross income.
      Present law does not provide a tax credit for the 
purchase of health insurance.
      The health care continuation rules (commonly referred to 
as ``COBRA'' rules, after the Consolidated Omnibus Budget 
Reconciliation Act of 1985 in which they were enacted) require 
that employer-sponsored group health plans of employers with 20 
or more employees must offer certain covered employees and 
their dependents (``qualified beneficiaries'') the option of 
purchasing continued health coverage in the event of loss of 
coverage resulting from certain qualifying events. These 
qualifying events include: termination or reduction in hours of 
employment, death, divorce or legal separation, enrollment in 
Medicare, the bankruptcy of the employer, or the end of a 
child's dependency under a parent's health plan. In general, 
the maximum period of COBRA coverage is 18 months. An employer 
is permitted to charge qualified beneficiaries 102 percent of 
the applicable premium for COBRA coverage.
      Under present law, individuals without access to COBRA 
are able to purchase individual policies on a guaranteed issue 
basis without exclusion of coverage forpre-existing conditions 
if they had 18 months of creditable coverage under an employer 
sponsored group health plan, governmental plan, or a church plan. Those 
with access to COBRA are required to exhaust their 18 months of COBRA 
prior to obtaining a policy on a guaranteed issue basis without 
exclusion of coverage for pre-existing conditions.
House amendment
      The House bill provides a refundable tax credit for up to 
60 percent of the expenses of an eligible individual for 
qualified health insurance coverage of the eligible individual 
and his or her spouse or dependents. Eligible individuals are 
certain TAA eligible workers and PBGC pension beneficiaries. In 
the case of TAA eligible workers, no more than 12 months of 
coverage would be eligible for the credit. The amount of the 
credit would be phased out for taxpayers with modified adjusted 
gross income between $20,000 and $40,000 for single taxpayers 
($40,000 and $80,000 for married taxpayers filing a joint 
return). The credit would be available on an advance basis 
pursuant to a program to be established by the Secretary of the 
Treasury. Insurance that qualifies for the credit includes 
certain COBRA coverage and certain individual market options.
Senate amendment
      The Senate amendment provides a refundable credit for 70 
percent of qualified health insurance expenses. The credit is 
available with respect to certain TAA eligible workers. The 
credit is payable on an advance basis pursuant to a program to 
be established by the Secretary of the Treasury. Insurance that 
qualifies for the credit includes certain COBRA coverage, 
certain State-based options, and individual health insurance if 
certain requirements are satisfied.
Conference agreement
            Refundable health insurance credit: in general
      In the case of taxpayers who are eligible individuals, 
the conference agreement provides a refundable tax credit for 
65 percent of the taxpayer's expenses for qualified health 
insurance of the taxpayer and qualifying family members for 
each eligible coverage month beginning in the taxable year. The 
credit is available only with respect to amounts paid by the 
taxpayer.
      Qualifying family members are the taxpayer's spouse and 
any dependent of the taxpayer with respect to whom the taxpayer 
is entitled to claim a dependency exemption.\1\ Any individual 
who has other specified coverage is not a qualifying family 
member.
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    \1\ Present law allows the custodial parent to release the right to 
claim the dependency exemption for a child to the noncustodial parent. 
In addition, if certain requirements are met, the parents may decide by 
ageement that the noncustodial parent is entitled to the dependency 
exemption with respect to a child. In such cases, the provision would 
treat the child as the dependent of the custodial parent for purposes 
of the credit.
---------------------------------------------------------------------------
            Persons eligible for the credit
      Eligibility for the credit is determined on a monthly 
basis. In general, an eligible coverage month is any month if, 
as of the first day of the month, the taxpayer (1) is an 
eligible individual, (2) is covered by qualified health 
insurance, (3) does not have other specified coverage, and (4) 
is not imprisoned under Federal, State, or local authority. In 
the case of a joint return, the eligibility requirements are 
met if at least one spouse satisfies the requirements. An 
eligible month must begin more than 90 days after the date of 
enactment.
      An eligible individual is (1) an eligible TAA recipient, 
(2) an eligible alternative TAA recipient, and (3) an eligible 
PBGC pension recipient.
      An individual is an eligible TAA recipient during any 
month if the individual (1) is receiving for any day of such 
month a trade adjustment allowance \2\ or who would be eligible 
to receive such an allowance but for the requirement that the 
individual exhaust unemployment benefits before being eligible 
to receive an allowance and (2) with respect to such allowance, 
is covered under a certification issued under subchapter A or D 
of chapter 2 of title II of the Trade Act of 1974. An 
individual is treated as an eligible TAA recipient during the 
first month that such individual would otherwise cease to be an 
eligible TAA recipient.
---------------------------------------------------------------------------
    \2\ Part I of subchapter B, or subchapter D, of chapter 2 of title 
II of the Trade Act of 1974.
---------------------------------------------------------------------------
      An individual is an eligible alternative TAA recipient 
during any month if the individual (1) is a worker described in 
section 246(a)(3)(B) of the Trade Act of 1974 who is 
participating in the program established under section 
246(a)(1) of such Act, and (2) is receiving a benefit for such 
month under section 246(a)(2) of such Act. An individual is 
treated as an eligible alternative TAA recipient during the 
first month that such individual would otherwise cease to be an 
eligible TAA recipient.
      An individual is a PBGC pension recipient for any month 
if he or she (1) is age 55 or over as of the first day of the 
month, and (2) is receiving a benefit any portion of which is 
paid by the Pension Benefit Guaranty Corporation (PBGC).
      An otherwise eligible taxpayer is not eligible for the 
credit for a month if, as of the first day of the month the 
individual has other specified coverage. Specified coverage 
would be (1) coverage under any insurance which constitutes 
medical care (expect for insurance substantially all of the 
coverage of which is for excepted benefits) \3\ if at least 50 
percent of the cost of the coverage is paid by an employer \4\ 
(or former employer) of the individual or his or her spouse or 
(2) coverage under certain governmental health programs.\5\ A 
rule aggregating plans of the same employer applies in 
determining whether the employer pays at least 50 percent of 
the cost of coverage. A person is not an eligible individual if 
he or she may be claimed as a dependent on another person's tax 
return. A special rule applies with respect to alternative TAA 
recipients.
---------------------------------------------------------------------------
    \3\ Excepted benefits are: (1) coverage only for accident or 
disability income or any combination thereof, (2) coverage issued as a 
supplement to liability insurance; (3) liability insurance, including 
general liability insurance and automobile liability insurance; (4) 
worker's compensation or similar insurance; (5) automobile medical 
payment insurance; (6) credit-only insurance; (7) coverage for on-site 
medical clinics; (8) other insurance coverage similar to the coverages 
in (1)-(7) specified in regulations under which benefits for medical 
care are secondary or incidental to other insurance benefits; (9) 
limited scope dental or vision benefits; (10) benefits for long-term 
care, nursing home care, home health care, community-based care, or any 
combination thereof. and (11) other benefits similar to those in (9) 
and (10) as specified in regulations. (12) coverage only for a 
specified disease or illness; (13) hospital indemnity or other fixed 
indemnity insurance; and (14) Medicare supplemental insurance.
    \4\ An amount would be considered paid by the employer if it is 
excludable from income. Thus. for example, amounts paid for health 
coverage on a salary reduction basis under an employer plan are 
considered paid by the employer.
    \5\ Specifically, an individual would not be eligible for the 
credit if, as of the first day of the month, the individual is (1) 
entitled to benefits under Medicare Part A, enrolled in Medicare Part 
B, or enrolled in Medicaid or SCHIP, (2) enrolled in a health benefits 
plan under the Federal Employees Health Benefit Plan, or (3) entitled 
to receive benefits under chapter 55 of title 10 of the United States 
Code (relating to military personnel). An individual is not considered 
to be enrolled in Medicaid solely by reason of receiving immunizations.
---------------------------------------------------------------------------
            Qualified health insurance
      Qualified health insurance eligible for the credit is: 
(1) COBRA continuation coverage; (2) State based continuation 
coverage provided by the State under a State law that requires 
such coverage; (3) coverage offered through a qualified State 
high risk pool; (4) coverage under a health insurance program 
offered to State employees or a comparable program; (5) 
coverage through an arrangement entered into by the State and a 
group health plan, an issuer of health insurance coverage, an 
administrator, or an employer; (6) coverage offered through a 
State arrangement with a private sector health care coverage 
purchasing pool; (7) coverage under a State-operated health 
plan that does not receive any Federal financial participation; 
(8) coverage under a group health plan that is available 
through the employment of the eligible individual's spouse; and 
(9) coverage under individual health insurance if the eligible 
individual was covered under individual health insurance during 
the entire 30-day period that ends on the date the individual 
became separated from the employment which qualified the 
individual for the TAA allowance, the benefit for an eligible 
alternative TAA recipient, or a pension benefit from the PBGC, 
whichever applies.\6\
---------------------------------------------------------------------------
    \6\ For this purpose, ``individual health insurance'' means any 
insurance which constitutes medical care offered to individuals other 
than in connection with a group health plan. Such term does not include 
Federal- or State-based health insurance coverage.
---------------------------------------------------------------------------
      Qualified health insurance does not include any State-
based coverage (i.e., coverage described in (2)-(8) in the 
preceding paragraph), unless the State has elected to have such 
coverage treated as qualified health insurance and such 
coverage meets certain requirements. Such State coverage must 
provide that each qualifying individual is guaranteed 
enrollment if the individual pays the premium for enrollment or 
provides a qualified health insurance costs eligibility 
certificate and pays the remainder of the premium. In addition, 
the State-based coverage cannot impose any pre-existing 
condition limitation with respect to qualifying individuals. 
State-based coverage cannot require a qualifying individual to 
pay a premium or contribution that is greater than the premium 
or contribution for a similarly situated individual who is not 
a qualified individual. Finally, benefits under the State-based 
coverage must be the same as (or substantially similar to) 
benefits provided to similarly situated individuals who are not 
qualified individuals. A qualifying individual is an eligible 
individual who seeks to enroll in the State-based coverage and 
who has aggregate periods of creditable coverage \7\ of three 
months or longer, does not have other specified coverage, and 
who is not imprisoned. A qualifying individual also includes 
qualified family members of such an eligible individual.
---------------------------------------------------------------------------
    \7\ Creditable coverage is determined under the Health Care 
Portability and Accountability Act (Code sec. 9801 (c)).
---------------------------------------------------------------------------
      Qualified health insurance does not include coverage 
under a flexible spending or similar arrangement or any 
insurance if substantially all of the coverage is of excepted 
benefits.
            Other rules
      Amounts taken into account in determining the credit 
could not be taken into account in determining the amount 
allowable under the itemized deduction for medical expenses or 
the deduction for health insurance expenses of self-employed 
individuals. Amounts distributed from a medical savings account 
would not be eligible for the credit. The amount of the credit 
is reduced by any credit received on an advance basis. Married 
taxpayers filing separate returns are eligible for the credit; 
however, if both spouses are eligible individuals and the 
spouses file a separate return, then the spouse of the taxpayer 
is not a qualifying family member.
      The Secretary of the Treasury is authorized to prescribe 
such regulations and other guidance as may be necessary or 
appropriate to carry out the provision.
            Advance payment of refundable health insurance credit; 
                    reporting requirements
      The conference agreement provides for payment of the 
credit on an advance basis (i.e., prior to the filing of the 
taxpayer's return) pursuant to a program to be established by 
the Secretary of the Treasury no later than August 1, 2003. 
Such program is to provide for making payments on behalf of 
certified individuals to providers of qualified health 
insurance. In order to receive the credit on an advance basis, 
a qualified health insurance costs credit eligibility 
certificate would have to be in effect for the taxpayer. A 
qualified health insurance costs credit eligibility certificate 
is a written statement that an individual is an eligible 
individual for purposes of the credit, provides such 
information as the Secretary of the Treasury may require, and 
is provided by the Secretary of Labor or the PBGC (as 
appropriate) or such other person or entity designated by the 
Secretary.
      The conference report permits the disclosure of return 
information of certified individuals to providers of health 
insurance information to the extent necessary to carry out the 
advance payment mechanism.
      The conference report provides that any person who 
receives payments during a calendar year for qualified health 
insurance and claims a reimbursement for an advance credit 
amount is to file an information return with respect to each 
individual from whom such payments were received or for whom 
such a reimbursement is claimed. The return is to be in such 
form as the Secretary may prescribe and is to contain the name, 
address, and taxpayer identification number of the individual 
and any other individual on the same health insurance policy, 
the aggregate of the advance credit amounts provided, the 
number of months for which advance credit amounts are provided, 
and such other information as the Secretary may prescribe. The 
conference report requires that similar information be provided 
to the individual no later than January 31 of the year 
following the year for which the information return is made.

                             Effective Date

      The provision is generally effective with respect to 
taxable years beginning after December 31, 2001. The provision 
relating to the advance payment mechanism to be developed by 
the Secretary would be effective on the date of enactment.

                   TITLE III--CUSTOMS REAUTHORIZATION

               Subtitle A--United States Customs Service

  CHAPTER 1--DRUG ENFORCEMENT AND OTHER NONCOMMERCIAL AND COMMERCIAL 
                               OPERATIONS

                         SEC. 301--SHORT TITLE

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House provides 
that the Act may be cited as, the ``Customs Border Security Act 
of 2002.''
Senate amendment
      The Senate amendment is identical.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

SEC. 311--AUTHORIZATION OF APPROPRIATIONS FOR NONCOMMERCIAL OPERATIONS, 
         COMMERCIAL OPERATIONS, AND AIR AND MARINE INTERDICTION

Present law
      The statutory basis for authorization of appropriations 
for Customs is section 301 (b)(1) of the Customs Procedural and 
Simplification Act of 1978 (19 U.S.C. 2075(b)). That law, as 
amended by section 8102 of the Omnibus Budget Reconciliation 
Act of 1986 [P.L. 99-509], first outlined separate amounts for 
non-commercial and commercial operations for the salaries and 
expenses portion of the Customs authorization. Under 19 U.S.C. 
2075, Congress has adopted a two-year authorization process to 
provide Customs with guidance as it plans its budget, as well 
as guidance from the Committee for the appropriation process.
      The most recent authorization of appropriations for 
Customs (under section 101 of the Customs and Trade Act of 1990 
[P.L. 101-382]) provided $118,238,000 for salaries and expenses 
and $143,047,000 for air and marine interdiction program for FY 
1991, and $1,247,884,000 for salaries and expenses and 
$150,199,000 for air and marine interdiction program in FY 
1992.
House amendment
      This provision authorizes $1,365,456,000 for FY 2003 and 
$1,399,592,400 for FY 2004 for noncommercial operations of the 
Customs Service. It also authorizes $1,642,602,000 for FY 2003 
and $1,683,667,050 for FY 2004 for commercial operations of the 
Customs Service. Of the amounts authorized for commercial 
operations, $308,000,000 is authorized for the automated 
commercial environment computer system for each fiscal year. 
The provisions require that the Customs Service provide the 
Committee on Ways and Means and the Committee on Finance of the 
Senate with a report demonstrating that the computer system is 
being built in a cost-effective manner. In addition, the 
provisions authorizes $170,829,000 for FY 2003 and $175,099,725 
for FY 2004 for air and marine interdiction operations of the 
Customs Service. The provision requires submission of out-of-
year budget projections to the Ways and Means and Finance 
Committees.
Senate amendment
      This provision authorizes $886,513,000 for FY 2003 and 
$909,471,000 for FY 2004 for noncommercial operations of the 
Customs Service. It also authorizes $1,603,482,000 for FY 2003 
and $1,645,009,000 for FY 2004 for commercial operations of the 
Customs Service. Of the amounts authorized for commercial 
operations, $308,000,000 is authorized for the automated 
commercial environment computer system for each fiscal year. 
The provisions require that the Customs Service provide the 
Committee on Ways and Means and the Committee on Finance of the 
Senate with a report demonstrating that the computer system is 
being built in a cost-effective manner. In addition, the 
provisions authorizes $181,860,000 for FY 2003 and $186,570,000 
for FY 2004 for air and marine interdiction operations of the 
Customs Service. The provision requires submission of out-of-
year budget projections to the Ways and Means and Finance 
Committees.
Conference agreement
      The Senate recedes to House.

 SEC. 312--ANTITERRORIST AND ILLICIT NARCOTICS DETECTION EQUIPMENT FOR 
   THE UNITED STATES-MEXICO BORDER, UNITED STATES-CANADA BORDER, AND 
                  FLORIDA AND THE GULF COAST SEAPORTS

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
require that $90,244,000 of the FY 2003 appropriations be 
available until expended for acquisition and other expenses 
associated with implementation and deployment of terrorist and 
narcotics detection equipment along the United States-Mexico 
border, the United States-Canada border, and Florida and the 
Gulf seaports. The equipment would include vehicle and 
inspection systems. The provision would require that $9,000,000 
of the FY 2004 appropriations be used for maintenance of 
equipment described above. This section would also provide the 
Commissioner of Customs with flexibility in using these funds 
and would allow for the acquisition of new updated technology 
not anticipated when this bill was drafted. Nothing in the 
language of the bill is intended to prevent the Commissioner of 
Customs from dedicating resources to specific ports not 
identified in the bill.
      The equipment would include vehicle and container 
inspection systems, mobile truck x-rays, upgrades to fixed-site 
truck x-rays, pallet x-rays, busters, contraband detection 
kits, ultrasonic container inspection units, automated 
targeting systems, rapid tire deflator systems, portable 
Treasury Enforcement Communications Systems terminals, remote 
surveillance camera systems, weigh-in-motion sensors, vehicle 
counters, spotter camera systems, inbound commercial truck 
transponders, narcotics vapor and particle detectors, and 
license plate reader automatic targeting software.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

        SEC. 313--COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
require Customs to measure specifically the effectiveness of 
the resources dedicated in sections 312 as part of its annual 
performance plan.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

    Subtitle B--Child Cyber-Smuggling Center of the Customs Service

SEC. 321--AUTHORIZATION OF APPROPRIATIONS FOR PROGRAM TO PREVENT CHILD 
                 PORNOGRAPHY/CHILD SEXUAL EXPLOITATION

Present law
      Customs enforcement responsibilities include enforcement 
of U.S. laws to prevent border trafficking relating to child 
pornography, intellectual property rights violations, money 
laundering, and illegal arms. Funding for these activities has 
been included in the Customs general account.
House amendment
      H.R. 3009 as amended and passed by the House would 
authorize $10 million for Customs to carry out its program to 
combat on-line child sex predators. Of that amount, $375,000 
would be dedicated to the National Center for Missing Children 
for the operation of its child pornography cyber tipline.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

                  CHAPTER 2--MISCELLANEOUS PROVISIONS

  SEC. 331--ADDITIONAL CUSTOMS SERVICE OFFICERS FOR U.S.-CANADA BORDER

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House earmarks $25 
million and 285 new staff hires for Customs to use at the U.S.-
Canada border.
Senate amendment
      The Senate amendment is the same as the House Amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

   SEC. 332--STUDY AND REPORT RELATING TO PERSONNEL PRACTICES OF THE 
                            CUSTOMS SERVICE

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House requires 
Customs to conduct a study of current personnel practices 
including: performance standards; the effect and impact of the 
collective bargaining process on Customs drug interdiction 
efforts; and a comparison of duty rotations policies of Customs 
and other federal agencies employing similarly situated 
personnel.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

    SEC. 333--STUDY AND REPORT RELATING TO ACCOUNTING AND AUDITING 
                   PROCEDURES OF THE CUSTOMS SERVICE

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
require Customs to conduct a study to ensure that appropriate 
training is being provided to personnel who are responsible for 
financial auditing of importers. Customs would specifically 
report on how its audit personnel protect the privacy and trade 
secrets of importers.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

 SEC. 334--ESTABLISHMENT AND IMPLEMENTATION OF COST ACCOUNTING SYSTEM; 
                                REPORTS

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
mandate the imposition of a cost accounting system in order for 
Customs to effectively explain its expenditures. Such a system 
would provide compliance with the core financial system 
requirements of the Joint Financial Management Improvement 
Program (JFMIP), which is a joint and cooperative undertaking 
of the U.S. Department of the Treasury, the General Accounting 
Office, the Office of Management and Budget, and the Office of 
Personnel Management working in cooperation with each other and 
other agencies to improve financial management practices in 
government. That Program has statutory authorization in the 
Budget and Accounting Procedures Act of 1950 (31 U.S.C. 65).
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

   SEC. 335--STUDY AND REPORT RELATING TO TIMELINESS OF PROSPECTIVE 
                                RULINGS

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
require the Comptroller General to prepare a report to 
determine whether Customs has improved its timeliness in 
providing prospective rulings.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

        SEC. 336--STUDY AND REPORT RELATING TO CUSTOMS USER FEES

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
require the Comptroller General to prepare a confidential 
report to determine whether current user fees are appropriately 
set at a level commensurate with the service provided for the 
fee. The Comptroller General is authorized to recommend the 
appropriate level for customs user fees.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

  SEC. 337--FEES FOR CUSTOMS INSPECTIONS AT EXPRESS COURIER FACILITIES

Present law
      Current law provides for direct reimbursement by courier 
facilities of expenses incurred by Customs conducting 
inspections at those facilities.
House amendment
      H.R. 3009 as amended and passed by the House would 
establish a per item fee of sixty-six cents to cover Customs 
expenses. This amount could be lowered to more than thirty-five 
cents or raised to no more than $1.00 by the Secretary of the 
Treasury after a rulemaking process to reevaluate the expenses 
incurred by Customs in providing inspectional services.
Senate amendment
      No provision.
Conference agreement
      The Senate recedes to the House.

             SEC. 338--NATIONAL CUSTOMS AUTOMATION PROGRAM

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
empower the Secretary to require the electronic submission of 
any information required to be submitted to the Customs 
Service.
Senate amendment
      No provision.
Conference agreement
      The Senate recedes to the House.

     SEC. 339--AUTHORIZATION OF APPROPRIATIONS FOR CUSTOMS STAFFING

Present law
      No applicable section.
House amendment
      No provision.
Senate amendment
      The Senate Amendment authorizes the appropriation to the 
Department of the Treasury such sums as may be necessary to 
increase the annual pay of journeyman Customs inspectors and 
Canine Enforcement Officers who have completed at least one 
year of service and are being paid at a GS-9 level, from GS-9 
to GS-11. The Senate provision also authorizes an increase in 
pay of support staff.
Conference agreement
      The House recedes to the Senate.

                  CHAPTER 4--ANTITERRORISM PROVISIONS

     SEC. 341--IMMUNITY FOR CUSTOMS OFFICERS THAT ACT IN GOOD FAITH

Present law
      Currently, Customs officers are entitled to qualified 
immunity in civil suits brought by persons, who were searched 
upon arrival in the United States. Qualified immunity protects 
officers from liability if they can establish that their 
actions did not violate any clearly established constitutional 
or statutory rights.
House amendment
      H.R. 3009 as amended and passed by the House would 
protect Customs officers by providing them immunity from 
lawsuits stemming from personal searches of people entering the 
country so long as the officers conduct the searches in good 
faith.
Senate amendment
      No provision.
Conference agreement
      Senate recedes to the House, but conferees qualify the 
provision by adding that the means used to effectuate such 
searches must be reasonable. To be covered by this immunity 
provision, inspectors must follow Customs Service inspection 
rules including the rule against profiling against race, 
religions, or ethnic background.

SEC. 342--EMERGENCY ADJUSTMENTS TO OFFICES, PORTS OF ENTRY, OR STAFFING 
                         OF THE CUSTOMS SERVICE

Present law
      Present law places numerous restrictions on and, in some 
instances, precludes the Secretary of the Treasury or Customs 
from making any adjustments to ports and staff. 19 U.S.C. 1318 
requires a Presidential proclamation of an emergency and 
authorization to the Secretary of the Treasury only to extend 
the time for performance of legally required acts during an 
emergency. No other emergency powers statute for Customs 
exists.
House amendment
      H.R. 3009 as amended and passed by the House would permit 
the Secretary of the Treasury, if the President declares a 
national emergency or if necessary to address specific threats 
to human life or national interests, to eliminate, consolidate, 
or relocate Customs ports and offices and to alter staffing 
levels, services rendered and hours of operations at those 
locations. In addition, the amendment would permit the 
Commissioner of Customs, when necessary to address threats to 
human life or national interests, to close temporarily any 
Customs office or port or take any other lesser action 
necessary to respond to the specific threat. The Secretary or 
the Commissioner would be required to notify Congress of any 
action taken under this proposal within 72 hours.
Senate amendment
      The Senate amendment is the same as the House Amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

SEC. 343 AND 343A--MANDATORY ADVANCED ELECTRONIC INFORMATION FOR CARGO 
            AND PASSENGERS; SECURE SYSTEMS OF TRANSPORTATION

Present law
      Currently, commercial carriers bringing passengers or 
cargo into or out of the country have no obligation to provide 
Customs with such information in advance.
House amendment
      H.R. 3009 as amended and passed by the House would 
require every air, land, or water-based commercial carrier to 
file an electronic manifest describing all passengers with 
Customs before entering or leaving the country. There is a 
similar requirement for cargo entering the country. Specific 
information required in the advanced manifest system would be 
developed by Treasury in regulations.
Senate amendment
      The Senate Amendment is similar to the House Amendment. 
However, with respect to cargo, the Senate Amendment applies to 
out-bound as well as in-bound shipments.
Conference agreement
      The conferees agree to direct the Secretary of the 
Treasury to promulgate regulations pertaining to the electronic 
transmission to the Customs Service of information relevant to 
aviation, maritime, and surface transportation safety and 
security prior to a cargo carrier's arrival in or departure 
from the United States. The agreement sets forth parameters for 
the Secretary to follow in developing these regulations. For 
example, the parameters require that the regulations be 
flexible with respect to the commercial and operational aspects 
of different modes of transportation. They also require that, 
in general, the Customs Service seek information from parties 
most likely to have direct knowledge of the information at 
issue. The conferees also agree to amendment of the Tariff Act 
of 1930 to establish requirements concerning proper 
documentation of ocean-bound cargo prior to a vessel's 
departure. Finally, the conferees agree to direct the Secretary 
of the Treasury to establish a task force to evaluate, 
prototype and certify secure systems of transportation.

 SEC. 344--BORDER SEARCH AUTHORITY FOR CERTAIN CONTRABAND IN OUTBOUND 
                                  MAIL

Present law
      Although Customs currently searches all inbound mail, and 
although it searches outbound mail sent via private carriers, 
outbound mail carried by the Postal Service is not subject to 
search.
House amendment
      H.R. 3009 as amended and passed by the House would enable 
Customs officers to search outbound U.S. mail for unreported 
monetary instruments, weapons of mass destruction, firearms, 
and other contraband used by terrorists. However, reading of 
mail would not be authorized absent Customs officers obtaining 
a search warrant or consent.
Senate amendment
      The Senate Amendment is the same as the House Amendment 
with respect to mail weighing in excess of 16 ounces. However, 
under the Senate Amendment, the Customs Service would be 
required to obtain a warrant in order to search mail weighing 
16 ounces or less. The Senate Amendment also requires the 
Secretary of State to determine whether it is consistent with 
international law and U.S. treaty obligations for the Customs 
Service to search mail transiting the United States between two 
foreign countries. The Customs Service would be authorized to 
search such mail only after the Secretary of State determined 
that such measures are consistent with international law and 
U.S. treaty obligations.
Conference agreement
      The House recedes to the Senate.

   SEC. 345--AUTHORIZATION OF APPROPRIATIONS FOR REESTABLISHMENT OF 
                  CUSTOMS OPERATIONS IN NEW YORK CITY

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House authorizes 
funds to reestablish those operations.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

              CHAPTER 5--TEXTILE TRANSSHIPMENT PROVISIONS

  SEC. 351--GAO AUDIT OF TEXTILE TRANSSHIPMENT MONITORING BY CUSTOMS 
                                SERVICE

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would direct 
the Comptroller General to conduct an audit of the systems at 
the Customs Service to monitor and enforce textile 
transshipment. The Comptroller General would report on 
recommendations for improvements.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

  SEC. 352--AUTHORIZATION OF APPROPRIATIONS FOR TEXTILE TRANSSHIPMENT 
                         ENFORCEMENT OPERATIONS

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
authorize $9,500,000 for FY 2002 to the Customs Service for the 
purpose of enhancing its textile transshipment enforcement 
operations. This amount would be in addition to Customs 
Service's base authorization and the authorization to 
reestablish the destroyed textile monitoring and enforcement 
operations at the World Trade Center.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The Senate recedes to the House, but the text is 
clarified to provide that personnel will also conduct education 
and outreach in addition to enforcement.

   SEC. 353--IMPLEMENTATION OF THE AFRICAN GROWTH AND OPPORTUNITY ACT

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
earmark approximately $1.3 million within Customs' budget for 
selected activities related to providing technical assistance 
to help sub-Saharan African countries develop and implement 
effective visa and anti-transshipment systems as required by 
the African Growth and Opportunity Act (title I of Public Law 
106-200).
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

      Subtitle B--Office of the United States Trade Representative

               SEC. 361--AUTHORIZATION OF APPROPRIATIONS

Present law
      The statutory authority for budget authorization for the 
Office of the United States Trade Representative is section 
141(g)(1) of the Trade Act of 1974 (19 U.S.C. 2171(g)(1)). The 
most recent authorization of appropriations for USTR was under 
section 101 of the Customs and Trade Act of 1990 [P.L. 101-
382]. Under 19 U.S.C. 2171, Congress has adopted a two-year 
authorization process to provide USTR with guidance as it plans 
its budget as well as guidance from the Committee for the 
appropriation process.
House amendment
      H.R. 3009 as amended and passed by the House authorizes 
$32,300,000 for FY 2003 and $31,108,000 for FY 2004. The 
provision requires submission of out-of-year budget projections 
to the Ways and Means and Finance Committees. In light of the 
substantial increase in trade negotiation work to be conducted 
by USTR and the associated need for consultations with 
Congress, this provision would authorize the addition of two 
individuals to assist the office of Congressional Affairs.
Senate amendment
      The Senate amendment authorizes $30,000,000 for FY 2003 
and $31,000,000 for FY 2004.
Conference agreement
      The Senate recedes to the House.

        Subtitle C--United States International Trade Commission

               SEC. 371--AUTHORIZATION OF APPROPRIATIONS

Present law
      The statutory authority for budget authorization for the 
International Trade Commission is section 330(e)(2)(A) of the 
Tariff Act of 1930 (19 U.S.C. 1330(e)(2)(A)). The most recent 
authorization of appropriations for the ITC was under section 
101 of the Customs and Trade Act of 1990 [P.L. 101-382]. Under 
19 U.S.C. 1330, Congress has adopted a two-year authorization 
process to provide the ITC with guidance as it plans its budget 
as well as guidance from the Committees for the appropriation 
process.
House amendment
      H.R. 3009 as amended and passed by the House authorizes 
$54,000,000 for FY 2003 and $57,240,000 for FY 2004. The 
provision requires submission of out-of-year budget projections 
to the Ways and Means and Finance Committees.
Senate amendment
      The Senate amendment authorizes $51,400,000 for FY 2003 
and $53,400,000 for FY 2004.
Conference agreement
      The Senate recedes to the House.

                   Subtitle D--Other Trade Provisions

  SEC. 381. INCREASE IN AGGREGATE VALUE OF ARTICLES EXEMPT FROM DUTY 
               ACQUIRED ABROAD BY UNITED STATES RESIDENTS

Present law
      The Harmonized Tariff Schedule at subheading 9804.00.65 
currently provides a $400 duty exemption for travelers 
returning from abroad.
House amendment
      H.R. 3009 as amended and passed by the House would 
increased the current $400 duty exemption to $800.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

                 SEC. 382--REGULATORY AUDIT PROCEDURES

Present law
      Section 509 of the Tariff Act of 1930 (19 U.S.C. 1509) 
provides the authority for Customs to audit persons making 
entry of merchandise into the U.S. In the course of such audit, 
Customs auditors may identify discrepancies, including 
underpayments of duties. However, if there also are 
overpayments, there is no requirement that such overpayments be 
offset against the underpayments if the underlying entry has 
been liquidated.
House amendment
      H.R. 3009 as amended and passed by the House would 
require that when conducting an audit, Customs must recognize 
and offset overpayments and overdeclarations of duties, 
quantities and values against underpayments and 
underdeclarations. As an example, if during an audit Customs 
finds that an importer has underpaid duties associated with one 
entry of merchandise by $100 but has also overpaid duties from 
another entry of merchandise by $25, then any assessment by 
Customs must be the difference of $75.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

                  SEC. 383--PAYMENT OF DUTIES AND FEES

Present law
      Current law at 19 U.S.C. 1505 provides for the collection 
of duties by the Secretary through regulatory process.
House amendment
      H.R. 3009 as amended and passed by the House would 
require duties to be paid within 10 working days without 
extension. The bill also provides for the Customs Service to 
create a monthly billing system upon the building of the 
Automated Commercial Environment.
Senate amendment
      No provision.
Conference agreement
      Senate recedes to the House.

            DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY

                  TITLE XXI--TRADE PROMOTION AUTHORITY

                  SEC. 2101--SHORT TITLE AND FINDINGS

Present law
      No provision.
House amendment
      The short title of the bill is the ``Bipartisan Trade 
Promotion Authority Act of 2001.'' Section 2101 of the House 
amendment to H.R. 3009 states that Congress finds the expansion 
of international trade is vital to U.S. national security and 
economic growth, as well as U.S. leadership. Section 2101 also 
states that the recent pattern of decisions by dispute 
settlement panels and the Appellate Body of the World Trade 
Organization to impose obligations and restrictions on the use 
of antidumping and countervailing measures by WTO members has 
raised concerns, and Congress is concerned that such bodies 
appropriately apply the standard of review contained in Article 
17.6 of the Antidumping Agreement, to provide deference to a 
permissible interpretation by a WTO member and to the 
evaluation by a member of the facts where that evaluation is 
unbiased and objective and the establishment of the facts is 
proper.
Senate amendment
      The short title of the bill is the ``Bipartisan Trade 
Promotion Authority Act of 2002.'' Section 2101 of the Senate 
amendment to H.R. 3009 states that Congress finds the expansion 
of international trade is vital to U.S. national security and 
economic growth, as well as U.S. leadership. Section 2101 also 
states that support for continued trade expansion requires that 
dispute settlement procedures under international trade 
agreements not add to or diminish the rights and obligations 
provided in such agreements. It goes on to note a troubling 
pattern of cases before WTO dispute settlement panels and the 
WTO Appellate Body that do precisely that.
Conference agreement
      The Senate recedes to the House with modifications. With 
respect to the findings, the Conferees believe that, as stated 
in section 2101(b) of the Conference agreement, support for 
continued trade expansion requires that dispute settlement 
procedures under international trade agreements not add to or 
diminish the rights and obligations provided in such 
agreements. Therefore, the recent pattern of decisions by 
dispute settlement panels and the WTO Appellate Body to impose 
obligations and restrictions on the use of antidumping, 
countervailing and safeguard measures by WTO members has raised 
concerns, and Congress is concerned that such bodies 
appropriately apply the standard of review contained in Article 
17.6 of the Antidumping Agreement, to provide deference to a 
permissible interpretation by a WTO member and to the 
evaluation by a member of the facts where that evaluation is 
unbiased and objective and the establishment of the facts is 
proper.

                SEC. 2102--TRADE NEGOTIATING OBJECTIVES

Present/expired law
      Section 1101(a) of the Omnibus Trade and Competitiveness 
Act of 1988 (the 1988 Act) set forth overall negotiating 
objectives for concluding trade agreements. These objectives 
were to obtain more open, equitable, and reciprocal market 
access, the reduction or elimination of barriers and other 
trade-distorting policies and practices, and a more effective 
system of international trading disciplines and procedures. 
Section 1102(b) set forth the following principal trade 
negotiating objectives: dispute settlement, transparency, 
developing countries, current account surpluses, trade and 
monetary coordination, agriculture, unfair trade practices, 
trade in services, intellectual property, foreign direct 
investment, safeguards, specific barriers, worker rights, 
access to high technology, and border taxes.
House amendment
      Section 2102 of the House amendment to H.R. 3009 would 
establish the following overall negotiating objectives: 
obtaining more open, equitable, and reciprocal market access; 
obtaining the reduction or elimination of barriers and other 
trade-distorting policies and practices; further strengthening 
the system of international trading disciplines and procedures, 
including dispute settlement; fostering economic growth and 
full employment in the U.S. and the global economy; ensuring 
that trade and environmental policies are mutually supportive 
and seeking to protect and preserve the environment and enhance 
the international means of doing so, while optimizing the use 
of the world's resources; promoting respect for worker rights 
and the rights of children consistent with International Labor 
Organization core labor standards, as defined in the bill; and 
seeking provisions in trade agreements under which parties 
strive to ensure that they do not weaken or reduce the 
protections afforded in domestic environmental and labor laws 
as an encouragement to trade.
      In addition, section 2102 would establish the principal 
trade negotiating objectives for concluding trade agreements, 
as follows:
      Trade barriers and distortions: expanding competitive 
market opportunities for U.S. exports and obtaining fairer and 
more open conditions of trade by reducing or eliminating tariff 
and nontariff barriers and policies and practices of foreign 
governments directly related to trade that decrease market 
opportunities for U.S. exports and distort U.S. trade; and 
obtaining reciprocal tariff and nontariff barrier elimination 
agreements, with particular attention to products covered in 
section 111(b) of the Uruguay Round Agreements Act.
      Services: to reduce or eliminate barriers to 
international trade in services, including regulatory and other 
barriers, that deny national treatment or unreasonably restrict 
the establishment or operations of services suppliers.
      Foreign investment: to reduce or eliminate artificial or 
trade-distorting barriers to trade-related foreign investment 
and, recognizing that U.S. law on the whole provides a high 
level of protection for investment, consistent with or greater 
than the level required by international law, to secure for 
investors important rights comparable to those that would be 
available under U.S. legal principles and practice, by:
            Reducing or eliminating exceptions to the principle 
        of national treatment;
            Freeing the transfer of funds relating to 
        investments;
            Reducing or eliminating performance requirements, 
        forced technology transfers, and other unreasonable 
        barriers to the establishment and operation of 
        investments;
            Seeking to establish standards for expropriation 
        and compensation for expropriation, consistent with 
        United States legal principles and practice;
            Providing meaningful procedures for resolving 
        investment disputes including between an investor and a 
        government;
            Seeking to improve mechanisms used to resolve 
        disputes between an investor and a government through 
        mechanisms to eliminate frivolous claims and procedures 
        to ensure the efficient selection of arbitrators and 
        the expeditious disposition of claims;
            Providing an appellate or similar review mechanism 
        to correct manifestly erroneous interpretations of law; 
        and
            Ensuring the fullest measure of transparency in 
        investment disputes by
                    Ensuring that all requests for dispute 
                settlement and all proceedings, submissions, 
                findings, and decisions are promptly made 
                public;
                    All hearings are open to the public; and
                    Establishing a mechanism for acceptance of 
                amicus curiae submissions.
      Intellectual property: including promoting adequate and 
effective protection of intellectual property rights through 
ensuring accelerated and full implementation of the Agreement 
on Trade-Related Aspects of Intellectual Property Rights, 
including strong enforcement;
            Providing stronger protection for new and emerging 
        technologies and new methods of transmitting and 
        distributing products embodying intellectual property; 
        and
            Ensuring that standards of protection and 
        enforcement keep pace with technological developments, 
        and in particular ensuring that tight holders have the 
        legal and technological means to control the use of 
        their works through the internet and other global 
        communication media.
      Transparency: to increase public access to information 
regarding trade issues as well as the activities of 
international trade institutions; to increase openness in 
international trade fora, including the WTO, by increasing 
public access to appropriate meetings, proceedings, and 
submissions, including with regard to dispute settlement and 
investment; and to increase timely public access to 
notifications made by WTO member states and the supporting 
documents.
      Anti-corruption: to obtain high standards and appropriate 
enforcement mechanisms applicable to persons from all countries 
participating in a trade agreement that prohibit attempts to 
influence acts, decisions, or omissions of foreign government; 
and to ensure that such standards do not place U.S. persons at 
a competitive disadvantage in international trade.
      Improvement of the WTO and multilateral trade agreements: 
to achieve full implementation and extend the coverage of the 
WTO and such agreements to products, sectors, and conditions of 
trade not adequately covered; and to expand country 
participation in and enhancement of the Information Technology 
Agreement (ITA) and other trade agreements.
      Regulatory practices: to achieve increased transparency 
and opportunity for the participation of affected parties in 
the development of regulations; to require that proposed 
regulations be based on sound science, cost-benefit analysis, 
risk assessment, or other objective evidence; to establish 
consultative mechanisms among parties to trade agreements to 
promote increased transparency in developing guidelines, rules, 
regulations, and laws for government procurement and other 
regulatory regimes; and to achieve the elimination of 
government measures such as price controls and reference 
pricing which deny full market access for United States 
products.
      Electronic commerce: to ensure that current obligations, 
rules, disciplines, and commitments under the WTO apply to 
electronic commerce; to ensure that electronically delivered 
goods and services receive no less favorable treatment under 
trade rules and commitments than like products delivered in 
physical form; and the classification of such goods and 
services ensures the most liberal trade treatment possible; to 
ensure that governments refrain from implementing trade-related 
measures that impede electronic commerce; where legitimate 
policy objectives require domestic regulations that affect 
electronic commerce, to obtain commitments that any such 
regulations are the least restrictive on trade, 
nondiscriminatory, and transparent, and promote an open market 
environment; and to extend the moratorium of the WTO on duties 
on electronic transmissions.
      Agriculture: to ensure that the U.S. trade negotiators 
duly recognize the importance of agricultural issues; to obtain 
competitive market opportunities for U.S. exports in foreign 
markets substantially equivalent to the competitive 
opportunities afforded foreign exports in U.S. markets and to 
achieve fairer and more open conditions of trade; to reduce or 
eliminate trade distorting subsidies; to impose disciplines on 
the operations of state-trading enterprises or similar 
administrative mechanisms; to eliminate unjustified 
restrictions on products derived from biotechnology; to 
eliminate sanitary or phytosanitary restrictions that 
contravene the Uruguay Round Agreement as they are not based on 
scientific principles and to improve import relief mechanisms 
to accommodate the unique aspects of perishable and cyclical 
agriculture.
      Labor and the environment: to ensure that a party does 
not fail to effectively enforce its environmental or labor 
laws, through a sustained or recurring course of action or 
inaction, in a manner affecting trade between the United States 
and that party; to recognize that a party to a trade agreement 
is effectively enforcing its laws if a course of inaction or 
inaction reflects a reasonable exercise of discretion or 
results from a bona fide decision regarding allocation of 
resources and no retaliation may be authorized based on the 
exercise of these rights or the right to establish domestic 
labor standards and levels of environmental protection; to 
strengthen the capacity of U.S. trading partners to promote 
respect for core labor standards and to protect the environment 
through the promotion of sustainable development; to reduce or 
eliminate government practices or policies that unduly threaten 
sustainable development; to seek market access for U.S. 
environmental technologies, goods, and services; and to ensure 
that labor, environmental, health, or safety policies and 
practices of parties to trade agreements do not arbitrarily or 
unjustifiably discriminate against U.S. exports or serve as 
disguised barriers to trade.
      Dispute settlement and enforcement: to seek provisions in 
trade agreements providing for resolution of disputes between 
governments in an effective, timely, transparent, equitable, 
and reasoned manner requiring determinations based on facts and 
the principles of the agreement, with the goal of increasing 
compliance; seek to strengthen the capacity of the WTO Trade 
Policy Review Mechanism to review compliance; seek provisions 
encouraging the early identification and settlement of disputes 
through consultations; seek provisions encouraging trade-
expanding compensation; seek provisions to impose a penalty 
that encourages compliance, is appropriate to the parties, 
nature, subject matter, and scope of the violation, and has the 
aim of not adversely affecting parties or interests not party 
to the dispute while maintaining the effectiveness of the 
enforcement mechanism; and seek provisions that treat U.S. 
principal negotiating objectives equally with respect to 
ability to resort to dispute settlement and availability of 
equivalent procedures and remedies.
      Extended WTO negotiations: concerning extended WTO 
negotiations on financial services, civil aircraft, and rules 
of origin.
Senate amendment
      The Senate Amendment is substantially similar to the 
House Amendment, with the exception of several key provisions:
      Small Business: The Senate Amendment contains an overall 
negotiating objective ``to ensure that trade agreements afford 
small businesses equal access to international markets, 
equitable trade benefits, expanded export market opportunities, 
and provide for the reduction or elimination of trade barriers 
that disproportionately impact small businesses.''
      Trade in Motor Vehicles and Parts: The Senate Amendment 
contains a principal negotiating objective on expanding 
competitive opportunities for exports of U.S. motor vehicles 
and parts.
      Foreign Investment: The Senate Amendment states as an 
objective of the United States in the context of investor-state 
dispute settlement ``ensuring that foreign investors in the 
United States are not accorded greater rights than United 
States investors in the United States.'' The Senate Amendment's 
objective with respect to investor-state dispute settlement 
also differs from the House Amendment in the following 
respects:
            It sets as an objective ``seeking to establish 
        standards for fair and equitable treatment consistent 
        with United States legal principles and practice, 
        including the principle of due process.''
            It sets deterrence of the filing of frivolous 
        claims as an objective, in addition to the prompt 
        elimination of frivolous claims.
            The Senate Amendment seeks to establish 
        ``procedures to enhance opportunities for public input 
        into the formulation of government positions.''
            The Senate Amendment seeks to establish a single 
        appellate body to review decisions by arbitration 
        panels in investor-state dispute settlement cases. 
        Also, unlike the House Amendment, the Senate Amendment 
        does not prescribe a standard of review for an eventual 
        appellate body.
      Intellectual Property: The Senate Amendment contains an 
objective to respect the ``Declaration on the TRIPS Agreement 
and Public Health, adopted by the World Trade Organization at 
the Fourth Ministerial Conference at Doha, Qatar on November 
14, 2001.''
      Trade in Agriculture: The Senate Amendment's negotiating 
objective on export subsidies differs from the House Amendment, 
stating that an objective of the United States is ``seeking to 
eliminate all export subsidies on agricultural commodities 
while maintaining bona fide food aid and preserving U.S. 
agriculture development and export credit programs that allow 
the U.S. to compete with other foreign export promotion 
efforts.'' The Senate Amendment also provides that it is a 
negotiating objective of the United States to ``strive to 
complete a general multilateral round in the WTO by January 1, 
2005, and seek the broadest market access possible in 
multilateral, regional, and bilateral negotiations, recognizing 
the effect that simultaneous sets of negotiations may have on 
US import-sensitive commodities (including those subject to 
tariff-rate quotas).''
      Human Rights and Democracy: The Senate Amendment contains 
a negotiating objective ``to obtain provisions in trade 
agreements that require parties to those agreements to strive 
to protect internationally recognized civil, political, and 
human rights.''
      Dispute Settlement: The Senate Amendment contains a 
negotiating objective absent in the House Amendment ``to seek 
improved adherence by panels convened under the WTO 
Understanding on Rules and Procedures Governing the Settlement 
of Disputes and by the WTO Appellate Body to the standard of 
review applicable under the WTO Agreement involved in the 
dispute, including greater deference, where appropriate, to the 
fact finding and technical expertise of national investigating 
authorities.''
      Border Taxes: The Senate Amendment contains an objective 
absent from the House Amendment on border taxes. The objective 
seeks ``to obtain a revision of the WTO rules with respect to 
the treatment of border adjustments for internal taxes to 
redress the disadvantage to countries relying primarily on 
direct taxes for revenue rather than indirect taxes.'' The 
objective is addressed to a decision by the WTO Dispute 
Settlement Body holding the foreign sales corporation 
provisions of the Internal Revenue Code to be inconsistent with 
WTO rules.
      Textiles: The Senate Amendment contains an extensive 
objective on opening foreign markets to U.S. textile exports. 
There is no similar provision in the House Amendment.
      Worst Forms of Child Labor: The Senate Amendment contains 
a negotiating objective to prevent distortions in the conduct 
of international trade caused by the use of the worst forms of 
child labor and to redress unfair and illegitimate competition 
based upon the use of the worst forms of child labor.
Conference agreement
      The Senate recedes to the House with several 
modifications. With respect to the overall negotiating 
objectives, the Conferees agree to the overall negotiating 
objective regarding small business in section 2101(a)(8) of the 
Senate amendment. Second, theConferees agree to an overall 
negotiating objective to promote universal compliance with ILO 
Declaration 182 concerning the worst forms of child labor.
      With respect to the principal negotiating objectives, the 
Conferees agree to expand the negotiating objective on 
intellectual property to respect the Declaration on the TRIPS 
Agreement and Public Health, adopted by the WTO at Doha 
(section 2102(b)(4)(c) of the Senate amendment).
      With respect to the principal negotiating objectives 
regarding foreign investment, the Conferees believe that it is 
a priority for negotiators to seek agreements protecting the 
rights of U.S. investors abroad and ensuring the existence of a 
neutral investor-state dispute settlement mechanism. At the 
same time, these protections must be balanced so that they do 
not come at the expense of making Federal, State and local laws 
and regulations more vulnerable to successful challenges by 
foreign investors than by similarly situated U.S. investors.
      No Greater Rights: The House recedes to the Senate with a 
technical modification to clarify that foreign investors in the 
United States are not accorded greater substantive rights with 
respect to investment protections than United States investors 
in the United States. That is, the reciprocal obligations 
regarding investment protections that the United States 
undertakes in pursuing its goals should not result in foreign 
investors being entitled to compensation for government actions 
where a similarly situated U.S. investor would not be entitled 
to any form of relief, while ensuring that U.S. investors 
abroad can challenge host government measures which violate the 
terms of the investment agreement. Thus, this language 
expresses Congress' direction that the substantive investment 
protections (e.g., expropriation, fair and equitable treatment, 
and full protection and security) should be consistent with 
United States legal principles and practice and not provide 
greater rights to foreign investors in the United States.
      This language applies to substantive protections only and 
is not applicable to procedural issues, such as access to 
investor-state dispute settlement. The Conferees recognize that 
the procedures for resolving disputes between a foreign 
investor and a government may differ from the procedures for 
resolving disputes between a domestic investor and a government 
and may be available at different times during the dispute. 
Thus, the ``no greater rights'' direction does not, for 
instance, apply to such issues as the dismissal of frivolous 
claims, the exhaustion of remedies, access to appellate 
procedures, or other similar issues.
      The Conferees also agree that negotiators should seek to 
provide for an appellate body or similar mechanism to provide 
coherence to the interpretations of investment provisions in 
trade agreements.
      With respect to the principal negotiating objective on 
agriculture, the Conferees agree to section 2102(b)(10)(A)(iii) 
and (xv) of the House amendment, in lieu of section 
2102(b)(10)(A)(iii) of the Senate amendment. The Conferees also 
accept section 2102(b)(10)(A)(xvi) of the Senate amendment on 
the timing and sequence of WTO agriculture negotiations 
relative to other negotiations.
      The Conferees agree to section 2102(b)(13)(C) of the 
Senate amendment, relating to dispute settlement in dumping, 
subsidy, and safeguard cases, as modified, to seek adherence by 
WTO panels to the applicable standard of review.
      The Conferees recognize the importance of preserving the 
ability of the United States to enforce rigorously its trade 
remedy laws, including the antidumping, countervailing duty and 
safeguard laws. Because this issue is significant to many 
Members of Congress in both the House and Senate, the Conferees 
have made this priority a principal negotiating objective. 
Negotiators must also avoid agreements that lessen the 
effectiveness of domestic and international disciplines on 
unfair trade, as well as domestic and international safeguard 
provisions. In addition, section 2102(b)(14)(B) directs the 
President to address and remedy market distortions that lead to 
dumping and subsidization, including overcapacity, 
cartelization, and market-access barriers.
      The Conferees agree to section 2012(b)(14) of the Senate 
amendment stating that the United States should seek a revision 
of WTO rules on the treatment of border adjustments for 
internal taxes to redress the disadvantage to countries relying 
primarily on direct taxes for revenue rather than indirect 
taxes. The Conferees agree that such a revision of WTO rules is 
one among other options for the United States, including 
domestic legislation, to redress such a disadvantage.
      The Conferees agree to include as a principal negotiating 
objective to obtain competitive market opportunities for U.S. 
exports of textiles substantially equivalent to those for 
foreign textiles in the United States.
      The Conferees agree to a principal negotiating objective 
concerning the worst forms of child labor, to seek commitments 
by trade agreement parties to vigorously enforce their own laws 
prohibiting the worst forms of child labor.

             SEC. 2102(C)--PROMOTION OF CERTAIN PRIORITIES

Present/expired law
      No provision.
House amendment
      Section 2102(c) of the House amendment to H.R. 3009 sets 
forth certain priorities for the President to address. These 
provisions include seeking greater cooperation between WTO and 
the ILO; seeking to establish consultative mechanisms 
amongparties to trade agreements to strengthen the capacity of U.S. 
trading partners to promote respect for core labor standards, seeking 
to seek to establish consultative mechanisms among parties to trade 
agreements to strengthen the capacity of U.S. trading partners to 
develop and implement standards for environment and human health based 
on sound science; conducting environmental reviews of future trade and 
investment agreements, consistent with Executive Order 13141 and its 
relevant guidelines; reviewing the impact of future trade agreements on 
U.S. employment, modeled after Executive Order 13141; taking into 
account, in negotiating trade agreements, protection of legitimate 
health or safety, essential security, and consumer interests; requiring 
the Secretary of Labor to consult with foreign parties to trade 
negotiations as to their labor laws and providing technical assistance 
where needed; reporting to Congress on the extent to which parties to 
an agreement have in effect laws governing exploitative child labor; 
preserving the ability of the United States to enforce rigorously its 
trade laws, including antidumping and countervailing duty laws, and 
avoiding agreements which lessen their effectiveness; ensuring that 
U.S. exports are not subject to the abusive use of trade laws, 
including antidumping and countervailing duty laws, by other countries; 
continuing to promote consideration of Multilateral Environmental 
Agreements (MEAs) and consulting with parties to such agreements 
regarding the consistency of any MEA that includes trade measures with 
existing environmental exceptions under Article XX of the GATT.
      In addition, USTR, twelve months after the imposition of 
a penalty or remedy by the United States permitted by an 
agreement to which this Act applies, is to report to the 
Committee on the effectiveness of remedies applied under U.S. 
law to enforce U.S. rights under trade agreements. USTR shall 
address whether the remedy was effective in changing the 
behavior of the targeted party and whether the remedy had any 
adverse impact on parties or interests not party to the 
dispute.
      Finally, section 2102(c) would direct the President to 
seek to establish consultative mechanisms among parties to 
trade agreements to examine the trade consequences of 
significant and unanticipated currency movements and to 
scrutinize whether a foreign government engaged in a pattern of 
manipulating its currency to promote a competitive advantage in 
international trade.
Senate amendment
      With several notable exceptions, the priorities set forth 
in section 2102(c) of the Senate Amendment are identical to the 
priorities set forth in the House Amendment. The exceptions 
are:
      With respect to the study that the President must perform 
on the impact of future trade agreements on employment, the 
Senate Amendment requires the President to examine particular 
criteria, as follows: the impact on job security, the level of 
compensation of new jobs and existing jobs, the displacement of 
employment, and the regional distribution of employment, 
utilizing experience from previous trade agreements and 
alternative models of employment analysis. The Senate Amendment 
also requires that the report be made available to the public.
            The Senate Amendment requires that, in connection 
        with new trade agreement negotiations, the President 
        shall ``submit to the Committee on Ways and Means of 
        the House of Representatives and the Committee on 
        Finance of the Senate a meaningful labor rights report 
        of the country, or countries, with respect to which the 
        President is negotiating.''
            The Senate Amendment adds to the House Amendment 
        priority on preserving the ability of the United States 
        to enforce vigorously its trade laws, by including U.S. 
        ``safeguards'' law in the list of laws at issue. This 
        is the U.S. law authorizing the President to provide 
        relief to parties seriously injured or threatened with 
        serious injury due to surges of imports. The priority 
        in the Senate Amendment also directs the President to 
        remedy certain market distorting measures that underlie 
        unfair trade practices.
Conference agreement
      The Senate recedes to the House amendment with several 
modifications. With respect to the worst forms of child labor, 
the Conferees agree to expand section 2102(c)(2) of the House 
amendment to include the worst forms of child labor within 
requirements to seek to establish consultative mechanisms to 
strengthen the capacity of U.S. trading partners to promote 
respect for core labor standards.
      The Conferees agree to modify section 2105(c)(5) of the 
House amendment to require the President to report on impact of 
future trade agreements on U.S. employment, including on labor 
markets, modeled after E.O. 13141 to the extent appropriate in 
establishing procedures and criteria, and to make the report 
public.
      With respect to the labor rights report in section 
2102(c)(8) of both bills, the Conferees agree to the Senate 
provision. Furthermore, the Conferees agree to section 
2107(b)(2)(E) of the Senate amendment to require that 
guidelines for the Congressional Oversight Group include the 
time frame for submitting this report.

  SEC. 2102(D)--CONSULTATIONS, ADHERENCE TO OBLIGATIONS UNDER URUGUAY 
                            ROUND AGREEMENTS

Present/expired law
      No provision.
House amendment
      Section 2102(d) of the House amendment to H.R. 3009 
requires that USTR consult closely and on a timely basis with 
the Congressional Oversight Group appointed undersection 2107. 
In addition, USTR would be required to consult closely (including 
immediately before the initialing of an agreement) with the 
congressional advisers on trade policy and negotiations appointed under 
section 161 of the Trade Act of 1974, as well as the House Committee on 
Ways and Means, the Senate Committee on Finance, and the Congressional 
Oversight Group. With regard to negotiations concerning agriculture 
trade, USTR would also be required to consult with the House and Senate 
Committees on Agriculture.
      In determining whether to enter into negotiations with a 
particular country, section 2102(e) would require the President 
to take into account whether that country has implemented its 
obligations under the Uruguay Round Agreements.
Senate amendment
      Section 2102(d) of the Senate amendment is identical to 
the House provision in the House amendment to H.R. 3009.
Conference agreement
      The Conference agreement follows the House amendment and 
the Senate amendment.

                 SEC. 2103--TRADE AGREEMENTS AUTHORITY

Present/expired law
      Tariff proclamation authority. Section 1102(a) of the 
1988 Act provided authority to the President to proclaim 
modifications in duties without the need for Congressional 
approval, subject to certain limitations. Specifically, for 
rates that exceed 5 percent ad valorem, the President could not 
reduce any rate of duty to a rate less than 50 percent of the 
rate of duty applying on the date of enactment. Rates at or 
below 5 percent could be reduced to zero. Any duty reduction 
that exceeded 50 percent of an existing duty higher than 5 
percent or any tariff increase had to be approved by Congress.
      Staging authority required that duty reductions on any 
article could not exceed 3 percent per year, or one-tenth of 
the total reduction, whichever is greater, except that staging 
was not required if the International Trade Commission 
determined there was no U.S. production of that article.
      Negotiation of bilateral agreements. Section 1102(c) of 
the 1988 Act set forth three requirements for the negotiation 
of a bilateral agreement:
      The foreign country must request the negotiation of the 
bilateral agreement;
      The agreement must make progress in meeting applicable 
U.S. trade negotiating objectives; and
      The President must provide written notice of the 
negotiations to the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate and 
consult with these committees.
      The negotiations could proceed unless either Committee 
disapproved the negotiations within 60 days prior to the 90 
calendar days advance notice required of entry into an 
agreement (described below).
      Negotiation of multilateral non-tariff agreements. With 
respect to multilateral agreements, section 1102(b) of the 1988 
Act provided that whenever the President determines that any 
barrier to, or other distortion of, international trade unduly 
burdens or restricts the foreign trade of the United States or 
adversely affects the U.S. economy, or the imposition of any 
such barrier or distortion is likely to result in such a 
burden, restriction, or effect, he may enter into a trade 
agreement with the foreign countries involved. The agreement 
must provide for the reduction or elimination of such barrier 
or other distortion or prohibit or limit the imposition of such 
a barrier or distortion.
      Provisions qualifying for fast track procedures. Section 
1103(b)(1)(A) of the 1988 Act provided that fast track apply to 
implementing bills submitted with respect to any trade 
agreements entered into under the statute. Section 151(b)(1) of 
the Trade Act of 1974 further defined ``implementing bill'' as 
a bill containing provisions ``necessary or appropriate'' to 
implement the trade agreement, as well as provisions approving 
the agreement and the statement of administrative action.
      Time period. The authority applied with respect to 
agreements entered into before June 1, 1991, and until June 1, 
1993 unless Congress passed an extension disapproval 
resolution. The authority was then extended to April 15, 1994, 
to cover the Uruguay Round of multilateral negotiations under 
the General Agreement on Tariffs and Trade.
House amendment
      Section 2103 of the House amendment provides:
      Proclamation authority. Section 2103(a) would provide the 
President the authority to proclaim, without Congressional 
approval, certain duty modifications in a manner very similar 
to the expired provision. Specifically, for rates that exceed 5 
percent ad valorem, the President would not be authorized to 
reduce any rate of duty to a rate lessthan 50 percent of the 
rate of duty applying on the date of enactment. Rates at or below 5 
percent ad valorem could be reduced to zero. Any duty reduction that 
exceeded 50 percent of an existing duty higher than 5 percent or any 
tariff increase would have to be approved by Congress.
      In addition, section 2103(a) would not allow the use of 
tariff proclamation authority on import sensitive agriculture.
      Staging authority would require that duty reductions on 
any article could not exceed 3 percent per year, or one-tenth 
of the total reduction, whichever is greater, except that 
staging would not be required if the International Trade 
Commission determined there is no U.S. production of that 
article.
      These limitations would not apply to reciprocal 
agreements to eliminate or harmonize duties negotiated under 
the auspices of the World Trade Organization, such as so-called 
``zero-for-zero'' negotiations.
      Agreements on tariff and non-tariff barriers. Section 
2103(b)(1) would authorize the President to enter into a trade 
agreement with a foreign country whenever he determined that 
any duty or other import restriction or any other barrier to or 
distortion of international trade unduly burdens or restricts 
the foreign trade of the United States or adversely affects the 
U.S. economy, or the imposition of any such barrier or 
distortion is likely to result in such a burden, restriction, 
or effect. The agreement must provide for the reduction or 
elimination of such barrier or other distortion or prohibit or 
limit the imposition of such a barrier or distortion. No 
distinction would be made between bilateral and multilateral 
agreements.
      Conditions. Section 2103(b)(2) would provide that the 
special implementing bills procedures may be used only if the 
agreement makes progress in meeting the applicable objectives 
set forth in section 2102(a) and (b) and the President 
satisfies the consultation requirements set forth in section 
2104.
      Bills qualifying for trade authorities procedures. 
Section 2103(b)(3)(A) would provide that bills implementing 
trade agreements may qualify for trade promotion authority TPA 
procedures only if those bills consist solely of the following 
provisions:
            Provisions approving the trade agreement and 
        statement of administrative action; and
            Provisions necessary or appropriate to implement 
        the trade agreement.
      Time period. Sections 2103(a)(1)(A) and 2103(b)(1)(C) 
would extend trade promotion authority to agreements entered 
into before June 1, 2005. An extension until June 1, 2007, 
would be permitted unless Congress passed a disapproval 
resolution, as described under section 2103(c).
Senate amendment
      In most respects, section 2103 of the Senate Amendment is 
identical to section 2103 of the House Amendment. However, 
there are several key differences, as follows:
            The Senate Amendment limits the President's 
        proclamation authority with respect to ``import 
        sensitive agricultural products,'' a term defined in 
        section 2113(5) of the Senate Amendment. This 
        limitation differs from the limitation in the House 
        Amendment, inasmuch as it includes certain products 
        subject to tariff rate quotas.
            The Senate Amendment contains a provision making a 
        trade agreement implementing bill ineligible for ``fast 
        track'' procedures if the bill modifies, amends, or 
        requires modification or amendment to certain trade 
        remedy laws. A bill that does modify, amend or require 
        modification or amendment to those laws is subject to a 
        point of order in the Senate, which may be waived by a 
        majority vote.
            The Senate Amendment requires the U.S. 
        International Trade Commission to submit a report to 
        Congress on negotiations during the initial period for 
        which the President is granted trade promotion 
        authority. This report would be made in connection with 
        a request by the President to have such authority 
        extended.
Conference agreement
      The Senate recedes to the House amendment with several 
modifications. The Conferees agree to the new definition of 
import sensitive agriculture in section 2103(a)(2)(B), 
2104(b)(2)(A)(i), and 2113(5) of the Senate amendment to 
encompass products subject to tariff rate quotas, as well as 
products subject to the lowest tariff reduction in the Uruguay 
Round.
      The Conferees agree to section 2103(c)(3)(B) of the 
Senate amendment, which requires the ITC to submit a report to 
Congress by May 1, 2005 (if the President seeks extension of 
TPA until June 2, 2007) analyzing the economic impact on the 
United States of all trade agreements implemented between 
enactment and the extension request.

                SEC. 2104--CONSULTATIONS AND ASSESSMENT

Present/expired law
      Section 102 of the Trade Act of 1974 and sections 1102(d) 
and 1103 of the 1988 Act set forth the fast track requirements. 
These provisions required the President, before entering into 
any trade agreement, to consult with Congress as to the nature 
of the agreement, how and to what extent the agreement will 
achieve applicable purposes, policies, and objectives, and all 
matters relating to agreement implementation. Inaddition, 
before entering into an agreement, the President was required to give 
Congress at least 90 calendar days advance notice of his intent. The 
purpose of this period was to provide the Congressional Committees of 
jurisdiction an opportunity to review the proposed agreement before it 
was signed.
      Section 135(e) of the Trade Act of 1974 required that the 
Advisory Committee for Trade Policy and Negotiations meet at 
the conclusion of negotiations for each trade agreement and 
provide a report as to whether and to what extent the agreement 
promotes the economic interests of the United States and 
achieves the applicable overall and principal negotiating 
objectives of section 1101 of the 1988 Act. The report was due 
not later than the date on which the President notified 
Congress of his intent to enter into an agreement. With regard 
to the Uruguay Round, the report was due 30 days after the date 
of notification.
House amendment
      Section 2104 of the House amendment to H.R. 3009 would 
establish a number of requirements that the President consult 
with Congress. Specifically, section 2104(a)(1) would require 
the President to provide written notice and consult with the 
relevant committees at least 90 calendar days prior to entering 
into negotiations. Section 2104(a)(c) also provides that 
President shall meet with the Congressional Oversight Group 
established under section 2107 upon a request of a majority of 
its members. Trade promotion authority would not apply to an 
implementing bill if both Houses separately agree to a 
procedural disapproval resolution within any 60-day period 
stating that the Administration has failed to notify or consult 
with Congress.
      Section 2104(b)(1) would establish a special consultation 
requirement for agriculture. Specifically, before initiating 
negotiations concerning tariff reductions in agriculture, the 
President is to assess whether U.S. tariffs on agriculture 
products that were bound under the Uruguay Round Agreements are 
lower than the tariffs bound by that country. In his 
assessment, the President would also be required to consider 
whether the tariff levels bound and applied throughout the 
world with respect to imports from the United States are higher 
than U.S. tariffs and whether the negotiation provides an 
opportunity to address any such disparity. The President would 
be required to consult with the Committees on Ways and Means 
and Agriculture of the House and the Committees on Finance and 
Agriculture, Nutrition and Forestry of the Senate concerning 
the results of this assessment and whether it is appropriate 
for the United States to agree to further tariff reductions 
under such circumstances and how all applicable negotiating 
objectives would be met.
      Section 2104(b)(2) provides special consultations on 
import sensitive agriculture products. Specifically, before 
initiating negotiations on agriculture and as soon as 
practicable with respect to the Free Trade Area of the Americas 
and WTO negotiations, USTR is to identify import sensitive 
agriculture products and consult with the Committees on Ways & 
Means and Agriculture of the House and the Committees on 
Finance and Agriculture, Nutrition, and Forestry in the Senate 
concerning whether any further tariff reduction should be 
appropriate, and whether the identified products face 
unjustified sanitary or phytosanitary barriers. USTR is also to 
request that the International Trade Commission prepare an 
assessment of the probable economic effects of any such tariff 
reduction on the U.S. industry producing the product and on the 
U.S. economy as a whole. USTR is to then notify the Committees 
of those products for which it intends to seek tariff 
liberalization as well as the reasons. If USTR commences 
negotiations and then identifies additional import sensitive 
agriculture products, or a party to the negotiations requests 
tariff reductions on such a product, then USTR shall notify the 
Committees as soon as practicable of those products and the 
reasons for seeking tariff reductions.
      Section 2104(c) would establish a special consultation 
requirement for textiles. Specifically, before initiating 
negotiations concerning tariff reductions in textiles and 
apparel, the President is to assess whether U.S. tariffs on 
textile and apparel products that were bound under the Uruguay 
Round Agreements are lower than the tariffs bound by that 
country. In his assessment, the President would also be 
required to consider whether the tariff levels bound and 
applied throughout the world with respect to imports from the 
United States are higher than U.S. tariffs and whether the 
negotiation provides an opportunity to address any such 
disparity. The President would be required to consult with the 
Committee on Ways and Means of the House and the Committee on 
Finance of the Senate concerning the results of this assessment 
and whether it is appropriate for the United States to agree to 
further tariff reductions under such circumstances and how all 
applicable negotiating objectives would be met.
      In addition, section 2104(d) would require the President, 
before entering into any trade agreement, to consult with the 
relevant Committees concerning the nature of the agreement, how 
and to what extent the agreement will achieve the applicable 
purposes, policies, and objectives set forth in the House 
amendment to H.R. 3009 and all matters relating to 
implementation under section 2105, including the general effect 
of the agreement on U.S. laws.
      Section 2104(e) would require that the report of the 
Advisory Committee for Trade Policy and Negotiations under 
section 135(e)(1) of the Trade Act of 1974 be provided not 
later than 30 days after the date on which the President 
notifies Congress of his intent to enter into the agreement 
under section 2105(a)(1)(A).
      Finally, section 2104(f) would require the President, at 
least 90 days before entering into a trade agreement, to ask 
the International Trade Commission to assess the agreement, 
including the likely impact of the agreement on the U.S. 
economy as a whole, specific industry sectors, and U.S. 
consumers. That report would be due 90 days from the date after 
the President enters into the agreement.
Senate amendment
      The Senate Amendment is substantially similar to the 
House bill, with the following exceptions:
      Consultations on export subsidies and distorting 
policies. Section 2104(b)(2)(A)(ii)(III) requires consultations 
on whether nations producing identified products maintain 
export subsidies or distorting policies that distort trade and 
impact of policies on U.S. producers.
      Consultations relating to fishing trade. Section 
2104(b)(3) requires that for negotiations relating to fishing 
trade, the Administration will keep fully apprised and on 
timely basis consult with the House Resources Committee and the 
Senate Commerce Committee.
      Special reporting requirements on U.S. trade remedy laws. 
Section 2104(d) provides that the President, at least 90 
calendar days before the President enters into a trade 
agreement, shall notify the House Ways and Means Committee and 
the Senate Finance Committee in writing any amendments to U.S. 
antidumping and countervailing duty laws (title VII of the 
Tariff Act of 1930) or U.S. safeguard provisions (chapter 1 of 
title II of the Trade Act of 1974) that the President proposes 
to include in the implementing legislation. On the date that 
the President transmits the notification, the President must 
also transmit to the Committees a report explaining his reasons 
for believing that amendments to these trade remedy laws are 
necessary to implement the trade agreement and his reasons for 
believing that such amendments are consistent with the 
negotiating objective on this issue. Not later than 60 calendar 
days after the date on which the President transmits 
notification to the relevant committees, the Chairman and 
ranking members of the House Ways and Means Committee and the 
Senate Finance Committees shall issue reports stating whether 
the proposed amendments described in the President's 
notification are consistent with the negotiating objectives on 
trade laws.
Conference agreement
      The Senate recedes to the House with several 
modifications. The Conferees agree to section 
2104(b)(2)(A)(11)(III) of the Senate amendment, which requires 
consultations on whether other nations producing identified 
products maintain export subsidies or distorting policies that 
distort trade and impact of policies on U.S. producers. In 
addition, the Conferees agree to section 2104(b)(3) of the 
Senate amendment, which requires that for negotiations relating 
to fishing trade, the Administration will keep fully apprised 
and on timely basis consult with the House Resources Committee 
and the Senate Commerce Committee.
      Finally, the Conferees agree to include the notification 
and report on changes to trade remedy laws in sections 
2104(d)(3)(A) and (B) in the Senate amendment with 
modifications. Given the priority that Conferees attach to 
keeping U.S. trade remedy laws strong and ensuring that they 
remain fully enforceable, the Conference agreement puts in 
place a process requiring special scrutiny of any impact that 
trade agreements may have on these laws. The process requires 
the President, at least 180 calendar days before the day on 
which he enters into a trade agreement, to report to the 
Committees on Ways and Means and the Committee on Finance the 
range of proposals advanced in trade negotiations and may be in 
the final agreement that could require amendments to title VII 
of the Tariff Act of 1930 or to chapter 1 of title II of the 
Trade Act of 1974; and how these proposals relate to the 
objectives described in section 2102(b)(14).
      The Conference agreement also provides a mechanism for 
any Member in the House or Senate to introduce at any time 
after the President's report is issued a nonbinding resolution 
which states ``that the ________ finds that the proposed 
changes to U.S. trade remedy laws contained in the report of 
the President transmitted to the Congress on ________ under 
section 2104(d)(3) of the Bipartisan Trade Promotion Authority 
Act of 2002 with respect to ________, are inconsistent with the 
negotiating objectives described in section 2102(b)(14) of that 
Act.'', with the first blank space being filled in with either 
the ``House of Representatives'' or the ``Senate'', as the case 
may be, the second blank space filled in with the appropriate 
date of the report, and the third blank space being filled in 
with the name of the country or countries involved.
      The resolution is referred to the Ways and Means and 
Rules Committees in the House and the Finance Committee in the 
Senate, and is privileged on the floor if it is reported by the 
Committees. The Conference agreement allows only one resolution 
(either a nonbinding resolution or a disapproval resolution) 
per agreement to be eligible for the trade promotion authority 
procedures contained in sections 152 (d) and (e) of the Trade 
Act of 1974. The one resolution quota is satisfied for the 
House only after the Ways and Means Committee reports a 
resolution, and for the Senate only after the Finance Committee 
reports a resolution.
      The Conference agreement states that, with respect to 
agreements entered into with Chile and Singapore, the report 
referenced in section 2104(d)(3)(A) shall be submitted by the 
President at least 90 calendar days before the day on which the 
President enters into a trade agreement with either country.

             SEC. 2105--IMPLEMENTATION OF TRADE AGREEMENTS

Present/expired law
      Before entering into the draft agreement, the President 
was required to give Congress 90 days advance notice (120 days 
for the Uruguay Round) to provide an opportunity for revision 
before signature. After entering into the agreement, the 
President was required to submit formally the draft agreement, 
implementing legislation, and a statement of administrative 
action. Once the bill was formally introduced, there was no 
opportunity to amend any portion of the bill--whether on the 
floor or in committee. Consequently, before the formal 
introduction took place, the committees of jurisdiction would 
hold hearings, ``unofficial'' or ``informal'' mark-up sessions 
and a ``mock conference'' with the Senate committees of 
jurisdiction in order to develop a draft implementing bill 
together with the Administration and to make their concerns 
known to the Administration before it introduced the 
legislation formally.
      After formal introduction of the implementing bill, the 
House committees of jurisdiction had 45 legislative days to 
report the bill, and the House was required to vote on the bill 
within 15 legislative days after the measure was reported or 
discharged from the committees. Fifteen additional days were 
provided for Senate committee consideration (assuming the 
implementing bill was a revenue bill), and the Senate floor 
action was required within 15 additional days. Accordingly, the 
maximum period for Congressional consideration of an 
implementing bill from the date of introduction was 90 
legislative days. Amendments to the legislation were not 
permitted once the bill was introduced; the committee and floor 
actions consisted of ``up or down'' votes on the bill as 
introduced.
      Finally, section 1103(d) of the 1988 Act specified that 
the fast track rules were enacted as an exercise of the 
rulemaking power of the House and the Senate, with the 
recognition of the right of either House to change the rules at 
any time.
House amendment
      Under Section 2105 of the House amendment to H.R. 3009, 
the President would be required, at least 90 days before 
entering into an agreement, to notify Congress of his intent to 
enter into the agreement. Section 2105(a) also would establish 
a new requirement that the President, within 60 days of signing 
an agreement, submit to Congress a preliminary list of existing 
laws that he considers would be required to bring the United 
States into compliance with agreement.
      Section 2105(b) would provide that trade promotion 
authority would not apply if both Houses separately agree to a 
procedural disapproval resolution within any 60-day period 
stating that the Administration failed to notify or consult 
with Congress, which is defined as failing or refusing to 
consult in accordance with section 2104 or 2105, failing to 
develop or meet guidelines under section 2107(b), failure to 
meet with the Congressional Oversight Group, or the agreement 
fails to make progress in achieving the purposes. policies, 
priorities, and objectives of the Act. In a change from the 
expired law, such a resolution may be introduced by any Member 
of the House or Senate. Only one such privileged resolution 
would be permitted to be considered per trade agreement per 
Congress.
      Most of the remaining provisions are identical to the 
expired law. Specifically, section 2105(a) would require the 
President, after entering into agreement, to submit formally 
the draft agreement, the implementing legislation, and a 
statement of administrative action to Congress, and there would 
be no time limit to do so, but with the new requirement that 
the submission be made on a date on which both Houses are in 
session. The procedures of section 151 of the Trade Act of 1974 
would then apply. Specifically, on the same day as the 
President formally submits the legislation, the bill would be 
introduced (by request) by the Majority Leaders of the House 
and the Senate. After formal introduction of the legislation, 
the House Committees of jurisdiction would have 45 legislative 
days to report the bill. The House would be required to vote on 
the bill within 15 legislative days after the measure was 
reported or discharged from the Committees. Fifteen additional 
days would be provided for Senate Committee consideration 
(assuming the implementing bill was a revenue bill), and Senate 
floor action would be required within 15 additional days. 
Accordingly, the maximum period for Congressional consideration 
of the implementing bill from the date of introduction would be 
90 legislative days.
      As with the expired provisions, once the bill has been 
formally introduced, no amendments would be permitted either in 
Committee or floor action, and a straight ``up or down'' vote 
would be required. Of course, before formal introduction, the 
bill could be developed by the Committees of jurisdiction 
together with the Administration during the informal Committee 
mark-up process.
      Finally, as with the expired provision, section 2105(c) 
specifies that sections 2105(b) and 3(c) are enacted as an 
exercise of the rulemaking power of the House and the Senate, 
with the recognition of the right of either House to change the 
rules at any time.
Senate amendment
      The Senate Amendment is substantially similar to the 
House Bill, with the following exception:
      Reporting requirements. Section 2105(a)(1)(A)(ii) 
requires the President to transmit to the House Ways and Means 
Committee and the Senate Finance Committee the notification and 
report described in section 2104(d)(3)(A) regarding changes to 
U.S. trade remedy laws.
      Disclosure Requirements. Section 2105(a)(4) of the Senate 
bill specifies that any trade agreement or understanding with a 
foreign government (oral or written) not disclosed to Congress 
will not be considered part of trade agreement approved by 
Congress and shall have no effect under U.S. law or in any 
dispute settlement body.
      Senate Procedures. Section 2105(b)(1)(C)(i)(II) provides 
that any Member of the Senate may introduce a procedural 
disapproval resolution, and that that resolution will be 
referred to the Senate Finance Committee. Section 
2105(b)(1)(C)(iv) provides that the Senate may not consider a 
disapproval resolution that has not been reported by the Senate 
Finance Committee.
Conference agreement
      The Senate recedes to the House amendment with several 
modifications. The Conferees agree to section 2105(a)(4) of the 
Senate amendment, which specifies that any trade agreement or 
understanding with a foreign government (oral or written) not 
disclosed to Congress will not be considered part of trade 
agreement approved by Congress and shall have no effect under 
U.S. law or in any dispute settlement body, theConferees also 
agree to sections 2105(b)(1)(C)(i)(II) and (b)(1)(C)(iv) of the Senate 
amendment, which applies the same procedures for consideration of bills 
in the Senate as for the House.
      Finally, the Conferees agree to section 2105(b)(2) of the 
Senate amendment with modifications, which requires the 
Secretary of Commerce, in consultation with the Secretaries of 
State and Treasury, the Attorney General, and the United States 
Trade Representative, to transmit to Congress a report setting 
forth the strategy of the executive branch to address concerns 
of Congress regarding whether dispute settlement panels and the 
Appellate Body of the WTO have added to obligations or 
diminished rights of the United States, as described in section 
2101(b)(3). Trade authorities procedures shall not apply to any 
implementing bill with respect to an agreement negotiated under 
the auspices of the WTO unless the Secretary of Commerce has 
issued such report prior to December 31, 2002.

            SEC. 2106--TREATMENT OF CERTAIN TRADE AGREEMENTS

Present/expired law
      No provision.
House amendment
      Section 2106 of the House amendment to H.R. 3009 exempts 
agreements resulting from ongoing negotiations with Chile or 
Singapore, an agreement establishing a Free Trade Area of the 
Americas, and agreements concluded under the auspices of the 
WTO from prenegotiation consultation requirements of section 
2104(a) only. However, upon enactment of H.R. 3009, the 
Administration is required to consult as to those elements set 
forth in section 2104(a) as soon as feasible.
Senate amendment
      Section 2106 of the Senate amendment is substantially 
similar to the House bill.
Conference agreement
      The Conference agreement follows the House amendment and 
the Senate amendment.

                SEC. 2107--CONGRESSIONAL OVERSIGHT GROUP

Present/expired law
      No provision.
House amendment
      Section 2107 of the House amendment to H.R. 3009 would 
require the Chairman of the Committee on Ways and Means and the 
Chairman of the Committee on Finance to chair and convene, 
sixty days after the effective date of this Act, the 
Congressional Oversight Group. The Group would be comprised of 
the following Members of the House: the Chairman and Ranking 
Member of the Committee on Ways and Means and three additional 
members of the Committee (not more than two of whom are from 
the same party), and the Chairman and Ranking Member of the 
Committees which would have, under the Rules of the House, 
jurisdiction over provisions of law affected by a trade 
negotiation. The Group would be comprised of the following 
Members of the Senate: the Chairman and Ranking Member of the 
Committee on Finance and three additional members of the 
Committee (not more than two of whom are from the same party), 
and the Chairman and Ranking Member of the Committees which 
would have, under the Rules of the Senate, jurisdiction over 
provisions of law affected by a trade negotiation.
      Members are to be accredited as official advisors to the 
U.S. delegation in the negotiations. USTR is to develop 
guidelines to facilitate the useful and timely exchange of 
information between USTR and the Group, including regular 
briefings, access to pertinent documents, and the closest 
possible coordination at all critical periods during the 
negotiations, including at negotiation sites.
      Finally, section 2107(c) provides that upon the request 
of a majority of the Congressional Oversight Group, the 
President shall meet with the Group before initiating 
negotiations or at any other time concerning the negotiations.
Senate amendment
      Section 2107 of the Senate amendment is identical to the 
House amendment to H.R. 3009.
Conference agreement
      The Conference agreement follows the House amendment and 
the Senate amendment.

   SEC. 2108--ADDITIONAL IMPLEMENTATION AND ENFORCEMENT REQUIREMENTS

Present/expired law
      No provision.
House amendment
      Section 2108 of the House amendment to H.R. 3009 would 
require the President to submit to the Congress a plan for 
implementing and enforcing any trade agreement resulting from 
this Act. The report is to be submitted simultaneously with the 
text of the agreement and is to include a review of the 
Executive Branch personnel needed to enforce the agreement as 
well as an assessment of any U.S. Customs Service 
infrastructure improvements required. The range of personnel to 
be addressed in the report is very comprehensive, including 
U.S. Customs and Department of Agriculture border inspectors, 
and monitoring and implementing personnel at USTR, the 
Departments of Agriculture, Commerce, and the Treasury, and any 
other agencies as may be required.
Senate amendment
      Section 2108 of the Senate amendment is identical to the 
House amendment to H.R. 3009.
Conference agreement
      The Conference agreement follows the House amendment and 
the Senate amendment.

                       SEC. 2109--COMMITTEE STAFF

Present/expired law
      No provision.
House amendment
      Section 2109 of the House amendment to H.R. 3009 states 
that the grant of trade promotion authority is likely to 
increase the activities of the primary committees of 
jurisdiction and the creation of the Congressional Oversight 
Group under section 2107 will increase the participation of a 
broader Members of Congress in the formulation of U.S. trade 
policy and oversight of the U.S. trade agenda. The provision 
specifies that the primary committees of jurisdiction should 
have adequate staff to accommodate these increases in 
activities.
Senate amendment
      Section 2109 of the Senate amendment is identical to the 
House amendment to H.R. 3009.
Conference agreement
      The Conference agreement follows the House amendment and 
the Senate amendment.

      SEC. 2111--REPORT ON THE IMPACT OF TRADE PROMOTION AUTHORITY

Present/expired law
      No provision.
House amendment
      No provision.
Senate amendment
      Section 2111 requires the International Trade Commission, 
within one year following enactment of this Act, to issue a 
report regarding the economic impact of the following trade 
agreements: (1) The U.S.-Israel Free Trade Agreement; (2) the 
U.S.-Canada Free Trade Agreement; (3) the North American Free 
Trade Agreement (NAFTA); (4) The Uruguay Round Agreements, 
which established the World Trade Organization; and (5) The 
Tokyo Round of Multilateral Trade Negotiations.
Conference agreement
      The House recedes to the Senate amendment.

                       SEC. 2112--SMALL BUSINESS

Present/expired law
      No provision.
House amendment
      No provision.
Senate amendment
      WTO small business advocate. Section 2112(a) provides 
that the U.S. Trade Representative shall pursue identification 
of a small business advocate at the World Trade Organization 
Secretariat to examine the impact of WTO agreements on the 
interests of small businesses, address the concerns of small 
businesses, and recommend ways to address those interests in 
trade negotiations involving the WTO.
      Assistant USTR responsible for small businesses. Section 
2112(b) provides that the Assistant United States Trade 
Representative for Industry and Telecommunications shall be 
responsible for ensuring that the interests of small businesses 
are considered in trade negotiations.
Conference agreement
      The Senate recedes to the House amendment with a 
modification. The Conferees agree to section 2112(b) of the 
Senate amendment, which provides that the Assistant USTR for 
Industry and Telecommunications will be responsible for 
ensuring that the interests of small business are considered in 
trade negotiations.

                DIVISION C--ANDEAN TRADE PREFERENCE ACT

                  TITLE XXXI--ANDEAN TRADE PREFERENCE

                         SEC. 3101--SHORT TITLE

Present law
      No provision.
House amendment
      Section 3101 of H.R. 3009, as amended, provides that the 
Act may be cited as the ``Andean Trade Promotion and Drug 
Eradication Act.''
Senate amendment
      Section 3101 provides that the Act may be cited as the 
``Andean Trade Preference Expansion Act.''
Conference agreement
      The Senate recedes.

                          SEC. 3102--FINDINGS

Present law
      No provision.
House amendment
      Section 1302 contains findings of Congress that:
      (1) Since the Andean Trade Preference Act was enacted in 
1991, it has had a positive impact on United States trade with 
Bolivia, Colombia, Ecuador, and Peru. Two-way trade has 
doubled, with the United States serving as the leading source 
of imports and leading export market for each of the Andean 
beneficiary countries. This has resulted in increased jobs and 
expanded export opportunities in both the United States and the 
Andean region.
      (2) The Andean Trade Preference Act has been a key 
element in the United States counter narcotics strategy in the 
Andean region, promoting export diversification and broad-based 
economic development that provide sustainable economic 
alternatives to drug-crop production, strengthening the 
legitimate economies of Andean countries and creating viable 
alternatives to illicit trade in coca.
      (3) Notwithstanding the success of the Andean Trade 
Preference Act, the Andean region remains threatened by 
political and economic instability and fragility, vulnerable to 
the consequences of the drug war and fierce global competition 
for its legitimate trade.
      (4) The continuing instability in the Andean region poses 
a threat to the security interests of the United States and the 
world. This problem has been partially addressed through 
foreign aid, such as Plan Colombia, enacted by Congress in 
2000. However, foreign aid alone is not sufficient. Enhancement 
of legitimate trade with the United States provides an 
alternative means for reviving and stabilizing the economies in 
the Andean region.
      (5) The Andean Trade Preference Act constitutes a 
tangible commitment by the United States to the promotion of 
prosperity, stability, and democracy in the beneficiary 
countries.
      (6) Renewal and enhancement of the Andean Trade 
Preference Act will bolster the confidence of domestic private 
enterprise and foreign investors in the economic prospects of 
the region, ensuring that legitimate private enterprise can be 
the engine of economic development and political stability in 
the region.
      (7) Each of the Andean beneficiary countries is committed 
to conclude negotiation of a Free Trade Area of the Americas by 
the year 2005 as a means of enhancing the economic security of 
the region.
      (8) Temporarily enhancing trade benefits for Andean 
beneficiaries countries will promote the growth of free 
enterprise and economic opportunity in these countries and 
serve the security interests of the United States, the region, 
and the world.
Senate amendment
      Section 3101 is identical.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

        SEC. 3103--ARTICLES ELIGIBLE FOR PREFERENTIAL TREATMENT

     Articles (Except Apparel) Eligible for Preferential Treatment

Present law
      The Andean Trade Preference Act (ATPA), enacted on 
December 4, 1991 as title II of Public Law 102-182, authorizes 
preferential trade benefits for the Andean nations of Bolivia, 
Colombia, Ecuador, and Peru, similar to those benefits granted 
to beneficiariesunder the Caribbean Basin Initiative program. 
The ATPA authorizes the President to proclaim duty-free treatment for 
all eligible articles from Bolivia, Colombia, Ecuador, Peru. This 
authority applies only to normal column 1 rates of duty in the 
Harmonized Tariff Schedule of the United States (HTS); any additional 
duties imposed under U.S. unfair trade practice laws, such as the 
antidumping or countervailing duty laws, are not affected by this 
authority.
      The ATPA contains a list of products that are ineligible 
for duty-free treatment. More specifically, ATPA duty-free 
treatment does not apply to textile and apparel articles that 
are subject to textile agreements; petroleum and petroleum 
products; footwear not eligible for duty-free treatment under 
the Generalized System of Preferences; certain watches and 
watch parts; certain leather products; and sugar, syrups and 
molasses subject to over-quota rates of duty.
House amendment
      Section 3103(a) amends the Andean Trade Preference Act to 
authorize the President to proclaim duty-free treatment for any 
of the following articles which were previously excluded from 
duty-free treatment under the ATPA, if the President determines 
that the article is not import-sensitive in the context of 
imports from beneficiary countries:
            (1) Footwear not designated at the time of the 
        effective date of this Act as eligible for the purposes 
        of the Generalized System of Preferences under title V 
        of the Trade Act of 1974;
            (2) Petroleum, or any product derived from 
        petroleum, provided for in headings 2709 and 2710 of 
        the HTS;
            (3) Watches and watch parts (including cases, 
        bracelets and straps), of whatever type including, but 
        not limited to, mechanical, quartz digital or quartz 
        analog, if such watches or watch parts contain any 
        material which is the product of any country with 
        respect to which HTS column 2 rates of duty apply;
            (4) Handbags, luggage, flat goods, work gloves, and 
        leather wearing apparel that--(i) are the product of 
        any beneficiary country; and (ii) were not designated 
        on August 5, 1983, as eligible articles for purposes of 
        the Generalized System of Preferences under title V of 
        the Trade Act of 1974.
      Under H.R. 3009, textiles subject to textile agreements; 
sugar, syrups and molasses subject to over-quota tariffs; and 
rum and tafia classified in subheading 2208.40.00 of the HTS 
would continue to be ineligible for duty-free treatment, as 
would apparel products other than those specifically described 
below. Imports of tuna, prepared or preserved in any manner, in 
airtight containers would receive immediate duty-free 
treatment.
Senate amendment
      Section 3102 of the bill replaces the list of excluded 
products under section 204(b) of the current ATPA with a new 
provision that extends duty preferences to most of those 
products. The new preferences take the form of exceptions to 
the general rule that the excluded products are not eligible 
for duty-free treatment.
      The enhanced preferences are made available to ``ATPEA 
beneficiary countries.'' Paragraph (5) of section 204(b) of the 
ATPA as amended by the present bill defines ATPEA beneficiary 
countries as those countries previously designated by the 
President as ``beneficiary countries'' (i.e., Bolivia, 
Colombia, Ecuador, and Peru) which subsequently are designated 
by the President as ``ATPEA beneficiary countries,'' based on 
the President's consideration of additional eligibility 
criteria.
      In the event that the President did not designate a 
current ``beneficiary country'' as an ``ATPEA beneficiary 
country,'' that country would remain eligible for ATPA benefits 
under the law as expired on December 4, 2001, but would not be 
eligible for the enhanced benefits provided under the present 
bill.
      Footwear not eligible for duty-free treatment under GSP 
receives the same tariff treatment as like products from 
Mexico, except that duties on articles in particular tariff 
subheadings are to be reduced by \1/15\ per year.
      The Senate Amendment provides special treatment for rum 
and tafia, allowing them to receive the same tariff treatment 
as like products from Mexico. The bill also allows certain 
handbags, luggage, flat goods, work gloves, and leather wearing 
apparel to receive the same tariff treatment as like products 
from Mexico.
      Under the bill, the President is authorized to proclaim 
duty-free treatment for tuna that is harvested by United States 
or ATPEA vessels, subject to a quantitative yearly cap of 20 
percent of the domestic United States tuna pack in the 
preceding year.
Conference agreement
      Senate recedes on the authority of President to proclaim 
duty-free treatment for particular articles which were 
previously excluded from duty-free treatment under the ATPA, if 
the President determines that the article is not import-
sensitive in the context of imports from beneficiary countries.
      Textiles subject to textile agreements; sugar, syrups and 
molasses subject to over-quota tariffs; and rum and tafia 
classified in subheading 2208.40.00 of the HTS would continue 
to be ineligible for duty-free treatment, as would apparel 
products other than those specifically described below.
      House recedes on the treatment of tuna with an amendment 
to: (1) retain U.S. orAndean flagged vessel rule of origin 
requirement in Senate amendment; (2) authorize the President to grant 
duty-free treatment for Andean exports of tuna packed in flexible 
(e.g., foil), airtight containers weighing with their contents not more 
than 6.8 kg each; and (3) update calculation of current MFN tariff-rate 
quota to be an amount based on 4.8 percent of apparent domestic 
consumption of tuna in airtight containers rather than domestic 
production.

                       Eligible Apparel Articles

Present law
      Under the ATPA, apparel articles are on the list of 
products excluded from eligibility for duty-free treatment.
House amendment
      Under Section 3103, the President may proclaim duty-free 
and quota-free treatment for apparel articles sewn or otherwise 
assembled in one or more beneficiary countries exclusively from 
any one or any combination of the following:
      (1) Fabrics or fabric components formed, or components 
knit-to-shape, in the United States (including fabrics not 
formed from yarns, if such fabrics are classifiable under 
heading 5602 or 5603 of the HTS and are formed in the United 
States).
      (2) Fabrics or fabric components formed, or components 
knit-to-shape, in one or more beneficiary countries, from yarns 
formed in one or more beneficiary countries, if such fabrics 
(including fabrics not formed from yarns, if such fabrics are 
classifiable under heading 5602 or 5603 of the HTS and are 
formed in one or more beneficiary countries) are in chief 
weight of llama, or alpaca.
      (3) Fabrics or yarn not produced in the United States or 
in the region, to the extent that apparel articles of such 
fabrics or yarn would be eligible for preferential treatment, 
without regard to the source of the fabrics or yarn, under 
Annex 401 of the NAFTA (short supply provisions). Any 
interested party may request the President to consider such 
treatment for additional fabrics and yarns on the basis that 
they cannot be supplied by the domestic industry in commercial 
quantities in a timely manner, and the President must make a 
determination within 60 calendar days of receiving the request 
from the interested party.
      (4) Apparel articles sewn or otherwise assembled in one 
or more beneficiary countries from fabrics or fabric components 
formed or components knit-to-shape, in one or more beneficiary 
countries, from yarns formed in the United States or in one or 
more beneficiary countries (including fabrics not formed from 
yarns, if such fabrics are classifiable under heading 5602 or 
5603 of the HTS and are formed in one or more beneficiary 
countries), whether or not the apparel articles are also made 
from any of the fabrics, fabric components formed, or 
components knit-to-shape in the United States described in 
paragraph 1. Imports of apparel made from regional fabric and 
regional yarn would be capped at 3% of U.S. imports growing to 
6% of U.S. imports in 2006, measured in square meter 
equivalents.
Senate amendment
      Paragraph (2) of section 204(b) of the ATPA as amended by 
section 3102 of the present bill extends duty-free treatment to 
certain textile and apparel articles from ATPEA beneficiary 
countries. The provision divides articles eligible for this 
treatment into several different categories and limits duty-
free treatment to a period defined as the ``transition 
period.'' The transition period is defined in paragraph (5) of 
section 204(b) of the ATPA as amended to be the period from 
enactment of the present bill through the earlier of February 
28, 2006 or establishment of a FTAA.
      In general, the different categories of textile and 
apparel articles eligible for duty free treatment are defined 
according to the origin of the yarn and fabric from which the 
articles are made. Under the first category, apparel sewn or 
otherwise assembled in one or more ATPEA beneficiary countries 
is eligible for duty-free treatment if it is made exclusively 
from one or a combination of several sub-categories of 
components, as follows:
            (1) United States fabric, fabric components, or 
        knit-to-shape components, made from yarns wholly formed 
        in the United States;
            (2) A combination of both United States and ATPEA 
        beneficiary country components knit-to-shape from yarns 
        wholly formed in the United States;
            (3) ATPEA beneficiary country fabric, fabric 
        components, or knit-to-shape components, made from 
        yarns wholly formed in one or more ATPEA beneficiary 
        countries, if the constituent fibers are primarily 
        llama or alpaca hair; and
            (4) Fabrics or yarns, regardless of origin, if such 
        fabrics or yarns have been deemed, under the North 
        American Free Trade Agreement, not to be widely 
        available in commercial quantities in the United 
        States. A separate provision of section 204(b) of the 
        ATPA as amended by the present bill sets forth a 
        process for interested parties to petition the 
        President for inclusion of additional yarns and fabrics 
        in the ``short supply'' list. This process includes 
        obtaining advice from the United States International 
        Trade Commission and industry advisory groups, and 
        consultation with the Committee on Finance of the 
        Senate and the Committee on Ways and Means of the House 
        of Representatives.
      A second category of apparel articles eligible for duty-
free treatment is apparel articles knit-to-shape (except socks) 
in one or more ATPEA beneficiary countries from yarns wholly 
formed in the United States. To qualify under this category, 
the entire articlemust be knit-to-shape--as opposed to being 
assembled from components that are themselves knit-to-shape.
      A third category of apparel articles eligible for duty-
free treatment is apparel articles wholly assembled in one or 
more ATPEA beneficiary countries from fabric or fabric 
components knit, or components knit-to-shape in one or more 
ATPEA beneficiary countries from yarns wholly formed in the 
United States. The quantity of apparel eligible for this 
benefit is subject to an annual cap. The cap is set at 70 
million square meter equivalents for the one-year period 
beginning March 1, 2002. The cap will increase by 16 percent, 
compounded annually, in each succeeding one-year period, 
through February 28, 2006.
      Thus, the cap applied to this category in each year 
following enactment will be as follows:
            70 million square meter equivalents (SME) in the 
        year beginning March 1, 2002;
            81.2 million SME in the year beginning March 1, 
        2003;
            94.19 million SME in the year beginning March 1, 
        2004; and
            109.26 million SME in the year beginning March 1, 
        2005.
      A separate provision makes clear that goods otherwise 
qualifying under the latter category will not be disqualified 
if they happen to contain United States fabric made from United 
States yarn.
      A fourth category of apparel eligible for duty-free 
treatment under the Senate bill is brassieres that are cut or 
sewn, or otherwise assembled, in one or more ATPEA beneficiary 
countries, or in such countries and the United States. This 
separate category requires that, in the aggregate, brassieres 
manufactured by a given producer claiming duty-free treatment 
for such products contain certain quantities of United States 
fabric.
      A fifth category of textile and apparel eligible for 
duty-free treatment is handloomed, handmade, and folklore 
articles.
      A final category of textile and apparel goods eligible 
for duty-free treatment is textile luggage assembled in an 
ATPEA beneficiary country from fabric and yarns formed in the 
United States.
      In addition to the foregoing categories, the bill sets 
forth special rules for determining whether particular textile 
and apparel articles qualify for duty-free treatment.
Conference agreement
      In general the conferees agreed to follow the House 
amendment on apparel provisions with the exception that the 
House receded to the Senate on the treatment of textile 
luggage. With respect to category 2 in the House bill relating 
to fabrics or fabric components formed, or components knit-to-
shape, in one or more beneficiary countries, from yarns formed 
in one or more beneficiary countries, if such fabrics are in 
chief weight of llama, or alpaca, conferees agreed to include 
vicuna and calculate product eligibility based on chief value 
instead of chief weight. Also, conferees agreed to cap imports 
of apparel made from regional fabric and regional yarn 
(category 4 in the House bill) at 2% of U.S. imports growing to 
5% of U.S. imports in 2006, measured in square meter 
equivalents.
      It is the intention of the conferees that in cases where 
fabrics or yarns determined by the President to be in short 
supply impart the essential character to an article, the 
remaining textile components may be constructed of fabrics or 
yarns regardless of origin, as in Annex 401 of the NAFTA. In 
cases where the fabrics or yarns determined by the President to 
be in short supply do not impart the essential character of the 
article, the article shall not be ineligible for preferential 
treatment under this Act because the article contains the short 
supply fabric or yarn.

              Special Origin Rule for Nylon Filament Yarn

House amendment
      No provision.
Senate amendment
      Articles otherwise eligible for duty-free treatment and 
quota free treatment under the bill are not ineligible because 
they contain certain nylon filament yarn (other than 
elastomeric yarn) from a country that had an FTA with the U.S. 
in force prior to January 1, 1995.
Conference agreement
      House recedes.

               Dyeing, Finishing and Printing Requirement

House amendment
      New requirement that apparel made of U.S. knit or woven 
fabric assembled in CBTPA country qualifies for benefits only 
if the U.S. knit or woven fabric is dyed and finished in the 
United States. Apparel made of U.S. knit or woven fabric 
assembled in an Andean beneficiary country qualifies for 
benefits only if the U.S. knit or woven fabric is dyed and 
finished in the United States.
Senate provision
      No provision.
Conference agreement
      Senate recedes.

                      Penalties for Transshipment

Present law
      The Tariff Act of 1930, as amended, provides for civil 
monetary penalties for unlawful transshipment. These include 
penalties under 19 U.S.C. 1592 for up to a maximum of the 
domestic value of the imported merchandise or eight times the 
loss of revenue, as well as denial of entry, redelivery or 
liquidated damages for failure to redeliver the merchandise 
determined to be inaccurately represented. In addition, an 
importer may be liable for criminal penalties, including 
imprisonment for up to five years, under section 1001 of title 
18 of the United States Code for making false statements on 
import documentation.
      Under the North American Free Trade Agreement (NAFTA), 
Parties to the Agreement must observe Customs procedures and 
documentation requirements, which are established in Chapter 5 
of NAFTA. Requirements regarding Certificates of Origin for 
imports receiving preferential tariffs are detailed in Article 
502.1 of NAFTA.
House amendment
      Section 3103 requires that importers comply with 
requirements similar in all material respects to the 
requirements regarding Certificates of Origin contained in 
Article 502.1 of the North American Free Trade Agreement 
(NAFTA) for a similar importation from Mexico.
      In addition, if an exporter is determined under the laws 
of the United States to have engaged in illegal transshipment 
of apparel products from an Andean country, then the President 
shall deny all benefits under the bill to such exporter, and to 
any successors of such exporter, for a period of two years.
      In cases where the President has requested a beneficiary 
country to take action to prevent transshipment and the country 
has failed to do so, the President shall reduce the quantities 
of textile and apparel articles that may be imported into the 
United States from that country by three times the quantity of 
articles transshipped, to the extent that such action is 
consistent with World Trade Organization (WTO) rules.
Senate amendment
      In amending section 204(b) of the ATPA, section 3102 of 
the present bill provides special penalties for transshipment 
of textile and apparel articles from an ATPEA beneficiary 
country. Transshipment is defined as claiming duty-free 
treatment for textile and apparel imports on the basis of 
materially false information. An exporter found to have engaged 
in such transshipment (or a successor of such exporter) shall 
be denied all benefits under the ATPA for a period of two 
years.
      The bill further provides penalties for an ATPEA 
beneficiary country that fails to cooperate with the United 
States in efforts to prevent transshipment. Where textile and 
apparel articles from such country are subject to quotas on 
importation into the United States consistent with WTO rules, 
the President must reduce the quantity of such articles that 
may be imported into the United States by three times the 
quantity of transshipped articles, to the extent consistent 
with WTO rules.
Conference agreement
      Conference agreement follows House and Senate bill.

                         Import Relief Actions

Present law
      The import relief procedures and authorities under 
sections 201-204 of the Trade Act of 1974 apply to imports from 
ATPA beneficiary countries, as they do to imports from other 
countries. If ATPA imports cause serious injury, or threat of 
such injury, to the domestic industry producing a like or 
directly competitive article, section 204(d) of the ATPA 
authorizes the President to suspend ATPA duty-free treatment 
and proclaim a rate of duty or other relief measures.
      Under NAFTA, the United States may invoke a special 
safeguard provision at any time during the tariff phase-out 
period if a NAFTA-origin textile or apparel good is being 
imported in such increased quantities and under such conditions 
as to cause ``serious damage, or actual threat thereof,'' to a 
domestic industry producing a like or directly competitive 
good. The President is authorized to either suspend further 
duty reductions or increase the rate of duty to the NTR rate 
for up to three years.
House amendment
      Under Section 3103 normal safeguard authorities under 
ATPA would apply to imports of all products except textiles and 
apparel. A NAFTA equivalent safeguard authorities would apply 
to imports of apparel products from ATPA countries, except 
that, United States, if it applied a safeguard action, would 
not be obligated to provide equivalent trade liberalizing 
compensation to the exporting country.
Senate amendment
      The bill establishes similar textile and apparel 
safeguard provisions based on the NAFTA textile and apparel 
safeguard provision.
Conference agreement
      Conference Agreement follows House and Senate bill.

                          Designation Criteria

Present law
      In determining whether to designate any country as an 
ATPA beneficiary country, the President must take into account 
seven mandatory and 12 discretionary criteria, which are listed 
in section 203 of the ATPA.
      Under Section 203 of the ATPA, the President shall not 
designate any country a ATPA beneficiary country if:
            (1) the country is a Communist country;
            (2) the country has nationalized, expropriated, 
        imposed taxes or other exactions or otherwise seized 
        ownership or control of U.S. property (including 
        intellectual property), unless he determines that 
        prompt, adequate, and effective compensation has been 
        or is being made, or good faith negotiations to provide 
        such compensation are in progress, or the country is 
        otherwise taking steps to discharge its international 
        obligations, or a dispute over compensation has been 
        submitted to arbitration;
            (3) the country fails to act in good faith in 
        recognizing as binding or in enforcing arbitral awards 
        in favor of U.S. citizens;
            (4) the country affords ``reverse'' preferences to 
        developed countries and whether such treatment has or 
        is likely to have a significant adverse effect on U.S. 
        commerce;
            (5) a government-owned entity in the country 
        engages in the broadcast of copyrighted material 
        belonging to U.S. copyright owners without their 
        express consent or the country fails to work toward the 
        provision of adequate and effective intellectual 
        property rights;
            (6) the country is not a signatory to an agreement 
        regarding the extradition of U.S. citizens,
            (7) if the country has not or is not taking steps 
        to afford internationally recognized worker rights to 
        workers in the country;
      In determining whether to designate a country as eligible 
for ATPA benefits, the President shall take into account 
(discretionary criteria):
            (1) an expression by the country of its desire to 
        be designated;
            (2) the economic conditions in the country, its 
        living standards, and any other appropriate economic 
        factors;
            (3) the extent to which the country has assured the 
        United States it will provide equitable and reasonable 
        access to its markets and basic commodity resources;
            (4) the degree to which the country follows 
        accepted rules of international trade under the World 
        Trade Organization;
            (5) the degree to which the country uses export 
        subsidies or imposes export performance or local 
        content requirements which distort international trade;
            (6) the degree to which the trade policies of the 
        country are contributing to the revitalization of the 
        region;
            (7) the degree to which the country is undertaking 
        self-help measures to protect its own economic 
        development;
            (8) whether or not the country has taken or is 
        taking steps to afford to workers in that country 
        (including any designated zone in that country) 
        internationally recognized workers rights;
            (9) the extent to which the country provides under 
        its law adequate and effective means for foreign 
        nationals to secure, exercise, and enforce exclusive 
        intellectual property rights;
            (10) the extent to which the country prohibits its 
        nationals from engaging in the broadcast of copyrighted 
        material belonging to U.S. copyright owners without 
        their express consent;
            (11) whether such country has met the narcotics 
        cooperation certification criteria of the Foreign 
        Assistance Act of 1961 for eligibility for U.S. 
        assistance; and
            (12) the extent to which the country is prepared to 
        cooperate with the United States in the administration 
        of the Act.
      Under the ATPA the President is prohibited from 
designating a country a beneficiary country if any of criteria 
(1)-(7) apply to that country, subject to waiver if the 
President determines that country designation will be in the 
U.S. national economic or security interest. The waiver does 
not apply to criteria (4) and (6). Under the ATPA criteria on 
(7) is included as both mandatory and discretionary.
      The President may withdraw or suspend beneficiary country 
status or duty-freetreatment on any article if he determines 
the country should be barred from designation as a result of changed 
circumstances. The President must submit a triennial report to the 
Congress on the operation of the program. The report shall include any 
evidence that the crop eradication and crop substitution efforts of the 
beneficiary country are directly related to the effects of the 
legislation
House amendment
      The House amendment provides that the President, in 
designating a country as eligible for the enhanced ATPDEA 
benefits, shall take into account the existing eligibility 
criteria established under ATPA described above, as well as 
other appropriate criteria, including: whether a country has 
demonstrated a commitment to undertake its WTO obligations and 
participate in negotiations toward the completion of the FTAA 
or comparable trade agreement; the extent to which the country 
provides intellectual property protection consistent with or 
greater than that afforded under the Agreement on Trade-Related 
Aspects of Intellectual Property Rights; the extent to which 
the country provides internationally recognized worker fights; 
whether the country has implemented its commitments to 
eliminate the worst forms of child labor; the extent to which a 
country has taken steps to become a party to and implement the 
Inter-American Convention Against Corruption; and the extent to 
which the country applies transparent, nondiscriminatory and 
competitive procedures in government procurement equivalent to 
those included in the WTO Agreement on Government Procurement 
and otherwise contributes to efforts in international fora to 
develop and implement international rules in transparency in 
government procurement.
Senate amendment
      Section 3102(5) contains identical provisions.
Conference agreement
      Conference Agreement follows the House and Senate 
amendments. In evaluating a potential beneficiary's compliance 
with its WTO obligations, the conferees expect the President to 
take into account the extent to which the country follows the 
rules on customs valuation set forth in the WTO Customs 
Valuation Agreement. With respect to intellectual property 
protection, it is the Conferees intent that the President will 
also take into account the extent to which potential 
beneficiary countries are providing or taking steps to provide 
protection of intellectual property rights comparable to the 
protections provided to the United States in bilateral 
intellectual property agreements.
      Since April 1995, Colombia has applied a variable import 
duty system, known as the ``price band'' system, on fourteen 
basic agriculture products such as wheat, corn, and soybean 
oil. An additional 147 commodities, considered substitutes or 
related products, are subject to the price band system which 
establishes ceiling, floor, and reference prices on imports. 
The Conferees's view is that the price band system is non-
transparent and easily manipulated as a protectionist device. 
In early 2000, the United States reached agreement with 
Colombia in the WTO that Colombia would delink wet pet food, 
the only finished product in this system, from the price band 
system. In implementing the eligibility criteria relating to 
market access and implementation of WTO commitments, it is the 
Conferees intent that USTR insist that Colombia implement its 
WTO commitment to remove pet food from the price band tariff 
system and to apply the 20% common external tariff to imported 
pet food.
      With respect to whether beneficiary countries are 
following established WTO rules, the Conferees believe it is 
important for Andean governments to provide transparent and 
non-discriminatory regulatory procedures. Unfortunately, the 
Conferees know of instances where regulatory policies in Andean 
countries are opaque, unpredictable, and arbritarily applied. 
As such, it is the Conferees' view that Andean countries that 
seek trade benefits should adopt, implement, and apply 
transparent and non-discriminatory regulatory procedures. The 
development of such procedures would help create regulatory 
stability in the Andean region and thus provide mere certainty 
to U.S. companies that would like to invest in these countries.

            Determination Regarding Retention of Designation

Present law
      Under Section 203(e) of the ATPA, the President may 
withdraw or suspend a country's beneficiary country 
designation, or withdraw, suspend, or limit the application of 
duty-free treatment to particular articles of a beneficiary 
country, due to changed circumstances.
House amendment
      Section 3102(b) amends section 203(e) of the ATPA to 
provide that the President may withdraw or suspend ATPA 
designation, or withdraw, suspend or limit benefits if a 
country's performance under eligibility criteria are no longer 
satisfactory.
Senate amendment
      Identical.
Conference agreement
      Conference agreement follows the House amendment and 
Senate amendment.

                         Reporting Requirements

Present law
      Provides for: (1) an annual report by the International 
Trade Commission on the economic impact of the bill and; (2) an 
annual report by the Secretary of Labor on the impact of the 
bill with respect to U.S. labor. Also under present law, USTR 
is required to report triannually on operation of the program.
House amendment
      Retains current law on reports.
Senate amendment
      Senate bill requires same ITC and Labor reports as well 
as an annual report by the Customs Service on compliance and 
anti-circumvention on the part of beneficiary countries in the 
area of textile and apparel trade. It also requires USTR to 
report biannually on operation of the program.
Conference agreement
      House recedes.
            Petitions for review
Present law
      No provision.
House amendment
      No provision.
Senate amendment
      Section 3102(e) of the bill directs the President to 
promulgate regulations regarding the review of eligibility of 
articles and countries under the ATPA. Such regulations are to 
be similar to regulations governing the Generalized System of 
Preferences petition process.
Conference agreement
      House recedes.

            SECTION 3104--TERMINATION OF DUTY-FREE TREATMENT

Present law
      Duty-free treatment under the ATPA expires on December 4, 
2001.
House amendment
      Duty-free treatment terminates under the Act on December 
31, 2006.
Senate amendment
      Section 3103 of the bill amends section 208(b) of the 
ATPA to provide for a termination date of February 28, 2006. 
Basic ATPA benefits apply retroactively to December 4, 2001.
Conference agreement
      House recedes on retroactivity for basic ATPA benefits; 
Senate recedes on termination.

     SECTION 3106--TRADE BENEFITS UNDER THE CARIBBEAN BASIN TRADE 
   PARTNERSHIP ACT (CBTPA) AND THE AFRICA GROWTH AND OPPORTUNITY ACT 
                                 (AGOA)

            Knit-to-shape apparel
Present law
      Draft regulations issued by Customs to implement P.L. 
106-200 stipulate that knit to-shape garments, because 
technically they do not go through the fabric stage, are not 
eligible for trade benefits under the act.
House amendment
      Sec. 3106 and 3107 of the House bill amends AGOA and 
CBTPA to clarify that preferential treatment is provided to 
knit-to-shape apparel articles assembled in beneficiary 
countries.
Senate amendment
      No provision.
Conference agreement
      Senate recedes.
Present law
      Draft regulations issued by Customs to implement P.L. 
106-200 deny preferential access to garments that are cut both 
in the United States and beneficiary countries, on the 
rationale that the legislation does not specifically list this 
variation in processing (the so called ``hybrid cutting 
problem'').
House amendment
      Sec. 3107 of H.R. 3009 adds new rules in CBTPA and AGOA 
to provide preferential treatment for apparel articles that are 
cut both in the United States and beneficiary countries.
Senate amendment
      No provision.
Conference agreement
      Senate recedes.
            CBI knit cap
Present law
      P.L. 106-200 extended duty-free benefits to knit apparel 
made in CBI countries from regional fabric made with U.S. yarn 
and to knit-to-shape apparel (except socks), up to a cap of 
250,000,000 square meter equivalents (SMEs), with a growth rate 
of 16% per year for first 3 years.
House amendment
      Sec. 3106 of H.R. 2009 would raise this cap to the 
following amounts: 250,000,000 SMEs for the 1-year period 
beginning October 1, 2001; 500,000,000 SMEs for the 1-year 
period beginning on October 1, 2002; 850,000,000 SMEs for the 
1-year period beginning on October 1, 2003; 970,000,000 SMEs in 
each succeeding 1-year period through September 30, 2009.
Senate amendment
      No provision.
Conference agreement
      Senate recedes.
            CBI T-shirt cap
Present law
      P.L. 106-200 extends benefits for an additional category 
of CBI regional knit apparel products (T-shirts) up to a cap of 
4.2 million dozen, growing 16% per year for the first 3 years.
House amendment
      Section 3106 of H.R. 3006 would raise this cap to the 
following amounts: 4,200,000 dozen during the 1-year period 
beginning October 1, 2001; 9,000,000 dozen for the 1-year 
period beginning on October 1, 2002; 10,000,000 dozen for the 
1-year period beginning on October 1, 2003; 12,000,000 dozen in 
each succeeding 1-year period through September 30, 2009.
Senate amendment
      No provision.
Conference agreement
      Senate recedes.
Present law
      Section 112(b)(3) of the AGOA provides preferential 
treatment for apparel made in beneficiary sub-Saharan African 
countries from ``regional'' fabric (i.e., fabric formed in one 
or more beneficiary countries) from yarn originating either in 
the United States or one or more such countries. Section 
112(b)(3)(B) establishes a special rule for lesser developed 
beneficiary sub-Saharan African countries, which provides 
preferential treatment, through September 30, 2004, for apparel 
wholly assembled in one or more such countries regardless of 
the origin of the fabric used to make the articles. Section 
112(b)(3)(A) establishes a quantitative limit or ``cap'' on the 
amount of apparel that may be imported under section 112(b)(3) 
or section 112(b)(3)(B). This ``cap'' is 1.5 percent of the 
aggregate square meter equivalents of all apparel articles 
imported into the United States for the year that began October 
1, 2000, and increases in equal increments to 3.5 percent for 
the year beginning October 1, 2007.
House amendment
      Section 3107 would clarify that apparel wholly assembled 
in one or more beneficiary sub-Saharan African countries from 
components knit-to-shape in one or more such countries from 
U.S. or regional yarn is eligible for preferential treatment 
under section 112(b)(3) of AGOA. Similarly, Section 5 would 
clarify that apparel knit-to-shape and wholly assembled in one 
or more lesser developed beneficiary sub-Saharan African 
countries is eligible for preferential treatment, regardless of 
the origin of the yarn used to make such articles. The House 
amendment also would increase the ``cap'' by changing the 
applicable percentages from 1.5 percent to 3 percent in the 
year that began October 1, 2000, and from 3.5 percent to 7 
percent in the year beginning October 1, 2007.
Senate amendment
      No provision.
Conference agreement
      Conference agreement follows House Amendment accept the 
increase in the cap is limited to apparel products made with 
regional or U.S. fabric and yarn. No increases in amounts of 
apparel made of third-country fabric over current law.
Present law
      AGOA was supposed to provide duty-free, quota-free 
treatment to sweaters knit in African beneficiary countries 
from fine merino wool yarn, regardless of where the yarn was 
formed. AGOA was supposed to provide duty-free, quota-free 
treatment to sweaters knit in African beneficiary countries 
from fine merino wool yarn, regardless of where the yarn was 
formed. However, due to a drafting problem, the wrong diameter 
was included, making it impossible to use the provision.
House amendment
      Section 3107 corrects the yarn diameter in the AGOA 
legislation so that sweaters knit to shape from merino wool of 
a specific diameter are eligible.
Senate amendment
      No provision.
Conferce agreement
      Senate recedes.

                      AFRICA: NAMIBIA AND BOTSWANA

Present law
      The GDBs of Botswana and Namibia exceed the LLDC limit of 
$1500 and therefore these countries are not eligible to use 
third country fabric for the transitionperiod under the AGOA 
regional fabric country cap.
House amendment
      Section 5 allows Namibia and Botswana to use third 
country fabric for the transition period under the AGOA 
regional fabric country cap.
Senate amendment
      No provision.
Conference agreement
      Senate recedes.

       TITLE XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES

       SEC. 4101--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES

Expired law
      Section 505 of the Trade Act of 1974, as amended, 
provides that no duty-free treatment under Title V (the 
Generalized System of Preferences) shall remain in effect after 
September 30, 2001.
House bill
      The House amendment to H.R. 3009 would amend section 505 
of the Trade Act of 1974 to authorize an extension through 
December 31, 2002. It would also provide retroactive relief in 
that, notwithstanding section 514 of the Tariff Act of 1930 or 
any other provision of law, the entry of any article to which 
duty-free treatment under Title V of the Trade Act of 1974 
would have applied if the entry had been made on September 30. 
2001, and was made after September 30, 2001, and before the 
enactment of this Act, shall be liquidated or reliquidated as 
free of duty and the Secretary of Treasury shall refund any 
duty paid, upon proper request filed with the appropriate 
Customs officer, within 180 days after the date of enactment.
Senate amendment
      The Senate amendment authorizes an extension of GSP 
through December 31, 2006. The extension is retroactive to 
September 30, 2001, permitting importers to liquidate or 
reliquidate entries made since that date and to seek a return 
of duties paid on goods that would have entered the United 
States free of duty, but for expiration of GSP.
      The Senate amendment also amends the definition of 
``internationally recognized worker rights'' set forth in the 
GSP statute (section 507(4) of the Trade Act of 1974). 
Specifically, it adds to that definition ``a prohibition on 
discrimination with respect to employment and occupation'' and 
a ``prohibition of the worst forms of child labor.'' These two 
prohibitions come from the International Labor Organization's 
1998 Declaration on Fundamental Principles and Rights at Work, 
which defines certain worker rights as ``fundamental.''
      The GSP statute identifies certain criteria that the 
President must take into account in determining whether to 
designate a country as eligible for GSP benefits. Conversely, a 
country's lapse in compliance with one or more of these 
criteria may be grounds for withdrawal, suspension, or 
limitation of benefits. Whether a country is taking steps to 
afford its workers internationally recognized worker rights is 
one of those criteria. The Senate Amendment seeks to make the 
concept of ``internationally recognized worker rights'' as 
defined for GSP consistent with the concept as defined by the 
ILO.
      Finally, the Senate Amendment establishes a new 
eligibility criterion for GSP: ``A country is ineligible for 
GSP if it has not taken steps to support the efforts of the 
United States to combat terrorism.''
Conference agreement
      The Conference agreement authorizes an extension of GSP 
through December 31, 2006. Conferees approved the Senate 
provision to include a prohibition on the worst forms of child 
labor in the definition of internationally recognized worker 
rights in Section 507(a) of the Trade Act of 1974. Conferees 
declined to include the Senate provision on discrimination with 
respect to employment in the definition of ``international 
recognized worker rights under Sec. 507(a) of the Trade Act of 
1974. Agreement follows the House and the Senate bill with 
respect to providing retroactive relief.

                  DIVISION E--MISCELLANEOUS PROVISIONS

                 TITLE L--MISCELLANEOUS TRADE BENEFITS

                      Subtitle A--Wool Provisions

   SEC. 5101--WOOL MANUFACTURER PAYMENT CLARIFICATION AND TECHNICAL 
                            CORRECTIONS ACT

Present law
      Title V of the Trade and Development Act of 2000 (Pub. L. 
No. 106-200) included certain tariff relief for the domestic 
tailored clothing and textile industries. The relief was 
largely aimed at reducing the harmful affects of a ``tariff 
inversion''--i.e., a tariff structure that levies higher duties 
on the raw material (such as wool fabric) than on the finished 
goods (such as mens' suits). A component of the relief to the 
U.S. tailored clothing and textile industry was a refund of 
duties paid in calendar year 1999, spread out over calendar 
years 2000, 2001 and 2002. Pub. L. No. 106-2000, Sec. 505.
House amendment
      No provision.
Senate amendment
      The Senate bill amends section 505 of the Trade and 
Development Act of 2000 to simplify the process for refunding 
to eligible parties duties paid in 1999. Specifically, it 
creates three special refund pools for each of the affected 
wool articles (fabric, yarn, and fiber and top). Refunds for 
importing manufacturers will be distributed in three 
installments--the first and second on or before the date that 
is 45 days after the date of enactment of the Wool Manufacturer 
Payment and Clarification and Technical Corrections Act, and 
the third on or before April 15, 2003. Refunds for nonimporting 
manufacturers will be distributed in two installments--the 
first on or before the date that is 120 days after the date of 
enactment of the Wool Manufacturer Payment Clarification and 
Technical Corrections Act, and the second on or before April 
15, 2003.
      The provision also streamlines the paperwork process, in 
light of the destruction of previously filed claims and 
supporting information in the September 11, 2001 attacks on the 
World Trade Center in New York, New York. Finally, the 
provision identifies all persons eligible for the refunds.
Conference agreement
      The House recedes to the Senate.

                   SEC. 5102--DUTY SUSPENSION ON WOOL

Present law
      Sections 501(a) and (b) of the Trade and Development Act 
of 2000 provide temporary duty reductions for certain worsted 
wool fabrics through 2003.
      Section 501(d) limits the aggregate quantity of worsted 
wool fabrics entered under heading 9902.51.11 from January 1 to 
December 31 of each year, inclusive, to 2,500,000 square meter 
equivalents, or such other quantity proclaimed by the President 
pursuant to section 504(b)(3) of the Trade and Development Act. 
Further, the section limits the aggregate quantity of worsted 
wool fabrics entered under heading 9902.51.12 from January 1 to 
December 31 of each year, inclusive, to 1,500,000 square meter 
equivalents, or such other quantity proclaimed by the President 
pursuant to section 504(b)(3) of the Trade and Development Act.
House amendment
      No provision.
Senate bill
      The Senate bill extends the temporary duty reductions on 
fabrics of worsted wool from 2003 to 2005. The provision 
increases the limitation on the quantity of imports of worsted 
wool fabrics entered under heading 9902.51.11 to 3,500,000 
square meter equivalents in calendar year 2002, and 4,500,000 
square meter equivalents in calendar year 2003. Imports of 
worsted wool fabrics entered under heading 9902.51.12 are 
increased to 2,500,000 square meter equivalents in calendar 
year 2002, and 3,500,000 square meter equivalents in calendar 
year 2003.
      The bill extends the payments made to manufacturers under 
section 505 of the Trade and Development Act of 2000 and 
requires an affidavit that the manufacturer will remain a 
manufacturer in the United States as of January 1 of the year 
of payment. The two additional payments will occur as follows: 
the first to be made after January 1, 2004, but on or before 
April 15, 2004, and the second after January 1, 2005, but on or 
before April 15, 2005.
      Finally, the bill extends the ``Wool Research Trust 
Fund'' for two years through 2006.
 Conference agreement
      The House recedes to the Senate.

                      Subtitle B--Other Provisions

               SEC. 5201--FUND FOR WTO DISPUTE SETTLEMENT

Present law
      No applicable section.
House amendment
      The provision authorizes a settlement fund within the 
United States Trade Representative's Office in the amount of 
$50 million for the use in settling disputes that occur related 
to the World Trade Organization. The Trade Representative must 
certify to the Secretary of the Treasury that the settlement is 
in the best interest of the United States in cases of not more 
than $10 million. For cases above $10 million, the Trade 
Representative must make the same certification to the United 
States Congress.
Senate bill
      No provision.
Conference agreement
      The Senate recedes to the House.

  SEC. 5202--CERTAIN STEAM OR OTHER VAPOR GENERATING BOILERS USED IN 
                           NUCLEAR FACILITIES

Present law
      Under present law, certain steam or other vapor 
generating boilers used in nuclear facilities imported into the 
United States prior to December 31, 2003 are charged a duty 
rate of 4.9 percent ad valorem. This rate took effect pursuant 
to section 1268 of Public Law Number 106-476 (``Tariff 
Suspension and Trade Act of 2000''). Previously, the rate had 
been 5.2 percent ad valorem.
House amendment
      No provision.
Senate amendment
      Section 203 of the Senate amendment chances the duty rate 
on certain steam or other vapor generating boilers used in 
nuclear facilities to zero for such goods entered, or withdrawn 
from warehouse for consumption, on or after January 1, 2002, 
and on or before December 31, 2006. The provision was intended 
to lower the cost of inputs into the operation of nuclear 
facilities and thereby lower the cost of energy to consumers.
Committee agreement
      The House recedes to the Senate.

            SEC. 5203--SUGAR TARIFF RATE QUOTA CIRCUMVENTION

Present law
      No applicable section.
House amendment
      No provision.
Senate amendment
      The Senate bill establishes a sugar anti-circumvention 
program which requires the Secretary of Agriculture to identify 
imports of articles that are circumventing tariff rate quotas 
on sugars, syrups, or sugar-containing products imposed under 
chapters 17, 18, 19, and 21 of the Harmonized Tariff Schedule. 
The Secretary shall then report to the President articles found 
to be circumventing such tariff-rate quotas. Upon receiving the 
Secretary's report, the President shall, by proclamation, 
include any identified article in the appropriate tariff-rate 
quota provision of the Harmonized Tariff Schedule.
Conference agreement
      Conferees agreed to a provision directing the Secretary 
of Agriculture and the Commissioner of Customs shall monitor 
for sugar circumvention and shall report and make 
recommendations to Congress and the President.
      This provision amends the Harmonized Tariff Schedule of 
the United States (``HTSUS'') to make clear in the statute an 
important element of the ruling of the Court of Appeals for the 
Federal Circuit in Heartland By-Products, Inc. v. United 
States, 264 F. 3rd 1126 (Fed. Cir. 2001), i.e., that molasses 
is one of the foreign substances that must be excluded when 
calculating the percentage of soluble non-sugar solids under 
subheading 1702.90.40.
      The provision requires the Secretary of Agriculture and 
the Commissioner of Customs to establish a monitoring program 
to identify existing or likely circumvention of the tariff-rate 
quotas in Chapters 17, 18, 19 and 21 of the HTSUS. The 
Secretary and the Commissioner shall report the results of 
their monitoring to Congress and the President every six 
months, together with data and a description of developments 
and trends in the composition of trade provided for in such 
chapters. This report will be made public. The report will 
discuss any indications that imports of articles not subject to 
the tariff-rate quotas are being used for commercial extraction 
of sugar in the United States. Imports of so-called ``high-test 
molasses'' currently classified under subheading 1703.10.30 
will be examined particularly closely for such indications.
      Finally, the Secretary and the Commissioner will include 
in the report their recommendations for ending circumvention, 
including their recommendations for legislation. The Managers 
emphasize that rapid action to stop circumvention is the best 
way to prevent a problem from developing and that quick 
administrative or legislative action is preferable to 
protracted procedures and litigation, as occurred in the 
Heartland case.

                DIVISION A--TRADE ADJUSTMENT ASSISTANCE

                         SEC. 101--SHORT TITLE

Present law
      No provision.
House amendment
      Section 101 of H.R. 3009 provides that Division A of the 
Act may be cited as the ``Trade Adjustment Assistance Reform 
Act of 2002.''
Senate amendment
      Section 101 of H.R. 3009 provides that Division A of the 
Act may be cited as the ``Trade Adjustment Assistance Reform 
Act of 2002.''
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

              TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM

          Subtitle A--Trade Adjustment Assistance for Workers

  SEC. 111--REAUTHORIZATION OF THE TRADE ADJUSTMENT ASSISTANCE PROGRAM

Present law
      Current section 245 authorizes to be appropriated to the 
Department of Labor such sums as may be necessary to carry out 
the purposes of the TAA and NAFTA-TAA for workers programs for 
the period October 1, 1998 through September 30, 2001. Current 
section 285 provides for termination of all Trade Adjustment 
Assistance programs on September 30, 2001, but provides that 
workers, and firms eligible to receive benefits on or before 
that date shall continue to be eligible to receive such 
benefits as though the programs were in effect.
House amendment
      The House Amendment reauthorized the Trade Adjustment 
Assistance programs through September 30, 2004.
Senate amendment
      Section 111 of the Senate bill creates a new section 248 
of the Trade Act of 1974 which authorizes to be appropriated to 
the Department of Labor such sums as may be necessary to carry 
out the purposes of the Trade Adjustment Assistance for workers 
program for the period October 1, 2001, through September 30, 
2007. Section 701 of the Senate bill amends current section 285 
to provide for termination of all Trade Adjustment Assistance 
programs on September 30, 2007, but provides that workers, and 
firms, communities, farmers, and fishermen eligible to receive 
benefits on or before that date shall continue to be eligible 
to receive such benefits as though the programs were in effect.
Conference agreement
      Conferees agree to extend the authorization of the Trade 
Adjustment Assistance programs through September 30, 2007, and 
to consolidate the NAFTA-TAA program with the regular TAA 
program.

     SEC. 112--FILING OF PETITIONS AND PROVISION OF RAPID RESPONSE 
    ASSISTANCE; EXPEDITED REVIEW OF PETITIONS BY SECRETARY OF LABOR

Present law
      Current sections 221 and 250 set forth requirements 
concerning who may file a petition for certification of 
eligibility to apply for TAA and NAFTA-TAA assistance, 
respectively. Under both programs, petitions may be filed by a 
group of workers or by their certified or recognized union or 
other duly authorized representative. TAA petitions are filed 
with the Secretary of Labor. NAFTA-TAA petitions are filed with 
the Governor of the relevant State and forwarded by him to the 
Secretary of Labor. Under section 223, the Secretary of Labor 
must rule on eligibility within 60 days after a TAA petition is 
filed. Under section 250, the Governor must make a preliminary 
eligibility determination within 10 days after a NAFTA-TAA 
petition is filed, and the Secretary of Labor must make a final 
eligibility determination within the next 30 days. Section 221 
also sets forth notice and hearing obligations of the Secretary 
of Labor upon receipt of a TAA petition. Section 250 provides 
that, in the event of preliminary certification of eligibility 
to apply for NAFTA-TAA benefits, the Governor immediately 
provide the affected workers with certain rapid response 
services.
House amendment
      The House Amendment provided for a shortened period for 
the Secretary of Labor to consider petitions from 60 days to 40 
days and for other rapid response assistance toworkers.
Senate amendment
      Section 111 of the Senate bill creates a new section 231 
of the Trade Act of 1974, which consolidates the TAA and NAFTA-
TAA programs by establishing a single program with a single set 
of group eligibility criteria and a single set of procedures 
and standards for filing and reviewing petitions, certifying 
eligibility, and terminating certifications of eligibility.
      Section 231 expands the list of entities that may file a 
petition for group certification of eligibility to include 
employers, one-stop operators or one-stop partners, State 
employment agencies, and any entity to which notice of a plant 
closing or mass layoff must be given under section 3 of the 
Worker Adjustment and Retraining Notification Act. Section 231 
also provides that the President, or the Committee on Finance 
of the Senate or the Committee on Ways and Means of the House 
of Representatives (by resolution), may direct the Secretary of 
Labor to initiate a certification process under this chapter to 
determine the eligibility for Trade Adjustment Assistance of a 
group of workers.
      Section 231 creates a single process for filing and 
reviewing petitions for Trade Adjustment Assistance for 
workers, under which all petitions are filed with both the 
Secretary of Labor and the Governor of the State. Upon filing 
of the petition, the Governor is required to fulfill the 
requirements of any agreement entered into with the Department 
of Labor under section 222, to provide certain rapid response 
services, and to notify workers on whose behalf a petition has 
been filed of their potential eligibility for certain existing 
federal health care, child care, transportation, and other 
assistance programs. Upon filing the petition, the Secretary of 
Labor must make his certification determination within 40 days 
and provide the notice required.
Conference agreement
      The Senate recedes to the House with a change providing 
for simultaneous filing of petitions with the Secretary of 
Labor and State Governor.

                SEC. 113--GROUP ELIGIBILITY REQUIREMENTS

Present law
      Current law sections 222 and 250 of Title 11 of the Trade 
Act of 1974 set forth group eligibility criteria. Under TAA, 
the Secretary must certify a group of workers as eligible to 
apply for Trade Adjustment Assistance if he determines (1) that 
a significant number or proportion of the workers in such 
workers' firm have become or are threatened to become totally 
or partially separated; (2) sales or production of such firm 
have decreased absolutely; and (3) imports of articles like or 
directly competitive with articles produced by such workers' 
firm contributed importantly to the total or partial separation 
or threat thereof, and to the decline in sales or production. 
Under NAFTA-TAA, group eligibility may be based on the same 
criteria set forth in section 222, but section 250 also 
provides for NAFTA-TAA eligibility where there has been a shift 
in production by the workers' firm to Mexico or Canada of 
articles like or directly competitive with articles which are 
produced by the firm. Section 222 also includes special 
eligibility provisions with respect to oil and natural gas 
producers.
House amendment
      The House Amendment at Section 113 expanded the Trade 
Adjustment Assistance programs to secondary workers that are 
suppliers to firms that were certified and which satisfied 
certain conditions.
Senate amendment
      Section 111 of the Senate Amendment creates a new section 
231 under which the eligibility criteria are revised. First, 
workers are eligible for TAA if the value or volume of imports 
of articles like or directly competitive with articles produced 
by that firm have increased and the increase in the value or 
volume of imports contributed importantly to the workers' 
separation or threat of separation. Second, eligibility is 
extended to workers who are separated due to shifts in 
production to any country, rather than only when the shift in 
production is to Mexico or Canada. Third, eligibility is 
extended to adversely affected secondary workers. Eligible 
secondary workers include workers in supplier firms and, with 
respect to trade with NAFTA countries, downstream firms. 
Fourth, a new special eligibility provision is added with 
respect to taconite pellets.
Conference agreement
      The Conferees agree to extend coverage of Trade 
Adjustment Assistance to new categories of workers: (1) 
secondary workers that supply directly to another firm 
component parts for articles that were the basis for a 
certification of eligibility, (2) downstream workers that were 
affected by trade with Mexico or Canada, and (3) certain 
workers that have been laid off because their firm has shifted 
its production to another country that has a free trade 
agreement with the United States, that has a unilaterally 
preferential trading arrangement with the United States, or 
when there has been or is likely to be an increase in imports 
of the relevant articles.

  SEC. 114--QUALIFYING REQUIREMENTS FOR TRADE READJUSTMENT ALLOWANCES

Present law
      Current section 231 establishes qualifying requirements 
that must be met in orderfor an individual worker within a 
certified group to receive Trade Adjustment Assistance. In order to 
receive trade readjustment allowances, a certified worker must have 
been separated on or after the eligibility date established in the 
certification but within 2 years of the date of the certification 
determination; been employed for at least 26 of the 52 weeks preceding 
the separation at wages of $30 or more a week; be eligible for and have 
exhausted unemployment insurance benefits; not be disqualified for 
extended compensation payable under the Federal-State Extended 
Unemployment Compensation Act of 1970 by reason of the work acceptance 
and job search requirements in section 202(a)(3) of that Act; and be 
enrolled in a training program approved by the Secretary of Labor or 
have received a training waiver.
House amendment
      The House Amendment at Section 114 provided for 
requirements and deadlines for workers to enroll in training.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
235 which maintains the individual eligibility requirements in 
current law, with the exception of revisions to provisions 
governing bases for granting training waivers.
Conference agreement
      The Senate recedes to the House, with a change to adopt a 
training enrollment deadline of 16 weeks after separation.

               SEC. 115--WAIVERS OF TRAINING REQUIREMENTS

Present law
      Section 231 sets forth permissible bases for granting a 
training waiver. Pursuant to section 250(d), training waivers 
are not available in the NAFTA-TAA program.
House amendment
      The House Amendment provides that all workers who are 
eligible to apply for Trade Adjustment Assistance may be 
considered for training waivers and codifies several bases on 
which the Secretary may grant a waiver.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
235 which provides that all workers who are eligible to apply 
for Trade Adjustment Assistance may be considered for training 
waivers and codifies several bases on which the Secretary may 
grant a waiver.
Conference agreement
      The House receded to the Senate with a change to delete 
the Senate provision giving the Secretary discretion to grant 
waivers for ``other'' reasons.

  SEC. 116--AMENDMENTS TO LIMITATIONS ON TRADE READJUSTMENT ALLOWANCES

Present law
      Current section 233 provides that each certified worker 
may receive trade readjustment allowances for a maximum of 52 
weeks. Current law also provides that, in most circumstances, a 
worker is treated as participating in training during any week 
which is part of a break in training that does not exceed 14 
days.
House amendment
      Section 116 of the House Amendment would add 26 weeks of 
trade adjustment allowances for those workers who were in 
training and required the extension of benefits for the purpose 
of completing training.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
237 which increases the maximum time period during which a 
worker may receive trade adjustment allowances to 78 weeks, 
extends the permissible duration of a break in training to 30 
days, and provides for an additional 26 weeks of income support 
for workers requiring remedial education. Section 237 also 
clarifies that the requirement that a worker exhaust 
unemployment insurance benefits prior to receiving trade 
adjustment allowances does not apply to any extension of 
unemployment insurance by a State using its own funds that 
extends beyond either the 26 week period mandated by Federal 
law or any additional period provided for under the Federal-
State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 
3304 note).
Conference agreement
      The Senate recedes to the House.

         SEC. 117--ANNUAL TOTAL AMOUNT OF PAYMENTS FOR TRAINING

Present law
      Current section 236 establishes the terms and conditions 
under which training isavailable to eligible workers; permits 
the Secretary of Labor to approve certain specified types of training 
programs and to pay the costs of approved training and certain 
supplemental costs, including subsistence and transportation costs, for 
eligible workers; and caps total annual funding for training under the 
TAA for workers program at $80 million. Section 250 separately caps 
training expenditures under the NAFTA-TAA program at $30 million 
annually.
House amendment
      The House provided $30 million additional funds for the 
Trade Adjustment Assistance program. Combined with NAFTA Trade 
Adjustment Assistance, the total training funds available were 
$140 million.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
240 which sets the total funds available for training 
expenditures under the unified TAA for workers program to $300 
million annually.
Conference agreement
      Conferees agreed to a combined training cap of $220 
million for Trade Adjustment Assistance training.

             SEC. 118--PROVISION OF EMPLOYER-BASED TRAINING

Present law
      No applicable section.
House amendment
      The House Amendment included provisions related to 
employer based training including on-the-job training and 
customized training with partial reimbursements provided to the 
employer.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
240 which revises the list of training programs which the 
Secretary may approve to include customized training. It also 
adds a new section 237, which clarifies that the prohibition on 
payment of trade adjustment allowances to a worker receiving 
on-the-job training does not apply to a worker receiving on-
the-job training does not apply to worker enrolled in a non-
paid customized training program.
Conference agreement
      The Senate recedes to the House.

SEC. 119--COORDINATION WITH TITLE I OF THE WORKFORCE INVESTMENT ACT OF 
                                  1998

Present law
      No provision.
House amendment
      The House Amendment provided multiple provisions related 
to coordinating efforts under the Trade Adjustment Assistance 
programs to provide information and benefits to workers under 
the Workforce Investment Act.
Senate amendment
      No provision.
Conference agreement
      Conferees agreed to drop House language with the 
exception of a provision related to coordinating the delivery 
of Trade Adjustment Assistance benefits and information at one-
stop delivery systems under the Workforce Investment Act.

                      SEC. 120--EXPENDITURE PERIOD

Present law
      No provision.
House amendment
      The House amendment provided that certain funds obligated 
for any fiscal year to carry out activities may be expended by 
each State in the succeeding two fiscal years.
Senate amendment
      No provision.
Conference agreement
      The Senate recedes to the House.

                    SEC. 121--JOB SEARCH ALLOWANCES

Present law
      Under current section 237, when the Secretary of Labor 
determines that local employment is not available, an adversely 
affected worker certified eligible for TAA benefits may receive 
reimbursement of 90 percent of the cost of necessary job search 
expenses up to $800.
House amendment
      No provision.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
241 which raises the maximum reimbursement for job search 
expenses to $1250 per worker.
Conference agreement
      The House recedes to the Senate.

                    SEC. 122--RELOCATION ALLOWANCES

Present law
      Under current section 238, when the Secretary of Labor 
determines that local employment is not available, an adversely 
affected worker certified eligible for TAA benefits may receive 
a relocation allowance consisting of (1) 90 percent of the 
reasonable and necessary expenses incurred in transporting a 
worker and his family, if any, and household effects, and (2) a 
lump sum equivalent to three times the worker's average weekly 
wage, up to a maximum payment of $800.
House amendment
      No provision.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
242 which raises themaximum lump sum portion of the relocation 
allowance to $1,250.
Conference agreement
      The House recedes to the Senate.

  SEC. 123--REPEAL OF NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE PROGRAM

Present law
      Current law authorizes a Trade Adjustment Assistance 
Program for workers affected by NAFTA trade.
House amendment
      No provision.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
231 which combines the TAA and NAFTA-TAA programs, establishing 
a single program with a single set of group eligibility 
criteria and a single set of procedures and standards for 
filing and reviewing petitions, certifying eligibility, and 
terminating certification of eligibility.
Conference agreement
      The House recedes to the Senate to the extent of 
repealing the NAFTA Trade Adjustment Assistance program and 
creating a single, unified TAA program for workers.

   SEC. 124--DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE ADJUSTMENT 
                      ASSISTANCE FOR OLDER WORKERS

Present law
      No provision.
House amendment
      No provision.
Senate amendment
      Section 111 of the Senate Amendment adds a new section 
243 which directs the Secretary of Labor, within one year of 
enactment, to establish a two-year wage insurance pilot program 
under which a State uses the funds provided to the State for 
Trade Adjustment allowances to pay to an adversely affected 
worker certified under section 231, for a period not to exceed 
two years, a wage subsidy of up to 50 percent of the difference 
between the wages received by the adversely affected worker 
from reemployment and the wages received by the adversely 
affected worker at the time of separation. An adversely 
affected worker may be eligible to receive a wage subsidy if 
the worker obtains reemployment not more than 26 weeks after 
the date of separation from the adversely affected employment, 
is at least 50 years of age, earns not more than $50,000 a year 
in wages from reemployment, is employed at least 30 hours a 
week in the reemployment, and does not return to the employment 
from which the worker was separated. The wage subsidy available 
to workers in the wage insurance program is 50 percent of the 
difference between the amount of the wages received by the 
worker from reemployment and the amount of the wages received 
by the worker at the time of separation, if the wages the 
worker receives from reemployment are less than $40,000 a year. 
The wage subsidy is 25 percent if the wages received by the 
worker from reemployment are greater than $40,000 a year but 
not more than $50,000 a year. Total payments made to an 
adversely affected worker under the wage insurance program may 
not exceed $5,000 in each year of the 2-year period. A worker 
participating in the wage insurance program is not eligible to 
receive any other Trade Adjustment Assistance benefits, unless 
the Secretary of Labor determines that the worker has shown 
circumstances that warrant eligibility for training benefits 
under section 240.
Conference agreement
      The Conferees agree to create a new alternative Trade 
Adjustment Assistance program for older workers.

          SEC. 125--DECLARATIONS OF POLICY; SENSE OF CONGRESS

Present law
      No provision.
House amendment
      The House passed amendment included a declaration of 
policy and Sense of the Congress related to the responsibility 
of the Secretary of Labor to provide information to workers 
related to benefits available to them under the TAA and other 
federal programs.
Senate amendment
      Although certain supportive services are available to 
dislocated workers under WIA, current law makes no express 
linkage between these services and Trade AdjustmentAssistance 
and TAA certified workers may not be able to access them. Section 111 
of the Senate Amendment adds a new section 243 which provides that 
States may apply for and the Secretary of Labor may make available to 
adversely affected workers certified under the Trade Adjustment 
Assistance program supportive services available under WIA, including 
transportation, child care, and dependent care, that are necessary to 
enable a worker to participate in or complete training. Section 243 
requires the Comptroller General to conduct a study of all assistance 
provided by the Federal Government for workers facing job loss and 
economic distress; to submit a report to the Committee on Finance of 
the Senate and the Committee on Ways and Means of the House of 
Representatives on the study within one year of enactment of this Act; 
and to distribute the report to all WIA one-stop partners. Section 243 
further provides that each State may conduct a study of its assistance 
programs for workers facing job loss and economic distress. Each State 
is eligible for a grant from the Secretary of Labor, not to exceed 
$50,000, to enable it to conduct the study. In the event that a grant 
is awarded, the State must, within one year of receiving the grant, 
provide its report to the Committee on Finance and the Committee on 
Ways and Means and distribute its report to one-stop partners in the 
State.
Conference agreement
      The Senate recedes to the House.

           Subtitle B--Trade Adjustment Assistance for Firms

    SEC. 131--REAUTHORIZATION OF TRADE ADJUSTMENT FOR FIRMS PROGRAM

Present law
      The Trade Adjustment Assistance for Firms program 
provides technical assistance to qualifying firms. Current 
Title II, Chapter 3, section 251 of the Trade Act of 1974 
provides that a firm is eligible to receive Trade Adjustment 
Assistance under this program if (1) a significant number or 
proportion of its workers have become or are threatened to 
become totally or partially separated; (2) sales or production, 
or both, have decreased absolutely; and (3) increases of 
imports of articles like or directly competitive with articles 
which are produced by such firms contributed importantly to the 
total or partial separations or threat thereof.
      The authorization for the Trade Adjustment Assistance for 
Firms program expired on September 30, 2001. The TAA for Firms 
program is currently subject to annual appropnations and is 
funded as part of the budget of the Economic Development 
Administration in the Department of Commerce.
House amendment
      The House passed amendment included a 2 year 
reauthorization for Trade Adjustment Assistance for Firms.
Senate amendment
      Section 201 of the Senate Amendment reauthorizes the 
Trade Adjustment Assistance for Firms program for fiscal years 
2002 through 2007; expands the definition of qualifying firms 
to cover shifts in production; and authorizes appropriations to 
the Department of Commerce in the amount of $16 million 
annually for fiscal years 2002 through 2007 to carry out the 
purposes of the Trade Adjustment Assistance for Firms program.
Conference agreement
      The House recedes to the Senate on the issue of providing 
a $16 million authorization for Trade Adjustment Assistance for 
Firms and reauthorizing the program through September 30, 2007.

    Subtitle C--Trade Adjustment Assistance for Farmers and Ranchers

           SEC. 141--TRADE ADJUSTMENT ASSISTANCE FOR FARMERS

Present law
      No provision.
House amendment
      No provision.
Senate amendment
      Section 401 of the Senate Amendment adds new sections 
292-298 of the Trade Act of 1974 which create a Trade 
Adjustment Assistance program for farmers and ranchers in the 
Department of Agriculture. Under this section, a group of 
agricultural commodity producers may petition the Secretary of 
Agriculture for Trade Adjustment Assistance. The Secretary must 
certify the group as eligible for Trade Adjustment Assistance 
for farmers if it is determined that the national average price 
in the most recent marketing year for the commodity produced by 
the group is less than 80 percent of the national average price 
in the preceding 5 marketing years and that increases in 
imports of that commodity contributed importantly to the 
decline in price.
Conference agreement
      The House recedes to the Senate with changes. The 
Conferees agree to include limitations on eligibility based 
upon adjusted gross income and counter-cyclical payment 
limitations set forth in the Food Security Act of 1985.

                    SEC. 142--CONFORMING AMENDMENTS

Present law
      No applicable section.
House amendment
      No provision.
Senate amendment
      The Senate Amendment makes conforming amendments to the 
Trade Act of 1974 concerning the TAA for Farmers program.
Conference agreement
      Conferees agree to make conforming amendments to the 
Trade Act of 1974.

          SEC. 143--TRADE ADJUSTMENT ASSISTANCE FOR FISHERMEN

Present law
      No provision.
House amendment
      No provision.
Senate amendment
      Section 502 of the Senate Amendment adds new sections 
299-299(G) which create a Trade Adjustment Assistance program 
for fishermen in the Department of Commerce. Under this 
program, a group of fishermen may petition the Secretary of 
Commerce for Trade Adjustment Assistance. The Secretary must 
certify the group as eligible for Trade Adjustment Assistance 
for fishermen if it is determined that the national average 
price in the most recent marketing year for the fish produced 
by the group is less than 80 percent of the national average 
price in the proceeding five marketing years and that increases 
in imports of that fish contributed importantly to the decline 
in price.
Conference agreement
      Conferees agree to drop Senate Amendment and authorize a 
study by the Department of Labor to investigate applying TAA to 
fisherman.

                       Subtitle D--Effective Date

                        SEC. 151--EFFECTIVE DATE

Present law
      No applicable provision.
House amendment
      No provision.
Senate amendment
      Section 801 of the Senate Amendment provides that except 
as otherwise specified, the amendments to the TAA program shall 
be effective 90 days after enactment of the Trace Act of 2002. 
The Senate Amendment includes transitional provisions governing 
the period between expiration of the prior authorizations of 
TAA for workers and firms and the effective date of the 
amendments.
Conference agreement
      The House recedes to the Senate.

  TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS

 SEC. 201(A) AND 202--CREDIT FOR HEALTH INSURANCE COSTS OF INDIVIDUALS 
RECEIVING A TRADE READJUSTMENT ALLOWANCE OR A BENEFIT FROM THE PENSION 
  BENEFIT GUARANTY CORPORATION; ADVANCE PAYMENT OF CREDIT FOR HEALTH 
                INSURANCE COSTS OF ELIGIBLE INDIVIDUALS

Present law
      Under present law, the tax treatment of health insurance 
expenses depends on the individual's circumstances. In general, 
employer contributions to an accident or health plan are 
excludable from an employee's gross income (sec. 106).
      Self-employed individuals are entitled to deduct a 
portion of the amount paid for health insurance expenses for 
the individual and his or her spouse and dependents. The 
percentage of deductible expenses is 70 percent in 2002 and 100 
percent in 2003 and thereafter.
      Individuals other than self-employed individuals who 
purchase their own health insurance and itemize deductions may 
deduct their expenses to the extent that their total medical 
expenses exceed 7.5 percent of adjusted gross income.
      Present law does not provide a tax credit for the 
purchase of health insurance.
      The health care continuation rules (commonly referred to 
as ``COBRA'' rules, after the Consolidated Omnibus Budget 
Reconciliation Act of 1985 in which they were enacted) require 
that employer-sponsored group health plans of employers with 20 
or more employees must offer certain covered employees and 
their dependents (``qualified beneficiaries'') the option of 
purchasing continued health coverage in the event of loss of 
coverage resulting from certain qualifying events. These 
qualifying events include: termination or reduction in hours of 
employment, death, divorce or legal separation, enrollment in 
Medicare, the bankruptcy of the employer, or the end of a 
child's dependency under a parent's health plan. In general, 
the maximum period of COBRA coverage is 18 months. An employer 
is permitted to charge qualified beneficiaries 102 percent of 
the applicable premium for COBRA coverage.
      Under present law, individuals without access to COBRA 
are able to purchase individual policies on a guaranteed issue 
basis without exclusion of coverage for pre-existing conditions 
if they had 18 months of creditable coverage under an employer 
sponsored group health plan, governmental plan, or a church 
plan. Those with access to COBRA are required to exhaust their 
18 months of COBRA prior to obtaining a policy on a guaranteed 
issue basis without exclusion of coverage for pre-existing 
conditions.
House amendment
      The House bill provides a refundable tax credit for up to 
60 percent of the expenses of an eligible individual for 
qualified health insurance coverage of the eligible individual 
and his or her spouse or dependents. Eligible individuals are 
certain TAA eligible workers and PBGC pension beneficiaries. In 
the case of TAA eligible workers, no more than 12 months of 
coverage would be eligible for the credit. The amount of the 
credit would be phased out for taxpayers with modified adjusted 
gross income between $20,000 and $40,000 for single taxpayers 
($40,000 and $80,000 for married taxpayers filing a joint 
return). The credit would be available on an advance basis 
pursuant to a program to be established by the Secretary of the 
Treasury. Insurance that qualifies for the credit includes 
certain COBRA coverage and certain individual market options.
Senate amendment
      The Senate amendment provides a refundable credit for 70 
percent of qualified health insurance expenses. The credit is 
available with respect to certain TAA eligible workers. The 
credit is payable on an advance basis pursuant to a program to 
be established by the Secretary of the Treasury. Insurance that 
qualifies for the credit includes certain COBRA coverage, 
certain State-based options, and individual health insurance if 
certain requirements are satisfied.
Conference agreement
            Refundable health insurance credit: in general
      In the case of taxpayers who are eligible individuals, 
the conference agreement provides a refundable tax credit for 
65 percent of the taxpayer's expenses for qualified health 
insurance of the taxpayer and qualifying family members for 
each eligible coverage month beginning in the taxable year. The 
credit is available only with respect to amounts paid by the 
taxpayer.
      Qualifying family members are the taxpayer's spouse and 
any dependent of the taxpayer with respect to whom the taxpayer 
is entitled to claim a dependency exemption.\1\ Any individual 
who has other specified coverage is not a qualifying family 
member.
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    \1\ Present law allows the custodial parent to release the night to 
claim the dependency exemption for a child to the noncustodial parent. 
In addition, if certain requirements are met, the parents may, decide 
by agreement that the noncustodial parent is entitled to the dependency 
exemption with respect to a child. In such cases, the provision would 
treat the child as the dependent of the custodial parent for purposes 
of the credit.
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            Persons eligible for the credit
      Eligibility for the credit is determined on a monthly 
basis. In general, an eligible coverage month is any month if, 
as of the first day of the month, the taxpayer (1) is an 
eligible individual, (2) is covered by qualified health 
insurance, (3) does not have other specified coverage, and (4) 
is not imprisoned under Federal, State, or local authority. In 
the case of a joint return, the eligibility requirements are 
met if at least one spouse satisfies the requirements. An 
eligible month must begin more than 90 days after the date of 
enactment.
      An eligible individual is (1) an eligible TAA recipient, 
(2) an eligible alternative TAA recipient, and (3) an eligible 
PBGC pension recipient.
      An individual is an eligible TAA recipient during any 
month if the individual (1) is receiving for any day of such 
month a trade adjustment allowance \2\ or who would be eligible 
to receive such an allowance but for the requirement that the 
individual exhaust unemployment benefits before being eligible 
to receive an allowance and (2) with respect to such allowance, 
is covered under a certification issued under subchapter A or D 
of chapter 2 of title 11 of the Trade Act of 1974. An 
individual is treated as an eligible TAA recipient during the 
first month that such individual would otherwise cease to be an 
eligible TAA recipient.
---------------------------------------------------------------------------
    \2\ Part I of subchapter B, or subchapter D. of chapter 2 of title 
11 of the Trade Act of 1974.
---------------------------------------------------------------------------
      An individual is an eligible alternative TAA recipient 
during any month if the individual (1) is a worker described in 
section 246(a)(3)(B) of the Trade Act of 1974 who is 
participating in the program established under section 
246(a)(1) of such Act, and (2) is receiving a benefit for such 
month under section 246(a)(2) of such Act. An individual is 
treated as an eligible alternative TAA recipient during the 
first month that such individual would otherwise cease to be an 
eligible TAA recipient.
      An individual is a PBGC pension recipient for any month 
if he or she (1) is age 55 or over as of the first day of the 
month, and (2) is receiving a benefit any portion of which is 
paid by the Pension Benefit Guaranty Corporation (``PBGC).
      An otherwise eligible taxpayer is not eligible for the 
credit for a month if, as of the first day of the month the 
individual has other specified coverage. Specified coverage 
would be (1) coverage under any insurance which constitutes 
medical care (expect for insurance substantially all of the 
coverage of which is for excepted benefits) \3\ if at least 50 
percent of the cost of the coverage is paid by an employee \4\ 
(or former employer) of the individual or his or her spouse or 
(2) coverage under certain governmental health programs. \5\ A 
rule aggregating plans of the same employer applies in 
determining whether the employer pays at least 50 percent of 
the cost of coverage. A person is not an eligible individual if 
he or she may be claimed as a dependent on another person's tax 
return. A special rule applies with respect to alternative TAA 
recipients.
---------------------------------------------------------------------------
    \3\ Excepted benefits are: (1) coverage only for accident or 
disability income or any combination thereof, (2) coverage issued as a 
supplement to liability insurance; (3) liability insurance. including 
general liability insurance and automobile liability insurance; (4) 
worker's compensation or similar insurance; (5) automobile medical 
payment insurance; (6) credit-only insurance; (7) coverage for on-site 
medical clinics; (8) other insurance coverage similar to the coverages 
in (1)-(7) specified in regulations under which benefits for medical 
care are secondary or incidental to other insurance benefits; (9) 
limited scope dental or vision benefits; (10) benefits for long-term 
care, nursing home care, home health care, community-based care, or any 
combination thereof, and (11) other benefits similar to those in (9) 
and (10) as specified in regulations; (12) coverage only for a 
specified disease or illness; (13) hospital indemnity or other fixed 
indemnity insurance; and (14) Medicare supplemental insurance.
    \4\ An amount would be considered paid by the employer if it is 
excludable from income. Thus. for example, amounts paid for health 
coverage on a salary reduction basis under an employer plan are 
considered paid by the employer.
    \5\ Specifically, an individual would not be eligible for the 
credit if, as of the first day of the month, the individual is (1) 
entitled to benefits under Medicare Part A, enrolled in Medicare Part 
B, or enrolled in Medicaid or SCHIP, (2) enrolled in a health benefits 
plan under the Federal Employees Health Benefit Plan, or (3) entitled 
to receive benefits under chapter 55 of title 10 of the United States 
Code (relating to military personnel). An individual is not considered 
to be enrolled in Medicaid solely by reason of receiving immunizations.
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            Qualified health insurance
      Qualified health insurance eligible for the credit is: 
(1) COBRA continuation coverage (2) State based continuation 
coverage provided by the State under a State law that requires 
such coverage; (3) coverage offered through a qualified State 
high risk pool;(4) coverage under a health insurance program 
offered to State employees or a comparable program; (5) coverage 
through an arrangement entered into by the State and a group health 
plan, an issuer of health insurance coverage, an administrator, or an 
employer; (6) coverage offered through a State arrangement with a 
private sector health care coverage purchasing pool; (7) coverage under 
a State-operated health plan that does not receive any Federal 
financial participation; (8) coverage under a group health plan that is 
available through the employment of the eligible individual's spouse; 
and (9) coverage under individual health insurance if the eligible 
individual was covered under individual health insurance during the 
entire 30-day period that ends on the date the individual became 
separated from the employment which qualified the individual for the 
TAA allowance, the benefit for an eligible alternative TAA recipient, 
or a pension benefit from the PBGC, whichever applies.\6\
---------------------------------------------------------------------------
    \6\ For this purpose, ``individual health insurance'' means any 
insurance which constitutes medical care offered to individuals other 
than in connection with a group health plan. Such term does not include 
Federal- or State-based health insurance coverage.
---------------------------------------------------------------------------
      Qualified health insurance does not include any State-
based coverage (i.e., coverage described in (2)-(8) in the 
preceding paragraph), unless the State has elected to have such 
coverage treated as qualified health insurance and such 
coverage meets certain requirements. Such State coverage must 
provide that each qualifying individual is guaranteed 
enrollment if the individual pays the premium for enrollment or 
provides a qualified health insurance costs eligibility 
certificate and pays the remainder of the premium. In addition, 
the State-based coverage cannot impose any pre-existing 
condition limitation with respect to qualifying individuals. 
State-based coverage cannot require a qualifying individual to 
pay a premium or contribution that is greater than the premium 
or contribution for a similarly situated individual who is not 
a qualified individual. Finally, benefits under the State-based 
coverage must the same as (or substantially similar to) 
benefits provided to similarly situated individuals who are not 
qualifying individuals. A qualifying individual is an eligible 
individual who seeks to enroll in the State-based coverage and 
who has aggregate periods of creditable coverage \7\ of three 
months or longer, does not have other specified coverage, and 
who is not imprisoned. A ``qualifying individual'' also 
includes qualified family members of such an eligible 
individual.
---------------------------------------------------------------------------
    \7\ Creditable coverage is determined under the Health Care 
Portability and Accountability Act (Code sec. 9801 (c)).
---------------------------------------------------------------------------
      Qualified health insurance does not include coverage 
under a flexible spending or similar arrangement or any 
insurance if substantially all of the coverage is of excepted 
benefits.
            Other rules
      Amounts taken into account in determining the credit 
could not be taken into account in determining the amount 
allowable under the itemized deduction for medical expenses or 
the deduction for health insurance expenses of self-employed 
individuals. Amounts distributed from a medical savings account 
would not be eligible for the credit. The amount of the credit 
is reduced by any credit received on an advance basis. Married 
taxpayers filing separate returns are eligible for the credit; 
however, if both spouses are eligible individuals and the 
spouses file a separate return, then the spouse of the taxpayer 
is not a qualifying family member.
      The Secretary of the Treasury is authorized to prescribe 
such regulations and other guidance as may be necessary or 
appropriate to carry out the provision.
            Advance payment of refundable health insurance credit; 
                    reporting requirements
      The conference agreement provides for payment of the 
credit on an advance basis (i.e., prior to the filing of the 
taxpayer's return) pursuant to a program to be established by 
the Secretary of the Treasury no later than August 1, 2003. 
Such program is to provide for making payments on behalf of 
certified individuals to providers of qualified health 
insurance. In order to receive the credit on an advance basis, 
a qualified health insurance costs credit eligibility 
certificate would have to be in effect for the taxpayer. A 
qualified health insurance costs credit eligibility certificate 
is a written statement that an individual is an eligible 
individual for purposes of the credit, provides such 
information as the Secretary of the Treasury may require, and 
is provided by the Secretary of Labor or the PBGC (as 
appropriate) or such other person or entity designated by the 
Secretary.
      The conference report permits the disclosure of return 
information of certified individuals to providers of health 
insurance information to the extent necessary to carry out the 
advance payment mechanism.
      The conference report provides that any person who 
receives payments during a calendar year for qualified health 
insurance and claims a reimbursement for an advance credit 
amount is to file an information return with respect to each 
individual from whom such payments were received or for whom 
such a reimbursement is claimed. The return is to be in such 
form as the Secretary may prescribe and is to contain the name, 
address, and taxpayer identification number of the individual 
and any other individual on the same health insurance policy, 
the aggregate of the advance credit amounts provided, the 
number of months for which advance credit amounts are provided, 
and such other information as the Secretary may prescribe. The 
conference report requires that similar information be provided 
to the individual no later than January 31 of the year 
following the year for which the information return is made.

                             Effective Date

      The provision is generally effective with respect to 
taxable years beginning after December 31, 2001. The provision 
relating to the advance payment mechanism to be developed by 
the Secretary would be effective on the date of enactment.

                   TITLE III--CUSTOMS REAUTHORIZATION

               Subtitle A--United States Customs Service

  CHAPTER 1--DRUG ENFORCEMENT AND OTHER NONCOMMERCIAL AND COMMERCIAL 
                               OPERATIONS

                         SEC. 301--SHORT TITLE

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House provides 
that the Act may be cited as the ``Customs Border Security Act 
of 2002.''
Senate amendment
      The Senate amendment is identical.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment

SEC. 311--AUTHORIZATION OF APPROPRIATIONS FOR NONCOMMERCIAL OPERATIONS, 
         COMMERCIAL OPERATIONS, AND AIR AND MARINE INTERDICTION

Present law
      The statutory basis for authorization of appropriations 
for Customs is section 301(b)(1) of the Customs Procedural and 
Simplification Act of 1978 (19 U.S.C. 2075(b)). That law, as 
amended by section 8102 of the Omnibus Budget Reconciliation 
Act of 1986 [P.L. 99-509], first outlined separate amounts for 
non-commercial and commercial operations for the salaries and 
expenses portion of the Customs authorization. Under 19 U.S.C. 
2075, Congress has adopted a two-year authorization process to 
provide Customs with guidance as it plans its budget, as well 
as guidance from the Committee for the appropriation process.
      The most recent authorization of appropriations for 
Customs (under section 101 of the Customs and Trade Act of 1990 
[P.L. 101 382]) provided $118,238,000 for salaries and expenses 
and $143,047,000 for air and marine interdiction program for FY 
1991, and $1,247,884,000 for salaries and expenses and 
$150,199,000 for air and marine interdiction program in FY 
1992.
House amendment
      This provision authorizes $1,365,456,000 for FY 2003 and 
$1,399,592,400 for FY 2004 for noncommercial operations of the 
Customs Service. It also authorizes $1,642,602,000 for FY 2003 
and $1,683,667,050 for FY 2004 for commercial operations of the 
Customs Service. Of the amounts authorized for commercial 
operations, $308,000,000 is authorized for the automated 
commercial environment computer system for each fiscal year. 
The provisions require that the Customs Service provide the 
Committee on Ways and Means and the Committee on Finance of the 
Senate with a report demonstrating that the computer system is 
being built in a cost-effective manner. In addition, the 
provisions authorizes $170,829,000 for FY 2003 and $175,099,725 
for FY 2004 for air and marine interdiction operations of the 
Customs Service. The provision requires submission of out-of-
year budget projections to the Ways and Means and Finance 
Committees.
Senate amendment
      This provision authorizes $886,513,000 for FY 2003 and 
$909,471,000 for FY 2004 for noncommercial operations of the 
Customs Service. It also authorizes $1,603,482,000 for FY 2003 
and $1,645,009,000 for FY 2004 for commercial operations of the 
Customs Service. Of the amounts authorized for commercial 
operations, $308,000,000 is authorized for the automated 
commercial environment computer system for each fiscal year. 
The provisions require that the Customs Service provide the 
Committee on Ways and Means and the Committee on Finance of the 
Senate with a report demonstrating that the computer system is 
being built in a cost-effective manner. In addition, the 
provisions authorizes $181,860,000 for FY 2003 and $186,570,000 
for FY 2004 for air and marine interdiction operations of the 
Customs Service. The provision requires submission of out-of-
year budget projections to the Ways and Means and Finance 
Committees.
Conference agreement
      The Senate recedes to House.

 SEC. 312--ANTITERRORIST AND ILLICIT NARCOTICS DETECTION EQUIPMENT FOR 
   THE UNITED STATES-MEXICO BORDER, UNITED STATES-CANADA BORDER, AND 
                  FLORIDA AND THE GULF COAST SEAPORTS

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
require that $90,244,000 ofthe FY 2003 appropriations be 
available until expended for acquisition and other expenses associated 
with implementation and deployment of terrorist and narcotics detection 
equipment along the United States-Mexico border, the United States-
Canada border, and Florida and the Gulf seaports. The equipment would 
include vehicle and inspection systems. The provision would require 
that $9,000,000 of the FY 2004 appropriations be used for maintenance 
of equipment described above. This section would also provide the 
Commissioner of Customs with flexibility in using these funds and would 
allow for the acquisition of new updated technology not anticipated 
when this bill was drafted. Nothing in the language of the bill is 
intended to prevent the Commissioner of Customs from dedicating 
resources to specific ports not identified in the bill.
      The equipment would include vehicle and container 
inspection systems, mobile truck x-rays, upgrades to fixed-site 
truck x-rays, pallet x-rays, busters, contraband detection 
kits, ultrasonic container inspection units, automated 
targeting systems, rapid tire deflator systems, portable 
Treasury Enforcement Communications Systems terminals, remote 
surveillance camera systems, weigh-in-motion sensors, vehicle 
counters, spotter camera systems, inbound commercial truck 
transponders, narcotics vapor and particle detectors, and 
license plate reader automatic targeting software.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

        SEC. 313--COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
require Customs to measure specifically the effectiveness of 
the resources dedicated in sections 312 as part of its annual 
performance plan.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

    Subtitle B--Child Cyber-Smuggling Center of the Customs Service

SEC. 321--AUTHORIZATION OF APPROPRIATIONS FOR PROGRAM TO PREVENT CHILD 
                 PORNOGRAPHY/CHILD SEXUAL EXPLOITATION

Present law
      Customs enforcement responsibilities include enforcement 
of U.S. laws to prevent border trafficking relating to child 
pornography, intellectual property rights violations, money 
laundering, and illegal arms. Funding for these activities has 
been included in the Customs general account.
House amendment
      H.R. 3009 as amended and passed by the House would 
authorize $10 million for Customs to carry out its program to 
combat on-line child sex predators. Of that amount, $375,000 
would be dedicated to the National Center for Missing Children 
for the operation of its child pornography cyber tipline.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

                  CHAPTER 2--MISCELLANEOUS PROVISIONS

  SEC. 331--ADDITIONAL CUSTOMS SERVICE OFFICERS FOR U.S.-CANADA BORDER

Present law
      No applicable section.
House Amendment
      H.R. 3009 as amended and passed by the House earmarks $25 
million and 285new staff hires for Customs to use at the U.S.-
Canada border.
Senate amendment
      The Senate amendment is the same as the House Amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

   SEC. 332--STUDY AND REPORT RELATING TO PERSONNEL PRACTICES OF THE 
                            CUSTOMS SERVICE

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House requires 
Customs to conduct a study of current personnel practices 
including: performance standards; the effect and impact of the 
collective bargaining process on Customs drug interdiction 
efforts; and a comparison of duty rotations policies of Customs 
and other federal agencies employing similarly situated 
personnel.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

    SEC. 333--STUDY AND REPORT RELATING TO ACCOUNTING AND AUDITING 
                   PROCEDURES OF THE CUSTOMS SERVICE

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
require Customs to conduct a study to ensure that appropriate 
training is being provided to personnel who are responsible for 
financial auditing of importers. Customs would specifically 
report on how its audit personnel protect the privacy and trade 
secrets of importers.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

 SEC. 334--ESTABLISHMENT AND IMPLEMENTATION OF COST ACCOUNTING SYSTEM; 
                                REPORTS

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
mandate the imposition of a cost accounting system in order for 
Customs to effectively explain its expenditures. Such a system 
would provide compliance with the core financial system 
requirements of the Joint Financial Management Improvement 
Program (JFMIP), which is a joint and cooperative undertaking 
of the U.S. Department of the Treasury, the General Accounting 
Office, the Office of Management and Budget, and the Office of 
Personnel Management working in cooperation with each other and 
other agencies to improve financial management practices in 
government. That Program has statutory authorization in the 
Budget and Accounting Procedures Act of 1950 (31 U.S.C. 65).
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

   SEC. 335--STUDY AND REPORT RELATING TO TIMELINESS OF PROSPECTFVE 
                                RULINGS

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
require the Comptroller General to prepare a report to 
determine whether Customs has improved its timeliness in 
providing prospective rulings.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

        SEC. 336--STUDY AND REPORT RELATING TO CUSTOMS USER FEES

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
require the Comptroller General to prepare a confidential 
report to determine whether current user fees are appropriately 
set at a level commensurate with the service provided for the 
fee. The Comptroller General is authorized to recommend the 
appropriate level for customs user fees.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

  SEC. 337--FEES FOR CUSTOMS INSPECTIONS AT EXPRESS COURIER FACILITIES

Present law
      Current law provides for direct reimbursement by courier 
facilities of expenses incurred by Customs conducting 
inspections at those facilities.
House amendment
      H.R. 3009 as amended and passed by the House would 
establish a per item fee of sixty-six cents to cover Customs 
expenses. This amount could be lowered to more than thirty-five 
cents or raised to no more than $1.00 by the Secretary of the 
Treasury after a rulemaking process to reevaluate the expenses 
incurred by Customs in providing inspectional services.
Senate amendment
      No provision.
Conference agreement
      The Senate recedes to the House.

             SEC. 338--NATIONAL CUSTOMS AUTOMATION PROGRAM

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
empower the Secretary to require the electronic submission of 
any information required to be submitted to the Customs 
Service.
Senate amendment
      No provision.
Conference agreement
      The Senate recedes to the House.

     SEC. 339--AUTHORIZATION OF APPROPRIATIONS FOR CUSTOMS STAFFING

Present law
      No applicable section.
House amendment
      No provision.
Senate amendment
      The Senate Amendment authorizes the appropriation to the 
Department of Treasury such sums as may be necessary to 
increase the annual pay of journeyman Customs inspectors and 
Canine Enforcement Officers who have completed at least one 
year of service and are being paid at a GS-9 level, from GS-9 
to GS-11. The Senate provision also authorizes an increase in 
pay of support staff.
Conference agreement
      The House recedes to the Senate.

                  CHAPTER 4--ANTITERRORISM PROVISIONS

     SEC. 341--IMMUNITY FOR CUSTOMS OFFICERS THAT ACT IN GOOD FAITH

Present law
      Currently, Customs officers are entitled to qualified 
immunity in civil suits brought by persons, who were searched 
upon arrival in the United States. Qualified immunity protects 
officers from liability if they can establish that their 
actions did not violate any clearly established constitutional 
or statutory rights.
House amendment
      H.R. 3009 as amended and passed by the House would 
protect Customs officers by providing them immunity from 
lawsuits stemming from personal searches of people entering the 
country so long as the officers conduct the searches in good 
faith.
Senate amendment
      No provision.
Conference agreement
      Senate recedes to the House, but conferees qualify the 
provision by adding that the means used to effectuate such 
searches must be reasonable. To be covered by this immunity 
provision, inspectors must follow Customs Service inspection 
rules including the rule against profiling against race, 
religions, or ethnic background.

SEC. 342--EMERGENCY ADJUSTMENTS TO OFFICES, PORTS OF ENTRY, OR STAFFING 
                         OF THE CUSTOMS SERVICE

Present law
      Present law places numerous restrictions on and, in some 
instances, precludes the Secretary of the Treasury or Customs 
from making any adjustments to ports and staff. 19 U.S.C. 1318 
requires a Presidential proclamation of an emergency and 
authorization to the Secretary of the Treasury only to extend 
the time for performance of legally required acts during an 
emergency. No other emergency powers statute for Customs 
exists.
House amendment
      H.R. 3009 as amended and passed by the House would permit 
the Secretary of the Treasury, if the President declares a 
national emergency or if necessary to address specific threats 
to human life or national interests, to eliminate, consolidate, 
or relocate Customs ports and offices and to alter staffing 
levels, services rendered and hours of operations at those 
locations. In addition, the amendment would permit the 
Commissioner of Customs, when necessary to address threats to 
human life or national interests, to close temporarily any 
Customs office or port or take any other lesser action 
necessary to respond to the specific threat. The Secretary or 
the Commissioner would be required to notify Congress of any 
action taken under this proposal within 72 hours.
Senate amendment
      The Senate amendment is the same as the House Amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

SECS. 343 AND 343A--MANDATORY ADVANCED ELECTRONIC INFORMATION FOR CARGO 
            AND PASSENGERS; SECURE SYSTEMS OF TRANSPORTATION

Present law
      Currently, commercial carriers bringing passengers or 
cargo into or out of the country have no obligation to provide 
Customs with such information in advance.
House amendment
      H.R. 3009 as amended and passed by the House would 
require every air, land, or water-based commercial carrier to 
file an electronic manifest describing all passengers with 
Customs before entering or leaving the country. There is a 
similar requirement for cargo entering the country. Specific 
information required in the advanced manifest system would be 
developed by Treasury in regulations.
Senate amendment
      The Senate Amendment is similar to the House Amendment. 
However, with respect to cargo, the Senate Amendment applies to 
out-bound as well as in-bound shipments.
Conference agreement
      The conferees agree to direct the Secretary of the 
Treasury to promulgate regulations pertaining to the electronic 
transmission to the Customs Service of information relevant to 
aviation, maritime, and surface transportation safety and 
security prior to a cargo carrier's arrival in or departure 
from the United States. The agreement sets forth parameters for 
the Secretary to follow in developing these regulations. For 
example, the parameters require that the regulations be 
flexible with respect to the commercial and operational aspects 
of different modes of transportation. They also require that, 
in general, the Customs Service seek information from parties 
most likely to have direct knowledge of the information at 
issue. The conferees also agree to amendment of the Tariff Act 
of 1930 to establish requirements concerning proper 
documentation of ocean-bound cargo prior to a vessel's 
departure. Finally, the conferees agree to direct the Secretary 
of the Treasury to establish a task force to evaluate, 
prototype and certify secure systems of transportation.

 SEC. 344--BORDER SEARCH AUTHORITY FOR CERTAIN CONTRABAND IN OUTBOUND 
                                  MAIL

Present law
      Although Customs currently searches all inbound mail, and 
although it searches outbound mail sent via private carriers, 
outbound mail carried by the Postal Service is not subject to 
search.
House amendment
      H.R. 3009 as amended and passed by the House would enable 
Customs officers to search outbound U.S. mail for unreported 
monetary instruments, weapons of mass destruction, firearms, 
and other contraband used by terrorists. However, reading of 
mail would not be authorized absent Customs officers obtaining 
a search warrant or consent.
Senate amendment
      The Senate Amendment is the same as the House Amendment 
with respect to mail weighing in excess of 16 ounces. However, 
under the Senate Amendment, the Customs Service would be 
required to obtain a warrant in order to search mail weighing 
16 ounces or less. The Senate Amendment also requires the 
Secretary of State to determine whether it is consistent with 
international law and U.S. treaty obligations for the Customs 
Service to search mail transiting the United States between two 
foreign countries. The Customs Service would be authorized to 
search such mail only after the Secretary of State determined 
that such measures are consistent with international law and 
U.S. treaty obligations.
Conference agreement
      The House recedes to the Senate.

   SEC. 345--AUTHORIZATION OF APPROPRIATIONS FOR REESTABLISHMENT OF 
                  CUSTOMS OPERATIONS IN NEW YORK CITY

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House authorizes 
funds to reestablish those operations.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

              CHAPTER 5--TEXTILE TRANSSHIPMENT PROVISIONS

  SEC. 351--GAO AUDIT OF TEXTILE TRANSSHIPMENT MONITORING BY CUSTOMS 
                                SERVICE

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would direct 
the Comptroller General to conduct an audit of the systems at 
the Customs Service to monitor and enforce textile 
transshipment. The Comptroller General would report on 
recommendations for improvements.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

  SEC. 352--AUTHORIZATION OF APPROPRIATIONS FOR TEXTILE TRANSSHIPMENT 
                         ENFORCEMENT OPERATIONS

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
authorize $9,500,000 for FY 2002 to the Customs Service for the 
purpose of enhancing its textile transshipment enforcement 
operations. This amount would be in addition to Customs 
Service's base authorization and the authorization to 
reestablish the destroyed textile monitoring and enforcement 
operations at the World Trade Center.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The Senate recedes to the House, but the text is 
clarified to provide that personnel will also conduct education 
and outreach in addition to enforcement.

   SEC. 353--IMPLEMENTATION OF THE AFRICAN GROWTH AND OPPORTUNITY ACT

Present law
      No applicable section.
House amendment
      H.R. 3009 as amended and passed by the House would 
earmark approximately $1.3 million within Customs' budget for 
selected activities related to providing technical assistance 
to help sub-Saharan African countries develop and implement 
effective visa and anti-transshipment systems as required by 
the African Growth and Opportunity Act (title I of Public Law 
106-200).
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

      Subtitle B--Office of the United States Trade Representative

               SEC. 361--AUTHORIZATION OF APPROPRIATIONS

Present law
      The statutory authority for budget authorization for the 
Office of the United States Trade Representative is section 
141(g)(1) of the Trade Act of 1974 (19 U.S.C. 2171(g)(1)). The 
most recent authorization of appropriations for USTR was under 
section 101 of the Customs and Trade Act of 1990 [P.L. 101-
382]. Under 19 U.S.C. 2171, Congress has adopted a two-year 
authorization process to provide USTR with guidance as it plans 
its budget as well as guidance from the Committee for the 
appropriation process.
House amendment
      H.R. 3009 as amended and passed by the House authorizes 
$32,300,000 for FY 2003 and $31,108,000 for FY 2004. The 
provision requires submission of out-of-year budget projections 
to the Ways and Means and Finance Committees. In light of the 
substantial increase in trade negotiation work to be conducted 
by USTR and the associated need for consultations with 
Congress, this provision would authorize the addition of two 
individuals to assist the office of Congressional Affairs.
Senate amendment
      The Senate amendment authorizes $30,000,000 for FY 2003 
and $31,000,000 for FY 2004.
Conference agreement
      The Senate recedes to the House.

        Subtitle C--United States International Trade Commission

               SEC. 371--AUTHORIZATION OF APPROPRIATIONS

Present law
      The statutory authority for budget authorization for the 
International Trade Commission is section 330(e)(2)(A) of the 
Tariff Act of 1930 (19 U.S.C. 1330(e)(2)(A)). The most recent 
authorization of appropriations for the ITC was under section 
101 of the Customs and Trade Act of 1990 [P.L. 101-382]. Under 
19 U.S.C. 1330, Congress has adopted a two-year authorization 
process to provide the ITC with guidance as it plans its budget 
as well as guidance from the Committees for the appropriation 
process.
House amendment
      H.R. 3009 as amended and passed by the House authorizes 
$54,000,000 for FY 2003 and $57,240,000 for FY 2004. The 
provision requires submission of out-of-year budget projections 
to the Ways and Means and Finance Committees.
Senate amendment
      The Senate amendment authorizes $51,400,000 for FY 2003 
and $53,400,000 for FY 2004.
Conference agreement
      The Senate recedes to the House.

                   Subtitle D--Other Trade Provisions

  SEC. 381--INCREASE IN AGGREGATE VALUE OF ARTICLES EXEMPT FROM DUTY 
               ACQUIRED ABROAD BY UNITED STATES RESIDENTS

Present law
      The Harmonized Tariff Schedule at subheading 9804.00.65 
currently provides a $400 duty exemption for travelers 
returning from abroad.
House amendment
      H.R. 3009 as amended and passed by the House would 
increased the current $400 duty exemption to $800.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

                 SEC. 382--REGULATORY AUDIT PROCEDURES

Present law
      Section 509 of the Tariff Act of 1930 (19 U.S.C. 1509) 
provides the authority for Customs to audit persons making 
entry of merchandise into the U.S. In the course of such audit, 
Customs auditors may identify discrepancies, including 
underpayments of duties. However, if there also are 
overpayments, there is no requirement that such overpayments be 
offset against the underpayments if the underlying entry has 
been liquidated.
House amendment
      H.R. 3009 as amended and passed by the House would 
require that when conducting an audit, Customs must recognize 
and offset overpayments and overdeclarations of duties, 
quantities and values against underpayments and 
underdeclarations. As an example, if during an audit Customs 
finds that an importer has underpaid duties associated with one 
entry of merchandise by $100 but has also overpaid duties from 
another entry of merchandise by $25, then any assessment by 
Customs must be the difference of $75.
Senate amendment
      The Senate amendment is the same as the House amendment.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

                  SEC. 383--PAYMENT OF DUTIES AND FEES

Present law
      Current law at 19 U.S.C. 1505 provides for the collection 
of duties by the Secretary through regulatory process.
House amendment
      H.R. 3009 as amended and passed by the House would 
require duties to be paid within 10 working days without 
extension. The bill also provides for the Customs Service to 
create a monthly billing system upon the building of the 
Automated Commercial Environment.
Senate amendment
      No provision.
Conference agreement
      Senate recedes to the House.

            DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY

                  TITLE XXI--TRADE PROMOTION AUTHORITY

                  SEC. 2101--SHORT TITLE AND FINDINGS

Present law
      No provision.
House amendment
      The short title of the bill is the ``Bipartisan Trade 
Promotion Authority Act of 2001.'' Section 2101 of the House 
amendment to H.R. 3009 states that Congress finds the expansion 
of international trade is vital to U.S. national security and 
economic growth, as well as U.S. leadership. Section 2101 also 
states that the recent pattern of decisions by dispute 
settlement panels and the Appellate Body of the World Trade 
Organization to impose obligations and restrictions on the use 
of antidumping and countervailing measures by WTO members has 
raised concerns, and Congress is concerned that such bodies 
appropriately apply the standard of review contained in Article 
17.6 of the Antidumping Agreement, to provide deference to a 
permissible interpretation by a WTO member and to the 
evaluation by a member of the facts where that evaluation is 
unbiased and objective and the establishment of the facts is 
proper.
Senate amendment
      The short title of the bill is the ``Bipartisan Trade 
Promotion Authority Act of 2002.'' Section 2101 of the Senate 
amendment to H.R. 3009 states that Congress finds the expansion 
of international trade is vital to U.S. national security and 
economic growth, as well as U.S. leadership. Section 2101 also 
states that support for continued trade expansion requires that 
dispute settlement procedures under international trade 
agreements not add to or diminish the rights and obligations 
provided in such agreements. It goes on to note a troubling 
pattern of cases before WTO dispute settlement panels and the 
WTO Appellate Body that do precisely that.
Conference agreement
      The Senate recedes to the House with modifications. With 
respect to the findings, the Conferees believe that, as stated 
in section 2101(b) of the Conference agreement, support for 
continued trade expansion requires that dispute settlement 
procedures under international trade agreements not add to or 
diminish the rights and obligations provided in such 
agreements. Therefore, the recent pattern of decisions by 
dispute settlement panels and the WTO Appellate Body to impose 
obligations and restrictions on the use of antidumping, 
countervailing and safeguard measures by WTO members has raised 
concerns, and Congress is concerned that such bodies 
appropriately apply the standard of review contained in Article 
17.6 of the Antidumping Agreement, to provide deference to a 
permissible interpretation by a WTO member and to the 
evaluation by a member of the facts where that evaluation is 
unbiased and objective and the establishment of the facts is 
proper.

                SEC. 2102--TRADE NEGOTIATING OBJECTIVES

Present/expired law
      Section 1101(a) of the Omnibus Trade and Competitiveness 
Act of 1988 (the 1988 Act) set forth overall negotiating 
objectives for concluding trade agreements. These objectives 
were to obtain more open, equitable, and reciprocal market 
access, the reduction or elimination of barriers and other 
trade-distorting policies and practices, and a more effective 
system of international trading disciplines and procedures. 
Section 1102(b) set forth the following principal trade 
negotiating objectives: dispute settlement, transparency, 
developing countries, current account surpluses, trade and 
monetary coordination, agriculture, unfair trade practices, 
trade in services, intellectual property, foreign direct 
investment, safeguards, specific barriers, worker rights, 
access to high technology, and border taxes.
House amendment
      Section 2102 of the House amendment to H.R. 3009 would 
establish the following overall negotiating objectives: 
obtaining more open, equitable, and reciprocal market access; 
obtaining the reduction or elimination of barriers and other 
trade-distorting policies and practices; further strengthening 
the system of international trading disciplines and procedures, 
including dispute settlement; fostering economic growth and 
full employment in the U.S. and the global economy; ensuring 
that trade and environmental policies are mutually supportive 
and seeking to protect and preserve the environment and enhance 
the international means of doing so, while optimizing the use 
of the world's resources; promoting respect for worker rights 
and the rights of children consistent with International Labor 
Organization core labor standards, as defined in the bill; and 
seeking provisions in trade agreements under which parties 
strive to ensure that they do not weaken or reduce the 
protections afforded in domestic environmental and labor laws 
as an encouragement to trade.
      In addition, section 2102 would establish the principal 
trade negotiating objectives for concluding trade agreements, 
as follows:
      Trade barriers and distortions: expanding competitive 
market opportunities for U.S. exports and obtaining fairer and 
more open conditions of trade by reducing or eliminating tariff 
and nontariff barriers and policies and practices of foreign 
governments directly related to tradethat decrease market 
opportunities for U.S. exports and distort U.S. trade; and obtaining 
reciprocal tariff and nontariff barrier elimination agreements, with 
particular attention to products covered in section 111(b) of the 
Uruguay Round Agreements Act.
      Services: to reduce or eliminate barriers to 
international trade in services, including regulatory and other 
barriers, that deny national treatment or unreasonably restrict 
the establishment or operations of services suppliers.
      Foreign investment: to reduce or eliminate artificial or 
trade-distorting barriers to trade-related foreign investment 
and, recognizing that U.S. law on the whole provides a high 
level of protection for investment, consistent with or greater 
than the level required by international law, to secure for 
investors important rights comparable to those that would be 
available under U.S. legal principles and practice, by:
            Reducing or eliminating exceptions to the principle 
        of national treatment;
            Freeing the transfer of funds relating to 
        investments;
            Reducing or eliminating performance requirements, 
        forced technology transfers, and other unreasonable 
        barriers to the establishment and operation of 
        investments;
            Seeking to establish standards for expropriation 
        and compensation for expropriation, consistent with 
        United States legal principles and practice;
            Providing meaningful procedures for resolving 
        investment disputes including between an investor and a 
        government;
            Seeking to improve mechanisms used to resolve 
        disputes between an investor and a government through 
        mechanisms to eliminate frivolous claims and procedures 
        to ensure the efficient selection of arbitrators and 
        the expeditious disposition of claims;
            Providing an appellate or similar review mechanism 
        to correct manifestly erroneous interpretations of law; 
        and
            Ensuring the fullest measure of transparency in 
        investment disputes by ensuring that all requests for 
        dispute settlement and all proceedings, submissions, 
        findings, and decisions are promptly made public; all 
        hearings are open to the public; and establishing a 
        mechanism for acceptance of amicus curiae submissions.
      Intellectual property: including: promoting adequate and 
effective protection of intellectual property rights through 
ensuring accelerated and full implementation of the Agreement 
on Trade-Related Aspects of Intellectual Property Rights, 
including strong enforcement; providing strong protection for 
new and emerging technologies and new methods of transmitting 
and distributing products embodying intellectual property; and 
ensuring that standards of protection and enforcement keep pace 
with technological developments, and in particular ensuring 
that right holders have the legal and technological means to 
control the use of their works through the internet and other 
global communication media.
      Transparency: to increase public access to information 
regarding trade issues as well as the activities of 
international trade institutions; to increase openness in 
international trade fora, including the WTO, by increasing 
public access to appropriate meetings, proceedings, and 
submissions, including with regard to dispute settlement and 
investment; and to increase timely public access to 
notifications made by WT0 member states and the supporting 
documents.
      Anti-corruption: to obtain high standards and appropriate 
enforcement mechanisms applicable to persons from all countries 
participating in a trade agreement that prohibit attempts to 
influence acts, decisions, or omissions of foreign government; 
and to ensure that such standards do not place U.S. persons at 
a competitive disadvantage in international trade.
      Improvement of the WTO and multilateral trade agreements: 
to achieve full implementation and extend the coverage of the 
WTO and such agreements to products, sectors, and conditions of 
trade not adequately covered; and to expand country 
participation in and enhancement of the Information Technology 
Agreement (ITA) and other trade agreements.
      Regulatory practices: to achieve increased transparency 
and opportunity for the participation of affected parties in 
the development of regulations; to require that proposed 
regulations be based on sound science, cost-benefit analysis, 
risk assessment, or other objective evidence; to establish 
consultative mechanisms among parties to trade agreements to 
promote increased transparency in developing guidelines, rules, 
regulations, and laws for government procurement and other 
regulatory regimes; and to achieve the elimination of 
government measures such as price controls and reference 
pricing which deny full market access for United States 
products.
      Electronic commerce: to ensure that current obligations, 
rules, disciplines, and commitments under the WTO apply to 
electronic commerce; to ensure that electronically delivered 
goods and services receive no less favorable treatment under 
trade rules and commitments than like products delivered in 
physical form; and the classification of such goods and 
services ensures the most liberal trade treatment possible; to 
ensure that governments refrain from implementing trade-related 
measures that impede electronic commerce; where legitimate 
policy objectives require domestic regulations that affect 
electronic commerce, to obtain commitments that any such 
regulations are the leastrestrictive on trade, 
nondiscriminatory, and transparent, and promote an open market 
environment, and to extend the moratorium of the WTO on duties on 
electronic transmissions.
      Agriculture: to ensure that the U.S. trade negotiators 
duly recognize the importance of agricultural issues; to obtain 
competitive market opportunities for U.S. exports in foreign 
markets substantially equivalent to the competitive 
opportunities afforded foreign exports in U.S. markets and to 
achieve fairer and more open conditions of trade; to reduce or 
eliminate trade distorting subsidies; to impose disciplines on 
the operations of state-trading enterprises or similar 
administrative mechanisms; to eliminate unjustified 
restrictions on products derived from biotechnology; to 
eliminate sanitary or phytosanitary restrictions that 
contravene the Uruguay Round Agreement as they are not based on 
scientific principles and to improve import relief mechanisms 
to accommodate the unique aspects of perishable and cyclical 
agriculture.
      Labor and the environment: to ensure that a party does 
not fail to effectively enforce its environmental or labor 
laws, through a sustained or recurring course of action or 
Inaction, in a manner affecting trade between the United States 
and that party; to recognize that a party to a trade agreement 
is effectively enforcing its laws if a course of inaction or 
inaction reflects a reasonable exercise of discretion or 
results from a bona fide decision regarding allocation of 
resources and no retaliation may be authorized based on the 
exercise of these rights or the right to establish domestic 
labor standards and levels of environmental protection; to 
strengthen the capacity of U.S. trading partners to promote 
respect for core labor standards and to protect the environment 
through the promotion of sustainable development; to reduce or 
eliminate government practices or policies that unduly threaten 
sustainable development; to seek market access for U.S. 
environmental technologies, goods, and services; and to ensure 
that labor, environmental, health, or safety policies and 
practices of parties to trade agreements do not arbitrarily or 
unjustifiably discriminate against U.S. exports or serve as 
disguised barriers to trade.
      Dispute settlement and enforcement: to seek provisions in 
trade agreements providing for resolution of disputes between 
governments in an effective, timely, transparent, equitable, 
and reasoned manner requiring determinations based on facts and 
the principles of the agreement, with the goal of increasing 
compliance; seek to strengthen the capacity of the WTO Trade 
Policy Review Mechanism to review compliance; seek provisions 
encouraging the early identification and settlement of disputes 
through consultations; seek provisions encouraging trade-
expanding compensation; seek provisions to impose a penalty 
that encourages compliance, is appropriate to the parties, 
nature, subject matter, and scope of the violation, and has the 
aim of not adversely affecting parties or interests not party 
to the dispute while maintaining the effectiveness of the 
enforcement mechanism; and seek provisions that treat U.S. 
principal negotiating objectives equally with respect to 
ability to resort to dispute settlement and availability of 
equivalent procedures and remedies.
      Extended WTO negotiations: concerning extended WTO 
negotiations on financial services, civil aircraft, and rules 
of origin.
Senate amendment
      The Senate Amendment is substantially similar to the 
House Amendment, with the exception of several key provisions:
      Small Business: The Senate Amendment contains an overall 
negotiating objective ``to ensure that trade agreements afford 
small businesses equal access to international markets, 
equitable trade benefits, expanded export market opportunities, 
and provide for the reduction or elimination of trade barriers 
that disproportionately impact small businesses.''
      Trade in Motor Vehicles and Parts: The Senate Amendment 
contains a principal negotiating objective on expanding 
competitive opportunities for exports of U.S. motor vehicles 
and parts.
      Foreign Investment: The Senate Amendment states as an 
objective of the United States in the context of investor-state 
dispute settlement ``ensuring that foreign investors in the 
United States are not accorded greater rights than United 
States investors in the United States.'' The Senate Amendment's 
objective with respect to investor-state dispute settlement 
also differs from the House Amendment in the following 
respects:
            It sets as an objective'' seeking to establish 
        standards for fair and equitable treatment consistent 
        with United States legal principles and practice, 
        including the principle of due process.''
            It sets deterrence of the filing of frivolous 
        claims as an objective, ``in addition to the prompt 
        elimination of frivolous claims.
            The Senate Amendment seeks to establish 
        ``procedures to enhance opportunities for public input 
        into the formulation of government positions.''
            The Senate Amendment seeks to establish a single 
        appellate body to review decisions by arbitration 
        panels 'in investor-state dispute settlement cases. 
        Also, unlike the House Amendment, the Senate Amendment 
        does not prescribe a standard of review for an eventual 
        appellate body.
      Intellectual Property: The Senate Amendment contains an 
objective to respect the Declaration on the TRIPS Agreement and 
Public Health, adopted by the World Trade Organization at the 
Fourth Ministerial Conference at Doha, Qatar on November 14, 
2001.''
      Trade in Agriculture: The Senate Amendment's negotiating 
objective on export subsidies differs from the House Amendment, 
stating that an objective of the United States is ``seeking to 
eliminate all export subsidies on agricultural commodities 
while maintaining bona fide food aid and preserving U.S. 
agriculture development and export credit programs that allow 
the U.S. to compete with other foreign export promotion 
efforts.'' The Senate Amendment also provides that it is a 
negotiating objective of the United States to ``strive to 
complete a general multilateral round in the WTO by January 1, 
2005, and seek the broadest market access possible in 
multilateral, regional, and bilateral negotiations, recognizing 
the effect that simultaneous sets of negotiations may have on 
US import-sensitive commodities (including those subject to 
tariff-rate quotas).''
      Human Rights and Democracy: The Senate Amendment contains 
a negotiating objective ``to obtain provisions in trade 
agreements that require parties to those agreements to strive 
to protect internationally recognized civil, political, and 
human rights.''
      Dispute Settlement: The Senate Amendment contains a 
negotiating objective absent in the House Amendment ``to seek 
improved adherence by panels convened under the WTO 
Understanding on Rules and Procedures Governing the Settlement 
of Disputes and by the WTO Appellate Body to the standard of 
review applicable under the WTO Agreement involved in the 
dispute, including greater deference, where appropriate, to the 
fact finding and technical expertise of national investigating 
authorities.''
      Border Taxes: The Senate Amendment contains an objective 
absent from the House Amendment on border taxes. The objective 
seeks ``to obtain a revision of the WTO rules with respect to 
the treatment of border adjustments for internal taxes to 
redress the disadvantage to countries relying primarily on 
direct taxes for revenue rather than indirect taxes.'' The 
objective is addressed to a decision by the WTO Dispute 
Settlement Body holding the foreign sales corporation 
provisions of the Internal Revenue Code to be inconsistent with 
WTO rules.
      Textiles: The Senate Amendment contains an extensive 
objective on opening foreign markets to U.S. textile exports. 
There is no similar provision in the House Amendment.
      Worst Forms of Child Labor: The Senate Amendment contains 
a negotiating objective to prevent distortions in the conduct 
of international trade caused by the use of the worst forms of 
child labor and to redress unfair and illegitimate competition 
based upon the use of the worst forms of child labor.
Conference agreement
      The Senate recedes to the House with several 
modifications. With respect to the overall negotiating 
objectives, the Conferees agree to the overall negotiating 
objective regarding small business in section 2102(a)(8) of the 
Senate amendment. Second, the Conferees agree to an overall 
negotiating objective to promote universal compliance with ILO 
Declaration 182 concerning the worst forms of child labor.
      With respect to the principal negotiating objectives, the 
Conferees agree to expand the negotiating objective on 
intellectual property to respect the Declaration on the TRIPS 
Agreement and Public Health, adopted by the WTO at Doha 
(section 2102(b)(4)(c) of the Senate amendment).
      With respect to the principal negotiating objectives 
regarding foreign investment, the Conferees believe that it is 
a priority for negotiators to seek agreements protecting the 
rights of U.S. investors abroad and ensuring the existence of a 
neutral investor-state dispute settlement mechanism. At the 
same time, these protections must be balanced so that they do 
not come at the expense of making Federal, State and local laws 
and regulations more vulnerable to successful challenges by 
foreign investors than by similarly situated U.S. investors.
      No Greater Rights: The House recedes to the Senate with a 
technical modification to clarify that foreign investors in the 
United States are not accorded greater substantive rights with 
respect to investment protections than United States investors 
in the United States. That is, the reciprocal obligations 
regarding investment protections that the United States 
undertakes in pursuing its goals should not result in foreign 
investors being entitled to compensation for government actions 
where a similarly situated U.S. investor would not be entitled 
to any form of relief, while ensuring that U.S. investors 
abroad can challenge host government measures which violate the 
terms of the investment agreement. Thus, this language 
expresses Congress' direction that the substantive investment 
protections (e.g., expropriation, fair and equitable treatment, 
and full protection and security) should be consistent with 
United States legal principles and practice and not provide 
greater rights to foreign investors in the United States.
      This language applies to substantive protections only and 
is not applicable to procedural issues, such as access to 
investor-state dispute settlement. The Conferees recognize that 
the procedures for resolving disputes between a foreign 
investor and a government may differ from the procedures for 
resolving disputes between a domestic investor and a government 
and may be available at different times during the dispute. 
Thus, the ``no greater rights'' direction does not, for 
instance, apply to such issues as the dismissal of frivolous 
claims, the exhaustion of remedies, access to appellate 
procedures, or other similar issues.
      The Conferees also agree that negotiators should seek to 
provide for an appellate body, or similar mechanism to provide 
coherence to the interpretations of investment provisions in 
trade agreements.
      With respect to the principal negotiating objective on 
agriculture, the Conferees agree to section 2102(b)(10)(A)(iii) 
and (xv) of the House amendment, in lieu of section 
2102(b)(10)(A)(iii) of the Senate amendment. The Conferees also 
accept section2102(b)(10)(A)(xvi) of the Senate amendment on 
the timing and sequence of WTO agriculture negotiations relative to 
other negotiations.
      The Conferees agree to section 2102(b)(13)(C) of the 
Senate amendment, relating to dispute settlement in dumping, 
subsidy, and safeguard cases, as modified, to seek adherence by 
WTO panels to the applicable standard of review.
      The Conferees recognize the importance of preserving the 
ability of the United States to enforce rigorously its trade 
remedy laws, including the antidumping, countervailing duty and 
safeguard laws. Because this issue is significant to many 
Members of Congress in both the House and Senate, the Conferees 
have made this priority a principal negotiating objective. 
Negotiators must also avoid agreements that lessen the 
effectiveness of domestic and international disciplines on 
unfair trade, as well as domestic and international safeguard 
provisions. In addition, section 2102(b)(14)(B) directs the 
President to address and remedy market distortions that lead to 
dumping and subsidization, including overcapacity, 
cartelization, and market-access barriers.
      The Conferees agree to section 2012(b)(14) of the Senate 
amendment stating that the United States should seek a revision 
of WTO rules on the treatment of border adjustments for 
internal taxes to redress the disadvantage to countries relying 
primarily on direct taxes for revenue rather than indirect 
taxes. The Conferees agree that such a revision of WTO rules is 
one among other options for the United States, including 
domestic legislation, to redress such a disadvantage.
      The Conferees agree to include as a principal negotiating 
objective to obtain competitive market opportunities for U.S. 
exports of textiles substantially equivalent to those for 
foreign textiles in the United States.
      The Conferees agree to a principal negotiating objective 
concerning the worst forms of child labor, to seek commitments 
by trade agreement parties to vigorously enforce their own laws 
prohibiting the worst forms of child labor.

             SEC. 2102(C)--PROMOTION OF CERTAIN PRIORITIES

Present/expired law
      No provision.
House amendment
      Section 2102(c) of the House amendment to H.R. 3009 sets 
forth certain priorities for the President to address. These 
provisions include seeking greater cooperation between WTO and 
the ILO; seeking to establish consultative mechanisms among 
parties to trade agreements to strengthen the capacity of U.S. 
trading partners to promote respect for core labor standards; 
seeking to seek to establish consultative mechanisms among 
parties to trade agreements to strengthen the capacity of U.S. 
trading partners to develop and implement standards for 
environment and human health based on sound science; conducting 
environmental reviews of future trade and investment 
agreements, consistent with Executive Order 13141 and its 
relevant guidelines; reviewing the impact of future trade 
agreements on U.S. employment, modeled after Executive Order 
13141; taking into account, in negotiating trade agreements, 
protection of legitimate health or safety, essential security, 
and consumer interests; requiring the Secretary of Labor to 
consult with foreign parties to trade negotiations as to their 
labor laws and providing technical assistance where needed; 
reporting to Congress on the extent to which parties to an 
agreement have in effect laws governing exploitative child 
labor; preserving the ability of the United States to enforce 
rigorously its trade laws, including antidumping and 
countervailing duty laws, and avoiding agreements which lessen 
their effectiveness; ensuring that U.S. exports are not subject 
to the abusive use of trade laws, including antidumping and 
countervailing duty laws, by other countries; continuing to 
promote consideration of Multilateral Environmental Agreements 
(MEAs) and consulting with parties to such agreements regarding 
the consistency of any MEA that includes trade measures with 
existing environmental exceptions under Article XX of the GATT.
      In addition, USTR, twelve months after the imposition of 
a penalty or remedy by the United States permitted by an 
agreement to which this Act applies, is to report to the 
Committee on the effectiveness of remedies applied under U.S. 
law to enforce U.S. rights under trade agreements. USTR shall 
address whether the remedy was effective in changing the 
behavior of the targeted party and whether the remedy had any 
adverse impact on parties or interests not party to the 
dispute.
      Finally, section 2102(c) would direct the President to 
seek to establish consultative mechanisms among parties to 
trade agreements to examine the trade consequences of 
significant and unanticipated currency movements and to 
scutinize whether a foreign government engaged in a pattern of 
manipulating its currency to promote a competitive advantage in 
international trade.
Senate amendment
      With several notable exceptions, the priorities set forth 
in section 2102(c) of the Senate Amendment are identical to the 
priorities set forth in the House Amendment. The exceptions 
are:
      With respect to the study that the President must perform 
on the impact of future trade agreements on employment, the 
Senate Amendment requires the President to examine particular 
criteria, as follows: the impact on job security, the level of 
compensation of new jobs and existing jobs, the displacement of 
employment, and the regional distribution of employment, 
utilizing experience from previous trade agreements and 
alternative models of employment analysis. The Senate Amendment 
also requires that the report be made available to the public.
      The Senate Amendment requires that, in connection with 
new trade agreement negotiations, the President shall ``submit 
to the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate a 
meaningful labor rights report of the country, or countries, 
with respect to which the President is negotiating.''
      The Senate Amendment adds to the House Amendment priority 
on preserving the ability of the United States to enforce 
vigorously its trade laws, by including U.S. ``safeguards'' law 
in the list of laws at issue. This is the U.S. law authorizing 
the President to provide relief to parties seriously injured or 
threatened with serious injury due to surges of imports. The 
priority in the Senate Amendment also directs the President to 
remedy certain market distorting measures that underlie unfair 
trade practices.
Conference agreement
      The Senate recedes to the House amendment with several 
modifications. With respect to the worst forms of child labor, 
the Conferees agree to expand section 2102(c)(2) of the House 
amendment to include the worst forms of child labor within 
requirement to seek to establish consultative mechanisms to 
strengthen the capacity of U.S. trading partners to promote 
respect for core labor standards.
      The Conferees agree to modify section 2105(c)(5) of the 
House amendment to require the President to report on impact of 
future trade agreements on US employment, including on labor 
markets, modeled after E.O. 13141 to the extent appropriate in 
establishing procedures and criteria, and to make the report 
public.
      With respect to the labor rights report in section 
2102(c)(8) of both bills, the Conferees agree to the Senate 
provision. Furthermore, the Conferees agree to section 
2107(b)(2)(E) of the Senate amendment to require that 
guidelines for the Congressional Oversight Group include the 
time frame for submitting this report.

  SEC. 2102(D)--CONSULTATIONS, ADHERENCE TO OBLIGATIONS UNDER URUGUAY 
                            ROUND AGREEMENTS

Present/expired law
      No provision.
House amendment
      Section 2102(d) of the House amendment to H.R. 3009 
requires that USTR consult closely and on a timely basis with 
the Congressional Oversight Group appointed under section 2107. 
In addition, USTR would be required to consult closely 
(including immediately before the initialing of an agreement) 
with the congressional advisers on trade policy and 
negotiations appointed under section 161 of the Trade Act of 
1974, as well as the House Committee on Ways and Means, the 
Senate Committee on Finance, and the Congressional Oversight 
Group. With regard to negotiations concerning agriculture 
trade, USTR would also be required to consult with the House 
and Senate Committees on Agriculture.
      In determining whether to enter into negotiations with a 
particular country, section 2102(e) would require the President 
to take into account whether that country has implemented its 
obligations under the Uruguay Round Agreements.
Senate amendment
      Section 2102(d) of the Senate amendment is identical to 
the House provision in the House amendment to H.R. 3009.
Conference agreement
      The Conference agreement follows the House amendment and 
the Senate amendment.

                 SEC. 2103--TRADE AGREEMENTS AUTHORITY

Present/expired law
      Tariff proclamation authority. Section 1102(a) of the 
1988 Act provided authority to the President to proclaim 
modifications in duties without the need for Congressional 
approval, subject to certain limitations. Specifically, for 
rates that exceed 5 percent ad valorem, the President could not 
reduce any rate of duty to a rate less than 50 percent of the 
rate of duty applying on the date of enactment. Rates at or 
below 5 percent could be reduced to zero. Any duty reduction 
that exceeded 50 percent of an existing duty higher than 5 
percent or any tariff increase had to be approved by Congress.
      Staging authority required that duty reductions on any 
article could not exceed 3 percent per year, or one-tenth of 
the total reduction, whichever is greater, except that staging 
was not required if the International Trade Commission 
determined there was no U.S. production of that article.
      Negotiation of bilateral agreements. Section 1102(c) of 
the 1988 Act set forth three requirements for the negotiation 
of a bilateral agreement:
      The foreign country must request the negotiation of the 
bilateral agreement;
      The agreement must make progress in meeting applicable 
U.S. trade negotiating objectives; and
      The President must provide written notice of the 
negotiations to the Committee on Ways and Means and the 
Committee on Finance of the Senate and consult with these 
committees.
      The negotiations could proceed unless either Committee 
disapproved the negotiations within 60 days prior to the 90 
calendar days advance notice required of entry into an 
agreement (described below).
      Negotiation of multilateral non-tariff agreements. With 
respect to multilateral agreements, section 1102(b) of the 1988 
Act provided that whenever the President determines that any 
barrier to, or other distortion of, international trade unduly 
burdens or restricts the foreign trade of the United States or 
adversely affects the U.S. economy, or the imposition of any 
such barrier or distortion is likely to result in such a 
burden, restriction, or effect, he may enter into a trade 
agreement with the foreign countries involved. The agreement 
must provide for the reduction or elimination of such barrier 
or other distortion or prohibit or limit the imposition of such 
a barrier or distortion.
      Provisions qualifying for fast track procedures. Section 
1103(b)(1)(A) of the 1988 Act provided that fast track apply to 
implementing bills submitted with respect to any trade 
agreements entered into under the statute. Section 151(b)(1) of 
the Trade Act of 1974 further defined ``implementing bill'' as 
a bill containing provisions ``necessary or appropriate'' to 
implement the trade agreement, as well as provisions approving 
the agreement and the statement of administrative action.
      Time period. The authority applied with respect to 
agreements entered into before June 1, 1991, and until June 1, 
1993 unless Congress passed an extension disapproval 
resolution. The authority was then extended to April 15, 1994, 
to cover the Uruguay Round of multilateral negotiations under 
the General Agreement on Tariffs and Trade.
House amendment
      Section 2103 of the House amendment provides:
      Proclamation authority. Section 2103(a) would provide the 
President the authority to proclaim, without Congressional 
approval, certain duty modifications in a manner very similar 
to the expired provision. Specifically, for rates that exceed 5 
percent ad valorem, the President would not be authorized to 
reduce any rate of duty to a rate less than 50 percent of the 
rate of duty applying on the date of enactment. Rates at or 
below 5 percent ad valorem could be reduced to zero. Any duty 
reduction that exceeded 50 percent of an existing duty higher 
than 5 percent or any tariff increase would have to be approved 
by Congress.
      In addition, section 2103(a) would not allow the use of 
tariff proclamation authority on import sensitive agriculture.
      Staging authority would require that duty reductions on 
any article could not exceed 3 percent per year, or one-tenth 
of the total reduction, whichever is greater, except that 
staging would not be required if the International Trade 
Commission determined there is no U.S. production of that 
article.
      These limitations would not apply to reciprocal 
agreements to eliminate or harmonize duties negotiated under 
the auspices of the World Trade Organization, such as so-called 
``zero-for-zero'' negotiations.
      Agreements on tariff and non-tariff barriers. Section 
2103(b)(1) would authorize the President to enter into a trade 
agreement with a foreign country whenever he determined that 
any duty or other import restriction or any other barrier to or 
distortion of international trade unduly burdens or restricts 
the foreign trade of the United States or adversely affects the 
U.S. economy, or the imposition of any such barrier or 
distortion is likely to result in such a burden, restriction, 
or effect. The agreement must provide for the reduction or 
elimination of such barrier or other distortion or prohibit or 
limit the imposition of such a barrier or distortion. No 
distinction would be made between bilateral and multilateral 
agreements.
      Conditions. Section 2103(b)(2) would provide that the 
special implementing bills procedures may be used only if the 
agreement makes progress in meeting the applicable objectives 
set forth in section 2102(a) and (b) and the President 
satisfies the consultation requirements set forth in section 
2104.
      Bills qualifying for trade authorities procedures. 
Section 2103(b)(3)(A) would provide that bills implementing 
trade agreements may qualify for trade promotion authority TPA 
procedures only if those bills consist solely of the following 
provisions:
        Provisions approving the trade agreement and statement 
of administrative action; and
        Provisions necessary or appropriate to implement the 
trade agreement.
      Time period. Sections 2103(a)(1)(A) and 2103(b)(1)(C) 
would extend trade promotion authority to agreements entered 
into before June 1, 2005. An extension until June 1, 2007, 
would be permitted unless Congress passed a disapproval 
resolution, as described under section 2103(c).
Senate amendment
      In most respects, section 2103 of the Senate Amendment is 
identical to section 2103 of the House Amendment. However, 
there are several key differences, as follows:
        The Senate Amendment limits the President's 
proclamation authority with respect to ``import sensitive 
agricultural products,'' a term defined in section 2113(5) of 
the Senate Amendment. This limitation differs from the 
limitation in the House Amendment, inasmuch as it includes 
certain products subject to tariff rate quotas.
        The Senate Amendment contains a provision making a 
trade agreement implementing bill ineligible for ``fast track'' 
procedures if the bill modifies, amends, or requires 
modification or amendment to certain trade remedy laws. A bill 
that does modify, amend or require modification or amendment to 
those laws is subject to a point of order in the Senate, which 
may be waived by a majority vote.
        The Senate Amendment requires the U.S. International 
Trade Commission to submit a report to Congress on negotiations 
during the initial period for which the President is granted 
trade promotion authority. This report would be made in 
connection with a request by the President to have such 
authority extended.
Conference agreement
      The Senate recedes to the House amendment with several 
modifications. The Conferees agree to the new definition of 
import sensitive agriculture in section 2103(a)(2)(B), 
2104(b)(2)(A)(i), and 2113(5) of the Senate amendment to 
encompass products subject to tariff rate quotas, as well as 
products subject to the lowest tariff reduction in the Uruguay 
Round.
      The Conferees agree to section 2103(c)(3)(B) of the 
Senate amendment, which requires the ITC to submit a report to 
Congress by May 1, 2005 (if the President seeks extension of 
TPA until June 2, 2007) analyzing the economic impact on the 
United States of all trade agreements implemented between 
enactment and the extension request.

                SEC. 2104--CONSULTATIONS AND ASSESSMENT

Present/expired law
      Section 102 of the Trade Act of 1974 and sections 1102(d) 
and 1103 of the 1988 Act set forth the fast track requirements. 
These provisions required the President, before entering into 
any trade agreement, to consult with Congress as to the nature 
of the agreement, how and to what extent the agreement will 
achieve applicable purposes, policies, and objectives, and all 
matters relating to agreement implementation. In addition, 
before entering into an agreement, the President was required 
to give Congress at least 90 calendar days advance notice of 
his intent. The purpose of this period was to provide the 
Congressional Committees of jurisdiction an opportunity to 
review the proposed agreement before it was signed.
      Section 135(e) of the Trade Act of 1974 required that the 
Advisory Committee for Trade Policy and Negotiations meet at 
the conclusion of negotiations for each trade agreement and 
provide a report as to whether and to what extent the agreement 
promotes the economic interests of the United States and 
achieves the applicable overall and principal negotiating 
objectives of section 1101 of the 1988 Act. The report was due 
not later than the date on which the President notified 
Congress of his intent to enter into an agreement. With regard 
to the Uruguay Round, the report was due 30 days after the date 
of notification.
House amendment
      Section 2104 of the House amendment to H.R. 3009 would 
establish a number of requirements that the President consult 
with Congress. Specifically, section 2104(a)(1) would require 
the President to provide written notice and consult with the 
relevant committees at least 90 calendar days prior to entering 
into negotiations. Section 2104(a)(c) also provides that 
President shall meet with the Congressional Oversight Group 
established under section 2107 upon a request of a majority of 
its members. Trade promotion authority would not apply to an 
implementing bill if both Houses separately agree to a 
procedural disapproval resolution within any 60-day period 
stating that the Administration has failed to notify or consult 
with Congress.
      Section 2104(b)(1) would establish a special consultation 
requirement for agriculture. Specifically, before initiating 
negotiations concerning tariff reductions in agriculture, the 
President is to assess whether U.S. tariffs on agriculture 
products that were bound under the Uruguay Round Agreements are 
lower than the tariffs bound by that country. In his 
assessment, the President would also be required to consider 
whether the tariff levels bound and applied throughout the 
world with respect to imports from the United States are higher 
than U.S. tariffs and whether the negotiation provides an 
opportunity to address any such disparity. The President would 
be required to consult with the Committees on Ways and Means 
and Agriculture of the House and the Committees on Finance and 
Agriculture, Nutrition and Forestry of the Senate concerning 
the results of this assessment and whether it is appropriate 
for the United States to agree to further tariff reductions 
under such circumstances and how all applicable negotiating 
objectives would be met.
      Section 2104(b)(2) provides special consultations on 
import sensitive agriculture products. Specifically, before 
initiating negotiations on agriculture and as soon as 
practicable with respect to the Free Trade Area of the Americas 
and WTO negotiations, USTR is to identify import sensitive 
agriculture products and consult with the Committees on Ways 
and Means and Agriculture of the House and the Committees 
onFinance and Agriculture, Nutrition, and Forestry in the Senate 
concerning whether any further tariff reduction should be appropriate, 
and whether the identified products face unjustified sanitary or 
phytosanitary barriers. USTR is also to request that the International 
Trade Commission prepare an assessment of the probable economic effects 
of any such tariff reduction on the U.S. industry producing the product 
and on the U.S. economy as a whole. USTR is to then notify the 
Committees of those products for which it intends to seek tariff 
liberalization as well as the reasons. If USTR commences negotiations 
and then identifies additional import sensitive agriculture products, 
or a party to the negotiations requests tariff reductions on such a 
product, then USTR shall notify the Committees as soon as practicable 
of those products and the reasons for seeking tariff reductions.
      Section 2104(c) would establish a special consultation 
requirement for textiles. Specifically, before initiating 
negotiations concerning tariff reductions in textiles and 
apparel, the President is to assess whether U.S. tariffs on 
textile and apparel products that were bound under the Uruguay 
Round Agreements are lower than the tariffs bound by that 
country. In his assessment, the President would also be 
required to consider whether the tariff levels bound and 
applied throughout the world with respect to imports from the 
United States are higher than U.S. tariffs and whether the 
negotiation provides an opportunity to address any such 
disparity. The President would be required to consult with the 
Committee on Ways and Means of the House and the Committee on 
Finance of the Senate concerning the results of this assessment 
and whether it is appropriate for the United States to agree to 
further tariff reductions under such circumstances and how all 
applicable negotiating objectives would be met.
      In addition, section 2104(d) would require the President, 
before entering into any trade agreement, to consult with the 
relevant Committees concerning the nature of the agreement, how 
and to what extent the agreement will achieve the applicable 
purposes, policies, and objectives set forth in the House 
amendment to H.R. 3009 and all matters relating, to 
implementation under section 2105, including the general effect 
of the agreement on U.S. laws.
      Section 2104(e) would require that the report of the 
Advisory Committee for Trade Policy and Negotiations under 
section 135(e)(1) of the Trade Act of 1974 be provided not 
later than 30 days after the date on which the President 
notifies Congress of his intent to enter into the agreement 
under section 2105(a)(1)(A).
      Finally, section 2104(f) would require the President, at 
least 90 days before entering into a trade agreement, to ask 
the International Trade Commission to assess the agreement, 
including the likely impact of the agreement on the U.S. 
economy as a whole, specific industry sectors, and U.S. 
consumers. That report would be due 90 days from the date after 
the President enters into the agreement.
Senate amendment
      The Senate Amendment is substantially similar to the 
House bill, with the following exceptions:
      Consultations on export subsidies and distorting 
policies. Section 2104(b)(2)(A)(ii)(III) requires consultations 
on whether nations producing identified products maintain 
export subsidies or distorting policies that distort trade and 
impact of policies on U.S. producers.
      Consultations relating to fishing trade. Section 
2104(b)(3) requires that for negotiations relating to fishing 
trade, the Administration will keep fully apprised and on 
timely basis consult with the House Resources Committee and the 
Senate Commerce Committee.
      Special reporting requirements on U.S. trade remedy laws. 
Section 2104(d) provides that the President, at least 90 
calendar days before the President enters into a trade 
agreement, shall notify the House Ways and Means Committee and 
the Senate Finance Committee in writing any amendments to U.S. 
antidumping and countervailing duty laws (title VII of the 
Tariff Act of 1930) or U.S. safeguard provisions (chapter 1 of 
title II of the Trade Act of 1974) that the President proposes 
to include in the implementing legislation. On the date that 
the President transmits the notification, the President must 
also transmit to the Committees a report explaining his reasons 
for believing that amendments to these trade remedy laws are 
necessary to implement the trade agreement and his reasons for 
believing that such amendments are consistent with the 
negotiating objective on this issue. Not later than 60 calendar 
days after the date on which the President transmits 
notification to the relevant committees, the Chairman and 
ranking members of the House Ways and Means Committee and the 
Senate Finance Committees shall issue reports stating whether 
the proposed amendments described in the President's 
notification are consistent with the negotiating objectives on 
trade laws.
Conference agreement
      The Senate recedes to the House with several 
modifications. The Conferees agree to section 
2104(b)(2)(A)(ii)(III) of the Senate amendment, which requires 
consultations on whether other nations producing identified 
products maintain export subsidies or distorting policies that 
distort trade and impact of policies on U.S. producers. In 
addition, the Conferees agree to section 2104(b)(3) of the 
Senate amendment, which requires that for negotiations relating 
to fishing trade, the Administration will keep fully apprised 
and on timely basis consult with the House Resources Committee 
and the Senate Commerce Committee.
      Finally, the Conferees agree to include the notification 
and report on changes to trade remedy laws in sections 
2104(d)(3)(A) and (B) in the Senate amendment with 
modifications. Given the priority that Conferees attach to 
keeping U.S. trade remedy laws strong and ensuring that they 
remain fully enforceable, the Conference agreement puts in 
place a process requiring special scrutiny of any impact that 
trade agreements may have on these laws. The process requires 
the President, at least 180 calendar days beforethe day on 
which he enters into a trade agreement, to report to the Committees on 
Ways and Means and the Committee on Finance the range of proposals 
advanced in trade negotiations and may be in the final agreement that 
could require amendments to title VII of the Tariff Act of 1930 or to 
chapter 1 of title II of the Trade Act of 1974; and how these proposals 
relate to the objectives described in section 2102(b)(14).
      The Conference agreement also provides a mechanism for 
any Member in the House or Senate to introduce at any time 
after the President's report is issued a nonbinding resolution 
which states ``that the ______ finds that the proposed changes 
to U.S. trade remedy laws contained in the report of the 
President transmitted to the Congress on ______ under section 
2104(d)(3) of the Bipartisan Trade Promotion Authority Act of 
2002 with respect to ______, are inconsistent with the 
negotiating objectives described in section 2102(b)(14) of that 
Act.'', with the first blank space being filled in with either 
the ``House of Representatives'' or the ``Senate'', as the case 
may be, the second blank space filled in with the appropriate 
date of the report, and the third blank space being filled in 
with the name of the country or countries involved.
      The resolution is referred to the Ways and Means and 
Rules Committees in the House and the Finance Committee in the 
Senate, and is privileged on the floor if it is reported by the 
Committees. The Conference agreement allows only one resolution 
(either a nonbinding resolution or a disapproval resolution) 
per agreement to be eligible for the trade promotion authority 
procedures contained in sections 152 (d) and (e) of the Trade 
Act of 1974. The one resolution quota is satisfied for the 
House only after the Ways and Means Committee reports a 
resolution, and for the Senate only after the Finance Committee 
reports a resolution.
      The Conference agreement states that, with respect to 
agreements entered into with Chile and Singapore, the report 
referenced in section 2104(d)(3)(A) shall be submitted by the 
President at least 90 calendar days before the day on which the 
President enters into a trade agreement with either country.

             SEC. 2105--IMPLEMENTATION OF TRADE AGREEMENTS

Present/expired law
      Before entering into the draft agreement, the President 
was required to give Congress 90 days advance notice (120 days 
for the Uruguay Round) to provide an opportunity for revision 
before signature. After entering into the agreement, the 
President was required to submit formally the draft agreement, 
implementing legislation, and a statement of administrative 
action. Once the bill was formally introduced, there was no 
opportunity to amend any portion of the bill--whether on the 
floor or in committee. Consequently, before the formal 
introduction took place, the committees of jurisdiction would 
hold hearings, ``unofficial'' or ``informal'' mark-up sessions 
and a ``mock conference'' with the Senate committees of 
jurisdiction in order to develop a draft implementing bill 
together with the Administration and to make their concerns 
known to the Administration before it introduced the 
legislation formally.
      After formal introduction of the implementing bill, the 
House committees of jurisdiction had 45 legislative days to 
report the bill, and the House was required to vote on the bill 
within 15 legislative days after the measure was reported or 
discharged from the committees. Fifteen additional days were 
provided for Senate committee consideration (assuming the 
implementing bill was a revenue bill), and the Senate floor 
action was required within 15 additional days. Accordingly, the 
maximum period for Congressional consideration of an 
implementing bill from the date of introduction was 90 
legislative days. Amendments to the legislation were not 
permitted once the bill was introduced; the committee and floor 
actions consisted of ``up or down'' votes on the bill as 
introduced.
      Finally, section 1103(d) of the 1988 Act specified that 
the fast track rules were enacted as an exercise of the 
rulemaking power of the House and the Senate, with the 
recognition of the right of either House to change the rules at 
any time.
House amendment
      Under Section 2105 of the House amendment to H.R. 3009, 
the President would be required, at least 90 days before 
entering into an agreement, to notify Congress of his intent to 
enter into the agreement. Section 2105(a) also would establish 
a new requirement that the President, within 60 days of signing 
an agreement, submit to Congress a preliminary list of existing 
laws that he considers would be required to bring the United 
States into compliance with agreement.
      Section 2105(b) would provide that trade promotion 
authority would not apply if both Houses separately agree to a 
procedural disapproval resolution within any 60-day period 
stating that the Administration failed to notify or consult 
with Congress, which is defined as failing or refusing to 
consult in accordance with section 2104 or 2105, failing to 
develop or meet guidelines under section 2107(b), failure to 
meet with the Congressional Oversight Group, or the agreement 
fails to make progress in achieving the purposes. policies, 
priorities, and objectives of the Act. In a change from the 
expired law, such a resolution may be introduced by any Member 
of the House or Senate. Only one such privileged resolution 
would be permitted to be considered per trade agreement per 
Congress.
      Most of the remaining provisions are identical to the 
expired law. Specifically, section 2105(a) would require the 
President, after entering into agreement, to submit formally 
the draft agreement, the implementing legislation, and a 
statement of administrative action to Congress, and there would 
be no time limit to do so, but with the new requirement that 
the submission be made on a date on which both Houses are in 
session, The procedures of section 151 of the Trade Act of 1974 
would then apply. Specifically, on the same day as the 
President formally submits the legislation, the bill would be 
introduced (by request) by the Majority Leaders of the House 
and the Senate. After formal introduction of the legislation, 
the House Committees of jurisdiction would have 45 legislative 
days to report the bill. The House would be required to vote on 
thebill within 15 legislative days after the measure was 
reported or discharged from the Committees. Fifteen additional days 
would be provided for Senate Committee consideration (assuming the 
implementing bill was a revenue bill), and Senate floor action would be 
required within 15 additional days. Accordingly, the maximum period for 
Congressional consideration of the implementing bill from the date of 
introduction would be 90 legislative days.
      As with the expired provisions, once the bill has been 
formally introduced, no amendments would be permitted either in 
Committee or floor action, and a straight ``up or down'' vote 
would be required. Of course, before formal introduction, the 
bill could be developed by the Committees of jurisdiction 
together with the Administration during the informal Committee 
mark-up process.
      Finally, as with the expired provision, section 2105(c) 
specifies that sections 2105(b) and 3(c) are enacted as an 
exercise of the rulemaking power of the House and the Senate, 
with the recognition of the right of either House to change the 
rules at any time.
Senate amendment
      The Senate Amendment is substantially similar to the 
House Bill, with the following exception:
      Reporting requirements. Section 2105(a)(1)(A)(ii) 
requires the President to transmit to the House Ways and Means 
Committee and the Senate Finance Committee the notification and 
report described in section 2104(d)(3)(A) regarding changes to 
U.S. trade remedy laws.
      Disclosure Requirements. Section 2105(a)(4) of the Senate 
bill specifies that any trade agreement or understanding with a 
foreign government (oral or written) not disclosed to Congress 
will not be considered part of trade agreement approved by 
Congress and shall have no effect under U.S. law or in any 
dispute settlement body.
      Senate Procedures. Section 2105(b)(1)(C)(i)(II) provides 
that any Member of the Senate may introduce a procedural 
disapproval resolution, and that that resolution will be 
referred to the Senate Finance Committee. Section 
2105(b)(1)(C)(iv) provides that the Senate may not consider a 
disapproval resolution that has not been reported by the Senate 
Finance Committee.
Conference agreement
      The Senate recedes to the House amendment with several 
modifications. The Conferees agree to section 2105(a)(4) of the 
Senate amendment, which specifies that any trade agreement or 
understanding with a foreign government (oral or written) not 
disclosed to Congress will not be considered part of trade 
agreement approved by Congress and shall have no effect under 
U.S. law or in any dispute settlement body. The Conferees also 
agree to sections 2105(b)(1)(C)(i)(II) and (b)(1)(C)(iv) of the 
Senate amendment, which applies the same procedures for 
consideration of bills in the Senate as for the House.
      Finally, the Conferees agree to section 2105(b)(2) of the 
Senate amendment with modifications, which requires the 
Secretary of Commerce, in consultation with the Secretaries of 
State and Treasury, the Attorney General, and the United States 
Trade Representative, to transmit to Congress a report setting 
forth the strategy of the executive branch to address concerns 
of Congress regarding whether dispute settlement panels and the 
Appellate Body of the WTO have added to obligations or 
diminished rights of the United States, as described in section 
2101(b)(3). Trade authorities procedures shall not apply to any 
implementing bill with respect to an agreement negotiated under 
the auspices of the WTO unless the Secretary of Commerce has 
issued such report prior to December 31, 2002.

            SEC. 2106--TREATMENT OF CERTAIN TRADE AGREEMENTS

Present/expired law
      No provision.
House amendment
      Section 2106 of the House amendment to H.R. 3009 exempts 
agreements resulting from ongoing negotiations with Chile or 
Singapore, an agreement establishing a Free Trade Area of the 
Americas, and agreements concluded under the auspices of the 
WTO from prenegotiation consultation requirements of section 
2104(a) only. However, upon enactment of H.R. 3009, the 
Administration is required to consult as to those elements set 
forth in section 2104(a) as soon as feasible.
Senate amendment
      Section 2106 of the Senate amendment is substantially 
similar to the House bill.
Conference agreement
      The Conference agreement follows the House amendment and 
the Senate amendment.

                SEC. 2107--CONGRESSIONAL OVERSIGHT GROUP

Present/expired law
      No provision.
House amendment
      Section 2107 of the House amendment to H.R. 3009 would 
require the Chairman of the Committee on Ways and Means and the 
Chairman of the Committee on Finance to chair and convene, 
sixty days after the effective date of this Act, the 
Congressional Oversight Group. The Group would be comprised of 
the following Members of the House: the Chairman and Ranking 
Member of the Committee on Ways and Means and three additional 
members of the Committee (not more than two of whom are from 
the same party), and the Chairman and Ranking Member of the 
Committees which would have, under the Rules of the House, 
jurisdiction over provisions of law affected by a trade 
negotiation. The Group would be comprised of the following 
Members of the Senate: the Chairman and Ranking Member of the 
Committee on Finance and three additional members of the 
Committee (not more than two of whom are from the same party), 
and the Chairman and Ranking Member of the Committees which 
would have, under the Rules of the Senate, jurisdiction over 
provisions of law affected by a trade negotiation.
      Members are to be accredited as official advisors to the 
U.S. delegation in the negotiations. USTR is to develop 
guidelines to facilitate the useful and timely exchange of 
information between USTR and the Group, including regular 
briefings, access to pertinent documents, and the closest 
possible coordination at all critical periods during the 
negotiations, including at negotiation sites.
      Finally, section 2107(c) provides that upon the request 
of a majority of the Congressional Oversight Group, the 
President shall meet with the Group before initiating 
negotiations or any other time concerning the negotiations.
Senate amendment
      Section 2107 of the Senate amendment is identical to the 
House amendment to H.R. 3009.
Conference agreement
      The Conference agreement follows the House amendment and 
the Senate amendment.

   SEC. 2108--ADDITIONAL IMPLEMENTATION AND ENFORCEMENT REQUIREMENTS

Present/expired law
      No provision.
House amendment
      Section 2108 of the House amendment to H.R. 3009 would 
require the President to submit to the Congress a plan for 
implementing and enforcing any trade agreement resulting from 
this Act. The report is to be submitted simultaneously with the 
text of the agreement and is to include a review of the 
Executive Branch personnel needed to enforce the agreement as 
well as an assessment of any U.S. Customs Service 
infrastructure improvements required. The range of personnel to 
be addressed in the report is very comprehensive, including 
U.S. Customs and Department of Agriculture border inspectors, 
and monitoring and implementing personnel at USTF, the 
Departments of Agriculture, Commerce, and the Treasury, and any 
other agencies as may be required.
Senate amendment
      Section 2108 of the Senate amendment is identical to the 
House amendment to H.R. 3009.
Conference agreement
      The Conference agreement follows the House amendment and 
the Senate amendment.

                       SEC. 2109--COMMITTEE STAFF

Present/expired law
      No provision.
House amendment
      Section 2109 of the House amendment to H.R. 3009 states 
that the grant of trade promotion authority is likely to 
increase the activities of the primary committees of 
jurisdiction and the creation of the Congressional Oversight 
Group under section 2107 will increase the participation of a 
broader Members of Congress in the formulation of U.S. trade 
policy and oversight of the U.S. trade agenda. The provision 
specifies that the primary committees of jurisdiction should 
have adequate staff to accommodate these increases in 
activities.
Senate amendment
      Section 2109 of the Senate amendment is identical to the 
House amendment to H.R. 3009.
Conference agreement
      The Conference agreement follows the House amendment and 
the Senate amendment.

      SEC. 2111--REPORT ON THE IMPACT OF TRADE PROMOTION AUTHORITY

Present/expired law
      No provision.
House amendment
      No provision.
Senate amendment
      Section 2111 requires the International Trade Commission, 
within one year following enactment of this Act, to issue a 
report regarding the economic impact of the following trade 
agreements: (1) The U.S.-Israel Free Trade Agreement; (2) the 
U.S.-Canada Free Trade Agreement; (3) the North American Free 
Trade Agreement (NAFTA); (4) The Uruguay Round Agreements, 
which established the World Trade Organization; and (5) The 
Tokyo Round of Multilateral Trade Negotiations.
Conference agreement
      The House recedes to the Senate amendment.

                       SEC. 2112--SMALL BUSINESS

Present/expired law
      No provision.
House amendment
      No provision.
Senate amendment
      WTO small business advocate. Section 2112(a) provides 
that the U.S. Trade Representative shall pursue identification 
of a small business advocate at the World Trade Organization 
Secretariat to examine the impact of WTO agreements on the 
interests of small businesses, address the concerns of small 
businesses, and recommend ways to address those interests in 
trade negotiations involving the WTO.
      Assistant USTR responsible for small businesses. Section 
2112(b) provides that the Assistant United States Trade 
Representative for Industry and Telecommunications shall be 
responsible for ensuring that the interests of small businesses 
are considered in trade negotiations.
Conference agreement
      The Senate recedes to the House amendment with a 
modification. The Conferees agree to section 2112(b) of the 
Senate amendment, which provides that the Assistant USTR for 
Industry and Telecommunications will be responsible for 
ensuring that the interests of small business are considered in 
trade negotiations.

                DIVISION C--ANDEAN TRADE PREFERENCE ACT

                  TITLE XXXI--ANDEAN TRADE PREFERENCE

                         SEC. 3101--SHORT TITLE

Present law
      No provision.
House amendment
      Section 3101 of H.R. 3009, as amended, provides that the 
Act may be cited as the ``Andean Trade Promotion and Drug 
Eradication Act.''
Senate amendment
      Section 3101 provides that the Act may be cited as the 
``Andean Trade Preference Expansion Act.''
Conference agreement
      The Senate recedes.

                          SEC. 3102--FINDINGS

Present law
      No provision.
House amendment
      Section 1302 contains findings of Congress that:
      (1) Since the Andean Trade Preference Act was enacted in 
1991, it has had a positive impact on United States trade with 
Bolivia, Colombia, Ecuador, and Peru. Two-way trade has 
doubled, with the United States serving as the leading source 
of imports and leading export market for each of the Andean 
beneficiary countries. This has resulted in increased jobs and 
expanded export opportunities in both the United States and the 
Andean region.
      (2) The Andean Trade Preference Act has been a key 
element in the United States counter narcotics strategy in the 
Andean region, promoting export diversification and broad-based 
economic development that provide sustainable economic 
alternatives to drug-crop production, strengthening the 
legitimate economies of Andean countries and creating viable 
alternatives to illicit trade in coca.
      (3) Notwithstanding the success of the Andean Trade 
Preference Act, the Andean region remains threatened by 
political and economic instability and fragility, vulnerable to 
the consequences of the drug war and fierce global competition 
for its legitimate trade.
      (4) The continuing instability in the Andean region poses 
a threat to the security interests of the United States and the 
world. This problem has been partially addressed through 
foreign aid, such as Plan Colombia, enacted by Congress in 
2000. However, foreign aid alone is not sufficient. Enhancement 
of legitimate trade with the United States provides an 
alternative means for reviving and stabilizing the economies in 
the Andean region.
      (5) The Andean Trade Preference Act constitutes a 
tangible commitment by the United States to the promotion of 
prosperity, stability, and democracy in the beneficiary 
countries.
      (6) Renewal and enhancement of the Andean Trade 
Preference Act will bolster the confidence of domestic private 
enterprise and foreign investors in the economic prospects of 
the region, ensuring that legitimate private enterprise can be 
the engine of economic development and political stability in 
the region.
      (7) Each of the Andean beneficiary countries is committed 
to conclude negotiation of a Free Trade Area of the Americas by 
the year 2005 as a means of enhancing the economic security of 
the region.
      (8) Temporarily enhancing trade benefits for Andean 
beneficiaries countries will promote the growth of free 
enterprise and economic opportunity in these countries and 
serve the security interests of the United States, the region, 
and the world.
Senate amendment
      Section 3101 is identical.
Conference agreement
      The conference agreement follows the House amendment and 
the Senate amendment.

        SEC. 3103--ARTICLES ELIGIBLE FOR PREFERENTIAL TREATMENT

     Articles (Except Apparel) Eligible for Preferential Treatment

Present law
      The Andean Trade Preference Act (ATPA), enacted on 
December 4, 1991 as title II of Public Law 102-182, authorizes 
preferential trade benefits for the Andean nations of Bolivia, 
Colombia, Ecuador, and Peru, similar to those benefits granted 
to beneficiaries under the Caribbean Basin Initiative program. 
The ATPA authorizes the President to proclaim duty-free 
treatment for all eligible articles from Bolivia, Colombia, 
Ecuador, Peru. This authority applies only to normal column I 
rates of duty in the Harmonized Tariff Schedule of the United 
States (HTS); any additional duties imposed under U.S. unfair 
trade practice laws, such as the antidumping or countervailing 
duty laws, are not affected by this authority.
      The ATPA contains a list of products that are ineligible 
for duty-free treatment. More specifically, ATPA duty-free 
treatment does not apply to textile and apparel articles that 
are subject to textile agreements; petroleum and petroleum 
products; footwear not eligible for duty-free treatment under 
the Generalized System of Preferences; certain watches and 
watch parts; certain leather products; and sugar, syrups and 
molasses subject to over-quota rates of duty.
House amendment
      Section 3103 (a) amends the Andean Trade Preference Act 
to authorize the President to proclaim duty-free treatment for 
any of the following articles which were previously excluded 
from duty-free treatment under the ATPA, if the President 
determines that the article is not import-sensitive in the 
context of imports from beneficiary countries:
            (1) Footwear not designated at the time of the 
        effective date of this Act as eligible for the purposes 
        of the Generalized System of Preferences under title V 
        of the Trade Act of 1974;
            (2) Petroleum, or any product derived from 
        petroleum, provided for in headings 2709 and 2710 of 
        the HTS;
            (3) Watches and watch parts (including cases, 
        bracelets and straps), of whatever type including, but 
        not limited to, mechanical, quartz digital or quartz 
        analog, if such watches or watch parts contain any 
        material which is the product of any country with 
        respect to which HTS column 2 rates of duty apply;
            (4) Handbags, luggage, flat goods, work gloves, and 
        leather wearing apparel that--(i) are the product of 
        any beneficiary country; and (ii) were not designated 
        on August 5, 1983, as eligible articles for purposes of 
        the Generalized System of Preferences under title V of 
        the Trade Act of 1974.
      Under H.R. 3009, textiles subject to textile agreements; 
sugar, syrups and molasses subject to over-quota tariffs; and 
rum and tafia classified in subheading 2208.40.00 of the HTS 
would continue to be ineligible for duty-free treatment, as 
would apparel products other than those specifically described 
below. Imports of tuna, prepared or preserved in any manner, in 
airtight containers would receive immediate duty-free 
treatment.
Senate amendment
      Section 3102 of the bill replaces the list of excluded 
products under section 204(b) of the current ATPA with a new 
provision that extends duty preferences to most of those 
products. The new preferences take the form of exceptions to 
the general rule that the excluded products are not eligible 
for duty-free treatment.
      The enhanced preferences are made available to ``ATPEA 
beneficiary countries.'' Paragraph (5) of section 204(b) of the 
ATPA as amended by the present bill defines ATPEA beneficiary 
countries as those countries previously designated by the 
President as ``beneficiary countries'' (i.e., Bolivia, 
Colombia, Ecuador, and Peru) which subsequently are designated 
by the President as ``ATPEA beneficiary countries,'' based on 
the President's consideration of additional eligibility 
criteria.
      In the event that the President did not designate a 
current ``beneficiary country'' as an ``ATPEA beneficiary 
country,'' that country would remain eligible for ATPA benefits 
under the law as expired on December 4, 2001, but would not be 
eligible for the enhanced benefits provided under the present 
bill.
      Footwear not eligible for duty-free treatment under GSP 
receives the same tariff treatment as like products from 
Mexico, except that duties on articles in particular tariff 
subheadings are to be reduced by 1/15 per year.
      The Senate Amendment provides special treatment for rum 
and tafia, allowing them to receive the same tariff treatment 
as like products from Mexico. The bill also allows certain 
handbags, luggage, flat goods, work gloves, and leather wearing 
apparel to receive the same tariff treatment as like products 
from Mexico.
      Under the bill, the President is authorized to proclaim 
duty-free treatment for tuna that is harvested by United States 
or ATPEA vessels, subject to a quantitative yearly cap of 20 
percent of the domestic United States tuna pack in the 
preceding year.
Conference agreement
      Senate recedes on the authority of President to proclaim 
duty-free treatment for particular articles which were 
previously excluded from duty-free treatment under the ATPA, if 
the President determines that the article is not import-
sensitive in the context of imports from beneficiary countries.
      Textiles subject to textile agreements; sugar, syrups and 
molasses subject to over-quota tariffs; and rum and tafia 
classified in subheading 2208.40.00 of the HTS would continue 
to be ineligible for duty-free treatment, as would apparel 
products other than those specifically described below.
      House recedes on the treatment of tuna with an amendment 
to: (1) retain U.S. or Andean flagged vessel rule of origin 
requirement in Senate amendment; (2) authorize the President to 
grant duty-free treatment for Andean exports of tuna packed in 
flexible (e.g., foil), airtight containers weighing with their 
contents not more than 6.8 kg each; and (3) update calculation 
of current MFN tariff-rate quota to be an amount based on 4.8 
percent of apparent domestic consumption of tuna in airtight 
containers rather than domestic production.

                       Eligible Apparel Articles

Present law
      Under the ATPA, apparel articles are on the list of 
products excluded from eligibility for duty-free treatment.
House amendment
      Under Section 3103, the President may proclaim duty-free 
and quota-free treatment for apparel articles sewn or otherwise 
assembled in one or more beneficiary countries exclusively from 
any one or any combination of the following:
            (1) Fabrics or fabric components formed, or 
        components knit-to-shape, in the United States 
        (including fabrics not formed from yarns, if such 
        fabrics are classifiable under heading 5602 or 5603 of 
        the HTS and are formed in the United States).
            (2) Fabrics or fabric components formed, or 
        components knit-to-shape, in one or more beneficiary 
        countries, from yarns formed in one or more beneficiary 
        countries, if such fabrics (including fabrics not 
        formed from yarns, if such fabrics are classifiable 
        under heading 5602 or 5603 of the HTS and are formed in 
        one or more beneficiary countries) are in chief weight 
        of llama, or alpaca.
            (3) Fabrics or yarn not produced in the United 
        States or in the region, to the extent that apparel 
        articles of such fabrics or yarn would be eligible for 
        preferential treatment, without regard to the source of 
        the fabrics or yarn, under Annex 401 of the NAFTA 
        (short supply provisions). Any interested party may 
        request the President to consider such treatment for 
        additional fabrics and yarns on the basis that they 
        cannot be supplied by the domestic industry in 
        commercial quantities in a timely manner, and the 
        President must make a determination within 60 calendar 
        days of receiving the request from the interested 
        party.
            (4) Apparel articles sewn or otherwise assembled in 
        one or more beneficiary countries from fabrics or 
        fabric components formed or components knit-to-shape, 
        in one or more beneficiary countries, from yarns formed 
        in the United States or in one or more beneficiary 
        countries (including fabrics not formed from yarns, if 
        such fabrics are classifiable under heading 5602 or 
        5603 of the HTS and are formed in one or more 
        beneficiary countries), whether or not the apparel 
        articles are alsomade from any of the fabrics, fabric 
components formed, or components knit-to-shape in the United States 
described in paragraph 1. Imports of apparel made from regional fabric 
and regional yarn would be capped at 3% of U.S. imports growing to 6% 
of U.S. imports in 2006, measured in square meter equivalents.
Senate amendment
      Paragraph (2) of section 204(b) of the ATPA as amended by 
section 3102 of the present bill extends duty-free treatment to 
certain textile and apparel articles from ATPEA beneficiary 
countries. The provision divides articles eligible for this 
treatment into several different categories and limits duty-
free treatment to a period defined as the ``transition 
period.'' The transition period is defined in paragraph (5) of 
section 204(b) of the ATPA as amended to be the period from 
enactment of the present bill through the earlier of February 
28, 2006 or establishment of a FTAA.
      In general, the different categories of textile and 
apparel articles eligible for duty-free treatment are defined 
according to the origin of the yarn and fabric from which the 
articles are made. Under the first category, apparel sewn or 
otherwise assembled in one or more ATPEA beneficiary countries 
is eligible for duty-free treatment if it is made exclusively 
from one or a combination of several sub-categories of 
components, as follows:
            (1) United States fabric, fabric components, or 
        knit-to-shape components, made from yarns wholly formed 
        in the United States;
            (2) A combination of both United States and ATPEA 
        beneficiary country components knit-to-shape from yarns 
        wholly formed in the United States;
            (3) ATPEA beneficiary country fabric, fabric 
        components, or knit-to-shape components, made from 
        yarns wholly formed in one or more ATPEA beneficiary 
        countries, if the constituent fibers are primarily 
        llama or alpaca hair; and
            (4) Fabrics or yarns, regardless of origin, if such 
        fabrics or yarns have been deemed, under the North 
        American Free Trade Agreement, not to be widely 
        available in commercial quantities in the United 
        States. A separate provision of section 204(b) of the 
        ATPA as amended by the present bill sets forth a 
        process for interested parties to petition the 
        President for inclusion of additional yarns and fabrics 
        in the ``short supply'' list. This process includes 
        obtaining advice from the United States International 
        Trade Commission and industry advisory groups, and 
        consultation with the Committee on Finance of the 
        Senate and the Committee on Ways and Means of the House 
        of Representatives.
      A second category of apparel articles eligible for duty-
free treatment is apparel articles knit-to-shape (except socks) 
in one or more ATPEA beneficiary countries from yarns wholly 
formed in the United States. To qualify under this category, 
the entire article must be knit-to-shape--as opposed to being 
assembled from components that are themselves knit-to-shape.
      A third category of apparel articles eligible for duty-
free treatment is apparel articles wholly assembled in one or 
more ATPEA beneficiary countries from fabric or fabric 
components knit, or components knit-to-shape in one or more 
ATPEA beneficiary countries from yarns wholly formed in the 
United States. The quantity of apparel eligible for this 
benefit is subject to an annual cap. The cap is set at 70 
million square meter equivalents for the one-year period 
beginning March 1, 2002. The cap will increase by 16 percent, 
compounded annually, in each succeeding one-year period, 
through February 28, 2006.
      Thus, the cap applied to this category in each year 
following enactment will be as follows:
            70 million square meter equivalents (SME) in the 
        year beginning March 1, 2002;
            81.2 million SME in the year beginning March 1, 
        2003;
            94.19 million SME in the year beginning March 1, 
        2004; and
            109.26 million SME in the year beginning March 1, 
        2005.
      A separate provision makes clear that goods otherwise 
qualifying under the latter category will not be disqualified 
if they happen to contain United States fabric made from United 
States yarn.
      A fourth category of apparel eligible for duty-free 
treatment under the Senate bill is brassieres that are cut or 
sewn, or otherwise assembled, in one or more ATPEA beneficiary 
countries, or in such countries and the United States. This 
separate category requires that, in the aggregate, brassieres 
manufactured by a given producer claiming duty-free treatment 
for such products contain certain quantities of United States 
fabric.
      A fifth category of textile and apparel eligible for 
duty-free treatment is handloomed, handmade, and folklore 
articles.
      A final category of textile and apparel goods eligible 
for duty-free treatment is textile luggage assembled in an 
ATPEA beneficiary country from fabric and yarns formed in the 
United States.
      In addition to the foregoing categories, the bill sets 
forth special rules for determining whether particular textile 
and apparel articles qualify for duty-free treatment.
Conference agreement
      In general the conferees agreed to follow the House 
amendment on apparel provisions with the exception that the 
House receded to the Senate on the treatment of textile 
luggage. With respect to category 2 in the House bill relating 
to fabrics or fabric components formed, or components knit-to-
shape, in one or more beneficiary countries,from yarns formed 
in one or more beneficiary countries, if such fabrics are in chief 
weight of llama, or alpaca, conferees agreed to include vicuna and 
calculate product eligibility based on chief value instead of chief 
weight. Also, conferees agreed to cap imports of apparel made from 
regional fabric and regional yarn (category 4 in the House bill) at 2% 
of U.S. imports growing to 5% of U.S. imports in 2006, measured in 
square meter equivalents.
      It is the intention of the conferees that in cases where 
fabrics or yarns determined by the President to be in short 
supply impart the essential character to an article, the 
remaining textile components may be constructed of fabrics or 
yarns regardless of origin, as in Annex 401 of the NAFTA. In 
cases where the fabrics or yarns determined by the President to 
be in short supply do not impart the essential character of the 
article, the article shall not be ineligible for preferential 
treatment under this Act because the article contains the short 
supply fabric or yarn.

              Special Origin Rule for Nylon Filament Yarn

House amendment
      No provision.
Senate amendment
      Articles otherwise eligible for duty-free treatment and 
quota free treatment under the bill are not ineligible because 
they contain certain nylon filament yarn (other than 
elastomeric yarn) from a country that had an FTA with the U.S. 
in force prior to January 1, 1995.
Conference agreement
      House recedes.

               Dyeing, Finishing and Printing Requirement

House amendment
      New requirement that apparel made of U.S. knit or woven 
fabric assembled in CBTPA country qualifies for benefits only 
if the U.S. knit or woven fabric is dyed and finished in the 
United States. Apparel made of U.S. knit or woven fabric 
assembled in an Andean beneficiary country qualifies for 
benefits only if the U.S. knit or woven fabric is dyed and 
finished in the United States.
Senate provision
      No provision.
Conference agreement
      Senate recedes.

                      Penalties for Transshipment

Present law
      The Tariff Act of 1930, as amended, provides for civil 
monetary penalties for unlawful transshipment. These include 
penalties under 19 U.S.C. 1592 for up to a maximum of the 
domestic value of the imported merchandise or eight times the 
loss of revenue, as well as denial of entry, redelivery or 
liquidated damages for failure to redeliver the merchandise 
determined to be inaccurately represented. In addition, an 
importer may be liable for criminal penalties, including 
imprisonment for up to five years, under section 1001 of title 
18 of the United States Code for making false statements on 
import documentation.
      Under the North American Free Trade Agreement (NAFTA), 
Parties to the Agreement must observe Customs procedures and 
documentation requirements, which are established in Chapter 5 
of NAFTA. Requirements regarding Certificates of Origin for 
imports receiving preferential tariffs are detailed in Article 
502.1 of NAFTA.
House amendment
      Section 3103 requires that importers comply with 
requirements similar in all material respects to the 
requirements regarding Certificates of Origin contained in 
Article 502.1 of the North American Free Trade Agreement 
(NAFTA) for a similar importation from Mexico.
      In addition, if an exporter is determined under the laws 
of the United States to have engaged in illegal transshipment 
of apparel products from an Andean country, then the President 
shall deny all benefits under the bill to such exporter, and to 
any successors of such exporter, for a period of two years.
      In cases where the President has requested a beneficiary 
country to take action to prevent transshipment and the country 
has failed to do so, the President shall reduce the quantities 
of textile and apparel articles that may be imported into the 
United States from that country by three times the quantity of 
articles transshipped, to the extent that such action is 
consistent with World Trade Organization (WTO) rules.
Senate amendment
      In amending, section 204(b) of the ATPA, section 3102 of 
the present bill provides special penalties for transshipment 
of textile and apparel articles from an ATPEA beneficiary 
country. Transshipment is defined as claiming duty-free 
treatment for textileand apparel imports on the basis of 
materially false information. An exporter found to have engaged in such 
transshipment (or a successor of such exporter) shall be denied all 
benefits under the ATPA for a period of two years.
      The bill further provides penalties for an ATPEA 
beneficiary country that fails to cooperate with the United 
States in efforts to prevent transshipment. Where textile and 
apparel articles from such country are subject to quotas on 
importation into the United States consistent with WTO rules, 
the President must reduce the quantity of such articles that 
may be imported into the United States by three times the 
quantity of transshipped articles, to the extent consistent 
with WTO rules.
Conference agreement
      Conference agreement follows House and Senate bill.

                         Import Relief Actions

Present law
      The import relief procedures and authorities under 
sections 201-204 of the Trade Act of 1974 apply to imports from 
ATPA beneficiary countries, as they do to imports from other 
countries. If ATPA imports cause serious injury, or threat of 
such injury, to the domestic industry producing a like or 
directly competitive article, section 204(d) of the ATPA 
authorizes the President to suspend ATPA duty-free treatment 
and proclaim a rate of duty or other relief measures.
      Under NAFTA, the United States may invoke a special 
safeguard provision at any time during the tariff phase-out 
period if a NAFTA-origin textile or apparel good is being 
imported in such increased quantities and under such conditions 
as to cause ``serious damage, or actual threat thereof,'' to a 
domestic industry producing a like or directly competitive 
good. The President is authorized to either suspend further 
duty reductions or increase the rate of duty to the NTR rate 
for up to three years.
House amendment
      Under Section 3103 normal safeguard authorities under 
ATPA would apply to imports of all products except textiles and 
apparel. A NAFTA equivalent safeguard authorities would apply 
to imports of apparel products from ATPA countries, except 
that, United States, if it applied a safeguard action, would 
not be obligated to provide equivalent trade liberalizing 
compensation to the exporting country.
Senate amendment
      The bill establishes similar textile and apparel 
safeguard provisions based on the NAFTA textile and apparel 
safeguard provision.
Conference agreement
      Conference Agreement follows House and Senate bill.

                          Designation Criteria

Present law
      In determining whether to designate any country as an 
ATPA beneficiary country, the President must take into account 
seven mandatory and 12 discretionary criteria, which are listed 
in section 203 of the ATPA.
      Under Section 203 of the ATPA, the President shall not 
designate any country a ATPA beneficiary country if:
      (1) The country is a Communist country;
      (2) The country has nationalized, expropriated, imposed 
taxes or other exactions or otherwise seized ownership or 
control of U.S. property (including intellectual property), 
unless he determines that prompt, adequate, and effective 
compensation has been or is being made, or good faith 
negotiations to provide such compensation are in progress, or 
the country is otherwise taking steps to discharge its 
international obligations, or a dispute over compensation has 
been submitted to arbitration;
      (3) The country fails to act in good faith in recognizing 
as binding or in enforcing arbitral awards in favor of U.S. 
citizens;
      (4) The country affords ``reverse'' preferences to 
developed countries and whether such treatment has or is likely 
to have a significant adverse effect on U.S. commerce;
      (5) A government-owned entity in the country engages in 
the broadcast of copyrighted material belonging to U.S. 
copyright owners without their express consent or the country 
fails to work toward the provision of adequate and effective 
intellectual property rights;
      (6) The country is not a signatory to an agreement 
regarding the extradition of U.S. citizens;
      (7) If the country has not or is not taking steps to 
afford internationally recognized worker rights to workers in 
the country;
      In determining whether to designate a country as eligible 
for ATPA benefits, the President shall take into account 
(discretionary criteria):
      (1) An expression by the country of its desire to be 
designated;
      (2) The economic conditions in the country, its living 
standards, and any other appropriate economic factors;
      (3) The extent to which the country has assured the 
United States it will provide equitable and reasonable access 
to its markets and basic commodity resources;
      (4) The degree to which the country follows accepted 
rules of international trade under the World Trade 
Organization;
      (5) The degree to which the country uses export subsidies 
or imposes export performance or local content requirements 
which distort international trade;
      (6) The degree to which the trade policies of the country 
are contributing to the revitalization of the region;
      (7) The degree to which the country is undertaking self-
help measures to protect its own economic development;
      (8) Whether or not the country has taken or is taking 
steps to afford to workers in that country (including any 
designated zone in that country) internationally recognized 
workers rights;
      (9) The extent to which the country provides under its 
law adequate and effective means for foreign nationals to 
secure, exercise, and enforce exclusive intellectual property 
rights;
      (10) The extent to which the country prohibits its 
nationals from engaging in the broadcast of copyrighted 
material belonging to U.S. copyright owners without their 
express consent;
      (11) Whether such country has met the narcotics 
cooperation certification criteria of the Foreign Assistance 
Act of 1961 for eligibility for U.S. assistance; and
      (12) The extent to which the country is prepared to 
cooperate with the United States in the administration of the 
Act.
      Under the ATPA the President is prohibited from 
designating a country a beneficiary country if any of criteria 
(1)-(7) apply to that country, subject to waiver if the 
President determines that country designation will be in the 
U.S. national economic or security interest. The waiver does 
not apply to criteria (4) and (6). Under the ATPA criteria on 
(7) is included as both mandatory and discretionary.
      The President may withdraw or suspend beneficiary country 
status or duty-free treatment on any article if he determines 
the country should be barred from designation as a result of 
changed circumstances. The President must submit a triennial 
report to the Congress on the operation of the program. The 
report shall include any evidence that the crop eradication and 
crop substitution efforts of the beneficiary country are 
directly related to the effects of the legislation.
House amendment
      The House amendment provides that the President, in 
designating a country as eligible for the enhanced ATPDEA 
benefits, shall take into account the existing eligibility 
criteria established under ATPA described above, as well as 
other appropriate criteria, including: whether a country has 
demonstrated a commitment to undertake its WTO obligations and 
participate in negotiations toward the completion of the FTAA 
or comparable trade agreement; the extent to which the country 
provides intellectual property protection consistent with or 
greater than that afforded under the Agreement on Trade-Related 
Aspects of Intellectual Property Rights; the extent to which 
the country provides internationally recognized worker rights; 
whether the country has implemented its commitments to 
eliminate the worst forms of child labor; the extent to which a 
country has taken steps to become a party to and implement the 
Inter-American Convention Against Corruption; and the extent to 
which the country applies transparent, nondiscriminatory and 
competitive procedures in government procurement equivalent to 
those included in the WTO Agreement on Government Procurement 
and otherwise contributes to efforts in international fora to 
develop and implement international rules in transparency in 
government procurement.
Senate amendment
      Section 3102(5) contains identical provisions.
Conference agreement
      Conference Agreement follows the House and Senate 
amendments. In evaluating a potential beneficiary's compliance 
with its WTO obligations, the conferees expect the President to 
take into account the extent to which the country follows the 
rules on customs valuation set forth in the WTO Customs 
Valuation Agreement. With respect to intellectual property 
protection, it is the Conferees intent that the President will 
also take into account the extent to which potential 
beneficiary countries are providing or taking steps to provide 
protection of intellectual property rights comparable to the 
protections provided to the United States in bilateral 
intellectual property agreements.
      Since April 1995, Colombia has applied a variable import 
duty system, known as the ``price band'' system, on fourteen 
basic agriculture products such as wheat, corn, and soybean 
oil. An additional 147 commodities, considered substitutes or 
related products, are subject to the price band system which 
establishes ceiling, floor, and reference priceson imports. The 
Conferees's view is that the price band system is non-transparent and 
easily manipulated as a protectionist device. In early 2000, the United 
States reached agreement with Colombia in the WTO that Colombia would 
delink wet pet food, the only finished product in this system, from the 
price band system. In implementing the eligibility criteria relating to 
market access and implementation of WTO commitments, it is the 
Conferees intent that USTR insist that Colombia implement its WTO 
commitment to remove pet food from the price band tariff system and to 
apply the 20% common external tariff to imported pet food.
      With respect to whether beneficiary countries are 
following established WTO rules, the Conferees believe it is 
important for Andean governments to provide transparent and 
non-discriminatory regulatory procedures. Unfortunately, the 
Conferees know of instances where regulatory policies in Andean 
countries are opaque, unpredictable, and arbritarily applied. 
As such, it is the Conferees's view that Andean countries that 
seek trade benefits should adopt, implement, and apply 
transparent and non-discriminatory regulatory procedures. The 
development of such procedures would help create regulatory 
stability in the Andean region and thus provide mere certainty 
to U.S. companies that would like to invest in these countries.

            Determination regarding retention of designation

Present law
      Under Section 203(e) of the ATPA, the President may 
withdraw or suspend a country's beneficiary country 
designation, or withdraw, suspend, or limit the application of 
duty-free treatment to particular articles of a beneficiary 
country, due to changed circumstances.
House amendment
      Section 3102(b) amends section 203(e) of the ATPA to 
provide that President may withdraw or suspend ATPA 
designation, or withdraw, suspend or limit benefits is a 
country's performance under eligibility criteria are no longer 
satisfactory.
Senate amendment
      Identical.
Conference agreement
      Conference agreement follows the House amendment and 
Senate amendment.
            Reporting Requirements
Present law
      Provides for: (1) an annual report by the International 
Trade Commission on the economic impact of the bill and; (2) an 
annual report by the Secretary of Labor on the impact of the 
bill with respect to U.S. labor. Also under present law, USTR 
is required to report triannually on operation of the program.
House amendment
      Retains current law on reports.
Senate amendment
      Senate bill requires same ITC and Labor reports as well 
as an annual report by the Customs Service on compliance and 
anti-circumvention on the part of beneficiary countries in the 
area of textile and apparel trade. It also requires USTR to 
report biannually on operation of the program.
Conference agreement
      House recedes.
            Petitions for review
Present law
      No provision.
House amendment
      No provision.
Senate amendment
      Section 3102(e) of the bill directs the President to 
promulgate regulations regarding the review of eligibility of 
articles and countries under the ATPA. Such regulations are to 
be similar to regulations governing the Generalized System of 
Preferences petition process.
Conference agreement
      House recedes.

             SEC. 3104--TERMINATION OF DUTY-FREE TREATMENT

Present law
      Duty-free treatment under the ATPA expires on December 4, 
2001.
House amendment
      Duty-free treatment terminates under the Act on December 
31, 2006.
Senate amendment
      Section 3103 of the bill amends section 208(b) of the 
ATPA to provide for a termination date of February 28, 2006. 
Basic ATPA benefits apply retroactively to December 4, 2001.
Conference agreement
      House recedes on retroactivity for basic ATPA benefits; 
Senate recedes on termination.

 SEC. 3106--TRADE BENEFITS UNDER THE CARIBBEAN BASIN TRADE PARTNERSHIP 
      ACT (CBTPA) AND THE AFRICA GROWTH AND OPPORTUNITY ACT (AGOA)

                         Knit-to-shape Apparel

Present law
      Draft regulations issued by Customs to implement P.L. 
106-200 stipulate that knit to-shape garments, because 
technically they do not go through the fabric stage, are not 
eligible for trade benefits under the act.
House amendment
      Sec. 3106 and 3107 of the House bill amends AGOA and 
CBTPA to clarify that preferential treatment is provided to 
knit-to-shape apparel articles assembled in beneficiary 
countries.
Senate amendment
      No provision.
Conference agreement
      Senate recedes.
Present law
      Draft regulations issued by Customs to implement P.L. 
106-200 deny preferential access to garments that are cut both 
in the United States and beneficiary countries, on the 
rationale that the legislation does not specifically list this 
variation in processing (the so-called ``hybrid cutting 
problem'').
House amendment
      Sec. 3107 of H.R. 3009 adds new rules in CBTPA and AGOA 
to provide preferential treatment for apparel articles that are 
cut both in the United States and beneficiary countries.
Senate amendment
      No provision.
Conference agreement
      Senate recedes

                              CBI Knit Cap

Present law
      P.L. 106-200 extended duty-free benefits to knit apparel 
made in CBI] countries from regional fabric made with U.S. yarn 
and to knit-to-shape apparel (except socks), up to a cap of 
250,000,000 square meter equivalents (SMEs), with a growth rate 
of 16% per year for first 3 years.
House amendment
      Sec. 3106 of H.R. 2009 would raise this cap to the 
following amounts: 250.000,000 SMEs for the 1-year period 
beginning October 1, 2001; 500,000,000 SMEs for the 1-year 
period beginning on October 1, 2002; 850,000,000 SMEs for the 
1-year period beginning, on October 1, 2003; 970,000,000 SMEs 
in each succeeding 1-year period through September 30, 2009.
Senate amendment
      No provision.
Conference agreement
      Senate recedes.

                            CBI T-shirt Cap

Present law
      P.L. 106-200 extends benefits for an additional category 
of CBI regional knit apparel products (T-shirts) up to a cap of 
4.2 million dozen, growing 16% per year for the first 3 years.
House amendment
      Section 3106 of H.R 3006 would raise this cap to the 
following amounts: 4,200,000 dozen during the 1-year period 
beginning October 1, 2001; 9,000,000 dozen for the 1-year 
period beginning on October 1, 2002; 10,000,00 dozen for the 1-
year period beginning on October 1, 2003; 12,000,000 dozen in 
each succeeding 1-year period through September 30, 2009.
Senate amendment
      No provision.
Conference agreement
      Senate recedes
Present law
      Section 112(b)(3) of the AGOA provides preferential 
treatment for apparel made in beneficiary sub-Saharan African 
countries from ``regional'' fabric (i.e., fabric formed in one 
or more beneficiary countries) from yarn originating either in 
the United States or one or more such countries. Section 
112(b)(3)(B) establishes a special rule for lesser developed 
beneficiary sub-Saharan African countries, which provides 
preferential treatment, through September 30, 2004, for apparel 
wholly assembled in one or more such countries regardless of 
the origin of the fabric used to make the articles. Section 
112(b)(3)(A) establishes a quantitative limit or ``cap'' on the 
amount of apparel that may be imported under section 112(b)(3) 
or section 112(b)(3)(B). This ``cap'' is 1.5 percent of the 
aggregate square meter equivalents of all apparel articles 
imported into the United States for the year that began October 
1, 2000, and increases in equal increments to 3.5 percent for 
the year beginning October 1, 2007.
House amendment
      Section 3107 would clarify that apparel wholly assembled 
in one or more beneficiary, sub-Saharan African countries from 
components knit-to-shape in one or more such countries from 
U.S. or regional yarn is eligible for preferential treatment 
under section 112(b)(3) of AGOA. Similarly, Section 5 would 
clarify that apparel knit-to-shape and wholly assembled in one 
or more lesser developed beneficiary sub-Saharan African 
countries is eligible for preferential treatment, regardless of 
the origin of the yarn used to make such articles. The House 
amendment also would increase the ``cap'' by changing the 
applicable percentages from 1.5 percent to 3 percent in the 
year that began October 1, 2000, and from 3.5 percent to 7 
percent in the year beginning October 1, 2007.
Senate amendment
      No provision.
Conference agreement
      Conference agreement follows House Amendment accept the 
increase in the cap is limited to apparel products made with 
regional or U.S. fabric and yarn. No increases in amounts of 
apparel made of third-country fabric over current law.
Present law
      AGOA was supposed to provide duty-free, quota-free 
treatment to sweaters knit in African beneficiary countries 
from fine merino wool yarn, regardless of where the yarn was 
formed. AGOA was supposed to provide duty-free, quota-free 
treatment to sweaters knit in African beneficiary countries 
from fine merino wool yarn, regardless of where the yarn was 
formed. However, due to a drafting problem, the wrong diameter 
was included, making it impossible to use the provision.
House amendment
      Section 3107 corrects the yarn diameter in the AGOA 
legislation so that sweaters knit to shape from merino wool of 
a specific diameter are eligible.
Senate amendment
      No provision.
Conference agreement
      Senate recedes.

                      Africa: Namibia and Botswana

Present law
      The GDBs of Botswana and Namibia exceed the LLDC limit of 
$1500 and therefore these countries are not eligible to use 
third country fabric for the transitionperiod under the AGOA 
regional fabric country cap.
House amendment
      Section 5 allows Namibia and Botswana to use third 
country fabric for the transition period under the AGOA 
regional fabric country cap.
Senate amendment
      No provision.
Conference agreement
      Senate recedes.

       TITLE XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES

       SEC. 4101--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES

Expired law
      Section 505 of the Trade Act of 1974, as amended, 
provides that no duty-free treatment under Title V (the 
Generalized System of Preferences) shall remain in effect after 
September 30, 2001.
House bill
      The House amendment to H.R. 3009 would amend section 505 
of the Trade Act of 1974 to authorize an extension through 
December 31, 2002. It would also provide retroactive relief in 
that, notwithstanding section 514 of the Tariff Act of 1930 or 
any other provision of law, the entry of any article to which 
duty-free treatment under Title V of the Trade Act of 1974 
would have applied if the entry had been made on September 30, 
2001, and was made after September 30, 2001, and before the 
enactment of this Act, shall be liquidated or reliquidated as 
free of duty and the Secretary of Treasury shall refund any 
duty paid, upon proper request filed with the appropriate 
Customs officer, within 180 days after the date of enactment.
Senate amendment
      The Senate amendment authorizes an extension of GSP 
through December 31, 2006. The extension is retroactive to 
September 30, 2001, permitting importers to liquidate or 
reliquidate entries made since that date and to seek a return 
of duties paid on goods that would have entered the United 
States free of duty, but for expiration of GSP.
      The Senate Amendment also amends the definition of 
``internationally recognized worker rights'' set forth in the 
GSP statute (section 507(4) of the Trade Act of 1974). 
Specifically, it adds to that definition ``a prohibition on 
discrimination with respect to employment and occupation'' and 
a ``prohibition of the worst forms of child labor.'' These two 
prohibitions come from the International Labor Organization's 
1998 Declaration on Fundamental Principles and Rights at Work, 
which defines certain worker rights as ``fundamental.''
      The GSP statute identifies certain criteria that the 
President must take into account in determining whether to 
designate a country as eligible for GSP benefits. Conversely, a 
country's lapse in compliance with one or more of these 
criteria may be grounds for withdrawal, suspension, or 
limitation of benefits. Whether a country is taking steps to 
afford its workers internationally recognized worker rights is 
one of those criteria. The Senate Amendment seeks to make the 
concept of ``internationally recognized worker rights'' as 
defined for GSP consistent with the concept as defined by the 
ILO.
      Finally, the Senate Amendment establishes a new 
eligibility criterion for GSP: ``A country is ineligible for 
GSP if it has not taken steps to support the efforts of the 
United States to combat terrorism.''
Conference agreement
      The Conference agreement authorizes an extension of GSP 
through December 31, 2006. Conferees approved the Senate 
provision to include a prohibition on the worst forms of child 
labor in the definition of internationally recognized worker 
rights in Section 507(a) of the Trade Act of 1974. Conferees 
declined to include the Senate provision on discrimination with 
respect to employment in the definition of ``international 
recognized worker rights under Sec. 507(a) of the Trade Act of 
1974. Agreement follows the House and the Senate bill with 
respect to providing retroactive relief.

                  DIVISION E--MISCELLANEOUS PROVISIONS

                 TITLE L--MISCELLANEOUS TRADE BENEFITS

                      Subtitle A--Wool Provisions

   SEC. 5101--WOOL MANUFACTURER PAYMENT CLARIFICATION AND TECHNICAL 
                            CORRECTIONS ACT

Present law
      Title V of the Trade and Development Act of 2000 (Pub. L. 
No. 106-200) included certain tariff relief for the domestic 
tailored clothing and textile industries. The relief was 
largely aimed at reducing the harmful affects of a ``tariff 
inversion''--i.e., a tariff structure that levies higher duties 
on the raw material (such as wool fabric) than on the finished 
goods (such as mens' suits). A component of the relief to the 
U.S. tailored clothing and textile industry was a refund of 
duties paid in calendar year 1999, spread out over calendar 
years 2000, 2001 and 2002. Pub. L. No. 106-2000, Sec. 505.
House amendment
      No provision.
Senate amendment
      The Senate bill amends section 505 of the Trade and 
Development Act of 2000 to simplify the process for refunding 
to eligible parties duties paid in 1999. Specifically, it 
creates three special refund pools for each of the affected 
wool articles (fabric, yarn, and fiber and top). Refunds for 
importing manufacturers will be distributed in three 
installments--the first and second on or before the date that 
is 45 days after the date of enactment of the Wool Manufacturer 
Payment and Clarification and Technical Corrections Act, and 
the third on or before April 15, 2003. Refunds for nonimporting 
manufacturers will be distributed in two installments--the 
first on or before the date that is 120 days after the date of 
enactment of the Wool Manufacturer Payment Clarification and 
Technical Corrections Act, and the second on or before April 
15, 2003.
      The provision also streamlines the paperwork process, in 
light of the destruction of previously filed claims and 
supporting information in the September 11, 2001 attacks on the 
World Trade Center in New York, New York. Finally, the 
provision identifies all persons eligible for the refunds.
Conference agreement
      The House recedes to the Senate.

                   SEC. 5102--DUTY SUSPENSION ON WOOL

Present law
      Sections 501(a) and (b) of the Trade and Development Act 
of 2000 provide temporary duty reductions for certain worsted 
wool fabrics through 2003.
      Section 501(d) limits the aggregate quantity of worsted 
wool fabrics entered under heading 9902.51.11 from January 1 to 
December 31 of each year, inclusive, to 2,500,000 square meter 
equivalents, or such other quantity proclaimed by the President 
pursuant to section 504(b)(3) of the Trade and Development Act. 
Further, the section limits the aggregate quantity of worsted 
wool fabrics entered under heading 9902.51.12 from January 1 to 
December 31 of each year, inclusive, to 1,500,000 square meter 
equivalents, or such other quantity proclaimed by the President 
pursuant to section 504(b)(3) of the Trade and Development Act.
House amendment
      No provision.
Senate bill
      The Senate bill extends the temporary duty reductions on 
fabrics of worsted wool from 2003 to 2005. The provision 
increases the limitation on the quantity of imports of worsted 
wool fabrics entered under heading 9902.51.11 to 3,500,000 
square meter equivalents in calendar year 2002, and 4,500,000 
square meter equivalents in calendar year 2003. Imports of 
worsted wool fabrics entered under heading 9902.51.12 are 
increased to 2,500,000 square meter equivalents in calendar 
year 2002, and 3,500,000 square meter equivalents in calendar 
year 2003.
      The bill extends the payments made to manufacturers under 
section 505 of the Trade and Development Act of 2000 and 
requires an affidavit that the manufacturer will remain a 
manufacturer in the United States as of January 1 of the year 
of payment. The two additional payments will occur as follows: 
the first to be made after January 1, 2004, but on or before 
April 15, 2004, and the second after January 1, 2005, but on or 
before April 15, 2005.
      Finally, the bill extends the ``Wool Research Trust 
Fund'' for two years through 2006.
Conference agreement
      The House recedes to the Senate.

                      Subtitle B--Other Provisions

               SEC. 5201--FUND FOR WTO DISPUTE SETTLEMENT

Present law
      No applicable section.
House amendment
      The provision authorizes a settlement fund within the 
United States Trade Representative's Office in the amount of 
$50 million for the use in settling disputes that occur related 
to the World Trade Organization. The Trade Representative must 
certify to the Secretary of the Treasury that the settlement is 
in the best interest of the United States in cases of not more 
than $10 million. For cases above $10 million, the Trade 
Representative must make the same certification to the United 
States Congress.
Senate bill
      No provision.
Conference agreement
      The Senate recedes to the House.

  SEC. 5202--CERTAIN STEAM OR OTHER VAPOR GENERATING BOILERS USED IN 
                           NUCLEAR FACILITIES

Present law
      Under present law, certain steam or other vapor 
generating boilers used in nuclear facilities imported into the 
United States prior to December 31, 2003 are charged a duty 
rate of 4.9 percent ad valorem. This rate took effect pursuant 
to section 1268 of Public Law Number 106-476 (``Tariff 
Suspension and Trade Act of 2000''). Previously, the rate had 
been 5.2 percent ad valorem.
House amendment
      No provision.
Senate amendment
      Section 203 of the Senate amendment changes the duty rate 
on certain steam or other vapor generating boilers used in 
nuclear facilities to zero for such goods entered, or withdrawn 
from warehouse for consumption, on or after January 1, 2002, 
and on or before December 31, 2006. The provision was intended 
to lower the cost of inputs into the operation of nuclear 
facilities and thereby lower the cost of energy to consumers.
Committee agreement
      The House recedes to the Senate.

            SEC. 5203--SUGAR TARIFF RATE QUOTA CIRCUMVENTION

Present law
      No applicable section.
House amendment
      No provision.
Senate amendment
      The Senate bill establishes a sugar anti-circumvention 
program which requires the Secretary of Agriculture to identify 
imports of articles that are circumventing tariff-rate quotas 
on sugars, syrups, or sugar-containing products imposed under 
chapters 17, 18, 19, and 21 of the Harmonized Tariff Schedule. 
The Secretary shall then report to the President articles found 
to be circumventing such tariff-rate quotas. Upon receiving the 
Secretary's report, the President shall, by proclamation, 
include any identified article in the appropriate tariff-rate 
quota provision of the Harmonized Tariff Schedule.
Conference agreement
      Conferees agreed to a provision directing the Secretary 
of Agriculture and the Commissioner of Customs shall monitor 
for sugar circumvention and shall report and make 
recommendations to Congress and the President.
      This provision amends the Harmonized Tariff Schedule of 
the United States (``HTSUS'') to make clear in the statute an 
important element of the ruling of the Court of Appeals for the 
Federal Circuit in Heartland By-Products, Inc. v. United 
States, 264 F. 3rd 1126 (Fed. Cir. 2001), i.e., that molasses 
is one of the foreign substances that must be excluded when 
calculating the percentage of soluble non-sugar solids under 
subheading 1702.90.40.
      The provision requires the Secretary of Agriculture and 
the Commissioner of Customs to establish a monitoring program 
to identify existing or likely circumvention of the tariff-rate 
quotas in Chapters 17, 18, 19 and 21 of the HTSUS. The 
Secretary and the Commissioner shall report the results of 
their monitoring to Congress and the President every six 
months, together with data and a description of developments 
and trends in the composition of trade provided for in such 
chapters. This report will be made public. The report will 
discuss any indications that imports of articles not subject to 
the tariff-rate quotas are being used for commercial extraction 
of sugar in the United States. Imports of so-called ``high-test 
molasses'' currently classified under subheading 1703.10.30 
will be examined particularly closely for such indications.
      Finally, the Secretary and the Commissioner will include 
in the report their recommendations for ending circumvention, 
including their recommendations for legislation. The Managers 
emphasize that rapid action to stop circumvention is the best 
way to prevent a problem from developing and that quick 
administrative or legislative action is preferable to 
protracted procedures and litigation, as occurred in the 
Heartland case.

                From the Committee on Ways and Means, for 
                consideration of the House amendment and the 
                Senate amendment, and modifications committed 
                to conference:
                                   William Thomas,
                                   Phillip M. Crane,
                From the Committee on Education and the 
                Workforce, for consideration of sec. 603 of the 
                Senate amendment, and modifications committed 
                to conference:
                                   John Boehner,
                                   Sam Johnson,
                From the Committee on Energy and Commerce, for 
                consideration of sec. 603 of the Senate 
                amendment, and modifications committed to 
                conference:
                                   Billy Tauzin,
                                   Michael Bilirakis,
                From the Committee on Government Reform, for 
                consideration of sec. 344 of the House 
                amendment, and sec. 1143 of the Senate 
                amendment, and modifications committed to 
                conference:
                                   Dan Burton,
                                   Bob Barr,
                From the Committee on the Judiciary, for 
                consideration of secs. 111, 601, and 701 of the 
                Senate amendment, and modifications committed 
                to conference:
                                   F. James Sensenbrenner,
                                   Howard Coble,
                From the Committee on Rules, for consideration 
                of secs. 2103, 2105, and 2106 of the House 
                amendment and secs. 2103, 2105, and 2106 of the 
                Senate amendment, and modifications committed 
                to conference:
                                   David Dreier,
                                   John Linder,
                                 Managers on the Part of the House.

                                   Max Baucus,
                                   John Breaux,
                                   Chuck Grassley,
                                   Orrin Hatch,
                                Managers on the Part of the Senate.

                                
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