[Senate Report 109-87]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                                 SENATE                          
 1st Session                                                     109-87
_______________________________________________________________________

                                     

                                                       Calendar No. 136


                        CONGRESSIONAL AWARD ACT

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                 S. 335

               TO REAUTHORIZE THE CONGRESSIONAL AWARD ACT




                 June 23, 2005.--Ordered to be printed
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia

           Michael D. Bopp, Staff Director and Chief Counsel
                 Amy L. Hall, Professional Staff Member
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                  Lawrence B. Novey, Minority Counsel
                      Trina D. Tyrer, Chief Clerk


                            C O N T E N T S

                              ----------                              
                                                                   Page
I. Purpose and Summary...........................................     1
II. Background...................................................     1
III. Legislative History.........................................     3
IV. Section-by-Section Analysis..................................     3
V. Estimated Cost of Legislation.................................     4
VI. Evaluation of Regulatory Impact..............................     5
VII. Changes in Existing Law.....................................     5


                                                       Calendar No. 136
109th Congress                                                   Report
                                 SENATE                          
 1st Session                                                     109-87

======================================================================



 
                        CONGRESSIONAL AWARD ACT

                                _______
                                

                 June 23, 2005.--Ordered to be printed

                                _______
                                

 Ms. Collins, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 335]

    The Committee on Homeland Security and Governmental 
Affairs, to whom was referred the bill (S. 335) to reauthorize 
the Congressional Award Act, having considered the same reports 
favorably thereon without amendment and recommends that the 
bill do pass.

                         I. Purpose and Summary

    S. 335 reauthorizes the Congressional Award Program through 
October 1, 2009. Designed to promote initiative, achievement, 
and excellence among the youth of America, the Program arranges 
for medals to be awarded to young people who have satisfied 
specified standards of achievement. Members of Congress are 
included on the Board that administers the program and 
participate in the presentation of awards.

                             II. Background

    The Congressional Award Act, Public Law 96-114, was enacted 
on November 16, 1979, as a bipartisan initiative led by Senator 
Malcolm Wallop (R-WY) and Representative James J. Howard (D-
NJ). Under the Congressional Award Program established by the 
Act, young people between the ages of 14 and 23 earn awards by 
completing hours in each of four areas of achievement--
volunteer public service, personal development, physical 
fitness, and expedition/exploration. The Award is non-
competitive, and participants, with the guidance of adult 
advisors, establish their own goals and work to achieve them. 
Depending on how many hours are completed, participants earn 
Bronze, Silver, and Gold certificates or Bronze, Silver, and 
Gold medals. Members of the House and Senate recognize their 
constituents who earn Bronze and Silver medals at in-state 
ceremonies, and Gold-medal winners are recognized at an annual 
ceremony in the Capitol presided over by House and Senate 
leadership. In fiscal year 2004, 1,343 participants were 
recognized with certificates, and 858 received medals, 
including 164 who earned gold medals. The Program is very 
popular, with more than 20,000 active participants and more 
than 10,000 adult mentors involved across the Nation.
    Under the Act, the Congressional Award Program is 
administered by a 25-member Board. Twenty-four of the members 
are appointed by Congressional leadership--six by each of the 
Majority Leader of the Senate, the Minority Leader of the 
Senate, the Speaker of the House of Representatives, and the 
Minority Leader of the House of Representatives. The Director 
of the Board, appointed by a majority vote of the Board, is the 
principal executive of the Program and sits as a non-voting 
member of the Board. By statute, four of the Board members must 
be Members of Congress. At present, Senator Max Baucus, Senator 
Larry E. Craig, Representative Barbara Cubin, and 
Representative Sheila Jackson-Lee serve on the Board.
    The Board operates as a private, nonprofit, tax-exempt 
organization (under section 501(c)(3) of the Internal Revenue 
Code), called the Congressional Award Foundation. Financial 
sponsors of the Program include business corporations, 
charitable foundations, and labor unions. The Foundation also 
receives a small amount of in-kind services from the federal 
government. As patrons of the Congressional Award program, the 
U.S. Congress provides office space in a House Office Building 
and an annual audit by the Government Accountability Office 
(GAO); moreover, the award medals are designed and struck by 
the U.S. Mint.\1\
---------------------------------------------------------------------------
    \1\ In the cost estimate prepared by the Congressional Budget 
Office (CBO) for S. 335, CBO estimated that the Board's use of House 
Office Building space and services costs less than $500,000 a year, and 
the U.S. Mint's production of Congressional Award medals costs less 
than $500,000 a year. These costs are under the threshold below which 
CBO does not report more precise estimates. Estimates provided by the 
U.S. Mint indicate that its costs are under $50,000 annually.
---------------------------------------------------------------------------
    GAO has reported that the Foundation, which sustains itself 
with private donations, has faced increasing financial 
difficulty in recent years.\2\ The rapid growth of the Program 
has strained the Foundation's resources, and its financial 
situation has been further taxed by the downturn in the 
financial markets and by the general difficulty in maintaining 
charitable giving arising out of the recent recession.\3\ Thus, 
cash contributions decreased from over $1 million in fiscal 
year 1999 to about $600,000 in fiscal year 2003. In the most 
recent financial audit report for the Foundation, issued in 
November 2004, GAO found no reportable problem with the 
Foundation's financial statements, but reported that the 
Foundation faced a worsening financial condition, raising 
substantial doubt about its ability to continue as an ongoing 
concern.\4\ In its plan to deal with this deteriorating 
financial condition, the Foundation has significantly cut 
operating expenses, from over $1,700,000 in fiscal year 2002 to 
$760,000 in fiscal year 2003, to under $500,000 in fiscal year 
2004. The plan also calls for a modified approach to 
fundraising. The Foundation has recently begun holding more 
frequent but smaller and less expensive fundraising events, and 
is undertaking other efforts to keep current and former donors 
better informed and engaged in the award program's activities. 
It is too soon to know the outcome of these efforts, but the 
Foundation believes the trends are favorable.
---------------------------------------------------------------------------
    \2\ GAO, ``Financial Audit, Congressional Award Foundation's Fiscal 
Years 2003 and 2002 Financial Statements,'' November 2004 (GAO-05-132).
    \3\ Id.; Statement of Senator Craig, 149 Cong. Rec. S14939 (Nov. 
17, 2003) (Senator Craig is a member of the Board of the Congressional 
Award Program).
    \4\ GAO, ``Financial Audit, Congressional Award Foundation's Fiscal 
Years 2003 and 2002 Financial Statements,'' November 2004 (GAO-05-132).
---------------------------------------------------------------------------
    The Act has been reauthorized several times since November 
16, 1979, when Public Law 96-114 was enacted, establishing the 
Board for a 6-year period. The Act was first reauthorized, for 
a further 3-year period, by Public Law 99-161, the 
Congressional Award Amendments of 1985. Public Law 100-674, the 
Congressional Award Act Amendments of 1988, reauthorized the 
Act for an additional 2 years, contingent upon the Board's 
complying with the established reporting requirements. Public 
Law 101-525, the Congressional Award Amendments of 1990, 
extended the Act for approximately an additional 2-year period, 
until October 1, 1992. Public Law 102-457, the Congressional 
Award Act Amendments of 1992, extended the Act for a 3-year 
period, and Public Law 104-208 extended the Act for a 4-year 
period. Public Law 106-63 extended the Act for 5 years, until 
October 1, 2004. On September 14, 2004, the Committee on 
Governmental Affairs reported a bill, S. 2639, to reauthorize 
the Act for 5 additional years, until October 1, 2009. The 
Senate passed the bill by unanimous consent on September 29, 
but the House did not act on the legislation before the end of 
the 108th Congress.
    The Congressional Award Program is very popular and 
continues to grow rapidly. The number of Program participants 
has more than doubled over a recent 4-year period, from 
approximately 8,000 in 2001 to over 20,000 at present. There 
are also more than 10,000 adult mentors involved in the 
program. By statute, GAO audits the Foundation's financial 
statements annually and has issued generally favorable reports. 
The Committee believes that the Congressional Award Program 
performs a valuable service, at minimal cost to the taxpayer, 
encouraging initiative, achievement, public service, and 
personal development in the Nation's youth, as well as 
providing an opportunity for service for the adult volunteers. 
The Committee therefore supports and recommends reauthorization 
of the Program.

                        III. Legislative History

    S. 335 was introduced on February 9, 2005 by Senator 
Lieberman and is cosponsored by Chairman Collins and Senators 
Baucus and Craig. The bill was referred to the Committee on 
Homeland Security and Governmental Affairs, and on April 13, 
2005, the Committee considered the bill and by voice vote 
ordered it reported favorably without amendment. Present 
wereSenators Akaka, Carper, Chafee, Coburn, Coleman, Collins, 
Lautenberg, Lieberman, Levin, and Warner.

                    IV. Section-by-Section Analysis

    Section 1, the only section of the bill, is entitled 
``Reauthorization of the Congressional Award Act.''
    Subsection (a) amends the Congressional Award Act to extend 
for 5 years the Comptroller General's responsibility to assess 
the fiscal controls and accounting procedures of the 
Congressional Award Program. Under section 104(c)(1) of the Act 
(2 U.S.C. Sec. 804(c)(1)), as amended, the Director of the 
Board is responsible for ensuring that appropriate procedures 
for fiscal control and fund accounting are established for the 
Program, that operations are administered by personnel who are 
expert in accounting and financial management, and that the 
Board's liabilities not exceed its assets for any fiscal year. 
Under section 104(c)(2)(A) of the Act (2 U.S.C. 
Sec. 804(c)(2)(A)), as amended, the Comptroller General must 
determine whether the Director has substantially complied with 
these requirements and must include his findings in annual 
reports to Congress. This subsection extends these 
responsibilities of the Comptroller General through calendar 
year 2009.
    Subsection (b) amends the Congressional Award Act to extend 
for 5 years the existence of the Board. Under section 108 of 
the Act (2 U.S.C. Sec. 808), as amended, the Board expired on 
October 1, 2004. Paragraph (1) of subsection (b) extends the 
existence of the Board until October 1, 2009, and paragraph (2) 
of this subsection is a savings provision, affirming the 
effectiveness of the Board's actions under the Act from October 
1, 2004, until the date on which this reauthorization is 
enacted.
    Subsection (c) makes non-substantive technical corrections 
to the Act.

                    V. Estimated Cost of Legislation


S. 335--A bill to reauthorize the Congressional Award Act

    S. 335 would reauthorize the Congressional Award Act 
through fiscal year 2009. The Congressional Award Program 
recognizes excellence in public service and personal 
development among young people. The program is overseen by the 
Congressional Award Board, a nonprofit organization that 
receives no federal funding.
    CBO estimates that implementing S. 335 would cost less than 
$500,000 a year, assuming the availability of appropriated 
funds. In addition, by requiring the U.S. Mint to design and 
strike medals at the request of the Congressional Award Board, 
S. 335 would increase direct spending by less than $500,000 a 
year.
    Under S. 335, the Congressional Award Board would continue 
to receive in-kind services from the federal government. Those 
services consist of free office space in the Ford House Office 
Building, including maintenance and utilities, and the 
performance of an annual audit by the Government Accountability 
Office. CBO estimates that the board's continued use of such 
services would cost less than $500,000 a year in appropriated 
funds.
    In addition, young people recognized by the Congressional 
Award Program are awarded medals produced by the U.S. Mint. 
Based on information from the board and the Mint, CBO estimates 
that reauthorizing the program would increase direct spending 
from the U.S. Mint Public Enterprise Fund by less than $500,000 
annually.
    S. 335 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. This estimate was approved by Peter H. Fontaine, 
Deputy Assistant Director for Budget Analysis.

                  VI. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill. The enactment of 
this legislation will not have a significant regulatory impact.

                      VII. Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic and existing law, in which no 
change is proposed, is shown in roman):

   Congressional Award Act, as amended, Pub. L. 96-114, Nov. 16, 1979

Sections 103, 104, and 108, as codified at 2 U.S.C. Sec. Sec. 803, 804, 
                                and 808

                           UNITED STATES CODE

                         TITLE 2, THE CONGRESS

                CHAPTER 19--CONGRESSIONAL AWARD PROGRAM


               Subchapter I--Congressional Award Program


Sec. 803. Board organization

    (a) Membership; Composition; Appointment Criteria; 
Derivation of Appointment--
          (1) The Board shall consist of 25 members, as 
        follows:
                  (A) Six members appointed by the majority 
                leader of the Senate, 1 of whom shall be a 
                recipient of the Congressional Award.
                  (B) Six members appointed by the minority 
                leader of the Senate, 1 of whom shall be [a a 
                local] a local Congressional Award program 
                volunteer.
                  (C) Six members appointed by the Speaker of 
                the House of Representatives, 1 of whom shall 
                be [a a local] a local Congressional Award 
                program volunteer.
                  (D) Six members appointed by the minority 
                leader of the House of Representatives, 1 of 
                whom shall be a recipient of the Congressional 
                Award.
                  (E) The Director of the Board, who shall 
                serve as a nonvoting member.

           *       *       *       *       *       *       *

    (b) Terms of Appointed Members; Reappointment--
          (1) Appointed members of the Board shall continue to 
        serve at the pleasure of the officer by whom they are 
        appointed, and (unless reappointed under paragraph (3)) 
        shall serve for a term of 4 years.
          (2) For the purpose of adjusting the terms of Board 
        members to allow for staggered appointments, the 
        following distribution of Board terms shall take effect 
        at the first meeting of the Board occurring after 
        November 6, 1990:
                  (A) Those members who have served 10 years or 
                more, as of the date of such meeting, shall 
                have an appointment expiring on a date 2 years 
                from October 1, 1990.
                  (B) Those members who have served for 6 
                months or less, as of the date of such meeting, 
                shall have an appointment expiring on a date 6 
                years from October 11, 1990.
                  (C) All other members shall apportion the 
                remaining Board positions between equal numbers 
                of 2 and 4 year terms (providing that if there 
                are an unequal number of remaining members, 
                there shall be a predominance of 4 year terms), 
                such apportionment to be made by lot.
          (3)(A) Subject to the limitations in subparagraphs 
        (B) and (C) of this paragraph, members of the Board may 
        be reappointed, provided that no member may serve more 
        than 2 consecutive terms.
          (B) Members of the Board covered under paragraph 
        (2)(A) of this [section] subsection shall not be 
        eligible for reappointment to the Board. Members of the 
        Board covered under subparagraphs (B) and (C) of 
        paragraph (2) of this [section] subsection may be 
        reappointed for 1 additional consecutive 4 year term.

           *       *       *       *       *       *       *


Sec. 804. Administration

           *       *       *       *       *       *       *


    (c) Requirements Regarding Financial Operations; 
Noncompliance With Requirements--
          (1) The Director shall, in consultation with the 
        Board, ensure that appropriate procedures for fiscal 
        control and fund accounting are established for the 
        financial operations of the Congressional Award 
        Program, and that such operations are administered by 
        personnel with expertise in accounting and financial 
        management. Such personnel may be retained under 
        contract. In carrying out this paragraph, the Director 
        shall ensure that the liabilities of the Board do not, 
        for any calendar year, exceed the assets of the Board.
          (2)(A) The Comptroller General of the United States 
        shall determine, for calendar years 1993, 1994, 1995, 
        1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, [and 
        2004] 2004, 2005, 2006, 2007, 2008, and 2009, whether 
        the Director has substantially complied with paragraph 
        (1). * * *

           *       *       *       *       *       *       *


Sec. 808. Termination

    The Board shall terminate [October 1, 2004] October 1, 
2009.

                                  
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