The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS” mentioning the Department of Interior was published in the Senate section on pages S101-S419 on Jan. 22, 2001.
The publication is reproduced in full below:
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. DASCHLE (for himself, Mr. Kennedy, Mr. Dodd, Mr. Bingaman,
Mrs. Murray, Mr. Wellstone, Mr. Dorgan, Ms. Mikulski, Mr.
Levin, Mrs. Clinton, Mr. Schumer, Mr. Rockefeller, Mr. Johnson,
Mr. Corzine, Mr. Biden, Mr. Kerry, and Mr. Reed):
S. 6. A bill to amend the Public Health Service Act, the Employee Retirement Income Security Act of 1974, and the Internal Revenue Code of 1986 to protect consumers in managed care plans and other health coverage; to the Committee on Health, Education, Labor, and Pensions.
patients' bill of rights act
Mr. DASCHLE. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the Record, as follows:
S. 6
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Patients' Bill of Rights Act''.
(b) Table of Contents.--The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I--IMPROVING MANAGED CARE
Subtitle A--Grievance and Appeals
Sec. 101. Utilization review activities.
Sec. 102. Internal appeals procedures.
Sec. 103. External appeals procedures.
Sec. 104. Establishment of a grievance process.
Subtitle B--Access to Care
Sec. 111. Consumer choice option.
Sec. 112. Choice of health care professional.
Sec. 113. Access to emergency care.
Sec. 114. Access to specialty care.
Sec. 115. Access to obstetrical and gynecological care.
Sec. 116. Access to pediatric care.
Sec. 117. Continuity of care.
Sec. 118. Access to needed prescription drugs.
Sec. 119. Coverage for individuals participating in approved clinical trials.
Subtitle C--Access to Information
Sec. 121. Patient access to information.
Subtitle D--Protecting the Doctor-Patient Relationship
Sec. 131. Prohibition of interference with certain medical communications.
Sec. 132. Prohibition of discrimination against providers based on licensure.
Sec. 133. Prohibition against improper incentive arrangements.
Sec. 134. Payment of claims.
Sec. 135. Protection for patient advocacy.
Subtitle E--Definitions
Sec. 151. Definitions.
Sec. 152. Preemption; State flexibility; construction. Sec. 153. Exclusions.
Sec. 154. Coverage of limited scope plans.
Sec. 155. Regulations.
TITLE II--APPLICATION OF QUALITY CARE STANDARDS TO GROUP HEALTH PLANS
AND HEALTH INSURANCE COVERAGE UNDER THE PUBLIC HEALTH SERVICE ACT
Sec. 201. Application to group health plans and group health insurance coverage.
Sec. 202. Application to individual health insurance coverage.
TITLE III--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974
Sec. 301. Application of patient protection standards to group health plans and group health insurance coverage under the
Employee Retirement Income Security Act of 1974.
Sec. 302. ERISA preemption not to apply to certain actions involving health insurance policyholders.
Sec. 303. Limitations on actions.
TITLE IV--APPLICATION TO GROUP HEALTH PLANS UNDER THE INTERNAL REVENUE
CODE OF 1986
Sec. 401. Amendments to the Internal Revenue Code of 1986.
TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION
Sec. 501. Effective dates.
Sec. 502. Coordination in implementation.
TITLE VI--MISCELLANEOUS PROVISIONS
Sec. 601. Health care paperwork simplification.
Sec. 602. No impact on social security trust fund.
TITLE I--IMPROVING MANAGED CARE
Subtitle A--Grievance and Appeals
SEC. 101. UTILIZATION REVIEW ACTIVITIES.
(a) Compliance With Requirements.--
(1) In general.--A group health plan, and a health insurance issuer that provides health insurance coverage, shall conduct utilization review activities in connection with the provision of benefits under such plan or coverage only in accordance with a utilization review program that meets the requirements of this section.
(2) Use of outside agents.--Nothing in this section shall be construed as preventing a group health plan or health insurance issuer from arranging through a contract or otherwise for persons or entities to conduct utilization review activities on behalf of the plan or issuer, so long as such activities are conducted in accordance with a utilization review program that meets the requirements of this section.
(3) Utilization review defined.--For purposes of this section, the terms ``utilization review'' and ``utilization review activities'' mean procedures used to monitor or evaluate the use or coverage, clinical necessity, appropriateness, efficacy, or efficiency of health care services, procedures or settings, and includes prospective review, concurrent review, second opinions, case management, discharge planning, or retrospective review.
(b) Written Policies and Criteria.--
(1) Written policies.--A utilization review program shall be conducted consistent with written policies and procedures that govern all aspects of the program.
(2) Use of written criteria.--
(A) In general.--Such a program shall utilize written clinical review criteria developed with input from a range of appropriate actively practicing health care professionals, as determined by the plan, pursuant to the program. Such criteria shall include written clinical review criteria that are based on valid clinical evidence where available and that are directed specifically at meeting the needs of at-risk populations and covered individuals with chronic conditions or severe illnesses, including gender-specific criteria and pediatric-specific criteria where available and appropriate.
(B) Continuing use of standards in retrospective review.--If a health care service has been specifically pre-authorized or approved for an enrollee under such a program, the program shall not, pursuant to retrospective review, revise or modify the specific standards, criteria, or procedures used for the utilization review for procedures, treatment, and services delivered to the enrollee during the same course of treatment.
(C) Review of sample of claims denials.--Such a program shall provide for an evaluation of the clinical appropriateness of at least a sample of denials of claims for benefits.
(c) Conduct of Program Activities.--
(1) Administration by health care professionals.--A utilization review program shall be administered by qualified health care professionals who shall oversee review decisions.
(2) Use of qualified, independent personnel.--
(A) In general.--A utilization review program shall provide for the conduct of utilization review activities only through personnel who are qualified and have received appropriate training in the conduct of such activities under the program.
(B) Prohibition of contingent compensation arrangements.--Such a program shall not, with respect to utilization review activities, permit or provide compensation or anything of value to its employees, agents, or contractors in a manner that encourages denials of claims for benefits.
(C) Prohibition of conflicts.--Such a program shall not permit a health care professional who is providing health care services to an individual to perform utilization review activities in connection with the health care services being provided to the individual.
(3) Accessibility of review.--Such a program shall provide that appropriate personnel performing utilization review activities under the program, including the utilization review administrator, are reasonably accessible by toll-free telephone during normal business hours to discuss patient care and allow response to telephone requests, and that appropriate provision is made to receive and respond promptly to calls received during other hours.
(4) Limits on frequency.--Such a program shall not provide for the performance of utilization review activities with respect to a class of services furnished to an individual more frequently than is reasonably required to assess whether the services under review are medically necessary or appropriate.
(d) Deadline for Determinations.--
(1) Prior authorization services.--
(A) In general.--Except as provided in paragraph (2), in the case of a utilization review activity involving the prior authorization of health care items and services for an individual, the utilization review program shall make a determination concerning such authorization, and provide notice of the determination to the individual or the individual's designee and the individual's health care provider by telephone and in printed form, as soon as possible in accordance with the medical exigencies of the case, and in no event later than the deadline specified in subparagraph (B).
(B) Deadline.--
(i) In general.--Subject to clauses (ii) and (iii), the deadline specified in this subparagraph is 14 days after the date of receipt of the request for prior authorization.
(ii) Extension permitted where notice of additional information required.--If a utilization review program--
(I) receives a request for a prior authorization;
(II) determines that additional information is necessary to complete the review and make the determination on the request; and
(III) notifies the requester, not later than five business days after the date of receiving the request, of the need for such specified additional information,
the deadline specified in this subparagraph is 14 days after the date the program receives the specified additional information, but in no case later than 28 days after the date of receipt of the request for the prior authorization. This clause shall not apply if the deadline is specified in clause
(iii).
(iii) Expedited cases.--In the case of a situation described in section 102(c)(1)(A), the deadline specified in this subparagraph is 72 hours after the time of the request for prior authorization.
(2) Ongoing care.--
(A) Concurrent review.--
(i) In general.--Subject to subparagraph (B), in the case of a concurrent review of ongoing care (including hospitalization), which results in a termination or reduction of such care, the plan must provide by telephone and in printed form notice of the concurrent review determination to the individual or the individual's designee and the individual's health care provider as soon as possible in accordance with the medical exigencies of the case, with sufficient time prior to the termination or reduction to allow for an appeal under section 102(c)(1)(A) to be completed before the termination or reduction takes effect.
(ii) Contents of notice.--Such notice shall include, with respect to ongoing health care items and services, the number of ongoing services approved, the new total of approved services, the date of onset of services, and the next review date, if any, as well as a statement of the individual's rights to further appeal.
(B) Exception.--Subparagraph (A) shall not be interpreted as requiring plans or issuers to provide coverage of care that would exceed the coverage limitations for such care.
(3) Previously provided services.--In the case of a utilization review activity involving retrospective review of health care services previously provided for an individual, the utilization review program shall make a determination concerning such services, and provide notice of the determination to the individual or the individual's designee and the individual's health care provider by telephone and in printed form, within 30 days of the date of receipt of information that is reasonably necessary to make such determination, but in no case later than 60 days after the date of receipt of the claim for benefits.
(4) Failure to meet deadline.--In a case in which a group health plan or health insurance issuer fails to make a determination on a claim for benefit under paragraph (1),
(2)(A), or (3) by the applicable deadline established under the respective paragraph, the failure shall be treated under this subtitle as a denial of the claim as of the date of the deadline.
(5) Reference to special rules for emergency services, maintenance care, and post-stabilization care.--For waiver of prior authorization requirements in certain cases involving emergency services and maintenance care and post-stabilization care, see subsections (a)(1) and (b) of section 113, respectively.
(e) Notice of Denials of Claims for Benefits.--
(1) In general.--Notice of a denial of claims for benefits under a utilization review program shall be provided in printed form and written in a manner calculated to be understood by the participant, beneficiary, or enrollee and shall include--
(A) the reasons for the denial (including the clinical rationale);
(B) instructions on how to initiate an appeal under section 102; and
(C) notice of the availability, upon request of the individual (or the individual's designee) of the clinical review criteria relied upon to make such denial.
(2) Specification of any additional information.--Such a notice shall also specify what (if any) additional necessary information must be provided to, or obtained by, the person making the denial in order to make a decision on such an appeal.
(f) Claim for Benefits and Denial of Claim for Benefits Defined.--For purposes of this subtitle:
(1) Claim for benefits.--The term ``claim for benefits'' means any request for coverage (including authorization of coverage), for eligibility, or for payment in whole or in part, for an item or service under a group health plan or health insurance coverage.
(2) Denial of claim for benefits.--The term ``denial'' means, with respect to a claim for benefits, a denial, or a failure to act on a timely basis upon, in whole or in part, the claim for benefits and includes a failure to provide benefits (including items and services) required to be provided under this title.
SEC. 102. INTERNAL APPEALS PROCEDURES.
(a) Right of Review.--
(1) In general.--Each group health plan, and each health insurance issuer offering health insurance coverage--
(A) shall provide adequate notice in writing to any participant or beneficiary under such plan, or enrollee under such coverage, whose claim for benefits under the plan or coverage has been denied (within the meaning of section 101(f)(2)), setting forth the specific reasons for such denial of claim for benefits and rights to any further review or appeal, written in a manner calculated to be understood by the participant, beneficiary, or enrollee; and
(B) shall afford such a participant, beneficiary, or enrollee (and any provider or other person acting on behalf of such an individual with the individual's consent or without such consent if the individual is medically unable to provide such consent) who is dissatisfied with such a denial of claim for benefits a reasonable opportunity (of not less than 180 days) to request and obtain a full and fair review by a named fiduciary (with respect to such plan) or named appropriate individual (with respect to such coverage) of the decision denying the claim.
(2) Treatment of oral requests.--The request for review under paragraph (1)(B) may be made orally, but, in the case of an oral request, shall be followed by a request in writing.
(b) Internal Review Process.--
(1) Conduct of review.--
(A) In general.--A review of a denial of claim under this section shall be made by an individual who--
(i) in a case involving medical judgment, shall be a physician or, in the case of limited scope coverage (as defined in subparagraph (B)), shall be an appropriate specialist;
(ii) has been selected by the plan or issuer; and
(iii) did not make the initial denial in the internally appealable decision.
(B) Limited scope coverage defined.--For purposes of subparagraph (A), the term ``limited scope coverage'' means a group health plan or health insurance coverage the only benefits under which are for benefits described in section 2791(c)(2)(A) of the Public Health Service Act (42 U.S.C. 300gg-91(c)(2)).
(2) Time limits for internal reviews.--
(A) In general.--Having received such a request for review of a denial of claim, the plan or issuer shall, in accordance with the medical exigencies of the case but not later than the deadline specified in subparagraph (B), complete the review on the denial and transmit to the participant, beneficiary, enrollee, or other person involved a decision that affirms, reverses, or modifies the denial. If the decision does not reverse the denial, the plan or issuer shall transmit, in printed form, a notice that sets forth the grounds for such decision and that includes a description of rights to any further appeal. Such decision shall be treated as the final decision of the plan. Failure to issue such a decision by such deadline shall be treated as a final decision affirming the denial of claim.
(B) Deadline.--
(i) In general.--Subject to clauses (ii) and (iii), the deadline specified in this subparagraph is 14 days after the date of receipt of the request for internal review.
(ii) Extension permitted where notice of additional information required.--If a group health plan or health insurance issuer--
(I) receives a request for internal review;
(II) determines that additional information is necessary to complete the review and make the determination on the request; and
(III) notifies the requester, not later than five business days after the date of receiving the request, of the need for such specified additional information,
the deadline specified in this subparagraph is 14 days after the date the plan or issuer receives the specified additional information, but in no case later than 28 days after the date of receipt of the request for the internal review. This clause shall not apply if the deadline is specified in clause
(iii).
(iii) Expedited cases.--In the case of a situation described in subsection (c)(1)(A), the deadline specified in this subparagraph is 72 hours after the time of the request for review.
(c) Expedited Review Process.--
(1) In general.--A group health plan, and a health insurance issuer, shall establish procedures in writing for the expedited consideration of requests for review under subsection (b) in situations--
(A) in which the application of the normal timeframe for making a determination could seriously jeopardize the life or health of the participant, beneficiary, or enrollee or such an individual's ability to regain maximum function; or
(B) described in section 101(d)(2) (relating to requests for continuation of ongoing care which would otherwise be reduced or terminated).
(2) Process.--Under such procedures--
(A) the request for expedited review may be submitted orally or in writing by an individual or provider who is otherwise entitled to request the review;
(B) all necessary information, including the plan's or issuer's decision, shall be transmitted between the plan or issuer and the requester by telephone, facsimile, or other similarly expeditious available method; and
(C) the plan or issuer shall expedite the review in the case of any of the situations described in subparagraph (A) or (B) of paragraph (1).
(3) Deadline for decision.--The decision on the expedited review must be made and communicated to the parties as soon as possible in accordance with the medical exigencies of the case, and in no event later than 72 hours after the time of receipt of the request for expedited review, except that in a case described in paragraph (1)(B), the decision must be made before the end of the approved period of care.
(d) Waiver of Process.--A plan or issuer may waive its rights for an internal review under subsection (b). In such case the participant, beneficiary, or enrollee involved (and any designee or provider involved) shall be relieved of any obligation to complete the review involved and may, at the option of such participant, beneficiary, enrollee, designee, or provider, proceed directly to seek further appeal through any applicable external appeals process.
SEC. 103. EXTERNAL APPEALS PROCEDURES.
(a) Right to External Appeal.--
(1) In general.--A group health plan, and a health insurance issuer offering health insurance coverage, shall provide for an external appeals process that meets the requirements of this section in the case of an externally appealable decision described in paragraph (2), for which a timely appeal is made either by the plan or issuer or by the participant, beneficiary, or enrollee (and any provider or other person acting on behalf of such an individual with the individual's consent or without such consent if such an individual is medically unable to provide such consent). The appropriate Secretary shall establish standards to carry out such requirements.
(2) Externally appealable decision defined.--
(A) In general.--For purposes of this section, the term
``externally appealable decision'' means a denial of claim for benefits (as defined in section 101(f)(2))--
(i) that is based in whole or in part on a decision that the item or service is not medically necessary or appropriate or is investigational or experimental; or
(ii) in which the decision as to whether a benefit is covered involves a medical judgment.
(B) Inclusion.--Such term also includes a failure to meet an applicable deadline for internal review under section 102.
(C) Exclusions.--Such term does not include--
(i) specific exclusions or express limitations on the amount, duration, or scope of coverage that do not involve medical judgment; or
(ii) a decision regarding whether an individual is a participant, beneficiary, or enrollee under the plan or coverage.
(3) Exhaustion of internal review process.--Except as provided under section 102(d), a plan or issuer may condition the use of an external appeal process in the case of an externally appealable decision upon a final decision in an internal review under section 102, but only if the decision is made in a timely basis consistent with the deadlines provided under this subtitle.
(4) Filing fee requirement.--
(A) In general.--Subject to subparagraph (B), a plan or issuer may condition the use of an external appeal process upon payment to the plan or issuer of a filing fee that does not exceed $25.
(B) Exception for indigency.--The plan or issuer may not require payment of the filing fee in the case of an individual participant, beneficiary, or enrollee who certifies (in a form and manner specified in guidelines established by the Secretary of Health and Human Services) that the individual is indigent (as defined in such guidelines).
(C) Refunding fee in case of successful appeals.--The plan or issuer shall refund payment of the filing fee under this paragraph if the recommendation of the external appeal entity is to reverse or modify the denial of a claim for benefits which is the subject of the appeal.
(b) General Elements of External Appeals Process.--
(1) Contract with qualified external appeal entity.--
(A) Contract requirement.--Except as provided in subparagraph (D), the external appeal process under this section of a plan or issuer shall be conducted under a contract between the plan or issuer and one or more qualified external appeal entities (as defined in subsection (c)).
(B) Limitation on plan or issuer selection.--
(i) In general.--The applicable authority shall implement procedures--
(I) to assure that the selection process among qualified external appeal entities will not create any incentives for external appeal entities to make a decision in a biased manner; and
(II) for auditing a sample of decisions by such entities to assure that no such decisions are made in a biased manner.
(ii) Limitation on ability to influence selection.--No selection process established by the applicable authority under this subsection shall provide the participant, beneficiary, or enrollee or the plan or issuer with the ability to determine or influence the selection of a qualified external appeal entity to review the appeal of the participant, beneficiary, or enrollee.
(C) Other terms and conditions.--The terms and conditions of a contract under this paragraph shall be consistent with the standards the appropriate Secretary shall establish to assure there is no real or apparent conflict of interest in the conduct of external appeal activities. Such contract shall provide that all costs of the process (except those incurred by the participant, beneficiary, enrollee, or treating professional in support of the appeal) shall be paid by the plan or issuer, and not by the participant, beneficiary, or enrollee. The previous sentence shall not be construed as applying to the imposition of a filing fee under subsection (a)(4).
(D) State authority with respect qualified external appeal entity for health insurance issuers.--With respect to health insurance issuers offering health insurance coverage in a State, the State may provide for external review activities to be conducted by a qualified external appeal entity that is designated by the State or that is selected by the State in a manner determined by the State to assure an unbiased determination.
(2) Elements of process.--An external appeal process shall be conducted consistent with standards established by the appropriate Secretary that include at least the following:
(A) Fair and de novo determination.--The process shall provide for a fair, de novo determination. However, nothing in this paragraph shall be construed as providing for coverage of items and services for which benefits are specifically excluded under the plan or coverage.
(B) Standard of review.--An external appeal entity shall determine whether the plan's or issuer's decision is in accordance with the medical needs of the patient involved (as determined by the entity) taking into account, as of the time of the entity's determination, the patient's medical condition and any relevant and reliable evidence the entity obtains under subparagraph (D). If the entity determines the decision is in accordance with such needs, the entity shall affirm the decision and to the extent that the entity determines the decision is not in accordance with such needs, the entity shall reverse or modify the decision.
(C) Consideration of plan or coverage definitions.--In making such determination, the external appeal entity shall consider (but not be bound by) any language in the plan or coverage document relating to the definitions of the terms medical necessity, medically necessary or appropriate, or experimental, investigational, or related terms.
(D) Evidence.--
(i) In general.--An external appeal entity shall include, among the evidence taken into consideration--
(I) the decision made by the plan or issuer upon internal review under section 102 and any guidelines or standards used by the plan or issuer in reaching such decision;
(II) any personal health and medical information supplied with respect to the individual whose denial of claim for benefits has been appealed; and
(III) the opinion of the individual's treating physician or health care professional.
(ii) Additional evidence.--Such entity may also take into consideration but not be limited to the following evidence
(to the extent available):
(I) The results of studies that meet professionally recognized standards of validity and replicability or that have been published in peer-reviewed journals.
(II) The results of professional consensus conferences conducted or financed in whole or in part by one or more Government agencies.
(III) Practice and treatment guidelines prepared or financed in whole or in part by Government agencies.
(IV) Government-issued coverage and treatment policies.
(V) Community standard of care and generally accepted principles of professional medical practice.
(VI) To the extent that the entity determines it to be free of any conflict of interest, the opinions of individuals who are qualified as experts in one or more fields of health care which are directly related to the matters under appeal.
(VII) To the extent that the entity determines it to be free of any conflict of interest, the results of peer reviews conducted by the plan or issuer involved.
(E) Determination concerning externally appealable decisions.--A qualified external appeal entity shall determine--
(i) whether a denial of claim for benefits is an externally appealable decision (within the meaning of subsection
(a)(2));
(ii) whether an externally appealable decision involves an expedited appeal; and
(iii) for purposes of initiating an external review, whether the internal review process has been completed.
(F) Opportunity to submit evidence.--Each party to an externally appealable decision may submit evidence related to the issues in dispute.
(G) Provision of information.--The plan or issuer involved shall provide timely access to the external appeal entity to information and to provisions of the plan or health insurance coverage relating to the matter of the externally appealable decision, as determined by the entity.
(H) Timely decisions.--A determination by the external appeal entity on the decision shall--
(i) be made orally or in writing and, if it is made orally, shall be supplied to the parties in writing as soon as possible;
(ii) be made in accordance with the medical exigencies of the case involved, but in no event later than 21 days after the date (or, in the case of an expedited appeal, 72 hours after the time) of requesting an external appeal of the decision;
(iii) state, in layperson's language, the basis for the determination, including, if relevant, any basis in the terms or conditions of the plan or coverage; and
(iv) inform the participant, beneficiary, or enrollee of the individual's rights (including any limitation on such rights) to seek further review by the courts (or other process) of the external appeal determination.
(I) Compliance with determination.--If the external appeal entity reverses or modifies the denial of a claim for benefits, the plan or issuer shall--
(i) upon the receipt of the determination, authorize benefits in accordance with such determination;
(ii) take such actions as may be necessary to provide benefits (including items or services) in a timely manner consistent with such determination; and
(iii) submit information to the entity documenting compliance with the entity's determination and this subparagraph.
(c) Qualifications of External Appeal Entities.--
(1) In general.--For purposes of this section, the term
``qualified external appeal entity'' means, in relation to a plan or issuer, an entity that is certified under paragraph
(2) as meeting the following requirements:
(A) The entity meets the independence requirements of paragraph (3).
(B) The entity conducts external appeal activities through a panel of not fewer than three clinical peers.
(C) The entity has sufficient medical, legal, and other expertise and sufficient staffing to conduct external appeal activities for the plan or issuer on a timely basis consistent with subsection (b)(2)(G).
(D) The entity meets such other requirements as the appropriate Secretary may impose.
(2) Initial certification of external appeal entities.--
(A) In general.--In order to be treated as a qualified external appeal entity with respect to--
(i) a group health plan, the entity must be certified (and, in accordance with subparagraph (B), periodically recertified) as meeting the requirements of paragraph (1)--
(I) by the Secretary of Labor;
(II) under a process recognized or approved by the Secretary of Labor; or
(III) to the extent provided in subparagraph (C)(i), by a qualified private standard-setting organization (certified under such subparagraph); or
(ii) a health insurance issuer operating in a State, the entity must be certified (and, in accordance with subparagraph (B), periodically recertified) as meeting such requirements--
(I) by the applicable State authority (or under a process recognized or approved by such authority); or
(II) if the State has not established a certification and recertification process for such entities, by the Secretary of Health and Human Services, under a process recognized or approved by such Secretary, or to the extent provided in subparagraph (C)(ii), by a qualified private standard-setting organization (certified under such subparagraph).
(B) Recertification process.--The appropriate Secretary shall develop standards for the recertification of external appeal entities. Such standards shall include a review of--
(i) the number of cases reviewed;
(ii) a summary of the disposition of those cases;
(iii) the length of time in making determinations on those cases;
(iv) updated information of what was required to be submitted as a condition of certification for the entity's performance of external appeal activities; and
(v) such information as may be necessary to assure the independence of the entity from the plans or issuers for which external appeal activities are being conducted.
(C) Certification of qualified private standard-setting organizations.--
(i) For external reviews under group health plans.--For purposes of subparagraph (A)(i)(III), the Secretary of Labor may provide for a process for certification (and periodic recertification) of qualified private standard-setting organizations which provide for certification of external review entities. Such an organization shall only be certified if the organization does not certify an external review entity unless it meets standards required for certification of such an entity by such Secretary under subparagraph
(A)(i)(I).
(ii) For external reviews of health insurance issuers.--For purposes of subparagraph (A)(ii)(II), the Secretary of Health and Human Services may provide for a process for certification (and periodic recertification) of qualified private standard-setting organizations which provide for certification of external review entities. Such an organization shall only be certified if the organization does not certify an external review entity unless it meets standards required for certification of such an entity by such Secretary under subparagraph (A)(ii)(II).
(D) Requirement of sufficient number of certified entities.--The appropriate Secretary shall certify and recertify a sufficient number of external appeal entities under this paragraph to ensure the timely and efficient provision of external review services.
(3) Independence requirements.--
(A) In general.--A clinical peer or other entity meets the independence requirements of this paragraph if--
(i) the peer or entity does not have a familial, financial, or professional relationship with any related party;
(ii) any compensation received by such peer or entity in connection with the external review is reasonable and not contingent on any decision rendered by the peer or entity;
(iii) except as provided in paragraph (4), the plan and the issuer have no recourse against the peer or entity in connection with the external review; and
(iv) the peer or entity does not otherwise have a conflict of interest with a related party as determined under any regulations which the Secretary may prescribe.
(B) Related party.--For purposes of this paragraph, the term ``related party'' means--
(i) with respect to--
(I) a group health plan or health insurance coverage offered in connection with such a plan, the plan or the health insurance issuer offering such coverage; or
(II) individual health insurance coverage, the health insurance issuer offering such coverage,
or any plan sponsor, fiduciary, officer, director, or management employee of such plan or issuer;
(ii) the health care professional that provided the health care involved in the coverage decision;
(iii) the institution at which the health care involved in the coverage decision is provided;
(iv) the manufacturer of any drug or other item that was included in the health care involved in the coverage decision; or
(v) any other party determined under any regulations which the Secretary may prescribe to have a substantial interest in the coverage decision.
(4) Limitation on liability of reviewers.--No qualified external appeal entity having a contract with a plan or issuer under this part and no person who is employed by any such entity or who furnishes professional services to such entity, shall be held by reason of the performance of any duty, function, or activity required or authorized pursuant to this section, to have violated any criminal law, or to be civilly liable under any law of the United States or of any State (or political subdivision thereof) if due care was exercised in the performance of such duty, function, or activity and there was no actual malice or gross misconduct in the performance of such duty, function, or activity.
(d) External Appeal Determination Binding on Plan.--The determination by an external appeal entity under this section is binding on the plan and issuer involved in the determination.
(e) Penalties Against Authorized Officials for Refusing to Authorize the Determination of an External Review Entity.--
(1) Monetary penalties.--In any case in which the determination of an external review entity is not followed by a group health plan, or by a health insurance issuer offering health insurance coverage, any person who, acting in the capacity of authorizing the benefit, causes such refusal may, in the discretion in a court of competent jurisdiction, be liable to an aggrieved participant, beneficiary, or enrollee for a civil penalty in an amount of up to $1,000 a day from the date on which the determination was transmitted to the plan or issuer by the external review entity until the date the refusal to provide the benefit is corrected.
(2) Cease and desist order and order of attorney's fees.--In any action described in paragraph (1) brought by a participant, beneficiary, or enrollee with respect to a group health plan, or a health insurance issuer offering health insurance coverage, in which a plaintiff alleges that a person referred to in such paragraph has taken an action resulting in a refusal of a benefit determined by an external appeal entity in violation of such terms of the plan, coverage, or this subtitle, or has failed to take an action for which such person is responsible under the plan, coverage, or this title and which is necessary under the plan or coverage for authorizing a benefit, the court shall cause to be served on the defendant an order requiring the defendant--
(A) to cease and desist from the alleged action or failure to act; and
(B) to pay to the plaintiff a reasonable attorney's fee and other reasonable costs relating to the prosecution of the action on the charges on which the plaintiff prevails.
(3) Additional civil penalties.--
(A) In general.--In addition to any penalty imposed under paragraph (1) or (2), the appropriate Secretary may assess a civil penalty against a person acting in the capacity of authorizing a benefit determined by an external review entity for one or more group health plans, or health insurance issuers offering health insurance coverage, for--
(i) any pattern or practice of repeated refusal to authorize a benefit determined by an external appeal entity in violation of the terms of such a plan, coverage, or this title; or
(ii) any pattern or practice of repeated violations of the requirements of this section with respect to such plan or plans or coverage.
(B) Standard of proof and amount of penalty.--Such penalty shall be payable only upon proof by clear and convincing evidence of such pattern or practice and shall be in an amount not to exceed the lesser of--
(i) 25 percent of the aggregate value of benefits shown by the appropriate Secretary to have not been provided, or unlawfully delayed, in violation of this section under such pattern or practice; or
(ii) $500,000.
(4) Removal and disqualification.--Any person acting in the capacity of authorizing benefits who has engaged in any such pattern or practice described in paragraph (3)(A) with respect to a plan or coverage, upon the petition of the appropriate Secretary, may be removed by the court from such position, and from any other involvement, with respect to such a plan or coverage, and may be precluded from returning to any such position or involvement for a period determined by the court.
(f) Protection of Legal Rights.--Nothing in this subtitle shall be construed as altering or eliminating any cause of action or legal rights or remedies of participants, beneficiaries, enrollees, and others under State or Federal law (including sections 502 and 503 of the Employee Retirement Income Security Act of 1974), including the right to file judicial actions to enforce rights.
SEC. 104. ESTABLISHMENT OF A GRIEVANCE PROCESS.
(a) Establishment of Grievance System.--
(1) In general.--A group health plan, and a health insurance issuer in connection with the provision of health insurance coverage, shall establish and maintain a system to provide for the presentation and resolution of oral and written grievances brought by individuals who are participants, beneficiaries, or enrollees, or health care providers or other individuals acting on behalf of an individual and with the individual's consent or without such consent if the individual is medically unable to provide such consent, regarding any aspect of the plan's or issuer's services.
(2) Grievance defined.--In this section, the term
``grievance'' means any question, complaint, or concern brought by a participant, beneficiary or enrollee that is not a claim for benefits (as defined in section 101(f)(1)).
(b) Grievance System.--Such system shall include the following components with respect to individuals who are participants, beneficiaries, or enrollees:
(1) Written notification to all such individuals and providers of the telephone numbers and business addresses of the plan or issuer personnel responsible for resolution of grievances and appeals.
(2) A system to record and document, over a period of at least three previous years, all grievances and appeals made and their status.
(3) A process providing for timely processing and resolution of grievances.
(4) Procedures for follow-up action, including the methods to inform the person making the grievance of the resolution of the grievance.Grievances are not subject to appeal under the previous provisions of this subtitle.
Subtitle B--Access to Care
SEC. 111. CONSUMER CHOICE OPTION.
(a) In General.--If--
(1) a health insurance issuer providing health insurance coverage in connection with a group health plan offers to enrollees health insurance coverage which provides for coverage of services only if such services are furnished through health care professionals and providers who are members of a network of health care professionals and providers who have entered into a contract with the issuer to provide such services, or
(2) a group health plan offers to participants or beneficiaries health benefits which provide for coverage of services only if such services are furnished through health care professionals and providers who are members of a network of health care professionals and providers who have entered into a contract with the plan to provide such services,
then the issuer or plan shall also offer or arrange to be offered to such enrollees, participants, or beneficiaries (at the time of enrollment and during an annual open season as provided under subsection (c)) the option of health insurance coverage or health benefits which provide for coverage of such services which are not furnished through health care professionals and providers who are members of such a network unless such enrollees, participants, or beneficiaries are offered such non-network coverage through another group health plan or through another health insurance issuer in the group market.
(b) Additional Costs.--The amount of any additional premium charged by the health insurance issuer or group health plan for the additional cost of the creation and maintenance of the option described in subsection (a) and the amount of any additional cost sharing imposed under such option shall be borne by the enrollee, participant, or beneficiary unless it is paid by the health plan sponsor or group health plan through agreement with the health insurance issuer.
(c) Open Season.--An enrollee, participant, or beneficiary, may change to the offering provided under this section only during a time period determined by the health insurance issuer or group health plan. Such time period shall occur at least annually.
SEC. 112. CHOICE OF HEALTH CARE PROFESSIONAL.
(a) Primary Care.--If a group health plan, or a health insurance issuer that offers health insurance coverage, requires or provides for designation by a participant, beneficiary, or enrollee of a participating primary care provider, then the plan or issuer shall permit each participant, beneficiary, and enrollee to designate any participating primary care provider who is available to accept such individual.
(b) Specialists.--
(1) In general.--Subject to paragraph (2), a group health plan and a health insurance issuer that offers health insurance coverage shall permit each participant, beneficiary, or enrollee to receive medically necessary or appropriate specialty care, pursuant to appropriate referral procedures, from any qualified participating health care professional who is available to accept such individual for such care.
(2) Limitation.--Paragraph (1) shall not apply to specialty care if the plan or issuer clearly informs participants, beneficiaries, and enrollees of the limitations on choice of participating health care professionals with respect to such care.
(3) Construction.--Nothing in this subsection shall be construed as affecting the application of section 114
(relating to access to specialty care).
SEC. 113. ACCESS TO EMERGENCY CARE.
(a) Coverage of Emergency Services.--
(1) In general.--If a group health plan, or health insurance coverage offered by a health insurance issuer, provides any benefits with respect to services in an emergency department of a hospital, the plan or issuer shall cover emergency services (as defined in paragraph (2)(B))--
(A) without the need for any prior authorization determination;
(B) whether or not the health care provider furnishing such services is a participating provider with respect to such services;
(C) in a manner so that, if such services are provided to a participant, beneficiary, or enrollee--
(i) by a nonparticipating health care provider with or without prior authorization; or
(ii) by a participating health care provider without prior authorization,the participant, beneficiary, or enrollee is not liable for amounts that exceed the amounts of liability that would be incurred if the services were provided by a participating health care provider with prior authorization; and
(D) without regard to any other term or condition of such coverage (other than exclusion or coordination of benefits, or an affiliation or waiting period, permitted under section 2701 of the Public Health Service Act, section 701 of the Employee Retirement Income Security Act of 1974, or section 9801 of the Internal Revenue Code of 1986, and other than applicable cost-sharing).
(2) Definitions.--In this section:
(A) Emergency medical condition based on prudent layperson standard.--The term ``emergency medical condition'' means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in a condition described in clause (i), (ii), or (iii) of section 1867(e)(1)(A) of the Social Security Act.
(B) Emergency services.--The term ``emergency services'' means--
(i) a medical screening examination (as required under section 1867 of the Social Security Act) that is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate an emergency medical condition (as defined in subparagraph (A)); and
(ii) within the capabilities of the staff and facilities available at the hospital, such further medical examination and treatment as are required under section 1867 of such Act to stabilize the patient.
(C) Stabilize.--The term ``to stabilize'' means, with respect to an emergency medical condition, to provide such medical treatment of the condition as may be necessary to assure, within reasonable medical probability, that no material deterioration of the condition is likely to result from or occur during the transfer of the individual from a facility.
(b) Reimbursement for Maintenance Care and Post-Stabilization Care.--In the case of services (other than emergency services) for which benefits are available under a group health plan, or under health insurance coverage offered by a health insurance issuer, the plan or issuer shall provide for reimbursement with respect to such services provided to a participant, beneficiary, or enrollee other than through a participating health care provider in a manner consistent with subsection (a)(1)(C) (and shall otherwise comply with the guidelines established under section 1852(d)(2) of the Social Security Act), if the services are maintenance care or post-stabilization care covered under such guidelines.
SEC. 114. ACCESS TO SPECIALTY CARE.
(a) Specialty Care for Covered Services.--
(1) In general.--If--
(A) an individual is a participant or beneficiary under a group health plan or an enrollee who is covered under health insurance coverage offered by a health insurance issuer;
(B) the individual has a condition or disease of sufficient seriousness and complexity to require treatment by a specialist; and
(C) benefits for such treatment are provided under the plan or coverage,the plan or issuer shall make or provide for a referral to a specialist who is available and accessible to provide the treatment for such condition or disease.
(2) Specialist defined.--For purposes of this subsection, the term ``specialist'' means, with respect to a condition, a health care practitioner, facility, or center that has adequate expertise through appropriate training and experience (including, in the case of a child, appropriate pediatric expertise) to provide high quality care in treating the condition.
(3) Care under referral.--A group health plan or health insurance issuer may require that the care provided to an individual pursuant to such referral under paragraph (1) be--
(A) pursuant to a treatment plan, only if the treatment plan is developed by the specialist and approved by the plan or issuer, in consultation with the designated primary care provider or specialist and the individual (or the individual's designee); and
(B) in accordance with applicable quality assurance and utilization review standards of the plan or issuer.Nothing in this subsection shall be construed as preventing such a treatment plan for an individual from requiring a specialist to provide the primary care provider with regular updates on the specialty care provided, as well as all necessary medical information.
(4) Referrals to participating providers.--A group health plan or health insurance issuer is not required under paragraph (1) to provide for a referral to a specialist that is not a participating provider, unless the plan or issuer does not have an appropriate specialist that is available and accessible to treat the individual's condition and that is a participating provider with respect to such treatment.
(5) Treatment of nonparticipating providers.--If a plan or issuer refers an individual to a nonparticipating specialist pursuant to paragraph (1), services provided pursuant to the approved treatment plan (if any) shall be provided at no additional cost to the individual beyond what the individual would otherwise pay for services received by such a specialist that is a participating provider.
(b) Specialists as Gatekeeper for Treatment of Ongoing Special Conditions.--
(1) In general.--A group health plan, or a health insurance issuer, in connection with the provision of health insurance coverage, shall have a procedure by which an individual who is a participant, beneficiary, or enrollee and who has an ongoing special condition (as defined in paragraph (3)) may request and receive a referral to a specialist for such condition who shall be responsible for and capable of providing and coordinating the individual's care with respect to the condition. Under such procedures if such an individual's care would most appropriately be coordinated by such a specialist, such plan or issuer shall refer the individual to such specialist.
(2) Treatment for related referrals.--Such specialists shall be permitted to treat the individual without a referral from the individual's primary care provider and may authorize such referrals, procedures, tests, and other medical services as the individual's primary care provider would otherwise be permitted to provide or authorize, subject to the terms of the treatment (referred to in subsection (a)(3)(A)) with respect to the ongoing special condition.
(3) Ongoing special condition defined.--In this subsection, the term ``ongoing special condition'' means a condition or disease that--
(A) is life-threatening, degenerative, or disabling; and
(B) requires specialized medical care over a prolonged period of time.
(4) Terms of referral.--The provisions of paragraphs (3) through (5) of subsection (a) apply with respect to referrals under paragraph (1) of this subsection in the same manner as they apply to referrals under subsection (a)(1).
(c) Standing Referrals.--
(1) In general.--A group health plan, and a health insurance issuer in connection with the provision of health insurance coverage, shall have a procedure by which an individual who is a participant, beneficiary, or enrollee and who has a condition that requires ongoing care from a specialist may receive a standing referral to such specialist for treatment of such condition. If the plan or issuer, or if the primary care provider in consultation with the medical director of the plan or issuer and the specialist (if any), determines that such a standing referral is appropriate, the plan or issuer shall make such a referral to such a specialist if the individual so desires.
(2) Terms of referral.--The provisions of paragraphs (3) through (5) of subsection (a) apply with respect to referrals under paragraph (1) of this subsection in the same manner as they apply to referrals under subsection (a)(1).
SEC. 115. ACCESS TO OBSTETRICAL AND GYNECOLOGICAL CARE.
(a) In General.--If a group health plan, or a health insurance issuer in connection with the provision of health insurance coverage, requires or provides for a participant, beneficiary, or enrollee to designate a participating primary care health care professional, the plan or issuer--
(1) may not require authorization or a referral by the individual's primary care health care professional or otherwise for coverage of gynecological care (including preventive women's health examinations) and pregnancy-related services provided by a participating health care professional, including a physician, who specializes in obstetrics and gynecology to the extent such care is otherwise covered; and
(2) shall treat the ordering of other obstetrical or gynecological care by such a participating professional as the authorization of the primary care health care professional with respect to such care under the plan or coverage.
(b) Construction.--Nothing in subsection (a) shall be construed to--
(1) waive any exclusions of coverage under the terms of the plan or health insurance coverage with respect to coverage of obstetrical or gynecological care; or
(2) preclude the group health plan or health insurance issuer involved from requiring that the obstetrical or gynecological provider notify the primary care health care professional or the plan or issuer of treatment decisions.
SEC. 116. ACCESS TO PEDIATRIC CARE.
(a) Pediatric Care.--If a group health plan, or a health insurance issuer in connection with the provision of health insurance coverage, requires or provides for an enrollee to designate a participating primary care provider for a child of such enrollee, the plan or issuer shall permit the enrollee to designate a physician who specializes in pediatrics as the child's primary care provider.
(b) Construction.--Nothing in subsection (a) shall be construed to waive any exclusions of coverage under the terms of the plan or health insurance coverage with respect to coverage of pediatric care.
SEC. 117. CONTINUITY OF CARE.
(a) In General.--
(1) Termination of provider.--If a contract between a group health plan, or a health insurance issuer in connection with the provision of health insurance coverage, and a health care provider is terminated (as defined in paragraph (3)(B)), or benefits or coverage provided by a health care provider are terminated because of a change in the terms of provider participation in a group health plan, and an individual who is a participant, beneficiary, or enrollee in the plan or coverage is undergoing treatment from the provider for an ongoing special condition (as defined in paragraph (3)(A)) at the time of such termination, the plan or issuer shall--
(A) notify the individual on a timely basis of such termination and of the right to elect continuation of coverage of treatment by the provider under this section; and
(B) subject to subsection (c), permit the individual to elect to continue to be covered with respect to treatment by the provider of such condition during a transitional period
(provided under subsection (b)).
(2) Treatment of termination of contract with health insurance issuer.--If a contract for the provision of health insurance coverage between a group health plan and a health insurance issuer is terminated and, as a result of such termination, coverage of services of a health care provider is terminated with respect to an individual, the provisions of paragraph (1) (and the succeeding provisions of this section) shall apply under the plan in the same manner as if there had been a contract between the plan and the provider that had been terminated, but only with respect to benefits that are covered under the plan after the contract termination.
(3) Definitions.--For purposes of this section:
(A) Ongoing special condition.--The term ``ongoing special condition'' has the meaning given such term in section 114(b)(3), and also includes pregnancy.
(B) Termination.--The term ``terminated'' includes, with respect to a contract, the expiration or nonrenewal of the contract, but does not include a termination of the contract by the plan or issuer for failure to meet applicable quality standards or for fraud.
(b) Transitional Period.--
(1) In general.--Except as provided in paragraphs (2) through (4), the transitional period under this subsection shall extend up to 90 days (as determined by the treating health care professional) after the date of the notice described in subsection (a)(1)(A) of the provider's termination.
(2) Scheduled surgery and organ transplantation.--If surgery or organ transplantation was scheduled for an individual before the date of the announcement of the termination of the provider status under subsection (a)(1)(A) or if the individual on such date was on an established waiting list or otherwise scheduled to have such surgery or transplantation, the transitional period under this subsection with respect to the surgery or transplantation shall extend beyond the period under paragraph (1) and until the date of discharge of the individual after completion of the surgery or transplantation.
(3) Pregnancy.--If--
(A) a participant, beneficiary, or enrollee was determined to be pregnant at the time of a provider's termination of participation; and
(B) the provider was treating the pregnancy before date of the termination,the transitional period under this subsection with respect to provider's treatment of the pregnancy shall extend through the provision of post-partum care directly related to the delivery.
(4) Terminal illness.--If--
(A) a participant, beneficiary, or enrollee was determined to be terminally ill (as determined under section 1861(dd)(3)(A) of the Social Security Act) at the time of a provider's termination of participation; and
(B) the provider was treating the terminal illness before the date of termination,the transitional period under this subsection shall extend for the remainder of the individual's life for care directly related to the treatment of the terminal illness or its medical manifestations.
(c) Permissible Terms and Conditions.--A group health plan or health insurance issuer may condition coverage of continued treatment by a provider under subsection (a)(1)(B) upon the individual notifying the plan of the election of continued coverage and upon the provider agreeing to the following terms and conditions:
(1) The provider agrees to accept reimbursement from the plan or issuer and individual involved (with respect to cost-sharing) at the rates applicable prior to the start of the transitional period as payment in full (or, in the case described in subsection (a)(2), at the rates applicable under the replacement plan or issuer after the date of the termination of the contract with the health insurance issuer) and not to impose cost-sharing with respect to the individual in an amount that would exceed the cost-sharing that could have been imposed if the contract referred to in subsection
(a)(1) had not been terminated.
(2) The provider agrees to adhere to the quality assurance standards of the plan or issuer responsible for payment under paragraph (1) and to provide to such plan or issuer necessary medical information related to the care provided.
(3) The provider agrees otherwise to adhere to such plan's or issuer's policies and procedures, including procedures regarding referrals and obtaining prior authorization and providing services pursuant to a treatment plan (if any) approved by the plan or issuer.
(d) Construction.--Nothing in this section shall be construed to require the coverage of benefits which would not have been covered if the provider involved remained a participating provider.
SEC. 118. ACCESS TO NEEDED PRESCRIPTION DRUGS.
(a) In General.--To the extent that a group health plan, or health insurance coverage offered by a health insurance issuer, provides coverage for benefits with respect to prescription drugs, and limits such coverage to drugs included in a formulary, the plan or issuer shall--
(1) ensure the participation of physicians and pharmacists in developing and reviewing such formulary;
(2) provide for disclosure of the formulary to providers; and
(3) in accordance with the applicable quality assurance and utilization review standards of the plan or issuer, provide for exceptions from the formulary limitation when a non-formulary alternative is medically necessary and appropriate and, in the case of such an exception, apply the same cost-sharing requirements that would have applied in the case of a drug covered under the formulary.
(b) Coverage of Approved Drugs and Medical Devices.--
(1) In general.--A group health plan (or health insurance coverage offered in connection with such a plan) that provides any coverage of prescription drugs or medical devices shall not deny coverage of such a drug or device on the basis that the use is investigational, if the use--
(A) in the case of a prescription drug--
(i) is included in the labeling authorized by the application in effect for the drug pursuant to subsection (b) or (j) of section 505 of the Federal Food, Drug, and Cosmetic Act, without regard to any postmarketing requirements that may apply under such Act; or
(ii) is included in the labeling authorized by the application in effect for the drug under section 351 of the Public Health Service Act, without regard to any postmarketing requirements that may apply pursuant to such section; or
(B) in the case of a medical device, is included in the labeling authorized by a regulation under subsection (d) or
(3) of section 513 of the Federal Food, Drug, and Cosmetic Act, an order under subsection (f) of such section, or an application approved under section 515 of such Act, without regard to any postmarketing requirements that may apply under such Act.
(2) Construction.--Nothing in this subsection shall be construed as requiring a group health plan (or health insurance coverage offered in connection with such a plan) to provide any coverage of prescription drugs or medical devices.
SEC. 119. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED
CLINICAL TRIALS.
(a) Coverage.--
(1) In general.--If a group health plan, or health insurance issuer that is providing health insurance coverage, provides coverage to a qualified individual (as defined in subsection (b)), the plan or issuer--
(A) may not deny the individual participation in the clinical trial referred to in subsection (b)(2);
(B) subject to subsection (c), may not deny (or limit or impose additional conditions on) the coverage of routine patient costs for items and services furnished in connection with participation in the trial; and
(C) may not discriminate against the individual on the basis of the enrollee's participation in such trial.
(2) Exclusion of certain costs.--For purposes of paragraph
(1)(B), routine patient costs do not include the cost of the tests or measurements conducted primarily for the purpose of the clinical trial involved.
(3) Use of in-network providers.--If one or more participating providers is participating in a clinical trial, nothing in paragraph (1) shall be construed as preventing a plan or issuer from requiring that a qualified individual participate in the trial through such a participating provider if the provider will accept the individual as a participant in the trial.
(b) Qualified Individual Defined.--For purposes of subsection (a), the term ``qualified individual'' means an individual who is a participant or beneficiary in a group health plan, or who is an enrollee under health insurance coverage, and who meets the following conditions:
(1)(A) The individual has a life-threatening or serious illness for which no standard treatment is effective.
(B) The individual is eligible to participate in an approved clinical trial according to the trial protocol with respect to treatment of such illness.
(C) The individual's participation in the trial offers meaningful potential for significant clinical benefit for the individual.
(2) Either--
(A) the referring physician is a participating health care professional and has concluded that the individual's participation in such trial would be appropriate based upon the individual meeting the conditions described in paragraph
(1); or
(B) the participant, beneficiary, or enrollee provides medical and scientific information establishing that the individual's participation in such trial would be appropriate based upon the individual meeting the conditions described in paragraph (1).
(c) Payment.--
(1) In general.--Under this section a group health plan or health insurance issuer shall provide for payment for routine patient costs described in subsection (a)(2) but is not required to pay for costs of items and services that are reasonably expected (as determined by the Secretary) to be paid for by the sponsors of an approved clinical trial.
(2) Payment rate.--In the case of covered items and services provided by--
(A) a participating provider, the payment rate shall be at the agreed upon rate; or
(B) a nonparticipating provider, the payment rate shall be at the rate the plan or issuer would normally pay for comparable services under subparagraph (A).
(d) Approved Clinical Trial Defined.--
(1) In general.--In this section, the term ``approved clinical trial'' means a clinical research study or clinical investigation approved and funded (which may include funding through in-kind contributions) by one or more of the following:
(A) The National Institutes of Health.
(B) A cooperative group or center of the National Institutes of Health.
(C) Either of the following if the conditions described in paragraph (2) are met:
(i) The Department of Veterans Affairs.
(ii) The Department of Defense.
(2) Conditions for departments.--The conditions described in this paragraph, for a study or investigation conducted by a Department, are that the study or investigation has been reviewed and approved through a system of peer review that the Secretary determines--
(A) to be comparable to the system of peer review of studies and investigations used by the National Institutes of Health; and
(B) assures unbiased review of the highest scientific standards by qualified individuals who have no interest in the outcome of the review.
(e) Construction.--Nothing in this section shall be construed to limit a plan's or issuer's coverage with respect to clinical trials.
Subtitle C--Access to Information
SEC. 121. PATIENT ACCESS TO INFORMATION.
(a) Disclosure Requirement.--
(1) Group health plans.--A group health plan shall--
(A) provide to participants and beneficiaries at the time of initial coverage under the plan (or the effective date of this section, in the case of individuals who are participants or beneficiaries as of such date), and at least annually thereafter, the information described in subsection (b) in printed form;
(B) provide to participants and beneficiaries, within a reasonable period (as specified by the appropriate Secretary) before or after the date of significant changes in the information described in subsection (b), information in printed form on such significant changes; and
(C) upon request, make available to participants and beneficiaries, the applicable authority, and prospective participants and beneficiaries, the information described in subsection (b) or (c) in printed form.
(2) Health insurance issuers.--A health insurance issuer in connection with the provision of health insurance coverage shall--
(A) provide to individuals enrolled under such coverage at the time of enrollment, and at least annually thereafter, the information described in subsection (b) in printed form;
(B) provide to enrollees, within a reasonable period (as specified by the appropriate Secretary) before or after the date of significant changes in the information described in subsection (b), information in printed form on such significant changes; and
(C) upon request, make available to the applicable authority, to individuals who are prospective enrollees, and to the public the information described in subsection (b) or
(c) in printed form.
(b) Information Provided.--The information described in this subsection with respect to a group health plan or health insurance coverage offered by a health insurance issuer includes the following:
(1) Service area.--The service area of the plan or issuer.
(2) Benefits.--Benefits offered under the plan or coverage, including--
(A) covered benefits, including benefit limits and coverage exclusions;
(B) cost sharing, such as deductibles, coinsurance, and copayment amounts, including any liability for balance billing, any maximum limitations on out of pocket expenses, and the maximum out of pocket costs for services that are provided by nonparticipating providers or that are furnished without meeting the applicable utilization review requirements;
(C) the extent to which benefits may be obtained from nonparticipating providers;
(D) the extent to which a participant, beneficiary, or enrollee may select from among participating providers and the types of providers participating in the plan or issuer network;
(E) process for determining experimental coverage; and
(F) use of a prescription drug formulary.
(3) Access.--A description of the following:
(A) The number, mix, and distribution of providers under the plan or coverage.
(B) Out-of-network coverage (if any) provided by the plan or coverage.
(C) Any point-of-service option (including any supplemental premium or cost-sharing for such option).
(D) The procedures for participants, beneficiaries, and enrollees to select, access, and change participating primary and specialty providers.
(E) The rights and procedures for obtaining referrals
(including standing referrals) to participating and nonparticipating providers.
(F) The name, address, and telephone number of participating health care providers and an indication of whether each such provider is available to accept new patients.
(G) Any limitations imposed on the selection of qualifying participating health care providers, including any limitations imposed under section 112(b)(2).
(H) How the plan or issuer addresses the needs of participants, beneficiaries, and enrollees and others who do not speak English or who have other special communications needs in accessing providers under the plan or coverage, including the provision of information described in this subsection and subsection (c) to such individuals.
(4) Out-of-area coverage.--Out-of-area coverage provided by the plan or issuer.
(5) Emergency coverage.--Coverage of emergency services, including--
(A) the appropriate use of emergency services, including use of the 911 telephone system or its local equivalent in emergency situations and an explanation of what constitutes an emergency situation;
(B) the process and procedures of the plan or issuer for obtaining emergency services; and
(C) the locations of (i) emergency departments, and (ii) other settings, in which plan physicians and hospitals provide emergency services and post-stabilization care.
(6) Percentage of premiums used for benefits (loss-ratios).--In the case of health insurance coverage only (and not with respect to group health plans that do not provide coverage through health insurance coverage), a description of the overall loss-ratio for the coverage (as defined in accordance with rules established or recognized by the Secretary of Health and Human Services).
(7) Prior authorization rules.--Rules regarding prior authorization or other review requirements that could result in noncoverage or nonpayment.
(8) Grievance and appeals procedures.--All appeal or grievance rights and procedures under the plan or coverage, including the method for filing grievances and the time frames and circumstances for acting on grievances and appeals, who is the applicable authority with respect to the plan or issuer.
(9) Quality assurance.--Any information made public by an accrediting organization in the process of accreditation of the plan or issuer or any additional quality indicators the plan or issuer makes available.
(10) Information on issuer.--Notice of appropriate mailing addresses and telephone numbers to be used by participants, beneficiaries, and enrollees in seeking information or authorization for treatment.
(11) Notice of requirements.--Notice of the requirements of this title.
(12) Availability of information on request.--Notice that the information described in subsection (c) is available upon request.
(c) Information Made Available Upon Request.--The information described in this subsection is the following:
(1) Utilization review activities.--A description of procedures used and requirements (including circumstances, time frames, and appeal rights) under any utilization review program under section 101, including under any drug formulary program under section 118.
(2) Grievance and appeals information.--Information on the number of grievances and appeals and on the disposition in the aggregate of such matters.
(3) Method of physician compensation.--A general description by category (including salary, fee-for-service, capitation, and such other categories as may be specified in regulations of the Secretary) of the applicable method by which a specified prospective or treating health care professional is (or would be) compensated in connection with the provision of health care under the plan or coverage.
(4) Specific information on credentials of participating providers.--In the case of each participating provider, a description of the credentials of the provider.
(5) Formulary restrictions.--A description of the nature of any drug formula restrictions.
(6) Participating provider list.--A list of current participating health care providers.
(d) Construction.--Nothing in this section shall be construed as requiring public disclosure of individual contracts or financial arrangements between a group health plan or health insurance issuer and any provider.
Subtitle D--Protecting the Doctor-Patient Relationship
SEC. 131. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL
COMMUNICATIONS.
(a) General Rule.--The provisions of any contract or agreement, or the operation of any contract or agreement, between a group health plan or health insurance issuer in relation to health insurance coverage (including any partnership, association, or other organization that enters into or administers such a contract or agreement) and a health care provider (or group of health care providers) shall not prohibit or otherwise restrict a health care professional from advising such a participant, beneficiary, or enrollee who is a patient of the professional about the health status of the individual or medical care or treatment for the individual's condition or disease, regardless of whether benefits for such care or treatment are provided under the plan or coverage, if the professional is acting within the lawful scope of practice.
(b) Nullification.--Any contract provision or agreement that restricts or prohibits medical communications in violation of subsection (a) shall be null and void.
SEC. 132. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS
BASED ON LICENSURE.
(a) In General.--A group health plan and a health insurance issuer offering health insurance coverage shall not discriminate with respect to participation or indemnification as to any provider who is acting within the scope of the provider's license or certification under applicable State law, solely on the basis of such license or certification.
(b) Construction.--Subsection (a) shall not be construed--
(1) as requiring the coverage under a group health plan or health insurance coverage of particular benefits or services or to prohibit a plan or issuer from including providers only to the extent necessary to meet the needs of the plan's or issuer's participants, beneficiaries, or enrollees or from establishing any measure designed to maintain quality and control costs consistent with the responsibilities of the plan or issuer;
(2) to override any State licensure or scope-of-practice law; or
(3) as requiring a plan or issuer that offers network coverage to include for participation every willing provider who meets the terms and conditions of the plan or issuer.
SEC. 133. PROHIBITION AGAINST IMPROPER INCENTIVE
ARRANGEMENTS.
(a) In General.--A group health plan and a health insurance issuer offering health insurance coverage may not operate any physician incentive plan (as defined in subparagraph (B) of section 1876(i)(8) of the Social Security Act) unless the requirements described in clauses (i), (ii)(I), and (iii) of subparagraph (A) of such section are met with respect to such a plan.
(b) Application.--For purposes of carrying out paragraph
(1), any reference in section 1876(i)(8) of the Social Security Act to the Secretary, an eligible organization, or an individual enrolled with the organization shall be treated as a reference to the applicable authority, a group health plan or health insurance issuer, respectively, and a participant, beneficiary, or enrollee with the plan or organization, respectively.
(c) Construction.--Nothing in this section shall be construed as prohibiting all capitation and similar arrangements or all provider discount arrangements.
SEC. 134. PAYMENT OF CLAIMS.
A group health plan, and a health insurance issuer offering group health insurance coverage, shall provide for prompt payment of claims submitted for health care services or supplies furnished to a participant, beneficiary, or enrollee with respect to benefits covered by the plan or issuer, in a manner consistent with the provisions of sections 1816(c)(2) and 1842(c)(2) of the Social Security Act (42 U.S.C. 1395h(c)(2) and 42 U.S.C. 1395u(c)(2)), except that for purposes of this section, subparagraph (C) of section 1816(c)(2) of the Social Security Act shall be treated as applying to claims received from a participant, beneficiary, or enrollee as well as claims referred to in such subparagraph.
SEC. 135. PROTECTION FOR PATIENT ADVOCACY.
(a) Protection for Use of Utilization Review and Grievance Process.--A group health plan, and a health insurance issuer with respect to the provision of health insurance coverage, may not retaliate against a participant, beneficiary, enrollee, or health care provider based on the participant's, beneficiary's, enrollee's or provider's use of, or participation in, a utilization review process or a grievance process of the plan or issuer (including an internal or external review or appeal process) under this title.
(b) Protection for Quality Advocacy by Health Care Professionals.--
(1) In general.--A group health plan or health insurance issuer may not retaliate or discriminate against a protected health care professional because the professional in good faith--
(A) discloses information relating to the care, services, or conditions affecting one or more participants, beneficiaries, or enrollees of the plan or issuer to an appropriate public regulatory agency, an appropriate private accreditation body, or appropriate management personnel of the plan or issuer; or
(B) initiates, cooperates, or otherwise participates in an investigation or proceeding by such an agency with respect to such care, services, or conditions.
If an institutional health care provider is a participating provider with such a plan or issuer or otherwise receives payments for benefits provided by such a plan or issuer, the provisions of the previous sentence shall apply to the provider in relation to care, services, or conditions affecting one or more patients within an institutional health care provider in the same manner as they apply to the plan or issuer in relation to care, services, or conditions provided to one or more participants, beneficiaries, or enrollees; and for purposes of applying this sentence, any reference to a plan or issuer is deemed a reference to the institutional health care provider.
(2) Good faith action.--For purposes of paragraph (1), a protected health care professional is considered to be acting in good faith with respect to disclosure of information or participation if, with respect to the information disclosed as part of the action--
(A) the disclosure is made on the basis of personal knowledge and is consistent with that degree of learning and skill ordinarily possessed by health care professionals with the same licensure or certification and the same experience;
(B) the professional reasonably believes the information to be true;
(C) the information evidences either a violation of a law, rule, or regulation, of an applicable accreditation standard, or of a generally recognized professional or clinical standard or that a patient is in imminent hazard of loss of life or serious injury; and
(D) subject to subparagraphs (B) and (C) of paragraph (3), the professional has followed reasonable internal procedures of the plan, issuer, or institutional health care provider established for the purpose of addressing quality concerns before making the disclosure.
(3) Exception and special rule.--
(A) General exception.--Paragraph (1) does not protect disclosures that would violate Federal or State law or diminish or impair the rights of any person to the continued protection of confidentiality of communications provided by such law.
(B) Notice of internal procedures.--Subparagraph (D) of paragraph (2) shall not apply unless the internal procedures involved are reasonably expected to be known to the health care professional involved. For purposes of this subparagraph, a health care professional is reasonably expected to know of internal procedures if those procedures have been made available to the professional through distribution or posting.
(C) Internal procedure exception.--Subparagraph (D) of paragraph (2) also shall not apply if--
(i) the disclosure relates to an imminent hazard of loss of life or serious injury to a patient;
(ii) the disclosure is made to an appropriate private accreditation body pursuant to disclosure procedures established by the body; or
(iii) the disclosure is in response to an inquiry made in an investigation or proceeding of an appropriate public regulatory agency and the information disclosed is limited to the scope of the investigation or proceeding.
(4) Additional considerations.--It shall not be a violation of paragraph (1) to take an adverse action against a protected health care professional if the plan, issuer, or provider taking the adverse action involved demonstrates that it would have taken the same adverse action even in the absence of the activities protected under such paragraph.
(5) Notice.--A group health plan, health insurance issuer, and institutional health care provider shall post a notice, to be provided or approved by the Secretary of Labor, setting forth excerpts from, or summaries of, the pertinent provisions of this subsection and information pertaining to enforcement of such provisions.
(6) Constructions.--
(A) Determinations of coverage.--Nothing in this subsection shall be construed to prohibit a plan or issuer from making a determination not to pay for a particular medical treatment or service or the services of a type of health care professional.
(B) Enforcement of peer review protocols and internal procedures.--Nothing in this subsection shall be construed to prohibit a plan, issuer, or provider from establishing and enforcing reasonable peer review or utilization review protocols or determining whether a protected health care professional has complied with those protocols or from establishing and enforcing internal procedures for the purpose of addressing quality concerns.
(C) Relation to other rights.--Nothing in this subsection shall be construed to abridge rights of participants, beneficiaries, enrollees, and protected health care professionals under other applicable Federal or State laws.
(7) Protected health care professional defined.--For purposes of this subsection, the term ``protected health care professional'' means an individual who is a licensed or certified health care professional and who--
(A) with respect to a group health plan or health insurance issuer, is an employee of the plan or issuer or has a contract with the plan or issuer for provision of services for which benefits are available under the plan or issuer; or
(B) with respect to an institutional health care provider, is an employee of the provider or has a contract or other arrangement with the provider respecting the provision of health care services.
Subtitle E--Definitions
SEC. 151. DEFINITIONS.
(a) Incorporation of General Definitions.--Except as otherwise provided, the provisions of section 2791 of the Public Health Service Act shall apply for purposes of this title in the same manner as they apply for purposes of title XXVII of such Act.
(b) Secretary.--Except as otherwise provided, the term
``Secretary'' means the Secretary of Health and Human Services, in consultation with the Secretary of Labor and the term ``appropriate Secretary'' means the Secretary of Health and Human Services in relation to carrying out this title under sections 2706 and 2751 of the Public Health Service Act and the Secretary of Labor in relation to carrying out this title under section 713 of the Employee Retirement Income Security Act of 1974.
(c) Additional Definitions.--For purposes of this title:
(1) Actively practicing.--The term ``actively practicing'' means, with respect to a physician or other health care professional, such a physician or professional who provides professional services to individual patients on average at least two full days per week.
(2) Applicable authority.--The term ``applicable authority'' means--
(A) in the case of a group health plan, the Secretary of Health and Human Services and the Secretary of Labor; and
(B) in the case of a health insurance issuer with respect to a specific provision of this title, the applicable State authority (as defined in section 2791(d) of the Public Health Service Act), or the Secretary of Health and Human Services, if such Secretary is enforcing such provision under section 2722(a)(2) or 2761(a)(2) of the Public Health Service Act.
(3) Clinical peer.--The term ``clinical peer'' means, with respect to a review or appeal, an actively practicing physician (allopathic or osteopathic) or other actively practicing health care professional who holds a nonrestricted license, and who is appropriately credentialed in the same or similar specialty or subspecialty (as appropriate) as typically handles the medical condition, procedure, or treatment under review or appeal and includes a pediatric specialist where appropriate; except that only a physician
(allopathic or osteopathic) may be a clinical peer with respect to the review or appeal of treatment recommended or rendered by a physician.
(4) Enrollee.--The term ``enrollee'' means, with respect to health insurance coverage offered by a health insurance issuer, an individual enrolled with the issuer to receive such coverage.
(5) Group health plan.--The term ``group health plan'' has the meaning given such term in section 733(a) of the Employee Retirement Income Security Act of 1974 and in section 2791(a)(1) of the Public Health Service Act.
(6) Health care professional.--The term ``health care professional'' means an individual who is licensed, accredited, or certified under State law to provide specified health care services and who is operating within the scope of such licensure, accreditation, or certification.
(7) Health care provider.--The term ``health care provider'' includes a physician or other health care professional, as well as an institutional or other facility or agency that provides health care services and that is licensed, accredited, or certified to provide health care items and services under applicable State law.
(8) Network.--The term ``network'' means, with respect to a group health plan or health insurance issuer offering health insurance coverage, the participating health care professionals and providers through whom the plan or issuer provides health care items and services to participants, beneficiaries, or enrollees.
(9) Nonparticipating.--The term ``nonparticipating'' means, with respect to a health care provider that provides health care items and services to a participant, beneficiary, or enrollee under group health plan or health insurance coverage, a health care provider that is not a participating health care provider with respect to such items and services.
(10) Participating.--The term ``participating'' means, with respect to a health care provider that provides health care items and services to a participant, beneficiary, or enrollee under group health plan or health insurance coverage offered by a health insurance issuer, a health care provider that furnishes such items and services under a contract or other arrangement with the plan or issuer.
(11) Prior authorization.--The term ``prior authorization'' means the process of obtaining prior approval from a health insurance issuer or group health plan for the provision or coverage of medical services.
SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.
(a) Continued Applicability of State Law With Respect to Health Insurance Issuers.--
(1) In general.--Subject to paragraph (2), this title shall not be construed to supersede any provision of State law which establishes, implements, or continues in effect any standard or requirement solely relating to health insurance issuers (in connection with group health insurance coverage or otherwise) except to the extent that such standard or requirement prevents the application of a requirement of this title.
(2) Continued preemption with respect to group health plans.--Nothing in this title shall be construed to affect or modify the provisions of section 514 of the Employee Retirement Income Security Act of 1974 with respect to group health plans.
(b) Definitions.--For purposes of this section:
(1) State law.--The term ``State law'' includes all laws, decisions, rules, regulations, or other State action having the effect of law, of any State. A law of the United States applicable only to the District of Columbia shall be treated as a State law rather than a law of the United States.
(2) State.--The term ``State'' includes a State, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, any political subdivisions of such, or any agency or instrumentality of such.
SEC. 153. EXCLUSIONS.
(a) No Benefit Requirements.--Nothing in this title shall be construed to require a group health plan or a health insurance issuer offering health insurance coverage to include specific items and services under the terms of such a plan or coverage, other than those that are provided for under the terms of such plan or coverage.
(b) Exclusion From Access to Care Managed Care Provisions for Fee-for-Service Coverage.--
(1) In general.--The provisions of sections 111 through 117 shall not apply to a group health plan or health insurance coverage if the only coverage offered under the plan or coverage is fee-for-service coverage (as defined in paragraph
(2)).
(2) Fee-for-service coverage defined.--For purposes of this subsection, the term ``fee-for-service coverage'' means coverage under a group health plan or health insurance coverage that--
(A) reimburses hospitals, health professionals, and other providers on the basis of a rate determined by the plan or issuer on a fee-for-service basis without placing the provider at financial risk;
(B) does not vary reimbursement for such a provider based on an agreement to contract terms and conditions or the utilization of health care items or services relating to such provider;
(C) does not restrict the selection of providers among those who are lawfully authorized to provide the covered services and agree to accept the terms and conditions of payment established under the plan or by the issuer; and
(D) for which the plan or issuer does not require prior authorization before providing coverage for any services.
SEC. 154. COVERAGE OF LIMITED SCOPE PLANS.
Only for purposes of applying the requirements of this title under sections 2707 and 2753 of the Public Health Service Act and section 714 of the Employee Retirement Income Security Act of 1974, section 2791(c)(2)(A), and section 733(c)(2)(A) of the Employee Retirement Income Security Act of 1974 shall be deemed not to apply.
SEC. 155. REGULATIONS.
The Secretaries of Health and Human Services and Labor shall issue such regulations as may be necessary or appropriate to carry out this title. Such regulations shall be issued consistent with section 104 of Health Insurance Portability and Accountability Act of 1996. Such Secretaries may promulgate any interim final rules as the Secretaries determine are appropriate to carry out this title.
TITLE II--APPLICATION OF QUALITY CARE STANDARDS TO GROUP HEALTH PLANS
AND HEALTH INSURANCE COVERAGE UNDER THE PUBLIC HEALTH SERVICE ACT
SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND GROUP HEALTH
INSURANCE COVERAGE.
(a) In General.--Subpart 2 of part A of title XXVII of the Public Health Service Act is amended by adding at the end the following new section:
``SEC. 2707. PATIENT PROTECTION STANDARDS.
``(a) In General.--Each group health plan shall comply with patient protection requirements under title I of the Patients' Bill of Rights Act, and each health insurance issuer shall comply with patient protection requirements under such title with respect to group health insurance coverage it offers, and such requirements shall be deemed to be incorporated into this subsection.
``(b) Notice.--A group health plan shall comply with the notice requirement under section 711(d) of the Employee Retirement Income Security Act of 1974 with respect to the requirements referred to in subsection (a) and a health insurance issuer shall comply with such notice requirement as if such section applied to such issuer and such issuer were a group health plan.''.
(b) Conforming Amendment.--Section 2721(b)(2)(A) of such Act (42 U.S.C. 300gg-21(b)(2)(A)) is amended by inserting
``(other than section 2707)'' after ``requirements of such subparts''.
SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSURANCE
COVERAGE.
Part B of title XXVII of the Public Health Service Act is amended by inserting after section 2752 the following new section:
``SEC. 2753. PATIENT PROTECTION STANDARDS.
``(a) In General.--Each health insurance issuer shall comply with patient protection requirements under title I of the Patients' Bill of Rights Act with respect to individual health insurance coverage it offers, and such requirements shall be deemed to be incorporated into this subsection.
``(b) Notice.--A health insurance issuer under this part shall comply with the notice requirement under section 711(d) of the Employee Retirement Income Security Act of 1974 with respect to the requirements of such title as if such section applied to such issuer and such issuer were a group health plan.''.
TITLE III--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974
SEC. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO
GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE
COVERAGE UNDER THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974.
Subpart B of part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 is amended by adding at the end the following new section:
``SEC. 714. PATIENT PROTECTION STANDARDS.
``(a) In General.--Subject to subsection (b), a group health plan (and a health insurance issuer offering group health insurance coverage in connection with such a plan) shall comply with the requirements of title I of the Patients' Bill of Rights Act (as in effect as of the date of the enactment of such Act), and such requirements shall be deemed to be incorporated into this subsection.
``(b) Plan Satisfaction of Certain Requirements.--
``(1) Satisfaction of certain requirements through insurance.--For purposes of subsection (a), insofar as a group health plan provides benefits in the form of health insurance coverage through a health insurance issuer, the plan shall be treated as meeting the following requirements of title I of the Patients' Bill of Rights Act with respect to such benefits and not be considered as failing to meet such requirements because of a failure of the issuer to meet such requirements so long as the plan sponsor or its representatives did not cause such failure by the issuer:
``(A) Section 112 (relating to choice of providers).
``(B) Section 113 (relating to access to emergency care).
``(C) Section 114 (relating to access to specialty care).
``(D) Section 115 (relating to access to obstetrical and gynecological care).
``(E) Section 116 (relating to access to pediatric care).
``(F) Section 117(a)(1) (relating to continuity in case of termination of provider contract) and section 117(a)(2)
(relating to continuity in case of termination of issuer contract), but only insofar as a replacement issuer assumes the obligation for continuity of care.
``(G) Section 118 (relating to access to needed prescription drugs).
``(H) Section 119 (relating to coverage for individuals participating in approved clinical trials.)
``(I) Section 134 (relating to payment of claims).
``(2) Information.--With respect to information required to be provided or made available under section 121, in the case of a group health plan that provides benefits in the form of health insurance coverage through a health insurance issuer, the Secretary shall determine the circumstances under which the plan is not required to provide or make available the information (and is not liable for the issuer's failure to provide or make available the information), if the issuer is obligated to provide and make available (or provides and makes available) such information.
``(3) Grievance and internal appeals.--With respect to the internal appeals process and the grievance system required to be established under sections 102 and 104, in the case of a group health plan that provides benefits in the form of health insurance coverage through a health insurance issuer, the Secretary shall determine the circumstances under which the plan is not required to provide for such process and system (and is not liable for the issuer's failure to provide for such process and system), if the issuer is obligated to provide for (and provides for) such process and system.
``(4) External appeals.--Pursuant to rules of the Secretary, insofar as a group health plan enters into a contract with a qualified external appeal entity for the conduct of external appeal activities in accordance with section 103, the plan shall be treated as meeting the requirement of such section and is not liable for the entity's failure to meet any requirements under such section.
``(5) Application to prohibitions.--Pursuant to rules of the Secretary, if a health insurance issuer offers health insurance coverage in connection with a group health plan and takes an action in violation of any of the following sections, the group health plan shall not be liable for such violation unless the plan caused such violation:
``(A) Section 131 (relating to prohibition of interference with certain medical communications).
``(B) Section 132 (relating to prohibition of discrimination against providers based on licensure).
``(C) Section 133 (relating to prohibition against improper incentive arrangements).
``(D) Section 135 (relating to protection for patient advocacy).
``(6) Construction.--Nothing in this subsection shall be construed to affect or modify the responsibilities of the fiduciaries of a group health plan under part 4 of subtitle B.
``(7) Application to certain prohibitions against retaliation.--With respect to compliance with the requirements of section 135(b)(1) of the Patients' Bill of Rights Act, for purposes of this subtitle the term `group health plan' is deemed to include a reference to an institutional health care provider.
``(c) Enforcement of Certain Requirements.--
``(1) Complaints.--Any protected health care professional who believes that the professional has been retaliated or discriminated against in violation of section 135(b)(1) of the Patients' Bill of Rights Act may file with the Secretary a complaint within 180 days of the date of the alleged retaliation or discrimination.
``(2) Investigation.--The Secretary shall investigate such complaints and shall determine if a violation of such section has occurred and, if so, shall issue an order to ensure that the protected health care professional does not suffer any loss of position, pay, or benefits in relation to the plan, issuer, or provider involved, as a result of the violation found by the Secretary.
``(d) Conforming Regulations.--The Secretary may issue regulations to coordinate the requirements on group health plans under this section with the requirements imposed under the other provisions of this title.''.
(b) Satisfaction of ERISA Claims Procedure Requirement.--Section 503 of such Act (29 U.S.C. 1133) is amended by inserting ``(a)'' after ``Sec. 503.'' and by adding at the end the following new subsection:
``(b) In the case of a group health plan (as defined in section 733) compliance with the requirements of subtitle A of title I of the Patients Bill of Rights Act in the case of a claims denial shall be deemed compliance with subsection
(a) with respect to such claims denial.''.
(c) Conforming Amendments.--(1) Section 732(a) of such Act
(29 U.S.C. 1185(a)) is amended by striking ``section 711'' and inserting ``sections 711 and 714''.
(2) The table of contents in section 1 of such Act is amended by inserting after the item relating to section 713 the following new item:
``Sec. 714. Patient protection standards.''.
(3) Section 502(b)(3) of such Act (29 U.S.C. 1132(b)(3)) is amended by inserting ``(other than section 135(b))'' after
``part 7''.
SEC. 302. ERISA PREEMPTION NOT TO APPLY TO CERTAIN ACTIONS
INVOLVING HEALTH INSURANCE POLICYHOLDERS.
(a) In General.--Section 514 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1144) (as amended by section 301(b)) is amended further by adding at the end the following subsections:
``(f) Preemption Not To Apply to Certain Actions Arising Out of Provision of Health Benefits.--
``(1) Non-preemption of certain causes of action.--
``(A) In general.--Except as provided in this subsection, nothing in this title shall be construed to invalidate, impair, or supersede any cause of action by a participant or beneficiary (or the estate of a participant or beneficiary) under State law to recover damages resulting from personal injury or for wrongful death against any person--
``(i) in connection with the provision of insurance, administrative services, or medical services by such person to or for a group health plan as defined in section 733), or
``(ii) that arises out of the arrangement by such person for the provision of such insurance, administrative services, or medical services by other persons.
``(B) Limitation on punitive damages.--
``(i) In general.--No person shall be liable for any punitive, exemplary, or similar damages in the case of a cause of action brought under subparagraph (A) if--
``(I) it relates to an externally appealable decision (as defined in subsection (a)(2) of section 103 of the Patients' Bill of Rights Act);
``(II) an external appeal with respect to such decision was completed under such section 103;
``(III) in the case such external appeal was initiated by the plan or issuer filing the request for the external appeal, the request was filed on a timely basis before the date the action was brought or, if later, within 30 days after the date the externally appealable decision was made; and
``(IV) the plan or issuer complied with the determination of the external appeal entity upon receipt of the determination of the external appeal entity.
The provisions of this clause supersede any State law or common law to the contrary.
``(ii) Exception.--Clause (i) shall not apply with respect to damages in the case of a cause of action for wrongful death if the applicable State law provides (or has been construed to provide) for damages in such a cause of action which are only punitive or exemplary in nature.
``(C) Personal injury defined.--For purposes of this subsection, the term `personal injury' means a physical injury and includes an injury arising out of the treatment
(or failure to treat) a mental illness or disease.
``(2) Exception for group health plans, employers, and other plan sponsors.--
``(A) In general.--Subject to subparagraph (B), paragraph
(1) does not authorize--
``(i) any cause of action against a group health plan or an employer or other plan sponsor maintaining the plan (or against an employee of such a plan, employer, or sponsor acting within the scope of employment), or
``(ii) a right of recovery, indemnity, or contribution by a person against a group health plan or an employer or other plan sponsor (or such an employee) for damages assessed against the person pursuant to a cause of action under paragraph (1).
``(B) Special rule.--Subparagraph (A) shall not preclude any cause of action described in paragraph (1) against group health plan or an employer or other plan sponsor (or against an employee of such a plan, employer, or sponsor acting within the scope of employment) if--
``(i) such action is based on the exercise by the plan, employer, or sponsor (or employee) of discretionary authority to make a decision on a claim for benefits covered under the plan or health insurance coverage in the case at issue; and
``(ii) the exercise by the plan, employer, or sponsor (or employee) of such authority resulted in personal injury or wrongful death.
``(C) Exception.--The exercise of discretionary authority described in subparagraph (B)(i) shall not be construed to include--
``(i) the decision to include or exclude from the plan any specific benefit;
``(ii) any decision to provide extra-contractual benefits; or
``(iii) any decision not to consider the provision of a benefit while internal or external review is being conducted.
``(3) Futility of exhaustion.--An individual bringing an action under this subsection is required to exhaust administrative processes under sections 102 and 103 of the Patients' Bill of Rights Act, unless the injury to or death of such individual has occurred before the completion of such processes.
``(4) Construction.--Nothing in this subsection shall be construed as--
``(A) permitting a cause of action under State law for the failure to provide an item or service which is specifically excluded under the group health plan involved;
``(B) as preempting a State law which requires an affidavit or certificate of merit in a civil action; or
``(C) permitting a cause of action or remedy under State law in connection with the provision or arrangement of excepted benefits (as defined in section 733(c)), other than those described in section 733(c)(2)(A).
``(g) Rules of Construction Relating to Health Care.--Nothing in this title shall be construed as--
``(1) permitting the application of State laws that are otherwise superseded by this title and that mandate the provision of specific benefits by a group health plan (as defined in section 733(a)) or a multiple employer welfare arrangement (as defined in section 3(40)), or
``(2) affecting any State law which regulates the practice of medicine or provision of medical care, or affecting any action based upon such a State law.''.
(b) Effective Date.--The amendment made by subsection (a) shall apply to acts and omissions occurring on or after the date of enactment of this Act, from which a cause of action arises.
SEC. 303. LIMITATIONS ON ACTIONS.
Section 502 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1132) is amended further by adding at the end the following new subsection:
``(n)(1) Except as provided in this subsection, no action may be brought under subsection (a)(1)(B), (a)(2), or (a)(3) by a participant or beneficiary seeking relief based on the application of any provision in section 101, subtitle B, or subtitle D of title I of the Patients' Bill of Rights Act (as incorporated under section 714).
``(2) An action may be brought under subsection (a)(1)(B),
(a)(2), or (a)(3) by a participant or beneficiary seeking relief based on the application of section 101, 113, 114, 115, 116, 117, 119, or 118(3) of the Patients' Bill of Rights Act (as incorporated under section 714) to the individual circumstances of that participant or beneficiary, except that--
``(A) such an action may not be brought or maintained as a class action; and
``(B) in such an action, relief may only provide for the provision of (or payment of) benefits, items, or services denied to the individual participant or beneficiary involved
(and for attorney's fees and the costs of the action, at the discretion of the court) and shall not provide for any other relief to the participant or beneficiary or for any relief to any other person.
``(3) Nothing in this subsection shall be construed as affecting any action brought by the Secretary.''.
TITLE IV--APPLICATION TO GROUP HEALTH PLANS UNDER THE INTERNAL REVENUE
CODE OF 1986
SEC. 401. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.
Subchapter B of chapter 100 of the Internal Revenue Code of 1986 is amended--
(1) in the table of sections, by inserting after the item relating to section 9812 the following new item:
``Sec. 9813. Standard relating to patient freedom of choice.'';
and
(2) by inserting after section 9812 the following:
``SEC. 9813. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.
``A group health plan shall comply with the requirements of title I of the Patients' Bill of Rights Act (as in effect as of the date of the enactment of such Act), and such requirements shall be deemed to be incorporated into this section.''.
TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION
SEC. 501. EFFECTIVE DATES.
(a) Group Health Coverage.--
(1) In general.--Subject to paragraph (2), the amendments made by sections 201(a), 301, 303, and 401 (and title I insofar as it relates to such sections) shall apply with respect to group health plans, and health insurance coverage offered in connection with group health plans, for plan years beginning on or after January 1, 2002 (in this section referred to as the ``general effective date'') and also shall apply to portions of plan years occurring on and after such date.
(2) Treatment of collective bargaining agreements.--In the case of a group health plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified before the date of the enactment of this Act, the amendments made by sections 201(a), 301, 303, and 401 (and title I insofar as it relates to such sections) shall not apply to plan years beginning before the later of--
(A) the date on which the last collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act); or
(B) the general effective date.For purposes of subparagraph (A), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by this Act shall not be treated as a termination of such collective bargaining agreement.
(b) Individual Health Insurance Coverage.--The amendments made by section 202 shall apply with respect to individual health insurance coverage offered, sold, issued, renewed, in effect, or operated in the individual market on or after the general effective date.
SEC. 502. COORDINATION IN IMPLEMENTATION.
The Secretary of Labor, the Secretary of Health and Human Services, and the Secretary of the Treasury shall ensure, through the execution of an interagency memorandum of understanding among such Secretaries, that--
(1) regulations, rulings, and interpretations issued by such Secretaries relating to the same matter over which such Secretaries have responsibility under the provisions of this Act (and the amendments made thereby) are administered so as to have the same effect at all times; and
(2) coordination of policies relating to enforcing the same requirements through such Secretaries in order to have a coordinated enforcement strategy that avoids duplication of enforcement efforts and assigns priorities in enforcement.
TITLE VI--MISCELLANEOUS PROVISIONS
SEC. 601. HEALTH CARE PAPERWORK SIMPLIFICATION.
(a) Establishment of Panel.--
(1) Establishment.--There is established a panel to be known as the Health Care Panel to Devise a Uniform Explanation of Benefits (in this section referred to as the
``Panel'').
(2) Duties of panel.--
(A) In general.--The Panel shall devise a single form for use by third-party health care payers for the remittance of claims to providers.
(B) Definition.--For purposes of this section, the term
``third-party health care payer'' means any entity that contractually pays health care bills for an individual.
(3) Membership.--
(A) Size and composition.--The Secretary of Health and Human Services shall determine the number of members and the composition of the Panel. Such Panel shall include equal numbers of representatives of private insurance organizations, consumer groups, State insurance commissioners, State medical societies, State hospital associations, and State medical specialty societies.
(B) Terms of appointment.--The members of the Panel shall serve for the life of the Panel.
(C) Vacancies.--A vacancy in the Panel shall not affect the power of the remaining members to execute the duties of the Panel, but any such vacancy shall be filled in the same manner in which the original appointment was made.
(4) Procedures.--
(A) Meetings.--The Panel shall meet at the call of a majority of its members.
(B) First meeting.--The Panel shall convene not later than 60 days after the date of the enactment of the Patients' Bill of Rights Act.
(C) Quorum.--A quorum shall consist of a majority of the members of the Panel.
(D) Hearings.--For the purpose of carrying out its duties, the Panel may hold such hearings and undertake such other activities as the Panel determines to be necessary to carry out its duties.
(5) Administration.--
(A) Compensation.--Except as provided in subparagraph (B), members of the Panel shall receive no additional pay, allowances, or benefits by reason of their service on the Panel.
(B) Travel expenses and per diem.--Each member of the Panel who is not an officer or employee of the Federal Government shall receive travel expenses and per diem in lieu of subsistence in accordance with sections 5702 and 5703 of title 5, United States Code.
(C) Contract authority.--The Panel may contract with and compensate Government and private agencies or persons for items and services, without regard to section 3709 of the Revised Statutes (41 U.S.C. 5).
(D) Use of mails.--The Panel may use the United States mails in the same manner and under the same conditions as Federal agencies and shall, for purposes of the frank, be considered a commission of Congress as described in section 3215 of title 39, United States Code.
(E) Administrative support services.--Upon the request of the Panel, the Secretary of Health and Human Services shall provide to the Panel on a reimbursable basis such administrative support services as the Panel may request.
(6) Submission of form.--Not later than 2 years after the first meeting, the Panel shall submit a form to the Secretary of Health and Human Services for use by third-party health care payers.
(7) Termination.--The Panel shall terminate on the day after submitting the form under paragraph (6).
(b) Requirement for Use of Form by Third-Party Care Payers.--A third-party health care payer shall be required to use the form devised under subsection (a) for plan years beginning on or after 5 years following the date of the enactment of this Act.
SEC. 602. NO IMPACT ON SOCIAL SECURITY TRUST FUND.
(a) In General.--Nothing in this Act (or an amendment made by this Act) shall be construed to alter or amend the Social Security Act (or any regulation promulgated under that Act).
(b) Transfers.--
(1) Estimate of secretary.--The Secretary of the Treasury shall annually estimate the impact that the enactment of this Act has on the income and balances of the trust funds established under section 201 of the Social Security Act (42 U.S.C. 401).
(2) Transfer of funds.--If, under paragraph (1), the Secretary of the Treasury estimates that the enactment of this Act has a negative impact on the income and balances of the trust funds established under section 201 of the Social Security Act (42 U.S.C. 401), the Secretary shall transfer, not less frequently than quarterly, from the general revenues of the Federal Government an amount sufficient so as to ensure that the income and balances of such trust funds are not reduced as a result of the enactment of such Act.
______
By Mr. DASCHLE (for himself, Mr. Kennedy, Mr. Dodd, Mr. Bingaman,
Mrs. Murray, Mr. Wellstone, Mr. Dorgan, Ms. Mikulski, Mr.
Levin, Mrs. Clinton, Mr. Schumer, Mr. Rockefeller, Mr. Johnson,
Mr. Corzine, Mr. Biden, Mr. Kerry, and Mr. Reed)
S. 7. A bill to improve public education for all children and support lifelong learning; to the Committee on Health, Education, Labor, and Pensions.
educational excellence for all learners act of 2001
Mr. DASCHLE. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the Record, as follows:
S.7
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the
``Educational Excellence for All Learners Act of 2001''.
(b) Table of Contents.--The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. References.
TITLE I--HOLDING SCHOOLS ACCOUNTABLE
Sec. 100. Short title.
Subtitle A--Helping Disadvantaged Children
Sec. 101. Reservations for accountability.
Sec. 102. Improved accountability.
Sec. 103. Comprehensive school reform.
Subtitle B--Teachers
Sec. 121. State applications.
Subtitle C--Innovative Education
Sec. 131. Requirements for State plans.
Sec. 132. Performance objectives.
Sec. 133. Report cards.
Sec. 134. Additional accountability provisions.
TITLE II--CLOSING THE ACHIEVEMENT GAP
Subtitle A--Reauthorization of Programs
Sec. 201. Authorization of appropriations.
Subtitle B--Options: Opportunities to Improve our Nation's Schools
Sec. 211. Options: Opportunities to Improve our Nation's Schools.
Subtitle C--Parental Involvement
Sec. 221. State plans.
Sec. 222. Parental assistance.
TITLE III--NATIONAL PRIORITIES WITH PROVEN EFFECTIVENESS
Subtitle A--Qualified Teacher in Every Classroom
Sec. 301. Teacher quality.
Subtitle B--Safe, Healthy Schools and Communities
Chapter 1--Grants for School Renovation
Sec. 311. Grants for school renovation.
Sec. 312. Charter school credit enhancement initiative.
Chapter 2--School Construction
Sec. 321. Short title.
Sec. 322. Expansion of incentives for public schools.
Sec. 323. Application of certain labor standards on construction projects financed under public school modernization program.
Sec. 324. Employment and training activities relating to construction or reconstruction of public school facilities.
Sec. 325. Indian school construction.
Chapter 3--21st Century Community Learning Centers
Sec. 331. Reauthorization.
Chapter 4--Enhancement of Basic Learning Skills
Sec. 341. Reducing class size.
Sec. 342. Reading excellence.
Sec. 343. Tutorial assistance grants.
Chapter 5--Integration of Technology into the Classroom
Sec. 351. Short title.
Sec. 352. Local applications for school technology resource grants.
Sec. 353. Teacher preparation.
Sec. 354. Professional development.
TITLE IV--INDIVIDUALS WITH DISABILITIES EDUCATION ACT
Sec. 401. Full funding of IDEA.
TITLE V--MAKING HIGHER EDUCATION MORE AFFORDABLE
Sec. 501. Increase in maximum Pell grant.
Sec. 502. Deduction for higher education expenses.
SEC. 2. REFERENCES.
Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.).
TITLE I--HOLDING SCHOOLS ACCOUNTABLE
SEC. 100. SHORT TITLE.
This title may be cited as the ``School Improvement Accountability Act''.
Subtitle A--Helping Disadvantaged Children
SEC. 101. RESERVATIONS FOR ACCOUNTABILITY.
Section 1003 (20 U.S.C. 6303) is amended to read as follows:
``SEC. 1003. RESERVATION FOR ACCOUNTABILITY AND SCHOOL
IMPROVEMENT.
``(a) State Reservation.--
``(1) In general.--Each State educational agency shall reserve 3 percent of the amount the agency receives under part A for each of fiscal years 2002 and 2003, and 5 percent of that amount for each of fiscal years 2004 through 2006, to carry out paragraph (2) and to carry out its responsibilities under sections 1116 and 1117, including carrying out its statewide system of technical assistance and providing support for local educational agencies.
``(2) Local educational agencies.--Of the amount reserved under paragraph (1) for any fiscal year, the State educational agency shall allocate at least 80 percent directly to local educational agencies. In making allocations under this paragraph, the State educational agency shall give first priority to agencies, and agencies serving schools, identified for corrective action or improvement under section 1116(c).
``(3) Use of funds.--Each local educational agency receiving an allotment under paragraph (2) shall use the allotment to--
``(A) carry out corrective action, as defined in section 1116(c)(5)(A), in those schools; or
``(B) achieve substantial improvement in the performance of those schools.
``(b) National Activities.--From the total amount appropriated for any fiscal year to carry out this title, the Secretary may reserve not more than 0.30 percent to conduct evaluations and studies and to collect data.''.
SEC. 102. IMPROVED ACCOUNTABILITY.
(a) State Plans.--Section 1111(b) (20 U.S.C. 6311(b)) is amended--
(1) in the subsection heading, by striking ``and Assessments'' and inserting ``, Assessments, and Accountability'';
(2) by amending paragraph (2) to read as follows:
``(2) Adequate yearly progress.--(A) Each State plan shall specify what constitutes adequate yearly progress in student achievement, under the State's accountability system described in paragraph (4), for each school and each local educational agency receiving funds under this part, and for the State.
``(B) The specification of adequate yearly progress in the State plan for schools--
``(i) shall be based primarily on the standards described in paragraph (1) and the valid and reliable assessments aligned to State standards described in paragraph (3);
``(ii) shall include specific numerical adequate yearly progress requirements in each subject and grade included in the State assessments at least for each of the assessments required under paragraph (3) and shall base the numerical goal required for each group of students specified in clause
(iv) upon a timeline that ensures all students meet or exceed the proficient level of performance on the assessments required by this section within 10 years after the effective date of the School Improvement Accountability Act;
``(iii) shall include other academic indicators, such as school completion or dropout rates, with the data for all such academic indicators disaggregated as required by clause
(iv), but the inclusion of such indicators shall not decrease the number of schools or local educational agencies that would be subject to identification for improvement or corrective action if the indicators were not included;
``(iv) shall compare separately data for the State as a whole, for each local educational agency, and for each school, regarding the performance and progress of students, disaggregated by each major ethnic and racial group, by English proficiency status, and by economically disadvantaged students as compared with students who are not economically disadvantaged (except that such disaggregation shall not be required in a case in which the number of students in a category would be insufficient to yield statistically reliable information or the results would reveal individually identifiable information about individual students); and
``(v) shall compare the proportion of students at the basic, proficient, and advanced levels of performance in a grade for a year with the proportion of students at each of the 3 levels in the same grade in the previous year.
``(C)(i) Adequate yearly progress for a local educational agency shall be based upon both--
``(I) the number or percentage of schools identified for school improvement or corrective action; and
``(II) the progress of the local educational agency in reducing the number or length of time schools are identified for school improvement or corrective action.
``(ii) The State plan shall provide that each local educational agency shall ensure that, not later than the end of the fourth academic year after the effective date of the School Improvement Accountability Act, the percentage of schools making adequate yearly progress among schools whose concentrations of poor children are greater than the average concentration of such children served by the local educational agency shall not be less than the percentage of schools making adequate yearly progress among schools whose concentrations of poor children are less than the average concentration of such children served by the local educational agency.
``(D)(i) Adequate yearly progress for a State shall be based upon both--
``(I) the number or percentage of local educational agencies identified for improvement or corrective action; and
``(II) the progress of the State in reducing the number or length of time local educational agencies are identified for improvement or corrective action.
``(ii) The State plan shall provide that the State shall ensure that, not later than the end of the fourth academic year after the effective date of the School Improvement Accountability Act, the percentage of local educational agencies making adequate yearly progress among local educational agencies whose concentrations of poor children are greater than the State average of such concentrations shall not be less than the percentage of local educational agencies making adequate yearly progress among local educational agencies whose concentrations of poor children are less than the State average.'';
(3) in paragraph (3)--
(A) in the matter preceding subparagraph (A)--
(i) by striking ``developed or adopted'' and inserting ``in place''; and
(ii) by inserting ``, not later than the school year 2000-2001,'' after ``will be used'';
(B) by redesignating subparagraphs (G), (H), and (I) as subparagraphs (H), (I), and (J);
(C) in subparagraph (F)--
(i) in clause (ii), by striking ``and'' after the semicolon; and
(ii) by adding at the end the following:
``(iv) the use of assessments written in Spanish for the assessment of Spanish-speaking students with limited English proficiency, if Spanish-language assessments are more likely than English language assessments to yield accurate and reliable information regarding what those students know and can do in content areas other than English; and
``(v) notwithstanding clauses (iii) and (iv), the assessment (using tests written in English) of reading or language arts of any student who has attended school in the United States (not including Puerto Rico) for 3 or more consecutive years, for purposes of school accountability;'';
(D) by inserting after subparagraph (F) the following:
``(G) result in a report from each local educational agency that indicates the number and percentage of students excluded from each assessment at each school, including, where statistically sound, data disaggregated in accordance with subparagraph (J), except that a local educational agency shall be prohibited from providing such information if providing the information would reveal the identity of any individual student.''; and
(E) by amending subparagraph (I) (as so redesignated) to read as follows:
``(I) provide individual student interpretive and descriptive reports, which shall include scores and other information on the attainment of student performance standards that reflect the quality of daily instruction and learning such as measures of student coursework over time, student attendance rates, student dropout rates, and rates of student participation in advanced level courses; and``;
(4) by striking paragraph (7);
(5) by redesignating paragraphs (4), (5), (6), and (8) as paragraphs (8), (9), (10), and (11), respectively;
(6) by inserting after paragraph (3) the following:
``(4) Accountability.--(A) Each State plan shall demonstrate that the State has developed and is implementing a statewide accountability system that is or will be effective in substantially increasing the numbers and percentages of all students, including the lowest performing students, economically disadvantaged students, and students with limited proficiency in English, who meet the State's proficient and advanced levels of performance within 10 years after the date of enactment of the School Improvement Accountability Act. The State accountability system shall--
``(i) be the same accountability system the State uses for all schools or all local educational agencies in the State, if the State has an accountability system for all schools or all local educational agencies in the State;
``(ii) hold local educational agencies and schools accountable for student achievement in at least reading and mathematics and in any other subject that the State may choose; and
``(iii) identify schools and local educational agencies for improvement or corrective action based upon failure to make adequate yearly progress as defined in the State plan pursuant to paragraph (2).
``(B) The accountability system described in subparagraph
(A) and described in the State plan shall also include a procedure for identifying for improvement a school or local educational agency, intervening in that school or agency, and (if that intervention is not effective) implementing a corrective action not later than 3 years after first identifying such agency or school, that--
``(i) complies with sections 1116 and 1117, including the provision of technical assistance, professional development, and other capacity-building as needed, to ensure that schools and local educational agencies so identified have the resources, skills, and knowledge needed to carry out their obligations under sections 1114 and 1115 and to meet the requirements for adequate yearly progress described in paragraph (2); and
``(ii) includes rigorous criteria for identifying those agencies and schools based upon failure to make adequate yearly progress in student achievement in accordance with paragraph (2).
``(5) Public notice and comment.--Each State plan shall contain assurances that--
``(A) in developing the State plan provisions relating to adequate yearly progress, the State diligently sought public comment from a range of institutions and individuals in the State with an interest in improved student achievement; and
``(B) the State will continue to make a substantial effort to ensure that information regarding this part is widely known and understood by citizens, parents, teachers, and school administrators throughout the State, and is provided in a widely read or distributed medium.
``(6) Annual review.--The State plan shall provide an assurance that the State will annually submit to the Secretary information, as part of the State's consolidated plan under section 14302, on the extent to which schools and local educational agencies are making adequate yearly progress, including the number and names of schools and local educational agencies identified for improvement and corrective action under section 1116, the steps taken to address the performance problems of such schools and local educational agencies, and the number and names of schools that are no longer so identified, for purposes of determining State and local compliance with section 1116.
``(7) Penalties.--(A) The State plan shall provide that, if the State fails to meet the deadlines described in paragraphs
(1)(C) and (10) for demonstrating that the State has in place high-quality State content and student performance standards and aligned assessments, or if the State fails to establish a system for measuring and monitoring adequate yearly progress, for a fiscal year, including having the ability to disaggregate student achievement data for the assessments as required under this section at the State, local educational agency, and school levels, then the State shall be ineligible to reserve a greater amount of administrative funds under section 1003 for the succeeding fiscal year than the State reserved for such purposes for the fiscal year preceding the fiscal year in which the failure occurred.
``(B)(i) The State plan shall provide that, except as described in clause (ii), if the State fails to meet the deadlines described in paragraphs (1)(C) and (10) for a fiscal year, then the Secretary may withhold funds made available under this part for administrative expenses for the succeeding fiscal year in such amount as the Secretary determines appropriate.
``(ii) The State plan shall provide that, if the State fails to meet the deadlines described in paragraphs (1)(C) and (10) for the succeeding fiscal year or a subsequent fiscal year, the Secretary shall withhold not less than \1/5\ of the funds made available under this part for administrative expenses for the fiscal year.
``(C) The State plan shall provide that, if the State has not developed challenging State assessments that are aligned to challenging State content standards in at least mathematics and reading or language arts by school year 2000-2001, the State shall not be eligible for designation as an Ed-Flex Partnership State under the Education Flexibility Partnership Act of 1999 until the State develops such assessments, and the State shall be subject to such other penalties as are provided in this Act for failure to develop the assessments.''; and
(7) by adding at the end the following:
``(12) School reports.--The State plan shall provide that individual school reports publicized and disseminated under section 1116(a)(2) shall include information on the total number of students excluded from each assessment at each school, including, where statistically sound, data disaggregated in accordance with paragraph (3)(J), and shall include information on why such students were excluded from the assessment. In issuing this report, a local educational agency may not provide any information that would violate the privacy or reveal the identity of any individual student.''.
(b) Assurances.--Section 1112(c)(1) (20 U.S.C. 6312(c)(1)) is amended--
(1) in subparagraph (G), by striking ``; and'' and inserting a semicolon;
(2) in subparagraph (H), by striking the period and inserting ``; and''; and
(3) by adding at the end the following:
``(I) ensure, through incentives for voluntary transfers, the provision of professional development, and recruitment programs, that low-income students and minority students are not taught at higher rates than other students by unqualified, out-of-field, or inexperienced teachers.''.
(c) Assessment and Improvement.--Section 1116 (20 U.S.C. 6317) is amended--
(1) by amending subsection (a) to read as follows:
``(a) State and Local Review.--
``(1) In general.--Each local educational agency receiving funds under this part shall use the State assessments and other academic indicators described in the State plan or in a State-approved local educational agency plan to review annually the progress of each school served under this part by the agency to determine whether the school is making the adequate yearly progress specified in section 1111(b)(2) toward enabling all students to meet the State's student performance standards described in the State plan.
``(2) Publication and dissemination; results.--Each local educational agency receiving funds under this part shall--
``(A) publicize and disseminate in individual school reports that include statistically sound results disaggregated in the same manner as results are disaggregated under section 1111(b)(3)(J), to teachers and other staff, parents, students, and the community, the results of the annual review under paragraph (1) and (if not already included in the review), graduation rates, attendance rates, retention rates, and rates of participation in advanced level courses, for all schools served under this part; and
``(B) provide the results of the annual review to schools served by the agency under this part so that the schools can continually refine their programs of instruction to help all students served under this part in those schools to meet the State's student performance standards.'';
(2) in subsection (c)--
(A) by amending paragraph (1) to read as follows:
``(1) In general.--(A) A local educational agency shall identify for school improvement any school served under this part that--
``(i) for 2 consecutive years failed to make adequate yearly progress as defined in the State's plan under section 1111, except that in the case of a school participating in a targeted assistance program under section 1115, a local educational agency may review the progress of only those students in such school who are served under this part; or
``(ii) was identified for school improvement under this section on the day preceding the date of enactment of the School Improvement Accountability Act.
``(B) The 2-year period described in subparagraph (A)(i) shall include any continuous period of time immediately preceding the date of the enactment of such Act, during which a school did not make adequate yearly progress as defined in the State's plan, as such plan was in effect on the day preceding the date of enactment.'';
(B) by amending paragraph (2) to read as follows:
``(2) Requirements.--(A)(i) Each school identified under paragraph (1)(A) shall promptly notify a parent of each student enrolled in the school that the school was identified for improvement by the local educational agency and provide with the notification--
``(I) the reasons for such identification; and
``(II) information about opportunities for parents to participate in the school improvement process.
``(ii) The notification under this subparagraph shall be in a format and, to the extent practicable, in a language, that the parents can understand.
``(B)(i) Before identifying a school for school improvement under paragraph (1)(A), the local educational agency shall inform the school that the agency proposes to identify the school for school improvement and provide the school with an opportunity to review the school-level data, including assessment data, upon which the proposed determination regarding identification is based.
``(ii) If the school believes that the proposed identification is in error for statistical or other substantive reasons, the school may provide supporting evidence to the local educational agency during the review period, and the agency shall consider such evidence before making a final determination regarding identification.
``(iii) The review period under this subparagraph shall not exceed 30 days. At the end of the period, the agency shall make public a final determination regarding indentification of the school.
``(C) Each school identified under paragraph (1)(A) shall, within 3 months after being so identified, and in consultation with parents, the local educational agency, and the school support team or other outside experts, develop or revise a school plan that--
``(i) addresses the fundamental teaching and learning needs in the school;
``(ii) describes the specific achievement problems to be solved;
``(iii) includes the strategies, supported by valid and reliable evidence of effectiveness, with specific goals and objectives, that have the greatest likelihood of improving the performance of participating students in meeting the State's student performance standards;
``(iv) explains how those strategies will work to address the achievement problems identified under clause (ii), including providing a summary of evaluation-based evidence of student achievement after implementation of those strategies in other schools;
``(v) addresses the need for high-quality staff by ensuring that all new teachers in the school in programs supported with funds provided under this part are fully qualified;
``(vi) addresses the professional development needs of the instructional staff of the school by describing a plan for spending a minimum of 10 percent of the funds received by the school under this part on professional development that--
``(I) does not supplant professional development services that the instructional staff would otherwise receive; and
``(II) is designed to increase the content knowledge of teachers, build teachers' capacity to align classroom instruction with challenging content standards, and bring all students in the school to proficient or advanced levels of performance;
``(vii) identifies specific goals and objectives the school will undertake for making adequate yearly progress, including specific numerical performance goals and targets that are high enough to ensure that all groups of students specified in section 1111(b)(2)(B)(iv) meet or exceed the proficient levels of performance in each subject area within 10 years after the date of enactment of the School Improvement Accountability Act; and
``(viii) specifies the responsibilities of the school and the local educational agency, including how the local educational agency will hold the school accountable for, and assist the school in, meeting the school's obligations to provide enriched and accelerated curricula, effective instructional methods, highly qualified professional development, and timely and effective individual assistance, in partnership with parents.
``(D)(i) The school shall submit the plan (including a revised plan) to the local educational agency for approval.
``(ii) The local educational agency shall promptly subject the plan to a peer review process, work with the school to revise the plan as necessary, and approve the plan.
``(iii) The school shall implement the plan as soon as the plan is approved.'';
(C) by amending paragraph (4) to read as follows:
``(4) Technical assistance.--(A) For each school identified for school improvement under paragraph (1)(A), the local educational agency shall provide technical assistance as the school develops and implements the school's plan.
``(B) Such technical assistance--
``(i) shall include information on effective methods and instructional strategies that are supported by valid and reliable evidence of effectiveness;
``(ii) shall be designed to strengthen the core academic program for the students served under this part, address specific elements of student performance problems, and address problems, if any, in implementing the parental involvement requirements in section 1118, implementing the professional development provisions in section 1119, and carrying out the responsibilities of the school and local educational agency under the plan; and
``(iii) may be provided directly by the local educational agency, through mechanisms authorized under section 1117, or
(with the local educational agency's approval) by an institution of higher education whose teacher preparation program is not identified as low performing by its State and that is in full compliance with the requirements of section 207 of the Higher Education Act of 1965, a private nonprofit organization, an educational service agency, a comprehensive regional assistance center under part A of title XIII, or other entities with experience in helping schools improve achievement.
``(C) Technical assistance provided under this section by the local educational agency or an entity approved by such agency shall be supported by valid and reliable evidence of effectiveness.'';
(D) by amending paragraph (5) to read as follows:
``(5) Corrective action.--In order to help students served under this part meet challenging State standards, each local educational agency shall implement a system of corrective action in accordance with the following:
``(A) In this paragraph, the term `corrective action' means action, consistent with State and local law, that--
``(i) substantially and directly responds to the consistent academic failure that caused the local educational agency to take such action and to any underlying staffing, curricular, or other problems in the school involved; and
``(ii) is designed to substantially increase the likelihood that students will perform at the proficient and advanced performance levels.
``(B) After providing technical assistance under paragraph
(4), the local educational agency--
``(i) may take corrective action at any time with respect to a school that has been identified under paragraph (1)(A);
``(ii) shall take corrective action with respect to any school that fails to make adequate yearly progress, as defined by the State, for 2 consecutive years following the school's identification under paragraph (1)(A), at the end of the second year; and
``(iii) shall continue to provide technical assistance while instituting any corrective action under clause (i) or
(ii).
``(C) In the case of a school described in subparagraph
(B)(ii), the local educational agency--
``(i) shall take corrective action that changes the school's administration or governance by--
``(I) instituting and fully implementing a new curriculum, including providing appropriate professional development for all relevant staff, that is supported by valid and reliable evidence of effectiveness and offers substantial promise of improving educational achievement for low-performing students;
``(II) restructuring the school, such as by creating schools within schools or other small learning environments, or making alternative governance arrangements (such as the creation of a public charter school);
``(III) redesigning the school by reconstituting all or part of the school staff;
``(IV) eliminating the use of noncredentialed teachers; or
``(V) closing the school;
``(ii) shall provide professional development for all relevant staff, that is supported by valid and reliable evidence of effectiveness and that offers substantial promise of improving student educational achievement and is directly related to the content area in which each teacher is providing instruction and the State's content and performance standards in that content area; and
``(iii) may defer, reduce, or withhold funds provided to carry out this title.
``(D)(i) When a local educational agency has identified a school for corrective action under subparagraph (B)(ii), the agency shall provide all students enrolled in the school with the option to transfer to another public school that is within the area served by the local educational agency that has not been identified for school improvement and provide such students with transportation (or the costs of transportation) to such school, subject to the following requirements:
``(I) Such transfer must be consistent with State or local law.
``(II) If the local educational agency cannot accommodate the request of every student from the identified school, the agency shall permit as many students as possible to transfer, with such students being selected at random on a nondiscriminatory and equitable basis.
``(III) The local educational agency may use not more than 10 percent of the funds the local educational agency receives through the State reservation under section 1003(a)(2) to provide transportation to students whose parents choose to transfer the students to a different school under this subparagraph.
``(ii) If all public schools served by the local educational agency are identified for corrective action, the agency shall, to the extent practicable, establish a cooperative agreement with another local educational agency in the area to enable students served by the agency to transfer to a school served by that other agency.
``(E) A local educational agency may delay, for a period not to exceed 1 year, implementation of corrective action if the failure to make adequate yearly progress was justified due to exceptional or uncontrollable circumstances such as a natural disaster or a precipitous and unforeseen decline in the financial resources of the local educational agency or school.
``(F) The local educational agency shall publish and disseminate to parents and the public in a format and, to the extent practicable, in a language the parents and the public can understand, through such means as the Internet, the media, and public agencies, information on any corrective action the agency takes under this paragraph.
``(G)(i) Before taking corrective action with respect to any school under this paragraph, the local educational agency shall inform the school that the agency proposes to take corrective action and provide the school with an opportunity to review the school-level data, including assessment data, upon which the proposed determination regarding corrective action is based.
``(ii) If the school believes that the proposed determination is in error for statistical or other substantive reasons, the school may provide supporting evidence to the local educational agency during the review period, and the agency shall consider such evidence before making a final determination regarding corrective action.
``(iii) The review period under this subparagraph shall not exceed 45 days. At the end of the period, the local educational agency shall make public a final determination regarding corrective action for the school.'';
(E) by amending paragraph (6) to read as follows:
``(6) State educational agency responsibilities.--If a State educational agency determines that a local educational agency failed to carry out its responsibilities under this section, the State educational agency shall take such action as the agency finds necessary, consistent with this section, to improve the affected schools and to ensure that the local educational agency carries out its responsibilities under this section.''; and
(F) by amending paragraph (7) to read as follows:
``(7) Waivers.--The State educational agency shall review any waivers that have previously been approved for a school identified for improvement or corrective action, and shall terminate any waiver approved by the State, under the Educational Flexibility Partnership Act of 1999, if the State determines, after notice and an opportunity for a hearing, that the waiver is not helping such school make adequate yearly progress toward meeting the goals, objectives, and performance targets in the school's improvement plan.''; and
(3) by amending subsection (d) to read as follows:
``(d) State Review and Local Educational Agency Improvement.--
``(1) In general.--A State educational agency shall annually review the progress of each local educational agency receiving funds under this part to determine whether schools receiving assistance under this part are making adequate yearly progress as defined in section 1111(b)(2) toward meeting the State's student performance standards.
``(2) Identification of local educational agency for improvement.--A State educational agency shall identify for improvement any local educational agency that--
``(A) for 2 consecutive years failed to make adequate yearly progress as defined in the State's plan under section 1111(b)(2); or
``(B) was identified for improvement under this section as this section was in effect on the day preceding the date of enactment of the School Improvement Accountability Act.
``(3) Transition.--The 2-year period described in paragraph
(2)(A) shall include any continuous period of time immediately preceding the date of enactment of such Act, during which a local educational agency did not make adequate yearly progress as defined in the State's plan, as such plan was in effect on the day preceding the date of enactment.
``(4) Targeted assistance schools.--For purposes of reviewing the progress of targeted assistance schools served by a local educational agency, a State educational agency may choose to review the progress of only the students in such schools who are served under this part.
``(5) Opportunity to review and present evidence.--(A) Before identifying a local educational agency for improvement under paragraph (2), a State educational agency shall inform the local educational agency that the State educational agency proposes to identify the local educational agency for improvement and provide the local educational agency with an opportunity to review the local educational agency data, including assessment data, upon which the proposed determination regarding identification is based.
``(B) If the local educational agency believes that the proposed identification is in error for statistical or other substantive reasons, the agency may provide supporting evidence to the State educational agency during the review period, and the agency shall consider such evidence before making a final determination regarding identification.
``(C) The review period under this paragraph shall not exceed 30 days. At the end of the period, the State shall make public a final determination regarding identification of the local educational agency.
``(6) Notification to parents.--(A) The local educational agency shall promptly notify a parent of each student enrolled in a school served by a local educational agency identified for improvement that the agency was identified for improvement and provide with the notification--
(i) the reasons for the agency's identification; and
(ii) information about opportunities for parents to participate in upgrading the quality of the local educational agency.
``(B) The notification under this paragraph shall be in a format and, to the extent practicable, in a language, that the parents can understand.
``(7) Local educational agency revisions.--(A) Each local educational agency identified under paragraph (2) shall, not later than 3 months after being so identified, develop or revise a local educational agency plan and annual academic achievement goals, in consultation with parents, school staff, and others.
``(B) Achievement goals.--The annual academic achievement goals shall be sufficiently high to ensure that all students within the jurisdiction involved, including the lowest performing students, economically disadvantaged students, students of different races and ethnicities, and students with limited English proficiency will meet or exceed the proficient level of performance on the assessments required by section 1111 within 10 years after the date of enactment of the School Improvement Accountability Act.
``(C) The plan shall--
``(i) address the fundamental teaching and learning needs in the schools served by that agency, and the specific academic problems of low-performing students, including stating a determination of why the local educational agency's prior plan, if any, failed to bring about increased achievement;
``(ii) incorporate strategies that are supported by valid and reliable evidence of effectiveness and that strengthen the core academic program in the local educational agency;
``(iii) identify specific annual academic achievement goals and objectives that will--
``(I) have the greatest likelihood of improving the performance of participating students in meeting the State's student performance standards; and
``(II) include specific numerical performance goals and targets for each of the groups of students for which data are disaggregated pursuant to section 1111(b)(2)(B)(iv);
``(iv) address the professional development needs of the instructional staff of the schools by describing a plan for spending a minimum of 10 percent of the funds received by the schools under this part on professional development that--
``(I) does not supplant professional development services that the instructional staff would otherwise receive; and
``(II) is designed to increase the content knowledge of teachers, build teachers' capacity to align classroom instruction with challenging content standards, and bring all students in the schools to proficient or advanced levels of performance;
``(v) identify measures the local educational agency will undertake to make adequate yearly progress;
``(vi) identify how, pursuant to paragraph (6), the local educational agency will provide written notification to parents in a format and, to the extent practicable, in a language the parents can understand;
``(vii) specify the responsibilities of the State educational agency and the local educational agency under the plan; and
``(viii) include strategies to promote effective parental involvement in the schools.
``(D) The local educational agency shall submit the plan
(including a revised plan) to the State educational agency for approval. The State educational agency shall, within 60 days after submission of the plan, subject the plan to a peer review process, work with the local educational agency to revise the plan as necessary, and approve the plan.
``(E) The local educational agency shall implement the plan
(including a revised plan) as soon as the plan is approved.
``(8) State educational agency responsibility.--(A) For each local educational agency identified under paragraph (2), the State educational agency (or an entity authorized by the agency) shall provide technical or other assistance, if requested, as authorized under section 1117, to better enable the local educational agency--
``(i) to develop and implement the local educational agency plan as approved by the State educational agency consistent with the requirements of this section; and
``(ii) to work with schools identified for improvement.
``(B) Technical assistance provided under this section by the State educational agency or an entity authorized by the agency shall be supported by valid and reliable evidence of effectiveness.
``(9) Corrective action.--In order to help students served under this part meet challenging State standards, each State educational agency shall implement a system of corrective action in accordance with the following:
``(A) In this paragraph, the term `corrective action' means action, consistent with State law, that--
``(i) substantially and directly responds to the consistent academic failure that caused the State educational agency to take such action and to any underlying staffing, curricular, or other problems in the schools involved; and
``(ii) is designed to substantially increase the likelihood that students served under this part will perform at the proficient and advanced performance levels.
``(B) After providing technical assistance under paragraph
(8) and subject to subparagraph (D), the State educational agency--
``(i) may take corrective action at any time with respect to a local educational agency that has been identified under paragraph (2);
``(ii) shall take corrective action with respect to any local educational agency that fails to make adequate yearly progress, as defined by the State, for 3 consecutive years following the agency's identification under paragraph (2), at the end of the third year; and
``(iii) shall continue to provide technical assistance while instituting any corrective action under clause (i) or
(ii).
``(C) In the case of a local educational agency described in subparagraph (B)(ii), the State educational agency shall take at least 1 of the following corrective actions:
``(i) Withholding funds from the local educational agency.
``(ii) Reconstituting school district personnel.
``(iii) Removing particular schools from the jurisdiction of the local educational agency and establishing alternative arrangements for public governance and supervision of the schools.
``(iv) Appointing, through the State educational agency, a receiver or trustee to administer the affairs of the local educational agency in place of the superintendent and school board.
``(v) Abolishing or restructuring the local educational agency.
``(D) When a State educational agency has identified a local educational agency for corrective action under subparagraph (B)(ii), the State educational agency shall provide all students enrolled in a school served by the local educational agency with a plan to transfer to a higher performing public school served by another local educational agency and shall provide such students with transportation
(or the costs of transportation) to such schools, subject to the following requirements:
``(i) The provision of the transfer shall be done in conjunction with at least 1 additional action described in this paragraph.
``(ii) If the State educational agency cannot accommodate the request of every student from the schools served by the agency, the agency shall permit as many students as possible to transfer, with such students being selected at random on a nondiscriminatory and equitable basis.
``(iii) The State educational agency may use not more than 10 percent of the funds the agency receives through the State reservation under section 1003(a)(2) to provide transportation to students whose parents choose to transfer their child to a different school under this subparagraph.
``(E) Prior to implementing any corrective action under this paragraph, the State educational agency shall provide due process and a hearing to the affected local educational agency, if State law provides for such process and hearing. The hearing shall take place not later than 45 days following the decision to implement the corrective action.
``(F) The State educational agency shall publish and disseminate to parents and the public in a format and, to the extent practicable, in a language the parents and the public can understand, through such means as the Internet, the media, and public agencies, information on any corrective action the agency takes under this paragraph.
``(G) A State educational agency may delay, for a period not to exceed 1 year, implementation of corrective action if the failure to make adequate yearly progress was justified due to exceptional or uncontrollable circumstances such as a natural disaster or a precipitous and unforeseen decline in the financial resources of the local educational agency.
``(10) Waivers.--The State educational agency shall review any waivers that have previously been approved for a local educational agency identified for improvement or corrective action, and shall terminate any waiver approved by the State, under the Educational Flexibility Partnership Act of 1999, if the State determines, after notice and an opportunity for a hearing, that the waiver is not helping such agency make adequate yearly progress toward meeting the goals, objectives, and performance targets in the agency's improvement plan.''.
(d) State Assistance for School Support and Improvement.--Section 1117(a) (20 U.S.C. 6318(a)) is amended to read as follows:
``(a) System for Support.--
``(1) In general.--Each State educational agency shall establish a statewide system of intensive and sustained support and improvement for local educational agencies and schools receiving funds under this part, in order to increase the opportunity for all students served by those agencies and schools to meet the State's content standards and student performance standards.
``(2) Priorities.--In carrying out this section, a State educational agency shall--
``(A) provide support and assistance to local educational agencies and schools identified for corrective action under section 1116;
``(B) provide support and assistance to other local educational agencies and schools identified for improvement under section 1116; and
``(C) provide support and assistance to each school receiving funds under this part in which the number of students in poverty equals or exceeds 75 percent of the total number of students enrolled in such school.
``(3) Approaches.--In order to achieve the objectives of this subsection, each statewide system shall provide technical assistance and support through approaches such as--
``(A) use of school support teams, composed of individuals who are knowledgeable about research on and practice of teaching and learning, particularly about strategies for improving educational results for low-achieving students;
``(B) the designation and use of `Distinguished Educators', chosen from schools served under this part that have been especially successful in improving academic achievement;
``(C) assisting local educational agencies or schools to implement research-based comprehensive school reform models; and
``(D) use of a peer review process designed to increase the capacity of local educational agencies and schools to develop high-quality school improvement plans.
``(4) Funds.--Each State educational agency--
``(A) shall use funds reserved under section 1003(a)(1), but not used under section 1003(a)(2) and funds appropriated under section 1002(f) to carry out this section; and
``(B) may use State administrative funds authorized for such purpose.
``(5) Alternatives.--The State educational agency may devise additional approaches to providing the assistance described in subparagraphs (A) and (B) of paragraph (3), other than the provision of assistance under the statewide system, such as providing assistance through institutions of higher education, educational service agencies, or other local consortia. The State educational agency may seek approval from the Secretary to use funds made available under section 1003 for such approaches as part of the State plan.''.
(e) Conforming Amendments.--The 1965 (20 U.S.C. 6301 et seq.) is amended--
(1) in section 1111(b)(1)(C) (20 U.S.C. 6311(b)(1)(C)), by striking ``paragraph (6)'' and inserting ``paragraph (10)'';
(2) in section 1112(c)(1)(D) (20 U.S.C. 6312(c)(1)(D)), by striking ``section 1116(c)(4)'' and inserting ``section 1116(c)(5)'';
(3) in section 1117(c)(2)(A) (20 U.S.C. 6318(c)(2)(A)), by striking ``section 1111(b)(2)(A)(i)'' and inserting ``section 1111(b)(2)(A)'';
(4) in section 1118(c)(4)(B) (20 U.S.C. 6319(c)(4)(B)), by striking ``school performance profiles required under section 1116(a)(3)'' and inserting ``individual school reports required under section 1116(a)(2)(A)'';
(5) in section 1118(e)(1) (20 U.S.C. 6319(e)(1)), by striking ``section 1111(b)(8)'' and inserting ``section 1111(b)(11)''; and
(6) in section 1119(h)(3) (20 U.S.C. 6320(h)(3)), by striking ``section 1116(d)(6)'' and inserting ``section 1116(d)(9)''.
SEC. 103. COMPREHENSIVE SCHOOL REFORM.
Title I (20 U.S.C. 6301 et seq.) is amended--
(1) by redesignating part F as part G; and
(2) by inserting after part E the following:
``PART F--COMPREHENSIVE SCHOOL REFORM
``SEC. 1551. PURPOSE.
``The purpose of this part is to provide financial incentives for schools to develop comprehensive school reforms based upon promising and effective practices and research-based programs that emphasize basic academics and parental involvement so that all children can meet challenging State content and student performance standards.
``SEC. 1552. PROGRAM AUTHORIZATION.
``(a) Program Authorized.--
``(1) In general.--The Secretary may award grants to State educational agencies, from allotments under paragraph (2), to enable the State educational agencies to award subgrants to local educational agencies to carry out the purpose described in section 1551.
``(2) Allotments.--
``(A) Reservations.--Of the amount appropriated under section 1558 for a fiscal year, the Secretary may reserve--
``(i) not more than 1 percent to provide assistance to schools supported by the Bureau of Indian Affairs and in the United States Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands according to their respective needs for assistance under this part; and
``(ii) not more than 1 percent to conduct national evaluation activities described in section 1557.
``(B) In general.--Of the amount appropriated under section 1558 that remains after making the reservation under subparagraph (A) for a fiscal year, the Secretary shall allot to each State for the fiscal year an amount that bears the same ratio to the remainder for that fiscal year as the amount made available under section 1124 to the State for the preceding fiscal year bears to the total amount made available under section 1124 to all States for the preceding fiscal year.
``(C) Reallotment.--If a State does not apply for funds under this part, the Secretary shall reallot such funds to other States in proportion to the amount allotted to such other States under subparagraph (B).
``SEC. 1553. STATE APPLICATIONS.
``(a) In General.--Each State educational agency that desires to receive a grant under this part shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may reasonably require.
``(b) Contents.--Each such application shall describe--
``(1) the process and selection criteria by which the State educational agency, using expert review, will select local educational agencies to receive subgrants under this part;
``(2) how the State educational agency will ensure that only comprehensive school reforms that are based upon promising and effective practices and research-based programs receive funds under this part;
``(3) how the State educational agency will disseminate information on comprehensive school reforms that are based upon promising and effective practices and research-based programs;
``(4) how the State educational agency will evaluate the implementation of such reforms and measure the extent to which the reforms have resulted in increased student academic performance; and
``(5) how the State educational agency will make available technical assistance to a local educational agency in evaluating, developing, and implementing comprehensive school reform.
``SEC. 1554. STATE USE OF FUNDS.
``(a) In General.--Except as provided in subsection (e), a State educational agency that receives a grant under this part shall use the grant funds to award subgrants, on a competitive basis, to local educational agencies (including consortia of local educational agencies) in the State that receive funds under part A.
``(b) Subgrant Requirements.--A subgrant to a local educational agency shall be--
``(1) of sufficient size and scope to support the initial costs for the particular comprehensive school reform plan selected or designed by each school identified in the application of the local educational agency;
``(2) in an amount not less than $50,000 for each participating school; and
``(3) renewable for 2 additional 1-year periods after the initial 1-year grant is made, if the participating school is making substantial progress in the implementation of reforms.
``(c) Priority.--A State educational agency, in awarding subgrants under this part, shall give priority to local educational agencies that--
``(1) plan to use the funds in schools identified for improvement or corrective action under section 1116(c); and
``(2) demonstrate a commitment to assist schools with budget allocation, professional development, and other strategies necessary to ensure that comprehensive school reforms are properly implemented and are sustained in the future.
``(d) Grant Consideration.--In awarding subgrants under this part, the State educational agency shall take into consideration the equitable distribution of subgrants to different geographic regions within the State, including urban and rural areas, and to schools serving elementary school and secondary school students.
``(e) Administrative Costs.--A State educational agency that receives a grant under this part may reserve not more than 5 percent of the grant funds for administrative, evaluation, and technical assistance expenses.
``(f) Supplement.--Funds made available under this part shall be used to supplement, and not supplant, any other Federal, State, or local funds that would otherwise be available to carry out the activities assisted under this part.
``(g) Reporting.--Each State educational agency that receives a grant under this part shall provide to the Secretary such information as the Secretary may require, including the names of local educational agencies and schools receiving assistance under this part, the amount of the assistance, and a description of the comprehensive school reform model selected and used.
``SEC. 1555. LOCAL APPLICATIONS.
``(a) In General.--Each local educational agency desiring a subgrant under this part shall submit an application to the State educational agency at such time, in such manner, and containing such information as the State educational agency may reasonably require.
``(b) Contents.--Each such application shall--
``(1) identify the schools, that are eligible for assistance under part A, that plan to implement a comprehensive school reform program and include the projected costs of such program;
``(2) describe the promising and effective practices and research-based programs that such schools will implement;
``(3) describe how the local educational agency will provide technical assistance and support for the effective implementation of the promising and effective practices and research-based school reforms selected by such schools; and
``(4) describe how the local educational agency will evaluate the implementation of such reforms and measure the results achieved in improving student academic performance.
``SEC. 1556. LOCAL USE OF FUNDS.
``(a) Use of Funds.--A local educational agency that receives a subgrant under this part shall provide the subgrant funds to schools, that are eligible for assistance under part A and served by the agency, to enable the schools to implement a comprehensive school reform program for--
``(1) employing innovative strategies for student learning, teaching, and school management that are based upon promising and effective practices and research-based programs and have been replicated successfully in schools with diverse characteristics;
``(2) integrating a comprehensive design for effective school functioning, including instruction, assessment, classroom management, professional development, parental involvement, and school management, that aligns the school's curriculum, technology, and professional development into a comprehensive reform plan for schoolwide change designed to enable all students to meet challenging State content and student performance standards and addresses needs identified through a school needs assessment;
``(3) providing high quality and continuous teacher and staff professional development;
``(4) including measurable goals for student performance;
``(5) providing support to teachers, principals, administrators, and other school personnel staff;
``(6) including meaningful community and parental involvement initiatives that will strengthen school improvement activities;
``(7) using high quality external technical support and assistance from an entity that has experience and expertise in schoolwide reform and improvement, which may include an institution of higher education;
``(8) evaluating school reform implementation and student performance; and
``(9) identifying other resources, including Federal, State, local, and private resources, that will be used to coordinate services supporting and sustaining the school reform effort.
``(b) Special Rule.--A school that receives funds to develop a comprehensive school reform program shall not be limited to using the approaches identified or developed by the Secretary, but may develop the school's own comprehensive school reform programs for schoolwide change as described in subsection (a).
``SEC. 1557. NATIONAL EVALUATION AND REPORTS.
``(a) In General.--The Secretary shall develop a plan for a national evaluation of the programs assisted under this part.
``(b) Evaluation.--The national evaluation shall--
``(1) evaluate the implementation and results achieved by schools after 3 years of implementing comprehensive school reforms; and
``(2) assess the effectiveness of comprehensive school reforms in schools with diverse characteristics.
``(c) Reports.--Prior to the completion of the national evaluation, the Secretary shall submit an interim report describing implementation activities for the Comprehensive School Reform Program to the Committee on Education and the Workforce, and the Committee on Appropriations, of the House of Representatives, and the Committee on Health, Education, Labor, and Pensions, and the Committee on Appropriations, of the Senate.
``SEC. 1558. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to carry out this part $500,000,000 for fiscal year 2002 and such sums as may be necessary for each of the 4 succeeding fiscal years.''.
Subtitle B--Teachers
SEC. 121. STATE APPLICATIONS.
(a) Contents of State Plan.--Section 2205(b)(2) (20 U.S.C. 6645(b)(2)) is amended--
(1) by amending subparagraph (N) to read as follows:
``(N) set specific annual, quantifiable, and measurable performance goals to increase the percentage of teachers participating in sustained professional development activities, reduce the beginning teacher attrition rate, and reduce the percentage of teachers who are not certified or licensed, and the percentage who are out-of-field teachers;'';
(2) by redesignating subparagraph (O) as subparagraph (P); and
(3) by inserting after subparagraph (N) the following:
``(O) describe how the State will ensure that all teachers in the State will be fully qualified not later than December 1, 2005; and''.
(b) State and Local Activities.--Part B of title II (20 U.S.C. 6641 et seq.) is amended--
(1) by redesignating section 2211 as section 2215;
(2) by inserting after section 2210 the following:
``SEC. 2211. LOCAL CONTINUATION OF FUNDING.
``(a) Agencies.--If a local educational agency applies for funds from a State under this part for a fourth or subsequent fiscal year, the agency may not receive the funds for that fiscal year unless the State determines that the agency has demonstrated that, in carrying out activities under this part during the past fiscal year, the agency has annual numerical performance objectives consisting of--
``(1) improved student performance for all groups identified in section 1111;
``(2) an increased percentage of teachers participating in sustained professional development activities;
``(3) a reduction in the beginning teacher attrition rate for the agency; and
``(4) a reduction in the percentage of teachers who are not certified or licensed, and the percentage who are out-of-field teachers, for the agency.
``(b) Schools.--If a local educational agency applies for funds under this part on behalf of a school for a fourth or subsequent fiscal year (including applying for funds as part of a partnership), the agency may not receive the funds for the school for that fiscal year unless the State determines that the school has demonstrated that, in carrying out activities under this part during the past fiscal year, the school has met the requirements of paragraphs (1) through (4) of subsection (a).
``SEC. 2212. INFORMATION AND NOTICE TO PARENTS.
``(a) Parents' Right To Know Information.--
``(1) In general.--A local educational agency that receives funds under this title shall provide, on request, in an understandable and uniform format, to any parent of a student attending any school served by the agency, information regarding the professional qualifications of each of the student's classroom teachers.
``(2) Contents.--The agency shall provide, at a minimum, information on--
``(A) whether the teacher has met State certification or licensing criteria for the academic subjects and grade levels in which the teacher teaches the student;
``(B) whether the teacher is teaching with emergency or other provisional credentials, due to which any State certification or licensing criteria have been waived; and
``(C) the academic qualifications of the teacher in the academic subjects and grade levels in which the teacher teaches.
``(b) Notice.--In addition to providing the information described in subsection (a), if a school that receives funds under this title assigns a student to a teacher who is not a fully qualified teacher or assigns a student, for 2 or more consecutive weeks, to a substitute teacher who is not a fully qualified teacher, the school shall provide notice of the assignment to a parent of the student, not later than 15 school days after the assignment.
``SEC. 2213. GENERAL ACCOUNTING OFFICE STUDY.
``Not later than September 30, 2005, the Comptroller General of the United States shall prepare and submit to the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate a study setting forth information regarding the progress of States' compliance in increasing the percentage of fully qualified teachers for fiscal years 2001 through 2004.
``SEC. 2214. DEFINITION OF FULLY QUALIFIED.
``(a) In General.--In this part, the term `fully qualified', used with respect to a teacher, means a teacher who--
``(1)(A) has demonstrated the subject matter knowledge, teaching knowledge, and teaching skill necessary to teach effectively in the academic subject in which the teacher teaches, according to the criteria described in subsections
(b) and (c); and
``(B) is not a teacher for whom State certification or licensing requirements have been waived or who is teaching under an emergency or other provisional credential; or
``(2) meets the standards set by the National Board for Professional Teaching Standards.
``(b) Elementary School.--For purposes of making the demonstration described in subsection (a)(1), each teacher who teaches elementary school students (other than middle school students) shall, at a minimum--
``(1) have State certification (which may include certification obtained through an alternative route) or a State license to teach; and
``(2) hold a bachelor's degree and demonstrate the subject matter knowledge, teaching knowledge, and teaching skill required to teach effectively in reading, writing, mathematics, social studies, science, and other elements of a liberal arts education.
``(c) Middle School and Secondary School.--For purposes of making the demonstration described in subsection (a)(1), each teacher who teaches middle school students or secondary school students shall, at a minimum--
``(1) have State certification (which may include certification obtained through an alternative route) or a State license to teach; and
``(2) hold a bachelor's degree or higher degree and demonstrate a high level of competence in all academic subjects in which the teacher teaches through--
``(A) achievement of a high level of performance on rigorous academic subject area tests;
``(B) completion of an academic major (or courses totaling an equivalent number of credit hours) in each of the academic subjects in which the teacher teaches; or
``(C) in the case of teachers hired before the date of enactment of the School Improvement Accountability Act, completion of appropriate coursework for mastery of the academic subjects in which the teacher teaches.''; and
(3) by amending section 2215 (as so redesignated)--
(A) in subsection (a)(3), by adding after ``agency'' the following: ``for which at least 40 percent of the students served by the agency are eligible for free or reduced price lunches under the Richard B. Russell National School Lunch Act''; and
(B) by inserting after subsection (a)(4) the following:
``(5) Reporting requirements.--Each institution of higher education receiving assistance under paragraph (1) shall fully comply with all reporting requirements of title II of the Higher Education Act of 1965.''.
(c) Conforming Amendments.--The Act (20 U.S.C. 6301 et seq.) is amended--
(1) in section 2203(2) (20 U.S.C. 6643(2)), by striking
``section 2211'' and inserting ``section 2215''; and
(2) in section 2205(c)(2) (20 U.S.C. 6645(c)(2)), by striking ``section 2211'' and inserting ``section 2215''.
Subtitle C--Innovative Education
SEC. 131. REQUIREMENTS FOR STATE PLANS.
Part B of title VI (20 U.S.C. 7331 et seq.) is amended by adding at the end the following:
``SEC. 6203. REQUIREMENTS FOR STATE PLANS.
``(a) State Plans.--In addition to requirements relating to State applications under this part, the State educational agency for each State desiring a grant under this title shall submit a State plan that meets the requirements of this section to the Secretary at such time, in such manner, and accompanied by such information as the Secretary may require.
``(b) Consolidated Plan.--A State plan submitted under subsection (a) may be submitted as part of a consolidated plan under section 14302, and as part of a State application described in section 6202.
``(c) Contents.--Each plan submitted under subsection (a) shall--
``(1) describe how the funds made available through the grant will be used to increase student academic performance;
``(2) describe annual, quantifiable, and measurable performance goals that will be used to measure the impact of those funds on student performance;
``(3) describe the methods the State will use to measure the annual impact of programs described in the plan and the extent to which such goals are aligned with State standards;
``(4) certify that the State has in place the standards and assessments required under section 1111;
``(5) certify that the State educational agency has a system, as required under section 1111, for--
``(A) holding each local educational agency and school accountable for adequate yearly progress (as described in section 1111(b)(2));
``(B) identifying local educational agencies and schools for improvement and corrective action (as required in sections 1116 and 1117);
``(C) assisting local educational agencies and schools that are identified for improvement with the development of improvement plans; and
``(D) providing technical assistance, professional development, and other capacity building as needed to get such agencies and schools out of improvement status;
``(6) certify that the State educational agency will use the disaggregated results of student assessments required under section 1111(b)(3), and other measures or indicators available, to review annually the progress of each local educational agency and school served under this title to determine whether each such agency and school is making adequate yearly progress as required under section 1111(b)(2);
``(7) certify that the State educational agency will take action against a local educational agency that is identified for corrective action and receiving funds under this title;
``(8) describe what, if any, State and other non-Federal resources will be provided to local educational agencies and schools served under this title to carry out activities consistent with this title; and
``(9) certify that the State educational agency has a system to hold local educational agencies accountable for meeting the annual performance goals required under paragraph
(2).
``(d) Approval.--The Secretary, using a peer review process, shall approve a State plan submitted under this section if the State plan meets the requirements of this section.
``(e) Duration of the Plan.--Each State plan shall remain in effect for the duration of the State's participation under this title.
``(f) Requirement.--A State shall not be eligible to receive funds under this title unless the State has established the standards and assessments required under section 1111.
``(g) Public Review.--Each State educational agency will make publicly available the plan approved under subsection
(d).
``SEC. 6204. SANCTIONS.
``(a) Third Fiscal Year.--If a State receiving grant funds under this title fails to meet performance goals established under section 6203(c)(2) by the end of the third fiscal year for which the State receives such grant funds, the Secretary shall reduce by 50 percent the amount the State is entitled to receive for administrative expenses under this title.
``(b) Fourth Fiscal Year.--If the State fails to meet such performance goals by the end of the fourth fiscal year for which the State receives grant funds under this title, the Secretary shall reduce the total amount the State receives under this title by 20 percent.
``(c) Technical Assistance.--The Secretary shall provide technical assistance, at the request of a State subjected to sanctions under subsection (a) or (b).
``(d) Local Sanctions.--
``(1) In general.--Each State receiving assistance under this title shall develop a system to hold local educational agencies accountable for meeting the adequate yearly progress requirements established under part A of title I and the performance goals established under this title.
``(2) Sanctions.--A system developed under paragraph (1) shall include a mechanism for sanctioning local educational agencies for failure to meet such performance goals and adequate yearly progress levels.
``SEC. 6205. STATE REPORTS.
``Each State educational agency or Chief Executive Officer of a State receiving funds under this title shall annually publish and disseminate to the public in a format and, to the extent practicable, in a language that the public can understand, a report on--
``(1) the use of such funds;
``(2) the impact of programs conducted with such funds and an assessment of such programs' effectiveness; and
``(3) the progress of the State toward attaining the performance goals established under section 6203(c)(2), and the extent to which the programs have increased student achievement.
``SEC. 6206. STANDARDS; ASSESSMENTS ENHANCEMENT.
``Each State educational agency receiving a grant under this title may use such grant funds, consistent with section 6201(a)(1)(C), to--
``(1) establish high quality, internationally competitive content and student performance standards and strategies that all students will be expected to meet;
``(2) provide for the establishment of high quality, rigorous assessments that include multiple measures and demonstrate comprehensive knowledge; or
``(3) develop and implement value-added assessments.''.
SEC. 132. PERFORMANCE OBJECTIVES.
Title VII (20 U.S.C. 7401 et seq.) is amended by inserting after section 7105 the following:
``SEC. 7106. PERFORMANCE OBJECTIVES.
``(a) In General.--Each State educational agency or local educational agency receiving a grant under this part shall develop annual numerical performance objectives that are age-appropriate and developmentally-appropriate with respect to helping limited English proficient students become proficient in English and improve overall academic performance based upon State and local content and performance standards. The objectives shall include incremental percentage increases for each fiscal year a State educational agency or local educational agency receives a grant under this title, including increases from the preceding fiscal year in the number of limited English proficient students demonstrating an increase in performance on annual assessments concerning reading, writing, speaking, and listening comprehension.
``(b) Accountability.--Each State educational agency or local educational agency receiving a grant under this title shall be held accountable for meeting the annual numerical performance objectives under this title and the adequate yearly progress levels for limited English proficient students under clauses (ii) and (iv) of section 1111(b)(2)(B). Any State educational agency or local educational agency that fails to meet the annual performance objectives shall be subject to sanctions described in section 14515.
``(c) Parental Notification.--
``(1) In general.--Each State educational agency or local educational agency shall notify a parent of a student who is participating in a language instruction educational program under this title, in a manner and form understandable to the parent, including, if necessary and to the extent feasible, in the native language of the parent, of--
``(A) the student's level of English proficiency, how such level was assessed, the status of the student's academic achievement, and the implications of the student's educational strengths and needs for age-appropriate and grade-appropriate academic attainment, promotion, and graduation;
``(B) what programs are available to meet the student's educational strengths and needs, and how such programs differ in content and instructional goals from other language instruction educational programs and, in the case of a student with a disability, how such available programs meet the objectives of the individualized education program of such a student; and
``(C) the instructional goals of the language instruction educational program, and how the program will specifically help the limited English proficient student learn English and meet State and local content and performance standards, including--
``(i) the characteristics, benefits, and past academic results of the language instruction educational program and of instructional alternatives; and
``(ii) the reasons the student was identified as being in need of a language instruction educational program.
``(2) Option to decline.--Each parent described in paragraph (1) shall also be informed that the parent has the option of declining the enrollment of a student in a language instruction educational program, and shall be given an opportunity to decline such enrollment if the parent so chooses.
``(3) Special rule.--A student shall not be admitted to, or excluded from, any federally assisted language instruction educational program solely on the basis of a surname or language-minority status.''.
SEC. 133. REPORT CARDS.
Title XIV (20 U.S.C. 8801 et seq.) is amended by adding at the end the following:
``PART I--REPORT CARDS
``SEC. 14901. REPORT CARDS.
``(a) Grants Authorized.--The Secretary shall award a grant, from allotments under subsection (b), to each State having a State report card meeting the requirements described in subsection (e), to enable the State, and local educational agencies and schools in the State, annually to publish report cards for each elementary school and secondary school that receives funding under this Act and is served by the State.
``(b) Reservations and Allotments.--
``(1) Reservations.--From the amount appropriated under subsection (j) to carry out this part for each fiscal year, the Secretary shall reserve--
``(A) \1/2\ of 1 percent of such amount for payments to the Secretary of the Interior for activities approved by the Secretary of Education, consistent with this part, in schools operated or supported by the Bureau of Indian Affairs, on the basis of their respective needs for assistance under this part; and
``(B) \1/2\ of 1 percent of such amount for payments to outlying areas, to be allotted in accordance with their respective needs for assistance under this part, as determined by the Secretary, for activities approved by the Secretary, consistent with this part.
``(2) State allotments.--From the amount appropriated under subsection (j) for a fiscal year and remaining after the Secretary makes reservations under paragraph (1), the Secretary shall allot to each State having a State report card meeting the requirements described in subsection (e) an amount that bears the same relationship to the remainder as the number of public school students enrolled in elementary schools and secondary schools in the State bears to the number of such students so enrolled in all States.
``(c) State Reservation of Funds.--Each State educational agency receiving a grant under subsection (a) may reserve--
``(1) not more than 10 percent of the grant funds to carry out activities described in subsections (e) and (g)(2) for fiscal year 2002; and
``(2) not more than 5 percent of the grant funds to carry out activities described in subsections (e) and (g)(2) for fiscal year 2003 and each of the 3 succeeding fiscal years.
``(d) Within-State Allocations.--Each State educational agency receiving a grant under subsection (a) shall allocate the grant funds that remain after making the reservation described in subsection (c) to each local educational agency in the State in an amount that bears the same relationship to the remainder as the number of public school students enrolled in elementary schools and secondary schools served by the local educational agency bears to the number of such students served by local educational agencies within the State.
``(e) Annual State Report Card.--
``(1) Report cards required.--Not later than the beginning of the 2002-2003 school year, a State that receives assistance under this Act shall prepare and disseminate an annual report card for parents, the general public, teachers, and the Secretary, with respect to all elementary schools and secondary schools within the State.
``(2) Required information.--Each State described in paragraph (1), at a minimum, shall include in the annual State report card information regarding--
``(A) student performance on statewide assessments for the year for which the annual State report card is prepared and the preceding year, in at least English language arts and mathematics, including--
``(i) a comparison of the proportions of students who performed at the basic, proficient, and advanced levels in each subject area, for each grade level for which assessments are required under title I for the year for which the report card is prepared, with proportions in each of the same 3 levels in each subject area at the same grade levels in the preceding school year;
``(ii) a statement on the most recent 3-year trend in the percentage of students performing at the basic, proficient, and advanced levels in each subject area, for each grade level for which assessments are required under title I; and
``(iii) a statement of the percentage of students not tested and a listing of categories of the reasons why such students were not tested;
``(B) student retention rates in each grade, the number of students completing advanced placement courses, annual school dropout rates as calculated by procedures conforming with the National Center for Education Statistics Common Core of Data, and 4-year graduation rates; and
``(C) the professional qualifications of teachers in the aggregate, including the percentage of teachers teaching with emergency or provisional credentials, the percentage of class sections not taught by fully qualified teachers, and the percentage of teachers who are fully qualified.
``(3) Student data.--Student data in each report card shall contain disaggregated results for the following categories:
``(A) Racial and ethnic groups.
``(B) Gender groups.
``(C) Economically disadvantaged students, as compared with students who are not economically disadvantaged.
``(D) Students with limited English proficiency, as compared with students who are proficient in English.
``(E) Migrant status groups.
``(F) Students with disabilities, as compared with students who are not disabled.
``(4) Optional information.--A State may include in the State annual report card any other information the State determines appropriate to reflect school quality and school achievement, including by grade level information on the following:
``(A) Average class size.
``(B) School safety, such as the incidence of school violence and drug and alcohol abuse.
``(C) The incidence of student suspensions and expulsions.
``(D) Student access to technology, including the number of computers for educational purposes, the number of computers per classroom, and the number of computers connected to the Internet.
``(E) Parental involvement, as determined by such measures as the extent of parental participation in schools, parental involvement activities, and extended learning time programs, such as after-school and summer programs.
``(f) Local Educational Agency and School Report Cards.--
``(1) In general.--The State shall ensure that each local educational agency, elementary school, and secondary school in the State, collects appropriate data and publishes an annual report card consistent with this subsection.
``(2) Required information.--Each local educational agency, elementary school, and secondary school described in paragraph (1), at a minimum, shall include in its annual report card--
``(A) the information described in paragraphs (2) and (3) of subsection (e) for each local educational agency and school;
``(B) in the case of a local educational agency--
``(i) information regarding the number and percentage of schools served by the local educational agency that are identified for school improvement, including schools identified under section 1116;
``(ii) information on the most recent 3-year trend in the number and percentage of elementary schools and secondary schools served by the local educational agency that are identified for school improvement; and
``(iii) information on how students in the schools served by the local educational agency performed on the statewide assessment compared with students in the State as a whole;
``(C) in the case of an elementary school or a secondary school--
``(i) information regarding whether the school has been identified for school improvement;
``(ii) information on how the school's students performed on the statewide assessment compared with students in schools served by the same local educational agency and with all students in the State; and
``(iii) information about the enrollment of students compared with the rated capacity of the schools; and
``(D) other appropriate information, regardless of whether the information is included in the annual State report.
``(g) Dissemination and Accessibility of Report Cards.--
``(1) Report card format.--Annual report cards under this part shall be--
``(A) concise; and
``(B) presented in a format and manner that parents can understand, including, to the extent practicable, in a language the parents can understand.
``(2) State report cards.--State annual report cards under subsection (e) shall be disseminated to all elementary schools, secondary schools, and local educational agencies in the State, and made broadly available to the public through means such as posting on the Internet and distribution to the media, and through public agencies.
``(3) Local report cards.--Local educational agency report cards under subsection (f) shall be disseminated to all elementary schools and secondary schools served by the local educational agency and to parents of students attending such schools, and made broadly available to the public through means such as posting on the Internet and distribution to the media, and through public agencies.
``(4) School report cards.--Elementary school and secondary school report cards under subsection (f) shall be disseminated to parents of students attending that school, and made broadly available to the public through means such as posting on the Internet and distribution to the media, and through public agencies.
``(h) Coordination of State Plan Content.--A State shall include in its plan under part A of title I or part B of title II, an assurance that the State has in effect a policy that meets the requirements of this section.
``(i) Privacy.--Information collected under this section shall be collected and disseminated in a manner that protects the privacy of individuals.
``(j) Authorization of Appropriations.--There are authorized to be appropriated to carry out this part
$5,000,000 for fiscal year 2002 and such sums as may be necessary for each of the 4 succeeding fiscal years.
``PART J--ADDITIONAL PERFORMANCE AND ACCOUNTABILITY PROVISIONS
``SEC. 14911. REWARDING HIGH PERFORMANCE.
``(a) State Rewards.--
``(1) In general.--From amounts appropriated under subsection (d), the Secretary shall make awards to States that--
``(A) for 3 consecutive years have--
``(i) exceeded the State performance goals and objectives established for any title under this Act;
``(ii) exceeded the adequate yearly progress levels established under section 1111(b)(2);
``(iii) significantly narrowed the gaps between minority and nonminority students, and between economically disadvantaged students and students who are not economically disadvantaged;
``(iv) raised all students to the proficient standard level prior to 10 years after the date of enactment of the School Improvement Accountability Act; or
``(v) significantly increased the percentage of core classes being taught by fully qualified teachers, in schools receiving funds under part A of title I; or
``(B) by not later than fiscal year 2005, ensure that all teachers teaching in the State public elementary schools and secondary schools are fully qualified.
``(2) State use of funds.--
``(A) Demonstration sites.--Each State receiving an award under paragraph (1) shall use a portion of the award funds that are not distributed under subsection (b) to establish demonstration sites with respect to high-performing schools
(based upon achievement, or performance levels and adequate yearly progress) in order to help low-performing schools.
``(B) Improvement of performance.--Each State receiving an award under paragraph (1) shall use the portion of the award funds that are not used pursuant to subparagraph (A) or (C) and are not distributed under subsection (b) for the purpose of improving the level of performance of all elementary school and secondary school students in the State, based upon State content and performance standards.
``(C) Reservation for administrative expenses.--Each State receiving an award under paragraph (1) may set aside not more than \1/2\ of 1 percent of the award funds for the planning and administrative costs of carrying out this section, including the costs of distributing awards to local educational agencies.
``(b) Local Educational Agency Awards.--
``(1) In general.--Each State receiving an award under subsection (a)(1) shall distribute 80 percent of the award funds to local educational agencies in the State that--
``(A) for 3 consecutive years have--
``(i) exceeded the State-established local educational agency performance goals and objectives established for any title under this Act;
``(ii) exceeded the adequate yearly progress levels established under section 1111(b)(2);
``(iii) significantly narrowed the gaps between minority and nonminority students, and between economically disadvantaged students and students who are not economically disadvantaged;
``(iv) raised all students enrolled in schools served by the local educational agency to the proficient standard level prior to 10 years from the date of enactment of the School Improvement Accountability Act; or
``(v) significantly increased the percentage of core classes being taught by fully qualified teachers, in schools receiving funds under part A of title I;
``(B) not later than December 31, 2005, ensure that all teachers teaching in the elementary schools and secondary schools served by the local educational agency are fully qualified; or
``(C) have attained consistently high achievement in another area that the State determines appropriate to reward.
``(2) School-based performance awards.--A local educational agency shall use funds made available under paragraph (1) for activities described in subsection (c) such as school-based performance awards.
``(3) Reservation for administrative expenses.--Each local educational agency receiving an award under paragraph (1) may set aside not more than \1/2\ of 1 percent of the award funds for the planning and administrative costs of carrying out this section, including the costs of distributing awards to eligible elementary schools and secondary schools, teachers, and principals.
``(c) School Rewards.--Each local educational agency receiving an award under subsection (b) shall consult with teachers and principals to develop a reward system, and shall use the award funds--
``(1) to reward individual schools that demonstrate high performance with respect to--
``(A) increasing the academic achievement of all students;
``(B) narrowing the academic achievement gap described in section 1111(b)(2)(B)(iv);
``(C) improving teacher quality;
``(D) increasing high-quality professional development for teachers, principals, and administrators; or
``(E) improving the English proficiency of limited English proficient students;
``(2) to reward collaborative teams of teachers, or teams of teachers and principals, that--
``(A) significantly increase the annual performance of low-performing students; or
``(B) significantly improve in a fiscal year the English proficiency of limited English proficient students;
``(3) to reward principals who successfully raise the performance of a substantial number of low-performing students to high academic levels;
``(4) to develop or implement school district-wide programs or policies to increase the level of student performance on State assessments that are aligned with State content standards; and
``(5) to reward schools for consistently high achievement in another area that the local educational agency determines appropriate to reward.
``(d) Authorization of Appropriations.--There are authorized to be appropriated to carry out this section
$200,000,000 for fiscal year 2002, and such sums as may be necessary for each of the 4 succeeding fiscal years.
``(e) Definition.--The term `low-performing student' means a student who is below a basic State standard level.''.
SEC. 134. ADDITIONAL ACCOUNTABILITY PROVISIONS.
Part E of title XIV (20 U.S.C. 8891 et seq.) is amended by adding at the end the following:
``SEC. 14515. ADDITIONAL ACCOUNTABILITY PROVISIONS.
``(a) In General.--Notwithstanding any other provision of this Act, a recipient of funds provided for a fiscal year under part A of title I, part A or C of title III, part A of title IV, part A of title V, or title VII, shall include--
(1) in the plans or applications required under such part or title--
(A) the methods the recipient will use to measure the annual impact of each program funded in whole or in part with funds provided under such part or title and, if applicable, the extent to which each such program will increase student academic achievement;
(B) the annual, quantifiable, and measurable performance goals and objectives for each such program, and the extent to which, if applicable, the program's performance goals and objectives align with State content standards and State student performance standards established under section 1111(b)(1)(A); and
(C) if the recipient is a local educational agency, assurances that the local educational agency consulted, at a minimum, with parents, school board members, teachers, administrators, business partners, education organizations, and community groups to develop the plan or application submitted and that such consultation will continue on a regular basis; and
``(2) in the reports required under such part or title, a report for the preceding fiscal year regarding how the plan or application submitted for such fiscal year under such part or title was implemented, the recipient's progress toward attaining the performance goals and objectives identified in the plan or application for such year, and, if applicable, the extent to which programs funded in whole or in part with funds provided under such part or title increased student achievement.
``(b) Penalties.--If a recipient of funds under a part or title described in subsection (a) fails to meet the performance goals and objectives of the part or title for 3 consecutive fiscal years, the Secretary shall--
``(1) withhold not less than 50 percent of the funds made available under the relevant program for administrative expenses for the succeeding fiscal year, and for each consecutive fiscal year until the recipient meets such performance goals and objectives; and
``(2) in the case of--
``(A) a competitive grant (as determined by the Secretary), consider the recipient ineligible for grants under the part or title until the recipient meets such performance goals and objectives; and
``(B) a formula grant (as determined by the Secretary), withhold not less than 20 percent of the total amount of funds provided under title VI for the succeeding fiscal year and each consecutive fiscal year until the recipient meets such goals and objectives.
``(c) Other Penalties.--A State that has not met the requirements of subsection (a)(1)(B) with respect to a fiscal year--
``(1) shall not be eligible for designation as an Ed-Flex Partnership State under the Education Flexibility Partnership Act of 1999 until the State meets the requirements of subsection (a)(1)(B); and
``(2) shall be subject to such other penalties as are provided in this Act for failure to meet the requirements of subsection (a)(1)(B).
``(d) Special Rule for Secretary Awards.--
``(1) In general.--Notwithstanding any other provision of this Act, a recipient of funds provided under a direct award made by the Secretary, or a contract or cooperative agreement entered into with the Secretary, for a program shall include the following information in any application or plan required for such program:
``(A) How funds provided under the program will be used and how such use will increase student academic achievement.
``(B) The goals and objectives to be met, including goals for dissemination and use of the information or materials produced, where applicable.
``(C) If the grant requires dissemination of information or materials, how the recipient will track and report annually to the Secretary--
``(i) the successful dissemination of information or materials produced;
``(ii) where information or materials produced are being used; and
``(iii) the impact of such use and, if applicable, the extent to which such use increased student academic achievement or contributed to the stated goal of the program.
``(2) Requirement.--If no application or plan is required under a program described in paragraph (1), the Secretary shall require the recipient of funds to submit a plan containing the information required under paragraph (1).
``(3) Failure to achieve goals and objectives.--
``(A) In general.--The Secretary shall evaluate the information submitted under this subsection to determine whether the recipient has met the goals and objectives described in paragraph (1)(B), where applicable, assess the magnitude of dissemination described in paragraph (1)(C), and, where applicable, assess the effectiveness of the activity funded in raising student academic achievement in places where information or materials produced with such funds are used.
``(B) Ineligibility.--The Secretary shall consider the recipient ineligible for grants, contracts, or cooperative agreements under the program described in paragraph (1) if--
``(i) the goals and objectives described in paragraph
(1)(B) have not been met;
``(ii) where applicable, the dissemination has not been of a magnitude to ensure goals and objectives are being addressed; and
``(iii) where applicable, the information or materials produced have not made a significant impact on raising student achievement in places where such information or materials are used.''.
TITLE II--CLOSING THE ACHIEVEMENT GAP
Subtitle A--Reauthorization of Programs
SEC. 201. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--Section 1002(a) (20 U.S.C. 6302(a)) is amended by striking ``appropriated $7,400,000,000 for fiscal year 1995'' and all that follows through the period and inserting the following: ``appropriated--
``(1) $11,000,000,000 for fiscal year 2002;
``(2) $13,000,000,000 for fiscal year 2003;
``(3) $15,000,000,000 for fiscal year 2004;
``(4) $15,000,000,000 for fiscal year 2005; and
``(5) $15,000,000,000 for fiscal year 2006.''.
(b) Review of Allocations.--The Secretary of Education shall annually review the manner in which funds are allocated under title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.) to ensure that local education agencies with the highest need are receiving funds in proportion to that need as compared to other local education agencies.
Subtitle B--Options: Opportunities to Improve our Nation's Schools
SEC. 211. OPTIONS: OPPORTUNITIES TO IMPROVE OUR NATION'S
SCHOOLS.
Title V (20 U.S.C. 7201 et seq.) is amended by adding at the end the following:
``PART D--OPTIONS: OPPORTUNITIES TO IMPROVE OUR NATION'S SCHOOLS
``SEC. 5401. PURPOSE.
``It is the purpose of this part to identify and support innovative approaches to high-quality public school choice by providing financial assistance for the demonstration, development, implementation, and evaluation of, and the dissemination of information about, public school choice programs that stimulate educational innovation for all public schools and contribute to standards-based school reform efforts.
``SEC. 5402. GRANTS.
``(a) In General.--From funds appropriated under section 5405(a) and not reserved under section 5405(b), the Secretary is authorized to make grants to State and local educational agencies to support programs that promote innovative approaches to high-quality public school choice.
``(b) Duration.--A grant under this part shall not be awarded for a period that exceeds 3 years.
``SEC. 5403. USES OF FUNDS.
``(a) Uses of Funds.--
``(1) In general.--Funds under this part may be used to demonstrate, develop, implement, and evaluate, and to disseminate information about, innovative approaches to broaden public elementary school and secondary school choice, including the design and development of new public school choice options, the development of new strategies for overcoming barriers to effective public school choice, and the design and development of public school choice systems that promote high standards for all students and the continuous improvement of all such public schools.
``(2) Examples.--The approaches described in paragraph (1) at the school, school district, and State levels may include--
``(A) inter school district approaches to public school choice, including approaches that increase equal access to high-quality educational programs and diversity in schools;
``(B) public elementary and secondary programs that involve partnerships with institutions of higher education and that are located on the campuses of the institutions;
``(C) programs that allow students in public secondary schools to enroll in postsecondary courses and to receive both secondary and postsecondary academic credit;
``(D) worksite satellite schools, in which State or local educational agencies form partnerships with public or private employers, to create public schools at parents' places of employment; and
``(E) approaches to school desegregation that provide students and parents choice through strategies other than magnet schools.
``(b) Limitations.--Funds under this part--
``(1) shall supplement, and not supplant, non-Federal funds expended for existing programs;
``(2) may be used for providing transportation services or costs, except that not more than 10 percent of the funds received under this part may be used by the local educational agency to provide such services or costs;
``(3) may be used for improving low performing schools that lose students as a result of school choice plans, except that not more than 10 percent of the funds under this part may be used by the local educational agency for the improvement of low performing schools; and
``(4) shall not be used to fund programs that are authorized under part C, D, or E.
``SEC. 5404. GRANT APPLICATION; PRIORITIES.
``(a) Application Required.--A State or local educational agency desiring to receive a grant under this part shall submit an application to the Secretary in such form and containing such information as the Secretary may require.
``(b) Application Contents.--Each application shall include--
``(1) a description of the program for which funds are sought and the goals for such program;
``(2) a description of how the program funded under this part will be coordinated with, and will complement and enhance, programs under other related Federal and non-Federal programs;
``(3) if the program includes partners, the name of each partner and a description of the partner's responsibilities; and
``(4) a description of the policies and procedures the agency will use to ensure--
``(A) that priority is provided to parents of students attending schools identified for school improvement under section 1116 in exercising choice among schools;
``(B) that priority is provided to parents of students who want to stay enrolled at a school;
``(C) the agency's accountability for results, including the agency's goals and performance indicators;
``(D) that the program is open and accessible to, and will promote high academic standards for, all students regardless of the achievement level or disability of the students and the family income of the families of the students;
``(E) that all parents are provided with easily comprehensible information about various school options, including information on instructional approaches at different schools, resources, and transportation that will be provided at or for the schools on an annual basis;
``(F) that all parents are given timely notice about opportunities to choose which school their child will attend the following year and the period during which the choice may be made;
``(G) that limitations on transfers between schools only occur because of facilities constraints, statutory class size limits, and local efforts to ensure that schools reflect the diversity of the communities in which the schools are located;
``(H) that a lottery or other random system be established for parents of students wishing to attend a school that cannot receive all students wishing to attend; and
``(I) that the program is carried out in a manner consistent with Federal law, including court orders, such as desegregation orders, issued to enforce Federal law.
``(c) Priorities.--
``(1) In general.--The Secretary shall give a priority to applications for programs that will serve high-poverty local educational agencies.
``(2) Permissive.--The Secretary may give a priority to applications demonstrating that the State or local educational agency will carry out the agency's program in partnership with one or more public or private agencies, organizations, or institutions, including institutions of higher education and public or private employers.
``SEC. 5405. AUTHORIZATION OF APPROPRIATIONS; RESERVATION;
EVALUATIONS.
``(a) Authorization of Appropriations.--For the purpose of carrying out this part, there are authorized to be appropriated $100,000,000 for each of fiscal years 2002 through 2006.
``(b) Reservation for Evaluation, Technical Assistance, and Dissemination.--From the amount appropriated under subsection
(a) for any fiscal year, the Secretary may reserve not more than 5 percent to carry out evaluations under subsection (c), to provide technical assistance, and to disseminate information.
``(c) Evaluations.--The Secretary may use funds reserved under subsection (b) to carry out one or more evaluations of programs assisted under this part, which, at a minimum, shall address--
``(1) how, and the extent to which, the programs supported with funds under this part promote educational equity and excellence; and
``(2) the extent to which public schools of choice supported with funds under this part are--
``(A) held accountable to the public;
``(B) effective in improving public education; and
``(C) open and accessible to all students.''.
Subtitle C--Parental Involvement
SEC. 221. STATE PLANS.
Section 1111 (20 U.S.C. 6311) is amended--
(1) by redesignating subsections (d) through (g) as subsections (e) through (h), respectively; and
(2) by inserting after subsection (c) the following:
``(d) Parental Involvement.--Each State plan shall demonstrate that the State will support, in collaboration with the regional educational laboratories, the collection and dissemination to local educational agencies and schools of effective parental involvement practices. Such practices shall--
``(1) be based on the most current research on effective parental involvement that fosters achievement to high standards for all children; and
``(2) be geared toward lowering barriers to greater participation in school planning, review, and improvement experienced by parents.''.
SEC. 222. PARENTAL ASSISTANCE.
Part D of title I (20 U.S.C. 6421 et seq.) is amended to read as follows:
``PART D--PARENTAL ASSISTANCE AND CHILD OPPORTUNITY
``Subpart I--Parental Assistance''.
``SEC. 1401. PARENTAL INFORMATION AND RESOURCE CENTERS.
``(a) Purpose.--The purpose of this part is--
``(1) to provide leadership, technical assistance, and financial support to nonprofit organizations and local educational agencies to help the organizations and agencies implement successful and effective parental involvement policies, programs, and activities that lead to improvements in student performance;
``(2) to strengthen partnerships among parents (including parents of preschool age children), teachers, principals, administrators, and other school personnel in meeting the educational needs of children;
``(3) to develop and strengthen the relationship between parents and the school;
``(4) to further the developmental progress primarily of children assisted under this part; and
``(5) to coordinate activities funded under this part with parental involvement initiatives funded under section 1118 and other provisions of this Act.
``(b) Grants Authorized.--
``(1) In general.--The Secretary is authorized to award grants in each fiscal year to nonprofit organizations, and nonprofit organizations in consortia with local educational agencies, to establish school-linked or school-based parental information and resource centers that provide training, information, and support to--
``(A) parents of children enrolled in elementary schools and secondary schools;
``(B) individuals who work with the parents described in subparagraph (A); and
``(C) State educational agencies, local educational agencies, schools, organizations that support family-school partnerships (such as parent-teacher associations), and other organizations that carry out parent education and family involvement programs.
``(2) Award rule.--In awarding grants under this part, the Secretary shall ensure that such grants are distributed in all geographic regions of the United States.
``SEC. 1402. APPLICATIONS.
``(a) Grants Applications.--
``(1) In general.--Each nonprofit organization or nonprofit organization in consortium with a local educational agency that desires a grant under this part shall submit an application to the Secretary at such time and in such manner as the Secretary shall require.
``(2) Contents.--Each application submitted under paragraph
(1), at a minimum, shall include assurances that the organization or consortium will--
``(A)(i) be governed by a board of directors the membership of which includes parents; or
``(ii) be an organization or consortium that represents the interests of parents;
``(B) establish a special advisory committee the membership of which includes--
``(i) parents described in section 1401(b)(1)(A);
``(ii) representatives of education professionals with expertise in improving services for disadvantaged children; and
``(iii) representatives of local elementary schools and secondary schools who may include students and representatives from local youth organizations;
``(C) use at least \1/2\ of the funds provided under this part in each fiscal year to serve areas with high concentrations of low-income families in order to serve parents who are severely educationally or economically disadvantaged;
``(D) operate a center of sufficient size, scope, and quality to ensure that the center is adequate to serve the parents in the area;
``(E) serve both urban and rural areas;
``(F) design a center that meets the unique training, information, and support needs of parents described in section 1401(b)(1)(A), particularly such parents who are educationally or economically disadvantaged;
``(G) demonstrate the capacity and expertise to conduct the effective training, information and support activities for which assistance is sought;
``(H) network with--
``(i) local educational agencies and schools;
``(ii) parents of children enrolled in elementary schools and secondary schools;
``(iii) parent training and information centers assisted under section 682 of the Individuals with Disabilities Education Act;
``(iv) clearinghouses; and
``(v) other organizations and agencies;
``(I) focus on serving parents described in section 1401(b)(1)(A) who are parents of low-income, minority, and limited English proficient, children;
``(J) use part of the funds received under this part to establish, expand, or operate Parents as Teachers programs or Home Instruction for Preschool Youngsters programs;
``(K) provide assistance to parents in such areas as understanding State and local standards and measures of student and school performance; and
``(L) work with State and local educational agencies to determine parental needs and delivery of services.
``(b) Grant Renewal.--For each fiscal year after the first fiscal year an organization or consortium receives assistance under this part, the organization or consortium shall demonstrate in the application submitted for such fiscal year after the first fiscal year that a portion of the services provided by the organization or consortium is supported through non-Federal contributions, which contributions may be in cash or in kind.
``SEC. 1403. USES OF FUNDS.
``(a) In General.--Grant funds received under this part shall be used--
``(1) to assist parents in participating effectively in their children's education and to help their children meet State and local standards, such as assisting parents--
``(A) to engage in activities that will improve student performance, including understanding the accountability systems in place within their State educational agency and local educational agency and understanding their children's educational performance in comparison to State and local standards;
``(B) to provide followup support for their children's educational achievement;
``(C) to communicate effectively with teachers, principals, counselors, administrators, and other school personnel;
``(D) to become active participants in the development, implementation, and review of school-parent compacts, parent involvement policies, and school planning and improvement;
``(E) to participate in the design and provision of assistance to students who are not making adequate educational progress;
``(F) to participate in State and local decisionmaking; and
``(G) to train other parents;
``(2) to obtain information about the range of options, programs, services, and resources available at the national, State, and local levels to assist parents and school personnel who work with parents;
``(3) to help the parents learn and use the technology applied in their children's education;
``(4) to plan, implement, and fund activities for parents that coordinate the education of their children with other Federal programs that serve their children or their families; and
``(5) to provide support for State or local educational personnel if the participation of such personnel will further the activities assisted under the grant.
``(b) Permissive Activities.--Grant funds received under this part may be used to assist schools with activities such as--
``(1) developing and implementing their plans or activities under sections 1118 and 1119; and
``(2) developing and implementing school improvement plans, including addressing problems that develop in the implementation of sections 1118 and 1119.
``(3) providing information about assessment and individual results to parents in a manner and a language the family can understand;
``(4) coordinating the efforts of Federal, State, and local parent education and family involvement initiatives; and
``(5) providing training, information, and support to--
``(A) State educational agencies;
``(B) local educational agencies and schools, especially those local educational agencies and schools that are low performing; and
``(C) organizations that support family-school partnerships.
``(c) Grandfather Clause.--The Secretary shall use funds made available under this part to continue to make grant or contract payments to each entity that was awarded a multiyear grant or contract under title IV of the Goals 2000: Educate America Act (as such title was in effect on the day before the date of enactment of the Educational Excellence for All Learners Act of 2001) for the duration of the grant or contract award.
``SEC. 1403A. LOCAL FAMILY INFORMATION CENTERS.
``(a) Centers Authorized.--The Secretary shall award grants to, and enter into contracts and cooperative agreements with, local nonprofit parent organizations to enable the organizations to support local family information centers that help ensure that parents of students in schools assisted under part A have the training, information, and support the parents need to enable the parents to participate effectively in helping their children to meet challenging State standards.
``(b) Definition of Local Nonprofit Parent Organization.--In this section, the term `local nonprofit parent organization' means a private nonprofit organization (other than an institution of higher education) that--
``(1) has a demonstrated record of working with low-income individuals and parents;
``(2)(A) has a board of directors the majority of whom are parents of students in schools that are assisted under part A and located in the geographic area to be served by the center; or
``(B) has a special governing committee to direct and implement the center, a majority of the members of whom are parents of students in schools assisted under part A; and
``(3) is located in a community with schools that receive funds under part A, and is accessible to the families of students in those schools.
``(c) Required Center Activities.--Each center assisted under this section shall be exempt from the uses of funds requirements under section 1403 and shall instead--
``(1) provide training, information, and support that meets the needs of parents of children in schools assisted under part A who are served through the grant, contract, or cooperative agreement, particularly underserved parents, low-income parents, parents of students with limited English proficiency, parents of students with disabilities, and parents of students in schools identified for school improvement or corrective action under section 1116(c);
``(2) help families of students enrolled in a school assisted under part A to understand and participate in all of the provisions of this Act designed to improve the achievement of students in the school;
``(3) provide information in a language and form that parents understand, including taking steps to ensure that underserved parents, low-income parents, parents with limited English proficiency, parents of students with disabilities, or parents of students in schools identified for school improvement or corrective action, are effectively informed and assisted;
``(4) assist parents to--
``(A) understand what their child's school is doing to enable students at the school to meet the State and local standards, including understanding the curriculum and instructional methods the school is using to help the students meet the standards;
``(B) better understand their child's educational needs, where their child stands with respect to State standards, how the school is addressing the child's education needs, and how they can work with their child to increase the child's academic achievement;
``(C) participate in the decisionmaking processes at the school, school district, and State levels;
``(D) understand and benefit from the provisions of other Federal education programs; and
``(E) understand public school choice options available in the local community, including magnet schools, charter schools, and alternative schools;
``(5) be designed to meet the specific needs of families who experience significant isolation from available sources of information and support; and
``(6) report annually to the Secretary regarding measures, determined by the Secretary, that indicate the program's effectiveness in reaching underserved parents and developing meaningful parent involvement in schools assisted under part A.
``(c) Application Requirements.--Each local nonprofit parent organization desiring assistance under this section shall submit to the Secretary an application (in place of the application required under section 1402) at such time, in such manner, and accompanied by such information as the Secretary may require. Each such application shall--
``(1) describe how the organization will use the assistance to help families under this section;
``(2) describe what steps the organization has taken to meet with school district or school personnel in the geographic area to be served by the center in order to inform the personnel of the plan and application for the assistance; and
``(3) identify with specificity the special efforts that the organization will take--
``(A) to ensure that the needs for training, information, and support for parents of students in schools assisted under part A, particularly underserved parents, low-income parents, parents with limited English proficiency, parents of students with disabilities, and parents of students in schools identified for school improvement or corrective action, are effectively met; and
``(B) to work with community-based organizations.
``(d) Distribution of Funds.--
``(1) Allocation of funds.--The Secretary shall make at least 2 awards of assistance under this section to a local nonprofit parent organization in each State, unless the Secretary does not receive at least 2 applications from such organizations in a State of sufficient quality to warrant providing the assistance in the State.
``(2) Selection requirement for local family information centers.--
``(A) In general.--The Secretary shall select local nonprofit parent organizations in a State to receive assistance under this section in a manner that ensures the provision of the most effective assistance to low-income parents of students in schools assisted under part A.
``(B) Priority.--The Secretary shall give priority to--
``(i) non-profit parent organizations that are located in rural and urban areas in the State where the percentage of students from families at or below the poverty line is greater than the median, as determined by the State; and
``(ii) areas with high school dropout rates, high percentages of limited English proficient students, or schools identified for school improvement or corrective action under section 1116(c).
``SEC. 1404. TECHNICAL ASSISTANCE.
``The Secretary shall provide technical assistance, by grant or contract, for the establishment, development, and coordination of parent training, information, and support programs and parental information and resource centers.
``SEC. 1405. REPORTS.
``(a) Information.--Each organization or consortium receiving assistance under this part shall submit to the Secretary, on an annual basis, information concerning the parental information and resource centers assisted under this part, including--
``(1) the number of parents (including the number of minority and limited English proficient parents) who receive information and training;
``(2) the types and modes of training, information, and support provided under this part;
``(3) the strategies used to reach and serve parents of minority and limited English proficient children, parents with limited literacy skills, and other parents in need of the services provided under this part;
``(4) the parental involvement policies and practices used by the center and an evaluation of whether such policies and practices are effective in improving home-school communication, student achievement, student and school performance, and parental involvement in school planning, review, and improvement; and
``(5) the effectiveness of the activities that local educational agencies and schools are carrying out with regard to parental involvement and other activities assisted under this Act that lead to improved student achievement and improved student and school performance.
``(b) Dissemination.--The Secretary annually shall disseminate, widely to the public and to Congress, the information that each organization or consortium submits under subsection (a) to the Secretary.
``SEC. 1406. GENERAL PROVISIONS.
``Notwithstanding any other provision of this part--
``(1) no person, including a parent who educates a child at home, a public school parent, or a private school parent, shall be required to participate in any program of parent education or developmental screening pursuant to the provisions of this part; and
``(2) no program or center assisted under this part shall take any action that infringes in any manner on the right of a parent to direct the education of their children.''.
TITLE III--NATIONAL PRIORITIES WITH PROVEN EFFECTIVENESS
Subtitle A--Qualified Teacher in Every Classroom
SEC. 301. TEACHER QUALITY.
(a) In General.--Title II (20 U.S.C. 6601 et seq.) is amended by striking the title heading and all that follows through the end of part A and inserting the following:
``TITLE II--QUALIFIED TEACHER IN EVERY CLASSROOM
``PART A--TEACHER QUALITY
``SEC. 2001. PURPOSES.
``The purposes of this part are the following:
``(1) To improve student achievement in order to help every student meet State content and student performance standards.
``(2) To--
``(A) enable States, local educational agencies, and schools to improve the quality and success of the teaching force by providing all teachers, including beginning and veteran teachers, with the support those teachers need to succeed and stay in teaching, by providing professional development and mentoring programs for teachers, by offering incentives for additional qualified individuals to go into teaching, by reducing out-of-field placement of teachers, and by reducing the number of teachers with emergency credentials; and
``(B) hold the States, agencies, and schools accountable for such improvements.
``(3) To support State and local efforts to recruit qualified teachers to address teacher shortages, particularly in communities with the greatest need.
``(4) To ensure that underqualified and inexperienced teachers do not teach higher percentages of low-income students and minority students than other students.
``SEC. 2002. DEFINITIONS.
``In this part:
``(1) Beginning teacher.--The term `beginning teacher' means a fully qualified teacher who has taught for 3 years or less.
``(2) Core academic subjects.--The term `core academic subjects' means--
``(A) mathematics;
``(B) science;
``(C) reading (or language arts) and English;
``(D) social studies (consisting of history, civics, government, geography, and economics);
``(E) foreign languages; and
``(F) fine arts (consisting of music, dance, drama, and the visual arts).
``(3) Covered recruitment.--The term `covered recruitment' means activities described in section 2017(c).
``(4) Fully qualified.--
``(A) In general.--The term `fully qualified', used with respect to a teacher, means a teacher who--
``(i)(I) is certified or licensed and has demonstrated the academic subject knowledge, teaching knowledge, and teaching skills necessary to teach effectively in the academic subject in which the teacher teaches, according to the standards described in subparagraph (B) or (C), as appropriate; and
``(II) shall not be a teacher for whom State certification or licensing requirements have been waived or who is teaching under an emergency; or
``(ii) meets the standards of the National Board for Professional Teaching Standards.
``(B) Elementary school instructional staff.--For purposes of complying with subparagraph (A)(i), each elementary school teacher (other than a middle school teacher) in the State shall, at a minimum--
``(i) have State certification or a State license to teach
(which may include certification or licensing obtained through alternative routes); and
``(ii) hold a bachelor's degree and demonstrate the academic subject knowledge, teaching knowledge, and teaching skills required to teach effectively in reading, writing, mathematics, social studies, science, and other academic subjects.
``(C) Middle school and secondary school instructional staff.--For purposes of complying with subparagraph (A)(i), each middle school or secondary school teacher in the State shall, at a minimum--
``(i) have State certification or a State license to teach
(which may include certification or licensing obtained through alternative routes); and
``(ii) hold a bachelor's degree or higher degree and demonstrate a high level of competence in all academic subjects in which the teacher teaches through--
``(I) achievement of a high level of performance on rigorous academic subject tests;
``(II) completion of an academic major (or courses totaling an equivalent number of credit hours) in each of the academic subjects in which the teacher teaches; or
``(III) for a teacher hired prior to the date of enactment of the Educational Opportunities Act, completion of appropriate coursework for mastery of such academic subjects.
``(5) High-poverty.--The term `high-poverty', used with respect to a school, means a school that serves a high number or percentage of children from families with incomes below the poverty line, as determined by the State in which the school is located.
``(6) High-poverty local educational agency.--The term
`high-poverty local educational agency' means a local educational agency for which the number of children served by the agency who are age 5 through 17, and from families with incomes below the poverty line--
``(A) is not less than 20 percent of the number of all children served by the agency; or
``(B) is more than 10,000.
``(7) Institution of higher education.--The term
`institution of higher education'--
``(A) has the meaning given the term in section 101(a) of the Higher Education Act of 1965; and
``(B) if such an institution prepares teachers and receives Federal funds, means such an institution that--
``(i) is in full compliance with the requirements of section 207 of the Higher Education Act of 1965; and
``(ii) does not have a teacher preparation program identified by a State as low-performing.
``(8) Low-performing school.--The term `low-performing school' means--
``(A) a school identified by a local educational agency for school improvement under section 1116(c); or
``(B) a school in which the great majority of students, as determined by the State in which the school is located, fail to meet State student performance standards based on assessments the local educational agency is using under part A of title I.
``(9) Mentoring.--The term `mentoring' means activities that--
``(A) consist of structured guidance and regular and ongoing support for beginning teachers, that--
``(i) is designed to help the teachers continue to improve their practice of teaching and to develop their instructional skills; and
``(ii)(I) as part of a multiyear, developmental induction process;
``(II) involves the assistance of a mentor teacher and other appropriate individuals from a school, local educational agency, or institution of higher education; and
``(III) may include coaching, classroom observation, team teaching, and reduced teaching loads; and
``(B) may include the establishment of a partnership by a local educational agency with an institution of higher education, another local educational agency, teacher organization, or another organization, for the purpose of carrying out the activities described in subparagraph (A).
``(10) Mentor teacher.--The term `mentor teacher' means a fully qualified teacher who--
``(A) is a highly competent classroom teacher who is formally selected and trained to work effectively with beginning teachers (including corps members described in section 2018);
``(B) is full-time, and is assigned and qualified to teach in the content area or grade level in which a beginning teacher (including a corps member described in section 2018), to whom the teacher provides mentoring, intends to teach;
``(C) has been consistently effective in helping diverse groups of students make substantial achievement gains; and
``(D) has been selected to provide mentoring through a peer review process that uses, as the primary selection criterion for the process, the teacher's ability to help students achieve academic gains.
``(11) Poverty line.--The term `poverty line' means the income official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Community Services Block Grant Act
(42 U.S.C. 9902(2))) applicable to a family of the size involved.
``(12) Professional development.--The term `professional development' means activities that are--
``(A)(i) an integral part of broad schoolwide and districtwide educational improvement plans and enhance the ability of teachers and other staff to help all students, including females, students with disabilities, students with limited English proficiency, and students who have economic and educational disadvantages, meet high State and local content and student performance standards;
``(ii) sustained, intensive, school-embedded, tied to State standards, and of high quality and sufficient duration to have a positive and lasting impact on classroom instruction
(not one-time workshops); and
``(iii) based on the best available research on teaching and learning; and
``(B) described in subparagraphs (A) through (F) of section 2017(a)(1).
``(13) Recruitment activities.--The term `recruitment activities' means activities carried out through a teacher corps program as described in section 2018 to attract highly qualified individuals, including individuals taking nontraditional routes to teaching, to enter teaching and support the individuals during necessary certification and licensure activities.
``(14) Recruitment partnership.--The term `recruitment partnership' means a partnership described in section 2015(b)(2).
``SEC. 2003. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to carry out this part--
``(1) $2,000,000,000 for fiscal year 2001, of which--
``(A) $1,730,000,000 shall be made available to carry out subpart 1; and
``(B) $270,000,000 shall be made available to carry out subpart 2, of which--
``(i) $120,000,000 shall be made available to carry out chapter 1 of subpart 2;
``(ii) $25,000,000 shall be made available to carry out chapter 2 of subpart 2;
``(iii) $75,000,000 shall be made available to carry out chapter 3 of subpart 2; and
``(iv) $50,000,000 shall be made available to carry out chapter 4 of subpart 2; and
``(2) such sums as may be necessary for each of fiscal years 2002 through 2005.
``Subpart 1--Grants to States and Local Educational Agencies
``Chapter 1--Grants and Activities
``SEC. 2011. ALLOTMENTS TO STATES.
``(a) In General.--The Secretary is authorized to make grants to eligible State educational agencies for the improvement of teaching and learning through sustained and intensive high-quality professional development, mentoring, and recruitment activities (and covered recruitment, at the election of a local educational agency) at the State and local levels. Each grant shall consist of the allotment determined for the State under subsection (b).
``(b) Determination of Amount of Allotment.--
``(1) Reservation of funds.--
``(A) In general.--From the total amount made available to carry out this subpart under section 2003(1) for any fiscal year, the Secretary shall reserve--
``(i) \1/2\ of 1 percent for allotments for the outlying areas to be distributed among those outlying areas on the basis of their relative need, as determined by the Secretary, for professional development and mentoring and recruitment activities carried out in accordance with the purposes of this part; and
``(ii) \1/2\ of 1 percent for the Secretary of the Interior for programs carried out in accordance with the purposes of this part to provide professional development and mentoring and recruitment activities for teachers and other staff in schools operated or funded by the Bureau of Indian Affairs.
``(B) Limitation.--Notwithstanding subparagraph (A), the Secretary shall not reserve, for either the outlying areas under subparagraph (A)(i) or the schools operated or funded by the Bureau of Indian Affairs under subparagraph (A)(ii), more than the amount reserved for those areas or schools for fiscal year 2000 under the authority described in paragraph
(2)(A)(i).
``(2) State allotments.--
``(A) Hold harmless.--
``(i) In general.--Subject to subparagraph (B), from the total amount made available to carry out this subpart for any fiscal year and not reserved under paragraph (1), the Secretary shall allot to each of the 50 States, the District of Columbia, and the Commonwealth of Puerto Rico an amount equal to the amount that the State received for fiscal year 2000 under section 2202(b) of this Act (as in effect on the day before the date of enactment of the Educational Opportunities Act).
``(ii) Ratable reduction.--If the total amount made available to carry out this subpart for any fiscal year and not reserved under paragraph (1) is insufficient to pay the full amounts that all States are eligible to receive under clause (i) for any fiscal year, the Secretary shall ratably reduce such amounts for such fiscal year.
``(B) Allotment of additional funds.--
``(i) In general.--Subject to clause (ii), for any fiscal year for which the total amount made available to carry out this subpart and not reserved under paragraph (1) exceeds the total amount made available to the 50 States, the District of Columbia, and the Commonwealth of Puerto Rico for fiscal year 2000 under the authority described in subparagraph (A)(i), the Secretary shall allot to each of those States the sum of--
``(I) an amount that bears the same relationship to 40 percent of the excess amount as the number of individuals age 5 through 17 in the State, as determined by the Secretary on the basis of the most recent satisfactory data, bears to the number of those individuals in all such States, as so determined; and
``(II) an amount that bears the same relationship to 60 percent of the excess amount as the number of individuals age 5 through 17 from families with incomes below the poverty line in the State, as determined by the Secretary on the basis of the most recent satisfactory data, bears to the number of those individuals in all such States, as so determined.
``(ii) Exception.--No State receiving an allotment under clause (i) may receive less than \1/2\ of 1 percent of the total excess amount allotted under clause (i) for a fiscal year.
``(3) Reallotment.--If any State described in paragraph (2) does not apply for an allotment under paragraph (2) for any fiscal year, the Secretary shall reallot such amount to the remaining such States in accordance with paragraph (2).
``SEC. 2012. STATE APPLICATIONS.
``(a) Applications Required.--
``(1) In general.--Each State desiring to receive a grant under this subpart shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may reasonably require.
``(2) Development.--The State educational agency shall develop the State application--
``(A) in consultation with the State agency for higher education, community-based and other nonprofit organizations, and institutions of higher education; and
``(B) with the extensive participation of teachers, teacher educators, school administrators, and content specialists.
``(b) Contents.--Each such application shall include--
``(1) a description of the State's shortages of fully qualified teachers relating to high-poverty school districts and high-need academic subjects (as such districts or subjects are determined by the State);
``(2) an assessment of the need for professional development for veteran teachers in the State and the need for strong mentoring programs for beginning teachers that is--
``(A) developed with the involvement of teachers; and
``(B) based on student achievement data in the core academic subjects and other indicators of the need for professional development and mentoring programs;
``(3) a description of how the State educational agency will use funds made available under this part to improve the quality of the State's teaching force, eliminate the use of out-of-field placement of teachers, and eliminate the use of teachers hired with emergency or other provisional credentials by setting numerical, annual improvement goals, and meet the requirements of this section;
``(4) a description of how the State educational agency will align activities assisted under this subpart with State content and student performance standards, and State assessments by setting numerical, annual improvement goals;
``(5) a description of how the State educational agency will coordinate activities funded under this subpart with professional development and mentoring and recruitment activities that are supported with funds from other relevant Federal and non-Federal programs;
``(6) a plan, developed with the extensive participation of teachers, for addressing long-term teacher recruitment, retention, and professional development and mentoring needs, which may include--
``(A) providing technical assistance to help school districts reform hiring and employment practices to improve the recruitment and retention of fully qualified teachers, especially with respect to high-poverty schools; or
``(B) establishing State or regional partnerships to address teacher shortages;
``(7) a description of how the State educational agency will assist local educational agencies in implementing effective and sustained professional development and mentoring activities and high-quality recruitment activities under this part;
``(8) an assurance that the State will consistently monitor the progress of each local educational agency and school in the State in achieving the goals specified in the information submitted under paragraphs (1) through (7);
``(9) a description of how the State educational agency will work with recipients of grants awarded for recruitment activities under section 2015(b) to ensure that recruits who successfully complete a teacher corps program will be certified or licensed; and
``(10) the assurances and description referred to in section 2021.
``(c) Approval.--The Secretary shall, using a peer-review process, approve a State application if the application meets the requirements of this section and holds reasonable promise of achieving the purposes of this part.
``SEC. 2013. STATE USE OF FUNDS.
``(a) In General.--Of the funds allotted to a State under section 2011 for a fiscal year--
``(1) not more than 6 percent shall be used by the State educational agency to carry out State activities described in section 2014, or for the administration of this subpart
(other than the administration of section 2019 but including the administration of State activities under chapter 2), except that not more than 3 percent of the allotted funds may be used for the administration of this subpart;
``(2) 60 percent shall be used by the State educational agency to provide grants to local educational agencies under section 2015(a) for professional development and mentoring
(except as provided in section 2017(c));
``(3) 30 percent shall be used by the State educational agency--
``(A) except as provided in subparagraph (B), to provide grants to recruitment partnerships under section 2015(b) for recruitment activities; or
``(B) if the State educational agency determines that all elementary school and secondary school teachers in the State that are teaching core academic subjects are fully qualified, to provide the grants described in paragraph (2); and
``(4) 4 percent (or 4 percent of the amount the State would have been allotted if the appropriation for this subpart were
$1,730,000,000, whichever is greater) shall be used by the State agency for higher education to provide grants to partnerships under section 2019.
``(b) Priority for Professional Development and Mentoring in Mathematics and Science.--
``(1) Priority.--
``(A) Appropriations of not more than $300,000,000.--Except as provided in section 2017(c), for any fiscal year for which the appropriation for this subpart is $300,000,000 or less, each State educational agency that receives funds under this subpart, working jointly with the State agency for higher education, shall ensure that all funds received under this subpart are used for--
``(i) professional development and mentoring in mathematics and science that is aligned with State content and student performance standards; and
``(ii) recruitment activities to attract fully qualified math and science teachers to high-poverty schools.
``(B) Appropriation of more than $300,000,000.--Except as provided in section 2017(c), for any fiscal year for which the appropriation for this subpart is greater than
$300,000,000, the State educational agency and the State agency for higher education shall jointly ensure that the total amount of funds that the agencies receive under this subpart and that the agencies use for activities described in subparagraph (A) is at least as great as the allotment the State would have received if that appropriation had been $300,000,000.
``(2) Interdisciplinary activities.--A State may use funds received under this subpart for activities that focus on more than 1 core academic subject, and apply the funds toward meeting the requirements of paragraph (1), if the activities include a strong focus on improving instruction in mathematics or science.
``(3) Additional funds.--Except as provided in section 2017(c), each State educational agency that receives funds under this subpart and the State agency for higher education shall jointly ensure that any portion of the funds that exceeds the amount required by paragraph (1) to be spent on activities described in paragraph (1)(A) is used to provide--
``(A) professional development and mentoring in 1 or more of the core academic subjects that is aligned with State content and student performance standards; and
``(B) recruitment activities involving teachers of 1 or more of the core academic subjects.
``SEC. 2014. STATE LEVEL ACTIVITIES.
``(a) Activities.--Each State educational agency that receives a grant described in section 2011 shall use the funds made available under section 2013(a)(1) to carry out statewide strategies and activities to improve teacher quality, including--
``(1) establishing, expanding, or improving alternative routes to State certification or licensing of teachers, for highly qualified individuals with a baccalaureate degree, mid-career professionals from other occupations, or paraprofessionals, that are at least as rigorous as the State's standards for initial certification or licensing of teachers;
``(2) developing or improving evaluation systems to evaluate the effectiveness of professional development and mentoring and recruitment activities in improving teacher quality, skills, and content knowledge, and the impact of the professional development and mentoring and recruitment activities on increasing student academic achievement and student performance with performance measures drawn from assessments that objectively measure student achievement against State performance standards;
``(3) funding projects to promote reciprocity of teacher certification or licensure between or among States;
``(4) providing assistance to local educational agencies to reduce out-of-field placements and the use of emergency credentials;
``(5) supporting certification by the National Board for Professional Teaching Standards of teachers who are teaching or will teach in high-poverty schools;
``(6) providing assistance to local educational agencies in implementing effective programs of recruitment activities, and professional development and mentoring, including supporting efforts to encourage and train teachers to become mentor teachers;
``(7) increasing the rigor and quality of State certification and licensure tests for individuals entering the field of teaching, including subject matter tests for elementary, middle and secondary school teachers; and
``(8) implementing teacher recognition programs.
``(b) Coordination.--A State that receives a grant to carry out this subpart and a grant under section 202 of the Higher Education Act of 1965 shall coordinate the activities carried out under this section and the activities carried out under that section 202.
``SEC. 2015. GRANTS TO LOCAL EDUCATIONAL AGENCIES.
``(a) Grants for Professional Development and Mentoring Activities.--
``(1) In general.--The State educational agency of a State that receives a grant described in section 2011 shall use the funds made available under section 2013(a)(2) (and any funds made available under section 2013(a)(3)(B)) to make grants to eligible local educational agencies, from allocations made under paragraph (2), to carry out the activities described in section 2017(a) (except as provided in section 2017(c)).
``(2) Allocations.--The State educational agency shall allocate to each eligible local educational agency the sum of--
``(A) an amount that bears the same relationship to 20 percent of the funds described in paragraph (1) as the number of individuals enrolled in public and private nonprofit elementary schools and secondary schools in the geographic area served by the agency bears to the number of those individuals in the geographic areas served by all the local educational agencies in the State; and
``(B) an amount that bears the same relationship to 80 percent of the funds as the number of individuals age 5 through 17 from families with incomes below the poverty line, in the geographic area served by the agency, as determined by the Secretary on the basis of the most recent satisfactory data, bears to the number of those individuals in the geographic areas served by all the local educational agencies in the State, as so determined.
``(3) Eligibility.--To be eligible to receive a grant from a State educational agency under this subsection, a local educational agency shall serve schools that include--
``(A) high-poverty schools;
``(B) schools that need support for improving teacher quality based on low achievement of students served;
``(C) schools that have low teacher retention rates;
``(D) schools that need to improve or expand the knowledge and skills of new and veteran teachers in high-priority content areas;
``(E) schools that have high out-of-field placement rates; or
``(F) high-poverty schools that have been identified for improvement in accordance with section 1116.
``(4) Equitable geographic distribution.--A State educational agency shall ensure an equitable distribution of grants under this subsection among eligible local educational agencies serving urban and rural areas.
``(b) Grants for Recruitment Activities.--
``(1) In general.--The State educational agency of a State that receives a grant under section 2011 shall use the funds made available under section 2013(a)(3)(A) to make grants to eligible recruitment partnerships, on a competitive basis, to carry out the recruitment activities and meet requirements described in section 2017(b).
``(2) Eligibility.--
``(A) In general.--To be eligible to receive a grant from a State educational agency under this subsection, a recruitment partnership--
``(i) shall include an eligible local educational agency, or a consortium of eligible local educational agencies;
``(ii) shall include an institution of higher education, a tribal college, or a community college; and
``(iii) may include other members, such as a nonprofit organization or professional education organization.
``(B) Eligible local educational agency.--In subparagraph
(A), the term `eligible local educational agency' means a local educational agency that receives assistance under part A of title I, and meets any additional eligibility criteria that the appropriate State educational agency may establish.
``(3) Equitable geographic distribution.--A State educational agency shall ensure an equitable distribution of grants under this subsection among eligible recruitment partnerships serving urban and rural areas.
``SEC. 2016. LOCAL APPLICATIONS.
``(a) In General.--A local educational agency or a recruitment partnership seeking to receive a grant from a State under section 2015 to carry out activities described in section 2017 shall submit an application to the State at such time, in such manner, and containing such information as the State may reasonably require.
``(b) Contents Relating to Professional Development and Mentoring Activities.--If the local educational agency seeks a grant under section 2015(a) to carry out activities described in section 2017(a), the local application described in subsection (a) shall include, at a minimum, the following:
``(1) A description of how the local educational agency intends to use the funds provided through the grant to carry out activities that meet requirements described in section 2017(a).
``(2) An assurance that the local educational agency will target the funds to high-poverty, low-performing schools served by the local educational agency that--
``(A) have the lowest proportions of qualified teachers;
``(B) are identified for school improvement and corrective action under section 1116; or
``(C) are identified for school improvement in accordance with other measures of school quality as determined and documented by the local educational agency.
``(3) A description of how the local educational agency will coordinate professional development and mentoring activities described in section 2017(a) with professional development and mentoring activities provided through other Federal, State, and local programs, including programs authorized under--
``(A) titles I, IV, and V, and part A of title VII; and
``(B) where applicable, the Individuals with Disabilities Education Act, the Carl D. Perkins Vocational and Technical Education Act of 1998, and title II of the Higher Education Act of 1965.
``(4) A description of how the local educational agency will integrate funds received to carry out activities described in section 2017(a) with funds received under title V that are used for professional development and mentoring in order to carry out professional development and mentoring activities that--
``(A) train teachers, paraprofessionals, counselors, pupil services personnel, administrators, and other school staff, including school library media specialists, in how to use technology to improve learning and teaching; and
``(B) take into special consideration the different learning needs for, and exposures to, technology for all students, including females, students with disabilities, students with limited English proficiency, and students who have economic and educational disadvantages.
``(5) A description of how the local application was developed with extensive participation of teachers, paraprofessionals, principals, and parents.
``(6) A description of how the professional development and mentoring activities described in section 2017(a) will address the ongoing professional development and mentoring of teachers, paraprofessionals, counselors, pupil services personnel, administrators, and other school staff, including school library media specialists.
``(7) A description of how the professional development and mentoring activities described in section 2017(a) will have a substantial, measurable, and positive impact on student achievement and how the activities will be used as part of a broader strategy to eliminate the achievement gap that separates low-income and minority student from other students.
``(8) A description of how the local educational agency will address the needs of teachers of students with disabilities, students with limited English proficiency, and other students with special needs.
``(9) A description of how the local educational agency will provide training to teachers to enable the teachers to work with parents, involve parents in their child's education, and encourage parents to become collaborators with schools in promoting their child's education.
``(10) The assurances and description referred to in section 2023, with respect to professional development and mentoring activities.
``(c) Development and Contents Relating to Recruitment Activities.--If an eligible local educational agency (as defined in section 2015(b)) seeks a grant under section 2015(b) to carry out activities described in section 2017(b)--
``(1) the eligible local educational agency shall enter into a recruitment partnership, which shall jointly prepare and submit the local application described in subsection (a); and
``(2) at a minimum, the application shall include--
``(A) a description of how the recruitment partnership will meet the teacher corps program requirements described in section 2018;
``(B) a description of the individual and collective responsibilities of members of the recruitment partnership in meeting the requirements and goals of a teacher corps program described in section 2018;
``(C) information demonstrating that the State agency responsible for teacher licensure or certification in the State in which a recruitment partnership is established will--
``(i) ensure that a corps member who successfully completes a teacher corps program will have the academic requirements necessary for initial certification or licensure as a teacher in the State; and
``(ii) work with the recruitment partnership to ensure the partnership uses high-quality methods and establishes high-quality requirements concerning alternative routes to certification or licensing, in order to meet State requirements for certification or licensure; and
``(D) the assurances and description referred to in section 2023, with respect to recruitment activities.
``(d) Contents Relating to Covered Recruitment.--If the local educational agency seeks a grant under section 2015(a) to carry out activities described in section 2017(c), the local application described in subsection (a) shall include, at a minimum, a description of the activities and the manner in which the activities will contribute to accomplishing the objectives of section 2023, and how the activities are in compliance with the requirements of this Act.
``(e) Approval.--A State educational agency shall approve a local educational agency's or recruitment partnership's application under this section only if the State educational agency determines that the application is of high quality and holds reasonable promise of achieving the purposes of this part.
``SEC. 2017. LOCAL ACTIVITIES.
``(a) Professional Development and Mentoring Activities.--Except as provided in subsection (c), each local educational agency receiving a grant under section 2015(a) shall use the funds made available through the grant to carry out activities (and only activities) that--
``(1) are professional development activities (as defined in section 2002(12)(A)) that--
``(A) improve teacher knowledge of--
``(i) 1 or more of the core academic subjects;
``(ii) effective instructional strategies, methods, and skills for improving student achievement in core academic subjects, including strategies for identifying and eliminating gender and racial bias;
``(iii) the use of data and assessments to inform teachers about and thereby help teachers to improve classroom practice; and
``(iv) innovative instructional methodologies designed to meet the diverse learning needs of individual students, including methodologies that integrate academic and technical skills and applied learning (such as service learning), methodologies for interactive and interdisciplinary team teaching, and other alternative teaching strategies, such as strategies for experiential learning, career-related education, and environmental education, that integrate real world applications into the core academic subjects;
``(B) provide teachers and paraprofessionals (and other staff as appropriate) with information on recent research findings on how children learn to read and with staff development on research-based instructional strategies for the teaching of reading;
``(C) replicate effective instructional practices that involve collaborative groups of teachers and administrators from the same school or district, using strategies such as--
``(i) provision of dedicated time for collaborative lesson planning and curriculum development meetings;
``(ii) provision of collaborative professional development experiences for veteran teachers based on the standards in the core academic subjects of the National Board for Professional Teaching Standards;
``(iii) consultation with exemplary teachers;
``(iv) provision of short-term and long-term visits to classrooms and schools;
``(v) participation of teams of teachers in summer institutes and summer immersion activities that are focused on preparing teachers to enable all students to meet high standards in 1 or more of the core academic subjects; and
``(vi) establishment and maintenance of local professional networks that provide a forum for interaction among teachers and administrators and that allow for the exchange of information on advances in content knowledge and teaching skills;
``(D) provide for the participation of paraprofessionals, pupil services personnel, and other school staff;
``(E) include strategies for fostering meaningful parental involvement and relations with parents to encourage parents to become collaborators in their children's education, for improving classroom management and discipline, and for integrating technology into a curriculum;
``(F) as a whole, are regularly evaluated for their impact on increased teacher effectiveness and improved student achievement, with the findings of the evaluations used to improve the quality of activities described in this paragraph;
``(G) include, to the extent practicable, the establishment of a partnership with an institution of higher education, another local educational agency, a teacher organization, or another organization, for the purpose of carrying out activities described in this paragraph; and
``(H) include ongoing and school-based support for activities described in this paragraph, such as support for peer review, coaching, or study groups, and the provision of release time as needed for the activities;
``(2) are mentoring activities; and
``(3) include local activities carried out under chapter 2.
``(b) Recruitment Activities.--Each recruitment partnership receiving a grant under section 2015(b) shall use the funds made available through the grant to carry out recruitment activities (and only recruitment activities) described in section 2018.
``(c) Covered Recruitment.--A local educational agency receiving a grant under section 2015(a) for a fiscal year may elect to use a portion of the funds made available through the grant, but not more than the agency's share of 10 percent of the funds allotted to the State involved under section 2011 for the fiscal year, to carry out recruitment (including recruitment through the use of signing bonuses and other financial incentives) and hiring of fully qualified teachers.
``SEC. 2018. RECRUITMENT ACTIVITIES THROUGH A TEACHER CORPS
PROGRAM.
``(a) Teacher Corps Program Requirements.--
``(1) Recruitment.--A recruitment partnership that receives a grant under section 2015(b) shall broadly recruit and screen for a teacher corps a highly qualified pool of candidates who demonstrate the potential to become effective teachers. Each candidate shall meet--
``(A) standards to ensure that--
``(i) each corps member possesses appropriate, high-level credentials and presents the likelihood of becoming an effective teacher; and
``(ii) each group of corps members includes people who have expertise in academic subjects and otherwise meet the specific needs of the district to be served; and
``(B) any additional standard that the recruitment partnership establishes to enhance the quality and diversity of candidates and to meet the academic and grade level needs of the partnership.
``(2) Required curriculum and placement.--Members of the recruitment partnership shall work together to plan and develop a program that includes--
``(A) a rigorous curriculum that includes a preservice training program (incorporating innovative approaches to preservice training, such as distance learning), for a period not to exceed 1 year, that provides corps members with the skills and knowledge necessary to become effective teachers, by--
``(i) requiring completed course work in basic areas of teaching, such as principles of learning and child development, effective teaching strategies, assessments, and classroom management, and in the pedagogy related to the academic subjects in which a corps member intends to teach;
``(ii) providing extensive preparation in the pedagogy of reading to corps members, including preparation components that focus on--
``(I) understanding the psychology of reading, and human growth and development;
``(II) understanding the structure of the English language; and
``(III) learning and applying the best teaching methods to all aspects of reading instruction;
``(iii) providing training in the use of technology as a tool to enhance a corps member's effectiveness as a teacher and improve the achievement of the corps member's students; and
``(iv) focusing on the teaching skills and knowledge that corps members need to enable all students to meet the State's highest challenging content and student performance standards;
``(B) placement of a corps member with the local educational agency participating in the recruitment partnership, in a teaching internship that--
``(i) includes intensive mentoring;
``(ii) provides a reduced teaching load; and
``(iii) provides regular opportunities for the corps member to co-teach with a mentor teacher, observe other teachers, and be observed and coached by other teachers;
``(C) individualized inservice training over the course of the corps member's first 2 years of full-time teaching that provides--
``(i) high-quality professional development, coordinated jointly by members of the recruitment partnership, and the course work necessary to provide additional or supplementary knowledge to meet the specific needs of the corps member; and
``(ii) ongoing mentoring by a teacher who meets the criteria for a mentor teacher described in paragraph (4)(B), including the requirements of section 2002(10); and
``(D) collaboration between the recruitment partnership, and local community student and parent groups, to assist corps members in enhancing their understanding of the community in which the members are placed.
``(3) Evaluation.--A recruitment partnership shall evaluate a corps member's progress in course study and classroom practice at regular intervals. Each recruitment partnership shall have a formal process to identify corps members who seem unlikely to become effective teachers and terminate their participation in the program.
``(4) Mentor teachers.--
``(A) In general.--A recruitment partnership shall develop a plan for the program, which shall include strategies for identifying, recruiting, training, and providing ongoing support to individuals who will serve as mentor teachers to corps members.
``(B) Mentor teacher requirements.--The plan described in subparagraph (A) shall specify the criteria that the recruitment partnership will use to identify and select mentor teachers and, at a minimum, shall--
``(i) require a mentor teacher to meet the requirements of section 2002(10); and
``(ii) require that consideration be given to teachers with national board certification.
``(C) Compensation.--The plan shall specify the compensation--
``(i) for mentor teachers, including monetary compensation, release time, or a reduced work load to ensure that mentor teachers can provide ongoing support for corps members; and
``(ii) for corps members, including salary levels and the stipends, if any, that will be provided during a corps member's preservice training.
``(5) Assurances.--The plan shall include assurances that--
``(A) a corps member will be assigned to teach only academic subjects and grade levels for which the member is fully qualified;
``(B) corps members, to the extent practicable, will be placed in schools with teams of corps members; and
``(C) every mentor teacher will be provided sufficient time to meet the needs of the corps members assigned to the mentor teacher.
``(b) Corps Member Qualifications.--
``(1) Candidates intending to teach in elementary schools.--At a minimum, to be accepted by a teacher corps program, a candidate who intends to teach at the elementary school level shall--
``(A) have a bachelor's degree;
``(B) possess an outstanding commitment to working with children and youth;
``(C) possess a strong professional or postsecondary record of achievement; and
``(D) pass all basic skills and subject matter tests required by the State for teacher certification or licensure.
``(2) Candidates intending to teach in secondary schools.--At a minimum, to be accepted by a teacher corps program, a candidate who intends to teach at the secondary school level shall--
``(A) meet the requirements described in paragraph (1); and
``(B)(i) possess at least an academic major or postsecondary degree in each academic subject in which the candidate intends to teach; or
``(ii) if the candidate did not major or earn a postsecondary degree in an academic subject in which the candidate intends to teach, have completed a rigorous course of instruction in that subject that is equivalent to having majored in the subject.
``(3) Special rule.--Notwithstanding paragraph (2)(B), the recruitment partnership may consider the candidate to be an eligible corps member and accept the candidate for a teacher corps program if the candidate has worked successfully and directly in a field and in a position that provided the candidate with direct and substantive knowledge in the academic subject in which the candidate intends to teach.
``(c) Three-Year Commitment to Teaching in Eligible Districts.--
``(1) In general.--In return for acceptance to a teacher corps program, a corps member shall commit to 3 years of full-time teaching in a school or district served by a local educational agency participating in a recruitment partnership receiving funds under this subpart.
``(2) Reimbursement.--
``(A) In general.--If a corps member leaves the school district to which the corps member has been assigned prior to the end of the 3-year period described in paragraph (1), the corps member shall be required to reimburse the Secretary for the amount of the Federal share of the cost of the corps member's participation in the teacher corps program.
``(B) Partnership claims.--A recruitment partnership that provides a teacher corps program to a corps member who leaves the school district, as discussed in subparagraph (A), may submit a claim to the corps member requiring the corps member to reimburse the recruitment partnership for the amount of the partnership's share of the cost described in subparagraph
(A).
``(C) Reduction.--Reimbursements required under this paragraph may be reduced proportionally based on the amount of time a corps member remained in the teacher corps program beyond the corps member's initial 2 years of service.
``(D) Waiver.--The Secretary may waive reimbursements required under subparagraph (A) in the case of severe hardship to a corps member who leaves the school district, as described in subparagraph (A).
``(d) Federal Share; Non-Federal Share.--
``(1) Payment of federal share.--The Secretary shall pay to each recruitment partnership carrying out a teacher corps program under this section the Federal share of the cost of the activities described in the partnership's application under section 2016(c).
``(2) Non-federal share.--A recruitment partnership's share of the cost of the activities described in the partnership's application under section 2016(c)--
``(A) may be provided in cash or in kind, fairly evaluated, including plant, equipment, or services; and
``(B)(i) for the first year for which the partnership receives assistance under this subpart, shall be not less than 10 percent;
``(ii) for the second such year, shall be not less than 20 percent;
``(iii) for the third year such year, shall be not less than 30 percent;
``(iv) for the fourth such year, shall be not less than 40 percent; and
``(v) for the fifth such year, shall be not less than 50 percent.
``SEC. 2019. GRANTS TO PARTNERSHIPS OF INSTITUTIONS OF HIGHER
EDUCATION AND LOCAL EDUCATIONAL AGENCIES.
``(a) Administration.--A State agency for higher education may use, from the funds made available to the agency under section 2013(a)(4) for any fiscal year, not more than 3\1/3\ percent for the expenses of the agency in administering this section, including conducting evaluations of activities on the performance measures described in section 2014(a)(2).
``(b) Grants to Partnerships.--
``(1) In general.--The State agency for higher education shall use the remainder of the funds, in cooperation with the State educational agency, to make grants to (including entering into contracts or cooperative agreements with) partnerships of--
``(A) institutions of higher education that are in full compliance with all reporting requirements of title II of the Higher Education Act of 1965 or nonprofit organizations of demonstrated effectiveness in providing professional development and mentoring in the core academic subjects; and
``(B) eligible local educational agencies (as defined in section 2015(b)(2)),to carry out activities (and only activities) described in subsection (e).
``(2) Size; duration.--Each grant made under this section shall be--
``(A) in a sufficient amount to carry out the objectives of this section effectively; and
``(B) for a period of 3 years, which the State agency for higher education may extend for an additional 2 years if the agency determines that the partnership is making substantial progress toward meeting the specific goals set out in the written agreement required in subsection (c) and on the performance measures described in section 2014(a)(2).
``(3) Applications.--To be eligible to receive a grant under this section, a partnership shall submit an application to the State agency for higher education at such time, in such manner, and containing such information as the agency may reasonably require.
``(4) Award process and basis.--The State agency for higher education shall make the grants on a competitive basis, using a peer review process.
``(5) Priority.--In making the grants, the State agency for higher education shall give priority to partnerships submitting applications for projects that focus on mentoring programs for beginning teachers.
``(6) Considerations.--In making such a grant for a partnership, the State agency for higher education shall consider--
``(A) the need of the local educational agency involved for the professional development and mentoring activities proposed in the application;
``(B) the quality of the program proposed in the application and the likelihood of success of the program in improving classroom instruction and student academic achievement; and
``(C) such other criteria as the agency finds to be appropriate.
``(c) Agreements.--
``(1) In general.--No partnership may receive a grant under this section unless the institution of higher education or nonprofit organization involved enters into a written agreement with at least 1 eligible local educational agency
(as defined in section 2015(b)(2)) to provide professional development and mentoring for elementary and secondary school teachers in the schools served by that agency in the core academic subjects.
``(2) Goals.--Each such agreement shall identify specific measurable annual goals concerning how the professional development and mentoring that the partnership provides will enhance the ability of the teachers to prepare all students to meet challenging State and local content and student performance standards.
``(d) Joint Efforts Within Institutions of Higher Education.--Each professional development and mentoring activity assisted under this section by a partnership containing an institution of higher education shall involve the joint effort of the institution of higher education's school or department of education and the schools or departments of the institution in the specific disciplines in which the professional development and mentoring will be provided.
``(e) Uses of Funds.--A partnership that receives funds under this section shall use the funds for activities (and only for activities) that consist of--
``(1) professional development and mentoring in the core academic subjects, aligned with State or local content standards, for teams of teachers from a school or school district and, where appropriate, administrators and paraprofessionals;
``(2) research-based professional development and mentoring programs to assist beginning teachers, which may include--
``(A) mentoring and coaching by trained mentor teachers that lasts at least 2 years;
``(B) team teaching with veteran teachers who have a consistent record of helping their students make substantial academic gains;
``(C) provision of time for observation of, and consultation with, veteran teachers;
``(D) provision of reduced teaching loads; and
``(E) provision of additional time for preparation;
``(3) the provision of technical assistance to school and agency staff for planning, implementing, and evaluating professional development and mentoring;
``(4) the provision of training for teachers to help the teachers develop the skills necessary to work most effectively with parents; and
``(5) in appropriate cases, the provision of training to address areas of teacher and administrator shortages.
``(f) Coordination.--Any partnership that carries out professional development and mentoring activities under this section shall coordinate the activities with activities carried out under title II of the Higher Education Act of 1965, if a local educational agency or institution of higher education in the partnership is participating in programs funded under that title.
``(g) Annual Reports.--
``(1) In general.--Beginning with fiscal year 2002, each partnership that receives a grant under this section shall prepare and submit to the appropriate State agency for higher education, by a date set by that agency, an annual report on the progress of the partnership on the performance measures described in section 2014(a)(2).
``(2) Contents.--Each such report shall--
``(A) include a copy of each written agreement required by subsection (c) that is entered into by the partnership; and
``(B) describe how the members of the partnership have collaborated to achieve the specific goals set out in the agreement, and the results of that collaboration.
``(3) Copy.--The State agency for higher education shall provide the State educational agency with a copy of each such report.
``Chapter 2--Accountability
``SEC. 2021. STATE APPLICATION ACCOUNTABILITY PROVISIONS.
``(a) Assurances.--Each State application submitted under section 2012 shall contain assurances that--
``(1) beginning on the date of enactment of the Educational Opportunities Act, no school in the State that is served under this subpart will use funds received under this subpart to hire a teacher who is not a fully qualified teacher; and
``(2) not later than 4 years after the date of enactment of the Educational Opportunities Act, each teacher in the State who provides services to students served under this subpart shall be a fully qualified teacher.
``(b) Withholding.--If a State fails to meet the requirements described in subsection (a)(2) for a fiscal year in which the requirements apply--
``(1) the Secretary shall withhold, for the following fiscal year, a portion of the funds that would otherwise be available to the State under section 2013(a)(1) for the administration of this subpart; and
``(2) the State shall be subject to such other penalties as are provided by law for a violation of this Act.
``(c) Assistance by State Educational Agency.--Each State application submitted under section 2012 shall describe how the State educational agency will help each local educational agency and school in the State develop the capacity to comply with the requirements of this section.
``SEC. 2022. STATE REPORTS.
``(a) Report to Secretary.--
``(1) In General.--Each State that receives funds under this subpart shall annually prepare and submit to the Secretary a report containing--
``(A) information on the activities of the State under this subpart, including statewide information, and information on the activities of each grant recipient in the State;
``(B) information on the effectiveness of the activities, and the progress of recipients of grants under this subpart, on performance measures, including measures described in section 2014(a)(2) and goals described in paragraphs (3) and
(4) of section 2012(b); and
``(C) such other information as the Secretary may reasonably require.
``(2) Deadlines.--The State shall submit the reports described in paragraph (1) by such deadlines as the Secretary may establish.
``(b) Public Accountability.--
``(1) In general.--Each State that receives funds under this subpart--
``(A) in the event the State provides public State report cards on education, shall include in such report cards--
``(i) the percentage of middle school and other secondary school classes in core academic subjects that are taught by out-of-field teachers;
``(ii) the percentage of middle school, other elementary school, and other secondary school classes taught by individuals holding only emergency credentials, or for whom any State certification or licensing standards for teachers have been waived;
``(iii) the average statewide class size; or
``(B) in the event the State provides no such report card, shall disseminate to the public the information described in clauses (i) through (iii) of subparagraph (A) through other means.
``(2) Public availability.--Such information shall be made widely available to the public, including parents and students, throughout the State.
``(c) General Accounting Office.--Not later than September 30, 2004, the Comptroller General of the United States shall--
``(1) conduct a study of the progress of the States in increasing the percentage of teachers who are fully qualified teachers for fiscal years 2001 through 2003; and
``(2) prepare and submit to the Committee on Education and Workforce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate a report containing the results of the study.
``SEC. 2023. LOCAL APPLICATION ACCOUNTABILITY PROVISIONS.
``Each local application submitted under section 2016 shall contain assurances that--
``(1) the agency will not hire a teacher with funds made available to the agency under this subpart, unless the teacher is a fully qualified teacher;
``(2) the local educational agency and schools served by the agency will work to ensure, through voluntary agreements and incentive programs, that elementary school and secondary school teachers in high-poverty schools served by the local educational agency will be at least as well qualified, in terms of experience and credentials, as the instructional staff in schools served by the same local educational agency that are not high-poverty schools;
``(3) any teacher who receives certification from the National Board for Professional Teaching Standards will be considered fully qualified to teach, in the academic subjects in which the teacher is certified, in high-poverty schools in any school district or community served by the local educational agency; and
``(4) the agency will--
``(A) make available, on request and in an understandable and uniform format, to any parent of a student attending any school served by the local educational agency, information regarding the professional qualifications of the student's classroom teachers with regard to--
``(i) whether the teacher has met State certification or licensing criteria for the academic subjects and grade level in which the teacher teaches the student;
``(ii) whether the teacher is teaching with emergency or whether any State certification or licensing standard has been waived for the teacher; and
``(iii) the academic qualifications of the teacher in the academic subjects and grade levels in which the teacher teaches; and
``(B) inform parents that the parents are entitled to receive the information upon request.
``SEC. 2024. LOCAL CONTINUATION OF FUNDING.
``(a) Agencies.--If a local educational agency applies for funds under this subpart for a 4th or subsequent fiscal year
(including applying for funds as part of a partnership), the agency may receive the funds for that fiscal year only if the State determines that the agency has demonstrated that the agency, in carrying out activities under this subpart during the past fiscal year, has met annual numerical performance objectives for--
``(1) improved student performance for all groups described in section 1111(b)(2);
``(2) increased participation in sustained professional development and mentoring programs;
``(3) reduced the beginning teacher attrition rate for the agency; and
``(4) reduced the number of teachers who are not certified or licensed, and the number who are out-of-field teachers, for the agency.
``(b) Schools.--If a local educational agency applies for funds under this subpart on behalf of a school for a 4th or subsequent fiscal year (including applying for funds as part of a partnership), the agency may receive the funds for the school for that fiscal year only if the State determines that the school has demonstrated that the school, in carrying out activities under this subpart during the past fiscal year, has met the requirements of paragraphs (1) through (4) of subsection (a).
``(c) Recruitment Partnerships.--
``(1) In general.--If not more than 90 percent of the graduates of a teacher corps program assisted under this subpart for a fiscal year pass applicable State or local initial teacher licensing or certification examinations, the recruitment partnership providing the teacher corps program shall be ineligible to receive grant funds for the succeeding fiscal year.
``(2) Waiver.--The State in which the partnership is located may waive the requirement described in paragraph (1) for a recruitment partnership serving a school district that has special circumstances, such as a district with a small number of corps members.
``SEC. 2025. LOCAL REPORTS.
``(a) In General.--Each local educational agency that receives funds under this subpart (including funds received through a partnership) shall prepare, make publicly available, and submit to the State educational agency, every year, beginning in fiscal year 2002, a report on the activities of the agency under this subpart, in such form and containing such information as the State educational agency may reasonably require.
``(b) Contents.--The report shall contain, at a minimum--
``(1) information on progress throughout the schools served by the local educational agency on the performance measures described in section 2014(a)(2) and goals described in paragraphs (3) and (4) of section 2012(b);
``(2) information on progress throughout the schools served by the local educational agency toward achieving the objectives of, and carrying out the activities described in, this subpart;
``(3) data on the progress described in paragraphs (1) and
(2), disaggregated by school poverty level, as defined by the State; and
``(4) a description of the methodology used to gather the information and data described in paragraphs (1) through (3).
``Subpart 2--National Activities for the Improvement of Teaching and
School Leadership
``Chapter 1--National Activities and Clearinghouse
``SEC. 2031. PROGRAM AUTHORIZED.
``(a) In General.--The Secretary is authorized to make grants to, and to enter into contracts and cooperative agreements with, local educational agencies, educational service agencies, State educational agencies, State agencies for higher education, institutions of higher education, and other public and private nonprofit agencies, organizations, and institutions to carry out subsection (b).
``(b) Activities.--In making the grants, and entering into the contracts and cooperative agreements, the Secretary--
``(1) may support activities of national significance that are not supported through other sources and that the Secretary determines will contribute to the improvement of teaching and school leadership in the Nation's schools, such as--
``(A) supporting collaborative efforts by States, or consortia of States, to review and measure the quality, rigor, and alignment of State standards and assessments;
``(B) supporting State and local efforts to develop curricula aligned with State standards and assessments;
``(C) supporting collaborative efforts by States, or consortia of States, to review and measure the quality and rigor of standards for entry into the field of teaching, including the alignment of such standards with State standards for students in elementary school and secondary school, and the alignment of initial teacher licensing and certification assessments with State standards for entry into the field of teaching;
``(D) supporting the development of models, at the State and local levels, of innovative compensation systems that--
``(i) provide incentives for talented individuals who have a strong knowledge of academic content to enter teaching; and
``(ii) reward veteran teachers who acquire new knowledge and skills that are needed in the schools and districts in which the teachers teach; and
``(E) supporting collaborative efforts by States, or consortia of States, to develop performance-based systems for assessing content knowledge and teaching skills of teachers prior to initial certification or licensure of the teachers;
``(2) may support activities of national significance that the Secretary determines will contribute to the recruitment and retention of highly qualified teachers and principals in schools served by high-poverty local educational agencies, such as--
``(A) the development and implementation of a national teacher recruitment clearinghouse and job bank, which shall be coordinated and, to the extent feasible, integrated with the America's Job Bank administered by the Secretary of Labor, to--
``(i) disseminate information and resources nationwide on entering the teaching profession, to persons interested in becoming teachers;
``(ii) serve as a national resource center regarding effective practices for teacher professional development and mentoring, recruitment, and retention;
``(iii) link prospective teachers to local educational agencies and training resources;
``(iv) provide information and technical assistance to prospective teachers about certification and licensing and other State and local requirements related to teaching; and
``(v) provide data projections concerning teacher and administrator supply and demand and available teaching and administrator opportunities;
``(B) the development and implementation, or expansion, of programs that recruit talented individuals to become principals, including such programs that employ alternative routes to State certification or licensing that are at least as rigorous as the State's standards for initial certification or licensing of teachers, and that prepare both new and experienced principals to serve as instructional leaders, which may include the creation and operation of a national center or regional centers for the preparation and support of principals as leaders of school reform;
``(C) efforts to increase the portability of teacher pensions and reciprocity of teaching credentials across State lines;
``(D) research, evaluation, and dissemination activities related to effective strategies for increasing the portability of teachers' credited years of experience across State and school district lines;
``(E) the development and implementation of national or regional programs to--
``(i) recruit highly talented individuals to become teachers, through alternative routes to certification or licensing that are at least as rigorous as the State's standards for initial certification or licensing of teachers, in schools served by high-poverty local educational agencies; and
``(ii) help retain the individuals for more than 3 years as classroom teachers in schools served by the local educational agencies; and
``(F) the establishment of partnerships of high-poverty local educational agencies, teacher organizations, and local businesses, in order to help the agencies attract and retain high-quality teachers and principals through provision of increased pay, combined with reforms to raise teacher performance including use of regular, rigorous peer evaluations and (where appropriate) student evaluations of every teacher;
``(3) may support the National Board for Professional Teaching Standards;
``(4)(A) shall carry out a national evaluation, not sooner than 3 years and not later than 4 years after the date of enactment of the Educational Opportunities Act, of the effect of activities carried out under this title, including an assessment of changes in instructional practice and objective measures of student achievement; and
``(B) shall submit a report containing the results of the evaluation to Congress; and
``(5) shall annually submit to Congress a report on the information contained in the State reports described in section 2022.
``SEC. 2032. EISENHOWER NATIONAL CLEARINGHOUSE FOR
MATHEMATICS AND SCIENCE EDUCATION.
``(a) Establishment of Clearinghouse.--The Secretary shall award a grant or contract, on a competitive basis, to an entity to establish and operate an Eisenhower National Clearinghouse for Mathematics and Science Education (referred to in this section as `the Clearinghouse').
``(b) Authorized Activities.--
``(1) Application and award basis.--
``(A) In general.--An entity desiring to establish and operate the Clearinghouse shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may reasonably require.
``(B) Peer review.--The Secretary shall establish a peer review panel to make recommendations on the recipient of the award for the Clearinghouse.
``(C) Basis.--The Secretary shall make the award for the Clearinghouse on the basis of merit.
``(2) Duration.--The Secretary shall award the grant or contract for the Clearinghouse for a period of 5 years.
``(3) Activities.--The award recipient shall use the award funds to--
``(A) maintain a permanent collection of such mathematics and science education instructional materials and programs for elementary schools and secondary schools as the Secretary finds appropriate, and give priority to maintaining such materials and programs that have been identified as promising or exemplary, through a systematic approach such as the use of expert panels required under the Educational Research, Development, Dissemination, and Improvement Act of 1994;
``(B) disseminate the materials and programs described in subparagraph (A) to the public, State educational agencies, local educational agencies, and schools (particularly high-poverty, low-performing schools), including dissemination through the maintenance of an interactive national electronic information management and retrieval system accessible through the World Wide Web and other advanced communications technologies;
``(C) coordinate activities with entities operating other databases containing mathematics and science curriculum and instructional materials, including Federal, non-Federal, and, where feasible, international databases;
``(D) using not more than 10 percent of the amount awarded under this section for any fiscal year, participate in collaborative meetings of representatives of the Clearinghouse and regional mathematics and science education consortia to--
``(i) discuss issues of common interest and concern;
``(ii) foster effective collaboration and cooperation in acquiring and distributing instructional materials and programs; and
``(iii) coordinate and enhance computer network access to the Clearinghouse and the resources of the regional consortia;
``(E) support the development and dissemination of model professional development and mentoring materials for mathematics and science education;
``(F) contribute materials or information, as appropriate, to other national repositories or networks; and
``(G) gather qualitative and evaluative data on submissions to the Clearinghouse, and disseminate that data widely, including through the use of electronic dissemination networks.
``(4) Submission to clearinghouse.--Each Federal agency or department that develops mathematics or science education instructional materials or programs, including the National Science Foundation and the Department, shall submit copies of that materials or those programs to the Clearinghouse.
``(5) Steering committee.--The Secretary may appoint a steering committee to recommend policies and activities for the Clearinghouse.
``(6) Application of copyright laws.--
``(A) Construction.--Nothing in this section shall be construed to allow the use or copying, in any medium, of any material collected by the Clearinghouse that is protected under the copyright laws of the United States unless the Clearinghouse obtains the permission of the owner of the copyright.
``(B) Compliance.--In carrying out this section, the Clearinghouse shall ensure compliance with title 17, United States Code.
``Chapter 2--Transition to Teaching
``SEC. 2041. PURPOSE.
``The purpose of this chapter is to address the need of high-poverty local educational agencies for highly qualified teachers in particular academic subjects, such as mathematics, science, foreign languages, bilingual education, and special education needed by the agencies, by--
``(1) continuing and enhancing the Troops to Teachers model for recruiting and supporting the placement of such teachers; and
``(2) recruiting, preparing, placing, and supporting career-changing professionals who have knowledge and experience that will help the professionals become such teachers.
``SEC. 2042. DEFINITIONS.
``In this chapter:
``(1) Program participant.--The term `program participant' means a career-changing professional who--
``(A) demonstrates interest in, and commitment to, becoming a teacher; and
``(B) has knowledge and experience that is relevant to teaching a high-need academic subject for a high-poverty local educational agency.
``(2) Secretary.--The term `Secretary' means the Secretary of Education, except as otherwise determined in accordance with the agreements described in section 2043(b).
``SEC. 2043. PROGRAM AUTHORIZED.
``(a) Authority.--Subject to subsection (b), using funds made available to carry out this chapter under section 2003(2)(A) for each fiscal year, the Secretary may award grants, contracts, or cooperative agreements to institutions of higher education and public and private nonprofit agencies or organizations to carry out programs authorized under this chapter.
``(b) Implementation.--
``(1) Consultation.--Before making awards under subsection
(a) for any fiscal year, the Secretary of Education shall--
``(A) consult with the Secretary of Defense and the Secretary of Transportation regarding the appropriate amount of funding needed to carry out this chapter; and
``(B) upon agreement, transfer that amount to the Department of Defense to carry out this chapter.
``(2) Agreement.--The Secretary of Education may enter into a written agreement with the Secretary of Defense and the Secretary of Transportation, or take such other steps as the Secretary of Education determines are appropriate, to ensure effective implementation of this chapter.
``SEC. 2044. APPLICATION.
``Each entity that desires an award under section 2043(a) shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require, including--
``(1) a description of the target group of career-changing professionals on which the entity will focus in carrying out a program under this chapter, including a description of the characteristics of that target group that shows how the knowledge and experience of the members of the group are relevant to meeting the purpose of this chapter;
``(2) a description of how the entity will identify and recruit program participants;
``(3) a description of the training that program participants will receive and how that training will relate to their certification or licensing as teachers;
``(4) a description of how the entity will ensure that program participants are placed with, and teach for, high-poverty local educational agencies;
``(5) a description of the teacher induction services
(which may be provided through induction programs in existence on the date of submission of the application) the program participants will receive throughout at least their first year of teaching;
``(6) a description of how the entity will collaborate, as needed, with other institutions, agencies, or organizations to recruit, train, place, and support program participants under this chapter, including evidence of the commitment of the institutions, agencies, or organizations to the entity's program;
``(7) a description of how the entity will evaluate the progress and effectiveness of the entity's program, including a description of--
``(A) the program's goals and objectives;
``(B) the performance indicators the entity will use to measure the program's progress; and
``(C) the outcome measures that the entity will use to determine the program's effectiveness; and
``(8) an assurance that the entity will provide to the Secretary such information as the Secretary determines to be necessary to determine the overall effectiveness of programs carried out under this chapter.
``SEC. 2045. USES OF FUNDS AND PERIOD OF SERVICE.
``(a) Authorized Activities.--Funds made available under this chapter may be used for--
``(1) recruiting program participants, including informing individuals who are potential participants of opportunities available under the program and putting the individuals in contact with other institutions, agencies, or organizations that would train, place, and support the individuals;
``(2) providing training stipends and other financial incentives for program participants, such as paying for moving expenses, not to exceed $5,000, in the aggregate, per participant;
``(3) assisting institutions of higher education or other providers of teacher training to tailor their training to meet the particular needs of professionals who are changing their careers to teaching;
``(4) providing placement activities, including identifying high-poverty local educational agencies with needs for the particular skills and characteristics of the newly trained program participants and assisting the participants to obtain employment with the local educational agencies; and
``(5) providing post-placement induction or support activities for program participants.
``(b) Period of Service.--A program participant in a program under carried out under this chapter who completes the participant's training shall serve in a high-poverty local educational agency for at least 3 years.
``(c) Repayment.--The Secretary shall establish such requirements as the Secretary determines to be appropriate to ensure that program participants who receive a training stipend or other financial incentive under subsection (a)(2), but fail to complete their service obligation under subsection (b), repay all or a portion of such stipend or other incentive.
``SEC. 2046. EQUITABLE DISTRIBUTION.
``To the extent practicable, the Secretary shall make awards under this chapter that support programs in different geographic regions of the Nation.
``Chapter 3--Hometown Teachers
``SEC. 2051. PURPOSE.
``The purpose of this chapter is to support the efforts of high-need local educational agencies to develop and implement comprehensive approaches to recruiting and retaining highly qualified teachers, including recruiting such teachers through Hometown Teacher programs that carry out long-term strategies to expand the capacity of the communities served by the agencies to produce local teachers.
``SEC. 2052. DEFINITION.
``The term `high-need local educational agency' means a local educational agency that serves an elementary school or secondary school located in an area in which there is--
``(1) a high percentage (as determined by the State in which the agency is located) of individuals from families with incomes below the poverty line;
``(2) a high percentage (as determined by the State in which the agency is located) of secondary school teachers not teaching in the core academic subjects in which the teachers were trained to teach; or
``(3) a high percentage (as determined by the State in which the agency is located) of elementary school and secondary school teachers who are not fully qualified teachers.
``SEC. 2053. PROGRAM AUTHORIZED.
``From funds made available to carry out this chapter under section 2003(2)(B) for each fiscal year, the Secretary may award grants to high-need local educational agencies to carry out Hometown Teacher programs and other activities described in this chapter.
``SEC. 2054. APPLICATIONS.
``Each high-need local educational agency that desires to receive a grant under section 2053 shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require, including--
``(1) a description of the local educational agency's assessment of the agency's needs for teachers, such as the agency's projected shortage of qualified teachers and the percentage of teachers serving the agency who lack certification or licensure or who are teaching out of field;
``(2) a description of a Hometown Teacher program that the local educational agency plans to develop and implement with the funds made available through the grant, including a description of--
``(A) strategies the agency will use to--
``(i) encourage secondary school and middle school students in schools served by the local educational agency to consider pursuing careers in the teaching profession; and
``(ii) provide support at the undergraduate level to those students who intend to become teachers; and
``(B) the agency's plans to streamline the hiring timelines in the hiring policies and practices of the agency for participants in the Hometown Teacher program;
``(3) a description of the long-term strategies that the agency will use, if any, to reduce the agency's teacher attrition rate, including providing mentoring programs and making efforts to raise teacher salaries and create more desirable working conditions for teachers;
``(4) a description of the agency's strategy for ensuring that all secondary school teachers and middle school teachers in the school district are fully certified or licensed in an academic subject and are teaching the majority of their classes in the subject in which the teachers are certified or licensed;
``(5) a description of the short-term strategies the agency will use, if any, to address the agency's teacher shortage problem, including the strategies the agency will use to ensure that the teachers that the local educational agency is targeting for employment are fully certified or licensed;
``(6) a description of the agency's long-term plan for ensuring that the agency's teachers have opportunities for sustained, high-quality professional development;
``(7) a description of the ways in which the activities proposed to be carried out through the grant are part of the agency's overall plan for improving the quality of teaching and student achievement;
``(8) a description of how the agency will collaborate, as needed, with other institutions, agencies, or organizations to develop and implement the strategies the agency proposes in the application, including evidence of the commitment of the institutions, agencies, or organizations to the agency's activities;
``(9) a description of the strategies the agency will use to coordinate activities funded under the program carried out under this chapter with activities funded through other Federal programs that address teacher shortages, including programs carried out through grants to local educational agencies under title I or this title, including chapter 2, if the applicant receives funds from the programs;
``(10) a description of how the agency will evaluate the progress and effectiveness of the Hometown Teacher program, including a description of--
``(A) the agency's goals and objectives for the program;
``(B) the performance indicators that the agency will use to measure the program's effectiveness; and
``(C) the measurable outcome measures, such as increased percentages of fully certified or licensed teachers, that the agency will use to determine the program's effectiveness; and
``(11) an assurance that the agency will provide to the Secretary such information as the Secretary determines to be necessary to determine the overall effectiveness of programs carried out under this chapter.
``SEC. 2055. PRIORITY.
``In awarding grants under this chapter, the Secretary may give priority to agencies submitting applications that--
``(1) focus on increasing the percentage of qualified teachers in particular teaching fields, such as mathematics, science, and bilingual education; and
``(2) focus on recruiting qualified teachers for certain types of communities, such as urban and rural communities.
``SEC. 2056. USE OF FUNDS.
``(a) Mandatory Use of Funds.--A local educational agency that receives a grant under this chapter shall use the funds made available through the grant to develop and implement long-term strategies to address the agency's teacher shortage, including carrying out Hometown Teacher programs such as the programs described in section 2051.
``(b) Permissible Use of Funds.--A local educational agency that receives a grant under this chapter may use the funds made available through the grant to--
``(1) develop and implement strategies to reduce the local educational agency's teacher attrition rate, including providing mentoring programs, increasing teacher salaries, and creating more desirable working conditions for teachers; and
``(2) develop and implement short-term strategies to address the agency's teacher shortage, including providing scholarships to undergraduates who agree to teach in the school district served by the agency for a certain number of years, providing signing bonuses for teachers, and implementing streamlined hiring practices.
``(c) Supplement, Not Supplant.--Funds made available under this chapter shall be used to supplement, and shall not supplant, State and local funds expended to carry out programs and activities authorized under this chapter.
``SEC. 2057. SERVICE REQUIREMENTS.
``(a) In General.--The Secretary shall establish such requirements as the Secretary finds to be necessary to ensure that a recipient of a scholarship under this chapter who completes a teacher education program subsequently--
``(1) teaches in a school district served by a high-need local educational agency, for a period of time equivalent to the period for which the recipient received the scholarship; or
``(2) repays the amount of the funds provided through the scholarship.
``(b) Use of Repaid Funds.--The Secretary shall deposit any such repaid funds in an account, and use the funds to carry out additional activities under this chapter.
``Chapter 4--Early Childhood Educator Professional Development
``SEC. 2061. PURPOSE.
``In support of the national effort to attain the first of America's Education Goals, the purpose of this chapter is to enhance the school readiness of young children, particularly disadvantaged young children, and to prevent them from encountering reading difficulties once they enter school, by improving the knowledge and skills of early childhood educators who work in communities that have high concentrations of children living in poverty.
``SEC. 2062. PROGRAM AUTHORIZED.
``(a) Grants to Partnerships.--The Secretary shall carry out the purpose of this chapter by awarding grants, on a competitive basis, to partnerships consisting of--
``(1)(A) one or more institutions of higher education that provide professional development for early childhood educators who work with children from low-income families in high-need communities; or
``(B) another public or private, nonprofit entity that provides such professional development;
``(2) one or more public agencies (including local educational agencies, State educational agencies, State human services agencies, and State and local agencies administering programs under the Child Care and Development Block Grant Act of 1990), Head Start agencies, or private, nonprofit organizations; and
``(3) to the extent feasible, an entity with demonstrated experience in providing violence prevention education training to educators in early childhood education programs.
``(b) Priority.--In awarding grants under this chapter, the Secretary shall give priority to partnerships that include 1 or more local educational agencies which operate early childhood education programs for children from low-income families in high-need communities.
``(c) Duration and Number of Grants.--
``(1) Duration.--Each grant under this chapter shall be awarded for not more than 4 years.
``(2) Number.--No partnership may receive more than 1 grant under this chapter.
``SEC. 2063. APPLICATIONS.
``(a) Applications Required.--Any partnership that desires to receive a grant under this chapter shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require.
``(b) Contents.--Each such application shall include--
``(1) a description of the high-need community to be served by the project, including such demographic and socioeconomic information as the Secretary may request;
``(2) information on the quality of the early childhood educator professional development program currently conducted by the institution of higher education or other provider in the partnership;
``(3) the results of the assessment that the entities in the partnership have undertaken to determine the most critical professional development needs of the early childhood educators to be served by the partnership and in the broader community, and a description of how the proposed project will address those needs;
``(4) a description of how the proposed project will be carried out, including--
``(A) how individuals will be selected to participate;
``(B) the types of research-based professional development activities that will be carried out;
``(C) how research on effective professional development and on adult learning will be used to design and deliver project activities;
``(D) how the project will coordinate with and build on, and will not supplant or duplicate, early childhood education professional development activities that exist in the community;
``(E) how the project will train early childhood educators to provide services that are based on developmentally appropriate practices and the best available research on child, language, and literacy development and on early childhood pedagogy;
``(F) how the program will train early childhood educators to meet the diverse educational needs of children in the community, including children who have limited English proficiency, disabilities, or other special needs; and
``(G) how the project will train early childhood educators in identifying and preventing behavioral problems or violent behavior in children;
``(5) a description of--
``(A) the specific objectives that the partnership will seek to attain through the project, and how the partnership will measure progress toward attainment of those objectives; and
``(B) how the objectives and the measurement activities align with the performance indicators established by the Secretary under section 2066(a);
``(6) a description of the partnership's plan for institutionalizing the activities carried out under the project, so that the activities continue once Federal funding ceases;
``(7) an assurance that, where applicable, the project will provide appropriate professional development to volunteer staff, as well as to paid staff; and
``(8) an assurance that, in developing its application and in carrying out its project, the partnership has consulted with, and will consult with, relevant agencies and early childhood educator organizations described in section 2062(a)(2) that are not members of the partnership.
``SEC. 2064. SELECTION OF GRANTEES.
``(a) Criteria.--The Secretary shall select partnerships to receive funding on the basis of the community's need for assistance and the quality of the applications.
``(b) Geographic Distribution.--In selecting partnerships, the Secretary shall seek to ensure that communities in different regions of the Nation, as well as both urban and rural communities, are served.
``SEC. 2065. USES OF FUNDS.
``(a) In General.--Each partnership receiving a grant under this chapter shall use the grant funds to carry out activities that will improve the knowledge and skills of early childhood educators who are working in early childhood programs that are located in high-need communities and serve concentrations of children from low-income families.
``(b) Allowable Activities.--Such activities may include--
``(1) professional development for individuals working as early childhood educators, particularly to familiarize those individuals with the application of recent research on child, language, and literacy development and on early childhood pedagogy;
``(2) professional development for early childhood educators in working with parents, based on the best current research on child, language, and literacy development and parent involvement, so that the educators can prepare their children to succeed in school;
``(3) professional development for early childhood educators to work with children who have limited English proficiency, disabilities, and other special needs;
``(4) professional development to train early childhood educators in identifying and preventing behavioral problems or violent behavior in children;
``(5) activities that assist and support early childhood educators during their first three years in the field;
``(6) development and implementation of early childhood educator professional development programs that make use of distance learning and other technologies;
``(7) professional development activities related to the selection and use of research-based diagnostic assessments to improve teaching and learning; and
``(8) data collection, evaluation, and reporting needed to meet the requirements of this chapter relating to accountability.
``SEC. 2066. ACCOUNTABILITY.
``(a) Performance Indicators.--Simultaneously with the publication of any application notice for grants under this chapter, the Secretary shall announce performance indicators for this chapter, which shall be designed to measure--
``(1) the quality and assessability of the professional development provided;
``(2) the impact of that professional development on the early childhood education provided by the individuals who are trained; and
``(3) such other measures of program impact as the Secretary determines appropriate.
``(b) Annual Reports; Termination.--
``(1) Annual reports.--Each partnership receiving a grant under this chapter shall report annually to the Secretary on the partnership's progress against the performance indicators.
``(2) Termination.--The Secretary may terminate a grant under this chapter at any time if the Secretary determines that the partnership is not making satisfactory progress against the indicators.
``SEC. 2067. COST-SHARING.
``(a) In General.--Each partnership shall provide, from other sources, which may include other Federal sources--
``(1) at least 50 percent of the total cost of its project for the grant period; and
``(2) at least 20 percent of the project cost in each year.
``(b) Acceptable Contributions.--A partnership may meet the requirement of subsection (a) through cash or in-kind contributions, fairly valued.
``(c) Waivers.--The Secretary may waive or modify the requirements of subsection (a) in cases of demonstrated financial hardship.
``SEC. 2068. FEDERAL COORDINATION.
``The Secretary and the Secretary of Health and Human Services shall coordinate activities under this chapter and other early childhood programs administered by the two Secretaries.
``SEC. 2069. DEFINITIONS.
``In this chapter:
``(1) High-need community.--
``(A) In general.--The term `high-need community' means--
``(i) a municipality, or a portion of a municipality, in which at least 50 percent of the children are from low-income families; or
``(ii) a municipality that is one of the 10 percent of municipalities within the State having the greatest numbers of such children.
``(B) Determination.--In determining which communities are described in subparagraph (A), the Secretary shall use such data as the Secretary determines are most accurate and appropriate.
``(2) Low-income family.--The term `low-income family' means a family with an income below the poverty line (as defined by the Office of Management and Budget and revised annually in accordance with section 673(2) of the Community Services Block Grant Act) applicable to a family of the size involved for the most recent fiscal year for which satisfactory data are available.
``(3) Early childhood educator.--The term `early childhood educator' means a person who provides care and education to children at any age from birth through kindergarten.''.
(b) Conforming Amendment.--The Troops-to-Teachers Program Act of 1999 (20 U.S.C. 9301 et seq.) is repealed.
Subtitle B--Safe, Healthy Schools and Communities
CHAPTER 1--GRANTS FOR SCHOOL RENOVATION
SEC. 311. GRANTS FOR SCHOOL RENOVATION.
Title X (20 U.S.C. 8001 et seq.) is amended by adding at the end the following:
``PART L--SCHOOL RENOVATION
``SEC. 10995. GRANTS FOR SCHOOL RENOVATION.
``(a) In General.--
``(1) Allocation of funds.--Of the amount appropriated for each fiscal year under subsection (k), the Secretary of Education shall allocate--
``(A) 6.0 percent of such amount for grants to impacted local educational agencies (as defined in paragraph (3)) for school repair, renovation, and construction;
``(B) 0.25 percent of such amount for grants to outlying areas for school repair and renovation in high-need schools and communities, allocated on such basis, and subject to such terms and conditions, as the Secretary determines appropriate;
``(C) 2 percent of such amount for grants to public entities, private nonprofit entities, and consortia of such entities, for use in accordance with subpart 2 of part C of this title X; and
``(D) the remainder to State educational agencies in proportion to the amount each State received under part A of title I for fiscal year 2001, except that no State shall receive less than 0.5 percent of the amount allocated under this subparagraph.
``(2) Determination of grant amount.--
``(A) Determination of weighted student units.--For purposes of computing the grant amounts under paragraph
(1)(A) for fiscal year 2001, the Secretary shall determine the results obtained by the computation made under section 8003 with respect to children described in subsection
(a)(1)(C) of such section and computed under subsection
(a)(2)(B) of such section for such year--
``(i) for each impacted local educational agency that receives funds under this section; and
``(ii) for all such agencies together.
``(B) Computation of payment.--For fiscal year 2002, the Secretary shall calculate the amount of a grant to an impacted local educational agency by--
``(i) dividing the amount described in paragraph (1)(A) by the results of the computation described in subparagraph
(A)(ii); and
``(ii) multiplying the number derived under clause (i) by the results of the computation described in subparagraph
(A)(i) for such agency.
``(3) Definition.--For purposes of this section, the term
`impacted local educational agency' means, for fiscal year 2001--
``(A) a local educational agency that receives a basic support payment under section 8003(b) for such fiscal year; and
``(B) with respect to which the number of children determined under section 8003(a)(1)(C) for the preceding school year constitutes at least 50 percent of the total student enrollment in the schools of the agency during such school year.
``(b) Within-State Allocations.--
``(1) Administrative costs.--
``(A) State educational agency administration.--Except as provided in subparagraph (B), each State educational agency may reserve not more than 1 percent of its allocation under subsection (a)(1)(D) for the purpose of administering the distribution of grants under this subsection.
``(B) State entity administration.--If the State educational agency transfers funds to a State entity described in paragraph (2)(A), the agency shall transfer to such entity 0.75 of the amount reserved under this paragraph for the purpose of administering the distribution of grants under this subsection.
``(2) Reservation for competitive school repair and renovation grants to local educational agencies.--
``(A) In general.--Subject to the reservation under paragraph (1), of the funds allocated to a State educational agency under subsection (a)(1)(D), the State educational agency shall distribute 75 percent of such funds to local educational agencies or, if such State educational agency is not responsible for the financing of education facilities, the agency shall transfer such funds to the State entity responsible for the financing of education facilities
(referred to in this section as the `State entity') for distribution by such entity to local educational agencies in accordance with this paragraph, to be used, consistent with subsection (c), for school repair and renovation.
``(B) Competitive grants to local educational agencies.--
``(i) In general.--The State educational agency or State entity shall carry out a program of competitive grants to local educational agencies for the purpose described in subparagraph (A). Of the total amount available for distribution to such agencies under this paragraph, the State educational agency or State entity, shall, in carrying out the competition--
``(I) award to high poverty local educational agencies described in clause (ii), in the aggregate, at least an amount which bears the same relationship to such total amount as the aggregate amount such local educational agencies received under part A of title I for fiscal year 2002 bears to the aggregate amount received for such fiscal year under such part by all local educational agencies in the State;
``(II) award to rural local educational agencies in the State, in the aggregate, at least an amount which bears the same relationship to such total amount as the aggregate amount such rural local educational agencies received under part A of title I for fiscal year 2001 bears to the aggregate amount received for such fiscal year under such part by all local educational agencies in the State; and
``(III) award the remaining funds to local educational agencies not receiving an award under subclause (I) or (II), including high poverty and rural local educational agencies that did not receive such an award.
``(ii) High poverty local educational agencies.--A local educational agency is described in this clause if--
``(I) the percentage described in subparagraph (C)(i) with respect to the agency is 30 percent or greater; or
``(II) the number of children described in such subparagraph with respect to the agency is at least 10,000.
``(C) Criteria for awarding grants.--In awarding competitive grants under this paragraph, a State educational agency or State entity shall take into account the following criteria:
``(i) The percentage of poor children 5 to 17 years of age, inclusive, in a local educational agency.
``(ii) The need of a local educational agency for school repair and renovation, as demonstrated by the condition of its public school facilities.
``(iii) The fiscal capacity of a local educational agency to meet its needs for repair and renovation of public school facilities without assistance under this section, including its ability to raise funds through the use of local bonding capacity and otherwise.
``(iv) In the case of a local educational agency that proposes to fund a repair or renovation project for a charter school or schools, the extent to which the school or schools have access to funding for the project through the financing methods available to other public schools or local educational agencies in the State.
``(v) The likelihood that the local educational agency will maintain, in good condition, any facility whose repair or renovation is assisted under this section.
``(D) Possible matching requirement.--
``(i) In general.--A State educational agency or State entity may require local educational agencies to match funds awarded under this subsection.
``(ii) Match amount.--The amount of a match described in clause (i) may be established by using a sliding scale that takes into account the relative poverty of the population served by the local educational agency.
``(3) Reservation for competitive idea or technology grants to local educational agencies.--
``(A) In general.--Subject to the reservation under paragraph (1), of the funds allocated to a State educational agency under subsection (a)(1)(D), the State educational agency shall distribute 25 percent of such funds to local educational agencies through competitive grant processes, to be used for the following:
``(i) To carry out activities under part B of the Individuals with Disabilities Education Act (20 U.S.C. 1411 et seq.).
``(ii) For technology activities that are carried out in connection with school repair and renovation, including--
``(I) wiring;
``(II) acquiring hardware and software;
``(III) acquiring connectivity linkages and resources; and
``(IV) acquiring microwave, fiber optics, cable, and satellite transmission equipment.
``(B) Criteria for awarding idea grants.--In awarding competitive grants under subparagraph (A) to be used to carry out activities under part B of the Individuals with Disabilities Education Act (20 U.S.C. 1411 et seq.), a State educational agency shall take into account the following criteria:
``(i) The need of a local educational agency for additional funds for a student whose individually allocable cost for expenses related to the Individuals with Disabilities Education Act substantially exceeds the State's average per-pupil expenditure (as defined in section 14101(2)).
``(ii) The need of a local educational agency for additional funds for special education and related services under part B of the Individuals with Disabilities Education Act (20 U.S.C. 1411 et seq.).
``(iii) The need of a local educational agency for additional funds for assistive technology devices (as defined in section 602 of the Individuals with Disabilities Education Act (20 U.S.C. 1401)) or assistive technology services (as so defined) for children being served under part B of the Individuals with Disabilities Education Act (20 U.S.C. 1411 et seq.).
``(iv) The need of a local educational agency for additional funds for activities under part B of the Individuals with Disabilities Education Act (20 U.S.C. 1411 et seq.) in order for children with disabilities to make progress toward meeting the performance goals and indicators established by the State under section 612(a)(16) of such Act
(20 U.S.C. 1412).
``(C) Criteria for awarding technology grants.--In awarding competitive grants under subparagraph (A) to be used for technology activities that are carried out in connection with school repair and renovation, a State educational agency shall take into account the need of a local educational agency for additional funds for such activities, including the need for the activities described in subclauses (I) through (IV) of subparagraph (A)(ii).
``(c) Rules Applicable to School Repair and Renovation.--With respect to funds made available under this section that are used for school repair and renovation, the following rules shall apply:
``(1) Permissible uses of funds.--School repair and renovation shall be limited to one or more of the following:
``(A) Emergency repairs or renovations to public school facilities only to ensure the health and safety of students and staff, including--
``(i) repairing, replacing, or installing roofs, electrical wiring, plumbing systems, or sewage systems;
``(ii) repairing, replacing, or installing heating, ventilation, or air conditioning systems (including insulation); and
``(iii) bringing public schools into compliance with fire and safety codes.
``(B) School facilities modifications necessary to render public school facilities accessible in order to comply with the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.).
``(C) School facilities modifications necessary to render public school facilities accessible in order to comply with section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794).
``(D) Asbestos abatement or removal from public school facilities.
``(E) Renovation, repair, and acquisition needs related to the building infrastructure of a charter school.
``(2) Impermissible uses of funds.--No funds received under this section may be used for--
``(A) payment of maintenance costs in connection with any projects constructed in whole or part with Federal funds provided under this section;
``(B) the construction of new facilities, except for facilities for an impacted local educational agency (as defined in subsection (a)(3)); or
``(C) stadiums or other facilities primarily used for athletic contests or exhibitions or other events for which admission is charged to the general public.
``(3) Charter schools.--A public charter school that constitutes a local educational agency under State law shall be eligible for assistance under the same terms and conditions as any other local educational agency (as defined in section 14101(18)).
``(4) Supplement, not supplant.--Excluding the uses described in subparagraphs (B) and (C) of paragraph (1), a local educational agency shall use Federal funds subject to this subsection only to supplement the amount of funds that would, in the absence of such Federal funds, be made available from non-Federal sources for school repair and renovation.
``(d) Special Rule.--Each local educational agency that receives funds under this section shall ensure that, if it carries out repair or renovation through a contract, any such contract process ensures the maximum number of qualified bidders, including small, minority, and women-owned businesses, through full and open competition.
``(e) Public Comment.--Each local educational agency receiving funds under paragraph (2) or (3) of subsection
(b)--
``(1) shall provide parents, educators, and all other interested members of the community the opportunity to consult on the use of funds received under such paragraph;
``(2) shall provide the public with adequate and efficient notice of the opportunity described in paragraph (1) in a widely read and distributed medium; and
``(3) shall provide the opportunity described in paragraph
(1) in accordance with any applicable State and local law specifying how the comments may be received and how the comments may be reviewed by any member of the public.
``(f) Reporting.--
``(1) Local reporting.--Each local educational agency receiving funds under subsection (a)(1)(D) shall submit a report to the State educational agency, at such time as the State educational agency may require, describing the use of such funds for--
``(A) school repair and renovation (and construction, in the case of an impacted local educational agency (as defined in subsection (a)(3)));
``(B) activities under part B of the Individuals with Disabilities Education Act (20 U.S.C. 1411 et seq.); and
``(C) technology activities that are carried out in connection with school repair and renovation, including the activities described in subclauses (I) through (IV) of subsection (b)(3)(A)(ii).
``(2) State reporting.--Each State educational agency shall submit to the Secretary of Education, not later than December 31, 2003, a report on the use of funds received under subsection (a)(1)(D) by local educational agencies for--
``(A) school repair and renovation (and construction, in the case of an impacted local educational agency (as defined in subsection (a)(3)));
``(B) activities under part B of the Individuals with Disabilities Education Act (20 U.S.C. 1411 et seq.); and
``(C) technology activities that are carried out in connection with school repair and renovation, including the activities described in subclauses (I) through (IV) of subsection (b)(3)(A)(ii).
``(3) Additional reports.--Each entity receiving funds allocated under subsection (a)(1) (A) of (B) shall submit to the Secretary, not later than December 31, 2003, a report on its uses of funds under this section, in such form and containing such information as the Secretary may require.
``(g) Applicability of Part B of IDEA.--If a local educational agency uses funds received under this section to carry out activities under part B of the Individuals with Disabilities Education Act (20 U.S.C. 1411 et seq.), such part (including provisions respecting the participation of private school children), and any other provision of law that applies to such part, shall apply to such use.
``(h) Reallocation.--If a State educational agency does not apply for an allocation of funds under subsection (a)(1)(D) for fiscal year 2002, or does not use its entire allocation for such fiscal year, the Secretary may reallocate the amount of the State educational agency's allocation (or the remainder thereof, as the case may be) to the remaining State educational agencies in accordance with subsection (a)(1)(D).
``(i) Participation of Private Schools.--
``(1) In general.--Section 6402 shall apply to subsection
(b)(2) in the same manner as it applies to activities under title VI, except that--
``(A) such section shall not apply with respect to the title to any real property renovated or repaired with assistance provided under this section;
``(B) the term `services' as used in section 6402 with respect to funds under this section shall be provided only to private, nonprofit elementary or secondary schools with a rate of child poverty of at least 40 percent and may include for purposes of subsection (b)(2) only--
``(i) modifications of school facilities necessary to meet the standards applicable to public schools under the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.);
``(ii) modifications of school facilities necessary to meet the standards applicable to public schools under section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794); and
``(iii) asbestos abatement or removal from school facilities; and
``(C) notwithstanding the requirements of section 6402(b), expenditures for services provided using funds made available under subsection (b)(2) shall be considered equal for purposes of such section if the per-pupil expenditures for services described in subparagraph (B) for students enrolled in private nonprofit elementary and secondary schools that have child poverty rates of at least 40 percent are consistent with the per-pupil expenditures under this section for children enrolled in the public schools in the school district of the local educational agency receiving funds under this section.
``(2) Remaining funds.--If the expenditure for services described in paragraph (1)(B) is less than the amount calculated under paragraph (1)(C) because of insufficient need for such services, the remainder shall be available to the local educational agency for renovation and repair of public school facilities.
``(3) Application.--If any provision of this section, or the application thereof, to any person or circumstances is judicially determined to be invalid, the provisions of the remainder of the section and the application to other persons or circumstances shall not be affected thereby.
``(j) Definitions.--For purposes of this section:
``(1) Charter school.--The term `charter school' has the meaning given such term in section 10310(1).
``(2) Poor children and child poverty.--The terms `poor children' and `child poverty' refer to children 5 to 17 years of age, inclusive, who are from families with incomes below the poverty line (as defined by the Office of Management and Budget and revised annually in accordance with section 673(2) of the Community Services Block Grant (42 U.S.C. 9902(2)) applicable to a family of the size involved for the most recent fiscal year for which data satisfactory to the Secretary are available.
``(3) Rural local educational agency.--The term `rural local educational agency' means a local educational agency that the State determines is located in a rural area using objective data and a commonly employed definition of the term
`rural'.
``(4) State.--The term `State' means each of the 50 states, the District of Columbia, and the Commonwealth of Puerto Rico.
``(k) Authorization of Appropriations.--There is authorized to be appropriated to carry out this section, $1,600,000,000 for fiscal year 2002, and such sums as may be necessary for each of fiscal years 2003 through 2006.''.
SEC. 312. CHARTER SCHOOL CREDIT ENHANCEMENT INITIATIVE.
Section 10331, as added by section 322 of the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2001 (as enacted into law by section 1(a)(1) of Public Law 106-554) is amended by inserting before the period the following: ``, and such sums as may be necessary for each of fiscal years 2002 through 2006''.
CHAPTER 2--SCHOOL CONSTRUCTION
SEC. 321. SHORT TITLE.
This chapter may be cited as the ``America's Better Classrooms Act of 2001''.
SEC. 322. EXPANSION OF INCENTIVES FOR PUBLIC SCHOOLS.
(a) In General.--Chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subchapter:
``Subchapter X--Public School Modernization Provisions
``Sec. 1400F. Credit to holders of qualified public school modernization bonds.
``Sec. 1400G. Qualified school construction bonds.
``Sec. 1400H. Qualified zone academy bonds.
``SEC. 1400F. CREDIT TO HOLDERS OF QUALIFIED PUBLIC SCHOOL
MODERNIZATION BONDS.
``(a) Allowance of Credit.--In the case of a taxpayer who holds a qualified public school modernization bond on a credit allowance date of such bond which occurs during the taxable year, there shall be allowed as a credit against the tax imposed by this chapter for such taxable year an amount equal to the sum of the credits determined under subsection
(b) with respect to credit allowance dates during such year on which the taxpayer holds such bond.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined under this subsection with respect to any credit allowance date for a qualified public school modernization bond is 25 percent of the annual credit determined with respect to such bond.
``(2) Annual credit.--The annual credit determined with respect to any qualified public school modernization bond is the product of--
``(A) the applicable credit rate, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Applicable credit rate.--For purposes of paragraph
(1), the applicable credit rate with respect to an issue is the rate equal to an average market yield (as of the day before the date of issuance of the issue) on outstanding long-term corporate debt obligations (determined under regulations prescribed by the Secretary).
``(4) Special rule for issuance and redemption.--In the case of a bond which is issued during the 3-month period ending on a credit allowance date, the amount of the credit determined under this subsection with respect to such credit allowance date shall be a ratable portion of the credit otherwise determined based on the portion of the 3-month period during which the bond is outstanding. A similar rule shall apply when the bond is redeemed.
``(c) Limitation Based on Amount of Tax.--
``(1) In general.--The credit allowed under subsection (a) for any taxable year shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under part IV of subchapter A (other than subpart C thereof, relating to refundable credits).
``(2) Carryover of unused credit.--If the credit allowable under subsection (a) exceeds the limitation imposed by paragraph (1) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such taxable year.
``(d) Qualified Public School Modernization Bond; Credit Allowance Date.--For purposes of this section--
``(1) Qualified public school modernization bond.--The term
`qualified public school modernization bond' means--
``(A) a qualified zone academy bond, and
``(B) a qualified school construction bond.
``(2) Credit allowance date.--The term `credit allowance date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.Such term includes the last day on which the bond is outstanding.
``(e) Other Definitions.--For purposes of this subchapter--
``(1) Local educational agency.--The term `local educational agency' has the meaning given to such term by section 14101 of the Elementary and Secondary Education Act of 1965. Such term includes the local educational agency that serves the District of Columbia but does not include any other State agency.
``(2) Bond.--The term `bond' includes any obligation.
``(3) State.--The term `State' includes the District of Columbia and any possession of the United States.
``(4) Public school facility.--The term `public school facility' shall not include--
``(A) any stadium or other facility primarily used for athletic contests or exhibitions or other events for which admission is charged to the general public, or
``(B) any facility which is not owned by a State or local government or any agency or instrumentality of a State or local government.
``(f) Credit Included in Gross Income.--Gross income includes the amount of the credit allowed to the taxpayer under this section (determined without regard to subsection
(c)) and the amount so included shall be treated as interest income.
``(g) Bonds Held by Regulated Investment Companies.--If any qualified public school modernization bond is held by a regulated investment company, the credit determined under subsection (a) shall be allowed to shareholders of such company under procedures prescribed by the Secretary.
``(h) Credits May Be Stripped.--Under regulations prescribed by the Secretary--
``(1) In general.--There may be a separation (including at issuance) of the ownership of a qualified public school modernization bond and the entitlement to the credit under this section with respect to such bond. In case of any such separation, the credit under this section shall be allowed to the person who on the credit allowance date holds the instrument evidencing the entitlement to the credit and not to the holder of the bond.
``(2) Certain rules to apply.--In the case of a separation described in paragraph (1), the rules of section 1286 shall apply to the qualified public school modernization bond as if it were a stripped bond and to the credit under this section as if it were a stripped coupon.
``(i) Treatment for Estimated Tax Purposes.--Solely for purposes of sections 6654 and 6655, the credit allowed by this section to a taxpayer by reason of holding a qualified public school modernization bonds on a credit allowance date shall be treated as if it were a payment of estimated tax made by the taxpayer on such date.
``(j) Credit May Be Transferred.--Nothing in any law or rule of law shall be construed to limit the transferability of the credit allowed by this section through sale and repurchase agreements.
``(k) Reporting.--Issuers of qualified public school modernization bonds shall submit reports similar to the reports required under section 149(e).
``(l) Termination.--This section shall not apply to any bond issued after September 30, 2006.
``SEC. 1400G. QUALIFIED SCHOOL CONSTRUCTION BONDS.
``(a) Qualified School Construction Bond.--For purposes of this subchapter, the term `qualified school construction bond' means any bond issued as part of an issue if--
``(1) 95 percent or more of the proceeds of such issue are to be used for the construction, rehabilitation, or repair of a public school facility or for the acquisition of land on which such a facility is to be constructed with part of the proceeds of such issue,
``(2) the bond is issued by a State or local government within the jurisdiction of which such school is located,
``(3) the issuer designates such bond for purposes of this section, and
``(4) the term of each bond which is part of such issue does not exceed 15 years.
``(b) Limitation on Amount of Bonds Designated.--The maximum aggregate face amount of bonds issued during any calendar year which may be designated under subsection (a) by any issuer shall not exceed the sum of--
``(1) the limitation amount allocated under subsection (d) for such calendar year to such issuer, and
``(2) if such issuer is a large local educational agency
(as defined in subsection (e)(4)) or is issuing on behalf of such an agency, the limitation amount allocated under subsection (e) for such calendar year to such agency.
``(c) National Limitation on Amount of Bonds Designated.--There is a national qualified school construction bond limitation for each calendar year. Such limitation is--
``(1) $11,000,000,000 for 2002,
``(2) $11,000,000,000 for 2003, and
``(3) except as provided in subsection (f), zero after 2003.
``(d) 60 Percent of Limitation Allocated Among States.--
``(1) In general.--60 percent of the limitation applicable under subsection (c) for any calendar year shall be allocated by the Secretary among the States in proportion to the respective numbers of children in each State who have attained age 5 but not age 18 for the most recent fiscal year ending before such calendar year. The limitation amount allocated to a State under the preceding sentence shall be allocated by the State to issuers within such State and such allocations may be made only if there is an approved State application.
``(2) Minimum allocations to states.--
``(A) In general.--The Secretary shall adjust the allocations under this subsection for any calendar year for each State to the extent necessary to ensure that the sum of--
``(i) the amount allocated to such State under this subsection for such year, and
``(ii) the aggregate amounts allocated under subsection (e) to large local educational agencies in such State for such year,is not less than an amount equal to such State's minimum percentage of the amount to be allocated under paragraph (1) for the calendar year.
``(B) Minimum percentage.--A State's minimum percentage for any calendar year is the minimum percentage described in section 1124(d) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6334(d)) for such State for the most recent fiscal year ending before such calendar year.
``(3) Allocations to certain possessions.--The amount to be allocated under paragraph (1) to any possession of the United States other than Puerto Rico shall be the amount which would have been allocated if all allocations under paragraph (1) were made on the basis of respective populations of individuals below the poverty line (as defined by the Office of Management and Budget). In making other allocations, the amount to be allocated under paragraph (1) shall be reduced by the aggregate amount allocated under this paragraph to possessions of the United States.
``(4) Allocations for indian schools.--The provisions of section 1400J shall apply with respect to the construction, rehabilitation, and repair of schools funded by the Bureau of Indian Affairs. No funds may be allocated under this section for such schools.
``(5) Approved state application.--For purposes of paragraph (1), the term `approved State application' means an application which is approved by the Secretary of Education and which includes--
``(A) the results of a recent publicly-available survey
(undertaken by the State with the involvement of local education officials, members of the public, and experts in school construction and management) of such State's needs for public school facilities, including descriptions of--
``(i) health and safety problems at such facilities,
``(ii) the capacity of public schools in the State to house projected enrollments, and
``(iii) the extent to which the public schools in the State offer the physical infrastructure needed to provide a high-quality education to all students, and
``(B) a description of how the State will allocate to local educational agencies, or otherwise use, its allocation under this subsection to address the needs identified under subparagraph (A), including a description of how it will--
``(i) ensure that the needs of both rural and urban areas will be recognized,
``(ii) give highest priority to localities with the greatest needs, as demonstrated by inadequate school facilities coupled with a low level of resources to meet those needs,
``(iii) use its allocation under this subsection to assist localities that lack the fiscal capacity to issue bonds on their own, and
``(iv) ensure that its allocation under this subsection is used only to supplement, and not supplant, the amount of school construction, rehabilitation, and repair in the State that would have occurred in the absence of such allocation.Any allocation under paragraph (1) by a State shall be binding if such State reasonably determined that the allocation was in accordance with the plan approved under this paragraph.
``(e) 40 Percent of Limitation Allocated Among Largest School Districts.--
``(1) In general.--40 percent of the limitation applicable under subsection (c) for any calendar year shall be allocated under paragraph (2) by the Secretary among local educational agencies which are large local educational agencies for such year. No qualified school construction bond may be issued by reason of an allocation to a large local educational agency under the preceding sentence unless such agency has an approved local application.
``(2) Allocation formula.--The amount to be allocated under paragraph (1) for any calendar year shall be allocated among large local educational agencies in proportion to the respective amounts each such agency received for Basic Grants under subpart 2 of part A of title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6331 et seq.) for the most recent fiscal year ending before such calendar year.
``(3) Allocation of unused limitation to state.--The amount allocated under this subsection to a large local educational agency for any calendar year may be reallocated by such agency to the State in which such agency is located for such calendar year. Any amount reallocated to a State under the preceding sentence may be allocated as provided in subsection
(d)(1).
``(4) Large local educational agency.--For purposes of this section, the term `large local educational agency' means, with respect to a calendar year, any local educational agency if such agency is--
``(A) among the 100 local educational agencies with the largest numbers of children aged 5 through 17 from families living below the poverty level, as determined by the Secretary using the most recent data available from the Department of Commerce that are satisfactory to the Secretary, or
``(B) 1 of not more than 25 local educational agencies
(other than those described in subparagraph (A)) that the Secretary of Education determines (based on the most recent data available satisfactory to the Secretary) are in particular need of assistance, based on a low level of resources for school construction, a high level of enrollment growth, or such other factors as the Secretary deems appropriate.
``(5) Approved local application.--For purposes of paragraph (1), the term `approved local application' means an application which is approved by the Secretary of Education and which includes--
``(A) the results of a recent publicly-available survey
(undertaken by the local educational agency or the State with the involvement of school officials, members of the public, and experts in school construction and management) of such agency's needs for public school facilities, including descriptions of--
``(i) the overall condition of the local educational agency's school facilities, including health and safety problems,
``(ii) the capacity of the agency's schools to house projected enrollments, and
``(iii) the extent to which the agency's schools offer the physical infrastructure needed to provide a high-quality education to all students,
``(B) a description of how the local educational agency will use its allocation under this subsection to address the needs identified under subparagraph (A), and
``(C) a description of how the local educational agency will ensure that its allocation under this subsection is used only to supplement, and not supplant, the amount of school construction, rehabilitation, or repair in the locality that would have occurred in the absence of such allocation.A rule similar to the rule of the last sentence of subsection
(d)(6) shall apply for purposes of this paragraph.
``(f) Carryover of Unused Limitation.--If for any calendar year--
``(1) the amount allocated under subsection (d) to any State, exceeds
``(2) the amount of bonds issued during such year which are designated under subsection (a) pursuant to such allocation,the limitation amount under such subsection for such State for the following calendar year shall be increased by the amount of such excess. A similar rule shall apply to the amounts allocated under subsection (d)(5) or (e).
``(g) Special Rules Relating to Arbitrage.--
``(1) In general.--A bond shall not be treated as failing to meet the requirement of subsection (a)(1) solely by reason of the fact that the proceeds of the issue of which such bond is a part are invested for a temporary period (but not more than 36 months) until such proceeds are needed for the purpose for which such issue was issued.
``(2) Binding commitment requirement.--Paragraph (1) shall apply to an issue only if, as of the date of issuance, there is a reasonable expectation that--
``(A) at least 10 percent of the proceeds of the issue will be spent within the 6-month period beginning on such date for the purpose for which such issue was issued, and
``(B) the remaining proceeds of the issue will be spent with due diligence for such purpose.
``(3) Earnings on proceeds.--Any earnings on proceeds during the temporary period shall be treated as proceeds of the issue for purposes of applying subsection (a)(1) and paragraph (1) of this subsection.
``SEC. 1400H. QUALIFIED ZONE ACADEMY BONDS.
``(a) Qualified Zone Academy Bond.--For purposes of this subchapter--
``(1) In general.--The term `qualified zone academy bond' means any bond issued as part of an issue if--
``(A) 95 percent or more of the proceeds of such issue are to be used for a qualified purpose with respect to a qualified zone academy established by a local educational agency,
``(B) the bond is issued by a State or local government within the jurisdiction of which such academy is located,
``(C) the issuer--
``(i) designates such bond for purposes of this section,
``(ii) certifies that it has written assurances that the private business contribution requirement of paragraph (2) will be met with respect to such academy, and
``(iii) certifies that it has the written approval of the local educational agency for such bond issuance, and
``(D) the term of each bond which is part of such issue does not exceed 15 years.Rules similar to the rules of section 1400G(g) shall apply for purposes of paragraph (1).
``(2) Private business contribution requirement.--
``(A) In general.--For purposes of paragraph (1), the private business contribution requirement of this paragraph is met with respect to any issue if the local educational agency that established the qualified zone academy has written commitments from private entities to make qualified contributions having a present value (as of the date of issuance of the issue) of not less than 10 percent of the proceeds of the issue.
``(B) Qualified contributions.--For purposes of subparagraph (A), the term `qualified contribution' means any contribution (of a type and quality acceptable to the local educational agency) of--
``(i) equipment for use in the qualified zone academy
(including state-of-the-art technology and vocational equipment),
``(ii) technical assistance in developing curriculum or in training teachers in order to promote appropriate market driven technology in the classroom,
``(iii) services of employees as volunteer mentors,
``(iv) internships, field trips, or other educational opportunities outside the academy for students, or
``(v) any other property or service specified by the local educational agency.
``(3) Qualified zone academy.--The term `qualified zone academy' means any public school (or academic program within a public school) which is established by and operated under the supervision of a local educational agency to provide education or training below the postsecondary level if--
``(A) such public school or program (as the case may be) is designed in cooperation with business to enhance the academic curriculum, increase graduation and employment rates, and better prepare students for the rigors of college and the increasingly complex workforce,
``(B) students in such public school or program (as the case may be) will be subject to the same academic standards and assessments as other students educated by the local educational agency,
``(C) the comprehensive education plan of such public school or program is approved by the local educational agency, and
``(D)(i) such public school is located in an empowerment zone or enterprise community (including any such zone or community designated after the date of the enactment of this section), or
``(ii) there is a reasonable expectation (as of the date of issuance of the bonds) that at least 35 percent of the students attending such school or participating in such program (as the case may be) will be eligible for free or reduced-cost lunches under the school lunch program established under the National School Lunch Act.
``(4) Qualified purpose.--The term `qualified purpose' means, with respect to any qualified zone academy--
``(A) constructing, rehabilitating, or repairing the public school facility in which the academy is established,
``(B) acquiring the land on which such facility is to be constructed with part of the proceeds of such issue,
``(C) providing equipment for use at such academy,
``(D) developing course materials for education to be provided at such academy, and
``(E) training teachers and other school personnel in such academy.
``(b) Limitations on Amount of Bonds Designated.--
``(1) In general.--There is a national zone academy bond limitation for each calendar year. Such limitation is--
``(A) $400,000,000 for 1999,
``(B) $400,000,000 for 2000,
``(C) $400,000,000 for 2001,
``(D) $1,400,000,000 for 2002,
``(E) $1,400,000,000 for 2003, and
``(F) except as provided in paragraph (3), zero after 2003.
``(2) Allocation of limitation.--
``(A) Allocation among states.--
``(i) 1999, 2000, and 2001 limitations.--The national zone academy bond limitations for calendar years 1999, 2000, and 2001 shall be allocated by the Secretary among the States on the basis of their respective populations of individuals below the poverty line (as defined by the Office of Management and Budget).
``(ii) Limitation after 2001.--The national zone academy bond limitation for any calendar year after 2001 shall be allocated by the Secretary among the States in proportion to the respective amounts each such State received for Basic Grants under subpart 2 of part A of title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6331 et seq.) for the most recent fiscal year ending before such calendar year.
``(B) Allocation to local educational agencies.--The limitation amount allocated to a State under subparagraph (A) shall be allocated by the State to qualified zone academies within such State.
``(C) Designation subject to limitation amount.--The maximum aggregate face amount of bonds issued during any calendar year which may be designated under subsection (a) with respect to any qualified zone academy shall not exceed the limitation amount allocated to such academy under subparagraph (B) for such calendar year.
``(3) Carryover of unused limitation.--If for any calendar year--
``(A) the limitation amount under this subsection for any State, exceeds
``(B) the amount of bonds issued during such year which are designated under subsection (a) (or the corresponding provisions of prior law) with respect to qualified zone academies within such State,the limitation amount under this subsection for such State for the following calendar year shall be increased by the amount of such excess.''
(b) Reporting.--Subsection (d) of section 6049 of such Code
(relating to returns regarding payments of interest) is amended by adding at the end the following new paragraph:
``(8) Reporting of credit on qualified public school modernization bonds.--
``(A) In general.--For purposes of subsection (a), the term
`interest' includes amounts includible in gross income under section 1400F(f) and such amounts shall be treated as paid on the credit allowance date (as defined in section 1400F(d)(2)).
``(B) Reporting to corporations, etc.--Except as otherwise provided in regulations, in the case of any interest described in subparagraph (A) of this paragraph, subsection
(b)(4) of this section shall be applied without regard to subparagraphs (A), (H), (I), (J), (K), and (L)(i).
``(C) Regulatory authority.--The Secretary may prescribe such regulations as are necessary or appropriate to carry out the purposes of this paragraph, including regulations which require more frequent or more detailed reporting.''
(c) Conforming Amendments.--
(1) Subchapter U of chapter 1 of such Code is amended by striking part IV, by redesignating part V as part IV, and by redesignating section 1397F as section 1397E.
(2) The table of subchapters for chapter 1 of such Code is amended by adding at the end the following new item:
``Subchapter X. Public school modernization provisions.''
(3) The table of parts of subchapter U of chapter 1 of such Code is amended by striking the last 2 items and inserting the following item:
``Part IV. Regulations.''
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this subsection, the amendments made by this section shall apply to obligations issued after December 31, 2001.
(2) Repeal of restriction on zone academy bond holders.--In the case of bonds to which section 1397E of the Internal Revenue Code of 1986 (as in effect before the date of the enactment of this Act) applies, the limitation of such section to eligible taxpayers (as defined in subsection
(d)(6) of such section) shall not apply after the date of the enactment of this Act.
SEC. 323. APPLICATION OF CERTAIN LABOR STANDARDS ON
CONSTRUCTION PROJECTS FINANCED UNDER PUBLIC
SCHOOL MODERNIZATION PROGRAM.
Section 439 of the General Education Provisions Act
(relating to labor standards) is amended--
(1) by inserting ``(a)'' before ``All laborers and mechanics'', and
(2) by adding at the end the following:
``(b)(1) For purposes of this section, the term `applicable program' also includes the qualified zone academy bond provisions enacted by section 226 of the Taxpayer Relief Act of 1997 and the program established by section 322 of the America's Better Classroom Act of 2001.
``(2) A State or local government participating in a program described in paragraph (1) shall--
``(A) in the awarding of contracts, give priority to contractors with substantial numbers of employees residing in the local education area to be served by the school being constructed; and
``(B) include in the construction contract for such school a requirement that the contractor give priority in hiring new workers to individuals residing in such local education area.
``(3) In the case of a program described in paragraph (1), nothing in this subsection or subsection (a) shall be construed to deny any tax credit allowed under such program. If amounts are required to be withheld from contractors to pay wages to which workers are entitled, such amounts shall be treated as expended for construction purposes in determining whether the requirements of such program are met.''.
SEC. 324. EMPLOYMENT AND TRAINING ACTIVITIES RELATING TO
CONSTRUCTION OR RECONSTRUCTION OF PUBLIC SCHOOL
FACILITIES.
(a) In General.--Section 134 of the Workforce Investment Act of 1998 (29 U.S.C. 2864) is amended by adding at the end the following:
``(f) Local Employment and Training Activities Relating to Construction or Reconstruction of Public School Facilities.--
``(1) In general.--In order to provide training services related to construction or reconstruction of public school facilities receiving funding assistance under an applicable program, each State shall establish a specialized program of training meeting the following requirements:
``(A) The specialized program provides training for jobs in the construction industry.
``(B) The program provides trained workers for projects for the construction or reconstruction of public school facilities receiving funding assistance under an applicable program.
``(C) The program ensures that skilled workers (residing in the area to be served by the school facilities) will be available for the construction or reconstruction work.
``(2) Coordination.--The specialized program established under paragraph (1) shall be integrated with other activities under this Act, with the activities carried out under the National Apprenticeship Act of 1937 by the State Apprenticeship Council or through the Bureau of Apprenticeship and Training in the Department of Labor, as appropriate, and with activities carried out under the Carl D. Perkins Vocational and Technical Education Act of 1998. Nothing in this subsection shall be construed to require services duplicative of those referred to in the preceding sentence.
``(3) Applicable program.--In this subsection, the term
`applicable program' has the meaning given the term in section 439(b) of the General Education Provisions Act
(relating to labor standards).''.
(b) State Plan.--Section 112(b)(17)(A) of the Workforce Investment Act of 1998 (29 U.S.C. 2822(b)(17)(A)) is amended--
(1) in clause (iii), by striking ``and'' at the end;
(2) by redesignating clause (iv) as clause (v); and
(3) by inserting after clause (iii) the following:
``(iv) how the State will establish and carry out a specialized program of training under section 134(f); and''.
SEC. 325. INDIAN SCHOOL CONSTRUCTION.
(a) Definitions.--In this section:
(1) Bureau.--The term ``Bureau'' means the Bureau of Indian Affairs of the Department of the Interior.
(2) Indian.--The term ``Indian'' means any individual who is a member of a tribe.
(3) Secretary.--The term ``Secretary'' means the Secretary of the Interior.
(4) Tribal school.--The term ``tribal school'' means an elementary school, secondary school, or dormitory that is operated by a tribal organization or the Bureau for the education of Indian children and that receives financial assistance for its operation under an appropriation for the Bureau under section 102, 103(a), or 208 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450f, 450h(a), and 458d) or under the Tribally Controlled Schools Act of 1988 (25 U.S.C. 2501 et seq.) under a contract, a grant, or an agreement, or for a Bureau-operated school.
(5) Tribe.--The term ``tribe'' has the meaning given the term ``Indian tribal government'' by section 7701(a)(40) of the Internal Revenue Code of 1986, including the application of section 7871(d) of such Code. Such term includes any consortium of tribes approved by the Secretary.
(b) Issuance of Bonds.--
(1) In general.--The Secretary shall establish a pilot program under which eligible tribes have the authority to issue qualified tribal school modernization bonds to provide funding for the construction, rehabilitation, or repair of tribal schools, including the advance planning and design thereof.
(2) Eligibility.--
(A) In general.--To be eligible to issue any qualified tribal school modernization bond under the program under paragraph (1), a tribe shall--
(i) prepare and submit to the Secretary a plan of construction that meets the requirements of subparagraph (B);
(ii) provide for quarterly and final inspection of the project by the Bureau; and
(iii) pledge that the facilities financed by such bond will be used primarily for elementary and secondary educational purposes for not less than the period such bond remains outstanding.
(B) Plan of construction.--A plan of construction meets the requirements of this subparagraph if such plan--
(i) contains a description of the construction to be undertaken with funding provided under a qualified tribal school modernization bond;
(ii) demonstrates that a comprehensive survey has been undertaken concerning the construction needs of the tribal school involved;
(iii) contains assurances that funding under the bond will be used only for the activities described in the plan;
(iv) contains response to the evaluation criteria contained in Instructions and Application for Replacement School Construction, Revision 6, dated February 6, 1999; and
(v) contains any other reasonable and related information determined appropriate by the Secretary.
(C) Priority.--In determining whether a tribe is eligible to participate in the program under this subsection, the Secretary shall give priority to tribes that, as demonstrated by the relevant plans of construction, will fund projects--
(i) described in the Education Facilities Replacement Construction Priorities List as of FY 2000 of the Bureau of Indian Affairs (65 Fed. Reg. 4623-4624);
(ii) described in any subsequent priorities list published in the Federal Register; or
(iii) which meet the criteria for ranking schools as described in Instructions and Application for Replacement School Construction, Revision 6, dated February 6, 1999.
(D) Advance planning and design funding.--A tribe may propose in its plan of construction to receive advance planning and design funding from the tribal school modernization escrow account established under paragraph
(6)(B). Before advance planning and design funds are allocated from the escrow account, the tribe shall agree to issue qualified tribal school modernization bonds after the receipt of such funds and agree as a condition of each bond issuance that the tribe will deposit into such account or a fund managed by the trustee as described in paragraph (4)(C) an amount equal to the amount of such funds received from the escrow account.
(3) Permissible activities.--In addition to the use of funds permitted under paragraph (1), a tribe may use amounts received through the issuance of a qualified tribal school modernization bond to--
(A) enter into and make payments under contracts with licensed and bonded architects, engineers, and construction firms in order to determine the needs of the tribal school and for the design and engineering of the school;
(B) enter into and make payments under contracts with financial advisors, underwriters, attorneys, trustees, and other professionals who would be able to provide assistance to the tribe in issuing bonds; and
(C) carry out other activities determined appropriate by the Secretary.
(4) Bond trustee.--
(A) In general.--Notwithstanding any other provision of law, any qualified tribal school modernization bond issued by a tribe under this subsection shall be subject to a trust agreement between the tribe and a trustee.
(B) Trustee.--Any bank or trust company that meets requirements established by the Secretary may be designated as a trustee under subparagraph (A).
(C) Content of trust agreement.--A trust agreement entered into by a tribe under this paragraph shall specify that the trustee, with respect to any bond issued under this subsection shall--
(i) act as a repository for the proceeds of the bond;
(ii) make payments to bondholders;
(iii) receive, as a condition to the issuance of such bond, a transfer of funds from the tribal school modernization escrow account established under paragraph (6)(B) or from other funds furnished by or on behalf of the tribe in an amount, which together with interest earnings from the investment of such funds in obligations of or fully guaranteed by the United States or from other investments authorized by paragraph (10), will produce moneys sufficient to timely pay in full the entire principal amount of such bond on the stated maturity date therefore;
(iv) invest the funds received pursuant to clause (iii) as provided by such clause; and
(v) hold and invest the funds in a segregated fund or account under the agreement, which fund or account shall be applied solely to the payment of the costs of items described in paragraph (3).
(D) Requirements for making direct payments.--
(i) In general.--Notwithstanding any other provision of law, the trustee shall make any payment referred to in subparagraph (C)(v) in accordance with requirements that the tribe shall prescribe in the trust agreement entered into under subparagraph (C). Before making a payment to a contractor under subparagraph (C)(v), the trustee shall require an inspection of the project by a local financial institution or an independent inspecting architect or engineer, to ensure the completion of the project.
(ii) Contracts.--Each contract referred to in paragraph (3) shall specify, or be renegotiated to specify, that payments under the contract shall be made in accordance with this paragraph.
(5) Payments of principal and interest.--
(A) Principal.--No principal payments on any qualified tribal school modernization bond shall be required until the final, stated maturity of such bond, which stated maturity shall be within 15 years from the date of issuance. Upon the expiration of such period, the entire outstanding principal under the bond shall become due and payable.
(B) Interest.--In lieu of interest on a qualified tribal school modernization bond there shall be awarded a tax credit under section 1400F of the Internal Revenue Code of 1986.
(6) Bond guarantees.--
(A) In general.--Payment of the principal portion of a qualified tribal school modernization bond issued under this subsection shall be guaranteed solely by amounts deposited with each respective bond trustee as described in paragraph
(4)(C)(iii).
(B) Establishment of account.--
(i) In general.--Notwithstanding any other provision of law, beginning in fiscal year 2002, from amounts made available for school replacement under the construction account of the Bureau, the Secretary is authorized to deposit not more than $30,000,000 each fiscal year into a tribal school modernization escrow account.
(ii) Payments.--The Secretary shall use any amounts deposited in the escrow account under clauses (i) and (iii) to make payments to trustees appointed and acting pursuant to paragraph (4) or to make payments described in paragraph
(2)(D).
(iii) Transfers of excess proceeds.--Excess proceeds held under any trust agreement that are not needed for any of the purposes described in clauses (iii) and (v) of paragraph
(4)(C) shall be transferred, from time to time, by the trustee for deposit into the tribal school modernization escrow account.
(7) Limitations.--
(A) Obligation to repay.--Notwithstanding any other provision of law, the principal amount on any qualified tribal school modernization bond issued under this subsection shall be repaid only to the extent of any escrowed funds furnished under paragraph (4)(C)(iii). No qualified tribal school modernization bond issued by a tribe shall be an obligation of, nor shall payment of the principal thereof be guaranteed by, the United States.
(B) Land and facilities.--Any land or facilities purchased or improved with amounts derived from qualified tribal school modernization bonds issued under this subsection shall not be mortgaged or used as collateral for such bonds.
(8) Sale of bonds.--Qualified tribal school modernization bonds may be sold at a purchase price equal to, in excess of, or at a discount from the par amount thereof.
(9) Treatment of trust agreement earnings.--Any amounts earned through the investment of funds under the control of a trustee under any trust agreement described in paragraph (4) shall not be subject to Federal income tax.
(10) Investment of sinking funds.--Any sinking fund established for the purpose of the payment of principal on a qualified tribal school modernization bond shall be invested in obligations issued by or guaranteed by the United States or in such other assets as the Secretary of the Treasury may by regulation allow.
(c) Expansion of Incentives for Tribal Schools.--Chapter 1 of the Internal Revenue Code of 1986 (as amended by section 322) is further amended by adding at the end the following new subchapter:
``Subchapter XI--Tribal School Modernization Provisions
``Sec. 1400J. Credit to holders of qualified tribal school modernization bonds.
``SEC. 1400J. CREDIT TO HOLDERS OF QUALIFIED TRIBAL SCHOOL
MODERNIZATION BONDS.
``(a) Allowance of Credit.--In the case of a taxpayer who holds a qualified tribal school modernization bond on a credit allowance date of such bond which occurs during the taxable year, there shall be allowed as a credit against the tax imposed by this chapter for such taxable year an amount equal to the sum of the credits determined under subsection
(b) with respect to credit allowance dates during such year on which the taxpayer holds such bond.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined under this subsection with respect to any credit allowance date for a qualified tribal school modernization bond is 25 percent of the annual credit determined with respect to such bond.
``(2) Annual credit.--The annual credit determined with respect to any qualified tribal school modernization bond is the product of--
``(A) the applicable credit rate, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Applicable credit rate.--For purposes of paragraph
(1), the applicable credit rate with respect to an issue is the rate equal to an average market yield (as of the date of sale of the issue) on outstanding long-term corporate obligations (as determined by the Secretary).
``(4) Special rule for issuance and redemption.--In the case of a bond which is issued during the 3-month period ending on a credit allowance date, the amount of the credit determined under this subsection with respect to such credit allowance date shall be a ratable portion of the credit otherwise determined based on the portion of the 3-month period during which the bond is outstanding. A similar rule shall apply when the bond is redeemed.
``(c) Limitation Based on Amount of Tax.--
``(1) In general.--The credit allowed under subsection (a) for any taxable year shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under part IV of subchapter A (other than subpart C thereof, relating to refundable credits).
``(2) Carryover of unused credit.--If the credit allowable under subsection (a) exceeds the limitation imposed by paragraph (1) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such taxable year.
``(d) Qualified Tribal School Modernization Bond; Other Definitions.--For purposes of this section--
``(1) Qualified tribal school modernization bond.--
``(A) In general.--The term `qualified tribal school modernization bond' means, subject to subparagraph (B), any bond issued as part of an issue under section 2(c) of the Indian School Construction Act, as in effect on the date of the enactment of this section, if--
``(i) 95 percent or more of the proceeds of such issue are to be used for the construction, rehabilitation, or repair of a school facility funded by the Bureau of Indian Affairs of the Department of the Interior or for the acquisition of land on which such a facility is to be constructed with part of the proceeds of such issue,
``(ii) the bond is issued by a tribe,
``(iii) the issuer designates such bond for purposes of this section, and
``(iv) the term of each bond which is part of such issue does not exceed 15 years.
``(B) National limitation on amount of bonds designated.--
``(i) National limitation.--There is a national qualified tribal school modernization bond limitation for each calendar year. Such limitation is--
``(I) $200,000,000 for 2002,
``(II) $200,000,000 for 2003, and
``(III) zero after 2003.
``(ii) Allocation of limitation.--The national qualified tribal school modernization bond limitation shall be allocated to tribes by the Secretary of the Interior subject to the provisions of section 2 of the Indian School Construction Act, as in effect on the date of the enactment of this section.
``(iii) Designation subject to limitation amount.--The maximum aggregate face amount of bonds issued during any calendar year which may be designated under subsection (d)(1) with respect to any tribe shall not exceed the limitation amount allocated to such government under clause (ii) for such calendar year.
``(iv) Carryover of unused limitation.--If for any calendar year--
``(I) the limitation amount under this subparagraph, exceeds
``(II) the amount of qualified tribal school modernization bonds issued during such year,
the limitation amount under this subparagraph for the following calendar year shall be increased by the amount of such excess. The preceding sentence shall not apply if such following calendar year is after 2010.
``(2) Credit allowance date.--The term `credit allowance date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.Such term includes the last day on which the bond is outstanding.
``(3) Bond.--The term `bond' includes any obligation.
``(4) Tribe.--The term ``tribe'' has the meaning given the term ``Indian tribal government'' by section 7701(a)(40), including the application of section 7871(d). Such term includes any consortium of tribes approved by the Secretary of the Interior.
``(e) Credit Included in Gross Income.--Gross income includes the amount of the credit allowed to the taxpayer under this section (determined without regard to subsection
(c)) and the amount so included shall be treated as interest income.
``(f) Bonds Held by Regulated Investment Companies.--If any qualified tribal school modernization bond is held by a regulated investment company, the credit determined under subsection (a) shall be allowed to shareholders of such company under procedures prescribed by the Secretary.
``(g) Credits May Be Stripped.--Under regulations prescribed by the Secretary--
``(1) In general.--There may be a separation (including at issuance) of the ownership of a qualified tribal school modernization bond and the entitlement to the credit under this section with respect to such bond. In case of any such separation, the credit under this section shall be allowed to the person who on the credit allowance date holds the instrument evidencing the entitlement to the credit and not to the holder of the bond.
``(2) Certain rules to apply.--In the case of a separation described in paragraph (1), the rules of section 1286 shall apply to the qualified tribal school modernization bond as if it were a stripped bond and to the credit under this section as if it were a stripped coupon.
``(h) Treatment for Estimated Tax Purposes.--Solely for purposes of sections 6654 and 6655, the credit allowed by this section to a taxpayer by reason of holding a qualified tribal school modernization bonds on a credit allowance date shall be treated as if it were a payment of estimated tax made by the taxpayer on such date.
``(i) Credit May Be Transferred.--Nothing in any law or rule of law shall be construed to limit the transferability of the credit allowed by this section through sale and repurchase agreements.
``(j) Credit Treated as Allowed Under Part IV of Subchapter A.--For purposes of subtitle F, the credit allowed by this section shall be treated as a credit allowable under part IV of subchapter A of this chapter.
``(k) Reporting.--Issuers of qualified tribal school modernization bonds shall submit reports similar to the reports required under section 149(e).''.
(d) Additional Provisions.--
(1) Sovereign immunity.--This section and the amendments made by this section shall not be construed to impact, limit, or affect the sovereign immunity of the Federal Government or any State or tribal government.
(2) Application.--This section and the amendments made by this section shall take effect on the date of the enactment of this Act with respect to bonds issued after December 31, 2001, regardless of the status of regulations promulgated thereunder.
CHAPTER 3--21ST CENTURY COMMUNITY LEARNING CENTERS
SEC. 331. REAUTHORIZATION.
Section 10907 (20 U.S.C. 8247) is amended by striking
``$20,000,000 for fiscal year 1995'' and all that follows through the period and inserting ``$1,000,000,000 for each of fiscal years 2002 through 2006, to carry out this part.''.
CHAPTER 4--ENHANCEMENT OF BASIC LEARNING SKILLS
SEC. 341. REDUCING CLASS SIZE.
Title X (20 U.S.C. 8001 et seq.), as amended by section 311, is further amended by adding at the end the following:
``PART M--CLASS SIZE REDUCTION
``SEC. 10998. GRANTS FOR CLASS SIZE REDUCTION.
``(a) In General.--From the amount appropriated for a fiscal year under subsection (i), the Secretary of Education--
``(1) shall make available 1 percent of such amount to the Secretary of the Interior (on behalf of the Bureau of Indian Affairs) and the outlying areas for activities under this section; and
``(2) shall allocate the remainder by providing each State the same percentage of that remainder as it received of the funds allocated to States under section 307(a)(2) of the Department of Education Appropriations Act, 1999.
``(b) Allocation of Funds.--
``(1) In general.--Each State that receives funds under this section shall distribute 100 percent of such funds to local educational agencies, of which--
``(A) 80 percent of such amount shall be allocated to such local educational agencies in proportion to the number of children, aged 5 to 17, who reside in the school district served by such local educational agency from families with incomes below the poverty line (as defined by the Office of Management and Budget and revised annually in accordance with section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2))) applicable to a family of the size involved for the most recent fiscal year for which satisfactory data are available compared to the number of such individuals who reside in the school districts served by all the local educational agencies in the State for that fiscal year; and
``(B) 20 percent of such amount shall be allocated to such local educational agencies in accordance with the relative enrollments of children, aged 5 to 17, in public and private nonprofit elementary and secondary schools within the boundaries of such agencies.
``(2) Exception.--Notwithstanding paragraph (1), if the award to a local educational agency under this section is less than the starting salary for a new fully qualified teacher in that agency, who is certified within the State
(which may include certification through State or local alternative routes), has a baccalaureate degree, and demonstrates the general knowledge, teaching skills, and subject matter knowledge required to teach in his or her content areas, that agency may use funds under this section to--
``(A) help pay the salary of a full- or part-time teacher hired to reduce class size, which may be in combination with other Federal, State, or local funds; or
``(B) pay for activities described in subsection
(c)(2)(A)(iii) which may be related to teaching in smaller classes.
``(c) Use of Funds.--
``(1) Purpose, intent, and general use.--The basic purpose and intent of this section is to reduce class size with fully qualified teachers. Each local educational agency that receives funds under this section shall use such funds to carry out effective approaches to reducing class size with fully qualified teachers who are certified within the State, including teachers certified through State or local alternative routes, and who demonstrate competency in the areas in which they teach, to improve educational achievement for both regular and special needs children, with particular consideration given to reducing class size in the early elementary grades for which some research has shown class size reduction is most effective.
``(2) Specific uses.--
``(A) In general.--Each such local educational agency may use funds under this section for--
``(i) recruiting (including through the use of signing bonuses, and other financial incentives), hiring, and training fully qualified regular and special education teachers (which may include hiring special education teachers to team-teach with regular teachers in classrooms that contain both children with disabilities and non-disabled children) and teachers of special-needs children who are certified within the State, including teachers certified through State or local alternative routes, have a baccalaureate degree and demonstrate the general knowledge, teaching skills, and subject matter knowledge required to teach in their content areas;
``(ii) testing new teachers for academic content knowledge and to meet State certification requirements that are consistent with title II of the Higher Education Act of 1965; and
``(iii) providing professional development (which may include such activities as those described in section 2210, opportunities for teachers to attend multi-week institutes, such as those made available during the summer months that provide intensive professional development in partnership with local educational agencies and initiatives that promote retention and mentoring), to teachers, including special education teachers and teachers of special-needs children, in order to meet the goal of ensuring that all instructional staff have the subject matter knowledge, teaching knowledge, and teaching skills necessary to teach effectively in the content area or areas in which they provide instruction, consistent with title II of the Higher Education Act of 1965.
``(B) Limitation.--
``(i) In general.--Except as provided under clause (ii), a local educational agency may use not more than a total of 25 percent of the award received under this section for activities described in clauses (ii) and (iii) of subparagraph (A).
(ii) Exception.--A local educational agency in which 10 percent or more of teachers in elementary schools, as defined by section 14101(14), have not met applicable State and local certification requirements (including certification through State or local alternative routes), or if such requirements have been waived, may use more than 25 percent of the funds it receives under this section for activities described in subparagraph (A)(iii) to help teachers who are not certified by the State become certified, including through State or local alternative routes, or to help teachers affected by class size reduction who lack sufficient content knowledge to teach effectively in the areas they teach to obtain that knowledge, if the local educational agency notifies the State educational agency of the percentage of the funds that it will use for the purpose described in this clause.
``(C) Use for further reductions.--A local educational agency that has already reduced class size in the early grades to 18 or less children (or has already reduced class size to a State or local class size reduction goal that was in effect on the day before the enactment of the Department of Education Appropriations Act, 2000, if that State or local educational agency goal is 20 or fewer children) may use funds received under this section--
``(i) to make further class size reductions in grades kindergarten through 3;
``(ii) to reduce class size in other grades; or
``(iii) to carry out activities to improve teacher quality including professional development.
``(D) Professional development.--If a local educational agency has already reduced class size in the early grades to 18 or fewer children and intends to use funds provided under this section to carry out professional development activities, including activities to improve teacher quality, then the State shall make the award under subsection (b) to the local educational agency.
``(3) Supplement not supplant.--Each such agency shall use funds under this section only to supplement, and not to supplant, State and local funds that, in the absence of such funds, would otherwise be spent for activities under this section.
``(4) Limitation.--No funds made available under this section may be used to increase the salaries or provide benefits, other than participation in professional development and enrichment programs, to teachers who are not hired under this section. Funds under this section may be used to pay the salary of teachers hired under section 307 of the Department of Education Appropriations Act, 1999, or under section 310 of the Department of Education Appropriations Act, 2000.
``(d) Reporting.--
``(1) In general.--Each State receiving funds under this section shall report on activities in the State under this section, consistent with section 6202(a)(2).
``(2) Reporting to parents.--Each State and local educational agency receiving funds under this section shall publicly report to parents on its progress in reducing class size, increasing the percentage of classes in core academic areas taught by fully qualified teachers who are certified within the State and demonstrate competency in the content areas in which they teach, and on the impact that hiring additional highly qualified teachers and reducing class size, has had, if any, on increasing student academic achievement.
``(3) Provision of qualification to parents.--Each school receiving funds under this section shall provide to parents, upon request, the professional qualifications of their child's teacher.
``(e) Professional Development.--If a local educational agency uses funds made available under this section for professional development activities, the agency shall ensure for the equitable participation of private nonprofit elementary and secondary schools in such activities. Section 6402 shall not apply to other activities under this section.
``(f) Limitation on Administrative Costs.--A local educational agency that receives funds under this section may use not more than 3 percent of such funds for local administrative costs.
``(g) Application.--Each local educational agency that desires to receive funds under this section shall include in the application required under section 6303 a description of the agency's program to reduce class size by hiring additional highly qualified teachers.
``(h) No use of Funds for Payments to Certain Teachers.--No funds under this section may be used to pay the salary of any teacher hired with funds under section 307 of the Department of Education Appropriations Act, 1999, unless, by the start of the 2001-2002 school year, the teacher is certified within the State (which may include certification through State or local alternative routes) and demonstrates competency in the subject areas in which he or she teaches.
``(i) Notification.--Not later than 30 days after the date of the enactment of this section, the Secretary shall provide specific notification to each local educational agency eligible to receive funds under this part regarding the flexibility provided under subsection (c)(2)(B)(ii) and the ability to use such funds to carry out activities described in subsection (c)(2)(A)(iii).
``(j) Authorization of Appropriations.--There is authorized to be appropriated to carry out this section--
``(1) $2,317,507,723 for fiscal year 2002;
``(2) $3,012,015,447 for fiscal year 2003;
``(3) $3,706,523,170 for fiscal year 2004; and
``(4) $4,401,030,983 for fiscal year 2005.''.
SEC. 342. READING EXCELLENCE.
Part C of title II (20 U.S.C. 6661 et seq.) is amended--
(1) by inserting after the part heading the following:
``SEC. 2250. SHORT TITLE.
``This part may be cited as the `Reading Excellence Act'.'';
(2) in section 2253(a) (20 U.S.C. 6661b(a)) by adding at the end the following:
``(3) Amount of Grants.--From the amount appropriated for each fiscal year under section 2260(a), the Secretary shall award to each State educational agency a grant under this part in an amount that is in proportion to the amount the State received under part A of title I for the previous fiscal year.'';
(3) in section 2255 (20 U.S.C. 6661d) by adding at the end the following:
``(f) Other Uses.--With respect to a State educational agency that has used amounts received under a grant under section 2253 in a previous fiscal year to sufficiently serve schools described in subsection (a)(1), such State agency may use amounts received under such a grant in succeeding fiscal years to provide subgrants to local educational agencies to assist other schools that may receive assistance under title I.''; and
(4) in section 2260(a) (20 U.S.C. 6661i(a)) by adding at the end the following:
``(3) Other fiscal years.--There are authorized to be appropriated to carry out this part and section 1202(c)--
``(A) $500,000,000 for fiscal year 2002;
``(B) $600,000,000 for fiscal year 2003;
``(C) $700,000,000 for fiscal year 2004;
``(D) $850,000,000 for fiscal year 2005; and
``(E) $1,000,000,000 for fiscal year 2006.''.
SEC. 343. TUTORIAL ASSISTANCE GRANTS.
(a) In General.--Section 2256 (20 U.S.C. 6661e) is repealed.
(b) Conforming Amendments.--Part C of title II (20 U.S.C. 6661 et seq.) is amended--
(1) in section 2253 (20 U.S.C. 6661b)--
(A) in subsection (a)(1), by striking ``sections 2254 through 2256'' and inserting ``sections 2254 and 2255''; and
(B) in subsection (b)(2)--
(i) in subparagraph (A)(ii), by striking ``sections 2255 and 2256'' and inserting ``section 2255'';
(ii) in subparagraph (B)--
(I) in clause (ii), by striking ``section 2255 and 2256'' and inserting ``section 2255''; and
(II) in clause (vi), , by striking ``sections 2255 and 2256'' and inserting ``section 2255''; and
(iii) in subparagraph (E)(iii)--
(I) by striking ``sections 2255(a)(1) and 2256(a)(1)'' and inserting ``section 2255(a)(1)''; and
(II) by striking ``sections 2255 and 2256'' and inserting
``section 2255'';
(2) in section 2254 (20 U.S.C. 6661c)--
(A) in paragraph (1)--
(i) by striking ``(excluding section 2256)''; and
(ii) by striking ``; and'' and inserting a period;
(B) by striking ``2253--'' and all that follows through
``shall use'' in paragraph (1) and inserting ``2253 shall use''; and
(C) by striking in paragraph (2); and
(3) in section 2258(a) (20 U.S.C. 6661h(a)), by striking
``or 2256''.
CHAPTER 5--INTEGRATION OF TECHNOLOGY INTO THE CLASSROOM
SEC. 351. SHORT TITLE.
This chapter may be cited as the ``Training for Technology Act of 2001''.
SEC. 352. LOCAL APPLICATIONS FOR SCHOOL TECHNOLOGY RESOURCE
GRANTS.
Section 3135 (20 U.S.C. 6845) is amended--
(1) in the first sentence, by inserting ``(a) In General.--
'' before ``Each local educational agency'';
(2) in subsection (a) (as so redesignated)--
(A) in paragraph (3)(B), by striking ``; and'' and inserting a semicolon;
(B) in paragraph (4), by striking the period and inserting
``; and''; and
(C) by inserting after paragraph (4) the following:
``(5) demonstrate the manner in which the local educational agency will utilize at least 30 percent of the amounts provided to the agency under this subpart in each fiscal year to provide for in-service teacher training, or that the agency is using at least 30 percent of its total technology funding available to the agency from all sources (including Federal, State, and local sources) to provide in-service teacher training.'';
(3) by redesignating subsections (d) and (e) as subsections
(b) and (c) respectively; and
(4) in subsection (c) (as so redesignated), by striking
``subsection (e)'' and inserting ``subsection (a)''.
SEC. 353. TEACHER PREPARATION.
Part A of title III (20 U.S.C. 6811 et seq.) is amended by adding at the end the following:
``Subpart 5--Preparing Tomorrow's Teachers To Use Technology
``SEC. 3161. PURPOSE; PROGRAM AUTHORITY.
``(a) Purpose.--It is the purpose of this subpart to assist consortia of public and private entities in carrying out programs that prepare prospective teachers to use advanced technology to foster learning environments conducive to preparing all students to achieve to challenging State and local content and student performance standards.
``(b) Program Authority.--
``(1) In general.--The Secretary is authorized, through the Office of Educational Technology, to award grants, contracts, or cooperative agreements on a competitive basis to eligible applicants in order to assist them in developing or redesigning teacher preparation programs to enable prospective teachers to use technology effectively in their classrooms.
``(2) Period of award.--The Secretary may award grants, contracts, or cooperative agreements under this subpart for a period of not more than 5 years.
``SEC. 3162. ELIGIBILITY.
``(a) Eligible Applicants.--In order to receive an award under this subpart, an applicant shall be a consortium that includes--
``(1) at least 1 institution of higher education that offers a baccalaureate degree and prepares teachers for their initial entry into teaching;
``(2) at least 1 State educational agency or local educational agency; and
``(3) 1 or more of the following entities:
``(A) an institution of higher education (other than the institution described in paragraph (1));
``(B) a school or department of education at an institution of higher education;
``(C) a school or college of arts and sciences at an institution of higher education;
``(D) a professional association, foundation, museum, library, for-profit business, public or private nonprofit organization, community-based organization, or other entity with the capacity to contribute to the technology-related reform of teacher preparation programs.
``(b) Application Requirements.--In order to receive an award under this subpart, an eligible applicant shall submit an application to the Secretary at such time, and containing such information, as the Secretary may require. Such application shall include--
``(1) a description of the proposed project, including how the project would ensure that individuals participating in the project would be prepared to use technology to create learning environments conducive to preparing all students, including girls and students who have economic and educational disadvantages, to achieve to challenging State and local content and student performance standards;
``(2) a demonstration of--
``(A) the commitment, including the financial commitment, of each of the members of the consortium; and
``(B) the active support of the leadership of each member of the consortium for the proposed project;
``(3) a description of how each member of the consortium would be included in project activities;
``(4) a description of how the proposed project would be continued once the Federal funds awarded under this subpart end; and
``(5) a plan for the evaluation of the program, which shall include benchmarks to monitor progress toward specific project objectives.
``(c) Matching Requirements.--
``(1) In general.--The Federal share of the cost of any project funded under this subpart shall not exceed 50 percent. Except as provided in paragraph (2), the non-Federal share of such project may be in cash or in kind, fairly evaluated, including services.
``(2) Acquisition of equipment.--Not more than 10 percent of the funds awarded for a project under this subpart may be used to acquire equipment, networking capabilities, or infrastructure, and the non-Federal share of the cost of any such acquisition shall be in cash.
``SEC. 3163. USE OF FUNDS.
``(a) Required Uses.--A recipient shall use funds under this subpart for--
``(1) creating programs that enable prospective teachers to use advanced technology to create learning environments conducive to preparing all students, including girls and students who have economic and educational disadvantages, to achieve to challenging State and local content and student performance standards; and
``(2) evaluating the effectiveness of the project.
``(b) Permissible Uses.--A recipient may use funds under this subpart for activities, described in its application, that carry out the purposes of this subpart, such as--
``(1) developing and implementing high-quality teacher preparation programs that enable educators to--
``(A) learn the full range of resources that can be accessed through the use of technology;
``(B) integrate a variety of technologies into the classroom in order to expand students' knowledge;
``(C) evaluate educational technologies and their potential for use in instruction; and
``(D) help students develop their own technical skills and digital learning environments;
``(2) developing alternative teacher development paths that provide elementary schools and secondary schools with well-prepared, technology-proficient educators;
``(3) developing performance-based standards and aligned assessments to measure the capacity of prospective teachers to use technology effectively in their classrooms;
``(4) providing technical assistance to other teacher preparation programs;
``(5) developing and disseminating resources and information in order to assist institutions of higher education to prepare teachers to use technology effectively in their classrooms; and
``(6) subject to section 3162(c)(2), acquiring equipment, networking capabilities, and infrastructure to carry out the project.
``SEC. 3164. AUTHORIZATION OF APPROPRIATIONS.
``For purposes of carrying out this subpart, there is authorized to be appropriated $150,000,000 for fiscal year 2002, and such sums as may be necessary for each of the 4 succeeding fiscal years.''.
SEC. 354. PROFESSIONAL DEVELOPMENT.
Section 3141(b)(2)(A) (20 U.S.C. 6861(b)(2)(A)) is amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii)(V), by adding ``and'' after the semicolon; and
(2) by adding at the end the following:
``(iii) the provision of incentives, including bonus payments, to recognized educators who achieve the National Education Technology Standards, or an information technology certification that is directly related to the curriculum or content area in which the teacher provides instruction;''.
TITLE IV--INDIVIDUALS WITH DISABILITIES EDUCATION ACT
SEC. 401. FULL FUNDING OF IDEA.
(a) Full Funding.--In additional to any amounts otherwise appropriated, there are appropriated to carry out part B of the Individuals with Disabilities Education Act (20 U.S.C. 1411 et seq.), $2,000,000,000 for fiscal year 2002.
(b) Sense of the Senate.--
(1) Findings.--The Senate makes the following findings:
(A) Before the Individuals with Disabilities Education Act
(20 U.S.C. 1400 et seq.) (referred to in this subsection as
``IDEA'') was enacted in 1975, as many as 4,000,000 children were denied appropriate educational services. Few disabled preschoolers received services. 1,000,000 children with disabilities were excluded from public school. Courts ruled this practice was unconstitutional.
(B) States asked the Federal Government to help them fund educational services to disabled children. Congress responded by enacting IDEA to ensure that disabled children received appropriate services and to provide financial support to the States for providing these services.
(C) Since the enactment of IDEA, schools have been serving disabled children, helping them develop their skills and abilities and go on to lead productive and independent lives. Today, IDEA serves 5,400,000 children with disabilities from birth through age 21. Every State offers public education and early intervention services for children with disabilities. Fewer than 6,000 disabled children now live in institutional settings away from their families, compared to 95,000 such children in 1969. The number of disabled students completing high school with a diploma or certificate has increased by 10 percent in the last decade. The number of students with disabilities entering higher education has more than tripled since the implementation of IDEA.
(D) When IDEA was enacted, the legislation included a goal to provide 40 percent of the cost of providing services for these students.
(E) The cost of providing special education has increased significantly for school districts across the country. The Federal Government currently provides about 15 percent of the national average per pupil expenditure for IDEA students.
(F) IDEA will be up for reauthorization for fiscal year 2003.
(2) Sense of the Senate.--It is the sense of the Senate that--
(A) when Congress reauthorizes the IDEA program, it should ensure that the Federal Government will reach the goal of providing 40 percent of the national average per pupil expenditure under IDEA; and
(B) disabled children will benefit from efforts to help schools hire and train high quality teachers and principals, reduce class size, renovate overcrowded and crumbling buildings, integrate technology into the classroom, strengthen early literacy programs, and increase the availability of after-school learning opportunities.
TITLE V--MAKING HIGHER EDUCATION MORE AFFORDABLE
SEC. 501. INCREASE IN MAXIMUM PELL GRANT.
(a) Findings.--Congress makes the following findings:
(1) A college education has become increasingly important, not just to the individual beneficiary, but to the nation as a whole. The growth and continued expansion of the nation's economy is heavily dependent on an educated and highly skilled workforce.
(2) The opportunity to gain a college education also is important to the nation as a means to help advance the American ideals of progress and equality.
(3) The Federal Government plays an invaluable role in making student financial aid available to ensure that qualified students are able to attend college, regardless of their financial means. Since the inception of the Pell Grant program in 1973, nearly 80,000,000 grants have helped low- and middle-income students go to college, enrich their lives, and become productive members of society.
(4) Nationwide, almost 70 percent of high school graduates continue on to higher education. This degree of college participation would not exist without the Federal investment in student aid, especially the Pell Grant program. Nearly 25 percent of low- and middle-income students receive some amount of Pell Grant funding.
(5) In the next 10 years, the number of undergraduate students enrolled in the nation's colleges and universities will increase by 11 percent to more than 11,000,000 students. Many of these students will be the first in their families to attend college. One in 5 of these students will be from families with incomes below the poverty level. The continued investment in the Pell Grant program is essential if college is to remain an achievable part of the American dream.
(6) Increasing the maximum Pell Grant to $4,700 would allow approximately 430,000 additional students to benefit from the program.
(7) Increasing the maximum Pell Grant to $4,700 would result in an $800 increase in the average grant award.
(8) Because Pell Grant recipients are more likely to graduate with student loan debt and to amass more debt than other student borrowers, increasing the maximum Pell Grant to
$4,700 by fiscal year 2004 will help remedy this disparity.
(b) Sense of the Senate.--It is the sense of the Senate the maximum Pell Grant should be increased to $4,700.
SEC. 502. DEDUCTION FOR HIGHER EDUCATION EXPENSES.
(a) Deduction Allowed.--Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to additional itemized deductions for individuals) is amended by redesignating section 222 as section 223 and by inserting after section 221 the following:
``SEC. 222. HIGHER EDUCATION EXPENSES.
``(a) Allowance of Deduction.--
``(1) In general.--In the case of an individual, there shall be allowed as a deduction an amount equal to the applicable dollar amount of the qualified higher education expenses paid by the taxpayer during the taxable year.
``(2) Applicable dollar amount.--The applicable dollar amount for any taxable year shall be determined as follows:
Applicable
``Taxable year: dollar amount:
2002......................................................$4,000 ....
2003......................................................$8,000 ....
2004 and thereafter......................................$12,000.....
``(b) Limitation Based on Modified Adjusted Gross Income.--
``(1) In general.--The amount which would (but for this subsection) be taken into account under subsection (a) shall be reduced (but not below zero) by the amount determined under paragraph (2).
``(2) Amount of reduction.--The amount determined under this paragraph equals the amount which bears the same ratio to the amount which would be so taken into account as--
``(A) the excess of--
``(i) the taxpayer's modified adjusted gross income for such taxable year, over
``(ii) $62,450 ($104,050 in the case of a joint return,
$89,150 in the case of a return filed by a head of household, and $52,025 in the case of a return by a married individual filing separately), bears to
``(B) $15,000.
``(3) Modified adjusted gross income.--For purposes of this subsection, the term `modified adjusted gross income' means the adjusted gross income of the taxpayer for the taxable year determined--
``(A) without regard to this section and sections 911, 931, and 933, and
``(B) after the application of sections 86, 135, 219, 220, and 469.For purposes of the sections referred to in subparagraph (B), adjusted gross income shall be determined without regard to the deduction allowed under this section.
``(c) Qualified Higher Education Expenses.--For purposes of this section--
``(1) Qualified higher education expenses.--
``(A) In general.--The term `qualified higher education expenses' means tuition and fees charged by an educational institution and required for the enrollment or attendance of--
``(i) the taxpayer,
``(ii) the taxpayer's spouse,
``(iii) any dependent of the taxpayer with respect to whom the taxpayer is allowed a deduction under section 151, or
``(iv) any grandchild of the taxpayer,as an eligible student at an institution of higher education.
``(B) Eligible courses.--Amounts paid for qualified higher education expenses of any individual shall be taken into account under subsection (a) only to the extent such expenses--
``(i) are attributable to courses of instruction for which credit is allowed toward a baccalaureate degree by an institution of higher education or toward a certificate of required course work at a vocational school, and
``(ii) are not attributable to any graduate program of such individual.
``(C) Exception for nonacademic fees.--Such term does not include any student activity fees, athletic fees, insurance expenses, or other expenses unrelated to a student's academic course of instruction.
``(D) Eligible student.--For purposes of subparagraph (A), the term `eligible student' means a student who--
``(i) meets the requirements of section 484(a)(1) of the Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)), as in effect on the date of the enactment of this section, and
``(ii) is carrying at least one-half the normal full-time work load for the course of study the student is pursuing, as determined by the institution of higher education.
``(E) Identification requirement.--No deduction shall be allowed under subsection (a) to a taxpayer with respect to an eligible student unless the taxpayer includes the name, age, and taxpayer identification number of such eligible student on the return of tax for the taxable year.
``(2) Institution of higher education.--The term
`institution of higher education' means an institution which--
``(A) is described in section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088), as in effect on the date of the enactment of this section, and
``(B) is eligible to participate in programs under title IV of such Act.
``(d) Special Rules.--
``(1) No double benefit.--
``(A) In general.--No deduction shall be allowed under subsection (a) for any expense for which a deduction is allowable to the taxpayer under any other provision of this chapter unless the taxpayer irrevocably waives his right to the deduction of such expense under such other provision.
``(B) Denial of deduction if credit elected.--No deduction shall be allowed under subsection (a) for a taxable year with respect to the qualified higher education expenses of an individual if the taxpayer elects to have section 25A apply with respect to such individual for such year.
``(C) Dependents.--No deduction shall be allowed under subsection (a) 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.
``(D) Coordination with exclusions.--A deduction shall be allowed under subsection (a) for qualified higher education expenses only to the extent the amount of such expenses exceeds the amount excludable under section 135 or 530(d)(2) for the taxable year.
``(2) Limitation on taxable year of deduction.--
``(A) In general.--A deduction shall be allowed under subsection (a) for qualified higher education expenses for any taxable year only to the extent such expenses are in connection with enrollment at an institution of higher education during the taxable year.
``(B) Certain prepayments allowed.--Subparagraph (A) shall not apply to qualified higher education expenses paid during a taxable year if such expenses are in connection with an academic term beginning during such taxable year or during the first 3 months of the next taxable year.
``(3) Adjustment for certain scholarships and veterans benefits.--The amount of qualified higher education expenses otherwise taken into account under subsection (a) with respect to the education of an individual shall be reduced
(before the application of subsection (b)) by the sum of the amounts received with respect to such individual for the taxable year as--
``(A) a qualified scholarship which under section 117 is not includable in gross income,
``(B) an educational assistance allowance under chapter 30, 31, 32, 34, or 35 of title 38, United States Code, or
``(C) a payment (other than a gift, bequest, devise, or inheritance within the meaning of section 102(a)) for educational expenses, or attributable to enrollment at an eligible educational institution, which is exempt from income taxation by any law of the United States.
``(4) No deduction for married individuals filing separate returns.--If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year.
``(5) Nonresident aliens.--If the taxpayer is a nonresident alien individual for any portion of the taxable year, this section shall apply only if such individual is treated as a resident alien of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013.
``(6) Regulations.--The Secretary may prescribe such regulations as may be necessary or appropriate to carry out this section, including regulations requiring recordkeeping and information reporting.''.
(b) Deduction Allowed in Computing Adjusted Gross Income.--Section 62(a) of the Internal Revenue Code of 1986 is amended by inserting after paragraph (17) the following:
``(18) Higher education expenses.--The deduction allowed by section 222.''.
(c) Conforming Amendment.--The table of sections for part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by striking the item relating to section 222 and inserting the following:
``Sec. 222. Higher education expenses.
``Sec. 223. Cross reference.''.
(d) Effective Date.--The amendments made by this section shall apply to payments made in taxable years beginning after December 31, 2001.
______
By Mr. DASCHLE (for himself, Mr. Baucus, Mr. Dorgan, Mr. Reid,
Mr. Durbin, Mr. Rockfeller, Mrs. Clinton, Mr. Kerry, Mr.
Schumer, Mr. Dodd, and Mr. Conrad):
S. 9. A bill to amend the Internal Revenue Code of 1986 to provide tax relief, and for other purposes; to the Committee on Finance.
working family tax relief act of 2001
Mr. DASCHLE. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the Record, as follows:
S. 9
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Working Family Tax Relief Act of 2001''.
(b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as follows:
Sec. 1. Short title; etc.
TITLE I--MARRIAGE PENALTY TAX RELIEF
Sec. 101. Optional separate calculations.
TITLE II--ESTATE TAX RELIEF
Sec. 201. Increase in amount of unified credit against estate and gift taxes.
Sec. 202. Increase in qualified family-owned business interest deduction amount.
TITLE III--TAX RELIEF FOR AFFORDABLE HIGHER EDUCATION
Sec. 301. Deduction for higher education expenses.
TITLE IV--TAX RELIEF FOR FAMILY CHOICES IN CHILD CARE
Subtitle A--Dependent Care Tax Credit
Sec. 401. Expanding the dependent care tax credit.
Sec. 402. Minimum credit allowed for stay-at-home parents.
Sec. 403. Credit made refundable.
Subtitle B--Incentives for Employer-Provided Child Care
Sec. 411. Allowance of credit for employer expenses for child care assistance.
TITLE V--TAX RELIEF FOR LONG-TERM CARE GIVERS
Sec. 501. Long-term care tax credit.
TITLE VI--TAX RELIEF FOR WORKING FAMILIES
Sec. 601. Increased earned income tax credit for 2 or more qualifying children.
Sec. 602. Simplification of definition of earned income.
Sec. 603. Simplification of definition of child dependent.
Sec. 604. Other modifications to earned income tax credit.
TITLE VII--TAX RELIEF FOR SELF-EMPLOYED INDIVIDUALS
Sec. 701. Deduction for health insurance costs of self-employed individuals increased.
TITLE VIII--TAX RELIEF FOR EXPANDING PENSION AVAILABILITY
Sec. 801. Nonrefundable credit to certain individuals for elective deferrals and IRA contributions.
Sec. 802. Credit for qualified pension plan contributions of small employers.
Sec. 803. Credit for pension plan startup costs of small employers.
TITLE IX--TAX RELIEF FOR ADOPTIVE PARENTS
Sec. 901. Expansion of adoption credit.
TITLE I--MARRIAGE PENALTY TAX RELIEF
SEC. 101. OPTIONAL SEPARATE CALCULATIONS.
(a) In General.--Subpart B of part II of subchapter A of chapter 61 (relating to income tax returns) is amended by inserting after section 6013 the following new section:
``SEC. 6013A. COMBINED RETURN WITH SEPARATE RATES.
``(a) General Rule.--A husband and wife may make a combined return of income taxes under subtitle A under which--
``(1) a separate taxable income is determined for each spouse by applying the rules provided in this section, and
``(2) the tax imposed by section 1 is the aggregate amount resulting from applying the separate rates set forth in section 1(c) to each such taxable income.
``(b) Treatment of Income.--For purposes of this section--
``(1) earned income (within the meaning of section 911(d)), and any income received as a pension or annuity which arises from an employer-employee relationship, shall be treated as the income of the spouse who rendered the services,
``(2) income from property shall be divided between the spouses in accordance with their respective ownership rights in such property (equally in the case of property held jointly by the spouses), and
``(3) any exclusion from income shall be allowable to the spouse with respect to whom the income would be otherwise includible.
``(c) Treatment of Deductions.--For purposes of this section--
``(1) except as otherwise provided in this subsection, the deductions described in section 62(a) shall be allowed to the spouse treated as having the income to which such deductions relate,
``(2) the deductions allowable by section 151(b) (relating to personal exemptions for taxpayer and spouse) shall be determined by allocating 1 personal exemption to each spouse,
``(3) section 63 shall be applied as if such spouses were not married, except that the election whether or not to itemize deductions shall be made jointly by both spouses and apply to each, and
``(4) each spouse's share of all other deductions shall be determined by multiplying the aggregate amount thereof by the fraction--
``(A) the numerator of which is such spouse's gross income, and
``(B) the denominator of which is the combined gross incomes of the 2 spouses.Any fraction determined under paragraph (4) shall be rounded to the nearest percentage point.
``(d) Treatment of Credits.--For purposes of this section--
``(1) In general.--Except as provided in paragraph (2), each spouse's share of credits allowed to both spouses shall be determined by multiplying the aggregate amount of the credits by the fraction determined under subsection (c)(4).
``(2) Earned income credit.--The earned income credit under section 32 shall be determined as if each spouse were a separate taxpayer, except that--
``(A) the earned income and the modified adjusted gross income of each spouse shall be determined under the rules of subsections (b), (c), and (e), and
``(B) qualifying children shall be allocated between spouses proportionate to the earned income of each spouse
(rounded to the nearest whole number).
``(e) Special Rules Regarding Income Limitations.--
``(1) Exclusions and deductions.--For purposes of making a determination under subsection (b) or (c), any eligibility limitation with respect to each spouse shall be determined by taking into account the limitation applicable to a single individual.
``(2) Credits.--For purposes of making a determination under subsection (d)(1), in no event shall an eligibility limitation for any credit allowable to both spouses be less than twice such limitation applicable to a single individual.
``(f) Special Rules for Alternative Minimum Tax.--If a husband and wife elect the application of this section--
``(1) the tax imposed by section 55 shall be computed separately for each spouse, and
``(2) for purposes of applying section 55--
``(A) the rules under this section for allocating items of income, deduction, and credit shall apply, and
``(B) the exemption amount for each spouse shall be the amount determined under section 55(d)(1)(B).
``(g) Treatment as Joint Return.--Except as otherwise provided in this section or in the regulations prescribed hereunder, for purposes of this title (other than sections 1 and 63(c)) a combined return under this section shall be treated as a joint return.
``(h) Limitations.--
``(1) Phase-in of benefit.--
``(A) In general.--In the case of any taxable year beginning before January 1, 2005, the tax imposed by section 1 or 55 shall in no event be less than the sum of--
``(i) the tax determined after the application of this section, plus
``(ii) the applicable percentage of the excess of--
``(I) the tax determined without the application of this section, over
``(II) the amount determined under clause (i).
``(B) Applicable percentage.--For purposes of subparagraph
(A), the applicable percentage shall be determined in accordance with the following table:
``For taxable years beginning in: The applicable percentage is:
2003..........................................................50 ....
2004..........................................................10.....
``(2) Limitation of benefit based on combined adjusted gross income.--With respect to spouses electing the treatment of this section for any taxable year, the tax under section 1 or 55 shall be increased by an amount which bears the same ratio to the excess of the tax determined without the application of this section over the tax determined after the application of this section as the ratio (but not over 100 percent) of the excess of the combined adjusted gross income of the spouses over $100,000 bears to $50,000.
``(i) Regulations.--The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this section.''.
(b) Unmarried Rate Made Applicable.--So much of subsection
(c) of section 1 as precedes the table is amended to read as follows:
``(c) Separate or Unmarried Return Rate.--There is hereby imposed on the taxable income of every individual (other than a married individual (as defined in section 7703) filing a return which is not a combined return under section 6013A, a surviving spouse as defined in section 2(a), or a head of household as defined in section 2(b)) a tax determined in accordance with the following table:''.
(c) Penalty for Substantial Understatement of Income From Property.--Section 6662 (relating to imposition of accuracy-related penalty) is amended--
(1) by adding at the end of subsection (b) the following new paragraph:
``(6) Any substantial understatement of income from property under section 6013A.'', and
(2) by adding at the end the following new subsection:
``(i) Substantial Understatement of Income From Property Under Section 6013A.--For purposes of this section, there is a substantial understatement of income from property under section 6013A if--
``(1) the spouses electing the treatment of such section for any taxable year transfer property from 1 spouse to the other spouse in such year,
``(2) such transfer results in reduced tax liability under such section, and
``(3) the significant purpose of such transfer is the avoidance or evasion of Federal income tax.''.
(d) Protection of Social Security and Medicare Trust Funds.--
(1) In general.--Nothing in this section shall be construed to alter or amend the Social Security Act (or any regulation promulgated under that Act).
(2) Transfers.--
(A) Estimate of secretary.--The Secretary of the Treasury shall annually estimate the impact that the enactment of this section has on the income and balances of the trust funds established under sections 201 and 1817 of the Social Security Act (42 U.S.C. 401 and 1395i).
(B) Transfer of funds.--If, under subparagraph (A), the Secretary of the Treasury estimates that the enactment of this section has a negative impact on the income and balances of such trust funds, the Secretary shall transfer, not less frequently than quarterly, from the general revenues of the Federal Government an amount sufficient so as to ensure that the income and balances of such trust funds are not reduced as a result of the enactment of this section.
(e) Clerical Amendment.--The table of sections for subpart B of part II of subchapter A of chapter 61 is amended by inserting after the item relating to section 6013 the following new item:
``Sec. 6013A. Combined return with separate rates.''.
(f) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2002.
TITLE II--ESTATE TAX RELIEF
SEC. 201. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE
AND GIFT TAXES.
(a) In General.--The table contained in section 2010(c)
(relating to applicable credit amount) is amended to read as follows:
``In the case of estates of decedentThe applicable exclusion amount is:
2002, 2003, 2004, 2005, and 2006......................$1,000,000
2007 and 2008.........................................$1,125,000
2009..................................................$1,500,000
2010 or thereafter.................................$2,000,000.''.
(b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2001.
SEC. 202. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS
INTEREST DEDUCTION AMOUNT.
(a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows:
``(2) Maximum deduction.--
``(A) In general.--The deduction allowed by this section shall not exceed the sum of--
``(i) the applicable deduction amount, plus
``(ii) in the case of a decedent described in subparagraph
(C), the applicable unused spousal deduction amount.
``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table:
``In the case of estates of decedentThe applicable deduction amount is:
2002, 2003, 2004, 2005, and 2006.......................$1,375,000
2007 and 2008..........................................$1,625,000
2009...................................................$2,375,000
2010 or thereafter....................................$3,375,000.
``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2001, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of--
``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over
``(ii) the sum of--
``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus
``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.''.
(b) Conforming Amendments.--Section 2057(a)(3)(B) is amended--
(1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and
(2) by striking ``$675,000'' in the heading and inserting
``applicable deduction amount''.
(c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2001.
TITLE III--TAX RELIEF FOR AFFORDABLE HIGHER EDUCATION
SEC. 301. DEDUCTION FOR HIGHER EDUCATION EXPENSES.
(a) Deduction Allowed.--Part VII of subchapter B of chapter 1 (relating to additional itemized deductions for individuals) is amended by redesignating section 222 as section 223 and by inserting after section 221 the following new section:
``SEC. 222. HIGHER EDUCATION EXPENSES.
``(a) Allowance of Deduction.--
``(1) In general.--In the case of an individual, there shall be allowed as a deduction an amount equal to the applicable dollar amount of the qualified higher education expenses paid by the taxpayer during the taxable year.
``(2) Applicable dollar amount.--The applicable dollar amount for any taxable year shall be determined as follows:
Applicable
``Taxable year: dollar amount:
2002......................................................$4,000 ....
2003......................................................$8,000 ....
2004 and thereafter......................................$12,000.....
``(b) Limitation Based on Modified Adjusted Gross Income.--
``(1) In general.--The amount which would (but for this subsection) be taken into account under subsection (a) shall be reduced (but not below zero) by the amount determined under paragraph (2).
``(2) Amount of reduction.--The amount determined under this paragraph equals the amount which bears the same ratio to the amount which would be so taken into account as--
``(A) the excess of--
``(i) the taxpayer's modified adjusted gross income for such taxable year, over
``(ii) $62,450 ($104,050 in the case of a joint return,
$89,150 in the case of a return filed by a head of household, and $52,025 in the case of a return by a married individual filing separately), bears to
``(B) $15,000.
``(3) Modified adjusted gross income.--For purposes of this subsection, the term `modified adjusted gross income' means the adjusted gross income of the taxpayer for the taxable year determined--
``(A) without regard to this section and sections 911, 931, and 933, and
``(B) after the application of sections 86, 135, 219, 220, and 469.For purposes of the sections referred to in subparagraph (B), adjusted gross income shall be determined without regard to the deduction allowed under this section.
``(c) Qualified Higher Education Expenses.--For purposes of this section--
``(1) Qualified higher education expenses.--
``(A) In general.--The term `qualified higher education expenses' means tuition and fees charged by an educational institution and required for the enrollment or attendance of--
``(i) the taxpayer,
``(ii) the taxpayer's spouse,
``(iii) any dependent of the taxpayer with respect to whom the taxpayer is allowed a deduction under section 151, or
``(iv) any grandchild of the taxpayer,as an eligible student at an institution of higher education.
``(B) Eligible courses.--Amounts paid for qualified higher education expenses of any individual shall be taken into account under subsection (a) only to the extent such expenses--
``(i) are attributable to courses of instruction for which credit is allowed toward a baccalaureate degree by an institution of higher education or toward a certificate of required course work at a vocational school, and
``(ii) are not attributable to any graduate program of such individual.
``(C) Exception for nonacademic fees.--Such term does not include any student activity fees, athletic fees, insurance expenses, or other expenses unrelated to a student's academic course of instruction.
``(D) Eligible student.--For purposes of subparagraph (A), the term `eligible student' means a student who--
``(i) meets the requirements of section 484(a)(1) of the Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)), as in effect on the date of the enactment of this section, and
``(ii) is carrying at least one-half the normal full-time work load for the course of study the student is pursuing, as determined by the institution of higher education.
``(E) Identification requirement.--No deduction shall be allowed under subsection (a) to a taxpayer with respect to an eligible student unless the taxpayer includes the name, age, and taxpayer identification number of such eligible student on the return of tax for the taxable year.
``(2) Institution of higher education.--The term
`institution of higher education' means an institution which--
``(A) is described in section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088), as in effect on the date of the enactment of this section, and
``(B) is eligible to participate in programs under title IV of such Act.
``(d) Special Rules.--
``(1) No double benefit.--
``(A) In general.--No deduction shall be allowed under subsection (a) for any expense for which a deduction is allowable to the taxpayer under any other provision of this chapter unless the taxpayer irrevocably waives his right to the deduction of such expense under such other provision.
``(B) Denial of deduction if credit elected.--No deduction shall be allowed under subsection (a) for a taxable year with respect to the qualified higher education expenses of an individual if the taxpayer elects to have section 25A apply with respect to such individual for such year.
``(C) Dependents.--No deduction shall be allowed under subsection (a) 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.
``(D) Coordination with exclusions.--A deduction shall be allowed under subsection (a) for qualified higher education expenses only to the extent the amount of such expenses exceeds the amount excludable under section 135 or 530(d)(2) for the taxable year.
``(2) Limitation on taxable year of deduction.--
``(A) In general.--A deduction shall be allowed under subsection (a) for qualified higher education expenses for any taxable year only to the extent such expenses are in connection with enrollment at an institution of higher education during the taxable year.
``(B) Certain prepayments allowed.--Subparagraph (A) shall not apply to qualified higher education expenses paid during a taxable year if such expenses are in connection with an academic term beginning during such taxable year or during the first 3 months of the next taxable year.
``(3) Adjustment for certain scholarships and veterans benefits.--The amount of qualified higher education expenses otherwise taken into account under subsection (a) with respect to the education of an individual shall be reduced
(before the application of subsection (b)) by the sum of the amounts received with respect to such individual for the taxable year as--
``(A) a qualified scholarship which under section 117 is not includable in gross income,
``(B) an educational assistance allowance under chapter 30, 31, 32, 34, or 35 of title 38, United States Code, or
``(C) a payment (other than a gift, bequest, devise, or inheritance within the meaning of section 102(a)) for educational expenses, or attributable to enrollment at an eligible educational institution, which is exempt from income taxation by any law of the United States.
``(4) No deduction for married individuals filing separate returns.--If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year.
``(5) Nonresident aliens.--If the taxpayer is a nonresident alien individual for any portion of the taxable year, this section shall apply only if such individual is treated as a resident alien of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013.
``(6) Regulations.--The Secretary may prescribe such regulations as may be necessary or appropriate to carry out this section, including regulations requiring recordkeeping and information reporting.''.
(b) Deduction Allowed in Computing Adjusted Gross Income.--Section 62(a) is amended by inserting after paragraph (17) the following new paragraph:
``(18) Higher education expenses.--The deduction allowed by section 222.''.
(c) Conforming Amendment.--The table of sections for part VII of subchapter B of chapter 1 is amended by striking the item relating to section 222 and inserting the following new items:
``Sec. 222. Higher education expenses.
``Sec. 223. Cross reference.''.
(d) Effective Date.--The amendments made by this section shall apply to payments made in taxable years beginning after December 31, 2001.
TITLE IV--TAX RELIEF FOR FAMILY CHOICES IN CHILD CARE
Subtitle A--Dependent Care Tax Credit
SEC. 401. EXPANDING THE DEPENDENT CARE TAX CREDIT.
(a) Percentage of Employment-Related Expenses Determined by Taxpayer Status.--Section 21(a)(2) (defining applicable percentage) is amended to read as follows:
``(2) Applicable percentage defined.--For purposes of paragraph (1), the term `applicable percentage' means--
``(A) except as provided in subparagraph (B), 50 percent reduced (but not below 20 percent) by 1 percentage point for each $1,000, or fraction thereof, by which the taxpayers's adjusted gross income for the taxable year exceeds $30,000, and
``(B) in the case of employment-related expenses described in subsection (e)(11), 50 percent reduced (but not below zero) by 1 percentage point for each $800, or fraction thereof, by which the taxpayers's adjusted gross income for the taxable year exceeds $30,000.''.
(b) Inflation Adjustment for Allowable Expenses.--Section 21(c) (relating to dollar limit on amount creditable) is amended by striking ``The amount determined'' and inserting
``In the case of any taxable year beginning after 2002, each dollar amount referred to in paragraphs (1) and (2) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting `calendar year 2001' for `calendar year 1992' in subparagraph (B) thereof. If any dollar amount after being increased under the preceding sentence is not a multiple of $10, such dollar amount shall be rounded to the nearest multiple of $10. The amount determined''.
(c) Effective Date.--The amendments made by this section apply to taxable years beginning after December 31, 2001.
SEC. 402. MINIMUM CREDIT ALLOWED FOR STAY-AT-HOME PARENTS.
(a) In General.--Section 21(e) (relating to special rules) is amended by adding at the end the following new paragraph:
``(11) Minimum credit allowed for stay-at-home parents.--Notwithstanding subsection (d), in the case of any taxpayer with one or more qualifying individuals described in subsection (b)(1)(A) under the age of 1 at any time during the taxable year, such taxpayer shall be deemed to have employment-related expenses with respect to such qualifying individuals in an amount equal to the sum of--
``(A) $90 for each month in such taxable year during which at least one of such qualifying individuals is under the age of 1, and
``(B) the amount of employment-related expenses otherwise incurred for such qualifying individuals for the taxable year
(determined under this section without regard to this paragraph).''.
(b) Effective Date.--The amendments made by this section apply to taxable years beginning after December 31, 2001.
SEC. 403. CREDIT MADE REFUNDABLE.
(a) In General.--Part IV of subchapter A of chapter 1
(relating to credits against tax) is amended--
(1) by redesignating section 35 as section 36, and
(2) by redesignating section 21 as section 35.
(b) Advance Payment of Credit.--Chapter 25 (relating to general provisions relating to employment taxes) is amended by inserting after section 3507 the following new section:
``SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE CREDIT.
``(a) General Rule.--Except as otherwise provided in this section, every employer making payment of wages with respect to whom a dependent care eligibility certificate is in effect shall, at the time of paying such wages, make an additional payment equal to such employee's dependent care advance amount.
``(b) Dependent Care Eligibility Certificate.--For purposes of this title, a dependent care eligibility certificate is a statement furnished by an employee to the employer which--
``(1) certifies that the employee will be eligible to receive the credit provided by section 35 for the taxable year,
``(2) certifies that the employee reasonably expects to be an applicable taxpayer for the taxable year,
``(3) certifies that the employee does not have a dependent care eligibility certificate in effect for the calendar year with respect to the payment of wages by another employer,
``(4) states whether or not the employee's spouse has a dependent care eligibility certificate in effect,
``(5) states the number of qualifying individuals in the household maintained by the employee, and
``(6) estimates the amount of employment-related expenses for the calendar year.
``(c) Dependent Care Advance Amount.--
``(1) In general.--For purposes of this title, the term
`dependent care advance amount' means, with respect to any payroll period, the amount determined--
``(A) on the basis of the employee's wages from the employer for such period,
``(B) on the basis of the employee's estimated employment-related expenses included in the dependent care eligibility certificate, and
``(C) in accordance with tables provided by the Secretary.
``(2) Advance amount tables.--The tables referred to in paragraph (1)(C) shall be similar in form to the tables prescribed under section 3402 and, to the maximum extent feasible, shall be coordinated with such tables and the tables prescribed under section 3507(c).
``(d) Other Rules.--For purposes of this section, rules similar to the rules of subsections (d) and (e) of section 3507 shall apply.
``(e) Definitions.--For purposes of this section, terms used in this section which are defined in section 35 shall have the respective meanings given such terms by section 35.''.
(c) Conforming Amendments.--
(1) Section 35(a)(1), as redesignated by subsection (a)(1), is amended by striking ``chapter'' and inserting
``subtitle''.
(2) Section 35(e), as so redesignated and amended by section 402(a), is amended by adding at the end the following new paragraph:
``(12) Coordination with advance payments and minimum tax.--Rules similar to the rules of subsections (g) and (h) of section 32 shall apply for purposes of this section.''.
(3) Sections 23(f)(1) and 129(a)(2)(C) are each amended by striking ``section 21(e)'' and inserting ``section 35(e)''.
(4) Section 129(b)(2) is amended by striking ``section 21(d)(2)'' and inserting ``section 35(d)(2)''.
(5) Section 129(e)(1) is amended by striking ``section 21(b)(2)'' and inserting ``section 35(b)(2)''.
(6) Section 213(e) is amended by striking ``section 21'' and inserting ``section 35''.
(7) Section 995(f)(2)(C) is amended by striking ``and 34'' and inserting ``34, and 35''.
(8) Section 6211(b)(4)(A) is amended by striking ``and 34'' and inserting ``, 34, and 35''.
(9) Section 6213(g)(2)(H) is amended by striking ``section 21'' and inserting ``section 35''.
(10) Section 6213(g)(2)(L) is amended by striking ``section 21, 24, or 32'' and inserting ``section 24, 32, or 35''.
(11) The table of sections for subpart C of part IV of subchapter A of chapter 1 is amended by striking the item relating to section 35 and inserting the following new items:
``Sec. 35. Expenses for household and dependent care services necessary for gainful employment.
``Sec. 36. Overpayments of tax.''.
(12) The table of sections for subpart A of such part IV is amended by striking the item relating to section 21.
(13) The table of sections for chapter 25 is amended by adding after the item relating to section 3507 the following new item:
``Sec. 3507A. Advance payment of dependent care credit.''.
(14) Section 1324(b)(2) of title 31, United States Code, is amended by striking ``or'' before ``enacted'' and by inserting before the period at the end ``, or from section 35 of such Code''.
(d) Effective Date.--The amendments made by this section apply to taxable years beginning after December 31, 2001.
Subtitle B--Incentives for Employer-Provided Child Care
SEC. 411. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD
CARE ASSISTANCE.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1 (relating to business related credits) is amended by adding at the end the following new section:
``SEC. 45E. EMPLOYER-PROVIDED CHILD CARE CREDIT.
``(a) In General.--For purposes of section 38, the employer-provided child care credit determined under this section for the taxable year is an amount equal to the sum of--
``(1) 25 percent of the qualified child care expenditures, and
``(2) 10 percent of the qualified child care resource and referral expenditures,of the taxpayer for such taxable year.
``(b) Dollar Limitation.--The credit allowable under subsection (a) for any taxable year shall not exceed
$150,000.
``(c) Definitions.--For purposes of this section--
``(1) Qualified child care expenditure.--
``(A) In general.--The term `qualified child care expenditure' means any amount paid or incurred--
``(i) to acquire, construct, rehabilitate, or expand property--
``(I) which is to be used as part of a qualified child care facility of the taxpayer,
``(II) with respect to which a deduction for depreciation
(or amortization in lieu of depreciation) is allowable, and
``(III) which does not constitute part of the principal residence (within the meaning of section 121) of the taxpayer or any employee of the taxpayer,
``(ii) for the operating costs of a qualified child care facility of the taxpayer, including costs related to the training of employees, to scholarship programs, and to the providing of increased compensation to employees with higher levels of child care training,
``(iii) under a contract with a qualified child care facility to provide child care services to employees of the taxpayer, or
``(iv) to reimburse an employee for expenses for child care which enables the employee to be gainfully employed including expenses related to--
``(I) day care and before and after school care,
``(II) transportation associated with such care, and
``(III) before and after school and holiday programs including educational and recreational programs and camp programs.
``(B) Fair market value.--The term `qualified child care expenditures' shall not include expenses in excess of the fair market value of such care.
``(2) Qualified child care facility.--
``(A) In general.--The term `qualified child care facility' means a facility--
``(i) the principal use of which is to provide child care assistance, and
``(ii) which meets the requirements of all applicable laws and regulations of the State or local government in which it is located, including the licensing of the facility as a child care facility.Clause (i) shall not apply to a facility which is the principal residence (within the meaning of section 121) of the operator of the facility.
``(B) Special rules with respect to a taxpayer.--A facility shall not be treated as a qualified child care facility with respect to a taxpayer unless--
``(i) enrollment in the facility is open to employees of the taxpayer during the taxable year,
``(ii) if the facility is the principal trade or business of the taxpayer, at least 30 percent of the enrollees of such facility are dependents of employees of the taxpayer, and
``(iii) the use of such facility (or the eligibility to use such facility) does not discriminate in favor of employees of the taxpayer who are highly compensated employees (within the meaning of section 414(q)).
``(3) Qualified child care resource and referral expenditure.--The term `qualified child care resource and referral expenditure' means any amount paid or incurred under a contract to provide child care resource and referral services to an employee of the taxpayer.
``(d) Recapture of Acquisition and Construction Credit.--
``(1) In general.--If, as of the close of any taxable year, there is a recapture event with respect to any qualified child care facility of the taxpayer, then the tax of the taxpayer under this chapter for such taxable year shall be increased by an amount equal to the product of--
``(A) the applicable recapture percentage, and
``(B) the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted if the qualified child care expenditures of the taxpayer described in subsection (c)(1)(A) with respect to such facility had been zero.
``(2) Applicable recapture percentage.--
``(A) In general.--For purposes of this subsection, the applicable recapture percentage shall be determined from the following table:
``If the recapture event occurs The applicable recapture percentage is:
Years 1-3....................................................100
Year 4........................................................85
Year 5........................................................70
Year 6........................................................55
Year 7........................................................40
Year 8........................................................25
Years 9 and 10................................................10
Years 11 and thereafter........................................0.
``(B) Years.--For purposes of subparagraph (A), year 1 shall begin on the first day of the taxable year in which the qualified child care facility is placed in service by the taxpayer.
``(3) Recapture event defined.--For purposes of this subsection, the term `recapture event' means--
``(A) Cessation of operation.--The cessation of the operation of the facility as a qualified child care facility.
``(B) Change in ownership.--
``(i) In general.--Except as provided in clause (ii), the disposition of a taxpayer's interest in a qualified child care facility with respect to which the credit described in subsection (a) was allowable.
``(ii) Agreement to assume recapture liability.--Clause (i) shall not apply if the person acquiring such interest in the facility agrees in writing to assume the recapture liability of the person disposing of such interest in effect immediately before such disposition. In the event of such an assumption, the person acquiring the interest in the facility shall be treated as the taxpayer for purposes of assessing any recapture liability (computed as if there had been no change in ownership).
``(4) Special rules.--
``(A) Tax benefit rule.--The tax for the taxable year shall be increased under paragraph (1) only with respect to credits allowed by reason of this section which were used to reduce tax liability. In the case of credits not so used to reduce tax liability, the carryforwards and carrybacks under section 39 shall be appropriately adjusted.
``(B) No credits against tax.--Any increase in tax under this subsection shall not be treated as a tax imposed by this chapter for purposes of determining the amount of any credit under subpart A, B, or D of this part.
``(C) No recapture by reason of casualty loss.--The increase in tax under this subsection shall not apply to a cessation of operation of the facility as a qualified child care facility by reason of a casualty loss to the extent such loss is restored by reconstruction or replacement within a reasonable period established by the Secretary.
``(e) Special Rules.--For purposes of this section--
``(1) Aggregation rules.--All persons which are treated as a single employer under subsections (a) and (b) of section 52 shall be treated as a single taxpayer.
``(2) Pass-thru in the case of estates and trusts.--Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.
``(3) Allocation in the case of partnerships.--In the case of partnerships, the credit shall be allocated among partners under regulations prescribed by the Secretary.
``(f) No Double Benefit.--
``(1) Reduction in basis.--For purposes of this subtitle--
``(A) In general.--If a credit is determined under this section with respect to any property by reason of expenditures described in subsection (c)(1)(A), the basis of such property shall be reduced by the amount of the credit so determined.
``(B) Certain dispositions.--If, during any taxable year, there is a recapture amount determined with respect to any property the basis of which was reduced under subparagraph
(A), the basis of such property (immediately before the event resulting in such recapture) shall be increased by an amount equal to such recapture amount. For purposes of the preceding sentence, the term `recapture amount' means any increase in tax (or adjustment in carrybacks or carryovers) determined under subsection (d).
``(2) Other deductions and credits.--No deduction or credit shall be allowed under any other provision of this chapter with respect to the amount of the credit determined under this section.''.
(b) Conforming Amendments.--
(1) Section 38(b) is amended by striking ``plus'' at the end of paragraph (12), by striking the period at the end of paragraph (13) and inserting ``, plus'', and by adding at the end the following new paragraph:
``(14) the employer-provided child care credit determined under section 45E.''.
(2) Subsection (d) of section 39 is amended by adding at the end the following new paragraph:
``(10) No carryback of employer-provided child care credit before january 1, 2002.--No portion of the unused business credit for any taxable year which is attributable to the credit under section 45E may be carried back to a taxable year ending before January 1, 2002.''.
(3) Subsection (c) of section 196 is amended by striking
``and'' at the end of paragraph (8), by striking the period at the end of paragraph (9) and inserting ``, and'', and by adding at the end the following new paragraph:
``(10) the employer-provided child care credit determined under section 45E(a).''.
(4) The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:
``Sec. 45E. Employer-provided child care credit.''.
(5) Section 1016(a) is amended by striking ``and'' at the end of paragraph (26), by striking the period at the end of paragraph (27) and inserting ``, and'', and by adding at the end the following new paragraph:
``(28) in the case of a facility with respect to which a credit was allowed under section 45E, to the extent provided in section 45E(f)(1).''.
(c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001.
TITLE V--TAX RELIEF FOR LONG-TERM CARE GIVERS
SEC. 501. LONG-TERM CARE TAX CREDIT.
(a) Allowance of Credit.--
(1) In general.--Section 24(a) (relating to allowance of child tax credit) is amended to read as follows:
``(a) Allowance of Credit.--There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of--
``(1) $500 multiplied by the number of qualifying children of the taxpayer, plus
``(2) $3,000 multiplied by the number of applicable individuals with respect to whom the taxpayer is an eligible caregiver for the taxable year.''.
(2) Additional credit for taxpayer with 3 or more separate credit amounts.--So much of section 24(d) as precedes paragraph (1)(A) thereof is amended to read as follows:
``(d) Additional Credit for Taxpayers With 3 or More Separate Credit Amounts.--
``(1) In general.--If the sum of the number of qualifying children of the taxpayer and the number of applicable individuals with respect to which the taxpayer is an eligible caregiver is 3 or more for any taxable year, the aggregate credits allowed under subpart C shall be increased by the lesser of--''.
(3) Conforming amendments.--
(A) The heading for section 32(n) is amended by striking
``Child'' and inserting ``Family Care''.
(B) The heading for section 24 is amended to read as follows:
``SEC. 24. FAMILY CARE CREDIT.''.
(C) The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by striking the item relating to section 24 and inserting the following new item:
``Sec. 24. Family care credit.''.
(b) Definitions.--Section 24(c) (defining qualifying child) is amended to read as follows:
``(c) Definitions.--For purposes of this section--
``(1) Qualifying child.--
``(A) In general.--The term `qualifying child' means any individual if--
``(i) the taxpayer is allowed a deduction under section 151 with respect to such individual for the taxable year,
``(ii) such individual has not attained the age of 17 as of the close of the calendar year in which the taxable year of the taxpayer begins, and
``(iii) such individual bears a relationship to the taxpayer described in section 32(c)(3)(B).
``(B) Exception for certain noncitizens.--The term
`qualifying child' shall not include any individual who would not be a dependent if the first sentence of section 152(b)(3) were applied without regard to all that follows `resident of the United States'.
``(2) Applicable individual.--
``(A) In general.--The term `applicable individual' means, with respect to any taxable year, any individual who has been certified, before the due date for filing the return of tax for the taxable year (without extensions), by a physician (as defined in section 1861(r)(1) of the Social Security Act) as being an individual with long-term care needs described in subparagraph (B) for a period--
``(i) which is at least 180 consecutive days, and
``(ii) a portion of which occurs within the taxable year.Such term shall not include any individual otherwise meeting the requirements of the preceding sentence unless within the 39\1/2\ month period ending on such due date (or such other period as the Secretary prescribes) a physician (as so defined) has certified that such individual meets such requirements.
``(B) Individuals with long-term care needs.--An individual is described in this subparagraph if the individual meets any of the following requirements:
``(i) The individual is at least 6 years of age and--
``(I) is unable to perform (without substantial assistance from another individual) at least 3 activities of daily living (as defined in section 7702B(c)(2)(B)) due to a loss of functional capacity, or
``(II) requires substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment and is unable to perform at least 1 activity of daily living (as so defined) or to the extent provided in regulations prescribed by the Secretary (in consultation with the Secretary of Health and Human Services), is unable to engage in age appropriate activities.
``(ii) The individual is at least 2 but not 6 years of age and is unable due to a loss of functional capacity to perform
(without substantial assistance from another individual) at least 2 of the following activities: eating, transferring, or mobility.
``(iii) The individual is under 2 years of age and requires specific durable medical equipment by reason of a severe health condition or requires a skilled practitioner trained to address the individual's condition to be available if the individual's parents or guardians are absent.
``(3) Eligible caregiver.--
``(A) In general.--A taxpayer shall be treated as an eligible caregiver for any taxable year with respect to the following individuals:
``(i) The taxpayer.
``(ii) The taxpayer's spouse.
``(iii) An individual with respect to whom the taxpayer is allowed a deduction under section 151 for the taxable year.
``(iv) An individual who would be described in clause (iii) for the taxable year if section 151(c)(1)(A) were applied by substituting for the exemption amount an amount equal to the sum of the exemption amount, the standard deduction under section 63(c)(2)(C), and any additional standard deduction under section 63(c)(3) which would be applicable to the individual if clause (iii) applied.
``(v) An individual who would be described in clause (iii) for the taxable year if--
``(I) the requirements of clause (iv) are met with respect to the individual, and
``(II) the requirements of subparagraph (B) are met with respect to the individual in lieu of the support test of section 152(a).
``(B) Residency test.--The requirements of this subparagraph are met if an individual has as his principal place of abode the home of the taxpayer and--
``(i) in the case of an individual who is an ancestor or descendant of the taxpayer or the taxpayer's spouse, is a member of the taxpayer's household for over half the taxable year, or
``(ii) in the case of any other individual, is a member of the taxpayer's household for the entire taxable year.
``(C) Special rules where more than 1 eligible caregiver.--
``(i) In general.--If more than 1 individual is an eligible caregiver with respect to the same applicable individual for taxable years ending with or within the same calendar year, a taxpayer shall be treated as the eligible caregiver if each such individual (other than the taxpayer) files a written declaration (in such form and manner as the Secretary may prescribe) that such individual will not claim such applicable individual for the credit under this section.
``(ii) No agreement.--If each individual required under clause (i) to file a written declaration under clause (i) does not do so, the individual with the highest modified adjusted gross income (as defined in section 32(c)(5)) shall be treated as the eligible caregiver.
``(iii) Married individuals filing separately.--In the case of married individuals filing separately, the determination under this subparagraph as to whether the husband or wife is the eligible caregiver shall be made under the rules of clause (ii) (whether or not one of them has filed a written declaration under clause (i)).''.
(c) Identification Requirements.--
(1) In general.--Section 24(e) is amended by adding at the end the following new sentence: ``No credit shall be allowed under this section to a taxpayer with respect to any applicable individual unless the taxpayer includes the name and taxpayer identification number of such individual, and the identification number of the physician certifying such individual, on the return of tax for the taxable year.''.
(2) Assessment.--Section 6213(g)(2)(I) is amended--
(A) by inserting ``or physician identification'' after
``correct TIN'', and
(B) by striking ``child'' and inserting ``family care''.
(d) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001.
TITLE VI--TAX RELIEF FOR WORKING FAMILIES
SEC. 601. INCREASED EARNED INCOME TAX CREDIT FOR 2 OR MORE
QUALIFYING CHILDREN.
(a) In General.--The table in section 32(b)(1)(A) (relating to percentages) is amended--
(1) in the second item--
(A) by striking ``or more'', and
(B) by striking ``21.06'' and inserting ``19.06'', and
(2) by inserting after the second item the following new item:
``3 or more qualifying children......................... 45 19.06''
(b) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001. SEC. 602. SIMPLIFICATION OF DEFINITION OF EARNED INCOME.
(a) In General.--Section 32(c)(2)(A)(i) (defining earned income) is amended by inserting ``, but only if such amounts are includible in gross income for the taxable year'' after
``other employee compensation''.
(b) Conforming Amendment.--Section 32(c)(2)(B) is amended by striking ``and'' at the end of clause (iv), by striking the period at the end of clause (v) and inserting ``, and'', and by adding at the end the following new clause:
``(vi) the requirement under subparagraph (A)(i) that an amount be includible in gross income shall not apply if such amount is exempt from tax under section 7873 or is derived directly from restricted and allotted land under the Act of February 8, 1887 (commonly known as the Indian General Allotment Act) (25 U.S.C. 331 et seq.) or from land held under Acts or treaties containing an exception provision similar to the Indian General Allotment Act.''.
(c) Effective Date.--The amendment made by this section shall apply to amounts received in taxable years beginning after December 31, 2001.
SEC. 603. SIMPLIFICATION OF DEFINITION OF CHILD DEPENDENT.
(a) Removal of Support Test for Certain Individuals.--Section 152(a) (relating to definition of dependent) is amended to read as follows:
``(a) General Definition.--For purposes of this subtitle--
``(1) Dependent.--The term `dependent' means--
``(A) any individual described in paragraph (2) over half of whose support, for the calendar year in which the taxable year of the taxpayer begins, was received from the taxpayer
(or is treated under subsection (c) as received from the taxpayer), or
``(B) any individual described in subsection (f).
``(2) Individuals.--An individual is described in this paragraph if such individual is--
``(A) a brother, sister, stepbrother, or stepsister of the taxpayer,
``(B) the father or mother of the taxpayer, or an ancestor of either,
``(C) a stepfather or stepmother of the taxpayer,
``(D) a son or daughter of a brother or sister of the taxpayer,
``(E) a brother or sister of the father or mother of the taxpayer,
``(F) a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law of the taxpayer, or
``(G) an individual (other than an individual who at any time during the taxable year was the spouse, determined without regard to section 7703, of the taxpayer) who, for the taxable year of the taxpayer, has as their principal place of abode the home of the taxpayer and is a member of the taxpayer's household.''.
(b) Other Modifications.--Section 152 is amended by adding at the end the following new subsection:
``(f) Subsection (f) Dependents.--
``(1) In general.--An individual is described in this subsection for the taxable year if such individual--
``(A) bears a relationship to the taxpayer described in paragraph (2),
``(B) except in the case of an eligible foster child or as provided in subsection (e), has the same principal place of abode as the taxpayer for more than one-half of such taxable year, and
``(C)(i) has not attained the age of 19 at the close of the calendar year in which the taxable year begins, or
``(ii) is a student (within the meaning of section 151(c)(4)) who has not attained the age of 24 at the close of such calendar year.
``(2) Relationship test.--An individual bears a relationship to the taxpayer described in this paragraph if such individual is--
``(A) a son or daughter of the taxpayer, or a descendant of either, or
``(B) a stepson or stepdaughter of the taxpayer.
``(3) Special rules.--
``(A) 2 or more claiming dependent.--Except as provided in subparagraph (B), if an individual may be claimed as a dependent by 2 or more taxpayers (but for this subparagraph) for a taxable year beginning in the same calendar year, only the taxpayer with the highest adjusted gross income for such taxable year shall be allowed the deduction with respect to such individual.
``(B) Release of claim to exemption.--Subparagraph (A) shall not apply with respect to an individual if--
``(i) the taxpayer with the highest adjusted gross income under subparagraph (A), for any calendar year signs a written declaration (in such manner and form as the Secretary may by regulations prescribe) that such taxpayer will not claim such individual as a dependent for any taxable year beginning in such calendar year,
``(ii) the other taxpayer provides over half of such individual's support for the calendar year in which the taxable year of such other taxpayer begins, and
``(iii) such other taxpayer attaches such written declaration to such taxpayer's return for the taxable year beginning during such calendar year.''.
(c) Rules Relating to Foster Child.--Section 152(b)(2)
(relating to rules relating to general definition) is amended by striking ``a foster child'' and all that follows through
``individual)'' and inserting ``an eligible foster child (as defined in section 32(c)(3)(B)(iii)) of an individual''.
(d) Exemption From Gross Income Test.--Section 151(c)(3)
(relating to definition of child) is amended by striking ``or stepdaughter'' and inserting ``stepdaughter, or a descendant of such individual''.
(e) Waiver of Deduction for Divorced Parents.--
(1) In general.--So much of section 152(e) as precedes paragraph (4) (relating to support test in case of child of divorced parents, etc.) is amended to read as follows:
``(e) Special Rules for Child of Divorced Parents.--
``(1) Release of claim to exemption.--In the case of a child (as defined in section 151(c)(3)) of parents--
``(A) who are divorced or legally separated under a decree of divorce or separate maintenance,
``(B) who are separated under a written separation agreement, or
``(C) who live apart at all times during the last 6 months of the calendar year,
the custodial parent who is entitled to the deduction under section 151 for a taxable year with respect to such child may release such deduction to the noncustodial parent.
``(2) Procedure.--The noncustodial parent may claim a child described in paragraph (1) as a dependent for the taxable year if--
``(A) the custodial parent signs a written declaration (in such manner and form as the Secretary may by regulations prescribe) that such custodial parent will not claim such child as a dependent for any taxable year beginning in such calendar year,
``(B) the custodial parent and the noncustodial parent provide over half of such child's support for the calendar year in which the taxable years of such parents begin, and
``(C) the noncustodial parent attaches such written declaration to such noncustodial parent's return for the taxable year beginning during such calendar year.
``(3) Definitions.--For purposes of this subsection--
``(A) Custodial parent.--The term `custodial parent' means, with regard to an individual, a parent who has custody of such individual for a greater portion of the calendar year than the noncustodial parent.
``(B) Noncustodial parent.--The term `noncustodial parent' means the parent who is not the custodial parent.''.
(2) Pre-1985 instruments.--Section 152(e)(4)(A) is amended by striking ``A child'' and all that follows through
``noncustodial parent'' and inserting ``A noncustodial parent described in paragraph (1) shall be entitled to the deduction under section 151 for a taxable year with respect to a child if''.
(f) Conforming Amendments.--
(1) Section 1(g)(5)(A) is amended by inserting ``as in effect on the day before the date of the enactment of the Working Family Tax Relief Act of 2001'' after ``152(e)''.
(2) Section 2(b)(1)(A)(i) is amended by striking
``paragraph (2) or (4) of''.
(3) Section 2(b)(3)(B)(i) is amended by striking
``paragraph (9)'' and inserting ``paragraph (2)(G)''.
(4) Section 21(e)(5)(A) is amended by striking ``paragraph
(2) or (4) of''.
(5) Section 21(e)(5) is amended in the matter following subclause (B) by inserting ``as in effect on the day before the date of the enactment of the Working Family Tax Relief Act of 2001'' after ``152(e)(1)''.
(6) Section 32(c)(1)(G) is amended by striking ``(3)(D).'' and inserting ``(1)(C). An individual whose qualifying child or qualifying children are not taken into account under subsection (b) solely by reason of paragraph (3)(D) shall be treated as an eligible individual if such individual otherwise meets the requirements of subparagraph (A)(ii).''.
(7) Section 32(c)(3)(B)(ii) is amended by striking
``paragraph (2) or (4) of''.
(8) Section 51(i)(1)(C) is amended by striking
``152(a)(9)'' and inserting ``152(a)(2)(G)''.
(9) Section 152(b) is amended by striking ``specified in subsection (a)'' and inserting ``specified in subsection
(a)(2) or (f)(2)''.
(10) Section 152(c) is amended by striking ``(a)'' and inserting ``(a)(1)''.
(11) Section 7703(b)(1) is amended by striking ``paragraph
(2) or (4) of''.
(12) The following provisions of are each amended by striking ``paragraphs (1) through (8) of section 152(a)'' and inserting ``subparagraphs (A) through (F) of subsection
(a)(2) or subsection (f)(2) of section 152'':
(A) Section 170(g)(3).
(B) Subparagraphs (A) and (B) of section 51(i)(1).
(C) The second sentence of section 213(d)(11).
(D) Section 529(e)(2)(B).
(E) Section 7702B(f)(2)(C)(iii).
(g) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001.
SEC. 604. OTHER MODIFICATIONS TO EARNED INCOME TAX CREDIT.
(a) Modification of Joint Return Requirement.--Subsection
(d) of section 32 is amended to read as follows:
``(d) Married Individuals.--
``(1) In general.--If the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and his spouse file a joint return for the taxable year.
``(2) Marital status.--For purposes of paragraph (1), an individual legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married.
``(3) Certain married individuals living apart.--For purposes of paragraph (1), if--
``(A) an individual --
``(i) is married and files a separate return, and
``(ii) has a qualifying child who is a son, daughter, stepson, or stepdaughter of such individual, and
``(B) during the last 6 months of such taxable year, such individual and such individual's spouse do not have the same principal place of abode,
such individual shall not be considered as married.''.
(b) Modification of Rule Where There Are 2 or More Eligible Individuals.--Subparagraph (C) of section 32(c)(1) is amended to read as follows:
``(C) 2 or more eligible individuals.--
``(i) In general.--Except as provided in clause (ii), if 2 or more individuals would (but for this subparagraph and after application of subparagraph (B)) be treated as eligible individuals with respect to the same qualifying child for taxable years beginning in the same calendar year, only the individual with the highest modified adjusted gross income for such taxable years shall be treated as an eligible individual with respect to such qualifying child.
``(ii) Exception for certain parents.--An otherwise eligible individual who is not treated under clause (i) as the only eligible individual with respect to any qualifying child shall be treated as an eligible individual with respect to such child if--
``(I) such child is the son, daughter, stepson, or stepdaughter of such individual,
``(II) such child is not taken into account under subsection (b) by any other individual, and
``(III) the limitation under subsection (a)(2) for the individual who would (but for this clause) be treated under clause (i) as the only eligible individual with respect to such child would be greater than zero (determined as if such individual had 2 qualifying children).''.
(c) Expansion of Mathematical Error Authority.--Paragraph
(2) of section 6213(g) is amended by striking ``and'' at the end of subparagraph (K), by striking the period at the end of subparagraph (L) and inserting ``, and'', and by inserting after subparagraph (L) the following new subparagraph:
``(M) the entry on the return claiming the credit under section 32 with respect to a child if, according to the Federal Case Registry of Child Support Orders established under section 453(h) of the Social Security Act, the taxpayer is a noncustodial parent of such child.''.
(d) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001.
TITLE VII--TAX RELIEF FOR SELF-EMPLOYED INDIVIDUALS
SEC. 701. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-
EMPLOYED INDIVIDUALS INCREASED.
(a) In General.--Section 162(l)(1) (relating to special rules for health insurance costs of self-employed individuals) is amended to read as follows:
``(1) Allowance of deduction.--In the case of an individual who is an employee within the meaning of section 401(c)(1), there shall be allowed as a deduction under this section an amount equal to the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, the taxpayer's spouse, and dependents.''.
(b) Clarification of Limitations on Other Coverage.--The first sentence of section 162(l)(2)(B) is amended to read as follows: ``Paragraph (1) shall not apply to any taxpayer for any calendar month for which the taxpayer participates in any subsidized health plan maintained by any employer (other than an employer described in section 401(c)(4)) of the taxpayer or the spouse of the taxpayer.''.
(c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000.
TITLE VIII--TAX RELIEF FOR EXPANDING PENSION AVAILABILITY
SEC. 801. NONREFUNDABLE CREDIT TO CERTAIN INDIVIDUALS FOR
ELECTIVE DEFERRALS AND IRA CONTRIBUTIONS.
(a) In General.--Subpart A of part IV of subchapter A of chapter 1 (relating to nonrefundable personal credits), as amended by section 302(a), is amended by inserting after section 25B the following new section:
``SEC. 25C. ELECTIVE DEFERRALS AND IRA CONTRIBUTIONS BY
CERTAIN INDIVIDUALS.
``(a) Allowance of Credit.--In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the applicable percentage of so much of the qualified retirement savings contributions of the eligible individual for the taxable year as do not exceed $2,000.
``(b) Applicable Percentage.--For purposes of this section, the applicable percentage is the percentage determined in accordance with the following table:
----------------------------------------------------------------------------------------------------------------
Adjusted Gross Income
-------------------------------------------------------------------------------------------------
Joint return Head of a household All other cases Applicable
------------------------------------------------------------------------------------------------- percentage
Over Not over Over Not over Over Not over
----------------------------------------------------------------------------------------------------------------
$0 $35,000 $0 $26,250 $0 $17,500 50
35,000 40,000 26,250 30,000 17,500 20,000 40
40,000 45,000 30,000 33,750 20,000 22,500 30
45,000 50,000 33,750 37,500 22,500 25,000 15
----------------------------------------------------------------------------------------------------------------
``(c) Eligible Individual.--For purposes of this section--
``(1) In general.--The term `eligible individual' means any individual if such individual has attained the age of 18 as of the close of the taxable year.
``(2) Dependents and full-time students not eligible.--The term `eligible individual' shall not include--
``(A) any individual with respect to whom a deduction under section 151 is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins, and
``(B) any individual who is a student (as defined in section 151(c)(4)).
``(d) Qualified Retirement Savings Contributions.--For purposes of this section--
``(1) In general.--The term `qualified retirement savings contributions' means, with respect to any taxable year, the sum of--
``(A) the amount of the qualified retirement contributions
(as defined in section 219(e)) made by the eligible individual,
``(B) the amount of--
``(i) any elective deferrals (as defined in section 402(g)(3)) of such individual, and
``(ii) any elective deferral of compensation by such individual under an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer described in section 457(e)(1)(A), and
``(C) the amount of voluntary employee contributions by such individual to any qualified retirement plan (as defined in section 4974(c)).
``(2) Reduction for certain distributions.--
``(A) In general.--The qualified retirement savings contributions determined under paragraph (1) shall be reduced
(but not below zero) by the sum of--
``(i) any distribution from a qualified retirement plan (as defined in section 4974(c)), or from an eligible deferred compensation plan (as defined in section 457(b)), received by the individual during the testing period which is includible in gross income, and
``(ii) any distribution from a Roth IRA received by the individual during the testing period which is not a qualified rollover contribution (as defined in section 408A(e)) to a Roth IRA.
``(B) Testing period.--For purposes of subparagraph (A), the testing period, with respect to a taxable year, is the period which includes--
``(i) such taxable year,
``(ii) the 2 preceding taxable years, and
``(iii) the period after such taxable year and before the due date (including extensions) for filing the return of tax for such taxable year.
``(C) Excepted distributions.--There shall not be taken into account under subparagraph (A)--
``(i) any distribution referred to in section 72(p), 401(k)(8), 401(m)(6), 402(g)(2), 404(k), or 408(d)(4), and
``(ii) any distribution to which section 408A(d)(3) applies.
``(D) Treatment of distributions received by spouse of individual.--For purposes of determining distributions received by an individual under subparagraph (A) for any taxable year, any distribution received by the spouse of such individual shall be treated as received by such individual if such individual and spouse file a joint return for such taxable year and for the taxable year during which the spouse receives the distribution.
``(e) Adjusted Gross Income.--For purposes of this section, adjusted gross income shall be determined without regard to sections 911, 931, and 933.
``(f) Investment in the Contract.--Notwithstanding any other provision of law, a qualified retirement savings contribution shall not fail to be included in determining the investment in the contract for purposes of section 72 by reason of the credit under this section.''.
(b) Credit Allowed Against Regular Tax and Alternative Minimum Tax.--
(1) In general.--Subsection (a) of section 26 is amended by inserting ``(other than the credit allowed by section 25C)'' after ``credits allowed by this subpart''.
(2) Conforming amendment.--Section 25C, as added by subsection (a), is amended by inserting after subsection (f) the following new subsection:
``(g) Limitation Based on Amount of Tax.--The aggregate credit allowed by this section for the taxable year shall not exceed the sum of--
``(1) the taxpayer's regular tax liability for the taxable year reduced by the sum of the credits allowed by sections 21, 22, 23, 24, 25, 25A, and 25B, plus
``(2) the tax imposed by section 55 for such taxable year.''.
(c) Annual Report.--The Comptroller General of the United States shall submit a report annually to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate regarding the number of taxpayers receiving the credit allowed under section 25C of the Internal Revenue Code of 1986, as added by subsection
(a).
(d) Conforming Amendment.--The table of sections for subpart A of part IV of subchapter A of chapter 1, as amended by section 302(b), is amended by inserting after the item relating to section 25B the following new item:
``Sec. 25C. Elective deferrals and IRA contributions by certain individuals.''.
(e) Effective Dates.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001.
SEC. 802. CREDIT FOR QUALIFIED PENSION PLAN CONTRIBUTIONS OF
SMALL EMPLOYERS.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1 (relating to business related credits), as amended by section 411(a), is amended by adding at the end the following new section:
``SEC. 45F. SMALL EMPLOYER PENSION PLAN CONTRIBUTIONS.
``(a) General Rule.--For purposes of section 38, in the case of an eligible employer, the small employer pension plan contribution credit determined under this section for any taxable year is an amount equal to 50 percent of the amount which would (but for subsection (f)(1)) be allowed as a deduction under section 404 for such taxable year for qualified employer contributions made to any qualified retirement plan on behalf of any employee who is not a highly compensated employee.
``(b) Credit Limited to 3 Years.--The credit allowable by this section shall be allowed only with respect to the period of 3 taxable years beginning with the first taxable year for which a credit is allowable with respect to a plan under this section.
``(c) Qualified Employer Contribution.--For purposes of this section--
``(1) Defined contribution plans.--In the case of a defined contribution plan, the term `qualified employer contribution' means the amount of nonelective and matching contributions to the plan made by the employer on behalf of any employee who is not a highly compensated employee to the extent such amount does not exceed 3 percent of such employee's compensation from the employer for the year.
``(2) Defined benefit plans.--In the case of a defined benefit plan, the term `qualified employer contribution' means the amount of employer contributions to the plan made on behalf of any employee who is not a highly compensated employee to the extent that the accrued benefit of such employee derived from employer contributions for the year does not exceed the equivalent (as determined under regulations prescribed by the Secretary and without regard to contributions and benefits under the Social Security Act) of 3 percent of such employee's compensation from the employer for the year.
``(d) Qualified Retirement Plan.--
``(1) In general.--The term `qualified retirement plan' means any plan described in section 401(a) which includes a trust exempt from tax under section 501(a) if the plan meets--
``(A) the contribution requirements of paragraph (2),
``(B) the vesting requirements of paragraph (3), and
``(C) the distributions requirements of paragraph (4).
``(2) Contribution requirements.--
``(A) In general.--The requirements of this paragraph are met if, under the plan--
``(i) the employer is required to make nonelective contributions of at least 1 percent of compensation (or the equivalent thereof in the case of a defined benefit plan) for each employee who is not a highly compensated employee who is eligible to participate in the plan, and
``(ii) allocations of nonelective employer contributions are either in equal dollar amounts for all employees covered by the plan or bear a uniform relationship to the total compensation, or the basic or regular rate of compensation, of the employees covered by the plan.
``(B) Compensation limitation.--The compensation taken into account under subparagraph (A) for any year shall not exceed the limitation in effect for such year under section 401(a)(17).
``(3) Vesting requirements.--The requirements of this paragraph are met if the plan satisfies the requirements of subparagraph (A) or (B).
``(A) 3-year vesting.--A plan satisfies the requirements of this subparagraph if an employee who has completed at least 3 years of service has a nonforfeitable right to 100 percent of the employee's accrued benefit derived from employer contributions.
``(B) 5-year graded vesting.--A plan satisfies the requirements of this subparagraph if an employee has a nonforfeitable right to a percentage of the employee's accrued benefit derived from employer contributions determined under the following table:
The nonforfeitable
``Years of service: percentage is:
1.............................................................20 ....
2.............................................................40 ....
3.............................................................60 ....
4.............................................................80 ....
5............................................................100.....
``(4) Distribution requirements.--In the case of a profit-sharing or stock bonus plan, the requirements of this paragraph are met if, under the plan, qualified employer contributions are distributable only as provided in section 401(k)(2)(B).
``(e) Other Definitions.--For purposes of this section--
``(1) Eligible employer.--
``(A) In general.--The term `eligible employer' means, with respect to any year, an employer which has no more than 50 employees who received at least $5,000 of compensation from the employer for the preceding year.
``(B) Requirement for new qualified employer plans.--Such term shall not include an employer if, during the 3-taxable year period immediately preceding the 1st taxable year for which the credit under this section is otherwise allowable for a qualified employer plan of the employer, the employer or any member of any controlled group including the employer
(or any predecessor of either) established or maintained a qualified employer plan with respect to which contributions were made, or benefits were accrued, for substantially the same employees as are in the qualified employer plan.
``(2) Highly compensated employee.--The term `highly compensated employee' has the meaning given such term by section 414(q) (determined without regard to section 414(q)(1)(B)(ii)).
``(f) Special Rules.--
``(1) Disallowance of deduction.--No deduction shall be allowed for that portion of the qualified employer contributions paid or incurred for the taxable year which is equal to the credit determined under subsection (a).
``(2) Election not to claim credit.--This section shall not apply to a taxpayer for any taxable year if such taxpayer elects to have this section not apply for such taxable year.
``(3) Aggregation rules.--All persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (n) or (o) of section 414, shall be treated as one person. All eligible employer plans shall be treated as 1 eligible employer plan.
``(g) Recapture of Credit on Forfeited Contributions.--
``(1) In general.--Except as provided in paragraph (2), if any accrued benefit which is forfeitable by reason of subsection (d)(3) is forfeited, the employer's tax imposed by this chapter for the taxable year in which the forfeiture occurs shall be increased by 35 percent of the employer contributions from which such benefit is derived to the extent such contributions were taken into account in determining the credit under this section.
``(2) Reallocated contributions.--Paragraph (1) shall not apply to any contribution which is reallocated by the employer under the plan to employees who are not highly compensated employees.''.
(b) Credit Allowed as Part of General Business Credit.--Section 38(b) (defining current year business credit), as amended by section 411(b)(1), is amended by striking ``plus'' at the end of paragraph (13), by striking the period at the end of paragraph (14) and inserting ``, plus'', and by adding at the end the following new paragraph:
``(15) in the case of an eligible employer (as defined in section 45F(e)), the small employer pension plan contribution credit determined under section 45F(a).''.
(c) Conforming Amendments.--
(1) Section 39(d), as amended by section 411(b)(2), is amended by adding at the end the following new paragraph:
``(11) No carryback of small employer pension plan contribution credit before january 1, 2002.--No portion of the unused business credit for any taxable year which is attributable to the small employer pension plan contribution credit determined under section 45F may be carried back to a taxable year beginning before January 1, 2002.''.
(2) Subsection (c) of section 196, as amended by section 411(b)(3), is amended by striking ``and'' at the end of paragraph (9), by striking the period at the end of paragraph
(10) and inserting ``, and'', and by adding at the end the following new paragraph:
``(11) the small employer pension plan contribution credit determined under section 45F(a).''.
(3) The table of sections for subpart D of part IV of subchapter A of chapter 1, as amended by section 411(b)(4), is amended by adding at the end the following new item:
``Sec. 45F. Small employer pension plan contributions.''.
(d) Effective Date.--The amendments made by this section shall apply to contributions paid or incurred in taxable years beginning after December 31, 2001. SEC. 803. CREDIT FOR PENSION PLAN STARTUP COSTS OF SMALL
EMPLOYERS.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1 (relating to business related credits), as amended by section 802(a), is amended by adding at the end the following new section:
``SEC. 45G. SMALL EMPLOYER PENSION PLAN STARTUP COSTS.
``(a) General Rule.--For purposes of section 38, in the case of an eligible employer, the small employer pension plan startup cost credit determined under this section for any taxable year is an amount equal to 50 percent of the qualified startup costs paid or incurred by the taxpayer during the taxable year.
``(b) Dollar Limitation.--The amount of the credit determined under this section for any taxable year shall not exceed--
``(1) $500 for the first credit year and each of the 2 taxable years immediately following the first credit year, and
``(2) zero for any other taxable year.
``(c) Eligible Employer.--For purposes of this section--
``(1) In general.--The term `eligible employer' has the meaning given such term by section 408(p)(2)(C)(i).
``(2) Requirement for new qualified employer plans.--Such term shall not include an employer if, during the 3-taxable year period immediately preceding the 1st taxable year for which the credit under this section is otherwise allowable for a qualified employer plan of the employer, the employer or any member of any controlled group including the employer
(or any predecessor of either) established or maintained a qualified employer plan with respect to which contributions were made, or benefits were accrued, for substantially the same employees as are in the qualified employer plan.
``(d) Other Definitions.--For purposes of this section--
``(1) Qualified startup costs.--
``(A) In general.--The term `qualified startup costs' means any ordinary and necessary expenses of an eligible employer which are paid or incurred in connection with--
``(i) the establishment or administration of an eligible employer plan, or
``(ii) the retirement-related education of employees with respect to such plan.
``(B) Plan must have at least 1 participant.--Such term shall not include any expense in connection with a plan that does not have at least 1 employee eligible to participate who is not a highly compensated employee.
``(2) Eligible employer plan.--The term `eligible employer plan' means a qualified employer plan within the meaning of section 4972(d).
``(3) First credit year.--The term `first credit year' means--
``(A) the taxable year which includes the date that the eligible employer plan to which such costs relate becomes effective, or
``(B) at the election of the eligible employer, the taxable year preceding the taxable year referred to in subparagraph
(A).
``(e) Special Rules.--For purposes of this section--
``(1) Aggregation rules.--All persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (n) or (o) of section 414, shall be treated as one person. All eligible employer plans shall be treated as 1 eligible employer plan.
``(2) Disallowance of deduction.--No deduction shall be allowed for that portion of the qualified startup costs paid or incurred for the taxable year which is equal to the credit determined under subsection (a).
``(3) Election not to claim credit.--This section shall not apply to a taxpayer for any taxable year if such taxpayer elects to have this section not apply for such taxable year.''.
(b) Credit Allowed as Part of General Business Credit.--Section 38(b) (defining current year business credit), as amended by section 802(b), is amended by striking ``plus'' at the end of paragraph (14), by striking the period at the end of paragraph (15) and inserting ``, plus'', and by adding at the end the following new paragraph:
``(16) in the case of an eligible employer (as defined in section 45G(c)), the small employer pension plan startup cost credit determined under section 45G(a).''.
(c) Conforming Amendments.--
(1) Section 39(d), as amended by section 802(c)(1), is amended by adding at the end the following new paragraph:
``(12) No carryback of small employer pension plan startup cost credit before january 1, 2002.--No portion of the unused business credit for any taxable year which is attributable to the small employer pension plan startup cost credit determined under section 45G may be carried back to a taxable year beginning before January 1, 2002.''.
(2) Subsection (c) of section 196, as amended by section 802(c)(2), is amended by striking ``and'' at the end of paragraph (10), by striking the period at the end of paragraph (11) and inserting ``, and'', and by adding at the end the following new paragraph:
``(12) the small employer pension plan startup cost credit determined under section 45G(a).''.
(3) The table of sections for subpart D of part IV of subchapter A of chapter 1, as amended by section 802(c)(3), is amended by adding at the end the following new item:
``Sec. 45G. Small employer pension plan startup costs.''.
(d) Effective Date.--The amendments made by this section shall apply to costs paid or incurred in taxable years beginning after December 31, 2001, with respect to qualified employer plans established after such date.
TITLE IX--TAX RELIEF FOR ADOPTIVE PARENTS
SEC. 901. EXPANSION OF ADOPTION CREDIT.
(a) In General.--
(1) Adoption credit.--Section 23(a)(1) (relating to allowance of credit) is amended to read as follows:
``(1) In general.--In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter--
``(A) in the case of an adoption of a child other than a child with special needs, the amount of the qualified adoption expenses paid or incurred by the taxpayer, and
``(B) in the case of an adoption of a child with special needs, $10,000.''.
(2) Adoption assistance programs.--Section 137(a) (relating to adoption assistance programs) is amended to read as follows:
``(a) In General.--Gross income of an employee does not include amounts paid or expenses incurred by the employer for adoption expenses in connection with the adoption of a child by an employee if such amounts are furnished purusant to an adoption assistance program. The amount of the exclusion shall be--
``(1) in the case of an adoption of a child other than a child with special needs, the amount of the qualified adoption expenses paid or incurred by the taxpayer, and
``(2) in the case of an adoption of a child with special needs, $10,000.''.
(b) Dollar Limitations.--
(1) Dollar amount of allowed expenses.--
(A) Adoption expenses.--Section 23(b)(1) (relating to allowance of credit) is amended--
(i) by striking ``$5,000'' and inserting ``$10,000'',
(ii) by striking ``($6,000, in the case of a child with special needs)'', and
(iii) by striking ``subsection (a)'' and inserting
``subsection (a)(1)(A)''.
(B) Adoption assistance programs.--Section 137(b)(1)
(relating to dollar limitations for adoption assistance programs) is amended--
(i) by striking ``$5,000'' and inserting ``$10,000'', and
(ii) by striking ``($6,000, in the case of a child with special needs)'', and
(iii) by striking ``subsection (a)'' and inserting
``subsection (a)(1)''.
(2) Phase-out limitation.--
(A) Adoption expenses.--Clause (i) of section 23(b)(2)(A)
(relating to income limitation) is amended by striking
``$75,000'' and inserting ``$150,000''.
(B) Adoption assistance programs.--Section 137(b)(2)(A)
(relating to income limitation) is amended by striking
``$75,000'' and inserting ``$150,000''.
(c) Year Credit Allowed.--Section 23(a)(2) is amended by adding at the end the following new flush sentence:
``In the case of the adoption of a child with special needs, the credit allowed under paragraph (1) shall be allowed for the taxable year in which the adoption becomes final.''.
(d) Repeal of Sunset Provisions.--
(1) Children Without Special Needs.--Paragraph (2) of section 23(d) (relating to definition of eligible child) is amended to read as follows:
``(2) Eligible child.--The term `eligible child' means any individual who--
``(A) has not attained age 18, or
``(B) is physically or mentally incapable of caring for himself.''.
(2) Adoption Assistance Programs.--Section 137 (relating to adoption assistance programs) is amended by striking subsection (f).
(e) Adjustment of Dollar and Income Limitations for Inflation.--
(1) Adoption credit.--Section 23 is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection:
``(h) Adjustments for Inflation.--In the case of a taxable year beginning after December 31, 2002, each of the dollar amounts in subsection (a)(1)(B) and paragraphs (1) and
(2)(A)(i) of subsection (b) shall be increased by an amount equal to--
``(1) such dollar amount, multiplied by
``(2) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting `calendar year 2001' for `calendar year 1992' in subparagraph (B) thereof.''.
(2) Adoption assistance programs.--Section 137, as amended by subsection (d), is amended by adding at the end the following new subsection:
``(f) Adjustments for Inflation.--In the case of a taxable year beginning after December 31, 2002, each of the dollar amounts in subsection (a)(2) and paragraphs (1) and (2)(A) of subsection (b) shall be increased by an amount equal to--
``(1) such dollar amount, multiplied by
``(2) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting `calendar year 2001' for `calendar year 1992' in subparagraph (B) thereof.''.
(f) Limitation Based on Amount of Tax.--
(1) In general.--Subsection (c) of section 23 is amended by striking ``the limitation imposed'' and all that follows through ``1400C)'' and inserting ``the applicable tax limitation''.
(2) Applicable tax limitation.--Subsection (d) of section 23 is amended by adding at the end the following new paragraph:
``(4) Applicable tax limitation.--The term `applicable tax limitation' means the sum of--
``(A) the taxpayer's regular tax liability for the taxable year, reduced (but not below zero) by the sum of the credits allowed by sections 21, 22, 24 (other than the amount of the increase under subsection (d) thereof), 25, and 25A, and
``(B) the tax imposed by section 55 for such taxable year.''.
(3) Conforming amendments.--
(A) Subsection (a) of section 26 (relating to limitation based on amount of tax) is amended by inserting ``(other than section 23)'' after ``allowed by this subpart''.
(B) Paragraph (1) of section 53(b) (relating to minimum tax credit) is amended by inserting ``reduced by the aggregate amount taken into account under section 23(d)(3)(B) for all such prior taxable years,'' after ``1986,''.
(g) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001.
______
By Mr. DASCHLE (for himself, Mr. Baucus, Mr. Graham, Mr. Kennedy,
Mr. Akaka, Mr. Biden, Mr. Bingaman, Mrs. Boxer, Mr. Byrd, Mrs.
Carnahan, Mr. Cleland, Mrs. Clinton, Mr. Corzine, Mr. Dayton,
Mr. Dodd, Mr. Dorgan, Mr. Durbin, Mr. Hollings, Mr. Inouye, Mr.
Johnson, Mr. Kerry, Mr. Leahy, Mr. Levin, Mrs. Lincoln, Ms.
Mikulski, Mrs. Murray, Mr. Nelson of Florida, Mr. Reed, Mr.
Reid, Mr. Rockefeller, Mr. Sarbanes and, Mr. Schumer):
S. 10. A bill to amend title XVIII of the Social Security Act to provide coverage of outpatient prescription drugs under the Medicare Program; to the Committee on Finance.
medicare prescription drug coverage act of 2001
Mr. BAUCUS. Mr. President, today I introduce legislation, along with Senator Daschle and our colleagues, to establish a universal prescription drug benefit program in Medicare. I am pleased to be part of this effort, because I believe Congress should enact a drug benefit this year. The lack of coverage for outpatient prescription drugs in Medicare has become a glaring gap in the program.
The practice of medicine has changed dramatically since Medicare was created in 1965. Today, more often than not, a trip to the doctor results in a trip to the pharmacy, to fill a prescription as part of the therapy. In many cases, prescription drugs allow patients to avoid more expensive and invasive therapies such as hospitalization and surgery.
Our increasing reliance on pharmaceutical products has also fueled drug spending. Pharmaceuticals are the fastest growing segment of national health expenditures. In 2000, national drug spending increased by an estimated 11 percent, compared with 7 percent for physician services and 6 percent for hospital care. Since 1990, national spending for prescription drugs has tripled.
And as the role and expense of prescription drugs have grown, their absence from Medicare's outpatient benefit package has become increasingly problematic for beneficiaries. An estimated 35 percent of Medicare beneficiaries currently lack coverage for outpatient prescription drugs. But that figure may understate the problem. One study has shown that only about 50 percent of seniors have drug coverage throughout the year, and for many who do have coverage, it is often limited or inadequate.
In my home state of Montana, Medicare beneficiaries are even less likely to have coverage for prescription drugs than those living in other parts of the country. A National Economic Council study that I requested last year showed that rural Medicare beneficiaries are 50 percent less likely than their urban counterparts to have prescription drug coverage. And although rural Medicare beneficiaries use 10 percent more prescriptions than urban folks, they pay 25 percent more out-of-
pocket for their drugs.
These factors underscore the importance of this issue to folks back home. I intend to work hard this year to pass a Medicare drug bill for them and for the millions of other Medicare beneficiaries who lack coverage or are at risk of losing the coverage they currently have. It is time for Congress to act on this issue and pass legislation to provide prescription drugs for America's seniors.
The Medicare Prescription Drug Coverage Act of 2001 is a good place to start. This legislation builds on the excellent work of Senator Graham and other members of the Finance Committee, including Senators Conrad, Jeffords, and Rockefeller. The benefit is universal, it is part of the Medicare program, it includes a deductible, and patient coinsurance decreases as drug expenditures increase. The proposal provides subsidies for low-income seniors to help them with their premiums and cost sharing. And the proposal relies on private sector entities to administer the benefit.
Let me add--by no means does this legislation represent the end of the debate. Rather, it represents a beginning, a starting point. For example, the bill does not address many of the elements of Medicare reform that are currently on the table and, quite frankly, should be included. President Bush and others have emphasized that a new drug benefit must be added in the context of overall Medicare reform. As Senator Breaux is fond of saying, a prescription drug benefit is the dessert that we get when we take the medicine of reform.
I expect that any prescription drug legislation we pass, and the President signs, will include provisions addressing solvency, competition, HCFA reform, and fee-for-service modernizations. These are areas, in addition to adding a drug benefit, where Medicare could also be updated and improved, and the bipartisan Medicare Commission has gone a long way toward putting these issues on the national agenda.
I am encouraged that the new administration also recognizes that prescription drugs is an important issue. President Bush campaigned on a promise to address this issue early on, and I sincerely appreciate that it is one of the top priorities of the new administration. Likewise, I know that Senator Grassley also cares deeply about this issue.
In closing, I want to reiterate that I am committed to working with Senator Grassley, with the other members of the Finance Committee, and with the new Administration to come up with a compromise solution. It is truly my hope that we can work together, build consensus, and forge compromise solutions on this issue. If we're creative, and if we listen to each other, I am confident that we can find balanced and bipartisan solution.
S. 10
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Medicare Prescription Drug Coverage Act of 2001''.
(b) Table of Contents.--The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Medicare outpatient prescription drug benefit program.
``Part D--Outpatient Prescription Drug Benefit Program
``Sec. 1860. Definitions.
``Subpart 1--Establishment of Outpatient Prescription Drug Benefit
Program
``Sec. 1860A. Establishment of outpatient prescription drug benefit program.
``Sec. 1860B. Enrollment.
``Sec. 1860C. Providing information to beneficiaries.
``Sec. 1860D. Premiums.
``Sec. 1860E. Cost-sharing.
``Sec. 1860F. Selection of entities to provide outpatient drug benefit.
``Sec. 1860G. Conditions for awarding contract.
``Sec. 1860H. Payments.
``Sec. 1860I. Employer incentive program for employment-based retiree drug coverage.
``Sec. 1860J. Procedures for partial year implementation.
``Sec. 1860K. Appropriations.
``Subpart 2--Medicare Pharmacy and Therapeutics (P&T) Advisory
Committee
``Sec. 1860M. Medicare Pharmacy and Therapeutics (P&T) Advisory
Committee.''.
Sec. 4. Part D benefits under Medicare+Choice plans.
Sec. 5. Exclusion of part D costs from determination of part B monthly premium.
Sec. 6. Additional assistance for low-income beneficiaries.
Sec. 7. Medigap revisions.
Sec. 8. Comprehensive immunosuppressive drug coverage for transplant patients. Sec. 9. HHS studies and report to Congress regarding outpatient prescription drug benefit program.
Sec. 10. GAO study and biennial reports on competition and savings.
Sec. 11. MedPAC study and annual reports on the pharmaceutical market, pharmacies, and beneficiary access.
Sec. 12. Appropriations.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Prescription drug coverage was not a standard part of health insurance when the medicare program under title XVIII of the Social Security Act was enacted in 1965. Since 1965, however, drug coverage has become a key component of most private and public health insurance coverage, except for the medicare program.
(2) At least \2/3\ of medicare beneficiaries have unreliable, inadequate, or no drug coverage at all.
(3) Seniors who do not have drug coverage typically pay 15 percent more for prescription drugs than individuals that have such coverage pay for such drugs, and often pay 2 times the best available price for such drugs.
(4) Although many medicare beneficiaries who lack prescription drug coverage have low incomes, more than \1/2\ of such beneficiaries have incomes greater than 150 percent of the poverty line.
(5) The number of private firms offering retiree health coverage is declining.
(6) The premiums for medicare supplemental policies
(medigap policies) that provide prescription drug coverage are too expensive for most medicare beneficiaries and are highest for older senior citizens who need prescription drug coverage the most and typically have the lowest incomes.
(7) The management of a medicare prescription drug benefit should mirror the practices employed by private entities in delivering prescription drugs. Discounts should be achieved through competition.
(8) All medicare beneficiaries should have access to a voluntary, reliable, affordable outpatient drug benefit as part of the medicare program that assists with the high cost of prescription drugs and protects them against excessive out-of-pocket costs.
(9) The addition of a medicare drug benefit should be consistent with an overall plan to strengthen and modernize the medicare program.
SEC. 3. MEDICARE OUTPATIENT PRESCRIPTION DRUG BENEFIT
PROGRAM.
(a) Establishment.--Title XVIII of the Social Security Act
(42 U.S.C. 1395 et seq.) is amended by redesignating part D as part E and by inserting after part C the following new part:
``Part D--Outpatient Prescription Drug Benefit Program
``definitions
``Sec. 1860. In this part:
``(1) Covered outpatient drug.--
``(A) In general.--Except as provided in subparagraph (B), the term `covered outpatient drug' means any of the following products:
``(i) A drug which may be dispensed only upon prescription, and--
``(I) which is approved for safety and effectiveness as a prescription drug under section 505 of the Federal Food, Drug, and Cosmetic Act;
``(II)(aa) which was commercially used or sold in the United States before the date of enactment of the Drug Amendments of 1962 or which is identical, similar, or related
(within the meaning of section 310.6(b)(1) of title 21 of the Code of Federal Regulations) to such a drug, and (bb) which has not been the subject of a final determination by the Secretary that it is a `new drug' (within the meaning of section 201(p) of the Federal Food, Drug, and Cosmetic Act) or an action brought by the Secretary under section 301, 302(a), or 304(a) of such Act to enforce section 502(f) or 505(a) of such Act; or
``(III)(aa) which is described in section 107(c)(3) of the Drug Amendments of 1962 and for which the Secretary has determined there is a compelling justification for its medical need, or is identical, similar, or related (within the meaning of section 310.6(b)(1) of title 21 of the Code of Federal Regulations) to such a drug, and (bb) for which the Secretary has not issued a notice of an opportunity for a hearing under section 505(e) of the Federal Food, Drug, and Cosmetic Act on a proposed order of the Secretary to withdraw approval of an application for such drug under such section because the Secretary has determined that the drug is less than effective for all conditions of use prescribed, recommended, or suggested in its labeling.
``(ii) A biological product which--
``(I) may only be dispensed upon prescription;
``(II) is licensed under section 351 of the Public Health Service Act; and
``(III) is produced at an establishment licensed under such section to produce such product.
``(iii) Insulin approved under appropriate Federal law, including needles, syringes, and disposable pumps for the administration of such insulin.
``(iv) A prescribed drug or biological product that would meet the requirements of clause (i) or (ii) but that it is available over-the-counter in addition to being available upon prescription.
``(B) Exclusion.--The term `covered outpatient drug' does not include any product--
``(i) except as provided in subparagraph (A)(iv), which may be distributed to individuals without a prescription;
``(ii) that is covered under part A or B (unless coverage of such product is not available because benefits under part A or B have been exhausted); or
``(iii) except for agents used to promote smoking cessation, for which coverage may be excluded or restricted under section 1927(d)(2).
``(2) Eligible beneficiary.--The term `eligible beneficiary' means an individual that is entitled to benefits under part A or enrolled under part B.
``(3) Eligible entity.--The term `eligible entity' means any entity that the Secretary determines to be appropriate to provide eligible beneficiaries with covered outpatient drugs under a contract entered into under this part, including--
``(A) a pharmacy benefit management company;
``(B) a retail pharmacy delivery system;
``(C) a health plan or insurer;
``(D) a State (through mechanisms established under a State plan under title XIX);
``(E) any other entity approved by the Secretary; or
``(F) any combination of the entities described in subparagraphs (A) through (E) if the Secretary determines that such combination--
``(i) increases the scope or efficiency of the provision of benefits under this part; and
``(ii) is not anticompetitive.
``Subpart 1--Establishment of Outpatient Prescription Drug Benefit
Program
``establishment of outpatient prescription drug benefit program
``Sec. 1860A. (a) Provision of Benefit.--Beginning on the date that is 1 year after the date of enactment of this Act, the Secretary shall provide for an outpatient prescription drug benefit program under which an eligible beneficiary shall be provided covered outpatient drugs.
``(b) Voluntary Nature of Program.--Nothing in this part shall be construed as requiring an eligible beneficiary to enroll in the program established under this part.
``(c) Scope of Benefits.--The program established under this part shall provide for coverage of all therapeutic classes of covered outpatient drugs.
``(d) Financing.--The costs of providing benefits under this part shall be payable from the Federal Supplementary Medical Insurance Trust Fund established under section 1841.
``enrollment
``Sec. 1860B. (a) Enrollment Under Part D.--
``(1) Establishment of process.--
``(A) In general.--The Secretary shall establish a process through which an eligible beneficiary (including an eligible beneficiary enrolled in a Medicare+Choice plan offered by a Medicare+Choice organization) may make an election to enroll under this part. Such process shall be similar to the process for enrollment in part B under section 1837.
``(B) Requirement of enrollment.--An eligible beneficiary must enroll under this part in order to be eligible to receive covered outpatient drugs under this title.
``(2) Enrollment procedures.--
``(A) Late enrollment penalty.--
``(i) In general.--Subject to the succeeding provisions of this subparagraph, in the case of an eligible beneficiary whose coverage period under this part began pursuant to an enrollment after the beneficiary's initial enrollment period under part B (determined pursuant to section 1837(d)) and not pursuant to the open enrollment period described in subparagraph (B), the Secretary shall establish procedures for increasing the amount of the monthly premium under section 1860D applicable to such beneficiary--
``(I) by an amount that is equal to 10 percent of such premium for each full 12-month period (in the same continuous period of eligibility) in which the eligible beneficiary could have been enrolled under this part but was not so enrolled; or
``(II) if determined appropriate by the Secretary, by an amount that the Secretary determines is actuarily sound for each such period.
``(ii) Periods taken into account.--For purposes of calculating any 12-month period under clause (i), there shall be taken into account--
``(I) the months which elapsed between the close of the eligible beneficiary's initial enrollment period and the close of the enrollment period in which the beneficiary enrolled; and
``(II) in the case of an eligible beneficiary who reenrolls under this part, the months which elapsed between the date of termination of a previous coverage period and the close of the enrollment period in which the beneficiary reenrolled.
``(iii) Periods not taken into account.--
``(I) In general.--For purposes of calculating any 12-month period under clause (i), subject to subclause (II), there shall not be taken into account months for which the eligible beneficiary can demonstrate that the beneficiary was covered under a group health plan, including a qualified retiree prescription drug plan (as defined in section 1860I(e)(3)) for which an incentive payment was paid under section 1860I, that provides coverage of the cost of prescription drugs whose actuarial value (as defined by the Secretary) to the beneficiary equals or exceeds the actuarial value of the benefits provided to an individual enrolled in the outpatient prescription drug benefit program under this part.
``(II) Application.--This clause shall only apply with respect to a coverage period the enrollment for which occurs before the end of the 60-day period that begins on the first day of the month which includes the date on which the plan terminates, ceases to provide, or reduces the value of the prescription drug coverage under such plan to below the value of the coverage provided under the program under this part.
``(iv) Periods treated separately.--Any increase in an eligible beneficiary's monthly premium under clause (i) with respect to a particular continuous period of eligibility shall not be applicable with respect to any other continuous period of eligibility which the beneficiary may have.
``(v) Continuous period of eligibility.--
``(I) In general.--Subject to subclause (II), for purposes of this subparagraph, an eligible beneficiary's `continuous period of eligibility' is the period that begins with the first day on which the beneficiary is eligible to enroll under section 1836 and ends with the beneficiary's death.
``(II) Separate period.--Any period during all of which an eligible beneficiary satisfied paragraph (1) of section 1836 and which terminated in or before the month preceding the month in which the beneficiary attained age 65 shall be a separate `continuous period of eligibility' with respect to the beneficiary (and each such period which terminates shall be deemed not to have existed for purposes of subsequently applying this subparagraph).
``(B) Open enrollment period for current beneficiaries in which late enrollment procedures do not apply.--The Secretary shall establish an applicable period, which shall begin on the date on which the Secretary first begins to accept elections for enrollment under this part, during which any eligible beneficiary may enroll under this part without the application of the late enrollment procedures established under subparagraph (A)(i).
``(3) Period of coverage.--
``(A) In general.--Except as provided in subparagraph (B), an eligible beneficiary's coverage under the program under this part shall be effective for the period provided in section 1838, as if that section applied to the program under this part.
``(B) Open enrollment.--An eligible beneficiary who enrolls under the program under this part pursuant to paragraph
(2)(B) shall be entitled to the benefits under this part beginning on the first day of the month following the month in which such enrollment occurs.
``(C) Limitation.--Coverage under this part shall not begin prior to the date that is 1 year after the date of enactment of this Act.
``(4) Part d coverage terminated by termination of coverage under parts a and b.--
``(A) In general.--In addition to the causes of termination specified in section 1838, the Secretary shall terminate an individual's coverage under this part if the individual is no longer enrolled in either part A or part B.
``(B) Effective date.--The termination described in subparagraph (A) shall be effective on the effective date of termination of coverage under part A or (if later) under part B.
``(b) Enrollment With Eligible Entity.--
``(1) Process.--
``(A) In general.--The Secretary shall establish a process through which an eligible beneficiary who is enrolled under this part but not enrolled in a Medicare+Choice plan offered by a Medicare+Choice organization shall make an annual election to enroll with any eligible entity that has been awarded a contract under this part and serves the geographic area in which the beneficiary resides.
``(B) Rules.--In establishing the process under subparagraph (A), the Secretary shall use rules similar to the rules for enrollment and disenrollment with a Medicare+Choice plan under section 1851 (including special election periods under subsection (e)(4) of such section).
``(2) Medicare+choice enrollees.--An eligible beneficiary who is enrolled under this part and enrolled in a Medicare+Choice plan offered by a Medicare+Choice organization shall receive coverage of covered outpatient drugs under this part through such plan.
``(c) First Enrollment Period.--The processes developed under subsections (a) and (b) shall ensure that eligible beneficiaries are permitted to enroll under this part and with an eligible entity prior to the date that is 1 year after the date of enactment of this Act, in order to ensure that coverage under this part is effective as of such date.
``providing information to beneficiaries
``Sec. 1860C. (a) Activities.--
``(1) In general.--The Secretary shall conduct activities that are designed to broadly disseminate information to eligible beneficiaries (and prospective eligible beneficiaries) regarding the coverage provided under this part.
``(2) Special rule for first enrollment under the program.--To the extent practicable, the activities described in paragraph (1) shall ensure that eligible beneficiaries are provided with such information at least 30 days prior to the first enrollment period described in section 1860B(c).
``(b) Requirements.--
``(1) In general.--The activities described in subsection
(a) shall--
``(A) be similar to the activities performed by the Secretary under section 1851(d);
``(B) be coordinated with the activities performed by the Secretary under such section and under section 1804; and
``(C) provide for the dissemination of information comparing the eligible entities that are available to eligible beneficiaries residing in an area under this part.
``(2) Comparative information.--The comparative information described in paragraph (1)(B) shall include the following:
``(A) Benefits.--A comparison of the benefits provided by each eligible entity, including a comparison of the pharmacy networks used by each eligible entity and the formularies and appeals processes implemented by each entity.
``(B) Quality and performance.--To the extent available, the quality and performance of each eligible entity.
``(C) Beneficiary costs.--The cost-sharing required of eligible beneficiaries enrolled in each eligible entity.
``(D) Consumer satisfaction surveys.--To the extent available, the results of consumer satisfaction surveys regarding each eligible entity.
``(E) Additional information.--Such additional information as the Secretary may prescribe.
``(3) Information standards.--The Secretary shall develop standards to ensure that the information provided to eligible beneficiaries under this part is complete, accurate, and uniform.
``(c) Use of Medicare Consumer Coalitions To Provide Information.--
``(1) In general.--The Secretary may contract with Medicare Consumer Coalitions to conduct the informational activities--
``(A) under this section;
``(B) under section 1851(d); and
``(C) under section 1804.
``(2) Selection of coalitions.--If the Secretary determines the use of Medicare Consumer Coalitions to be appropriate, the Secretary shall--
``(A) develop and disseminate, in such areas as the Secretary determines appropriate, a request for proposals for Medicare Consumer Coalitions to contract with the Secretary in order to conduct any of the informational activities described in paragraph (1); and
``(B) select a proposal of a Medicare Consumer Coalition to conduct the informational activities in each such area, with a preference for broad participation by organizations with experience in providing information to beneficiaries under this title.
``(3) Payment to medicare consumer coalitions.--The Secretary shall make payments to Medicare Consumer Coalitions contracting under this subsection in such amounts and in such manner as the Secretary determines appropriate.
``(4) Authorization of appropriations.--There are authorized to be appropriated to the Secretary such sums as may be necessary to contract with Medicare Consumer Coalitions under this section.
``(5) Medicare consumer coalition defined.--In this subsection, the term `Medicare Consumer Coalition' means an entity that is a nonprofit organization operated under the direction of a board of directors that is primarily composed of beneficiaries under this title.
``premiums
``Sec. 1860D. (a) Annual Establishment of Monthly Premium Rates.--
``(1) Premium.--The Secretary shall, during September of each year (beginning with the first September after the day that is 1 year after the date of enactment of the Medicare Prescription Drug Coverage Act of 2001), determine and promulgate a monthly premium rate for the succeeding year in accordance with the provisions of this subsection.
``(2) Actuarial determinations.--
``(A) Determination of annual benefit and administrative costs.--The Secretary shall estimate annually for the succeeding year the amount equal to the total of the benefits and administrative costs that will be payable from the Federal Supplementary Medical Insurance Trust Fund for providing covered outpatient drugs in such calendar year with respect to enrollees in the program under this part.
``(B) Determination of monthly premium rates.--
``(i) In general.--The Secretary shall determine the monthly premium rate with respect to such enrollees for such succeeding year, which shall be \1/12\ of the applicable percent of the amount determined under subparagraph (A), divided by the total number of such enrollees, and rounded
(if such rate is not a multiple of 10 cents) to the nearest multiple of 10 cents.
``(ii) Definition of applicable percent.--For purposes of clause (i), the term `applicable percent' means--
``(I) 45 percent, in the case of premiums paid by an eligible beneficiary enrolled in the program under this part; and
``(II) 66.66 percent, in the case of premiums paid for such a beneficiary by an employer (as defined in section 1860I(e)(2)) that the beneficiary formerly worked for.
``(3) Publication of assumptions.--The Secretary shall publish, together with the promulgation of the monthly premium rates for the succeeding year, a statement setting forth the actuarial assumptions and bases employed in arriving at the amounts and rates determined under paragraphs
(1) and (2).
``(b) Collection of Premium.--The monthly premium applicable to an eligible beneficiary under this part shall be collected and credited to the Federal Supplementary Medical Insurance Trust Fund in the same manner as the monthly premium determined under section 1839 is collected and credited to such Trust Fund under section 1840.
``cost-sharing
``Sec. 1860E. (a) Deductible.--
``(1) In general.--Subject to paragraph (2), no payments shall be made under this part on behalf of an eligible beneficiary until the beneficiary has met a $250 deductible.
``(2) Waiver of deductible for generic drugs.--
``(A) In general.--An eligible entity may provide that generic drugs are not subject to the deductible described in paragraph (1) if the Secretary determines that the waiver of the deductible--
``(i) is tied to the performance measures and other incentives applicable to the entity pursuant to section 1860H(a); and
``(ii) will not result in an increase in the expenditures made from the Federal Supplementary Medical Insurance Trust Fund.
``(B) Credit for amounts paid.--If the deductible is waived pursuant to subparagraph (A), any coinsurance paid by an eligible beneficiary for the generic drug shall be credited toward the annual deductible.
``(b) Coinsurance.--
``(1) Establishment.--
``(A) In general.--Subject to paragraph (2), if any covered outpatient drug is provided to an eligible beneficiary in a year after the beneficiary has met any deductible requirement under subsection (a) for the year, the beneficiary shall be responsible for making payments for the drug in an amount equal to the applicable percentage of the cost of the drug.
``(B) Applicable percentage defined.--For purposes of subparagraph (A), the `applicable percentage' means, with respect to any covered outpatient drug provided to an eligible beneficiary in a year--
``(i) 50 percent to the extent the out-of-pocket expenses of the beneficiary for such drug, when added to the out-of-pocket expenses of the beneficiary for covered outpatient drugs previously provided in the year, do not exceed $3,500;
``(ii) 25 percent to the extent such expenses, when so added, exceed $3,500 but do not exceed $4,000; and
``(iii) 0 percent to the extent such expenses, when so added, would exceed $4,000.
``(C) Out-of-pocket expenses defined.--For purposes of subparagraph (B), the term `out-of-pocket expenses' means expenses incurred as a result of the application of the deductible under subsection (a) and the coinsurance required under this subsection.
``(2) Reduction by eligible entity.--An eligible entity may reduce the applicable percentage that an eligible beneficiary is subject to under paragraph (1) if the Secretary determines that such reduction--
``(A) is tied to the performance measures and other incentives applicable to the entity pursuant to section 1860H(a); and
``(B) will not result in an increase in the expenditures made from the Federal Supplementary Medical Insurance Trust Fund.
``(c) Inflation Adjustment.--
``(1) In general.--In the case of any calendar year beginning after 2004, each of the dollar amounts in subsections (a)(1) and (b)(1)(B) shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the percentage (if any) by which the amount of average per capita expenditures under this part in the preceding calendar year exceeds the amount of such expenditures in 2003.
``(2) Rounding.--If any dollar amount after being increased under paragraph (1) is not a multiple of $5, such dollar amount shall be rounded to the nearest multiple of $5.
``selection of entities to provide outpatient drug benefit
``Sec. 1860F. (a) Establishment of Bidding Process.--
``(1) In general.--The Secretary shall establish procedures under which the Secretary accepts bids submitted by eligible entities and awards contracts to such entities in order to administer and deliver the benefits provided under this part to eligible beneficiaries in an area.
``(2) Competitive procedures.--Competitive procedures (as defined in section 4(5) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(5))) shall be used to enter into contracts under this part.
``(b) Area for Contracts.--
``(1) Regional basis.--
``(A) In general.--Except as provided in subparagraph (B) and subject to paragraph (2), the contract entered into between the Secretary and an eligible entity shall require the eligible entity to provide covered outpatient drugs on a regional basis.
``(B) Partial regional basis.--
``(i) In general.--If determined appropriate by the Secretary, the Secretary may permit the coverage described in subparagraph (A) to be provided on a partial regional basis.
``(ii) Requirements.--If the Secretary permits coverage pursuant to clause (i), the Secretary shall ensure that the partial region in which coverage is provided is--
``(I) at least the size of the commercial service area of the eligible entity for that area; and
``(II) not smaller than a State.
``(2) Determination.--
``(A) In general.--In determining coverage areas under this part, the Secretary shall--
``(i) take into account the number of eligible beneficiaries in an area in order to encourage participation by eligible entities; and
``(ii) ensure that there are at least 10 different coverage areas in the United States.
``(B) No administrative or judicial review.--The determination of coverage areas under this part shall not be subject to administrative or judicial review.
``(c) Submission of Bids.--
``(1) In general.--Each eligible entity desiring to provide covered outpatient drugs under this part shall submit a bid to the Secretary at such time, in such manner, and accompanied by such information as the Secretary may reasonably require.
``(2) Required information.--The bids described in paragraph (1) shall include--
``(A) a proposal for the estimated prices of covered outpatient drugs and the projected annual increases in such prices, including differentials between formulary and nonformulary prices, if applicable;
``(B) the amount that the entity will charge the Secretary for administering and delivering the benefits under such contract;
``(C) a statement regarding whether the entity will waive the deductible for generic drugs pursuant to section 1860E(a)(2);
``(D) a statement regarding whether the entity will reduce the applicable coinsurance percentage pursuant to section 1860E(b)(2) and if so, the amount of such reduction;
``(E) a detailed description of--
``(i) the risk corridors tied to performance measures and other incentives that the entity will accept under the contract; and
``(ii) how the entity will meet such measures and incentives;
``(F) a detailed description of proposed contracts with local pharmacy providers designed to ensure access, including compensation for local pharmacists' services;
``(G) a detailed description of any ownership or shared financial interests with other entities involved in the delivery of the benefit as proposed;
``(H) a detailed description of the entity's estimated marketing and advertising expenditures related to enrolling and retaining eligible beneficiaries; and
``(I) such other information that the Secretary determines is necessary in order to carry out this part, including information relating to the bidding process under this part.
``(d) Access.--
``(1) In general.--The Secretary shall ensure that an eligible entity--
``(A) complies with the access requirements described in section 1860G(a)(4)(A); and
``(B) makes available to each beneficiary covered under the contract the full scope of the benefits required under this part.
``(2) Areas not covered by contracts.--The Secretary shall develop procedures for the provision of covered outpatient drugs under this part to each eligible beneficiary that resides in an area that is not covered by any contract under this part.
``(3) Beneficiaries residing in different locations.--The Secretary shall develop procedures to ensure that each eligible beneficiary that resides in different areas in a year is provided the benefits under this part throughout the entire year.
``(4) Special attention to rural and hard-to-serve areas.--
``(A) In general.--The Secretary shall ensure that all eligible beneficiaries have access to the full range of benefits under this part, and shall give special attention to access, pharmacist counseling, and delivery in rural and hard-to-serve areas (as the Secretary may define by regulation).
``(B) Special attention defined.--For purposes of subparagraph (A), the term `special attention' may include bonus payments to retail pharmacists in rural areas, extra payments to eligible entities for the cost of rapid delivery of pharmaceuticals, and any other actions the Secretary determines are necessary to ensure full access to benefits under this part by eligible beneficiaries residing in rural and hard-to-serve areas.
``(C) GAO report.--Not later than 2 years after the date of enactment of the Medicare Prescription Drug Coverage Act of 2001, the Comptroller General of the United States shall submit to Congress a report on the access to benefits under this part by eligible beneficiaries residing in rural and hard-to-serve areas, together with any recommendations of the Comptroller General regarding any additional steps the Secretary may need to take to ensure the access of medicare beneficiaries to such benefits.
``(e) Awarding of Contracts.--
``(1) Number of contracts.--The Secretary shall, consistent with the requirements of this part and the goal of containing costs under this title, award in a competitive manner at least 2 contracts in an area, unless only 1 bidding entity meets the minimum standards specified under this part and by the Secretary.
``(2) Determination.--In determining which of the eligible entities that submitted bids that meet the minimum standards specified under this part and by the Secretary (including the terms and conditions described in section 1860G) to award a contract, the Secretary shall consider the comparative merits of each bid, as determined on the basis of the past performance of the entity and other relevant factors, with respect to--
``(A) how well the entity meets such minimum standards;
``(B) the amount that the entity will charge the Secretary for administering and delivering the benefits under the contract;
``(C) the proposed prices of covered outpatient drugs and annual increases in such prices;
``(D) the proposed risk corridors tied to performance measures and other incentives that the entity will be subject to under the contract;
``(E) the factors described in section 1860C(b)(2);
``(F) prior experience in administering a prescription drug benefit program;
``(G) effectiveness in containing costs through pricing incentives and utilization management; and
``(H) such other factors as the Secretary deems necessary to evaluate the merits of each bid.
``(3) Exception to conflict of interest rules.--In awarding contracts under this part, the Secretary may waive conflict of interest laws generally applicable to Federal acquisitions
(subject to such safeguards as the Secretary may find necessary to impose) in circumstances where the Secretary finds that such waiver--
``(A) is not inconsistent with the--
``(i) purposes of the programs under this title; or
``(ii) best interests of enrolled individuals; and
``(B) permits a sufficient level of competition for such contracts, promotes efficiency of benefits administration, or otherwise serves the objectives of the program under this part.
``(4) No administrative or judicial review.--The determination of the Secretary to award or not award a contract to an eligible entity under this part shall not be subject to administrative or judicial review.
``(f) Approval of Marketing Material and Application Forms.--The provisions of section 1851(h) shall apply to marketing material and application forms under this part in the same manner as such provisions apply to marketing material and application forms under part C.
``(g) Duration of Contracts.--Each contract under this part shall be for a term of at least 2 years but not more than 5 years, as determined by the Secretary.
``conditions for awarding contract
``Sec. 1860G. (a) In General.--The Secretary shall not award a contract to an eligible entity under this part unless the Secretary finds that the eligible entity agrees to comply with such terms and conditions as the Secretary shall specify, including the following:
``(1) Quality and financial standards.--The eligible entity meets the quality and financial standards specified by the Secretary.
``(2) Procedures to ensure proper utilization, compliance, and avoidance of adverse drug reactions.--The eligible entity has in place drug utilization review procedures to ensure--
``(A) the appropriate utilization by eligible beneficiaries of the benefits to be provided under the contract; and
``(B) the avoidance of adverse drug reactions among eligible beneficiaries enrolled with the entity, including problems due to therapeutic duplication, drug-disease contraindications, drug-drug interactions (including serious interactions with nonprescription or over-the-counter drugs), incorrect drug dosage or duration of drug treatment, drug-allergy interactions, and clinical abuse and misuse.
``(3) Cost-effective provision of benefits.--
``(A) In general.--In providing the benefits under a contract under this part, an eligible entity may--
``(i) employ mechanisms to provide the benefits economically, including the use of--
``(I) formularies (pursuant to subparagraph (B));
``(II) alternative methods of distribution; and
``(III) generic drug substitution;
``(ii) use mechanisms to encourage eligible beneficiaries to select cost-effective drugs or less costly means of receiving drugs, including the use of pharmacy incentive programs, therapeutic interchange programs, and disease management programs; and
``(iii) encourage pharmacy providers to--
``(I) inform beneficiaries of the differentials in price between generic and nongeneric drug equivalents; and
``(II) provide medication therapy management programs in order to enhance beneficiaries' understanding of the appropriate use of medications and to reduce the risk of potential adverse events associated with medications.
``(B) Formularies.--If an eligible entity uses a formulary under this part, such formulary shall comply with standards established by the Secretary in consultation with the Medicare Pharmacy and Therapeutics Advisory Committee established under section 1860M. Such standards shall require that the eligible entity--
``(i) use a pharmacy and therapeutic committee (that meets the standards for a pharmacy and therapeutic committee established by the Secretary in consultation with the Medicare Pharmacy and Therapeutics Advisory Committee established under section 1860M) to develop and implement the formulary;
``(ii) include in the formulary--
``(I) at least 1 drug from each therapeutic class (as defined by the entity's pharmacy and therapeutic committee in accordance with standards established by the Secretary in consultation with the Medicare Pharmacy and Therapeutics Advisory Committee established under section 1860M);
``(II) if there is more than 1 drug available in a therapeutic class, at least 2 drugs from such class; and
``(III) if there are more than 2 drugs available in a therapeutic class, at least 2 drugs from such class and a generic drug substitute if available;
``(iii) develop procedures for the--
``(I) addition of new therapeutic classes to the formulary;
``(II) addition of new drugs to an existing therapeutic class; and
``(III) modification of the formulary;
``(iv) provide for coverage of otherwise covered non-formulary drugs when recommended by a prescribing provider; and
``(v) disclose to current and prospective beneficiaries and to providers in the service area the nature of the formulary restrictions, including information regarding the drugs included in the formulary, coinsurance, and any difference in the cost-sharing for different types of drugs.
``(C) Construction.--Nothing in this paragraph shall be construed as precluding an eligible entity from--
``(i) requiring cost-sharing for nonformulary drugs that is higher than the cost-sharing established in section 1860E(b), except that such entity shall provide for coverage of a nonformulary drug at the same cost-sharing level as a drug within the formulary if such nonformulary drug is recommended by a prescribing provider;
``(ii) educating prescribing providers, pharmacists, and beneficiaries about the medical and cost benefits of formulary drugs (including generic drugs); or
``(iii) requiring prescribing providers to consider a formulary drug prior to dispensing of a nonformulary drug, as long as such requirement does not unduly delay the provision of the drug.
``(4) Patient protections.--
``(A) Access.--The eligible entity ensures that the covered outpatient drugs are accessible and convenient to eligible beneficiaries covered under the contract, including by doing the following:
``(i) Services during emergencies.--Offering services 24 hours a day and 7 days a week for emergencies.
``(ii) Agreements with pharmacies.--Entering into participation agreements under subsection (b) with pharmacies, that include terms that--
``(I) secure the participation of sufficient numbers of pharmacies to ensure convenient access (including adequate emergency access); and
``(II) permit the participation of any pharmacy in the service area that meets the participation requirements described in subsection (b).
``(B) Continuity of care.--
``(i) In general.--The eligible entity ensures that, in the case of an eligible beneficiary who loses coverage under this part with such entity under circumstances that would permit a special election period (as established by the Secretary under section 1860B(b)), the entity will continue to provide coverage under this part to such beneficiary until the beneficiary enrolls and receives such coverage with another eligible entity under this part.
``(ii) Limited period.--In no event shall an eligible entity be required to provide the extended coverage required under clause (i) beyond the date which is 30 days after the coverage with such entity would have terminated but for this subparagraph.
``(C) Procedures regarding denials of care.--The eligible entity has in place procedures to ensure--
``(i) a timely internal and external review and resolution of denials of coverage (in whole or in part) and complaints
(including those regarding the use of formularies under paragraph (3)) by eligible beneficiaries, or by providers, pharmacists, and other individuals acting on behalf of each such beneficiary (with the beneficiary's consent) in accordance with requirements (as established by the Secretary) that are comparable to such requirements for Medicare+Choice organizations under part C; and
``(ii) that beneficiaries are provided with information regarding the appeals procedures under this part at the time of enrollment.
``(D) Procedures regarding patient confidentiality.--Insofar as an eligible entity maintains individually identifiable medical records or other health information regarding eligible beneficiaries under a contract entered into under this part, the entity has in place procedures to--
``(i) safeguard the privacy of any individually identifiable beneficiary information;
``(ii) maintain such records and information in a manner that is accurate and timely;
``(iii) ensure timely access by such beneficiaries to such records and information; and
``(iv) otherwise comply with applicable laws relating to patient confidentiality.
``(E) Procedures regarding transfer of medical records.--
``(i) In general.--The eligible entity has in place procedures for the timely transfer of records and information described in subparagraph (D) (with respect to a beneficiary who loses coverage under this part with the entity and enrolls with another entity under this part) to such other entity.
``(ii) Patient confidentiality.--The procedures described in clause (i) shall comply with the patient confidentiality procedures described in subparagraph (D).
``(F) Procedures regarding medical errors.--The eligible entity has in place procedures for working with the Secretary to deter medical errors related to the provision of covered outpatient drugs.
``(5) Procedures to control fraud, abuse, and waste.--The eligible entity has in place procedures to control fraud, abuse, and waste.
``(6) Reporting requirements.--
``(A) In general.--The eligible entity provides the Secretary with reports containing information regarding the following:
``(i) The prices that the eligible entity is paying for covered outpatient drugs.
``(ii) The prices that eligible beneficiaries enrolled with the entity will be charged for covered outpatient drugs.
``(iii) The administrative costs of providing such benefits.
``(iv) Utilization of such benefits.
``(v) Marketing and advertising expenditures related to enrolling and retaining eligible beneficiaries.
``(B) Timeframe for submitting reports.--
``(i) In general.--The eligible entity shall submit a report described in subparagraph (A) to the Secretary within 3 months after the end of each 12-month period in which the eligible entity has a contract under this part. Such report shall contain information concerning the benefits provided during such 12-month period.
``(ii) Last year of contract.--In the case of the last year of a contract under this section, the Secretary may require that a report described in subparagraph (A) be submitted 3 months prior to the end of the contract. Such report shall contain information concerning the benefits provided between the period covered by the most recent report under this subparagraph and the date that a report is submitted under this clause.
``(C) Confidentiality of information.--
``(i) In general.--Notwithstanding any other provision of law and subject to clause (ii), information disclosed by an eligible entity pursuant to subparagraph (A) is confidential and shall only be used by the Secretary for the purposes of, and to the extent necessary, to carry out this part.
``(ii) Utilization data.--Subject to patient confidentiality laws, the Secretary shall make information disclosed by an eligible entity pursuant to subparagraph
(A)(iv) (regarding utilization data) available for research purposes. The Secretary may charge a reasonable fee for making such information available.
``(7) Approval of marketing material and application forms.--The eligible entity will comply with the requirements described in section 1860F(f).
``(8) Records and audits.--The eligible entity maintains adequate records related to the administration of the benefit under this part and affords the Secretary access to such records for auditing purposes.
``(b) Pharmacy Participation Agreements.--
``(1) In general.--A pharmacy that meets the requirements of this subsection shall be eligible to enter an agreement with an eligible entity to furnish covered outpatient drugs and pharmacists' services to eligible beneficiaries enrolled with such entity and residing in the service area.
``(2) Terms of agreement.--An agreement under this subsection shall include the following terms and requirements:
``(A) Licensing.--The pharmacy and pharmacists shall meet
(and throughout the contract period will continue to meet) all applicable State and local licensing requirements.
``(B) Limitation on charges.--Pharmacies participating under this part shall not charge an eligible beneficiary enrolled with the eligible entity more than--
``(i) the negotiated price for an individual drug (as reported to the Secretary pursuant to subsection (a)(6)(A)); or
``(ii) the amount of the beneficiary's obligation (as determined in accordance with the provisions of this part) of the negotiated price of such drug.
``(C) Performance standards.--The pharmacy shall comply with performance standards relating to--
``(i) measures for quality assurance, reduction of medical errors, and compliance with the drug utilization review procedures described in subsection (a)(2);
``(ii) systems to ensure compliance with the patient confidentiality standards applicable under subsection
(a)(4)(D); and
``(iii) other requirements as the Secretary may impose to ensure integrity, efficiency, and the quality of the program under this part.
``payments
``Sec. 1860H. (a) Payments to Eligible Entities.--
``(1) Procedures.--
``(A) In general.--The Secretary shall establish procedures for making payments to an eligible entity under a contract entered into under this part for the administration and delivery of the benefits under this part.
``(B) Entities only subject to limited risk.--Under the procedures established under subparagraph (A), an eligible entity shall only be at risk to the extent that the entity is at risk under paragraph (2).
``(2) Risk corridors tied to performance measures and other incentives.--
``(A) In general.--The procedures established under paragraph (1) may include the use of--
``(i) risk corridors tied to performance measures that have been agreed to between the eligible entity and the Secretary under the contract; and
``(ii) any other incentives that the Secretary determines appropriate.
``(B) Phase-in of risk corridors tied to performance measures.--The Secretary may phase-in the use of risk corridors tied to performance measures if the Secretary determines such phase-in to be appropriate.
``(C) Payments subject to incentives.--If a contract under this part includes the use of risk corridors tied to performance measures or other incentives pursuant to subparagraph (A), payments to eligible entities under such contract shall be subject to such risk corridors tied to performance measures and other incentives.
``(3) Risk adjustment.--To the extent that eligible entities are at risk because of the risk corridors or other incentives described in paragraph (2)(A), the procedures established under paragraph (1) may include a methodology for adjusting the payments made to such entities based on the differences in actuarial risk of different enrollees being served if the Secretary determines such adjustments to be necessary and appropriate.
``(b) Secondary Payer Provisions.--The provisions of section 1862(b) shall apply to the benefits provided under this part.
``employer incentive program for employment-based retiree drug coverage
``Sec. 1860I. (a) Program Authority.--The Secretary is authorized to develop and implement a program under this section called the `Employer Incentive Program' that encourages employers and other sponsors of employment-based health care coverage to provide adequate prescription drug benefits to retired individuals by subsidizing, in part, the sponsor's cost of providing coverage under qualifying plans.
``(b) Sponsor Requirements.--In order to be eligible to receive an incentive payment under this section with respect to coverage of an individual under a qualified retiree prescription drug plan (as defined in subsection (f)(3)), a sponsor shall meet the following requirements:
``(1) Assurances.--The sponsor shall--
``(A) annually attest, and provide such assurances as the Secretary may require, that the coverage offered by the sponsor is a qualified retiree prescription drug plan, and will remain such a plan for the duration of the sponsor's participation in the program under this section; and
``(B) guarantee that it will give notice to the Secretary and covered retirees--
``(i) at least 120 days before terminating its plan; and
``(ii) immediately upon determining that the actuarial value of the prescription drug benefit under the plan falls below the actuarial value of the outpatient prescription drug benefit under this part.
``(2) Beneficiary information.--The sponsor shall report to the Secretary, for each calendar quarter for which it seeks an incentive payment under this section, the names and social security numbers of all retirees (and their spouses and dependents) covered under such plan during such quarter and the dates (if less than the full quarter) during which each such individual was covered.
``(3) Audits.--The sponsor and the employment-based retiree health coverage plan seeking incentive payments under this section shall agree to maintain, and to afford the Secretary access to, such records as the Secretary may require for purposes of audits and other oversight activities necessary to ensure the adequacy of prescription drug coverage, the accuracy of incentive payments made, and such other matters as may be appropriate.
``(4) Other requirements.--The sponsor shall provide such other information, and comply with such other requirements, as the Secretary may find necessary to administer the program under this section.
``(c) Incentive Payments.--
``(1) In general.--A sponsor that meets the requirements of subsection (b) with respect to a quarter in a calendar year shall be entitled to have payment made by the Secretary on a quarterly basis (to the sponsor or, at the sponsor's direction, to the appropriate employment-based health plan) of an incentive payment, in the amount determined in paragraph (2), for each retired individual (or spouse) who--
``(A) was covered under the sponsor's qualified retiree prescription drug plan during such quarter; and
``(B) was eligible for, but was not enrolled in, the outpatient prescription drug benefit program under this part.
``(2) Amount of incentive.--The payment under this section with respect to each individual described in paragraph (1) for a month shall be equal to \2/3\ of the monthly premium amount payable by an eligible beneficiary enrolled under this part, as set for the calendar year pursuant to section 1860D(a)(2).
``(3) Payment date.--The incentive under this section with respect to a calendar quarter shall be payable as of the end of the next succeeding calendar quarter.
``(d) Civil Money Penalties.--A sponsor, health plan, or other entity that the Secretary determines has, directly or through its agent, provided information in connection with a request for an incentive payment under this section that the entity knew or should have known to be false shall be subject to a civil monetary penalty in an amount up to 3 times the total incentive amounts under subsection (c) that were paid (or would have been payable) on the basis of such information.
``(e) Definitions.--In this section:
``(1) Employment-based retiree health coverage.--The term
`employment-based retiree health coverage' means health insurance or other coverage of health care costs for retired individuals (or for such individuals and their spouses and dependents) based on their status as former employees or labor union members.
``(2) Employer.--The term `employer' has the meaning given the term in section 3(5) of the Employee Retirement Income Security Act of 1974 (except that such term shall include only employers of 2 or more employees).
``(3) Qualified retiree prescription drug plan.--The term
`qualified retiree prescription drug plan' means health insurance coverage included in employment-based retiree health coverage that--
``(A) provides coverage of the cost of prescription drugs whose actuarial value (as defined by the Secretary) to each retired beneficiary equals or exceeds the actuarial value of the benefits provided to an individual enrolled in the outpatient prescription drug benefit program under this part; and
``(B) does not deny, limit, or condition the coverage or provision of prescription drug benefits for retired individuals based on age or any health status-related factor described in section 2702(a)(1) of the Public Health Service Act.
``(4) Sponsor.--The term `sponsor' has the meaning given the term `plan sponsor' in section 3(16)(B) of the Employer Retirement Income Security Act of 1974.
``(f) Authorization of Appropriations.--There are authorized to be appropriated from time to time, out of any moneys in the Treasury not otherwise appropriated, such sums as may be necessary to carry out the program under this section.
``procedures for partial year implementation
``Sec. 1860J. If the Secretary first implements the program under this part on a day other that January 1 of a year, the Secretary shall establish procedures for implementing the program during the period between the date of implementation and December 31 of such year, including procedures--
``(1) for prorating premiums, deductibles, and coinsurance under the program during such period; and
``(2) relating to requirements and payments under the Medicare+Choice program during such period.
``appropriations
``Sec. 1860K. There are authorized to be appropriated from time to time, out of any moneys in the Treasury not otherwise appropriated, to the Federal Supplementary Medical Insurance Trust Fund established under section 1841, an amount equal to the amount by which the benefits and administrative costs of providing the benefits under this part exceed the premiums collected under section 1860D.
``Subpart 2--Medicare Pharmacy and Therapeutics (P&T) Advisory
Committee
``medicare pharmacy and therapeutics (p&t) advisory committee
``Sec. 1860M. (a) Establishment of Committee.--There is established a Medicare Pharmacy and Therapeutics Advisory Committee (in this section referred to as the `Committee').
``(b) Functions of Committee.--On and after January 1, 2002, the Committee shall advise the Secretary on policies related to--
``(1) the development of guidelines for the implementation and administration of the outpatient prescription drug benefit program under this part; and
``(2) the development of--
``(A) standards for a pharmacy and therapeutics committee required of eligible entities under section 1860G(a)(3)(B)(i);
``(B) standards for--
``(i) defining therapeutic classes;
``(ii) adding new therapeutic classes to a formulary;
``(iii) adding new drugs to a therapeutic class within a formulary; and
``(iv) when and how often a formulary should be modified;
``(C) procedures to evaluate the bids submitted by eligible entities under this part; and
``(D) procedures to ensure that eligible entities with a contract under this part are in compliance with the requirements under this part.
``(c) Structure and Membership of the Committee.--
``(1) Structure.--The Committee shall be composed of 19 members who shall be appointed by the Secretary.
``(2) Membership.--
``(A) In general.--The members of the Committee shall be chosen on the basis of their integrity, impartiality, and good judgment, and shall be individuals who are, by reason of their education, experience, and attainments, exceptionally qualified to perform the duties of members of the Committee.
``(B) Specific members.--Of the members appointed under paragraph (1)--
``(i) eleven shall be chosen to represent physicians;
``(ii) four shall be chosen to represent pharmacists;
``(iii) one shall be chosen to represent the Health Care Financing Administration;
``(iv) two shall be chosen to represent actuaries and pharmacoeconomists; and
``(v) one shall be chosen to represent emerging drug technologies.
``(d) Terms of Appointment.--Each member of the Committee shall serve for a term determined appropriate by the Secretary. The terms of service of the members initially appointed shall begin on January 1, 2002.
``(e) Chairman.--The Secretary shall designate a member of the Committee as Chairman. The term as Chairman shall be for a 1-year period.
``(f) Compensation and Travel Expenses.--
``(1) Compensation of members.--Each member of the Committee who is not an officer or employee of the Federal Government shall be compensated at a rate equal to the daily equivalent of the annual rate of basic pay prescribed for level IV of the Executive Schedule under section 5315 of title 5, United States Code, for each day (including travel time) during which such member is engaged in the performance of the duties of the Committee. All members of the Committee who are officers or employees of the United States shall serve without compensation in addition to that received for their services as officers or employees of the United States.
``(2) Travel expenses.--The members of the Committee shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, while away from their homes or regular places of business in the performance of services for the Committee.
``(g) Operation of the Committee.--
``(1) Meetings.--The Committee shall meet at the call of the Chairman (after consultation with the other members of the Committee) not less often than quarterly to consider a specific agenda of issues, as determined by the Chairman after such consultation.
``(2) Quorum.--Ten members of the Committee shall constitute a quorum for purposes of conducting business.
``(h) Federal Advisory Committee Act.--Section 14 of the Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the Committee.
``(i) Transfer of Personnel, Resources, and Assets.--For purposes of carrying out its duties, the Secretary and the Committee may provide for the transfer to the Committee of such civil service personnel in the employ of the Department of Health and Human Services, and such resources and assets of the Department used in carrying out this title, as the Committee requires.
``(j) Authorization of Appropriations.--There are authorized to be appropriated such sums as may be necessary to carry out the purposes of this section.''.
(b) Exclusions From Coverage.--
(1) Application to part d.--Section 1862(a) of the Social Security Act (42 U.S.C. 1395y(a)) is amended in the matter preceding paragraph (1) by striking ``part A or part B'' and inserting ``part A, B, or D''.
(2) Prescription drugs not excluded from coverage if appropriately prescribed.--Section 1862(a)(1) of the Social Security Act (42 U.S.C. 1395y(a)(1)) is amended--
(A) in subparagraph (H), by striking ``and'' at the end;
(B) in subparagraph (I), by striking the semicolon at the end and inserting ``, and''; and
(C) by adding at the end the following new subparagraph:
``(J) in the case of prescription drugs covered under part D, which are not prescribed in accordance with such part;''.
(c) Conforming References to Previous Part D.--
(1) In general.--Any reference in law (in effect before the date of enactment of this Act) to part D of title XVIII of the Social Security Act is deemed a reference to part E of such title (as in effect after such date).
(2) Secretarial submission of legislative proposal.--Not later than 6 months after the date of enactment of this Act, the Secretary of Health and Human Services shall submit to the appropriate committees of Congress a legislative proposal providing for such technical and conforming amendments in the law as are required by the provisions of this Act.
SEC. 4. PART D BENEFITS UNDER MEDICARE+CHOICE PLANS.
(a) Eligibility, Election, and Enrollment.--Section 1851 of the Social Security Act (42 U.S.C. 1395w-21) is amended--
(1) in subsection (a)(1)(A), by striking ``parts A and B'' and inserting ``parts A, B, and D''; and
(2) in subsection (i)(1), by striking ``parts A and B'' and inserting ``parts A, B, and D''.
(b) Voluntary Beneficiary Enrollment for Drug Coverage.--Section 1852(a)(1)(A) of such Act (42 U.S.C. 1395w-22(a)(1)(A)) is amended by inserting ``(and under part D to individuals also enrolled under that part)'' after ``parts A and B''.
(c) Access to Services.--Section 1852(d)(1) of such Act (42 U.S.C. 1395w-22(d)(1)) is amended--
(1) in subparagraph (D), by striking ``and'' at the end;
(2) in subparagraph (E), by striking the period at the end and inserting ``; and''; and
(3) by adding at the end the following new subparagraph:
``(F) in the case of covered outpatient drugs provided to individuals enrolled under part D (as defined in section 1860(1)), the organization complies with the access requirements applicable under part D.''.
(d) Payments to Organizations.--Section 1853(a)(1)(A) of such Act (42 U.S.C. 1395w-23(a)(1)(A)) is amended--
(1) by inserting ``determined separately for the benefits under parts A and B and under part D (for individuals enrolled under that part)'' after ``as calculated under subsection (c)'';
(2) by striking ``that area, adjusted for such risk factors'' and inserting ``that area. In the case of payment for the benefits under parts A and B, such payment shall be adjusted for such risk factors as''; and
(3) by inserting before the last sentence the following:
``In the case of the payments for the benefits under part D, such payment shall initially be adjusted for the risk factors of each enrollee as the Secretary determines to be feasible and appropriate to ensure actuarial equivalence. By 2006, the adjustments to payments for benefits under part D shall be for the same risk factors used to adjust payments for the benefits under parts A and B.''.
(e) Calculation of Annual Medicare+Choice Capitation Rates.--Section 1853(c) of such Act (42 U.S.C. 1395w-23(c)) is amended--
(1) in paragraph (1), in the matter preceding subparagraph
(A), by inserting ``for benefits under parts A and B'' after
``capitation rate''; and
(2) by adding at the end the following new paragraph:
``(8) Payment for part d benefits.--The Secretary shall determine a capitation rate for part D benefits (for individuals enrolled under such part) as follows:
``(A) Drugs dispensed before 2004.--In the case of prescription drugs dispensed on or after the date that is 1 year after the date of enactment of the Medicare Prescription Drug Coverage Act of 2001 and before January 1, 2004, the capitation rate shall be based on the projected national per capita costs for prescription drug benefits under part D and associated claims processing costs for beneficiaries enrolled under part D and not enrolled with a Medicare+Choice organization under this part.
``(B) Drugs dispensed in subsequent years.--In the case of prescription drugs dispensed in 2004 or a subsequent year, the capitation rate shall be equal to the capitation rate for the preceding year increased by the Secretary's estimate of the projected per capita rate of growth in expenditures under this title for an individual enrolled under part D for such subsequent year.''.
(f) Limitation on Enrollee Liability.--Section 1854(e) of such Act (42 U.S.C. 1395w-24(e)) is amended by adding at the end the following new paragraph:
``(5) Special rule for part d benefits.--With respect to outpatient prescription drug benefits under part D, a Medicare+Choice organization may not require that an enrollee pay a deductible or a coinsurance percentage that exceeds the deductible or coinsurance percentage applicable for such benefits for an eligible beneficiary under part D.''.
(g) Requirement for Additional Benefits.--Section 1854(f)(1) of such Act (42 U.S.C. 1395w-24(f)(1)) is amended by adding at the end the following new sentence: ``Such determination shall be made separately for the benefits under parts A and B and for prescription drug benefits under part D.''.
(h) Effective Date.--The amendments made by this section shall apply to items and services provided under a Medicare+Choice plan on or after the date that is 1 year after the date of enactment of this Act.
SEC. 5. EXCLUSION OF PART D COSTS FROM DETERMINATION OF PART
B MONTHLY PREMIUM.
Section 1839(g) of the Social Security Act (42 U.S.C. 1395r(g)) is amended--
(1) by striking ``attributable to the application of section'' and inserting ``attributable to--
``(1) the application of section'';
(2) by striking the period and inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(2) the program under part D providing payment for covered outpatient drugs (including costs associated with making payments to employers and other sponsors of employment-based health care coverage under the Employer Incentive Program under section 1860I).''.
SEC. 6. ADDITIONAL ASSISTANCE FOR LOW-INCOME BENEFICIARIES.
(a) Inclusion in Medicare Cost-Sharing.--Section 1905(p)(3) of the Social Security Act (42 U.S.C. 1396d(p)(3)) is amended--
(1) in subparagraph (A)--
(A) in clause (i), by striking ``and'' at the end;
(B) in clause (ii), by inserting ``and'' at the end; and
(C) by adding at the end the following new clause:
``(iii) premiums under section 1860D.'';
(2) in subparagraph (B), by striking ``section 1813'' and inserting ``sections 1813 and 1860E(b)''; and
(3) in subparagraph (C), by striking ``section 1813 and section 1833(b)'' and inserting ``sections 1813, 1833(b), and 1860E(a)''.
(b) Expansion of Medical Assistance.--Section 1902(a)(10)(E) of the Social Security Act (42 U.S.C. 1396a(a)(10)(E)) is amended--
(1) in clause (iii)--
(A) by striking ``section 1905(p)(3)(A)(ii)'' and inserting
``clauses (ii) and (iii) of section 1905(p)(3)(A), for the coinsurance described in section 1860E(b), and for the deductible described in section 1860E(a)''; and
(B) by striking ``and'' at the end;
(2) by redesignating clause (iv) as clause (vi); and
(3) by inserting after clause (iii) the following new clauses:
``(iv) for making medical assistance available for Medicare cost-sharing described in section 1905(p)(3)(A)(iii), for the coinsurance described in section 1860E(b), and for the deductible described in section 1860E(a) for individuals who would be qualified Medicare beneficiaries described in section 1905(p)(1) but for the fact that their income exceeds 120 percent but does not exceed 135 percent of such official poverty line for a family of the size involved;
``(v) for making medical assistance available for Medicare cost-sharing described in section 1905(p)(3)(A)(iii) on a linear sliding scale based on the income of such individuals for individuals who would be qualified Medicare beneficiaries described in section 1905(p)(1) but for the fact that their income exceeds 135 percent but does not exceed 175 percent of such official poverty line for a family of the size involved; and''.
(c) Nonapplicability of Resource Requirements to Medicare Part D Cost-Sharing.--Section 1905(p)(1) of the Social Security Act (42 U.S.C. 1396d(p)(1)) is amended by adding at the end the following flush sentence:
``In determining if an individual is a qualified medicare beneficiary under this paragraph, subparagraph (C) shall not be applied for purposes of providing the individual with medicare cost-sharing that consists of premiums under section 1860D, coinsurance described in section 1860E(b), or deductibles described in section 1860E(a).''.
(d) Nonapplicability of Payment Differential Requirements to Medicare Part D Cost-Sharing.--Section 1902(n)(2) of the Social Security Act (42 U.S.C. 1396a(n)(2)) is amended by adding at the end the following new sentence: ``The preceding sentence shall not apply to coinsurance described in section 1860E(b) or deductibles described in section 1860E(a).''.
(e) 100 Percent Federal Medical Assistance Percentage.--The first sentence of section 1905(b) of the Social Security Act
(42 U.S.C. 1396d(b)) is amended--
(1) by striking ``and'' before ``(3)''; and
(2) by inserting before the period at the end the following: ``, and (4) the Federal medical assistance percentage shall be 100 percent with respect to medical assistance provided under clauses (iv) and (v) of section 1902(a)(10)(E)''.
(f) Treatment of Territories.--Section 1108(g) of such Act
(42 U.S.C. 1308(g)) is amended by adding at the end the following new paragraph:
``(3) Notwithstanding the preceding provisions of this subsection, with respect to the first fiscal quarter that begins on or after the date that is 1 year after the date of enactment of the Medicare Prescription Drug Coverage Act of 2001 and any fiscal year thereafter, the amount otherwise determined under this subsection (and subsection (f)) for the fiscal year for a Commonwealth or territory shall be increased by the ratio (as estimated by the Secretary) of--
``(A) the aggregate amount of payments made to the 50 States and the District of Columbia for the fiscal year under title XIX that are attributable to making medical assistance available for individuals described in clauses (i), (iii),
(iv), and (v) of section 1902(a)(10)(E) for payment of Medicare cost-sharing that consists of premiums under section 1860D, coinsurance described in section 1860E(b), or deductibles described in section 1860E(a); to
``(B) the aggregate amount of total payments made to such States and District for the fiscal year under such title.''.
(g) Conforming Amendments.--Section 1933 of the Social Security Act (42 U.S.C. 1396u-3) is amended--
(1) in subsection (a), by striking ``section 1902(a)(10)(E)(iv)'' and inserting ``section 1902(a)(10)(E)(vi)'';
(2) in subsection (c)(2)(A)--
(A) in clause (i), by striking ``section 1902(a)(10)(E)(iv)(I)'' and inserting ``section 1902(a)(10)(E)(vi)(I)''; and
(B) in clause (ii), by striking ``section 1902(a)(10)(E)(iv)(II)'' and inserting ``section 1902(a)(10)(E)(vi)(II)'';
(3) in subsection (d), by striking ``section 1902(a)(10)(E)(iv)'' and inserting ``section 1902(a)(10)(E)(vi)''; and
(4) in subsection (e), by striking ``section 1902(a)(10)(E)(iv)'' and inserting ``section 1902(a)(10)(E)(vi)''.
(h) Effective Date.--The amendments made by this section shall apply for medical assistance provided under section 1902(a)(10)(E) of the Social Security Act (42 U.S.C. 1396a(a)(10)(E)) on and after the date that is 1 year after the date of enactment of this Act.
SEC. 7. MEDIGAP REVISIONS.
Section 1882 of the Social Security Act (42 U.S.C. 1395ss) is amended by adding at the end the following new subsection:
``(v) Modernized Benefit Packages for Medicare Supplemental Policies.--
``(1) Promulgation of model regulation.--
``(A) NAIC model regulation.--If, within 6 months after the date of enactment of the Medicare Prescription Drug Coverage Act of 2001, the National Association of Insurance Commissioners (in this subsection referred to as the `NAIC') changes the 1991 NAIC Model Regulation (described in subsection (p)) to revise the benefit packages classified as
`H', `I', and `J' under the standards established by subsection (p)(2) (including the benefit package classified as `J' with a high deductible feature, as described in subsection (p)(11)) so that--
``(i) the coverage for outpatient prescription drugs available under such benefit packages is replaced with coverage for outpatient prescription drugs that compliments but does not duplicate the benefits for outpatient prescription drugs that beneficiaries are otherwise entitled to under this title;
``(ii) the revised benefit packages provide a range of coverage options for outpatient prescription drugs for beneficiaries, but do not provide coverage for--
``(I) the deductible under section 1860E(a); or
``(II) more than 90 percent of the coinsurance applicable to an individual under section 1860E(b);
``(iii) uniform language and definitions are used with respect to such revised benefits;
``(iv) uniform format is used in the policy with respect to such revised benefits; and
``(v) such revised standards meet any additional requirements imposed by the Medicare Prescription Drug Coverage Act of 2001;subsection (g)(2)(A) shall be applied in each State, effective for policies issued to policy holders on and after the date that is 1 year after the date of enactment of the Medicare Prescription Drug Coverage Act of 2001, as if the reference to the Model Regulation adopted on June 6, 1979, were a reference to the 1991 NAIC Model Regulation as changed under this subparagraph (such changed regulation referred to in this section as the `2002 NAIC Model Regulation').
``(B) Regulation by the secretary.--If the NAIC does not make the changes in the 1991 NAIC Model Regulation within the 6-month period specified in subparagraph (A), the Secretary shall promulgate, not later than 6 months after the end of such period, a regulation and subsection (g)(2)(A) shall be applied in each State, effective for policies issued to policy holders on and after the date that is 1 year after the date of enactment of the Medicare Prescription Drug Coverage Act of 2001, as if the reference to the Model Regulation adopted on June 6, 1979, were a reference to the 1991 NAIC Model Regulation as changed by the Secretary under this subparagraph (such changed regulation referred to in this section as the `2002 Federal Regulation').
``(C) Consultation with working group.--In promulgating standards under this paragraph, the NAIC or Secretary shall consult with a working group similar to the working group described in subsection (p)(1)(D).
``(D) Modification of standards if medicare benefits change.--If benefits (including deductibles and coinsurance) under part D of this title are changed and the Secretary determines, in consultation with the NAIC, that changes in the 2002 NAIC Model Regulation or 2002 Federal Regulation are needed to reflect such changes, the preceding provisions of this paragraph shall apply to the modification of standards previously established in the same manner as they applied to the original establishment of such standards.
``(2) Construction of benefits in other medicare supplemental policies.--Nothing in the benefit packages classified as `A' through `G' under the standards established by subsection (p)(2) (including the benefit package classified as `F' with a high deductible feature, as described in subsection (p)(11)) shall be construed as providing coverage for benefits for which payment may be made under part D.
``(3) Application of provisions and conforming references.--
``(A) Application of provisions.--The provisions of paragraphs (4) through (10) of subsection (p) shall apply under this section, except that--
``(i) any reference to the model regulation applicable under that subsection shall be deemed to be a reference to the applicable 2002 NAIC Model Regulation or 2002 Federal Regulation; and
``(ii) any reference to a date under such paragraphs of subsection (p) shall be deemed to be a reference to the appropriate date under this subsection.
``(B) Other references.--Any reference to a provision of subsection (p) or a date applicable under such subsection shall also be considered to be a reference to the appropriate provision or date under this subsection.''.
SEC. 8. COMPREHENSIVE IMMUNOSUPPRESSIVE DRUG COVERAGE FOR
TRANSPLANT PATIENTS.
(a) In General.--Section 1861(s)(2)(J) of the Social Security Act (42 U.S.C. 1395x(s)(2)(J)), as amended by section 113(a) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (as enacted into law by section 1(a)(6) of Public Law 106-554), is amended by striking ``, to an individual who receives'' and all that follows before the semicolon at the end and inserting ``to an individual who has received an organ transplant''.
(b) Effective Date.--The amendment made by subsection (a) shall apply to drugs furnished on or after the date of enactment of this Act.
SEC. 9. HHS STUDIES AND REPORT TO CONGRESS REGARDING
OUTPATIENT PRESCRIPTION DRUG BENEFIT PROGRAM.
(a) Studies.--The Secretary of Health and Human Services shall conduct a study on the following:
(1) Waiver or reduction of late enrollment penalty.--The feasibility and advisability of establishing an annual open enrollment period under the outpatient prescription drug benefit program under part D of title XVIII of the Social Security Act (as added by section 3) in which the late enrollment penalty under section 1860B(a)(2)(A) of the Social Security Act (as so added) would be reduced or would not be applied. Such study shall include a projection of the costs if open enrollment was allowed with a reduced penalty or without a penalty.
(2) Uniform format for pharmacy benefit cards.--The feasibility and advisability of establishing a uniform format for pharmacy benefit cards provided to beneficiaries by eligible entities under such outpatient prescription drug benefit program.
(3) Development of systems to electronically transfer prescriptions.--The feasibility and advisability of developing systems to electronically transfer prescriptions under such outpatient prescription drug benefit program from the prescriber to the pharmacist.
(b) Report.--Not later than 9 months after the date of enactment of this Act, the Secretary of Health and Human Services shall submit to Congress a report on the results of the studies conducted under subsection (a), together with any recommendations for legislation that the Secretary determines to be appropriate as a result of such studies.
SEC. 10. GAO STUDY AND BIENNIAL REPORTS ON COMPETITION AND
SAVINGS.
(a) Ongoing Study.--The Comptroller General of the United States shall conduct an ongoing study and analysis of the outpatient prescription drug benefit program under part D of title XVIII of the Social Security Act (as added by section 3), including an analysis of--
(1) the extent to which the competitive bidding process under such program fosters maximum competition and efficiency; and
(2) the savings to the medicare program resulting from such outpatient prescription drug benefit program, including the reduction in the number or length of hospital visits.
(b) Initial Report on Competitive Bidding Process.--Not later than 9 months after the date of enactment of this Act, the Comptroller General shall submit to Congress a report on the extent to which the competitive bidding process under the outpatient prescription drug benefit program under part D of title XVIII of the Social Security Act (as added by section 3) is expected to foster maximum competition and efficiency.
(c) Biennial Reports.--Not later than January 1, 2004, and biennially thereafter, the Comptroller General of the United States shall submit to Congress a report on the results of the study conducted under subsection (a), together with any recommendations for legislation that the Comptroller General determines to be appropriate as a result of such study.
SEC. 11. MEDPAC STUDY AND ANNUAL REPORTS ON THE
PHARMACEUTICAL MARKET, PHARMACIES, AND
BENEFICIARY ACCESS.
(a) Ongoing Study.--The Medicare Payment Advisory Commission shall conduct an ongoing study and analysis of the outpatient prescription drug benefit program under part D of title XVIII of the Social Security Act (as added by section 3), including an analysis of the impact of such program on--
(1) the pharmaceutical market, including costs and pricing of pharmaceuticals, beneficiary access to such pharmaceuticals, and trends in research and development;
(2) franchise, independent, and rural pharmacies; and
(3) beneficiary access to outpatient prescription drugs, including an assessment of--
(A) out-of-pocket spending;
(B) generic and brand-name utilization; and
(C) pharmacists' services.
(b) Report.--Not later than January 1, 2004, and annually thereafter, the Medicare Payment Advisory Commission shall submit to Congress a report on the results of the study conducted under subsection (a), together with any recommendations for legislation that such Commission determines to be appropriate as a result of such study.
SEC. 12. APPROPRIATIONS.
In addition to amounts otherwise appropriated to the Secretary of Health and Human Services, there are authorized to be appropriated to the Secretary for fiscal year 2002 and each subsequent fiscal year such sums as may be necessary to administer the outpatient prescription drug benefit program under part D of title XVIII of the Social Security Act (as added by section 3).
______
By Mrs. HUTCHISON (for herself, Mr. Lott, Mr. Brownback, Mr.
Nickles, Mr. Kyl, Mr. Murkowski, Mr. Allen, Mr. Gramm, Mr.
Crapo, Mr. Warner, Mr. Hagel, Mr. Bunning, Mr. Frist, Mr.
McConnell, Mr. Burns, Mr. Ensign, Mr. Helms, and Mr. Craig):
S. 11. A bill to amend the Internal Revenue Code of 1986 to eliminate the marriage penalty by providing that the income tax rate bracket amounts, and the amount of the standard deduction, for joint returns shall be twice the amounts applicable to unmarried individuals, and for other purposes; to the Committee on Finance. marriage penalty legislation
Mrs. HUTCHISON. Mr. President, for 4 years now, I have introduced a bill to eliminate the marriage penalty tax. I have said all of these years that I do not think Americans should have to choose between love and money. They should be able to get married and not be penalized because they do. But in fact 25 million married couples in America today do pay a penalty just because they got married. The sad thing is, the average penalty they pay is about $1,400. That is $1,400 that a young couple would like to have as they are starting their lives together, for the things they want: Like the down payment on the new house or the new car or the expenses associated with having children. We want them to be able to have the money they earn to make their choices rather than having Uncle Sam take $1,400 more just because of what amounts to a glitch in the Tax Code that requires these married couples to pay this penalty.
The bill I have just introduced today, S. 11, is cosponsored by Senators Brownback, Lott, Nickles, Allen, Bunning, Burns, Crapo, Frist, Gramm, Hagel, Kyl, Ensign, McConnell, Murkowski and Warner.
This is a bill that I hope will have broad bipartisan support because, in fact, we have passed it twice and sent it to the President with bipartisan majorities in the past. The President has chose to veto the bills before, but today we have a new President who I believe will sign marriage penalty relief. It was part of President Bush's campaign. When we send him Marriage penalty relief for the third time in a bipartisan way in Congress, I believe President Bush will sign it.
I am very pleased this bill will double the standard deduction for married couples. Today, if you get married the standard deduction that two single people would have is not double. We want to double the standard deduction. Two people getting married who have two incomes but do not itemize would receive a increase of $1,500 in their standard deduction. That is what we want to do.
Secondly, we will double each tax bracket for married couples filing a joint return. For example, if a couple is in the 15-percent income tax bracket but they get married and are thrown into the 30-percent bracket, we want to provide them relief such that they will effectively remain in the 15 percent bracket. This bill would widen the 15-percent bracket by $9,000 for married couples.
Congress passed this legislation, and it was vetoed. Today, I am introducing this bill. I know we are going to pass it in this Congress, and I know it will be signed. This is the beginning of a new day in our United States of America, and we are going to eliminate the marriage penalty this year. I will count on it.
Mr. BURNS. Mr. President, I rise in support of legislation my colleague from Texas introduced today that will put an end to the
``marriage penalty'' tax. Mr. President, we've been fighting this tax inequity for several years now. The people of Montana have spoken to me either through letters or conversation--they think this tax is unfair.
When we first started working to resolve this issue, I was contacted by Joshua and Jody Hayes of Billings, Montana. The Hayes paid $971 more in taxes because they were married than they would have paid if they remained single.
In Montana, it is estimated that nearly 90,000 couples are penalized by this tax to the tune of $51.5 million--solely for being married. Making a living--supporting a family--is a difficult task in today's fast paced economy. A young couple married today is immediately subject to an additional financial burden because they want to share their lives together. The federal tax system penalizes these young couples. These are not wealthy people--this effort to provide tax relief does not discriminate--this effort does not single out a specific income group. It is a tax on families.
I, along with my Republican colleagues, have made it clear that continued tax reform and tax relief is necessary, but I can think of no other tax that has such a dramatic impact on so many people.
If ever there was a disincentive to be married, this penalty would be it. I believe this, along with the estate tax, is one of the most unfair taxes on Americans. It is not right for people to be penalized with higher taxes simply because they choose to get married.
According to the Congressional Budget Office (CBO), almost half of all married couples pay higher taxes due to their marital status. Cumulatively, the marriage penalty increases taxes on affected couples by $29 billion per year. Currently, this tax penalty imposes an average additional tax of $1400 on 21 million married couples nationwide.
Mr. President, the marriage penalty can have significantly negative economic implications for the country as a whole as well. Not only does this penalty within the tax system stand as a likely obstacle to marriage, it can actually discourage a spouse from entering the workforce.
By adding together husband and wife under the rate schedule, tax laws both encourage families to identify a primary and secondary worker and then place an extra burden on the secondary worker because his or her wages come on top of the primary earner's wages.
As the American family realizes lower income levels, the nation realizes lower economic output. From a strictly economic perspective, the fact that potential workers would avoid the labor force as a result of a tax penalty is a clear sign of a failure to maximize true economic output. As a result, the nation as a whole fails to reach its economic potential, which is demonstrated by decreased earnings and international competitiveness.
Whereas I am very disappointed President Clinton has vetoed this initiative in the past, I am confident our new President will support America's families.
Congress has momentum considering this body has already passed this legislation to correct this inequity. I encourage my colleagues to support this legislation to repeal the marriage penalty.
______
By Mr. DASCHLE (for himself, Mr. Leahy, Mr. Schumer, Mr. Durbin,
Mrs. Boxer, Mr. Breaux, Mrs. Clinton, Mr. Corzine, Mr.
Rockefeller, Mr. Levin, and Mr. Johnson):
S. 16. A bill to improve law enforcement, crime prevention, and victim assistance in the 21st century; to the Committee on the Judiciary.
21st Century Law Enforcement, Crime Prevention, and Victims Assistance
Act
Mr. DASCHLE. Mr. President, I ask unanimous consent that the text of the bill and an analysis of the bill be printed in the Record.
There being no objection, the material was ordered to be printed in the Record, as follows:
S. 16
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``21st Century Law Enforcement, Crime Prevention, and Victims Assistance Act''.
(b) Table of Contents.--The table of contents for this Act is as follows:
Sec. 1. Short title and table of contents.
TITLE I--SUPPORTING LAW ENFORCEMENT AND THE EFFECTIVE ADMINISTRATION OF
JUSTICE
Subtitle A--Support for Community Personnel
Sec. 1101. 21st Century Community Policing Initiative.
Subtitle B--Protecting Federal, State, and Local Law Enforcement
Officers and the Judiciary
Sec. 1201. Expansion of protection of Federal officers and employees from murder due to their status.
Sec. 1202. Assaulting, resisting, or impeding certain officers or employees.
Sec. 1203. Influencing, impeding, or retaliating against a Federal official by threatening a family member.
Sec. 1204. Mailing threatening communications.
Sec. 1205. Amendment of the sentencing guidelines for assaults and threats against Federal judges and certain other Federal officials and employees.
Sec. 1206. Killing persons aiding Federal investigations or State correctional officers.
Sec. 1207. Killing State correctional officers.
Sec. 1208. Establishment of protective function privilege.
Subtitle C--Disarming Felons and Protecting Children From Violence
Part 1--Extension of Project Exile
Sec. 1311. Authorization of funding for additional State and local gun prosecutors. Sec. 1312. Authorization of funding for additional Federal firearms prosecutors and gun enforcement teams.
Part 2--Expansion of the Youth Crime Gun Interdiction Initiative
Sec. 1321. Youth Crime Gun Interdiction Initiative.
Part 3--Gun Offenses
Sec. 1331. Gun ban for dangerous juvenile offenders.
Sec. 1332. Improving firearms safety.
Sec. 1333. Juvenile handgun safety.
Sec. 1334. Serious juvenile drug offenses as armed career criminal predicates.
Sec. 1335. Increased penalty for transferring a firearm to a minor for use in crime of violence or drug trafficking crime.
Sec. 1336. Increased penalty for firearms conspiracy.
Part 4--Closing the Gun Show Loophole
Sec. 1341. Extension of Brady background checks to gun shows.
Subtitle D--Assistance to States for Prosecuting and Punishing Juvenile
Offenders, and Reducing Juvenile Crime
Sec. 1401. Juvenile and violent offender incarceration grants.
Sec. 1402. Certain punishment and graduated sanctions for youth offenders.
Sec. 1403. Pilot program to promote replication of recent successful juvenile crime reduction strategies.
Sec. 1404. Reimbursement of States for costs of incarcerating juvenile alien offenders.
Subtitle E--Ballistics, Law Assistance, and Safety Technology
Sec. 1501. Short title.
Sec. 1502. Purposes.
Sec. 1503. Definition of ballistics.
Sec. 1504. Test firing and automated storage of ballistics records.
Sec. 1505. Privacy rights of law abiding citizens.
Sec. 1506. Demonstration firearm crime reduction strategy.
Subtitle F--Offender Reentry and Community Safety
Sec. 1601. Short title.
Sec. 1602. Findings.
Sec. 1603. Purposes.
Part 1--Federal Reentry Demonstration Projects
Sec. 1611. Federal reentry center demonstration.
Sec. 1612. Federal high-risk offender reentry demonstration.
Sec. 1613. District of Columbia Intensive Supervision, Tracking, and
Reentry Training (DC iSTART) Demonstration.
Sec. 1614. Federal Intensive Supervision, Tracking, and Reentry
Training (FED iSTART) Demonstration.
Sec. 1615. Federal enhanced in-prison vocational assessment and training and demonstration.
Sec. 1616. Research and reports to Congress.
Sec. 1617. Definitions.
Sec. 1618. Authorization of appropriations.
Part 2--State Reentry Grant Programs
Sec. 1621. Amendments to the Omnibus Crime Control and Safe Streets Act of 1968.
TITLE II--STRENGTHENING THE FEDERAL CRIMINAL LAWS
Subtitle A--Combating Gang Violence
Part 1--Enhanced Penalties for Gang-related Activities
Sec. 2101. Gang franchising.
Sec. 2102. Enhanced penalty for use or recruitment of minors in gangs.
Sec. 2103. Gang franchising as a RICO predicate.
Sec. 2104. Increase in offense level for participation in crime as gang member.
Sec. 2105. Enhanced penalty for discharge of firearms in relation to counts of violence or drug trafficking crimes.
Sec. 2106. Punishment of arson or bombing at facilities receiving
Federal financial assistance.
Sec. 2107. Elimination of statute of limitations for murder.
Sec. 2108. Extension of statute of limitations for violent and drug trafficking crimes.
Sec. 2109. Increased penalties under the RICO law for gang and violent crimes.
Sec. 2110. Increased penalty and broadened scope of statute against violent crimes in aid of racketeering.
Sec. 2111. Facilitating the prosecution of carjacking offenses.
Sec. 2112. Facilitation of RICO prosecutions.
Sec. 2113. Assault as a RICO predicate.
Sec. 2114. Expansion of definition of ``racketeering activity'' to affect gangs in Indian country.
Sec. 2115. Increased penalties for violence in the course of riot offenses.
Sec. 2116. Expansion of Federal jurisdiction over crimes occurring in private penal facilities housing Federal prisoners or prisoners from other States.
Part 2--Targeting Gang-related Gun Offenses
Sec. 2121. Transfer of firearm to commit a crime of violence.
Sec. 2122. Increased penalty for knowingly receiving firearm with obliterated serial number.
Sec. 2123. Amendment of the sentencing guidelines for transfers of firearms to prohibited persons.
Part 3--Using and Protecting Witnesses to Help Prosecute Gangs and
Other Violent Criminals
Sec. 2131. Interstate travel to engage in witness intimidation or obstruction of justice.
Sec. 2132. Expanding pretrial detention eligibility for serious gang and other violent criminals.
Sec. 2133. Conspiracy penalty for obstruction of justice offenses involving victims, witnesses, and informants.
Sec. 2134. Allowing a reduction of sentence for providing useful investigative information although not regarding a particular individual.
Sec. 2135. Increasing the penalty for using physical force to tamper with witnesses, victims, or informants.
Sec. 2136. Expansion of Federal kidnapping offense to cover when death of victim occurs before crossing State line and when facility in interstate commerce or the mails are used.
Sec. 2137. Assaults or other crimes of violence for hire.
Sec. 2138. Clarification of interstate threat statute to cover threats to kill.
Sec. 2139. Conforming amendment to law punishing obstruction of justice by notification of existence of a subpoena for records in certain types of investigations.
Part 4--Gang Paraphernalia
Sec. 2141. Streamlining procedures for law enforcement access to clone numeric pagers.
Sec. 2142. Sentencing enhancement for using body armor in commission of a felony.
Sec. 2143. Sentencing enhancement for using laser sighting devices in commission of a felony.
Sec. 2144. Government access to location information.
Sec. 2145. Limitation on obtaining transactional information from pen registers or trap and trace devices.
Subtitle B--Combating Money Laundering
Sec. 2201. Short title.
Sec. 2202. Illegal money transmitting businesses.
Sec. 2203. Restraint of assets of persons arrested abroad.
Sec. 2204. Civil money laundering jurisdiction over foreign persons.
Sec. 2205. Punishment of laundering money through foreign banks.
Sec. 2206. Addition of serious foreign crimes to list of money laundering predicates.
Sec. 2207. Criminal forfeiture for money laundering conspiracies.
Sec. 2208. Fungible property in foreign bank accounts.
Sec. 2209. Admissibility of foreign business records.
Sec. 2210. Charging money laundering as a course of conduct.
Sec. 2211. Venue in money laundering cases.
Sec. 2212. Technical amendment to restore wiretap authority for certain money laundering offenses.
Sec. 2213. Criminal penalties for violations of anti-money laundering orders.
Sec. 2214. Encouraging financial institutions to notify law enforcement authorities of suspicious financial transactions.
Sec. 2215. Coverage of foreign bank branches in the territories.
Sec. 2216. Conforming statute of limitations amendment for certain bank fraud offenses.
Sec. 2217. Jurisdiction over certain financial crimes committed abroad.
Sec. 2218. Knowledge that the property is the proceeds of a felony.
Sec. 2219. Money laundering transactions; commingled accounts.
Sec. 2220. Laundering the proceeds of terrorism.
Sec. 2221. Violations of section 6050i.
Sec. 2222. Including agencies of tribal governments in the definition of a financial institution.
Sec. 2223. Penalties for violations of geographic targeting orders and certain recordkeeping requirements.
Subtitle C--Antidrug Provisions
Sec. 2301. Amendments concerning temporary emergency scheduling.
Sec. 2302. Amendment to reporting requirement for transactions involving certain listed chemicals.
Sec. 2303. Drug paraphernalia.
Sec. 2304. Counterfeit substances/imitation controlled substances.
Sec. 2305. Conforming amendment concerning marijuana plants.
Sec. 2306. Serious juvenile drug trafficking offenses as armed career criminal act predicates.
Sec. 2307. Increased penalties for using Federal property to grow or manufacture controlled substances. Sec. 2308. Clarification of length of supervised release terms in controlled substance cases.
Sec. 2309. Supervised release period after conviction for continuing criminal enterprise.
Sec. 2310. Technical correction to ensure compliance of sentencing guidelines with provisions of all Federal statutes.
Sec. 2311. Import and export of chemicals used to produce illicit drugs.
Subtitle D--Deterring Cargo Theft
Sec. 2351. Punishment of cargo theft.
Sec. 2352. Reports to Congress on cargo theft.
Sec. 2353. Establishment of Advisory Committee on Cargo Theft.
Sec. 2354. Addition of attempted theft and counterfeiting offenses to eliminate gaps and inconsistencies in coverage.
Sec. 2355. Clarification of scienter requirement for receiving property stolen from an Indian tribal organization.
Sec. 2356. Larceny involving post office boxes and postal stamp vending machines.
Sec. 2357. Expansion of Federal theft offenses to cover theft of vessels.
Subtitle E--Improvements to Federal Criminal Law
Part 1--Sentencing Improvements
Sec. 2411. Application of sentencing guidelines to all pertinent statutes.
Sec. 2412. Doubling maximum penalty for voluntary manslaughter.
Sec. 2413. Authorization of imposition of both a fine and imprisonment rather than only either penalty in certain offenses.
Sec. 2414. Addition of supervised release violation as predicates for certain offenses.
Sec. 2415. Authority of court to impose a sentence of probation or supervised release when reducing a sentence of imprisonment in certain cases.
Sec. 2416. Elimination of proof of value requirement for felony theft or conversion of grand jury material.
Sec. 2417. Increased maximum corporate penalty for antitrust violations.
Sec. 2418. Amendment of Federal sentencing guidelines for counterfeit bearer obligations of the United States.
Part 2--Additional Improvements to Federal Criminal Law
Sec. 2421. Violence directed at dwellings in Indian country.
Sec. 2422. Corrections to Amber Hagerman Child Protection Act.
Sec. 2423. Elimination of ``bodily harm'' element in assault with a dangerous weapon offense.
Sec. 2424. Appeals from certain dismissals.
Sec. 2425. Authority for injunction against disposal of ill-gotten gains from violations of fraud statutes.
Sec. 2426. Expansion of interstate travel fraud statute to cover interstate travel by perpetrator.
Sec. 2427. Clarification of scope of unauthorized selling of military medals or decorations.
Sec. 2428. Amendment to section 669 to conform to Public Law 104-294.
Sec. 2429. Expansion of jurisdiction over child buying and selling offenses.
Sec. 2430. Limits on disclosure of wiretap orders.
Sec. 2431. Prison credit and aging prisoner reform.
Sec. 2432. Miranda reaffirmation.
TITLE III--PROTECTING AMERICANS AND SUPPORTING VICTIMS OF CRIME
Subtitle A--Crime Victims Assistance
Sec. 3101. Short title.
Part 1--Victim Rights
Sec. 3111. Right to notice and to be heard concerning detention.
Sec. 3112. Right to a speedy trial.
Sec. 3113. Right to notice and to be heard concerning plea.
Sec. 3114. Enhanced participatory rights at trial.
Sec. 3115. Right to notice and to be heard concerning sentence.
Sec. 3116. Right to notice and to be heard concerning sentence adjustment.
Sec. 3117. Right to notice of release or escape.
Sec. 3118. Right to notice and to be heard concerning executive clemency.
Sec. 3119. Remedies for noncompliance.
Part 2--Victim Assistance Initiatives
Sec. 3121. Pilot programs to establish ombudsman programs for crime victims.
Sec. 3122. Amendments to Victims of Crime Act of 1984.
Sec. 3123. Increased training for law enforcement officers and court personnel to respond to the needs of crime victims.
Sec. 3124. Increased resources to develop State-of-the-art systems for notifying crime victims of important dates and developments.
Part 3--Victim-offender Programs: ``Restorative Justice''
Sec. 3131. Pilot program and study on effectiveness of restorative justice approach on behalf of victims of crime.
Subtitle B--Violence Against Women Act Enhancements
Sec. 3201. Shelter services for battered women and children.
Sec. 3202. Transitional housing assistance for victims of domestic violence.
Sec. 3203. Family unity demonstration project.
Subtitle C--Senior Safety
Sec. 3301. Short title.
Sec. 3302. Findings and purposes.
Sec. 3303. Definitions.
Part 1--Combating Crimes Against Seniors
Sec. 3311. Enhanced sentencing penalties based on age of victim.
Sec. 3312. Study and report on health care fraud sentences.
Sec. 3313. Increased penalties for fraud resulting in serious injury or death.
Sec. 3314. Safeguarding pension plans from fraud and theft.
Sec. 3315. Additional civil penalties for defrauding pension plans.
Sec. 3316. Punishing bribery and graft in connection with employee benefit plans.
Part 2--Preventing Telemarketing Fraud
Sec. 3321. Centralized complaint and consumer education service for victims of telemarketing fraud.
Sec. 3322. Blocking of telemarketing scams.
Part 3--Preventing Health Care Fraud
Sec. 3331. Injunctive authority relating to false claims and illegal kickback schemes involving Federal health care programs.
Sec. 3332. Authorized investigative demand procedures.
Sec. 3333. Extending antifraud safeguards to the Federal employee health benefits program.
Sec. 3334. Grand jury disclosure.
Sec. 3335. Increasing the effectiveness of civil investigative demands in false claims investigations.
Part 4--Protecting the Rights of Elderly Crime Victims
Sec. 3341. Use of forfeited funds to pay restitution to crime victims and regulatory agencies.
Sec. 3342. Victim restitution.
Sec. 3343. Bankruptcy proceedings not used to shield illegal gains from false claims.
Sec. 3344. Forfeiture for retirement offenses.
Subtitle D--Violent Crime Reduction Trust Fund
Sec. 3401. Extension of violent crime reduction trust fund.
TITLE IV--BREAKING THE CYCLE OF DRUGS AND VIOLENCE
Subtitle A--Drug Courts, Drug Treatment, and Alternative Sentencing
Part 1--Expansion of Drug Courts
Sec. 4111. Reauthorization of drug courts program.
Sec. 4112. Juvenile drug courts.
Part 2--Zero Tolerance Drug Testing
Sec. 4121. Grant authority.
Sec. 4122. Administration.
Sec. 4123. Applications.
Sec. 4124. Federal share.
Sec. 4125. Geographic distribution.
Sec. 4126. Technical assistance, training, and evaluation.
Sec. 4127. Authorization of appropriations.
Sec. 4128. Permanent set-aside for research and evaluation.
Sec. 4129. Additional requirements for the use of funds under the violent offender incarceration and truth-in-sentencing grant programs.
Part 3--Drug Treatment
Sec. 4131. Drug treatment alternative to prison programs administered by State or local prosecutors.
Sec. 4132. Substance abuse treatment in Federal prisons reauthorization.
Sec. 4133. Residential substance abuse treatment for State prisoners reauthorization
Sec. 4134. Drug treatment for juveniles.
Part 4--Funding for Drug Free Community Programs
Sec. 4141. Extension of safe and drug-free schools and communities program.
Sec. 4142. Say No to Drugs community centers.
Sec. 4143. Drug education and prevention relating to youth gangs.
Sec. 4144. Drug education and prevention program for runaway and homeless youth.
Subtitle B--Youth Crime Prevention and Juvenile Courts
Part 1--Grants to Youth Organizations
Sec. 4211. Grant program.
Sec. 4212. Grants to national organizations.
Sec. 4213. Grants to States.
Sec. 4214. Allocation; grant limitation.
Sec. 4215. Report and evaluation.
Sec. 4216. Authorization of appropriations.
Sec. 4217. Grants to public and private agencies.
Part 2--Reauthorization of Incentive Grants for Local Delinquency
Prevention Programs
Sec. 4221. Incentive grants for local delinquency prevention programs. Sec. 4222. Research, evaluation, and training.
Part 3--Jump Ahead
Sec. 4231. Short title.
Sec. 4232. Findings.
Sec. 4233. Juvenile mentoring grants.
Sec. 4234. Implementation and evaluation grants.
Sec. 4235. Evaluations; reports.
Part 4--Truancy Prevention
Sec. 4241. Short title.
Sec. 4242. Findings.
Sec. 4243. Grants.
Part 5--Juvenile Crime Control and Delinquency Prevention Act
Sec. 4251. Short title.
Sec. 4252. Findings.
Sec. 4253. Purpose.
Sec. 4254. Definitions.
Sec. 4255. Name of office.
Sec. 4256. Concentration of Federal effort.
Sec. 4257. Allocation.
Sec. 4258. State plans.
Sec. 4259. Juvenile delinquency prevention block grant program.
Sec. 4260. Research; evaluation; technical assistance; training.
Sec. 4261. Demonstration projects.
Sec. 4262. Authorization of appropriations.
Sec. 4263. Administrative authority.
Sec. 4264. Use of funds.
Sec. 4265. Limitation on use of funds.
Sec. 4266. Rules of construction.
Sec. 4267. Leasing surplus Federal property.
Sec. 4268. Issuance of rules.
Sec. 4269. Technical and conforming amendments.
Sec. 4270. References.
Part 6--Local Gun Violence Prevention Programs
Sec. 4271. Competitive grants for children's firearm safety education.
Sec. 4272. Dissemination of best practices via the Internet.
Sec. 4273. Grant priority for tracing of guns used in crimes by juveniles.
TITLE I--SUPPORTING LAW ENFORCEMENT AND THE EFFECTIVE ADMINISTRATION OF
JUSTICE
Subtitle A--Support for Community Personnel
SEC. 1101. 21ST CENTURY COMMUNITY POLICING INITIATIVE.
(a) COPS Program.--Section 1701(a) of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd(a)) is amended by--
(1) inserting ``and prosecutor'' after ``increase police''; and
(2) inserting ``to enhance law enforcement access to new technologies, and'' after ``presence,''.
(b) Hiring and Redeployment Grant Projects.--Section 1701(b) of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd(b)) is amended--
(1) in paragraph (1)--
(A) by striking ``and'' at the end of subparagraph (B) and inserting after ``Nation,'' ``or pay overtime to existing career law enforcement officers;'';
(B) by striking the period at the end of subparagraph (C) and inserting ``; and''; and
(C) by adding at the end the following:
``(D) promote higher education among inservice State and local law enforcement officers by reimbursing them for the costs associated with seeking a college or graduate school education.''; and
(2) in paragraph (2), by striking all that follows
``Support systems.--'' and inserting ``Grants pursuant to paragraph (1)(A) for overtime may not exceed 25 percent of the funds available for grants pursuant to this subsection for any fiscal year; grants pursuant to paragraph (1)(C) may not exceed 20 percent of the funds available for grants pursuant to this subsection in any fiscal year, and grants pursuant to paragraph (1)(D) may not exceed 5 percent of the funds available for grants pursuant to this subsection for any fiscal year.''.
(c) Additional Grant Projects.--Section 1701(d) of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd(d)) is amended--
(1) in paragraph (2)--
(A) by inserting ``integrity and ethics'' after
``specialized''; and
(B) by inserting ``and'' after ``enforcement officers'';
(2) in paragraph (7), by inserting ``school officials, religiously affiliated organizations,'' after ``enforcement officers'';
(3) by striking paragraph (8) and inserting the following:
``(8) establish school-based partnerships between local law enforcement agencies and local school systems, by using school resource officers who operate in and around elementary and secondary schools to serve as a law enforcement liaison with other Federal, State, and local law enforcement and regulatory agencies, combat school-related crime and disorder problems, gang membership and criminal activity, firearms and explosives-related incidents, illegal use and possession of alcohol and illegal possession, use, and distribution of drugs;'';
(4) in paragraph (10), by striking ``and'' at the end;
(5) in paragraph (11), by striking the period that appears at the end and inserting a semicolon; and
(6) by adding at the end the following:
``(12) develop and implement innovative programs (such as the TRIAD program) that bring together a community's sheriff, chief of police, and elderly residents to address the public safety concerns of older citizens; and
``(13) assist State, local, or tribal prosecutors' offices in the implementation of community-based programs that build on local community efforts through the--
``(A) hiring of additional indigent defense attorneys to be assigned to community programs; and
``(B) establishment of programs to assist local indigent defense offices in the implementation of programs that help them identify and respond to priority needs of a community with specifically tailored solutions.''.
(d) Technical Assistance.--Section 1701(f) of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd(f)) is amended--
(1) in paragraph (1)--
(A) by inserting ``use up to 5 percent of the funds appropriated under subsection (a) to'' after ``The Attorney General may'';
(B) by inserting at the end the following: ``In addition, the Attorney General may use up to 5 percent of the funds appropriated under subsections (d), (e), and (f) for technical assistance and training to States, units of local government, Indian tribal governments, and to other public and private entities for those respective purposes,'';
(2) in paragraph (2), by inserting ``under subsection (a)'' after ``the Attorney General''; and
(3) in paragraph (3)--
(A) by striking ``the Attorney General may'' and inserting
``the Attorney General shall'';
(B) by inserting ``regional community policing institutes'' after ``operation of''; and
(C) by inserting ``representatives of police labor and management organizations, community residents,'' after
``supervisors,''.
(e) Technology and Prosecution Programs.--Section 1701 of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd) is amended by--
(1) striking subsection (k);
(2) redesignating subsections (f) through (j) as subsections (g) through (k), respectively; and
(3) striking subsection (e) and inserting the following:
``(e) Law Enforcement Technology Program.--Grants made under subsection (a) may be used to assist police departments, in employing professional, scientific, and technological advancements that will help them--
``(1) improve police communications through the use of wireless communications, computers, software, videocams, databases, and other hardware and software that allow law enforcement agencies to communicate more effectively across jurisdictional boundaries and effectuate interoperability;
``(2) develop and improve access to crime-solving technologies, including DNA analysis, photo enhancement, voice recognition, and other forensic capabilities; and
``(3) promote comprehensive crime analysis by utilizing new techniques and technologies, such as crime mapping, that allow law enforcement agencies to use real-time crime and arrest data and other related information, including non-criminal justice data, to improve their ability to analyze, predict, and respond proactively to local crime and disorder problems, as well as to engage in regional crime analysis.
``(f) Community-Based Prosecution Program.--Grants made under subsection (a) may be used to assist State, local, or tribal prosecutors' offices in the implementation of community-based prosecution programs that build on local community policing efforts. Funds made available under this subsection may be used to--
``(1) hire additional prosecutors who will be assigned to community prosecution programs, including (but not limited to) programs that assign prosecutors to handle cases from specific geographic areas, to address specific violent crime and other local crime problems (including intensive illegal gang, gun, and drug enforcement projects and quality of life initiatives), and to address localized violent and other crime problems based on needs identified by local law enforcement agencies, community organizations, and others;
``(2) redeploy existing prosecutors to community prosecution programs as described in paragraph (1) of this section by hiring victim and witness coordinators, paralegals, community outreach, and other such personnel; and
``(3) establish programs to assist local prosecutors' offices in the implementation of programs that help them identify and respond to priority crime problems in a community with specifically tailored solutions.At least 75 percent of the funds made available under this subsection shall be reserved for grants under paragraphs (1) and (2) and of those amounts no more than 10 percent may be used for grants under paragraph (2) and at least 25 percent of the funds shall be reserved for grants under paragraphs
(1) and (2) to units of local government with a population of less than 50,000.''.
(f) Retention Grants.--Section 1703 of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd-2) is amended by inserting at the end the following:
``(d) Retention Grants.--The Attorney General may use no more than 50 percent of the funds under subsection (a) to award grants targeted specifically for retention of police officers to grantees in good standing, with preference to those that demonstrate financial hardship or severe budget constraint that impacts the entire local budget and may result in the termination of employment for police officers funded under subsection (b)(1).''.
(g) Hiring Costs.--Section 1704(c) of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd-3(c)) is amended by striking ``$75,000'' and inserting
``$125,000''.
(h) Definitions.--
(1) Career law enforcement officer.--Section 1709(1) of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd-8) is amended by inserting after
``criminal laws'' the following: ``including sheriffs' deputies charged with supervising offenders who are released into the community but also engaged in local community policing efforts.''.
(2) School resource officer.--Section 1709(4) of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd-8) is amended--
(A) by striking subparagraph (A) and inserting the following:
``(A) to serve as a law enforcement liaison with other Federal, State, and local law enforcement and regulatory agencies, to address and document crime and disorder problems including gangs and drug activities, firearms and explosives-related incidents, and illegal use and possession of alcohol affecting or occurring in or around an elementary or secondary school;'';
(B) by striking subparagraph (E) and inserting the following:
``(E) to train students in conflict resolution, restorative justice, and crime awareness, and to provide assistance to and coordinate with other officers, mental health professionals, and youth counselors who are responsible for the implementation of prevention/intervention programs within the schools;''; and
(C) by adding at the end the following:
``(H) to work with school administrators, members of the local parent teacher associations, community organizers, law enforcement, fire departments, and emergency medical personnel in the creation, review, and implementation of a school violence prevention plan;
``(I) to assist in documenting the full description of all firearms found or taken into custody on school property and to initiate a firearms trace and ballistics examination for each firearm with the local office of the Bureau of Alcohol, Tobacco, and Firearms;
``(J) to document the full description of all explosives or explosive devices found or taken into custody on school property and report to the local office of the Bureau of Alcohol, Tobacco, and Firearms; and
``(K) to assist school administrators with the preparation of the Department of Education, Annual Report on State Implementation of the Gun-Free Schools Act which tracks the number of students expelled per year for bringing a weapon, firearm, or explosive to school.''.
(i) Authorization of Appropriations.--Section 1001(a)(11) of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3793(a)(11)) is amended--
(1) by amending subparagraph (A) to read as follows:
``(A) There are authorized to be appropriated to carry out part Q, to remain available until expended--
``(i) $1,150,000,000 for fiscal year 2002;
``(ii) $1,150,000,000 for fiscal year 2003;
``(iii) $1,150,000,000 for fiscal year 2004;
``(iv) $1,150,000,000 for fiscal year 2005;
``(v) $1,150,000,000 for fiscal year 2006; and
``(vi) $1,150,000,000 for fiscal year 2007.''; and
(2) in subparagraph (B)--
(A) by striking ``3 percent'' and inserting ``5 percent'';
(B) by striking ``85 percent'' and inserting
``$600,000,000''; and
(C) by striking ``1701(b),'' and all that follows through
``of part Q'' and inserting the following: ``1701 (b) and
(c), $350,000,000 to grants for the purposes specified in section 1701(f), and $200,000,000 to grants for the purposes specified in section 1701(g).''.
Subtitle B--Protecting Federal, State, and Local Law Enforcement
Officers and the Judiciary
SEC. 1201. EXPANSION OF PROTECTION OF FEDERAL OFFICERS AND
EMPLOYEES FROM MURDER DUE TO THEIR STATUS.
Section 1114 of title 18, United States Code, is amended--
(1) by inserting ``or because of the status of the victim as such an officer or employee,'' after ``on account of the performance of official duties,''; and
(2) by inserting ``or, if the person assisting is an officer or employee of a State or local government, because of the status of the victim as such an officer or employee,'' after ``on account of that assistance,''.
SEC. 1202. ASSAULTING, RESISTING, OR IMPEDING CERTAIN
OFFICERS OR EMPLOYEES.
Section 111 of title 18, United States Code, is amended--
(1) in subsection (a), by striking ``three'' and inserting
``12''; and
(2) in subsection (b), by striking ``ten'' and inserting
``20''.
SEC. 1203. INFLUENCING, IMPEDING, OR RETALIATING AGAINST A
FEDERAL OFFICIAL BY THREATENING A FAMILY
MEMBER.
Section 115(b)(4) of title 18, United States Code, is amended--
(1) by striking ``five'' and inserting ``10''; and
(2) by striking ``three'' and inserting ``6''.
SEC. 1204. MAILING THREATENING COMMUNICATIONS.
Section 876 of title 18, United States Code, is amended--
(1) by designating the first 4 undesignated paragraphs as subsections (a) through (d), respectively;
(2) in subsection (c), as so designated, by adding at the end the following: ``If such a communication is addressed to a United States judge, a Federal law enforcement officer, or an official who is covered by section 1114, the individual shall be fined under this title, imprisoned not more than 10 years, or both.''; and
(3) in subsection (d), as so designated, by adding at the end the following: ``If such a communication is addressed to a United States judge, a Federal law enforcement officer, or an official who is covered by section 1114, the individual shall be fined under this title, imprisoned not more than 10 years, or both.''.
SEC. 1205. AMENDMENT OF THE SENTENCING GUIDELINES FOR
ASSAULTS AND THREATS AGAINST FEDERAL JUDGES AND
CERTAIN OTHER FEDERAL OFFICIALS AND EMPLOYEES.
(a) In General.--Pursuant to its authority under section 994 of title 28, United States Code, the United States Sentencing Commission shall review and amend the Federal sentencing guidelines and the policy statements of the Commission, if appropriate, to provide an appropriate sentencing enhancement for offenses involving influencing, assaulting, resisting, impeding, retaliating against, or threatening a Federal judge, magistrate judge, or any other official described in section 111 or 115 of title 18, United States Code.
(b) Factors for Consideration.--In carrying out this section, the United States Sentencing Commission shall consider, with respect to each offense described in subsection (a)--
(1) any expression of congressional intent regarding the appropriate penalties for the offense;
(2) the range of conduct covered by the offense;
(3) the existing sentences for the offense;
(4) the extent to which sentencing enhancements within the Federal sentencing guidelines and the court's authority to impose a sentence in excess of the applicable guideline range are adequate to ensure punishment at or near the maximum penalty for the most egregious conduct covered by the offense;
(5) the extent to which Federal sentencing guideline sentences for the offense have been constrained by statutory maximum penalties;
(6) the extent to which Federal sentencing guidelines for the offense adequately achieve the purposes of sentencing as set forth in section 3553(a)(2) of title 18, United States Code;
(7) the relationship of Federal sentencing guidelines for the offense to the Federal sentencing guidelines for other offenses of comparable seriousness; and
(8) any other factors that the Commission considers to be appropriate.
SEC. 1206. KILLING PERSONS AIDING FEDERAL INVESTIGATIONS OR
STATE CORRECTIONAL OFFICERS.
Section 1121(a)(1) of title 18, United States Code, is amended in the matter preceding subparagraph (A), by inserting ``, State, or joint Federal-State'' after ``a Federal''.
SEC. 1207. KILLING STATE CORRECTIONAL OFFICERS.
Section 1121(b)(3) of title 18, United States Code, is amended--
(1) in subparagraph (A), by striking ``or'' at the end;
(2) in subparagraph (B), by striking the period at the end and inserting ``; or''; and
(3) by adding at the end the following:
``(C) the incarcerated person is incarcerated pending an initial appearance, arraignment, trial, or appeal for an offense against the United States.''.
SEC. 1208. ESTABLISHMENT OF PROTECTIVE FUNCTION PRIVILEGE.
(a) Findings.--Congress makes the following findings:
(1) The physical safety of the Nation's top elected officials is a public good of transcendent importance.
(2) By virtue of the critical importance of the Office of the President, the President and those in direct line of the Presidency are subject to unique and mortal jeopardy--jeopardy that in turn threatens profound disruption to our system of representative government and to the security and future of the Nation.
(3) The physical safety of visiting heads of foreign states and foreign governments is also a matter of paramount importance. The assassination of such a person while on American soil could have calamitous consequences for our foreign relations and national security.
(4) Given these grave concerns, Congress has provided for the Secret Service to protect the President and those in direct line of the Presidency, and has directed that these officials may not waive such protection. Congress has also provided for the Secret Service to protect visiting heads of foreign states and foreign governments.
(5) The protective strategy of the Secret Service depends critically on the ability of its personnel to maintain close and unremitting physical proximity to the protectee.
(6) Secret Service personnel must remain at the side of the protectee on occasions of confidential conversations and, as a result, may overhear top secret discussions, diplomatic exchanges, sensitive conversations, and matters of personal privacy.
(7) The necessary level of proximity can be maintained only in an atmosphere of complete trust and confidence between the protectee and his or her protectors.
(8) If a protectee has reason to doubt the confidentiality of actions or conversations taken in sight or hearing of Secret Service personnel, the protectee may seek to push the protective envelope away or undermine it to the point at which it could no longer be fully effective.
(9) The possibility that Secret Service personnel might be compelled to testify against their protectees could induce foreign nations to refuse Secret Service protection in future state visits, making it impossible for the Secret Service to fulfill its important statutory mission of protecting the life and safety of foreign dignitaries.
(10) A privilege protecting information acquired by Secret Service personnel while performing their protective function in physical proximity to a protectee will preserve the security of the protectee by lessening the incentive of the protectee to distance Secret Service personnel in situations in which there is some risk to the safety of the protectee.
(11) Recognition of a protective function privilege for the President and those in direct line of the Presidency, and for visiting heads of foreign states and foreign governments, will promote sufficiently important interests to outweigh the need for probative evidence.
(12) Because Secret Service personnel retain law enforcement responsibility even while engaged in their protective function, the privilege must be subject to a crime/treason exception.
(b) Purposes.--The purposes of this Act are--
(1) to facilitate the relationship of trust and confidence between Secret Service personnel and certain protected officials that is essential to the ability of the Secret Service to protect these officials, and the Nation, from the risk of assassination; and
(2) to ensure that Secret Service personnel are not precluded from testifying in a criminal investigation or prosecution about unlawful activity committed within their view or hearing.
(c) Admissibility of Information Acquired by Secret Service Personnel While Performing Their Protective Function.--
(1) Protective function privilege.--Chapter 203 of title 18, United States Code, is amended by inserting after section 3056 the following:
``Sec. 3056A. Testimony by Secret Service personnel; protective function privilege
``(a) Definitions.--In this section:
``(1) Protectee.--The term `protectee' means--
``(A) the President;
``(B) the Vice President (or other officer next in the order of succession to the Office of President);
``(C) the President-elect;
``(D) the Vice President-elect; and
``(E) visiting heads of foreign states or foreign governments who, at the time and place concerned, are being provided protection by the United States Secret Service.
``(2) Secret service personnel.--The term `Secret Service personnel' means any officer or agent of the United States Secret Service.
``(b) General Rule of Privilege.--Subject to subsection
(c), testimony by Secret Service personnel or former Secret Service personnel regarding information affecting a protectee that was acquired during the performance of a protective function in physical proximity to the protectee shall not be received in evidence or otherwise disclosed in any trial, hearing, or other proceeding in or before any court, grand jury, department, officer, agency, regulatory body, or other authority of the United States, a State, or a political subdivision thereof.
``(c) Exceptions.--There is no privilege under this section--
``(1) with respect to information that, at the time the information was acquired by Secret Service personnel, was sufficient to provide reasonable grounds to believe that a crime had been, was being, or would be committed; or
``(2) if the privilege is waived by the protectee or the legal representative of a protectee or deceased protectee.''.
(2) Technical and conforming amendment.--The analysis for chapter 203 of title 18, United States Code, is amended by inserting after the item relating to section 3056 the following:
``3056A. Testimony by Secret Service personnel; protective function privilege.''.
(3) Application.--This section and the amendments made by this section shall apply to any proceeding commenced on or after the date of enactment of this section.
Subtitle C--Disarming Felons and Protecting Children From Violence
PART 1--EXTENSION OF PROJECT EXILE
SEC. 1311. AUTHORIZATION OF FUNDING FOR ADDITIONAL STATE AND
LOCAL GUN PROSECUTORS.
(a) Grants for State and Local Gun Prosecutors.--Title III of the Violent Crime Control and Law Enforcement Act of 1994 is amended by adding at the end the following:
``Subtitle Y--Grants for State and Local Gun Prosecutors
``SEC. 32501. GRANT AUTHORIZATION.
``The Attorney General may award grants to State, Indian tribal, or local prosecutors for the purpose of supporting the creation or expansion of community-based justice programs for the prosecution of firearm-related crimes.
``SEC. 32502. USE OF FUNDS.
``Grants awarded by the Attorney General under this subtitle shall be used to fund programs for the hiring of prosecutors and related personnel under which those prosecutors and personnel shall utilize an interdisciplinary team approach to prevent, reduce, and respond to firearm-related crimes in partnership with communities.
``SEC. 32503. APPLICATIONS.
``(a) Eligibility.--To be eligible to receive a grant award under this subtitle for a fiscal year, a State, Indian tribal, or local prosecutor, in conjunction with the chief executive officer of the jurisdiction in which the program will be placed, shall submit to the Attorney General an application, in such form and containing such information as the Attorney General may reasonably require.
``(b) Requirements.--Each application submitted under this section shall include--
``(1) a request for funds for the purposes described in section 32502;
``(2) a description of the communities to be served by the grant, including the nature of the firearm-related crime in such communities; and
``(3) assurances that Federal funds received under this subtitle shall be used to supplement, not supplant, non-Federal funds that would otherwise be available for activities funded under this section.
``SEC. 32504. MATCHING REQUIREMENT.
``The Federal share of a grant awarded under this subtitle may not exceed 50 percent of the total cost of the program described in the application submitted under section 32503 for the fiscal year for which the program receives assistance under this subtitle.
``SEC. 32505. AWARD OF GRANTS.
``(a) In General.--Except as provided in subsection (b), in awarding grants under this subtitle, the Attorney General shall consider--
``(1) the demonstrated need for, and the evidence of the ability of the applicant to provide, the services described in section 32503(b)(2), as described in the application submitted under section 32503;
``(2) the extent to which, as reflected in the 1998 Uniform Crime Report of the Federal Bureau of Investigation, there is a high rate of firearm-related crime in the jurisdiction of the applicant, measured either in total or per capita;
``(3) the extent to which the jurisdiction of the applicant has experienced an increase in the total or per capita rate of firearm-related crime, as reported in the 3 most recent annual Uniform Crime Reports of the Federal Bureau of Investigation;
``(4) the extent to which State and local law enforcement agencies in the jurisdiction of the applicant have pledged to cooperate with Federal officials in responding to the illegal acquisition, distribution, possession, and use of firearms within the jurisdiction; and
``(5) The extent to which the jurisdiction of the applicant participates in comprehensive firearm law enforcement strategies, including programs such as the Youth Crime Gun Interdiction Initiative, Project Achilles, Project Disarm, Project Triggerlock, Project Exile, Project Surefire, and Operation Ceasefire.
``(b) Indian Tribes.--
``(1) Federal grants.--Not less than 5 percent of the amount made available for grants under this subtitle for each fiscal year shall be awarded as grants to Indian tribes.
``(2) Grant criteria.--In awarding grants to Indian tribes in accordance with this subsection, the Attorney General shall consider, to the extent practicable, the factors for consideration set forth in subsection (a).
``(c) Research and Evaluation.--Of the amount made available for grants under this subtitle for each fiscal year, the Attorney General shall use not less than 1 percent and not more than 3 percent for research and evaluation of the activities carried out with grants awarded under this subtitle.
``SEC. 32506. REPORTS.
``(a) Report to Attorney General.--Not later than March 1 of each fiscal year, each law enforcement agency that receives funds from a grant awarded under this subtitle for that fiscal year shall submit to the Attorney General a report describing the progress achieved in carrying out the grant program for which those funds were received.
``(b) Report to Congress.--Beginning not later than October 1 of the first fiscal year following the initial fiscal year during which grants are awarded under this subtitle, and not later than October 1 of each fiscal year thereafter, the Attorney General shall submit to Congress a report, which shall contain a detailed statement regarding grant awards, activities of grant recipients, a compilation of statistical information submitted by applicants, and an evaluation of programs established with amounts from grants awarded under this subtitle during the preceding fiscal year.
``SEC. 32507. DEFINITIONS.
``In this subtitle--
``(1) the term `firearm' has the meaning given the term in section 921(a) of title 18, United States Code;
``(2) the term `Indian tribe' means a tribe, band, pueblo, nation, or other organized group or community of Indians, including an Alaska Native village (as defined in or established under the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.)), that is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians; and
``(3) the term `State' means a State, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, American Samoa, Guam, and the United States Virgin Islands.
``SEC. 32508. AUTHORIZATION OF APPROPRIATIONS.
``There is authorized to be appropriated to carry out this subtitle $150,000,000 for fiscal year 2002.''.
(b) Technical and Conforming Amendment.--The table of contents in section 2 of the Violent Crime Control and Law Enforcement Act of 1994 is amended by inserting after the item relating to subtitle X the following:
``Subtitle Y--Grants for State and Local Gun Prosecutors
``Sec. 32501. Grant authorization.
``Sec. 32502. Use of funds.
``Sec. 32503. Applications.
``Sec. 32504. Matching requirement.
``Sec. 32505. Award of grants.
``Sec. 32506. Reports.
``Sec. 32507. Definitions.
``Sec. 32508. Authorization of appropriations.''.
SEC. 1312. AUTHORIZATION OF FUNDING FOR ADDITIONAL FEDERAL
FIREARMS PROSECUTORS AND GUN ENFORCEMENT TEAMS.
(a) Additional Federal Firearms Prosecutors.--The Attorney General shall hire 114 additional Federal prosecutors to prosecute violations of Federal firearms laws.
(b) Gun Enforcement Teams.--
(1) Establishment.--The Attorney General shall establish in each of the jurisdictions specified in paragraph (3) a gun enforcement team.
(2) Gun enforcement team requirements.--Each gun enforcement team established under this subsection shall be composed of--
(A) 1 coordinator, who shall be responsible, with respect to the jurisdiction concerned, for coordinating among Federal, State, and local law enforcement--
(i) the appropriate forum for the prosecution of crimes relating to firearms; and
(ii) efforts for the prevention of such crimes; and
(B) 1 analyst, who shall be responsible, with respect to the jurisdiction concerned, for analyzing data relating to such crimes and recommending law enforcement strategies to reduce such crimes.
(3) Covered jurisdictions.--The jurisdictions specified in this subsection are not more than 20 jurisdictions designated by the Attorney General for purposes of this subsection as areas having high rates of crimes relating to firearms.
(c) Authorization of Appropriations.--In addition to any other amounts authorized to be appropriated that may be used for such purpose, there is authorized to be appropriated to carry out this section $15,000,000 for fiscal year 2002.
PART 2--EXPANSION OF THE YOUTH CRIME GUN INTERDICTION INITIATIVE
SEC. 1321. YOUTH CRIME GUN INTERDICTION INITIATIVE.
(a) In General.--
(1) Expansion of number of cities.--The Secretary of the Treasury shall endeavor to expand the number of cities and counties directly participating in the Youth Crime Gun Interdiction Initiative (in this section referred to as the
``YCGII'') to 75 cities or counties by October 1, 2002, to 150 cities or counties by October 1, 2004, and to 250 cities or counties by October 1, 2005.
(2) Selection.--Cities and counties selected for participation in the YCGII shall be selected by the Secretary of the Treasury and in consultation with Federal, State and local law enforcement officials.
(b) Identification of Individuals.--
(1) In general.--The Secretary of the Treasury shall, utilizing the information provided by the YCGII, facilitate the identification and prosecution of individuals illegally trafficking firearms to prohibited individuals.
(2) Sharing of information.--The Secretary of the Treasury shall share information derived from the YCGII with State and local law enforcement agencies through on-line computer access, as soon as such capability is available.
(c) Grant Awards.--
(1) In general.--The Secretary of the Treasury shall award grants (in the form of funds or equipment) to States, cities, and counties for purposes of assisting such entities in the tracing of firearms and participation in the YCGII.
(2) Use of grant funds.--Grants made under this part shall be used to--
(A) hire or assign additional personnel for the gathering, submission and analysis of tracing data submitted to the Bureau of Alcohol, Tobacco and Firearms under the YCGII;
(B) hire additional law enforcement personnel for the purpose of identifying and arresting individuals illegally trafficking firearms; and
(C) purchase additional equipment, including automatic data processing equipment and computer software and hardware, for the timely submission and analysis of tracing data.
PART 3--GUN OFFENSES
SEC. 1331. GUN BAN FOR DANGEROUS JUVENILE OFFENDERS.
(a) Definition.--Section 921(a)(20) of title 18, United States Code, is amended--
(1) by inserting ``(A)'' after ``(20)'';
(2) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively;
(3) by inserting after subparagraph (A) the following:
``(B) For purposes of subsections (d), (g), and (s) of section 922, the term `act of juvenile delinquency' means an adjudication of delinquency based on a finding of the commission of an act by a person prior to his or her eighteenth birthday that, if committed by an adult, would be a serious drug offense or violent felony (as defined in section 3559(c)(2) of this title), on or after the date of enactment of this paragraph.''; and
(4) by striking ``What constitutes'' through the end and inserting the following: ``What constitutes a conviction of such a crime or an adjudication of juvenile delinquency shall be determined in accordance with the law of the jurisdiction in which the proceedings were held. Any State conviction or adjudication of delinquency which has been expunged or set aside or for which a person has been pardoned or has had civil rights restored by the jurisdiction in which the conviction or adjudication of delinquency occurred shall not be considered a conviction or adjudication of delinquency.
(b) Prohibition.--Section 922 of title 18, United States Code is amended--
(1) in subsection (d)--
(A) by striking ``or'' at the end of paragraph (8);
(B) by striking the period at the end of paragraph (9) and inserting ``; or''; and
(C) by inserting after paragraph (9) the following:
``(10) who has committed an act of juvenile delinquency.'';
(2) in subsection (g)--
(A) by striking ``or'' at the end of paragraph (8);
(B) by striking the period at the end of paragraph (9) and inserting ``; or''; and
(C) by inserting after paragraph (9) the following:
``(10) who has committed an act of juvenile delinquency.''; and
(3) in subsection (s)(3)(B)--
(A) by striking ``and'' at the end of clause (vi);
(B) by inserting ``and'' after the semicolon at the end of clause (vii); and
(C) by inserting after clause (vii) the following:
``(viii) has not committed an act of juvenile delinquency.''.
SEC. 1332. IMPROVING FIREARMS SAFETY.
(a) Secure Gun Storage Device.--Section 921(a) of title 18, United States Code, is amended by adding at the end the following:
``(35) Secure gun storage or safety device.--The term
`secure gun storage or safety device' means--
``(A) a device that, when installed on a firearm, is designed to prevent the firearm from being operated without first deactivating the device;
``(B) a device incorporated into the design of the firearm that is designed to prevent the operation of the firearm by anyone not having access to the device; or
``(C) a safe, gun safe, gun case, lock box, or other device that is designed to be or can be used to store a firearm and that is designed to be unlocked only by means of a key, a combination, or other similar means.''.
(b) Certification Required in Application for Dealer's License.--Section 923(d)(1) of title 18, United States Code, is amended--
(1) in subparagraph (E), by striking ``and'' at the end;
(2) in subparagraph (F), by striking the period at the end and inserting ``; and''; and
(3) by adding at the end the following:
``(G) in the case of an application to be licensed as a dealer, the applicant certifies that secure gun storage or safety devices will be available at any place in which firearms are sold under the license to persons who are not licensees (subject to the exception that in any case in which a secure gun storage or safety device is temporarily unavailable because of theft, casualty loss, consumer sales, backorders from a manufacturer, or any other similar reason beyond the control of the licensee, the dealer shall not be considered to be in violation of the requirement under this subparagraph to make available such a device).''.
(c) Revocation of Dealer's License for Failure To Have Secure Gun Storage or Safety Devices Available.--The first sentence of section 923(e) of title 18, United States Code, is amended by inserting before the period at the end the following: ``or fails to have secure gun storage or safety devices available at any place in which firearms are sold under the license to persons who are not licensees (except that in any case in which a secure gun storage or safety device is temporarily unavailable because of theft, casualty loss, consumer sales, backorders from a manufacturer, or any other similar reason beyond the control of the licensee, the dealer shall not be considered to be in violation of the requirement to make available such a device)''.
(d) Statutory Construction.--Nothing in the amendments made by this section shall be construed--
(1) as creating a cause of action against any firearms dealer or any other person for any civil liability; or
(2) as establishing any standard of care.
SEC. 1333. JUVENILE HANDGUN SAFETY.
(a) Juvenile Handgun Safety.--Section 924(a)(6) of title 18, United States Code, is amended--
(1) by striking subparagraph (A);
(2) by redesignating subparagraph (B) as subparagraph (A); and
(3) in subparagraph (A), as redesignated--
(A) by striking ``A person other than a juvenile who knowingly'' and inserting ``A person who knowingly''; and
(B) in clause (i), by striking ``not more than 1 year'' and inserting ``not more than 5 years''.
SEC. 1334. SERIOUS JUVENILE DRUG OFFENSES AS ARMED CAREER
CRIMINAL PREDICATES.
Section 924(e)(2)(A) of title 18, United States Code, is amended--
(1) in clause (i), by striking ``or'' at the end;
(2) in clause (ii), by adding ``or'' at the end; and
(3) by adding at the end the following:
``(iii) any act of juvenile delinquency that, if committed by an adult, would be an offense described in this paragraph;''.
SEC. 1335. INCREASED PENALTY FOR TRANSFERRING A FIREARM TO A
MINOR FOR USE IN CRIME OF VIOLENCE OR DRUG
TRAFFICKING CRIME.
Section 924(h) of title 18, United States Code, is amended by striking ``10 years, fined in accordance with this title, or both'' and inserting ``10 years, and if the transferee is a person who is under 18 years of age, imprisoned for a term of not more than 15 years, fined in accordance with this title, or both''.
SEC. 1336. INCREASED PENALTY FOR FIREARMS CONSPIRACY.
Section 924 of title 18, United States Code, is amended by adding at the end the following:
``(p) Except as otherwise provided in this section, a person who conspires to commit an offense defined in this chapter shall be subject to the same penalties (other than the penalty of death) as those prescribed for the offense the commission of which is the object of the conspiracy.''.
Part 4--CLOSING THE GUN SHOW LOOPHOLE
SEC. 1341. EXTENSION OF BRADY BACKGROUND CHECKS TO GUN SHOWS.
(a) Findings.--Congress finds that--
(1) more than 4,400 traditional gun shows are held annually across the United States, attracting thousands of attendees per show and hundreds of Federal firearms licensees and nonlicensed firearms sellers;
(2) traditional gun shows, as well as flea markets and other organized events, at which a large number of firearms are offered for sale by Federal firearms licensees and nonlicensed firearms sellers, form a significant part of the national firearms market;
(3) firearms and ammunition that are exhibited or offered for sale or exchange at gun shows, flea markets, and other organized events move easily in and substantially affect interstate commerce;
(4) in fact, even before a firearm is exhibited or offered for sale or exchange at a gun show, flea market, or other organized event, the gun, its component parts, ammunition, and the raw materials from which it is manufactured have moved in interstate commerce;
(5) gun shows, flea markets, and other organized events at which firearms are exhibited or offered for sale or exchange, provide a convenient and centralized commercial location at which firearms may be bought and sold anonymously, often without background checks and without records that enable gun tracing;
(6) at gun shows, flea markets, and other organized events at which guns are exhibited or offered for sale or exchange, criminals and other prohibited persons obtain guns without background checks and frequently use guns that cannot be traced to later commit crimes;
(7) many persons who buy and sell firearms at gun shows, flea markets, and other organized events cross State lines to attend these events and engage in the interstate transportation of firearms obtained at these events;
(8) gun violence is a pervasive, national problem that is exacerbated by the availability of guns at gun shows, flea markets, and other organized events;
(9) firearms associated with gun shows have been transferred illegally to residents of another State by Federal firearms licensees and nonlicensed firearms sellers, and have been involved in subsequent crimes including drug offenses, crimes of violence, property crimes, and illegal possession of firearms by felons and other prohibited persons; and
(10) Congress has the power, under the interstate commerce clause and other provisions of the Constitution of the United States, to ensure that criminals and other prohibited persons do not obtain firearms at gun shows, flea markets, and other organized events.
(b) Definitions.--Section 921(a) of title 18, United States Code, is amended by adding at the end the following:
``(35) Gun show.--The term `gun show' means any event--
``(A) at which 50 or more firearms are offered or exhibited for sale, transfer, or exchange, if 1 or more of the firearms has been shipped or transported in, or otherwise affects, interstate or foreign commerce; and
``(B) at which--
``(i) not less than 20 percent of the exhibitors are firearm exhibitors;
``(ii) there are not less than 10 firearm exhibitors; or
``(iii) 50 or more firearms are offered for sale, transfer, or exchange.
``(36) Gun show promoter.--The term `gun show promoter' means any person who organizes, plans, promotes, or operates a gun show.
``(37) Gun show vendor.--The term `gun show vendor' means any person who exhibits, sells, offers for sale, transfers, or exchanges 1 or more firearms at a gun show, regardless of whether or not the person arranges with the gun show promoter for a fixed location from which to exhibit, sell, offer for sale, transfer, or exchange 1 or more firearms.''
(c) Regulation of Firearms Transfers at Gun Shows.--
(1) In general.--Chapter 44 of title 18, United States Code, is amended by adding at the end the following:
``Sec. 931. Regulation of firearms transfers at gun shows
``(a) Registration of Gun Show Promoters.--It shall be unlawful for any person to organize, plan, promote, or operate a gun show unless that person--
``(1) registers with the Secretary in accordance with regulations promulgated by the Secretary; and
``(2) pays a registration fee, in an amount determined by the Secretary.
``(b) Responsibilities of Gun Show Promoters.--It shall be unlawful for any person to organize, plan, promote, or operate a gun show unless that person--
``(1) before commencement of the gun show, verifies the identity of each gun show vendor participating in the gun show by examining a valid identification document (as defined in section 1028(d)(1)) of the vendor containing a photograph of the vendor;
``(2) before commencement of the gun show, requires each gun show vendor to sign--
``(A) a ledger with identifying information concerning the vendor; and
``(B) a notice advising the vendor of the obligations of the vendor under this chapter; and
``(3) notifies each person who attends the gun show of the requirements of this chapter, in accordance with such regulations as the Secretary shall prescribe; and
``(4) maintains a copy of the records described in paragraphs (1) and (2) at the permanent place of business of the gun show promoter for such period of time and in such form as the Secretary shall require by regulation.
``(c) Responsibilities of Transferors Other Than Licensees.--
``(1) In general.--If any part of a firearm transaction takes place at a gun show, it shall be unlawful for any person who is not licensed under this chapter to transfer a firearm to another person who is not licensed under this chapter, unless the firearm is transferred through a licensed importer, licensed manufacturer, or licensed dealer in accordance with subsection (e).
``(2) Criminal background checks.--A person who is subject to the requirement of paragraph (1)--
``(A) shall not transfer the firearm to the transferee until the licensed importer, licensed manufacturer, or licensed dealer through which the transfer is made under subsection (e) makes the notification described in subsection
(e)(3)(A); and
``(B) notwithstanding subparagraph (A), shall not transfer the firearm to the transferee if the licensed importer, licensed manufacturer, or licensed dealer through which the transfer is made under subsection (e) makes the notification described in subsection (e)(3)(B).
``(3) Absence of recordkeeping requirements.--Nothing in this section shall permit or authorize the Secretary to impose recordkeeping requirements on any nonlicensed vendor.
``(d) Responsibilities of Transferees Other Than Licensees.--
``(1) In general.--If any part of a firearm transaction takes place at a gun show, it shall be unlawful for any person who is not licensed under this chapter to receive a firearm from another person who is not licensed under this chapter, unless the firearm is transferred through a licensed importer, licensed manufacturer, or licensed dealer in accordance with subsection (e).
``(2) Criminal background checks.--A person who is subject to the requirement of paragraph (1)--
``(A) shall not receive the firearm from the transferor until the licensed importer, licensed manufacturer, or licensed dealer through which the transfer is made under subsection (e) makes the notification described in subsection
(e)(3)(A); and
``(B) notwithstanding subparagraph (A), shall not receive the firearm from the transferor if the licensed importer, licensed manufacturer, or licensed dealer through which the transfer is made under subsection (e) makes the notification described in subsection (e)(3)(B).
``(e) Responsibilities of Licensees.--A licensed importer, licensed manufacturer, or licensed dealer who agrees to assist a person who is not licensed under this chapter in carrying out the responsibilities of that person under subsection (c) or (d) with respect to the transfer of a firearm shall--
``(1) enter such information about the firearm as the Secretary may require by regulation into a separate bound record;
``(2) record the transfer on a form specified by the Secretary;
``(3) comply with section 922(t) as if transferring the firearm from the inventory of the licensed importer, licensed manufacturer, or licensed dealer to the designated transferee
(although a licensed importer, licensed manufacturer, or licensed dealer complying with this subsection shall not be required to comply again with the requirements of section 922(t) in delivering the firearm to the nonlicensed transferor), and notify the nonlicensed transferor and the nonlicensed transferee--
``(A) of such compliance; and
``(B) if the transfer is subject to the requirements of section 922(t)(1), of any receipt by the licensed importer, licensed manufacturer, or licensed dealer of a notification from the national instant criminal background check system that the transfer would violate section 922 or would violate State law;
``(4) not later than 10 days after the date on which the transfer occurs, submit to the Secretary a report of the transfer, which report--
``(A) shall be on a form specified by the Secretary by regulation; and
``(B) shall not include the name of or other identifying information relating to any person involved in the transfer who is not licensed under this chapter;
``(5) if the licensed importer, licensed manufacturer, or licensed dealer assists a person other than a licensee in transferring, at 1 time or during any 5 consecutive business days, 2 or more pistols or revolvers, or any combination of pistols and revolvers totaling 2 or more, to the same nonlicensed person, in addition to the reports required under paragraph (4), prepare a report of the multiple transfers, which report shall be--
``(A) prepared on a form specified by the Secretary; and
``(B) not later than the close of business on the date on which the transfer occurs, forwarded to--
``(i) the office specified on the form described in subparagraph (A); and
``(ii) the appropriate State law enforcement agency of the jurisdiction in which the transfer occurs; and
``(6) retain a record of the transfer as part of the permanent business records of the licensed importer, licensed manufacturer, or licensed dealer.
``(f) Records of Licensee Transfers.--If any part of a firearm transaction takes place at a gun show, each licensed importer, licensed manufacturer, and licensed dealer who transfers 1 or more firearms to a person who is not licensed under this chapter shall, not later than 10 days after the date on which the transfer occurs, submit to the Secretary a report of the transfer, which report--
``(1) shall be in a form specified by the Secretary by regulation;
``(2) shall not include the name of or other identifying information relating to the transferee; and
``(3) shall not duplicate information provided in any report required under subsection (e)(4).
``(g) Firearm Transaction Defined.--In this section, the term `firearm transaction'--
``(1) includes the offer for sale, sale, transfer, or exchange of a firearm; and
``(2) does not include the mere exhibition of a firearm.''.
(2) Penalties.--Section 924(a) of title 18, United States Code, is amended by adding at the end the following:
``(7)(A) Whoever knowingly violates section 931(a) shall be fined under this title, imprisoned not more than 5 years, or both.
``(B) Whoever knowingly violates subsection (b) or (c) of section 931, shall be--
``(i) fined under this title, imprisoned not more than 2 years, or both; and
``(ii) in the case of a second or subsequent conviction, such person shall be fined under this title, imprisoned not more than 5 years, or both.
``(C) Whoever willfully violates section 931(d), shall be--
``(i) fined under this title, imprisoned not more than 2 years, or both; and
``(ii) in the case of a second or subsequent conviction, such person shall be fined under this title, imprisoned not more than 5 years, or both.
``(D) Whoever knowingly violates subsection (e) or (f) of section 931 shall be fined under this title, imprisoned not more than 5 years, or both.
``(E) In addition to any other penalties imposed under this paragraph, the Secretary may, with respect to any person who knowingly violates any provision of section 931--
``(i) if the person is registered pursuant to section 931(a), after notice and opportunity for a hearing, suspend for not more than 6 months or revoke the registration of that person under section 931(a); and
``(ii) impose a civil fine in an amount equal to not more than $10,000.''.
(2) Technical and conforming amendments.--Chapter 44 of title 18, United States Code, is amended--
(A) in the chapter analysis, by adding at the end the following:
``931. Regulation of firearms transfers at gun shows.'';
and
(B) in the first sentence of section 923(j), by striking
``a gun show or event'' and inserting ``an event''; and
(d) Inspection Authority.--Section 923(g)(1) is amended by adding at the end the following:
``(E) Notwithstanding subparagraph (B), the Secretary may enter during business hours the place of business of any gun show promoter and any place where a gun show is held for the purposes of examining the records required by sections 923 and 931 and the inventory of licensees conducting business at the gun show. Such entry and examination shall be conducted for the purposes of determining compliance with this chapter by gun show promoters and licensees conducting business at the gun show and shall not require a showing of reasonable cause or a warrant.''.
(e) Increased Penalties for Serious Recordkeeping Violations by Licensees.--Section 924(a)(3) of title 18, United States Code, is amended to read as follows:
``(3)(A) Except as provided in subparagraph (B), any licensed dealer, licensed importer, licensed manufacturer, or licensed collector who knowingly makes any false statement or representation with respect to the information required by this chapter to be kept in the records of a person licensed under this chapter, or violates section 922(m) shall be fined under this title, imprisoned not more than 1 year, or both.
``(B) If the violation described in subparagraph (A) is in relation to an offense--
``(i) under paragraph (1) or (3) of section 922(b), such person shall be fined under this title, imprisoned not more than 5 years, or both; or
``(ii) under subsection (a)(6) or (d) of section 922, such person shall be fined under this title, imprisoned not more than 10 years, or both.''.
(f) Increased Penalties for Violations of Criminal Background Check Requirements.--
(1) Penalties.--Section 924 of title 18, United States Code, is amended--
(A) in paragraph (5), by striking ``subsection (s) or (t) of section 922'' and inserting ``section 922(s)''; and
(B) by adding at the end the following:
``(8) Whoever knowingly violates section 922(t) shall be fined under this title, imprisoned not more than 5 years, or both.''.
(2) Elimination of certain elements of offense.--Section 922(t)(5) of title 18, United States Code, is amended by striking ``and, at the time'' and all that follows through
``State law''.
(g) Gun Owner Privacy and Prevention of Fraud and Abuse of System Information.--Section 922(t)(2)(C) of title 18, United States Code, is amended by inserting before the period at the end the following: ``, as soon as possible, consistent with the responsibility of the Attorney General under section 103(h) of the Brady Handgun Violence Prevention Act to ensure the privacy and security of the system and to prevent system fraud and abuse, but in no event later than 90 days after the date on which the licensee first contacts the system with respect to the transfer''.
(h) Effective Date.--This section and the amendments made by this section shall take effect 180 days after the date of enactment of this Act.
Subtitle D--Assistance to States for Prosecuting and Punishing Juvenile
Offenders, and Reducing Juvenile Crime
SEC. 1401. JUVENILE AND VIOLENT OFFENDER INCARCERATION
GRANTS.
(a) Grants for Violent and Chronic Juvenile Facilities.--
(1) Definitions.--In this subsection:
(A) Co-located facility.--The term ``co-located facility'' means the location of adult and juvenile facilities on the same property in a manner consistent with regulations issued by the Attorney General to ensure that adults and juveniles are substantially segregated.
(B) Substantially segregated.--The term ``substantially segregated'' means--
(i) complete sight and sound separation in residential confinement;
(ii) use of shared direct care and management staff, properly trained and certified by the State to interact with juvenile offenders, if the staff does not interact with adult and juvenile offenders during the same shift; and
(iii) incidental contact during transportation to court proceedings and other activities in accordance with regulations issued by the Attorney General to ensure reasonable efforts are made to segregate adults and juveniles.
(C) Violent juvenile offender.--The term ``violent juvenile offender'' means a person under the age of majority pursuant to State law who has been adjudicated delinquent or convicted in adult court of a violent felony as defined in section 924(e)(2)(B) of title 18, United States Code.
(D) Qualifying state.--The term ``qualifying State'' means a State that has submitted, or a State in which an eligible unit of local government has submitted, a grant application that meets the requirements of paragraphs (3) and (5).
(2) Authority.--
(A) In general.--The Attorney General may make grants in accordance with this subsection to States, units of local government, or any combination thereof, to assist them in planning, establishing, and operating secure facilities, staff-secure facilities, detention centers, and other correctional programs for violent juvenile offenders.
(B) Use of amounts.--Grants under this subsection may be used--
(i) for co-located facilities for adult prisoners and violent juvenile offenders; and
(ii) only for the construction or operation of facilities in which violent juvenile offenders are substantially segregated from nonviolent juvenile offenders.
(3) Applications.--
(A) In general.--The chief executive officer of a State or unit of local government that seeks to receive a grant under this subsection shall submit to the Attorney General an application, in such form and in such manner as the Attorney General may prescribe.
(B) Contents.--Each application submitted under subparagraph (A) shall provide written assurances that each facility or program funded with a grant under this subsection--
(i) will provide appropriate educational and vocational training, appropriate mental health services, a program of substance abuse testing, and substance abuse treatment for appropriate juvenile offenders; and
(ii) will afford juvenile offenders intensive post-release supervision and services.
(4) Minimum amount.--
(A) In general.--Except as provided in subparagraph (B), each qualifying State, together with units of local government within the State, shall be allocated for each fiscal year not less than 1.0 percent of the total amount made available in each fiscal year for grants under this subsection.
(B) Exception.--The United States Virgin Islands, American Samoa, Guam, and the Northern Mariana Islands shall each be allocated 0.2 percent of the total amount made available in each fiscal year for grants under this subsection.
(5) Performance evaluation.--
(A) Evaluation components.--
(i) In general.--Each facility or program funded under this subsection shall contain an evaluation component developed pursuant to guidelines established by the Attorney General.
(ii) Outcome measures.--The evaluations required by this subsection shall include outcome measures that can be used to determine the effectiveness of the funded programs, including the effectiveness of such programs in comparison with other correctional programs or dispositions in reducing the incidence of recidivism, and other outcome measures.
(B) Periodic review and reports.--
(i) Review.--The Attorney General shall review the performance of each grant recipient under this subsection.
(ii) Reports.--The Attorney General may require a grant recipient to submit to the Office of Justice Programs, Corrections Programs Office the results of the evaluations required under subparagraph (A) and such other data and information as are reasonably necessary to carry out the responsibilities of the Attorney General under this subsection.
(6) Technical assistance and training.--The Attorney General shall provide technical assistance and training to grant recipients under this subsection to achieve the purposes of this subsection.
(b) Juvenile Facilities on Tribal Lands.--
(1) Reservation of funds.--Of amounts made available to carry out this section under section 20108(a)(2)(A) of the Violent Crime Control and Law Enforcement Act of 1994 (42 U.S.C. 13708(a)(2)(A)), the Attorney General shall reserve, to carry out this subsection, 0.75 percent for each of fiscal years 2002 through 2005.
(2) Grants to indian tribes.--Of amounts reserved under paragraph (1), the Attorney General may make grants to Indian tribes or to regional groups of Indian tribes for the purpose of constructing secure facilities, staff-secure facilities, detention centers, and other correctional programs for incarceration of juvenile offenders subject to tribal jurisdiction.
(3) Applications.--To be eligible to receive a grant under this section, an Indian tribe shall submit to the Attorney General an application in such form and containing such information as the Attorney General may by regulation require.
(4) Regional groups.--Individual Indian tribes from a geographic region may apply for grants under paragraph (2) jointly for the purpose of building regional facilities.
(c) Report on Accountability and Performance Measures in Juvenile Corrections Programs.--
(1) In general.--Not later than 6 months after the date of enactment of this Act, the Attorney General shall, after consultation with the National Institute of Justice and other appropriate governmental and nongovernmental organizations, submit to Congress a report regarding the possible use of performance-based criteria in evaluating and improving the effectiveness of juvenile corrections facilities and programs.
(2) Contents.--The report required under this subsection shall include an analysis of--
(A) the range of performance-based measures that might be utilized as evaluation criteria, including measures of recidivism among juveniles who have been incarcerated in facilities or have participated in correctional programs;
(B) the feasibility of linking Federal juvenile corrections funding to the satisfaction of performance-based criteria by grantees (including the use of a Federal matching mechanism under which the share of Federal funding would vary in relation to the performance of a program or facility);
(C) whether, and to what extent, the data necessary for the Attorney General to utilize performance-based criteria in the Attorney General's administration of juvenile corrections programs are collected and reported nationally; and
(D) the estimated cost and feasibility of establishing minimal, uniform data collection and reporting standards nationwide that would allow for the use of performance-based criteria in evaluating juvenile corrections programs and facilities and administering Federal juvenile corrections funds.
SEC. 1402. CERTAIN PUNISHMENT AND GRADUATED SANCTIONS FOR
YOUTH OFFENDERS.
(a) Findings and Purposes.--
(1) Findings.--Congress finds that--
(A) youth violence constitutes a growing threat to the national welfare requiring immediate and comprehensive action by the Federal Government to reduce and prevent youth violence;
(B) the behavior of youth who become violent offenders often follows a progression, beginning with aggressive behavior in school, truancy, and vandalism, leading to property crimes and then serious violent offenses;
(C) the juvenile justice systems in most States are ill-equipped to provide meaningful sanctions to minor, nonviolent offenders because most of their resources are dedicated to dealing with more serious offenders;
(D) in most States, some youth commit multiple, nonviolent offenses without facing any significant criminal sanction;
(E) the failure to provide meaningful criminal sanctions for first time, nonviolent offenders sends the false message to youth that they can engage in antisocial behavior without suffering any negative consequences and that society is unwilling or unable to restrain that behavior;
(F) studies demonstrate that interventions during the early stages of a criminal career can halt the progression to more serious, violent behavior; and
(G) juvenile courts need access to a range of sentencing options so that at least some level of sanction is imposed on all youth offenders, including status offenders, and the severity of the sanctions increase along with the seriousness of the offense.
(2) Purposes.--The purposes of this section are to provide--
(A) assistance to State and local juvenile courts to expand the range of sentencing options for first time, nonviolent offenders; and
(B) a selection of graduated sanctions for more serious offenses.
(b) Definitions.--In this section:
(1) First time offender.--The term ``first time offender'' means a juvenile against whom formal charges have not previously been filed in any Federal or State judicial proceeding.
(2) Nonviolent offender.--The term ``nonviolent offender'' means a juvenile who is charged with an offense that does not involve the use of force against the person of another.
(3) Status offender.--The term ``status offender'' means a juvenile who is charged with an offense that would not be criminal if committed by an adult (other than an offense that constitutes a violation of a valid court order or a violation of section 922(x) of title 18, United States Code (or similar State law)).
(c) Grant Authorization.--The Attorney General may make grants in accordance with this section to States, State courts, local courts, units of local government, and Indian tribes, for the purposes of--
(1) providing juvenile courts with a range of sentencing options such that first time juvenile offenders, including status offenders such as truants, vandals, and juveniles in violation of State or local curfew laws, face at least some level of punishment as a result of their initial contact with the juvenile justice system; and
(2) increasing the sentencing options available to juvenile court judges so that juvenile offenders receive increasingly severe sanctions--
(A) as the seriousness of their unlawful conduct increases; and
(B) for each additional offense.
(d) Applications.--
(1) Eligibility.--In order to be eligible to receive a grant under this section, the chief executive of a State, unit of local government, or Indian tribe, or the chief judge of a local court, shall submit an application to the Attorney General in such form and containing such information as the Attorney General may reasonably require.
(2) Requirements.--Each application submitted in accordance with paragraph (1) shall include--
(A) a request for a grant to be used for the purposes described in this section;
(B) a description of the communities to be served by the grant, including the extent of youth crime and violence in those communities;
(C) written assurances that Federal funds received under this subtitle will be used to supplement, not supplant, non-Federal funds that would otherwise be available for activities funded under this subsection;
(D) a comprehensive plan described in paragraph (3) (in this section referred to as the ``comprehensive plan''); and
(E) any additional information in such form and containing such information as the Attorney General may reasonably require.
(3) Implementation plan.--For purposes of paragraph (2), a comprehensive plan shall include--
(A) an action plan outlining the manner in which the applicant will achieve the purposes described in subsection
(c)(1);
(B) a description of any resources available in the jurisdiction of the applicant to implement the action plan described in subparagraph (A);
(C) an estimate of the costs of full implementation of the plan; and
(D) a plan for evaluating the impact of the grant on the jurisdiction's juvenile justice system.
(e) Grant Awards.--
(1) Considerations.--In awarding grants under this section, the Attorney General shall consider--
(A) the ability of the applicant to provide the stated services;
(B) the level of youth crime, violence, and drug use in the community; and
(C) to the extent practicable, achievement of an equitable geographic distribution of the grant awards.
(2) Allocations.--
(A) In general.--The Attorney General shall allot not less than 0.75 percent of the total amount made available to carry out this section in each fiscal year to applicants in each State from which applicants have applied for grants under this section.
(B) Indian tribes.--The Attorney General shall allocate not less than 0.75 percent of the total amount made available to carry out this section in each fiscal year to Indian tribes.
(f) Use of Grant Amounts.--
(1) In general.--Each grant made under this section shall be used to establish programs that--
(A) expand the number of judges, prosecutors, and public defenders for the purpose of imposing sanctions on first time juvenile offenders and status offenders and for establishing restorative justice boards involving members of the community;
(B) provide expanded sentencing options, such as restitution, community service, drug testing and treatment, mandatory job training, curfews, house arrest, mandatory work projects, and boot camps, for status offenders and nonviolent offenders;
(C) increase staffing for probation officers to supervise status offenders and nonviolent offenders to ensure that sanctions are enforced;
(D) provide aftercare and supervision for status and nonviolent offenders, such as drug education and drug treatment, vocational training, job placement, and family counseling;
(E) encourage private sector employees to provide training and work opportunities for status offenders and nonviolent offenders; and
(F) provide services and interventions for status and nonviolent offenders designed, in tandem with criminal sanctions, to reduce the likelihood of further criminal behavior.
(2) Prohibition on use of amounts.--
(A) Definitions.--In this paragraph:
(i) Alien.--The term ``alien'' has the same meaning as in section 101(a) of the Immigration and Nationality Act (8 U.S.C. 1101(a)).
(ii) Secure detention facility; secure correctional facility.--The terms ``secure detention facility'' and
``secure correctional facility'' have the same meanings as in section 103 of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5603).
(B) Prohibition.--No amounts made available under this subtitle may be used for any program that permits the placement of status offenders, alien juveniles in custody, or nonoffender juveniles (such as dependent, abused, or neglected children) in secure detention facilities or secure correctional facilities.
(g) Grant Limitations.--Not more than 3 percent of the amounts made available to the Attorney General or a grant recipient under this section may be used for administrative purposes.
(h) Federal Share.--
(1) In general.--Subject to paragraphs (2) and (3), the Federal share of a grant made under this section may not exceed 90 percent of the total estimated costs of the program described in the comprehensive plan submitted under subsection (d)(3) for the fiscal year for which the program receives assistance under this section.
(2) Waiver.--The Attorney General may waive, in whole or in part, the requirements of paragraph (1).
(3) In-kind contributions.--For purposes of paragraph (1), in-kind contributions may constitute any portion of the non-Federal share of a grant under this section.
(i) Report and Evaluation.--
(1) Report to the attorney general.--Not later than October 1, 2002, and October 1 of each year thereafter, each grant recipient under this section shall submit to the Attorney General a report that describes, for the year to which the report relates, any progress achieved in carrying out the comprehensive plan of the grant recipient.
(2) Evaluation and report to congress.--Not later than March 1, 2003, and March 1 of each year thereafter, the Attorney General shall submit to Congress an evaluation and report that contains a detailed statement regarding grant awards, activities of grant recipients, a compilation of statistical information submitted by grant recipients under this section, and an evaluation of programs established by grant recipients under this section.
(3) Criteria.--In assessing the effectiveness of the programs established and operated by grant recipients pursuant to this section, the Attorney General shall consider--
(A) a comparison between the number of first time offenders who received a sanction for criminal behavior in the jurisdiction of the grant recipient before and after initiation of the program;
(B) changes in the recidivism rate for first time offenders in the jurisdiction of the grant recipient;
(C) a comparison of the recidivism rates and the seriousness of future offenses of first time offenders in the jurisdiction of the grant recipient that receive a sanction and those who do not;
(D) changes in truancy rates of the public schools in the jurisdiction of the grant recipient; and
(E) changes in the arrest rates for vandalism and other property crimes in the jurisdiction of the grant recipient.
(4) Documents and information.--Each grant recipient under this section shall provide the Attorney General with all documents and information that the Attorney General determines to be necessary to conduct an evaluation of the effectiveness of programs funded under this section.
(j) Authorization of Appropriations.--There are authorized to be appropriated to carry out this section from the Violent Crime Reduction Trust Fund--
(1) such sums as may be necessary for each of fiscal years 2002 and 2003; and
(2) $175,000,000 for each of fiscal years 2004 and 2005.
SEC. 1403. PILOT PROGRAM TO PROMOTE REPLICATION OF RECENT
SUCCESSFUL JUVENILE CRIME REDUCTION STRATEGIES.
(a) Pilot Program To Promote Replication of Recent Successful Juvenile Crime Reduction Strategies.--
(1) Establishment.--The Attorney General (or a designee of the Attorney General), in conjunction with the Secretary of the Treasury (or the designee of the Secretary), shall establish a pilot program (in this section referred to as the
``program'') to encourage and support communities that adopt a comprehensive approach to suppressing and preventing violent juvenile crime patterned after successful State juvenile crime reduction strategies.
(2) Program.--In carrying out the program, the Attorney General shall--
(A) make and track grants to grant recipients (in this section referred to as ``coalitions'');
(B) in conjunction with the Secretary of the Treasury, provide for technical assistance and training, data collection, and dissemination of relevant information; and
(C) provide for the general administration of the program.
(3) Administration.--Not later than 30 days after the date of enactment of this Act, the Attorney General shall appoint an Administrator (in this section referred to as the
``Administrator'') to carry out the program.
(4) Program authorization.--To be eligible to receive an initial grant or a renewal grant under this section, a coalition shall meet each of the following criteria:
(A) Composition.--The coalition shall consist of 1 or more representatives of--
(i) the local police department or sheriff's department;
(ii) the local prosecutors' office;
(iii) the United States Attorney's office;
(iv) the Federal Bureau of Investigation;
(v) the Bureau of Alcohol, Tobacco and Firearms;
(vi) State or local probation officers;
(vii) religious affiliated or fraternal organizations involved in crime prevention;
(viii) schools;
(ix) parents or local grass roots organizations such as neighborhood watch groups; and
(x) social service agencies involved in crime prevention.
(B) Other participants.--If possible, in addition to the representatives from the categories listed in subparagraph
(A), the coalition shall include--
(i) representatives from the business community; and
(ii) researchers who have studied criminal justice and can offer technical or other assistance.
(C) Coordinated strategy.--A coalition shall submit to the Attorney General, or the Attorney General's designee, a comprehensive plan for reducing violent juvenile crime. To be eligible for consideration, a plan shall--
(i) ensure close collaboration among all members of the coalition in suppressing and preventing juvenile crime;
(ii) place heavy emphasis on coordinated enforcement initiatives, such as Federal and State programs that coordinate local police departments, prosecutors, and local community leaders to focus on the suppression of violent juvenile crime involving gangs;
(iii) ensure that there is close collaboration between police and probation officers in the supervision of juvenile offenders, such as initiatives that coordinate the efforts of parents, school officials, and police and probation officers to patrol the streets and make home visits to ensure that offenders comply with the terms of their probation;
(iv) ensure that a program is in place to trace all firearms seized from crime scenes or offenders in an effort to identify illegal gun traffickers; and
(v) ensure that effective crime prevention programs are in place, such as programs that provide after-school safe havens and other opportunities for at-risk youth to escape or avoid gang or other criminal activity, and to reduce recidivism.
(D) Accountability.--A coalition shall--
(i) establish a system to measure and report outcomes consistent with common indicators and evaluation protocols established by the Administrator and which receives the approval of the Administrator; and
(ii) devise a detailed model for measuring and evaluating the success of the plan of the coalition in reducing violent juvenile crime, and provide assurances that the plan will be evaluated on a regular basis to assess progress in reducing violent juvenile crime.
(5) Grant amounts.--
(A) In general.--The Administrator may grant to an eligible coalition under this paragraph, an amount not to exceed the amount of non-Federal funds raised by the coalition, including in-kind contributions, for that fiscal year.
(B) Nonsupplanting requirement.--A coalition seeking funds shall provide reasonable assurances that funds made available under this program to States or units of local government shall be so used as to supplement and increase (but not supplant) the level of the State, local, and other non-Federal funds that would in the absence of such Federal funds be made available for programs described in this section, and shall in no event replace such State, local, or other non-Federal funds.
(C) Suspension of grants.--If a coalition fails to continue to meet the criteria set forth in this section, the Administrator may suspend the grant, after providing written notice to the grant recipient and an opportunity to appeal.
(D) Renewal grants.--Subject to subparagraph (E), the Administrator may award a renewal grant to a grant recipient under this subparagraph for each fiscal year following the fiscal year for which an initial grant is awarded, in an amount not to exceed the amount of non-Federal funds raised by the coalition, including in-kind contributions, for that fiscal year, during the 4-year period following the period of the initial grant.
(E) Limitation.--The amount of a grant award under this section may not exceed $300,000 for a fiscal year.
(6) Permitted use of funds.--A coalition receiving funds under this section may expend such Federal funds on any use or program that is contained in the plan submitted to the Administrator.
(7) Congressional consultation.--Two years after the date of implementation of the program established in this section, the General Accounting Office shall submit a report to Congress reviewing the effectiveness of the program in suppressing and reducing violent juvenile crime in the participating communities. The report shall contain an analysis of each community participating in the program, along with information regarding the plan undertaken in the community, and the effectiveness of the plan in reducing violent juvenile crime. The report shall contain recommendations regarding the efficacy of continuing the program.
(b) Information Collection and Dissemination With Respect to Coalitions.--
(1) Coalition information.--For the purpose of audit and examination, the Administrator--
(A) shall have access to any books, documents, papers, and records that are pertinent to any grant or grant renewal request under this section; and
(B) may periodically request information from a coalition to ensure that the coalition meets the applicable criteria.
(2) Reporting.--The Administrator shall, to the maximum extent practicable and in a manner consistent with applicable law, minimize reporting requirements by a coalition and expedite any application for a renewal grant made under this section.
(c) Authorization of Appropriations.--There are authorized to be appropriated from the Violent Crime Reduction Trust Fund to carry out this section, $3,000,000 in each of fiscal years 2002, 2003, and 2004.
SEC. 1404. REIMBURSEMENT OF STATES FOR COSTS OF INCARCERATING
JUVENILE ALIEN OFFENDERS.
(a) In General.--Section 501 of the Immigration Reform and Control Act of 1986 (8 U.S.C. 1365) is amended--
(1) in subsection (a), by inserting ``or illegal juvenile alien who has been adjudicated delinquent and committed to a juvenile correctional facility by such State or locality'' before the period;
(2) in subsection (b), by inserting ``(including any juvenile alien who has been adjudicated delinquent and has been committed to a correctional facility)'' before ``who is in the United States unlawfully''; and
(3) by adding at the end the following:
``(f) Juvenile Alien Defined.--In this section, the term
`juvenile alien' means an alien (as that term is defined in section 101(a)(3) of the Immigration and Nationality Act (8 U.S.C. 1103)) who has been adjudicated delinquent and committed to a correctional facility by a State or locality as a juvenile offender.''.
Subtitle E--Ballistics, Law Assistance, and Safety Technology
SEC. 1501. SHORT TITLE.
This subtitle may be cited as the ``Ballistics, Law Assistance, and Safety Technology Act'' (``BLAST'').
SEC. 1502. PURPOSES.
The purposes of this subtitle are--
(1) to increase public safety by assisting law enforcement in solving more gun-related crimes and offering prosecutors evidence to link felons to gun crimes through ballistics technology;
(2) to provide for ballistics testing of all new firearms for sale to assist in the identification of firearms used in crimes;
(3) to require ballistics testing of all firearms in custody of Federal agencies to assist in the identification of firearms used in crimes; and
(4) to add ballistics testing to existing firearms enforcement programs.
SEC. 1503. DEFINITION OF BALLISTICS.
Section 921(a) of title 18, United States Code, is amended by adding at the end the following:
``(35) Ballistics.--The term `ballistics' means a comparative analysis of fired bullets and cartridge casings to identify the firearm from which bullets were discharged, through identification of the unique characteristics that each firearm imprints on bullets and cartridge casings.''.
SEC. 1504. TEST FIRING AND AUTOMATED STORAGE OF BALLISTICS
RECORDS.
(a) Amendment.--Section 923 of title 18, United States Code, is amended by adding at the end the following:
``(m)(1) In addition to the other licensing requirements under this section, a licensed manufacturer or licensed importer shall--
``(A) test fire firearms manufactured or imported by such licensees as specified by the Secretary by regulation;
``(B) prepare ballistics images of the fired bullet and cartridge casings from the test fire;
``(C) make the records available to the Secretary for entry in a computerized database; and
``(D) store the fired bullet and cartridge casings in such a manner and for such a period as specified by the Secretary by regulation.
``(2) Nothing in this subsection creates a cause of action against any Federal firearms licensee or any other person for any civil liability except for imposition of a civil penalty under this section.
``(3)(A) The Attorney General and the Secretary shall assist firearm manufacturers and importers in complying with paragraph (1) through--
``(i) the acquisition, disposition, and upgrades of ballistics equipment and bullet recovery equipment to be placed at or near the sites of licensed manufacturers and importers;
``(ii) the hiring or designation of personnel necessary to develop and maintain a database of ballistics images of fired bullets and cartridge casings, research and evaluation;
``(iii) providing education about the role of ballistics as part of a comprehensive firearm crime reduction strategy;
``(iv) providing for the coordination among Federal, State, and local law enforcement and regulatory agencies and the firearm industry to curb firearm-related crime and illegal firearm trafficking; and
``(v) any other steps necessary to make ballistics testing effective.
``(B) The Attorney General and the Secretary shall--
``(i) establish a computer system through which State and local law enforcement agencies can promptly access ballistics records stored under this subsection, as soon as such a capability is available; and
``(ii) encourage training for all ballistics examiners.
``(4) Not later than 1 year after the date of enactment of this subsection and annually thereafter, the Attorney General and the Secretary shall submit to the Committee on the Judiciary of the Senate and the Committee on the Judiciary of the House of Representatives a report regarding the impact of this section, including--
``(A) the number of Federal and State criminal investigations, arrests, indictments, and prosecutions of all cases in which access to ballistics records provided under this section served as a valuable investigative tool;
``(B) the extent to which ballistics records are accessible across jurisdictions; and
``(C) a statistical evaluation of the test programs conducted pursuant to section 1506 of the Ballistics, Law Assistance, and State Technology Act.
``(5) There is authorized to be appropriated to the Department of Justice and the Department of the Treasury for each of fiscal years 2002 through 2005, $20,000,000 to carry out this subsection, including--
``(A) installation of ballistics equipment and bullet recovery equipment;
``(B) establishment of sites for ballistics testing;
``(C) salaries and expenses of necessary personnel; and
``(D) research and evaluation.
``(6) The Secretary and the Attorney General shall conduct mandatory ballistics testing of all firearms obtained or in the possession of their respective agencies.''.
(b) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the amendment made by subsection (a) take effect on the date on which the Attorney General and the Secretary of the Treasury, in consultation with the Board of the National Integrated Ballistics Information Network, certify that the ballistics systems used by the Department of Justice and the Department of the Treasury are sufficiently interoperable to make mandatory ballistics testing of new firearms possible.
(2) Effective on date of enactment.--Section 923(m)(6) of title 18, United States Code, as added by subsection (a), shall take effect on the date of enactment of this Act. SEC. 1505. PRIVACY RIGHTS OF LAW ABIDING CITIZENS.
Ballistics information of individual guns in any form or database established by this Act may not be used for--
(1) prosecutorial purposes unless law enforcement officials have a reasonable belief that a crime has been committed and that ballistics information would assist in the investigation of that crime; or
(2) the creation of a national firearms registry of gun owners.
SEC. 1506. DEMONSTRATION FIREARM CRIME REDUCTION STRATEGY.
(a) In General.--Not later than 60 days after the date of enactment of this Act, the Secretary of the Treasury and the Attorney General shall establish in the jurisdictions selected under subsection (c), a comprehensive firearm crime reduction strategy that meets the requirements of subsection
(b).
(b) Program Elements.--Each program established under subsection (a) shall, for the jurisdiction concerned--
(1) provide for ballistics testing, in accordance with criteria set forth by the National Integrated Ballistics Information Network, of all firearms recovered during criminal investigations, in order to--
(A) identify the types and origins of the firearms;
(B) identify suspects; and
(C) link multiple crimes involving the same firearm;
(2) require that all identifying information relating to firearms recovered during criminal investigations be promptly submitted to the Secretary of the Treasury, in order to identify the types and origins of the firearms and to identify illegal firearms traffickers;
(3) provide for coordination among Federal, State, and local law enforcement officials, firearm examiners, technicians, laboratory personnel, investigators, and prosecutors in the tracing and ballistics testing of firearms and the investigation and prosecution of firearms-related crimes including illegal firearms trafficking; and
(4) require analysis of firearm tracing and ballistics data in order to establish trends in firearm-related crime and firearm trafficking.
(c) Participating Jurisdictions.--
(1) In general.--The Secretary of the Treasury and the Attorney General shall select not fewer than 10 jurisdictions for participation in the program under this section.
(2) Considerations.--In selecting jurisdictions under this subsection, the Secretary of the Treasury and the Attorney General shall give priority to jurisdictions that--
(A) participate in comprehensive firearm law enforcement strategies, including programs such as the Youth Crime Gun Interdiction Initiative, Project Achilles, Project Disarm, Project Triggerlock, Project Exile, Project Surefire, and Operation Ceasefire;
(B) draft a plan to share ballistics records with nearby jurisdictions that require ballistics testing of firearms recovered during criminal investigations; and
(C) pledge to match Federal funds for the expansion of ballistics testing on a one-on-one basis.
(d) Authorization of Appropriations.--There is authorized to be appropriated for each of fiscal years 2002 through 2005, $20,000,000 to carry out this section, including--
(1) installation of ballistics equipment; and
(2) salaries and expenses for personnel (including personnel from the Department of Justice and the Bureau of Alcohol, Tobacco, and Firearms).
Subtitle F--Offender Reentry and Community Safety
SEC. 1601. SHORT TITLE.
This subtitle may be cited as the ``Offender Reentry and Community Safety Act of 2001''.
SEC. 1602. FINDINGS.
Congress finds the following:
(1) There are now nearly 1,900,000 individuals in our country's prisons and jails, including over 140,000 individuals under the jurisdiction of the Federal Bureau of Prisons.
(2) Enforcement of offender violations of conditions of releases has sharply increased the number of offenders who return to prison--while revocations comprised 17 percent of State prison admissions in 1980, they rose to 36 percent in 1998.
(3) Although prisoners generally are serving longer sentences than they did a decade ago, most eventually reenter communities; for example, in 1999, approximately 538,000 State prisoners and over 50,000 Federal prisoners, a record number, were returned to American communities. Approximately 100,000 State offenders who returned to communities received no supervision whatsoever.
(4) Historically, two-thirds of returning State prisoners have been rearrested for new crimes within three years, so these individuals pose a significant public safety risk and a continuing financial burden to society.
(5) A key element to effective post-incarceration supervision is an immediate, predetermined, and appropriate response to violations of the conditions of supervision.
(6) An estimated 187,000 State and Federal prison inmates have been diagnosed with mental health problems; about 70 percent of State prisoners and 57 percent of Federal prisoners have a history of drug use or abuse; and nearly 75 percent of released offenders with heroin or cocaine problems return to using drugs within three months if untreated; however, few States link prison mental health treatment programs with those in the return community.
(7) Between 1987 and 1997, the volume of juvenile adjudicated cases resulting in court-ordered residential placements rose 56 percent. In 1997 alone, there were a total of 163,200 juvenile court-ordered residential placements. The steady increase of youth exiting residential placement has strained the juvenile justice aftercare system, however, without adequate supervision and services, youth are likely to relapse, recidivate, and return to confinement at the public's expense.
(8) Emerging technologies and multidisciplinary community-based strategies present new opportunities to alleviate the public safety risk posed by released prisoners while helping offenders to reenter their communities successfully.
SEC. 1603. PURPOSES.
The purposes of this subtitle are to--
(1) establish demonstration projects in several Federal judicial districts, the District of Columbia, and in the Federal Bureau of Prisons, using new strategies and emerging technologies that alleviate the public safety risk posed by released prisoners by promoting their successful reintegration into the community;
(2) establish court-based programs to monitor the return of offenders into communities, using court sanctions to promote positive behavior;
(3) establish offender reentry demonstration projects in the states using government and community partnerships to coordinate cost efficient strategies that ensure public safety and enhance the successful reentry into communities of offenders who have completed their prison sentences;
(4) establish intensive aftercare demonstration projects that address public safety and ensure the special reentry needs of juvenile offenders by coordinating the resources of juvenile correctional agencies, juvenile courts, juvenile parole agencies, law enforcement agencies, social service providers, and local Workforce Investment Boards; and
(5) rigorously evaluate these reentry programs to determine their effectiveness in reducing recidivism and promoting successful offender reintegration.
PART 1--FEDERAL REENTRY DEMONSTRATION PROJECTS
SEC. 1611. FEDERAL REENTRY CENTER DEMONSTRATION.
(a) Authority and Establishment of Demonstration Project.--From funds made available to carry out this section, the Attorney General, in consultation with the Director of the Administrative Office of the United States Courts, shall establish the Federal Reentry Center Demonstration project. The project shall involve appropriate prisoners from the Federal prison population and shall utilize community corrections facilities, home confinement, and a coordinated response by Federal agencies to assist participating prisoners, under close monitoring and more seamless supervision, in preparing for and adjusting to reentry into the community.
(b) Project Elements.--The project authorized by subsection
(a) shall include--
(1) a Reentry Review Team for each prisoner, consisting of representatives from the Bureau of Prisons, the United States Probation System, and the relevant community corrections facility, who shall initially meet with the prisoner to develop a reentry plan tailored to the needs of the prisoner and incorporating victim impact information, and will thereafter meet regularly to monitor the prisoner's progress toward reentry and coordinate access to appropriate reentry measures and resources;
(2) regular drug testing, as appropriate;
(3) a system of graduated levels of supervision within the community corrections facility to promote community safety, provide incentives for prisoners to complete the reentry plan, including victim restitution, and provide a reasonable method for imposing immediate sanctions for a prisoner's minor or technical violation of the conditions of participation in the project;
(4) substance abuse treatment and aftercare, mental and medical health treatment and aftercare, vocational and educational training, life skills instruction, conflict resolution skills training, batterer intervention programs, assistance obtaining suitable affordable housing, and other programming to promote effective reintegration into the community as needed;
(5) to the extent practicable, the recruitment and utilization of local citizen volunteers, including volunteers from the faith-based and business communities, to serve as advisers and mentors to prisoners being released into the community;
(6) a description of the methodology and outcome measures that will be used to evaluate the program; and
(7) notification to victims on the status and nature of offenders' reentry plan.
(c) Probation Officers.--From funds made available to carry out this section, the Director of the Administrative Office of the United States Courts shall assign one or more probation officers from each participating judicial district to the Reentry Demonstration project. Such officers shall be assigned to and stationed at the community corrections facility and shall serve on the Reentry Review Teams.
(d) Project Duration.--The Reentry Center Demonstration project shall begin not later than 6 months following the availability of funds to carry out this section, and shall last 3 years. The Attorney General may extend the project for a period of up to 6 months to enable participant prisoners to complete their involvement in the project.
(e) Selection of Districts.--The Attorney General, in consultation with the Judicial Conference of the United States, shall select an appropriate number of Federal judicial districts in which to carry out the Reentry Center Demonstration project.
(f) Coordination of Projects.--The Attorney General, may, if appropriate, include in the Reentry Center Demonstration project offenders who participated in the Enhanced In-Prison Vocational Assessment and Training Demonstration project established by section 1615 of this Act.
SEC. 1612. FEDERAL HIGH-RISK OFFENDER REENTRY DEMONSTRATION.
(a) Authority and Establishment of Demonstration Project.--From funds made available to carry out this section, the Director of the Administrative Office of the United States Courts, in consultation with the Attorney General, shall establish the Federal High-Risk Offender Reentry Demonstration project. The project shall involve Federal offenders under supervised release who have previously violated the terms of their release following a term of imprisonment and shall utilize, as appropriate and indicated, community corrections facilities, home confinement, appropriate monitoring technologies, and treatment and programming to promote more effective reentry into the community.
(b) Project Elements.--The project authorized by subsection
(a) shall include--
(1) participation by Federal prisoners who have previously violated the terms of their release following a term of imprisonment;
(2) use of community corrections facilities and home confinement that, together with the technology referenced in paragraph (5), will be part of a system of graduated levels of supervision;
(3) substance abuse treatment and aftercare, mental and medical health treatment and aftercare, vocational and educational training, life skills instruction, conflict resolution skills training, batterer intervention programs, and other programming to promote effective reintegration into the community as appropriate;
(4) involvement of a victim advocate and the family of the prisoner, if it is safe for the victim(s), especially in domestic violence cases, to be involved;
(5) the use of monitoring technologies, as appropriate and indicated, to monitor and supervise participating offenders in the community;
(6) a description of the methodology and outcome measures that will be used to evaluate the program; and
(7) notification to victims on the status and nature of a prisoner's reentry plan.
(c) Mandatory Condition of Supervised Release.--In each of the judicial districts in which the demonstration project is in effect, appropriate offenders who are found to have violated a previously imposed term of supervised release and who will be subject to some additional term of supervised release, shall be designated to participate in the demonstration project. With respect to these offenders, the court shall impose additional mandatory conditions of supervised release that each offender shall, as directed by the probation officer, reside at a community corrections facility or participate in a program of home confinement, or both, and submit to appropriate monitoring, and otherwise participate in the project.
(d) Project Duration.--The Federal High-Risk Offender Reentry Demonstration shall begin not later than six months following the availability of funds to carry out this section, and shall last 3 years. The Director of the Administrative Office of the United States Courts may extend the project for a period of up to six months to enable participating prisoners to complete their involvement in the project.
(e) Selection of Districts.--The Judicial Conference of the United States, in consultation with the Attorney General, shall select an appropriate number of Federal judicial districts in which to carry out the Federal High-Risk Offender Reentry Demonstration project.
SEC. 1613. DISTRICT OF COLUMBIA INTENSIVE SUPERVISION,
TRACKING, AND REENTRY TRAINING (DC ISTART)
DEMONSTRATION.
(a) Authority and Establishment of Demonstration Project.--From funds made available to carry out this section, the Trustee of the Court Services and Offender Supervision Agency of the District of Columbia, as authorized by the National Capital Revitalization and Self Government Improvement Act of 1997 (Public Law 105-33; 111 Stat. 712) shall establish the District of Columbia Intensive Supervision, Tracking and Reentry Training Demonstration (DC iSTART) project. The project shall involve high risk District of Columbia parolees who would otherwise be released into the community without a period of confinement in a community corrections facility and shall utilize intensive supervision, monitoring, and programming to promote such parolees' successful reentry into the community.
(b) Project Elements.--The project authorized by subsection
(a) shall include--
(1) participation by appropriate high risk parolees;
(2) use of community corrections facilities and home confinement;
(3) a Reentry Review Team that includes a victim witness professional for each parolee which shall meet with the parolee--by video conference or other means as appropriate--before the parolee's release from the custody of the Federal Bureau of Prisons to develop a reentry plan that incorporates victim impact information and is tailored to the needs of the parolee and which will thereafter meet regularly to monitor the parolee's progress toward reentry and coordinate access to appropriate reentry measures and resources;
(4) regular drug testing, as appropriate;
(5) a system of graduated levels of supervision within the community corrections facility to promote community safety, encourage victim restitution, provide incentives for prisoners to complete the reentry plan, and provide a reasonable method for immediately sanctioning a prisoner's minor or technical violation of the conditions of participation in the project;
(6) substance abuse treatment and aftercare, mental and medical health treatment and aftercare, vocational and educational training, life skills instruction, conflict resolution skills training, batterer intervention programs, assistance obtaining suitable affordable housing, and other programming to promote effective reintegration into the community as needed and indicated;
(7) the use of monitoring technologies, as appropriate;
(8) to the extent practicable, the recruitment and utilization of local citizen volunteers, including volunteers from the faith-based communities, to serve as advisers and mentors to prisoners being released into the community; and
(9) notification to victims on the status and nature of a prisoner's reentry plan.
(c) Mandatory Condition of Parole.--For those offenders eligible to participate in the demonstration project, the United States Parole Commission shall impose additional mandatory conditions of parole such that the offender when on parole shall, as directed by the community supervision officer, reside at a community corrections facility or participate in a program of home confinement, or both, submit to electronic and other remote monitoring, and otherwise participate in the project.
(d) Program Duration.--The District of Columbia Intensive Supervision, Tracking and Reentry Training Demonstration shall begin not later than 6 months following the availability of funds to carry out this section, and shall last 3 years. The Trustee of the Court Services and Offender Supervision Agency of the District of Columbia may extend the project for a period of up to 6 months to enable participating prisoners to complete their involvement in the project.
SEC. 1614. FEDERAL INTENSIVE SUPERVISION, TRACKING, AND
REENTRY TRAINING (FED ISTART) DEMONSTRATION.
(a) Authority and Establishment of Demonstration Project.--From funds made available to carry out this section, the Director of the Administrative Office of the United States Courts shall establish the Federal Intensive Supervision, Tracking and Reentry Training Demonstration (FED iSTART) project. The project shall involve appropriate high risk Federal offenders who are being released into the community without a period of confinement in a community corrections facility.
(b) Project Elements.--The project authorized by subsection
(a) shall include--
(1) participation by appropriate high risk Federal offenders;
(2) significantly smaller caseloads for probation officers participating in the demonstration project;
(3) substance abuse treatment and aftercare, mental and medical health treatment and aftercare, vocational and educational training, life skills instruction, conflict resolution skills training, batterer intervention programs, assistance obtaining suitable affordable housing, and other programming to promote effective reintegration into the community as needed; and
(4) notification to victims on the status and nature of a prisoner's reentry plan.
(c) Program Duration.--The Federal Intensive Supervision, Tracking and Reentry Training Demonstration shall begin not later than 6 months following the availability of funds to carry out this section, and shall last 3 years. The Director of the Administrative Office of the United States Courts may extend the project for a period of up to six months to enable participating prisoners to complete their involvement in the project.
(d) Selection of Districts.--The Judicial Conference of the United States, in consultation with the Attorney General, shall select an appropriate number of Federal judicial districts in which to carry out the Federal Intensive Supervision, Tracking and Reentry Training Demonstration project.
SEC. 1615. FEDERAL ENHANCED IN-PRISON VOCATIONAL ASSESSMENT
AND TRAINING DEMONSTRATION.
(a) Authority and Establishment of Demonstration Project.--From funds made available to carry out this section, the Attorney General shall establish the Federal Enhanced In-Prison Vocational Assessment and Training Demonstration project in selected institutions. The project shall provide in-prison assessments of prisoners' vocational needs and aptitudes, enhanced work skills development, enhanced release readiness programming, and other components as appropriate to prepare Federal prisoners for release and reentry into the community.
(b) Program Duration.--The Enhanced In-Prison Vocational Assessment and Training Demonstration shall begin not later than six months following the availability of funds to carry out this section, and shall last 3 years. The Attorney General may extend the project for a period of up to 6 months to enable participating prisoners to complete their involvement in the project.
SEC. 1616. RESEARCH AND REPORTS TO CONGRESS.
(a) Attorney General.--Not later than 2 years after the enactment of this Act, the Attorney General shall report to Congress on the progress of the demonstration projects authorized by sections 1611 and 1615. Not later than 1 year after the end of the demonstration projects authorized by sections 1611 and 1615, the Director of the Federal Bureau of Prisons shall report to Congress on the effectiveness of the reentry projects authorized by sections 1611 and 1615 on post-release outcomes and recidivism. The report shall address post-release outcomes and recidivism for a period of 3 years following release from custody. The reports submitted pursuant to this section shall be submitted to the Committees on the Judiciary in the House of Representatives and the Senate.
(b) Administrative Office of the United States Courts.--Not later than 2 years after the enactment of this Act, Director of the Administrative Office of the United States Courts shall report to Congress on the progress of the demonstration projects authorized by sections 1612 and 1614. Not later than 180 days after the end of the demonstration projects authorized by sections 1612 and 1614, the Director of the Administrative Office of the United States Courts shall report to Congress on the effectiveness of the reentry projects authorized by sections 1612 and 1614 on post-release outcomes and recidivism. The report should address post-release outcomes and recidivism for a period of 3 years following release from custody. The reports submitted pursuant to this section shall be submitted to the Committees on the Judiciary in the House of Representatives and the Senate.
(c) DC ISTART.--Not later than 2 years after the enactment of this Act, the Executive Director of the corporation or institute authorized by section 11281(2) of the National Capital Revitalization and Self-Government Improvement Act of 1997 (Pub. Law 105-33; 111 Stat. 712) shall report to Congress on the progress of the demonstration project authorized by section 1613 of this Act. Not later than 1 year after the end of the demonstration project authorized by section 1613, the Executive Director of the corporation or institute authorized by section 11281(2) of the National Capital Revitalization and Self-Government Improvement Act of 1997 (Pub. Law 105-33; 111 Stat. 712) shall report to Congress on the effectiveness of the reentry project authorized by section 1613 of this Act on post-release outcomes and recidivism. The report shall address post-release outcomes and recidivism for a period of three years following release from custody. The reports submitted pursuant to this section shall be submitted to the Committees on the Judiciary in the House of Representatives and the Senate. In the event that the corporation or institute authorized by section 11281(2) of the National Capital Revitalization and Self-Government Improvement Act of 1997
(Pub. Law 105-33; 111 Stat. 712) is not in operation 1 year after the enactment of this Act, the Director of the National Institute of Justice shall prepare and submit the reports required by this section and may do so from funds made available to the Court Services and Offender Supervision Agency of the District of Columbia, as authorized by the National Capital Revitalization and Self-Government Improvement Act of 1997 (Pub. Law 105-33; 111 Stat. 712).
SEC. 1617. DEFINITIONS.
In this part--
(1) the term ``appropriate prisoner'' means a person who is considered by prison authorities--
(A) to pose a medium to high risk of committing a criminal act upon reentering the community, and
(B) to lack the skills and family support network that facilitate successful reintegration into the community; and
(2) the term ``appropriate high risk parolees'' means parolees considered by prison authorities--
(A) to pose a medium to high risk of committing a criminal act upon reentering the community; and
(B) to lack the skills and family support network that facilitate successful reintegration into the community.
SEC. 1618. AUTHORIZATION OF APPROPRIATIONS.
To carry out this part, there are authorized to be appropriated, to remain available until expended, the following amounts:
(1) To the Federal Bureau of Prisons--
(A) $1,375,000 for fiscal year 2002;
(B) $1,110,000 for fiscal year 2003;
(C) $1,130,000 for fiscal year 2004;
(D) $1,155,000 for fiscal year 2005; and
(E) $1,230,000 for fiscal year 2006.
(2) To the Federal Judiciary--
(A) $3,380,000 for fiscal year 2002;
(B) $3,540,000 for fiscal year 2003;
(C) $3,720,000 for fiscal year 2004;
(D) $3,910,000 for fiscal year 2005; and
(E) $4,100,000 for fiscal year 2006.
(3) To the Court Services and Offender Supervision Agency of the District of Columbia, as authorized by the National Capital Revitalization and Self-Government Improvement Act of 1997 (Pub. Law 105-33; 111 Stat. 712)--
(A) $4,860,000 for fiscal year 2002;
(B) $4,510,000 for fiscal year 2003;
(C) $4,620,000 for fiscal year 2004;
(D) $4,740,000 for fiscal year 2005; and
(E) $4,860,000 for fiscal year 2006.
PART 2--STATE REENTRY GRANT PROGRAMS
SEC. 1621. AMENDMENTS TO THE OMNIBUS CRIME CONTROL AND SAFE
STREETS ACT OF 1968.
(a) In General.--Title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3711 et seq.) as amended, is amended by inserting after part CC the following new part:
``PART DD--OFFENDER REENTRY AND COMMUNITY SAFETY
``SEC. 2951. ADULT OFFENDER STATE AND LOCAL REENTRY
PARTNERSHIPS.
``(a) Grant Authorization.--The Attorney General shall make grants of up to $1,000,000 to States, Territories, and Indian tribes, in partnership with units of local government and nonprofit organizations, for the purpose of establishing adult offender reentry demonstration projects. Funds may be expended by the projects for the following purposes:
``(1) oversight/monitoring of released offenders;
``(2) providing returning offenders with drug and alcohol testing and treatment and mental health assessment and services;
``(3) convening community impact panels, victim impact panels or victim impact educational classes;
``(4) providing and coordinating the delivery of other community services to offenders such as housing assistance, education, employment training, conflict resolution skills training, batterer intervention programs, and other social services as appropriate; and
``(5) establishing and implementing graduated sanctions and incentives.
``(b) Submission of Application.--In addition to any other requirements that may be specified by the Attorney General, an application for a grant under this subpart shall--
``(1) describe a long-term strategy and detailed implementation plan, including how the jurisdiction plans to pay for the program after the Federal funding ends;
``(2) identify the governmental and community agencies that will be coordinated by this project;
``(3) certify that there has been appropriate consultation with all affected agencies and there will be appropriate coordination with all affected agencies in the implementation of the program, including existing community corrections and parole; and
``(4) describe the methodology and outcome measures that will be used in evaluating the program.
``(c) Applicants.--The applicants as designated under subsection (a)--
``(1) shall prepare the application as required under subsection (b); and
``(2) shall administer grant funds in accordance with the guidelines, regulations, and procedures promulgated by the Attorney General, as necessary to carry out the purposes of this part.
``(d) Matching Funds.--The Federal share of a grant received under this title may not exceed 25 percent of the costs of the project funded under this title unless the Attorney General waives, wholly or in part, the requirements of this section.
``(e) Reports.--Each entity that receives a grant under this part shall submit to the Attorney General, for each year in which funds from a grant received under this part is expended, a report at such time and in such manner as the Attorney General may reasonably require that contains:
``(1) a summary of the activities carried out under the grant and an assessment of whether such activities are meeting the needs identified in the application funded under this part; and
``(2) such other information as the Attorney General may require.
``(f) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated to carry out this section $40,000,000 in fiscal years 2002 and 2003; and such sums as may be necessary for each of the fiscal years 2004, 2005, and 2006.
``(2) Limitations.--Of the amount made available to carry out this section in any fiscal year--
``(A) not more than 2 percent or less than 1 percent may be used by the Attorney General for salaries and administrative expenses; and
``(B) not more than 3 percent or less than 2 percent may be used for technical assistance and training.
``SEC. 2952. STATE AND LOCAL REENTRY COURTS.
``(a) Grant Authorization.--The Attorney General shall make grants of up to $500,000 to State and local courts or state agencies, municipalities, public agencies, nonprofit organizations, and tribes that have agreements with courts to take the lead in establishing a reentry court. Funds may be expended by the projects for the following purposes:
``(1) monitoring offenders returning to the community;
``(2) providing returning offenders with drug and alcohol testing and treatment and mental and medical health assessment and services;
``(3) convening community impact panels, victim impact panels, or victim impact educational classes;
``(4) providing and coordinating the delivery of other community services to offenders, such as housing assistance, education, employment training, conflict resolution skills training, batterer intervention programs, and other social services as appropriate; and
``(5) establishing and implementing graduated sanctions and incentives.
``(b) Submission of Application.--In addition to any other requirements that may be specified by the Attorney General, an application for a grant under this subpart shall--
``(1) describe a long-term strategy and detailed implementation plan, including how the jurisdiction plans to pay for the program after the Federal funding ends;
``(2) identify the governmental and community agencies that will be coordinated by this project;
``(3) certify that there has been appropriate consultation with all affected agencies, including existing community corrections and parole, and there will be appropriate coordination with all affected agencies in the implementation of the program;
``(4) describe the methodology and outcome measures that will be used in evaluation of the program.
``(c) Applicants.--The applicants as designated under subsection (a)--
``(1) shall prepare the application as required under subsection (b); and
``(2) shall administer grant funds in accordance with the guidelines, regulations, and procedures promulgated by the Attorney General, as necessary to carry out the purposes of this part.
``(d) Matching Funds.--The Federal share of a grant received under this title may not exceed 25 percent of the costs of the project funded under this title unless the Attorney General waives, wholly or in part, the requirements of this section.
``(e) Reports.--Each entity that receives a grant under this part shall submit to the Attorney General, for each year in which funds from a grant received under this part is expended, a report at such time and in such manner as the Attorney General may reasonably require that contains:
``(1) a summary of the activities carried out under the grant and an assessment of whether such activities are meeting the needs identified in the application funded under this part; and
``(2) such other information as the Attorney General may require.
``(f) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated to carry out this section $10,000,000 in fiscal years 2002 and 2003, and such sums as may be necessary for each of the fiscal years 2004, 2005, and 2006.
``(2) Limitations.--Of the amount made available to carry out this section in any fiscal year--
``(A) not more than 2 percent or less than 1 percent may be used by the Attorney General for salaries and administrative expenses; and
``(B) not more than 3 percent or less than 2 percent may be used for technical assistance and training.
``SEC. 2953. JUVENILE OFFENDER STATE AND LOCAL REENTRY
PROGRAMS.
``(a) Grant Authorization.--The Attorney General shall make grants of up to $250,000 to States, in partnership with local units of governments or nonprofit organizations, for the purpose of establishing juvenile offender reentry programs. Funds may be expended by the projects for--
``(1) providing returning juvenile offenders with drug and alcohol testing and treatment and mental and medical health assessment and services;
``(2) convening victim impact panels, restorative justice panels, or victim impact educational classes for juvenile offenders;
``(3) oversight/monitoring of released juvenile offenders; and
``(4) providing for the planning of reentry services when the youth is initially incarcerated and coordinating the delivery of community-based services, such as education, conflict resolution skills training, batterer intervention programs, employment training and placement, efforts to identify suitable living arrangements, family involvement and support, and other services.
``(b) Submission of Application.--In addition to any other requirements that may be specified by the Attorney General, an application for a grant under this subpart shall--
``(1) describe a long-term strategy and detailed implementation plan, including how the jurisdiction plans to pay for the program after the Federal funding ends;
``(2) identify the governmental and community agencies that will be coordinated by this project;
``(3) certify that there has been appropriate consultation with all affected agencies and there will be appropriate coordination with all affected agencies, including existing community corrections and parole, in the implementation of the program;
``(4) describe the methodology and outcome measures that will be used in evaluating the program.
``(c) Applicants.--The applicants as designated under subsection (a)--
``(1) shall prepare the application as required under subsection (b); and
``(2) shall administer grant funds in accordance with the guidelines, regulations, and procedures promulgated by the Attorney General, as necessary to carry out the purposes of this part.
``(d) Matching Funds.--The Federal share of a grant received under this title may not exceed 25 percent of the costs of the project funded under this title unless the Attorney General waives, wholly or in part, the requirements of this section.
``(e) Reports.--Each entity that receives a grant under this part shall submit to the Attorney General, for each year in which funds from a grant received under this part is expended, a report at such time and in such manner as the Attorney General may reasonably require that contains:
``(1) a summary of the activities carried out under the grant and an assessment of whether such activities are meeting the needs identified in the application funded under this part; and
``(2) such other information as the Attorney General may require.
``(f) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated to carry out this section $5,000,000 in fiscal years 2002 and 2003, and such sums as are necessary for each of the fiscal years 2004, 2005, and 2006.
``(2) Limitations.--Of the amount made available to carry out this section in any fiscal year--
``(A) not more than 2 percent or less than 1 percent may be used by the Attorney General for salaries and administrative expenses; and
``(B) not more than 3 percent or less than 2 percent may be used for technical assistance and training.
``SEC. 2954. STATE REENTRY PROGRAM RESEARCH, DEVELOPMENT, AND
EVALUATION.
``(a) Grant Authorization.--The Attorney General shall make grants to conduct research on a range of issues pertinent to reentry programs, the development and testing of new reentry components and approaches, selected evaluation of projects authorized in the preceding sections, and dissemination of information to the field.
``(b) Authorization of Appropriations.--There are authorized to be appropriated to carry out this section
$5,000,000 in fiscal years 2002 and 2003, and such sums as are necessary to carry out this section in fiscal years 2004, 2005, and 2006.''.
(b) Technical Amendment.--The table of contents of title I of the Omnibus Crime Control and Safe Street Act of 1968 (42 U.S.C. 3711 et seq.), as amended, is amended by inserting after the matter relating to part CC the following:
``Part DD--Offender Reentry and Community Safety Act
``Sec. 2951. Adult Offender State and Local Reentry Partnerships.
``Sec. 2952. State and Local Reentry Courts.
``Sec. 2953. Juvenile Offender State and Local Reentry Programs.
``Sec. 2954. State Reentry Program Research and Evaluation.''.
TITLE II--STRENGTHENING THE FEDERAL CRIMINAL LAWS
Subtitle A--Combating Gang Violence
PART 1--ENHANCED PENALTIES FOR GANG-RELATED ACTIVITIES
SEC. 2101. GANG FRANCHISING.
Chapter 26 of title 18, United States Code, is amended by adding at the end the following:
``SEC. 522. INTERSTATE FRANCHISING OF CRIMINAL STREET GANGS.
``(a) Prohibited Act.--Whoever travels in interstate or foreign commerce, or causes another to do so, to recruit, solicit, induce, command, or cause to create, or attempt to create a franchise of a criminal street gang shall be punished in accordance with subsection (c).
``(b) Definitions.--In this section:
``(1) Criminal street gang.--The term `criminal street gang' has the meaning given that term in section 521.
``(2) Franchise.--The term `franchise' means an organized group of individuals related by name, moniker, or other identifier, that engages in coordinated violent crime or drug trafficking activities in interstate or foreign commerce with a criminal street gang in another State.
``(c) Penalties.--A person who violates subsection (a) shall be imprisoned for not more than 10 years, fined under this title, or both.''.
SEC. 2102. ENHANCED PENALTY FOR USE OR RECRUITMENT OF MINORS
IN GANGS.
(a) In General.--Chapter 26 of title 18, United States Code, as amended by section 2101 of this title, is amended by adding at the end the following:
``Sec. 523. Sentencing enhancement for use or recruitment of minors
``Pursuant to its authority under section 994(p) of title 28, the United States Sentencing Commission shall amend the Federal sentencing guidelines to provide an appropriate enhancement for the use of minors in a criminal street gang and the recruitment of minors in furtherance of the creation of a criminal street gang franchise.''.
(b) Conforming Amendment.--The chapter analysis for chapter 26 of title 18, United States Code, is amended by adding at the end the following:
``522. Interstate franchising of criminal street gangs.
``523. Sentencing enhancement for use or recruitment of minors.''.
SEC. 2103. GANG FRANCHISING AS A RICO PREDICATE.
Section 1961(1) of title 18, United States Code, is amended--
(1) by striking ``or'' before ``(F)''; and
(2) by inserting ``, or (G) an offense under section 522 of this title'' before the semicolon at the end.
SEC. 2104. INCREASE IN OFFENSE LEVEL FOR PARTICIPATION IN
CRIME AS GANG MEMBER.
(a) Definition of Criminal Street Gang.--In this section, the term ``criminal street gang'' has the same meaning as in section 521(a) of title 18, United States Code.
(b) Sentencing Enhancement.--Pursuant to its authority under section 994(p) of title 28, United States Code, the United States Sentencing Commission shall amend the Federal sentencing guidelines to provide an appropriate enhancement with respect to any offense committed in connection with, or in furtherance of, the activities of a criminal street gang if the defendant is a member of the criminal street gang at the time of the offense.
(c) Consistency.--In carrying out this section, the United States Sentencing Commission shall--
(1) ensure that there is reasonable consistency with other Federal sentencing guidelines; and
(2) avoid duplicative punishment for substantially the same offense.
SEC. 2105. ENHANCED PENALTY FOR DISCHARGE OF FIREARMS IN
RELATION TO COUNTS OF VIOLENCE OR DRUG
TRAFFICKING CRIMES.
(a) Definitions.--In this section, the terms ``crime of violence'' and ``drug trafficking crime'' have the same meanings as in section 924(c) of title 18, United States Code.
(b) Sentencing Enhancement.--Pursuant to its authority under section 994(p) of title 28, United States Code, the United States Sentencing Commission shall amend the Federal sentencing guidelines to provide an appropriate sentence enhancement with respect to any defendant who discharges a firearm during or in relation to any crime of violence or any drug trafficking crime.
(c) Consistency.--In carrying out this section, the United States Sentencing Commission shall--
(1) ensure that there is reasonable consistency with other Federal sentencing guidelines; and
(2) avoid duplicative punishment for substantially the same offense.
SEC. 2106. PUNISHMENT OF ARSON OR BOMBING AT FACILITIES
RECEIVING FEDERAL FINANCIAL ASSISTANCE.
Section 844(f)(1) of title 18, United States Code, is amended by inserting ``or any institution or organization receiving Federal financial assistance'' after ``or agency thereof,''.
SEC. 2107. ELIMINATION OF STATUTE OF LIMITATIONS FOR MURDER.
(a) In General.--Section 3281 of title 18, United States Code, is amended to read as follows:
``Sec. 3281. Capital offenses and Class A felonies involving murder
``An indictment for any offense punishable by death or an indictment or information for a Class A felony involving murder (as defined in section 1111 or as defined under applicable State law in the case of an offense under section 1963(a) involving racketeering activity described in section 1961(1)) may be found at any time without limitation.''.
(b) Applicability.--The amendment made by subsection (a) applies to any offense for which the applicable statute of limitations had not run as of the date of enactment of this Act.
SEC. 2108. EXTENSION OF STATUTE OF LIMITATIONS FOR VIOLENT
AND DRUG TRAFFICKING CRIMES.
(a) In General.--Chapter 213 of title 18, United States Code, is amended by adding at the end the following:
``Sec. 3296. Class A violent and drug trafficking offenses
``Except as provided in section 3281, no person shall be prosecuted, tried, or punished for a Class A felony that is a crime of violence or a drug trafficking crime (as that term is defined in section 924(c)) unless the indictment is returned or the information is filed within 10 years after the commission of the offense.''.
(b) Applicability.--The amendment made by subsection (a) applies to any offense for which the applicable statute of limitations had not run as of the date of enactment of this Act.
(c) Conforming Amendments.--The chapter analysis for chapter 213 of title 18, United States Code, is amended--
(1) in the item relating to section 3281, by inserting
``and Class A felonies involving murder'' before the period; and
(2) by adding at the end the following:
``3296. Class A violent and drug trafficking offenses.''.
SEC. 2109. INCREASED PENALTIES UNDER THE RICO LAW FOR GANG
AND VIOLENT CRIMES.
Section 1963(a) of title 18, United States Code, is amended by striking ``or imprisoned not more than 20 years (or for life if the violation is based on a racketeering activity for which the maximum penalty includes life imprisonment), or both,'' and inserting ``or imprisoned not more than the greater of 20 years or the statutory maximum term of imprisonment (other than the penalty of death) applicable to a racketeering activity on which the violation is based, or both,''.
SEC. 2110. INCREASED PENALTY AND BROADENED SCOPE OF STATUTE
AGAINST VIOLENT CRIMES IN AID OF RACKETEERING.
Section 1959(a) of title 18, United States Code, is amended--
(1) by inserting ``or commits any other crime of violence'' before ``or threatens to commit a crime of violence'';
(2) in paragraph (4), by inserting ``committing any other crime of violence or for'' before ``threatening to commit a crime of violence'', and by striking ``five'' and inserting
``ten'';
(3) in paragraph (5), by striking ``for not more than ten years'' and inserting ``for any term of years or for life'';
(4) in paragraph (6), by--
(A) striking ``or'' before ``assault resulting in serious bodily injury'';
(B) inserting ``or any other crime of violence'' after
``assault resulting in serious bodily injury''; and
(C) striking ``three'' and inserting ``10''; and
(5) by inserting ``(as defined in section 1365 of this title)'' after ``serious bodily injury'' the first place that term appears.
SEC. 2111. FACILITATING THE PROSECUTION OF CARJACKING
OFFENSES.
Section 2119 of title 18, United States Code, is amended by striking ``, with the intent to cause death or serious bodily harm''.
SEC. 2112. FACILITATION OF RICO PROSECUTIONS.
Section 1962(d) of title 18, United States Code, is amended by adding at the end the following: ``For purposes of this subsection, it is not necessary to establish that the defendant personally committed an act of racketeering activity.''.
SEC. 2113. ASSAULT AS A RICO PREDICATE.
Section 1961(1)(A) of title 18, United States Code, is amended by adding after ``extortion,'' ``assault''.
SEC. 2114. EXPANSION OF DEFINITION OF ``RACKETEERING
ACTIVITY'' TO AFFECT GANGS IN INDIAN COUNTRY.
Section 1961(1)(A) of title 18, United States Code, is amended by inserting ``or, with respect to an act or threat occurring solely in Indian country, as defined in section 1151 of this title, Federal'' after ``chargeable under State''.
SEC. 2115. INCREASED PENALTIES FOR VIOLENCE IN THE COURSE OF
RIOT OFFENSES.
Section 2101(a) of title 18, United States Code, is amended by striking ``paragraph--'' and all that follows through the end of the subsection and inserting ``shall be fined under this title--
``(i) if death results from such act, be imprisoned for any term of years or for life, or both;
``(ii) if serious bodily injury (as defined in section 1365 of this title) results from such act, be imprisoned for not more than 20 years, or both; or
``(iii) in any other case, be imprisoned for not more than 5 years, or both''.
SEC. 2116. EXPANSION OF FEDERAL JURISDICTION OVER CRIMES
OCCURRING IN PRIVATE PENAL FACILITIES HOUSING
FEDERAL PRISONERS OR PRISONERS FROM OTHER
STATES.
Section 1791(d)(4) of title 18, United States Code, is amended by inserting before the period at the end the following: ``, including privately owned facilities housing Federal prisoners or prisoners who are serving a term of imprisonment under a commitment order from a State other than the State in which the penal facility is located''.
PART 2--TARGETING GANG-RELATED GUN OFFENSES
SEC. 2121. TRANSFER OF FIREARM TO COMMIT A CRIME OF VIOLENCE.
Section 924(h) of title 18, United States Code, is amended by inserting ``or having reasonable cause to believe'' after
``knowing''.
SEC. 2122. INCREASED PENALTY FOR KNOWINGLY RECEIVING FIREARM
WITH OBLITERATED SERIAL NUMBER.
Section 924(a) of title 18, United States Code, is amended--
(1) in paragraph (1)(B), by striking ``(k),''; and
(2) in paragraph (2), by inserting ``(k),'' after ``(j),''.
SEC. 2123. AMENDMENT OF THE SENTENCING GUIDELINES FOR
TRANSFERS OF FIREARMS TO PROHIBITED PERSONS.
Pursuant to its authority under section 994(p) of title 28, United States Code, the United States Sentencing Commission shall amend the Federal sentencing guidelines to increase the base offense level for offenses subject to section 2K2.1 of those guidelines (Unlawful Receipt, Possession, or Firearms or Ammunitions) to assume that a person who transferred a firearm or ammunition and who knew or had reasonable cause to believe that the transferee was a prohibited person is subject to the same base offense level as the transferee. The amended guidelines shall not require the same offense level for the transferor and transferee to the extent that the transferee's base offense level is subject to an additional increase on the basis of a past criminal conviction of either a crime of violence or a controlled substance offense.
PART 3--USING AND PROTECTING WITNESSES TO HELP PROSECUTE GANGS AND
OTHER VIOLENT CRIMINALS
SEC. 2131. INTERSTATE TRAVEL TO ENGAGE IN WITNESS
INTIMIDATION OR OBSTRUCTION OF JUSTICE.
Section 1952 of title 18, United States Code, is amended--
(1) by redesignating subsections (b) and (c) as (c) and
(d), respectively; and
(2) by inserting after subsection (a) the following:
``(b) Whoever travels in interstate or foreign commerce with intent by bribery, force, intimidation, or threat, directed against any person, to delay or influence the testimony of or prevent from testifying a witness in a State criminal proceeding or by any such means to cause any person to destroy, alter, or conceal a record, document, or other object, with intent to impair the object's integrity or availability for use in such a proceeding, and thereafter engages or endeavors to engage in such conduct, shall--
``(1) be fined under this title or imprisoned not more than 10 years, or both;
``(2) if serious bodily injury (as defined in section 1365) results, be so fined or imprisoned for not more than 20 years, or both; and
``(3) if death results, be so fined and imprisoned for any term of years or for life, or both, and may be sentenced to death.''.
SEC. 2132. EXPANDING PRETRIAL DETENTION ELIGIBILITY FOR
SERIOUS GANG AND OTHER VIOLENT CRIMINALS.
(a) In General.--Section 3142(f)(1) of title 18, United States Code, is amended by adding at the end the following:
``For purposes of subparagraph (D), the term `convicted' includes a finding, under Federal or State law, that a person has committed an act of juvenile delinquency;''.
(b) Offenses.--Section 3156(a)(4) of title 18, United States Code, is amended--
(1) by striking ``or'' at the end of subparagraph (B);
(2) by striking the period at the end of subparagraph (C) and inserting ``; or''; and
(3) by adding at the end the following:
``(D) an offense that is a violation of section 842(i)(1) or 922(g)(1) of this title (relating to possession of explosives or firearms by convicted felons).''.
(c) Factors.--Section 3142(g)(3)(B) of title 18, United States Code, is amended--
(1) by striking ``the person was on probation'' and inserting ``the person was--
``(i) on probation'';
(2) by striking ``local law; and'' and inserting ``local law; or''; and
(3) by adding at the end the following:
``(ii) was a member of or participated in a criminal street gang or racketeering enterprise; and''.
SEC. 2133. CONSPIRACY PENALTY FOR OBSTRUCTION OF JUSTICE
OFFENSES INVOLVING VICTIMS, WITNESSES, AND
INFORMANTS.
Section 1512 of title 18, United States Code, is amended by adding at the end the following:
``(j) Whoever conspires to commit any offense defined in this section or section 1513 of this title shall be subject to the same penalties as those prescribed for the offense the commission of which was the object of the conspiracy.''.
SEC. 2134. ALLOWING A REDUCTION OF SENTENCE FOR PROVIDING
USEFUL INVESTIGATIVE INFORMATION ALTHOUGH NOT
REGARDING A PARTICULAR INDIVIDUAL.
(a) Title 18.--Section 3553(e) of title 18, United States Code, is amended by striking ``substantial assistance in the investigation or prosecution of another person who has committed an offense'' and inserting ``substantial assistance in an investigation of any offense or the prosecution of another person who has committed an offense''.
(b) Title 28.--Section 994(n) of title 28, United States Code, is amended by striking ``substantial assistance in the investigation or prosecution of another person who has committed an offense'' and inserting ``substantial assistance in an investigation of any offense or the prosecution of another person who has committed an offense''.
(c) Federal Rules of Criminal Procedure.--Rule 35(b) of the Federal Rules of Criminal Procedure is amended by striking
``substantial assistance in the investigation or prosecution of another person who has committed an offense'' and inserting ``substantial assistance in an investigation of any offense or the prosecution of another person who has committed an offense''.
SEC. 2135. INCREASING THE PENALTY FOR USING PHYSICAL FORCE TO
TAMPER WITH WITNESSES, VICTIMS, OR INFORMANTS.
Section 1512 of title 18, United States Code, is amended--
(1) in subsection (a)--
(A) in paragraph (1), by striking ``as provided in paragraph (2)'' and inserting ``as provided in paragraph
(3)'';
(B) by redesignating paragraph (2) as paragraph (3);
(C) by inserting after paragraph (1) the following:
``(2) Whoever uses physical force or the threat of physical force, or attempts to do so, with intent to--
``(A) influence, delay, or prevent the testimony of any person in an official proceeding;
``(B) cause or induce any person to--
``(i) withhold testimony, or withhold a record, document, or other object, from an official proceeding;
``(ii) alter, destroy, mutilate, or conceal an object with intent to impair the object's integrity or availability for use in an official proceeding;
``(iii) evade legal process summoning that person to appear as a witness, or to produce a record, document, or other object, in an official proceeding; and
``(iv) be absent from an official proceeding to which such person has been summoned by legal process; or
``(C) hinder, delay, or prevent the communication to a law enforcement officer or judge of the United States of information relating to the commission or possible commission of a Federal offense or a violation of conditions of probation, parole, or release pending judicial proceedings;
shall be punished as provided in paragraph (3).''; and
(D) by striking paragraph (3)(B), as redesignated, and inserting the following:
``(B) an attempt to murder, the use of physical force, the threat of physical force, or an attempt to do so, imprisonment for not more than 20 years.''; and
(2) in subsection (b), by striking ``or physical force''.
SEC. 2136. EXPANSION OF FEDERAL KIDNAPPING OFFENSE TO COVER
WHEN DEATH OF VICTIM OCCURS BEFORE CROSSING
STATE LINE AND WHEN FACILITY IN INTERSTATE
COMMERCE OR THE MAILS ARE USED.
Section 1201(a) of title 18, United States Code, is amended--
(1) by inserting before the semicolon at the end of paragraph (1) the following: ``, without regard to whether such person was alive when transported across a State boundary if the person was alive when the transportation began'';
(2) by striking ``or'' at the end of paragraph (4); and
(3) by inserting after paragraph (5) the following:
``(6) an individual travels in interstate or foreign commerce in furtherance of the offense; or
``(7) the mail or a facility in interstate or foreign commerce is used in furtherance of the offense;''.
SEC. 2137. ASSAULTS OR OTHER CRIMES OF VIOLENCE FOR HIRE.
Section 1958(a) of title 18, United States Code, is amended by inserting ``or other felony crime of violence against the person'' after ``murder''.
SEC. 2138. CLARIFICATION OF INTERSTATE THREAT STATUTE TO
COVER THREATS TO KILL.
Subsections (b) and (c) of section 875 of title 18, United States Code, and the second and third undesignated paragraphs of sections 876 and 877 of title 18, United States Code, are each amended by striking ``any threat to injure'' and inserting ``any threat to kill or injure''.
SEC. 2139. CONFORMING AMENDMENT TO LAW PUNISHING OBSTRUCTION
OF JUSTICE BY NOTIFICATION OF EXISTENCE OF A
SUBPOENA FOR RECORDS IN CERTAIN TYPES OF
INVESTIGATIONS.
Section 1510(b)(3)(B) of title 18, United States Code, is amended--
(1) in clause (i), by striking ``or'' at the end;
(2) in clause (ii), by striking the period at the end and inserting ``; or''; and
(3) by adding at the end the following:
``(iii) the Controlled Substances Act (21 U.S.C. 801 et seq.), the Controlled Substances Import and Export Act (21 U.S.C. 951 et seq.), or section 6050I of the Internal Revenue Code of 1986; and
``(iv) section 286, 287, 669, 1001, 1027, 1035, 1341, 1343, 1347, 1518, or 1954 relating to a Federal health care offense.''.
PART 4--GANG PARAPHERNALIA
SEC. 2141. STREAMLINING PROCEDURES FOR LAW ENFORCEMENT ACCESS
TO CLONE NUMERIC PAGERS.
(a) Amendment to Chapter 206.--Chapter 206 of title 18, United States Code, is amended--
(1) in the chapter heading, by striking ``AND TRAP AND TRACE DEVICES'' and inserting: ``TRAP AND TRACE DEVICES, AND CLONE NUMERIC PAGERS'';
(2) in section 3121--
(A) in the section heading, by striking ``and trap and trace device'' and inserting ``, trap and trace device, and clone pager'';
(B) in subsection (a)--
(i) by striking ``or a trap and trace device'' each place that term appears and inserting ``, a trap and trace device, or a clone pager'';
(ii) after ``3123'' by inserting ``or section 3129''; and
(C) in subsections (b) and (c), by striking ``or trap and trace device'' each place that term appears and inserting ``, a trap and trade device or a cone pager'';
(3) in section 3124--
(A) in the section heading, by striking ``or a trap and trace device'' and inserting ``, a trap and trace device, or a clone pager'';
(B) by redesignating subsections (c) through (f) as subsections (d) through (g), respectively; and
(C) by inserting after subsection (b) the following:
``(c) Clone Pager.--Upon the request of an attorney for the Government or an officer of a law enforcement agency authorized to use a clone pager under this chapter, a provider of a paging service or electronic communication service shall furnish such investigative or law enforcement officer, all information, facilities, and technical assistance necessary to accomplish the use of the clone pager unobtrusively and with a minimum of interference with the services that the person so ordered by the court provides to the subscriber, if such assistance is directed by a court order as provided in section 3129(b)(2) of this chapter.'';
(4) in section 3125--
(A) in the section heading, by striking ``and trap and trace device'' and inserting ``, trap and trace device, and clone pager'';
(B) in subsection (a)--
(i) by striking ``or trap and trace device'' each place that term appears and inserting ``, a trap and trace device, or a clone pager''; and
(ii) by striking ``an order approving the installation or use is issued in accordance with section 3123 of this title'' and inserting ``an application is made for an order approving the installation or use in accordance with section 3123 or section 3128 of this title''; and
(C) in subsection (b), by adding at the end the following:
``In the event such application for the use of a clone pager is denied, or in any other case where the use of the clone pager is terminated without an order having been issued, an inventory shall be served as provided for in section 3129(e).'';
(5) in section 3126--
(A) in the section heading, by striking ``and trap and trace devices'' and inserting ``, trap and trace devices, and clone pagers''; and
(B) by striking ``pen register orders and orders for trap and trace devices'' and inserting ``orders for pen registers, trap and trace devices, and clone pagers''; and
(6) in section 3127--
(A) in paragraph (2), by striking ``pen register or a trap and trace device'' and inserting ``pen register, a trap and trace device, or a clone pager'';
(B) by redesignating paragraphs (5) and (6) as paragraphs
(6) and (7), respectively; and
(C) by inserting after paragraph (4) the following:
``(5) the term `clone pager' means a numeric display device that receives transmissions intended for another numeric display paging device.''.
(b) Applications for Orders.--Chapter 206 of title 18, United States Code, is amended by adding at the end the following:
``Sec. 3128. Application for an order for use of a clone pager
``(a) Application.--(1) An attorney for the Government may apply to a court of competent jurisdiction for an order or an extension of an order under section 3129 of this title authorizing the use of a clone pager.
``(2) A State investigative or law enforcement officer may, if authorized by State law, apply to a court of competent jurisdiction of such State for an order or an extension of an order under section 3129 of this title authorizing the use of a clone pager.
``(b) Contents of Application.--An application under subsection (a) of this section shall include--
``(1) the identify of the attorney for the Government or the State law enforcement or investigative officer making the application and the identify of the law enforcement agency conducting the investigation;
``(2) the identify, if known, of the person using the numeric display paging device to be cloned;
``(3) a description of the numeric display paging device to be cloned;
``(4) the identify, if known, of the person who is the subject of the criminal investigation; and
``(5) an affidavit, sworn to before the court of competent jurisdiction, establishing probable cause for belief that information relevant to an ongoing criminal investigation being conducted by that agency will be obtained through use of the clone pager.
``Sec. 3129. Issuance of an order for use of a clone pager
``(a) In General.--Upon an application made under section 3128 of this title, the court shall enter an ex parte order authorizing the use of a clone pager within the jurisdiction of the court if the court finds that the application has established probable cause to believe that information relevant to an ongoing criminal investigation being conducted by that agency will be obtained through use of the clone pager.
``(b) Contents of an Order.--An order issued under this section--
``(1) shall specify--
``(A) the identity, if known, of each individual using the numeric display paging device to be cloned;
``(B) the numeric display paging device to be cloned;
``(C) the identity, if known, of the person who is the subject of the criminal investigation; and
``(D) the offense to which the information likely to be obtained by the clone pager relates; and
``(2) shall direct, upon the request of the applicant, the furnishing of information, facilities, and technical assistance necessary to use the clone pager under section 3124 of this title.
``(c) Time Period and Extensions.--(1) An order issued under this section shall authorize the use of a clone pager for a period not to exceed 30 days.
``(2) Extensions of an order referred to in paragraph (1) may be granted, but only upon an application for an order under section 3128 of this title and upon the judicial finding required by subsection (a). The period of extension shall be for a period not to exceed 30 days.
``(3) Within a reasonable time after the termination of the period of a clone pager order or any extensions thereof, the applicant shall report to the issuing judge the number of numeric pager messages acquired through the use of the clone pager during such period.
``(d) Nondisclosure of Existence of Clone Pager.--An order authorizing the use of a clone pager shall direct that--
``(1) the order be sealed until otherwise ordered by the court; and
``(2) the person who has been ordered by the court to provide assistance to the applicant not disclose the existence of the clone pager or the existence of the investigation to the listed subscriber, or to any other person, until otherwise ordered by the court.
``(e) Notification.--Within a reasonable time but not later than 90 days after the termination of the period of a clone pager order or any extensions thereof, the issuing judge shall cause to be served, on each individual using the numeric display paging device which was cloned, an inventory including notice of--
``(1) the fact of the entry of the order or the application;
``(2) the date of the entry and the period of clone pager use authorized, or the denial of the application; and
``(3) whether or not information was obtained through the use of the clone pager.
Upon an ex parte showing of good cause, a court of competent jurisdiction may in its discretion postpone the serving of the notice required by this section.''.
(c) Conforming Amendment.--The analysis for chapter 206 of title 18, United States Code, is amended--
(1) by striking the item relating to section 3121 and inserting the following:
``3121. General prohibition on pen register, trap and trace device, and clone pager use; exception.'';
(2) by striking the item relating to section 3124 and inserting the following:
``3124. Assistance in installation and use of a pen register, a trap and trace device, or clone pager.'';
(3) by striking the item relating to section 3125 and inserting the following:
``3125. Emergency pen register, trap and trace device, and clone pager installation and use.'';
(4) by striking the item relating to section 3126 and inserting the following:
``3126. Reports concerning pen registers, trap and trace devices, and clone pagers.'';
and
(5) by adding at the end the following:
``3128. Application for an order for use of a clone pager.
``3129. Issuance of an order for use of a clone pager.''.
(d) Conforming Amendments.--
(1) Section 2511(2)(h) of title 18, United States Code, is amended by striking clause (i) and inserting the following:
``(i) to use a pen register, a trap and trace device, or a clone pager (as those terms are defined for the purposes of chapter 206 (relating to pen registers, trap and trace devices, and clone pagers) of this title); or''.
(2) Section 2510(12) of title 18, United States Code, is amended--
(A) in subparagraph (C), by striking ``or'' at the end;
(B) by inserting ``or'' after subparagraph (D); and
(C) by adding at the end the following:
``(E) any transmission made through a clone pager (as defined in section 3127(5) of this title).''.
(3) Section 705(a) of the Communications Act of 1934 (47 U.S.C. 605(a)) is amended by striking ``chapter 119'' and inserting ``chapters 119 and 206''.
SEC. 2142. SENTENCING ENHANCEMENT FOR USING BODY ARMOR IN
COMMISSION OF A FELONY.
(a) Definitions.--In this section:
(1) Body armor.--The term ``body armor'' means any product sold or offered for sale as personal protective body covering intended to protect against gunfire, regardless of whether the product is to be worn alone or is sold as a complement to another product or garment; and
(2) Law enforcement officer.--The term ``law enforcement officer'' means any officer, agent, or employee of the United States, a State, or a political subdivision of a State, authorized by law or by a government agency to engage in or supervise the prevention, detection, investigation, or prosecution of any violation of criminal law.
(b) Sentencing Enhancement.--Pursuant to its authority under section 994(p) of title 28, United States Code, the United States Sentencing Commission shall amend the Federal sentencing guidelines to provide an appropriate sentencing enhancement for any offense in which the defendant used body armor.
(c) Consistency.--In carrying out this section, the United States Sentencing Commission shall--
(1) ensure that there is reasonable consistency with other Federal sentencing guidelines; and
(2) avoid duplicative punishment for substantially the same offense.
(d) Applicability.--No Federal sentencing guideline amendment made under this section shall apply if the Federal crime in which the body armor is used constitutes a violation of, attempted violation of, or conspiracy to violate the civil rights of a person by a law enforcement officer acting under color of the authority of such law enforcement officer.
SEC. 2143. SENTENCING ENHANCEMENT FOR USING LASER SIGHTING
DEVICES IN COMMISSION OF A FELONY.
(a) Definitions.--In this section--
(1) the term ``firearm'' has the same meaning as in section 921 of title 18, United States Code; and
(2) the term ``laser-sighting device'' includes any device designed to be attached to a firearm that uses technology, such as laser sighting, red-dot-sighting, night sighting, telescopic sighting, or other similarly effective technology, in order to enhance target acquisition.
(b) Sentencing Enhancement.--Pursuant to its authority under section 994(p) of title 28, United States Code, the United States Sentencing Commission shall amend the Federal sentencing guidelines to provide an appropriate sentencing enhancement for any serious violent felony or serious drug offense, as defined in section 3559 of title 18, United States Code, in which the defendant--
(1) possessed a firearm equipped with a laser-sighting device; or
(2) possessed a firearm and the defendant possessed a laser-sighting device (capable of being readily attached to the firearm).
(c) Consistency.--In carrying out this section, the United States Sentencing Commission shall--
(1) ensure that there is reasonable consistency with other Federal sentencing guidelines; and
(2) avoid duplicative punishment for substantially the same offense.
SEC. 2144. GOVERNMENT ACCESS TO LOCATION INFORMATION.
(a) Court Order Required.--Section 2703 of title 18, United States Code, is amended by adding at the end the following:
``(g) Requirements for Disclosure of Location Information.--A provider of mobile electronic communication service shall provide to a governmental entity information generated by and disclosing, on a real time basis, the physical location of a subscriber's equipment only if the governmental entity obtains a court order issued upon a finding that there is probable cause to believe that an individual using or possessing the subscriber equipment is committing, has committed, or is about to commit a felony offense.''.
(b) Conforming Amendment.--Section 2703(c)(1)(B) of title 18, United States Code, is amended by inserting ``or wireless location information covered by subsection (g) of this section'' after ``(b) of this section''.
SEC. 2145. LIMITATION ON OBTAINING TRANSACTIONAL INFORMATION
FROM PEN REGISTERS OR TRAP AND TRACE DEVICES.
Subsection 3123(a) of title 18, United States Code, is amended to read as follows:
``(a) In General.--Upon an application made under section 3122, the court may enter an ex parte order--
``(1) authorizing the installation and use of a pen register or a trap and trace device within the jurisdiction of the court if the court finds, based on the certification by the attorney for the Government or the State law enforcement or investigative officer, that the information likely to be obtained by such installation and use is relevant to an ongoing criminal investigation; and
``(2) directing that the use of the pen register or trap and trace device be conducted in such a way as to minimize the recording or decoding of any electronic or other impulses that are not related to the dialing and signaling information utilized in call processing.''.
Subtitle B--Combating Money Laundering
SEC. 2201. SHORT TITLE.
This subtitle may be cited as the ``Money Laundering Enforcement Act of 2001''.
SEC. 2202. ILLEGAL MONEY TRANSMITTING BUSINESSES.
(a) Civil Forfeiture for Money Transmitting Violation.--Section 981(a)(1)(A) of title 18, United States Code, is amended by striking ``or 1957'' and inserting ``, 1957, or 1960''.
(b) Scienter Requirement for Section 1960 Violation.--Section 1960 of title 18, United States Code, is amended by adding at the end the following:
``(c) Scienter Requirement.--For the purposes of proving a violation of this section involving an illegal money transmitting business--
``(1) it shall be sufficient for the Government to prove that the defendant knew that the money transmitting business lacked a license required by State law; and
``(2) it shall not be necessary to show that the defendant knew that the operation of such a business without the required license was an offense punishable as a felony or misdemeanor under State law.''.
SEC. 2203. RESTRAINT OF ASSETS OF PERSONS ARRESTED ABROAD.
Section 981(b) of title 18, United States Code, is amended by adding at the end the following:
``(3) Restraint of Assets.--
``(A) In general.--If any person is arrested or charged in a foreign country in connection with an offense that would give rise to the forfeiture of property in the United States under this section or under the Controlled Substances Act (21 U.S.C. 801 et seq.), the Attorney General may apply to any Federal judge or magistrate judge in the district in which the property is located for an ex parte order restraining the property subject to forfeiture for not more than 30 days, except that the time may be extended for good cause shown at a hearing conducted in the manner provided in Rule 43(e) of the Federal Rules of Civil Procedure.
``(B) Application.--An application for a restraining order under subparagraph (A) shall--
``(i) set forth the nature and circumstances of the foreign charges and the basis for belief that the person arrested or charged has property in the United States that would be subject to forfeiture; and
``(ii) contain a statement that the restraining order is needed to preserve the availability of property for such time as is necessary to receive evidence from the foreign country or elsewhere in support of probable cause for the seizure of the property under this subsection.''.
SEC. 2204. CIVIL MONEY LAUNDERING JURISDICTION OVER FOREIGN
PERSONS.
Section 1956(b) of title 18, United States Code, is amended--
(1) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and indenting each subparagraph appropriately;
(2) by striking ``(b) Whoever'' and inserting the following:
``(b) Civil Penalties.--
``(1) In general.--Whoever''; and
(3) by adding at the end the following:
``(2) Jurisdiction.--For purposes of adjudicating an action filed or enforcing a penalty ordered under this section, the district courts of the United States shall have jurisdiction over any foreign person, including any financial institution authorized under the laws of a foreign country, that commits an offense under subsection (a) involving a financial transaction that occurs in whole or in part in the United States, if service of process upon such foreign person is made in accordance with the Federal Rules of Civil Procedure or the laws of the foreign country in which the foreign person is found.
``(3) Satisfaction of judgment.--In any action described in paragraph (2), the court may issue a pretrial restraining order or take any other action necessary to ensure that any bank account or other property held by the defendant in the United States is available to satisfy a judgment under this section.''.
SEC. 2205. PUNISHMENT OF LAUNDERING MONEY THROUGH FOREIGN
BANKS.
Section 1956(c)(6) of title 18, United States Code, is amended to read as follows:
``(6) the term `financial institution' includes--
``(A) any financial institution described in section 5312(a)(2) of title 31, or the regulations promulgated thereunder; and
``(B) any foreign bank, as defined in section 1(b)(7) of the International Banking Act of 1978 (12 U.S.C. 3101(7));''.
SEC. 2206. ADDITION OF SERIOUS FOREIGN CRIMES TO LIST OF
MONEY LAUNDERING PREDICATES.
(a) In General.--Section 1956(c)(7) of title 18, United States Code, is amended--
(1) in subparagraph (B)--
(A) by striking clause (ii) and inserting the following:
``(ii) any act or acts constituting a crime of violence;''; and
(B) by adding at the end the following:
``(iv) fraud, or any scheme to defraud, committed against a foreign government or foreign governmental entity;
``(v) bribery of a public official, or the misappropriation, theft, or embezzlement of public funds by or for the benefit of a public official;
``(vi) smuggling or export control violations involving munitions listed in the United States Munitions List or technologies with military applications as defined in the Commerce Control List of the Export Administration Regulations; or
``(vii) an offense with respect to which the United States would be obligated by a multilateral treaty either to extradite the alleged offender or to submit the case for prosecution, if the offender were found within the territory of the United States;'';
(2) in subparagraph (D)--
(A) by inserting ``section 541 (relating to goods falsely classified),'' before ``section 542'';
(B) by inserting ``section 922(l) (relating to the unlawful importation of firearms), section 924(m) (relating to firearms trafficking),'' before ``section 956'';
(C) by inserting ``section 1030 (relating to computer fraud and abuse),'' before ``1032''; and
(D) by inserting ``any felony violation of the Foreign Agents Registration Act of 1938 (22 U.S.C. 611 et seq.),'' before ``or any felony violation of the Foreign Corrupt Practices Act''; and
(3) in subparagraph (E), by inserting ``the Clean Air Act
(42 U.S.C. 6901 et seq.),'' after ``the Safe Drinking Water Act (42 U.S.C. 300f et seq.),''.
SEC. 2207. CRIMINAL FORFEITURE FOR MONEY LAUNDERING
CONSPIRACIES.
Section 982(a)(1) of title 18, United States Code, is amended by inserting ``or a conspiracy to commit any such offense,'' after ``of this title,''.
SEC. 2208. FUNGIBLE PROPERTY IN FOREIGN BANK ACCOUNTS.
Section 984(d) of title 18, United States Code, is amended by adding at the end the following:
``(3) In this subsection, the term `financial institution' includes a foreign bank, as defined in section 1(b)(7) of the International Banking Act of 1978 (12 U.S.C. 3101(7)).''.
SEC. 2209. ADMISSIBILITY OF FOREIGN BUSINESS RECORDS.
(a) In General.--Chapter 163 of title 28, United States Code, is amended by adding at the end the following:
``Sec. 2467. Foreign records
``(a) Definitions.--In this section--
``(1) the term `business' includes business, institution, association, profession, occupation, and calling of every kind whether or not conducted for profit;
``(2) the term `foreign certification' means a written declaration made and signed in a foreign country by the custodian of a record of regularly conducted activity or another qualified person, that if falsely made, would subject the maker to criminal penalty under the law of that country;
``(3) the term `foreign record of regularly conducted activity' means a memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, maintained in a foreign country; and
``(4) the term `official request' means a letter rogatory, a request under an agreement, treaty or convention, or any other request for information or evidence made by a court of the United States or an authority of the United States having law enforcement responsibility, to a court or other authority of a foreign country.
``(b) Admissibility.--In a civil proceeding in a court of the United States, including a civil forfeiture proceeding and a proceeding in the United States Claims Court and the United States Tax Court, unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness, a foreign record of regularly conducted activity (or a duplicate of such record), obtained pursuant to an official request, shall not be excluded as evidence by the hearsay rule if a foreign certification, also obtained pursuant to the same official request or subsequent official request that adequately identifies such foreign record, attests that--
``(1) the foreign record was made, at or near the time of the occurrence of the matters set forth, by (or from information transmitted by) a person with knowledge of those matters;
``(2) the foreign record was kept in the course of a regularly conducted business activity;
``(3) the business activity made such a record as a regular practice; and
``(4) if the foreign record is not the original, the record is a duplicate of the original.
``(c) Foreign Certification.--A foreign certification under this section shall authenticate a record or duplicate described in subsection (b).
``(d) Notice.--
``(1) In general.--As soon as practicable after a responsive pleading has been filed, a party intending to offer in evidence under this section a foreign record of regularly conducted activity shall provide written notice of that intention to each other party.
``(2) Opposition.--A motion opposing admission in evidence of a record under paragraph (1) shall be made by the opposing party and determined by the court before trial. Failure by a party to file such motion before trial shall constitute a waiver of objection to such record, except that the court for cause shown may grant relief from the waiver.''.
(b) Conforming Amendment.--The analysis for chapter 163 of title 28, United States Code, is amended by adding at the end the following:
``2467. Foreign records.''.
SEC. 2210. CHARGING MONEY LAUNDERING AS A COURSE OF CONDUCT.
Section 1956(h) of title 18, United States Code, is amended--
(1) by striking ``(h) Any person'' and inserting the following:
``(h) Conspiracy; Multiple Violations.--
``(1) Conspiracy.--Any person''; and
(2) by adding at the end the following:
``(2) Multiple violations.--Any person who commits multiple violations of this section or section 1957 that are part of the same scheme or continuing course of conduct may be charged, at the election of the Government, in a single count in an indictment or information.''.
SEC. 2211. VENUE IN MONEY LAUNDERING CASES.
Section 1956 of title 18, United States Code, is amended by adding at the end the following:
``(i) Venue.--
``(1) In general.--Except as provided in paragraph (2), a prosecution for an offense under this section or section 1957 may be brought in any district in which the financial or monetary transaction is conducted, or in which a prosecution for the underlying specified unlawful activity could be brought, if the defendant participates in the transfer of the proceeds of the specified unlawful activity from that district to the district where the financial or monetary transaction is conducted.
``(2) Exception.--A prosecution for an attempt or conspiracy offense under this section or section 1957 may be brought in the district in which venue would lie for the completed offense under paragraph (1), or in any other district in which an act in furtherance of the attempt or conspiracy took place.''.
SEC. 2212. TECHNICAL AMENDMENT TO RESTORE WIRETAP AUTHORITY
FOR CERTAIN MONEY LAUNDERING OFFENSES.
Section 2516(1)(g) of title 18, United States Code, is amended by striking ``of title 31, United States Code
(dealing with the reporting of currency transactions)'' and inserting ``or 5324 of title 31 (dealing with the reporting and illegal structuring of currency transactions)''.
SEC. 2213. CRIMINAL PENALTIES FOR VIOLATIONS OF ANTI-MONEY
LAUNDERING ORDERS.
(a) Reporting Violations.--Section 5324(a) of title 31, United States Code, is amended--
(1) in the matter preceding paragraph (1), by inserting ``, or the reporting requirements imposed by an order issued pursuant to section 5326'' after ``any such section''; and
(2) in each of paragraphs (1) and (2), by inserting ``, or a report required under any order issued pursuant to section 5326'' before the semicolon.
(b) Penalties.--Sections 5321(a)(1), 5322(a), and 5322(b) of title 31, United States Code, are each amended by inserting ``or order issued'' after ``or a regulation prescribed'' each place that term appears.
SEC. 2214. ENCOURAGING FINANCIAL INSTITUTIONS TO NOTIFY LAW
ENFORCEMENT AUTHORITIES OF SUSPICIOUS FINANCIAL
TRANSACTIONS.
(a) In General.--Section 2702(b)(6) of title 18, United States Code, is amended--
(1) by inserting ``or supervisory agency'' after ``a law enforcement agency'';
(2) in subparagraph (A), by striking ``; and'' and inserting ``and appear to pertain to the commission of the crime; or''; and
(3) in subparagraph (B), by striking ``appear to pertain to the commission of the crime.'' and inserting ``appear to reveal a suspicious transaction relevant to a possible violation of law or regulation.''
(b) Definitions.--Section 2711 of title 18, United States Code, is amended--
(1) in paragraph (1), by striking ``and'' at the end;
(2) in paragraph (2), by striking the period at the end and inserting ``; and''; and
(3) by adding at the end the following:
``(3) the terms `suspicious transaction' and `relevant to a possible violation of the law or regulation' shall be interpreted in the same manner as those terms have been interpreted for purposes of section 5318(g) of title 31; and
``(4) the term `supervisory agency' has the meaning given the term in section 1101(7) of the Right to Financial Privacy Act of 1978.''.
SEC. 2215. COVERAGE OF FOREIGN BANK BRANCHES IN THE
TERRITORIES.
Section 20(9) of title 18, United States Code, is amended by inserting before the period the following: ``, except that for purposes of this section the definition of the term
`State' in such Act shall be deemed to include a commonwealth, territory, or possession of the United States''.
SEC. 2216. CONFORMING STATUTE OF LIMITATIONS AMENDMENT FOR
CERTAIN BANK FRAUD OFFENSES.
Section 3293 of title 18, United States Code, is amended--
(1) by inserting ``225,'' after ``215,''; and
(2) by inserting ``1032,'' before ``1033''.
SEC. 2217. JURISDICTION OVER CERTAIN FINANCIAL CRIMES
COMMITTED ABROAD.
Section 1029 of title 18, United States Code, is amended by adding at the end the following:
``(h) Jurisdiction Over Certain Financial Crimes Committed Abroad.--Any person who, outside the jurisdiction of the United States, engages in any act that, if committed within the jurisdiction of the United States, would constitute an offense under subsection (a) or (b), shall be subject to the same penalties as if that offense had been committed in the United States, if the act--
``(1) involves an access device issued, owned, managed, or controlled by a financial institution, account issuer, credit card system member, or other entity within the jurisdiction of the United States; and
``(2) causes, or if completed would have caused, a transfer of funds from or a loss to an entity listed in paragraph
(1).''.
SEC. 2218. KNOWLEDGE THAT THE PROPERTY IS THE PROCEEDS OF A
FELONY.
Section 1956(c)(1) of title 18, United States Code, is amended by inserting ``, and regardless of whether or not the person knew that the activity constituted a felony'' before the semicolon at the end.
SEC. 2219. MONEY LAUNDERING TRANSACTIONS; COMMINGLED
ACCOUNTS.
(a) Section 1956.--Section 1956 of title 18, United States Code, is amended by adding at the end the following:
``(i) A transaction, transportation, transmission, or transfer of funds shall be considered for the purposes of this section to be one involving the proceeds of specified unlawful activity, or property represented to be the proceeds of specified unlawful activity, if the transaction, transportation, transmission, or transfer involves--
``(1) funds directly traceable to the specified unlawful activity, or represented to be directly traceable to the specified unlawful activity;
``(2) a bank account in which the proceeds of specified unlawful activity, or property represented to be the proceeds of specified unlawful activity, have been commingled with other funds; or
``(3) 2 or more bank accounts, where the proceeds of specified unlawful activity, or property represented to be the proceeds of specified unlawful activity, are deposited into 1 bank account and there is a contemporaneous, related withdrawal from, or debit to, another bank account controlled by the same person, or by a person acting in concert with that person.''.
(b) Section 1957.--Section 1957(f) of title 18, United States Code, is amended by inserting after paragraph (3) the following:
``(4) the term `monetary transaction in criminally derived property that is of a value greater than $10,000' includes--
``(A) a monetary transaction involving the transfer, withdrawal, encumbrance or other disposition of more than
$10,000 from a bank account in which more than $10,000 in proceeds of specified unlawful activity have been commingled with other funds;
``(B) a series of monetary transactions in amounts under
$10,000 that exceed $10,000 in the aggregate and that are closely related to each other in terms of time, the identity of the parties involved, the nature of the transactions and the manner in which they are conducted; and
``(C) any financial transaction described in section 1956(i)(3) that involves more than $10,000 in proceeds of specified unlawful activity.''.
(c) Technical Amendment.--Section 1956(c)(7)(F) of title 18, United States Code, is amended by inserting ``, as defined in section 24'' before the period.
SEC. 2220. LAUNDERING THE PROCEEDS OF TERRORISM.
Section 1956(c)(7)(D) of title 18, United States Code, is amended by inserting ``or 2339B'' after ``2339A''.
SEC. 2221. VIOLATIONS OF SECTION 6050I.
Sections 981(a)(1)(A) and 982(a)(1) of title 18, United States Code, are amended by inserting ``, or of section 6050I of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 6050I)'' after ``of title 31''.
SEC. 2222. INCLUDING AGENCIES OF TRIBAL GOVERNMENTS IN THE
DEFINITION OF A FINANCIAL INSTITUTION.
Section 5312(a)(2)(W) of title 31, United States Code, is amended by striking ``State or local'' and inserting ``State, local or tribal''.
SEC. 2223. PENALTIES FOR VIOLATIONS OF GEOGRAPHIC TARGETING
ORDERS AND CERTAIN RECORDKEEPING REQUIREMENTS.
(a) Civil Penalty for Violation of Targeting Order.--Section 5321(a)(1) of title 31, United States Code, is amended--
(1) by inserting ``or order issued'' after ``subchapter or a regulation prescribed''; and
(2) by inserting A, or willfully violating a regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91-508,'' after ``section 5314 and 5315)''.
(b) Criminal Penalties for Violation of Targeting Order.--Section 5322 of title 31, United States Code, is amended--
(1) in subsection (a)--
(A) by inserting ``or order issued'' after ``willfully violating this subchapter or a regulation prescribed''; and
(B) by inserting ``or willfully violating a regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91-508,'' after ``under section 5315 or 5324),'';
(2) in subsection (b)--
(A) by inserting ``or order issued'' after ``willfully violating this subchapter or a regulation prescribed''; and
(B) by inserting ``willfully violating a regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91-508,'' after ``under section 5315 or 5324),'';
(c) Structuring Transactions To Evade Targeting Order or Certain Recordkeeping Requirements.--Section 5324 of title 31, United States Code, is amended--
(1) in the title by inserting ``or recordkeeping'' after
``reporting''.
(2) in subsection (a)--
(A) by inserting a comma after ``shall'';
(B) by striking ``section--'' and inserting ``section, the reporting or recordkeeping requirements imposed by any order issued under section 5326, or the recordkeeping requirements imposed by any regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91-508--'';
(C) in paragraphs (1) and (2), by inserting ``, to file a report or maintain a record required by any order issued under section 5326, or to maintain a record required pursuant to any regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91-508'' after ``regulation prescribed under any such section'' each place that term appears.
Subtitle C--Antidrug Provisions
SEC. 2301. AMENDMENTS CONCERNING TEMPORARY EMERGENCY
SCHEDULING.
Section 201(h) of the Controlled Substances Act (21 U.S.C. 811(h)) is amended to read as follows:
``(h) Temporary Scheduling To Avoid Imminent Hazards to Public Safety.--
``(1) In general.--If the Attorney General finds that the control of a substance on a temporary basis is necessary to avoid an imminent hazard to the public safety, the Attorney General may, by order and without regard to the requirements of subsection (b) of this section relating to the Secretary of Health and Human Services, and without regard to the findings required under section 202(b) (21 U.S.C. 812(b)), temporarily schedule such substance in accordance with this subsection if no approval is in effect for the substance under section 505(i) of the Federal Food, Drug, and Cosmetic Act (hereafter in this subsection referred to as the FDC Act)
(21 U.S.C. 355(i)).
``(A) If the substance is not contained in a drug for which an investigational new drug exemption is in effect under section 505(i) of the FDC Act, the temporary scheduling order shall place such substance in schedule I.
``(B) If the substance is contained in a drug for which an investigational new drug exemption is in effect under section 505(i) of the FDC Act, the temporary scheduling order shall place such substance in schedule II, subject to the conditions set forth in paragraph (6) of this subsection.
``(C) A temporary scheduling order, or order renewing such order, may not take effect before the expiration of thirty days from--
``(i) the date of the publication by the Attorney General of a notice in the Federal Register of the intention to issue such order and the grounds upon which such order is to be issued; and
``(ii) the date the Attorney General has transmitted the notice required by paragraph (4).
``(2) Duration of temporary scheduling; renewal of orders.--
``(A) A temporary scheduling order issued under subparagraph (1)(A) of this subsection shall expire at the end of one year from the effective date of the order, except that the Attorney General may, during the pendency of proceedings under subsection (a)(1) of this section with respect to the substance, extend the temporary scheduling order for up to six months.
``(B) A temporary scheduling order issued under subparagraph (1)(B) of this subsection shall expire at the end of 18 months from the effective date of the order, except that, if the Attorney General determines that continuation of the temporary scheduling order is necessary to avoid an imminent hazard to the public safety, the Attorney General may issue a renewal order, 30 days prior to expiration of the temporary scheduling order, extending the original order for an additional 18 months, provided the following conditions are met--
``(i) an exemption with respect to such substance remains in effect under section 505(i) of the FDC Act; and--
``(ii) the holder of such exemption is actively pursuing the clinical investigation of the substance.
The Secretary shall certify to the Attorney General whether or not each of conditions (i) and (ii) continue to be met no later than 90 days prior to the date on which the temporary scheduling order is scheduled to a expire. As long as both conditions continue to be met, the Attorney General may, every 18 months, continue to issue orders renewing the temporary scheduling of a particular substance. If either of the foregoing conditions are no longer met for a particular substance, the temporary scheduling of that substance may not be renewed and shall expire 12 months after the date on which such condition fails to be met, except that the Attorney General may, during the pendency of proceedings under subsection (a)(l) of this section with respect to the substance, extend the temporary scheduling for an additional six months.
``(3) Factors determinative of temporary scheduling.--When issuing an order under paragraph (1), the Attorney General shall be required to consider, with respect to the finding of an imminent hazard to the public safety, only those factors set forth in paragraphs (4), (5), and (6) of subsection (c) of this section, including actual abuse, diversion from legitimate channels, and clandestine importation, manufacture, or distribution.
``(4) Consultation with the secretary of health and human services.--The Attorney General shall transmit notice of an order proposed to be issued under paragraph (1) to the Secretary of Health and Human Services. In issuing an order under paragraph (1), the Attorney General shall take into consideration any comments submitted by the Secretary in response to a notice transmitted pursuant to this paragraph.
``(5) Effect of permanent scheduling proceedings.--An order issued under paragraph (1) with respect to a substance shall be vacated upon the conclusion of a subsequent rule making proceeding initiated under subsection (a) of this section with respect to such substance.
``(6) Special rules applicable to temporarily scheduled investigational drugs.--
(A) In the case of a substance that is temporarily scheduled under subparagraph (l)(B) of this subsection that was controlled under this subchapter prior to its temporary scheduling, any person who manufactures, distributes, dispenses, possesses, or uses such substance within the scope of the exemption under section 505(i) of the FDC Act shall be subject to the same requirements of this subchapter that were in effect prior to the temporary scheduling.
``(B) In the case of a substance that is temporarily scheduled under subparagraph (l)(B) of this subsection that was not controlled under this subchapter prior to its temporary scheduling, any person who manufactures, distributes, dispenses, possesses, or uses such substance within the scope of the exemption under section 505(i) of the FDC Act shall not be required to comply with the requirements of part C of this subchapter, except as provided in this paragraph--
``(i) Such person shall be subject to sections 302, 303, and 304 (21 U.S.C. 822, 823, and 824), relating to registration.
``(ii) Compliance with applicable record keeping and reporting requirements of the FDC Act, as determined by the Secretary, shall constitute compliance with section 307 (21 U.S.C. 827). A violation of such requirements shall constitute a violation of section 307 and shall subject a violator to applicable penalties under Part D of this subchapter, in addition to any other penalties provided by law. Records or documents required to be kept for such purposes under the FDC Act shall be deemed records or documents required under this subchapter, and places where such records or documents are kept or required to be kept shall be deemed controlled premises for purposes of administrative inspections and warrants under section 510 (21 U.S.C. 880).
``(iii) A registrant handling an investigational drug that has been temporarily scheduled under this section shall be subject to the requirements established under section 307(f), relating to procedures necessary to insure the security and accountability of controlled substances used in research and to prevent theft or diversion of the drug into illegal channels of distribution.
``(C) Each person that is a sponsor of an investigation of a new drug for which a research exemption is in effect under section 505(i) of the FDC Act with respect to such substance shall be required to certify to the Secretary of Health and Human Services, by one month after the effective date of the temporary scheduling order with respect to the substance, and by the end of each succeeding six month period, that such person is able to account for the location and use of all quantities of such substance that are or have been manufactured, distributed, dispensed, possessed, or used under such exemption on or before the date of such certification.
``(D) In the case of a substance that is temporarily scheduled under subparagraph (1)(B) of this subsection, the disclosure of the existence of an exemption under section 505(i) of the FDC Act with respect to such substance shall not be considered to be disclosure prohibited by section 301(j) of the FDC Act or section 1905 of title 18 of the United States Code.
``(E) The manufacture, possession, distribution, or use of such substance within the scope of such exception shall not be subject to any requirements or penalty under State or local law more stringent than the provisions of this chapter or other applicable Federal law.
``(7) Judicial review.--An order issued under paragraph (1) is not subject to judicial review, except that a renewal order issued under subparagraph (2)(B) of this subsection is subject to judicial review in accordance with section 507 (21 U.S.C. 877).''.
SEC. 2302. AMENDMENT TO REPORTING REQUIREMENT FOR
TRANSACTIONS INVOLVING CERTAIN LISTED
CHEMICALS.
Section 310(b)(3) of the Controlled Substances Act (21 U.S.C. 830(b)(3)) is amended by--
(1) redesignating subparagraphs (A) and (B) as subparagraphs (B) and (C);
(2) inserting a new subparagraph (A) as follows:
``(A) As used in this section, the term `drug product' means a pharmaceutical substance in dosage form that has been approved under the Food, Drug and Cosmetic Act for distribution in the United States.'';
(3) in the redesignated (B) by inserting ``or who engages in an export transaction'' after ``nonregulated person''; and
(4) adding at the end the following--
``(D) Except as provided in subparagraph (E), the following distributions to a nonregulated person and the following export transactions shall not be subject to the reporting requirement established in subparagraph (B):
``(i) distributions of sample packages of drug products when such packages contain not more than 2 solid dosage units or the equivalent of 2 dosage units in liquid form, not to exceed 10 milliliters of liquid per package, and not more than one package is distributed to an individual or residential address in any 30-day time period;
``(ii) distributions of drug products by retail distributors to the extent that such distributions are consistent with the activities authorized for a retail distributor as set out in section 102(46) of this title;
``(iii) distributions of drug products to a resident of a Long Term Care Facility (as that term is defined in the regulations of the Attorney General) or distributions of drug products to a Long Term Care Facility for dispensing to or for use by a resident of that facility;
``(iv) distributions of drug products pursuant to a valid prescription (as used in this section, the term `valid prescription' is one which is issued for a legitimate medical purpose by individual practitioner licensed by law to administer and prescribe such drugs and acting in the usual course of his/her professional practice);
``(v) exports which have been reported to the Attorney General pursuant to section 1004 or 1018 of title III or which are subject to a waiver granted under section 1018(e)(2) of title III; and
``(vi) any quantity, method or type of distribution or any quantity, method or type of distribution of a specific listed chemical (including specific formulations or drug products) or of a group of listed chemicals (including specific formulations or drug products) which the Attorney General has excluded by regulation from this reporting requirement on the basis that such reporting is not necessary to the enforcement of this title or title III.
``(E) The Attorney General may revoke any or all of the exemptions listed in (C) for an individual regulated person if he finds that drug products distributed by that person are being used in violation of this title or title III. The regulated person shall be notified of this revocation, which will be effective upon receipt by the regulated person of such notice, as provided in section 1018(c)(1) of title III and has the right to an expedited hearing as provided in section 1018(c)(2) of title III.''.
SEC. 2303. DRUG PARAPHERNALIA.
(a) In General.--Section 422(d) of the Controlled Substances Act (21 U.S.C. 863(d)) is amended by inserting
``packaging,'' after ``concealing,''.
(b) Determination of Drug Paraphernalia.--Section 422(e)(4) of the Controlled Substances Act (21 U.S.C. 863(e)(4)) is amended by adding the following after ``sale'': ``including, but not limited to, whether the item displays any name brand, insignia or other indicator which is associated with illegal drugs or which is used to advertise or identify an illegal drug''.
(c) Clerical Amendments.--(1) Section 511(a)(10) of the Controlled Substances Act (21 U.S.C. 881(a)(10)) is amended by striking all after ``as defined in'' and inserting
``section 422 of this title.''.
(2) Section 422 of the Controlled Substances Act (21 U.S.C. 881(a)(10)) is amended--
(A) by deleting subsection (c); and
(B) by redesignating subsections (d), (e), and (f) as subsections (c), (d), and (e), respectively.
SEC. 2304. COUNTERFEIT SUBSTANCES/IMITATION CONTROLLED
SUBSTANCES.
(a) Section 102(7) of the Controlled Substances Act (21 U.S.C. 802(7)) is amended by--
(1) inserting ``(A)'' after ``(7)'';
(2) designating the text after ``a controlled substance'' as clause (i);
(3) inserting ``characteristic,'' after ``number,'';
(4) striking the period at the end and inserting a semicolon; and
(5) adding at the end the following:
``(ii) which falsely purports or is represented to be a different controlled substance; or
``(iii) which is manufactured or designed in such a manner, or is distributed, dispensed, or otherwise transferred under such circumstances, such that a reasonable person would believe that the substance is a different controlled substance.
``(B) The term `imitation controlled substance' means a substance, which is not a controlled substance, that is represented (expressly or by implication) to be a controlled substance.
``(C) The term `imitation controlled substance' does not include a placebo which is directly applied to the body of a research subject or a patient or which is delivered to a research subject or a person for his own use, by, or pursuant to the order of, a practitioner for a lawful purpose.''.
(b) Section 102(8) of the Controlled Substances Act (21 U.S.C. 802(8)) is amended by inserting ``, an imitation controlled substance,'' after ``controlled substance''.
(c) Section 102(11) of the Controlled Substances Act (21 U.S.C. 802(11)) is amended by--
(1) inserting ``to deliver an imitation controlled substance or'' after ``controlled substance or'' in the first sentence; and
(2) inserting ``, an imitation controlled substance,'' after ``controlled substance'' in the second sentence.
(d) Section 102(44) of the Controlled Substances Act (21 U.S.C. 802(44)) is amended by--
(1) striking ``or'' after ``marihuana,''; and
(2) inserting ``, anabolic agents, or listed chemicals, or an offense that is punishable by imprisonment for more than one year under any provision of this title or title III'' after ``stimulant substances''.
(e) Section 401(a) of the Controlled Substances Act (21 U.S.C. 841(a)) is amended by--
(1) striking ``or'' at the end of paragraph (1);
(2) striking ``create'' in paragraph (2) and inserting
``manufacture'';
(3) inserting ``manufacture,'' after ``intent to'' in paragraph (2);
(4) striking the period at the end of paragraph (2) and inserting ``; or'' ; and
(5) adding at the end the following paragraph:
``(3) to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute or dispense, an imitation controlled substance.''.
(f) Section 401(b) of the Controlled Substances Act (21 U.S.C. 841(b) is amended by redesignating paragraphs (4) through (7) as paragraphs (6) through (9) and inserting after paragraph (3) the following:
``(4)(A) In the case of a counterfeit substance, such person shall be sentenced in accordance with this section based on the controlled substance which the counterfeit substance is represented to be or based on the controlled substance which is actually contained in the counterfeit substance, whichever provides the greater sentence.
``(B) Paragraph (5)(B) of this subsection may be applied to make a determination that a controlled substance is a counterfeit substance.
``(5)(A) In the case of an imitation controlled substance, such person shall be sentenced to a term of imprisonment or a fine, or both, which does not exceed one-half of the maximum term of imprisonment and fine which would apply under this section to the controlled substance which the imitation controlled substance is represented to be. The minimum period of supervised release for such person shall be one-half of that which would apply under this section to the controlled substance which the imitation controlled substance is represented to be.
``(B) In the case of a violation of this title or title III involving an imitation controlled substance, the following provisions shall apply:
``(i) The trier of fact may consider the following factors in addition to any other factor that may be relevant for purposes of determining whether a substance was an imitation controlled substance. The presence of any two of the following factors shall be prima facie evidence that the substance was an imitation controlled substance; however, the presence of two factors is not required for a determination that a substance is an imitation controlled substance:
``(I) The person in control of the substance expressly or impliedly represents that the substance is a controlled substance or has the effect of a controlled substance;
``(II) The person in control of the substance expressly or impliedly represents that the substance because of its nature or appearance can be sold, delivered or used as a controlled substance or as a substitute for a controlled substance;
``(III) The person in control of the substance utilizes evasive tactics or actions to avoid detection by law enforcement authorities or other authorities such as school authorities;
``(IV) The physical appearance of the substance is, or is designed to be, substantially identical to a specific controlled substance. This may be determined by such factors as color, shape, size, markings, taste, odor, consistency, packaging, labeling, or other identifying characteristics;
``(V) The substance is packaged or distributed in a manner normally used for the illegal distribution of controlled substances; or
``(VI) The distribution or attempted distribution includes an exchange or demand for money or other property as consideration, and the amount of the consideration is substantially greater than the reasonable retail market value of the substance.
``(ii) It shall not constitute a defense that the accused believed the imitation controlled substance to actually be a controlled substance.''.
(g) Section 403 of the Controlled Substances Act (21 U.S.C. 843) is amended--
(1) in paragraph (a)(2), by inserting ``or list I chemical'' after ``controlled substance'' each place it appears;
(2) in paragraph (a)(3), by inserting ``or a laboratory supply (as defined in section 402(a) of this title)'' after
``controlled substance''; and
(3) in paragraph (a)(5) by--
(A) inserting ``or substance'' after ``drug'' both places it appears; and
(B) inserting ``or an imitation controlled substance'' after ``counterfeit substance''.
(h) Section 506(a) of the Controlled Substances Act (21 U.S.C. 876(a)) is amended by inserting ``, imitation controlled substances,'' after ``controlled substances''.
(i) Section 509 of the Controlled Substances Act (21 U.S.C. 879) is amended by inserting ``imitation controlled substances, or listed chemicals'' after ``controlled substances''.
(j)(1) Section 511(a) of the Controlled Substances Act (21 U.S.C. 881(a)) is amended--
(A) in paragraph (1), by inserting ``and imitation controlled substances'' after ``controlled substances'';
(B) in paragraph (2), by inserting ``, imitation controlled substance,'' after ``controlled substance'';
(C) in paragraph (6), by inserting ``, imitation controlled substance,'' after ``controlled substance''; and
(D) in paragraph (8), by inserting ``and imitation controlled substances'' after ``controlled substances''.
(2) Section 607(a)(3) of the Tariff Act of 1930 (19 U.S.C. 1607(a)(3)) is amended by inserting ``, imitation controlled substance,'' after ``controlled substance''.
(3) Section 607(b) of the Tariff Act of 1930 (19 U.S.C. 1607(b)) is amended by inserting ``, `imitation controlled substance','' after `` `controlled substance' ''.
(k) Section 1010(a) of the Controlled Substances Act (21 U.S.C. 960(a)) is amended--
(1) in paragraph (2), by striking ``or'' at the end;
(2) in paragraph (3), by inserting ``or'' after
``substance,''; and
(3) by inserting after paragraph (3) the following:
``(4) knowingly or intentionally imports or exports a counterfeit substance or an imitation controlled substance,''.
(l) Section 2516(1)(e) of title 18, United States Code, is amended by inserting ``or a violation of the Controlled Substances Act (21 U.S.C. 801 et seq.) or the Controlled Substances Import and Export Act (21 U.S.C. 851, et seq.)'' after ``United States''.
SEC. 2305. CONFORMING AMENDMENT CONCERNING MARIJUANA PLANTS.
Section 1010(b)(4) of the Controlled Substances Import and Export Act (21 U.S.C. 960(b)(4)) is amended by striking
``except in the case of 100 or more marijuana plants'' and inserting ``except in the case of 50 or more marijuana plants''.
SEC. 2306. SERIOUS JUVENILE DRUG TRAFFICKING OFFENSES AS
ARMED CAREER CRIMINAL ACT PREDICATES.
Section 924(e)(2)(C) of title 18, United States Code, is amended by inserting ``or serious drug offense'' after
``violent felony''.
SEC. 2307. INCREASED PENALTIES FOR USING FEDERAL PROPERTY TO
GROW OR MANUFACTURE CONTROLLED SUBSTANCES.
(a) In General.--Section 401(b)(5) of the Controlled Substances Act (21 U.S.C. 841(b)(5)) is amended to read as follows:
``(5) Any person who violates subsection (a) of this section by cultivating or manufacturing a controlled substance on any property in whole or in part owned by or leased to the United States or any department or agency thereof shall be subject to twice the maximum punishment otherwise authorized for the offense.''.
(b) Sentencing Enhancement.--
(1) In general.--Pursuant to its authority under section 994(p) of title 28, United States Code, the United States Sentencing Commission shall amend the Federal sentencing guidelines to provide an appropriate sentencing enhancement for any offense under section 401(b)(5) of the Controlled Substances Act (21 U.S.C. 841(b)(5)) that occurs on Federal property.
(2) Consistency.--In carrying out this section, the United States Sentencing Commission shall--
(A) ensure that there is reasonable consistency with other Federal sentencing guidelines; and
(B) avoid duplicative punishment for substantially the same offense.
SEC. 2308. CLARIFICATION OF LENGTH OF SUPERVISED RELEASE
TERMS IN CONTROLLED SUBSTANCE CASES.
Subparagraphs (A) through (D) of section 401(b)(1) of the Controlled Substances Act (21 U.S.C. 841(b)(1)) are each amended by striking ``Any sentence'' and inserting
``Notwithstanding section 3583 of title 18, any sentence''.
SEC. 2309. SUPERVISED RELEASE PERIOD AFTER CONVICTION FOR
CONTINUING CRIMINAL ENTERPRISE.
Section 848(a) of title 21, United States Code, is amended by adding to the end of the following: ``Any sentence under this paragraph shall, in the absence of such a prior conviction, impose a term of supervised release of not less than 10 years in addition to such term of imprisonment and shall, if there was such a prior conviction, impose a term of supervised release of not less than 15 years in addition to such term of imprisonment.''.
SEC. 2310. TECHNICAL CORRECTION TO ENSURE COMPLIANCE OF
SENTENCING GUIDELINES WITH PROVISIONS OF ALL
FEDERAL STATUTES.
Section 994(a) of title 28, United States Code, is amended by striking ``consistent with all pertinent provisions of this title and title 18, United States Code,'' and inserting
``consistent with all pertinent provisions of any Federal statute''.
SEC. 2311. IMPORT AND EXPORT OF CHEMICALS USED TO PRODUCE
ILLICIT DRUGS.
(a) Notification Requirements.--Section 1018 of the Controlled Substances Import and Export Act (21 U.S.C. 971) is amended--
(1) by amending subsection (a) to read as follows:
``(a) Each person who proposes to engage in a transaction involving the importation or exportation of a listed chemical which requires advance notification pursuant to the regulations of the Attorney General or the importation or exportation of a tableting machine or an encapsulating machine shall notify the Attorney General of the importation or exportation not later than 15 days before the transaction is to take place in such form and supplying such information as the Attorney General shall require by regulation; in the case of an importation for transfer or transshipment pursuant to section 1004 of this title, such notice will be made as provided in that section.'';
(2) in subsection (c)(1)--
(A) by striking the phrase ``(other than a regulated transaction to which the requirement of subsection (a) of this section does not apply by reason of subsection (b) of this section)'';
(B) by inserting ``, a tableting machine or an encapsulating machine'' after ``a listed chemical''; and
(C) by inserting ``, tableting machine, or encapsulating machine'' after ``the chemical''; and
(3) in subsection (e)--
(A) by redesignating paragraphs (2) and (3) as paragraphs
(4) and (5);
(B) by inserting after paragraph (1) new paragraphs (2) and
(3) as follows:
``(2) The Attorney General may by regulation require that the 15-day notification requirement of subsection (a) apply to all imports of a listed chemical, regardless of the status of certain importers of that listed chemical as regular importers, if the Attorney General finds that such notification is necessary to support effective chemical diversion control programs or is required by treaty or other international agreement to which the United States is a party.
``(3) The Attorney General may require that the notification requirement of subsection (a) for certain importations or exportations, including those subject to section 1004 of this title, include additional information to enable a determination to be made that the listed chemical being imported or exported will be used for a legitimate purpose or when such information is needed to satisfy requirements of the importing or exporting country. The Attorney General will provide notice of these additional requirements specifically identifying the listed chemicals and countries involved.''.
(b) Transshipment.--Section 1004 of the Controlled Substances Import and Export Act (21 U.S.C. 954) is amended to read as follows:
``Sec. 954. Transshipment and in-transit shipment of controlled substances
``(a) Notwithstanding sections 952, 953, 957 and 971 of this title, except as provided below--
``(1) A controlled substance in schedule I may be imported into the United States--
``(A) for transshipment to another country, or
``(B) for transference or transshipment from one vessel, vehicle, or aircraft to another vessel, vehicle, or aircraft within the United States for immediate exportation, if and only if (i) evidence is furnished which enables the Attorney General to determine that the substance being so imported, transferred, or transshipped will be used for scientific, medical, or other legitimate purposes in the country of destination, and (ii) it is so imported, transferred, or transshipped with the prior written approval of the Attorney General (which shall be granted or denied within 21 days of the request) based on a determination that the requirements of this section and the applicable subsections of sections 952 and 953 have been satisfied.
``(2) A controlled substance in schedule II, III, or IV or a listed chemical may be so imported, transferred, or transshipped if and only evidence is furnished which enables the Attorney General to determine that the substance or chemical being so imported, transferred, or transshipped will be used for scientific, medical, or other legitimate purposes in the country of destination and (ii) advance notification is given to the Attorney General not later than 15 days prior to the exportation of the substance or chemical from the foreign port of embarkation (the notification period for imports other than for transfer or transshipment pursuant to section 1002 or 1018 of this title is not affected by this subsection). Such notification shall be in such form and contain such information as the Attorney General may require by regulation.
``(b)(1) Any such importation, transfer or transshipment of a controlled substance shall be subject to the applicable subsections of sections 1002 and 1003 of this title. The importation, transfer, transshipment or exportation of any controlled substance may be suspended on the ground that the controlled substance may be diverted to other than scientific, medical or other legitimate purposes.
``(2) Any such importation, transfer or transshipment of a listed chemical shall be subject to all the requirements of section 1018 of this title, except that in no case shall the 15-day advance notification requirement be waived. The importation, transfer, transshipment or exportation of a listed chemical may be suspended on the ground that the chemical may be diverted to the clandestine manufacture of a controlled substance.
``(3) Any such importation, transfer or transshipment of a controlled substance or listed chemical may be suspended if any requirement of subsection (a) is not satisfied. The Attorney General may withdraw a suspension order issued under this paragraph if (A) the requirements of subsection (a) are ultimately satisfied and (B) no grounds exist under paragraphs (1) or (2) of this subsection to suspend the shipment.
``(c) The suspension of any exportation of a controlled substance or listed chemical will be subject to the procedures and requirements established in section 1018(c) of this title.
``(d) Any shipment of a controlled substance or listed chemical which has been imported or is subject to the jurisdiction of the United States whose importation, transfer, transshipment or exportation has been suspended may, in the discretion of the Attorney General, be placed under seal. No disposition may be made of any such controlled substance or listed chemical until the suspension order becomes final. However, a court, upon application therefor, may at any time order the sale of a perishable controlled substance or listed chemical. Any such order shall require the deposit of the proceeds of the sale with the court. Upon a suspension order becoming final, the shipment may be disposed of as follows, at the discretion of the Attorney General and subject to such conditions as the Attorney General may impose:
``(1) The title holder may be allowed to return the shipment to any of the original exporter's facilities in the country of exportation;
``(2) The shipment may be exported, subject to the requirements of section 1003 or 1018 of this title, as appropriate, to a new consignee;
``(3) The shipment may be surrendered to the Attorney General for appropriate disposition; all costs associated with this disposition will be the responsibility of the title holder, however if there are any proceeds from the disposition, these will be applied to the repayment of the costs and any excess proceeds will be returned to the titleholder;
``(4) If sufficient cause exists, the shipment of controlled substances or listed chemicals (or proceeds of sale deposited in court) may be forfeited to the United States pursuant to section 511 of title II and may be disposed of in accordance with that section.
``(e) Nothing in this section may be used by any party to defend against a forfeiture action against a shipment of controlled substances or listed chemicals initiated by the United States or by any state. This section does not affect the liability of any party for storage and transportation costs incurred by the Government as a result of the suspension of a shipment.''.
(c) Penalties.--Section 1010(d) of the Controlled Substances Import and Export Act (21 U.S.C. 960(d)) is amended--
(1) by redesignating paragraphs (5), (6) and (7) as paragraphs (6), (7) and (8);
(2) in the redesignated paragraph (6), by striking
``1018(e)(2) or (3)'' and inserting ``1018(e)(4) or (5)'';
(3) in the redesignated paragraph (7), by inserting ``or violates section 1004 of this title,'' after ``1007 or 1018 of this title''; and
(4) by inserting after paragraph (4) a new paragraph (5) as follows:
``(5) imports or exports a listed chemical, with the intent to evade the reporting or recordkeeping requirements of section 1018 applicable to such importation or exportation by falsely representing to the Attorney General that the importation or exportation is not subject to the 15-day advance notification required by section 1018(a) or to any reporting requirements established by the Attorney General pursuant to section 1018(e) (1), (2) or (3) by misrepresenting the actual country of final destination of the listed chemical, or the actual listed chemical being imported or exported; or''.
(d) Section 1011 of the Controlled Substances Import and Export Act (21 U.S.C. 961) is amended to read as follows:
``Sec. 1011. Injunctions
``In addition to any other applicable penalty, any person convicted of a felony violation of this title or title II relating to the receipt, distribution, manufacture, importation or exportation of a listed chemical may be enjoined from engaging in any transaction involving a listed chemical for not more than ten years.''.
Subtitle D--Deterring Cargo Theft
SEC. 2351. PUNISHMENT OF CARGO THEFT.
(a) In General.--Section 659 of title 18, United States Code, is amended--
(1) by striking ``with intent to convert to his own use'' each place that term appears;
(2) in the first undesignated paragraph--
(A) by inserting ``trailer,'' after ``motortruck,'';
(B) by inserting ``air cargo container,'' after
``aircraft,''; and
(C) by inserting ``, or from any intermodal container, trailer, container freight station, warehouse, or freight consolidation facility,'' after ``air navigation facility'';
(3) in the fifth undesignated paragraph, by striking ``one year'' and inserting ``3 years'';
(4) in the penultimate undesignated paragraph, by inserting after the first sentence the following: ``For purposes of this section, goods and chattel shall be construed to be moving as an interstate or foreign shipment at all points between the point of origin and the final destination (as evidenced by the waybill or other shipping document of the shipment), regardless of any temporary stop while awaiting transshipment or otherwise.''; and
(5) by adding at the end the following:
``It shall be an affirmative defense (on which the defendant bears the burden of persuasion by a preponderance of the evidence) to an offense under this section that the defendant bought, received, or possessed the goods, chattels, money, or baggage at issue with the sole intent to report the matter to an appropriate law enforcement officer or to the owner of the goods, chattels, money, or baggage.''.
(b) Federal Sentencing Guidelines.--Pursuant to section 994 of title 28, United States Code, the United States Sentencing Commission shall review the Federal sentencing guidelines under section 659 of title 18, United States Code, as amended by this section and, upon completion of the review, promulgate amendments to the Federal Sentencing Guidelines to provide appropriate enhancement of the applicable guidelines.
SEC. 2352. REPORTS TO CONGRESS ON CARGO THEFT.
The Attorney General shall annually submit to Congress a report, which shall include an evaluation of law enforcement activities relating to the investigation and prosecution of offenses under section 659 of title 18, United States Code, as amended by this subtitle.
SEC. 2353. ESTABLISHMENT OF ADVISORY COMMITTEE ON CARGO
THEFT.
(a) Establishment.--
(1) In general.--There is established a Committee to be known as the Advisory Committee on Cargo Theft (in this section referred to as the ``Committee'').
(2) Membership.--
(A) Composition.--The Committee shall be composed of 6 members, who shall be appointed by the President, of whom--
(i) 1 shall be an officer or employee of the Department of Justice;
(ii) 1 shall be an officer or employee of the Department of Transportation;
(iii) 1 shall be an officer or employee of the Department of the Treasury; and
(iv) 3 shall be individuals from the private sector who are experts in cargo security.
(B) Date.--The appointments of the initial members of the Committee shall be made not later than 30 days after the date of enactment of this Act.
(3) Period of appointment; vacancies.--Each member of the Committee shall be appointed for the life of the Committee. Any vacancy in the Committee shall not affect its powers, but shall be filled in the same manner as the original appointment.
(4) Initial meeting.--Not later than 15 days after the date on which all initial members of the Committee have been appointed, the Committee shall hold its first meeting.
(5) Meetings.--The Committee shall meet, not less frequently than quarterly, at the call of the Chairperson.
(6) Quorum.--A majority of the members of the Committee shall constitute a quorum, but a lesser number of members may hold hearings.
(7) Chairperson.--The President shall select 1 member of the Committee to serve as the Chairperson of the Committee.
(b) Duties.--
(1) Study.--The Committee shall conduct a thorough study of, and develop recommendations with respect to, all matters relating to--
(A) the establishment of a national computer database for the collection and dissemination of information relating to violations of section 659 of title 18, United States Code (as added by section 3801(a) of this title); and
(B) the establishment of an office within the Federal Government to promote cargo security and to increase coordination between the Federal Government and the private sector with respect to cargo security.
(2) Report.--Not later than 1 year after the date of enactment of this Act, the Committee shall submit to the President and to Congress a report, which shall contain a detailed statement of results of the study and the recommendations of the Committee under paragraph (1).
(c) Powers.--
(1) Hearings.--The Committee may hold such hearings, sit and act at such times and places, take such testimony, and receive such evidence as the Committee considers advisable to carry out the purposes of this section.
(2) Information from federal agencies.--The Committee may secure directly from any Federal department or agency such information as the Committee considers necessary to carry out the provisions of this section. Upon request of the Chairperson of the Committee, the head of such department or agency shall furnish such information to the Committee.
(3) Postal services.--The Committee may use the United States mails in the same manner and under the same conditions as other departments and agencies of the Federal Government.
(4) Gifts.--The Committee may accept, use, and dispose of gifts or donations of services or property.
(d) Personnel Matters.--
(1) Compensation of members.--
(A) Non-federal members.--Each member of the Committee who is not an officer or employee of the Federal Government shall be compensated at a rate equal to the daily equivalent of the annual rate of basic pay prescribed for level IV of the Executive Schedule under section 5315 of title 5, United States Code, for each day (including travel time) during which such member is engaged in the performance of the duties of the Committee.
(B) Federal members.--Each member of the Committee who is an officer or employee of the United States shall serve without compensation in addition to that received for their service as an officer or employee of the United States.
(2) Travel expenses.--The members of the Committee shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, while away from their homes or regular places of business in the performance of services for the Committee.
(3) Staff.--
(A) In general.--The Chairperson of the Committee may, without regard to the civil service laws and regulations, appoint and terminate an executive director and such other additional personnel as may be necessary to enable the Committee to perform its duties. The employment of an executive director shall be subject to confirmation by the Committee.
(B) Compensation.--The Chairperson of the Committee may fix the compensation of the executive director and other personnel without regard to the provisions of chapter 51 and subchapter III of chapter 53 of title 5, United States Code, relating to classification of positions and General Schedule pay rates, except that the rate of pay for the executive director and other personnel may not exceed the rate payable for level V of the Executive Schedule under section 5316 of such title.
(4) Detail of government employees.--Any Federal Government employee may be detailed to the Committee without reimbursement, and such detail shall be without interruption or loss of civil service status or privilege.
(5) Procurement of temporary and intermittent services.--The Chairperson of the Committee may procure temporary and intermittent services under section 3109(b) of title 5, United States Code, at rates for individuals which do not exceed the daily equivalent of the annual rate of basic pay prescribed for level V of the Executive Schedule under section 5316 of such title.
(e) Termination.--The Committee shall terminate 90 days after the date on which the Committee submits the report under subsection (b)(2).
(f) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated such sums as may be necessary to the Committee to carry out the purposes of this section.
(2) Availability.--Any sums appropriated under the authorization contained in this section shall remain available, without fiscal year limitation, until expended.
SEC. 2354. ADDITION OF ATTEMPTED THEFT AND COUNTERFEITING
OFFENSES TO ELIMINATE GAPS AND INCONSISTENCIES
IN COVERAGE.
(a) In General.--
(1) Embezzlement against estate.--Section 153(a) of title 18, United States Code, is amended by inserting ``, or attempts so to appropriate, embezzle, spend, or transfer,'' before ``any property''.
(2) Public money.--Section 641 of title 18, United States Code, is amended by striking ``or'' at the end of the first paragraph and by inserting after such paragraph the following:
``Whoever attempts to commit an offense described in the preceding paragraph; or''.
(3) Theft by bank examiner.--Section 655 of title 18, United States Code, is amended by inserting ``or attempts to steal or so take,'' after ``unlawfully takes,''.
(4) Theft, embezzlement, or misapplication by bank officer or employee.--Sections 656 and 657 of title 18, United States Code, are each amended--
(A) by inserting ``, or attempts to embezzle, abstract, purloin, or willfully misapply,'' after ``willfully misapplies''; and
(B) by inserting ``or attempted to be embezzled, abstracted, purloined, or misapplied'' after ``misapplied''.
(5) Property mortgaged or pledged to farm credit agencies.--Section 658 of title 18, United States Code, is amended by inserting ``or attempts so to remove, dispose of, or convert,'' before ``any property''.
(6) Interstate or foreign shipments.--Section 659 of title 18, United States Code, is amended--
(A) in the first and third paragraphs, by inserting ``or attempts to embezzle, steal, or so take or carry away,'' after ``carries away,''; and
(B) in the fourth paragraph by inserting ``or attempts to embezzle, steal, or so take,'' before ``from any railroad car''.
(7) Within special maritime and territorial jurisdiction.--Section 661 of title 18, United States Code, is amended--
(A) by inserting ``or attempts so to take and carry away,'' before ``any personal property''; and
(B) by inserting ``or attempted to be taken'' after
``taken'' each place it appears.
(8) Theft or embezzlement from employee benefit plans.--Section 664 of title 18, United States Code, is amended by inserting ``or attempts to embezzle, steal, or so abstract or convert,'' before ``any of the moneys''.
(9) Theft or embezzlement from employment and training funds.--Section 665(a) of title 18, United States Code, is amended--
(A) by inserting ``, or attempts to embezzle, so misapply, steal, or obtain by fraud,'' before ``any of the moneys''; and
(B) by inserting ``or attempted to be embezzled, misapplied, stolen, or obtained by fraud'' after ``obtained by fraud''.
(10) Theft or bribery concerning programs receiving federal funds.--Section 666(a)(1)(A) of title 18, United States Code, is amended by inserting ``or attempts to embezzle, steal, obtain by fraud, or so convert or misapply,'' before
``property''.
(11) False pretenses on high seas.--Section 1025 of title 18, United States Code, is amended--
(A) by inserting ``or attempts to obtain'' after
``obtains''; and
(B) by inserting ``or attempted to be obtained'' after
``obtained''.
(12) Embezzlement and theft from indian tribal organizations.--Section 1163 of title 18, United States Code, is amended by inserting ``attempts so to embezzle, steal, convert, or misapply,'' after ``willfully misapplies,''.
(13) Theft from group establishments on indian lands.--Section 1167 (a) and (b) of title 18, United States Code, are each amended by inserting ``or attempts so to abstract, purloin, misapply, or take and carry away,'' before ``any money''.
(14) Theft by officers and employees of gaming establishments on indian lands.--Section 1168 (a) and (b) of title 18, United States Code, are each amended by inserting
``or attempts so to embezzle, abstract, purloin, misapply, or take and carry away,'' before ``any moneys,''.
(15) Theft of property used by the postal service.--Section 1707 of title 18, United States Code, is amended by inserting
``, or attempts to steal, purloin, or embezzle,'' before
``any property'' and by inserting ``or attempts to appropriate'' after ``appropriates''.
(16) Theft in receipt of stolen mail matter.--Section 1708 of title 18, United States Code, is amended in the second paragraph by inserting ``or attempts to steal, take, or abstract,'' after ``abstracts,'' and by inserting ``, or attempts so to obtain,'' after ``obtains''.
(17) Theft of mail matter by officer or employee.--Section 1709 of title 18, United States Code, is amended--
(A) by inserting ``or attempts to embezzle'' after
``embezzles''; and
(B) by inserting ``, or attempts to steal, abstract, or remove,'' after ``removes''.
(18) Misappropriation of postal funds.--Section 1711 of title 18, United States Code, is amended by inserting ``or attempts to loan, use, pledge, hypothecate, or convert to his own use,'' after ``use''.
(19) Bank robbery and incidental crimes.--Section 2113(b) of title 18, United States Code, is amended by inserting ``or attempts so to take and carry away,'' before ``any property'' each place it appears.
(b) Securities Crimes.--
(1) Possession of tools.--Section 477 of title 18, United States Code, is amended by inserting ``, or attempts so to sell, give, or deliver,'' before ``any such imprint''.
(2) Uttering counterfeit foreign obligations or securities.--Section 479 of title 18, United States Code, is amended by inserting ``or attempts to utter or pass,'' after
``passes,''.
(3) Minor coins.--Section 490 of title 18, United States Code, is amended by inserting
``attempts to pass, utter, or sell,'' before ``or possesses''.
(4) Securities of states and private entities.--Section 513(a) of title 18, United States Code, is amended by inserting ``or attempts to utter,'' after ``utters''.
SEC. 2355. CLARIFICATION OF SCIENTER REQUIREMENT FOR
RECEIVING PROPERTY STOLEN FROM AN INDIAN TRIBAL
ORGANIZATION.
Section 1163 of title 18, United States Code, is amended in the second paragraph by striking ``so''.
SEC. 2356. LARCENY INVOLVING POST OFFICE BOXES AND POSTAL
STAMP VENDING MACHINES.
Section 2115 of title 18, United States Code, is amended--
(1) by striking ``or'' before ``any building'';
(2) by inserting ``or any post office box or postal stamp vending machine for the sale of stamps owned by the Postal Service,'' after ``used in whole or in part as a post office,''; and
(3) by inserting ``or in such box or machine,'' after ``so used''.
SEC. 2357. EXPANSION OF FEDERAL THEFT OFFENSES TO COVER THEFT
OF VESSELS.
(a) Vessel Defined.--Section 2311 of title 18, United States Code, is amended by adding at the end the following:
`` `Vessel' means any watercraft or other contrivance used or designed for transportation or navigation on, under, or immediately above, water.''.
(b) Transportation of Stolen Vehicles; Sale or Receipt of Stolen Vehicles.--Sections 2312 and 2313 of title 18, United States Code, are each amended by striking ``motor vehicle or aircraft'' and inserting ``motor vehicle, vessel, or aircraft''.
Subtitle E--Improvements to Federal Criminal Law
PART 1--SENTENCING IMPROVEMENTS
SEC. 2411. APPLICATION OF SENTENCING GUIDELINES TO ALL
PERTINENT STATUTES.
Section 994(a) of title 28, United States Code, is amended by striking ``consistent with all pertinent provisions of this title and title 18, United States Code,'' and inserting
``consistent with all pertinent provisions of any Federal statute''.
SEC. 2412. DOUBLING MAXIMUM PENALTY FOR VOLUNTARY
MANSLAUGHTER.
Section 1112(b) of title 18, United States Code, is amended by striking ``ten years'' and inserting ``20 years''.
SEC. 2413. AUTHORIZATION OF IMPOSITION OF BOTH A FINE AND
IMPRISONMENT RATHER THAN ONLY EITHER PENALTY IN
CERTAIN OFFENSES.
(a) Power of Court.--Section 401 of title 18, United States Code, is amended by inserting ``or both,'' after ``fine or imprisonment,''.
(b) Destruction of Letter Boxes or Mail.--Section 1705 of title 18, United States Code, is amended by inserting ``, or both'' after ``years''.
(c) Other Sections.--Sections 1916, 2234, and 2235 of title 18, United States Code, are each amended by inserting ``, or both'' after ``year''.
SEC. 2414. ADDITION OF SUPERVISED RELEASE VIOLATION AS
PREDICATES FOR CERTAIN OFFENSES.
(a) In General.--Sections 1512(a)(1)(C), 1512(b)(3), 1512(c)(2), 1513(a)(1)(B), and 1513(b)(2) are each amended by striking ``violation of conditions of probation, parole or release pending judicial proceedings'' and inserting
``violation of conditions of probation, supervised release, parole, or release pending judicial proceedings''.
(b) Release or Detention of Defendant Pending Trial.--Section 3142 of title 18, United States Code, is amended--
(1) in subsection (d)(1)(A)(iii), by inserting ``, supervised release,'' after ``probation''; and
(2) in subsection (g)(3)(B), by inserting ``or supervised release'' after ``probation''.
SEC. 2415. AUTHORITY OF COURT TO IMPOSE A SENTENCE OF
PROBATION OR SUPERVISED RELEASE WHEN REDUCING A
SENTENCE OF IMPRISONMENT IN CERTAIN CASES.
Section 3582(c)(1)(A) of title 18, United States Code, is amended by inserting ``(and may impose a sentence of probation or supervised release with or without conditions)'' after ``may reduce the term of imprisonment''.
SEC. 2416. ELIMINATION OF PROOF OF VALUE REQUIREMENT FOR
FELONY THEFT OR CONVERSION OF GRAND JURY
MATERIAL.
Section 641 of title 18, United States Code, is amended by striking ``but if the value of such property does not exceed the sum of $1,000, he'' and inserting ``but if the value of such property, other than property constituting `matters occurring before the grand jury' within the meaning of Rule 6(e) of the Federal Rules of Criminal Procedure, does not exceed the sum of $1,000,''.
SEC. 2417. INCREASED MAXIMUM CORPORATE PENALTY FOR ANTITRUST
VIOLATIONS.
(a) Restraint of Trade Among the States.--Section 1 of the Sherman Act (15 U.S.C. 1) is amended by striking
``$10,000,000'' and inserting ``$100,000,000''.
(b) Monopolizing Trade.--Section 2 of the Sherman Act (15 U.S.C. 2) is amended by striking ``$10,000,000'' and inserting ``$100,000,000''.
(c) Other Restraints.--Section 3 of the Sherman Act (15 U.S.C. 3) is amended by striking ``$10,000,000'' and inserting ``$100,000,000''.
SEC. 2418. AMENDMENT OF FEDERAL SENTENCING GUIDELINES FOR
COUNTERFEIT BEARER OBLIGATIONS OF THE UNITED
STATES.
(a) In General.--Pursuant to its authority under section 994(p) of title 28, United States Code, the United States Sentencing Commission shall review and if appropriate, amend the Federal sentencing guidelines generally to enhance the penalty for offenses involving counterfeit bearer obligation of the United States.
(b) Factors for Consideration.--In carrying out this section, the Commission shall consider, with respect to the offenses described in subsection (a)--
(1) whether the base offense level in the current guidelines is adequate to address the serious nature of these offenses and the public interest in protecting the integrity of United States currency, especially in light of recent technological advancements in counterfeiting methods that decrease the cost and increase the availability of such counterfeiting methods to criminals;
(2) whether the current specific offense characteristic applicable to manufacturing counterfeit obligations fails to take into account the range of offenses in this category; and
(3) any other factor that the Commission considers to be appropriate.
(c) Emergency Authority to Sentencing Commission.--The Commission shall promulgate the guidelines or amendments provided for under this section as soon as is practicable in accordance with the procedure set forth in section 21(a) of the Sentencing Act of 1987, as though the authority under that Act had not expired.
PART 2--ADDITIONAL IMPROVEMENTS TO FEDERAL CRIMINAL LAW
SEC. 2421. VIOLENCE DIRECTED AT DWELLINGS IN INDIAN COUNTRY.
Section 1153(a) of title 18, United States Code, is amended by inserting ``or 1363'' after ``section 661''.
SEC. 2422. CORRECTIONS TO AMBER HAGERMAN CHILD PROTECTION
ACT.
(a) Aggravated Sexual Abuse.--Section 2241(c) of title 18, United States Code, is amended by striking ``younger than that person'' and inserting ``younger than the person so engaging''.
(b) Sexual Abuse of a Minor or Ward.--Section 2243(a) of title 18, United States Code, is amended--
(1) by striking ``Whoever'' and inserting ``Except as provided in section 2241(c) of this title, whoever''; and
(2) by striking ``crosses a State line with intent to engage in a sexual act with a person who has not attained the age of 12 years, or''.
(c) Definitions.--Section 2246 of title 18, United States Code, is amended--
(1) in paragraph (4), by striking the period and inserting a semicolon;
(2) in paragraph (5), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(6) the term `State' means a State of the United States, the District of Columbia, and any commonwealth, possession, or territory of the United States.''.
SEC. 2423. ELIMINATION OF ``BODILY HARM'' ELEMENT IN ASSAULT
WITH A DANGEROUS WEAPON OFFENSE.
Section 113(a)(3) of title 18, United States Code, is amended by striking ``with intent to do bodily harm, and''.
SEC. 2424. APPEALS FROM CERTAIN DISMISSALS.
Section 3731 of title 18, United States Code, is amended by inserting ``or any part thereof'' after ``as to any one or more counts''.
SEC. 2425. AUTHORITY FOR INJUNCTION AGAINST DISPOSAL OF ILL-
GOTTEN GAINS FROM VIOLATIONS OF FRAUD STATUTES.
Section 1345(a)(2) of title 18, United States Code, is amended by inserting ``violation of this chapter or section 287, 371 (insofar as such violation involves a conspiracy to defraud the United States or any agency thereof), or 1001 of this title or of a'' after ``as a result of a''.
SEC. 2426. EXPANSION OF INTERSTATE TRAVEL FRAUD STATUTE TO
COVER INTERSTATE TRAVEL BY PERPETRATOR.
Section 2314 of title 18, United States Code, is amended in the second undesignated paragraph--
(1) by inserting ``travels in,'' before ``transports or causes to be transported, or induce any person or persons to travel in''; and
(2) by inserting a comma after ``transports''.
SEC. 2427. CLARIFICATION OF SCOPE OF UNAUTHORIZED SELLING OF
MILITARY MEDALS OR DECORATIONS.
Section 704(b)(2) of title 18, United States Code, is amended by striking ``with respect to a Congressional Medal of Honor''.
SEC. 2428. AMENDMENT TO SECTION 669 TO CONFORM TO PUBLIC LAW
104-294.
Section 669 of title 18, United States Code, is amended by striking ``$100'' and inserting ``$1,000''.
SEC. 2429. EXPANSION OF JURISDICTION OVER CHILD BUYING AND
SELLING OFFENSES.
Section 2251A(c)(3) of title 18, United States Code, is amended by striking ``in any territory or possession of the United States'' and inserting ``in the special maritime and territorial jurisdiction of the United States or in any commonwealth, territory, or possession of the United States''. SEC. 2430. LIMITS ON DISCLOSURE OF WIRETAP ORDERS.
Section 2518(9) of title 18, United States Code, is amended by inserting ``aggrieved'' before the word ``party'' wherever it appears.
SEC. 2431. PRISON CREDIT AND AGING PRISONER REFORM.
(a) Prison Credits in General.--Section 3585(b) of title 18, United States Code, is amended to read as follows:
``(b) Credit for Prior Custody.--A defendant shall be given credit toward the service of a term of imprisonment for any time spent in official detention prior to the date the sentence commences only if that official detention is as a result of the offense for which the sentence was imposed and has not been--
``(1) credited toward another sentence; or
``(2) applied in any manner to an undischarged concurrent term of imprisonment.''.
(b) Good Time Credits for Foreign Prisoners Transferred to the United States.--Section 4105(c) of title 18, United States Code, is amended--
(1) in paragraph (1), by inserting ``by the Bureau of Prisons and deducted from the sentence imposed by the foreign court'' after ``These credits shall be combined'';
(2) by redesignating paragraphs (3) and (4) as paragraphs
(5) and (6), respectively; and
(3) by inserting after paragraph (2) the following:
``(3) If the term of imprisonment under section 4106A(b)(1)(A) is less than or equal to the total sentence imposed and certified by the foreign authorities on the basis of considerations other than the limitation arising under section 4106A(b)(1)(C), the Bureau of Prisons shall calculate credits for satisfactory behavior at the rate provided in section 3624(b) and computed on the basis of the term of imprisonment under section 4106A(b)(1)(A). If the credits calculated under this paragraph produce a release date that is earlier than the release date otherwise determined under this section, the release date calculated under this paragraph shall apply to the transferred offender.
``(4) Upon release from imprisonment, the offender shall commence service of any period of supervised release established pursuant to section 4106A(b)(1)(A), and the balance of the foreign sentence remaining at the time of release from prison shall not be reduced by credits for satisfactory behavior, or labor, or any other credit that has been applied to establish the offender's release date.''.
(c) Conforming Amendment.--Section 4106A(b)(1)(A) of title 18, United States Code, is amended by striking ``release date'' and inserting ``term of imprisonment''.
(d) Expansion of Provision Allowing for Release of Nondangerous Offenders Who Have Served at Least 30 Years in Prison and Are at Least 70 Years Old.--Section 3582(c)(1)(A) of title 18, United States Code, is amended--
(1) by inserting ``(and may impose a sentence of probation or supervised release with or without conditions)'' after
``may reduce the term of imprisonment'';
(2) in subparagraph (ii), by inserting ``(other than an offense or offenses under chapter 109A of this title)'' after
``the offense or offenses''; and
(3) in subparagraph (ii), by striking ``, pursuant to a sentence imposed under section 3559(c),''.
SEC. 2432. MIRANDA REAFFIRMATION.
Section 3501 of title 18, United States Code, is amended--
(1) by striking subsections (a) and (b); and
(2) by redesignating subsections (c), (d), and (e) as subsections (a), (b), and (c), respectively.
TITLE III--PROTECTING AMERICANS AND SUPPORTING VICTIMS OF CRIME
Subtitle A--Crime Victims Assistance
SEC. 3101. SHORT TITLE.
This subtitle may be cited as the ``Crime Victims Assistance Act of 2001''.
PART 1--VICTIM RIGHTS
SEC. 3111. RIGHT TO NOTICE AND TO BE HEARD CONCERNING
DETENTION.
(a) In General.--Section 3142 of title 18, United States Code, is amended--
(1) in subsection (g)--
(A) in paragraph (3), by striking ``and'' at the end;
(B) by redesignating paragraph (4) as paragraph (5); and
(C) by inserting after paragraph (3) the following:
``(4) the views of the victim; and''; and
(2) by adding at the end the following:
``(k) Notice and Right To Be Heard.--
``(1) In general.--Subject to paragraph (2), with respect to each hearing under subsection (f)--
``(A) before the hearing, the Government shall make reasonable efforts to notify the victim of--
``(i) the date and time of the hearing; and
``(ii) the right of the victim to be heard on the issue of detention; and
``(B) at the hearing, the court shall inquire of the Government whether the victim wishes to be heard on the issue of detention and, if so, shall afford the victim such an opportunity.
``(2) Exceptions.--The requirements of paragraph (1) shall not apply to any case in which the Government or the court reasonably believes--
``(A) available evidence raises a significant expectation of physical violence or other retaliation by the victim against the defendant; or
``(B) identification of the defendant by the victim is a fact in dispute, and no means of verification has been attempted.''.
(b) Victim Defined.--Section 3156(a) of title 18, United States Code, is amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) in paragraph (5), by striking the period at the end and inserting ``; and''; and
(3) by adding at the end the following:
``(6) the term `victim'--
``(A) means an individual harmed as a result of a commission of an offense involving death or bodily injury to any person, a threat of death or bodily injury to any person, a sexual assault, or an attempted sexual assault; and
``(B) includes--
``(i) in the case of a victim who is less than 18 years of age or incompetent, the parent or legal guardian of the victim;
``(ii) in the case of a victim who is deceased or incapacitated, 1 or more family members designated by the court; and
``(iii) any other person appointed by the court to represent the victim.''.
SEC. 3112. RIGHT TO A SPEEDY TRIAL.
Section 3161(h)(8)(B) of title 18, United States Code, is amended by adding at the end the following:
``(v) The interests of the victim (or the family of a victim who is deceased or incapacitated) in the prompt and appropriate disposition of the case, free from unreasonable delay.''.
SEC. 3113. RIGHT TO NOTICE AND TO BE HEARD CONCERNING PLEA.
(a) In General.--Rule 11 of the Federal Rules of Criminal Procedure is amended--
(1) by redesignating subdivision (h) as subdivision (i); and
(2) by inserting after subdivision (g) the following:
``(h) Rights of Victims.--
``(1) Victim defined.--In this subdivision, the term
`victim' means an individual harmed as a result of a commission of an offense involving death or bodily injury to any person, a threat of death or bodily injury to any person, a sexual assault, or an attempted sexual assault, and also includes--
``(A) in the case of a victim who is less than 18 years of age or incompetent, the parent or legal guardian of the victim;
``(B) in the case of a victim who is deceased or incapacitated, 1 or more family members designated by the court; and
``(C) any other person appointed by the court to represent the victim.
``(2) Notice.--The Government, before a proceeding at which a plea of guilty or nolo contendere is entered, shall make reasonable efforts to notify the victim of--
``(A) the date and time of the proceeding;
``(B) the elements of the proposed plea or plea agreement;
``(C) the right of the victim to attend the proceeding; and
``(D) the right of the victim to address the court personally, through counsel, or in writing on the issue of the proposed plea or plea agreement.
``(3) Opportunity to be heard.--The court, before accepting a plea of guilty or nolo contendere, shall afford the victim an opportunity to be heard, personally, through counsel, or in writing, on the proposed plea or plea agreement.
``(4) Exceptions.--Notwithstanding any other provision of this subdivision--
``(A) in any case in which a victim is a defendant in the same or a related case, or in which the Government certifies to the court under seal that affording such victim any right provided under this rule will jeopardize an ongoing investigation, the victim shall not have such right;
``(B) a victim who, at the time of a proceeding at which a plea of guilty or nolo contendere is entered, is incarcerated in any Federal, State, or local correctional or detention facility, shall not have the right to appear in person, but, subject to subparagraph (A), shall be afforded a reasonable opportunity to present views or participate by alternate means; and
``(C) in any case involving more than 15 victims, the court, after consultation with the Government and the victims, may appoint a number of victims to represent the interests of the victims, except that all victims shall retain the right to submit a written statement under paragraph (2).''.
(b) Effective Date.--
(1) In general.--The amendments made by subsection (a) shall become effective as provided in paragraph (3).
(2) Action by judicial conference.--
(A) Recommendations.--Not later than 180 days after the date of enactment of this Act, the Judicial Conference of the United States shall submit to Congress a report containing recommendations for amending the Federal Rules of Criminal Procedure to provide enhanced opportunities for victims to be heard on the issue of whether or not the court should accept a plea of guilty or nolo contendere.
(B) Inapplicability of other law.--Chapter 131 of title 28, United States Code, does not apply to any recommendation made by the Judicial Conference of the United States under this paragraph.
(3) Congressional action.--Except as otherwise provided by law, if the Judicial Conference of the United States--
(A) submits a report in accordance with paragraph (2) containing recommendations described in that paragraph, and those recommendations are the same as the amendments made by subsection (a), then the amendments made by subsection (a) shall become effective 30 days after the date on which the recommendations are submitted to Congress under paragraph (2);
(B) submits a report in accordance with paragraph (2) containing recommendations described in that paragraph, and those recommendations are different in any respect from the amendments made by subsection (a), the recommendations made pursuant to paragraph (2) shall become effective 180 days after the date on which the recommendations are submitted to Congress under paragraph (2), unless an Act of Congress is passed overturning the recommendations; and
(C) fails to comply with paragraph (2), the amendments made by subsection (a) shall become effective 360 days after the date of enactment of this Act.
(4) Application.--Any amendment made pursuant to this section (including any amendment made pursuant to the recommendations of the Judicial Conference of the United States under paragraph (2)) shall apply in any proceeding commenced on or after the effective date of the amendment.
SEC. 3114. ENHANCED PARTICIPATORY RIGHTS AT TRIAL.
(a) Amendment to Victim Rights Clarification Act.--Section 3510 of title 18, United States Code, is amended by adding at the end the following:
``(d) Application to Televised Proceedings.--This section applies to any victim viewing proceedings pursuant to section 235 of the Antiterrorism and Effective Death Penalty Act of 1996 (42 U.S.C. 10608), or any rule issued thereunder.''.
(b) Amendment to Victims' Rights and Restitution Act of 1990.--Section 502(b) of the Victims' Rights and Restitution Act of 1990 (42 U.S.C. 10606(b)) is amended--
(1) by striking paragraph (4) and inserting the following:
``(4) The right to be present at all public court proceedings related to the offense, unless the court determines that testimony by the victim at trial would be materially affected if the victim heard the testimony of other witnesses.''; and
(2) in paragraph (5), by striking ``attorney'' and inserting ``the attorney''.
SEC. 3115. RIGHT TO NOTICE AND TO BE HEARD CONCERNING
SENTENCE.
(a) Enhanced Notice and Consideration of Victims' Views.--
(1) Imposition of sentence.--Section 3553(a) of title 18, United States Code, is amended--
(A) in paragraph (6), by striking ``and'' at the end;
(B) by redesignating paragraph (7) as paragraph (8); and
(C) by inserting after paragraph (6) the following:
``(7) the views of any victims of the offense, if such views are presented to the court; and''.
(2) Issuance and enforcement of order of restitution.--Section 3664(d)(2)(A) of title 18, United States Code is amended--
(A) by redesignating clauses (v) and (vi) as clauses (vii) and (viii) respectively; and
(B) by inserting after clause (iv) the following:
``(v) the opportunity of the victim to attend the sentencing hearing;
``(vi) the opportunity of the victim, personally or through counsel, to make a statement or present any information to the court in relation to the sentence;''.
(b) Enhanced Participatory Rights.--Rule 32 of the Federal Rules of Criminal Procedure is amended--
(1) in subdivision (b)--
(A) by redesignating paragraphs (4), (5), and (6) as paragraphs (5), (6), and (7), respectively;
(B) by inserting after paragraph (3) the following:
``(4) Notice to victim.--The probation officer must, before submitting the presentence report, provide notice to the victim as provided by section 3664(d)(2)(A) of title 18, United States Code.''; and
(C) in paragraph (5), as redesignated--
(i) by redesignating subparagraphs (E) through (H) as subparagraphs (F) through (I), respectively; and
(ii) by inserting after subparagraph (D) the following:
``(E) any victim impact statement submitted by a victim to the probation officer;'';
(2) in subdivision (c)(3), by striking subparagraph (E) and inserting the following:
``(E) afford the victim, personally or through counsel, an opportunity to make a statement or present any information in relation to the sentence, including information concerning the extent and scope of the victim's injury or loss, and the impact of the offense on the victim or the family of the victim, except that the court may reasonably limit the number of victims permitted to address the court if the number is so large that affording each victim such right would result in cumulative victim impact information or would unreasonably prolong the sentencing process.''; and
(3) in subdivision (f)(1)--
(A) by striking ``the right of allocution under subdivision
(c)(3)(E)'' and inserting ``the notice and participatory rights under subdivisions (b)(4) and (c)(3)(E)''; and
(B) by striking ``if such person or persons are present at the sentencing hearing, regardless of whether the victim is present;''.
(c) Effective Date.--
(1) In general.--The amendments made by subsection (b) shall become effective as provided in paragraph (3).
(2) Action by judicial conference.--
(A) Recommendations.--Not later than 180 days after the date of enactment of this Act, the Judicial Conference of the United States shall submit to Congress a report containing recommendations for amending the Federal Rules of Criminal Procedure to provide enhanced opportunities for victims to participate during the presentencing and sentencing phase of the criminal process.
(B) Inapplicability of other law.--Chapter 131 of title 28, United States Code, does not apply to any recommendation made by the Judicial Conference of the United States under this paragraph.
(3) Congressional action.--Except as otherwise provided by law, if the Judicial Conference of the United States--
(A) submits a report in accordance with paragraph (2) containing recommendations described in that paragraph, and those recommendations are the same as the amendments made by subsection (b), then the amendments made by subsection (b) shall become effective 30 days after the date on which the recommendations are submitted to Congress under paragraph
(2);
(B) submits a report in accordance with paragraph (2) containing recommendations described in that paragraph, and those recommendations are different in any respect from the amendments made by subsection (b), the recommendations made pursuant to paragraph (2) shall become effective 180 days after the date on which the recommendations are submitted to Congress under paragraph (2), unless an Act of Congress is passed overturning the recommendations; and
(C) fails to comply with paragraph (2), the amendments made by subsection (b) shall become effective 360 days after the date of enactment of this Act.
(4) Application.--Any amendment made pursuant to this section (including any amendment made pursuant to the recommendations of the Judicial Conference of the United States under paragraph (2)) shall apply in any proceeding commenced on or after the effective date of the amendment.
SEC. 3116. RIGHT TO NOTICE AND TO BE HEARD CONCERNING
SENTENCE ADJUSTMENT.
(a) In General.--Rule 32.1(a) of the Federal Rules of Criminal Procedure is amended by adding at the end the following:
``(3) Notice to victim.--At any hearing pursuant to paragraph (2) involving 1 or more persons who have been convicted of an offense involving death or bodily injury to any person, a threat of death or bodily injury to any person, a sexual assault, or an attempted sexual assault, the Government shall make reasonable efforts to notify the victim of the offense (and the victim of any new charges giving rise to the hearing), of--
``(A) the date and time of the hearing; and
``(B) the right of the victim to attend the hearing and to address the court regarding whether the terms or conditions of probation or supervised release should be modified.''.
(b) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall become effective as provided in paragraph (3).
(2) Action by judicial conference.--
(A) Recommendations.--Not later than 180 days after the date of enactment of this Act, the Judicial Conference of the United States shall submit to Congress a report containing recommendations for amending the Federal Rules of Criminal Procedure to ensure that reasonable efforts are made to notify victims of violent offenses of any revocation hearing held pursuant to Rule 32.1(a)(2), and to afford such victims an opportunity to participate.
(B) Inapplicability of other law.--Chapter 131 of title 28, United States Code, does not apply to any recommendation made by the Judicial Conference of the United States under this paragraph.
(3) Congressional action.--Except as otherwise provided by law, if the Judicial Conference of the United States--
(A) submits a report in accordance with paragraph (2) containing recommendations described in that paragraph, and those recommendations are the same as the amendment made by subsection (a), then the amendment made by subsection (a) shall become effective 30 days after the date on which the recommendations are submitted to Congress under paragraph
(2);
(B) submits a report in accordance with paragraph (2) containing recommendations described in that paragraph, and those recommendations are different in any respect from the amendment made by subsection (a), the recommendations made pursuant to paragraph (2) shall become effective 180 days after the date on which the recommendations are submitted to Congress under paragraph (2), unless an Act of Congress is passed overturning the recommendations; and
(C) fails to comply with paragraph (2), the amendment made by subsection (a) shall become effective 360 days after the date of enactment of this Act.
(4) Application.--Any amendment made pursuant to this section (including any amendment made pursuant to the recommendations of the Judicial Conference of the United States under paragraph (2)) shall apply in any proceeding commenced on or after the effective date of the amendment.
SEC. 3117. RIGHT TO NOTICE OF RELEASE OR ESCAPE.
(a) In General.--Subchapter C of chapter 229 of title 18, United States Code, is amended by adding at the end the following:
``Sec. 3627. Notice to victims of release or escape of defendants
``(a) In General.--The Bureau of Prisons shall ensure that reasonable notice is provided to each victim of an offense for which a person is in custody pursuant to this subchapter--
``(1) not less than 30 days before the release of such person under section 3624, assignment of such person to pre-release custody under section 3624(c), or transfer of such person under section 3623;
``(2) not less than 10 days before the temporary release of such person under section 3622;
``(3) not later than 12 hours after discovery that such person has escaped;
``(4) not later than 12 hours after the return to custody of such person after an escape; and
``(5) at such other times as may be reasonable before any other form of release of such person as may occur.
``(b) Applicability.--This section applies to any escape, work release, furlough, or any other form of release from a psychiatric institution or other facility that provides mental or other health services to persons in the custody of the Bureau of Prisons.
``(c) Victim Contact Information.--It shall be the responsibility of a victim to notify the Bureau of Prisons, by means of a form to be provided by the Attorney General, of any change in the mailing address of the victim, or other means of contacting the victim, while the defendant is in the custody of the Bureau of Prisons. The Bureau of Prisons shall ensure the confidentiality of any information relating to a victim.''.
(b) Technical and Conforming Amendment.--The analysis for subchapter C of chapter 229 of title 18, United States Code, is amended by adding at the end the following:
``3627. Notice to victims of release or escape of defendants.''.
SEC. 3118. RIGHT TO NOTICE AND TO BE HEARD CONCERNING
EXECUTIVE CLEMENCY.
(a) Notification.--Subchapter C of chapter 229 of title 18, United States Code, is amended by adding after section 3627, as added by section 3117, the following:
``Sec. 3628. Notice to victims concerning grant of executive clemency
``(a) Definitions.--In this section--
``(1) the term `executive clemency'--
``(A) means any exercise by the President of the power to grant reprieves and pardons under clause 1 of section 2 of article II of the Constitution of the United States; and
``(B) includes any pardon, reprieve, commutation of sentence, or remission of fine; and
``(2) the term `victim' has the same meaning given that term in section 503(e) of the Victims' Rights and Restitution Act of 1990 (42 U.S.C. 10607(e)).
``(b) Notice of Grant of Executive Clemency.--
``(1) If a petition for executive clemency is granted, the Attorney General shall make reasonable efforts to notify any victim of any offense that is the subject of the grant of executive clemency that such grant has been made as soon as practicable after that grant is made.
``(2) If a grant of executive clemency will result in the release of any person from custody, notice under paragraph
(1) shall be prior to that release from custody, if practicable.''.
(b) Technical and Conforming Amendment.--The analysis for subchapter C of chapter 229 of title 18, United States Code, is amended by adding at the end the following:
``3628. Notice to victims concerning grant of executive clemency.''.
(c) Reporting Requirements.--The Attorney General shall submit biannually to the Committees on the Judiciary of the House of Representatives and the Senate a report on executive clemency matters or cases delegated for review or investigation to the Attorney General by the President, including for each year--
(1) the number of petitions so delegated;
(2) the number of reports submitted to the President;
(3) the number of petitions for executive clemency granted and the number denied;
(4) the name of each person whose petition for executive clemency was granted or denied and the offenses of conviction of that person for which executive clemency was granted or denied; and
(5) with respect to any person granted executive clemency, the date that any victim of an offense that was the subject of that grant of executive clemency was notified, pursuant to Department of Justice regulations, of a petition for executive clemency, and whether such victim submitted a statement concerning the petition.
(d) Sense of Congress Concerning the Right of Victims To Notice and To Be Heard Concerning Executive Clemency.--It is the sense of Congress that--
(1) victims of a crime should be notified about any petition for executive clemency filed by the perpetrators of that crime and provided an opportunity to submit a statement concerning the petition to the President; and
(2) the Attorney General should promulgate regulations or internal guidelines to ensure that such notification and opportunity to submit a statement are provided.
SEC. 3119. REMEDIES FOR NONCOMPLIANCE.
(a) General Limitation.--Any failure to comply with any amendment made by this part shall not give rise to a claim for damages, or any other action against the United States, or any employee of the United States, any court official or officer of the court, or an entity contracting with the United States, or any action seeking a rehearing or other reconsideration of action taken in connection with a defendant.
(b) Regulations To Ensure Compliance.--
(1) In general.--Notwithstanding subsection (a), not later than 1 year after the date of enactment of this Act, the Attorney General of the United States and the Chairman of the United States Parole Commission shall promulgate regulations to implement and enforce the amendments made by this title.
(2) Contents.--The regulations promulgated under paragraph
(1) shall--
(A) contain disciplinary sanctions, including suspension or termination from employment, for employees of the Department of Justice (including employees of the United States Parole Commission) who willfully or repeatedly violate the amendments made by this title, or willfully or repeatedly refuse or fail to comply with provisions of Federal law pertaining to the treatment of victims of crime;
(B) include an administrative procedure through which parties can file formal complaints with the Department of Justice alleging violations of the amendments made by this title;
(C) provide that a complainant is prohibited from recovering monetary damages against the United States, or any employee of the United States, either in his official or personal capacity; and
(D) provide that the Attorney General, or the designee of the Attorney General, shall be the final arbiter of the complaint, and there shall be no judicial review of the final decision of the Attorney General by a complainant.
PART 2--VICTIM ASSISTANCE INITIATIVES
SEC. 3121. PILOT PROGRAMS TO ESTABLISH OMBUDSMAN PROGRAMS
FOR CRIME VICTIMS.
(a) Definitions.--In this section:
(1) Director.--The term ``Director'' means the Director of the Office of Victims of Crime.
(2) Office.--The term ``Office'' means the Office for Victims of Crime.
(3) Qualified private entity.--The term ``qualified private entity'' means a private entity that meets such requirements as the Attorney General, acting through the Director, may establish.
(4) Qualified unit of state or local government.--The term
``local government'' means a unit of a State or local government, including a State court, that meets such requirements as the Attorney General, acting through the Director, may establish.
(5) Voice centers.--The term ``VOICE Centers'' means the Victim Ombudsman Information Centers established under the program under subsection (b).
(b) Pilot Programs.--
(1) In general.--Not later than 12 months after the date of enactment of this Act, the Attorney General, acting through the Director, shall establish and carry out a program to provide for pilot programs to establish and operate Victim Ombudsman Information Centers in each of the following States:
(A) Iowa.
(B) Massachusetts.
(C) Maryland.
(D) Vermont.
(E) Virginia.
(F) Washington.
(G) Wisconsin.
(2) Agreements.--
(A) In general.--The Attorney General, acting through the Director, shall enter into an agreement with a qualified private entity or unit of State or local government to conduct a pilot program referred to in paragraph (1). Under the agreement, the Attorney General, acting through the Director, shall provide for a grant to assist the qualified private entity or unit of State or local government in carrying out the pilot program.
(B) Contents of agreement.--The agreement referred to in subparagraph (A) shall specify that--
(i) the VOICE Center shall be established in accordance with this section; and
(ii) except with respect to meeting applicable requirements of this section concerning carrying out the duties of a VOICE Center under this section (including the applicable reporting duties under subsection (c) and the terms of the agreement) each VOICE Center shall operate independently of the Office.
(C) No authority over daily operations.--The Office shall have no supervisory or decisionmaking authority over the day-to-day operations of a VOICE Center.
(c) Objectives.--
(1) Mission.--The mission of each VOICE Center established under a pilot program under this section shall be to assist a victim of a Federal or State crime to ensure that the victim--
(A) is fully apprised of the rights of that victim under applicable Federal or State law; and
(B) is provided the opportunity to participate in the criminal justice process to the fullest extent of the law.
(2) Duties.--The duties of a VOICE Center shall include--
(A) providing information to victims of Federal or State crime regarding the right of those victims to participate in the criminal justice process (including information concerning any right that exists under applicable Federal or State law);
(B) identifying and responding to situations in which the rights of victims of crime under applicable Federal or State law may have been violated;
(C) attempting to facilitate compliance with Federal or State law referred to in subparagraph (B);
(D) educating police, prosecutors, Federal and State judges, officers of the court, and employees of jails and prisons concerning the rights of victims under applicable Federal or State law; and
(E) taking measures that are necessary to ensure that victims of crime are treated with fairness, dignity, and compassion throughout the criminal justice process.
(d) Oversight.--
(1) Technical assistance.--The Office may provide technical assistance to each VOICE Center.
(2) Annual report.--Each qualified private entity or qualified unit of State or local government that carries out a pilot program to establish and operate a VOICE Center under this section shall prepare and submit to the Director, not later than 1 year after the VOICE Center is established, and annually thereafter, a report that--
(A) describes in detail the activities of the VOICE Center during the preceding year; and
(B) outlines a strategic plan for the year following the year covered under subparagraph (A).
(e) Review of Program Effectiveness.--
(1) GAO study.--Not later than 2 years after the date on which each VOICE Center established under a pilot program under this section is fully operational, the Comptroller General of the United States shall conduct a review of each pilot program carried out under this section to determine the effectiveness of the VOICE Center that is the subject of the pilot program in carrying out the mission and duties described in subsection (c).
(2) Other studies.--Not later than 2 years after the date on which each VOICE Center established under a pilot program under this section is fully operational, the Attorney General, acting through the Director, shall enter into an agreement with 1 or more private entities that meet such requirements that the Attorney General, acting through the Director, may establish, to study the effectiveness of each VOICE Center established by a pilot program under this section in carrying out the mission and duties described in subsection (c).
(f) Termination Date.--
(1) In general.--Except as provided in paragraph (2), a pilot program established under this section shall terminate on the date that is 4 years after the date of enactment of this Act.
(2) Renewal.--If the Attorney General determines that any of the pilot programs established under this section should be renewed for an additional period, the Attorney General may renew that pilot program for a period not to exceed 2 years.
(g) Funding.--Notwithstanding any other provision of law, an aggregate amount not to exceed $5,000,000 of the amounts collected pursuant to sections 3729 through 3731 of title 31, United States Code (commonly known as the ``False Claims Act''), may be used by the Director to make grants under subsection (b).
SEC. 3122. AMENDMENTS TO VICTIMS OF CRIME ACT OF 1984.
(a) Crime Victims Fund.--Section 1402 of the Victims of Crime Act of 1984 (42 U.S.C. 10601) is amended--
(1) in subsection (b)--
(A) in paragraph (3), by striking ``and'' at the end;
(B) in paragraph (4), by striking the period at the end and inserting ``; and''; and
(C) by adding at the end the following:
``(5) any gifts, bequests, or donations from private entities or individuals.''; and
(2) in subsection (d)--
(A) in paragraph (4)--
(i) in subparagraph (A), by striking ``48.5'' and inserting
``47.5'';
(ii) in subparagraph (B), by striking ``48.5'' and inserting ``47.5''; and
(iii) in subparagraph (C), by striking ``3'' and inserting
``5''; and
(B) in paragraph (5), by adding at the end the following:
``(C) Any State that receives supplemental funding to respond to incidents or terrorism or mass violence under this section shall be required to return to the Crime Victims Fund for deposit in the reserve fund, amounts subrogated to the State as a result of third-party payments to victims.''.
(b) Crime Victim Compensation.--Section 1403 of the Victims of Crime Act of 1984 (42 U.S.C. 10602) is amended--
(1) in subsection (a)--
(A) in each of paragraphs (1) and (2), by striking ``40'' and inserting ``60''; and
(B) in paragraph (3)--
(i) by striking ``5'' and inserting ``10''; and
(ii) by inserting ``and evaluation'' after
``administration''; and
(2) in subsection (b)--
(A) in paragraph (7), by inserting ``because the identity of the offender was not determined beyond a reasonable doubt in a criminal trial, because criminal charges were not brought against the offender, or'' after ``deny compensation to any victim'';
(B) by redesignating paragraphs (8) and (9) as paragraphs
(9) and (10), respectively; and
(C) by inserting after paragraph (7) the following:
``(8) such program does not discriminate against victims because they oppose the death penalty or disagree with the way the State is prosecuting the criminal case.''.
(c) Crime Victim Assistance.--Section 1404 of the Victims of Crime Act of 1984 (42 U.S.C. 10603) is amended--
(1) in subsection (b)(3), by striking ``5'' and inserting
``10'';
(2) in subsection (c)--
(A) in paragraph (1)--
(i) by inserting ``or enter into cooperative agreements'' after ``make grants'';
(ii) by striking subparagraph (A) and inserting the following:
``(A) for demonstration projects, evaluation, training, and technical assistance services to eligible organizations;'';
(iii) in subparagraph (B), by striking the period at the end and inserting ``; and''; and
(iv) by adding at the end the following:
``(C) training and technical assistance that address the significance of and effective delivery strategies for providing long-term psychological care.''; and
(B) in paragraph (3)--
(i) in subparagraph (C), by striking ``and'' at the end;
(ii) in subparagraph (D), by striking the period at the end and inserting ``; and''; and
(iii) by adding at the end the following:
``(E) use funds made available to the Director under this subsection--
``(i) for fellowships and clinical internships; and
``(ii) to carry out programs of training and special workshops for the presentation and dissemination of information resulting from demonstrations, surveys, and special projects.''; and
(3) in subsection (d)--
(A) by striking paragraph (1) and inserting the following:
``(1) the term `State' includes--
``(A) the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, and any other territory or possession of the United States; and
``(B) for purposes of a subgrant under subsection (a)(1) or a grant or cooperative agreement under subsection (c)(1), the United States Virgin Islands and any agency of the Government of the District of Columbia or the Federal Government performing law enforcement functions in and on behalf of the District of Columbia.'';
(B) in paragraph (2)--
(i) in subparagraph (C), by striking ``and'' at the end; and
(ii) by adding at the end the following:
``(E) public awareness and education and crime prevention activities that promote, and are conducted in conjunction with, the provision of victim assistance; and
``(F) for purposes of an award under subsection (c)(1)(A), preparation, publication, and distribution of informational materials and resources for victims of crime and crime victims organizations.'';
(C) by striking paragraph (4) and inserting the following:
``(4) the term `crisis intervention services' means counseling and emotional support including mental health counseling, provided as a result of crisis situations for individuals, couples, or family members following and related to the occurrence of crime;'';
(D) in paragraph (5), by striking the period at the end and inserting ``; and''; and
(E) by adding at the end the following:
``(6) for purposes of an award under subsection (c)(1), the term `eligible organization' includes any--
``(A) national or State organization with a commitment to developing, implementing, evaluating, or enforcing victims' rights and the delivery of services;
``(B) State agency or unit of local government;
``(C) State court;
``(D) tribal organization;
``(E) organization--
``(i) described in section 501(c) of the Internal Revenue Code of 1986; and
``(ii) exempt from taxation under section 501(a) of such Code; or
``(F) other entity that the Director determines to be appropriate.''.
SEC. 3123. INCREASED TRAINING FOR LAW ENFORCEMENT OFFICERS
AND COURT PERSONNEL TO RESPOND TO THE NEEDS OF
CRIME VICTIMS.
Notwithstanding any other provision of law, amounts collected pursuant to sections 3729 through 3731 of title 31, United States Code (commonly known as the ``False Claims Act'') may be used by the Office for Victims of Crime to make grants to States, State courts, units of local government, and qualified private entities, to provide training and information to prosecutors, judges, law enforcement officers, probation officers, and other officers and employees of Federal and State courts to assist them in responding effectively to the needs of victims of crime.
SEC. 3124. INCREASED RESOURCES TO DEVELOP STATE-OF-THE-ART
SYSTEMS FOR NOTIFYING CRIME VICTIMS OF
IMPORTANT DATES AND DEVELOPMENTS.
(a) In General.--Subtitle A of title XXIII of the Violent Crime Control and Law Enforcement Act of 1994 (Public Law 103-322; 108 Stat. 2077) is amended by adding at the end the following:
``SEC. 230103. STATE-OF-THE-ART SYSTEMS FOR NOTIFYING VICTIMS
OF IMPORTANT DATES AND DEVELOPMENTS.
``(a) Authorization of Appropriations.--There are authorized to be appropriated to the Office for Victims of Crime of the Department of Justice such sums as may be necessary for grants to Federal, State, and local prosecutors' offices and law enforcement agencies, Federal and State courts, county jails, Federal and State correctional institutions, and qualified private entities, to develop and implement state-of-the-art systems for notifying victims of crime of important dates and developments relating to the criminal proceedings at issue.
``(b) False Claims Act.--Notwithstanding any other provision of law, amounts collected pursuant to sections 3729 through 3731 of title 31, United States Code (commonly known as the `False Claims Act'), may be used for grants under this section.''.
(b) Violent Crime Reduction Trust Fund.--Section 310004(d) of the Violent Crime Control and Law Enforcement Act of 1994
(42 U.S.C. 14214(d)) is amended--
(1) in the first paragraph designated as paragraph (15)
(relating to the definition of the term ``Federal law enforcement program''), by striking ``and'' at the end;
(2) in the first paragraph designated as paragraph (16)
(relating to the definition of the term ``Federal law enforcement program''), by striking the period at the end and inserting ``; and''; and
(3) by inserting after the first paragraph designated as paragraph (16) (relating to the definition of the term
``Federal law enforcement program'') the following:
``(17) section 230103.''.
PART 3--VICTIM-OFFENDER PROGRAMS: ``RESTORATIVE JUSTICE''
SEC. 3131. PILOT PROGRAM AND STUDY ON EFFECTIVENESS OF
RESTORATIVE JUSTICE APPROACH ON BEHALF OF
VICTIMS OF CRIME.
(a) In General.--Notwithstanding any other provision of law, amounts collected pursuant to sections 3729 through 3731 of title 31, United States Code (commonly known as the
``False Claims Act'') and amounts available in the Crime Victims Fund (42 U.S.C. 10601 et seq.), may be used by the Office of Justice Programs of the Department of Justice to make grants to States, State courts, units of local government, tribal governments, and qualified private entities for the establishment of pilot programs that implement balanced and restorative justice models in juvenile court settings.
(b) Study.--The Office of Justice Programs of the Department of Justice shall conduct a study and report to Congress not later than 2 years after the date of enactment of this Act on the effectiveness of restorative justice models utilized as a part of grants made pursuant to this section.
(c) Criteria.--The study shall--
(1) evaluate the success of models already implemented in the States;
(2) examine such factors as community restoration, victim restoration, offender accountability, offender training, and treatment; and
(3) contain recommendations of best practices.
(d) Voluntary Programs.--Any program funded under this section shall be fully voluntary by both the victim and the offender, once the prosecuting agency has determined that the case is appropriate.
(e) Definition of Balanced and Restorative Justice Model.--In this section, the term ``balanced and restorative justice model'' means programs served by the criminal justice system that utilize alternatives to incarceration where the purposes are to--
(1) protect the community served by the system and agencies;
(2) ensure accountability of the offender and the system;
(3) obligate the offender to pay restitution to the victim and/or the community; and
(4) equip juvenile offenders with the skills needed to live responsibly and productively.
(f) Authorization.--There are authorized to be appropriated such sums as are necessary to carry out this section.
Subtitle B--Violence Against Women Act Enhancements
SEC. 3201. SHELTER SERVICES FOR BATTERED WOMEN AND CHILDREN.
(a) State Shelter Grants.--Section 303(a)(2)(C) of the Family Violence Prevention and Services Act (42 U.S.C. 10402(a)(2)(C)) is amended by striking ``populations underserved because of ethnic, racial, cultural, language diversity or geographic isolation'' and inserting
``populations underserved because of race, ethnicity, age, disability, religion, alienage status, geographic location
(including rural isolation), or language barriers, and any other populations determined by the Secretary to be underserved''.
(b) Secretarial Responsibilities.--Section 305(a) of the Family Violence Prevention and Services Act (42 U.S.C. 10404(a)) is amended--
(1) by striking ``an employee'' and inserting ``1 or more employees'';
(2) by striking ``of this title.'' and inserting ``of this title, including carrying out evaluation and monitoring under this title.''; and
(3) by striking ``The individual'' and inserting ``Any individual''.
(c) Resource Centers.--Section 308 of the Family Violence Prevention and Services Act (42 U.S.C. 10407) is amended--
(1) in subsection (a)(2), by inserting ``on providing information, training, and technical assistance'' after
``focusing''; and
(2) in subsection (c), by adding at the end the following:
``(8) Providing technical assistance and training to local entities carrying out domestic violence programs that provide shelter, related assistance, or transitional housing assistance.
``(9) Improving access to services, information, and training, concerning family violence, within Indian tribes and Indian tribal agencies.
``(10) Providing technical assistance and training to appropriate entities to improve access to services, information, and training concerning family violence occurring in underserved populations.''.
(d) Conforming Amendment.--Section 309(6) of the Family Violence Prevention and Services Act (42 U.S.C. 10408(6)) is amended by striking ``the Virgin Islands, the Northern Mariana Islands, and the Trust Territory of the Pacific Islands'' and inserting ``the United States Virgin Islands, the Commonwealth of the Northern Mariana Islands, and the combined Freely Associated States''.
(e) Reauthorization.--Section 310 of the Family Violence Prevention and Services Act (42 U.S.C. 10409) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) In General.--
``(1) Authorization of appropriations.--There are authorized to be appropriated to carry out this title
$175,000,000 for each of fiscal years 2002 through 2005.
``(2) Source of funds.--Amounts made available under paragraph (1) may be appropriated from the Violent Crime Reduction Trust Fund established under section 310001 of the Violent Crime Control and Law Enforcement Act of 1994 (42 U.S.C. 14211).'';
(2) in subsection (b), by striking ``under subsection 303(a)'' and inserting ``under section 303(a)'';
(3) in subsection (c), by inserting ``not more than the lesser of $7,500,000 or'' before ``5''; and
(4) by adding at the end the following:
``(f) Evaluation, Monitoring, and Administration.--Of the amounts appropriated under subsection (a) for each fiscal year, not more than 1 percent shall be used by the Secretary for evaluation, monitoring, and administrative costs under this title.''.
(f) State Domestic Violence Coalition Grant Activities.--Section 311 of the Family Violence Prevention and Services Act (42 U.S.C. 10410) is amended--
(1) in subsection (a)(4), by striking ``underserved racial, ethnic or language-minority populations'' and inserting
``underserved populations described in section 303(a)(2)(C)''; and
(2) in subsection (c), by striking ``the U.S. Virgin Islands, the Northern Mariana Islands, and the Trust Territory of the Pacific Islands'' and inserting ``the United States Virgin Islands, the Commonwealth of the Northern Mariana Islands, and the Freely Associated States''.
SEC. 3202. TRANSITIONAL HOUSING ASSISTANCE FOR VICTIMS OF
DOMESTIC VIOLENCE.
Title III of the Family Violence Prevention and Services Act (42 U.S.C. 10401 et seq.) is amended by adding at the end the following new section:
``SEC. 319. TRANSITIONAL HOUSING ASSISTANCE.
``(a) In General.--The Secretary shall award grants under this section to carry out programs to provide assistance to individuals, and their dependents--
``(1) who are homeless or in need of transitional housing or other housing assistance, as a result of fleeing a situation of domestic violence; and
``(2) for whom emergency shelter services are unavailable or insufficient.
``(b) Assistance Described.--Assistance provided under this section may include--
``(1) short-term housing assistance, including rental or utilities payments assistance and assistance with related expenses, such as payment of security deposits and other costs incidental to relocation to transitional housing, in cases in which assistance described in this paragraph is necessary to prevent homelessness because an individual or dependent is fleeing a situation of domestic violence; and
``(2) short-term support services, including payment of expenses and costs associated with transportation and job training referrals, child care, counseling, transitional housing identification and placement, and related services.
``(c) Term of Assistance.--An individual or dependent assisted under this section may not receive assistance under this section for a total of more than 12 months.
``(d) Reports.--
``(1) Report to secretary.--
``(A) In general.--An entity that receives a grant under this section shall annually prepare and submit to the Secretary a report describing the number of individuals and dependents assisted, and the types of housing assistance and support services provided, under this section.
``(B) Contents.--Each report shall include information on--
``(i) the purpose and amount of housing assistance provided to each individual or dependent assisted under this section;
``(ii) the number of months each individual or dependent received the assistance;
``(iii) the number of individuals and dependents who were eligible to receive the assistance, and to whom the entity could not provide the assistance solely due to a lack of available housing; and
``(iv) the type of support services provided to each individual or dependent assisted under this section.
``(2) Report to congress.--The Secretary shall annually prepare and submit to the Committee on the Judiciary of the House of Representatives and the Committee on the Judiciary of the Senate a report that contains a compilation of the information contained in reports submitted under paragraph
(1).
``(e) Authorization of Appropriations.--There are authorized to be appropriated from the Violent Crime Reduction Trust Fund established under section 310001 of the Violent Crime Control and Law Enforcement Act of 1994 (42 U.S.C. 14211) to carry out this section--
``(1) $25,000,000 for each of fiscal years 2002 through 2003; and
``(2) $30,000,000 for each of fiscal years 2004 and 2005.''.
SEC. 3203. FAMILY UNITY DEMONSTRATION PROJECT.
Section 31904(a) of the Family Unity Demonstration Project Act (42 U.S.C. 13883(a)) is amended--
(1) by striking ``1997'' and inserting ``2002'';
(2) by striking ``1998'' and inserting ``2003'';
(3) by striking ``1999'' and inserting ``2004''; and
(4) by striking ``2000'' and inserting ``2005''.
Subtitle C--Senior Safety
SEC. 3301. SHORT TITLE.
This subtitle may be cited as the ``Seniors Safety Act of 2001''.
SEC. 3302. FINDINGS AND PURPOSES.
(a) Findings.--Congress makes the following findings:
(1) The number of older Americans is growing both numerically and proportionally in the United States. Since 1990, the population of seniors has increased by almost 5,000,000, and is now 20.2 percent of the United States population.
(2) In 1997, 7 percent of victims of serious violent crime were age 50 or older.
(3) In 1997, 17.7 percent of murder victims were age 55 or older.
(4) According to the National Crime Victimization Survey, persons aged 50 and older experienced approximately 673,460 incidents of violent crime, including rape and sexual assaults, robberies and general assaults, during 1997.
(5) Older victims of violent crime are almost twice as likely as younger victims to be raped, robbed, or assaulted at or in their own homes.
(6) Approximately half of Americans who are 50 years old or older feel afraid to walk alone at night in their own neighborhoods.
(7) Seniors over the age of 50 reportedly account for 37 percent of the estimated $40,000,000,000 in losses each year due to telemarketing fraud.
(8) In 1998, Congress enacted legislation to provide for increased penalties for telemarketing fraud that targets seniors.
(9) There has not been a comprehensive study of crimes committed against seniors since 1994.
(10) It has been estimated that approximately 43 percent of those turning 65 can expect to spend some time in a long-term care facility, and approximately 20 percent can expect to spend 5 years or longer in a such a facility.
(11) In 1997, approximately $82,800,000,000 was spent on nursing home care in the United States and over half of this amount was spent by the medicaid and medicare programs.
(12) Losses to fraud and abuse in health care reportedly cost the United States an estimated $100,000,000,000 in 1996.
(13) The Inspector General for the Department of Health and Human Services has estimated that about $12,600,000,000 in improper medicare benefit payments, due to inadvertent mistake, fraud and abuse, were made during fiscal year 1998.
(14) Incidents of health care fraud and abuse remain high despite awareness of the problem.
(b) Purposes.--The purposes of this subtitle are to--
(1) combat nursing home fraud and abuse;
(2) enhance safeguards for pension plans and health care programs;
(3) develop strategies for preventing and punishing crimes that target or otherwise disproportionately affect seniors by collecting appropriate data to measure the extent of crimes committed against seniors and determine the extent of domestic and elder abuse of seniors; and
(4) prevent and deter criminal activity, such as telemarketing fraud, that results in economic and physical harm against seniors and ensure appropriate restitution.
SEC. 3303. DEFINITIONS.
In this subtitle--
(1) the term ``crime'' means any criminal offense under Federal or State law;
(2) the term ``nursing home'' means any institution or residential care facility defined as such for licensing purposes under State law, or if State law does not employ the term nursing home, the equivalent term or terms as determined by the Secretary of Health and Human Services, pursuant to section 1908(e) of the Social Security Act (42 U.S.C. 1396g(e)); and
(3) the term ``senior'' means an individual who is more than 55 years of age.
PART 1--COMBATING CRIMES AGAINST SENIORS
SEC. 3311. ENHANCED SENTENCING PENALTIES BASED ON AGE OF
VICTIM.
(a) Directive to the United States Sentencing Commission.--Pursuant to its authority under section 994(p) of title 28, United States Code, and in accordance with this section, the United States Sentencing Commission shall review and, if appropriate, amend section 3A1.1(a) of the Federal sentencing guidelines to include the age of a crime victim as 1 of the criteria for determining whether the application of a sentencing enhancement is appropriate.
(b) Requirements.--In carrying out this section, the Commission shall--
(1) ensure that the Federal sentencing guidelines and the policy statements of the Commission reflect the serious economic and physical harms associated with criminal activity targeted at seniors due to their particular vulnerability;
(2) consider providing increased penalties for persons convicted of offenses in which the victim was a senior in appropriate circumstances;
(3) consult with individuals or groups representing seniors, law enforcement agencies, victims organizations, and the Federal judiciary, as part of the review described in subsection (a);
(4) ensure reasonable consistency with other Federal sentencing guidelines and directives;
(5) account for any aggravating or mitigating circumstances that may justify exceptions, including circumstances for which the Federal sentencing guidelines provide sentencing enhancements;
(6) make any necessary conforming changes to the Federal sentencing guidelines; and
(7) ensure that the Federal sentencing guidelines adequately meet the purposes of sentencing set forth in section 3553(a)(2) of title 18, United States Code.
(c) Report.--Not later than December 31, 2002, the Commission shall submit to Congress a report on issues relating to the age of crime victims, which shall include--
(1) an explanation of any changes to sentencing policy made by the Commission under this section; and
(2) any recommendations of the Commission for retention or modification of penalty levels, including statutory penalty levels, for offenses involving seniors.
SEC. 3312. STUDY AND REPORT ON HEALTH CARE FRAUD SENTENCES.
(a) Directive to the United States Sentencing Commission.--Pursuant to its authority under section 994(p) of title 28, United States Code, and in accordance with this section, the United States Sentencing Commission shall review and, if appropriate, amend the Federal sentencing guidelines and the policy statements of the Commission with respect to persons convicted of offenses involving fraud in connection with a health care benefit program (as defined in section 24(b) of title 18, United States Code).
(b) Requirements.--In carrying out this section, the Commission shall--
(1) ensure that the Federal sentencing guidelines and the policy statements of the Commission reflect the serious harms associated with health care fraud and the need for aggressive and appropriate law enforcement action to prevent such fraud;
(2) consider providing increased penalties for persons convicted of health care fraud in appropriate circumstances;
(3) consult with individuals or groups representing victims of health care fraud, law enforcement agencies, the health care industry, and the Federal judiciary as part of the review described in subsection (a);
(4) ensure reasonable consistency with other Federal sentencing guidelines and directives;
(5) account for any aggravating or mitigating circumstances that might justify exceptions, including circumstances for which the Federal sentencing guidelines provide sentencing enhancements;
(6) make any necessary conforming changes to the Federal sentencing guidelines; and
(7) ensure that the Federal sentencing guidelines adequately meet the purposes of sentencing as set forth in section 3553(a)(2) of title 18, United States Code.
(c) Report.--Not later than December 31, 2002, the Commission shall submit to Congress a report on issues relating to offenses described in subsection (a), which shall include--
(1) an explanation of any changes to sentencing policy made by the Commission under this section; and
(2) any recommendations of the Commission for retention or modification of penalty levels, including statutory penalty levels, for those offenses.
SEC. 3313. INCREASED PENALTIES FOR FRAUD RESULTING IN SERIOUS
INJURY OR DEATH.
Sections 1341 and 1343 of title 18, United States Code, are each amended by inserting before the last sentence the following: ``If the violation results in serious bodily injury (as defined in section 1365 of this title), such person shall be fined under this title, imprisoned not more than 20 years, or both, and if the violation results in death, such person shall be fined under this title, imprisoned for any term of years or life, or both.''.
SEC. 3314. SAFEGUARDING PENSION PLANS FROM FRAUD AND THEFT.
(a) In General.--Chapter 63 of title 18, United States Code, is amended by adding at the end the following:
``Sec. 1348. Fraud in relation to retirement arrangements
``(a) Retirement Arrangement Defined.--In this section--
``(1) In general.--The term `retirement arrangement' means--
``(A) any employee pension benefit plan subject to any provision of title I of the Employee Retirement Income Security Act of 1974;
``(B) any qualified retirement plan within the meaning of section 4974(c) of the Internal Revenue Code of 1986;
``(C) any medical savings account described in section 220 of the Internal Revenue Code of 1986; or
``(D) fund established within the Thrift Savings Fund by the Federal Retirement Thrift Investment Board pursuant to subchapter III of chapter 84 of title 5.
``(2) Exception for governmental plan.--Such term does not include any governmental plan (as defined in section 3(32) of title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(32))), except as provided in paragraph
(1)(D).
``(3) Certain arrangements included.--Such term shall include any arrangement that has been represented to be an arrangement described in any subparagraph of paragraph (1)
(whether or not so described).
``(b) Prohibition and Penalties.--Whoever executes, or attempts to execute, a scheme or artifice--
``(1) to defraud any retirement arrangement or other person in connection with the establishment or maintenance of a retirement arrangement; or
``(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any retirement arrangement or other person in connection with the establishment or maintenance of a retirement arrangement;shall be fined under this title, imprisoned not more than 10 years, or both.
``(c) Enforcement.--
``(1) In general.--Subject to paragraph (2), the Attorney General may investigate any violation of and otherwise enforce this section.
``(2) Effect on other authority.--Nothing in this subsection may be construed to preclude the Secretary of Labor or the head of any other appropriate Federal agency from investigating a violation of this section in relation to a retirement arrangement subject to title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq.) or any other provision of Federal law.''.
(b) Technical Amendment.--Section 24(a)(1) of title 18, United States Code, is amended by inserting ``1348,'' after
``1347,''.
(c) Conforming Amendment.--The analysis for chapter 63 of title 18, United States Code, is amended by adding at the end the following:
``1348. Fraud in relation to retirement arrangements.''.
SEC. 3315. ADDITIONAL CIVIL PENALTIES FOR DEFRAUDING PENSION
PLANS.
(a) In General.--
(1) Action by attorney general.--Except as provided in subsection (b)--
(A) the Attorney General may bring a civil action in the appropriate district court of the United States against any person who engages in conduct constituting an offense under section 1348 of title 18, United States Code, or conspiracy to violate such section 1348; and
(B) upon proof of such conduct by a preponderance of the evidence, such person shall be subject to a civil penalty in an amount equal to the greatest of--
(i) the amount of pecuniary gain to that person;
(ii) the amount of pecuniary loss sustained by the victim; or
(iii) not more than--
(I) $50,000 for each such violation in the case of an individual; or
(II) $100,000 for each violation in the case of a person other than an individual.
(2) No effect on other remedies.--The imposition of a civil penalty under this subsection does not preclude any other statutory, common law, or administrative remedy available by law to the United States or any other person.
(b) Exception.--No civil penalty may be imposed pursuant to subsection (a) with respect to conduct involving a retirement arrangement that--
(1) is an employee pension benefit plan subject to title I of Employee Retirement Income Security Act of 1974; and
(2) for which the civil penalties may be imposed under section 502 of Employee Retirement Income Security Act of 1974 (29 U.S.C. 1132).
(c) Determination of Penalty Amount.--In determining the amount of the penalty under subsection (a), the district court may consider the effect of the penalty on the violator or other person's ability to--
(1) restore all losses to the victims; or
(2) provide other relief ordered in another civil or criminal prosecution related to such conduct, including any penalty or tax imposed on the violator or other person pursuant to the Internal Revenue Code of 1986.''.
SEC. 3316. PUNISHING BRIBERY AND GRAFT IN CONNECTION WITH
EMPLOYEE BENEFIT PLANS.
Section 1954 of title 18, United State Code, is amended to read as follows:
``Sec. 1954. Bribery and graft in connection with employee benefit plans
``(a) Definitions.--In this section--
``(1) the term `employee benefit plan' means any employee welfare benefit plan or employee pension benefit plan subject to any provision of title I of the Employee Retirement Income Security Act of 1974;
``(2) the terms `employee organization', `administrator', and `employee benefit plan sponsor' mean any employee organization, administrator, or plan sponsor, as defined in title I of the Employment Retirement Income Security Act of 1974; and
``(3) the term `applicable person' means a person who is--
``(A) an administrator, officer, trustee, custodian, counsel, agent, or employee of any employee benefit plan;
``(B) an officer, counsel, agent, or employee of an employer or an employer any of whose employees are covered by such plan;
``(C) an officer, counsel, agent, or employee of an employee organization any of whose members are covered by such plan;
``(D) a person who, or an officer, counsel, agent, or employee of an organization that, provides benefit plan services to such plan; or
``(E) a person with actual or apparent influence or decisionmaking authority in regard to such plan.
``(b) Bribery and Graft.--Whoever--
``(1) being an applicable person, receives or agrees to receive or solicits, any fee, kickback, commission, gift, loan, money, or thing of value, personally or for any other person, because of or with the intent to be corruptly influenced with respect to any action, decision, or duty of that applicable person relating to any question or matter concerning an employee benefit plan;
``(2) directly or indirectly, gives or offers, or promises to give or offer, any fee, kickback, commission, gift, loan, money, or thing of value, to any applicable person, because of or with the intent to be corruptly influenced with respect to any action, decision, or duty of that applicable person relating to any question or matter concerning an employee benefit plan; or
``(3) attempts to give, accept, or receive any thing of value with the intent to be corruptly influenced in violation of this subsection;shall be fined under this title, imprisoned not more than 5 years, or both.
``(c) Exceptions.--Nothing in this section may be construed to apply to any--
``(1) payment to or acceptance by any person of bona fide salary, compensation, or other payments made for goods or facilities actually furnished or for services actually performed in the regular course of his duties as an applicable person; or
``(2) payment to or acceptance in good faith by any employee benefit plan sponsor, or person acting on the sponsor's behalf, of any thing of value relating to the sponsor's decision or action to establish, terminate, or modify the governing instruments of an employee benefit plan in a manner that does not violate title I of the Employee Retirement Income Security Act of 1974, or any regulation or order promulgated thereunder, or any other provision of law governing the plan.''.
PART 2--PREVENTING TELEMARKETING FRAUD
SEC. 3321. CENTRALIZED COMPLAINT AND CONSUMER EDUCATION
SERVICE FOR VICTIMS OF TELEMARKETING FRAUD.
(a) Centralized Service.--
(1) Requirement.--The Federal Trade Commission shall, after consultation with the Attorney General, establish procedures to--
(A) log and acknowledge the receipt of complaints by individuals who certify that they have a reasonable belief that they have been the victim of fraud in connection with the conduct of telemarketing (as that term is defined in section 2325 of title 18, United States Code, as amended by section 3322(a) of this Act);
(B) provide to individuals described in subparagraph (A), and to any other persons, information on telemarketing fraud, including--
(i) general information on telemarketing fraud, including descriptions of the most common telemarketing fraud schemes;
(ii) information on means of referring complaints on telemarketing fraud to appropriate law enforcement agencies, including the Director of the Federal Bureau of Investigation, the attorneys general of the States, and the national toll-free telephone number on telemarketing fraud established by the Attorney General; and
(iii) information, if available, on the number of complaints of telemarketing fraud against particular companies and any record of convictions for telemarketing fraud by particular companies for which a specific request has been made; and
(C) refer complaints described in subparagraph (A) to appropriate entities, including State consumer protection agencies or entities and appropriate law enforcement agencies, for potential law enforcement action.
(2) Central location.--The service under the procedures under paragraph (1) shall be provided at and through a single site selected by the Commission for that purpose.
(3) Commencement.--The Commission shall commence carrying out the service not later than 1 year after the date of enactment of this Act.
(b) Creation of Fraud Conviction Database.--
(1) Requirement.--The Attorney General shall establish and maintain a computer database containing information on the corporations and companies convicted of offenses for telemarketing fraud under Federal and State law. The database shall include a description of the type and method of the fraud scheme for which each corporation or company covered by the database was convicted.
(2) Use of database.--The Attorney General shall make information in the database available to the Federal Trade Commission for purposes of providing information as part of the service under subsection (a).
(c) Authorization of Appropriations.--There is authorized to be appropriated such sums as may be necessary to carry out this section.
SEC. 3322. BLOCKING OF TELEMARKETING SCAMS.
(a) Expansion of Scope of Telemarketing Fraud Subject to Enhanced Criminal Penalties.--Section 2325(1) of title 18, United States Code, is amended by striking ``telephone calls'' and inserting ``wire communications utilizing a telephone service''.
(b) Blocking or Termination of Telephone Service Associated With Telemarketing Fraud.--
(1) In general.--Chapter 113A of title 18, United States Code, is amended by adding at the end the following:
``Sec. 2328. Blocking or termination of telephone service
``(a) In General.--If a common carrier subject to the jurisdiction of the Federal Communications Commission is notified in writing by the Attorney General, acting within the Attorney General's jurisdiction, that any wire communications facility furnished by such common carrier is being used or will be used by a subscriber for the purpose of transmitting or receiving a wire communication in interstate or foreign commerce for the purpose of executing any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, in connection with the conduct of telemarketing, the common carrier shall discontinue or refuse the leasing, furnishing, or maintaining of the facility to or for the subscriber after reasonable notice to the subscriber.
``(b) Prohibition on Damages.--No damages, penalty, or forfeiture, whether civil or criminal, shall be found or imposed against any common carrier for any act done by the common carrier in compliance with a notice received from the Attorney General under this section.
``(c) Relief.--
``(1) In general.--Nothing in this section may be construed to prejudice the right of any person affected thereby to secure an appropriate determination, as otherwise provided by law, in a Federal court, that--
``(A) the leasing, furnishing, or maintaining of a facility should not be discontinued or refused under this section; or
``(B) the leasing, furnishing, or maintaining of a facility that has been so discontinued or refused should be restored.
``(2) Supporting information.--In any action brought under this subsection, the court may direct that the Attorney General present evidence in support of the notice made under subsection (a) to which such action relates.
``(d) Definitions.--In this section:
``(1) Reasonable notice to the subscriber.--
``(A) In general.--The term `reasonable notice to the subscriber', in the case of a subscriber of a common carrier, means any information necessary to provide notice to the subscriber that--
``(i) the wire communications facilities furnished by the common carrier may not be used for the purpose of transmitting, receiving, forwarding, or delivering a wire communication in interstate or foreign commerce for the purpose of executing any scheme or artifice to defraud in connection with the conduct of telemarketing; and
``(ii) such use constitutes sufficient grounds for the immediate discontinuance or refusal of the leasing, furnishing, or maintaining of the facilities to or for the subscriber.
``(B) Included matter.--The term includes any tariff filed by the common carrier with the Federal Communications Commission that contains the information specified in subparagraph (A).
``(2) Wire communication.--The term `wire communication' has the meaning given that term in section 2510(1) of this title.
``(3) Wire communications facility.--The term `wire communications facility' means any facility (including instrumentalities, personnel, and services) used by a common carrier for purposes of the transmission, receipt, forwarding, or delivery of wire communications.''.
(2) Conforming amendment.--The analysis for that chapter is amended by adding at the end the following:
``2328. Blocking or termination of telephone service.''.
PART 3--PREVENTING HEALTH CARE FRAUD
SEC. 3331. INJUNCTIVE AUTHORITY RELATING TO FALSE CLAIMS AND
ILLEGAL KICKBACK SCHEMES INVOLVING FEDERAL
HEALTH CARE PROGRAMS.
(a) In General.--Section 1345(a) of title 18, United States Code, is amended--
(1) in paragraph (1)--
(A) in subparagraph (B), by striking ``, or'' and inserting a semicolon;
(B) in subparagraph (C), by striking the period at the end and inserting ``; or''; and
(C) by inserting after subparagraph (C) the following:
``(D) committing or about to commit an offense under section 1128B of the Social Security Act (42 U.S.C. 1320a-7b);''; and
(2) in paragraph (2), by inserting ``a violation of paragraph (1)(D) or'' before ``a banking''.
(b) Civil Actions.--
(1) In general.--Section 1128B of the Social Security Act
(42 U.S.C. 1320a-7b) is amended by adding at the end the following:
``(g) Civil Actions.--
``(1) In general.--The Attorney General may bring an action in the appropriate district court of the United States to impose upon any person who carries out any activity in violation of this section with respect to a Federal health care program a civil penalty of not more than $50,000 for each such violation, or damages of 3 times the total remuneration offered, paid, solicited, or received, whichever is greater.
``(2) Existence of violation.--A violation exists under paragraph (1) if 1 or more purposes of the remuneration is unlawful, and the damages shall be the full amount of such remuneration.
``(3) Procedures.--An action under paragraph (1) shall be governed by--
``(A) the procedures with regard to subpoenas, statutes of limitations, standards of proof, and collateral estoppel set forth in section 3731 of title 31, United States Code; and
``(B) the Federal Rules of Civil Procedure.
``(4) No effect on other remedies.--Nothing in this section may be construed to affect the availability of any other criminal or civil remedy.
``(h) Injunctive Relief.--The Attorney General may commence a civil action in an appropriate district court of the United States to enjoin a violation of this section, as provided in section 1345 of title 18, United States Code.''.
(2) Conforming amendment.--The heading of section 1128B of the Social Security Act (42 U.S.C. 1320a-7b) is amended by inserting ``AND CIVIL'' after ``CRIMINAL''.
SEC. 3332. AUTHORIZED INVESTIGATIVE DEMAND PROCEDURES.
Section 3486 of title 18, United States Code, is amended--
(1) in subsection (a), by inserting ``, or any allegation of fraud or false claims (whether criminal or civil) in connection with a Federal health care program (as defined in section 1128B(f) of the Social Security Act (42 U.S.C. 1320a-7b(f))),'' after ``Federal health care offense,''; and
(2) by adding at the end the following:
``(f) Privacy Protection.--
``(1) In general.--Except as provided in paragraph (2), any record (including any book, paper, document, electronic medium, or other object or tangible thing) produced pursuant to a subpoena issued under this section that contains personally identifiable health information may not be disclosed to any person, except pursuant to a court order under subsection (e)(1).
``(2) Exceptions.--A record described in paragraph (1) may be disclosed--
``(A) to an attorney for the government for use in the performance of the official duty of the attorney (including presentation to a Federal grand jury);
``(B) to such government personnel (including personnel of a State or subdivision of a State) as are determined to be necessary by an attorney for the government to assist an attorney for the government in the performance of the official duty of that attorney to enforce Federal criminal law;
``(C) as directed by a court preliminarily to or in connection with a judicial proceeding; and
``(D) as permitted by a court--
``(i) at the request of a defendant in an administrative, civil, or criminal action brought by the United States, upon a showing that grounds may exist for a motion to exclude evidence obtained under this section; or
``(E) at the request of an attorney for the government, upon a showing that such matters may disclose a violation of State criminal law, to an appropriate official of a State or subdivision of a State for the purpose of enforcing such law.
``(3) Manner of court ordered disclosures.--If a court orders the disclosure of any record described in paragraph
(1), the disclosure shall be made in such manner, at such time, and under such conditions as the court may direct and shall be undertaken in a manner that preserves the confidentiality and privacy of individuals who are the subject of the record, unless disclosure is required by the nature of the proceedings, in which event the attorney for the government shall request that the presiding judicial or administrative officer enter an order limiting the disclosure of the record to the maximum extent practicable, including redacting the personally identifiable health information from publicly disclosed or filed pleadings or records.
``(4) Destruction of records.--Any record described in paragraph (1), and all copies of that record, in whatever form (including electronic) shall be destroyed not later than 90 days after the date on which the record is produced, unless otherwise ordered by a court of competent jurisdiction, upon a showing of good cause.
``(5) Effect of violation.--Any person who knowingly fails to comply with this subsection may be punished as in contempt of court.
``(g) Personally Identifiable Health Information Defined.--In this section, the term `personally identifiable health information' means any information, including genetic information, demographic information, and tissue samples collected from an individual, whether oral or recorded in any form or medium, that--
``(1) relates to the past, present, or future physical or mental health or condition of an individual, the provision of health care to an individual, or the past, present, or future payment for the provision of health care to an individual; and
``(2) either--
``(A) identifies an individual; or
``(B) with respect to which there is a reasonable basis to believe that the information can be used to identify an individual.''.
SEC. 3333. EXTENDING ANTIFRAUD SAFEGUARDS TO THE FEDERAL
EMPLOYEE HEALTH BENEFITS PROGRAM.
Section 1128B(f)(1) of the Social Security Act (42 U.S.C. 1320a-7b(f)(1)) is amended by striking ``(other than the health insurance program under chapter 89 of title 5, United States Code)''.
SEC. 3334. GRAND JURY DISCLOSURE.
Section 3322 of title 18, United States Code, is amended--
(1) by redesignating subsections (c) and (d) as subsections
(d) and (e), respectively; and
(2) by inserting after subsection (b) the following:
``(c) Grand Jury Disclosure.--Subject to section 3486(f), upon ex parte motion of an attorney for the government showing that such disclosure would be of assistance to enforce any provision of Federal law, a court may direct the disclosure of any matter occurring before a grand jury during an investigation of a Federal health care offense (as defined in section 24(a) of this title) to an attorney for the government to use in any investigation or civil proceeding relating to fraud or false claims in connection with a Federal health care program (as defined in section 1128B(f) of the Social Security Act (42 U.S.C. 1320a-7b(f))).''.
SEC. 3335. INCREASING THE EFFECTIVENESS OF CIVIL
INVESTIGATIVE DEMANDS IN FALSE CLAIMS
INVESTIGATIONS.
Section 3733 of title 31, United States Code, is amended--
(1) in subsection (a)(1), in the second sentence, by inserting ``, except to the Deputy Attorney General or to an Assistant Attorney General'' before the period at the end; and
(2) in subsection (i)(2)(C), by adding at the end the following: ``Disclosure of information to a person who brings a civil action under section 3730, or such person's counsel, shall be allowed only upon application to a United States district court showing that such disclosure would assist the Department of Justice in carrying out its statutory responsibilities.''.
PART 4--PROTECTING THE RIGHTS OF ELDERLY CRIME VICTIMS
SEC. 3341. USE OF FORFEITED FUNDS TO PAY RESTITUTION TO CRIME
VICTIMS AND REGULATORY AGENCIES.
Section 981(e) of title 18, United States Code, is amended--
(1) in each of paragraphs (3), (4), and (5), by striking
``in the case of property referred to in subsection
(a)(1)(C)'' and inserting ``in the case of property forfeited in connection with an offense resulting in a pecuniary loss to a financial institution or regulatory agency'';
(2) by striking paragraph (6) and inserting the following:
``(6) as restoration to any victim of the offense giving rise to the forfeiture, including, in the case of a money laundering offense, any offense constituting the underlying specified unlawful activity; or''; and
(3) in paragraph (7), by striking ``in the case of property referred to in subsection (a)(1)(D)'' and inserting ``in the case of property forfeited in connection with an offense relating to the sale of assets acquired or held by any Federal financial institution or regulatory agency, or person appointed by such agency, as receiver, conservator, or liquidating agent for an financial institution''.
SEC. 3342. VICTIM RESTITUTION.
Section 413 of the Controlled Substances Act (21 U.S.C. 853) is amended by adding at the end the following:
``(r) Victim Restitution.--
``(1) Satisfaction of order of restitution.--
``(A) In general.--Except as provided in subparagraph (B), a defendant may not use property subject to forfeiture under this section to satisfy an order of restitution.
``(B) Exception.--If there are 1 or more identifiable victims entitled to restitution from a defendant, and the defendant has no assets other than the property subject to forfeiture with which to pay restitution to the victim or victims, the attorney for the Government may move to dismiss a forfeiture allegation against the defendant before entry of a judgment of forfeiture in order to allow the property to be used by the defendant to pay restitution in whatever manner the court determines to be appropriate if the court grants the motion. In granting a motion under this subparagraph, the court shall include a provision ensuring that costs associated with the identification, seizure, management, and disposition of the property are recovered by the United States.
``(2) Restoration of forfeited property.--
``(A) In general.--If an order of forfeiture is entered pursuant to this section and the defendant has no assets other than the forfeited property to pay restitution to 1 or more identifiable victims who are entitled to restitution, the Government shall restore the forfeited property to the victims pursuant to subsection (i)(1) once the ancillary proceeding under subsection (n) has been completed and the costs of the forfeiture action have been deducted.
``(B) Distribution of property.--On motion of the attorney for the Government, the court may enter any order necessary to facilitate the distribution of any property restored under this paragraph.
``(3) Victim defined.--In this subsection, the term
`victim'--
``(A) means a person other than a person with a legal right, title, or interest in the forfeited property sufficient to satisfy the standing requirements of subsection
(n)(2) who may be entitled to restitution from the forfeited funds pursuant to section 9.8 of part 9 of title 28, Code of Federal Regulations (or any successor to that regulation); and
``(B) includes any person who is the victim of the offense giving rise to the forfeiture, or of any offense that was part of the same scheme, conspiracy, or pattern of criminal activity, including, in the case of a money laundering offense, any offense constituting the underlying specified unlawful activity.''.
SEC. 3343. BANKRUPTCY PROCEEDINGS NOT USED TO SHIELD ILLEGAL
GAINS FROM FALSE CLAIMS.
(a) Certain Actions Not Stayed by Bankruptcy Proceedings.--
(1) In general.--Notwithstanding any other provision of law, the commencement or continuation of an action under section 3729 of title 31, United States Code, does not operate as a stay under section 105(a) or 362(a)(1) of title 11, United States Code.
(2) Conforming amendment.--Section 362(b) of title 11, United States Code, is amended--
(A) in paragraph (17), by striking ``or'' at the end;
(B) in paragraph (18), by striking the period at the end and inserting ``; or''; and
(C) by adding at the end the following:
``(19) the commencement or continuation of an action under section 3729 of title 31.''.
(b) Certain Debts Not Dischargeable in Bankruptcy.--Section 523 of title 11, United States Code, is amended by adding at the end the following:
``(f) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) does not discharge a debtor from a debt owed for violating section 3729 of title 31.''.
(c) Repayment of Certain Debts Considered Final.--
(1) In general.--Chapter 1 of title 11, United States Code, is amended by adding at the end the following:
``Sec. 111. False claims
``No transfer on account of a debt owed to the United States for violating 3729 of title 31, or under a compromise order or other agreement resolving such a debt may be avoided under section 544, 545, 547, 548, 549, 553(b), or 742(a).''.
(2) Conforming amendment.--The analysis for chapter 1 of title 11, United States Code, is amended by adding at the end the following:
``111. False claims.''.
SEC. 3344. FORFEITURE FOR RETIREMENT OFFENSES.
(a) Criminal Forfeiture.--Section 982(a) of title 18, United States Code, is amended by adding at the end the following:
``(9) Criminal Forfeiture.--
``(A) In general.--The court, in imposing sentence on a person convicted of a retirement offense, shall order the person to forfeit property, real or personal, that constitutes or that is derived, directly or indirectly, from proceeds traceable to the commission of the offense.
``(B) Retirement offense defined.--In this paragraph, the term `retirement offense' means a violation of any of the following provisions of law, if the violation, conspiracy, or solicitation relates to a retirement arrangement (as defined in section 1348 of title 18, United States Code):
``(i) Section 664, 1001, 1027, 1341, 1343, 1348, 1951, 1952, or 1954 of title 18, United States Code.
``(ii) Sections 411, 501, or 511 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1111, 1131, 1141).''.
(b) Civil Forfeiture.--Section 981(a)(1) of title 18, United States Code, is amended by adding at the end the following:
``(G) Any property, real or personal, that constitutes or is derived, directly or indirectly, from proceeds traceable to the commission of a violation of, a criminal conspiracy to violated or solicitation to commit a crime of violence involving a retirement offense (as defined in section 982(a)(9)(B)).''.
Subtitle D--Violent Crime Reduction Trust Fund
SEC. 3401. EXTENSION OF VIOLENT CRIME REDUCTION TRUST FUND.
(a) In General.--Section 310001(b) of the Violent Crime Control and Law Enforcement Act of 1994 (42 U.S.C. 14211) is amended by striking paragraphs (1) through (5) and inserting the following:
``(1) for fiscal year 2002, $6,169,000,000;
``(2) for fiscal year 2003, $6,316,000,000;
``(3) for fiscal year 2004, $6,458,000,000; and
``(4) for fiscal year 2005, $6,616,000,000.''.
(b) Discretionary Limits.--Title XXXI of the Violent Crime Control and Law Enforcement Act of 1994 (42 U.S.C. 14211 et seq.) is amended by inserting after section 310001 the following:
``SEC. 310002. DISCRETIONARY LIMITS.
``For the purposes of allocations made for the discretionary category under section 302(a) of the Congressional Budget Act of 1974 (2 U.S.C. 633(a)), the term
`discretionary spending limit' means--
``(1) with respect to fiscal year 2002--
``(A) for the discretionary category, amounts of budget authority and outlays necessary to adjust the discretionary spending limits to reflect the changes in subparagraph (B) as determined by the Chairman of the Committee on the Budget of the House of Representatives and the Chairman of the Committee on the Budget of the Senate; and
``(B) for the violent crime reduction category,
$6,169,000,000 in new budget authority and $6,020,000,000 in outlays;
``(2) with respect to fiscal year 2003--
``(A) for the discretionary category, amounts of budget authority and outlays necessary to adjust the discretionary spending limits to reflect the changes in subparagraph (B) as determined by the Chairman of the Committee on the Budget of the House of Representatives and the Chairman of the Committee on the Budget of the Senate; and
``(B) for the violent crime reduction category,
$6,316,000,000 in new budget authority and $6,161,000,000 in outlays;
``(3) with respect to fiscal year 2004--
``(A) for the discretionary category, amounts of budget authority and outlays necessary to adjust the discretionary spending limits to reflect the changes in subparagraph (B) as determined by the Chairman of the Committee on the Budget of the House of Representatives and the Chairman of the Committee on the Budget of the Senate; and
``(B) for the violent crime reduction category,
$6,459,000,000 in new budget authority and $6,303,000,000 in outlays; and
``(4) with respect to fiscal year 2005--
``(A) for the discretionary category, amounts of budget authority and outlays necessary to adjust the discretionary spending limits to reflect the changes in subparagraph (B) as determined by the Chairman of the Committee on the Budget of the House of Representatives and the Chairman of the Committee on the Budget of the Senate; and
``(B) for the violent crime reduction category, $6,616,000 in new budget authority and $6,452,000,000 in outlays;as adjusted in accordance with section 251(b) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 901(b)) and section 314 of the Congressional Budget Act of 1974.''.
TITLE IV--BREAKING THE CYCLE OF DRUGS AND VIOLENCE
Subtitle A--Drug Courts, Drug Treatment, and Alternative Sentencing
PART 1--EXPANSION OF DRUG COURTS
SEC. 4111. REAUTHORIZATION OF DRUG COURTS PROGRAM.
(a) Repeal.--Section 114(b)(1)(A) of title I of Public Law 104-134 is repealed.
(b) Reauthorization.--Section 1001(a)(20) of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3793(a)(20)) is amended--
(1) in subparagraph (E), by striking ``and'' at the end;
(2) in subparagraph (F), by striking the period at the end and inserting a semicolon; and
(3) by adding at the end the following:
``(G) $400,000,000 for fiscal year 2002; and
``(H) $400,000,000 for fiscal year 2003.''.
SEC. 4112. JUVENILE DRUG COURTS.
Title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3711 et seq.) is amended by inserting after part BB the following:
``PART Z--JUVENILE DRUG COURTS
``SEC. 2976. GRANT AUTHORITY.
``(a) Appropriate Drug Court Programs.--The Attorney General may make grants to States, State courts, local courts, units of local government, and Indian tribes to establish programs that--
``(1) involve continuous early judicial supervision over juvenile offenders, other than violent juvenile offenders with substance abuse, or substance abuse-related problems; and
``(2) integrate administration of other sanctions and services, including--
``(A) mandatory periodic testing for the use of controlled substances or other addictive substances during any period of supervised release or probation for each participant;
``(B) substance abuse treatment for each participant;
``(C) diversion, probation, or other supervised release involving the possibility of prosecution, confinement, or incarceration based on noncompliance with program requirements or failure to show satisfactory progress;
``(D) programmatic, offender management, and aftercare services such as relapse prevention, health care, education, vocational training, job placement, housing placement, and child care or other family support service for each participant who requires such services;
``(E) payment by the offender of treatment costs, to the extent practicable, such as costs for urinalysis or counseling; or
``(F) payment by the offender of restitution, to the extent practicable, to either a victim of the offense at issue or to a restitution or similar victim support fund.
``(b) Continued Availability of Grant Funds.--Amounts made available under this part shall remain available until expended.
``SEC. 2977. PROHIBITION OF PARTICIPATION BY VIOLENT
OFFENDERS.
``The Attorney General shall issue regulations and guidelines to ensure that the programs authorized in this part do not permit participation by violent offenders.
``SEC. 2978. DEFINITION.
``In this part, the term `violent offender' means an individual charged with an offense during the course of which--
``(1) the individual carried, possessed, or used a firearm or dangerous weapon;
``(2) the death of or serious bodily injury of another person occurred as a direct result of the commission of such offense; or
``(3) the individual used force against the person of another.
``SEC. 2979. ADMINISTRATION.
``(a) Regulatory Authority.--The Attorney General shall issue any regulations and guidelines necessary to carry out this part.
``(b) Applications.--In addition to any other requirements that may be specified by the Attorney General, an application for a grant under this part shall--
``(1) include a long term strategy and detailed implementation plan;
``(2) explain the inability of the applicant to fund the program adequately without Federal assistance;
``(3) certify that the Federal support provided will be used to supplement, and not supplant, State, tribal, or local sources of funding that would otherwise be available;
``(4) identify related governmental or community initiatives that complement or will be coordinated with the proposal;
``(5) certify that there has been appropriate consultation with all affected agencies and that there will be appropriate coordination with all affected agencies in the implementation of the program;
``(6) certify that participating offenders will be supervised by one or more designated judges with responsibility for the drug court program;
``(7) specify plans for obtaining necessary support and continuing the proposed program following the conclusion of Federal support; and
``(8) describe the methodology that will be used in evaluating the program.
``SEC. 2980. APPLICATIONS.
``To request funds under this part, the chief executive or the chief justice of a State, or the chief executive or chief judge of a unit of local government or Indian tribe shall submit an application to the Attorney General in such form and containing such information as the Attorney General may reasonably require.
``SEC. 2981. FEDERAL SHARE.
``(a) In General.--The Federal share of a grant made under this part may not exceed 75 percent of the total costs of the program described in the application submitted under section 2605 for the fiscal year for which the program receives assistance under this part.
``(b) Waiver.--The Attorney General may waive, in whole or in part, the requirement of a matching contribution under subsection (a).
``(c) In-Kind Contributions.--In-kind contributions may constitute a portion of the non-Federal share of a grant under this part.
``SEC. 2982. DISTRIBUTION OF FUNDS.
``(a) Geographical Distribution.--The Attorney General shall ensure that, to the extent practicable, an equitable geographic distribution of grant awards is made.
``(b) Indian Tribes.--The Attorney General shall allocate 0.75 percent of amounts made available under this subtitle for grants to Indian tribes.
``SEC. 2983. REPORT.
``A State, Indian tribe, or unit of local government that receives funds under this part during a fiscal year shall submit to the Attorney General, in March of the year following receipt of a grant under this part, a report regarding the effectiveness of programs established pursuant to this part.
``SEC. 2984. TECHNICAL ASSISTANCE, TRAINING, AND EVALUATION.
``(a) Technical Assistance and Training.--The Attorney General may provide technical assistance and training in furtherance of the purposes of this part.
``(b) Evaluations.--In addition to any evaluation requirements that may be prescribed for grantees, the Attorney General may carry out or make arrangements for evaluations of programs that receive support under this part.
``(c) Administration.--The technical assistance, training, and evaluations authorized by this section may be carried out directly by the Attorney General, in collaboration with the Secretary of Health and Human Services, or through grants, contracts, or other cooperative arrangements with other entities.
``SEC. 2985. UNAWARDED FUNDS.
``The Attorney General may reallocate any grant funds that are not awarded for juvenile drug courts under this part for use for other juvenile delinquency and crime prevention initiatives.
``SEC. 2986. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to carry out this part from the Violent Crime Reduction Trust Fund--
``(1) such sums as may be necessary for each of fiscal years 2002 and 2003;
``(2) $50,000,000 for fiscal year 2004; and
``(3) $50,000,000 for fiscal year 2005.''.
PART 2--ZERO TOLERANCE DRUG TESTING
SEC. 4121. GRANT AUTHORITY.
The Attorney General may make grants to States and units of local government, State courts, local courts, and Indian tribal governments, acting directly or through agreements with other public or private entities, for programs that support--
(1) developing and/or implementing comprehensive drug testing policies and practices with regard to criminal justice populations; and
(2) establishing appropriate interventions to illegal drug use for offender populations. Applicants may choose to submit joint proposals with other eligible criminal justice/court agencies for systemic drug testing and intervention programs; in this case, one organization must be designated as the primary applicant. SEC. 4122. ADMINISTRATION.
(a) Consultation/Coordination.--In carrying out section 4121, the Attorney General shall coordinate with the other Justice Department initiatives that address drug testing and interventions in the criminal justice system.
(b) Guidelines.--The Attorney General may issue guidelines necessary to carry out section 4121.
(c) Applications.--In addition to any other requirements that may be specified by the Attorney General, an application for a grant under section 4121 shall--
(1) reflect a comprehensive approach that recognizes the importance of collaboration and a continuum of testing, treatment, and other interventions;
(2) include a long-term strategy and detailed implementation plan;
(3) address the applicant's capability to continue the proposed program following the conclusion of Federal support;
(4) identify related governmental or community initiatives which complement or will be coordinated with the proposal;
(5) certify that there has been appropriate consultation with affected agencies and key stakeholders throughout the criminal justice system and that there will be continued coordination throughout the implementation of the program; and
(6) describe the methodology that will be used in evaluating the program.
SEC. 4123. APPLICATIONS.
To request funds under section 4121, interested applicants shall submit an application to the Attorney General in such form and containing such information as the Attorney General may reasonably require. Federal funding shall be awarded on a competitive basis based on criteria established by the Attorney General and specified in program guidelines.
SEC. 4124. FEDERAL SHARE.
The Federal share of a grant made under section 4121 may not exceed 75 percent of the total cost of the program described in the application submitted for the fiscal year for which the program receives assistance under section 4121, unless the Attorney General waives, wholly or in part, the requirement of a matching contribution under this section. In-kind contributions may constitute a portion of the non-federal share of a grant.
SEC. 4125. GEOGRAPHIC DISTRIBUTION.
The Attorney General shall ensure that, to the extent practicable, an equitable geographic distribution of grant awards under section 4121 is made, with rural and tribal jurisdiction representation.
SEC. 4126. TECHNICAL ASSISTANCE, TRAINING, AND EVALUATION.
(a) Technical Assistance and Training.--The Attorney General shall provide technical assistance and training in furtherance of the purposes of section 4121.
(b) Evaluation.--In addition to any evaluation requirements that may be prescribed for grantees, the Attorney General may carry out or make arrangements for a rigorous evaluation of the programs that receive support under section 4121.
(c) Administration.--The technical assistance, training, and evaluations authorized by this section may be carried out directly by the Attorney General or through grants, contracts, or cooperative agreements with other entities.
SEC. 4127. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out sections 4122 through 4126 $75,000,000 for fiscal year 2002 and such sums as may be necessary for fiscal years 2003 through 2006.
SEC. 4128. PERMANENT SET-ASIDE FOR RESEARCH AND EVALUATION.
The Attorney General shall reserve not less than 1 percent and no more than 3 percent of the sums appropriated under section 4127 in each fiscal year for research and evaluation of this program.
SEC. 4129. ADDITIONAL REQUIREMENTS FOR THE USE OF FUNDS UNDER
THE VIOLENT OFFENDER INCARCERATION AND TRUTH-
IN-SENTENCING GRANT PROGRAMS.
Section 20105(b) of the Violent Crime Control and Law Enforcement Act of 1994 (42 U.S.C. 13705(b)) is amended to read as follows:
``(b) Additional Requirements.--
``(1) Eligibility for grant.--To be eligible to receive a grant under section 20103 or section 20104, a State shall--
``(A) provide assurances to the Attorney General that the State has implemented or will implement not later than 18 months after the date of the enactment of this subtitle, policies that provide for the recognition of the rights of crime victims; and
``(B) no later than September 1, 2002, have a program of drug testing and intervention for appropriate categories of convicted offenders during periods of incarceration and criminal justice supervision, with sanctions including denial or revocation of release for positive drug tests, consistent with guidelines issued by the Attorney General.
``(2) Use of funds.--Funds provided under section 20103 or section 20104 of this subtitle may be applied to the cost of offender drug testing and appropriate intervention programs during periods of incarceration and criminal justice supervision, consistent with guidelines issued by the Attorney General. Further, such funds may be used by the States to pay the costs of providing to the Attorney General a baseline study on their prison drug abuse problem. Such studies shall be consistent with guidelines issued by the Attorney General.
``(3) System of sanctions and penalties.--Beginning in fiscal year 2002, and thereafter, States receiving funds pursuant to section 20103 or section 20104 of this subtitle shall have a system of sanctions and penalties that address drug trafficking within and into correctional facilities under their jurisdiction. Such systems shall be in accordance with guidelines issued by the Attorney General. Beginning in fiscal year 2002, and each year thereafter, any State that the Attorney General determines not to be in compliance with the provisions of this paragraph shall have the funds it would have otherwise been eligible to receive under section 20103 or section 20104 reduced by 10 percent for each fiscal year for which the Attorney General determines it does not comply. Any funds that are not allocated for failure to comply with this section shall be reallocated to States that comply with this section.''.
PART 3--DRUG TREATMENT
SEC. 4131. DRUG TREATMENT ALTERNATIVE TO PRISON PROGRAMS
ADMINISTERED BY STATE OR LOCAL PROSECUTORS.
(a) Prosecution Drug Treatment Alternative to Prison Programs.--Title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3711 et seq.) is amended by adding at the end the following new part:
``PART CC--PROSECUTION DRUG TREATMENT ALTERNATIVE TO PRISON PROGRAMS
``SEC. 2901. PROGRAM AUTHORIZED.
``(a) In General.--The Attorney General may make grants to State or local prosecutors for the purpose of developing, implementing, or expanding drug treatment alternative to prison programs that comply with the requirements of this part.
``(b) Use of Funds.--A State or local prosecutor who receives a grant under this part shall use amounts provided under the grant to develop, implement, or expand the drug treatment alternative to prison program for which the grant was made, which may include payment of the following expenses:
``(1) Salaries, personnel costs, equipment costs, and other costs directly related to the operation of the program, including the enforcement unit.
``(2) Payments to licensed substance abuse treatment providers for providing treatment to offenders participating in the program for which the grant was made, including aftercare supervision, vocational training, education, and job placement.
``(3) Payments to public and nonprofit private entities for providing treatment to offenders participating in the program for which the grant was made.
``(c) Federal Share.--The Federal share of a grant under this part shall not exceed 75 percent of the cost of the program.
``(d) Supplement and Not Supplant.--Grant amounts received under this part shall be used to supplement, and not supplant, non-Federal funds that would otherwise be available for activities funded under this part.
``SEC. 2902. PROGRAM REQUIREMENTS.
``A drug treatment alternative to prison program with respect to which a grant is made under this part shall comply with the following requirements:
``(1) A State or local prosecutor shall administer the program.
``(2) An eligible offender may participate in the program only with the consent of the State or local prosecutor.
``(3) Each eligible offender who participates in the program shall, as an alternative to incarceration, be sentenced to or placed with a long term, drug free residential substance abuse treatment provider that is licensed under State or local law.
``(4) Each eligible offender who participates in the program shall serve a sentence of imprisonment with respect to the underlying crime if that offender does not successfully complete treatment with the residential substance abuse provider.
``(5) Each residential substance abuse provider treating an offender under the program shall--
``(A) make periodic reports of the progress of treatment of that offender to the State or local prosecutor carrying out the program and to the appropriate court in which the defendant was convicted; and
``(B) notify that prosecutor and that court if that offender absconds from the facility of the treatment provider or otherwise violates the terms and conditions of the program.
``(6) The program shall have an enforcement unit comprised of law enforcement officers under the supervision of the State or local prosecutor carrying out the program, the duties of which shall include verifying an offender's addresses and other contacts, and, if necessary, locating, apprehending, and arresting an offender who has absconded from the facility of a residential substance abuse treatment provider or otherwise violated the terms and conditions of the program, and returning such offender to court for sentence on the underlying crime.
``SEC. 2903. APPLICATIONS.
``(a) In General.--To request a grant under this part, a State or local prosecutor shall submit an application to the Attorney General in such form and containing such information as the Attorney General may reasonably require.
``(b) Certifications.--Each such application shall contain the certification of the State or local prosecutor that the program for which the grant is requested shall meet each of the requirements of this part.
``SEC. 2904. GEOGRAPHIC DISTRIBUTION.
``The Attorney General shall ensure that, to the extent practicable, the distribution of grant awards is equitable and includes State or local prosecutors--
``(1) in each State; and
``(2) in rural, suburban, and urban jurisdictions.
``SEC. 2905. REPORTS AND EVALUATIONS.
``For each fiscal year, each recipient of a grant under this part during that fiscal year shall submit to the Attorney General a report regarding the effectiveness of activities carried out using that grant. Each report shall include an evaluation in such form and containing such information as the Attorney General may reasonably require. The Attorney General shall specify the dates on which such reports shall be submitted.
``SEC. 2906. DEFINITIONS.
``In this part:
``(1) Eligible offender.--The term `eligible offender' means an individual who--
``(A) has been convicted of, or pled guilty to, or admitted guilt with respect to a crime for which a sentence of imprisonment is required and has not completed such sentence;
``(B) has never been convicted of, or pled guilty to, or admitted guilt with respect to, and is not presently charged with, a felony crime of violence or a major drug offense or a crime that is considered a violent felony under State or local law; and
``(C) has been found by a professional substance abuse screener to be in need of substance abuse treatment because that offender has a history of substance abuse that is a significant contributing factor to that offender's criminal conduct.
``(2) Felony crime of violence.--The term `felony crime of violence' has the meaning given such term in section 924(c)(3) of title 18, United States Code.
``(3) Major drug offense.--The term `major drug offense' has the meaning given such term in section 36(a) of title 18, United States Code.
``(4) State or local prosecutor.--The term `State or local prosecutor' means any district attorney, State attorney general, county attorney, or corporation counsel who has authority to prosecute criminal offenses under State or local law.''.
(b) Authorization of Appropriations.--Section 1001(a) of title I of the Omnibus Crime Control and Safe Street Act of 1968 (42 U.S.C. 3793(a)) is amended by adding at the end the following new paragraph:
``(24) There are authorized to be appropriated to carry out part CC--
``(A) $75,000,000 for fiscal year 2002;
``(B) $85,000,000 for fiscal year 2003;
``(C) $95,000,000 for fiscal year 2004;
``(D) $105,000,000 for fiscal year 2005; and
``(E) $125,000,000 for fiscal year 2006.''.
SEC. 4132. SUBSTANCE ABUSE TREATMENT IN FEDERAL PRISONS
REAUTHORIZATION.
Section 3621(e)(4) of title 18, United States Code, is amended by striking subparagraph (E) and inserting the following:
``(E) $31,000,000 for fiscal year 2002; and
``(F) $38,000,000 for fiscal year 2003.''.
SEC. 4133. RESIDENTIAL SUBSTANCE ABUSE TREATMENT FOR STATE
PRISONERS REAUTHORIZATION
(a) Reauthorization.--Paragraph (17) of section 1001(a) of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3793(a)(17)) is amended to read as follows:
``(17) There are authorized to be appropriated to carry out part S $100,000,000 for fiscal year 2002 and such sums as may be necessary for fiscal years 2003 through 2007.''.
(b) Use of Residential Substance Abuse Treatment Grants to Provide For Services During and After Incarceration.--Section 1901 of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796ff) is amended by adding at the end the following:
``(c) Additional Use of Funds.--States that demonstrate that they have existing in-prison drug treatment programs that are in compliance with Federal requirements may use funds awarded under this part for treatment and sanctions both during incarceration and after release.''.
SEC. 4134. DRUG TREATMENT FOR JUVENILES.
Title V of the Public Health Service Act (42 U.S.C. 290aa et seq.) is amended by adding at the end the following:
``PART G--RESIDENTIAL TREATMENT PROGRAMS FOR JUVENILES
``SEC. 575. RESIDENTIAL TREATMENT PROGRAMS FOR JUVENILES.
``(a) In General.--The Director of the Center for Substance Abuse Treatment shall award grants to, or enter into cooperative agreements or contracts, with public and nonprofit private entities for the purpose of providing treatment to juveniles for substance abuse through programs in which, during the course of receiving such treatment the juveniles reside in facilities made available by the programs.
``(b) Availability of Services for Each Participant.--A funding agreement for an award under subsection (a) for an applicant is that, in the program operated pursuant to such subsection--
``(1) treatment services will be available through the applicant, either directly or through agreements with other public or nonprofit private entities; and
``(2) the services will be made available to each person admitted to the program.
``(c) Individualized Plan of Services.--A funding agreement for an award under subsection (a) for an applicant is that--
``(1) in providing authorized services for an eligible person pursuant to such subsection, the applicant will, in consultation with the juvenile and, if appropriate the parent or guardian of the juvenile, prepare an individualized plan for the provision to the juvenile or young adult of the services; and
``(2) treatment services under the plan will include--
``(A) individual, group, and family counseling, as appropriate, regarding substance abuse; and
``(B) followup services to assist the juvenile or young adult in preventing a relapse into such abuse.
``(d) Eligible Supplemental Services.--Grants under subsection (a) may be used to provide an eligible juvenile, the following services:
``(1) Hospital referrals.--Referrals for necessary hospital services.
``(2) HIV and aids counseling.--Counseling on the human immunodeficiency virus and on acquired immune deficiency syndrome.
``(3) Domestic violence and sexual abuse counseling.--Counseling on domestic violence and sexual abuse.
``(4) Preparation for reentry into society.--Planning for and counseling to assist reentry into society, both before and after discharge, including referrals to any public or nonprofit private entities in the community involved that provide services appropriate for the juvenile.
``(e) Minimum Qualifications for Receipt of Award.--
``(1) Certification by relevant state agency.--With respect to the principal agency of a State or Indian tribe that administers programs relating to substance abuse, the Director may award a grant to, or enter into a cooperative agreement or contract with, an applicant only if the agency or Indian tribe has certified to the Director that--
``(A) the applicant has the capacity to carry out a program described in subsection (a);
``(B) the plans of the applicant for such a program are consistent with the policies of such agency regarding the treatment of substance abuse; and
``(C) the applicant, or any entity through which the applicant will provide authorized services, meets all applicable State licensure or certification requirements regarding the provision of the services involved.
``(2) Status as medicaid provider.--
``(A) In general.--Subject to subparagraphs (B) and (C), the Director may make a grant, or enter into a cooperative agreement or contract, under subsection (a) only if, in the case of any authorized service that is available pursuant to the State plan approved under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) for the State involved--
``(i) the applicant for the grant, cooperative agreement, or contract will provide the service directly, and the applicant has entered into a participation agreement under the State plan and is qualified to receive payments under such plan; or
``(ii) the applicant will enter into an agreement with a public or nonprofit private entity under which the entity will provide the service, and the entity has entered into such a participation agreement plan and is qualified to receive such payments.
``(B) Services.--
``(i) In general.--In the case of an entity making an agreement pursuant to subparagraph (A)(ii) regarding the provision of services, the requirement established in such subparagraph regarding a participation agreement shall be waived by the Director if the entity does not, in providing health care services, impose a charge or accept reimbursement available from any third party payor, including reimbursement under any insurance policy or under any Federal or State health benefits plan.
``(ii) Voluntary donations.--A determination by the Director of whether an entity referred to in clause (i) meets the criteria for a waiver under such clause shall be made without regard to whether the entity accepts voluntary donations regarding the provision of services to the public.
``(C) Mental diseases.--
``(i) In general.--With respect to any authorized service that is available pursuant to the State plan described in subparagraph (A), the requirements established in such subparagraph shall not apply to the provision of any such service by an institution for mental diseases to an individual who has attained 21 years of age and who has not attained 65 years of age.
``(ii) Definition of institution for mental diseases.--In this subparagraph, the term `institution for mental diseases' has the same meaning as in section 1905(i) of the Social Security Act (42 U.S.C. 1396d(i)).
``(f) Requirements for Matching Funds.--
``(1) In general.--With respect to the costs of the program to be carried out by an applicant pursuant to subsection (a), a funding agreement for an award under such subsection is that the applicant will make available (directly or through donations from public or private entities) non-Federal contributions toward such costs in an amount that--
``(A) for the first fiscal year for which the applicant receives payments under an award under such subsection, is not less than $1 for each $9 of Federal funds provided in the award;
``(B) for any second such fiscal year, is not less than $1 for each $9 of Federal funds provided in the award; and
``(C) for any subsequent such fiscal year, is not less than
$1 for each $3 of Federal funds provided in the award.
``(2) Determination of amount contributed.--Non-Federal contributions required in paragraph (1) may be in cash or in kind, fairly evaluated, including plant, equipment, or services. Amounts provided by the Federal Government, or services assisted or subsidized to any significant extent by the Federal Government, may not be included in determining the amount of such non-Federal contributions.
``(g) Outreach.--A funding agreement for an award under subsection (a) for an applicant is that the applicant will provide outreach services in the community involved to identify juveniles who are engaging in substance abuse and to encourage the juveniles to undergo treatment for such abuse.
``(h) Accessibility of Program.--A funding agreement for an award under subsection (a) for an applicant is that the program operated pursuant to such subsection will be operated at a location that is accessible to low income juveniles.
``(i) Continuing Education.--A funding agreement for an award under subsection (a) is that the applicant involved will provide for continuing education in treatment services for the individuals who will provide treatment in the program to be operated by the applicant pursuant to such subsection.
``(j) Imposition of Charges.--A funding agreement for an award under subsection (a) for an applicant is that, if a charge is imposed for the provision of authorized services to or on behalf of an eligible juvenile, such charge--
``(1) will be made according to a schedule of charges that is made available to the public;
``(2) will be adjusted to reflect the economic condition of the juvenile involved; and
``(3) will not be imposed on any such juvenile whose family has an income of less than 185 percent of the official poverty line, as established by the Director of the Office for Management and Budget and revised by the Secretary in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 9902(2)).
``(k) Reports to Director.--A funding agreement for an award under subsection (a) is that the applicant involved will submit to the Director a report--
``(1) describing the utilization and costs of services provided under the award;
``(2) specifying the number of juveniles served, and the type and costs of services provided; and
``(3) providing such other information as the Director determines to be appropriate.
``(l) Requirement of Application.--The Director may make an award under subsection (a) only if an application for the award is submitted to the Director containing such agreements, and the application is in such form, is made in such manner, and contains such other agreements and such assurances and information as the Director determines to be necessary to carry out this section.
``(m) Equitable Allocation of Awards.--In making awards under subsection (a), the Director shall ensure that the awards are equitably allocated among the principal geographic regions of the United States, as well as among Indian tribes, subject to the availability of qualified applicants for the awards.
``(n) Duration of Award.--
``(1) In general.--The period during which payments are made to an entity from an award under this section may not exceed 5 years.
``(2) Approval of director.--The provision of payments described in paragraph (1) shall be subject to--
``(A) annual approval by the Director of the payments; and
``(B) the availability of appropriations for the fiscal year at issue to make the payments.
``(3) No limitation.--This subsection may not be construed to establish a limitation on the number of awards that may be made to an entity under this section.
``(o) Evaluations; Dissemination of Findings.--The Director shall, directly or through contract, provide for the conduct of evaluations of programs carried out pursuant to subsection
(a). The Director shall disseminate to the States the findings made as a result of the evaluations.
``(p) Reports to Congress.--
``(1) Initial report.--Not later than October 1, 2002, the Director shall submit to the Committee on the Judiciary of the House of Representatives, and to the Committee on the Judiciary of the Senate, a report describing programs carried out pursuant to this section.
``(2) Periodic reports.--
``(A) In general.--Not less than biennially after the date described in paragraph (1), the Director shall prepare a report describing programs carried out pursuant to this section during the preceding 2-year period, and shall submit the report to the Administrator for inclusion in the biennial report under section 501(k).
``(B) Summary.--Each report under this subsection shall include a summary of any evaluations conducted under subsection (m) during the period with respect to which the report is prepared.
``(q) Definitions.--In this section:
``(1) Authorized services.--The term `authorized services' means treatment services and supplemental services.
``(2) Juvenile.--The term `juvenile' means anyone 18 years of age or younger at the time that of admission to a program operated pursuant to subsection (a).
``(3) Eligible juvenile.--The term `eligible juvenile' means a juvenile who has been admitted to a program operated pursuant to subsection (a).
``(4) Funding agreement under subsection (a).--The term
`funding agreement under subsection (a)', with respect to an award under subsection (a), means that the Director may make the award only if the applicant makes the agreement involved.
``(5) Treatment services.--The term `treatment services' means treatment for substance abuse, including the counseling and services described in subsection (c)(2).
``(6) Supplemental services.--The term `supplemental services' means the services described in subsection (d).
``(r) Authorization of Appropriations.--
``(1) In general.--For the purpose of carrying out this section and section 576 there is authorized to be appropriated such sums as may be necessary for fiscal years 2002 and 2003. There is authorized to be appropriated from the Violent Crime Reduction Trust Fund $300,000,000 in each of fiscal years 2004 and 2005.
``(2) Transfer.--For the purpose described in paragraph
(1), in addition to the amounts authorized in such paragraph to be appropriated for a fiscal year, there is authorized to be appropriated for the fiscal year from the special forfeiture fund of the Director of the Office of National Drug Control Policy such sums as may be necessary.
``(3) Rule of construction.--The amounts authorized in this subsection to be appropriated are in addition to any other amounts that are authorized to be appropriated and are available for the purpose described in paragraph (1).
``SEC. 576. OUTPATIENT TREATMENT PROGRAMS FOR JUVENILES.
``(a) Grants.--The Secretary of Health and Human Services, acting through the Director of the Center for Substance Abuse Treatment, shall make grants to establish projects for the outpatient treatment of substance abuse among juveniles.
``(b) Prevention.--Entities receiving grants under this section shall engage in activities to prevent substance abuse among juveniles.
``(c) Evaluation.--The Secretary of Health and Human Services shall evaluate projects carried out under subsection
(a) and shall disseminate to appropriate public and private entities information on effective projects.''.
PART 4--FUNDING FOR DRUG-FREE COMMUNITY PROGRAMS
SEC. 4141. EXTENSION OF SAFE AND DRUG-FREE SCHOOLS AND
COMMUNITIES PROGRAM.
Title IV of the Elementary and Secondary Education Act (20 U.S.C. 7104) is amended to read as follows:
``TITLE IV--AUTHORIZATIONS
``SEC. 4001. AUTHORIZATION OF APPROPRIATIONS.
``There is authorized to be appropriated for State grants under subpart 1 and national programs under subpart 2,
$655,000,000 for fiscal years 2002 and 2003, and $955,000,000 for fiscal years 2004 through 2005, of which the following amounts may be appropriated from the Violent Crime Reduction Trust Fund:
``(1) $300,000,000 for fiscal year 2004; and
``(2) $300,000,000 for fiscal year 2005.''.
SEC. 4142. SAY NO TO DRUGS COMMUNITY CENTERS.
(a) Short Title.--This section may be cited as the ``Say No to Drugs Community Centers Act of 2001''.
(b) Definitions.--In this section--
(1) Community-based organization.--The term ``community-based organization'' means a private, locally initiated organization that--
(A) is a nonprofit organization, as that term is defined in section 103(23) of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5603(23)); and
(B) involves the participation, as appropriate, of members of the community and community institutions, including--
(i) business and civic leaders actively involved in providing employment and business development opportunities in the community;
(ii) educators;
(iii) religious organizations (which shall not provide any sectarian instruction or sectarian worship in connection with program activities funded under this subtitle);
(iv) law enforcement agencies; and
(v) other interested parties.
(2) Eligible community.--The term ``eligible community'' means a community--
(A) identified by an eligible recipient for assistance under this subtitle; and
(B) an area that meets such criteria as the Attorney General may, by regulation, establish, including criteria relating to poverty, juvenile delinquency, and crime.
(3) Eligible recipient.--The term ``eligible recipient'' means a community-based organization or public school that has--
(A) been approved for eligibility by the Attorney General, upon application submitted to the Attorney General in accordance with subsection (e); and
(B) demonstrated that the projects and activities it seeks to support in an eligible community involve the participation, when feasible and appropriate, of--
(i) parents, family members, and other members of the eligible community;
(ii) civic and religious organizations serving the eligible community;
(iii) school officials and teachers employed at schools located in the eligible community;
(iv) public housing resident organizations in the eligible community; and
(v) public and private nonprofit organizations and organizations serving youth that provide education, child protective services, or other human services to low income, at-risk youth and their families.
(4) Poverty line.--The term ``poverty line'' means the income official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Community Services Block Grant Act
(42 U.S.C. 9902(2)) applicable to a family of the size involved.
(5) Public school.--The term ``public school'' means a public elementary school, as defined in section 1201(i) of the Higher Education Act of 1965 (20 U.S.C. 1141(i)), and a public secondary school, as defined in section 1201(d) of that Act (42 U.S.C. 1141(d)).
(c) Grant Requirements.--The Attorney General may make grants to eligible recipients, which grants may be used to provide to youth living in eligible communities during after school hours or summer vacations, the following services:
(1) Rigorous drug prevention education.
(2) Drug counseling and treatment.
(3) Academic tutoring and mentoring.
(4) Activities promoting interaction between youth and law enforcement officials.
(5) Vaccinations and other basic preventive health care.
(6) Sexual abstinence education.
(7) Other activities and instruction to reduce youth violence and substance abuse.
(d) Location and Use of Amounts.--An eligible recipient that receives a grant under this section--
(1) shall ensure that the stated program is carried out--
(A) when appropriate, in the facilities of a public school during nonschool hours; or
(B) in another appropriate local facility that is--
(i) in a location easily accessible to youth in the community; and
(ii) in compliance with all applicable State and local ordinances;
(2) shall use the grant amounts to provide to youth in the eligible community services and activities that include extracurricular and academic programs that are offered--
(A) after school and on weekends and holidays, during the school year; and
(B) as daily full day programs (to the extent available resources permit) or as part day programs, during the summer months;
(3) shall use not more than 5 percent of the amounts to pay for the administrative costs of the program;
(4) shall not use such amounts to provide sectarian worship or sectarian instruction; and
(5) may not use the amounts for the general operating costs of public schools.
(e) Applications.--
(1) In general.--Each application to become an eligible recipient shall be submitted to the Attorney General at such time, in such manner, and accompanied by such information, as the Attorney General may reasonably require.
(2) Contents of application.--Each application submitted pursuant to paragraph (1) shall--
(A) describe the activities and services to be provided through the program for which the grant is sought;
(B) contain a comprehensive plan for the program that is designed to achieve identifiable goals for youth in the eligible community;
(C) describe in detail the drug education and drug prevention programs that will be implemented;
(D) specify measurable goals and outcomes for the program that will include--
(i) reducing the percentage of youth in the eligible community that enter the juvenile justice system or become addicted to drugs;
(ii) increasing the graduation rates, school attendance, and academic success of youth in the eligible community; and
(iii) improving the skills of program participants;
(E) contain an assurance that the applicant will use grant amounts received under this subtitle to provide youth in the eligible community with activities and services consistent with subsection (c);
(F) demonstrate the manner in which the applicant will make use of the resources, expertise, and commitment of private entities in carrying out the program for which the grant is sought;
(G) include an estimate of the number of youth in the eligible community expected to be served under the program;
(H) include a description of charitable private resources, and all other resources, that will be made available to achieve the goals of the program;
(I) contain an assurance that the applicant will comply with any research effort authorized under Federal law, and any investigation by the Attorney General;
(J) contain an assurance that the applicant will prepare and submit to the Attorney General an annual report regarding any program conducted under this subtitle;
(K) contain an assurance that the program for which the grant is sought will, to the maximum extent practicable, incorporate services that are provided solely through non-Federal private or nonprofit sources; and
(L) contain an assurance that the applicant will maintain separate accounting records for the program for which the grant is sought.
(3) Priority.--In determining eligibility under this section, the Attorney General shall give priority to applicants that submit applications that demonstrate the greatest local support for the programs they seek to support.
(f) Payments; Federal Share; Non-Federal Share.--
(1) Payments.--The Attorney General shall, subject to the availability of appropriations, provide to each eligible recipient the Federal share of the costs of developing and carrying out programs described in this section.
(2) Federal share.--The Federal share of the cost of a program under this subtitle shall be not more than--
(A) 75 percent of the total cost of the program for each of the first 2 years of the duration of a grant;
(B) 70 percent of the total cost of the program for the third year of the duration of a grant; and
(C) 60 percent of the total cost of the program for each year thereafter.
(3) Non-federal share.--
(A) In general.--The non-Federal share of the cost of a program under this subtitle may be in cash or in kind, fairly evaluated, including plant, equipment, and services. Federal funds made available for the activity of any agency of an Indian tribal government or the Bureau of Indian Affairs on any Indian lands may be used to provide the non-Federal share of the costs of programs or projects funded under this subtitle.
(B) Special rule.--Not less than 15 percent of the non-Federal share of the costs of a program under this subtitle shall be provided from private or nonprofit sources.
(g) Program Authority.--
(1) In general.--
(A) Allocations for states and indian tribes.--
(i) In general.--In any fiscal year in which the total amount made available to carry out this subtitle is equal to or greater than $20,000,000, from the amount made available to carry out this subtitle, the Attorney General shall allocate not less than 0.75 percent for grants under subparagraph (B) to eligible recipients in each State.
(ii) Indian tribes.--The Attorney General shall allocate 0.75 percent of amounts made available under this subtitle for grants to Indian tribes.
(B) Grants to community-based organizations and public schools from allocations.--For each fiscal year described in subparagraph (A), the Attorney General may award grants from the appropriate State or Indian tribe allocation determined under subparagraph (A) on a competitive basis to eligible recipients to pay for the Federal share of assisting eligible communities to develop and carry out programs in accordance with this subtitle.
(C) Reallocation.--If, at the end of a fiscal year described in subparagraph (A), the Attorney General determines that amounts allocated for a particular State or Indian tribe under subparagraph (B) remain unobligated, the Attorney General shall use such amounts to award grants to eligible recipients in another State or Indian tribe to pay for the Federal share of assisting eligible communities to develop and carry out programs in accordance with this subtitle. In awarding such grants, the Attorney General shall consider the need to maintain geographic diversity among eligible recipients.
(D) Availability of amounts.--Amounts made available under this paragraph shall remain available until expended.
(2) Other fiscal years.--In any fiscal year in which the amount made available to carry out this subtitle is equal to or less than $20,000,000, the Attorney General may award grants on a competitive basis to eligible recipients to pay for the Federal share of assisting eligible communities to develop and carry out programs in accordance with this subtitle.
(3) Administrative costs.--The Attorney General may use not more than 3 percent of the amounts made available to carry out this subtitle in any fiscal year for administrative costs, including training and technical assistance.
(h) Authorization of Appropriations.--There are authorized to be appropriated to carry out this section from the Violent Crime Reduction Trust Fund--
(1) for fiscal year 2002, $125,000,000; and
(2) for fiscal year 2003, $125,000,000.
SEC. 4143. DRUG EDUCATION AND PREVENTION RELATING TO YOUTH
GANGS.
Section 3505 of the Anti-Drug Abuse Act of 1988 (42 U.S.C. 11805) is amended to read as follows:
``SEC. 3505. AUTHORIZATION OF APPROPRIATIONS.
``There is authorized to be appropriated to carry out this chapter such sums as may be necessary for each of fiscal years 2002, 2003, 2004, 2005, and 2006.''.
SEC. 4144. DRUG EDUCATION AND PREVENTION PROGRAM FOR RUNAWAY
AND HOMELESS YOUTH.
Section 3513 of the Anti-Drug Abuse Act of 1988 (42 U.S.C. 11823) is amended to read as follows:
``SEC. 3513. AUTHORIZATION OF APPROPRIATIONS.
``There is authorized to be appropriated to carry out this chapter such sums as may be necessary for each of fiscal years 2002, 2003, 2004, 2005, and 2006.''.
Subtitle B--Youth Crime Prevention and Juvenile Courts
PART 1--GRANTS TO YOUTH ORGANIZATIONS
SEC. 4211. GRANT PROGRAM.
The Attorney General may make grants to States, Indian tribes, and national or statewide nonprofit organizations in crime prone areas, such as Boys and Girls Clubs, Police Athletic Leagues, 4-H Clubs, YMCA Big Brothers and Big Sisters, and Kids 'N Kops programs, for the purpose of--
(1) providing constructive activities to youth during after school hours, weekends, and school vacations;
(2) providing supervised activities in safe environments to youth in crime prone areas;
(3) providing antidrug education to prevent drug abuse among youth;
(4) supporting police officer training and salaries and educational materials to expand D.A.R.E. America's middle school campaign; or
(5) providing constructive activities to youth in a safe environment through parks and other public recreation areas.
SEC. 4212. GRANTS TO NATIONAL ORGANIZATIONS.
(a) Applications.--
(1) Eligibility.--In order to be eligible to receive a grant under this section, the chief operating officer of a national or statewide community-based organization shall submit an application to the Attorney General in such form and containing such information as the Attorney General may reasonably require.
(2) Application requirements.--Each application submitted in accordance with paragraph (1) shall include--
(A) a request for a grant to be used for the purposes described in this subtitle;
(B) a description of the communities to be served by the grant, including the nature of juvenile crime, violence, and drug use in the communities;
(C) written assurances that Federal funds received under this subtitle will be used to supplement and not supplant, non-Federal funds that would otherwise be available for activities funded under this subtitle;
(D) written assurances that all activities will be supervised by an appropriate number of responsible adults;
(E) a plan for assuring that program activities will take place in a secure environment that is free of crime and drugs; and
(F) any additional statistical or financial information that the Attorney General may reasonably require.
(b) Grant Awards.--In awarding grants under this section, the Attorney General shall consider--
(1) the ability of the applicant to provide the stated services;
(2) the history and establishment of the applicant in providing youth activities on a national or statewide basis; and
(3) the extent to which the organizations shall achieve an equitable geographic distribution of the grant awards.
SEC. 4213. GRANTS TO STATES.
(a) Applications.--
(1) In general.--The Attorney General may make grants under this section to States for distribution to units of local government and community-based organizations for the purposes set forth in section 4211.
(2) Grants.--To request a grant under this section, the chief executive of a State shall submit an application to the Attorney General in such form and containing such information as the Attorney General may reasonably require.
(3) Application requirements.--Each application submitted in accordance with paragraph (2) shall include--
(A) a request for a grant to be used for the purposes described in this subtitle;
(B) a description of the communities to be served by the grant, including the nature of juvenile crime, violence, and drug use in the community;
(C) written assurances that Federal funds received under this subtitle will be used to supplement and not supplant, non-Federal funds that would otherwise be available for activities funded under this subtitle;
(D) written assurances that all activities will be supervised by an appropriate number of responsible adults; and
(E) a plan for assuring that program activities will take place in a secure environment that is free of crime and drugs.
(b) Grant Awards.--In awarding grants under this section, the State shall consider--
(1) the ability of the applicant to provide the stated services;
(2) the history and establishment of the applicant in the community to be served;
(3) the level of juvenile crime, violence, and drug use in the community;
(4) the extent to which structured extracurricular activities for youth are otherwise unavailable in the community;
(5) the need in the community for secure environments for youth to avoid criminal victimization and exposure to crime and illegal drugs;
(6) to the extent practicable, achievement of an equitable geographic distribution of the grant awards; and
(7) whether the applicant has an established record of providing extracurricular activities that are generally not otherwise available to youth in the community.
(c) Allocation.--
(1) State allocations.--The Attorney General shall allot not less than 0.75 percent of the total amount made available each fiscal year to carry out this section to each State that has applied for a grant under this section.
(2) Indian tribes.--The Attorney General shall allot not less than 0.75 percent of the total amount made available each fiscal year to carry out this section to Indian tribes, in accordance with the criteria set forth in subsections (a) and (b).
(3) Remaining amounts.--Of the amount remaining after the allocations under paragraphs (1) and (2), the Attorney General shall allocate to each State an amount that bears the same ratio to the total amount of remaining funds as the population of the State bears to the total population of all States.
SEC. 4214. ALLOCATION; GRANT LIMITATION.
(a) Allocation.--Of amounts made available to carry out this part--
(1) 20 percent shall be for grants to national or statewide organizations under section 4212; and
(2) 80 percent shall be for grants to States under section 4213.
(b) Grant Limitation.--Not more than 3 percent of the funds made available to the Attorney General or a grant recipient under this subtitle may be used for administrative purposes.
SEC. 4215. REPORT AND EVALUATION.
(a) Report to the Attorney General.--Not later than October 1, 2002 and October 1 of each year thereafter, each grant recipient under this subtitle shall submit to the Attorney General a report that describes, for the year to which the report relates--
(1) the activities provided;
(2) the number of youth participating;
(3) the extent to which the grant enabled the provision of activities to youth that would not otherwise be available; and
(4) any other information that the Attorney General requires for evaluating the effectiveness of the program.
(b) Evaluation and Report to Congress.--Not later than March 1, 2003, and March 1 of each year thereafter, the Attorney General shall submit to Congress an evaluation and report that contains a detailed statement regarding grant awards, activities of grant recipients, a compilation of statistical information submitted by grant recipients under this part, and an evaluation of programs established by grant recipients under this part.
(c) Criteria.--In assessing the effectiveness of the programs established and operated by grant recipients pursuant to this part, the Attorney General shall consider--
(1) the number of youth served by the grant recipient;
(2) the percentage of youth participating in the program charged with acts of delinquency or crime compared to youth in the community at large;
(3) the percentage of youth participating in the program that uses drugs compared to youth in the community at large;
(4) the percentage of youth participating in the program that are victimized by acts of crime or delinquency compared to youth in the community at large; and
(5) the truancy rates of youth participating in the program compared to youth in the community at large.
(d) Documents and Information.--Each grant recipient under this part shall provide the Attorney General with all documents and information that the Attorney General determines to be necessary to conduct an evaluation of the effectiveness of programs funded under this part.
SEC. 4216. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There are authorized to be appropriated to carry out this part from the Violent Crime Reduction Trust Fund--
(1) such sums as may be necessary for each of fiscal years 2002 and 2003; and
(2) $125,000,000 for each of fiscal years 2004 and 2005.
(b) Continued Availability.--Amounts made available under this part shall remain available until expended.
SEC. 4217. GRANTS TO PUBLIC AND PRIVATE AGENCIES.
Title II of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5611 et seq.) is amended--
(1) by striking the first part designated as part I;
(2) by redesignating the second part designated as part I as part M; and
(3) by inserting after part H the following:
``PART I--AFTER SCHOOL CRIME PREVENTION
``SEC. 291. GRANTS TO PUBLIC AND PRIVATE AGENCIES FOR
EFFECTIVE AFTER SCHOOL CRIME PREVENTION
PROGRAMS.
``(a) In General.--Subject to the availability of appropriations, the Administrator shall make grants in accordance with this section to public and private agencies to fund effective after school juvenile crime prevention programs.
``(b) Matching Requirement.--The Administrator may not make a grant to a public or private agency under this section unless that agency agrees that, with respect to the costs to be incurred by the agency in carrying out the program for which the grant is to be awarded, the agency will make available non-Federal contributions in an amount that is not less than a specific percentage of Federal funds provided under the grant, as determined by the Administrator.
``(c) Priority.--In making grants under this section, the Administrator shall give priority to funding programs that--
``(1) are targeted to high crime neighborhoods or at-risk juveniles;
``(2) operate during the period immediately following normal school hours;
``(3) provide educational or recreational activities designed to encourage law-abiding conduct, reduce the incidence of criminal activity, and teach juveniles alternatives to crime; and
``(4) coordinate with State or local juvenile crime control and juvenile offender accountability programs.
``(d) Funding.--There are authorized to be appropriated for grants under this section $250,000,000 for each of fiscal years 2002, 2003, 2004, 2005, and 2006.''.
PART 2--REAUTHORIZATION OF INCENTIVE GRANTS FOR LOCAL DELINQUENCY
PREVENTION PROGRAMS
SEC. 4221. INCENTIVE GRANTS FOR LOCAL DELINQUENCY PREVENTION
PROGRAMS.
Section 506 of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5785) is amended to read as follows:
``SEC. 506. AUTHORIZATION OF APPROPRIATIONS.
``There is authorized to be appropriated to carry out this title such sums as may be necessary for each of fiscal years 2002, 2003, 2004, 2005, and 2006.''.
SEC. 4222. RESEARCH, EVALUATION, AND TRAINING.
Title V of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5781 et seq.) is amended by adding at the end the following:
``SEC. 507. RESEARCH, EVALUATION, AND TRAINING.
``Of the amounts made available by appropriations pursuant to section 506--
``(1) 2 percent shall be used by the Administrator for providing training and technical assistance under this title; and
``(2) 10 percent shall be used by the Administrator for research, statistics, and evaluation activities carried out in conjunction with the grant programs under this title.''.
PART 3--JUMP AHEAD
SEC. 4231. SHORT TITLE.
This part may be cited as the ``JUMP Ahead Act of 2001''.
SEC. 4232. FINDINGS.
Congress finds that--
(1) millions of young people in America live in areas in which drug use and violent and property crimes are pervasive;
(2) unfortunately, many of these same young people come from single parent homes, or from environments in which there is no responsible, caring adult supervision;
(3) all children and adolescents need caring adults in their lives, and mentoring is an effective way to fill this special need for at-risk children;
(4) the special bond of commitment fostered by the mutual respect inherent in effective mentoring can be the tie that binds a young person to a better future;
(5) through a mentoring relationship, adult volunteers and participating youth make a significant commitment of time and energy to develop relationships devoted to personal, academic, or career development and social, artistic, or athletic growth;
(6) rigorous independent studies have confirmed that effective mentoring programs can significantly reduce and prevent the use of alcohol and drugs by young people, improve school attendance and performance, improve peer and family and peer relationships, and reduce violent behavior;
(7) since the inception of the Federal JUMP program, dozens of innovative, effective mentoring programs have received funding grants;
(8) unfortunately, despite the recent growth in public and private mentoring initiatives, it is reported that between 5,000,000 and 15,000,000 additional children in the United States could benefit from being matched with a mentor; and
(9) although great strides have been made in reaching at-risk youth since the inception of the JUMP program, millions of vulnerable American children are not being reached, and without an increased commitment to connect these young people to responsible adult role models, our country risks losing an entire generation to drugs, crime, and unproductive lives.
SEC. 4233. JUVENILE MENTORING GRANTS.
(a) In General.--Section 288B of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5667e-2) is amended--
(1) by inserting ``(a) In General.--'' before ``The Administrator shall'';
(2) by striking paragraph (2) and inserting the following:
``(2) are intended to achieve 1 or more of the following goals:
``(A) Discourage at-risk youth from--
``(i) using illegal drugs and alcohol;
``(ii) engaging in violence;
``(iii) using guns and other dangerous weapons;
``(iv) engaging in other criminal and antisocial behavior; and
``(v) becoming involved in gangs.
``(B) Promote personal and social responsibility among at-risk youth.
``(C) Increase at-risk youth's participation in, and enhance the ability of those youth to benefit from, elementary and secondary education.
``(D) Encourage at-risk youth participation in community service and community activities.
``(E) Provide general guidance to at-risk youth.''; and
(3) by adding at the end the following:
``(b) Amount and Duration.--Each grant under this part shall be awarded in an amount not to exceed a total of
$200,000 over a period of not more than 3 years.
``(c) Authorization of Appropriations.--There is authorized to be appropriated $50,000,000 for each of fiscal years 2002, 2003, 2004, and 2005 to carry out this part.''.
SEC. 4234. IMPLEMENTATION AND EVALUATION GRANTS.
(a) In General.--The Administrator of the Office of Juvenile Justice and Delinquency Prevention of the Department of Justice may make grants to national organizations or agencies serving youth, in order to enable those organizations or agencies--
(1) to conduct a multisite demonstration project, involving between 5 and 10 project sites, that--
(A) provides an opportunity to compare various mentoring models for the purpose of evaluating the effectiveness and efficiency of those models;
(B) allows for innovative programs designed under the oversight of a national organization or agency serving youth, which programs may include--
(i) technical assistance;
(ii) training; and
(iii) research and evaluation; and
(C) disseminates the results of such demonstration project to allow for the determination of the best practices for various mentoring programs;
(2) to develop and evaluate screening standards for mentoring programs; and
(3) to develop and evaluate volunteer recruitment techniques and activities for mentoring programs.
(b) Authorization of Appropriations.--There is authorized to be appropriated $5,000,000 for each of fiscal years 2002, 2003, 2004, and 2005 to carry out this section.
SEC. 4235. EVALUATIONS; REPORTS.
(a) Evaluations.--
(1) In general.--The Attorney General shall enter into a contract with an evaluating organization that has demonstrated experience in conducting evaluations, for the conduct of an ongoing rigorous evaluation of the programs and activities assisted under this Act or under section 228B of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5667e-2) (as amended by this title).
(2) Criteria.--The Attorney General shall establish a minimum criteria for evaluating the programs and activities assisted under this Act or under section 228B of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5667e-2) (as amended by this title), which shall provide for a description of the implementation of the program or activity, and the effect of the program or activity on participants, schools, communities, and youth served by the program or activity.
(3) Mentoring program of the year.--The Attorney General shall, on an annual basis, based on the most recent evaluation under this subsection and such other criteria as the Attorney General shall establish by regulation--
(A) designate 1 program or activity assisted under this Act as the ``Juvenile Mentoring Program of the Year''; and
(B) publish notice of such designation in the Federal Register.
(b) Reports.--
(1) Grant recipients.--Each entity receiving a grant under this Act or under section 228B of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5667e-2) (as amended by this title) shall submit to the evaluating organization entering into the contract under subsection
(a)(1), an annual report regarding any program or activity assisted under this Act or under section 228B of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5667e-2) (as amended by this title). Each report under this paragraph shall be submitted at such time, in such a manner, and shall be accompanied by such information, as the evaluating organization may reasonably require.
(2) Comptroller general.--Not later than 4 years after the date of enactment of this Act, the Attorney General shall submit to Congress a report evaluating the effectiveness of grants awarded under this Act and under section 228B of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5667e-2) (as amended by this title), in--
(A) reducing juvenile delinquency and gang participation;
(B) reducing the school dropout rate; and
(C) improving academic performance of juveniles.
PART 4--TRUANCY PREVENTION
SEC. 4241. SHORT TITLE.
This part may be cited as the ``Truancy Prevention and Juvenile Crime Reduction Act of 2001''.
SEC. 4242. FINDINGS.
Congress makes the following findings:
(1) Truancy is often the first sign of trouble--the first indicator that a young person is giving up and losing his or her way.
(2) Many students who become truant eventually drop out of school, and high school drop outs are two and a half times more likely to be on welfare than high school graduates, twice as likely to be unemployed, or if employed, earn lower salaries.
(3) Truancy is the top-ranking characteristic of criminals--more common than such factors as coming from single-parent families and being abused as children.
(4) High rates of truancy are linked to high daytime burglary rates and high vandalism.
(5) As much as 44 percent of violent juvenile crime takes place during school hours.
(6) As many as 75 percent of children ages 13 to 16 who are arrested and prosecuted for crimes are truants.
(7) Some cities report as many as 70 percent of daily student absences are unexcused, and the total number of absences in a single city can reach 4,000 per day.
(8) Society pays a significant social and economic cost due to truancy: only 34 percent of inmates have completed high school education; 17 percent of youth under age 18 entering adult prisons have not completed grade school (8th grade or less), 25 percent completed 10th grade, and 2 percent completed high school.
(9) Truants and later high school drop outs cost the Nation
$240,000,000,000 in lost earnings and foregone taxes over their lifetimes, and the cost of crime control is staggering.
(10) In many instances, parents are unaware a child is truant.
(11) Effective truancy prevention, early intervention, and accountability programs can improve school attendance and reduce daytime crime rates.
(12) There is a lack of targeted funding for effective truancy prevention programs in current law.
SEC. 4243. GRANTS.
(a) Definitions.--In this section:
(1) Eligible partnership.--The term ``eligible partnership'' means a partnership between 1 or more qualified units of local government and 1 or more local educational agencies.
(2) Local educational agency.--The term ``local educational agency'' has the meaning given the term in section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801).
(3) Qualified unit of local government.--The term
``qualified unit of local government'' means a unit of local government that has in effect, as of the date on which the eligible partnership submits an application for a grant under this section, a statute or regulation that meets the requirements of section 223(a)(14) of the Juvenile Justice and Delinquency and Prevention Act of 1974 (42 U.S.C. 5633(a)(14)).
(4) Unit of local government.--The term ``unit of local government'' means any city, county, township, town, borough, parish, village, or other general purpose political subdivision of a State, or any Indian tribe.
(b) Grant Authority.--The Attorney General, in consultation with the Secretary of Education, shall make grants in accordance with this section on a competitive basis to eligible partnerships to reduce truancy and the incidence of daytime juvenile crime.
(c) Maximum Amount; Allocation; Renewal.--
(1) Maximum amount.--The total amount awarded to an eligible partnership under this section in any fiscal year shall not exceed $100,000.
(2) Allocation.--Not less than 25 percent of each grant awarded to an eligible partnership under this section shall be allocated for use by the local educational agency or agencies participating in the partnership.
(3) Renewal.--A grant awarded under this section for a fiscal year may be renewed for an additional period of not more than 2 fiscal years.
(d) Use of Funds.--
(1) In general.--Grant amounts made available under this section may be used by an eligible partnership to comprehensively address truancy through the use of--
(A) parental involvement in prevention activities, including meaningful incentives for parental responsibility;
(B) sanctions, including community service, or drivers' license suspension for students who are habitually truant;
(C) parental accountability, including fines, teacher-aid duty, or community service;
(D) in-school truancy prevention programs, including alternative education and in-school suspension;
(E) involvement of the local law enforcement, social services, judicial, business, and religious communities, and nonprofit organizations;
(F) technology, including automated telephone notice to parents and computerized attendance system; or
(G) elimination of 40-day count and other unintended incentives to allow students to be truant after a certain time of school year.
(2) Model programs.--In carrying out this section, the Attorney General may give priority to funding the following programs and programs that attempt to replicate one or more of the following model programs:
(A) The Truancy Intervention Project of the Fulton County, Georgia, Juvenile Court.
(B) The TABS (Truancy Abatement and Burglary Suppression) program of Milwaukee, Wisconsin.
(C) The Roswell Daytime Curfew Program of Roswell, New Mexico.
(D) The Stop, Cite and Return Program of Rohnert Park, California.
(E) The Stay in School Program of New Haven, Connecticut.
(F) The Atlantic County Project Helping Hand of Atlantic County, New Jersey.
(G) The THRIVE (Truancy Habits Reduced Increasing Valuable Education) initiative of Oklahoma City, Oklahoma.
(H) The Norfolk, Virginia project using computer software and data collection.
(I) The Community Service Early Intervention Program of Marion, Ohio.
(J) The Truancy Reduction Program of Bakersfield, California.
(K) The Grade Court program of Farmington, New Mexico.
(L) Any other model program that the Attorney General determines to be appropriate.
(e) Authorization of Appropriations.--There is authorized to be appropriated to carry out this section, $25,000,000 for each of fiscal years 2002, 2003, and 2004.
PART 5--JUVENILE CRIME CONTROL AND DELINQUENCY PREVENTION ACT
SEC. 4251. SHORT TITLE.
This part may be cited as the ``Juvenile Crime Control and Delinquency Prevention Act of 2001''.
SEC. 4252. FINDINGS.
Section 101 of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5601) is amended to read as follows:
``SEC. 101. FINDINGS.
``(a) Congress finds that the juvenile crime problem should be addressed through a 2-track common sense approach that addresses the needs of individual juveniles and society at large by promoting--
``(1) quality prevention programs that--
``(A) work with juveniles, their families, local public agencies, and community-based organizations, and take into consideration such factors as whether juveniles have ever been the victims of family violence (including child abuse and neglect); and
``(B) are designed to reduce risks and develop competencies in at-risk juveniles that will prevent, and reduce the rate of, violent delinquent behavior; and
``(2) programs that assist in holding juveniles accountable for their actions, including a system of graduated sanctions to respond to each delinquent act, requiring juveniles to make restitution, or perform community service, for the damage caused by their delinquent acts, and methods for increasing victim satisfaction with respect to the penalties imposed on juveniles for their acts.
``(b) Congress must act now to reform this program by focusing on juvenile delinquency prevention programs, as well as programs that hold juveniles accountable for their acts.''.
SEC. 4253. PURPOSE.
Section 102 of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5602) is amended to read as follows:
``SEC. 102. PURPOSES.
``The purposes of this title are--
``(1) to support State and local programs that prevent juvenile involvement in delinquent behavior;
``(2) to assist State and local governments in promoting public safety by encouraging accountability for acts of juvenile delinquency; and
``(3) to assist State and local governments in addressing juvenile crime through the provision of technical assistance, research, training, evaluation, and the dissemination of information on effective programs for combating juvenile delinquency.''.
SEC. 4254. DEFINITIONS.
Section 103 of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5603) is amended--
(1) in paragraph (3), by striking ``to help prevent juvenile delinquency'' and inserting ``designed to reduce known risk factors for juvenile delinquent behavior, provide activities that build on protective factors for, and develop competencies in, juveniles to prevent, and reduce the rate of, delinquent juvenile behavior'',
(2) in paragraph (4), by inserting ``title I of'' before
``the Omnibus'' each place it appears,
(3) in paragraph (7), by striking ``the Trust Territory of the Pacific Islands,'',
(4) in paragraph (9), by striking ``justice'' and inserting
``crime control'',
(5) in paragraph (12)(B), by striking ``, of any nonoffender,'',
(6) in paragraph (13)(B), by striking ``, any nonoffender,'',
(7) in paragraph (14), by inserting ``drug trafficking,'' after ``assault,'',
(8) in paragraph (16)--
(A) in subparagraph (A), by adding ``and'' at the end, and
(B) by striking subparagraph (C),
(9) by striking paragraph (17),
(10) in paragraph (22)--
(A) by redesignating subparagraphs (i), (ii), and (iii) as subparagraphs (A), (B), and (C), respectively, and
(B) by striking ``and'' at the end,
(11) in paragraph (23), by striking the period at the end and inserting a semicolon,
(12) by redesignating paragraphs (18), (19), (20), (21),
(22), and (23) as paragraphs (17) through (22), respectively, and
(13) by adding at the end the following:
``(23) the term `boot camp' means a residential facility
(excluding a private residence) at which there are provided--
``(A) a highly regimented schedule of discipline, physical training, work, drill, and ceremony characteristic of military basic training.
``(B) regular, remedial, special, and vocational education; and
``(C) counseling and treatment for substance abuse and other health and mental health problems;
``(24) the term `graduated sanctions' means an accountability-based, graduated series of sanctions
(including incentives and services) applicable to juveniles within the juvenile justice system to hold such juveniles accountable for their actions and to protect communities from the effects of juvenile delinquency by providing appropriate sanctions for every act for which a juvenile is adjudicated delinquent, by inducing their law- abiding behavior, and by preventing their subsequent involvement with the juvenile justice system;
``(25) the term `violent crime' means--
``(A) murder or nonnegligent manslaughter, forcible rape, or robbery, or
``(B) aggravated assault committed with the use of a firearm;
``(26) the term `co-located facilities' means facilities that are located in the same building, or are part of a related complex of buildings located on the same grounds; and
``(27) the term `related complex of buildings' means 2 or more buildings that share--
``(A) physical features, such as walls and fences, or services beyond mechanical services (heating, air conditioning, water and sewer); or
``(B) the specialized services that are allowable under section 31.303(e)(3)(i)(C)(3) of title 28 of the Code of Federal Regulations, as in effect on December 10, 1996.''.
SEC. 4255. NAME OF OFFICE.
Title II of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5611 et seq.) is amended--
(1) in part A, by striking the part heading and inserting the following:
``Part A--Office of Juvenile Crime Control and Delinquency
Prevention'';
(2) in section 201(a), by striking ``Justice and Delinquency Prevention'' and inserting ``Crime Control and Delinquency Prevention''; and
(3) in section 299A(c)(2) by striking ``Justice and Delinquency Prevention'' and inserting ``Crime Control and Delinquency Prevention''.
SEC. 4256. CONCENTRATION OF FEDERAL EFFORT.
Section 204 of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5614) is amended--
(1) in subsection (a)(1), by striking the last sentence;
(2) in subsection (b)--
(A) in paragraph (3), by striking ``and of the prospective'' and all that follows through ``administered'';
(B) by striking paragraph (5); and
(C) by redesignating paragraphs (6) and (7) as paragraphs
(5) and (6), respectively;
(3) in subsection (c), by striking ``and reports'' and all that follows through ``this part'', and inserting ``as may be appropriate to prevent the duplication of efforts, and to coordinate activities, related to the prevention of juvenile delinquency'';
(4) by striking subsection (i); and
(5) by redesignating subsection (h) as subsection (f).
SEC. 4257. ALLOCATION.
Section 222 of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5632) is amended--
(1) in subsection (a)--
(A) in paragraph (2)--
(i) in subparagraph (A)--
(I) by striking ``amount, up to $400,000,'' and inserting
``amount up to $400,000'';
(II) by inserting a comma after ``1992'' the first place it appears;
(III) by striking ``the Trust Territory of the Pacific Islands,''; and
(IV) by striking ``amount, up to $100,000,'' and inserting
``amount up to $100,000'';
(ii) in subparagraph (B)--
(I) by striking ``(other than part D)'';
(II) by striking ``or such greater amount, up to $600,000'' and all that follows through ``section 299(a) (1) and (3)'';
(III) by striking ``the Trust Territory of the Pacific Islands,'';
(IV) by striking ``amount, up to $100,000,'' and inserting
``amount up to $100,000''; and
(V) by inserting a comma after ``1992'';
(B) in paragraph (3) by striking ``allot'' and inserting
``allocate''; and
(2) in subsection (b) by striking ``the Trust Territory of the Pacific Islands,''.
SEC. 4258. STATE PLANS.
Section 223 of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5633) is amended--
(1) in subsection (a)--
(A) in the second sentence, by striking ``challenge'' and all that follows through ``part E'', and inserting ``, projects, and activities'';
(B) in paragraph (3)--
(i) by striking ``, which--'' and inserting ``that--'';
(ii) in subparagraph (A)--
(I) by striking ``not less'' and all that follows through
``33'', and inserting ``the attorney general of the State or such other State official who has primary responsibility for overseeing the enforcement of State criminal laws, and'';
(II) by inserting ``, in consultation with the attorney general of the State or such other State official who has primary responsibility for overseeing the enforcement of State criminal laws'' after ``State'';
(III) in clause (i), by striking ``or the administration of juvenile justice'' and inserting ``, the administration of juvenile justice, or the reduction of juvenile delinquency'';
(IV) in clause (ii), by striking ``include--'' and all that follows through the semicolon at the end of subclause (VIII), and inserting the following:
``represent a multidisciplinary approach to addressing juvenile delinquency and may include--
``(I) individuals who represent units of general local government, law enforcement and juvenile justice agencies, public agencies concerned with the prevention and treatment of juvenile delinquency and with the adjudication of juveniles, representatives of juveniles, or nonprofit private organizations, particularly such organizations that serve juveniles; and
``(II) such other individuals as the chief executive officer considers to be appropriate; and''; and
(V) by striking clauses (iv) and (v);
(iii) in subparagraph (C), by striking ``justice'' and inserting ``crime control'';
(iv) in subparagraph (D)--
(I) in clause (i), by inserting ``and'' at the end; and
(II) in clause (ii), by striking ``paragraphs'' and all that follows through ``part E'', and inserting ``paragraphs
(11), (12), and (13)''; and
(v) in subparagraph (E), by striking ``title--'' and all that follows through ``(ii)'' and inserting ``title,'';
(C) in paragraph (5)--
(i) in the matter preceding subparagraph (A), by striking
``, other than'' and inserting ``reduced by the percentage
(if any) specified by the State under the authority of paragraph (25) and excluding'' after ``section 222''; and
(ii) in subparagraph (C), by striking ``paragraphs (12)(A),
(13), and (14)'' and inserting ``paragraphs (11), (12), and
(13)'';
(D) by striking paragraph (6);
(E) in paragraph (7), by inserting ``, including in rural areas'' before the semicolon at the end;
(F) in paragraph (8)--
(i) in subparagraph (A)--
(I) by striking ``for (i)'' and all that follows through
``relevant jurisdiction'', and inserting ``for an analysis of juvenile delinquency problems in, and the juvenile delinquency control and delinquency prevention needs
(including educational needs) of, the State'';
(II) by striking ``justice'' the second place it appears and inserting ``crime control''; and
(III) by striking ``of the jurisdiction; (ii)'' and all that follows through the semicolon at the end, and inserting
``of the State; and'';
(ii) by striking subparagraph (B) and inserting the following:
``(B) contain--
``(i) a plan for providing needed gender-specific services for the prevention and treatment of juvenile delinquency;
``(ii) a plan for providing needed services for the prevention and treatment of juvenile delinquency in rural areas; and
``(iii) a plan for providing needed mental health services to juveniles in the juvenile justice system;''; and
(iii) by striking subparagraphs (C) and (D);
(G) by striking paragraph (9) and inserting the following:
``(9) provide for the coordination and maximum utilization of existing juvenile delinquency programs, programs operated by public and private agencies and organizations, and other related programs (such as education, special education, recreation, health, and welfare programs) in the State;'';
(H) in paragraph (10)--
(i) in subparagraph (A), by striking ``, specifically'' and inserting ``including''; and
(ii) by striking subparagraph (B) and inserting the following:
``(B) programs that assist in holding juveniles accountable for their actions, including the use of graduated sanctions and of neighborhood courts or panels that increase victim satisfaction and require juveniles to make restitution for the damage caused by their delinquent behavior;'';
(iii) in subparagraph (C), by striking ``juvenile justice'' and inserting ``juvenile crime control'';
(iv) by striking subparagraph (D) and inserting the following:
``(D) programs that provide treatment to juvenile offenders who are victims of child abuse or neglect, and to their families, in order to reduce the likelihood that such juvenile offenders will commit subsequent violations of law;'';
(v) in subparagraph (E)--
(I) by redesignating clause (ii) as clause (iii); and
(II) by striking ``juveniles, provided'' and all that follows through ``provides; and'', and inserting the following:
``juveniles--
``(i) to encourage juveniles to remain in elementary and secondary schools or in alternative learning situations;
``(ii) to provide services to assist juveniles in making the transition to the world of work and self-sufficiency; and'';
(vi) by striking subparagraph (F) and inserting the following:
``(F) expanding the use of probation officers--
``(i) particularly for the purpose of permitting nonviolent juvenile offenders (including status offenders) to remain at home with their families as an alternative to incarceration or institutionalization; and
``(ii) to ensure that juveniles follow the terms of their probation;'';
(vii) by striking subparagraph (G) and inserting the following:
``(G) one-on-one mentoring programs that are designed to link at-risk juveniles and juvenile offenders, particularly juveniles residing in high-crime areas and juveniles experiencing educational failure, with responsible adults
(such as law enforcement officers, adults working with local businesses, and adults working with community-based organizations and agencies) who are properly screened and trained;'';
(viii) in subparagraph (H) by striking ``handicapped youth'' and inserting ``juveniles with disabilities'';
(ix) by striking subparagraph (K) and inserting the following:
``(K) boot camps for juvenile offenders;'';
(x) by striking subparagraph (L) and inserting the following:
``(L) community-based programs and services to work with juveniles, their parents, and other family members during and after incarceration in order to strengthen families so that such juveniles may be retained in their homes;'';
(xi) by striking subparagraph (M) and inserting the following:
``(M) other activities (such as court-appointed advocates) that the State determines will hold juveniles accountable for their acts and decrease juvenile involvement in delinquent activities;'';
(xii) in subparagraph (O)--
(I) in striking ``cultural'' and inserting ``other''; and
(II) by striking the period at the end and inserting a semicolon; and
(xiii) by adding at the end the following:
``(P) programs that utilize multidisciplinary interagency case management and information sharing, that enable the juvenile justice and law enforcement agencies, schools, and social service agencies to make more informed decisions regarding early identification, control, supervision, and treatment of juveniles who repeatedly commit violent or serious delinquent acts; and
``(Q) programs designed to prevent and reduce hate crimes committed by juveniles.'';
(I) by striking paragraph (12) and inserting the following:
``(12) shall, in accordance with rules issued by the Administrator, provide that--
``(A) juveniles who are charged with or who have committed an offense that would not be criminal if committed by an adult, excluding--
``(i) juveniles who are charged with or who have committed a violation of section 922(x)(2) of title 18, United States Code, or of a similar State law;
``(ii) juveniles who are charged with or who have committed a violation of a valid court order; and
``(iii) juveniles who are held in accordance with the Interstate Compact on Juveniles, as enacted by the State;
shall not be placed in secure detention facilities or secure correctional facilities; and
``(B) juveniles--
``(i) who are not charged with any offense; and
``(ii) who are--
``(I) aliens; or
``(II) alleged to be dependent, neglected, or abused;
shall not be placed in secure detention facilities or secure correctional facilities;'';
(J) by striking paragraph (13) and inserting the following:
``(13) provide that--
``(A) juveniles alleged to be or found to be delinquent, and juveniles within the purview of paragraph (11), will not be detained or confined in any institution in which they have prohibited physical contact or sustained oral communication
(as defined in subparagraphs (D) and (E)) with adults incarcerated because such adults have been convicted of a crime or are awaiting trial on criminal charges;
``(B) to the extent practicable, violent juveniles shall be kept separate from nonviolent juveniles;
``(C) there is in effect in the State a policy that requires individuals who work with both such juveniles and such adults in colocated facilities have been trained and certified to work with juveniles;
``(D) the term `prohibited physical contact'--
``(i) means--
``(I) any physical contact between a juvenile and an adult inmate; and
``(II) proximity that provides an opportunity for physical contact between a juvenile and an adult inmate; and
``(ii) does not include--
``(I) communication that is accidental or incidental;
``(II) sounds or noises that cannot reasonably be considered to be speech; or
``(III) does not include supervised proximity between a juvenile and an adult inmate that is brief and incidental or accidental; and
``(E) the term `sustained oral communication' means the imparting or interchange of speech by or between an adult inmate and a juvenile;''.
(K) by striking paragraph (14) and inserting the following:
``(14) provide that no juvenile will be detained or confined in any jail or lockup for adults except--
``(A) juveniles who are accused of nonstatus offenses and who are detained in such jail or lockup for a period not to exceed 6 hours--
``(i) for processing or release;
``(ii) while awaiting transfer to a juvenile facility; or
``(iii) in which period such juveniles make a court appearance;
``(B) juveniles who are accused of nonstatus offenses, who are awaiting an initial court appearance that will occur within 48 hours after being taken into custody (excluding Saturdays, Sundays, and legal holidays), and who are detained or confined in a jail or lockup--
``(i) in which--
``(I) such juveniles do not have prohibited physical contact or sustained oral communication (as defined in subparagraphs (D) and (E) of paragraph (13)) with adults incarcerated because such adults have been convicted of a crime or are awaiting trial on criminal charges;
``(II) to the extent practicable, violent juveniles shall be kept separate from nonviolent juveniles; and
``(III) there is in effect in the State a policy that requires individuals who work with both such juveniles and such adults in co-located facilities have been trained and certified to work with juveniles; and
``(ii) that--
``(I) is located outside a metropolitan statistical area
(as defined by the Director of the Office of Management and Budget) and has no existing acceptable alternative placement available; or
``(II) is located where conditions of distance to be traveled or the lack of highway, road, or transportation do not allow for court appearances within 48 hours after being taken into custody (excluding Saturdays, Sundays, and legal holidays) so that a brief (not to exceed an additional 48 hours) delay is excusable; or
``(III) is located where conditions of safety exist (such as severe adverse, life-threatening weather conditions that do not allow for reasonably safe travel), in which case the time for an appearance may be delayed until 24 hours after the time that such conditions allow for reasonable safe travel;'';
(L) in paragraph (15)--
(i) by striking ``paragraph (12)(A), paragraph (13), and paragraph (14)'' and inserting ``paragraphs (11), (12), and
(13)''; and
(ii) by striking ``paragraph (12)(A) and paragraph (13)'' and inserting ``paragraphs (11) and (12)'';
(M) in paragraph (16) by striking ``mentally, emotionally, or physically handicapping conditions'' and inserting
``disability'';
(N) by striking paragraph (19) and inserting the following:
``(19) provide assurances that--
``(A) any assistance provided under this Act will not cause the displacement (including a partial displacement, such as a reduction in the hours of nonovertime work, wages, or employment benefits) of any currently employed employee;
``(B) activities assisted under this Act will not impair an existing collective bargaining relationship, contract for services, or collective bargaining agreement; and
``(C) no such activity that would be inconsistent with the terms of a collective bargaining agreement shall be undertaken without the written concurrence of the labor organization involved;'';
(O) by striking paragraph (23) and inserting the following:
``(23) address juvenile delinquency prevention efforts and system improvement efforts designed to reduce, without establishing or requiring numerical standards or quotas, the disproportionate number of juvenile members of minority groups, who come into contact with the juvenile justice system;'';
(P) by striking paragraph (24) and inserting the following:
``(24) provide that if a juvenile is taken into custody for violating a valid court order issued for committing a status offense--
``(A) an appropriate public agency shall be promptly notified that such juvenile is held in custody for violating such order;
``(B) not later than 24 hours after the juvenile is taken into custody and during which the juvenile is so held, an authorized representative of such agency shall interview, in person, such juvenile; and
``(C) not later than 48 hours after the juvenile is taken into custody and during which the juvenile is so held--
``(i) such representative shall submit an assessment to the court that issued such order, regarding the immediate needs of such juvenile; and
``(ii) such court shall conduct a hearing to determine--
``(I) whether there is reasonable cause to believe that such juvenile violated such order; and
``(II) the appropriate placement of such juvenile pending disposition of the violation alleged;'';
(Q) in paragraph (25) by striking the period at the end and inserting a semicolon;
(R) by redesignating paragraphs (7) through (25) as paragraphs (6) through (24), respectively; and
(S) by adding at the end the following:
``(25) specify a percentage (if any), not to exceed 5 percent, of funds received by the State under section 222
(other than funds made available to the state advisory group under section 222(d)) that the State will reserve for expenditure by the State to provide incentive grants to units of general local government that reduce the caseload of probation officers within such units.''; and
(2) by striking subsection (c) and inserting the following:
``(c) If a State fails to comply with any applicable requirement of paragraph (11), (12), (13), or (22) of subsection (a) in any fiscal year beginning after September 30, 1999, then the amount allocated to such State for the subsequent fiscal year shall be reduced by not to exceed 12.5 percent for each such paragraph with respect to which the failure occurs, unless the Administrator determines that the State--
``(1) has achieved substantial compliance with such applicable requirements with respect to which the State was not in compliance; and
``(2) has made, through appropriate executive or legislative action, an unequivocal commitment to achieving full compliance with such applicable requirements within a reasonable time.''; and
(3) in subsection (d)--
(A) by striking ``allotment'' and inserting ``allocation''; and
(B) by striking ``subsection (a) (12)(A), (13), (14) and
(23)'' each place it appears and inserting ``paragraphs (11),
(12), (13), and (22) of subsection (a)''.
SEC. 4259. JUVENILE DELINQUENCY PREVENTION BLOCK GRANT
PROGRAM.
Title II of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5611 et seq.) is amended by inserting after part I, as added by section 4217 of this title, the following:
``PART J--JUVENILE DELINQUENCY PREVENTION BLOCK GRANT PROGRAM
``SEC. 292. AUTHORITY TO MAKE GRANTS.
``The Administrator may make grants to eligible States, from funds allocated under section 292A, for the purpose of providing financial assistance to eligible entities to carry out projects designed to prevent juvenile delinquency, including--
``(1) projects that assist in holding juveniles accountable for their actions, including the use of neighborhood courts or panels that increase victim satisfaction and require juveniles to make restitution, or perform community service, for the damage caused by their delinquent acts;
``(2) projects that provide treatment to juvenile offenders who are victims of child abuse or neglect, and to their families, in order to reduce the likelihood that such juvenile offenders will commit subsequent violations of law;
``(3) educational projects or supportive services for delinquent or other juveniles--
``(A) to encourage juveniles to remain in elementary and secondary schools or in alternative learning situations in educational settings;
``(B) to provide services to assist juveniles in making the transition to the world of work and self-sufficiency;
``(C) to assist in identifying learning difficulties
(including learning disabilities);
``(D) to prevent unwarranted and arbitrary suspensions and expulsions;
``(E) to encourage new approaches and techniques with respect to the prevention of school violence and vandalism;
``(F) which assist law enforcement personnel and juvenile justice personnel to more effectively recognize and provide for learning-disabled and other disabled juveniles; or
``(G) which develop locally coordinated policies and programs among education, juvenile justice, and social service agencies;
``(4) projects which expand the use of probation officers--
``(A) particularly for the purpose of permitting nonviolent juvenile offenders (including status offenders) to remain at home with their families as an alternative to incarceration or institutionalization; and
``(B) to ensure that juveniles follow the terms of their probation;
``(5) one-on-one mentoring projects that are designed to link at-risk juveniles and juvenile offenders who did not commit serious crime, particularly juveniles residing in high-crime areas and juveniles experiencing educational failure, with responsible adults (such as law enforcement officers, adults working with local businesses, and adults working for community-based organizations and agencies) who are properly screened and trained;
``(6) community-based projects and services (including literacy and social service programs) which work with juvenile offenders, including those from families with limited English-speaking proficiency, their parents, their siblings, and other family members during and after incarceration of the juvenile offenders, in order to strengthen families, to allow juvenile offenders to be retained in their homes, and to prevent the involvement of other juvenile family members in delinquent activities;
``(7) projects designed to provide for the treatment of juveniles for dependence on or abuse of alcohol, drugs, or other harmful substances;
``(8) projects which leverage funds to provide scholarships for postsecondary education and training for low-income juveniles who reside in neighborhoods with high rates of poverty, violence, and drug-related crimes;
``(9) projects which provide for an initial intake screening of each juvenile taken into custody--
``(A) to determine the likelihood that such juvenile will commit a subsequent offense; and
``(B) to provide appropriate interventions, including mental health services and substance abuse treatment, to prevent such juvenile from committing subsequent offenses;
``(10) projects (including school- or community-based projects) that are designed to prevent, and reduce the rate of, the participation of juveniles in gangs that commit crimes (particularly violent crimes), that unlawfully use firearms and other weapons, or that unlawfully traffic in drugs and that involve, to the extent practicable, families and other community members (including law enforcement personnel and members of the business community) in the activities conducted under such projects;
``(11) comprehensive juvenile justice and delinquency prevention projects that meet the needs of juveniles through the collaboration of the many local service systems juveniles encounter, including schools, courts, law enforcement agencies, child protection agencies, mental health agencies, welfare services, health care agencies, and private nonprofit agencies offering services to juveniles;
``(12) to develop, implement, and support, in conjunction with public and private agencies, organizations, and businesses, projects for the employment of juveniles and referral to job training programs (including referral to Federal job training programs);
``(13) delinquency prevention activities which involve youth clubs, sports, recreation and parks, peer counseling and teaching, the arts, leadership development, community service, volunteer service, before- and after-school programs, violence prevention activities, mediation skills training, camping, environmental education, ethnic or cultural enrichment, tutoring, and academic enrichment;
``(14) family strengthening activities, such as mutual support groups for parents and their children;
``(15) programs that encourage social competencies, problem-solving skills, and communication skills, youth leadership, and civic involvement;
``(16) programs that focus on the needs of young girls at-risk of delinquency or status offenses; and
``(17) other activities that are likely to prevent juvenile delinquency.
``SEC. 292A. ALLOCATION.
``Funds appropriated to carry out this part shall be allocated among eligible States as follows:
``(1) 0.75 percent shall be allocated to each State.
``(2) Of the total amount remaining after the allocation under paragraph (1), there shall be allocated to each State as follows:
``(A) 50 percent of such amount shall be allocated proportionately based on the population that is less than 18 years of age in the eligible States.
``(B) 50 percent of such amount shall be allocated proportionately based on the annual average number of arrests for serious crimes committed in the eligible States by juveniles during the then most recently completed period of 3 consecutive calendar years for which sufficient information is available to the Administrator.
``SEC. 292B. ELIGIBILITY OF STATES.
``(a) Application.--To be eligible to receive a grant under section 292, a State shall submit to the Administrator an application that contains the following:
``(1) An assurance that the State will use--
``(A) not more than 5 percent of such grant, in the aggregate, for--
``(i) the costs incurred by the State to carry out this part; and
``(ii) to evaluate, and provide technical assistance relating to, projects and activities carried out with funds provided under this part; and
``(B) the remainder of such grant to make grants under section 292C.
``(2) An assurance that, and a detailed description of how, such grant will support, and not supplant State and local efforts to prevent juvenile delinquency.
``(3) An assurance that such application was prepared after consultation with and participation by community-based organizations, and organizations in the local juvenile justice system, that carry out programs, projects, or activities to prevent juvenile delinquency.
``(4) An assurance that each eligible entity described in section 292C(a) that receives an initial grant under section 292 to carry out a project or activity shall also receive an assurance from the State that such entity will receive from the State, for the subsequent fiscal year to carry out such project or activity, a grant under such section in an amount that is proportional, based on such initial grant and on the amount of the grant received under section 292 by the State for such subsequent fiscal year, but that does not exceed the amount specified for such subsequent fiscal year in such application as approved by the State.
``(5) Such other information and assurances as the Administrator may reasonably require by rule.
``(b) Approval of Applications.--
``(1) Approval required.--Subject to paragraph (2), the Administrator shall approve an application, and amendments to such application submitted in subsequent fiscal years, that satisfy the requirements of subsection (a).
``(2) Limitation.--The Administrator may not approve such application (including amendments to such application) for a fiscal year unless--
``(A)(i) the State submitted a plan under section 223 for such fiscal year; and
``(ii) such plan is approved by the Administrator for such fiscal year; or
``(B) the Administrator waives the application of subparagraph (A) to such State for such fiscal year, after finding good cause for such a waiver.
``SEC. 292C. GRANTS FOR LOCAL PROJECTS.
``(a) Selection From Among Applications.--
``(1) In general.--Using a grant received under section 292, a State may make grants to eligible entities whose applications are received by the State in accordance with subsection (b) to carry out projects and activities described in section 292.
``(2) For purposes of making grants under this section, the State shall give special consideration to eligible entities that--
``(A) propose to carry out such projects in geographical areas in which there is--
``(i) a disproportionately high level of serious crime committed by juveniles; or
``(ii) a recent rapid increase in the number of nonstatus offenses committed by juveniles;
``(B)(i) agreed to carry out such projects or activities that are multidisciplinary and involve 2 or more eligible entities; or
``(ii) represent communities that have a comprehensive plan designed to identify at-risk juveniles and to prevent or reduce the rate of juvenile delinquency, and that involve other entities operated by individuals who have a demonstrated history of involvement in activities designed to prevent juvenile delinquency; and
``(C) the amount of resources (in cash or in kind) such entities will provide to carry out such projects and activities.
``(b) Receipt of Applications.--
``(1) In general.--Subject to paragraph (2), a unit of general local government shall submit to the State simultaneously all applications that are--
``(A) timely received by such unit from eligible entities; and
``(B) determined by such unit to be consistent with a current plan formulated by such unit for the purpose of preventing, and reducing the rate of, juvenile delinquency in the geographical area under the jurisdiction of such unit.
``(2) Direct submission to state.--If an application submitted to such unit by an eligible entity satisfies the requirements specified in subparagraphs (A) and (B) of paragraph (1), such entity may submit such application directly to the State.
``SEC. 292D. ELIGIBILITY OF ENTITIES.
``(a) Eligibility.--Subject to subsections (b) and except as provided in subsection (c), to be eligible to receive a grant under section 292C, a community-based organization, local juvenile justice system officials (including prosecutors, police officers, judges, probation officers, parole officers, and public defenders), local education authority (as defined in section 14101 of the Elementary and Secondary Education Act of 1965 and including a school within such authority), nonprofit private organization, unit of general local government, or social service provider, and or other entity with a demonstrated history of involvement in the prevention of juvenile delinquency, shall submit to a unit of general local government an application that contains the following:
``(1) An assurance that such applicant will use such grant, and each such grant received for the subsequent fiscal year, to carry out throughout a 2-year period a project or activity described in reasonable detail, and of a kind described in 1 or more of paragraphs (1) through (14) of section 292 as specified in, such application.
``(2) A statement of the particular goals such project or activity is designed to achieve, and the methods such entity will use to achieve, and assess the achievement of, each of such goals.
``(3) A statement identifying the research (if any) such entity relied on in preparing such application.
``(b) Review and Submission of Applications.--Except as provided in subsection (c), an entity shall not be eligible to receive a grant under section 292C unless--
``(1) such entity submits to a unit of general local government an application that--
``(A) satisfies the requirements specified in subsection
(a); and
``(B) describes a project or activity to be carried out in the geographical area under the jurisdiction of such unit; and
``(2) such unit determines that such project or activity is consistent with a current plan formulated by such unit for the purpose of preventing, and reducing the rate of, juvenile delinquency in the geographical area under the jurisdiction of such unit.
``(c) Limitation.--If an entity that receives a grant under section 292C to carry out a project or activity for a 2-year period, and receives technical assistance from the State or the Administrator after requesting such technical assistance
(if any), fails to demonstrate, before the expiration of such 2-year period, that such project or such activity has achieved substantial success in achieving the goals specified in the application submitted by such entity to receive such grants, then such entity shall not be eligible to receive any subsequent grant under such section to continue to carry out such project or activity.''.
SEC. 4260. RESEARCH; EVALUATION; TECHNICAL ASSISTANCE;
TRAINING.
Title II of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5611 et seq.) is amended by inserting after part J, as added by section 4259 of this title, the following:
``PART K--RESEARCH; EVALUATION; TECHNICAL ASSISTANCE; TRAINING
``SEC. 293. RESEARCH AND EVALUATION; STATISTICAL ANALYSES;
INFORMATION DISSEMINATION.
``(a) Research and Evaluation.--(1) The Administrator may--
``(A) plan and identify, after consultation with the Director of the National Institute of Justice, the purposes and goals of all agreements carried out with funds provided under this subsection; and
``(B) make agreements with the National Institute of Justice or, subject to the approval of the Assistant Attorney General for the Office of Justice Programs, with another Federal agency authorized by law to conduct research or evaluation in juvenile justice matters, for the purpose of providing research and evaluation relating to--
``(i) the prevention, reduction, and control of juvenile delinquency and serious crime committed by juveniles;
``(ii) the link between juvenile delinquency and the incarceration of members of the families of juveniles;
``(iii) successful efforts to prevent first-time minor offenders from committing subsequent involvement in serious crime;
``(iv) successful efforts to prevent recidivism;
``(v) the juvenile justice system;
``(vi) juvenile violence; and
``(vii) other purposes consistent with the purposes of this title and title I.
``(2) The Administrator shall ensure that an equitable amount of funds available to carry out paragraph (1)(B) is used for research and evaluation relating to the prevention of juvenile delinquency.
``(b) Statistical Analyses.--The Administrator may--
``(1) plan and identify, after consultation with the Director of the Bureau of Justice Statistics, the purposes and goals of all agreements carried out with funds provided under this subsection; and
``(2) make agreements with the Bureau of Justice Statistics, or subject to the approval of the Assistant Attorney General for the Office of Justice Programs, with another Federal agency authorized by law to undertake statistical work in juvenile justice matters, for the purpose of providing for the collection, analysis, and dissemination of statistical data and information relating to juvenile delinquency and serious crimes committed by juveniles, to the juvenile justice system, to juvenile violence, and to other purposes consistent with the purposes of this title and title I.
``(c) Competitive Selection Process.--The Administrator shall use a competitive process, established by rule by the Administrator, to carry out subsections (a) and (b).
``(d) Implementation of Agreements.--A Federal agency that makes an agreement under subsections (a)(1)(B) and (b)(2) with the Administrator may carry out such agreement directly or by making grants to or contracts with public and private agencies, institutions, and organizations.
``(e) Information Dissemination.--The Administrator may--
``(1) review reports and data relating to the juvenile justice system in the United States and in foreign nations
(as appropriate), collect data and information from studies and research into all aspects of juvenile delinquency
(including the causes, prevention, and treatment of juvenile delinquency) and serious crimes committed by juveniles;
``(2) establish and operate, directly or by contract, a clearinghouse and information center for the preparation, publication, and dissemination of information relating to juvenile delinquency, including State and local prevention and treatment programs, plans, resources, and training and technical assistance programs; and
``(3) make grants and contracts with public and private agencies, institutions, and organizations, for the purpose of disseminating information to representatives and personnel of public and private agencies, including practitioners in juvenile justice, law enforcement, the courts, corrections, schools, and related services, in the establishment, implementation, and operation of projects and activities for which financial assistance is provided under this title.
``SEC. 293A. TRAINING AND TECHNICAL ASSISTANCE.
``(a) Training.--The Administrator may--
``(1) develop and carry out projects for the purpose of training representatives and personnel of public and private agencies, including practitioners in juvenile justice, law enforcement, courts, corrections, schools, and related services, to carry out the purposes specified in section 102; and
``(2) make grants to and contracts with public and private agencies, institutions, and organizations for the purpose of training representatives and personnel of public and private agencies, including practitioners in juvenile justice, law enforcement, courts, corrections, schools, and related services, to carry out the purposes specified in section 102.
``(b) Technical Assistance.--The Administrator may--
``(1) develop and implement projects for the purpose of providing technical assistance to representatives and personnel of public and private agencies and organizations, including practitioners in juvenile justice, law enforcement, courts, corrections, schools, and related services, in the establishment, implementation, and operation of programs, projects, and activities for which financial assistance is provided under this title; and
``(2) make grants to and contracts with public and private agencies, institutions, and organizations, for the purpose of providing technical assistance to representatives and personnel of public and private agencies, including practitioners in juvenile justice, law enforcement, courts, corrections, schools, and related services, in the establishment, implementation, and operation of programs, projects, and activities for which financial assistance is provided under this title.''. SEC. 4261. DEMONSTRATION PROJECTS.
Title II of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5611 et seq.) is amended by inserting after part K, as added by section 4260 of this title, the following:
``PART L--DEVELOPING, TESTING, AND DEMONSTRATING PROMISING NEW
INITIATIVES AND PROGRAMS
``SEC. 294. GRANTS AND PROJECTS.
``(a) Authority To Make Grants.--The Administrator may make grants to and contracts with States, units of general local government, Indian tribal governments, public and private agencies, organizations, and individuals, or combinations thereof, to carry out projects for the development, testing, and demonstration of promising initiatives and programs for the prevention, control, or reduction of juvenile delinquency. The Administrator shall ensure that, to the extent reasonable and practicable, such grants are made to achieve an equitable geographical distribution of such projects throughout the United States.
``(b) Use of Grants.--A grant made under subsection (a) may be used to pay all or part of the cost of the project for which such grant is made.
``SEC. 294A. GRANTS FOR TECHNICAL ASSISTANCE.
``The Administrator may make grants to and contracts with public and private agencies, organizations, and individuals to provide technical assistance to States, units of general local government, Indian tribal governments, local private entities or agencies, or any combination thereof, to carry out the projects for which grants are made under section 261.
``SEC. 294B. ELIGIBILITY.
``To be eligible to receive a grant made under this part, a public or private agency, Indian tribal government, organization, institution, individual, or combination thereof shall submit an application to the Administrator at such time, in such form, and containing such information as the Administrator may reasonable require by rule.
``SEC. 294C. REPORTS.
``Recipients of grants made under this part shall submit to the Administrator such reports as may be reasonably requested by the Administrator to describe progress achieved in carrying the projects for which such grants are made.''.
SEC. 4262. AUTHORIZATION OF APPROPRIATIONS.
Section 299 of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5671) is amended--
(1) by striking subsection (e); and
(2) by striking subsections (a) and (b), and inserting the following:
``(a) Authorization of Appropriations for Title II.--
``(1) In general.--There are authorized to be appropriated to carry out this title such sums as may be appropriate for fiscal years 2002, 2003, and 2004.
``(2) Allocation.--Of the amount made available for each fiscal year to carry out this title not more than 5 percent shall be available to carry out part A.
SEC. 4263. ADMINISTRATIVE AUTHORITY.
Section 299A(d) of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5672) is amended by striking ``as are consistent with the purpose of this Act'' and inserting ``only to the extent necessary to ensure that there is compliance with the specific requirements of this title or to respond to requests for clarification and guidance relating to such compliance''.
SEC. 4264. USE OF FUNDS.
Section 299C of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5674) is amended--
(1) in subsection (a)--
(A) by striking ``may be used for'';
(B) in paragraph (1), by inserting ``may be used for'' after ``(1)''; and
(C) by striking paragraph (2) and inserting the following:
``(2) may not be used for the cost of construction of any short- or long-term facilities for adult or juvenile offenders, except not more than 15 percent of the funds received under this title by a State for a fiscal year may be used for the purpose of renovating or replacing juvenile facilities.'';
(2) by striking subsection (b); and
(3) by redesignating subsection (c) as subsection (b).
SEC. 4265. LIMITATION ON USE OF FUNDS.
Part M of title II of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5671 et seq.), as redesignated by section 4217 of this title, is amended by adding at the end the following:
``SEC. 299F. LIMITATION ON USE OF FUNDS.
``None of the funds made available to carry out this title may be used to advocate for, or support, the unsecured release of juveniles who are charged with a violent crime.''.
SEC. 4266. RULES OF CONSTRUCTION.
Part M of title II of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5671 et seq.), as amended by section 4265 of this title, is amended by adding at the end the following:
``SEC. 299G. RULES OF CONSTRUCTION.
``Nothing in this title or title I may be construed--
``(1) to prevent financial assistance from being awarded through grants under this title to any otherwise eligible organization; or
``(2) to modify or affect any Federal or State law relating to collective bargaining rights of employees.''.
SEC. 4267. LEASING SURPLUS FEDERAL PROPERTY.
Part M of title II of the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5671 et seq.), as amended by section 4266 of this title, is amended by adding at the end the following:
``SEC. 299H. LEASING SURPLUS FEDERAL PROPERTY.
``The Administrator may receive surplus Federal property
(including facilities) and may lease such property to States and units of general local government for use in or as facilities for juvenile offenders, or for use in or as facilities for delinquency prevention and treatment activities.''.
SEC. 4268. ISSUANCE OF RULES.
Part M of title II or the Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5671 et seq.), as amended by section 4267 of this title, is amended by adding at the end the following:
``SEC. 299I. ISSUANCE OF RULES.
``The Administrator shall issue rules to carry out this title, including rules that establish procedures and methods for making grants and contracts, and distributing funds available, to carry out this title.''.
SEC. 4269. TECHNICAL AND CONFORMING AMENDMENTS.
(a) Technical Amendments.--The Juvenile Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 5601 et seq.) is amended--
(1) in section 202(b), by striking ``prescribed for GS-18 of the General Schedule by section 5332'' and inserting
``payable under section 5376'';
(2) in section 221(b)(2), by striking the last sentence; and
(3) in section 299D, by striking subsection (d).
(b) Conforming Amendments.--
(1) Title 5.--Section 5315 of title 5, United States Code, is amended by striking ``Office of Juvenile Justice and Delinquency Prevention'' and inserting ``Office of Juvenile Crime Control and Delinquency Prevention''.
(2) Title 18.--Section 4351(b) of title 18, United States Code, is amended by striking ``Office of Juvenile Justice and Delinquency Prevention'' and inserting ``Office of Juvenile Crime Control and Delinquency Prevention''.
(3) Title 39.--Subsections (a)(1) and (c) of section 3220 of title 39, United States Code, is amended by striking
``Office of Juvenile Justice and Delinquency Prevention'' each place it appears and inserting ``Office of Juvenile Crime Control and Delinquency Prevention''.
(4) Social security act.--Section 463(f) of the Social Security Act (42 U.S.C. 663(f)) is amended by striking
``Office of Juvenile Justice and Delinquency Prevention'' and inserting ``Office of Juvenile Crime Control and Delinquency Prevention''.
(5) Omnibus crime control and safe streets act of 1968.--Sections 801(a), 804, 805, and 813 of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3712(a), 3782, 3785, 3786, 3789i) are each amended by striking ``Office of Juvenile Justice and Delinquency Prevention'' each place it appears and inserting ``Office of Juvenile Crime Control and Delinquency Prevention''.
(6) Victims of child abuse act of 1990.--The Victims of Child Abuse Act of 1990 (42 U.S.C. 13001 et seq.) is amended--
(A) in section 214(b)(1), by striking ``262, 293, and 296 of subpart II of title II'' and inserting ``299B and 299E'';
(B) in section 214A(c)(1), by striking ``262, 293, and 296 of subpart II of title II'' and inserting ``299B and 299E'';
(C) in sections 217 and 222, by striking ``Office of Juvenile Justice and Delinquency Prevention'' each place it appears and inserting ``Office of Juvenile Crime Control and Delinquency Prevention''; and
(D) in section 223(c), by striking ``section 262, 293, and 296'' and inserting ``sections 262, 299B, and 299E''.
(7) Missing children's assistance.--The Missing Children's Assistance Act (42 U.S.C. 5771 et seq.) is amended--
(A) in section 403(2), by striking ``Justice and Delinquency Prevention'' and inserting ``Crime Control and Delinquency Prevention''; and
(B) in subsections (a)(5)(E) and (b)(1)(B) of section 404, by striking ``section 313'' and inserting ``section 331''.
(8) Crime control act of 1990.--The Crime Control Act of 1990 (42 U.S.C. 13001 et seq.) is amended--
(A) in section 217(c)(1), by striking ``sections 262, 293, and 296 of subpart II of title II'' and inserting ``sections 299B and 299E''; and
(B) in section 223(c), by striking ``section 262, 293, and 296 of title II'' and inserting ``sections 299B and 299E''.
SEC. 4270. REFERENCES.
In any Federal law (excluding this Act and the Acts amended by this Act), Executive order, rule, regulation, order, delegation of authority, grant, contract, suit, or document--
(1) a reference to the Office of Juvenile Justice and Delinquency Prevention shall be deemed to include a reference to the Office of Juvenile Crime Control and Delinquency Prevention, and
(2) a reference to the National Institute for Juvenile Justice and Delinquency Prevention shall be deemed to include a reference to Office of Juvenile Crime Control and Delinquency Prevention.
PART 6--LOCAL GUN VIOLENCE PREVENTION PROGRAMS
SEC. 4271. COMPETITIVE GRANTS FOR CHILDREN'S FIREARM SAFETY
EDUCATION.
(a) Purposes.--The purposes of this section are--
(1) to award grants to assist local educational agencies, in consultation with community groups and law enforcement agencies, to educate children about preventing gun violence; and
(2) to assist communities in developing partnerships between public schools, community organizations, law enforcement, and parents in educating children about preventing gun violence.
(b) Definitions.--In this section:
(1) Local educational agency.--The term ``local educational agency'' has the same meaning given such term in section 14101 of the Elementary and Secondary Education Act of 1965
(20 U.S.C. 8801).
(2) Secretary.--The term ``Secretary'' means the Secretary of Education.
(3) State.--The term ``State'' means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and the United States Virgin Islands.
(c) Allocation of Competitive Grants.--
(1) Grants by the secretary.--For any fiscal year in which the amount appropriated to carry out this section does not equal or exceed $50,000,000, the Secretary of Education may award competitive grants described under subsection (d).
(2) Grants by the states.--For any fiscal year in which the amount appropriated to carry out this section exceeds
$50,000,000, the Secretary shall make allotments to State educational agencies pursuant to paragraph (3) to award competitive grants described in subsection (d).
(3) Formula.--Except as provided in paragraph (4), funds appropriated to carry out this section shall be allocated among the States as follows:
(A) Minors.--75 percent of such amount shall be allocated proportionately based upon the population that is less than 18 years of age in the State.
(B) Incarcerated minors.--25 percent of such amount shall be allocated proportionately based upon the population that is less than 18 years of age in the State that is incarcerated.
(4) Minimum allotment.--Of the amounts appropriated to carry out this section, 0.50 percent shall be allocated to each State.
(d) Authorization of Competitive Grants.--The Secretary or the State educational agency, as the case may be, may award grants to eligible local educational agencies for the purposes of educating children about preventing gun violence, in accordance with the following:
(1) Assurances.--
(A) Amount of funds distributed.--The Secretary or the State educational agency, as the case may be, shall ensure that not less than 90 percent of the funds allotted under this section are distributed to local educational agencies.
(B) Distribution.--In awarding the grants, the Secretary or the State educational agency, as the case may be, shall ensure, to the maximum extent practicable--
(i) an equitable geographic distribution of grant awards;
(ii) an equitable distribution of grant awards among programs that serve public elementary school students, public secondary school students, and a combination of both; and
(iii) that urban, rural and suburban areas are represented within the grants that are awarded.
(2) Priority.--In awarding grants under this section, the Secretary or the State educational agency, as the case may be, shall give priority to a local educational agency that--
(A) coordinates with other Federal, State, and local programs that educate children about personal health, safety, and responsibility, including programs carried out under the Safe and Drug-Free Schools and Communities Act of 1994 (20 U.S.C. 7101 et seq.);
(B) serves a population with a high incidence of students found in possession of a weapon on school property or students suspended or expelled for bringing a weapon onto school grounds or engaging in violent behavior on school grounds; and
(C) forms a partnership that includes not less than 1 local educational agency working in consultation with not less than 1 public or private nonprofit agency or organization with experience in violence prevention or 1 local law enforcement agency.
(3) Peer review; consultation.--
(A) In general.--
(i) Peer review by panel.--Before grants are awarded, the Secretary shall submit grant applications to a peer review panel for evaluation.
(ii) Composition of panel.--The panel shall be composed of not less than 1 representative from a local educational agency, State educational agency, a local law enforcement agency, and a public or private nonprofit organization with experience in violence prevention.
(B) Consultation.--The Secretary shall submit grant applications to the Attorney General for consultation.
(e) Eligible Grant Recipients.--
(1) In general.--Except as provided in paragraph (2), an eligible grant recipient is a local educational agency that may work in partnership with 1 or more of the following:
(A) A public or private nonprofit agency or organization with experience in violence prevention.
(B) A local law enforcement agency.
(C) An institution of higher education.
(2) Exception.--A State educational agency may, with the approval of a local educational agency, submit an application on behalf of such local educational agency or a consortium of such agencies.
(f) Local Applications; Reports.--
(1) Applications.--Each local educational agency that wishes to receive a grant under this section shall submit an application to the Secretary and the State educational agency that includes--
(A) a description of the proposed activities to be funded by the grant and how each activity will further the goal of educating children about preventing gun violence;
(B) how the program will be coordinated with other programs that educate children about personal health, safety, and responsibility, including programs carried out under the Safe and Drug-Free Schools and Communities Act of 1994 (20 U.S.C. 7101 et seq.); and
(C) the age and number of children that the programs will serve.
(2) Reports.--Each local educational agency that receives a grant under this section shall submit a report to the Secretary and to the State educational agency not later than 18 months after the grant is awarded and submit an additional report to the Secretary and to the State not later than 36 months after the grant is awarded. Each report shall include information regarding--
(A) the activities conducted to educate children about gun violence;
(B) how the program will continue to educate children about gun violence in the future; and
(C) how the grant is being coordinated with other Federal, State, and local programs that educate children about personal health, safety, and responsibility, including programs carried out under the Safe and Drug-Free Schools and Communities Act of 1994 (20 U.S.C. 7101 et seq.).
(g) Authorized Activities.--
(1) Required activities.--Grants authorized under subsection (d) shall be used for the following activities:
(A) Supporting existing programs that educate children about personal health, safety, and responsibility, including programs carried out under the Safe and Drug-Free Schools and Communities Act of 1994 (20 U.S.C. 7101 et seq.).
(B) Educating children about the effects of gun violence.
(C) Educating children to identify dangerous situations in which guns are involved and how to avoid and prevent such situations.
(D) Educating children how to identify threats and other indications that their peers are in possession of a gun and may use a gun, and what steps they can take in such situations.
(E) Developing programs to give children access to adults to whom they can report, in a confidential manner, any problems relating to guns.
(2) Permissible activities.--Grants authorized under subsection (d) may be used for the following:
(A) Encouraging schoolwide programs and partnerships that involve teachers, students, parents, administrators, other staff, and members of the community in reducing gun incidents in public elementary and secondary schools.
(B) Establishing programs that assist parents in helping educate their children about firearm safety and the prevention of gun violence.
(C) Providing ongoing professional development for public school staff and administrators to identify the causes and effects of gun violence and risk factors and student behavior that may result in gun violence, including training sessions to review and update school crisis response plans and school policies for preventing the presence of guns on school grounds and facilities.
(D) Providing technical assistance for school psychologists and counselors to provide timely counseling and evaluations, in accordance with State and local laws, of students who possess a weapon on school grounds.
(E) Improving security on public elementary and secondary school campuses to prevent outside persons from entering school grounds with firearms.
(F) Assisting public schools and communities in developing crisis response plans when firearms are found on school campuses and when gun-related incidents occur.
(h) State Applications; Activities and Reports.--
(1) State applications.--
(A) Contents.--Each State desiring to receive funds under this section shall, through its State educational agency, submit an application to the Secretary of Education at such time and in such manner as the Secretary shall require. Such application shall describe--
(i) the manner in which funds under this section for State activities and competitive grants will be used to fulfill the purposes of this section;
(ii) the manner in which the activities and projects supported by this section will be coordinated with other State and Federal education, law enforcement, and juvenile justice programs, including the Safe and Drug-Free Schools and Communities Act of 1994 (20 U.S.C. 7101 et seq.);
(iii) the manner in which States will ensure an equitable geographic distribution of grant awards; and
(iv) the criteria which will be used to determine the impact and effectiveness of the funds used pursuant to this section.
(B) Form.--A State educational agency may submit an application to receive a grant under this section under paragraph (1) or as an amendment to the application the State educational agency submits under the Safe and Drug-Free Schools and Communities Act of 1994 (20 U.S.C. 7101 et seq.).
(2) State activities.--Of appropriated amounts allocated to the States under subsection (c)(2), the State educational agency may reserve not more than 10 percent for activities to further the goals of this section, including--
(A) providing technical assistance to eligible grant recipients in the State;
(B) performing ongoing research into the causes of gun violence among children and methods to prevent gun violence among children; and
(C) providing ongoing professional development for public school staff and administrators to identify the causes and indications of gun violence.
(3) State reports.--Each State receiving an allotment under this section shall submit a report to the Secretary and to the Committees on Health, Education, Labor, and Pensions and the Judiciary of the Senate and the Committees on Education and the Workforce and the Judiciary of the House of Representatives, not later than 12 months after receipt of the grant award and shall submit an additional report to those committees not later than 36 months after receipt of the grant award. Each report shall include information regarding--
(A) the progress of local educational agencies that received a grant award under this section in the State in educating children about firearms;
(B) the progress of State activities under paragraph (1) to advance the goals of this section; and
(C) how the State is coordinating funds allocated under this section with other State and Federal education, law enforcement, and juvenile justice programs, including the Safe and Drug-Free Schools and Communities Act of 1994 (20 U.S.C. 7101 et seq.).
(i) Supplement Not Supplant.--A State or local educational agency shall use funds received under this section only to supplement the amount of funds that would, in the absence of such Federal funds, be made available from non-Federal sources for reducing gun violence among children and educating children about firearms, and not to supplant such funds.
(j) Displacement.--A local educational agency that receives a grant award under this section shall ensure that persons hired to carry out the activities under this section do not displace persons already employed.
(k) Home Schools.--Nothing in this section shall be construed to affect home schools.
(l) Authorization of Appropriations.--There are authorized to be appropriated for this section $60,000,000 for each of fiscal years 2002, 2003, and 2004.
SEC. 4272. DISSEMINATION OF BEST PRACTICES VIA THE INTERNET.
(a) Model Dissemination.--The Secretary of Education shall include on the Internet site of the Department of Education a description of programs that receive grants under section 4271.
(b) Grant Program Notification.--The Secretary shall publicize the competitive grant program through its Internet site, publications, and public service announcements.
SEC. 4273. GRANT PRIORITY FOR TRACING OF GUNS USED IN CRIMES
BY JUVENILES.
Section 517 of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3763) is amended by adding at the end the following:
``(c) Priority.--In awarding discretionary grants under section 511 to public agencies to undertake law enforcement initiatives relating to gangs, or relating to juveniles who are involved or at risk of involvement in gangs, the Director shall give priority to a public agency that includes in its application a description of strategies or programs of that public agency (either in effect or proposed) that provide cooperation between Federal, State, and local law enforcement authorities, through the use of firearms and ballistics identification systems, to disrupt illegal sale or transfer of firearms to or between juveniles through tracing the sources of guns used in crime that were provided to juveniles.''.
____
21st Century Law Enforcement, Crime Prevention, and Victim Assistance
Act--Section-by-Section Analysis
Title I: supporting Law Enforcement and the Effective Administration of
Justice
Subtitle A. Support for Community Personnel
Sec. 1101. 21st century community policing initiative. Extends COPS program through FY2007. Authorizes funds for up to 50,000 police officers, 10,000 additional prosecutors, and 10,000 indigent defense attorneys. Authorizes $350 million annually for new law enforcement technology designed to improve police communications and promote comprehensive crime analysis.
Subtitle B. Protecting Federal, State, and Local Law Enforcement
Officers and the Judiciary
Sec. 1201. Expansion of protection of Federal officers and employees from murder due to their status. Clarifies that it is a crime to murder a Federal employee because of his or her status, as well as because of his or her performance of official duties, and that the same protection applies to a State or local government employee who is assisting a Federal official.
Sec. 1202. Assaulting, resisting, or impeding certain officers or employees. Increases the maximum penalties for simple assault (from 1 to 3 years) and other assaults (from 10 to 20 years) on Federal officials acting in performance of their official duties, or persons acting in concert with a Federal employee.
Sec. 1203. Influencing, impeding, or retaliating against a Federal official by threatening or injuring a family member. Increases the maximum penalties for actual or attempted influencing, impeding, or retaliating against a Federal official by threatening a family member of the employee, from 5 to 10 years, and from 3 to 6 years if the threat is to commit an assault.
Sec. 1204. Mailing threatening communications. Increases the maximum penalties from 5 to 10 years for threats of injury or kidnaping of any person mailed to a Federal judge, and from 3 to 6 years for extortionate threats to Federal judges.
Sec. 1205. Amendment of the sentencing guidelines for assaults and threats against Federal judges and certain other Federal officials and employees. Directs the United States Sentencing Commission to amend the Sentencing Guidelines to enhance penalties for assaults and threats against Federal judges and other Federal officials and employees engaged in their official duties.
Sec. 1206. Killing persons aiding Federal investigations or State correctional officers. Provides that the killing of a person working with Federal officials in a State or joint Federal-State investigation shall be a crime, just as is a killing in conjunction with a Federal investigation.
Sec. 1207. Killing State correctional officers. Clarifies that Federal criminal penalties regarding assaults by prisoners apply where the person committing the offense was incarcerated prior to a finding of guilt, including pending an initial appearance, arraignment, trial, or appeal.
Sec. 1208. Establishment of protective function privilege. Establishes a privilege against testimony by Secret Service officers charged with protecting the President, those in direct line for the Presidency, and visiting foreign heads of state.
Part 1. Extension of Project Exile
Sec. 1311. Authorization of funding for additional State and local gun prosecutors. Authorizes $150,000,000 in FY2002 to hire additional local and State prosecutors to expand the Project Exile program in high gun-crime areas. Requires interdisciplinary team approach to prevent, reduce, and respond to firearm related crimes in partnership with communities.
Sec. 1312. Authorization of funding for additional Federal firearms prosecutors and gun enforcement teams. Authorizes the Attorney General to hire 114 additional Federal prosecutors to prosecute violations of Federal firearms in up to 20 jurisdictions designated as high crime areas. Authorizes $15,000,000 for FY2002.
Part 2. Expansion of the Youth Crime Gun Interdiction Initiative
Sec. 1321. Youth Crime Gun Interdiction Initiative. Directs the Secretary of the Treasury to expand participation in the Youth Crime Gun Interdiction Initiative (``YCGII''). Authorizes grants to States and localities for purposes of assisting them in the tracing of firearms and participation in the YCGII.
Part 3. Gun Offenses
Sec. 1331. Gun ban for dangerous juvenile offenders. Prohibits juveniles adjudged delinquent for serious drug offenses or violent felonies from receiving or possessing a firearm, and makes it a crime for any person to sell or provide a firearm to someone they have reason to believe has been adjudged delinquent. This section applies only prospectively, and access to firearms may be restored under State restoration of rights provisions, but only if such restoration is on a case-by-case, rather than automatic basis.
Sec. 1332. Improving firearms safety. Requires gun dealers to have secure gun storage devices available for sale, including any device or attachment to prevent a gun's use by one not having regular access to the firearm, or a lockable safe or storage box.
Sec. 1333. Juvenile handgun safety. Increases the maximum penalty for transferring a handgun to a juvenile or for a juvenile to unlawfully possess a handgun from 1 to 5 years.
Sec. 1334. Serious juvenile drug offenses as armed career criminal predicates. Permits the use of an adjudication of juvenile delinquency for a serious drug trafficking offense as a predicate offense for determining whether a defendant falls within the Armed Career Criminal Act. That act provides additional penalties for armed criminals with a proven record of serious crimes involving drugs and violence.
Sec. 1335. Increased penalty for transferring a firearm to a minor for use in crime of violence or drug trafficking crime. Increases the maximum penalty for providing a firearm to a juvenile that one knows will be used in a serious crime from 10 to 15 years.
Sec. 1336. Increased penalty for firearms conspiracy. Subjects conspirators to the same penalties as are provided for the underlying firearm offenses in 18 U.S.C. Sec. 924.
Part 4. Closing the Gun Show Loophole
Sec. 1341. Extension of Brady background checks to gun shows. Eliminates the gun show loopholes by requiring criminal background checks on all gun sales at gun shows; clarifies that gun sellers and buyers are not subject to penalties unless they knowingly attempt to circumvent the background checks; and amends the Brady law to prevent the Federal government from keeping records on qualified purchasers for more than 90 days.
Subtitle D. Assistance to States for Prosecuting and Punishing Juvenile
Offenders, and Reducing Juvenile Crime
Sec. 1401. Juvenile and violent offender incarceration grants. Authorizes the Attorney General to make grants to States, local governments, or any combination thereof, to assist them in planning, establishing, and operating secure facilities, staff-secure facilities, detention centers, and other correctional programs for violent juvenile offenders.
Sec. 1402. Certain punishment and graduated sanctions for youth offenders. Authorizes the Attorney General to make grants for the purposes of: (1) providing juvenile courts with a range of sentencing options such that first time juvenile offenders face some level of punishment as a result of their initial contact with the juvenile justice system; and (2) increasing the sentencing options available to juvenile court judges. Authorizes appropriations through FY2005.
Sec. 1403. Pilot program to promote replication of recent successful juvenile crime reduction strategies. Directs the Attorney General to establish a pilot program to encourage and support communities that adopt a comprehensive approach to suppressing and preventing violent juvenile crime patterned after successful State juvenile crime reduction strategies. Authorities appropriations through FY2004.
Sec. 1404. Reimbursement of States for costs of incarcerating juvenile alien offenders. Amends: (1) the Immigration Reform and Control Act of 1986 to provide for the reimbursement of States for the costs of incarcerating juvenile alien offenders; and (2) the Illegal Immigration Reform and Immigrant Reform and Immigrant Responsibility Act of 1996 to require that the annual report on criminal aliens include additional details on illegal juvenile aliens.
Subtitle E. Ballistics, Law Assistance, and Safety Technology
Sec. 1501. Short title. This subtitle may be cited as the
``Ballistics, Law Assistance, and Safety Technology Act''
(``BLAST'').
Sec. 1502. Purposes. Statement of legislative purposes.
Sec. 1511. Definition of ballistics. Defines terms used in this subtitle.
Sec. 1512. Test firing and automated storage of ballistics records. Requires a licensed manufacturer or importer to test fire firearms, prepare ballistics images, make records available to the Secretary of the Treasury for entry in a computerized database, and store the fired bullet and cartridge casings. Directs the Attorney General and the Secretary to assist firearm manufacturers and importers in complying. Specifies that nothing herein creates a cause of action against any Federal firearms licensee or any other person for any civil liability except for imposition of a civil penalty under this section.
Sec. 1513. Privacy rights of law abiding citizens. Prohibits the use of ballistics information of individual guns for (1) prosecutorial purposes, unless law enforcement officials have a reasonable belief that crime has been committed and that ballistics information would assist in the investigation of that crime, or (2) the creation of a national firearms registry of gun owners.
Sec. 1514. Demonstration firearm crime reduction strategy. Directs the Secretary and the Attorney General to establish in the jurisdiction selected a comprehensive firearm crime reduction strategy. Requires the Secretary and the Attorney General to select not fewer than ten jurisdictions for participation in the program. Sets forth provisions regarding selection criteria.
Subtitle F. Offender Reentry and Community Safety
Section 1601. Short title. This subtitle may be cited as the ``Offender Reentry and Community Safety Act of 2001.''
Section 1602. Findings. Legislative findings in support of this subtitle.
Section 1603. Purposes. Statement of legislative purposes.
Part 1. Federal Reentry Demonstration Projects
Section 1611. Federal Reentry Center Demonstration. Establishes the Federal Reentry Center Demonstration project to assist participating prisoners, under close monitoring, in preparing for and adjusting to reentry into the community; details project duration and selection of districts in which to carry out programs.
Section 1612. Federal High-Risk Offender Reentry Demonstration. Establishes the Federal High-Risk Offender Reentry Demonstration project. Uses community corrections facilities and appropriate monitoring technologies to promote effective reentry into the community; notifies victims of prisoner reentry; details project duration and selection of districts in which to carry out programs.
Section 1613. District of Columbia Intensive Supervision, Tracking, and Reentry Training (DC iSTART) Demonstration. Establishes the District of Columbia Intensive Supervision, Tracking and Reentry Training Demonstration (DC iSTART) project. Uses intensive supervision to promote high risk parolees' successful reentry into the community.
Section 1614. Federal Intensive Supervision, Tracking, and Reentry Training (FED iSTART) Demonstration. Establishes the Federal Intensive Supervision, Tracking and Reentry Training Demonstration (FED iSTART) project. Uses intensive supervision to promote high risk parolees' successful reentry into the community.
Section 1615. Federal Enhanced In-Prison Vocational Assessment and Training Demonstration. Establishes Federal Enhanced In-Prison Vocational Assessment and Training Demonstration project to provide in-prison assessment of prisoners' vocational needs, development, and release readiness, and other programs to prepare Federal prisoners for reentry into the community.
Section 1616. Research and reports to Congress. Defines requirements for reporting on the effectiveness of the programs established in this subtitle.
Section 1617., Definitions. Defines terms used in this subtitle.
Section 1618. Authorization of appropriations. Authorizes appropriations through FY2006.
Part 2. State Reentry Grant Programs
Section 1621. Amendments to the Omnibus Crime Control and Safe Streets Act of 1968. Establishes adult offender reentry demonstration projects; State and local reentry courts; juvenile offender State and local reentry programs; and State reentry program research, development, and evaluation.
Title II: Strengthening the Federal Criminal Laws
Subtitle A. Combating Gang Violence
Part 1. Enhanced Penalties for Gang Related Activities
Sec. 2101. Gang franchising. Prohibits travel in interstate commerce to create or promote a franchise of a criminal street gang, with penalty of up to 10 years in prison for a violation.
Sec. 2102. Enhanced penalties for use or recruitment of minors in gangs. Requires the United States Sentencing Commission to provide for enhanced penalties for those who use or recruit minors in a criminal street gang franchise.
Sec. 2103. Gang franchising as a RICO predicate. Makes gang franchising a predicate crime for a RICO prosecution.
Sec. 2104. Increase in offense level for participating in crime as a gang member. Requires the United States Sentencing Commission to provide an enhanced penalty for street gang members who commit crimes as a member of the gang.
Sec. 2105. Enhanced penalty for discharge of a firearm in relation to counts of violence or drug trafficking crimes. Requires the United States Sentencing Commission to provide for an enhanced penalty for any defendant who discharges a firearm during the course of a crime of violence or a drug offense.
Sec. 2106. Punishment of arson or bombings at facilities receiving Federal financial assistance. Sets penalties for arson or bombings a facilities of any institution or organization receiving Federal financial assistance.
Sec. 2107. Elimination of statute of limitations for murder. Eliminates the Federal statute of limitations for Federal crimes involving murder regardless of whether the crime carries the death penalty. Lifts the statute of limitation, for example, on RICO offenses involving murder.
Sec. 2108. Extension of statute of limitations for violent and drug trafficking crimes. Extends to 10 years the statute of limitations for Class A felonies involving drug trafficking and crimes of violence.
Sec. 2109. Increased penalties under the RICO law for gang and violent crimes. Raises the maximum term of imprisonment for a violation of RICO to 20 years or life imprisonment.
Sec. 2110. Increased penalty and broadened scope of statute against violent crimes in aid of racketeering. Expands the scope of anti-racketeering laws by including as violations not only threats of violence in aid of racketeering, but also actual acts of violence. Increases maximum penalty for conspiracy to kidnap or murder in aid of racketeering from 10 years to life imprisonment; raises maximum penalty for other actual or attempted crimes of violence in aid of racketeering from 5 to 10 years.
Sec. 2111. Facilitating the prosecution of carjacking offenses. Eliminates requirement that prosecutors prove that a defendant actually intended to cause death or serious bodily injury, as opposed, for example, to using a firearm
``merely'' to threaten the car owner.
Sec. 2112. Facilitation of RICO prosecutions. Eliminates requirement that prosecutors prove that each defendant committed two specific acts of racketeering activity. Brings RICO conspiracy law into line with general conspiracy law.
Sec. 2113. Assault as a RICO predicate. Makes an assault a predicate offense for purposes of the RICO statute
Sec. 2114. Expansion of definition of ``racketeering activity'' to affect gangs in Indian country. Expands the definition of racketeering activity to include acts or threats committed solely in Indian Country.
Sec. 2115. Increased penalties for violence in the course of riot offenses. Changes the current 5 year maximum penalty for violence in the course of a riot to a maximum of life imprisonment where death results, or 20 years where serious bodily injury results.
Sec. 2116. Expansion of Federal jurisdiction over crimes occurring in private penal facilities housing Federal prisoners or prisoners from other States. Expands the definition of prisons under chapter 87 of Title 18 to include, in addition to Federal prisons, private facilities used to house Federal prisoners or for interstate housing of prisoners.
Part 2. Targeting Gang-Related Gun Offenses
Sec. 2121. Transfer of firearm to commit a crime of violence. Increases the ability of prosecutors to punish those who facilitate crimes of violence by providing firearms to criminals. Specifies that it is a crime for a person to transfer a weapon to another when the person has ``reason to know'', or actual knowledge, that the recipient of the weapon will use it to commit a crime of violence.
Sec. 2122. Increased penalty for knowingly receiving firearm with obliterated serial number. Increases from 5 to 10 years the maximum penalty for receiving a firearm with an obliterated serial number, makes the maximum penalty the same as for receiving a firearm known to be stolen.
Sec. 2123. Amendment of sentencing guidelines for transfers of firearms to prohibited persons. Directs the United States Sentencing commission to enhance penalties for the transfer of a firearm to a person whom the defendant has reasonable cause to believe is prohibited from possessing the firearm.
Part 3. Using and Protecting Witnesses to Help Prosecute Gangs and
Other Violent Criminals
Sec. 2131. Interstate travel to engage in witness intimidation or obstruction of justice. Adds witness bribery, witness intimidation, obstruction of justice, and related conduct in State criminal proceedings to the list of predicates under the Travel Act.
Sec. 2132. Expanding pretrial detention eligibility for serious gang and other violent criminals. Protects witnesses by expanding eligibility for pretrial detention of gang members likely to harm or intimidate a witness. Allows a court to (1) consider any adjudication of juvenile delinquency in determining the number of prior convictions of a defendant; (2) treat prior convictions for crimes of possession of explosives or firearms as ``crimes of violence''; and (3) consider membership in a criminal street gang as a factor.
Sec. 2133. Conspiracy penalty for obstruction of justice offenses involving victims, witnesses, and informants. Makes a conspiracy to intimidate a witness or to obstruct justice a separate crime punishable by up to the amount of the contemplated crime, as opposed to the five year maximum under the existing general conspiracy statute.
Sec. 2134. Allowing a reduction in sentence for providing useful investigative information although not regarding a particular individual. Clarifies the criminal code and the Federal Rules of Criminal Procedure provisions dealing with reduced sentences in return for cooperation investigation, as opposed to an investigation focused on a particular person.
Sec. 2135. Increasing the penalty for using physical force to tamper with witnesses, victims or informants. Amends the witness tampering statute to include not only killing or attempting to kill a witness, but also any use or attempted use of physical force to deter a witness, and efforts to delay testimony by witnesses or to alter or destroy documents.
Sec. 2136. Expansion of Federal kidnaping offense to cover when death of victim occurs before crossing State line and when facility in interstate commerce or the mails are used. Expands the Federal kidnaping offense to cover situations where the death of the victim occurs before the crossing of any State line, and situations where a facility in interstate commerce or the mails is used, to make clear that the Federal courts have jurisdiction over such cases.
Sec. 2137. Assaults or other crimes of violence for hire. Includes, in addition to murder for hire connected to interstate commerce, all felony crimes of violence against persons under such circumstances as Federal crimes.
Sec. 2138. Clarification of interstate threats statute to cover threats to kill. Clarifies the interstate threats statute covers threats to kill as well as threats merely to injure.
Sec. 2139. Conforming amendment to law punishing obstruction of justice by notification of existence of subpoena for records in certain types of investigations. Expands the list of predicate crimes under the Federal obstruction of justice statute to include the Controlled Substances Act, the Controlled Substances Import and Export Act, and the Internal Revenue Code.
Part 4. Gang Paraphernalia
Sec. 2141. Streamlining procedures for law enforcement access to clone numeric pagers. Allows the use of clone pagers (devices used to capture numbers sent to another pager) with consent or on application to a court.
Sec. 2142. Sentencing enhancement for using body armor in commission of a felony. Requires the Sentencing Commission to adopt an appropriate sentencing enhancement for crimes committed by persons wearing body armor, and provides an exception where the crime is committed by a police officer, who often wears such armor in the course of official duties.
Sec. 2143. Sentencing enhancement for using laser sighting devices in commission of a felony. Requires the Sentencing Commission to adopt an appropriate sentencing enhancement for the use or possession of a laser sighting device in the commission of a felony.
Sec. 2144. Government access to location information. Provides that a mobile electronic communications service is to provide the real-time physical location of a customer's cell phone only upon a court order finding probable cause connecting the subscriber to a felony.
Sec. 2145. Limitation on obtaining transactional information from pen registers or trap and trace devices. Provides that ex parte orders for the use of pen registers or trap and trace devices are to direct that the devices be used so as to minimize the interception of information other than that involved in processing the call (i.e. telephone numbers).
Subtitle B. Combating Money Laundering
Sec. 2201. Short title. This subtitle may be cited as the
``Money Laundering Enforcement Act of 2001''.
Sec. 2202. Illegal money transmitting businesses. Provides that a defendant need only know that a money transmitting business lacked a license required by the State law, not that the operation of the business without the license was a criminal violation of State law. Therefore, a prosecutor does not have to provide actual knowledge of State law.
Sec. 2203. Restraint of assets of persons arrested a abroad. Responds to the ease with which money can be transferred from country to country by electronic means, and provides for temporary seizure of property held within the Unites States when a person has been arrested or charged in a foreign country.
Sec. 2204. Civil money laundering jurisdiction over foreign persons.. Provides ``long arm'' jurisdiction over foreign banks engaged in money laundering that have accounts in the United States, so that the foreign bank cannot claim that it lacks the minimum contacts with the United States for in personam jurisdiction.
Sec. 2205. Punishment of laundering money through foreign banks. Amends civil money laundering provisions to include foreign as well as domestic banks in the definition of
``financial institutions''.
Sec. 2206. Addition of serious foreign crimes to list of money laundering predicates. Expands the list of money laundering ``specified unlawful activity,'' or crimes for which money laundering prosecutions can be brought. Includes the following foreign crimes as predictes for a money laundering prosecution: (1) all crimes of violence not currently covered; (2) fraud against a foreign government;
(3) bribery of or theft by a foreign official; (4) smuggling weapons; and (5) any other offense for which the United States would extradite the defendant.
Sec. 2207. Criminal forfeiture for money laundering conspiracies.. Makes a conspiracy to commit an existing forfeiture crime a separate criminal violation.
Sec. 2208. Fungible property in foreign bank accounts. Amends fungible property provisions to make them applicable to all forfeitures (e.g., drug violations as well as money laundering violations) and to foreign and domestic banks. Extends the term for bringing fungible property actions from one year to two years. Makes clear that the time runs from the arrest or seizure.
Sec. 2209. Admissibility of foreign business records. Provides that foreign records are admissible in civil proceedings in the same way that they currently are admissible in criminal proceedings.
Sec. 2210. Charging money laundering as a course of conduct. Allows prosecutors to charge a continuing scheme to violate the money laundering statutes as a single count in an indictment, as an alternative to the present requirement that prosecutors charge each transaction as a separate count.
Sec. 2211. Venue in money laundering cases. Establishes that a money laundering prosecution can be brought in any district in which the transaction is conducted, where a prosecution for the underlying specified unlawful activity could be brought, or where an act in any conspiracy took place.
Sec. 2212. Technical amendment to restore wiretap authority for certain money laundering offenses. Restores Federal authority to obtain wiretaps in cases involving illegal structuring of currency transactions.
Sec. 2213. Criminal penalties for violations of anti-money laundering orders. Clarifies that criminal penalties apply to violations of Department of Treasury ``geographic targeting orders'' (temporary orders in enforcement of the Bank Secrecy Act). Violations occur where there are false reports or failures to make required reports.
Sec. 2214. Encouraging financial institution to notify law enforcement of suspicious financial transactions. Expands the definition of financial institutions which may, without civil liability, report suspicious financial transactions to law enforcement officials. Expanded definition includes electronics communications services that facilitate international transfer.
Sec. 2215. Coverage of foreign bank branches in the territories. Expands the definition of ``State'' to include commonwealths, territories, and possessions of the United States for purposes of the International Banking Act of 1978.
Sec. 2216. Conforming statute of limitations amendment for certain bank fraud offenses. Technical amendment to conform section number references.
Sec. 2217. Jurisdiction over certain financial crimes committee abroad. Clarifies United States' jurisdiction over access device fraud (credit card, debit card and telecommunications fraud) where the fraud has an effect on an entity within the United States.
Sec. 2218. Knowledge that property is the process of a felony. Clarifies the law regarding a defendant's knowledge of the source of money in a money laundering transactions. Although the offense must in fact be a felony, it is not necessary that the defendant be aware that the legislature has so classified the offense.
Sec. 2219. Money laundering transactions; commingled accounts. Clarifies the requirement in 18 U.S.A. Sec. 1957 that the monetary transaction involve more than $10,000 in criminally derived property. Discusses the impact on money laundering cases of commingled accounts which contain clean money and money in criminally derived property.
Sec. 2220. Laundering the process of terrorism. Corrects an omission in the Antiterrorism and Effective Death Penalty Act of 1996 by making it an offense to launder money which was raised for the material support of a foreign terrorist organization. Current law makes it an offense to raise such funds but not to launder the same.
Sec. 2221. Violations of sections 6050I. Requires any trade or business receiving more than $10,000 in cash to report the transaction to the IRS on Form 8300. Violations of the Form 8300 requirement will be treated the same as CTR and CMIR violations for forfeiture purposes.
Sec. 2222. Including agencies of tribal governments in the definition of a financial institution. Prevent tribes from offering ``off-shore banking'' on Indian reservations by forming tribal banks that may conceal deposit records from the Federal Government. Clarifies present law to state that the BSA and money laundering statues apply to banks owned or operated by Indian tribes.
Sec. 2223. Penalties for violations of geographic targeting orders and certain record keeping requirements. Correct ambiguity regarding reporting under the Bank Secrecy Act
(BSA). Eliminates doubt concerning the applicability of reporting provisions in reports required by GTOs issued under 31 U.S.C. Sec. 5326.
Subtitle C. Antidrug Provisions
Sec. 2301. Amendments concerning temporary emergency scheduling. Authorizes the Attorney General to schedule controlled substances on an emergency basis when that substance proses an immediate threat to health and/or public safety. Provides protections for legitimate researchers.
Sec. 2302. Amendment to reporting requirement for transactions involving certain listed chemicals. Allows reporting of certain transactions involving ephedrine, pseudoephedrine and phenylpropanolamine to be exempted from reporting requirements with no negative impact on law enforcement goals.
Sec. 2303. Drug paraphernalia. Adds ``packaging'' to the list of uses included in the definition of ``drug paraphernalia'' in the Controlled Substances Act (21 U.S.C. Sec. 863(d)). Facilitates prosecution of those who manufacture packaging materials, sell them, and possess them.
Sec. 2304. Counterfeit substances/imitation controlled substances. Expands the definition of counterfeit substance.
``Counterfeit substance'' applies to any controlled substance which is represented to be or which imitates another controlled substance regardless of whether that controlled substance is of licit or illicit origin. Adds a new definition for imitation controlled substances.
Sec. 2305. Conforming amendment concerning marijuana plants. Corrects an inconsistency in the penalties relating to marijuana plants that exists between 21 U.S.C. Sec. 841(b) and 21 U.S.C. Sec. 960(b). The former statute applies to domestic controlled substance trafficking violations and the latter to controlled substance importation offenses. The correction would make identical the number of marijuana plants cited in the provisions.
Sec. 2306. Serious juvenile drug trafficking offenses as armed career criminal act predicates. Permits the use of an adjudication of juvenile delinquency based on a serious drug trafficking offense as a predicate offense under the Armed Career Criminal Act (ACCA), 18 U.S.C. Sec. 924(c)(2)(A). The ACCA targets for a lengthy period of at least 15 years' imprisonment those felons found in unlawful possession of a firearm who have proven records of involvement in serious acts of misconduct involving drugs or violence.
Sec. 2307. Increased penalties for using Federal property to grow or manufacture controlled substances. Increases the penalty for cultivating or manufacturing a controlled substance on Federally owned or leased land. Federal law enforcement agencies believe that the use of Federal lands for cultivating and manufacturing controlled substances has increased because there is no possibility that the land will be forfeited as is the case if the cultivation or manufacture took place on private property.
Sec. 2308. Clarification of length of supervised release terms in controlled substance cases. Resolves a conflict in the circuits as to the permissible length of supervised release terms in controlled substance cases.
Sec. 2309. Supervised release period after conviction for continuing criminal enterprise. Provides a mandatory minimum period of 10 years of supervised release after a conviction for participation in a continuing criminal enterprise where there is no prior conviction, and a minimum of 15 years where there has been a prior conviction.
Sec. 2310. Technical correction to ensure compliance of sentencing guidelines with provisions of all Federal statutes. Ensures that sentencing guidelines promulgated by the United States Sentencing Commission are consistent with the provisions of all Federal statutes.
Sec. 2311. Import and export of chemicals used to produce illicit drugs. Authorizes the Drug Enforcement Administration to require that exporters of certain listed chemicals to drug producing areas of the world document to DEA the ultimate consignee and use of the listed chemical Clarifies DEA's authority to require advance notification of imports and exports including identifying the importer in the country of destination.
Subtitle D. Deterring Cargo Theft
Sec. 2351. Punishment of cargo theft. Clarifies Federal statute governing thefts of vehicles normally used in interstate commerce to include trailers, motortrucks, and air cargo containers; and freight warehouses and transfer stations. Makes such a theft a felony punishable by three
(not one) years in prison. Provides for appropriate amendments to the Sentencing Guidelines.
Sec. 2352. Reports to Congress on cargo theft. Mandates annual reports by the Attorney General to evaluate and identify further means of combating cargo theft.
Sec. 2353. Establishment of Advisory Committee on cargo theft. Establishes a six-member Advisory Committee on Cargo Theft with representatives of the Departments of Justice, Treasury and Transportation, and three experts from the private sector. Committee will hold hearing and submit a report within one year with detailed recommendations on cargo security.
Sec. 2354. Addition of attempted theft and counterfeiting offenses to eliminate gaps and inconsistencies in coverage. Amends 22 statutes to clarify that attempt to embezzle funds or counterfeit is a crime, just as is actual embezzlement or counterfeiting.
Sec. 2355. Clarification of scienter requirement for receiving property stolen from an Indian tribal organization. Provides that it is a crime to receive, conceal or retain property stolen from a tribal organization if one knows that the property has been stolen, even if one did not know that it had been stolen from a tribal organization.
Sec. 2356. Larceny involving post office boxes and postal stamp vending machines. Clarifies that it is a crime to steal from a post office box or stamp vending machine irrespective of whether it is in a building used by the Postal Service.
Sec. 2357. Expansion of Federal theft offenses to cover theft of vessels. Expands Federal law covering the transportation of stolen vehicles to include watercraft.
Subtitle E. Improvements to Federal Criminal Law
Part 1. Sentencing Improvements
Sec. 2411. Application of sentencing guidelines to all pertinent statutes. Clarifies that the rules and regulations promulgated by the United States Sentencing Commission are required to be consistent with all pertinent Federal statutes, not just the Federal criminal statues within titles 18 and 28 of the United States Code.
Sec. 2412. Doubling maximum penalty for voluntary manslaughter. Increases the maximum penalty for voluntary manslaughter within the special maritime and territorial jurisdiction of the United States from 10 to 20 years. Brings it in line with related Federal penalties and the higher penalty for voluntary manslaughter in many States.
Sec. 2413. Authorization of imposition of both a fine and imprisonment rather than only either penalty in certain offenses. Provides a uniform rule allowing both fine and imprisonment in all criminal statutes. Addresses drafting errors that have resulted in five Federal criminal statues, 18 U.S.C. Sec. 401 (criminal contempt), 18 U.S.C. Sec. 1705
(destruction of letter boxes), 18 U.S.C. Sec. 1916
(unauthorized employment or disposition of lapsed appropriations), 18 U.S.C. Sec. 2234 (willfully exceeding search warrant) and 18 U.S.C. Sec. 2235 (maliciously procuring search warrant), where the court can impose either a fine or imprisonment, but not both.
Sec. 2414. Addition of supervised release violation as predicate for certain offenses. Adds supervised release to various statutes which now relate only to probation or parole. Violation of supervised release could serve as a predicate offense in the same ways a violation of probation or parole currently does.
Sec. 2415. Authority of court to impose a sentence of probation or supervised release when reducing a sentence of imprisonment in certain cases. Allows a court to impose conditions of parole or supervised release (such as home confinement) where a prisoner has a terminal illness that is contagious.
Sec. 2416. Elimination of proof of value requirement for felony theft or conversion of grand jury material. Eliminates the $1,000 felony threshold for thefts of government property under 18 U.S.C. Sec. 641 where the material stolen is grand jury material.
Sec. 2417. Increased maximum corporate penalty for antitrust violations. Increases the maximum statutory fine for corporations convicted of criminal antitrust violations from the current Sherman Act maximum of $10,000,000 to a new maximum of $100,000,000.
Sec. 2418. Amendment of Federal sentencing guidelines for counterfeit bearer obligations of the United States. Directs the United States Sentencing Commission to amend the Sentencing Guidelines to enhance penalties for counterfeiting offenses, to address the recent increase of computer-generated counterfeit U.S. currency produced by inkjet printers and color copiers.
Part 2--Additional Improvements to Federal Criminal Law
Sec. 2421. Violence directed at dwellings in Indian country. Allows the prosecution of Indians as well as non-Indians who commit acts of violence directed against dwellings on Indian reservations. Such crimes currently are not among those specifically listed as prosecutable in the Major Crimes Act.
Sec. 2422. Correction to Amber Hagerman Child Protection Act. Corrects drafting errors in the Amber Hagerman Child Protection Act (a bill regarding the crossing of State lines to engage in sex with a child under 12). Expands penalties for engaging in forcible sex with children ages 12 to 16.
Sec. 2423. Elimination of ``bodily harm'' element in assault with a dangerous weapon offense. Eliminates voluntary intoxication as a defense in the case of a person accused of committing assault with a deadly weapon in the special maritime and territorial jurisdiction of the United States.
Sec. 2424. Appeals from certain dismissals. Clarifies that the government appeal statute authorizes appeal by the United States whenever a court dismisses any part of an indictment or information, so long as the appeal is consistent with the Double Jeopardy Clause. The decision to appeal is to be made by the Solicitor General.
Sec. 2425. Authority for injunction against disposal of ill-gotten gains from violations of fraud statutes. Allows injunctions for fraud when a person is disposing of or about to dispose of property obtained not only as a result of bank fraud, but also as a result of violations of general anti-fraud statutes: a false statement under 18 U.S.C. Sec. 1001, a false claim under 18 U.S.C. Sec. 287, or a conspiracy to defraud the United States or violate the law under 18 U.S.C. Sec. 371.
Sec. 2426. Expansion of interstate travel fraud statute to cover interstate travel by perpetrator. Closes a gap in the interstate travel fraud statute to cover situations where the perpetrator travels in interstate commerce, in addition to situations where the perpetrator transports or causes others to travel in interstate commerce.
Sec. 2427. Clarification scope of unauthorized selling of military medals or decorations. Clarifies that the prohibition against the unauthorized selling of military decorations also covers a person who ``trades, barters or exchanges for . . . value.''
Sec. 2428. Amendment to section 669 to conform to Public Law 104-294. Changes the threshold amount for a felony involving health care fraud from $100 to $1,000.
Sec. 2429. Expansion of jurisdiction over child buying and selling offenses. Expands Federal jurisdiction over child buying and selling statutes to cover, in addition to any territory or possession of the United States, the special maritime and territorial jurisdiction of the United States, and commonwealths and possessions of the United States.
Sec. 2430. Limits on disclosure of wiretap orders. Provides that only an ``aggrieved party'' may have access to Title III applications and orders for wiretaps. Only such aggrieved persons have standing to seek suppression of the resulting intercepted communications.
Sec. 2431. Prison credit and aging prisoner reform. Eliminates inappropriate accrual of custody credit and avoids the resulting unwarranted disparities in time served by Federal offenders. Eliminates disparities in the treatment of foreign and domestic prisoners with respect to ``good time credits''. Permits certain non-dangerous Federal prisoners over the age of 70 to be released after they have served at least 30 years in custody, upon approval of the Bureau of Prisons and a Federal court.
Sec. 2432. Miranda reaffirmation. Repeals 18 U.S.C. Sec. 3501, which purported to overturn the Supreme Court's Miranda decision; the Court has held Sec. 3501 to be unconstitutional.
Title III: Protecting Americans and Supporting Victims of Crime
Subtitle A. Crime Victims Assistance
Sec. 3101. Short title. This subtitle may be cited as the
``Crime Victims Assistance Act of 2001''.
Part 1. Victim Rights
Sec. 3111. Right to notice and to be heard concerning detention. Require the government to make reasonable efforts to notify victims of upcoming detention hearings and of their right to attend and address the court. Where identification of the defendant remains at issue, provides flexibility to the presiding judge to protect the integrity of the identification.
Sec. 3112. Right to a speedy trial. Require courts to take into account the interests of the victim in the prompt and appropriate disposition of the case.
Sec. 3113. Right to notice and to be heard concerning plea. Require the government to make reasonable efforts to notify victims of upcoming plea hearings and of their right to attend and address the court.
Sec. 3114. Enhanced participatory rights at trial. Extends the Victim Rights Clarification Act to apply to televised proceedings. Amends the Victims' Rights and Restitution Act of 1990 to strengthen the right of crime victims to be present at court proceedings, including trials.
Sec. 3115. Right to notice and to be heard concerning sentence. Directs courts to consider the views of victims in imposing sentence, and requires probation officers to notify victims of their right to attend sentencing proceedings and address the court.
Sec. 3116. Right to notice and to be heard concerning sentence adjustment. Directs the government to make reasonable efforts to notify victims of upcoming hearings concerning revocation or modification of probation or supervised release and of their right to attend and address the court.
Sec. 3117. Right to notice of release or escape. Requires the Bureau of Prisons to ensure victims reasonable notice of an offender's release or escape from custody. Specifically clarifies victim's rights to notification of an offender's release or escape from a psychiatric institution.
Sec. 3118. Right to notice and to be heard concerning executive clemency. Requires the Attorney General to make reasonable efforts to notify victims of the grant of executive clemency, and to report to Congress concerning executive clemency matters delegated for review or investigation to the Attorney General.
Sec. 3119. Remedies for noncompliance. Establishes a mechanism for addressing violations of the newly created statutory rights of crime victims.
Part 2. Victim Assistance Initiatives
Sec. 3121. Pilot programs to establish ombudsman programs for crime victims. Authorizes the establishment of pilot programs to operate Victim Ombudsman Information Centers in seven States, which would provide information to victims concerning their right to participate in the criminal justice process, identify and respond to violations of victims' rights, and educate public officials concerning the rights of victims. Authorizes the use of up to $5 million of False Claims Act funds to make grants for these pilot programs.
Sec. 3122. Amendments to Victims of Crime Act of 1984. Provides for improvements in Federal support for victim assistance and compensation under the Victims of Crime Act. Includes changes in the sources of funding to the Crime Victims Fund and increases the minimum threshold for the annual grant to victim compensation programs.
Sec. 3123. Increased training for law enforcement and court personnel to respond to the needs of crime victims. Authorizes the use of False Claims Act funds to make grants to provide victim-related training.
Sec. 3124. Increased resources to develop state-of-the-art systems for notifying crime victims of important dates and developments. Authorizes grants for the development of crime victim notification systems, using False Claims Act funds and amounts available in the Violent Crime Reduction Trust Fund.
Part 3. Victim-Offender Programs: ``Restorative Justice''
Sec. 3131. Pilot program and study of restorative justice approach on behalf of victims of crime. Authorizes grants for pilot programs in restorative justice in juvenile court settings. Includes a study of existing programs. Requires that participation in pilot programs be voluntary.
Subtitle B. Violence Against Women Act Enhancements
Sec. 3201. Shelter services for battered women and children. Provides assistance to local entities that provide shelter or transitional housing assistance to victims of domestic violence. Provides means to improve access to information on family violence within underserved populations. Reauthorizes funding for the Family Violence Prevention and Services Act at a level of $175,000,000 through FY 2005.
Sec. 3202. Transitional housing assistance for victims of domestic violence. Provides grants to those in need of housing assistance as a result of fleeing a family violence situation. Funding includes assistance with rent, utilities, transportation, and child care.
Sec. 3203. Family unity demonstration project. Extends the Family Unity Demonstration Project through FY 2005.
Subtitle C. Senior Safety
Sec. 3301. Short title. This subtitle may be cited as the
``Seniors Safety Act of 2001''.
Sec. 3302. Finding and purposes. Legislative findings in support of this subtitle, and statement of legislative purposes.
Sec. 3303. Definitions. Defines terms used in this subtitle.
Part 1. Combating Crimes Against Seniors
Sec. 3311. Enhanced sentencing penalties based on age of victim. Directs the U.S. Sentencing Commission to review and, if appropriate, amend the sentencing guidelines to include age as one of the criteria for determining whether a sentencing enhancement is appropriate. Encourages such review to reflect the economic and physical harms associated with criminal activity targeted at seniors and consider providing increased penalties for offenses where the victim was a senior.
Sec. 3312. Study and report on health care fraud sentences. Directs the U.S. Sentencing Commission to review and, if appropriate, amend the sentencing guidelines applicable to health care fraud offenses. Encourages such review to reflect the serious harms associated with health care fraud and the need for law enforcement to prevent such fraud, and to consider enhanced penalties for persons convicted of health care fraud.
Sec. 3313. Increased penalties for fraud resulting in serious injury or death. Increases the penalties under the mail fraud statute and the wire fraud statute for fraudulent schemes that result in serious injury or death. The maximum penalty if serious bodily harm occurred would be up to twenty years; if a death occurred, the maximum penalty would be a life sentence.
Sec. 3314. Safeguarding pension plans from fraud and theft. Punishes, with up to 10 years' imprisonment, the act of defrauding retirement arrangements, or obtaining by means of false or fraudulent pretenses money or property of any retirement arrangement.
Sec. 3315. Additional civil penalties for defrauding pension plans. Authorizes the Attorney General to bring a civil action for retirement fraud, with penalties up to
$50,000 for an individual or $100,000 for an organization, or the amount of the gain to the offender or loss to the victim, whichever is greatest.
Sec. 3316. Punishing bribery and graft in connection with employee benefit plans. Increases the maximum penalty for bribery and graft in connection with the operation of an employee benefit plan from 3 to 5 years' imprisonment. Broadens existing law to cover corrupt attempts to give or accept bribery or graft payments, and to proscribe bribery or graft payments to persons exercising de facto influence or control over employee benefit plans.
Part 2. Preventing Telemarketing Crime
Sec. 3321. Centralized complaint and consumer education service for victims of telemarketing fraud. Directs the Federal Trade Commission (FTC) to establish a central information clearinghouse for victims of telemarketing fraud and procedures for logging in complaints of telemarketing fraud victims, providing information on telemarketing fraud schemes, referring complaints to appropriate law enforcement officials, and providing complaint or prior conviction information. Directs the Attorney General to establish a database of telemarketing fraud convictions secured against corporations or companies, for uses described above.
Sec. 3322. Blocking of telemarketing scams. Clarifies that telemarketing fraud schemes executed using cellular telephone services are subject to the enhanced penalties for such fraud under 18 U.S.C. Sec. 2326. Authorizes termination of telephone service used to carry on telemarketing fraud. Requires telephone companies, upon notification in writing from the Department of Justice that a particular phone number is being used to engage in fraudulent telemarketing or other fraudulent conduct, and after notice to the customer, to terminate the subscriber's telephone service.
Part 3. Preventing Health Care Fraud
Sec. 3331. Injunctive authority relating to false claims and illegal kickback schemes involving Federal health care programs. Authorizes the Attorney General to take immediate action to halt illegal health care fraud kickback schemes under the Social Security Act. Attorney General may seek a civil penalty of up to $50,000 per violation, or three times the remuneration, whichever is greater, for each offense under this section with respect to a Federal health care program.
Sec. 3332. Authorized investigative demand procedures. Authorizes the Attorney General to issue administrative subpoenas to investigate civil health care fraud cases. Provides privacy safeguards for personally identifiable health information that may be obtained in response to an administrative subpoena and divulged in the course of a Federal investigation.
Sec. 3333. Extending antifraud safeguards to the Federal employees health benefits program. Removes the anti-fraud exemption for the Federal Employee Health Benefits Act
(FEHB), thereby extending anti-fraud and anti-kickback safeguards applicable to the Medicare and Medicaid program to the FEHB. Allows the Attorney General to use the same civil enforcement tools to fight fraud perpetrated against the FEHB program as are available to other Federal health care programs, and to recover civil penalties against persons or entities engaged in illegal kickback schemes.
Sec. 3334. Grand jury disclosure. Authorizes Federal prosecutors to seek a court order to share grand jury information regarding health care offenses with other Federal prosecutors for use in civil proceedings or investigations relating to fraud or false claims in connection with any Federal health care program. Permits grand jury information regarding health care offenses to be shared with Federal civil prosecutors, only after ex parte court review and a finding that the information would assist in enforcement of Federal laws or regulations.
Sec. 3335. Increasing the effectiveness of civil investigative demands in false claims investigations. Authorizes the Attorney General to delegate authority to issue civil investigative demands to the Deputy Attorney General or an Assistant Attorney General. Authorizes whistle-blowers who have brought qui tam actions under the False Claims Act to seek permission from a district court to obtain information disclosed to the Justice Department in response to civil investigative demands.
Part 4. Protecting the Rights of Elderly Crime Victims
Sec. 3341. Use of forfeited funds to pay restitution to crime victims and regulatory agencies. Authorizes the use of forfeited funds to pay restitution to crime victims and regulatory agencies.
Sec. 3342. Victim restitution. Allows the government to move to dismiss forfeiture proceedings to allow the defendant to use the property subject to forfeiture for the payment of restitution to victims. If forfeiture proceedings are complete, Government may return the forfeited property so it may be used for restitution.
Sec. 3343. Bankruptcy proceedings not used to shield illegal gains from false claims. Allows an action under the False Claims Act despite concurrent bankruptcy proceedings. Prohibits discharge of debts resulting from judgments or settlements in Medicare and Medicaid fraud cases. Provides that no debt owed for a violation of the False Claims Act or other agreement may be avoided under bankruptcy provisions.
Sec. 3344. Forfeiture for retirement offenses. Requires the forfeiture of proceeds of a criminal retirement offense. Permits the civil forfeiture of proceeds from a criminal retirement offense.
Subtitle D. Violent Crime Reduction Trust Fund
Sec. 3401. Extension of Violent Crime Reduction Trust Fund. Extends funding for the Violent Crime Control and Law Enforcement Act of 1994 through FY2005.
Title IV: Breaking the Cycle of Drugs and Violence
Subtitle A. Drug Courts, Drug Treatment, and Alternative sentencing
Part 1. Expansion of Drug Courts
Sec. 4111. Reauthorization of drug courts program. Authorizes appropriations for the Drug Courts Program for FY2002 and FY2003 at $400,000,000 each year.
Sec. 4112. Juvenile drug courts. Authorizes grants to States, State and local courts, and Indian tribes, to establish programs for juveniles adjudicated delinquent for non-violent crimes who have substance abuse problems. Programs must include drug testing, drug treatment, and aftercare services such as relapse prevention and vocational training. Authorizes appropriations through FY2005 from the Violent Crime Reduction Trust Fund.
Part 2. Zero Tolerance Drug Testing
Sec. 4121. Grant authority. Authorizes grants to States and localities for programs supporting comprehensive drug testing of criminal justice populations, and to establish appropriate interventions to illegal drug use for offender populations.
Sec. 4122. Administration. Instructs Attorney General to coordinate with the other Justice Department initiatives that address drug testing and interventions in the criminal justice system.
Sec. 4123. Applications. Instructs potential applicants on the process of requesting such grants, which are to be awarded on a competitive basis.
Sec. 4124. Federal share. The Federal share of a grant made under this part may not exceed 75 percent of the total cost of the program.
Sec. 4125. Geographic distribution. The Attorney General shall ensure that, to the extent practicable, an equitable geographic distribution of grant awards is made, with rural and tribal jurisdiction representation.
Sec. 4126. Technical assistance, training, and evaluation. The Attorney General shall provide technical assistance and training in furtherance of the purposes of this part.
Sec. 4127. Authorization of appropriations. Authorizes
$75,000,000 for FY2002 and such sums as are necessary for FY2003 through FY2006.
Sec. 4128. Permanent set-aside for research and evaluation. The Attorney General shall set aside between 1 and 3 percent of the sums appropriated under section 4127 for research and evaluation of this program.
Sec. 4129. Additional requirements for the use of funds under the violent offender incarceration and truth-in-sentencing grant programs. Requires that States receiving grants under the Violent Offender Incarceration and Truth-In-Sentencing grant programs (VOI/TIS) adopt a system of controlled substance testing and interventions. Permits use of VOI/TIS funds for such testing. Adds other conditions for receipt of funding under the VOI/TIS program.
Part 3. Drug Treatment
Sec. 4131. Drug treatment alternative to prison programs administered by State or local prosecutors. Authorizes the Attorney General to make grants to State or local prosecutors to implement or expand drug treatment alternative to prison programs. Authorizes appropriations through FY2006.
Sec. 4132. Substance abuse treatment in Federal prisons reauthorization. Authorizes funding for substance abuse treatment in Federal prisons for FY2002 and FY2003.
Sec. 4133. Residential substance abuse treatment for State prisoners reauthorization. Authorizes appropriations for residential substance abuse treatment for State prisoners through FY2007. Allows States to offer treatment during incarceration and after release.
Sec. 4134. Drug treatment for juveniles. Allows the Director of the Center for Substance Abuse to make grants to public and private nonprofit entities to provide residential drug treatment programs for juveniles. Authorizes appropriations through FY2005.
Part 4. Funding for Drug Free Community Programs
Sec. 4141. Extension of safe and drug-free schools and community programs. Extends funding for the Safe and Drug-Free Schools and Communities Program through FY2005, at
$655,000,000 for FY2002 and FY2003, and $955,000,000 for FY2004 and FY2005.
Sec. 4142. Say No to Drugs community centers. Authorizes grants for the provision of drug prevention services to youth living in eligible communities during after-school hours or summer vacations. Authorizes $125,000,000 for each of FY2002 and FY2003 from the Violent Crime Reduction Trust Fund.
Sec. 4143. Drug education and prevention relating to youth gangs. Extends funding under the Anti-Drug Abuse Act of 1988 through FY2006.
Sec. 4144. Drug education and prevention program for runaway and homeless youth. Extends funding under the Anti-Drug Abuse Act of 1988 through FY2006.
Subtitle B--Youth Crime Prevention and Juvenile Courts
Part 1--Grants to Youth Organizations
Sec. 4211. Grant program. Establishes a grant program for provision of (1) constructive activities for youth during critical time periods; (2) supervised activities in a safe environment; (3) anti-drug education; (4) anti-drug police efforts; or (5) a safe environment for activities in parks and other public recreation areas.
Sec. 4212. Grants to national organizations. Establishes application requirements and evaluation criteria for awarding grants to national and statewide organizations.
Sec. 4213. Grants to States. Establishes application requirements and evaluation criteria for awarding grants to States.
Sec. 4214. Allocation; grant limitation. Allocates funds under this subtitle: 20 percent shall go to national and statewide organizations; 80 percent shall go to States.
Sec. 4215. Report and evaluation. Defines reporting requirements and establishes criteria by which the Attorney General shall evaluate the funded programs.
Sec. 4216. Authorization of appropriations. Authorizes appropriation of such sums as may be necessary for FY2002 and FY2003, and $125,000,000 for each of FY2004 and FY2005.
Sec. 4217. Grants to public and private agencies. Authorizes grants to public and private agencies to fund effective after school juvenile crime prevention programs.
Part 2. Reauthorization of Incentive Grants for Local Delinquency
Prevention Programs
Sec. 4221. Incentive grants for local delinquency prevention programs. Reauthorizes incentive grants for local delinquency prevention programs through FY2006.
Sec. 4222. Research, evaluation, and training. Allocates a portion of the amounts appropriated for incentive grants for local delinquency programs to research, evaluation and training.
Part 3. JUMP Ahead
Sec. 4231. Short title. This part may be cited as the
``JUMP Ahead Act of 2001''.
Sec. 4232. Findings. Legislative findings in support of this part.
Sec. 4233. Juvenile mentoring grants. Amends the Juvenile Justice and Delinquency Prevention Act of 1973 (JJDPA) to include a list of the intended goals of mentoring grants. Each grant is limited to a total of $200,000 over a period not more than three years. Authorizes $50,000,000 for each of FY2002 through FY2005.
Sec. 4234. Implementation and evaluation grants. Authorizes grants to national organizations or agencies to improve youth mentoring programs. Authorizes $5,000,000 for each of FY2002 through FY2005.
Sec. 4235. Evaluations; reports. Directs the Attorney General to evaluate the programs and activities assisted under this part or under the JJDPA. Requires each grant recipient to report annually to the evaluating organization on any program or activity so assisted.
Part 4. Truancy Prevention
Sec. 4241. Short title. This part may be cited as the
``Truancy Prevention and Juvenile Crime Reduction Act of 2001''.
Sec. 4242. Findings. Legislative findings in support of this part.
Sec. 4243. Grants. Authorizes grants to eligible partnerships to reduce truancy and daytime juvenile crime. Authorizes $25,000,000 for each of FY2002 through FY2004.
Part 5. Juvenile Crime Control and Delinquency Prevention Act
Sec. 4251. Short title. This part may be cited as the
``Juvenile Crime Control and Delinquency Prevention Act of 2001''.
Sec. 4252. Findings. Legislative findings in support of this part.
Sec. 4253. Purpose. Statement of legislative purpose.
Sec. 4254. Definitions. Defines terms used in this part.
Sec. 4255. Name of office. Redesignated the Office of Juvenile and Delinquency Prevention as the Office of Juvenile Crime Control and Delinquency Prevention.
Sec. 4256. Concentration of Federal effort. Modifies provisions of the JJDPA regarding annual submission of juvenile delinquency development statements and the contents of such reports.
Sec. 4257. Allocation. Makes certain technical amendments to the allocation formulas.
Sec. 4258. State plans. Modifies JJDPA requirements regarding State plans. Defines who shall serve on State advisory groups. Requires State plans to provide services in rural areas, offer mental health services, and address gender-specific needs. Defines projects to which funds may be applied. Revises State plan requirements regarding limits on the placement of juveniles in secure detention or correctional facilities.
Sec. 4259. Juvenile delinquency prevention block grant program. Authorizes grants to eligible States to carry out projects designed to prevent juvenile delinquency. Delineates the manner in which funding shall be allocated between States. Defines requirements under which States must consider applications.
Sec. 4260. Research; evaluation; technical assistance; training. Authorizes the Administrator to undertake specified activities regarding research, evaluation, technical assistance, and training. Permits Federal agencies to carry out projects directly or by making grants to or contracts with public and private agencies, institutions, and organizations.
Sec. 4261. Demonstration projects. Authorizes the Administrator to fund initiatives for the prevention, control, or reduction of juvenile delinquency.
Sec. 4262. Authorization of appropriations. Authorizes appropriations for specified programs under the JJDPA for FY2002 through FY2004.
Sec. 4263. Administrative authority. Limits the Administrator's authority to establish rules, regulations and procedures to those necessary for the exercise of the function of the office and to ensure compliance with the requirements of the title.
Sec. 4264. Use of funds. Prohibits the use of funds for the construction of short or long-term juvenile or adult offender facilities; allows up to 15 percent of funds from a State's allocation for replacement or renovation of juvenile facilities.
Sec. 4265. Limitation on use of funds. Prohibits the use of funds under this part for advocacy or support for the unsecured release of juvenile charged with violent crimes.
Sec. 4266. Rules of construction. The JJDPA shall not be construed (1) to prevent financial assistance from being awarded through grants under the JJDPA to any otherwise eligible organization, or (2) to modify or affect any Federal or State law relating to collective bargaining rights.
Sec. 4267. Leasing surplus Federal property. Authorizes the Administrator to lease surplus Federal property to States and localities for use as facilities for juveniles offenders; issues rules for making grants and contracts, and distributing funds available, to carry out the JJDPA.
Sec. 4268. Issuance of rules. Authorizes the Administrator to issue such rules as are necessary to carry out this part.
Sec. 4269. Technical and conforming amendments. Makes technical and conforming amendments to the JJDPA and other laws.
Sec. 4270. References. Any reference to the Office of Juvenile Justice and Delinquency Prevention shall be deemed to include a reference to the Office of Juvenile Crime Control and Delinquency Prevention.
Part 6. Local Gun Violence Prevention Program
Sec. 4271. Competitive grants for children's firearm safety education. Authorizes competitive grants to eligible local educational agencies to educate children about prevention violence. Authorizes $60,000,000 for each of FY2002 and FY2004.
Sec. 4272. Dissemination of best practices via the Internet. Requires the Secretary of Education to post details of programs that receive grants on the Department's Internet site, and to publicize the program on its Internet site and in its publications.
Sec. 4273. Grant priority for tracing guns used in crimes by juveniles. Requires the Bureau of Justice Assistance to give priority to grant applications that include coordinated enforcement strategies to trace firearms and disrupt illegal firearms sales to or among juveniles.
Mr. LEAHY. I am pleased today to join Senator Daschle and other Democratic Senators in introducing the 21st Century Law Enforcement, Crime Prevention, and Victims Assistance Act. This comprehensive crime bill builds on prior Democratic crime initiatives, including the landmark Violent Crime Control and Law Enforcement Act of 1994, that have substantially reduced the Nations' serious crime rates.
Our current Attorney General, Janet Reno, has helped us all make unprecedented strides in combating violent crime, protecting women's rights, protecting crime victims rights and reducing violence against women. The Nation's serious crime rates have declined for an unprecedented eight straight years. Murder rates have fallen to their lowest levels in three decades, and since 1994, violent crimes by juveniles and the juvenile arrest rates for serious crimes have also declined. Our outgoing Attorney General must be commended for greatly improving the effectiveness of our law enforcement coordination efforts, federal law enforcement assistance efforts and for extending the reach of those efforts into rural areas.
The 21st Century Law Enforcement, Crime Prevention, and Victims Assistance Act is designed to keep our Nation's crime rates moving in the right direction--downward. The Nation's serious crime rates are now at their lowest level since 1973, the first year the national crime victimization survey was conducted. We are proud of the significant reduction in crime rates, but we must not become complacent. Too many Americans still encounter violence in their neighborhoods, workplaces, and unfortunately, even in their homes. This bill would ensure that the crime rates continue their downward trend next year, the year after, and beyond.
We should be able to enact this bill, without partisan or ideological controversy. We have tried to avoid the easy rhetoric about crime that some have to offer in this crucial area of public policy. Instead, we have crafted a bill that could actually make a difference.
The 21st Century Law Enforcement, Crime Prevention, and Victims Assistance Act targets violent crime in our schools, combats gang violence, cracks down on the sale and use of illegal drugs, enhances the rights of crime victims, fights crime against America's senior citizens, and provides meaningful assistance to law enforcement officers in the battle against street crime. The bill represents an important next step in the continuing effort by Senate Democrats to enact tough yet balanced reforms to our criminal justice system.
I should note that the bill contains no new death penalties and no new or increased mandatory minimum sentences. We can be tough without imposing the death penalty, and we can ensure swift and certain punishment without removing all discretion from the judge at sentencing.
Title I of the bill deals with proposals for supporting Federal, State and local law enforcement and promoting the effective administration of justice. this title extends the COPS program through fiscal year 2007, authorizing funding to deploy up to 50,000 additional police officers, 10,000 additional prosecutors, and 10,000 indigent defense attorneys in the coming years. The bill also extends Project Exile, the Department of Justice's gun violence reduction initiative designed to prosecute felons who unlawfully possess firearms, and the Youth Crime Gun Interdiction Initiative, the national program to disrupt the illegal supply of firearms to juveniles by tracing the guns that are used in crimes, and it includes a provision sponsored by Senator Biden to authorize grants to alleviate the public safety risk posed by released prisoners by promoting their successful reintegration into society.
Other important initiatives are included to protect children from violence, including violence resulting from the misuse of guns. Americans want concrete proposals to reduce the risk of such incidents recurring. At the same time, we must preserve adults' rights to use guns for legitimate purposes, such as home protection, hunting and for sport. Title I of the bill imposes a prospective gun ban for juveniles convicted or adjudicated delinquent for violent crimes. It also requires revocation of a firearms dealer's license for failing to have secure gun storage or safety devices available for sale with firearms. The bill enhances the penalties for certain firearm laws involving juveniles. In addition, the bill would close the gun show loophole by requiring criminal background checks on all gun sales at gun shows.
This title of the bill also recognizes that law enforcement officers put their lives on the line every day. According to the FBI, over 1,000 officers have been killed in the line of duty since 1980. The 21st Century Law Enforcement, Crime Prevention, and Victims Assistance Act establishes new crimes and increases penalties for killing Federal officers and persons working with Federal officers, including in their work with Federal prisoners, and for retaliation against Federal officials by threatening or injuring their family members. The bill enhances the penalty for assaults and threats against Federal judges and other federal officials engaged in their official duties.
A significant problem that arose during Special Prosecutor Kenneth Starr's investigation of president Clinton was the loss of confidentiality that had previously attached to the important work of the U.S. Secret Service. The Departments of Justice and Treasury and even a former Republican President advise that the safety of future Presidents may be jeopardized by forcing U.S. Secret Service agents to breach the confidentiality they need to do their job by testifying before a grant jury. I trust the Secret Service on this issue; they are the experts with the mission of protecting the lives of the President and other high-level official and visiting dignitaries. I also have confidence in the judgment of former President Bush, who has written,
``I feel very strongly that [Secret Service] agents should not be made to appear in court to discuss that which they might or might not have seen or heard.''
Title I of the 21st Century Law Enforcement, Crime Prevention, and Victims Assistance Act provides a reasonable and limited protective function privilege so future Secret Service agents are able to maintain the confidentiality they say they need to protect the lives of the President, Vice President and visiting heads of state.
Title II of the bill is aimed at strengthening the Federal criminal laws. This part of the bill cracks down on gangs by making the interstate ``franchising'' of street gangs a crime. It would also increase penalties for crimes during which the convicted felon wears protective body armor or uses ``laser-sighting'' devices to commit the crime, and doubles the maximum criminal penalties for using or threatening physical violence against witnesses and contains other provisions designed to facilitate the use and protection of witnesses to help prosecute gangs and other violent criminals.
Title II of the bill also details provisions for combating money laundering. Crime increasingly has an international face, from drug kingpins to millionaire terrorists, like Osama bin Laden. The money laundering provisions of this bill hit these international criminals where it hurts most--in the pocketbook.
These provisions would provide important tools not just to combat international terrorism but drug trafficking as well. We must have interdiction, we must have treatment programs; we must tell kids to say
``No'' to drugs. But we have to do more, and taking the profit away from international drug lords is an effective weapon. This Democratic crime bill would strengthen these laws.
Title II also contains important initiatives to deter cargo thefts, enhance the maximum penalties for voluntary manslaughter, felony theft or conversion of grand jury material, counterfeiting, and certain antitrust violations committed by corporations.
Title III of the bill is intended to increase the rights of victims within the criminal justice system. The criminal is only half of the equation. This bill guarantees the rights of crime victims. All States recognize victims' rights in some form, but they often lack the training and resources to make those rights a reality. This title provides a model Bill of Rights for crime victims in the Federal system, and makes available to the States grants for victim-related training and state-of-the art notification systems. In addition, this title would authorize grants for pilot programs to operate Victim Ombudsman Information Centers in seven States, and to study the effectiveness of the restorative justice approach for victims. It would also provide assistance for shelters and transitional housing for victims of domestic violence. In short, this title would help make victims' rights a reality.
This title of the bill also includes a number of provisions to improve the safety and security of older Americans. During the 1990s, while overall crime rates dropped throughout the nation, the rate of crime against seniors remained constant. In addition to the increased vulnerability of some seniors to violent crime, older Americans are increasingly targeted by swindlers looking to take advantage of them through telemarketing schemes, pension fraud, and health care fraud. We must strengthen the hand of law enforcement to combat those criminals who plunder the savings that older Americans have worked their lifetimes to earn. The 21st Century Law Enforcement, Crime Prevention, and Victims Assistance Act tries to do exactly that, through a comprehensive package of proposals to establish new protections and increase penalties for a wide variety of crimes against seniors.
Title IV of the bill outlines a number of prevention and alternative sentencing programs that are critical to further reducing juvenile crime. These programs include grants to youth organizations and ``Say No to Drugs'' Community Centers, and grants to promote drug testing and drug treatment, as well as reauthorization of the Safe and Drug-Free Schools and Communities Program, the Anti-Drug Abuse Programs, and the Local Deliquency Prevention Programs. Additional sections include a program suggested by Senator Bingaman to establish a competitive grant program to reduce truancy, with priority given to efforts to replicate successful programs.
The bill would also reauthorize the Juvenile Justice and Deliquency Prevention Act and create a new juvenile justice block grant program, retaining the four core protections for youth in the juvenile justice system while adopting greater flexibility for rural areas.
In recent years, the Senate Republicans have tried to gut these core protections in their juvenile crime bills. This Democratic crime bill puts ideology aside, and follows the advice of numerous child advocacy experts--including the Children's Defense Fund, National Collaboration for Youth, Youth Law Center and National Network for Youth--who believe these key protections must be preserved in order to protect juveniles who have been arrested or detained. These core protections ensure that juveniles are not housed with adults, do not have verbal or physical contact with adult inmates, and any disproportionate confinement of minority youth is addressed by the States. If these protections are abolished, many more youth may end up committing suicide or being released with serious physical or emotional scars.
The 21st Century Law Enforcement, Crime Prevention, and Victims Assistance Act is a comprehensive and realistic set of proposals for assisting local enforcement, preventing crime, protecting our children and senior citizens, and assisting the victims of crime. I look forward to working on a bipartisan basis for passage of as much of this bill as possible during the 107th Congress.
______
By Mr. DASCHLE (for himself, Mr. Dodd, Mr. Lieberman, Mr. Dorgan,
Mr. Durbin, Mr. Biden, Mrs. Boxer, Mrs. Clinton, Mr. Corzine,
Mr. Harkin, Mr. Johnson, Mr. Kennedy, Mr. Leahy, Ms. Mikulski,
Mr. Rockefeller, Mr. Sarbanes, and Mr. Schumer):
S. 17. A bill to amend the Federal Election Campaign Act of 1971 to provide bipartisan campaign reform; to the Committee on Rules and Administration.
federal elections reform act of 2001
Mr. DASCHLE. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the Record, as follows:
S. 17
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Federal Elections Reform Act of 2001''.
(b) Table of Contents.--The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I--REDUCTION OF SPECIAL INTEREST INFLUENCE
Sec. 101. Soft money of political parties.
Sec. 102. Increased contribution limits for State committees of political parties and aggregate contribution limit for individuals.
Sec. 103. Reporting requirements.
TITLE II--INDEPENDENT AND COORDINATED EXPENDITURES
Sec. 201. Definitions.
Sec. 202. Express advocacy determined without regard to background music.
Sec. 203. Civil penalty.
Sec. 204. Reporting requirements for certain independent expenditures.
Sec. 205. Independent versus coordinated expenditures by party.
Sec. 206. Coordination with candidates.
TITLE III--DISCLOSURE
Sec. 301. Audits.
Sec. 302. Reporting requirements for contributions of $50 or more.
Sec. 303. Use of candidates' names.
Sec. 304. Prohibition of false representation to solicit contributions.
Sec. 305. Campaign advertising.
TITLE IV--MISCELLANEOUS
Sec. 401. Codification of Beck decision.
Sec. 402. Use of contributed amounts for certain purposes.
Sec. 403. Limit on congressional use of the franking privilege.
Sec. 404. Prohibition of fundraising on Federal property.
Sec. 405. Penalties for violations.
Sec. 406. Strengthening foreign money ban.
Sec. 407. Prohibition of contributions by minors.
Sec. 408. Expedited procedures.
Sec. 409. Initiation of enforcement proceeding.
Sec. 410. Protecting equal participation of eligible voters in campaigns and elections.
Sec. 411. Penalty for violation of prohibition against foreign contributions.
Sec. 412. Expedited court review of certain alleged violations of
Federal Election Campaign Act of 1971.
Sec. 413. Conspiracy to violate presidential campaign spending limits.
Sec. 414. Deposit of certain contributions and donations in Treasury account.
Sec. 415. Establishment of a clearinghouse of information on political activities within the Federal Election Commission.
Sec. 416. Enforcement of spending limit on presidential and vice presidential candidates who receive public financing.
Sec. 417. Clarification of right of nationals of the United States to make political contributions.
Sec. 418. Prohibiting use of White House meals and accommodations for political fundraising.
Sec. 419. Prohibition against acceptance or solicitation to obtain access to certain Federal government property.
Sec. 420. Requiring national parties to reimburse at cost for use of
Air Force One for political fundraising.
Sec. 421. Enhancing enforcement of campaign finance law.
Sec. 422. Ban on coordination of soft money for issue advocacy by presidential candidates receiving public financing.
Sec. 423. Requirement that names of passengers on Air Force One and Air
Force Two be made available through the Internet.
TITLE V--ELECTION ADMINISTRATION AND TECHNOLOGY
Sec. 501. Findings.
Subtitle A--Establishment of Commission on Voting Rights and Procedures
Sec. 511. Establishment.
Sec. 512. Membership of the Commission.
Sec. 513. Duties of the Commission.
Sec. 514. Powers of the Commission.
Sec. 515. Personnel matters.
Sec. 516. Termination of the Commission.
Sec. 517. Authorization of appropriations for the Commission.
Subtitle B--Grant Program
Sec. 521. Establishment of grant program.
Sec. 522. Authorized activities.
Sec. 523. General policies and criteria.
Sec. 524. Submission of State plans.
Sec. 525. Approval of State plans.
Sec. 526. Federal matching funds.
Sec. 527. Audits and examinations.
Sec. 528. Reports.
Sec. 529. State defined.
Sec. 530. Authorization of appropriations.
Subtitle C--Miscellaneous
Sec. 541. Relationship to other laws.
TITLE VI--MILITARY VOTING
Sec. 601. Short title.
Sec. 602. Guarantee of residency.
Sec. 603. State responsibility to guarantee military voting rights.
TITLE VII--SEVERABILITY; CONSTITUTIONALITY; EFFECTIVE DATE; REGULATIONS
Sec. 701. Severability.
Sec. 702. Review of constitutional issues.
Sec. 703. Effective date.
Sec. 704. Regulations.
TITLE I--REDUCTION OF SPECIAL INTEREST INFLUENCE
SEC. 101. SOFT MONEY OF POLITICAL PARTIES.
(a) In General.--Title III of the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.) is amended by adding at the end the following:
``SEC. 323. SOFT MONEY OF POLITICAL PARTIES.
``(a) National Committees.--
``(1) In general.--A national committee of a political party (including a national congressional campaign committee of a political party) and any officers or agents of such party committees, shall not solicit, receive, or direct to another person a contribution, donation, or transfer of funds, or spend any funds, that are not subject to the limitations, prohibitions, and reporting requirements of this Act.
``(2) Applicability.--This subsection shall apply to an entity that is directly or indirectly established, financed, maintained, or controlled by a national committee of a political party (including a national congressional campaign committee of a political party), or an entity acting on behalf of a national committee, and an officer or agent acting on behalf of any such committee or entity.
``(b) State, District, and Local Committees.--
``(1) In general.--An amount that is expended or disbursed by a State, district, or local committee of a political party
(including an entity that is directly or indirectly established, financed, maintained, or controlled by a State, district, or local committee of a political party and an officer or agent acting on behalf of such committee or entity) for Federal election activity shall be made from funds subject to the limitations, prohibitions, and reporting requirements of this Act.
``(2) Federal election activity.--
``(A) In general.--The term `Federal election activity' means--
``(i) voter registration activity during the period that begins on the date that is 120 days before the date a regularly scheduled Federal election is held and ends on the date of the election;
``(ii) voter identification, get-out-the-vote activity, or generic campaign activity conducted in connection with an election in which a candidate for Federal office appears on the ballot (regardless of whether a candidate for State or local office also appears on the ballot); and
``(iii) a communication that refers to a clearly identified candidate for Federal office (regardless of whether a candidate for State or local office is also mentioned or identified) and is made for the purpose of influencing a Federal election (regardless of whether the communication is express advocacy).
``(B) Excluded activity.--The term `Federal election activity' does not include an amount expended or disbursed by a State, district, or local committee of a political party for--
``(i) campaign activity conducted solely on behalf of a clearly identified candidate for State or local office, provided the campaign activity is not a Federal election activity described in subparagraph (A);
``(ii) a contribution to a candidate for State or local office, provided the contribution is not designated or used to pay for a Federal election activity described in subparagraph (A);
``(iii) the costs of a State, district, or local political convention;
``(iv) the costs of grassroots campaign materials, including buttons, bumper stickers, and yard signs, that name or depict only a candidate for State or local office;
``(v) the non-Federal share of a State, district, or local party committee's administrative and overhead expenses (but not including the compensation in any month of an individual who spends more than 20 percent of the individual's time on Federal election activity) as determined by a regulation promulgated by the Commission to determine the non-Federal share of a State, district, or local party committee's administrative and overhead expenses; and
``(vi) the cost of constructing or purchasing an office facility or equipment for a State, district or local committee.
``(c) Fundraising Costs.--An amount spent by a national, State, district, or local committee of a political party, by an entity that is established, financed, maintained, or controlled by a national, State, district, or local committee of a political party, or by an agent or officer of any such committee or entity, to raise funds that are used, in whole or in part, to pay the costs of a Federal election activity shall be made from funds subject to the limitations, prohibitions, and reporting requirements of this Act.
``(d) Tax-Exempt Organizations.--A national, State, district, or local committee of a political party (including a national congressional campaign committee of a political party), an entity that is directly or indirectly established, financed, maintained, or controlled by any such national, State, district, or local committee or its agent, and an officer or agent acting on behalf of any such party committee or entity, shall not solicit any funds for, or make or direct any donations to, an organization that is described in section 501(c) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code (or has submitted an application to the Commissioner of the Internal Revenue Service for determination of tax-exemption under such section).
``(e) Candidates.--
``(1) In general.--A candidate, individual holding Federal office, agent of a candidate or individual holding Federal office, or an entity directly or indirectly established, financed, maintained or controlled by or acting on behalf of one or more candidates or individuals holding Federal office, shall not--
``(A) solicit, receive, direct, transfer, or spend funds in connection with an election for Federal office, including funds for any Federal election activity, unless the funds are subject to the limitations, prohibitions, and reporting requirements of this Act; or
``(B) solicit, receive, direct, transfer, or spend funds in connection with any election other than an election for Federal office or disburse funds in connection with such an election unless the funds--
``(i) are not in excess of the amounts permitted with respect to contributions to candidates and political committees under paragraphs (1) and (2) of section 315(a); and
``(ii) are not from sources prohibited by this Act from making contributions with respect to an election for Federal office.
``(2) State law.--Paragraph (1) does not apply to the solicitation, receipt, or spending of funds by an individual who is a candidate for a State or local office in connection with such election for State or local office if the solicitation, receipt, or spending of funds is permitted under State law for any activity other than a Federal election activity.
``(3) Fundraising events.--Notwithstanding paragraph (1), a candidate may attend, speak, or be a featured guest at a fundraising event for a State, district, or local committee of a political party.''.
(b) Definition of Generic Campaign Activity.--Section 301 of the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.) (as amended by section 201(b)) is further amended by adding at the end the following:
``(21) Generic campaign activity.--The term `generic campaign activity' means an activity that promotes a political party and does not promote a candidate or non-Federal candidate.''.
SEC. 102. INCREASED CONTRIBUTION LIMITS FOR STATE COMMITTEES
OF POLITICAL PARTIES AND AGGREGATE CONTRIBUTION
LIMIT FOR INDIVIDUALS.
(a) Contribution Limit for State Committees of Political Parties.--Section 315(a)(1) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441a(a)(1)) is amended--
(1) in subparagraph (B), by striking ``or'' at the end;
(2) in subparagraph (C)--
(A) by inserting ``(other than a committee described in subparagraph (D))'' after ``committee''; and
(B) by striking the period at the end and inserting ``; or''; and
(3) by adding at the end the following:
``(D) to a political committee established and maintained by a State committee of a political party in any calendar year that, in the aggregate, exceed $10,000.''.
(b) Aggregate Contribution Limit for Individual.--Section 315(a)(3) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441a(a)(3)) is amended by striking ``$25,000'' and inserting ``$30,000''.
SEC. 103. REPORTING REQUIREMENTS.
(a) Reporting Requirements.--Section 304 of the Federal Election Campaign Act of 1971 (2 U.S.C. 434), as amended by section 204, is amended by inserting after subsection (f) the following:
``(g) Political Committees.--
``(1) National and congressional political committees.--The national committee of a political party, any national congressional campaign committee of a political party, and any subordinate committee of either, shall report all receipts and disbursements during the reporting period.
``(2) Other political committees to which section 323 applies.--In addition to any other reporting requirements applicable under this Act, a political committee (not described in paragraph (1)) to which section 323(b)(1) applies shall report all receipts and disbursements made for activities described in paragraphs (2)(A) and (2)(B)(v) of section 323(b).
``(3) Itemization.--If a political committee has receipts or disbursements to which this subsection applies from any person aggregating in excess of $200 for any calendar year, the political committee shall separately itemize its reporting for such person in the same manner as required in paragraphs (3)(A), (5), and (6) of subsection (b).
``(4) Reporting periods.--Reports required to be filed under this subsection shall be filed for the same time periods required for political committees under subsection
(a).''.
(b) Building Fund Exception to the Definition of Contribution.--Section 301(8)(B) of the Federal Election Campaign Act of 1971 (2 U.S.C. 431(8)(B)) is amended--
(1) by striking clause (viii); and
(2) by redesignating clauses (ix) through (xv) as clauses
(viii) through (xiv), respectively.
TITLE II--INDEPENDENT AND COORDINATED EXPENDITURES
SEC. 201. DEFINITIONS.
(a) Definition of Independent Expenditure.--Section 301 of the Federal Election Campaign Act (2 U.S.C. 431) is amended by striking paragraph (17) and inserting the following:
``(17) Independent expenditure.--
``(A) In general.--The term `independent expenditure' means an expenditure by a person--
``(i) for a communication that is express advocacy; and
``(ii) that is not coordinated activity or is not provided in coordination with a candidate or a candidate's agent or a person who is coordinating with a candidate or a candidate's agent.''.
(b) Definition of Express Advocacy.--Section 301 of the Federal Election Campaign Act of 1971 (2 U.S.C. 431) is amended by adding at the end the following:
``(20) Express advocacy.--
``(A) In general.--The term `express advocacy' means a communication that advocates the election or defeat of a candidate by--
``(i) containing a phrase such as `vote for', `re-elect',
`support', `cast your ballot for', `(name of candidate) for Congress', `(name of candidate) in 1997', `vote against',
`defeat', `reject', or a campaign slogan or words that in context can have no reasonable meaning other than to advocate the election or defeat of one or more clearly identified candidates;
``(ii) referring to one or more clearly identified candidates in a paid advertisement that is transmitted through radio or television within 60 calendar days preceding the date of an election of the candidate and that appears in the State in which the election is occurring, except that with respect to a candidate for the office of Vice President or President, the time period is within 60 calendar days preceding the date of a general election; or
``(iii) expressing unmistakable and unambiguous support for or opposition to one or more clearly identified candidates when taken as a whole and with limited reference to external events, such as proximity to an election.
``(B) Voting record and voting guide exception.--The term
`express advocacy' does not include a communication which is in printed form or posted on the Internet that--
``(i) presents information solely about the voting record or position on a campaign issue of one or more candidates
(including any statement by the sponsor of the voting record or voting guide of its agreement or disagreement with the record or position of a candidate), so long as the voting record or voting guide when taken as a whole does not express unmistakable and unambiguous support for or opposition to one or more clearly identified candidates;
``(ii) is not coordinated activity or is not made in coordination with a candidate, political party, or agent of the candidate or party, or a candidate's agent or a person who is coordinating with a candidate or a candidate's agent, except that nothing in this clause may be construed to prevent the sponsor of the voting guide from directing questions in writing to a candidate about the candidate's position on issues for purposes of preparing a voter guide or to prevent the candidate from responding in writing to such questions; and
``(iii) does not contain a phrase such as `vote for', `re-elect', `support', `cast your ballot for', `(name of candidate) for Congress', `(name of candidate) in (year)',
`vote against', `defeat', or `reject', or a campaign slogan or words that in context can have no reasonable meaning other than to urge the election or defeat of one or more clearly identified candidates.''.
(c) Definition of Expenditure.--Section 301(9)(A) of the Federal Election Campaign Act of 1971 (2 U.S.C. 431(9)(A)) is amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii), by striking the period at the end and inserting ``; and''; and
(3) by adding at the end the following:
``(iii) a payment made by a political committee for a communication that--
``(I) refers to a clearly identified candidate; and
``(II) is for the purpose of influencing a Federal election
(regardless of whether the communication is express advocacy).''.
SEC. 202. EXPRESS ADVOCACY DETERMINED WITHOUT REGARD TO
BACKGROUND MUSIC.
Section 301(20) of the Federal Election Campaign Act of 1971 (2 U.S.C. 431(20)), as added by section 201(b), is amended by adding at the end the following new subparagraph:
``(C) Background music.--In determining whether any communication by television or radio broadcast constitutes express advocacy for purposes of this Act, there shall not be taken into account any background music not including lyrics used in such broadcast.''.
SEC. 203. CIVIL PENALTY.
Section 309 of the Federal Election Campaign Act of 1971 (2 U.S.C. 437g) is amended--
(1) in subsection (a)--
(A) in paragraph (4)(A)--
(i) in clause (i), by striking ``clause (ii)'' and inserting ``clauses (ii) and (iii)''; and
(ii) by adding at the end the following:
``(iii) If the Commission determines by an affirmative vote of 4 of its members that there is probable cause to believe that a person has made a knowing and willful violation of section 304(c), the Commission shall not enter into a conciliation agreement under this paragraph and may institute a civil action for relief under paragraph (6)(A).''; and
(B) in paragraph (6)(B), by inserting ``(except an action instituted in connection with a knowing and willful violation of section 304(c))'' after ``subparagraph (A)''; and
(2) in subsection (d)(1)--
(A) in subparagraph (A), by striking ``Any person'' and inserting ``Except as provided in subparagraph (D), any person''; and
(B) by adding at the end the following:
``(D) In the case of a knowing and willful violation of section 304(c) that involves the reporting of an independent expenditure, the violation shall not be subject to this subsection.''.
SEC. 204. REPORTING REQUIREMENTS FOR CERTAIN INDEPENDENT
EXPENDITURES.
Section 304 of the Federal Election Campaign Act of 1971 (2 U.S.C. 434) is amended--
(1) in subsection (c)(2), by striking the undesignated matter after subparagraph (C);
(2) by redesignating paragraph (3) of subsection (c) as subsection (e); and
(3) by inserting after subsection (e), as redesignated by paragraph (2), the following:
``(f) Time for Reporting Certain Expenditures.--
``(1) Expenditures aggregating $1,000.--
``(A) Initial report.--A person (including a political committee) that makes or contracts to make independent expenditures aggregating $1,000 or more after the 20th day, but more than 24 hours, before the date of an election shall file a report describing the expenditures within 24 hours after that amount of independent expenditures has been made.
``(B) Additional reports.--After a person files a report under subparagraph (A), the person shall file an additional report within 24 hours after each time the person makes or contracts to make independent expenditures aggregating an additional $1,000 with respect to the same election as that to which the initial report relates.
``(2) Expenditures aggregating $10,000.--
``(A) Initial report.--A person (including a political committee) that makes or contracts to make independent expenditures aggregating $10,000 or more at any time up to and including the 20th day before the date of an election shall file a report describing the expenditures within 48 hours after that amount of independent expenditures has been made.
``(B) Additional reports.--After a person files a report under subparagraph (A), the person shall file an additional report within 48 hours after each time the person makes or contracts to make independent expenditures aggregating an additional $10,000 with respect to the same election as that to which the initial report relates.
``(3) Place of filing; contents.--A report under this subsection--
``(A) shall be filed with the Commission; and
``(B) shall contain the information required by subsection
(b)(6)(B)(iii), including the name of each candidate whom an expenditure is intended to support or oppose.''.
SEC. 205. INDEPENDENT VERSUS COORDINATED EXPENDITURES BY
PARTY.
Section 315(d) of the Federal Election Campaign Act (2 U.S.C. 441a(d)) is amended--
(1) in paragraph (1), by striking ``and (3)'' and inserting
``, (3), and (4)''; and
(2) by adding at the end the following:
``(4) Independent Versus Coordinated Expenditures by Party.--
``(A) In general.--On or after the date on which a political party nominates a candidate, a committee of the political party shall not make both expenditures under this subsection and independent expenditures (as defined in section 301(17)) with respect to the candidate during the election cycle.
``(B) Certification.--Before making a coordinated expenditure under this subsection with respect to a candidate, a committee of a political party shall file with the Commission a certification, signed by the treasurer of the committee, that the committee has not and shall not make any independent expenditure with respect to the candidate during the same election cycle.
``(C) Application.--For the purposes of this paragraph, all political committees established and maintained by a national political party (including all congressional campaign committees) and all political committees established and maintained by a State political party (including any subordinate committee of a State committee) shall be considered to be a single political committee.
``(D) Transfers.--A committee of a political party that submits a certification under subparagraph (B) with respect to a candidate shall not, during an election cycle, transfer any funds to, assign authority to make coordinated expenditures under this subsection to, or receive a transfer of funds from, a committee of the political party that has made or intends to make an independent expenditure with respect to the candidate.''.
SEC. 206. COORDINATION WITH CANDIDATES.
(a) Definition of Coordination With Candidates.--
(1) Section 301(8).--Section 301(8) of the Federal Election Campaign Act of 1971 (2 U.S.C. 431(8)) is amended--
(A) in subparagraph (A)--
(i) by striking ``or'' at the end of clause (i);
(ii) by striking the period at the end of clause (ii) and inserting ``; or''; and
(iii) by adding at the end the following:
``(iii) coordinated activity (as defined in subparagraph
(C)).''; and
(B) by adding at the end the following:
``(C) Coordinated activity.--The term `coordinated activity' means anything of value provided by a person in coordination with a candidate, an agent of the candidate, or the political party of the candidate or its agent for the purpose of influencing a Federal election (regardless of whether the value being provided is a communication that is express advocacy) in which such candidate seeks nomination or election to Federal office, and includes any of the following:
``(i) A payment made by a person in cooperation, consultation, or concert with, at the request or suggestion of, or pursuant to any general or particular understanding with a candidate, the candidate's authorized committee, the political party of the candidate, or an agent acting on behalf of a candidate, authorized committee, or the political party of the candidate.
``(ii) A payment made by a person for the production, dissemination, distribution, or republication, in whole or in part, of any broadcast or any written, graphic, or other form of campaign material prepared by a candidate, a candidate's authorized committee, or an agent of a candidate or authorized committee (not including a communication described in paragraph (9)(B)(i) or a communication that expressly advocates the candidate's defeat).
``(iii) A payment made by a person based on information about a candidate's plans, projects, or needs provided to the person making the payment by the candidate or the candidate's agent who provides the information with the intent that the payment be made.
``(iv) A payment made by a person if, in the same election cycle in which the payment is made, the person making the payment is serving or has served as a member, employee, fundraiser, or agent of the candidate's authorized committee in an executive or policymaking position.
``(v) A payment made by a person if the person making the payment has served in any formal policy making or advisory position with the candidate's campaign or has participated in formal strategic or formal policymaking discussions (other than any discussion treated as a lobbying contact under the Lobbying Disclosure Act of 1995 in the case of a candidate holding Federal office or as a similar lobbying activity in the case of a candidate holding State or other elective office) with the candidate's campaign relating to the candidate's pursuit of nomination for election, or election, to Federal office, in the same election cycle as the election cycle in which the payment is made.
``(vi) A payment made by a person if, in the same election cycle, the person making the payment retains the professional services of any person that has provided or is providing campaign-related services in the same election cycle to a candidate (including services provided through a political committee of the candidate's political party) in connection with the candidate's pursuit of nomination for election, or election, to Federal office, including services relating to the candidate's decision to seek Federal office, and the person retained is retained to work on activities relating to that candidate's campaign.
``(vii) A payment made by a person who has directly participated in fundraising activities with the candidate or in the solicitation or receipt of contributions on behalf of the candidate.
``(viii) A payment made by a person who has communicated with the candidate or an agent of the candidate (including a communication through a political committee of the candidate's political party) after the declaration of candidacy (including a pollster, media consultant, vendor, advisor, or staff member acting on behalf of the candidate), about advertising message, allocation of resources, fundraising, or other campaign matters related to the candidate's campaign, including campaign operations, staffing, tactics, or strategy.
``(ix) The provision of in-kind professional services or polling data (including services or data provided through a political committee of the candidate's political party) to the candidate or candidate's agent.
``(x) A payment made by a person who has engaged in a coordinated activity with a candidate described in clauses
(i) through (ix) for a communication that clearly refers to the candidate or the candidate's opponent and is for the purpose of influencing that candidates's election (regardless of whether the communication is express advocacy).
``(D) Professional services.--For purposes of subparagraph
(C), the term `professional services' means polling, media advice, fundraising, campaign research or direct mail (except for mailhouse services solely for the distribution of voter guides as defined in section 301(20)(B)) services in support of a candidate's pursuit of nomination for election, or election, to Federal office.
``(E) Aggregation.--For purposes of subparagraph (C), all political committees established and maintained by a national political party (including all congressional campaign committees) and all political committees established and maintained by a State political party (including any subordinate committee of a State committee) shall be considered to be a single political committee.''.
(2) Section 315(a)(7).--Section 315(a)(7) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441a(a)(7)) is amended by striking subparagraph (B) and inserting the following:
``(B) a coordinated activity, as described in section 301(8)(C), shall be considered to be a contribution to the candidate, and in the case of a limitation on expenditures, shall be treated as an expenditure by the candidate; and''.
(b) Meaning of Contribution or Expenditure for the Purposes of Section 316.--Section 316(b)(2) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441b(b)) is amended by striking ``shall include'' and inserting ``includes a contribution or expenditure, as those terms are defined in section 301, and also includes''.
TITLE III--DISCLOSURE
SEC. 301. AUDITS.
(a) Random Audits.--Section 311(b) of the Federal Election Campaign Act of 1971 (2 U.S.C. 438(b)) is amended--
(1) by striking ``(b) The Commission'' and inserting the following:
``(b) Audits.--
``(1) In general.--The Commission''; and
(2) by adding at the end the following:
``(2) Random audits.--
``(A) In general.--Notwithstanding paragraph (1), the Commission may conduct random audits and investigations to ensure voluntary compliance with this Act. The selection of any candidate for a random audit or investigation shall be based on criteria adopted by a vote of at least four members of the Commission.
``(B) Limitation.--The Commission shall not conduct an audit or investigation of a candidate's authorized committee under subparagraph (A) until the candidate is no longer a candidate for the office sought by the candidate in an election cycle.
``(C) Applicability.--This paragraph does not apply to an authorized committee of a candidate for President or Vice President subject to audit under section 9007 or 9038 of the Internal Revenue Code of 1986.''.
(b) Extension of Period During Which Campaign Audits May Be Begun.--Section 311(b) of the Federal Election Campaign Act of 1971 (2 U.S.C. 438(b)) is amended by striking ``6 months'' and inserting ``12 months''.
SEC. 302. REPORTING REQUIREMENTS FOR CONTRIBUTIONS OF $50 OR
MORE.
Section 304(b)(3)(A) of the Federal Election Campaign Act at 1971 (2 U.S.C. 434(b)(3)(A) is amended--
(1) by striking ``$200'' and inserting ``$50''; and
(2) by striking the semicolon and inserting ``, except that in the case of a person who makes contributions aggregating at least $50 but not more than $200 during the calendar year, the identification need include only the name and address of the person;''.
SEC. 303. USE OF CANDIDATES' NAMES.
Section 302(e) of the Federal Election Campaign Act of 1971
(2 U.S.C. 432(e)) is amended by striking paragraph (4) and inserting the following:
``(4) Name of committee.--
``(A) Authorized committee.--The name of each authorized committee shall include the name of the candidate who authorized the committee under paragraph (1).
``(B) Other political committees.--A political committee that is not an authorized committee shall not--
``(i) include the name of any candidate in its name; or
``(ii) except in the case of a national, State, or local party committee, use the name of any candidate in any activity on behalf of the committee in such a context as to suggest that the committee is an authorized committee of the candidate or that the use of the candidate's name has been authorized by the candidate.''.
SEC. 304. PROHIBITION OF FALSE REPRESENTATION TO SOLICIT
CONTRIBUTIONS.
Section 322 of the Federal Election Campaign Act of 1971 (2 U.S.C. 441h) is amended--
(1) by inserting after ``Sec. 322.'' the following: ``(a) In General.--''; and
(2) by adding at the end the following:
``(b) Solicitation of Contributions.--No person shall solicit contributions by falsely representing himself or herself as a candidate or as a representative of a candidate, a political committee, or a political party.''.
SEC. 305. CAMPAIGN ADVERTISING.
Section 318 of the Federal Election Campaign Act of 1971 (2 U.S.C. 441d) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1)--
(i) by striking ``Whenever'' and inserting ``Whenever a political committee makes a disbursement for the purpose of financing any communication through any broadcasting station, newspaper, magazine, outdoor advertising facility, mailing, or any other type of general public political advertising, or whenever'';
(ii) by striking ``an expenditure'' and inserting ``a disbursement''; and
(iii) by striking ``direct''; and
(B) in paragraph (3), by inserting ``and permanent street address'' after ``name''; and
(2) by adding at the end the following:
``(c) Specification.-- Any printed communication described in subsection (a) shall--
``(1) be of sufficient type size to be clearly readable by the recipient of the communication;
``(2) be contained in a printed box set apart from the other contents of the communication; and
``(3) be printed with a reasonable degree of color contrast between the background and the printed statement.
``(d) Additional Requirements.--
``(1) Audio statement.--
``(A) Candidate.--Any communication described in paragraphs
(1) or (2) of subsection (a) which is transmitted through radio or television shall include, in addition to the requirements of that paragraph, an audio statement by the candidate that identifies the candidate and states that the candidate has approved the communication.
``(B) Other persons.--Any communication described in paragraph (3) of subsection (a) which is transmitted through radio or television shall include, in addition to the requirements of that paragraph, in a clearly spoken manner, the following statement: `________________ is responsible for the content of this advertisement.' (with the blank to be filled in with the name of the political committee or other person paying for the communication and the name of any connected organization of the payor). If transmitted through television, the statement shall also appear in a clearly readable manner with a reasonable degree of color contrast between the background and the printed statement, for a period of at least 4 seconds.''.
``(2) Television.--If a communication described in paragraph (1)(A) is transmitted through television, the communication shall include, in addition to the audio statement under paragraph (1), a written statement that--
``(A) appears at the end of the communication in a clearly readable manner with a reasonable degree of color contrast between the background and the printed statement, for a period of at least 4 seconds; and
``(B) is accompanied by a clearly identifiable photographic or similar image of the candidate.''.
TITLE IV--MISCELLANEOUS
SEC. 401. CODIFICATION OF BECK DECISION.
Section 8 of the National Labor Relations Act (29 U.S.C. 158) is amended by adding at the end the following:
``(h) Nonunion Member Payments to Labor Organization.--
``(1) In general.--It shall be an unfair labor practice for any labor organization which receives a payment from an employee pursuant to an agreement that requires employees who are not members of the organization to make payments to such organization in lieu of organization dues or fees not to establish and implement the objection procedure described in paragraph (2).
``(2) Objection procedure.--The objection procedure required under paragraph (1) shall meet the following requirements:
``(A) The labor organization shall annually provide to employees who are covered by such agreement but are not members of the organization--
``(i) reasonable personal notice of the objection procedure, a list of the employees eligible to invoke the procedure, and the time, place, and manner for filing an objection; and
``(ii) reasonable opportunity to file an objection to paying for organization expenditures supporting political activities unrelated to collective bargaining, including but not limited to the opportunity to file such objection by mail.
``(B) If an employee who is not a member of the labor organization files an objection under the procedure in subparagraph (A), such organization shall--
``(i) reduce the payments in lieu of organization dues or fees by such employee by an amount which reasonably reflects the ratio that the organization's expenditures supporting political activities unrelated to collective bargaining bears to such organization's total expenditures; and
``(ii) provide such employee with a reasonable explanation of the organization's calculation of such reduction, including calculating the amount of organization expenditures supporting political activities unrelated to collective bargaining.
``(3) Definition.--In this subsection, the term
`expenditures supporting political activities unrelated to collective bargaining' means expenditures in connection with a Federal, State, or local election or in connection with efforts to influence legislation unrelated to collective bargaining.''.
SEC. 402. USE OF CONTRIBUTED AMOUNTS FOR CERTAIN PURPOSES.
Title III of the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.) is amended by striking section 313 and inserting the following:
``SEC. 313. USE OF CONTRIBUTED AMOUNTS FOR CERTAIN PURPOSES.
``(a) Permitted Uses.--A contribution accepted by a candidate, and any other amount received by an individual as support for activities of the individual as a holder of Federal office, may be used by the candidate or individual--
``(1) for expenditures in connection with the campaign for Federal office of the candidate or individual;
``(2) for ordinary and necessary expenses incurred in connection with duties of the individual as a holder of Federal office;
``(3) for contributions to an organization described in section 170(c) of the Internal Revenue Code of 1986; or
``(4) for transfers to a national, State, or local committee of a political party.
``(b) Prohibited Use.--
``(1) In general.--A contribution or amount described in subsection (a) shall not be converted by any person to personal use.
``(2) Conversion.--For the purposes of paragraph (1), a contribution or amount shall be considered to be converted to personal use if the contribution or amount is used to fulfill any commitment, obligation, or expense of a person that would exist irrespective of the candidate's election campaign or individual's duties as a holder of Federal officeholder, including--
``(A) a home mortgage, rent, or utility payment;
``(B) a clothing purchase;
``(C) a noncampaign-related automobile expense;
``(D) a country club membership;
``(E) a vacation or other noncampaign-related trip;
``(F) a household food item;
``(G) a tuition payment;
``(H) admission to a sporting event, concert, theater, or other form of entertainment not associated with an election campaign; and
``(I) dues, fees, and other payments to a health club or recreational facility.''.
SEC. 403. LIMIT ON CONGRESSIONAL USE OF THE FRANKING
PRIVILEGE.
Section 3210(a)(6) of title 39, United States Code, is amended by striking subparagraph (A) and inserting the following:
``(A) A Member of Congress shall not mail any mass mailing as franked mail during the 180-day period which ends on the date of the general election for the office held by the Member or during the 90-day period which ends on the date of any primary election for that office, unless the Member has made a public announcement that the Member will not be a candidate for reelection during that year or for election to any other Federal office.''.
SEC. 404. PROHIBITION OF FUNDRAISING ON FEDERAL PROPERTY.
Section 607 of title 18, United States Code, is amended--
(1) by striking subsection (a) and inserting the following:
``(a) Prohibition.--
``(1) In general.--It shall be unlawful for any person to solicit or receive a donation of money or other thing of value in connection with a Federal, State, or local election from a person who is located in a room or building occupied in the discharge of official duties by an officer or employee of the United States. An individual who is an officer or employee of the Federal Government, including the President, Vice President, and Members of Congress, shall not solicit a donation of money or other thing of value in connection with a Federal, State, or local election while in any room or building occupied in the discharge of official duties by an officer or employee of the United States, from any person.
``(2) Penalty.--A person who violates this section shall be fined not more than $5,000, imprisoned more than 3 years, or both.''; and
(2) in subsection (b), by inserting ``or Executive Office of the President'' after ``Congress''.
SEC. 405. PENALTIES FOR VIOLATIONS.
(a) Increased Penalties.--Section 309(a) of the Federal Election Campaign Act of 1971 (2 U.S.C. 437g(a)) is amended--
(1) in paragraphs (5)(A), (6)(A), and (6)(B), by striking
``$5,000'' and inserting ``$10,000''; and
(2) in paragraphs (5)(B) and (6)(C), by striking ``$10,000 or an amount equal to 200 percent'' and inserting ``$20,000 or an amount equal to 300 percent''.
(b) Equitable Remedies.--Section 309(a)(5)(A) of the Federal Election Campaign Act of 1971 (2 U.S.C. 437g(a)(5)) is amended by striking the period at the end and inserting
``, and may include equitable remedies or penalties, including disgorgement of funds to the Treasury or community service requirements (including requirements to participate in public education programs).''.
SEC. 406. STRENGTHENING FOREIGN MONEY BAN.
(a) In General.--Section 319 of the Federal Election Campaign Act of 1971 (2 U.S.C. 441e) is amended--
(1) by striking the heading and inserting the following:
``contributions and donations by foreign nationals''; and
(2) by striking subsection (a) and inserting the following:
``(a) Prohibition.--It shall be unlawful for--
``(1) a foreign national, directly or indirectly, to make--
``(A) a donation of money or other thing of value, or to promise expressly or impliedly to make a donation, in connection with a Federal, State, or local election; or
``(B) a contribution or donation to a committee of a political party; or
``(2) a person to solicit, accept, or receive such a contribution or donation from a foreign national.''.
(b) Prohibiting Use of Willful Blindness as Defense Against Charge of Violating Foreign Contribution Ban.--
(1) In general.--Section 319 of the Federal Election Campaign Act of 1971 (2 U.S.C. 441e) is amended--
(A) by redesignating subsection (b) as subsection (c); and
(B) by inserting after subsection (a) the following new subsection:
``(b) Prohibiting Use of Willful Blindness Defense.--It shall not be a defense to a violation of subsection (a) that the defendant did not know that the contribution originated from a foreign national if the defendant should have known that the contribution originated from a foreign national, except that the trier of fact may not find that the defendant should have known that the contribution originated from a foreign national solely because of the name of the contributor.''.
(2) Effective date.--The amendments made by this subsection shall apply with respect to violations occurring on or after the date of enactment of this Act.
SEC. 407. PROHIBITION OF CONTRIBUTIONS BY MINORS.
Title III of the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.), as amended by section 101, is amended by adding at the end the following:
``SEC. 324. PROHIBITION OF CONTRIBUTIONS BY MINORS.
``An individual who is 17 years old or younger shall not make a contribution to a candidate or a contribution or donation to a committee of a political party.''.
SEC. 408. EXPEDITED PROCEDURES.
(a) In General.--Section 309(a) of the Federal Election Campaign Act of 1971 (2 U.S.C. 437g(a)) is amended by adding at the end the following:
``(13) Expedited procedure.--
``(A) In general.--If the complaint in a proceeding was filed within 60 days preceding the date of a general election, the Commission may take action described in this subparagraph.
``(B) Clear and convincing evidence exists.--If the Commission determines, on the basis of facts alleged in the complaint and other facts available to the Commission, that there is clear and convincing evidence that a violation of this Act has occurred, is occurring, or is about to occur, the Commission may order expedited proceedings, shortening the time periods for proceedings under paragraphs (1), (2),
(3), and (4) as necessary to allow the matter to be resolved in sufficient time before the election to avoid harm or prejudice to the interests of the parties.
``(C) Complaint without merit.--If the Commission determines, on the basis of facts alleged in the complaint and other facts available to the Commission, that the complaint is clearly without merit, the Commission may--
``(i) order expedited proceedings, shortening the time periods for proceedings under paragraphs (1), (2), (3), and
(4) as necessary to allow the matter to be resolved in sufficient time before the election to avoid harm or prejudice to the interests of the parties; or
``(ii) if the Commission determines that there is insufficient time to conduct proceedings before the election, summarily dismiss the complaint.''.
(b) Referral to Attorney General.--Section 309(a)(5) of the Federal Election Campaign Act of 1971 (2 U.S.C. 437g(a)(5)) is amended by striking subparagraph (C) and inserting the following:
``(C) Referral to attorney general.--The Commission may at any time, by an affirmative vote of at least 4 of its members, refer a possible violation of this Act or chapter 95 or 96 of the Internal Revenue Code of 1986, to the Attorney General of the United States, without regard to any limitation set forth in this section.''.
SEC. 409. INITIATION OF ENFORCEMENT PROCEEDING.
Section 309(a)(2) of the Federal Election Campaign Act of 1971 (2 U.S.C. 437g(a)(2)) is amended by striking ``reason to believe that'' and inserting ``reason to investigate whether''.
SEC. 410. PROTECTING EQUAL PARTICIPATION OF ELIGIBLE VOTERS
IN CAMPAIGNS AND ELECTIONS.
Title III of the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.), as amended by sections 101 and 407, is amended by adding at the end the following:
``SEC. 325. PROTECTING EQUAL PARTICIPATION OF ELIGIBLE VOTERS
IN CAMPAIGNS AND ELECTIONS.
``(a) In General.--Nothing in this Act may be construed to prohibit any individual eligible to vote in an election for Federal office from making contributions or expenditures in support of a candidate for such an election (including voluntary contributions or expenditures made through a separate segregated fund established by the individual's employer or labor organization) or otherwise participating in any campaign for such an election in the same manner and to the same extent as any other individual eligible to vote in an election for such office.
``(b) No Effect on Geographic Restrictions on Contributions.--Subsection (a) may not be construed to affect any restriction under this title regarding the portion of contributions accepted by a candidate from persons residing in a particular geographic area.''.
SEC. 411. PENALTY FOR VIOLATION OF PROHIBITION AGAINST
FOREIGN CONTRIBUTIONS.
(a) In General.--Section 319 of the Federal Election Campaign Act of 1971 (2 U.S.C. 441e), as amended by section 406(b), is amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following:
``(c) Penalty.--
``(1) In general.--Except as provided in paragraph (2), notwithstanding any other provision of this title, any person who violates subsection (a) shall be sentenced to a term of imprisonment which may not be more than 10 years, fined in an amount not to exceed $1,000,000, or both.
``(2) Exception.--Paragraph (1) shall not apply with respect to any violation of subsection (a) arising from a contribution or donation made by an individual who is lawfully admitted for permanent residence (as defined in section 101(a)(22) of the Immigration and Nationality Act).''.
(b) Effective Date.--The amendments made by this section shall apply with respect to violations occurring on or after the date of enactment of this Act.
SEC. 412. EXPEDITED COURT REVIEW OF CERTAIN ALLEGED
VIOLATIONS OF FEDERAL ELECTION CAMPAIGN ACT OF
1971.
(a) In General.--Section 309 of the Federal Election Campaign Act of 1971 (2 U.S.C. 437g) is amended--
(1) by redesignating subsection (d) as subsection (e); and
(2) by inserting after subsection (c) the following new subsection:
``(d) Private Action.--
``(1) In general.--Notwithstanding any other provision of this section, if a candidate (or the candidate's authorized committee) believes that a violation described in paragraph
(2) has been committed with respect to an election during the 90-day period preceding the date of the election, the candidate or committee may institute a civil action on behalf of the Commission for relief (including injunctive relief) against the alleged violator in the same manner and under the same terms and conditions as an action instituted by the Commission under subsection (a)(6), except that the court involved shall issue a decision regarding the action as soon as practicable after the action is instituted and to the greatest extent possible issue the decision prior to the date of the election involved.
``(2) Violations.--A violation described in this paragraph is a violation of this Act or of chapter 95 or chapter 96 of the Internal Revenue Code of 1986 relating to--
``(A) whether a contribution is in excess of an applicable limit or is otherwise prohibited under this Act; or
``(B) whether an expenditure is an independent expenditure under section 301(17).''.
(b) Effective Date.--The amendments made by this section shall apply with respect to elections occurring after the date of enactment of this Act.
SEC. 413. CONSPIRACY TO VIOLATE PRESIDENTIAL CAMPAIGN
SPENDING LIMITS.
(a) In General.--Section 9003 of the Internal Revenue Code of 1986 (relating to condition for eligibility for payments) is amended by adding at the end the following:
``(f) Prohibiting Conspiracy To Violate Limits.--
``(1) Violation of limits described.--If a candidate for election to the office of President or Vice President who receives amounts from the Presidential Election Campaign Fund under chapter 95 or 96 of the Internal Revenue Code of 1986, or the agent of such a candidate, seeks to avoid the spending limits applicable to the candidate under such chapter or under the Federal Election Campaign Act of 1971 by soliciting, receiving, transferring, or directing funds from any source other than such Fund for the direct or indirect benefit of such candidate's campaign, such candidate or agent shall be fined not more than $1,000,000, or imprisoned for a term of not more than 3 years, or both.
``(2) Conspiracy to violate limits defined.--If two or more persons conspire to commit a violation described in paragraph
(1), and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined not more than
$1,000,000, or imprisoned for a term of not more than 3 years, or both.''.
(b) Effective Date.--The amendment made by this section shall apply with respect to elections occurring on or after the date of enactment of this Act.
SEC. 414. DEPOSIT OF CERTAIN CONTRIBUTIONS AND DONATIONS IN
TREASURY ACCOUNT.
(a) In General.--Title III of the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.), as amended by sections 101, 407, and 410, is amended by adding at the end the following:
``SEC. 326. TREATMENT OF CERTAIN CONTRIBUTIONS AND DONATIONS
RETURNED TO DONORS.
``(a) Transfer to Commission.--
``(1) In general.--Notwithstanding any other provision of this Act, if a political committee intends to return any contribution or donation given to the political committee, the committee shall transfer the contribution or donation to the Commission if--
``(A) the contribution or donation is in an amount equal to or greater than $500 (other than a contribution or donation returned within 60 days of receipt by the committee); or
``(B) the contribution or donation was made in violation of section 315, 316, 317, 319, 320, or 325 (other than a contribution or donation returned within 30 days of receipt by the committee).
``(2) Information included with transferred contribution or donation.--A political committee shall include with any contribution or donation transferred under paragraph (1)--
``(A) a request that the Commission return the contribution or donation to the person making the contribution or donation; and
``(B) information regarding the circumstances surrounding the making of the contribution or donation and any opinion of the political committee concerning whether the contribution or donation may have been made in violation of this Act.
``(3) Establishment of escrow account.--
``(A) In general.--The Commission shall establish a single interest-bearing escrow account for deposit of amounts transferred under paragraph (1).
``(B) Disposition of amounts received.--On receiving an amount from a political committee under paragraph (1), the Commission shall--
``(i) deposit the amount in the escrow account established under subparagraph (A); and
``(ii) notify the Attorney General and the Commissioner of the Internal Revenue Service of the receipt of the amount from the political committee.
``(C) Use of interest.--Interest earned on amounts in the escrow account established under subparagraph (A) shall be applied or used for the same purposes as the donation or contribution on which it is earned.
``(4) Treatment of returned contribution or donation as a complaint.--The transfer of any contribution or donation to the Commission under this section shall be treated as the filing of a complaint under section 309(a).
``(b) Use of Amounts Placed in Escrow To Cover Fines and Penalties.--The Commission or the Attorney General may require any amount deposited in the escrow account under subsection (a)(3) to be applied toward the payment of any fine or penalty imposed under this Act or title 18, United States Code, against the person making the contribution or donation.
``(c) Return of Contribution or Donation After Deposit in Escrow.--
``(1) In general.--The Commission shall return a contribution or donation deposited in the escrow account under subsection (a)(3) to the person making the contribution or donation if--
``(A) within 180 days after the date the contribution or donation is transferred, the Commission has not made a determination under section 309(a)(2) that the Commission has reason to investigate whether that the making of the contribution or donation was made in violation of this Act; or
``(B)(i) the contribution or donation will not be used to cover fines, penalties, or costs pursuant to subsection (b); or
``(ii) if the contribution or donation will be used for those purposes, that the amounts required for those purposes have been withdrawn from the escrow account and subtracted from the returnable contribution or donation.
``(2) No effect on status of investigation.--The return of a contribution or donation by the Commission under this subsection shall not be construed as having an effect on the status of an investigation by the Commission or the Attorney General of the contribution or donation or the circumstances surrounding the contribution or donation, or on the ability of the Commission or the Attorney General to take future actions with respect to the contribution or donation.''.
(b) Amounts Used To Determine Amount of Penalty for Violation.--Section 309(a) of the Federal Election Campaign Act of 1971 (2 U.S.C. 437g(a)) is amended by inserting after paragraph (9) the following:
``(10) Amount of donation.--For purposes of determining the amount of a civil penalty imposed under this subsection for violations of section 326, the amount of the donation involved shall be treated as the amount of the contribution involved.''.
(c) Disgorgement Authority.--Section 309 of the Federal Election Campaign Act of 1971 (2 U.S.C. 437g), as amended by section 412(a), is amended by adding at the end the following:
``(f) Deposit in Escrow.--Any conciliation agreement, civil action, or criminal action entered into or instituted under this section may require a person to forfeit to the Treasury any contribution, donation, or expenditure that is the subject of the agreement or action for transfer to the Commission for deposit in accordance with section 326.''.
(d) Effective Date.--The amendments made by subsections (a) and (b) shall apply to contributions or donations refunded on or after the date of enactment of this Act, without regard to whether the Federal Election Commission or Attorney General has issued regulations to carry out section 326 of the Federal Election Campaign Act of 1971 (as added by subsection
(a)) by such date.
SEC. 415. ESTABLISHMENT OF A CLEARINGHOUSE OF INFORMATION ON
POLITICAL ACTIVITIES WITHIN THE FEDERAL
ELECTION COMMISSION.
(a) Establishment.--There shall be established within the Federal Election Commission a clearinghouse of public information regarding the political activities of foreign principals and agents of foreign principals. The information comprising this clearinghouse shall include only the following:
(1) All registrations and reports filed pursuant to the Lobbying Disclosure Act of 1995 (2 U.S.C. 1601 et seq.) during the preceding 5-year period.
(2) All registrations and reports filed pursuant to the Foreign Agents Registration Act (22 U.S.C. 611 et seq.) during the preceding 5-year period.
(3) The listings of public hearings, hearing witnesses, and witness affiliations printed in the Congressional Record during the preceding 5-year period.
(4) Public information disclosed pursuant to the rules of the Senate or the House of Representatives regarding honoraria, the receipt of gifts, travel, and earned and unearned income.
(5) All reports filed pursuant to title I of the Ethics in Government Act of 1978 (5 U.S.C. App.) during the preceding 5-year period.
(6) All public information filed with the Federal Election Commission pursuant to the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.) during the preceding 5-year period.
(b) Disclosure of Other Information Prohibited.--The disclosure by the clearinghouse, or any officer or employee thereof, of any information other than that set forth in subsection (a) is prohibited, except as otherwise provided by law.
(c) Director of Clearinghouse.--
(1) Duties.--The clearinghouse shall have a Director, who shall administer and manage the responsibilities and all activities of the clearinghouse. In carrying out such duties, the Director shall--
(A) develop a filing, coding, and cross-indexing system to carry out the purposes of this section (which shall include an index of all persons identified in the reports, registrations, and other information comprising the clearinghouse);
(B) notwithstanding any other provision of law, make copies of registrations, reports, and other information comprising the clearinghouse available for public inspection and copying, beginning not later than 30 days after the information is first available to the public, and permit copying of any such registration, report, or other information by hand or by copying machine or, at the request of any person, furnish a copy of any such registration, report, or other information upon payment of the cost of making and furnishing such copy, except that no information contained in such registration or report and no such other information shall be sold or used by any person for the purpose of soliciting contributions or for any profit-making purpose; and
(C) not later than 150 days after the date of enactment of this Act and at any time thereafter, to prescribe, in consultation with the Comptroller General, such rules, regulations, and forms, in conformity with the provisions of chapter 5 of title 5, United States Code, as are necessary to carry out the provisions of this section in the most effective and efficient manner.
(2) Appointment.--The Director shall be appointed by the Federal Election Commission.
(3) Term of service.--The Director shall serve a single term of a period of time determined by the Commission, but not to exceed 5 years.
(d) Penalties for Disclosure of Information.--Any person who discloses information in violation of subsection (b), and any person who sells or uses information for the purpose of soliciting contributions or for any profit-making purpose in violation of subsection (c)(1)(B), shall be imprisoned for a period of not more than 1 year, or fined in the amount provided in title 18, United States Code, or both.
(e) Authorization of Appropriations.--There are authorized to be appropriated such sums as may be necessary to conduct the activities of the clearinghouse.
(f) Foreign Principal.--In this section, the term ``foreign principal'' shall have the same meaning given the term
``foreign national'' under section 319 of the Federal Election Campaign Act of 1971 (2 U.S.C. 441e), as in effect as of the date of enactment of this Act.
SEC. 416. ENFORCEMENT OF SPENDING LIMIT ON PRESIDENTIAL AND
VICE PRESIDENTIAL CANDIDATES WHO RECEIVE PUBLIC
FINANCING.
(a) In General.--Section 9003 of the Internal Revenue Code of 1986, as amended by section 413, is amended by adding at the end the following:
``(g) Illegal Solicitation of Soft Money.--No candidate for election to the office of President or Vice President may receive amounts from the Presidential Election Campaign Fund under this chapter or chapter 96 unless the candidate certifies that the candidate shall not solicit any funds for the purposes of influencing such election, including any funds used for an independent expenditure under the Federal Election Campaign Act of 1971, unless the funds are subject to the limitations, prohibitions, and reporting requirements of the Federal Election Campaign Act of 1971.''.
(b) Effective Date.--The amendment made by this section shall apply with respect to elections occurring on or after the date of the enactment of this Act.
SEC. 417. CLARIFICATION OF RIGHT OF NATIONALS OF THE UNITED
STATES TO MAKE POLITICAL CONTRIBUTIONS.
Section 319(d)(2) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441e(d)(2)), as amended by sections 506(b) and 511(a), is further amended by inserting after ``United States'' the following: ``or a national of the United States
(as defined in section 101(a)(22) of the Immigration and Nationality Act)''.
SEC. 418. PROHIBITING USE OF WHITE HOUSE MEALS AND
ACCOMMODATIONS FOR POLITICAL FUNDRAISING.
(a) In General.--Chapter 29 of title 18, United States Code, is amended by adding at the end the following new section:
``Sec. 612. Prohibiting use of meals and accommodations at
White House for political fundraising
``(a) It shall be unlawful for any person to provide or offer to provide any meals or accommodations at the White House in exchange for any money or other thing of value, or as a reward for the provision of any money or other thing of value, in support of any political party or the campaign for electoral office of any candidate.
``(b) Any person who violates this section shall be fined under this title or imprisoned not more than 3 years, or both.
``(c) For purposes of this section, any official residence or retreat of the President (including private residential areas and the grounds of such a residence or retreat) shall be treated as part of the White House.''.
(b) Clerical Amendment.--The table of sections for chapter 29 of title 18, United States Code, is amended by adding at the end the following new item:
``612. Prohibiting use of meals and accommodations at White House for political fundraising.''.
SEC. 419. PROHIBITION AGAINST ACCEPTANCE OR SOLICITATION TO
OBTAIN ACCESS TO CERTAIN FEDERAL GOVERNMENT
PROPERTY.
(a) In General.--Chapter 11 of title 18, United States Code, is amended by adding at the end the following new section:
``Sec. 226. Acceptance or solicitation to obtain access to certain Federal Government property
``Whoever solicits or receives anything of value in consideration of providing a person with access to Air Force One, Marine One, Air Force Two, Marine Two, the White House, or the Vice President's residence, shall be fined under this title, or imprisoned not more than one year, or both.''.
(b) Clerical Amendment.--The table of sections for chapter 11 of title 18, United States Code, is amended by adding at the end the following new item:
``226. Acceptance or solicitation to obtain access to certain Federal
Government property.''.
SEC. 420. REQUIRING NATIONAL PARTIES TO REIMBURSE AT COST FOR
USE OF AIR FORCE ONE FOR POLITICAL FUNDRAISING.
Title III of the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.), as amended by sections 101, 407, 410, and 415, is amended by adding at the end the following:
``SEC. 327. REIMBURSEMENT BY POLITICAL PARTIES FOR USE OF AIR
FORCE ONE FOR POLITICAL FUNDRAISING.
``(a) In General.--If the President, Vice President, or the head of any executive department (as defined in section 101 of title 5, United States Code) uses Air Force One for transportation for any travel which includes a fundraising event for the benefit of any political committee of a national political party, such political committee shall reimburse the Federal Government for the fair market value of the transportation of the individual involved, based on the cost of an equivalent commercial chartered flight.
``(b) Air Force One Defined.--In subsection (a), the term
`Air Force One' means the airplane operated by the Air Force which has been specially configured to carry out the mission of transporting the President.''.
SEC. 421. ENHANCING ENFORCEMENT OF CAMPAIGN FINANCE LAW.
(a) Mandatory Imprisonment for Criminal Conduct.--Section 309(e)(1)(A) of the Federal Election Campaign Act of 1971 (2 U.S.C. 437g(e)(1)(A)), as redesignated by section 412, is amended--
(1) in the first sentence, by striking ``shall be fined, or imprisoned for not more than one year, or both'' and inserting ``shall be imprisoned for not fewer than 1 year and not more than 10 years''; and
(2) by striking the second sentence.
(b) Concurrent Authority of Attorney General To Bring Criminal Actions.--Section 309(e) of the Federal Election Campaign Act of 1971 (2 U.S.C. 437g(d)), as so redesignated, is amended by adding at the end the following:
``(4) Attorney general action.--In addition to the authority to bring cases referred pursuant to subsection
(a)(5), the Attorney General may at any time bring a criminal action for a violation of this Act or of chapter 95 or chapter 96 of the Internal Revenue Code of 1986.''.
(c) Effective Date.--The amendments made by this section shall apply with respect to actions brought with respect to elections occurring after January 2001.
SEC. 422. BAN ON COORDINATION OF SOFT MONEY FOR ISSUE
ADVOCACY BY PRESIDENTIAL CANDIDATES RECEIVING
PUBLIC FINANCING.
(a) In General.--Section 9003 of the Internal Revenue Code of 1986, as amended by section 416, is amended by adding at the end the following:
``(h) Ban on Coordination of Soft Money for Issue Advocacy.--
``(1) In general.--No candidate for election to the office of President or Vice President who is certified to receive amounts from the Presidential Election Campaign Fund under this chapter or chapter 96 may coordinate the expenditure of any funds for issue advocacy with any political party unless the funds are subject to the limitations, prohibitions, and reporting requirements of the Federal Election Campaign Act of 1971.
``(2) Issue advocacy defined.--In this section, the term
`issue advocacy' means any activity carried out for the purpose of influencing the consideration or outcome of any Federal legislation or the issuance or outcome of any Federal regulations, or educating individuals about candidates for election for Federal office or any Federal legislation, law, or regulations (without regard to whether the activity is carried out for the purpose of influencing any election for Federal office).''.
(b) Effective Date.--The amendment made by this section shall apply with respect to elections occurring on or after the date of the enactment of this Act.
SEC. 423. REQUIREMENT THAT NAMES OF PASSENGERS ON AIR FORCE
ONE AND AIR FORCE TWO BE MADE AVAILABLE THROUGH
THE INTERNET.
(a) In General.--The President shall make available through the Internet the name of any non-Government person who is a passenger on an aircraft designated as Air Force One or Air Force Two not later than 30 days after the date that the person is a passenger on such aircraft.
(b) Exception.--Subsection (a) shall not apply in a case in which the President determines that compliance with such subsection would be contrary to the national security interests of the United States. In any such case, not later than 30 days after the date that the person whose name will not be made available through the Internet was a passenger on the aircraft, the President shall submit to the chairman and ranking member of the Permanent Select Committee on Intelligence of the House of Representatives and of the Select Committee on Intelligence of the Senate--
(1) the name of the person; and
(2) the justification for not making such name available through the Internet.
(c) Definition of Person.--As used in this section, the term ``non-Government person'' means a person who is not an officer or employee of the United States, a member of the Armed Forces, or a Member of Congress.
TITLE V--ELECTION ADMINISTRATION AND TECHNOLOGY
SEC. 501. FINDINGS.
Congress makes the following findings:
(1) The right to vote is a fundamental and incontrovertible right under the Constitution.
(2) There is a need for Congress to encourage and enable every eligible American to vote by reaffirming that the right to vote is a fundamental right under the Constitution.
(3) There is a need for Congress to encourage and enable every eligible American to vote by reaffirming that the United States is a democratic government ``of the people, by the people and for the people'' where every vote counts.
(4) There is a need for Congress to encourage and enable every eligible American to vote by eliminating procedural and technological obstacles to voting.
(5) State governments have already begun to examine ways to improve the administration of elections and to modernize mechanisms and machinery for voting.
(6) Congress has authority under section 5 of the Fourteenth Amendment to the Constitution of the United States to enact legislation to address the equal protection violations that may be caused by our current, outdated voting system.
(7) Congress has an obligation to ensure that the necessary resources are available to States and localities to improve election technology and election administration and to ensure the integrity of the democratic elections process.
Subtitle A--Establishment of Commission on Voting Rights and Procedures
SEC. 511. ESTABLISHMENT.
There is established the Commission on Voting Rights and Procedures (in this subtitle referred to as the
``Commission'').
SEC. 512. MEMBERSHIP OF THE COMMISSION.
(a) Number and Appointment.--The Commission shall be composed of 12 members of whom--
(1) 6 members shall be appointed by the President;
(2) 3 members shall be appointed by the Minority Leader of the Senate (or, if the Minority Leader is a member of the same political party as the President, by the Majority Leader of the Senate); and
(3) 3 members shall be appointed by the Minority Leader of the House of Representatives (or, if the Minority Leader is a member of the same political party as the President, by the Majority Leader of the House of Representatives).
(b) Qualifications.--Each member appointed under subsection
(a) shall be chosen on the basis of--
(1) experience with, and knowledge of--
(A) election law;
(B) election technology;
(C) Federal, State, or local election administration;
(D) the United States Constitution; or
(E) the history of the United States; and
(2) integrity, impartiality, and good judgment.
(c) Period of Appointment; Vacancies.--
(1) Period of appointment.--Each member shall be appointed for the life of the Commission.
(2) Vacancies.--
(A) In general.--A vacancy in the Commission shall not affect its powers.
(B) Manner of replacement.--A vacancy on the Commission shall be filled in the same manner which the original appointment was made and shall be subject to any conditions which applied with respect to the original appointment not later than 60 days after the date of the vacancy.
(d) Chairperson; Vice Chairperson.--
(1) In general.--The Commission shall elect a chairperson and vice chairperson from among its members.
(2) Political affiliation.--The chairperson and vice chairperson may not be affiliated with the same political party.
(e) Date of Appointment.--The appointments of the members of the Commission shall be made not later than 45 days after the date of enactment of this Act.
(f) Meetings.--
(1) In general.--The Commission shall meet at the call of the chairperson.
(2) Initial meeting.--Not later than 20 days after the date on which all members of the Commission have been appointed, the Commission shall hold its first meeting.
(3) Quorum.--A majority of the members of the Commission shall constitute a quorum, but a lesser number of members may hold hearings.
(g) Voting.--Each action of the Commission shall be approved by a majority vote of members. Each member shall have 1 vote.
SEC. 513. DUTIES OF THE COMMISSION.
(a) Study.--
(1) In general.--The Commission shall conduct a thorough study of--
(A) election technology and systems;
(B) designs of ballots and the uniformity of ballots;
(C) access to polling places, including matters relating to access for individuals with disabilities and other individuals with particular needs;
(D) voter registration and maintenance of voter rolls, including the use of provisional voting and standards for reenfranchisement of voters;
(E) alternative voting methods;
(F) accuracy of voting, election procedures, and election technology;
(G) voter education;
(H) training election personnel and volunteers;
(I)(i) implementation of title I of the Uniformed and Overseas Absentee Voting Act (42 U.S.C. 1973ff et seq.), and the amendments made by title II of that Act, by--
(I) the Secretary of Defense;
(II) each other Federal Government official having a responsibility under that Act; and
(III) each State; and
(ii) whether any legislative or administrative action is necessary to provide a meaningful opportunity to register to vote in, and vote in, elections for Federal office (as defined in paragraph (3) of section 107 of that Act (42 U.S.C. 1973ff-6)) for--
(I) each absent uniformed services voter (as defined in paragraph (1) of such section); and
(II) each overseas voter (as defined in paragraph (5) of such section) to register to vote and vote in elections for Federal office);
(J) the feasibility and advisability of establishing the date on which elections for Federal office (as so defined) are held as a Federal or State holiday; and
(K)(i) how the Federal Government can, on a permanent basis, best provide ongoing assistance to State and local authorities to improve the administration of Federal elections; and
(ii) whether an existing or a new Federal agency should provide such assistance.
(2) Website.--For purposes of conducting the study under this subsection, the Commission shall establish an Internet website to facilitate public comment and participation.
(b) Recommendations.--
(1) Recommendations of best practices in voting and election administration.--The Commission shall develop recommendations with respect to the matters studied under subsection (a) that identify those methods of voting and administering elections studied by the Commission that would--
(A) be most convenient, accessible, and easy to use for voters in Federal elections, including voters with disabilities, absent uniformed services voters, overseas voters, and other voters with special needs;
(B) yield the broadest participation and most accurate results in Federal elections;
(C) be the most resource-efficient and cost-effective for use in Federal elections; and
(D) be the most effective means of ensuring security in Federal elections.
(2) Recommendations for providing assistance in federal elections.--The Commission shall develop recommendations with respect to the matters studied under subsection (a)(1)(K) on how the Federal Government can, on a permanent basis, best provide ongoing assistance to State and local authorities to improve the administration of Federal elections, and identify whether an existing or a new Federal agency should provide such assistance.
(3) Recommendations for voter participation in federal elections.--The Commission shall develop recommendations with respect to the matters studied under subsection (a) on methods--
(A) to increase voter registration;
(B) to increase the accuracy of voter rolls;
(C) to improve voter education; and
(D) to improve the training of election personnel and volunteers.
(c) Reports.--
(1) Interim reports.--Not later than the date on which the Commission submits the final report under paragraph (2), the Commission may submit to the President and Congress such interim reports as a majority of the members of the Commission determine appropriate.
(2) Final report.--
(A) In general.--Not later than one year after the date of enactment of this Act, the Commission shall submit to the President and Congress a final report that has received the approval of a majority of the members of the Commission.
(B) Content.--The final report shall contain--
(i) a detailed statement of the findings and conclusions of the Commission on the matters studied under subsection (a);
(ii) a detailed statement of the recommendations developed under subsection (b); and
(iii) any dissenting or minority opinions of the members of the Commission.
SEC. 514. POWERS OF THE COMMISSION.
(a) Hearings.--The Commission or, at its direction, any subcommittee or member of the Commission, may, for the purpose of carrying out this subtitle--
(1) hold such hearings, sit and act at such times and places, take such testimony, receive such evidence, administer such oaths; and
(2) require, by subpoena or otherwise, the attendance and testimony of such witnesses and the production of such books, records, correspondence, memoranda, papers, documents, tapes, and materials as the Commission or such subcommittee or member considers advisable.
(b) Issuance and Enforcement of Subpoenas.--
(1) Issuance.--Any subpoena issued under subsection (a) shall be issued by the chairperson and vice chairperson of the Commission acting jointly. Each subpoena shall bear the signature of the chairperson of the Commission and shall be served by any person or class of persons designated by the chairperson for that purpose.
(2) Enforcement.--In the case of contumacy or failure to obey a subpoena issued under subsection (a), the United States district court for the judicial district in which the subpoenaed person resides, is served, or may be found may issue an order requiring such person to appear at any designated place to testify or to produce documentary or other evidence. Any failure to obey the order of the court may be punished by the court as a contempt of that court.
(c) Witness Allowances and Fees.--Section 1821 of title 28, United States Code, shall apply to witnesses requested or subpoenaed to appear at any hearing of the Commission. The per diem and mileage allowances for witnesses shall be paid from funds available to pay the expenses of the Commission.
(d) Information From Federal Agencies.--The Commission may secure directly from any Federal department or agency such information as the Commission considers necessary to carry out this subtitle. Upon request of the chairperson and vice chairperson of the Commission acting jointly, the head of such department or agency shall furnish such information to the Commission.
(e) Postal Services.--The Commission may use the United States mails in the same manner and under the same conditions as other departments and agencies of the Federal Government.
(f) Administrative Support Services.--Upon the request of the chairperson and vice chairperson of the Commission acting jointly, the Administrator of the General Services Administration shall provide to the Commission, on a reimbursable basis, the administrative support services that are necessary to enable the Commission to carry out its duties under this subtitle.
(g) Gifts and Donations.--The Commission may accept, use, and dispose of gifts or donations of services or property to carry out this subtitle.
SEC. 515. PERSONNEL MATTERS.
(a) Compensation of Members.--Each member of the Commission who is not an officer or employee of the Federal Government shall be compensated at a rate equal to the daily equivalent of the annual rate of basic pay prescribed for level IV of the Executive Schedule under section 5315 of title 5, United States Code, for each day (including travel time) during which such member is engaged in the performance of the duties of the Commission. All members of the Commission who are officers or employees of the United States shall serve without compensation in addition to that received for their services as officers or employees of the United States.
(b) Travel Expenses.--The members of the Commission shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, while away from their homes or regular places of business in the performance of services for the Commission.
(c) Staff.--
(1) In general.--The chairperson and vice chairperson of the Commission, acting jointly, may, without regard to the civil service laws and regulations, appoint and terminate an executive director and such other additional personnel as may be necessary to enable the Commission to perform its duties. The employment of an executive director shall be subject to confirmation by the Commission.
(2) Compensation.--The chairperson and vice chairperson of the Commission, acting jointly, may fix the compensation of the executive director and other personnel without regard to chapter 51 and subchapter III of chapter 53 of title 5, United States Code, relating to classification of positions and General Schedule pay rates, except that the rate of pay for the executive director and other personnel may not exceed the rate payable for level V of the Executive Schedule under section 5316 of such title.
(d) Detail of Government Employees.--Any Federal Government employee may be detailed to the Commission without reimbursement, and such detail shall be without interruption or loss of civil service status or privilege.
(e) Procurement of Temporary and Intermittent Services.--The chairperson and vice chairperson of the Commission, acting jointly, may procure temporary and intermittent services under section 3109(b) of title 5, United States Code, at rates for individuals which do not exceed the daily equivalent of the annual rate of basic pay prescribed for level V of the Executive Schedule under section 5316 of such title.
SEC. 516. TERMINATION OF THE COMMISSION.
The Commission shall terminate 45 days after the date on which the Commission submits its final report under section 513(c)(2).
SEC. 517. AUTHORIZATION OF APPROPRIATIONS FOR THE COMMISSION.
(a) In General.--There are authorized to be appropriated such sums as may be necessary to carry out the purposes of this subtitle.
(b) Availability.--Any sums appropriated under the authorization contained in this section shall remain available, without fiscal year limitation, until expended.
Subtitle B--Grant Program
SEC. 521. ESTABLISHMENT OF GRANT PROGRAM.
The Attorney General, subject to the general policies and criteria established under section 523, in consultation with the Federal Election Commission, is authorized to make grants to States to pay the Federal share of the costs of the activities described in section 522.
SEC. 522. AUTHORIZED ACTIVITIES.
A State may use payments received under this subtitle to--
(1) improve or replace voting equipment or technology;
(2) implement new election administration procedures, such as ``same-day'' voter registration procedures;
(3) educate voters concerning voting procedures, voting rights, or voting technology and train election personnel; and
(4) upon completion of the final report under section 513(c), implement recommendations contained in such report.
SEC. 523. GENERAL POLICIES AND CRITERIA.
(a) General Policies.--The Attorney General shall establish general policies with respect to the approval of State plans, awarding of grants, and the use of assistance made available under this subtitle.
(b) Criteria.--
(1) In general.--The Attorney General shall establish criteria with respect to the approval of State plans submitted under section 524, including the requirements under paragraph (2).
(2) Requirements for approval.--The Attorney General shall not approve a State plan unless the plan provides for each of the following:
(A) Uniform standards within the State for election administration and technology.
(B) Accuracy of the records of eligible voters in the State to ensure that legally registered voters appear in such records and prevent any purging of such records to remove illegal voters that results in the elimination of legal voters as well.
(C) Voting accessibility standards that ensure--
(i) compliance with the Voting Accessibility for the Elderly and Handicapped Act (42 U.S.C. 1973ee et seq.);
(ii) compliance with the Voting Rights Act of 1965 (42 U.S.C. 1971 et seq.); and
(iii) that absent uniformed service voters and their dependents have a meaningful opportunity to exercise their voting rights as citizens of the United States.
(D) Voter education programs regarding methodology and procedures for participating in elections and training programs for election personnel and volunteers.
(c) Consultation.--In establishing the general policies and criteria under this section, the Attorney General shall consult with the Federal Election Commission.
SEC. 524. SUBMISSION OF STATE PLANS.
(a) In General.--Subject to subsection (c), the chief executive officer of each State that desires to receive a grant under this subtitle shall submit a State plan to the Attorney General at such time, in such manner, and accompanied by such additional information as the Attorney General, in consultation with the Federal Election Commission, may reasonably require.
(b) Contents.--Each State plan submitted under subsection
(a) shall--
(1) describe the activities for which assistance under this subtitle is sought;
(2) provide evidence that the State meets the general policies and criteria established by the Attorney General under section 523;
(3) provide assurances that the State will pay the non-Federal share of the activities for which assistance is sought from non-Federal sources; and
(4) provide such additional assurances as the Attorney General, in consultation with the Federal Election Commission, determines to be essential to ensure compliance with the requirements of this subtitle.
(c) Available for Review and Comment.--A State submitting a State plan under this section shall make such State plan publicly available for review and comment prior to submission.
SEC. 525. APPROVAL OF STATE PLANS.
The Attorney General, in consultation with the Federal Election Commission, shall approve State plans in accordance with the general policies and criteria established under section 523.
SEC. 526. FEDERAL MATCHING FUNDS.
(a) Payments.--The Attorney General shall pay to each State having a State plan approved under section 525 the Federal share of the cost of the activities described in the State plan.
(b) Federal Share.--
(1) In general.--Subject to paragraph (2), for purposes of subsection (a), the Federal share shall be 80 percent.
(2) Waiver.--The Attorney General may specify a Federal share greater than 80 percent if the State agrees to comply with such terms and conditions as the Attorney General may prescribe.
(c) Non-Federal Share.--The non-Federal share of payments under this subtitle may be in cash or in kind fairly evaluated, including planned equipment or services.
SEC. 527. AUDITS AND EXAMINATIONS.
(a) Recordkeeping Requirement.--Each recipient of a grant under this subtitle shall keep such records as the Attorney General, in consultation with the Federal Election Commission, shall prescribe.
(b) Audit and Examination.--
(1) Authority.--Subject to paragraph (2), the Attorney General and the Comptroller General of the United States, or any authorized representative of the Attorney General or the Comptroller General, shall have access to any record of a recipient of a grant under this subtitle that the Attorney General or the Comptroller General determines may be related to a grant received under this subtitle for the purpose of conducting an audit or examination.
(2) Expiration of authority.--The authority of the Attorney General and the Comptroller General conduct an audit or examination under this subsection with respect to the recipient of a grant under this subtitle shall expire on the date that is 3 years after the date on which the activity for which an State plan is approved under section 524 concludes.
SEC. 528. REPORTS.
(a) Reports to Congress.--Not later than January 31, 2003, and each year thereafter, the Attorney General shall submit to the President and Congress a report on the program under this subtitle for the preceding year. Each report shall set forth the following:
(1) A description and analysis of any activities funded by a grant awarded under this subtitle.
(2) Any recommendation for legislative or administrative action that the Attorney General considers appropriate.
(b) Reports to the Attorney General.--The Attorney General shall require in each grant awarded under this subtitle that the recipient of such grant submit to the Attorney General, under a schedule established by the Attorney General, such information as the Attorney General considers appropriate to submit reports under subsection (a).
SEC. 529. STATE DEFINED.
In this subtitle, the term ``State'' means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, American Samoa, Guam, and the United States Virgin Islands.
SEC. 530. AUTHORIZATION OF APPROPRIATIONS.
(a) Authorization.--
(1) In general.--There are authorized to be appropriated to the Department of Justice--
(A) $500,000,000 for fiscal year 2002;
(B) such amounts as necessary for each of fiscal years 2003, 2004, 2005, and 2006.
(2) Use of amounts.--Amounts appropriated under paragraph
(1) shall be for the purpose of--
(A) awarding grants under this subtitle; and
(B) paying for the costs of administering the program to award such grants.
(3) Federal election commission.--There are authorized to be appropriated for each of fiscal years 2002, 2003, 2004, 2005, and 2006 such amounts as necessary to the Federal Election Commission for the purpose of consultation with the Attorney General under this subtitle.
(b) Limitation.--Not more than 1 percent of any sums appropriated under paragraph (1) of subsection (a) may be used to pay for the administrative costs described in paragraph (2)(B) of such subsection.
(c) Supplemental Appropriations.--There are authorized to be appropriated as supplemental appropriations for fiscal year 2001 such sums as the Department of Justice and the Federal Election Commission consider necessary to carry out the provisions of this subtitle.
Subtitle C--Miscellaneous
SEC. 541. RELATIONSHIP TO OTHER LAWS.
Nothing in this title may be construed to authorize, require, or supersede conduct prohibited under the following laws, or otherwise affect such laws:
(1) The National Voter Registration Act of 1993 (42 U.S.C. 1973gg et seq.).
(2) The Voting Rights Act of 1965 (42 U.S.C. 1971 et seq.).
(3) The Voting Accessibility for the Elderly and Handicapped Act (42 U.S.C. 1973ee et seq.).
(4) The Uniformed and Overseas Citizens Absentee Voting Act
(42 U.S.C. 1973ff et seq.).
(5) The Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.).
TITLE VI--MILITARY VOTING
SEC. 601. SHORT TITLE.
This title may be cited as the ``Military Voting Rights Act of 2001''.
SEC. 602. GUARANTEE OF RESIDENCY.
Article VII of the Soldiers' and Sailors' Civil Relief Act of 1940 (50 U.S.C. 590 et seq.) is amended by adding at the end the following:
``Sec. 704. (a) For purposes of voting for an office of the United States or of a State, a person who is absent from a State in compliance with military or naval orders shall not, solely by reason of that absence--
``(1) be deemed to have lost a residence or domicile in that State;
``(2) be deemed to have acquired a residence or domicile in any other State; or
``(3) be deemed to have become resident in or a resident of any other State.
``(b) In this section, the term `State' includes a territory or possession of the United States, a political subdivision of a State, territory, or possession, and the District of Columbia.''.
SEC. 603. STATE RESPONSIBILITY TO GUARANTEE MILITARY VOTING
RIGHTS.
(a) Registration and Balloting.--Section 102 of the Uniformed and Overseas Citizens Absentee Voting Act (42 U.S.C. 1973ff-1) is amended--
(1) by inserting ``(a) Elections for Federal Offices.--'' before ``Each State shall--''; and
(2) by adding at the end the following:
``(b) Elections for State and Local Offices.--Each State shall--
``(1) permit absent uniformed services voters to use absentee registration procedures and to vote by absentee ballot in general, special, primary, and run-off elections for State and local offices; and
``(2) accept and process, with respect to any election described in paragraph (1), any otherwise valid voter registration application from an absent uniformed services voter if the application is received by the appropriate State election official not less than 30 days before the election.''.
(b) Conforming Amendment.--The heading for title I of such Act is amended by striking out ``FOR FEDERAL OFFICE''. TITLE VII--SEVERABILITY; CONSTITUTIONALITY; EFFECTIVE DATE; REGULATIONS
SEC. 701. SEVERABILITY.
If any provision of this Act or amendment made by this Act, or the application of a provision or amendment to any person or circumstance, is held to be unconstitutional, the remainder of this Act and amendments made by this Act, and the application of the provisions and amendment to any person or circumstance, shall not be affected by the holding.
SEC. 702. REVIEW OF CONSTITUTIONAL ISSUES.
An appeal may be taken directly to the Supreme Court of the United States from any final judgment, decree, or order issued by any court ruling on the constitutionality of any provision of this Act or amendment made by this Act.
SEC. 703. EFFECTIVE DATE.
Except as otherwise provided in this Act, this Act and the amendments made by this Act shall take effect upon the expiration of the 90-day period which begins on the date of the enactment of this Act.
SEC. 704. REGULATIONS.
The Federal Election Commission shall prescribe any regulations required to carry out this Act and the amendments made by this Act not later than 45 days after the date of the enactment of this Act.
______
Mr. DASCHLE (for himself, Mr. Dodd, Mr. Kennedy, Mrs. Murray, Mr.
Wellstone, Mrs. Clinton, Mr. Sarbanes, Mr. Rockefeller, Mr.
Schumer, Mrs. Boxer, Mr. Johnson, Mr. Corzine, and Mr. Breaux):
S. 18. A bill to increase the availability and affordability of quality child care and early learning services, to amend the Family and Medical Leave Act of 1993 to expand the scope of the Act, and for other purposes; to the Committee on Health, Education, Labor, and Pensions.
right start act of 2001
Mr. DASCHLE. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the Record, as follows:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Right Start Act of 2001''.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
TITLE I--INVESTING IN HEAD START PROGRAMS
Sec. 101. Authorization of appropriations.
TITLE II--INVESTING IN QUALITY CHILD CARE
Sec. 201. Authorization of appropriations.
TITLE III--PROMOTING EARLY LEARNING OPPORTUNITIES
Sec. 301. Amendments to the Early Learning Opportunities Act.
TITLE IV--SUPPORTING FAMILY CHOICES IN CHILD CARE
Subtitle A--Dependent Care Tax Credit
Sec. 401. Expanding the dependent care tax credit.
Sec. 402. Minimum credit allowed for stay-at-home parents.
Sec. 403. Credit made refundable.
Subtitle B--Incentives for Employer-Provided Child Care
Sec. 411. Allowance of credit for employer expenses for child care assistance.
TITLE V--EXPANDING FAMILY AND MEDICAL LEAVE
Subtitle A--Family Income to Respond to Significant Transitions
Sec. 501. Short title.
Sec. 502. Purposes. Sec. 503. Definitions.
Sec. 504. Demonstration projects.
Sec. 505. Evaluations and reports.
Sec. 506. Authorization of appropriations.
Subtitle B--Family Friendly Workplaces
Sec. 511. Short title.
Sec. 512. Coverage of employees.
Subtitle C--Time for Schools
Sec. 521. Short title.
Sec. 522. General requirements for leave.
Sec. 523. School involvement leave for civil service employees.
Sec. 524. Effective date.
Subtitle D--Employment Protection for Battered Women
Sec. 531. Entitlement to leave for addressing domestic violence for non-Federal employees.
Sec. 532. Entitlement to leave for addressing domestic violence for
Federal employees.
Sec. 533. Existing leave usable for domestic violence.
TITLE I--INVESTING IN HEAD START PROGRAMS
SEC. 101. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--Section 639(a) of the Head Start Act (42 U.S.C. 9834(a)) is amended by striking ``such sums'' and all that follows and inserting the following: ``$6,500,000,000 for fiscal year 2002, $7,000,000,000 for fiscal year 2003,
$7,750,000,000 for fiscal year 2004, $8,500,000,000 for fiscal year 2005, and $9,750,000,000 for fiscal year 2006.''.
(b) Conforming Amendments.--
(1) Reservations.--Paragraphs (1) and (3) of section 639(b) of the Head Start Act (42 U.S.C. 9834(b)) are amended by striking ``2003'' and inserting ``2006''.
(2) Distribution.--Paragraphs (3)(A)(i)(I) and (6)(A) of section 640(a) of the Head Start Act (42 U.S.C. 9835(a)) are amended by striking ``fiscal year 2003'' and inserting ``each of fiscal years 2003 through 2006''.
TITLE II--INVESTING IN QUALITY CHILD CARE
SEC. 201. AUTHORIZATION OF APPROPRIATIONS.
(a) Child Care and Development Block Grant Act of 1990.--Section 658B of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858) is amended by striking
``$1,000,000,000'' and all that follows and inserting
``$2,076,000,000 for fiscal year 2002, $2,109,000,000 for fiscal year 2003, $2,571,000,000 for fiscal year 2004,
$3,051,000,000 for fiscal year 2005, and $3,766,000,000 for fiscal year 2006.''.
(b) Social Security Act Funding for Child Care.--Section 418(a)(3) of the Social Security Act (42 U.S.C. 618(a)(3)) is amended--
(1) in subparagraph (E), by striking ``; and'';
(2) in subparagraph (F), by striking the period and inserting a semicolon; and
(3) by adding at the end the following:
``(G) $2,870,000,000 for fiscal year 2002;
``(H) $2,936,000,000 for fiscal year 2003;
``(I) $3,861,000,000 for fiscal year 2004;
``(J) $4,821,000,000 for fiscal year 2005; and
``(K) $3,766,000,000 for fiscal year 2006.''.
TITLE III--PROMOTING EARLY LEARNING OPPORTUNITIES
SEC. 301. AMENDMENTS TO THE EARLY LEARNING OPPORTUNITIES ACT.
Section 805 of the Early Learning Opportunities Act, as enacted by title VIII of the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2001 (as enacted into law by section 1(a)(1) of Public Law 106-554) is amended--
(1) in the matter preceding paragraph (1), by inserting ``, and there are appropriated,''; and
(2) by striking paragraphs (1) through (4) and inserting the following:
``(1) $750,000,000 for fiscal year 2002;
``(2) $1,000,000,000 for fiscal year 2003;
``(3) $1,500,000,000 for fiscal year 2004;
``(4) $2,000,000,000 for fiscal year 2005; and
``(5) $2,500,000,000 for fiscal year 2006.''.
TITLE IV--SUPPORTING FAMILY CHOICES IN CHILD CARE
Subtitle A--Dependent Care Tax Credit
SEC. 401. EXPANDING THE DEPENDENT CARE TAX CREDIT.
(a) Percentage of Employment-Related Expenses Determined by Taxpayer Status.--Section 21(a)(2) of the Internal Revenue Code of 1986 (defining applicable percentage) is amended to read as follows:
``(2) Applicable percentage defined.--For purposes of paragraph (1), the term `applicable percentage' means--
``(A) except as provided in subparagraph (B), 50 percent reduced (but not below 20 percent) by 1 percentage point for each $1,000, or fraction thereof, by which the taxpayers's adjusted gross income for the taxable year exceeds $30,000, and
``(B) in the case of employment-related expenses described in subsection (e)(11), 50 percent reduced (but not below zero) by 1 percentage point for each $800, or fraction thereof, by which the taxpayers's adjusted gross income for the taxable year exceeds $30,000.''.
(b) Inflation Adjustment for Allowable Expenses.--Section 21(c) of the Internal Revenue Code of 1986 (relating to dollar limit on amount creditable) is amended by striking
``The amount determined'' and inserting ``In the case of any taxable year beginning after 2002, each dollar amount referred to in paragraphs (1) and (2) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting `calendar year 2001' for `calendar year 1992' in subparagraph (B) thereof. If any dollar amount after being increased under the preceding sentence is not a multiple of
$10, such dollar amount shall be rounded to the nearest multiple of $10. The amount determined''.
(c) Effective Date.--The amendments made by this section apply to taxable years beginning after December 31, 2001.
SEC. 402. MINIMUM CREDIT ALLOWED FOR STAY-AT-HOME PARENTS.
(a) In General.--Section 21(e) of the Internal Revenue Code of 1986 (relating to special rules) is amended by adding at the end the following:
``(11) Minimum credit allowed for stay-at-home parents.--Notwithstanding subsection (d), in the case of any taxpayer with one or more qualifying individuals described in subsection (b)(1)(A) under the age of 1 at any time during the taxable year, such taxpayer shall be deemed to have employment-related expenses with respect to such qualifying individuals in an amount equal to the sum of--
``(A) $90 for each month in such taxable year during which at least one of such qualifying individuals is under the age of 1, and
``(B) the amount of employment-related expenses otherwise incurred for such qualifying individuals for the taxable year
(determined under this section without regard to this paragraph).''.
(b) Effective Date.--The amendments made by this section apply to taxable years beginning after December 31, 2001.
SEC. 403. CREDIT MADE REFUNDABLE.
(a) In General.--Part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to credits against tax) is amended--
(1) by redesignating section 35 as section 36, and
(2) by redesignating section 21 as section 35.
(b) Advance Payment of Credit.--Chapter 25 of such Code
(relating to general provisions relating to employment taxes) is amended by inserting after section 3507 the following:
``SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE CREDIT.
``(a) General Rule.--Except as otherwise provided in this section, every employer making payment of wages with respect to whom a dependent care eligibility certificate is in effect shall, at the time of paying such wages, make an additional payment equal to such employee's dependent care advance amount.
``(b) Dependent Care Eligibility Certificate.--For purposes of this title, a dependent care eligibility certificate is a statement furnished by an employee to the employer which--
``(1) certifies that the employee will be eligible to receive the credit provided by section 35 for the taxable year,
``(2) certifies that the employee reasonably expects to be an applicable taxpayer for the taxable year,
``(3) certifies that the employee does not have a dependent care eligibility certificate in effect for the calendar year with respect to the payment of wages by another employer,
``(4) states whether or not the employee's spouse has a dependent care eligibility certificate in effect,
``(5) states the number of qualifying individuals in the household maintained by the employee, and
``(6) estimates the amount of employment-related expenses for the calendar year.
``(c) Dependent Care Advance Amount.--
``(1) In general.--For purposes of this title, the term
`dependent care advance amount' means, with respect to any payroll period, the amount determined--
``(A) on the basis of the employee's wages from the employer for such period,
``(B) on the basis of the employee's estimated employment-related expenses included in the dependent care eligibility certificate, and
``(C) in accordance with tables provided by the Secretary.
``(2) Advance amount tables.--The tables referred to in paragraph (1)(C) shall be similar in form to the tables prescribed under section 3402 and, to the maximum extent feasible, shall be coordinated with such tables and the tables prescribed under section 3507(c).
``(d) Other Rules.--For purposes of this section, rules similar to the rules of subsections (d) and (e) of section 3507 shall apply.
``(e) Definitions.--For purposes of this section, terms used in this section which are defined in section 35 shall have the respective meanings given such terms by section 35.''.
(c) Conforming Amendments.--
(1) Section 35(a)(1) of such Code, as redesignated by paragraph (1), is amended by striking ``chapter'' and inserting ``subtitle''.
(2) Section 35(e) of such Code, as so redesignated and amended by subsection (c), is amended by adding at the end the following:
``(12) Coordination with advance payments and minimum tax.--Rules similar to the rules of subsections (g) and (h) of section 32 shall apply for purposes of this section.''.
(3) Sections 23(f)(1) and 129(a)(2)(C) of such Code are each amended by striking ``section 21(e)'' and inserting
``section 35(e)''.
(4) Section 129(b)(2) of such Code is amended by striking
``section 21(d)(2)'' and inserting ``section 35(d)(2)''.
(5) Section 129(e)(1) of such Code is amended by striking
``section 21(b)(2)'' and inserting ``section 35(b)(2)''.
(6) Section 213(e) of such Code is amended by striking
``section 21'' and inserting ``section 35''.
(7) Section 995(f)(2)(C) of such Code is amended by striking ``and 34'' and inserting ``34, and 35''.
(8) Section 6211(b)(4)(A) of such Code is amended by striking ``and 34'' and inserting ``, 34, and 35''.
(9) Section 6213(g)(2)(H) of such Code is amended by striking ``section 21'' and inserting ``section 35''.
(10) Section 6213(g)(2)(L) of such Code is amended by striking ``section 21, 24, or 32'' and inserting ``section 24, 32, or 35''.
(11) The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by striking the item relating to section 35 and inserting the following:
``Sec. 35. Expenses for household and dependent care services necessary for gainful employment.
``Sec. 36. Overpayments of tax.''.
(12) The table of sections for subpart A of such part IV is amended by striking the item relating to section 21.
(13) The table of sections for chapter 25 of such Code is amended by adding after the item relating to section 3507 the following:
``Sec. 3507A. Advance payment of dependent care credit.''.
(14) Section 1324(b)(2) of title 31, United States Code, is amended by striking ``or'' before ``enacted'' and by inserting before the period at the end ``, or from section 35 of such Code''.
(d) Effective Date.--The amendments made by this section apply to taxable years beginning after December 31, 2001.
Subtitle B--Incentives for Employer-Provided Child Care
SEC. 411. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD
CARE ASSISTANCE.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business related credits) is amended by adding at the end the following:
``SEC. 45E. EMPLOYER-PROVIDED CHILD CARE CREDIT.
``(a) In General.--For purposes of section 38, the employer-provided child care credit determined under this section for the taxable year is an amount equal to the sum of--
``(1) 25 percent of the qualified child care expenditures, and
``(2) 10 percent of the qualified child care resource and referral expenditures,of the taxpayer for such taxable year.
``(b) Dollar Limitation.--The credit allowable under subsection (a) for any taxable year shall not exceed
$150,000.
``(c) Definitions.--For purposes of this section--
``(1) Qualified child care expenditure.--
``(A) In general.--The term `qualified child care expenditure' means any amount paid or incurred--
``(i) to acquire, construct, rehabilitate, or expand property--
``(I) which is to be used as part of a qualified child care facility of the taxpayer,
``(II) with respect to which a deduction for depreciation
(or amortization in lieu of depreciation) is allowable, and
``(III) which does not constitute part of the principal residence (within the meaning of section 121) of the taxpayer or any employee of the taxpayer,
``(ii) for the operating costs of a qualified child care facility of the taxpayer, including costs related to the training of employees, to scholarship programs, and to the providing of increased compensation to employees with higher levels of child care training,
``(iii) under a contract with a qualified child care facility to provide child care services to employees of the taxpayer, or
``(iv) to reimburse an employee for expenses for child care which enables the employee to be gainfully employed including expenses related to--
``(I) day care and before and after school care,
``(II) transportation associated with such care, and
``(III) before and after school and holiday programs including educational and recreational programs and camp programs.
``(B) Fair market value.--The term `qualified child care expenditures' shall not include expenses in excess of the fair market value of such care.
``(2) Qualified child care facility.--
``(A) In general.--The term `qualified child care facility' means a facility--
``(i) the principal use of which is to provide child care assistance, and
``(ii) which meets the requirements of all applicable laws and regulations of the State or local government in which it is located, including the licensing of the facility as a child care facility.Clause (i) shall not apply to a facility which is the principal residence (within the meaning of section 121) of the operator of the facility.
``(B) Special rules with respect to a taxpayer.--A facility shall not be treated as a qualified child care facility with respect to a taxpayer unless--
``(i) enrollment in the facility is open to employees of the taxpayer during the taxable year,
``(ii) if the facility is the principal trade or business of the taxpayer, at least 30 percent of the enrollees of such facility are dependents of employees of the taxpayer, and
``(iii) the use of such facility (or the eligibility to use such facility) does not discriminate in favor of employees of the taxpayer who are highly compensated employees (within the meaning of section 414(q)).
``(3) Qualified child care resource and referral expenditure.--The term `qualified child care resource and referral expenditure' means any amount paid or incurred under a contract to provide child care resource and referral services to an employee of the taxpayer.
``(d) Recapture of Acquisition and Construction Credit.--
``(1) In general.--If, as of the close of any taxable year, there is a recapture event with respect to any qualified child care facility of the taxpayer, then the tax of the taxpayer under this chapter for such taxable year shall be increased by an amount equal to the product of--
``(A) the applicable recapture percentage, and
``(B) the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted if the qualified child care expenditures of the taxpayer described in subsection (c)(1)(A) with respect to such facility had been zero.
``(2) Applicable recapture percentage.--
``(A) In general.--For purposes of this subsection, the applicable recapture percentage shall be determined from the following table:
The applicable
recapture
``If the recapture evpercentage is:
Years 1-3....................................................100
Year 4........................................................85
Year 5........................................................70
Year 6........................................................55
Year 7........................................................40
Year 8........................................................25
Years 9 and 10................................................10
Years 11 and thereafter........................................0.
``(B) Years.--For purposes of subparagraph (A), year 1 shall begin on the first day of the taxable year in which the qualified child care facility is placed in service by the taxpayer.
``(3) Recapture event defined.--For purposes of this subsection, the term `recapture event' means--
``(A) Cessation of operation.--The cessation of the operation of the facility as a qualified child care facility.
``(B) Change in ownership.--
``(i) In general.--Except as provided in clause (ii), the disposition of a taxpayer's interest in a qualified child care facility with respect to which the credit described in subsection (a) was allowable.
``(ii) Agreement to assume recapture liability.--Clause (i) shall not apply if the person acquiring such interest in the facility agrees in writing to assume the recapture liability of the person disposing of such interest in effect immediately before such disposition. In the event of such an assumption, the person acquiring the interest in the facility shall be treated as the taxpayer for purposes of assessing any recapture liability (computed as if there had been no change in ownership).
``(4) Special rules.--
``(A) Tax benefit rule.--The tax for the taxable year shall be increased under paragraph (1) only with respect to credits allowed by reason of this section which were used to reduce tax liability. In the case of credits not so used to reduce tax liability, the carryforwards and carrybacks under section 39 shall be appropriately adjusted.
``(B) No credits against tax.--Any increase in tax under this subsection shall not be treated as a tax imposed by this chapter for purposes of determining the amount of any credit under subpart A, B, or D of this part.
``(C) No recapture by reason of casualty loss.--The increase in tax under this subsection shall not apply to a cessation of operation of the facility as a qualified child care facility by reason of a casualty loss to the extent such loss is restored by reconstruction or replacement within a reasonable period established by the Secretary.
``(e) Special Rules.--For purposes of this section--
``(1) Aggregation rules.--All persons which are treated as a single employer under subsections (a) and (b) of section 52 shall be treated as a single taxpayer.
``(2) Pass-thru in the case of estates and trusts.--Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.
``(3) Allocation in the case of partnerships.--In the case of partnerships, the credit shall be allocated among partners under regulations prescribed by the Secretary.
``(f) No Double Benefit.--
``(1) Reduction in basis.--For purposes of this subtitle--
``(A) In general.--If a credit is determined under this section with respect to any property by reason of expenditures described in subsection (c)(1)(A), the basis of such property shall be reduced by the amount of the credit so determined.
``(B) Certain dispositions.--If, during any taxable year, there is a recapture amount determined with respect to any property the basis of which was reduced under subparagraph
(A), the basis of such property (immediately before the event resulting in such recapture) shall be increased by an amount equal to such recapture amount. For purposes of the preceding sentence, the term `recapture amount' means any increase in tax (or adjustment in carrybacks or carryovers) determined under subsection (d).
``(2) Other deductions and credits.--No deduction or credit shall be allowed under any other provision of this chapter with respect to the amount of the credit determined under this section.''.
(b) Conforming Amendments.--
(1) Section 38(b) of the Internal Revenue Code of 1986 is amended by striking ``plus'' at the end of paragraph (12), by striking the period at the end of paragraph (13) and inserting ``, plus'', and by adding at the end the following:
``(14) the employer-provided child care credit determined under section 45E.''.
(2) Subsection (d) of section 39 of such Code is amended by adding at the end the following new paragraph:
``(10) No carryback of employer-provided child care credit before january 1, 2002.--No portion of the unused business credit for any taxable year which is attributable to the credit under section 45E may be carried back to a taxable year ending before January 1, 2002.''.
(3) Subsection (c) of section 196 of such Code is amended by striking ``and'' at the end of paragraph (8), by striking the period at the end of paragraph (9) and inserting ``, and'', and by adding at the end the following new paragraph:
``(10) the employer-provided child care credit determined under section 45E(a).''.
(4) The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following:
``Sec. 45E. Employer-provided child care credit.''.
(5) Section 1016(a) of such Code is amended by striking
``and'' at the end of paragraph (26), by striking the period at the end of paragraph (27) and inserting ``, and'', and by adding at the end the following:
``(28) in the case of a facility with respect to which a credit was allowed under section 45E, to the extent provided in section 45E(f)(1).''.
(c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001.
TITLE V--EXPANDING FAMILY AND MEDICAL LEAVE
Subtitle A--Family Income to Respond to Significant Transitions
SEC. 501. SHORT TITLE.
This subtitle may be cited as the ``Family Income to Respond to Significant Transitions Insurance Act''.
SEC. 502. PURPOSES.
The purposes of this subtitle are--
(1) to establish a demonstration program that supports the efforts of States and political subdivisions to provide partial or full wage replacement, often referred to as FIRST insurance, to new parents so that the new parents are able to spend time with a new infant or newly adopted child, and to other employees; and
(2) to learn about the most effective mechanisms for providing the wage replacement assistance.
SEC. 503. DEFINITIONS.
In this subtitle:
(1) Secretary.--The term ``Secretary'' means the Secretary of Labor, acting after consultation with the Secretary of Health and Human Services.
(2) Son or daughter; state.--The terms ``son or daughter'' and ``State'' have the meanings given the terms in section 101 of the Family and Medical Leave Act of 1993 (29 U.S.C. 2611).
SEC. 504. DEMONSTRATION PROJECTS.
(a) Grants.--The Secretary shall make grants to eligible entities to pay for the Federal share of the cost of carrying out projects that assist families by providing, through various mechanisms, wage replacement for eligible individuals that are responding to caregiving needs resulting from the birth or adoption of a son or daughter or other family caregiving needs. The Secretary shall make the grants for periods of 5 years.
(b) Eligible Entities.--To be eligible to receive a grant under this section, an entity shall be a State or political subdivision of a State.
(c) Use of Funds.--
(1) In general.--An entity that receives a grant under this section may use the funds made available through the grant to provide partial or full wage replacement as described in subsection (a) to eligible individuals--
(A) directly;
(B) through an insurance program, such as a State temporary disability insurance program or the State unemployment compensation benefit program;
(C) through a private disability or other insurance plan, or another mechanism provided by a private employer; or
(D) through another mechanism.
(2) Administrative costs.--No entity may use more than 10 percent of the total funds made available through the grant during the 5-year period of the grant to pay for the administrative costs relating to a project described in subsection (a).
(d) Eligible Individuals.--To be eligible to receive wage replacement under subsection (a), an individual shall--
(1) meet such eligibility criteria as the eligible entity providing the wage replacement may specify in an application described in subsection (e); and
(2) be--
(A) an individual who is taking leave, under the Family and Medical Leave Act of 1993 (29 U.S.C. 2601 et seq.), other Federal, State, or local law, or a private plan, for a reason described in subparagraph (A) or (B) of section 102(a)(1) of the Family and Medical Leave Act of 1993 (29 U.S.C. 2612(a)(1));
(B) at the option of the eligible entity, an individual who--
(i) is taking leave, under that Act, other Federal, State, or local law, or a private plan, for a reason described in subparagraph (C) or (D) of section 102(a)(1) of the Family and Medical Leave Act of 1993 (29 U.S.C. 2612(a)(1)); or
(ii) leaves employment because the individual has elected to care for a son or daughter under age 1; or
(C) at the option of the eligible entity, an individual with other characteristics specified by the eligible entity in an application described in subsection (e).
(e) Application.--To be eligible to receive a grant under this section, an entity shall submit an application to the Secretary, at such time, in such manner, and containing such information as the Secretary may require, including, at a minimum--
(1) a plan for the project to be carried out with the grant;
(2) information demonstrating that the applicant consulted representatives of employers and employees, including labor organizations, in developing the plan;
(3) estimates of the costs and benefits of the project;
(4)(A) information on the number and type of families to be covered by the project, and the extent of such coverage in the area served under the grant; and
(B) information on any criteria or characteristics that the entity will use to determine whether an individual is eligible for wage replacement under subsection (a), as described in paragraphs (1) and (2)(C) of subsection (d);
(5) if the project will expand on State and private systems of wage replacement for eligible individuals, information on the manner in which the project will expand on the systems;
(6) information demonstrating the manner in which the wage replacement assistance provided through the project will assist families in which an individual takes leave as described in subsection (d)(1); and
(7) an assurance that the applicant will participate in efforts to evaluate the effectiveness of the project.
(f) Selection Criteria.--In selecting entities to receive grants for projects under this section, the Secretary shall--
(1) take into consideration--
(A) the scope of the proposed projects;
(B) the cost-effectiveness, feasibility, and financial soundness of the proposed projects;
(C) the extent to which the proposed projects would expand access to wage replacement in response to family caregiving needs, particularly for low-wage employees, in the area served by the grant; and
(D) the benefits that would be offered to families and children through the proposed projects; and
(2) to the extent feasible, select entities proposing projects that utilize diverse mechanisms, including expansion of State unemployment compensation benefit programs, and establishment or expansion of State temporary disability insurance programs, to provide the wage replacement.
(g) Federal Share.--
(1) In general.--The Federal share of the cost described in subsection (a) shall be--
(A) 50 percent for the first year of the grant period;
(B) 40 percent for the second year of that period;
(C) 30 percent for the third year of that period; and
(D) 20 percent for each subsequent year.
(2) Non-federal share.--The non-Federal share of the cost may be in cash or in kind, fairly evaluated, including plant, equipment, and services and may be provided from State, local, or private sources, or Federal sources other than this subtitle.
(h) Supplement Not Supplant.--Funds appropriated pursuant to the authority of this subtitle shall be used to supplement and not supplant other Federal, State, and local public funds and private funds expended to provide wage replacement.
(i) Effect on Existing Rights.--Nothing in this subtitle shall be construed to supersede, preempt, or otherwise infringe on the provisions of any collective bargaining agreement or any employment benefit program or plan that provides greater rights to employees than the rights established under this subtitle.
SEC. 505. EVALUATIONS AND REPORTS.
(a) Available Funds.--The Secretary shall use not more than 2 percent of the funds made available under section 5 to carry out this section.
(b) Evaluations.--The Secretary shall, directly or by contract, evaluate the effectiveness of projects carried out with grants made under section 5, including conducting--
(1) research relating to the projects, including research comparing--
(A) the scope of the projects, including the type of insurance or other wage replacement mechanism used, the method of financing used, the eligibility requirements, the level of the wage replacement benefit provided (such as the percentage of salary replaced), and the length of the benefit provided, for the projects;
(B) the utilization of the projects, including the characteristics of individuals who benefit from the projects, particularly low-wage workers, and factors that determine the ability of eligible individuals to obtain wage replacement through the projects; and
(C) the costs of and savings achieved by the projects, including the cost-effectiveness of the projects and their benefits for children and families;
(2) analysis of the overall need for wage replacement; and
(3) analysis of the impact of the projects on the overall availability of wage replacement.
(c) Reports.--
(1) Initial report.--Not later than 3 years after the beginning of the grant period for the first grant made under section 5, the Secretary shall prepare and submit to Congress a report that contains information resulting from the evaluations conducted under subsection (b).
(2) Subsequent reports.--Not later than 4 years after the beginning of that grant period, and annually thereafter, the Secretary shall prepare and submit to Congress a report that contains--
(A) information resulting from the evaluations conducted under subsection (b); and
(B) usage data for the demonstration projects, for the most recent year for which data are available.
SEC. 506. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this subtitle $400,000,000 for fiscal year 2002 and such sums as may be necessary for each subsequent fiscal year.
Subtitle B--Family Friendly Workplaces
SEC. 511. SHORT TITLE.
This subtitle may be cited as the ``Family and Medical Leave Fairness Act of 2001''.
SEC. 512. COVERAGE OF EMPLOYEES.
Paragraphs (2)(B)(ii) and (4)(A)(i) of section 101 of the Family and Medical Leave Act of 1993 (29 U.S.C. 2611(2)(B)(ii) and (4)(A)(i)) are amended by striking ``50'' each place it appears and inserting ``25''.
Subtitle C--Time for Schools
SEC. 521. SHORT TITLE.
This subtitle may be cited as the ``Time for Schools Act of 2001''.
SEC. 522. GENERAL REQUIREMENTS FOR LEAVE.
(a) Entitlement to Leave.--Section 102(a) of the Family and Medical Leave Act of 1993 (29 U.S.C. 2612(a)) is amended by adding at the end the following:
``(3) Entitlement to school involvement leave.--
``(A) In general.--Subject to section 103(f), an eligible employee shall be entitled to a total of 24 hours of leave during any 12-month period to participate in an academic activity of a school of a son or daughter of the employee, such as a parent-teacher conference or an interview for a school, or to participate in literacy training under a family literacy program.
``(B) Definitions.--In this paragraph:
``(i) Family literacy program.--The term `family literacy program' means a program of services that are of sufficient intensity in terms of hours, and of sufficient duration, to make sustainable changes in a family and that integrate all of the following activities:
``(I) Interactive literacy activities between parents and their sons and daughters.
``(II) Training for parents on how to be the primary teacher for their sons and daughters and full partners in the education of their sons and daughters.
``(III) Parent literacy training.
``(IV) An age-appropriate education program for sons and daughters.
``(ii) Literacy.--The term `literacy', used with respect to an individual, means the ability of the individual to speak, read, and write English, and compute and solve problems, at levels of proficiency necessary--
``(I) to function on the job, in the family of the individual, and in society;
``(II) to achieve the goals of the individual; and
``(III) to develop the knowledge potential of the individual.
``(iii) School.--The term `school' means an elementary school or secondary school (as such terms are defined in section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801)), a Head Start program assisted under the Head Start Act (42 U.S.C. 9831 et seq.), and a child care facility operated by a provider who meets the applicable State or local government licensing, certification, approval, or registration requirements, if any.
``(4) Limitation.--No employee may take more than a total of 12 workweeks of leave under paragraphs (1) and (3) during any 12-month period.''.
(b) Schedule.--Section 102(b)(1) of such Act (29 U.S.C. 2612(b)(1)) is amended by inserting after the second sentence the following: ``Leave under subsection (a)(3) may be taken intermittently or on a reduced leave schedule.''.
(c) Substitution of Paid Leave.--Section 102(d)(2)(A) of such Act (29 U.S.C. 2612(d)(2)(A)) is amended by inserting before the period the following: ``, or for leave provided under subsection (a)(3) for any part of the 24-hour period of such leave under such subsection''.
(d) Notice.--Section 102(e) of such Act (29 U.S.C. 2612(e)) is amended by adding at the end the following:
``(3) Notice for school involvement leave.--In any case in which the necessity for leave under subsection (a)(3) is foreseeable, the employee shall provide the employer with not less than 7 days' notice, before the date the leave is to begin, of the employee's intention to take leave under such subsection. If the necessity for the leave is not foreseeable, the employee shall provide such notice as is practicable.''.
(e) Certification.--Section 103 of such Act (29 U.S.C. 2613) is amended by adding at the end the following:
``(f) Certification for School Involvement Leave.--An employer may require that a request for leave under section 102(a)(3) be supported by a certification issued at such time and in such manner as the Secretary may by regulation prescribe.''.
SEC. 523. SCHOOL INVOLVEMENT LEAVE FOR CIVIL SERVICE
EMPLOYEES.
(a) Entitlement to Leave.--Section 6382(a) of title 5, United States Code, is amended by adding at the end the following:
``(3)(A) Subject to section 6383(f), an employee shall be entitled to a total of 24 hours of leave during any 12-month period to participate in an academic activity of a school of a son or daughter of the employee, such as a parent-teacher conference or an interview for a school, or to participate in literacy training under a family literacy program.
``(B) In this paragraph:
``(i) The term `family literacy program' means a program of services that are of sufficient intensity in terms of hours, and of sufficient duration, to make sustainable changes in a family and that integrate all of the following activities:
``(I) Interactive literacy activities between parents and their sons and daughters.
``(II) Training for parents on how to be the primary teacher for their sons and daughters and full partners in the education of their sons and daughters.
``(III) Parent literacy training.
``(IV) An age-appropriate education program for sons and daughters.
``(ii) The term `literacy', used with respect to an individual, means the ability of the individual to speak, read, and write English, and compute and solve problems, at levels of proficiency necessary--
``(I) to function on the job, in the family of the individual, and in society;
``(II) to achieve the goals of the individual; and
``(III) to develop the knowledge potential of the individual.
``(iii) The term `school' means an elementary school or secondary school (as such terms are defined in section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801)), a Head Start program assisted under the Head Start Act (42 U.S.C. 9831 et seq.), and a child care facility operated by a provider who meets the applicable State or local government licensing, certification, approval, or registration requirements, if any.
``(4) No employee may take more than a total of 12 workweeks of leave under paragraphs (1) and (3) during any 12-month period.''.
(b) Schedule.--Section 6382(b)(1) of such title is amended by inserting after the second sentence the following: ``Leave under subsection (a)(3) may be taken intermittently or on a reduced leave schedule.''.
(c) Substitution of Paid Leave.--Section 6382(d) of such title is amended by inserting before ``, except'' the following: ``, or for leave provided under subsection (a)(3) any of the employee's accrued or accumulated annual leave under subchapter I for any part of the 24-hour period of such leave under such subsection''.
(d) Notice.--Section 6382(e) of such title is amended by adding at the end the following:
``(3) In any case in which the necessity for leave under subsection (a)(3) is foreseeable, the employee shall provide the employing agency with not less than 7 days' notice, before the date the leave is to begin, of the employee's intention to take leave under such subsection. If the necessity for the leave is not foreseeable, the employee shall provide such notice as is practicable.''.
(e) Certification.--Section 6383 of such title is amended by adding at the end the following:
``(f) An employing agency may require that a request for leave under section 6382(a)(3) be supported by a certification issued at such time and in such manner as the Office of Personnel Management may by regulation prescribe.''.
SEC. 524. EFFECTIVE DATE.
This subtitle takes effect 120 days after the date of enactment of this Act.
Subtitle D--Employment Protection for Battered Women
SEC. 531. ENTITLEMENT TO LEAVE FOR ADDRESSING DOMESTIC
VIOLENCE FOR NON-FEDERAL EMPLOYEES.
(a) Definitions.--Section 101 of the Family and Medical Leave Act of 1993 (29 U.S.C. 2611) is amended by adding at the end the following:
``(14) Addressing domestic violence and its effects.--The term `addressing domestic violence and its effects' means--
``(A) being unable to attend or perform work due to an incident of domestic violence;
``(B) seeking medical attention for or recovering from injuries caused by domestic violence;
``(C) seeking legal assistance or remedies, including communicating with the police or an attorney, or participating in any legal proceeding, related to domestic violence;
``(D) obtaining services from a domestic violence shelter or program or rape crisis center as a result of domestic violence;
``(E) obtaining psychological counseling related to experiences of domestic violence;
``(F) participating in safety planning and other actions to increase safety from future domestic violence, including temporary or permanent relocation; and
``(G) participating in any other activity necessitated by domestic violence that must be undertaken during the hours of employment involved.
``(15) Domestic violence.--The term `domestic violence' means domestic violence, and dating violence, as such terms are defined in section 2105 of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796hh-4).''.
(b) Leave Requirement.--Section 102 of the Family and Medical Leave Act of 1993 (29 U.S.C. 2612) is amended--
(1) in subsection (a)(1), by adding at the end the following:
``(E) In order to care for the son, daughter, or parent of the employee, if such son, daughter, or parent is addressing domestic violence and its effects.
``(F) Because the employee is addressing domestic violence and its effects, which make the employee unable to perform the functions of the position of such employee.'';
(2) in subsection (b), by adding at the end the following:
``(3) Domestic violence.--Leave under subparagraph (E) or
(F) of subsection (a)(1) may be taken by an eligible employee intermittently or on a reduced leave schedule. The taking of leave intermittently or on a reduced leave schedule pursuant to this paragraph shall not result in a reduction in the total amount of leave to which the employee is entitled under subsection (a) beyond the amount of leave actually taken.''; and
(3) in subsection (d)(2)(B), by striking ``(C) or (D)'' and inserting ``(C), (D), (E), or (F)''.
(c) Certification.--Section 103 of the Family and Medical Leave Act of 1993 (29 U.S.C. 2613), as amended by section 522(e), is further amended--
(1) in the title of the section, by inserting before the period the following: ``; CONFIDENTIALITY''; and
(2) by adding at the end the following:
``(g) Domestic Violence.--In determining if an employee meets the requirements of subparagraph (E) or (F) of section 102(a)(1), the employer of an employee may require the employee to provide--
``(1) a written statement describing the domestic violence and its effects;
``(2) documentation of the domestic violence involved, such as a police or court record, or documentation from a shelter worker, an employee of a domestic violence program, an attorney, a member of the clergy, or a medical or other professional, from whom the employee has sought assistance in addressing domestic violence and its effects; or
``(3) other corroborating evidence, such as a statement from any other individual with knowledge of the circumstances that provide the basis for the claim of domestic violence, or physical evidence of domestic violence, such as a photograph, torn or bloody clothing, or any other damaged property.
``(h) Confidentiality.--All evidence provided to the employer under subsection (g) of domestic violence experienced by an employee or the son, daughter, or parent of an employee, including a statement of an employee, any other documentation or corroborating evidence, and the fact that an employee has requested leave for the purpose of addressing, or caring for a son, daughter, or parent who is addressing, domestic violence and its effects, shall be retained in the strictest confidence by the employer, except to the extent that disclosure is requested, or consented to, by the employee for the purpose of--
``(1) protecting the safety of the employee or a family member or co-worker of the employee; or
``(2) assisting in documenting domestic violence for a court or agency.''.
SEC. 532. ENTITLEMENT TO LEAVE FOR ADDRESSING DOMESTIC
VIOLENCE FOR FEDERAL EMPLOYEES.
(a) Definitions.--Section 6381 of title 5, United States Code, is amended--
(1) at the end of paragraph (5), by striking ``and'';
(2) in paragraph (6), by striking the period and inserting a semicolon; and
(3) by adding at the end the following:
``(7) the term `addressing domestic violence and its effects' has the meaning given the term in section 101 of the Family and Medical Leave Act of 1993 (29 U.S.C. 2611); and
``(8) the term `domestic violence' means domestic violence, and dating violence, as such terms are defined in section 2105 of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796hh-4).''.
(b) Leave Requirement.--Section 6382 of title 5, United States Code, is amended--
(1) in subsection (a)(1), by adding at the end the following:
``(E) In order to care for the son, daughter, or parent of the employee, if such son, daughter, or parent is addressing domestic violence and its effects.
``(F) Because the employee is addressing domestic violence and its effects, which make the employee unable to perform the functions of the position of such employee.'';
(2) in subsection (b), by adding at the end the following:
``(3) Domestic violence.--Leave under subparagraph (E) or
(F) of subsection (a)(1) may be taken by an employee intermittently or on a reduced leave schedule. The taking of leave intermittently or on a reduced leave schedule pursuant to this paragraph shall not result in a reduction in the total amount of leave to which the employee is entitled under subsection (a) beyond the amount of leave actually taken.''; and
(3) in subsection (d), by striking ``(C), or (D)'' and inserting ``(C), (D), (E), or (F)''.
(c) Certification.--Section 6383 of title 5, United States Code, as amended by section 523(e), is further amended--
(1) in the title of the section, by adding at the end the following: ``; CONFIDENTIALITY''; and
(2) by adding at the end the following:
``(g) In determining if an employee meets the requirements of subparagraph (E) or (F) of section 6382(a)(1), the employing agency of an employee may require the employee to provide--
``(1) a written statement describing the domestic violence and its effects;
``(2) documentation of the domestic violence involved, such as a police or court record, or documentation from a shelter worker, an employee of a domestic violence program, an attorney, a member of the clergy, or a medical or other professional, from whom the employee has sought assistance in addressing domestic violence and its effects; or
``(3) other corroborating evidence, such as a statement from any other individual with knowledge of the circumstances that provide the basis for the claim of domestic violence, or physical evidence of domestic violence, such as a photograph, torn or bloody clothing, or other damaged property.
``(h) All evidence provided to the employing agency under subsection (g) of domestic violence experienced by an employee or the son, daughter, or parent of an employee, including a statement of an employee, any other documentation or corroborating evidence, and the fact that an employee has requested leave for the purpose of addressing, or caring for a son, daughter, or parent who is addressing, domestic violence and its effects, shall be retained in the strictest confidence by the employing agency, except to the extent that disclosure is requested, or consented to, by the employee for the purpose of--
``(1) protecting the safety of the employee or a family member or co-worker of the employee; or
``(2) assisting in documenting domestic violence for a court or agency.''.
SEC. 533. EXISTING LEAVE USABLE FOR DOMESTIC VIOLENCE.
(a) Definitions.--In this section:
(1) Addressing domestic violence and its effects.--The term
``addressing domestic violence and its effects'' has the meaning given the term in section 101 of the Family and Medical Leave Act of 1993 (29 U.S.C. 2611), as amended in section 531(a).
(2) Employee.--The term ``employee'' means any person employed by an employer. In the case of an individual employed by a public agency, such term means an individual employed as described in section 3(e) of the Fair Labor Standards Act of 1938 (29 U.S.C. 203(e)).
(3) Employer.--The term ``employer''--
(A) means any person engaged in commerce or in any industry or activity affecting commerce who employs individuals, if such person is also subject to the Family and Medical Leave Act of 1993 (29 U.S.C. 2601 et seq.) or to any provision of a State or local law, collective bargaining agreement, or employment benefits program or plan, addressing paid or unpaid leave from employment (including family, medical, sick, annual, personal, or similar leave); and
(B) includes any person acting directly or indirectly in the interest of an employer in relation to any employee, and includes a public agency, who is subject to a law, agreement, program, or plan described in subparagraph (A), but does not include any labor organization (other than when acting as an employer) or anyone acting in the capacity of officer or agent of such labor organization.
(4) Employment benefits.--The term ``employment benefits'' has the meaning given the term in section 101 of the Family and Medical Leave Act of 1993 (29 U.S.C. 2611).
(5) Parent; son or daughter.--The terms ``parent'' and
``son or daughter'' have the meanings given the terms in section 101 of the Family and Medical Leave Act of 1993 (29 U.S.C. 2611).
(6) Public agency.--The term ``public agency'' has the meaning given the term in section 3 of the Fair Labor Standards Act of 1938 (29 U.S.C. 203).
(b) Use of Existing Leave.--An employee who is entitled to take paid or unpaid leave (including family, medical, sick, annual, personal, or similar leave) from employment, pursuant to State or local law, a collective bargaining agreement, or an employment benefits program or plan, shall be permitted to use such leave for the purpose of addressing domestic violence and its effects, or for the purpose of caring for a son or daughter or parent of the employee, if such son or daughter or parent is addressing domestic violence and its effects.
(c) Certification.--In determining whether an employee qualifies to use leave as described in subsection (b), an employer may require a written statement, documentation of domestic violence, or corroborating evidence consistent with section 103(g) of the Family and Medical Leave Act of 1993
(29 U.S.C. 2613(g)), as amended by section 531(c).
(d) Confidentiality.--All evidence provided to the employer under subsection (c) of domestic violence experienced by an employee or the son or daughter or parent of the employee, including a statement of an employee, any other documentation or corroborating evidence, and the fact that an employee has requested leave for the purpose of addressing, or caring for a son or daughter or parent who is addressing, domestic violence and its effects, shall be retained in the strictest confidence by the employer, except to the extent that disclosure is requested, or consented to, by the employee for the purpose of--
(1) protecting the safety of the employee or a family member or co-worker of the employee; or
(2) assisting in documenting domestic violence for a court or agency.
(e) Prohibited Acts.--
(1) Interference with rights.--
(A) Exercise of rights.--It shall be unlawful for any employer to interfere with, restrain, or deny the exercise of or the attempt to exercise, any right provided under this section.
(B) Discrimination.--It shall be unlawful for any employer to discharge or in any other manner discriminate against an individual for opposing any practice made unlawful by this section.
(2) Interference with proceedings or inquiries.--It shall be unlawful for any person to discharge or in any other manner discriminate against any individual because such individual--
(A) has filed any charge, or had instituted or caused to be instituted any proceeding, under or related to this section;
(B) has given, or is about to give, any information in connection with any inquiry or proceeding relating to any right provided under this section; or
(C) has testified, or is about to testify, in any inquiry or proceeding relating to any right provided under this section.
(f) Enforcement.--
(1) Public enforcement.--The Secretary of Labor shall have the powers set forth in subsections (b), (c), (d), and (e) of section 107 of the Family and Medical Leave Act of 1993 (29 U.S.C. 2617) for the purpose of public agency enforcement of any alleged violation of subsection (e) against any employer.
(2) Private enforcement.--The remedies and procedures set forth in section 107(a) of the Family and Medical Leave Act of 1993 (29 U.S.C. 2617(a)) shall be the remedies and procedures pursuant to which an employee may initiate a legal action against an employer for alleged violations of subsection (e).
(3) References.--For purposes of paragraph (1) and (2), references in section 107 of the Family and Medical Leave Act of 1993 to section 105 of such Act shall be considered to be references to subsection (e).
(4) Employer liability under other laws.--Nothing in this section shall be construed to limit the liability of an employer to an employee for harm suffered relating to the employee's experience of domestic violence pursuant to any other Federal or State law, including a law providing for a legal remedy.
______
By Mr. DASCHLE (for himself, Mr. Kennedy, Mr. Lieberman, Mr.
Leahy, Mr. Biden, Mr. Feingold, Mr. Schumer, Mr. Durbin, Mr.
Akaka, Mrs. Boxer, Mr. Breaux, Mrs. Clinton, Mr. Corzine, Mr.
Dayton, Mr. Edwards, Mr. Harkin, Mr. Levin, Ms. Mikulski, Mr.
Rockefeller, and Mr. Wyden):
S. 19. A bill to protect the civil rights of all Americans, and for other purposes; to the Committee on the Judiciary.
protecting civil rights for all americans act
Mr. DASCHLE. Mr. President, I ask unanimous consent that the text be printed in the Record.
There being no objection the bill was ordered to be printed in the Record as follows:
S. 19
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Protecting Civil Rights for All Americans Act''.
(b) Table of Contents.--The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I--LOCAL LAW ENFORCEMENT ENHANCEMENT ACT OF 2001
Sec. 101. Short title.
Sec. 102. Findings.
Sec. 103. Definition of hate crime.
Sec. 104. Support for criminal investigations and prosecutions by State and local law enforcement officials.
Sec. 105. Grant program.
Sec. 106. Authorization for additional personnel to assist State and local law enforcement.
Sec. 107. Prohibition of certain hate crime acts.
Sec. 108. Duties of Federal sentencing commission.
Sec. 109. Statistics.
Sec. 110. Severability.
TITLE II--TRAFFIC STOPS STATISTICS STUDY
Sec. 201. Short title.
Sec. 202. Attorney General to conduct study.
Sec. 203. Grant program.
Sec. 204. Limitation on use of data.
Sec. 205. Definitions.
Sec. 206. Authorization of appropriations.
TITLE III--SUPPORTING INDIGENT REPRESENTATION
Sec. 301. Findings.
Sec. 302. Authorization of appropriations.
TITLE IV--GENETIC NONDISCRIMINATION IN HEALTH INSURANCE AND EMPLOYMENT
Subtitle A--Prohibition of Health Insurance Discrimination on the Basis of Predictive Genetic Information
Sec. 401. Amendments to Employee Retirement Income Security Act of
1974.
Sec. 402. Amendments to the Public Health Service Act.
Sec. 403. Amendments to Internal Revenue Code of 1986.
Sec. 404. Amendments to title XVIII of the Social Security Act relating to medigap.
Subtitle B--Prohibition of Employment Discrimination on the Basis of
Predictive Genetic Information
Sec. 411. Definitions.
Sec. 412. Employer practices.
Sec. 413. Employment agency practices.
Sec. 414. Labor organization practices.
Sec. 415. Training programs. Sec. 416. Maintenance and disclosure of predictive genetic information.
Sec. 417. Civil action.
Sec. 418. Construction.
Sec. 419. Authorization of appropriations.
Sec. 420. Effective date.
TITLE V--EMPLOYMENT NONDISCRIMINATION
Sec. 501. Short title.
Sec. 502. Purposes.
Sec. 503. Definitions.
Sec. 504. Discrimination prohibited.
Sec. 505. Retaliation and coercion prohibited.
Sec. 506. Benefits.
Sec. 507. Collection of statistics prohibited.
Sec. 508. Quotas and preferential treatment prohibited.
Sec. 509. Religious exemption.
Sec. 510. Nonapplication to members of the Armed Forces; veterans' preferences.
Sec. 511. Construction.
Sec. 512. Enforcement.
Sec. 513. State and Federal immunity.
Sec. 514. Attorneys' fees.
Sec. 515. Posting notices.
Sec. 516. Regulations.
Sec. 517. Relationship to other laws.
Sec. 518. Severability.
Sec. 519. Effective date.
TITLE VI--PROMOTING CIVIL RIGHTS ENFORCEMENT
Sec. 601. Establishment of the National Task Force on Violence Against
Health Care Providers.
Sec. 602. Increase in funding for enforcing civil rights laws.
TITLE I--LOCAL LAW ENFORCEMENT ENHANCEMENT ACT OF 2001
SEC. 101. SHORT TITLE.
This title may be cited as the ``Local Law Enforcement Enhancement Act of 2001''.
SEC. 102. FINDINGS.
Congress makes the following findings:
(1) The incidence of violence motivated by the actual or perceived race, color, religion, national origin, gender, sexual orientation, or disability of the victim poses a serious national problem.
(2) Such violence disrupts the tranquility and safety of communities and is deeply divisive.
(3) State and local authorities are now and will continue to be responsible for prosecuting the overwhelming majority of violent crimes in the United States, including violent crimes motivated by bias. These authorities can carry out their responsibilities more effectively with greater Federal assistance.
(4) Existing Federal law is inadequate to address this problem.
(5) The prominent characteristic of a violent crime motivated by bias is that it devastates not just the actual victim and the victim's family and friends, but frequently savages the community sharing the traits that caused the victim to be selected.
(6) Such violence substantially affects interstate commerce in many ways, including--
(A) by impeding the movement of members of targeted groups and forcing such members to move across State lines to escape the incidence or risk of such violence; and
(B) by preventing members of targeted groups from purchasing goods and services, obtaining or sustaining employment or participating in other commercial activity.
(7) Perpetrators cross State lines to commit such violence.
(8) Channels, facilities, and instrumentalities of interstate commerce are used to facilitate the commission of such violence.
(9) Such violence is committed using articles that have traveled in interstate commerce.
(10) For generations, the institutions of slavery and involuntary servitude were defined by the race, color, and ancestry of those held in bondage. Slavery and involuntary servitude were enforced, both prior to and after the adoption of the 13th amendment to the Constitution of the United States, through widespread public and private violence directed at persons because of their race, color, or ancestry, or perceived race, color, or ancestry. Accordingly, eliminating racially motivated violence is an important means of eliminating, to the extent possible, the badges, incidents, and relics of slavery and involuntary servitude.
(11) Both at the time when the 13th, 14th, and 15th amendments to the Constitution of the United States were adopted, and continuing to date, members of certain religious and national origin groups were and are perceived to be distinct ``races''. Thus, in order to eliminate, to the extent possible, the badges, incidents, and relics of slavery, it is necessary to prohibit assaults on the basis of real or perceived religions or national origins, at least to the extent such religions or national origins were regarded as races at the time of the adoption of the 13th, 14th, and 15th amendments to the Constitution of the United States.
(12) Federal jurisdiction over certain violent crimes motivated by bias enables Federal, State, and local authorities to work together as partners in the investigation and prosecution of such crimes.
(13) The problem of crimes motivated by bias is sufficiently serious, widespread, and interstate in nature as to warrant Federal assistance to States and local jurisdictions.
SEC. 103. DEFINITION OF HATE CRIME.
In this title, the term ``hate crime'' has the same meaning as in section 280003(a) of the Violent Crime Control and Law Enforcement Act of 1994 (28 U.S.C. 994 note).
SEC. 104. SUPPORT FOR CRIMINAL INVESTIGATIONS AND
PROSECUTIONS BY STATE AND LOCAL LAW ENFORCEMENT
OFFICIALS.
(a) Assistance Other Than Financial Assistance.--
(1) In general.--At the request of a law enforcement official of a State or Indian tribe, the Attorney General may provide technical, forensic, prosecutorial, or any other form of assistance in the criminal investigation or prosecution of any crime that--
(A) constitutes a crime of violence (as defined in section 16 of title 18, United States Code);
(B) constitutes a felony under the laws of the State or Indian tribe; and
(C) is motivated by prejudice based on the victim's race, color, religion, national origin, gender, sexual orientation, or disability or is a violation of the hate crime laws of the State or Indian tribe.
(2) Priority.--In providing assistance under paragraph (1), the Attorney General shall give priority to crimes committed by offenders who have committed crimes in more than 1 State and to rural jurisdictions that have difficulty covering the extraordinary expenses relating to the investigation or prosecution of the crime.
(b) Grants.--
(1) In general.--The Attorney General may award grants to assist State, local, and Indian law enforcement officials with the extraordinary expenses associated with the investigation and prosecution of hate crimes. In implementing the grant program, the Office of Justice Programs shall work closely with the funded jurisdictions to ensure that the concerns and needs of all affected parties, including community groups and schools, colleges, and universities, are addressed through the local infrastructure developed under the grants.
(2) Application.--
(A) In general.--Each State desiring a grant under this subsection shall submit an application to the Attorney General at such time, in such manner, and accompanied by or containing such information as the Attorney General shall reasonably require.
(B) Date for submission.--Applications submitted pursuant to subparagraph (A) shall be submitted during the 60-day period beginning on a date that the Attorney General shall prescribe.
(C) Requirements.--A State or political subdivision of a State or tribal official applying for assistance under this subsection shall--
(i) describe the extraordinary purposes for which the grant is needed;
(ii) certify that the State, political subdivision, or Indian tribe lacks the resources necessary to investigate or prosecute the hate crime;
(iii) demonstrate that, in developing a plan to implement the grant, the State, political subdivision, or tribal official has consulted and coordinated with nonprofit, nongovernmental victim services programs that have experience in providing services to victims of hate crimes; and
(iv) certify that any Federal funds received under this subsection will be used to supplement, not supplant, non-Federal funds that would otherwise be available for activities funded under this subsection.
(3) Deadline.--An application for a grant under this subsection shall be approved or disapproved by the Attorney General not later than 30 business days after the date on which the Attorney General receives the application.
(4) Grant amount.--A grant under this subsection shall not exceed $100,000 for any single jurisdiction within a 1 year period.
(5) Report.--Not later than December 31, 2002, the Attorney General shall submit to Congress a report describing the applications submitted for grants under this subsection, the award of such grants, and the purposes for which the grant amounts were expended.
(6) Authorization of appropriations.--There is authorized to be appropriated to carry out this subsection $5,000,000 for each of fiscal years 2002 and 2003.
SEC. 105. GRANT PROGRAM.
(a) Authority To Make Grants.--The Office of Justice Programs of the Department of Justice shall award grants, in accordance with such regulations as the Attorney General may prescribe, to State and local programs designed to combat hate crimes committed by juveniles, including programs to train local law enforcement officers in identifying, investigating, prosecuting, and preventing hate crimes.
(b) Authorization of Appropriations.--There are authorized to be appropriated such sums as may be necessary to carry out this section.
SEC. 106. AUTHORIZATION FOR ADDITIONAL PERSONNEL TO ASSIST
STATE AND LOCAL LAW ENFORCEMENT.
There are authorized to be appropriated to the Department of the Treasury and the Department of Justice, including the Community Relations Service, for fiscal years 2002, 2003, and 2004 such sums as are necessary to increase the number of personnel to prevent and respond to alleged violations of section 249 of title 18, United States Code (as added by this title).
SEC. 107. PROHIBITION OF CERTAIN HATE CRIME ACTS.
(a) In General.--Chapter 13 of title 18, United States Code, is amended by adding at the end the following:
``Sec. 249. Hate crime acts
``(a) In General.--
``(1) Offenses involving actual or perceived race, color, religion, or national origin.--Whoever, whether or not acting under color of law, willfully causes bodily injury to any person or, through the use of fire, a firearm, or an explosive or incendiary device, attempts to cause bodily injury to any person, because of the actual or perceived race, color, religion, or national origin of any person--
``(A) shall be imprisoned not more than 10 years, fined in accordance with this title, or both; and
``(B) shall be imprisoned for any term of years or for life, fined in accordance with this title, or both, if--
``(i) death results from the offense; or
``(ii) the offense includes kidnaping or an attempt to kidnap, aggravated sexual abuse or an attempt to commit aggravated sexual abuse, or an attempt to kill.
``(2) Offenses involving actual or perceived religion, national origin, gender, sexual orientation, or disability.--
``(A) In general.--Whoever, whether or not acting under color of law, in any circumstance described in subparagraph
(B), willfully causes bodily injury to any person or, through the use of fire, a firearm, or an explosive or incendiary device, attempts to cause bodily injury to any person, because of the actual or perceived religion, national origin, gender, sexual orientation, or disability of any person--
``(i) shall be imprisoned not more than 10 years, fined in accordance with this title, or both; and
``(ii) shall be imprisoned for any term of years or for life, fined in accordance with this title, or both, if--
``(I) death results from the offense; or
``(II) the offense includes kidnaping or an attempt to kidnap, aggravated sexual abuse or an attempt to commit aggravated sexual abuse, or an attempt to kill.
``(B) Circumstances described.--For purposes of subparagraph (A), the circumstances described in this subparagraph are that--
``(i) the conduct described in subparagraph (A) occurs during the course of, or as the result of, the travel of the defendant or the victim--
``(I) across a State line or national border; or
``(II) using a channel, facility, or instrumentality of interstate or foreign commerce;
``(ii) the defendant uses a channel, facility, or instrumentality of interstate or foreign commerce in connection with the conduct described in subparagraph (A);
``(iii) in connection with the conduct described in subparagraph (A): the defendant employs a firearm, explosive or incendiary device, or other weapon that has traveled in interstate or foreign commerce; or
``(iv) the conduct described in subparagraph (A)--
``(I) interferes with commercial or other economic activity in which the victim is engaged at the time of the conduct; or
``(II) otherwise affects interstate or foreign commerce.
``(b) Certification Requirement.--No prosecution of any offense described in this subsection may be undertaken by the United States, except under the certification in writing of the Attorney General, the Deputy Attorney General, the Associate Attorney General, or any Assistant Attorney General specially designated by the Attorney General that--
``(1) he or she has reasonable cause to believe that the actual or perceived race, color, religion, national origin, gender, sexual orientation, or disability of any person was a motivating factor underlying the alleged conduct of the defendant; and
``(2) he or his designee or she or her designee has consulted with State or local law enforcement officials regarding the prosecution and determined that--
``(A) the State does not have jurisdiction or does not intend to exercise jurisdiction;
``(B) the State has requested that the Federal Government assume jurisdiction;
``(C) the State does not object to the Federal Government assuming jurisdiction; or
``(D) the verdict or sentence obtained pursuant to State charges left demonstratively unvindicated the Federal interest in eradicating bias-motivated violence.
``(c) Definitions.--In this section--
``(1) the term `explosive or incendiary device' has the meaning given the term in section 232 of this title; and
``(2) the term `firearm' has the meaning given the term in section 921(a) of this title.''.
(b) Technical and Conforming Amendment.--The analysis for chapter 13 of title 18, United States Code, is amended by adding at the end the following:
``249. Hate crime acts.''.
SEC. 108. DUTIES OF FEDERAL SENTENCING COMMISSION.
(a) Amendment of Federal Sentencing Guidelines.--Pursuant to its authority under section 994 of title 28, United States Code, the United States Sentencing Commission shall study the issue of adult recruitment of juveniles to commit hate crimes and shall, if appropriate, amend the Federal sentencing guidelines to provide sentencing enhancements (in addition to the sentencing enhancement provided for the use of a minor during the commission of an offense) for adult defendants who recruit juveniles to assist in the commission of hate crimes.
(b) Consistency With Other Guidelines.--In carrying out this section, the United States Sentencing Commission shall--
(1) ensure that there is reasonable consistency with other Federal sentencing guidelines; and
(2) avoid duplicative punishments for substantially the same offense.
SEC. 109. STATISTICS.
Subsection (b)(1) of the first section of the Hate Crimes Statistics Act (28 U.S.C. 534 note) is amended by inserting
``gender,'' after ``race,''.
SEC. 110. SEVERABILITY.
If any provision of this title, an amendment made by this title, or the application of such provision or amendment to any person or circumstance is held to be unconstitutional, the remainder of this title, the amendments made by this title, and the application of the provisions of such to any person or circumstance shall not be affected thereby.
TITLE II--TRAFFIC STOPS STATISTICS STUDY
SEC. 201. SHORT TITLE.
This title may be cited as the ``Traffic Stops Statistics Study Act of 2001''.
SEC. 202. ATTORNEY GENERAL TO CONDUCT STUDY.
(a) Study.--
(1) In general.--The Attorney General shall conduct a nationwide study of stops for traffic violations by law enforcement officers.
(2) Initial analysis.--The Attorney General shall perform an initial analysis of existing data, including complaints alleging and other information concerning traffic stops motivated by race and other bias.
(3) Data collection.--After completion of the initial analysis under paragraph (2), the Attorney General shall then gather the following data on traffic stops from a nationwide sample of jurisdictions, including jurisdictions identified in the initial analysis:
(A) The traffic infraction alleged to have been committed that led to the stop.
(B) Identifying characteristics of the driver stopped, including the race, gender, ethnicity, and approximate age of the driver.
(C) Whether immigration status was questioned, immigration documents were requested, or an inquiry was made to the Immigration and Naturalization Service with regard to any person in the vehicle.
(D) The number of individuals in the stopped vehicle.
(E) Whether a search was instituted as a result of the stop and whether consent was requested for the search.
(F) Any alleged criminal behavior by the driver that justified the search.
(G) Any items seized, including contraband or money.
(H) Whether any warning or citation was issued as a result of the stop.
(I) Whether an arrest was made as a result of either the stop or the search and the justification for the arrest.
(J) The duration of the stop.
(b) Reporting.--Not later than 120 days after the date of enactment of this Act, the Attorney General shall report the results of its initial analysis to Congress, and make such report available to the public, and identify the jurisdictions for which the study is to be conducted. Not later than 2 years after the date of the enactment of this Act, the Attorney General shall report the results of the data collected under this title to Congress, a copy of which shall also be published in the Federal Register.
SEC. 203. GRANT PROGRAM.
In order to complete the study described in section 202, the Attorney General may provide grants to law enforcement agencies to collect and submit the data described in section 202 to the appropriate agency as designated by the Attorney General.
SEC. 204. LIMITATION ON USE OF DATA.
Information released pursuant to section 202 shall not reveal the identity of any individual who is stopped or any law enforcement officer involved in a traffic stop.
SEC. 205. DEFINITIONS.
In this title:
(1) Law enforcement agency.--The term ``law enforcement agency'' means an agency of a State or political subdivision of a State, authorized by law or by a Federal, State, or local government agency to engage in or supervise the prevention, detection, or investigation of violations of criminal laws, or a federally recognized Indian tribe.
(2) Indian tribe.--The term ``Indian tribe'' means any Indian or Alaska Native tribe, band, nation, pueblo, village, or community that the Secretary of the Interior acknowledges to exist as an Indian tribe.
SEC. 206. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums as may be necessary to carry out this title.
TITLE III--SUPPORTING INDIGENT REPRESENTATION
SEC. 301. FINDINGS.
Congress finds the following:
(1) There is a need to encourage equal access for individuals to the system of justice in the United States.
(2) There is a need to encourage the provision of high quality legal assistance for persons who would otherwise be unable to afford legal counsel.
(3) Legal Services Corporation programs serve clients with cases concerning housing, family law, income maintenance, consumer issues, and employment.
(4) For years the Federal resources available to the Legal Services Corporation have eroded. Nearly half of all people who applied for assistance from local Legal Services Corporation programs have been turned away in recent years.
(5) Congress must adequately fund Legal Services Corporation programs to preserve the strength of the programs.
SEC. 302. AUTHORIZATION OF APPROPRIATIONS.
Section 1010(a) of the Legal Services Corporation Act (42 U.S.C. 2996i(a)) is amended to read as follows:
``(a) There are authorized to be appropriated for the purpose of carrying out the activities of the Corporation,
$400,000,000 for fiscal year 2002.''.
TITLE IV--GENETIC NONDISCRIMINATION IN HEALTH INSURANCE AND EMPLOYMENT
Subtitle A--Prohibition of Health Insurance Discrimination on the Basis of Predictive Genetic Information
SEC. 401. AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974.
(a) Prohibition of Health Insurance Discrimination on the Basis of Genetic Services or Predictive Genetic Information.--
(1) No enrollment restriction for genetic services.--Section 702(a)(1)(F) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1182(a)(1)(F)) is amended by inserting before the period ``(or information about a request for or the receipt of genetic services by such individual or family member of such individual)''.
(2) No discrimination in group rate based on predictive genetic information.--
(A) In general.--Subpart B of Part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185 et seq.) is amended by adding at the end the following:
``SEC. 714. PROHIBITING DISCRIMINATION AGAINST GROUPS ON THE
BASIS OF PREDICTIVE GENETIC INFORMATION.
``A group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, shall not deny eligibility to a group or adjust premium or contribution rates for a group on the basis of predictive genetic information concerning an individual in the group (or information about a request for or the receipt of genetic services by such individual or family member of such individual).''.
(B) Conforming amendments.--
(i) Section 702(b)(2)(A) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1182(b)) is amended to read as follows:
``(A) to restrict the amount that an employer may be charged for coverage under a group health plan, except as provided in section 714; or''.
(ii) Section 732(a) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1191a(a)) is amended by striking ``section 711'' and inserting ``subsections
(a)(1)(F), (b) (with respect to cases relating to genetic information or information about a request or receipt of genetic services by an individual or family member of such individual), (c), (d), (e), (f), or (g) of section 702, section 711 and section 714''.
(b) Limitations on Genetic Testing and on Collection and Disclosure of Predictive Genetic Information.--Section 702 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1182) is amended by adding at the end the following:
``(c) Genetic Testing.--
``(1) Limitation on requesting or requiring genetic testing.--A group health plan, or a health insurance issuer offering health insurance coverage in connection with a group health plan, shall not request or require an individual or a family member of such individual to undergo a genetic test.
``(2) Rule of construction.--Nothing in this part shall be construed to limit the authority of a health care professional, who is providing treatment with respect to an individual and who is employed by a group health plan or a health insurance issuer, to request that such individual or family member of such individual undergo a genetic test. Such a health care professional shall not require that such individual or family member undergo a genetic test.
``(d) Collection of Predictive Genetic Information.--Except as provided in subsections (f) and (g), a group health plan, or a health insurance issuer offering health insurance coverage in connection with a group health plan, shall not request, require, collect, or purchase predictive genetic information concerning an individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual).
``(e) Disclosure of Predictive Genetic Information.--A group health plan, or a health insurance issuer offering health insurance coverage in connection with a group health plan, shall not disclose predictive genetic information about an individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual) to--
``(1) any entity that is a member of the same controlled group as such issuer or plan sponsor of such group health plan;
``(2) any other group health plan or health insurance issuer or any insurance agent, third party administrator, or other person subject to regulation under State insurance laws;
``(3) the Medical Information Bureau or any other person that collects, compiles, publishes, or otherwise disseminates insurance information;
``(4) the individual's employer or any plan sponsor; or
``(5) any other person the Secretary may specify in regulations.
``(f) Information for Payment for Genetic Services.--
``(1) In general.--With respect to payment for genetic services conducted concerning an individual or the coordination of benefits, a group health plan, or a health insurance issuer offering group health insurance coverage in connection with a group health plan, may request that the individual provide the plan or issuer with evidence that such services were performed.
``(2) Rule of construction.--Nothing in paragraph (1) shall be construed to--
``(A) permit a group health plan or health insurance issuer to request (or require) the results of the services referred to in such paragraph; or
``(B) require that a group health plan or health insurance issuer make payment for services described in such paragraph where the individual involved has refused to provide evidence of the performance of such services pursuant to a request by the plan or issuer in accordance with such paragraph.
``(g) Information for Payment of Other Claims.--With respect to the payment of claims for benefits other than genetic services, a group health plan, or a health insurance issuer offering group health insurance coverage in connection with a group health plan, may request that an individual provide predictive genetic information so long as such information--
``(1) is used solely for the payment of a claim;
``(2) is limited to information that is directly related to and necessary for the payment of such claim and the claim would otherwise be denied but for the predictive genetic information; and
``(3) is used only by an individual (or individuals) within such plan or issuer who needs access to such information for purposes of payment of a claim.
``(h) Rules of Construction.--
``(1) Collection or disclosure authorized by individual.--The provisions of subsections (d) (regarding collection) and
(e) shall not apply to an individual if the individual (or legal representative of the individual) provides prior, knowing, voluntary, and written authorization for the collection or disclosure of predictive genetic information.
``(2) Disclosure for health care treatment.--Nothing in this section shall be construed to limit or restrict the disclosure of predictive genetic information from a health care provider to another health care provider for the purpose of providing health care treatment to the individual involved.
``(i) Definitions.--In this section:
``(1) Controlled group.--The term `controlled group' means any group treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the Internal Revenue Code of 1986.
``(2) Group health plan, health insurance issuer.--The terms `group health plan' and `health insurance issuer' include a third party administrator or other person acting for or on behalf of such plan or issuer.''.
(c) Enforcement.--Section 502 (29 U.S.C. 1132) is amended by adding at the end the following:
``(n) Violation of Genetic Discrimination or Genetic Disclosure Provisions.--In any action under this section against any administrator of a group health plan, or health insurance issuer offering group health insurance coverage in connection with a group health plan (including any third party administrator or other person acting for or on behalf of such plan or issuer) alleging a violation of subsection
(a)(1)(F), (b) (with respect to cases relating to genetic information or information about a request or receipt of genetic services by an individual or family member of such individual), (c), (d), (e), (f), or (g) of section 702, or section 714, the court may award any appropriate legal or equitable relief. Such relief may include a requirement for the payment of attorney's fees and costs, including the costs of expert witnesses.
``(o) Civil Penalty.--The monetary provisions of section 308(b)(2)(C) of Public Law 101-336 (42 U.S.C. 12188(b)(2)(C)) shall apply for purposes of the Secretary enforcing the provisions referred to in subsection (n), except that any such relief awarded shall be paid only into the general fund of the Treasury.''.
(d) Preemption.--Section 731 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1191) is amended--
(1) in subsection (a)(1), by inserting ``or (e)'' after
``subsection (b)''; and
(2) by adding at the end the following:
``(e) Special Rule in Case of Genetic Information.--With respect to group health insurance coverage offered by a health insurance issuer, the provisions of this part relating to genetic information (including information about a request for or the receipt of genetic services by an individual or a family member of such individual) shall not be construed to supersede any provision of State law which establishes, implements, or continues in effect a standard, requirement, or remedy that more completely--
``(1) protects the confidentiality of genetic information
(including information about a request for or the receipt of genetic services by an individual or a family member of such individual) or the privacy of an individual or a family member of the individual with respect to genetic information
(including information about a request for or the receipt of genetic services by an individual or a family member of such individual) than does this part; or
``(2) prohibits discrimination on the basis of genetic information than does this part.''.
(e) Definitions.--Section 733(d) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1191b(d)) is amended by adding at the end the following:
``(5) Family member.--The term `family member' means with respect to an individual--
``(A) the spouse of the individual;
``(B) a dependent child of the individual, including a child who is born to or placed for adoption with the individual; or
``(C) any other individuals related by blood to the individual or to the spouse or child described in subparagraph (A) or (B).
``(6) Genetic information.--The term `genetic information' means information about genes, gene products, or inherited characteristics that may derive from an individual or a family member of such individual (including information about a request for or the receipt of genetic services by such individual or family member of such individual).
``(7) Genetic services.--The term `genetic services' means health services, including genetic tests, provided to obtain, assess, or interpret genetic information for diagnostic and therapeutic purposes, and for genetic education and counseling.
``(8) Genetic test.--The term `genetic test' means the analysis of human DNA, RNA, chromosomes, proteins, and certain metabolites in order to detect genotypes, mutations, or chromosomal changes.
``(9) Predictive genetic information.--
``(A) In general.--The term `predictive genetic information' means--
``(i) information about an individual's genetic tests;
``(ii) information about genetic tests of family members of the individual; or
``(iii) information about the occurrence of a disease or disorder in family members.
``(B) Limitations.--The term `predictive genetic information' shall not include--
``(i) information about the sex or age of the individual;
``(ii) information about chemical, blood, or urine analyses of the individual, unless these analyses are genetic tests; or
``(iii) information about physical exams of the individual, and other information relevant to determining the current health status of the individual.''.
(f) Amendment Concerning Supplemental Excepted Benefits.--Section 732(c)(3) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1191a(c)(3)) is amended by inserting
``, other than the requirements of subsections (a)(1)(F), (b)
(in cases relating to genetic information or information about a request for or the receipt of genetic services by an individual or a family member of such individual), (c), (d),
(e), (f) and (g) of section 702 and section 714,'' after
``The requirements of this part''.
(g) Effective Date.--
(1) In general.--Except as provided in this section, this section and the amendments made by this section shall apply with respect to group health plans for plan years beginning after October 1, 2002.
(2) Special rule for collective bargaining agreements.--In the case of a group health plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified before the date of the enactment of this Act, this section and the amendments made by this section shall not apply to plan years beginning before the later of--
(A) the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act), or
(B) October 1, 2002.
For purposes of subparagraph (A), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement of the amendments made by this section shall not be treated as a termination of such collective bargaining agreement.
SEC. 402. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.
(a) Amendments Relating to the Group Market.--
(1) Prohibition of health insurance discrimination on the basis of predictive genetic information or genetic services.--
(A) No enrollment restriction for genetic services.--Section 2702(a)(1)(F) of the Public Health Service Act (42 U.S.C. 300gg-1(a)(1)(F)) is amended by inserting before the period the following: ``(or information about a request for or the receipt of genetic services by an individual or a family member of such individual)''.
(B) No discrimination in group rate based on predictive genetic information.--
(i) In general.--Subpart 2 of part A of title XXVII of the Public Health Service (42 U.S.C. 300gg-4 et seq.) is amended by adding at the end the following:
``SEC. 2707. PROHIBITING DISCRIMINATION AGAINST GROUPS ON THE
BASIS OF PREDICTIVE GENETIC INFORMATION.
``A group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, shall not deny eligibility to a group or adjust premium or contribution rates for a group on the basis of predictive genetic information concerning an individual in the group (or information about a request for or the receipt of genetic services by such individual or family member of such individual).''.
(ii) Conforming amendments.--
(I) Section 2702(b)(2)(A) of the Public Health Service Act
(42 U.S.C. 300gg-1(b)(2)(A)) is amended to read as follows:
``(A) to restrict the amount that an employer may be charged for coverage under a group health plan, except as provided in section 2707; or''.
(II) Section 2721(a) of the Public Health Service Act (42 U.S.C. 300gg-21(a)) is amended by inserting ``(other than subsections (a)(1)(F), (b) (with respect to cases relating to genetic information or information about a request or receipt of genetic services by an individual or family member of such individual), (c), (d), (e), (f), or (g) of section 2702 and section 2707)'' after ``subparts 1 and 3''.
(2) Limitations on genetic testing and on collection and disclosure of predictive genetic information.--Section 2702 of the Public Health Service Act (42 U.S.C. 300gg-1) is amended by adding at the end the following:
``(c) Genetic Testing.--
``(1) Limitation on requesting or requiring genetic testing.--A group health plan, or a health insurance issuer offering health insurance coverage in connection with a group health plan, shall not request or require an individual or a family member of such individual to undergo a genetic test.
``(2) Rule of construction.--Nothing in this title shall be construed to limit the authority of a health care professional, who is providing treatment with respect to an individual and who is employed by a group health plan or a health insurance issuer, to request that such individual or family member of such individual undergo a genetic test. Such a health care professional shall not require that such individual or family member undergo a genetic test.
``(d) Collection of Predictive Genetic Information.--Except as provided in subsections (f) and (g), a group health plan, or a health insurance issuer offering health insurance coverage in connection with a group health plan, shall not request, require, collect, or purchase predictive genetic information concerning an individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual).
``(e) Disclosure of Predictive Genetic Information.--A group health plan, or a health insurance issuer offering health insurance coverage in connection with a group health plan, shall not disclose predictive genetic information about an individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual) to--
``(1) any entity that is a member of the same controlled group as such issuer or plan sponsor of such group health plan;
``(2) any other group health plan or health insurance issuer or any insurance agent, third party administrator, or other person subject to regulation under State insurance laws;
``(3) the Medical Information Bureau or any other person that collects, compiles, publishes, or otherwise disseminates insurance information;
``(4) the individual's employer or any plan sponsor; or
``(5) any other person the Secretary may specify in regulations.
``(f) Information for Payment for Genetic Services.--
``(1) In general.--With respect to payment for genetic services conducted concerning an individual or the coordination of benefits, a group health plan, or a health insurance issuer offering group health insurance coverage in connection with a group health plan, may request that the individual provide the plan or issuer with evidence that such services were performed.
``(2) Rule of construction.--Nothing in paragraph (1) shall be construed to--
``(A) permit a group health plan or health insurance issuer to request (or require) the results of the services referred to in such paragraph; or
``(B) require that a group health plan or health insurance issuer make payment for services described in such paragraph where the individual involved has refused to provide evidence of the performance of such services pursuant to a request by the plan or issuer in accordance with such paragraph.
``(g) Information for Payment of Other Claims.--With respect to the payment of claims for benefits other than genetic services, a group health plan, or a health insurance issuer offering group health insurance coverage in connection with a group health plan, may request that an individual provide predictive genetic information so long as such information--
``(1) is used solely for the payment of a claim;
``(2) is limited to information that is directly related to and necessary for the payment of such claim and the claim would otherwise be denied but for the predictive genetic information; and
``(3) is used only by an individual (or individuals) within such plan or issuer who needs access to such information for purposes of payment of a claim.
``(h) Rules of Construction.--
``(1) Collection or disclosure authorized by individual.--The provisions of subsections (d) (regarding collection) and
(e) shall not apply to an individual if the individual (or legal representative of the individual) provides prior, knowing, voluntary, and written authorization for the collection or disclosure of predictive genetic information.
``(2) Disclosure for health care treatment.--Nothing in this section shall be construed to limit or restrict the disclosure of predictive genetic information from a health care provider to another health care provider for the purpose of providing health care treatment to the individual involved.
``(i) Definitions.--In this section:
``(1) Controlled group.--The term `controlled group' means any group treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the Internal Revenue Code of 1986.
``(2) Group health plan, health insurance issuer.--The terms `group health plan' and `health insurance issuer' include a third party administrator or other person acting for or on behalf of such plan or issuer.''.
(3) Definitions.--Section 2791(d) of the Public Health Service Act (42 U.S.C. 300gg-91(d)) is amended by adding at the end the following new paragraphs:
``(15) Family member.--The term `family member' means with respect to an individual--
``(A) the spouse of the individual;
``(B) a dependent child of the individual, including a child who is born to or placed for adoption with the individual; and
``(C) all other individuals related by blood to the individual or the spouse or child described in subparagraph
(A) or (B).
``(16) Genetic information.--The term `genetic information' means information about genes, gene products, or inherited characteristics that may derive from an individual or a family member of such individual (including information about a request for or the receipt of genetic services by such individual or family member of such individual).
``(17) Genetic services.--The term `genetic services' means health services, including genetic tests, provided to obtain, assess, or interpret genetic information for diagnostic and therapeutic purposes, and for genetic education and counselling.
``(18) Genetic test.--The term `genetic test' means the analysis of human DNA, RNA, chromosomes, proteins, and certain metabolites in order to detect genotypes, mutations, or chromosomal changes.
``(19) Predictive genetic information.--
``(A) In general.--The term `predictive genetic information' means--
``(i) information about an individual's genetic tests;
``(ii) information about genetic tests of family members of the individual; or
``(iii) information about the occurrence of a disease or disorder in family members.
``(B) Limitations.--The term `predictive genetic information' shall not include--
``(i) information about the sex or age of the individual;
``(ii) information about chemical, blood, or urine analyses of the individual, unless these analyses are genetic tests; or
``(iii) information about physical exams of the individual, and other information relevant to determining the current health status of the individual.''.
(b) Amendment Relating to the Individual Market.--The first subpart 3 of part B of title XXVII of the Public Health Service Act (42 U.S.C. 300gg-51 et seq.) is amended--
(1) by redesignating such subpart as subpart 2; and
(2) by adding at the end the following:
``SEC. 2753. PROHIBITION OF HEALTH INSURANCE DISCRIMINATION
AGAINST INDIVIDUALS ON THE BASIS OF PREDICTIVE
GENETIC INFORMATION.
``(a) In Eligibility To Enroll.--A health insurance issuer offering health insurance coverage in the individual market shall not establish rules for eligibility to enroll in individual health insurance coverage that are based on predictive genetic information concerning the individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual).
``(b) In Premium Rates.--A health insurance issuer offering health insurance coverage in the individual market shall not adjust premium rates on the basis of predictive genetic information concerning an individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual).
``SEC. 2754. LIMITATIONS ON GENETIC TESTING AND ON COLLECTION
AND DISCLOSURE OF PREDICTIVE GENETIC
INFORMATION.
``(a) Genetic Testing.--
``(1) Limitation on requesting or requiring genetic testing.--A health insurance issuer offering health insurance coverage in the individual market shall not request or require an individual or a family member of such individual to undergo a genetic test.
``(2) Rule of construction.--Nothing in this title shall be construed to limit the authority of a health care professional, who is providing treatment with respect to an individual and who is employed by a group health plan or a health insurance issuer, to request that such individual or family member of such individual undergo a genetic test. Such a health care professional shall not require that such individual or family member undergo a genetic test.
``(b) Collection of Predictive Genetic Information.--Except as provided in subsections (d) and (e), a health insurance issuer offering health insurance coverage in the individual market shall not request, require, collect, or purchase predictive genetic information concerning an individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual).
``(c) Disclosure of Predictive Genetic Information.--A health insurance issuer offering health insurance coverage in the individual market shall not disclose predictive genetic information about an individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual) to--
``(1) any entity that is a member of the same controlled group as such issuer or plan sponsor of such group health plan;
``(2) any other group health plan or health insurance issuer or any insurance agent, third party administrator, or other person subject to regulation under State insurance laws;
``(3) the Medical Information Bureau or any other person that collects, compiles, publishes, or otherwise disseminates insurance information;
``(4) the individual's employer or any plan sponsor; or
``(5) any other person the Secretary may specify in regulations.
``(d) Information for Payment for Genetic Services.--
``(1) In general.--With respect to payment for genetic services conducted concerning an individual or the coordination of benefits, a health insurance issuer offering health insurance coverage in the individual market may request that the individual provide the plan or issuer with evidence that such services were performed.
``(2) Rule of construction.--Nothing in paragraph (1) shall be construed to--
``(A) permit a health insurance issuer to request (or require) the results of the services referred to in such paragraph; or
``(B) require that a health insurance issuer make payment for services described in such paragraph where the individual involved has refused to provide evidence of the performance of such services pursuant to a request by the plan or issuer in accordance with such paragraph.
``(e) Information for Payment of Other Claims.--With respect to the payment of claims for benefits other than genetic services, a health insurance issuer offering health insurance coverage in the individual market may request that an individual provide predictive genetic information so long as such information--
``(1) is used solely for the payment of a claim;
``(2) is limited to information that is directly related to and necessary for the payment of such claim and the claim would otherwise be denied but for the predictive genetic information; and
``(3) is used only by an individual (or individuals) within such plan or issuer who needs access to such information for purposes of payment of a claim.
``(f) Rules of Construction.--
``(1) Collection or disclosure authorized by individual.--The provisions of subsections (c) (regarding collection) and
(d) shall not apply to an individual if the individual (or legal representative of the individual) provides prior, knowing, voluntary, and written authorization for the collection or disclosure of predictive genetic information.
``(2) Disclosure for health care treatment.--Nothing in this section shall be construed to limit or restrict the disclosure of predictive genetic information from a health care provider to another health care provider for the purpose of providing health care treatment to the individual involved.
``(g) Definitions.--In this section:
``(1) Controlled group.--The term `controlled group' means any group treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the Internal Revenue Code of 1986.
``(2) Group health plan, health insurance issuer.--The terms `group health plan' and `health insurance issuer' include a third party administrator or other person acting for or on behalf of such plan or issuer.''.
(c) Enforcement.--
(1) Group plans.--Section 2722 of the Public Health Service Act (42 U.S.C. 300gg-22) is amended by adding at the end the following:
``(c) Violation of Genetic Discrimination or Genetic Disclosure Provisions.--In any action under this section against any administrator of a group health plan, or health insurance issuer offering group health insurance coverage in connection with a group health plan (including any third party administrator or other person acting for or on behalf of such plan or issuer) alleging a violation of subsections
(a)(1)(F), (b) (with respect to cases relating to genetic information or information about a request or receipt of genetic services by an individual or family member of such individual), (c), (d), (e), (f), or (g) of section 2702 and section 2707 the court may award any appropriate legal or equitable relief. Such relief may include a requirement for the payment of attorney's fees and costs, including the costs of expert witnesses.
``(d) Civil Penalty.--The monetary provisions of section 308(b)(2)(C) of Public Law 101-336 (42 U.S.C. 12188(b)(2)(C)) shall apply for purposes of the Secretary enforcing the provisions referred to in subsection (c), except that any such relief awarded shall be paid only into the general fund of the Treasury.''.
(2) Individual plans.--Section 2761 of the Public Health Service Act (42 U.S.C. 300gg-45) is amended by adding at the end the following:
``(c) Violation of Genetic Discrimination or Genetic Disclosure Provisions.--In any action under this section against any health insurance issuer offering health insurance coverage in the individual market (including any other person acting for or on behalf of such issuer) alleging a violation of sections 2753 and 2754 the court in which the action is commenced may award any appropriate legal or equitable relief. Such relief may include a requirement for the payment of attorney's fees and costs, including the costs of expert witnesses.
``(d) Civil Penalty.--The monetary provisions of section 308(b)(2)(C) of Public Law 101-336 (42 U.S.C. 12188(b)(2)(C)) shall apply for purposes of the Secretary enforcing the provisions referred to in subsection (c), except that any such relief awarded shall be paid only into the general fund of the Treasury.''.
(d) Preemption.--
(1) Group market.--Section 2723 of the Public Health Service Act (42 U.S.C. 300gg-23) is amended--
(A) in subsection (a)(1), by inserting ``or (e)'' after
``subsection (b)''; and
(B) by adding at the end the following:
``(e) Special Rule in Case of Genetic Information.--With respect to group health insurance coverage offered by a health insurance issuer, the provisions of this part relating to genetic information (including information about a request for or the receipt of genetic services by an individual or a family member of such individual) shall not be construed to supersede any provision of State law which establishes, implements, or continues in effect a standard, requirement, or remedy that more completely--
``(1) protects the confidentiality of genetic information
(including information about a request for or the receipt of genetic services by an individual or a family member of such individual) or the privacy of an individual or a family member of the individual with respect to genetic information
(including information about a request for or the receipt of genetic services by an individual or a family member of such individual); or
``(2) prohibits discrimination on the basis of genetic information than does this part.''.
(2) Individual market.--Section 2762 of the Public Health Service Act (42 U.S.C. 300gg-46) is amended--
(A) in subsection (a), by inserting ``and except as provided in subsection (c),'' after ``Subject to subsection
(b),''; and
(B) by adding at the end the following:
``(c) Special Rule in Case of Genetic Information.--With respect to individual health insurance coverage offered by a health insurance issuer, the provisions of this part (or part C insofar as it applies to this part) relating to genetic information (including information about a request for or the receipt of genetic services by an individual or a family member of such individual) shall not be construed to supersede any provision of State law (as defined in section 2723(d)) which establishes, implements, or continues in effect a standard, requirement, or remedy that more completely--
``(1) protects the confidentiality of genetic information
(including information about a request for or the receipt of genetic services of an individual or a family member of such individual) or the privacy of an individual or a family member of the individual with respect to genetic information
(including information about a request for or the receipt of genetic services by an individual or a family member of such individual) than does this part (or part C insofar as it applies to this part); or
``(2) prohibits discrimination on the basis of genetic information than does this part (or part C insofar as it applies to this part).''.
(e) Elimination of Option of Non-Federal Governmental Plans To Be Excepted From Requirements Concerning Genetic Information.--Section 2721(b)(2) of the Public Health Service Act (42 U.S. C. 300gg-21(b)(2)) is amended--
(1) in subparagraph (A), by striking ``If the plan sponsor'' and inserting ``Except as provided in subparagraph
(D), if the plan sponsor''; and
(2) by adding at the end the following:
``(D) Election not applicable to requirements concerning genetic information.--The election described in subparagraph
(A) shall not be available with respect to the provisions of subsections (a)(1)(F), (c), (d), (e), (f), and (g) of section 2702 and section 2707, and the provisions of section 2702(b) to the extent that they apply to genetic information (or information about a request for or the receipt of genetic services by an individual or a family member of such individual).''.
(f) Amendment Concerning Supplemental Excepted Benefits.--
(1) Group market.--Section 2721(d)(3) of the Public Health Service Act (42 U.S.C. 300gg-23(d)(3)) is amended by inserting ``, other than the requirements of subsections
(a)(1)(F), (b) (in cases relating to genetic information or information about a request for or the receipt of genetic services by an individual or a family member of such individual)), (c), (d), (e), (f) and (g) of section 2702 and section 2707,'' after ``The requirements of this part''.
(2) Individual market.--Section 2763(b) of the Public Health Service Act (42 U.S.C. 300gg-47(b)) is amended--
(A) by striking ``The requirements of this part'' and inserting the following:
``(1) In general.--Except as provided in paragraph (2), the requirements of this part''; and
(B) by adding at the end the following:
``(2) Limitation.--The requirements of sections 2753 and 2754 shall apply to excepted benefits described in section 2791(c)(4).''.
(g) Effective Date.--
(1) In general.--The amendments made by this section shall apply with respect to--
(A) group health plans, and health insurance coverage offered in connection with group health plans, for plan years beginning; and
(B) health insurance coverage offered, sold, issued, renewed, in effect, or operated in the individual market, after;October 1, 2002.
(2) Special rule for collective bargaining agreements.--In the case of a group health plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified before the date of the enactment of this Act, the amendments made by this section shall not apply to plan years beginning before the later of--
(A) the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act); or
(B) October 1, 2002.For purposes of subparagraph (A), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement of the amendments made by this section shall not be treated as a termination of such collective bargaining agreement.
SEC. 403. AMENDMENTS TO INTERNAL REVENUE CODE OF 1986.
(a) Prohibition of Health Insurance Discrimination on the Basis of Genetic Services or Predictive Genetic Information.--
(1) No enrollment restriction for genetic services.--Section 9802(a)(1)(F) of the Internal Revenue Code of 1986
(relating to eligibility to enroll) is amended by inserting before the period ``(or information about a request for or the receipt of genetic services by such individual or family member of such individual)''.
(2) No discrimination in group rate based on predictive genetic information.--
(A) In general.--Subchapter B of chapter 100 of such Code
(relating to other requirements) is amended by adding at the end the following:
``SEC. 9813. PROHIBITING DISCRIMINATION AGAINST GROUPS ON THE
BASIS OF PREDICTIVE GENETIC INFORMATION.
``A group health plan shall not deny eligibility to a group or adjust premium or contribution rates for a group on the basis of predictive genetic information concerning an individual in the group (or information about a request for or the receipt of genetic services by such individual or family member of such individual).''.
(B) Conforming amendments.--
(i) Section 9802(b)(2)(A) of such Code is amended to read as follows:
``(A) to restrict the amount that an employer may be charged for coverage under a group health plan, except as provided in section 9813; or''.
(ii) Section 9831(a) of such Code (relating to exception for certain plans) is amended by inserting ``(other than subsection (a)(1)(F), (b) (with respect to cases relating to genetic information or information about a request for or receipt of genetic services by an individual or family member of such individual), (d) (e), (f), (g) or (h) of section 9802 or section 9813)'' after ``chapter''.
(iii) The table of sections for subchapter B of chapter 100 of such Code is amended by adding at the end the following new item:
``Sec. 9813. Prohibiting discrimination against groups on the basis of predictive genetic information.''.
(b) Limitations on Genetic Testing and on Collection and Disclosure of Predictive Genetic Information.--Section 9802 of the Internal Revenue Code of 1986 (relating to prohibiting discrimination against individual participants and beneficiaries based on health status) is amended by adding at the end the following new subsections:
``(d) Genetic Testing.--
``(1) Limitation on requesting or requiring genetic testing.--A group health plan shall not request or require an individual or a family member of such individual to undergo a genetic test.
``(2) Rule of construction.--Nothing in this chapter shall be construed to limit the authority of a health care professional, who is providing treatment with respect to an individual and who is employed by a group health plan, to request that such individual or family member of such individual undergo a genetic test. Such a health care professional shall not require that such individual or family member undergo a genetic test.
``(e) Collection of Predictive Genetic Information.--Except as provided in subsections (g) and (h), a group health plan shall not request, require, collect, or purchase predictive genetic information concerning an individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual).
``(f) Disclosure of Predictive Genetic Information.--A group health plan shall not disclose predictive genetic information about an individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual) to--
``(1) any entity that is a member of the same controlled group as such issuer or plan sponsor of such group health plan,
``(2) any other group health plan or health insurance issuer or any insurance agent, third party administrator, or other person subject to regulation under State insurance laws,
``(3) the Medical Information Bureau or any other person that collects, compiles, publishes, or otherwise disseminates insurance information,
``(4) the individual's employer or any plan sponsor, or
``(5) any other person the Secretary may specify in regulations.
``(g) Information for Payment for Genetic Services.--
``(1) In general.--With respect to payment for genetic services conducted concerning an individual or the coordination of benefits, a group health plan may request that the individual provide the plan with evidence that such services were performed.
``(2) Rule of construction.--Nothing in paragraph (1) shall be construed to--
``(A) permit a group health plan to request (or require) the results of the services referred to in such paragraph, or
``(B) require that a group health plan make payment for services described in such paragraph where the individual involved has refused to provide evidence of the performance of such services pursuant to a request by the plan in accordance with such paragraph.
``(h) Information for Payment of Other Claims.--With respect to the payment of claims for benefits other than genetic services, a group health plan may request that an individual provide predictive genetic information so long as such information--
``(1) is used solely for the payment of a claim,
``(2) is limited to information that is directly related to and necessary for the payment of such claim and the claim would otherwise be denied but for the predictive genetic information, and
``(3) is used only by an individual within such plan or issuer who needs access to such information for purposes of payment of a claim.
``(i) Rules of Construction.--
``(1) Collection or disclosure authorized by individual.--The provisions of subsections (e) (regarding collection) and
(f) shall not apply to an individual if the individual (or legal representative of the individual) provides prior, knowing, voluntary, and written authorization for the collection or disclosure of predictive genetic information.
``(2) Disclosure for health care treatment.--Nothing in this section shall be construed to limit or restrict the disclosure of predictive genetic information from a health care provider to another health care provider for the purpose of providing health care treatment to the individual involved.
``(j) Definitions.--In this section:
``(1) Controlled group.--The term `controlled group' means any group treated as a single employer under subsections (b),
(c), (m), or (o) of section 414.
``(2) Group health plan, health insurance issuer.--The terms `group health plan' and `health insurance issuer' include a third party administrator or other person acting for or on behalf of such plan or issuer.
``(k) Violation of Genetic Discrimination or Genetic Disclosure Provisions.--In any action under this section against any administrator of a group health plan (including any third party administrator or other person acting for or on behalf of such plan) alleging a violation of subsection
(a)(1)(F), (b) (with respect to cases relating to genetic information or information about a request or receipt of genetic services by an individual or family member of such individual), (d), (e), (f), (g) or (h) or section 9813, the court may award any appropriate legal or equitable relief. Such relief may include a requirement for the payment of attorney's fees and costs, including the costs of expert witnesses.
``(l) Civil Penalty.--The monetary provisions of section 308(b)(2)(C) of Public Law 101-336 (42 U.S.C. 12188(b)(2)(C)) shall apply for purposes of the Secretary enforcing the provisions referred to in subsection (k), except that any such relief awarded shall be paid only into the general fund of the Treasury.''.
(c) Definitions.--Section 9832(d) of the Internal Revenue Code of 1986 (relating to other definitions) is amended by adding at the end the following new paragraphs:
``(6) Family member.--The term `family member' means with respect to an individual--
``(A) the spouse of the individual,
``(B) a dependent child of the individual, including a child who is born to or placed for adoption with the individual, or
``(C) any other individuals related by blood to the individual or to the spouse or child described in subparagraph (A) or (B).
``(7) Genetic information.--The term `genetic information' means information about genes, gene products, or inherited characteristics that may derive from an individual or a family member of such individual (including information about a request for or the receipt of genetic services by such individual or family member of such individual).
``(8) Genetic services.--The term `genetic services' means health services, including genetic tests, provided to obtain, assess, or interpret genetic information for diagnostic and therapeutic purposes, and for genetic education and counseling.
``(9) Genetic test.--The term `genetic test' means the analysis of human DNA, RNA, chromosomes, proteins, and certain metabolites in order to detect genotypes, mutations, or chromosomal changes.
``(10) Predictive genetic information.--
``(A) In general.--The term `predictive genetic information' means--
``(i) information about an individual's genetic tests,
``(ii) information about genetic tests of family members of the individual, or
``(iii) information about the occurrence of a disease or disorder in family members.
``(B) Limitations.--The term `predictive genetic information' shall not include--
``(i) information about the sex or age of the individual,
``(ii) information about chemical, blood, or urine analyses of the individual, unless these analyses are genetic tests, or
``(iii) information about physical exams of the individual, and other information relevant to determining the current health status of the individual.''.
(d) Effective Date.--
(1) In general.--Except as provided in this section, this section and the amendments made by this section shall apply with respect to group health plans for plan years beginning after October 1, 2002.
(2) Special rule for collective bargaining agreements.--In the case of a group health plan maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified before the date of the enactment of this Act, this section and the amendments made by this section shall not apply to plan years beginning before the later of--
(A) the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act), or
(B) October 1, 2002.For purposes of subparagraph (A), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement of the amendments made by this section shall not be treated as a termination of such collective bargaining agreement.
SEC. 404. AMENDMENTS TO TITLE XVIII OF THE SOCIAL SECURITY
ACT RELATING TO MEDIGAP.
(a) Nondiscrimination.--
(1) In general.--Section 1882(s)(2) of the Social Security Act (42 U.S.C. 1395ss(s)(2)) is amended by adding at the end the following:
``(E)(i) An issuer of a medicare supplemental policy shall not deny or condition the issuance or effectiveness of the policy, and shall not discriminate in the pricing of the policy (including the adjustment of premium rates) of an eligible individual on the basis of predictive genetic information concerning the individual (or information about a request for, or the receipt of, genetic services by such individual or family member of such individual).
``(ii) For purposes of clause (i), the terms `family member', `genetic services', and `predictive genetic information' shall have the meanings given such terms in subsection (v).''.
(2) Effective date.--The amendment made by paragraph (1) shall apply with respect to a policy for policy years beginning after October 1, 2002.
(b) Limitations on Genetic Testing and on Collection and Disclosure of Predictive Genetic Information.--
(1) In general.--Section 1882 of the Social Security Act
(42 U.S.C. 1395ss) is amended by adding at the end the following:
``(v) Limitations on Genetic Testing and on Collection and Disclosure of Predictive Genetic Information.--
``(1) Genetic testing.--
``(A) Limitation on requesting or requiring genetic testing.--An issuer of a medicare supplemental policy shall not request or require an individual or a family member of such individual to undergo a genetic test.
``(B) Rule of construction.--Nothing in this title shall be construed to limit the authority of a health care professional, who is providing treatment with respect to an individual and who is employed by an issuer of a medicare supplemental policy, to request that such individual or family member of such individual undergo a genetic test. Such a health care professional shall not require that such individual or family member undergo a genetic test.
``(2) Collection of predictive genetic information.--Except as provided in paragraphs (4) and (5), an issuer of a medicare supplemental policy shall not request, require, collect, or purchase predictive genetic information concerning an individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual).
``(3) Disclosure of predictive genetic information.--An issuer of a medicare supplemental policy shall not disclose predictive genetic information about an individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual) to--
``(A) any entity that is a member of the same controlled group as such issuer;
``(B) any issuer of a medicare supplemental policy, group health plan or health insurance issuer, or any insurance agent, third party administrator, or other person subject to regulation under State insurance laws;
``(C) the Medical Information Bureau or any other person that collects, compiles, publishes, or otherwise disseminates insurance information;
``(D) the individual's employer or any plan sponsor; or
``(E) any other person the Secretary may specify in regulations.
``(4) Information for payment for genetic services.--
``(A) In general.--With respect to payment for genetic services conducted concerning an individual or the coordination of benefits, an issuer of a medicare supplemental policy may request that the individual provide the issuer with evidence that such services were performed.
``(B) Rule of construction.--Nothing in subparagraph (A) shall be construed to--
``(i) permit an issuer to request (or require) the results of the services referred to in such subparagraph; or
``(ii) require that an issuer make payment for services described in such subparagraph where the individual involved has refused to provide evidence of the performance of such services pursuant to a request by the issuer in accordance with such subparagraph.
``(5) Information for payment of other claims.--With respect to the payment of claims for benefits other than genetic services, an issuer of a medicare supplemental policy may request that an individual provide predictive genetic information so long as such information--
``(A) is used solely for the payment of a claim;
``(B) is limited to information that is directly related to and necessary for the payment of such claim and the claim would otherwise be denied but for the predictive genetic information; and
``(C) is used only by an individual (or individuals) within such issuer who needs access to such information for purposes of payment of a claim.
``(6) Rules of construction.--
``(A) Collection or disclosure authorized by individual.--The provisions of paragraphs (2) (regarding collection) and
(3) shall not apply to an individual if the individual (or legal representative of the individual) provides prior, knowing, voluntary, and written authorization for the collection or disclosure of predictive genetic information.
``(B) Disclosure for health care treatment.--Nothing in this section shall be construed to limit or restrict the disclosure of predictive genetic information from a health care provider to another health care provider for the purpose of providing health care treatment to the individual involved.
``(7) Violation of genetic discrimination or genetic disclosure provisions.--In any action under this subsection against any administrator of a medicare supplemental policy
(including any third party administrator or other person acting for or on behalf of such policy) alleging a violation of this subsection, the court may award any appropriate legal or equitable relief. Such relief may include a requirement for the payment of attorney's fees and costs, including the costs of expert witnesses.
``(8) Civil penalty.--The monetary provisions of section 308(b)(2)(C) of Public Law 101-336 (42 U.S.C. 12188(b)(2)(C)) shall apply for purposes of the Secretary enforcing the provisions of this subsection, except that any such relief awarded shall be paid only into the general fund of the Treasury.
``(9) Special rule in case of genetic information.--This subsection (relating to genetic information or information about a request for, or the receipt of, genetic services by an individual or a family member of such individual) shall not be construed to supersede any provision of State law which establishes, implements, or continues in effect a standard, requirement, or remedy that more completely--
``(A) protects the confidentiality of genetic information
(including information about a request for, or the receipt of, genetic services by an individual or a family member of such individual) or the privacy of an individual or a family member of the individual with respect to genetic information
(including information about a request for, or the receipt of, genetic services by an individual or a family member of such individual) than does this subsection; or
``(B) prohibits discrimination on the basis of genetic information than does this subsection.
``(10) Definitions.--In this subsection:
``(A) Controlled group.--The term `controlled group' means any group treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the Internal Revenue Code of 1986.
``(B) Family member.--The term `family member' means with respect to an individual--
``(i) the spouse of the individual;
``(ii) a dependent child of the individual, including a child who is born to or placed for adoption with the individual; or
``(iii) any other individuals related by blood to the individual or to the spouse or child described in clause (i) or (ii).
``(C) Genetic information.--The term `genetic information' means information about genes, gene products, or inherited characteristics that may derive from an individual or a family member of such individual (including information about a request for, or the receipt of, genetic services by such individual or family member of such individual).
``(D) Genetic services.--The term `genetic services' means health services, including genetic tests, provided to obtain, assess, or interpret genetic information for diagnostic and therapeutic purposes, and for genetic education and counseling.
``(E) Genetic test.--The term `genetic test' means the analysis of human DNA, RNA, chromosomes, proteins, and certain metabolites in order to detect genotypes, mutations, or chromosomal changes.
``(F) Issuer of a medicare supplemental policy.--The term
`issuer of a medicare supplemental policy' includes a third-party administrator or other person acting for or on behalf of such issuer.
``(G) Predictive genetic information.--
``(i) In general.--The term `predictive genetic information' means--
``(I) information about an individual's genetic tests;
``(II) information about genetic tests of family members of the individual; or
``(III) information about the occurrence of a disease or disorder in family members.
``(ii) Limitations.--The term `predictive genetic information' shall not include--
``(I) information about the sex or age of the individual;
``(II) information about chemical, blood, or urine analyses of the individual, unless these analyses are genetic tests; or
``(III) information about physical exams of the individual, and other information relevant to determining the current health status of the individual.''.
(2) Conforming amendment.--Section 1882(o) of the Social Security Act (42 U.S.C. 1395ss(o)) is amended by adding at the end the following:
``(4) The issuer of the medicare supplemental policy complies with subsection (s)(2)(E) and subsection (v).''.
(3) Effective date.--The amendments made by this subsection shall apply with respect to an issuer of a medicare supplemental policy for policy years beginning after October 1, 2002.
(c) Transition Provisions.--
(1) In general.--If the Secretary of Health and Human Services identifies a State as requiring a change to its statutes or regulations to conform its regulatory program to the changes made by this section, the State regulatory program shall not be considered to be out of compliance with the requirements of section 1882 of the Social Security Act due solely to failure to make such change until the date specified in paragraph (4).
(2) NAIC standards.--If, not later than June 30, 2002, the National Association of Insurance Commissioners (in this subsection referred to as the ``NAIC'') modifies its NAIC Model Regulation relating to section 1882 of the Social Security Act (referred to in such section as the 1991 NAIC Model Regulation, as subsequently modified) to conform to the amendments made by this section, such revised regulation incorporating the modifications shall be considered to be the applicable NAIC model regulation (including the revised NAIC model regulation and the 1991 NAIC Model Regulation) for the purposes of such section.
(3) Secretary standards.--If the NAIC does not make the modifications described in paragraph (2) within the period specified in such paragraph, the Secretary of Health and Human Services shall, not later than October 1, 2002, make the modifications described in such paragraph and such revised regulation incorporating the modifications shall be considered to be the appropriate regulation for the purposes of such section.
(4) Date specified.--
(A) In general.--Subject to subparagraph (B), the date specified in this paragraph for a State is the earlier of--
(i) the date the State changes its statutes or regulations to conform its regulatory program to the changes made by this section, or
(ii) October 1, 2002.
(B) Additional legislative action required.--In the case of a State which the Secretary identifies as--
(i) requiring State legislation (other than legislation appropriating funds) to conform its regulatory program to the changes made in this section, but
(ii) having a legislature which is not scheduled to meet in 2002 in a legislative session in which such legislation may be considered,the date specified in this paragraph is the first day of the first calendar quarter beginning after the close of the first legislative session of the State legislature that begins on or after July 1, 2002. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.
Subtitle B--Prohibition of Employment Discrimination on the Basis of
Predictive Genetic Information
SEC. 411. DEFINITIONS.
In this subtitle:
(1) Employee; employer; employment agency; labor organization; member.--The terms ``employee'', ``employer'',
``employment agency'', and ``labor organization'' have the meanings given such terms in section 701 of the Civil Rights Act of 1964 (42 U.S.C. 2000e), except that the terms
``employee'' and ``employer'' shall also include the meanings given such terms in section 717 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-16). The terms
``employee'' and ``member'' include an applicant for employment and an applicant for membership in a labor organization, respectively.
(2) Family member.--The term ``family member'' means with respect to an individual--
(A) the spouse of the individual;
(B) a dependent child of the individual, including a child who is born to or placed for adoption with the individual; or
(C) any other individuals related by blood to the individual or to the spouse or child described in subparagraph (A) or (B).
(3) Genetic monitoring.--The term ``genetic monitoring'' means the periodic examination of employees to evaluate acquired modifications to their genetic material, such as chromosomal damage or evidence of increased occurrence of mutations, that may have developed in the course of employment due to exposure to toxic substances in the workplace, in order to identify, evaluate, and respond to the effects of or control adverse environmental exposures in the workplace.
(4) Genetic services.--The term ``genetic services'' means health services, including genetic tests, provided to obtain, assess, or interpret genetic information for diagnostic and therapeutic purposes, and for genetic education and counseling.
(5) Genetic test.--The term ``genetic test'' means the analysis of human DNA, RNA, chromosomes, proteins, and certain metabolites in order to detect genotypes, mutations, or chromosomal changes.
(6) Predictive genetic information.--
(A) In general.--The term ``predictive genetic information'' means--
(i) information about an individual's genetic tests;
(ii) information about genetic tests of family members of the individual; or
(iii) information about the occurrence of a disease or disorder in family members.
(B) Limitations.--The term ``predictive genetic information'' shall not include--
(i) information about the sex or age of the individual;
(ii) information about chemical, blood, or urine analyses of the individual, unless these analyses are genetic tests; or
(iii) information about physical exams of the individual, and other information relevant to determining the current health status of the individual.
SEC. 412. EMPLOYER PRACTICES.
(a) In General.--It shall be an unlawful employment practice for an employer--
(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to the compensation, terms, conditions, or privileges of employment of the individual, because of predictive genetic information with respect to the individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual;
(2) to limit, segregate, or classify the employees of the employer in any way that would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect the status of the individual as an employee, because of predictive genetic information with respect to the individual, or information about a request for or the receipt of genetic services by such individual or family member of such individual; or
(3) to request, require, collect or purchase predictive genetic information with respect to an individual or a family member of the individual except--
(A) where used for genetic monitoring of biological effects of toxic substances in the workplace, but only if--
(i) the employee has provided prior, knowing, voluntary, and written authorization;
(ii) the employee is informed of individual monitoring results;
(iii) the monitoring conforms to any genetic monitoring regulations that may be promulgated by the Secretary of Labor pursuant to the Occupational Safety and Health Act of 1970
(29 U.S.C. 651 et seq.) or the Federal Mine Safety and Health Act of 1977 (30 U.S.C. 801 et seq.); and
(iv) the employer, excluding any licensed health care professional that is involved in the genetic monitoring program, receives the results of the monitoring only in aggregate terms that do not disclose the identity of specific employees; or
(B) where genetic services are offered by the employer and the employee provides prior, knowing, voluntary, and written authorization, and only the employee or family member of such employee receives the results of such services.
(b) Limitation.--In the case of predictive genetic information to which subparagraph (A) or (B) of subsection
(a)(3) applies, such information may not be used in violation of paragraph (1) or (2) of subsection (a).
SEC. 413. EMPLOYMENT AGENCY PRACTICES.
It shall be an unlawful employment practice for an employment agency--
(1) to fail or refuse to refer for employment, or otherwise to discriminate against, any individual because of predictive genetic information with respect to the individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual);
(2) to limit, segregate, or classify individuals or fail or refuse to refer for employment any individual in any way that would deprive or tend to deprive any individual of employment opportunities or would limit the employment opportunities or otherwise adversely affect the status of the individual as an employee, because of predictive genetic information with respect to the individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual);
(3) to request, require, collect or purchase predictive genetic information with respect to an individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual); or
(4) to cause or attempt to cause an employer to discriminate against an individual in violation of this subtitle.
SEC. 414. LABOR ORGANIZATION PRACTICES.
It shall be an unlawful employment practice for a labor organization--
(1) to exclude or to expel from the membership of the organization, or otherwise to discriminate against, any individual because of predictive genetic information with respect to the individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual);
(2) to limit, segregate, or classify the members of the organization, or fail or refuse to refer for employment any individual, in any way that would deprive or tend to deprive any individual of employment opportunities, or would limit the employment opportunities or otherwise adversely affect the status of the individual as an employee, because of predictive genetic information with respect to the individual
(or information about a request for or the receipt of genetic services by such individual or family member of such individual);
(3) to request, require, collect or purchase predictive genetic information with respect to an individual (or information about a request for or the receipt of genetic services by such individual or family member of such individual); or
(4) to cause or attempt to cause an employer to discriminate against an individual in violation of this subtitle.
SEC. 415. TRAINING PROGRAMS.
It shall be an unlawful employment practice for any employer, labor organization, or joint labor-management committee controlling apprenticeship or other training or retraining, including on-the-job training programs--
(1) to discriminate against any individual because of predictive genetic information with respect to the individual
(or information about a request for or the receipt of genetic services by such individual), in admission to, or employment in, any program established to provide apprenticeship or other training or retraining;
(2) to limit, segregate, or classify the members of the organization, or fail or refuse to refer for employment any individual, in any way that would deprive or tend to deprive any individual of employment opportunities, or would limit the employment opportunities or otherwise adversely affect the status of the individual as an employee, because of predictive genetic information with respect to the individual
(or information about a request for or receipt of genetic services by such individual or family member of such individual);
(3) to request, require, collect or purchase predictive genetic information with respect to an individual (or information about a request for or receipt of genetic services by such individual or family member of such individual); or
(4) to cause or attempt to cause an employer to discriminate against an individual in violation of this subtitle.
SEC. 416. MAINTENANCE AND DISCLOSURE OF PREDICTIVE GENETIC
INFORMATION.
(a) Maintenance of Predictive Genetic Information.--If an employer possesses predictive genetic information about an employee (or information about a request for or receipt of genetic services by such employee or family member of such employee), such information shall be treated or maintained as part of the employee's confidential medical records.
(b) Disclosure of Predictive Genetic Information.--An employer shall not disclose predictive genetic information
(or information about a request for or receipt of genetic services by such employee or family member of such employee) except--
(1) to the employee who is the subject of the information at the request of the employee;
(2) to an occupational or other health researcher if the research is conducted in compliance with the regulations and protections provided for under part 46 of title 45, Code of Federal Regulations;
(3) under legal compulsion of a Federal court order, except that if the court order was secured without the knowledge of the individual to whom the information refers, the employer shall provide the individual with adequate notice to challenge the court order unless the court order also imposes confidentiality requirements; and
(4) to government officials who are investigating compliance with this Act if the information is relevant to the investigation.
SEC. 417. CIVIL ACTION.
(a) In General.--One or more employees, members of a labor organization, or participants in training programs may bring an action in a Federal or State court of competent jurisdiction against an employer, employment agency, labor organization, or joint labor-management committee or training program who commits a violation of this subtitle.
(b) Enforcement by the Equal Employment Opportunity Commission.--The powers, remedies, and procedures set forth in sections 705, 706, 707, 709, 710, and 717 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-4, 2000e-5, 2000e-6, 2000e-8, 2000e-9, and 2000e-16) shall be the powers, remedies, and procedures provided to the Equal Employment Opportunity Commission to enforce this subtitle. The Commission may promulgate regulations to implement these powers, remedies, and procedures.
(c) Remedy.--A Federal or State court may award any appropriate legal or equitable relief under this section. Such relief may include a requirement for the payment of attorney's fees and costs, including the costs of experts.
SEC. 418. CONSTRUCTION.
Nothing in this subtitle shall be construed to--
(1) limit the rights or protections of an individual under the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.), including coverage afforded to individuals under section 102 of such Act;
(2) limit the rights or protections of an individual under the Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.);
(3) limit the rights or protections of an individual under any other Federal or State statute that provides equal or greater protection to an individual than the rights accorded under this Act;
(4) apply to the Armed Forces Repository of Specimen Samples for the Identification of Remains; or
(5) limit the statutory or regulatory authority of the Occupational Safety and Health Administration or the Mine Safety and Health Administration to promulgate or enforce workplace safety and health laws and regulations.
SEC. 419. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums as may be necessary to carry out this subtitle.
SEC. 420. EFFECTIVE DATE.
This subtitle shall become effective on October 1, 2002.
TITLE V--EMPLOYMENT NONDISCRIMINATION
SEC. 501. SHORT TITLE.
This title may be cited as the ``Employment Non-Discrimination Act of 2001''.
SEC. 502. PURPOSES.
The purposes of this title are--
(1) to provide a comprehensive Federal prohibition of employment discrimination on the basis of sexual orientation;
(2) to provide meaningful and effective remedies for employment discrimination on the basis of sexual orientation; and
(3) to invoke congressional powers, including the powers to enforce the 14th amendment to the Constitution and to regulate interstate commerce, in order to prohibit employment discrimination on the basis of sexual orientation.
SEC. 503. DEFINITIONS.
In this title:
(1) Commission.--The term ``Commission'' means the Equal Employment Opportunity Commission.
(2) Covered entity.--The term ``covered entity'' means an employer, employment agency, labor organization, or joint labor-management committee.
(3) Employer.--The term ``employer'' means--
(A) a person engaged in an industry affecting commerce (as defined in section 701(h) of the Civil Rights Act of 1964 (42 U.S.C. 2000e(h))) who has 15 or more employees (as defined in section 701(f) of such Act (42 U.S.C. 2000e(f)) for each working day in each of 20 or more calendar weeks in the current or preceding calendar year, and any agent of such a person, but does not include a bona fide private membership club (other than a labor organization) that is exempt from taxation under section 501(c) of the Internal Revenue Code of 1986;
(B) an employing authority to which section 302(a)(1) of the Government Employee Rights Act of 1991 (2 U.S.C. 1202(a)(1)) applies;
(C) an employing office, as defined in section 101 of the Congressional Accountability Act of 1995 (2 U.S.C. 1301) or section 401 of title 3, United States Code; or
(D) an entity to which section 717(a) of the Civil Rights Act of 1964 (42 U.S.C. 2000e-16(a)) applies.
(4) Employment agency.--The term ``employment agency'' has the meaning given the term in section 701(c) of the Civil Rights Act of 1964 (42 U.S.C. 2000e(c)).
(5) Employment or an employment opportunity.--Except as provided in section 510(a)(1), the term ``employment or an employment opportunity'' includes job application procedures, referral for employment, hiring, advancement, discharge, compensation, job training, a term, condition, or privilege of union membership, or any other term, condition, or privilege of employment, but does not include the service of a volunteer for which the volunteer receives no compensation.
(6) Labor organization.--The term ``labor organization'' has the meaning given the term in section 701(d) of the Civil Rights Act of 1964 (42 U.S.C. 2000e(d)).
(7) Person.--The term ``person'' has the meaning given the term in section 701(a) of the Civil Rights Act of 1964 (42 U.S.C. 2000e(a)).
(8) Religious organization.--The term ``religious organization'' means--
(A) a religious corporation, association, or society; or
(B) a school, college, university, or other educational institution or institution of learning, if--
(i) the institution is in whole or substantial part controlled, managed, owned, or supported by a religion, religious corporation, association, or society; or
(ii) the curriculum of the institution is directed toward the propagation of a religion.
(9) Sexual orientation.--The term ``sexual orientation'' means homosexuality, bisexuality, or heterosexuality, whether the orientation is real or perceived.
(10) State.--The term ``State'' has the meaning given the term in section 701(i) of the Civil Rights Act of 1964 (42 U.S.C. 2000e(i)).
SEC. 504. DISCRIMINATION PROHIBITED.
(a) Employer Practices.--It shall be an unlawful employment practice for an employer--
(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to the compensation, terms, conditions, or privileges of employment of the individual, because of such individual's sexual orientation; or
(2) to limit, segregate, or classify the employees or applicants for employment of the employer in any way that would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect the status of the individual as an employee, because of such individual's sexual orientation.
(b) Employment Agency Practices.--It shall be an unlawful employment practice for an employment agency to fail or refuse to refer for employment, or otherwise to discriminate against, any individual because of the sexual orientation of the individual or to classify or refer for employment any individual on the basis of the sexual orientation of the individual.
(c) Labor Organization Practices.--It shall be an unlawful employment practice for a labor organization--
(1) to exclude or to expel from its membership, or otherwise to discriminate against, any individual because of the sexual orientation of the individual;
(2) to limit, segregate, or classify its membership or applicants for membership, or to classify or fail or refuse to refer for employment any individual, in any way that would deprive or tend to deprive any individual of employment opportunities, or would limit such employment opportunities or otherwise adversely affect the status of the individual as an employee or as an applicant for employment, because of such individual's sexual orientation; or
(3) to cause or attempt to cause an employer to discriminate against an individual in violation of this section.
(d) Training Programs.--It shall be an unlawful employment practice for any employer, labor organization, or joint labor-management committee controlling apprenticeship or other training or retraining, including on-the-job training programs, to discriminate against any individual because of the sexual orientation of the individual in admission to, or employment in, any program established to provide apprenticeship or other training.
(e) Association.--An unlawful employment practice described in any of subsections (a) through (d) shall be considered to include an action described in that subsection, taken against an individual based on the sexual orientation of a person with whom the individual associates or has associated.
(f) Disparate Impact.--Notwithstanding any other provision of this title, the fact that an employment practice has a disparate impact, as the term ``disparate impact'' is used in section 703(k) of the Civil Rights Act of 1964 (42 U.S.C. 2000e-2(k)), on the basis of sexual orientation does not establish a prima facie violation of this title.
SEC. 505. RETALIATION AND COERCION PROHIBITED.
(a) Retaliation.--A covered entity shall not discriminate against an individual because such individual opposed any act or practice prohibited by this title or because such individual made a charge, assisted, testified, or participated in any manner in an investigation, proceeding, or hearing under this title.
(b) Coercion.--A person shall not coerce, intimidate, threaten, or interfere with any individual in the exercise or enjoyment of, or on account of such individual's having exercised, enjoyed, or assisted in or encouraged the exercise or enjoyment of, any right granted or protected by this title.
SEC. 506. BENEFITS.
This title does not apply to the provision of employee benefits to an individual for the benefit of the domestic partner of such individual.
SEC. 507. COLLECTION OF STATISTICS PROHIBITED.
The Commission shall not collect statistics on sexual orientation from covered entities, or compel the collection of such statistics by covered entities.
SEC. 508. QUOTAS AND PREFERENTIAL TREATMENT PROHIBITED.
(a) Quotas.--A covered entity shall not adopt or implement a quota on the basis of sexual orientation.
(b) Preferential Treatment.--A covered entity shall not give preferential treatment to an individual on the basis of sexual orientation.
(c) Orders and Consent Decrees.--Notwithstanding any other provision of this title, an order or consent decree entered for a violation of this title may not include a quota, or preferential treatment to an individual, based on sexual orientation.
SEC. 509. RELIGIOUS EXEMPTION.
(a) In General.--Except as provided in subsection (b), this title shall not apply to a religious organization.
(b) Unrelated Business Taxable Income.--This title shall apply to employment or an employment opportunity for an employment position of a covered entity that is a religious organization if the duties of the position pertain solely to activities of the organization that generate unrelated business taxable income subject to taxation under section 511(a) of the Internal Revenue Code of 1986.
SEC. 510. NONAPPLICATION TO MEMBERS OF THE ARMED FORCES;
VETERANS' PREFERENCES.
(a) Armed Forces.--
(1) Employment or an employment opportunity.--In this title, the term ``employment or an employment opportunity'' does not apply to the relationship between the United States and members of the Armed Forces.
(2) Armed forces.--In paragraph (1), the term ``Armed Forces'' means the Army, Navy, Air Force, Marine Corps, and Coast Guard.
(b) Veterans' Preferences.--This title does not repeal or modify any Federal, State, territorial, or local law creating a special right or preference concerning employment or an employment opportunity for a veteran.
SEC. 511. CONSTRUCTION.
Nothing in this title shall be construed to prohibit a covered entity from enforcing rules regarding nonprivate sexual conduct, if the rules of conduct are designed for, and uniformly applied to, all individuals regardless of sexual orientation.
SEC. 512. ENFORCEMENT.
(a) Enforcement Powers.--With respect to the administration and enforcement of this title in the case of a claim alleged by an individual for a violation of this title--
(1) the Commission shall have the same powers as the Commission has to administer and enforce--
(A) title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.); or
(B) sections 302 and 304 of the Government Employee Rights Act of 1991 (2 U.S.C. 1202 and 1220);in the case of a claim alleged by such individual for a violation of such title, or of section 302(a)(1) of the Government Employee Rights Act of 1991 (2 U.S.C. 1202(a)(1)), respectively;
(2) the Librarian of Congress shall have the same powers as the Librarian of Congress has to administer and enforce title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.) in the case of a claim alleged by such individual for a violation of such title;
(3) the Board (as defined in section 101 of the Congressional Accountability Act of 1995 (2 U.S.C. 1301)) shall have the same powers as the Board has to administer and enforce the Congressional Accountability Act of 1995 (2 U.S.C. 1301 et seq.) in the case of a claim alleged by such individual for a violation of section 201(a)(1) of such Act
(2 U.S.C. 1311(a)(1));
(4) the Attorney General shall have the same powers as the Attorney General has to administer and enforce--
(A) title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.); or
(B) sections 302 and 304 of the Government Employee Rights Act of 1991 (2 U.S.C. 1202 and 1220);in the case of a claim alleged by such individual for a violation of such title, or of section 302(a)(1) of the Government Employee Rights Act of 1991 (2 U.S.C. 1202(a)(1)), respectively;
(5) the President, the Commission, and the Merit Systems Protection Board shall have the same powers as the President, the Commission, and the Board, respectively, have to administer and enforce chapter 5 of title 3, United States Code, in the case of a claim alleged by such individual for a violation of section 411 of such title;
(6) a court of the United States shall have the same jurisdiction and powers as the court has to enforce--
(A) title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.) in the case of a claim alleged by such individual for a violation of such title;
(B) sections 302 and 304 of the Government Employee Rights Act of 1991 (2 U.S.C. 1202 and 1220) in the case of a claim alleged by such individual for a violation of section 302(a)(1) of such Act (2 U.S.C. 1202(a)(1));
(C) the Congressional Accountability Act of 1995 (2 U.S.C. 1301 et seq.) in the case of a claim alleged by such individual for a violation of section 201(a)(1) of such Act
(2 U.S.C. 1311(a)(1)); and
(D) chapter 5 of title 3, United States Code, in the case of a claim alleged by such individual for a violation of section 411 of such title.
(b) Procedures and Remedies.--The procedures and remedies applicable to a claim alleged by an individual for a violation of this title are--
(1) the procedures and remedies applicable for a violation of title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.) in the case of a claim alleged by such individual for a violation of such title;
(2) the procedures and remedies applicable for a violation of section 302(a)(1) of the Government Employee Rights Act of 1991 (2 U.S.C. 1202(a)(1)) in the case of a claim alleged by such individual for a violation of such section;
(3) the procedures and remedies applicable for a violation of section 201(a)(1) of the Congressional Accountability Act of 1995 (2 U.S.C. 1311(a)(1)) in the case of a claim alleged by such individual for a violation of such section; and
(4) the procedures and remedies applicable for a violation of section 411 of title 3, United States Code, in the case of a claim alleged by such individual for a violation of such section.
(c) Other Applicable Provisions.--With respect to a claim alleged by a covered employee (as defined in section 101 of the Congressional Accountability Act of 1995 (2 U.S.C. 1301)) for a violation of this title, title III of the Congressional Accountability Act of 1995 (2 U.S.C. 1381 et seq.) shall apply in the same manner as such title applies with respect to a claim alleged by such a covered employee for a violation of section 201(a)(1) of such Act (2 U.S.C. 1311(a)(1)).
(d) Prohibition of Affirmative Action--Notwithstanding any other provision of this section, affirmative action for a violation of this title may not be imposed. Nothing in this section shall prevent the granting of relief to any individual who suffers a violation of such individual's rights provided in this title.
SEC. 513. STATE AND FEDERAL IMMUNITY.
(a) State Immunity.--A State shall not be immune under the 11th amendment to the Constitution from an action in a Federal court of competent jurisdiction for a violation of this title.
(b) Remedies Against the United States and the States.--Notwithstanding any other provision of this title, in an action or administrative proceeding against the United States or a State for a violation of this title, remedies (including remedies at law and in equity, and interest) are available for the violation to the same extent as the remedies are available for a violation of title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.) by a private entity, except that--
(1) punitive damages are not available; and
(2) compensatory damages are available to the extent specified in section 1977A(b) of the Revised Statutes (42 U.S.C. 1981a(b)).
SEC. 514. ATTORNEYS' FEES.
Notwithstanding any other provision of this title, in an action or administrative proceeding for a violation of this title, an entity described in section 512(a) (other than paragraph (4) of such section), in the discretion of the entity, may allow the prevailing party, other than the Commission or the United States, a reasonable attorney's fee
(including expert fees) as part of the costs. The Commission and the United States shall be liable for the costs to the same extent as a private person.
SEC. 515. POSTING NOTICES.
A covered entity who is required to post notices described in section 711 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-10) shall post notices for employees, applicants for employment, and members, to whom the provisions specified in section 512(b) apply, that describe the applicable provisions of this title in the manner prescribed by, and subject to the penalty provided under, section 711 of the Civil Rights Act of 1964.
SEC. 516. REGULATIONS.
(a) In General.--Except as provided in subsections (b),
(c), and (d), the Commission shall have authority to issue regulations to carry out this title.
(b) Librarian of Congress.--The Librarian of Congress shall have authority to issue regulations to carry out this title with respect to employees of the Library of Congress.
(c) Board.--The Board referred to in section 512(a)(3) shall have authority to issue regulations to carry out this title, in accordance with section 304 of the Congressional Accountability Act of 1995 (2 U.S.C. 1384), with respect to covered employees, as defined in section 101 of such Act (2 U.S.C. 1301).
(d) President.--The President shall have authority to issue regulations to carry out this title with respect to covered employees, as defined in section 401 of title 3, United States Code.
SEC. 517. RELATIONSHIP TO OTHER LAWS.
This title shall not invalidate or limit the rights, remedies, or procedures available to an individual claiming discrimination prohibited under any other Federal law or any law of a State or political subdivision of a State.
SEC. 518. SEVERABILITY.
If any provision of this title, or the application of the provision to any person or circumstance, is held to be invalid, the remainder of this title and the application of the provision to any other person or circumstance shall not be affected by the invalidity.
SEC. 519. EFFECTIVE DATE.
This title shall take effect 60 days after the date of enactment of this Act and shall not apply to conduct occurring before the effective date.
TITLE VI--PROMOTING CIVIL RIGHTS ENFORCEMENT
SEC. 601. ESTABLISHMENT OF THE NATIONAL TASK FORCE ON
VIOLENCE AGAINST HEALTH CARE PROVIDERS.
(a) Establishment.--There is established in the Department of Justice a National Task Force on Violence Against Health Care Providers (referred to in this section as the ``task force'').
(b) Composition.--The task force shall be composed on one or more individuals from--
(1) the Department of Justice;
(2) the Federal Bureau of Investigation;
(3) the United States Marshals Service;
(4) the Bureau of Alcohol, Tobacco, and Firearms; and
(5) the United States Postal Inspection Service.
(c) Chairman.--The task force shall be chaired by the Assistant Attorney General for Civil Rights.
(d) Powers and Duties.--The task force shall--
(1) coordinate the national investigation and prosecution of incidents of violence and other unlawful acts directed against reproductive health care providers, with a focus on connections that may exist between individuals involved in such unlawful activity;
(2) serve as a clearinghouse of information, for use by investigators and prosecutors, relating to acts of violence against reproductive health care providers;
(3) make available security information and recommendations to enhance the safety and protection of reproductive health care providers;
(4) provide training to Federal, State, and local law enforcement on issues relating to clinic violence; and
(5) support Federal civil investigation and litigation of violence and other unlawful acts directed at reproductive health care providers.
(e) Authorization of Appropriations.--There are authorized to be appropriated $1,000,000 for each fiscal year to carry out this section.
SEC. 602. INCREASE IN FUNDING FOR ENFORCING CIVIL RIGHTS
LAWS.
(a) Increase in Funding.--There are authorized to be appropriated for fiscal year 2002 for each of the agencies described in subsection (b) an amount equal to 105 percent of the amount appropriated for fiscal year 2001.
(b) Agencies.--The agencies referred to in subsection (a)
(with the increase and total amount authorized for fiscal year 2002) are as follows:
(1) Equal Employment Opportunity Commission (an increase of
$15,200,000 from fiscal year 2001 to $319,200,000 for fiscal year 2002).
(2) Department of Justice: Civil Rights Division (an increase of $4,600,000 from fiscal year 2001 to $96,600,000 for fiscal year 2002).
(3) Education: Office of Civil Rights (an increase of
$3,800,000 from fiscal year 2001 to $79,800,000 for fiscal year 2002).
(4) Department of Labor: Office of Federal Contract Compliance (an increase of $3,800,000 from fiscal year 2001 to $79,800,000 for fiscal year 2002).
(5) Department of Labor: Civil Rights Center (an increase of $300,000 from fiscal year 2001 to $6,300,000 for fiscal year 2002).
(6) Housing and Urban Development: Fair Housing Activities Grants (an increase of $2,300,000 from fiscal year 2001 to
$48,300,000 for fiscal year 2002).
(7) Health and Human Services: Office for Civil Rights (an increase of $1,400,000 from fiscal year 2001 to $29,400,000 for fiscal year 2002).
(8) Agriculture: Civil Rights Programs (an increase of
$1,000,000 from fiscal year 2001 to $21,000,000 for fiscal year 2002).
(9) Transportation: Office of Civil Rights (an increase of
$400,000 from fiscal year 2001 to $8,400,000 for fiscal year 2002).
(10) Environmental Protection Agency: Office of Civil Rights (an increase of $250,000 from fiscal year 2001 to
$5,250,000 for fiscal year 2002).
______
By Mr. DASCHLE (for himself, Mr. Harkin, Mr. Leahy, Mr. Johnson,
Mr. Baucus, Mr. Rockefeller, Mr. Kohl, Mr. Sarbanes, Mr.
Wellstone, Mr. Dorgan, Mr. Durbin, Mr. Conrad, Mr. Kerry, Mrs.
Carnahan, Mr. Dayton, Mr. Kennedy, and Mr. Akaka):
S. 20. A bill to enhance fair and open competition in the production and sale of agricultural commodities, and for other purposes; to the Committee on Agriculture, Nutrition, and Forestry.
securing a future for independent agriculture act of 2001
Mr. DASCHLE. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.
There being no objection, the material was ordered to be printed in the Record, as follows:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Securing a Future for Independent Agriculture Act of 2001''.
(b) Table of Contents.--The table of contents is as follows:
Sec. 1. Short title; table of contents.
TITLE I--PROTECTION FROM ANTICOMPETITIVE PRACTICES; CONTRACT FAIRNESS
Subtitle A--Definitions
Sec. 101. Definitions.
Subtitle B--Protection from Anticompetitive Practices
Sec. 111. Prohibitions against unfair practices in transactions involving agricultural commodities.
Sec. 112. Reports of the Secretary on potential unfair practices.
Sec. 113. Report on corporate structure.
Sec. 114. Mandatory funding for staff.
Sec. 115. General Accounting Office study.
Subtitle C--Contract Fairness
Sec. 121. Obligation of good faith.
Sec. 122. Disclosure of risks and readability requirements under agricultural contracts.
Sec. 123. Right of contract producers to cancel production contracts.
Sec. 124. Prohibition of confidentiality provisions.
Sec. 125. Production contract liens.
Sec. 126. Production contracts involving investment requirements.
Sec. 127. Producer rights.
Sec. 128. Mediation.
Subtitle D--Agricultural Fair Practices
Sec. 131. Agricultural fair practices.
Subtitle E--Implementation
Sec. 141. Relationship to State law.
Sec. 142. Regulations.
Sec. 143. Implementation plan.
Sec. 144. Effective date.
TITLE II--NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY FUND
Sec. 201. National Rural Cooperative and Business Equity Fund.
TITLE III--COUNTRY OF ORIGIN LABELING
Sec. 301. Country of origin labeling.
TITLE IV--MARKETING ASSISTANCE LOAN RATE EQUALIZATION
Sec. 401. Loan rates for marketing assistance loans.
Sec. 402. Term of loans.
Sec. 403. Application.
TITLE V--FARMLAND PROTECTION
Sec. 501. Farmland protection program.
TITLE VI--CIVIL RIGHTS
Sec. 601. Sense of Congress on participation of socially disadvantaged groups in Department of Agriculture programs.
TITLE I--PROTECTION FROM ANTICOMPETITIVE PRACTICES; CONTRACT FAIRNESS
Subtitle A--Definitions
SEC. 101. DEFINITIONS.
In this title:
(1) Active contractor.--The term ``active contractor'' means a person (including a processor) that (in accordance with a production contract) owns, or will own, an agricultural commodity that is produced by a contract producer.
(2) Agricultural commodity.--The term ``agricultural commodity'' has the meaning given the term in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602).
(3) Agricultural contract.--The term ``agricultural contract'' means a marketing contract or a production contract.
(4) Agricultural cooperative.--The term ``agricultural cooperative'' means an association of persons engaged in the production, marketing, or processing of an agricultural commodity that meets the requirements of the Act entitled
``An Act to authorize association of producers of agricultural products'' (commonly known as the ``Capper-Volstead Act'') (7 U.S.C. 291 et seq).
(5) Broker.--The term ``broker'' means any person engaged in the business of negotiating sales and purchases of any agricultural commodity in interstate or foreign commerce for or on behalf of the vendor or the purchaser, except that no person shall be considered a broker if the person's sales of such agricultural commodities are not in excess of $1,000,000 per year.
(6) Capital investment.--The term ``capital investment'' means an investment in--
(A) a structure, such as a building or manure storage structure; or
(B) machinery or equipment associated with producing an agricultural commodity that has a useful life of more than 1 year.
(7) Commission merchant.--The term ``commission merchant'' means any person engaged in the business of receiving in interstate or foreign commerce any agricultural commodity for sale, on commission, or for or on behalf of another person, except that no person shall be considered a commission merchant if the person's sales of such agricultural commodities are not in excess of $1,000,000 per year.
(8) Contract input.--
(A) In general.--The term ``contract input'' means an agricultural commodity or an organic or synthetic substance or compound that is used to produce an agricultural commodity.
(B) Inclusions.--The term ``contract input'' includes livestock, plants, agricultural seeds, semen or eggs for breeding stock, fertilizers, soil conditioners, and pesticides.
(9) Contract livestock facility.--The term ``contract livestock facility'' means a facility in which livestock or a product of live livestock is produced under a production contract by a contract producer.
(10) Contract producer.--The term ``contract producer'' means a producer that produces an agricultural commodity under a production contract.
(11) Contractor.--The term ``contractor'' means a person that is an active contractor or a passive contractor.
(12) Covered person.--The term ``covered person'' means a dealer, processor, commission merchant, and broker.
(13) Crop.--The term ``crop'' means an agricultural commodity produced from a plant.
(14) Dealer.--The term ``dealer'' means--
(A) any person (except an agricultural cooperative) engaged in the business of buying, selling, or marketing agricultural commodities in wholesale or jobbing quantities, as determined by the Secretary, in interstate or foreign commerce, except that--
(i) no person shall be considered a dealer with respect to sales or marketing of any agricultural commodity of that person's own production if the sales or marketing of such agricultural commodities do not exceed $10,000,000 per year; and
(ii) no person shall be considered a dealer who buys, sells, or markets less than $1,000,000 per year of such agricultural commodities; and
(B) an agricultural cooperative that sells or markets agricultural commodities of its members' own production if the agricultural cooperative sells or markets more than
$1,000,000 of its members' production per year of such agricultural commodities.
(15) Investment requirement.--The term ``investment requirement'' means a provision in a production contract that requires a contract producer to make a capital investment associated with producing an agricultural commodity subject to the production contract.
(16) Livestock.--The term ``livestock'' means beef cattle, dairy cattle, swine, sheep, or poultry.
(17) Marketing contract.--The term ``marketing contract'' means a written agreement between a processor and a producer for the purchase of an agricultural commodity grown or raised by the producer.
(18) Passive contractor.--The term ``passive contractor'' means a person that--
(A) provides a management service to a contract producer; and
(B) does not own an agricultural commodity that is produced by the contract producer under a production contract.
(19) Processor.--
(A) In general.--The term ``processor'' means--
(i) any person (other than an agricultural cooperative) engaged in the business of handling, preparing, or manufacturing (including slaughtering) an agricultural commodity or the products of an agricultural commodity for sale or marketing in interstate or foreign commerce for human consumption; and
(ii) an agricultural cooperative that handles, prepares, or manufactures (including slaughtering) agricultural commodities of its members' own production.
(B) Exclusions.--The term ``processor'' does not include--
(i) any person (other than an agricultural cooperative) with respect to the handling, preparing, or manufacturing
(including slaughtering) of an agricultural commodity that was produced by the person if the gross revenue derived by the person from the sales or marketing of the agricultural commodity is less than $10,000,000 per year; and
(ii) any agricultural cooperative that handles, prepares, or manufactures (including slaughtering) an agricultural commodity if the gross revenue derived by the person from the sales or marketing of the agricultural commodity is less than
$1,000,000 per year.
(20) Produce.--The term ``produce'' means--
(A) to provide feed or services relating to the care and feeding of livestock, including milking dairy cattle and storing raw milk; and
(B) to provide for planting, raising, harvesting, and storing a crop, including preparing soil for planting and applying a fertilizer, soil conditioner, or pesticide to a crop.
(21) Producer.--
(A) In general.--The term ``producer'' means a person that produces an agricultural commodity.
(B) Exclusions.--The term ``producer'' does not include--
(i) a commercial fertilizer or pesticide applicator;
(ii) a feed supplier; or
(iii) a veterinarian.
(22) Production contract.--
(A) In general.--The term ``production contract'' means a written agreement that provides for--
(i) the production of an agricultural commodity by a contract producer; or
(ii) the provision of a management service relating to the production of an agricultural commodity by a contract producer.
(B) Inclusions.--The term ``production contract'' includes--
(i) a contract between an active contractor and a contract producer for the production of an agricultural commodity;
(ii) a contract between an active contractor and a passive contractor for the provision of a management service to a contract producer in the production of an agricultural commodity; and
(iii) a contract between a passive contractor and a contract producer if--
(I) the production contract provides for a management service furnished by the passive contractor to the contract producer in the production of an agricultural commodity; and
(II) the passive contractor has a contractual relationship with the active contractor involving the production of the agricultural commodity.
(23) Secretary.--The term ``Secretary'' means the Secretary of Agriculture.
Subtitle B--Protection from Anticompetitive Practices
SEC. 111. PROHIBITIONS AGAINST UNFAIR PRACTICES IN
TRANSACTIONS INVOLVING AGRICULTURAL
COMMODITIES.
(a) Prohibitions.--It shall be unlawful in, or in connection with, any transaction in interstate or foreign commerce for any covered person or contractor--
(1) to engage in or use any unfair, unreasonable, unjustly discriminatory, or deceptive practice or device in the marketing, receiving, purchasing, sale, or contracting for the production of any agricultural commodity;
(2) to make or give any undue or unreasonable preference or advantage to any particular person or locality or subject any particular person or locality to any undue or unreasonable disadvantage in connection with any transaction involving any agricultural commodity;
(3) to make any false or misleading statement in connection with any transaction involving any agricultural commodity that is purchased or received in interstate or foreign commerce, or involving any production contract, or to fail, without reasonable cause, to perform any specification or duty, express or implied, arising out of any undertaking in connection with any such transaction or production contract;
(4) to retaliate against or disadvantage, or to conspire to retaliate against or disadvantage, any person because of statements or information lawfully provided by the person to any person (including to the Secretary or to a law enforcement agency) regarding alleged improper actions or violations of law by the covered person or contractor (unless the statements or information are determined to be libelous or slanderous under applicable State law) involving any agricultural commodity;
(5) to include as part of any new or renewed agreement or contract a right of first refusal, or to make any sale or transaction contingent on the granting of a right of first refusal, involving any agricultural commodity, before the date that is 180 days after the study required under section 115 is complete; or
(6) to offer different prices contemporaneously for agricultural commodities of like grade and quality (except agricultural commodities covered by the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499a et seq.)), unless--
(A) the agricultural commodity is purchased in a public market through a competitive bidding process or under similar conditions that provide opportunities for multiple competitors to seek to acquire the agricultural commodity;
(B) the premium or discount reflects the actual cost of acquiring an agricultural commodity prior to processing; or
(C) the Secretary has determined that such types of offers do not have a discriminatory impact against small volume producers of agricultural commodities.
(b) Violations.--
(1) Complaints.--Whenever the Secretary has reason to believe that any covered person or contractor has violated subsection (a), the Secretary shall cause a complaint in writing to be served on the covered person or contractor, stating the charges in that respect, and requiring the covered person or contractor to attend and testify at a hearing to be held not earlier than 30 days after the service of the complaint.
(2) Hearing.--
(A) In general.--The Secretary may hold hearings, sign and issue subpoenas, administer oaths, examine witnesses, receive evidence, and require the attendance and testimony of witnesses and the production of such accounts, records, and memoranda, as the Secretary considers necessary, for the determination of the existence of any violation of this section.
(B) Right to hearing.--A covered person or contractor may request a hearing if the covered person or contractor is subject to penalty for unfair conduct under this section.
(C) Respondents rights.--During a hearing, the covered person or contractor shall be given, pursuant to regulations promulgated by the Secretary, the opportunity--
(i) to be informed of the evidence against the covered person or contractor;
(ii) to cross-examine witnesses; and
(iii) to present evidence.
(D) Hearing limitation.--The issues of any hearing held or requested under this section shall be limited in scope to matters directly related to the purpose for which the hearing was held or requested.
(3) Report of finding and penalties.--
(A) In general.--If, after a hearing, the Secretary finds that the covered person or contractor has violated subsection
(a), the Secretary shall make a report in writing that states the findings of fact and includes an order requiring the covered person or contractor to cease and desist from continuing the violation.
(B) Civil penalty.--The Secretary may assess a civil penalty in an amount not to exceed $100,000 for each violation of subsection (a).
(4) Temporary injunction and finality and appealability of an order.--
(A) Temporary injunction.--At any time after a complaint is filed under paragraph (1), the court, on application of the Secretary, may issue a temporary injunction, restraining to the extent the court considers proper, the covered person or contractor and the officers, directors, agents, and employees of the covered person or contractor from violating subsection
(a).
(B) Appealability of an order.--An order issued pursuant to this subsection shall be final and conclusive unless within 30 days after service of the order, the covered person or contractor petitions to appeal the order to the court of appeals for the circuit in which the covered person or contractor resides or has its principal place of business or the District of Columbia Circuit Court of Appeals.
(C) Delivery of petition.--
(i) In general.--The clerk of the court shall immediately cause a copy of the petition filed under subparagraph (B) to be delivered to the Secretary.
(ii) Record.--On receipt of the petition, the Secretary shall file in the court the record of the proceedings under this subsection.
(D) Penalty for failure to obey an order.--
(i) In general.--Any covered person or contractor that fails to obey any order of the Secretary issued under this section after the order, or the order as modified, has been sustained by the court or has otherwise become final, shall be fined not less than $5,000 and not more than $100,000 for each offense.
(ii) Separate offenses.--Each day during which the failure continues shall be considered a separate offense.
(5) Records.--
(A) In general.--Each covered person or contractor shall maintain for a period of not less than 5 years accounts, records, and memoranda (including marketing agreements, forward contracts, and formula pricing arrangements) that fully and correctly disclose all transactions involved in the business of the covered person or contractor, including the true ownership of the business.
(B) Failure to keep records or allow the secretary to inspect records.--Failure to keep, or allow the Secretary to inspect records as required by this paragraph shall constitute an unfair practice in violation of subsection
(a)(1).
(C) Inspection of records.--The Secretary shall have the right to inspect such accounts, records, and memoranda
(including marketing agreements, forward contracts, and formula pricing arrangements) of any covered person or contractor as may be material to the investigation of any alleged violation of this section or for the purpose of investigating the business conduct or practices of an organization with respect to the covered person or contractor.
(c) Compensation for Injury.--
(1) Establishment of the family farmer and rancher claims commission.--
(A) In general.--The Secretary shall appoint 3 individuals to a commission to be known as the ``Family Farmer and Rancher Claims Commission'' (referred to in this subsection as the ``Commission'') to review claims of family farmers and ranchers that have suffered financial damages as a result of any violation of this section as determined by the Secretary pursuant to subsection (b)(3).
(B) Term of service.--
(i) In general.--Each member of the Commission shall serve 3-year terms which may be renewed.
(ii) Initial members.--The initial members of the Commission may be appointed for a period of less than 3 years, as determined by the Secretary.
(2) Review of claims.--
(A) Submission of claims.--A family farmer or rancher damaged as a result of a violation of this section, as determined by the Secretary pursuant to subsection (b)(3), may preserve the right to claim financial damages under this section by filing a claim pursuant to regulations promulgated by the Secretary.
(B) Determination.--Based on a review of the claim, the Commission shall determine the amount of damages to be paid, if any, as a result of the violation.
(C) Review.--The decisions of the Commission under this paragraph shall not be subject to judicial review except to determine that the amount of damages to be paid is consistent with the published regulations of the Secretary that establish the criteria for implementing this subsection.
(3) Funding.--
(A) In general.--Funds collected from civil penalties pursuant to this section shall--
(i) be transferred to a special fund in the Treasury;
(ii) be made available to the Secretary without further Act of appropriation; and
(iii) remain available until expended to pay the expenses of the Commission and claims described in this subsection.
(B) Authorization of appropriation.--In addition to the funds described in subparagraph (A), there are authorized to be appropriated such sums as may be necessary to carry out this section.
SEC. 112. REPORTS OF THE SECRETARY ON POTENTIAL UNFAIR
PRACTICES.
(a) Filing Premerger Notices With the Secretary.--No covered person, operator of a warehouse used to store agricultural commodities, or other agriculture-related business shall merge or acquire, directly or indirectly, any voting securities or assets of any other covered person, operator of a warehouse used to store agricultural commodities, or other agriculture-related business unless both persons (or in the case of a tender offer, the acquiring person) file notification pursuant to rules promulgated by the Secretary, if--
(1) any voting securities or assets of the covered person, operator of a warehouse used to store agricultural commodities, or other agriculture-related business with annual net sales or total assets of $10,000,000 or more are being acquired by a covered person, operator of a warehouse used to store agricultural commodities, or other agriculture-related business that has total assets or annual net sales of
$100,000,000 or more; or
(2) any voting securities or assets of a covered person, operator of a warehouse used to store agricultural commodities, or other agriculture-related business with annual net sales, or total assets, of $100,000,000 or more are being acquired by any covered person, operator of a warehouse used to store agricultural commodities, or agriculture-related business with annual net sales or total assets of $10,000,000 or more, if, as a result of the acquisition, the acquiring person would hold an aggregate total amount of the voting securities and assets of the acquired person in excess of $50,000,000.
(b) Review by the Secretary.--
(1) In general.--Except as provided in paragraph (2), the Secretary may conduct a review of any merger or acquisition described in subsection (a).
(2) Exception.--The Secretary shall conduct a review of any merger or acquisition described in subsection (a) on a request from a member of Congress.
(c) Access to Records.--The Secretary may request any information, including any testimony, documentary material, or related information, from a covered person, operator of a warehouse used to store agricultural commodities, or other agriculture-related business, pertaining to any merger or acquisition of any covered person, operator of a warehouse used to store agricultural commodities, or other agriculture-related business.
(d) Purpose of Review.--
(1) Findings.--In conducting the review under subsection
(a), the Secretary shall make findings concerning whether the merger or acquisition could--
(A) be significantly detrimental to the present or future viability of family farms or ranches or rural communities in the areas affected by the merger or acquisition, pursuant to standards established by the Secretary; or
(B) lead to a violation of section 111(a).
(2) Remedies.--The review may include a determination of possible remedies regarding how the parties of the merger or acquisition may take steps to modify their operations to address the findings described in paragraph (1).
(e) Report of Review.--
(1) Preliminary report.--After conducting the review required under subsection (b), the Secretary shall issue a preliminary report to the parties of the merger or acquisition and the Attorney General or the Federal Trade Commission, as appropriate, which shall include findings and a description of any remedies described in subsection (d)(2).
(2) Final report.--After affording the parties described in paragraph (1) an opportunity for a hearing regarding the findings and any proposed remedies in the preliminary report, the Secretary shall issue a final report to the President and the Attorney General or the Federal Trade Commission, as appropriate, with respect to the merger or acquisition.
(f) Implementation of the Report.--Not later than 120 days after the issuance of a final report described in subsection
(e)(2), the parties to the merger or acquisition affected by the report shall--
(1) make changes to their operations or structure to comply with the findings and implement any suggested remedy or any agreed-on alternative remedy; and
(2) file a response demonstrating the compliance or implementation.
(g) Confidentiality of Information.--
(1) In general.--Subject to paragraph (2), information used by the Secretary to conduct the review required under this section provided by a party to the merger or acquisition under review or by a government agency shall be treated by the Secretary as confidential information pursuant to section 1770 of the Food Security Act of 1985 (7 U.S.C. 2276).
(2) Party to hearing.--The Secretary may share any such information with the Attorney General, the Federal Trade Commission, and a party seeking a hearing pursuant to subsection (e)(2) with respect to information relating to the party.
(3) Report.--Subject to paragraph (1), the report issued under subsection (e) shall be available to the public.
(h) Civil Penalties.--
(1) Original penalty.--
(A) In general.--After affording the parties an opportunity for a hearing, the Secretary may assess a civil penalty in an amount not to exceed $300,000 for the failure of a person to comply with the requirements of subsection (a) or (f).
(B) Issue.--Any such hearing shall be limited to the issue of the amount of the civil penalty.
(2) Additional penalty.--
(A) In general.--If after being assessed a civil penalty under paragraph (1) a person continues to fail to meet the requirements of subsection (a) or (f), the Secretary may, after affording the parties an opportunity for a hearing, assess a further civil penalty in an amount not to exceed
$100,000 for each day the person continues the violation.
(B) Issue.--Any such hearing shall be limited to the issue of the additional civil penalty assessed under this paragraph.
SEC. 113. REPORT ON CORPORATE STRUCTURE.
(a) In General.--
(1) Report.--A covered person with annual sales in excess of $100,000,000 shall annually file with the Secretary a report that describes, with respect to both domestic and foreign activities, the strategic alliances, ownership in other agribusiness firms or agribusiness-related firms, joint ventures, subsidiaries, brand names, and interlocking boards of directors with other corporations, representatives, and agents that lobby Congress on behalf of the covered person, as determined by the Secretary.
(2) Contracts.--Paragraph (1) shall not apply to a contract.
(b) Civil Penalties.--
(1) Original penalty.--
(A) In general.--After affording the parties an opportunity for a hearing, the Secretary may assess a civil penalty in an amount not to exceed $100,000 for the failure of a person to comply with this section.
(B) Issue.--Any such hearing shall be limited to the issue of the amount of the civil penalty
(2) Additional penalty.--
(A) In general.--If after being assessed a civil penalty in accordance with paragraph (1) a person continues to fail to meet the requirements of this section, the Secretary may, after affording the parties an opportunity for a hearing, assess a further civil penalty in an amount not to exceed
$100,000 for each day the person continues the violation.
(B) Issue.--Any such hearing shall be limited to the amount of the additional civil penalty assessed under this paragraph.
SEC. 114. MANDATORY FUNDING FOR STAFF.
(a) In General.--Out of the funds in the Treasury not otherwise appropriated, the Secretary of Treasury shall provide to the Secretary of Agriculture $7,000,000 for each of fiscal years 2002 through 2006, to hire, train, and provide for additional staff to carry out additional responsibilities under this subtitle, including a Special Counsel on Fair Markets and Rural Opportunity, additional attorneys for the Office of General Counsel, investigators, economists, and support staff.
(b) Availability.--The sums shall be--
(1) made available to the Secretary without further Act of appropriation; and
(2) in addition to funds otherwise made available to the Secretary for the purposes described in subsection (a).
SEC. 115. GENERAL ACCOUNTING OFFICE STUDY.
Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States, in consultation with the Attorney General, the Secretary, the Federal Trade Commission, the National Association of Attorney's General, and other persons, shall--
(1) study competition in the domestic farm economy with a special focus on--
(A) protecting family farms and ranches and rural communities; and
(B) the potential for monopsony and oligopsony nationally and regionally; and
(2) provide a report to the appropriate committees of Congress on--
(A) the correlation between increases in the gap between--
(i) retail consumer food prices;
(ii) the prices paid to farmers and ranchers; and
(iii) any increases in concentration among processors, manufacturers, or other firms that buy from farmers and ranchers;
(B) the extent to which the use of formula pricing, marketing agreements, forward contracting, and production contracts tend to give processors, agribusinesses, and other buyers of agricultural commodities unreasonable market power over producers or suppliers in local markets;
(C) whether the granting of process patents relating to biotechnology research affecting agriculture during the past 20 years has tended to overly restrict related biotechnology research or has tended to overly limit competition in the biotechnology industries that affect agriculture in a manner that is contrary to the public interest, or could do so in the future;
(D) whether acquisitions of companies that own biotechnology patents and seed patents by multinational companies have the potential for reducing competition in the United States and unduly increasing the market power of the multinational companies;
(E) whether existing processors or agribusinesses have disproportionate market power and if competition could be increased if the processors or agribusinesses were required to divest assets to ensure that they do not exert the disproportionate market power over local markets;
(F) the extent of increase in concentration in milk processing, procurement and handling, and the potential risks from that increase in concentration on--
(i) the economic well-being of dairy farmers;
(ii) the school lunch program; and
(iii) other Federal nutrition programs;
(G) the impact of mergers, acquisitions, and joint ventures among dairy cooperatives on dairy farmers, including impacts on both members and nonmembers of the merging cooperatives;
(H) the impact of the significant increase in the use of stock as the primary means of effectuating mergers and acquisitions by large companies;
(I) the increase in the number and size of mergers or acquisitions in the United States and whether some of the mergers or acquisitions would have taken place if the merger or acquisition had to be consummated primarily with cash, other assets, or borrowing; and
(J) whether agricultural producers typically appear to derive any benefits (such as higher prices for their products or any other advantages) from right-of-first-refusal provisions contained in purchase contracts or other deals with agribusiness purchasers of the products.
Subtitle C--Contract Fairness
SEC. 121. OBLIGATION OF GOOD FAITH.
An agricultural contract shall carry an obligation of good faith (as defined in applicable State law provisions of the Uniform Commercial Code) on all parties to the agricultural contract with respect to the performance and enforcement of the agricultural contract.
SEC. 122. DISCLOSURE OF RISKS AND READABILITY REQUIREMENTS
UNDER AGRICULTURAL CONTRACTS.
(a) Readability and Understandability.--
(1) In general.--An agricultural contract shall be readable and understandable, in that the agricultural contract--
(A) shall be printed in legible type;
(B) shall be appropriately divided into captioned sections; and
(C) shall be written in clear and coherent language using words and grammar that are understandable by a person of average intelligence, education, and experience within the agricultural industry.
(2) Effect.--Paragraph (1) does not preclude the use of--
(A) a particular word, phrase, provision, or form of agreement that is specifically required, recommended, or endorsed by a Federal or State law (including a regulation); or
(B) a technical term that is used to describe the service or property that is the subject of the agricultural contract, if the term is customarily used by producers in the ordinary course of business in connection with the service or property described.
(b) Disclosure Statement Requirement.--An agricultural contract shall--
(1) be accompanied by a clear written disclosure statement describing the material risks faced by the producer if the producer enters into the agricultural contract; and
(2) disclose (in a manner consistent with subsection (a)), provisions of the agricultural contract relating to--
(A) duration;
(B) termination;
(C) renegotiation standards;
(D) responsibility for environmental damage;
(E) factors to be used in determining payment;
(F) responsibility for obtaining and complying with Federal, State, and local permits;
(G) in the case of a production contract, the right of the producer to cancel the production contract in accordance with section 123; and
(H) any other terms that the Secretary determines are appropriate for disclosure.
(c) Cover Sheet Requirement.--An agricultural contract entered into, amended, or renewed after the date of enactment of this Act shall contain as the first page, or first page of text if it is preceded by a title page, a cover sheet that complies with subsection (a) and contains the following:
(1) A brief statement that the agricultural contract is a legal contract between the parties to the agricultural contract.
(2) The following statement: ``READ YOUR CONTRACT CAREFULLY. This cover sheet provides only a brief summary of your contract. This cover sheet is not the contract, and only the terms of the actual contract are legally binding. The contract itself sets forth, in detail, the rights and obligations of both you and the contractor or processor. IT IS THEREFORE IMPORTANT THAT YOU READ YOUR CONTRACT CAREFULLY.''.
(3) A written disclosure of risks in accordance with subsection (b).
(4) In the case of a production contract, a statement describing, in plain language, the right of the producer to cancel the production contract in accordance with section 123.
(5) An index of the major provisions of the agricultural contract and the pages on which the provisions appear, including--
(A) the name of each party to the agricultural contract;
(B) the definitions section of the agricultural contract;
(C) the provisions governing termination, cancellation, renewal, and amendment of the agricultural contract by either party;
(D) the duties and obligations of each party; and
(E) provisions subject to change in the agricultural contract.
(d) Review by Secretary.--
(1) Submission to secretary.--A contractor may submit an agricultural contract to the Secretary for review to determine whether the agricultural contract complies with this section.
(2) Action by secretary.--The Secretary shall--
(A) in determining whether an agricultural contract or cover sheet is readable, in accordance with subsection (a), consider--
(i) the simplicity of the sentence structure;
(ii) the extent to which commonly used and understood words are employed;
(iii) the extent to which esoteric legal terms are avoided;
(iv) the extent to which references to other sections or provisions of the agricultural contract are minimized;
(v) the extent to which clear definitions are used; and
(vi) any additional factors relevant to the readability or understandability of the agricultural contract; and
(B) after reviewing the agricultural contract--
(i) certify that the agricultural contract complies with this section;
(ii) decline to certify that the agricultural contract complies with this section and provide specific reasons for declining to certify the agricultural contract; or
(iii) decline to review the agricultural contract because--
(I) the compliance of the agricultural contract with this section is subject to pending litigation; or
(II) the agricultural contract is not subject to this section.
(3) Judicial review.--An action of the Secretary under this subsection shall not be subject to judicial review.
(4) Certification.--
(A) In general.--An agricultural contract certified under this subsection shall be considered to comply with subsections (a), (b), and (c).
(B) No approval of legality or legal effect.--Certification of an agricultural contract under this subsection shall not constitute an approval of the legality or legal effect of the agricultural contract.
(C) Effect of approval; constructive approval.--If the Secretary certifies an agricultural contract under this subsection--
(i) the agricultural contract shall be considered to be in compliance with subsections (a), (b), and (c); and
(ii) the remedies provided under subsection (e) shall not be available.
(D) Timing.--To the maximum extent practicable, the Secretary shall make a decision on the certification of an agricultural contract not later than 30 days after receipt of the agricultural contract.
(5) Effect of disapproval.--If the Secretary disapproves the certification of an agricultural contract, the agricultural contract shall be void.
(6) Effect of failure to submit agricultural contract.--The failure to submit an agricultural contract to the Secretary for review under this subsection shall not be considered to be a lack of good faith or to raise a presumption that the agricultural contract violates this section.
(e) Remedies for Violations.--In addition to applicable remedies provided under State law, a court reviewing an agricultural contract that is not certified under subsection
(d) may change the terms of the agricultural contract, or limit a provision of the agricultural contract, to avoid an unfair result if--
(1) the court finds--
(A) a material provision of the agricultural contract violates subsection (a), (b), or (c);
(B) the violation reasonably caused the producer to be substantially confused about any of the rights, obligations, or remedies of any party to the agricultural contract; and
(C) the violation has caused or is likely to cause financial detriment to the producer; and
(2) the claim is brought before the obligations of any party to the agricultural contract have been fully performed.
(f) Limitations on Producer Actions.--
(1) In general.--A violation of this section--
(A) shall not entitle a producer to withhold performance of an otherwise valid contractual obligation when bringing a claim for relief under this section; and
(B) is not a defense to a claim arising from the breach of an agricultural contract by a producer.
(2) Actual damages.--A producer may recover actual damages caused by a violation of this section only if the violation reasonably caused the producer to fail to understand a right, obligation, or remedy under the agricultural contract.
(g) Statute of Limitations.--A claim that an agricultural contract violates this section shall be made not later than 6 years after the date on which the agricultural contract is executed by the producer.
SEC. 123. RIGHT OF CONTRACT PRODUCERS TO CANCEL PRODUCTION
CONTRACTS.
(a) In General.--A contract producer may cancel a production contract by mailing a cancellation notice to the contractor not later than the later of--
(1) the date that is 3 business days after the date on which the production contract is executed; or
(2) any cancellation date specified in the production contract.
(b) Disclosure.--A production contract shall clearly disclose--
(1) the right of the contract producer to cancel the production contract;
(2) the method by which the contract producer may cancel the production contract; and
(3) the deadline for canceling the production contract.
SEC. 124. PROHIBITION OF CONFIDENTIALITY PROVISIONS.
(a) Prohibition.--Any provision of an agricultural contract that provides that information contained in the agricultural contract (other than a trade secret to which section 552 of title 5, United States Code, applies) is confidential shall be void.
(b) Form.--A confidentiality provision described in subsection (a) shall be void regardless of whether the provision is--
(1) express or implied;
(2) oral or written;
(3) required or conditional; or
(4) contained in the agricultural contract, another agricultural contract, or in a related document, policy, or agreement.
(c) Other Provisions.--This section shall not affect other provisions of an agricultural contract or a related document, policy, or agreement that can be given effect without the voided provision.
(d) Disclosure of Information.--This subsection does not require a party to an agricultural contract to disclose information in the agricultural contract to any other person.
SEC. 125. PRODUCTION CONTRACT LIENS.
(a) Definition of Lien Starting Date.--In this section, the term ``lien starting date'' means--
(1) in the case of an annual crop, the date on which the annual crop is planted;
(2) in the case of a perennial crop, the starting date on which the perennial crop is subject to a production contract;
(3) in the case of livestock, the date on which the livestock arrive at the contract livestock facility; and
(4) in the case of milk or any other product of live livestock, the date on which the milk or other product is produced.
(b) Liens.--In the case of a production contract that provides for producing an agricultural commodity by a contract producer, the contract producer shall have a lien in the amount owed to the contract producer under the production contract on--
(1)(A) the agricultural commodity until the agricultural commodity is sold or processed (including slaughtered) by the contractor; and
(B) the cash proceeds of the sale of the agricultural commodity, including any cash provided as part of the sale; and
(2) any property of the contractor that may be subject to a security interest as provided in applicable State law provisions based on Article 9 of the Uniform Commercial Code.
(c) Lien Period.--A lien for the production of an agricultural commodity under this section shall apply during the period--
(1) beginning on the lien starting date; and
(2) ending 1 year after the agricultural commodity is no longer under the control of the contract producer.
(d) Central Filing System.--The Secretary shall establish a central filing system for the purposes of perfecting liens under this section and providing notice of the liens to the public.
(e) Perfecting Liens.--To perfect a lien for the production of an agricultural commodity under this section, a contract producer shall--
(1) not later than 45 days after the lien starting date, file with the Secretary a lien statement on a form prescribed by the Secretary that includes--
(A) an estimate of the amount owed under the production contract;
(B) the lien starting date;
(C) the estimated duration of the period during which the agricultural commodity will be under the control of the contract producer;
(D) the name of the party to the production contract whose agricultural commodity is produced under the production contract;
(E) a description of the location of the contract operation, by State, county, and township; and
(F) the printed name and signature of the person filing the form; and
(2) pay a filing fee in an amount determined by the Secretary, not to exceed $10.00.
(f) Priority of Lien.--A lien created under this section shall be superior to, and have priority over, any conflicting lien or security interest in the agricultural commodity, including a lien or security interest that was perfected prior to the creation of the lien under this section.
(g) Enforcement.--
(1) Control.--Before an agricultural commodity leaves the control of a contract producer, the contract producer may foreclose a lien created under this section in the manner provided for the foreclosure of a secured transaction under applicable State law provisions based on Article 9 of the Uniform Commercial Code.
(2) Post-control.--After an agricultural commodity leaves the control of the contract producer, the contract producer may enforce the lien in the manner provided under applicable State law provisions based Article 9 of the Uniform Commercial Code.
(h) Election of Other Remedies.--In lieu of obtaining a lien under this section, a contract producer described in subsection (b) may seek to collect funds due under a production contract in accordance with--
(1) the Packers and Stockyards Act, 1921 (7 U.S.C. 181 et seq.); or
(2) the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499a et seq.).
SEC. 126. PRODUCTION CONTRACTS INVOLVING INVESTMENT
REQUIREMENTS.
(a) Applicability.--This section applies only to a production contract between a contract producer and a contractor if the production contract requires the contract producer, together with any other production contract between the same parties, to make a capital investment of $100,000 or more.
(b) Restrictions on Contract Termination.--Except as provided in subsection
(d), a contractor shall not terminate or fail to renew a production contract until the contractor--
(1) provides the contract producer with written notice of the intention of the contractor to terminate or not renew the production contract at least 90 days before the effective date of the termination or nonrenewal; and
(2) reimburses the contract producer for damages (based on the value of the remaining useful life of the structures, machinery, equipment, or other capital investment items) incurred due to the termination, cancellation, or nonrenewal of the production contract.
(c) Breach of Investment Requirements.--
(1) In general.--Except as provided in subsection (d), a contractor shall not terminate or fail to renew a production contract with a contract producer that materially breaches a production contract, including the investment requirements of a production contract, until--
(A) the contractor provides the contract producer with a written notice of termination or nonrenewal, including a list of complaints alleging causes for the breach, at least 45 days before the effective date of the termination or nonrenewal; and
(B) the contract producer fails to remedy each cause of the breach alleged in the list of complaints provided in the notice not later than 30 days after receipt of the notice.
(2) Civil actions.--An effort by a contract producer to remedy a cause of an alleged breach shall not be considered to be an admission of a breach in a civil action.
(d) Exceptions.--A contractor may terminate or decline to renew a production contract in accordance with applicable law without notice or remedy as required in subsections (b) and
(c) if the basis for the termination or nonrenewal is--
(1) a voluntary abandonment of the contractual relationship by the contract producer, such as a complete failure of the performance of a contract producer under the production contract; or
(2) the conviction of a contract producer of an offense of fraud or theft committed against the contractor.
(e) Penalty.--If a contractor terminates or fails to renew a production contract other than as provided in this section, the contractor shall pay the contract producer the value of the remaining useful life of the structures, machinery, equipment, or other capital investment items.
SEC. 127. PRODUCER RIGHTS.
(a) In General.--It shall be unlawful, in or in connection with any transaction in interstate or foreign commerce, for any covered person or contractor to take an action to coerce, intimidate, disadvantage, retaliate against, or discriminate against any producer because the producer exercises, or attempts to exercise, the right of the producer--
(1)(A) to enter into a membership agreement or marketing contract with an agricultural cooperative, a processor, or another producer; and
(B) to exercise contractual rights under the membership agreement or marketing contract;
(2) to lawfully provide statements or information to the Secretary, a Federal or State law enforcement agency, or any other entity or person regarding improper actions or violations of law by a covered person or contractor under this subtitle, unless the statements or information are determined to be libelous or slanderous under applicable State law;
(3) to cancel a production contract in accordance with section 123;
(4) to disclose the terms of an agricultural contract under section 124;
(5) to file, continue, terminate, or enforce a lien under section 125; and
(6) to enforce other protections provided by this subtitle or other Federal or State law (including regulations).
(b) Waivers.--Any provision of an agricultural contract that waives a producer right described in subsection (a), or an obligation of a covered person or contractor established by this subtitle, shall be void and unenforceable.
(c) Violations.--Section 111(b) shall apply to a violation of this section.
SEC. 128. MEDIATION.
(a) Mediation.--
(1) In general.--An agricultural contract shall provide for resolution of disputes concerning the agricultural contract by mediation.
(2) Mediation by secretary or state mediation service.--If there is a dispute involving an agricultural contract, either party to the agricultural contract may make a written request to the Secretary for mediation services by the Secretary or by a designated State mediation service to facilitate resolution of the dispute.
(3) Hearing.--The parties to the agricultural contract shall receive a release from the mediation services described in paragraph (2) before the dispute may be heard by a court.
(b) No Arbitration of Future Controversy.--A provision in an agricultural contract submitting to arbitration a future controversy arising between a producer and a covered person or contractor shall be void.
Subtitle D--Agricultural Fair Practices
SEC. 131. AGRICULTURAL FAIR PRACTICES.
The Agricultural Fair Practices Act of 1967 (7 U.S.C. 2301 et seq.) is amended to read as follows:
``SECTION 1. SHORT TITLE.
``This Act may be cited as the `Agricultural Fair Practices Act of 1967'.
``SEC. 2. FINDINGS AND PURPOSE.
``(a) Findings.--Congress finds that--
``(1) agricultural products are produced in the United States by many individual farmers and ranchers scattered throughout the various States of the United States;
``(2) agricultural products in fresh or processed form move in large part in the channels of interstate and foreign commerce, and agricultural products that do not move in the channels directly burden or affect interstate commerce;
``(3) the efficient production and marketing of agricultural products by farmers and ranchers is of vital concern to the welfare of farmers and ranchers and to the general economy of the United States;
``(4) because agricultural products are produced by numerous individual farmers and ranchers, the marketing and bargaining position of individual farmers and ranchers will be adversely affected unless farmers and ranchers are free to join together voluntarily in cooperative organizations as authorized by law; and
``(5) interference with the right described in paragraph
(4) is contrary to the public interest and adversely affects the free and orderly flow of goods in interstate and foreign commerce.
``(b) Purpose.--The purpose of this Act is to establish standards of fair practices required of handlers for dealings in agricultural products.
``SEC. 3. DEFINITIONS.
``In this Act:
``(1) Accredited association.--The term `accredited association' means an association of producers accredited by the Secretary in accordance with section 6.
``(2) Association of producers.--
``(A) In general.--The term `association of producers' means an association of producers of agricultural products that engages in the marketing of agricultural products or of agricultural services described in paragraph (6)(B).
``(B) Inclusions.--The term `association of producers' includes--
``(i) a cooperative association (as defined in section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)); and
``(ii) an association described in the first section of the Act entitled `An Act to authorize association of producers of agricultural products' (commonly known as the `Capper-Volstead Act') (7 U.S.C. 291).
``(3) Bargain; bargaining.--The terms `bargain' and
`bargaining' refers to the performance of the mutual obligation of a handler and an accredited association to meet at reasonable times and for reasonable periods of time for the purpose of negotiating in good faith with respect to the price, terms of sale, compensation for products produced or services rendered under contract, or other provisions relating to the products marketed, or the services rendered, by the members of the accredited association or by the accredited association as agent for the members.
``(4) Designated handler.--The term `designated handler' means a handler that is designated in accordance with section 6.
``(5) Handler.--
``(A) In general.--The term `handler' means any person engaged in the business or practice of--
``(i) acquiring agricultural products from producers or associations of producers for processing or sale;
``(ii) grading, packaging, handling, storing, or processing agricultural products received from producers or associations of producers;
``(iii) contracting or negotiating contracts or other arrangements, written or oral, with or on behalf of producers or associations of producers with respect to the production or marketing of any agricultural product; or
``(iv) acting as an agent or broker for a handler in the performance of any function or act described in clause (i),
(ii), or (iii).
``(B) Exclusions.--The term ``handler'' does not include--
``(i) any person (other than an agricultural cooperative) engaged in a business or practice described in subparagraph
(A) if the gross revenue derived by the person from the business or activity is less than $10,000,000 per year; or
``(ii) any agricultural cooperative engaged in a business or practice described in subparagraph (A) if the gross revenue derived by the person from the business or activity is less than $1,000,000 per year.
``(6) Producer.--
``(A) In general.--The term `producer' means a person engaged in the production of agricultural products as a farmer, planter, rancher, dairyman, poultryman, or fruit, vegetable, or nut grower.
``(B) Inclusions.--The term `producer' includes a person that contributes labor, production management, facilities, or other services for the production of an agricultural product.
``(7) Person.--The term `person' includes an individual, partnership, corporation, and association.
``(8) Secretary.--The term `Secretary' means the Secretary of Agriculture.
``SEC. 4. PROHIBITED PRACTICES.
``It shall be unlawful for any handler knowingly to, or knowingly to permit any employee or agent to--
``(1) interfere with, restrain, or coerce any producer in the exercise of the right of the producer to join and belong to, or to refrain from joining or belonging to, an association of producers, or to refuse to deal with any producer because of the exercise of the right of the producer to join and belong to the association;
``(2) discriminate against any producer with respect to price, quantity, quality, or other terms of purchase, acquisition, or other handling of an agricultural product because of the membership of the producer in, or the contract of the producer with, an association of producers;
``(3) coerce or intimidate any producer to enter into, maintain, breach, cancel, or terminate a membership agreement or marketing contract with an association of producers or a contract with a handler;
``(4) pay or loan money, give any thing of value, or offer any other inducement or reward to a producer for refusing to or ceasing to belong to an association of producers;
``(5) make false reports about the finances, management, or activities of an association of producers or handlers;
``(6) conspire, combine, agree, or arrange with any other person to do, or aid or abet the performance of, any act made unlawful by this Act;
``(7) refuse to bargain in good faith with an accredited association, if the handler is a designated handler; or
``(8) dominate or interfere with the formation or administration of any association of producers or to contribute financial or other support to an association of producers.
``SEC. 5. BARGAINING IN GOOD FAITH.
``(a) Clarification of Obligation.--
``(1) In general.--The obligation of a designated handler to bargain in good faith shall apply with respect to an accredited association and the products or services for which the accredited association is accredited to bargain.
``(2) Agreements or concessions.--The good faith bargaining required between a handler and an accredited association shall not require either party to agree to a proposal or to make a concession.
``(b) Extension of Same Terms to Accredited Association.--
``(1) In general.--If a designated handler purchases a product or service from producers under terms more favorable to the producers than the terms negotiated with an accredited association for the same type of product or service, the handler shall offer the same terms to the accredited association.
``(2) Violations.--Failure to extend the same terms to the accredited association shall be considered to be a violation of section 4(g).
``(3) Factors.--In comparing terms, the Secretary shall consider--
``(A) the stipulated purchase price;
``(B) any bonuses, premiums, hauling, or loading allowances;
``(C) reimbursement of expenses;
``(D) payment for special services of any character that may be paid by the handler; and
``(E) any amounts paid or agreed to be paid by the handler for any designated purpose other than payment of the purchase price.
``(c) Mediation.--The Secretary may provide mediation services with respect to bargaining between an accredited association and a designated handler at the request of the accredited association or designated handler.
``SEC. 6. ACCREDITATION OF ASSOCIATIONS AND DESIGNATION OF
HANDLERS.
``(a) Accreditation Petition.--
``(1) In general.--An association of producers seeking accreditation to bargain on behalf of producers of an agricultural product or service shall submit to the Secretary a petition for accreditation.
``(2) Content.--The petition shall--
``(A) specify each agricultural product or service for which the association seeks accreditation to bargain on behalf of producers;
``(B) designate the handlers, individually, by production or marketing area, or by some other appropriate general classification, with whom the association seeks to be accredited to bargain; and
``(C) contain such other information and documents as may be required by the Secretary.
``(b) Notice of Petition; Proceedings.--
``(1) In general.--On receiving a petition under subsection
(a) and any supporting material, the Secretary shall provide notice of the petition to all handlers designated in the petition under subsection (a)(2)(B).
``(2) Individual handlers.--The Secretary shall provide personal notice under this subsection to a handler that has been designated individually.
``(3) General classifications.--The Secretary shall provide notice through the Federal Register to handlers that have been designated by production or marketing area or by some other general classification.
``(4) Opportunity to respond.--The association of producers seeking accreditation and the handlers shall have an opportunity to submit written evidence, views, and arguments to the Secretary.
``(5) Proceedings.--
``(A) In general.--Except as provided in subparagraph (B), the Secretary may conduct an informal proceeding on the petition.
``(B) Formal hearings.--The Secretary shall hold a formal hearing for the reception of testimony and evidence if the Secretary finds that there are substantial unresolved issues of material fact.
``(c) Issuance of Accreditation Order.--On the petition of an association of producers, the Secretary may issue an order designating the association of producers as an accredited association for the purposes of this Act if the Secretary determines that--
``(1) under the charter documents or bylaws of the association, the accredited association is owned and controlled by producers;
``(2) the association has contracts, binding under State law, with the members of the association empowering the association to sell or negotiate terms of sale of the products or services of the members;
``(3) the association represents a sufficient number of producers, or the members of the association produce a sufficient quantity of agricultural products or render a sufficient level of services, to enable the association to function as an effective agent for producers in bargaining with designated handlers;
``(4) the functions of the association include acting as principal or agent for the members of the association in negotiations with handlers for prices and other terms of trade with respect to the production, sale, and marketing of products or services of the members; and
``(5) the association is acting in good faith with respect to the members of the association and is complying with this Act.
``(d) Notification of Accreditation Order.--
``(1) In general.--The Secretary shall notify the petitioning association of producers, and each handler to be designated as part of the petition, of the decision of the Secretary regarding the petition and provide a concise statement of the basis for the decision.
``(2) Other associations.--The Secretary shall provide notice of an accreditation of an association to all other associations that have been accredited to bargain with respect to the product or service with any of the designated handlers of the association.
``(e) Annual Report.--Each accredited association shall submit to the Secretary an annual report in such form and including such information as the Secretary by regulation may require to enable the Secretary to determine whether the association is meeting the standards for accreditation.
``(f) Loss of Accreditation.--
``(1) In general.--If the Secretary determines that an accredited association has ceased to meet the standards for accreditation under subsection (c), the Secretary shall--
``(A) notify the association of the manner in which the association is deficient in maintaining the standards for accreditation; and
``(B) allow the association a reasonable period of time to answer or correct the deficiencies.
``(2) Hearing.--After providing notice and a corrective period in accordance with paragraph (1), if the Secretary is not satisfied that the association is in compliance with subsection (c), the Secretary shall--
``(A) notify the association of the continued deficiencies; and
``(B) hold a hearing to consider the revocation of accreditation.
``(3) Revocation.--If, based on the evidence submitted at the hearing, the Secretary finds that the association has ceased to maintain the standards for accreditation, the Secretary shall revoke the accreditation of the association.
``(g) Amendment.--
``(1) In general.--At the option of the Secretary or on the petition of an accredited association or a designated handler, the Secretary may amend an accreditation order with respect to the product or service specified in the accreditation order.
``(2) Notice.--The Secretary shall provide--
``(A) notice of any proposed amendment and the reasons for the amendment to all accredited associations and handlers that would be directly affected by the amendment; and
``(B) an opportunity for a public hearing.
``(3) Authority.--After providing notice and an opportunity for a hearing in accordance with paragraph (2), the Secretary may amend the accreditation order if the Secretary finds that the amendment will be conducive to more effective bargaining and orderly marketing by the accredited association of the product or services of the members of the accredited association.
``SEC. 7. ASSIGNMENT OF ASSOCIATION DUES AND FEES.
``(a) In General.--A producer of an agricultural product or service may execute, as a clause in a sales contract or in another written instrument, an assignment of dues or fees to, or the deduction of a sum to be retained by, an association of producers authorized by contract to represent the producer, under which assignment a handler shall--
``(1) deduct a portion of the amount to be paid for products or services of the producer under a growing contract; and
``(2) pay, on behalf of the producer, the portion over to the association as dues or fees or a sum to be retained by the association.
``(b) Duty of Handler.--After a handler receives notice from a producer of an assignment under subsection (a), the handler shall--
``(1) deduct the amount authorized by the assignment from the amount paid for any agricultural product sold by the producer or for any service rendered under any growing contract; and
``(2) on payment to producers for the product or service, pay the amount over to the association or the assignee of the association.
``SEC. 8. POWERS OF SECRETARY.
``(a) Records and Information.--
``(1) Maintenance.--The Secretary may require any person covered by this Act to establish and maintain such records, make such reports, and provide such other information as the Secretary may reasonably require to carry out this Act.
``(2) Access.--The Secretary and any officer or employee of the Department of Agriculture, on presentation of credentials and a warrant or such other order of a court--
``(A) shall have a right of entry to, on, or through any premises in which records required to be maintained under paragraph (1) are located; and
``(B) may at reasonable times have access to and copy any records that any person is required to maintain or that relate to any matter under this Act under investigation or in question.
``(b) Complaints.--If the Secretary has reason to believe
(whether through investigation or petition by any person) that any person has violated this Act, the Secretary shall cause a complaint to be served on the person--
``(1) stating the reasons for the alleged violation of this Act; and
``(2) requiring the person to attend and testify at a hearing to be held not earlier than 30 days after the date of service of the complaint.
``(c) Hearing.--
``(1) In general.--The Secretary may hold hearings, sign and issue subpoenas, administer oaths, examine witnesses, receive evidence, and require the attendance and testimony of witnesses and the production of such accounts, records, and memoranda, as the Secretary considers necessary to determine whether a violation of this Act has occurred.
``(2) Right to hearing.--A person may request a hearing if the person is subject to a penalty under this Act.
``(3) Respondents' rights.--During a hearing, the person complained of shall be given, in accordance with regulations promulgated by the Secretary, the opportunity--
``(A) to be informed of the evidence against the person;
``(B) to cross-examine witnesses; and
``(C) to present evidence.
``(4) Hearing limitation.--The issues at any hearing held or requested under this section shall be limited in scope to matters directly related to the purpose for which the hearing was held or requested.
``(d) Report of Finding and Penalties.--
``(1) In general.--If, after a hearing, the Secretary finds that a person has violated this Act, the Secretary shall make, and provide to the person, a written report that states the findings of fact and includes an order requiring the person to cease and desist from committing the violation.
``(2) Civil penalty.--The Secretary may assess a civil penalty not to exceed $100,000 for each violation of this Act.
``(e) Injunctions; Finality and Appealability of an Order.--
``(1) Injunctions.--At any time after a complaint is served on a person under subsection (b), the court, on application of the Secretary, may issue an injunction, restraining to the extent the court determines to be appropriate, the person and the officers, directors, agents, and employees of the person from violating this Act.
``(2) Appealability of an order.--An order issued under this section shall be final and conclusive unless, within 30 days after service of the order, the affected handler petitions to appeal the order to the United States court of appeals for the circuit in which the handler resides or has its principal place of business or the United States Court of Appeals for the District of Columbia Circuit.
``(3) Delivery of petition.--
``(A) In general.--The clerk of the court shall immediately cause a copy of any petition filed under paragraph (2) to be delivered to the Secretary.
``(B) Record.--On receipt of the petition, the Secretary shall file in the court the record of the proceedings under this section.
``(4) Penalty for failure to obey an order.--
``(A) In general.--Any person that fails to obey an order of the Secretary issued under this section after the order becomes final shall be fined not less than $5,000 and not more than $100,000 for each offense.
``(B) Separate offenses.--Each day during which the failure continues shall be considered to be a separate offense.
``SEC. 9. ENFORCEMENT.
``(a) Civil Actions by Aggrieved Persons.--
``(1) Preventive relief.--Whenever any handler has engaged or there are reasonable grounds to believe that any handler is about to engage in any act or practice prohibited by this Act, a civil action for preventive relief, including an application for a permanent or temporary injunction, restraining order, or other order, may be instituted by the person aggrieved.
``(2) Attorney's fees.--In any action commenced under paragraph (1), the court may allow the prevailing party a reasonable attorney's fee as part of the costs.
``(3) Security.--The court may provide that no restraining order or preliminary injunction shall issue unless security is provided by the applicant, in such sum as the court determines to be appropriate, for the payment of such costs and damages as may be incurred or suffered by any party that is found to have been wrongfully enjoined or restrained.
``(b) Civil Actions by Injured Persons.--
``(1) In general.--Any person injured in the business or property of the person by reason of any violation of, or combination or conspiracy to violate, this Act may--
``(A) sue for the violation in the appropriate United States district court without respect to the amount in controversy; and
``(B) recover damages sustained.
``(2) Attorney's fees.--In any action commenced under paragraph (1), the court may allow the prevailing party a reasonable attorney's fee as part of the costs.
``(3) Limitation on actions.--Any action to enforce any cause of action under this subsection shall be barred unless commenced within 2 years after the cause of action occurred.
``(c) Jurisdiction of District Courts.--
``(1) In general.--A United States district court shall have jurisdiction over an action brought under this section.
``(2) Limitations.--No action may be commenced under subsection (a) or (b)--
``(A) prior to 60 days after the plaintiff has given notice of the alleged violation to the Secretary through a petition under section 8(b); or
``(B) if the Secretary has commenced and is diligently prosecuting an action (administrative or judicial) dealing with the same violation to require compliance with the Act.
``(d) Judicial Review.--An order of the Secretary with respect to which review could have been obtained under section 8(e)(2) shall not be subject to judicial review in any proceeding for enforcement under this section.
``SEC. 10. PREEMPTION.
``(a) In General.--Except as expressly provided in this Act, this Act does not invalidate the provisions of any State law dealing with the same subject as this Act.
``(b) State Courts.--This Act shall not deprive a State court of jurisdiction under a State law dealing with the same subject as this Act.''.
Subtitle E--Implementation
SEC. 141. RELATIONSHIP TO STATE LAW.
(a) In General.--Except as expressly provided in this title, this title does not invalidate any provision of State law dealing with the same subject as this title.
(b) State Courts.--This title does not deprive a State court of jurisdiction under a State law dealing with the same subject as this title.
SEC. 142. REGULATIONS.
The Secretary shall promulgate such regulations as are appropriate to carry out this title and the amendments made by this title.
SEC. 143. IMPLEMENTATION PLAN.
Not later than 180 days after the date of enactment of this Act, the Secretary and the Attorney General shall develop and implement a plan to enable the Secretary, where appropriate, to file civil actions, including temporary injunctions, to enforce orders issued by the Secretary under this title and the Agricultural Fair Practices Act of 1967 (as amended by section 131).
SEC. 144. EFFECTIVE DATE.
(a) In General.--Except as provided in subsection (b), this title and the amendments made by this title take effect on the date of enactment of this Act.
(b) Agricultural Contracts.--
(1) In general.--Except as provided in paragraph (2), subtitle C applies to an agricultural contract in force on or after the date of enactment of this Act, regardless of the date on which the agricultural contract is executed.
(2) Exceptions.--Sections 122, 123, 126, 127(a)(5), and 128(a) shall apply only to an agricultural contract that is executed or substantively amended after the date of enactment of this Act.TITLE II--NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY FUND
SEC. 201. NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY
FUND.
The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) is amended by adding at the end the following:
``Subtitle F--National Rural Cooperative and Business Equity Fund
``SEC. 391A. SHORT TITLE.
``This subtitle may be cited as the `National Rural Cooperative and Business Equity Fund Act'.
``SEC. 391B. PURPOSE.
``The purpose of this subtitle is to revitalize rural communities and enhance farm income through sustainable rural business development by providing Federal funds and credit enhancements to a private equity fund in order to encourage investments by institutional and noninstitutional investors for the benefit of rural America.
``SEC. 391C. DEFINITIONS.
``In this subtitle:
``(1) Authorized private investor.--The term `authorized private investor' means an individual, legal entity, or affiliate or subsidiary of an individual or legal entity that--
``(A) is eligible to receive a loan guarantee under this title;
``(B) is eligible to receive a loan guarantee under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.);
``(C) is created under the National Consumer Cooperative Bank Act (12 U.S.C. 3011 et seq.);
``(D) is an insured depository institution; or
``(E) is determined by the Fund to be an appropriate investor in the Fund.
``(2) Board.--The term `Board' means the board of directors of the Fund established under section 391G.
``(3) Fund.--The term `Fund' means the National Rural Cooperative and Business Equity Fund established under section 391D.
``(4) Group of similar investors.--The term `group of similar investors' means any 1 of the following:
``(A) Insured depository institutions with total assets of more than $250,000,000.
``(B) Insured depository institutions with total assets equal to or less than $250,000,000.
``(C) Farm Credit System institutions under the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.).
``(D) Cooperative financial institutions (other than Farm Credit System institutions).
``(E) Authorized private investors, other than those described in subparagraphs (A) through (D).
``(F) Other nonprofit organizations, including credit unions.
``(5) Insured depository institution.--The term `insured depository institution' means any bank or savings association the deposits of which are insured under the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.).
``(6) Rural area.--The term `rural area' means an area that is located--
``(A) outside a standard metropolitan statistical area; or
``(B) within a community that has a population of 50,000 individuals or fewer.
``(7) Rural business.--The term `rural business' means a rural cooperative, a value-added agricultural enterprise, or any other business located or locating in a rural area.
``SEC. 391D. ESTABLISHMENT OF THE FUND.
``(a) In General.--
``(1) Authority to establish.--A group of authorized private investors may establish, as a non-Federal entity under State law, and manage a fund to be known as the
`National Rural Cooperative and Business Equity Fund', to raise and provide equity capital to rural businesses.
``(2) Composition of group.--The group of authorized private investors referred to in paragraph (1) shall be composed, to the maximum extent practicable, of representatives of a majority of groups of similar investors.
``(b) Purposes.--The purposes of the Fund shall be--
``(1) to strengthen the economy of rural areas;
``(2) to further sustainable rural business development;
``(3) to encourage start-up rural businesses, increased opportunities for small and minority-owned rural businesses, and the formation of new rural businesses;
``(4) to enhance rural employment opportunities;
``(5) to provide equity capital to rural businesses that have been unable to obtain equity capital; and
``(6) to leverage non-Federal funds for rural businesses.
``(c) Articles of Incorporation and By-Laws.--The articles of incorporation and by-laws of the Fund shall set forth purposes of the Fund that are consistent with subsection (b).
``SEC. 391E. INVESTMENT IN THE FUND.
``(a) In General.--The Secretary, using funds of the Commodity Credit Corporation, shall--
``(1) subject to subsection (b)(1), make available to the Fund $50,000,000 for each of fiscal years 2001 through 2003;
``(2) subject to subsection (c), guarantee 50 percent of each investment made by an authorized private investor in the Fund; and
``(3) subject to subsection (d), guarantee the repayment of principal to authorized private investors in debentures issued by the Fund.
``(b) Private Investment.--
``(1) Matching requirement.--Under subsection (a)(1), the Secretary shall make an amount available to the Fund only after an equal amount has been invested in the Fund by authorized private investors in accordance with this subtitle and the terms and conditions set forth in the by-laws of the Fund.
``(2) Investments by insured depository institutions.--Investments in the Fund by an insured depository institution shall be considered part of the record of the insured depository institution for meeting the credit needs of its entire community for the purposes of Federal law.
``(c) Guarantee of Private Investments.--
``(1) In general.--The Secretary shall guarantee, under terms and conditions determined by the Secretary, 50 percent of any loss of the principal of an investment made in the Fund by an authorized private investor.
``(2) Maximum total guarantee.--The aggregate liability of the Secretary with respect to all guarantees under paragraph
(1) shall not apply to more than $300,000,000 in private investments.
``(3) Redemption of guarantee.--
``(A) Date.--An authorized private investor in the Fund may redeem a guarantee under paragraph (1), with respect to the total investments in the Fund and the total losses of the authorized private investor as of the date of redemption--
``(i) on the date that is 5 years after the date of incorporation of the Fund; or
``(ii) annually thereafter.
``(B) Effect of redemption.--On redemption of a guarantee under subparagraph (A)--
``(i) the shares in the Fund of the authorized private investor shall be redeemed; and
``(ii) the authorized private investor shall be prohibited from making any future investment in the Fund.
``(d) Debt.--
``(1) In general.--The Fund may, at the discretion of the Board, raise additional capital through the issuance of debentures and through other means determined to be appropriate by the Board.
``(2) Guarantee of debt by secretary.--
``(A) In general.--The Secretary may guarantee 100 percent of the principal of, and accrued interest on, debentures issued by the Fund that are approved by the Secretary.
``(B) Maximum debt guaranteed by secretary.--The outstanding value of debentures issued by the Fund and guaranteed by the Secretary shall not exceed the lesser of--
``(i) the amount equal to twice the value of the assets held by the Fund; or
``(ii) $500,000,000.
``(C) Recapture of guarantee payments.--If the Secretary makes a payment on a debenture issued by the Fund as a result of a guarantee of the Secretary under this paragraph, the Secretary shall have priority over other creditors for repayment of the debenture.
``(3) Authorized private investors.--An authorized private investor may purchase debentures and other securities issued by the Fund.
``SEC. 391F. INVESTMENTS AND OTHER ACTIVITIES OF THE FUND.
``(a) Investments.--
``(1) In general.--
``(A) Types.--Subject to subparagraphs (B) and (C), the Fund may--
``(i) make equity investments in an entity that meets the requirements of paragraph (6) and such other requirements as the Board may establish; and
``(ii) extend credit to such an entity in--
``(I) the form of mezzanine debt or subordinated debt; or
``(II) any other form of quasi-equity.
``(B) Limitation on equity investments.--After the initial equity investment in an entity described in subparagraph
(A)(i), the Fund may not make additional equity investments in the entity if the additional equity investments would result in the Fund owning more than 30 percent of the equity of the entity.
``(C) Limitation on nonequity investments.--Except in the case of a project to assist a rural cooperative, the total amount of nonequity investments described in subparagraph
(A)(ii) that may be provided by the Fund shall not exceed 20 percent of the total investments of the Fund in the project.
``(2) Procedures.--The Fund shall implement procedures to ensure that--
``(A) the financing arrangements of the Fund meet the Fund's primary focus of providing equity capital; and
``(B) the Fund does not compete with conventional sources of credit.
``(3) Diversity of projects.--The Fund--
``(A) shall seek to make equity investments in a variety of viable projects, with a significant share of investments--
``(i) in smaller projects in rural communities of diverse sizes; and
``(ii) in cooperative and noncooperative enterprises; and
``(B) shall be managed in such a way as to diversify the risks to the Fund among a variety of projects.
``(4) Limitation on rural businesses assisted.--The Fund shall not invest in any rural business that is primarily retail in nature (as determined by the Board), other than a purchasing cooperative.
``(5) Interest rate limitations.--Returns on investments in and by the Fund and returns on the extension of credit by participants in projects assisted by the Fund, shall not be subject to any State or Federal law establishing a maximum allowable interest rate.
``(6) Requirements for recipients.--
``(A) Other investments.--Any recipient of amounts from the Fund shall make or obtain a significant investment from a source of capital other than the Fund.
``(B) Sponsorship.--Rural business investment projects to be considered for an equity investment from the Fund shall be sponsored by a regional, State, or local sponsoring or endorsing organization such as--
``(i) a financial institution;
``(ii) a development organization; or
``(iii) any other established entity engaging or assisting in rural business development, including a rural cooperative.
``(b) Technical Assistance.--The Board shall use not less than 1 percent of the net earnings of the Fund to provide technical assistance to rural businesses seeking an equity investment from the Fund.
``(c) Annual Audit.--
``(1) In general.--The Board shall authorize an annual audit of the financial statements of the Fund by a nationally recognized auditing firm using generally accepted auditing procedures.
``(2) Availability of audit results.--The results of the audit required by paragraph (1) shall be made available to investors in the Fund.
``(d) Annual Report.--The Board shall prepare and make available to the public an annual report that--
``(1) describes the projects funded with amounts from the Fund;
``(2) specifies the recipients of amounts from the Fund;
``(3) specifies the co-investors in all projects that receive amounts from the Fund; and
``(4) meets the reporting requirements, if any, of the State under the law of which the Fund is established.
``(e) Other Authorities.--The Board may exercise such other authorities as are necessary to carry out this subtitle.
``SEC. 391G. GOVERNANCE OF THE FUND.
``(a) In General.--The Fund shall be governed by a board of directors that represents all of the authorized private investors in the Fund and the Federal Government and that consists of--
``(1) the Secretary or a designee;
``(2) 2 members who are appointed by the Secretary and are not Federal employees, including--
``(A) 1 member with expertise in venture capital investment; and
``(B) 1 member with expertise in cooperative development;
``(3) 8 members who are elected by the authorized private investors with investments in the Fund; and
``(4) 1 member who is appointed by the Board and who is a community banker from an insured depository institution with total assets equal to or less than $250,000,000.
``(b) Limitation on Voting Control.--No individual investor or group of similar investors may control more than 25 percent of the votes on the Board.''.
TITLE III--COUNTRY OF ORIGIN LABELING
SEC. 301. COUNTRY OF ORIGIN LABELING.
The Agricultural Marketing Act of 1946 (7 U.S.C. 1621 et seq.) is amended by adding at the end the following:
``Subtitle C--Country of Origin Labeling
``SEC. 271. DEFINITIONS.
``In this subtitle:
``(1) Beef.--The term `beef' means meat produced from cattle (including veal).
``(2) Covered commodity.--The term `covered commodity' means--
``(A) muscle cuts of beef, lamb, and pork;
``(B) ground beef, ground lamb, and ground pork; and
``(C) a perishable agricultural commodity.
``(3) Food service establishment.--The term `food service establishment' means a restaurant, cafeteria, lunch room, food stand, saloon, tavern, bar, lounge, or other similar facility operated as an enterprise engaged in the business of selling food to the public.
``(4) Lamb.--The term `lamb' means meat, other than mutton, produced from sheep.
``(5) Packer.--The term `packer' has the meaning given the term in section 201 of the Packers and Stockyards Act, 1921
(7 U.S.C. 191).
``(6) Perishable agricultural commodity; retailer.--The terms `perishable agricultural commodity' and `retailer' have the meanings given the terms in section 1(b) of the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499a(b)).
``(7) Pork.--The term `pork' means meat produced from hogs.
``(8) Secretary.--The term `Secretary' means the Secretary of Agriculture, acting through the Agricultural Marketing Service.
``SEC. 272. NOTICE OF COUNTRY OF ORIGIN.
``(a) In General.--
``(1) Requirement.--Except as provided in subsection (b), a retailer of a covered commodity shall inform consumers, at the final point of sale of the covered commodity to consumers, of the country of origin of the covered commodity.
``(2) United states country of origin.--A retailer of a covered commodity (other than a perishable agricultural commodity) may designate the covered commodity as having a United States country of origin only if the covered commodity is exclusively from an animal that is exclusively born, raised, and slaughtered in the United States.
``(b) Exemption for Food Service Establishments.--Subsection (a) shall not apply to a covered commodity if the covered commodity is--
``(1) prepared or served in a food service establishment; and
``(2)(A) offered for sale or sold at the food service establishment in normal retail quantities; or
``(B) served to consumers at the food service establishment.
``(c) Method of Notification.--
``(1) In general.--The information required by subsection
(a) may be provided to consumers by means of a label, stamp, mark, placard, or other clear and visible sign on the covered commodity or on the package, display, holding unit, or bin containing the commodity at the final point of sale to consumers.
``(2) Labeled commodities.--If the covered commodity is already individually labeled for retail sale regarding country of origin by the packer, importer, or another person, the retailer shall not be required to provide any additional information to comply with this section.
``(d) Audit Verification System.--The Secretary may require by regulation that any person that prepares, stores, handles, or distributes a covered commodity for retail sale maintain a verifiable recordkeeping audit trail that will permit the Secretary to ensure compliance with the regulations promulgated under section 274.
``(e) Information.--A packer and any other person engaged in the business of supplying a covered commodity to a retailer shall provide information to the retailer indicating the country of origin of the covered commodity.
``SEC. 273. ENFORCEMENT.
``Section 253 shall apply to a violation of this subtitle.
``SEC. 274. REGULATIONS.
``(a) In General.--The Secretary shall promulgate such regulations as are necessary to carry out this subtitle.
``(b) Partnerships With States.--In promulgating the regulations, the Secretary shall, to the maximum extent practicable, enter into partnerships with States with enforcement infrastructure to carry out this subtitle.
``SEC. 275. APPLICATION.
``This subtitle shall apply to the retail sale of a covered commodity beginning on the date that is 180 days after the date of the enactment of this subtitle.''.
TITLE IV--MARKETING ASSISTANCE LOAN RATE EQUALIZATION
SEC. 401. LOAN RATES FOR MARKETING ASSISTANCE LOANS.
Section 132 of the Agricultural Market Transition Act (7 U.S.C. 7232) is amended to read as follows:
``SEC. 132. LOAN RATES FOR MARKETING ASSISTANCE LOANS.
``(a) Wheat.--The loan rate for a marketing assistance loan under section 131 for wheat shall be based on 80 percent of the average full economic cost of production per bushel
(based on yield per planted acre), as determined by the Secretary, for the immediately preceding 3 crops of wheat.
``(b) Feed Grains.--
``(1) Corn.--The loan rate for a marketing assistance loan under section 131 for corn shall be based on 80 percent of the average full economic cost of production per bushel
(based on yield per planted acre), as determined by the Secretary, for the immediately preceding 3 crops of corn.
``(2) Other feed grains.--
``(A) In general.--Subject to subparagraph (B), the loan rate for a marketing assistance loan under section 131 for grain sorghum, barley, and oats, individually, shall be established at such level as the Secretary determines is fair and reasonable in relation to the rate that loans are made available for corn, taking into consideration the feeding value of the commodity in relation to corn.
``(B) Basis.--The loan rate for a marketing assistance loan under section 131 for grain sorghum, barley, and oats, individually, shall be based on 80 percent of the average full economic cost of production per bushel (based on yield per planted acre), as determined by the Secretary, for the immediately preceding 3 crops of grain sorghum, barley, and oats, respectively.
``(c) Upland Cotton.--The loan rate for a marketing assistance loan under section 131 for upland cotton shall be based on 80 percent of the average full economic cost of production per bushel (based on yield per planted acre), as determined by the Secretary, for the immediately preceding 3 crops of upland cotton.
``(d) Extra Long Staple Cotton.--The loan rate for a marketing assistance loan under section 131 for extra long staple cotton shall be based on 80 percent of the average full economic cost of production per bushel (based on yield per planted acre), as determined by the Secretary, for the immediately preceding 3 crops of extra long staple cotton.
``(e) Rice.--The loan rate for a marketing assistance loan under section 131 for rice shall be based on 80 percent of the average full economic cost of production per bushel
(based on yield per planted acre), as determined by the Secretary, for the immediately preceding 3 crops of rice.
``(f) Oilseeds.--
``(1) Soybeans.--The loan rate for a marketing assistance loan under section 131 for soybeans shall be based on 80 percent of the average full economic cost of production per bushel (based on yield per planted acre), as determined by the Secretary, for the immediately preceding 3 crops of soybeans.
``(2) Sunflower seed, canola, rapeseed, safflower, mustard seed, and flaxseed.--The loan rate for a marketing assistance loan under section 131 for sunflower seed, canola, rapeseed, safflower, mustard seed, and flaxseed, individually, shall be based on 80 percent of the average full economic cost of production per bushel (based on yield per planted acre), as determined by the Secretary, for the immediately preceding 3 crops of sunflower seed, canola, rapeseed, safflower, mustard seed, and flaxseed, respectively.
``(3) Other oilseeds.--The loan rates for a marketing assistance loan under section 131 for other oilseeds shall be established at such level as the Secretary determines is fair and reasonable in relation to the loan rate available for soybeans, except in no event shall the rate for the oilseeds
(other than cottonseed) be less than the rate established for soybeans on a per-pound basis for the same crop.''.
SEC. 402. TERM OF LOANS.
Section 133 of the Agriculture Market Transition Act (7 U.S.C. 7233) is amended to read as follows:
``SEC. 133. TERM OF LOANS.
``(a) Term of Loan.--In the case of each loan commodity, a marketing assistance loan under section 131 shall have a term of 20 months beginning on the first day of the first month after the month in which the loan is made.
``(b) Extensions Authorized.--The Secretary may extend the term of a marketing assistance loan for any loan commodity.''. SEC. 403. APPLICATION.
This title and the amendments made by this title shall apply to each of the 2001 and 2002 crops of a loan commodity
(as defined in section 102 of the Agricultural Market Transition Act (7 U.S.C. 7202).
TITLE V--FARMLAND PROTECTION
SEC. 501. FARMLAND PROTECTION PROGRAM.
Section 388 of the Federal Agriculture Improvement and Reform Act of 1996 (16 U.S.C. 3830 note; Public Law 104-127) is amended to read as follows:
``SEC. 388. FARMLAND PROTECTION PROGRAM.
``(a) Definition of Eligible Entity.--In this section, the term `eligible entity' means--
``(1) any agency of any State or local government, or federally recognized Indian tribe; and
``(2) any organization that--
``(A) is organized for, and at all times since its formation has been operated principally for, 1 or more of the conservation purposes specified in clause (i), (ii), or (iii) of section 170(h)(4)(A) of the Internal Revenue Code of 1986;
``(B) is an organization described in section 501(c)(3) of the Code that is exempt from taxation under section 501(a) of the Code; and
``(C)(i) is described in section 509(a)(2) of the Code of; or
``(ii) is described in section 509(a)(3) of the Code and is controlled by an organization described in section 509(a)(2) of the Code.
``(b) Authority.--The Secretary of Agriculture shall establish and carry out a farmland protection program under which the Secretary shall provide grants to eligible entities, to provide the Federal share of the cost of purchasing conservation easements or other interests in land with prime, unique, or other productive soil for the purpose of protecting topsoil by limiting nonagricultural uses of the land.
``(c) Federal Share.--The Federal share of the cost of purchasing a conservation easement or other interest described in subsection (b) shall be not more than 50 percent.
``(d) Title; Enforcement.--Title to a conservation easement or other interest described in subsection (b) may be held, and the conservation requirements of the easement or interest enforced, by any eligible entity.
``(e) State Certification.--The attorney general of the State in which land is located shall take such actions as are necessary to ensure that a conservation easement or other interest under this section is in a form that is sufficient to achieve the conservation purpose of the farmland protection program established under this section, the law of the State, and the terms and conditions of any grant made by the Secretary under this section.
``(f) Conservation Plan.--Any land for which a conservation easement or other interest is purchased under this section shall be subject to the requirements of a conservation plan to the extent that the plan does not negate or adversely affect the restrictions contained in any easement.
``(g) Technical Assistance.--The Secretary may use not more than 10 percent of the amount that is made available for a fiscal year under subsection (h) to provide technical assistance to carry out this section.
``(h) Funding.--For each fiscal year, the Secretary shall use not more than $250,000,000 of the funds of the Commodity Credit Corporation to carry out this section.''.
TITLE VI--CIVIL RIGHTS
SEC. 601. SENSE OF CONGRESS ON PARTICIPATION OF SOCIALLY
DISADVANTAGED GROUPS IN DEPARTMENT OF
AGRICULTURE PROGRAMS.
It is the sense of Congress that the Secretary of Agriculture should take such actions as are necessary to ensure, to the maximum extent practicable, that members of socially disadvantaged groups (as defined in section 355(e) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2003(e))--
(1) are informed of the eligibility requirements to participate in programs of the Department of Agriculture; and
(2) receive technical support and assistance from the Department to participate in the programs.
Mr. HARKIN. I am pleased to cosponsor this legislation introduced by the Democratic leader, Senator Daschle. The bill contains a number of important features that constitute a strong start for our work toward a new farm bill.
In particular, I want to call attention to the provisions in this bill that will address directly the rapid changes occurring in the structure of our food and agriculture industry and the impact those changes are having on America's farm and ranch families and rural communities. This bill will give USDA new authority to deal with economic concentration and consolidation in agriculture: to prevent mergers and acquisitions that damage farmers and rural communities and to prevent and take enforcement action against anti-competitive and unfair practices in dealings by agribusinesses with farmers.
The legislation also incorporates legislation I introduced in the previous Congress to establish new protections for agricultural producers who are involved in contracting arrangements with agribusiness processors and to establish new protections that will enhance the ability of agricultural producers to form associations to bargain effectively with processors and buyers of agricultural products.
I am also pleased that this bill incorporates my legislation to create a new fund that will spur new equity capital investment in rural areas. The legislation has the support of a wide range of the key interested parties in providing and boosting financing and business investment in rural America. Clearly, if rural America is to grow, and if agricultural producers are to develop new value-added businesses, there will have to be increased levels of equity capital investment in agricultural processing and other businesses. This bill will go a long way in putting more investment capital into rural communities.
This bill also makes a strong start toward improving the shortcomings of the commodity program provisions of the current farm bill. We have all observed the critical need for emergency assistance packages to shore up the Freedom to Farm bill over the past several years. But our farm families and rural communities need a predictable and dependable system of farm income protection. This bill would provide for loan rates that are more realistic in light of current production costs in order to improve the farm income protection. It focuses on providing better assistance when it is needed, rather than simply making additional fixed payments regardless of actual market conditions.
As I said, I believe the marketing assistance loan rate provisions in this bill are a strong start. We recognize that under the current formula, even without the existing loan rate caps, the marketing loan rates would have declined quite substantially as market prices suffered in recent years. That means a less effective system of farm income protection. However, further work and discussion on loan rate formulas and program details will be necessary as we work further on the next farm bill. In particular, it is important that the relative loan rates among the various commodities are in balance. Of course, that is the main objective of these provisions: to bring other loan rates into reasonable equivalence with the loan rates for oilseeds. But we do not want to create any new inequality while trying to address what is now felt to be an imbalance.
It is also important for us to contemplate the consequences of any changes in loan rates that we may ultimately enact, including any impacts on production levels and patterns, and impacts on the relative benefits under the program for family-size farms in comparison with those for much larger operations. For that reason I believe that there must be some restriction or limitation on the quantity of production that is eligible for higher loan rates. Otherwise, I am concerned that we are providing only a small amount of help to family-size farms, but far more to their larger and already better capitalized neighbors simply because those larger farms are producing larger quantities of loan-eligible commodities. Similarly, if the loan rate is increased for every unit of production of a given commodity on every farm, no matter how large, we must consider the incentives for higher production that will be put into markets that are in surplus.
The commodity provisions are, of course, only one part of a comprehensive approach to a new farm bill. I very strongly believe that the next farm bill should include a new program of incentives for farm and ranch conservation practices. In this way we will improve farm income while also enhancing conservation of natural resources for our children and succeeding generations. I am not proposing a substitute for existing conservation programs, nor am I proposing to abandon commodity and farm income protection programs. But I believe that we can accomplish a great deal by adding to our farm policy a new conservation incentive program.
Again, I am pleased to cosponsor this bill and look forward to working with my colleagues to work further together on crafting a new farm bill.
______
By Mr. HAGEL (for himself, Ms. Landrieu, Mr. Breaux, Mr. DeWine,
Mrs. Hutchison, Mr. Nelson of Nebraska, Mr. Smith of Oregon, and Mr. Thomas):
S. 22. A bill to amend the Federal Election Campaign Act of 1971 to provide meaningful campaign finance reform through requiring better reporting, decreasing the role of soft money, and increasing individual contribution limits, and for other purposes; to the Committee on Rules and Administration.
open and accountable campaign financing act of 2001
Mr. HAGEL. Mr. President, today, I join several of my colleagues, including the Presiding Officer, in introducing the Open and Accountable Campaign Financing Act of 2001, S. 22. I am pleased to be joined by not only the Presiding Officer, my new colleague from Nebraska, but also by Senators Landrieu, Breaux, DeWine, Hutchison, Smith of New Hampshire, and Thomas, in introducing this legislation today.
I also want to acknowledge the two Senators who have led the fight on campaign finance reform over the years--John McCain and Russ Feingold. Their commitment to this issue and leadership has elevated the debate on this very important part of our democratic system. They deserve recognition and they deserve credit.
Mr. President, S. 22 has three primary components, as you know. First, it expands and codifies disclosure for candidates, political parties and all organizations and individuals who participate in the political process.
Second, it caps and regulates soft money donations to the National political parties.
Third, it increases hard money contribution limits and then indexes these limits to inflation for future years.
Our Federal campaign finance system is broken. As all of us know, in politics, as in life, perception is an important dynamic of reality. The American people's perception of the integrity of our political system is directly connected to their confidence in the system. Americans see a political system controlled by special interests and those able to pump in millions of unaccountable dollars.
As our citizens become demoralized and detached because they feel they are powerless, they lower their expectations and standards for government and our officeholders. As a result, the American people are losing confidence in our system. They are losing trust in their elected officials. We need to fix the system.
The Senate will engage in an open, honest and wide-ranging debate on campaign finance reform this year, as it should be.
The debate must be thoughtful, factual and deliberate. Any legislative action will have immense consequences for our political system and all who participate in it. S. 22 represents a strong, bipartisan foundation from which consensus can be built and real campaign finance reform can be established.
Our bill is imperfect. It does not address all of the issues. It does not have all of the answers. But it is a genuine attempt to bring about real reforms, including greater disclosure and more accountability. Greater disclosure, I believe, is the heart of campaign finance reform. We should not fear an educated and informed body politic. We should encourage it.
In recent years, so-called independent groups and individuals have played and increasingly dominant role in the political process launching late TV blitzes, moving poll numbers in the final weeks and days of a campaign, and then disappearing without the public ever knowing who they were and how much they spent for or against the candidate.
There are several provisions in S. 22 that will increase the disclosure of campaign financing and election activity. But the most significant is the provision affecting what information is made public regarding political broadcast ads, especially ads referred to as issue advocacy ads.
Issue advocacy adds generally refer to a Federal candidate and his or her positions on issues, but since the ads do not expressly advocate the election or defeat of a Federal candidate, they don't trigger the reporting and disclosure requirements of the Federal Election Campaign Act. Even though these ads don't expressly advocate for or against any candidate, many people consider the clear intent of these ads, which is to influence the outcome of elections.
Our legislation addresses the problems associated with the disclosure of these issue ads by requiring disclosure of the relevant information at the broadcast stations who broadcast these ads both on radio and TV.
Currently, broadcast stations must comply with Federal communications regulations requiring them to place in their public file information on ads run by Federal candidates and political parties. This includes a record of the times the spots are scheduled to air, the overall amount of time purchased, and at what rates, and the names of the officers of the organization placing the ad.
However, presently, there is no requirement that any of this information be placed in the public file for political ads run by independent organizations or individuals. Our legislation will codify these regulations and expand them to cover all political broadcast ads without violating anyone's constitutional rights. Under this bill, the American public and the media will know who is buying these ads and how much they are spending for the ads.
Also, let me make clear one thing this provision does not do. It does not require organizations to identify individual donors or provide membership lists. It preserves a reasonable balance between the public's right to know and the privacy rights of members and donors.
In addition to increased disclosure, this legislation regulates and caps soft money donations. It limits individuals, independent organizations, corporations, and unions, to an aggregate of $60,000 per year in soft money contributions to the national political parties. These donations are disclosed at the Federal Election Commission.
We already have constitutionally tested limits on hard money. Political parties have to deal with this. These contributions are reported from the political parties and from the candidates and their campaigns. We should look at placing limits on soft money contributions as well.
This legislation also adjusts the hard money, or Federal contributions, that is are already fully disclosed to and regulated by the Federal Election Commission.
Currently, an individual contribution limit is now set at $1,000. That limit was originally set in 1974. Our legislation would move that current $1,000 limit to $3,000 per candidate per election. Indexed to inflation, today a 1974 $1,000 contribution is worth $3,000. In future years, all individual limits would be indexed to inflation. This would have a positive effect on the system because more campaign money would go directly to the candidates, where there is the most disclosure and accountability.
Any legislation to reform America's campaign finance system needs to reverse the sharply rising trend of moneys going outside the reportable system toward unaccountable, independent groups and individuals who do not report, who are not required to report or disclose. That trend has been more and more away from the candidates in the political parties.
We must also ensure that any campaign finance reform genuinely improves the system and doesn't result in unintended consequences that actually make it worse. The challenge in reforming our campaign finance system to do so without infringing upon the constitutional rights of Americans to freely express themselves under the first amendment and the guarantees of equal protection under the law in the fifth amendment.
Any effort, no matter how well-intentioned, that doesn't pass constitutional muster will be an effort in futility, adding further to the erosion of public confidence in our system. Congress has an opportunity this year to pass a relevant and responsible campaign finance reform bill that the President will sign.
My colleagues and I will be fully engaged in this debate this year with the ultimate goal of making our campaign finance system more open and accountable--the essence of any reform.
______
Mr. LOTT (for Mr. Specter):
S. 23. A bill to promote a new urban agenda, and for other purposes; to the Committee on Finance.
the new urban agenda act of 2001
Mr. SPECTER. Mr. President. I have sought recognition to introduce legislation that will address the plight of our nation's cities. With 80 percent of the U.S. population living in metropolitan areas, there is an urgent need to improve our urban economies and the quality of life for the millions of Americans who live and work in cities. By simply making our cities an appealing place to live, work, and visit, urban areas can rebound to the vibrant economic centers they once were.
There is a common perception that most urban areas are abandoned and stripped of their resources, burdened with poverty and crime. However, cities have a wealth of resources available to not only the urban dweller, but to cultural centers, business hubs, and some of the finest educational and medical institutions. The real problem is that we do not draw upon these riches or strive to better coordinate them to serve people, especially those in need.
My proposal, the ``New Urban Agenda Act of 2001,'' is based on legislation which I have endeavored to enact into law since the 103rd Congress. The bill constitutes an effort to give our cities some much-
needed attention, but reflects the federal budgetary constraints which govern our actions in Congress. This bill, based in significant part on suggestions by Former Philadelphia Mayor Edward G. Rendell and the League of Cities as well as current Philadelphia Mayor John Street and Pittsburgh Mayor Tom Murphy, offers aid to the cities while containing federal expenditures and re-instituting important cost-effective tax breaks.
Urban areas remain integral to America's greatness as centers of commerce, industry, education, health care, and culture. Yet urban areas, particularly the inner cities which tend to have a disproportionate share of our nation's poor, also have special needs which must be recognized. We must develop ways of aiding our cities that do not require either new taxes or more government bureaucracy.
With that in mind, I am pleased that Congress recognized included an initiative to aid our cities in the fiscal year 2001 Omnibus Appropriations Act. This initiative provides important incentives for businesses to invest and locate in our nation's cities by stimulating new private capital investments in economically distressed communities, expanding empowerment zones, increasing the low income housing tax credit, creating new market venture capital firms, and creating 40 Renewal Communities, which will provide additional key incentives to spur investment. I am particularly pleased that a close variation of a provision from my Urban Agenda bill was included as part of this initiative, which will provide a 60 percent exclusion for capital gains tax purposes for any gain resulting from targeted investments in small businesses located in urban empowerment zones, enterprise communities, or enterprise zones. A targeted capital gain will serve as a catalyst for job creation and economic growth in our cities by encouraging additional private investment in our urban areas. While all of these initiatives are an important first step in assisting our cities, I believe that there is still more that needs to be accomplished to revitalize America's metropolitan areas.
If we are to address many of the serious social issues that we face--
unemployment, drug abuse, juvenile violence, welfare dependency, and other pressing issues--we cannot give up on our cities. We must continue to develop new strategies for dealing with the problems of urban America. The days of creating ``Great Society'' federal aid programs are clearly past, but that is no excuse for the national government to ignore the problems of the cities.
As a Philadelphia resident, I have first-hand knowledge of the growing problems that plague our cities. I have long supported a variety of programs to assist our cities, such as increased funding for Community Development Block Grants and legislation to establish enterprise and empowerment zones. To encourage similar efforts, in April 1994, I hosted my Senate Republican colleagues on a visit to explore urban problems in my hometown. We talked with people who wanted to obtain work, but had discovered few opportunities. We saw a crumbling infrastructure and its impact on residents and businesses. We were reminded of the devastating effect that the loss of inner city businesses and jobs has had on our neighborhoods. What my Republican colleagues saw in Philadelphia is the urban rule across our country, not the exception.
There are many who do not know of city life, who are far removed from the cities and would not be expected to have any key interest in what goes on in the big cities of America. I cite my own boyhood experience illustratively: Born in Wichita, Kansas, raised in Russell, a small town of 5,000 people on the plains of Kansas, where there is not much detailed knowledge of what goes on in Philadelphia, Pennsylvania, or other big cities like Los Angeles, San Francisco, New York, Miami, Pittsburgh, Dallas, Detroit or Chicago.
Those big cities are alien to many in America. But there is a growing understanding that the problems of big cities contribute significantly to the general problems affecting our nation as a whole and have an economic impact, at the very least, on our small towns. For rural America to prosper, we need to make sure that urban America prospers and vice-versa. For example, if cities had more economic growth, taxes could be reduced on all Americans at the federal and state level because revenues would increase and social welfare spending would be reduced.
There is indeed a domino effect from our cities to rural communities throughout the country. Lately, we have witnessed this in the violent behavior of adolescents. School violence, juvenile crime and drug abuse are no longer endemic to urban living. Take the Bloods and the Crips gangs from Los Angeles, California, and similar gangs; that are all over America. They are in Lancaster, Pennsylvania; Des Moines, Iowa; Portland, Oregon; Jackson, Mississippi, Racine, Wisconsin; and Martinsburg, West Virginia. They are literally everywhere, big city and small city alike. Additionally, while drug abuse among teens has historically been viewed solely as an inner city problem, recent statistics indicate that teen drug abuse in the suburbs is an increasing epidemic. According to an October 10, 1999 Philadelphia Inquirer article, in the seven county Philadelphia suburbs, the rate of youths in treatment for heroin jumped from 77 to 84 per 100,000 people between 1995 and 1998. In the Baltimore suburbs, 25 percent of teens admitted to drug treatment centers used heroin compared to 17 percent in inner city Baltimore.
In the U.S. Department of Housing and Urban Development's 2000 report on the ``State of the Cities,'' findings show that large urban schools still deal with a higher concentration of violence, and the data only represents crimes which were serious enough to report to the police. An estimated 3 million crimes each year are committed in or near the nation's 85,000 public schools. During the 1996-97 school year alone, one-fifth of public high schools and middle schools reported at least one violent crime, such as murder, rape or robbery. More than half reported less serious crimes. Homicide is now the third leading cause of death for children age 10 to 14. For more than a decade it has been the leading cause of death among minority youth between the ages of 15 and 24. The School District of Philadelphia's most recent report on school violence shows that in the 1994-1995 academic year, students, teachers and administrators were the victims of 2,147 reported criminal incidents, up by almost 100% from the previous year. These included assault, robbery, rape, and students being stabbed or even shot. The school district also reported troubling news about abysmal attendance rates. On any given day, more than one in every four students are absent.
In an effort to seriously address the problem of youth violence, during the summer of 1999, I convened three extensive roundtable discussions with experts from the Department of Education, Health and Human Services, Labor and Justice, who administer programs targeted at children from prenatal to age seventeen. On June 7, 1999, I chaired a discussion session on at-risk youth as part of the White House Conference on Mental Health. As a result of these meeting, $911 million in fiscal year 2000 and $1.6 billion in fiscal year 2001 have been reallocated across government agencies to tackle the problem of youth violence, focusing on the Safe and Drug Free Schools Program, mental health services for children, character education, and literacy programs. These programs pick up on the conclusion that Surgeon General Koop made in 1982--that juvenile violence is a national health problem.
I am pleased to note that the HUD 2000 ``State of the cities'' report found that the national poverty rate declined from 13.7% in 1996 to 12.7% in 1998. Encouragingly, the poverty rate also decreased in central cities during this same period from 19.6% to 18.5%. However, despite the dramatic record of job gains, one in eight cities still faces high unemployment and significant population loss or high poverty rates. The report further found that the overall poverty rate in the cities remains twice that of the suburbs. In fact, there are 67 large cities that have an unemployment rate of 50% or higher than the U.S. rate. These facts emphasize the need for more efforts to be focused on strengthening our inner city businesses which, in turn, will boost local economies and serve to provide more jobs, reduce poverty and, hopefully, reduce crime.
To facilitate economic development and job creation in the United States, I supported the Balanced Budget Act of 1995, which contained such provisions as the Job Training Partnership Act and the Targeted Job Tax Credit. As Congress put the final touches on that legislation, I circulated a joint letter with several Senators to then-Majority Leader Dole and Speaker Gingrich which recommended several new urban initiatives to spur job creation and economic growth in our cities such as a targeted capital gains exclusion, commercial revitalization tax credit, historic rehabilitation tax credit, and child care credit. In 1998, I introduced the ``Job Preparation and Retention Training Act,'' which was included in the Workforce Development act of 1998. My legislation authorized funding for States to enroll long-term welfare dependents into a training program to provide the necessary skills to locate and maintain gainful and unsubsidized employment.
A number of jobs are becoming available in the high tech industry and high tech growth is a substantial contributor to recent economic gains in cities. According to the HUD 2000 ``State of the Cities'' report, high tech jobs account for 27% of new employment in cities. However, there is anew digital divide in high tech jobs between cities and suburbs. High tech job growth in suburbs is 30% faster than that of cities. In effort to bridge the digital divide, I was an original cosponsor with Senator Biden of the ``Kids 2000'' legislation, which would authorize $120 million to build computer technology centers in Boys and Girls Clubs nationwide and allow the funds to be used to pay for computer teachers, who are crucial to the success of this initiative. The federal funds would be complemented by donations from private sources. I have also been supportive of collaborative efforts like PowerUp, founded by America Online (AOL) Chief Executive Steve Case, which joins non-profit organizations, major corporations, and Federal agencies to help close the digital divide. The goal of this initiative is to help ensure that America's underserved youth acquire the skills, experiences, and resources they need to succeed in the digital age. Initiatives like Kids 2000 and PowerUp are steps in the right direction to provide American children with the skills necessary to compete in an increasingly technologically-advanced workforce. These initiatives offer training for those segments of the American population which currently have no opportunity to learn these technology-based skills, and thus offer extraordinary employment and earning possibilities.
Each day, small business owners question whether they should remain in the city because they fear for the safety of their children, their employees, and, ultimately, their businesses. I have personally met and spoken with shop owners in the University City section of Philadelphia who tell me that they look desperately for reasons to stay, but it gets harder and harder.
I have long supported efforts to encourage the growth of small business, as small businesses provide the bulk of the jobs in this country. To that end, I am again introducing legislation to provide targeted tax incentives for investing in small minority or women-owned businesses called ``Minority and Women Capital Formation Act.'' Many minority entrepreneurs, for instance, have told me that they are dedicated to staying in the cities to continue to provide employment opportunities, but continue to face difficulty in obtaining the necessary capital. My legislation would help remove the capital access barriers, thereby enabling these entrepreneurs to grow their businesses and payrolls.
The economic problems our cities are facing are not easy to deal with or answer. Municipal leaders stress many of the same concerns that business people have voiced. Additionally, in a report by the National League of Cities entitled ``City Fiscal Conditions in 1996,'' municipal officials from 381 cities answered questions on the economic state of their cities. The report found that 21.7 percent of responding cities reduced municipal employment and 18.5 percent had frozen municipal employment due to state budgetary problems. Nearly six out of ten cities raised or imposed new taxes or user fees during the past twelve months.
These numbers are of concern to me and I believe they highlight the need for federal legislation to enhance the ability of cities to achieve competitive economic status. An added concern is that city managers are forced to balance cuts in services or enact higher taxes. Neither choice is easy, and it often counteracts municipal efforts to retain residents or businesses.
One issue in particular that is hurting many cities is the erosion of their tax bases, evidenced particularly by middle-class flight to the suburbs. Mr. Ronald Waiters, professor of Political Science at Howard University, in testimony before the Senate Banking Committee, stated that in 1950, 23 percent of American's lived outside central cities; by 1998, that number rose to 46 percent. The District of Columbia's population loss is among the worst in the nation, with a quarter of its population relocating to the suburbs since the 1970s. This trend of shrinking urban populations gives no sign of ending. Middle-class families continue to leave for the suburbs where there are typically better public services. According to the September 2000 General Accounting Office Report on Community Development, over 50 percent of U.S. cities reported that an inadequate tax base for supporting schools and services was among their top four growth related challenges. As America's cities struggle with the exodus of residents, businesses and industry, city, residents who remain are faced with problems ranging from increased tax burdens and lesser services to dwindling economic opportunities, leading to welfare dependence and unemployment assistance.
The September 2000 General Accounting Office Report on Community Development also found that of the 2000 cities surveyed, 83 percent reported that revitalizing their downtown areas was their top priority. The federal government has attempted to revitalize our ailing urban infrastructure by providing federal funding for transit and sewer systems, roads and bridges. As a member of the Transportation Appropriations Subcommittee, I have been a strong supporter of public transit, which provides critically needed transportation services in urban areas. Transit helps cities meet clean air standards, reduce traffic congestion, and allows disadvantaged persons access to jobs. Federal assistance for urban areas, however, has become increasingly scarce as we grapple with the nation's deficit and debt. Therefore, we must find alternatives to reinvigorate out nation's cities so they can once again become economically productive areas providing promising opportunities for residents and neighboring areas. To address the need for reliable transportation systems in our nation's cities and to provide access to jobs for city residents, I introduced reverse commute and jobs access legislation, which was successfully included in the 1998 ``TEA-21'' highway and transit reauthorization bill. The bill authorized over five years access-to-jobs transit grants targeted at low-income individuals. Up to $10 million per year may be used for reverse commute projects to move individuals from cities to suburban job centers.
In addition to support for infrastructure, I believe there are many other opportunities for Congress to assist the America's urban areas. Over the past few years, I have worked with Former Mayor Ed Rendell to develop a legislative package which contains many good ideas. I have taken many of these suggestions and have since added and revised provisions to take into account new developments at the federal, state and local levels to create the ``New Urban Agenda Act of 2001.''
First, recognizing that the federal government is the nation's largest purchaser of goods and services, my legislation would require that no less than 15 percent of federal government purchases be made from businesses and industries within designated urban Empowerment Zones, Enterprise Communities and Renewal Communities. Similarly, my bill would required that no less than 15 percent of foreign aid funds be redeemed through purchases of products manufactured in urban Empowerment Zones, Enterprise Communities and Renewal Communities. The General Services Administration would be required to submit to Congress its assessment of the extent to which federal agencies are committed to this policy, and in general, economic revitalization in distressed urban areas.
The second major provision of this bill would commit the federal government to play an active role in restoring the economic health of our cities by encouraging the location, or relocation, of all federal facilities in urban areas. To accomplish this, all federal agencies would be required to prepare and submit to the President an Urban Impact Statement detailing the impact that relocation or downsizing decisions would have on the affected city. Presidential approval would be required to place a federal facility outside an urban area, or to downsize a city-based agency.
The third critical component of this bill would revive and expand federal tax incentives that were eliminated or restricted in the Tax Relief Act of 1986. Until there is passage of legislation on the flat tax, which would provide benefits superior to all targeted tax breaks, I believe America's cities should have the advantages of such tax benefits. These provisions offer meaningful incentives to businesses to invest in our cities. I am calling for the restoration of the Historic Rehabilitation Tax Credit which supports inner city revitalization projects. According to the September 2000 GAO Report on Community Development, 32 percent of cities and 22 percent of counties surveyed strongly supported the extension of federal tax benefits to the rehabilitation of historic residential properties. The City of Philadelphia reports that there were 8,640 construction jobs involved in 356 projects in Philadelphia from 1978 to 1985 stimulated by the Historic Rehabilitation Tax Credit, which was eliminated in 1986. In Chicago, 302 projects prior to 1985 generated $524 million in investment and created 20,695 jobs. In St. Louis, 849 projects generated $653 million in investment and created 27,735 jobs. Nationally, according to National Park Service estimates for the 16 years before the 1986 Act, the Historic Rehabilitation Tax Credit stimulated $16 billion in private investment for the rehabilitation of 24,656 buildings and the creation of 125,306 homes which included 23,377 low and moderate income housing units. The 1986 Tax Act dramatically reduced the pool of private investment capital available for rehabilitation projects. In Philadelphia, projects dropped from 356 to 11 by 1988 from 1985 levels. During the same period, investments dropped 46 percent in Illinois and 92 percent in St. Louis.
Another tool is to expand the authorization of commercial industrial development bonds. Under the Tax Reform Act of 1986, authorization for commercial industrial bonds was permitted to expire. Consequently, private investment in cities declined. For instance, according to the City of Philadelphia, from 1986--the last year commercial development bonds were permitted--to 1987, the total number of city-supported projects in Philadelphia was reduced by more than half.
Industrial development or private activity bonds encourage private investment by allowing, under certain circumstances, tax-exempt status for projects where more than 10 percent of the bond proceeds are used for private business purposes. The availability of tax-exempt commercial industrial development bonds will encourage private investment in cities, particularly the construction of sports, convention and trade show facilities; parking facilities owned and operated by the private sector; air and water pollution facilities owned and operated by the private sector and industrial parks. My bill would also increase the small issue exemption, which provides a way to help finance private activity in the building of manufacturing facilities from $10 million to $50 million to allow increased private investment in our cities.
A minor change in the federal tax code related to arbitrage rebates on municipal bond interest earnings could also free additional capital for infrastructure and economic development by cities. Currently, municipalities are required to rebate to the federal government any arbitrage--a financial term meaning interest earned in excess of interest paid on the debt--earned from the issuance of tax-free municipal bonds. I understand that compliance, or the cost for consultants to perform the complicated rebate calculations, is actually costing municipalities more than the actual rebate owed to the government. This bill would allow cities to keep the arbitrage earned so that they can use it to fund city projects and for other necessary purposes.
A fourth provision of this legislation provides needed reforms to regulations and the financial challenges to obtaining affordable housing. My proposal provides language to study streamlining federal housing program assistance to urban areas into a block grant form so that municipal agencies can better serve local residents. Safe, clean, and affordable housing is not widely available to most low income families. According to the National Housing Law Project, in 1996, only one in four families was eligible to receive HUD assistance with a waiting period up to five years. This provision of the bill steers the Secretary of Housing and Urban Development to take a hard look at these conditions and determine what works and what does not in federally-
subsidized housing and to consider alternatives that will provide suitable homes for America's families.
I believe that as a nation we should work toward providing individuals and their families with more opportunities for home ownership which stabilizes a community and restores our cities. Urban home ownership, including middle-income home ownership, lags behind the suburbs. According to the Harvard University Joint Center for Housing Studies, city residents of all income levels are less likely to own a home than suburban residents with similar incomes. I hear time and time again from families starting out that they move out to the suburbs for better schools, because central cities lack the property tax base to provide a quality education. Home ownership is key to saving our cities, both socially and economically. A 1998 Fannie Mae national housing survey indicated that even though home ownership rates continued to increase in the late 1990s, six in every ten renters said that buying a home was a very important priority, if not their number-
one priority in life. Yet for so many families financial barriers make that dream unattainable. That is why my legislation includes two provisions to restore the American dream of home ownership.
First, my bill would amend the National Affordable Housing Act and the Community Development Block Act of 1974 to make municipal employees such as policemen, firemen, maintenance workers and teachers eligible for home ownership assistance. Municipal employees and teachers contribute to the health, safety and vitality of the communities in which they serve. However, escalating rent and housing prices due to the booming technology market and rising salaries have made it particularly difficult for teachers, police officers and city workers to live where they work. In a growing number of metropolitan areas, home buyers who make the median income in their region cannot afford its median-priced housing, and therefore, must live outside the community in which they work, resulting in longer commutes. According to the September 2000 GAO Report, the shortage of funding for affordable housing in urban areas has forced people to move to the fringes of metropolitan areas, where housing is typically less expensive. This provision would seek to remedy this situation by providing communities with the tools needed to increase home ownership opportunities for those who form the backbone of our cities and who are an integral component of our commitment to revitalize our urban areas.
Second, my bill would provide a tax credit for income-eligible individuals and families to purchase homes in distressed areas. In the 1999 Taxpayer Relief Act, Congress approved such a tax credit for home buyers in the District of Columbia. While single family home sales can be attributed to a multitude of factors, such as historically low interest rates and a strong economy, it is important to note some interesting statistics related to home ownership since enactment of the tax credit in the District of Columbia. The Home Purchase Assistance Program through the District of Columbia's Office of Housing and Community Development helped 410 families purchase homes. Further, a group called the ``Washington Partners for Home ownership,'' a collaboration of realtors, banks, community and faith-based organizations, set a goal last year to create 1,000 new homeowners in the District of Columbia for each of the next three years. Remarkably, the Washington Partners reached that goal before the end of the first year. I believe that this country will reap extraordinary benefits if we expand such a credit on a national basis, as I propose in the ``New Urban Agenda Act of 2001.''
I believe that the revitalization of cities will require social and economic facets, but is also imperative that our cities are safe and clean. This last component of my bill helps urban areas to address their unique environmental challenges and reforms Superfund law. First, the legislation authorizes a federal brownfields program to help clean up idle or underused industrial and commercial facilities and waives federal liability for persons who fully comply with a state cleanup plan to clean sites in urban and other areas pursuant to state law, provided that the site is not listed or proposed to be listed on the National Priorities List. The Environmental Protection Agency currently operates this pilot program under general authority provided by the Superfund law. My legislation would make this a permanent program and substantially increase the funding levels to a $100 million authorized level for Fiscal Year 2002, $105 million for Fiscal Year 2003, and $110 million for Fiscal Year 2004. The EPA could expend funds to identify and examine potential idle or underused Brownfield sites and to provide grants to States and local governments of up to $200,000 per site to put them back to productive use. One such grant has been used to great success to Pittsburgh Mayor Tom Murphy, and I hope this provision will generate additional success stories of redeveloping urban brownfields.
The Brownfields Program allows sites with minor levels of toxic waste to be cleaned up by State and local governments with federal and other funding sources. Companies and individuals who are interested in developing land into industrial, commercial, recreational, or residential use are often reluctant to purchase property with any level of toxic waste because of a fear of being saddled with cleanup liability under the Superfund law. Through expanded Brownfields grants, cleanup at such sites will be expedited and will encourage redevelopment of otherwise unusable property.
My bill would also waive federal liability for persons who fully comply with a state cleanup plan to clean sites in urban or other areas pursuant to state law, providing that the site is not listed or proposed to be listed on the National Priorities List. Many states, including Pennsylvania, have developed their own toxic waste cleanup programs and have done good work to clean up many of these sites. Pennsylvania Governor Tom Ridge has developed an extensive plan, where contaminated sites are made safe based on sound science by returning the site to productive use through the development of uniform cleanup standards, by creating a set of standardized review procedures, by releasing owners and developers from liability who fully comply with the state cleanup standards and procedures, and by providing financial assistance. However, the efforts of states like Pennsylvania are often stifled because the federal government has not been willing to work with the States to release owners and developers from liability, even when they fully comply with the state plans.
This section of my bill only applies to sites that are not on the National Priorities List. These are sites that the state has identified for which the state has created a comprehensive cleanup plan. If the federal government has concerns with the cleanup procedure or the safety of the site, then the government has full authority to place that site on the National Priority List. The plans, like that developed by Governor Ridge, deal with sites not controlled by the Superfund law. By not allowing the individual states to take the initiative to clean up these sites, and by not providing a waiver for federal liability to those who fully comply with the procedures and standards of the state cleanup, the federal government impedes the efforts of the states to work to clean up their own sites. This provision takes a significant step toward encouraging states to take the responsibility for their toxic waste sites and to encourage the effective cleanup of these sites in our nation's urban areas.
Mr. President, we must take a comprehensive approach to reversing urban decay. My bill seeks to accomplish this by requiring increased federal and foreign aid purchases operating in urban zones, a restoring of the issuance of tax free industrial development bonds, facilitating home ownership in urban areas, and providing regulatory relief to redevelop brownfield sites. As one of a handful of United States Senators who lives in a big city, I have a special understanding of both the problems and the promise of urban America. I am committed to a new urban agenda which relies on market forces, not a welfare state, for urban revitalization. While the issues facing our nation's cities are indeed difficult, working together with my colleagues I believe we can fashion a strong plan of action to help cities face their pressing problems.
I ask unanimous consent that my bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the Record, as follows:
S. 23
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``New Urban Agenda Act of 2001''.
(b) Table of Contents.--The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
TITLE I--FEDERAL COMMITMENT TO URBAN ECONOMIC DEVELOPMENT
Sec. 101. Federal purchases from businesses in empowerment zones, enterprise communities, and renewal communities.
Sec. 102. Minimum allocation of foreign assistance for purchase of certain United States goods.
Sec. 103. Preference for location of manufacturing outreach centers in urban areas.
Sec. 104. Preference for construction and improvement of Federal facilities in distressed urban areas.
Sec. 105. Definitions.
TITLE II--TAX INCENTIVES TO STIMULATE URBAN ECONOMIC DEVELOPMENT
Sec. 201. Treatment of rehabilitation credit under passive activity limitations.
Sec. 202. Rehabilitation credit allowed to offset portion of alternative minimum tax.
Sec. 203. Commercial industrial development bonds.
Sec. 204. Increase in amount of qualified small issue bonds permitted for facilities to be used by related principal users.
Sec. 205. Simplification of arbitrage interest rebate waiver.
Sec. 206. Qualified residential rental project bonds partially exempt from State volume cap.
Sec. 207. Expansion of qualified wages subject to work opportunity credit.
Sec. 208. Homebuyer credit for empowerment zones, enterprise communities, and renewal communities.
TITLE III--COMMUNITY-BASED HOUSING DEVELOPMENT
Sec. 301. Block grant study.
Sec. 302. Homeownership for municipal employees.
Sec. 303. Community development.
TITLE IV--RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES
Sec. 401. Release from liability of persons that fulfill requirements of State and local law.
Sec. 402. Brownfield program.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) cities in the United States have been facing an economic downhill trend in the past several years; and
(2) a new approach to help such cities prosper is necessary.
(b) Purposes.--It is the purpose of this Act to--
(1) provide various incentives for the economic growth of cities in the United States;
(2) provide an economic agenda designed to reverse current urban economic trends; and
(3) revitalize the jobs and tax base of such cities without significant new Federal outlays.
TITLE I--FEDERAL COMMITMENT TO URBAN ECONOMIC DEVELOPMENT
SEC. 101. FEDERAL PURCHASES FROM BUSINESSES IN EMPOWERMENT
ZONES, ENTERPRISE COMMUNITIES, AND RENEWAL
COMMUNITIES.
(a) Requirements.--The Office of Federal Procurement Policy Act (41 U.S.C. 401 et seq.) is amended by adding at the end the following new section:
``purchases from businesses in empowerment zones, enterprise communities, and renewal communities
``Sec. 40. (a) Minimum Purchase Requirement.--Not less than 15 percent of the total amount expended by executive agencies for the purchase of goods in a fiscal year shall be expended for the purchase of goods from businesses located in empowerment zones, enterprise communities, or renewal communities.
``(b) Recycled Products.--To the maximum extent practicable consistent with applicable law, the head of an executive agency shall purchase recycled products that meet the needs of the executive agency from businesses located in empowerment zones, enterprise communities, or renewal communities.
``(c) Regulations.--The Federal Acquisition Regulation shall include provisions that ensure the attainment of the minimum purchase requirement set out in subsection (a).
``(d) Definitions.--In this section:
``(1) The term `empowerment zone' means a zone designated as an empowerment zone pursuant to subchapter U of chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. 1391 et seq.).
``(2) The term `enterprise community' means a community designated as an enterprise community pursuant to subchapter U of chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. 1391 et seq.).
``(3) The term `renewal community' means a community designated as a renewal community pursuant to subchapter X of chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. 1400E et seq.).''.
(b) GSA Assessment.--(1) Not later than December 31, 2001, the Administrator of General Services shall submit to Congress, in writing, the Administrator's assessment of the extent to which executive agencies are committed, by policy and practice, to encouraging and supporting economic renewal in empowerment zones, enterprise communities, and renewal communities.
(2) In this subsection, the term ``executive agency'' has the meaning given such term in section 4(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(1)).
(c) Effective Date.--Section 40 of the Office of Federal Procurement Policy Act, as added by subsection (a), shall take effect on the date of enactment of this Act and shall apply with respect to fiscal years beginning after September 30, 2001.
(d) Conforming Amendment.--The table of contents in section 1(b) of the Office of Federal Procurement Policy Act is amended by adding at the end the following new item:
``Sec. 40. Purchases from businesses in empowerment zones, enterprise communities, and renewal communities.''.
SEC. 102. MINIMUM ALLOCATION OF FOREIGN ASSISTANCE FOR
PURCHASE OF CERTAIN UNITED STATES GOODS.
(a) Allocation of Assistance.--Notwithstanding any other provision of law, effective beginning with fiscal year 2002, not less than 15 percent of United States assistance provided in a fiscal year shall be provided in the form of credits which may only be used for the purchase of United States goods produced, manufactured, or assembled in empowerment zones, enterprise communities, or renewal communities within the United States.
(b) United States Assistance.--As used in this section, the term ``United States assistance'' means--
(1) any assistance under the Foreign Assistance Act of 1961
(22 U.S.C. 2151 et seq.);
(2) sales or financing of sales under the Arms Export Control Act (22 U.S.C. 2751 et seq.); and
(3) assistance and other activities under the Support for East European Democracy (SEED) Act of 1989 (22 U.S.C. 5401 et seq.).
SEC. 103. PREFERENCE FOR LOCATION OF MANUFACTURING OUTREACH
CENTERS IN URBAN AREAS.
(a) Designation.--In designating an organization as a manufacturing outreach center under subsection (c)(11) of section 5 of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3704), the Secretary of Commerce shall, to the maximum extent practicable, designate organizations that are located in empowerment zones, enterprise communities, or renewal communities.
(b) Financial Assistance.--In utilizing a competitive, merit-based review process to determine the manufacturing outreach centers to which to provide financial assistance under such section, the Secretary shall give such additional preference to centers located in empowerment zones, enterprise communities, and renewal communities as the Secretary determines appropriate in order to ensure the continuing existence of such centers in such zones and communities.
SEC. 104. PREFERENCE FOR CONSTRUCTION AND IMPROVEMENT OF
FEDERAL FACILITIES IN DISTRESSED URBAN AREAS.
(a) Definitions.--In this section:
(1) Distressed urban area.--The term ``distressed urban area'' means a city having a population of more than 100,000 that, as determined by the Secretary of Housing and Urban Development, meets the qualifications for making an urban development action grant to a community experiencing severe economic distress established for large cities and urban counties under subpart G of part 570 of title 24, Code of Federal Regulations (as in effect on April 1, 1998).
(2) Executive agency.--The term ``Federal agency'' means an Executive agency (as defined in section 105 of title 5, United States Code).
(3) Facility.--The term ``facility'' means any place where employees of a Federal agency are regularly employed.
(b) Preference.--Notwithstanding any other provision of law, in determining the location for the construction of a new facility of an Executive agency, in determining to improve an existing facility, or in determining the location to which to relocate functions of an Executive agency, the head of the Federal agency making the determination shall make best efforts to construct or improve the facility or to relocate the functions in a distressed urban area.
(c) Urban Impact Statement.--A determination to construct a new facility of an Executive agency, to improve an existing facility, or to relocate the functions of an Executive agency shall not be made until the head of the Executive agency making the determination submits to the President a report that--
(1) in the case of a facility to be constructed--
(A) identifies at least 1 distressed urban area that would be an appropriate location for the facility;
(B) describes the costs and benefits arising from the construction and use of the facility in the distressed urban area, including the effects of the construction and use on the rate of unemployment in the distressed urban area; and
(C) describes the effect on the economy of the area of the closure or consolidation, if any, of facilities located in the distressed urban area during the 10-year period ending on the date of the report, including the number of Federal and non-Federal employment positions terminated in the distressed urban area as a result of the closure or consolidation;
(2) in the case of a facility to be improved that is not located in a distressed urban area--
(A) identifies at least 1 facility located in a distressed urban area that would serve as an appropriate alternative location for the facility;
(B) describes the costs and benefits arising from the improvement and use of the facility located in the distressed urban area as an alternative location for the facility to be improved, including the effect of the improvement and use of the facility on the rate of unemployment in the distressed urban area; and
(C) describes the effect on the economy of the distressed urban area of the closure or consolidation, if any, of facilities located in the distressed urban area during the 10-year period ending on the date of the report, including the number of Federal and non-Federal employment positions terminated in the distressed urban area as a result of the closure or consolidation;
(3) in the case of a facility to be improved that is located in a distressed urban area--
(A) describes the costs and benefits arising from the improvement and continuing use of the facility in the distressed urban area, including the effect of the improvement and continuing use on the rate of unemployment in the distressed urban area; and
(B) describes the effect on the economy of the distressed urban area of the closure or consolidation, if any, of facilities located in the distressed urban area during the 10-year period ending on the date of the report, including the number of Federal and non-Federal employment positions terminated in the distressed urban area as a result of the closure or consolidation; or
(4) in the case of a relocation of functions--
(A) identifies at least 1 distressed urban area that would serve as an appropriate location for the carrying out of the functions;
(B) describes the costs and benefits arising from carrying out the functions in the distressed urban area, including the effect of carrying out the functions on the rate of unemployment in the distressed urban area; and
(C) describes the effect on the economy of the distressed urban area of the closure or consolidation, if any, of facilities located in the distressed urban area during the 10-year period ending on the date of the report, including the number of Federal and non-Federal employment positions terminated in the distressed urban area as a result of such closure or consolidation.
(d) Applicability to Department of Defense Facilities.--The requirements set forth in subsections (b) and (c) shall not apply to a determination to construct or improve a facility of the Department of Defense, or to relocate any functions of the Department of Defense, if the President determines that the waiver of the application of the requirements to that facility or relocation is in the national interest.
SEC. 105. DEFINITIONS.
As used in this title:
(1) The term ``empowerment zone'' means a zone designated as an empowerment zone pursuant to subchapter U of chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. 1391 et seq.).
(2) The term ``enterprise community'' means a community designated as an enterprise community pursuant to subchapter U of chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. 1391 et seq.).
(3) The term ``renewal community'' means a community designated as a renewal community pursuant to subchapter X of chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. 1400E et seq.).
TITLE II--TAX INCENTIVES TO STIMULATE URBAN ECONOMIC DEVELOPMENT
SEC. 201. TREATMENT OF REHABILITATION CREDIT UNDER PASSIVE
ACTIVITY LIMITATIONS.
(a) General Rule.--Paragraphs (2) and (3) of section 469(i) of the Internal Revenue Code of 1986 (relating to $25,000 offset for rental real estate activities) are amended to read as follows:
``(2) Dollar limitations.--
``(A) In general.--Except as otherwise provided in this paragraph, the aggregate amount to which paragraph (1) applies for any taxable year shall not exceed $25,000, reduced (but not below zero) by 50 percent of the amount (if any) by which the adjusted gross income of the taxpayer for the taxable year exceeds $100,000.
``(B) Phaseout not applicable to low-income housing credit.--In the case of the portion of the passive activity credit for any taxable year which is attributable to any credit determined under section 42--
``(i) subparagraph (A) shall not apply, and
``(ii) paragraph (1) shall not apply to the extent that the deduction equivalent of such portion exceeds--
``(I) $25,000, reduced by
``(II) the aggregate amount of the passive activity loss
(and the deduction equivalent of any passive activity credit which is not so attributable and is not attributable to the rehabilitation credit determined under section 47) to which paragraph (1) applies after the application of subparagraph
(A).
``(C) $55,500 limit for rehabilitation credits.--In the case of the portion of the passive activity credit for any taxable year which is attributable to the rehabilitation credit determined under section 47--
``(i) subparagraph (A) shall not apply, and
``(ii) paragraph (1) shall not apply to the extent that the deduction equivalent of such portion exceeds--
``(I) $55,500, reduced by
``(II) the aggregate amount of the passive activity loss
(and the deduction equivalent of any passive activity credit which is not so attributable) to which paragraph (1) applies for the taxable year after the application of subparagraphs
(A) and (B).
``(3) Adjusted gross income.--For purposes of paragraph
(2)(A), adjusted gross income shall be determined without regard to--
``(A) any amount includable in gross income under section 86,
``(B) any amount excludable from gross income under section 135, 911, 931, or 933,
``(C) any amount allowable as a deduction under section 219, and
``(D) any passive activity loss.''.
(b) Conforming Amendments.--
(1) Subparagraph (B) of section 469(i)(4) of the Internal Revenue Code of 1986 is amended to read as follows:
``(B) Reduction for surviving spouse's exemption.--For purposes of subparagraph (A), the $25,000 amounts under paragraphs (2)(A) and (2)(B)(ii) and the $55,500 amount under paragraph (2)(C)(ii) shall each be reduced by the amount of the exemption under paragraph (1) (determined without regard to the reduction contained in paragraph (2)(A)) which is allowable to the surviving spouse of the decedent for the taxable year ending with or within the taxable year of the estate.''.
(2) Subparagraph (A) of section 469(i)(5) of such Code is amended by striking clauses (i), (ii), and (iii) and inserting the following new clauses:
``(i) `$12,500' for `$25,000' in subparagraphs (A) and
(B)(ii) of paragraph (2),
``(ii) `$50,000' for `$100,000' in paragraph (2)(A)'', and
``(iii) `$27,750' for `$55,500' in paragraph (2)(C)(ii).''.
(3) The subsection heading for subsection (i) of section 469 of such Code is amended by striking ``$25,000''.
(c) Effective Date.--The amendments made by this section shall apply to property placed in service on or after the date of enactment of this Act, in taxable years ending on or after such date.
SEC. 202. REHABILITATION CREDIT ALLOWED TO OFFSET PORTION OF
ALTERNATIVE MINIMUM TAX.
(a) In General.--Section 38(c) of the Internal Revenue Code of 1986 (relating to limitation based on amount of tax) is amended by redesignating paragraph (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph:
``(3) Rehabilitation investment credit may offset portion of minimum tax.--
``(A) In general.--In the case of the rehabilitation investment tax credit--
``(i) this section and section 39 shall be applied separately with respect to such credit, and
``(ii) for purposes of applying paragraph (1) to such credit--
``(I) the tentative minimum tax under subparagraph (A) thereof shall be reduced by the minimum tax offset amount determined under subparagraph (B) of this paragraph, and
``(II) the limitation under paragraph (1) (as modified by subclause (I)) shall be reduced by the credit allowed under subsection (a) for the taxable year (other than the rehabilitation investment tax credit).
``(B) Minimum tax offset amount.--For purposes of subparagraph (A)(ii)(I), the minimum tax offset amount is an amount equal to--
``(i) in the case of a taxpayer not described in clause
(ii), the lesser of--
``(I) 25 percent of the tentative minimum tax for the taxable year, or
``(II) $20,000, or
``(ii) in the case of a C corporation other than a closely held C corporation (as defined in section 469(j)(1)), 5 percent of the tentative minimum tax for the taxable year.
``(C) Rehabilitation investment tax credit.--For purposes of this paragraph, the term `regular investment tax credit' means the portion of the credit under subsection (a) which is attributable to the credit determined under section 47.''.
(b) Conforming Amendment.--Section 38(d) of the Internal Revenue Code of 1986 (relating to components of investment credit) is amended by adding at the end the following new paragraph:
``(4) Special rule for rehabilitation credit.--Notwithstanding paragraphs (1) and (2), the rehabilitation investment tax credit (as defined in subsection (c)(2)(C)) shall be treated as used last.''.
(c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000.
SEC. 203. COMMERCIAL INDUSTRIAL DEVELOPMENT BONDS.
(a) Facility Bonds.--
(1) In general.--Subsection (a) of section 142 of the Internal Revenue Code of 1986 (relating to exempt facility bond) is amended by striking ``or'' at the end of paragraph
(11), by striking the period at the end of paragraph (12) and inserting a comma, and by adding at the end the following new paragraphs:
``(13) sports facilities,
``(14) convention or trade show facilities,
``(15) freestanding parking facilities,
``(16) air or water pollution control facilities, or
``(17) industrial parks.''.
(2) Industrial parks defined.--Section 142 of such Code is amended by adding at the end the following new subsection:
``(k) Industrial Parks.--A facility shall be treated as described in subsection (a)(17) only if all of the property to be financed by the net proceeds of the issue--
``(1) is--
``(A) land, and
``(B) water, sewage, drainage, or similar facilities, or transportation, power, or communication facilities incidental to the use of such land as an industrial park, and
``(2) is not structures or buildings (other than with respect to facilities described in paragraph (1)(B)).''.
(3) Conforming amendments.--
(A) Section 147(c) of such Code (relating to limitation on use for land acquisition) is amended by adding at the end the following new paragraph:
``(4) Special rule for industrial parks.--In the case of a bond described in section 142(a)(17), paragraph (1)(A) shall be applied by substituting `50 percent' for `25 percent'.''.
(B) Section 147(e) of such Code (relating to no portion of bonds may be issued for skyboxes, airplanes, gambling establishments, etc.) is amended by striking ``A private activity bond'' and inserting ``Except in the case of a bond described in section 142(a)(13), a private activity bond''.
(b) Small Issue Bonds.--Section 144(a)(12) of the Internal Revenue Code of 1986 (relating to termination of qualified small issue bonds) is amended--
(1) by striking ``any bond'' in subparagraph (A)(i) and inserting ``any bond described in subparagraph (B)'',
(2) by striking ``a bond'' in subparagraph (A)(ii) and inserting ``a bond described in subparagraph (B)'', and
(3) by striking subparagraph (B) and inserting the following new subparagraph:
``(B) Bonds for farming purposes.--A bond is described in this subparagraph if it is issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide any land or property not in accordance with section 147(c)(2).''.
(c) Effective Date.--The amendments made by this section shall apply to bonds issued after December 31, 2000.
SEC. 204. INCREASE IN AMOUNT OF QUALIFIED SMALL ISSUE BONDS
PERMITTED FOR FACILITIES TO BE USED BY RELATED
PRINCIPAL USERS.
(a) In General.--Clause (i) of section 144(a)(4)(A) of the Internal Revenue Code of 1986 (relating to $10,000,000 limit in certain cases) is amended by striking ``$10,000,000'' and inserting
``$50,000,000''.
(b) Clerical Amendment.--The heading of paragraph (4) of section 144(a) of the Internal Revenue Code of 1986 is amended by striking ``$10,000,000'' and inserting
``$50,000,000''.
(c) Effective Date.--The amendments made by this section shall apply to--
(1) obligations issued after the date of enactment of this Act, and
(2) capital expenditures made after such date with respect to obligations issued on or before such date.
SEC. 205. SIMPLIFICATION OF ARBITRAGE INTEREST REBATE WAIVER.
(a) In General.--Clause (ii) of section 148(f)(4)(C) of the Internal Revenue Code of 1986 (relating to exception from rebate for certain proceeds to be used to finance construction expenditures) is amended to read as follows:
``(ii) Spending requirement.--The spending requirement of this clause is met if 100 percent of the available construction proceeds of the construction issue are spent for the governmental purposes of the issue within the 3-year period beginning on the date the bonds are issued.''.
(b) Conforming Amendments.--
(1) Clause (iii) of section 148(f)(4)(C) of the Internal Revenue Code of 1986 (relating to exception for reasonable retainage) is repealed.
(2) Subclause (II) of section 148(f)(4)(C)(vi) of such Code
(relating to available construction proceeds) is amended by striking ``2-year period'' and inserting ``3-year period''.
(3) Subclause (I) of section 148(f)(4)(C)(vii) of such Code
(relating to election to pay penalty in lieu of rebate) is amended by striking ``, with respect to each 6-month period after the date the bonds were issued,'' and ``, as of the close of such 6-month period,''.
(4) Clause (viii) of section 148(f)(4)(C) of such Code
(relating to election to terminate 1\1/2\ percent penalty) is amended by striking ``to any 6-month period'' in the matter preceding subclause (I).
(5) Clause (ii) of section 148(c)(2)(C) of such Code
(relating to bonds used to provide construction financing) is amended by striking ``2 years'' and inserting ``3 years''.
(c) Effective Date.--The amendments made by this section shall apply to bonds issued after the date of enactment of this Act.
SEC. 206. QUALIFIED RESIDENTIAL RENTAL PROJECT BONDS
PARTIALLY EXEMPT FROM STATE VOLUME CAP.
(a) In General.--Section 146(g) of the Internal Revenue Code of 1986 (relating to exception for certain bonds) is amended by striking ``and'' at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting
``, and'', and by inserting after paragraph (4) the following new paragraph:
``(5) 75 percent of any exempt facility bond issued as part of an issue described in section 142(a)(7) (relating to qualified residential rental projects).''.
(b) Effective Date.--The amendments made by this section shall apply to bonds issued after the date of enactment of this Act.
SEC. 207. EXPANSION OF QUALIFIED WAGES SUBJECT TO WORK
OPPORTUNITY CREDIT.
(a) Increase in Percentage.--Section 51(a) of the Internal Revenue Code of 1986 (relating to determination of amount) is amended by striking ``40 percent'' and inserting ``50 percent''.
(b) First 3 Years of Wages Subject to Credit.--Section 51 of the Internal Revenue Code of 1986 (relating to amount of credit) is amended--
(1) in subsections (a) and (b)(3), by striking ``first-year''; and
(2) in subsection (b)--
(A) by striking paragraphs (1) and (2) and inserting the following new paragraph:
``(1) In general.--The term `qualified wages' means the wages paid or incurred by the employer during the taxable year--
``(A) with respect to an individual who is a member of a targeted group, and
``(B) attributable to service rendered by such individual during the 3-year period beginning with the day the individual begins work for the employer.''; and
(B) by redesignating paragraph (3) as paragraph (2).
(b) Effective Date.--The amendments made by this section shall apply to individuals who begin work for the employer after the date of enactment of this Act.
SEC. 208. HOMEBUYER CREDIT FOR EMPOWERMENT ZONES, ENTERPRISE
COMMUNITIES, AND RENEWAL COMMUNITIES.
(a) In General.--Part II of subchapter U of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
``SEC. 1395. HOMEBUYER CREDIT.
``(a) Allowance of Credit.--In the case of an individual who purchases a principal residence in an empowerment zone or enterprise community during any taxable year, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to so much of the purchase price of the residence as does not exceed $5,000.
``(b) Limitations.--
``(1) Limitation based on modified adjusted gross income.--
``(A) In general.--The amount allowable as a credit under subsection (a) (determined without regard to this subsection and subsection (d)) for the taxable year shall be reduced
(but not below zero) by the amount which bears the same ratio to the credit so allowable as--
``(i) the excess (if any) of--
``(I) the taxpayer's modified adjusted gross income for such taxable year, over
``(II) $70,000 ($110,000 in the case of a joint return), bears to
``(ii) $20,000.
``(B) Modified adjusted gross income.--For purposes of subparagraph (A), the term `modified adjusted gross income' means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.
``(2) Purchase price limitation.--A credit shall not be allowed under subsection (a) with respect to the purchase of a residence the purchase price of which exceeds $225,000.
``(c) Principal Residence.--For purposes of this section, the term `principal residence' has the same meaning as when used in section 121.
``(d) Carryover of Credit.--If the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under subpart A of part IV of subchapter A (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such taxable year.
``(e) Special Rules.--For purposes of this section--
``(1) Allocation of dollar limitation.--
``(A) Married individuals filing separately.--In the case of a married individual filing a separate return, subsection
(a) shall be applied by substituting `$2,500' for `$5,000'.
``(B) Other taxpayers.--If 2 or more individuals who are not married purchase a principal residence, the amount of the credit allowed under subsection (a) shall be allocated among such individuals in such manner as the Secretary may prescribe, except that the total amount of the credits allowed to all such individuals shall not exceed $5,000.
``(2) Purchase.--
``(A) In general.--The term `purchase' means any acquisition, but only if--
``(i) the property is not acquired from a person whose relationship to the person acquiring it would result in the disallowance of losses under section 267 or 707(b) (but, in applying section 267 (b) and (c) for purposes of this section, paragraph (4) of section 267(c) shall be treated as providing that the family of an individual shall include only his spouse, ancestors, and lineal descendants), and
``(ii) the basis of the property in the hands of the person acquiring it is not determined--
``(I) in whole or in part by reference to the adjusted basis of such property in the hands of the person from whom acquired, or
``(II) under section 1014(a) (relating to property acquired from a decedent).
``(B) Construction.--A residence which is constructed by the taxpayer shall be treated as purchased by the taxpayer on the date the taxpayer first occupies such residence.
``(3) Purchase price.--The term `purchase price' means the adjusted basis of the principal residence on the date such residence is purchased.
``(f) Reporting.--If the Secretary requires information reporting under section 6045 by a person described in subsection (e)(2) thereof to verify the eligibility of taxpayers for the credit allowable by this section, the exception provided by section 6045(e)(5) shall not apply.
``(g) Credit Treated as Nonrefundable Personal Credit.--For purposes of this title, the credit allowed by this section shall be treated as a credit allowable under subpart A of part IV of subchapter A of this chapter.
``(h) Basis Adjustment.--For purposes of this subtitle, if a credit is allowed under this section with respect to the purchase of any residence, the basis of such residence shall be reduced by the amount of the credit so allowed.
``(i) Application of Section.--This section shall apply to property purchased after December 31, 2001, and before January 1, 2005.''.
(b) Application to Renewal Communities.--Part III of subchapter X of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
``SEC. 1400K. HOMEBUYER CREDIT.
``For purposes of section 1395, a renewal community shall be treated as an empowerment zone.''.
(c) Conforming Amendments.--
(1) Part II of subchapter U of chapter 1 of the Internal Revenue Code of 1986 is amended to read as follows:
``PART II--INCENTIVES FOR EMPOWERMENT ZONES AND ENTERPRISE
COMMUNITIES.''.
(2) The table of parts of subchapter U of chapter 1 of such Code is amended to read as follows:
``Part II. Incentives for empowerment zones and enterprise communities.''.
(3) The table of sections of part II of subchapter U of chapter 1 of such Code is amended by adding at the end the following new item:
``Sec. 1395. Homebuyer credit.''.
(4) The table of sections of part III of subchapter X of chapter 1 of such Code is amended by adding at the end the following new item:
``Sec. 1400K. Homebuyer credit.''.
TITLE III--COMMUNITY-BASED HOUSING DEVELOPMENT
SEC. 301. BLOCK GRANT STUDY.
(a) Study.--
(1) In general.--The Secretary of Housing and Urban Development shall conduct a study regarding--
(A) the feasibility of consolidating existing public and low-income housing programs under the United States Housing Act of 1937 into a comprehensive block grant system of Federal aid that--
(i) provides assistance on an annual basis;
(ii) maximizes funding certainty and flexibility; and
(iii) minimizes paperwork and delay; and
(B) the possibility of administering future public and low-income housing programs under the United States Housing Act of 1937 in accordance with such a block grant system.
(2) Public housing/section 8 moving to work demonstration.--In conducting the study described in paragraph (1), the Secretary of Housing and Urban Development shall consider data from and assessments of the demonstration program conducted under section 204 of the Omnibus Consolidated Rescissions and Appropriations Act of 1996
(Public Law 104-134, 110 Stat. 1321).
(b) Report to Comptroller General.--Not later than 18 months after the date of enactment of this Act, the Secretary of Housing and Urban Development shall submit to the Comptroller General of the United States a report that includes--
(1) the results of the study conducted under subsection
(a); and
(2) any recommendations for legislation.
(c) Report to Congress.--Not later than 24 months after the date of enactment of this Act, the Comptroller General of the United States shall submit to the Congress a report that includes--
(1) an analysis of the report submitted under subsection
(b); and
(2) any recommendations for legislation.
SEC. 302. HOMEOWNERSHIP FOR MUNICIPAL EMPLOYEES.
(a) Eligible Activities.--Section 215(b)(2) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12745(b)(2)) is amended to read as follows:
``(2) is the principal residence of an owner who--
``(A) is a member of a family that qualifies as a low-income family--
``(i) in the case of a contract to purchase existing housing, at the time of purchase;
``(ii) in the case of a lease-purchase agreement for existing housing or for housing to be constructed, at the time the agreement is signed; or
``(iii) in the case of a contract to purchase housing to be constructed, at the time the contract is signed; or
``(B)(i) is a uniformed employee (which shall include policemen, firemen, and sanitation and other maintenance workers) or a teacher who is an employee of the participating jurisdiction (or an agency or school district serving such jurisdiction) that is investing funds made available under this subtitle to support homeownership of the residence; and
``(ii) is a member of a family whose income, at the time referred to in clause (i), (ii), or (iii) of subparagraph
(A), as appropriate, and as determined by the Secretary with adjustments for smaller and larger families, does not exceed 115 percent of the median income of the area;''.
(b) Income Targeting.--Section 214(2) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12744(2)) is amended by inserting before the semicolon the following:
``or families described in section 215(b)(2)(B)''.
(c) Eligible Investments.--Section 212(b) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12742(b)) is amended by adding at the end the following:
``Notwithstanding the preceding sentence, in the case of homeownership assistance for residences of owners described in section 215(b)(2)(B), funds made available under this subtitle may only be invested (A) to provide amounts for downpayments on mortgages, (B) to pay reasonable closing costs normally associated with the purchase of a residence,
(C) to obtain pre- or post-purchase counseling relating to the financial and other obligations of homeownership, or (D) to subsidize mortgage interest rates.''.
SEC. 303. COMMUNITY DEVELOPMENT.
(a) Eligible Activities.--Section 105(a) of the Housing and Community Development Act of 1974 (42 U.S.C. 5305(a)), is amended--
(1) in paragraph (22)(C), by striking ``and'' at the end;
(2) in paragraph (23), by striking the period at the end and inserting a semicolon;
(3) in paragraph (24), by striking ``and'' at the end;
(4) in paragraph (25), by striking the period at the end and inserting ``; and''; and
(5) by adding at the end the following:
``(26) provision of direct assistance to facilitate and expand homeownership among uniformed employees (including policemen, firemen, and sanitation and other maintenance workers) of, and teachers who are employees of, the metropolitan city or urban county (or an agency or school district serving such city or county) receiving grant amounts under this title pursuant to section 106(b), or the unit of general local government (or an agency or school district serving such unit) receiving such grant amounts pursuant to section 106(d), except that, notwithstanding section 102(a)(20)(B) or any other provision of this title, such assistance may be provided on behalf of such employees whose family incomes do not exceed 115 percent of the median income of the area involved, as determined by the Secretary with adjustments for smaller and larger families, and except that such assistance shall be used only for acquiring principal residences for such employees by--
``(A) providing amounts for downpayments on mortgages;
``(B) paying reasonable closing costs normally associated with the purchase of a residence;
``(C) obtaining pre- or post-purchase counseling relating to the financial and other obligations of homeownership; or
``(D) subsidizing mortgage interest rates.''.
(b) Primary Objectives.--Section 105(c) of the Housing and Community Development Act of 1974 (42 U.S.C. 5305(c)) is amended by adding at the end the following:
``(5) Homeownership assistance for municipal employees.--Notwithstanding any other provision of this title, any assisted activity described in subsection (a)(26) shall be considered, for purposes of this title, to benefit persons of low and moderate income and shall be directed toward the objective under section 101(c)(3).''.
TITLE IV--RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES
SEC. 401. RELEASE FROM LIABILITY OF PERSONS THAT FULFILL
REQUIREMENTS OF STATE AND LOCAL LAW.
Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9607) is amended by adding at the end the following:
``(o) Release From Liability of Persons That Fulfill Requirements of State and Local Law.--
``(1) Definition of urban nonlisted facility.--In this subsection, the term `urban nonlisted facility' means a facility that is not listed or proposed for listing on the National Priorities List.
``(2) Enforcement authority.--Neither the President nor any other person may bring an administrative or judicial enforcement action under this Act with respect to an urban nonlisted facility against a person that has fulfilled all requirements applicable to the person under State and local law to conduct a response action at the urban nonlisted facility, as evidenced by a release from liability issued by authorized State and local officials, to the extent that the administrative or judicial action would seek to require response action that is within the scope of the response action conducted in accordance with State and local law.''.
SEC. 402. BROWNFIELD PROGRAM.
Title I of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et seq.) is amended by adding at the end the following:
``SEC. 128. BROWNFIELD PROGRAM.
``(a) Definition of Brownfield Facility.--
``(1) In general.--In this section, the term `brownfield facility' means a parcel of land that contains an abandoned, idled, or underused commercial or industrial facility, the expansion or redevelopment of which is complicated by the presence or potential presence of a hazardous substance.
``(2) Exclusions.--The term `brownfield facility' does not include--
``(A) a facility that is the subject of a removal or planned removal under this title;
``(B) a facility that is listed or has been proposed for listing on the National Priorities List or that has been removed from the National Priorities List;
``(C) a facility that is subject to corrective action under section 3004(u) or 3008(h) of the Solid Waste Disposal Act
(42 U.S.C. 6924(u), 6928(h)) at the time at which an application for a grant or loan concerning the facility is submitted under this section;
``(D) a land disposal unit with respect to which--
``(i) a closure notification under subtitle C of the Solid Waste Disposal Act (42 U.S.C. 6921 et seq.) has been submitted; and
``(ii) closure requirements have been specified in a closure plan or permit;
``(E) a facility with respect to which an administrative order on consent or judicial consent decree requiring cleanup has been entered into by the United States under--
``(i) the Toxic Substances Control Act (15 U.S.C. 2601 et seq.);
``(ii) the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.);
``(iii) the Safe Drinking Water Act (42 U.S.C. 300f et seq.);
``(iv) the Solid Waste Disposal Act (42 U.S.C. 6901 et seq.); or
``(v) this Act;
``(F) a facility that is owned or operated by a department, agency, or instrumentality of the United States; or
``(G) a portion of a facility, for which portion, assistance for response activity has been obtained under subtitle I of the Solid Waste Disposal Act (42 U.S.C. 6991 et seq.) from the Leaking Underground Storage Tank Trust Fund established under section 9508 of the Internal Revenue Code of 1986.
``(b) Brownfield Program.--
``(1) In general.--There is established within the Environmental Protection Agency a brownfield program.
``(2) Components.--Under the brownfield program, the Administrator may--
``(A) expend funds to examine, identify as brownfield facilities, and include in the brownfield program, idle or underused industrial and commercial facilities; and
``(B) provide grants to State and local governments to clean up brownfield facilities and return brownfield facilities to productive use.
``(c) Maintenance of Preexisting Brownfield Program.--In carrying out subsection (b), the Administrator shall maintain any brownfield program established by the Administrator before the date of enactment of this section.
``(d) Maximum Grant Amount.--A grant under subsection
(b)(2)(B) shall not exceed $200,000 with respect to any brownfield facility.
``(e) Authorization of Appropriations.--There are authorized to be appropriated out of the Hazardous Substance Superfund to carry out this section--
``(1) $100,000,000 for fiscal year 2002;
``(2) $105,000,000 for fiscal year 2003; and
``(3) $110,000,000 for fiscal year 2004.''.
______
By Mr. LOTT (for Mr. Specter):
S. 24. A bill to provide improved access to health care, enhance informed individual choice regarding health care services, lower health care costs through the use of appropriate providers, improve the quality of health care, improve access to long-term care, and for other purposes; to the Committee on Finance.
health care assurance act of 2001
Mr. SPECTER. Mr. President, as the 107th Congress commences, those of us elected to serve in the most evenly divided Senate and House in history recognize that whatever our parties' differences may be, we have a new opportunity to make a positive impact on the lives of the American people. The narrow margins in both legislative bodies offer us a chance to learn from the past, determine how best to respond to the challenges that are before us, and forge important alliances which will enable us to pass legislation important to this nation. I believe it is clear that one of our first priorities must be additional incremental reforms of our health care system.
There is no time to waste. Many of our nation's health care problems are getting worse, not better. In its April 2000 report, the Employee Benefit Research Institute (EBRI) analyzed the March 1999 Current Population Survey, a document generated yearly by the U.S. Census Bureau. EBRI's analysis tells us that in 1998, about 194.7 million working-age Americans derived their health insurance coverage as follows: approximately 65 percent from employer plans; 10.4 percent from Medicare and Medicaid within a total of 14.0 percent from public sources of coverage; and 7 percent from other private insurance. While this survey shows us where the insured are obtaining their coverage, it also details a troubling statistic: 43.9 million Americans, or 18 percent of Americans aged 18-64, were uninsured. While the rate of growth of the number of uninsured is slowing, our goal of actually reducing the number of people without access to health coverage and services remains clear.
As I have said many times, we can fix the problems felt by uninsured Americans without resorting to big government and without completely overhauling our current system, one that works well for most Americans--serving 81.6 percent of our non-elderly citizens. We must enact reforms that improve upon our current market-based health care system, as it is clearly the best health care system in the world.
Accordingly, today I am introducing the Health Care Assurance Act of 2001, which, if enacted, will take us further down the path of the incremental reforms started by the Health Insurance Portability and Accountability Act of 1996 (Kassebaum-Kennedy) and various health care provisions enacted during the 105th and 106th Congresses. I would note that the final version of Kassebaum-Kennedy contained many elements which were in S. 18, the incremental health care reform bill I introduced when the 104th Congress began on January 4, 1995.
The bill I am introducing today is distinct from my longstanding efforts regarding managed care reform. During the 105th and 106th Congresses, I joined a bipartisan group of Senators to introduce the Promoting Responsible Managed Care Act of 1998 and 1999, balanced proposals which would ensure that patients receive the benefits and services to which they are entitled, without compromising the savings and coordination of care that can be achieved through managed care.
The managed care debate, which aims to improve insurance coverage for those who already have it, stands in stark contrast to the Health Care Assurance Act of 2001. My bill is intended to provide access to insurance coverage for those who have never even had the option to purchase it--or who simply could not afford it--due to market constraints.
Given the importance of enacting this type of legislation, it is worth reviewing recent history which has taught us that bipartisanship is crucial in accomplishing any goal. In particular, the debate over President Clinton's Health Security Act during the 103rd Congress is replete with lessons concerning the pitfalls that inevitably lead to legislative failure. Several times during the 103rd Congress, I spoke on the Senate floor to address what seemed to be the wisest course--to pass incremental health care reforms with which we could all agree. Unfortunately, what seemed obvious to me, based on comments and suggestions by a majority of Senators who favored a moderate approach, was not obvious at the time to the Senate's Democratic leadership.
This failure to understand the merits of an incremental approach was demonstrated in April 1993, during my attempts to offer a health care reform amendment based on the text of S. 631, an incremental reform bill I had introduced earlier in the session. This bill incorporated moderate, consensus principles in a reasonable reform package. First, I attempted to offer the bill as an amendment to legislation dealing with debt ceilings. Subsequently, I was informed that the floor consideration of this bill would be structured in a way that precluded my offering an amendment. Therefore, I prepared to offer my health care bill as an amendment to the fiscal year 1993 Emergency Supplemental Appropriations bill. To my dismay, then Majority Leader Mitchell, and Senator Byrd, then Chairman of the Appropriations Committee, worked together to ensure that I could not offer my amendment by keeping the Senate in a quorum call, a parliamentary tactic used to delay and obstruct. I was unable to obtain unanimous consent to end the quorum call, and thus could not proceed with my amendment.
Three years later, well after the behemoth Clinton health care reform bill was derailed, the Senate once again endured a lengthy political battle concerning the Kassebaum-Kennedy bill, which I was pleased to cosponsor. When enough Senators sensed the growing frustration of the American people, we achieved a breakthrough in August 1996, and Kassebaum-Kennedy's vital health insurance market reforms were finally passed. There is no question that Kassebaum-Kennedy made significant steps forward in addressing troubling issues in health care--such as increasing the ease of portability of health insurance coverage--but I continue to recognize that there is much more to be done. That bill's incremental approach to health care reform is what allowed it to generate bipartisan, consensus support in the Senate. We knew that it did not address every single problem in the health care delivery system, but it would make life better for millions of American men, women, and children.
I urge my colleagues to note a most important fact: the Kassebaum-
Kennedy bill was enacted only after Democrats abandoned their hopes for passing a nationalized, big government health care scheme, and Republicans abandoned their position that access to health care is not really a major problem in the United States that demands Federal action.
Perhaps the greatest recent example of the power of bipartisanship took place during the 105th Congress, with the passage of the Balanced Budget Act of 1997. This historic bipartisan agreement between Congress and the White House to balance the budget by 2002 extended the life of the vital Medicare hospital trust fund by ten years, while expanding needed benefits for seniors. The new law created a National Bipartisan Commission on the Future of Medicare to address the implications of the retirement of the Baby Boom generation, and marked the first balanced Federal budget in thirty years. This landmark accomplishment clearly would not have occurred without all members of Congress and the Administration crossing party lines, compromising, and doing what was right for the American people regardless of political affiliations.
Despite the historic nature of the Balanced Budget Act of 1997, however, many providers, hospitals, home health agencies, and insurers argued that the cuts went too deep, and that patient access and care were being compromised. In both the 105th and 106th Congresses, I supported bipartisan efforts to carefully relieve and infuse additional dollars into areas which suffered too greatly from Medicare cuts, without upsetting the delicate balance of the budget.
We must realize that if we are to continue to be successful in meeting the nation's health care needs, the solutions to the system's problems must come from the political center, not from the extremes.
I have advocated health care reform in one form or another throughout my 18 years in the Senate. My strong interest in health care dates back to my first term, when I sponsored S. 811, the Health Care for Displaced Workers Act of 1983, and S. 2051, the Health Care Cost Containment Act of 1983, which would have granted a limited antitrust exemption to health insurers, permitting them to engage in certain joint activities such as acquiring or processing information, and collecting and distributing insurance claims for health care services aimed at curtailing then escalating health care costs. In 1985, I introduced the Community Based Disease Prevention and Health Promotion Projects Act of 1985, S. 1873, directed at reducing the human tragedy of low birth weight babies and infant mortality. Since 1983, I have introduced and cosponsored numerous other bills concerning health care in our country. A complete list of the 31 health care bills that I have sponsored since 1983 is included for the Record.
During the 102nd Congress, I pressed the Senate to take action on the health care market issue. On July 29, 1992, I offered an amendment to legislation then pending on the Senate floor, which included a change from 25 percent to 100 percent deductibility for health insurance purchased by self-employed individuals, and small business insurance market reforms to make health coverage more affordable for small businesses. Included in this amendment were provisions from a bill introduced by the late Senator John Chafee, legislation which I cosponsored and which was previously proposed by Senators Bentsen and Durenberger. When then-Majority Leader Mitchell argued that the health care amendment I was proposing did not belong on that bill, I offered to withdraw the amendment if he would set a date certain to take up health care, similar to an arrangement made on product liability legislation, which had been placed on the calendar for September 8, 1992. The Majority Leader rejected that suggestion and the Senate did not consider comprehensive health care legislation during the balance of the 102nd Congress. My July 29, 1992 amendment was defeated on a procedural motion by a vote of 35 to 60, along party lines.
The substance of that amendment, however, was adopted later by the Senate on September 23, 1992, when it was included in a Bentsen/
Durenberger amendment which I cosponsored to broader tax legislation
(H.R. 11). This amendment, which included essentially the same self-
employed tax deductibility and small group reforms I had proposed on July 29th of that year, passed the Senate by voice vote. Unfortunately, these provisions were later dropped from H.R. 11 in the House-Senate conference.
On August 12, 1992, I introduced legislation entitled the Health Care Affordability and Quality Improvement Act of 1992, S. 3176, that would have enhanced informed individual choice regarding health care services by providing certain information to health care recipients, would have lowered the cost of health care through use of the most appropriate provider, and would have improved the quality of health care.
On January 21, 1993, the first day of the 103rd Congress, I introduced the Comprehensive Health Care Act of 1993, S. 18. This legislation was comprised of reforms that our health care system could have adopted immediately. These initiatives would have both improved access and affordability of insurance coverage and would have implemented systemic changes to lower the escalating cost of care in this country. S. 18 is the principal basis of the legislation I introduced in the last three Congresses as well as this one.
On March 23, 1993, I introduced the Comprehensive Access and Affordability Health Care Act of 1993, S. 631, which was a composite of health care legislation introduced by Senators Cohen, Kassebaum, Bond, and McCain, and included pieces of my bill, S. 18. I introduced this legislation in an attempt to move ahead on the consideration of health care legislation and provide a starting point for debate. As I noted earlier, I was precluded by Majority Leader Mitchell from obtaining Senate consideration of my legislation as a floor amendment on several occasions. Finally, on April 28, 1993, I offered the text of S. 631 as an amendment to the pending Department of the Environment Act (S. 171) in an attempt to urge the Senate to act on health care reform. My amendment was defeated 65 to 33 on a procedural motion, but the Senate had finally been forced to contemplate action on health care reform.
On the first day of the 104th Congress, January 4, 1995, I introduced a slightly modified version of S. 18, the Health Care Assurance Act of 1995 (also S. 18), which contained provisions similar to those ultimately enacted in the Kassebaum-Kennedy legislation, including insurance market reforms, an extension of the tax deductibility of health insurance for the self employed, and tax deductibility of long term care insurance.
I continued these efforts in the 105th Congress, with the introduction of Health Care Assurance Act of 1997 (S. 24), which included market reforms similar to my previous proposals with the addition of a new Title I, an innovative program to provide vouchers to States to cover children who lack health insurance coverage. I also introduced Title I of this legislation as a stand-alone bill, the Healthy Children's Pilot Program of 1997 (S. 435) on March 13, 1997. This proposal targeted the approximately 4.2 million children of the working poor who lacked health insurance at that time. These are children whose parents earn too much to be eligible for Medicaid, but do not earn enough to afford private health care coverage for their families. This legislation would have established a $10 billion/5 year discretionary pilot program to cover these uninsured children by providing grants to States. Modeled after Pennsylvania's extraordinarily successful Caring and BlueCHIP programs, this legislation was the first Republican-sponsored child health insurance bill during the 105th Congress.
I was encouraged that the Balanced Budget Act of 1997, signed into law on August 5, 1997, included a combination of the best provisions from many of the child health insurance proposals throughout this Congress. The new legislation allocated $24 billion over five years to establish State Child Health Insurance Programs, funded in part by a slight increase in the cigarette tax.
On the first day of the 106th Congress, I again introduced the Health Care Assurance Act of 1999, also designated S. 24. This bill contained similar insurance market reforms, as well as new provisions to augment the new State Child Health Insurance Program, to assist individuals with disabilities in maintaining quality health care coverage, and to establish a National Fund for Health Research to supplement the funding of the National Institutes of Health. All these new initiatives, as well as the market reforms that I supported previously, work toward the goals of covering more individuals and stemming the tide of rising health costs.
My commitment to the issue of health care reform across all populations has been consistently evident during my tenure in the Senate, as I have taken to this floor and offered health care reform bills and amendments on countless occasions. I will continue to stress the importance of the Federal government's investment in and attention to the system's future.
As my colleagues are aware, I can personally report on the miracles of modern medicine. Seven and one half years ago, an MRI detected a benign tumor (meningioma) at the outer edge of my brain. It was removed by conventional surgery, with five days of hospitalization and five more weeks of recuperation.
When a small regrowth was detected by a follow-up MRI in June 1996, it was treated with high powered radiation using a remarkable device called the
``Gamma Knife.'' I entered the hospital on the morning of October 11, 1996, and left the same afternoon, ready to resume my regular schedule. Like the MRI, the Gamma Knife is a recent innovation, coming into widespread use only in the past decade.
In July 1998, I was pleased to return to the Senate after a relatively brief period of convalescence following heart bypass surgery. This experience again led me to marvel at our health care system and made me more determined than ever to support Federal funding for biomedical research and to support legislation which will incrementally make health care available to all Americans.
My concern about health care has long pre-dated my own personal benefits from the MRI and other diagnostic and curative procedures. As I have previously discussed, my concern about health care began many years ago and has been intensified by my service on the Appropriations Subcommittee on Labor, Health and Human Services, and Education, which I now have the honor to chair.
My own experience as a patient has given me deeper insights into the American health care system beyond my perspective from the U.S. Senate. I have learned: (1) our health care system, the best in the world, is worth every cent we pay for it; (2) patients sometimes have to press their own cases beyond doctors' standard advice; (3) greater flexibility must be provided on testing and treatment; (4) our system has the resources to treat the 43.9 million Americans currently uninsured, but we must find the way to pay for it; and (5) all Americans deserve the access to health care from which I and others with coverage have benefitted.
I have long been convinced that our Federal budget of $1.8 trillion could provide sufficient funding for America's needs if we establish our real priorities. Over the past eight years, I believe we have learned a great deal about our health care system and what the American people are willing to accept from the Federal government. The message we heard loudest was that Americans do not want a massive overhaul of the health care system. Instead, our constituents want Congress to proceed at a slower pace and to target what is not working in the health care system while leaving in place what is working.
As I have said both publicly and privately, I had been willing to cooperate with the Clinton Administration in solving the health care problems facing our country. However, I found many important areas where I differed with President Clinton's approach to solutions and I did so because I believed that the proposals would have been deleterious to my fellow Pennsylvanians, to the American people, and to our health care system as a whole. Most importantly, as the President proposed in 1993, I did not support creating a large new government bureaucracy because I believe that savings should go to health care services and not bureaucracies.
On this latter issue, I first became concerned about the potential growth in bureaucracy in September 1993 after reading the President's 239-page preliminary health care reform proposal. I was surprised by the number of new boards, agencies, and commissions, so I asked my legislative assistant, Sharon Helfant, to make me a list of all of them. Instead, she decided to make a chart. The initial chart depicted 77 new entities and 54 existing entities with new or additional responsibilities.
When the President's 1,342-page Health Security Act was transmitted to Congress on October 27, 1993, my staff reviewed it and found an increase to 105 new agencies, boards, and commissions and 47 existing departments, programs and agencies with new or expanded jobs. This chart received national attention after being used by Senator Bob Dole in his response to the President's State of the Union address on January 24, 1994.
The response to the chart was tremendous, with more than 12,000 people from across the country contacting my office for a copy; I still receive requests for the chart nearly eight years later. Groups and associations, such as United We Stand America, the American Small Business Association, the National Federation of Republican Women, and the Christian Coalition, reprinted the chart in their publications--
amounting to hundreds of thousands more in distribution. Bob Woodward of the Washington Post later stated that he thought the chart was the single biggest factor contributing to the demise of the Clinton health care plan. And, as recently as the November 1996 election, my chart was used by Senator Dole in his presidential campaign to illustrate the need for incremental health care reform as opposed to a big government solution.
With the history of the health care reform debate in mind and building on my previous efforts, I am again introducing an incremental bill which would provide quality health care without adversely affecting the many positive aspects of our health care system. It is more prudent to implement targeted reforms and then act later to improve upon what we have done. I call this trial and modification. We must be careful not to damage the positive aspects of our health care system upon which more than 194.7 million Americans justifiably rely.
The legislation I am introducing today has three objectives: (1) to provide affordable health insurance for those now not covered; (2) to reduce health care costs for all Americans; and (3) to improve coverage for underinsured individuals, families, and children.
This bill includes provisions to expand the Medicaid program to cover higher income individuals than currently allowed, to encourage the formation of small group insurance purchasing arrangements, to expand access to health insurance for children, to improve health benefits for individuals with disabilities, to strengthen preventive health benefits under the Medicare program, to increase access to prenatal care and outreach for the prevention of low birth weight babies, to strengthen patients' rights regarding medical care at the end of life, to expand access to primary and preventive health services, to reform the COBRA law, to enhance our investment in outcomes research, to reduce the incidence of medical errors, and to establish a national fund for health research as a supplement to the National Institutes of Health budget.
Taken together, I believe the reforms proposed in the Health Care Assurance Act of 2001 will both improve the quality of health care delivery and will help ease the escalating costs of health care in this country.
This new initiative, which was not contained in my previous version of this legislation, would guarantee coverage for individuals earning up to 133 percent of the Federal poverty level ($11,105 for a single/
$22,676 for a family of four) and would give states the option to cover individuals earning up to 200 percent of poverty ($16,700 for a single/
$34,100 for a family of four). This population is generally deemed undesirable by private insurers, and since these low-income individuals are ineligible for Medicaid, they currently remain uninsured.
The provisions in this title advance the recent joint proposal by the Health Insurance Association of America and Families USA, two groups which have traditionally been on opposing ends of health policy debates. Recognizing the rising number of Americans who lack health insurance, these groups took the unprecedented step in crafting a set of basic policy goals on which Congress may build consensus and get something done for the uninsured. Currently, Medicaid only guarantees coverage for pregnant women and infants who earn up to 133 percent of the poverty level. Beyond that population, the Federal mandate varies across age, income, and disability status; for instance, there are different federal mandates for preschool age children than for school-
age children and for disabled individuals. Further, current law does not allow any Federal contributions for coverage of people ages 16-18 or for adults with children. I recognize that states may certainly choose to establish programs to cover these and other categories of low-income people, but usually will not do so without Federal help.
Title II of the bill builds on the State Child Health Insurance Program (SCHIP), the program established in the Balanced Budget Act of 1997, which allocated $24 billion over five years to increase health insurance coverage for children. The SCHIP program gives States the option to use federally funded grants to provide vouchers to eligible families to purchase health insurance for their children, or to expand Medicaid coverage for those uninsured children, or a combination of both. This title would increase the income eligibility to families with incomes at or below 235 percent of the Federal poverty level ($40,067 annually for a family of four). The Health Care Financing Administration reported that nearly two million children were enrolled in the SCHIP program during fiscal year 1999. The Administration's goal is to enroll five million more children in the program by the end of fiscal year 2002. This provision would allow eligibility for approximately another 850,000 uninsured children.
Title III assists another of our Nation's most vulnerable populations by improving the delivery of care for individuals with long-term disabilities. This title would allow for Medicaid reimbursement for community-based attendant care services, as an alternative to institutionalization, for eligible individuals who require such services based on functional need, without regard to the individual's age or the nature of the disability. The most recent data available tell us that 6.64 million individuals receive care for disabilities under the Medicaid program.
This title builds on S. 1935, legislation I introduced during the 106th Congress with Senator Tom Harkin of Iowa. Such a change in Medicaid law is desperately needed given the Supreme Court's recent ruling in Olmstead v. L.C., 119 S. Ct. 2176 (1999): the Americans with Disabilities Act (ADA) requires States, in some circumstances, to provide community-based treatment to persons with mental disabilities rather than placement in institutions. This decision and several lower court decisions have pointed to the need for a structured Medicaid attendant-care services benefit in order to meet obligations under the ADA.
I am pleased to report that my fiscal year 2001 Labor, HHS, and Education Appropriations bill provided $50 million for ``Real Choice, Systems Change'' grants for states to fund initiatives for systems improvements and to provide long term services and supports, including community-based attendant care. In addition, $20 million was provided to continue demonstration projects on Medicaid coverage of community-
based attendant care services. Title III of this bill expands and authorizes the programs we have been funding as demonstration projects in order to establish a permanent infrastructure for the new benefit.
The next title contains provisions to make it easier for small businesses to buy health insurance for their workers by establishing voluntary purchasing groups. It also obligates employers to offer, but not pay for, at least two health insurance plans that protect individual freedom of choice and that meet a standard minimum benefits package. It extends COBRA benefits and coverage options to provide portability and security of affordable coverage between jobs.
Specifically, Title IV extends the COBRA benefit option from 18 months to 24 months. COBRA refers to a measure which was enacted in 1985 as part of the Consolidated Omnibus Budget Reconciliation Act
(COBRA '85) to allow employees who leave their job, either through a lay-off or by choice, to continue receiving their health care benefits by paying the full cost of such coverage. By extending this option, such unemployed persons will have enhanced coverage options, particularly when compared to what they would be able to buy in the individual insurance market.
In addition, options under COBRA are expanded to include plans with lower premiums and higher deductibles of either $1,000 or $3,000. This provision is incorporated from legislation introduced in the 103rd Congress by Senator Phil Gramm and will provide an extra cushion of coverage options for people in transition. According to Senator Gramm, with these options, the typical monthly premium paid for a family of four would drop by as much as 20 percent when switching to a $1,000 deductible and as much as 52 percent when switching to a $3,000 deductible.
This title also includes a provision which would extend to 36 months the time period for COBRA coverage for a child who is no longer a dependent under a parent's health insurance policy. Uninsured workers tend to be concentrated among those under age 35, although the average age of uninsured workers is increasing. EBRI statistics indicate that 24 percent of young adults between the ages of 18 and 24 were without coverage in 1998. This provision would allow those who are no longer dependents on their parents' plan to have a more secure safety net.
With respect to the uninsured and underinsured, my bill would permit individuals and families to purchase guaranteed, comprehensive health coverage through purchasing groups. Health insurance plans offered through the purchasing groups would be required to meet basic, comprehensive standards with respect to benefits.
My bill would also create health insurance purchasing groups for individuals wishing to purchase health insurance on their own. In today's market, such individuals often face a market where coverage options are not affordable. Purchasing groups will allow small businesses and individuals to buy coverage by pooling together to form purchasing groups, and choose from insurance plans that provide comprehensive benefits, with guaranteed enrollment, renewability, and equal pricing through community rating, adjusted by age and family size.
Title IV of my bill also includes an important provision to give the self employed 100 percent deductibility of their health insurance premiums. The Kassebaum-Kennedy bill extended the deductibility of health insurance for the self employed to 80 percent by 2006. The Balanced Budget Act of 1997 and the Omnibus Appropriations Act for fiscal year 1999 both contained new phase-in scales for health insurance deductibility for the self-employed. Currently, self-employed persons may deduct 60 percent of their health insurance costs through 2002, to be fully deductible in 2003. My bill would speed up the phase-
in: health insurance costs would be 70 percent deductible in 2001 and fully deductible in 2002, thereby giving the currently 3.1 million self-employed Americans who are uninsured a better incentive to purchase coverage.
The provisions contained in this portion of my bill are vital, as EBRI statistics tell us that 60 percent of all uninsured workers in 1998 were either self-employed or were working in small private-sector firms. The disparity is further demonstrated by the fact that 31 percent of workers in private-sector firms with fewer than 25 employees were uninsured, compared with only 13 percent of workers in private-
sector firms with 1000 or more employees.
It is anticipated that the increased costs to employers electing to cover their employees as provided under Title IV in my bill would be offset by the administrative savings generated by development of the small employer purchasing groups. Such savings have been estimated at levels as high as $9 billion annually. In addition, by addressing some of the areas within the health care system that have exacerbated costs, significant savings can be achieved and then redirected toward direct health care services.
Although our existing health care system suffers from serious structural problems, common sense steps can be taken to head off the remaining problems before they reach crisis proportions. Title V of my bill includes initiatives which will enhance primary and preventive care services aimed at preventing disease.
Each year about 7.6 percent of babies born in the United States are born with a low birth weight, multiplying their risk of death and disability. Most of the deaths which do occur are preventable. Although the infant mortality rate in the United States fell to an all-time low in 1989, and the rate decreased by 28 percent between 1988 and 1998, too many babies continue to be born of low birth weight. The Executive Director of the National Commission To Prevent Infant Mortality put it this way: ``More babies are being born at risk and all we are doing is saving them with expensive technology.''
It is a human tragedy for a child to be born weighing 16 ounces with attendant problems which last a lifetime. I first saw one pound babies in 1984 when I was astounded to learn that Pittsburgh, Pennsylvania, had the highest infant mortality rate of African-American babies of any city in the United States. I wondered how that could be true of Pittsburgh, which has such enormous medical resources. It was an amazing thing for me to see a one pound baby, about as big as my hand. However, I am pleased to report that as a result of successful prevention initiatives like the federal Healthy Start program, Pittsburgh's infant mortality has decreased 20 percent.
The Department of Health and Human Services has estimated that between $1.1 billion and $2.5 billion per year could be saved if the number of low birth weight children were reduced by 82,000 births. We know that in most instances, prenatal care is effective in preventing low birth weight babies. Numerous studies have demonstrated that low birth weight that does not have a genetic link is most often associated with inadequate prenatal care or the lack of prenatal care. The short and long-term costs of saving and caring for infants of low birth weight is staggering. In the most recent available study on the costs of low birth weight babies, the Office of Technology Assessment in 1988 concluded that $8 billion was expended in 1987 for the care of 262,000 low birth weight infants in excess of that which would have been spent on an equivalent number of babies born of normal birth weight, averted by earlier or more frequent prenatal care.
To improve pregnancy outcomes for women at risk of delivering babies of low birth weight, my legislation would strengthen the Healthy Start program to reduce infant mortality and the incidence of low birth weight births, as well as to improve the health and well-being of mothers and their families, pregnant women and infants. Funds are awarded under this program with the goal of developing and coordinating effective health care and social support services for women and their babies.
I initiated action that led to the creation of the Healthy Start program in 1991, working with the Bush Administration and Senator Harkin. As Chairman of the Appropriations Subcommittee with jurisdiction over the Department of Health and Human Services, I have worked with my colleagues to ensure the continued growth of this important program. In 1991, we allocated $25 million for the development of 15 demonstration projects. This number grew to 22 in 1994, to 75 projects in 1998, and the Health Resources and Services Administration expects this number to continue to increase. For both fiscal years 2000 and 2001, we secured $90 million for this vital program.
Title V also provides increased support to local educational agencies to develop and strengthen comprehensive health education programs, and to Head Start resource centers to support health education training programs for teachers and other day care workers. Many studies indicate that poor health and social habits are carried into adulthood and often passed on to the next generation. To interrupt this tragic cycle, our nation must invest in proven preventive health education programs.
Title V also expands the authorization of a variety of public health programs, such as breast and cervical cancer prevention, childhood immunizations, family planning, and community health centers. These existing programs are designed to improve public health and prevent disease through primary and secondary prevention initiatives. It is essential that we invest more resources in these programs now if we are to make any substantial progress in reducing the costs of acute care in this country.
As Chairman of the Labor, HHS and Education Appropriations Subcommittee, I have greatly encouraged the development of prevention programs which are essential to keeping people healthy and lowering the cost of health care in this country. In my view, no aspect of health care policy is more important. Accordingly, my prevention efforts have been widespread. Specifically, I joined my colleagues in efforts to ensure that funding for the Centers for Disease Control and Prevention
(CDC) increased $2.92 billion or 290 percent since 1989, for a fiscal year 2001 total of $3.92 billion. We have also worked to increase funding for CDC's breast and cervical cancer early detection program to
$176 million in fiscal year 2001, almost one and a half times its 1993 total.
I have also supported programs at CDC which help children. CDC's childhood immunization program seeks to eliminate preventable diseases through immunization and to ensure that at least 90 percent of 2 year olds are vaccinated. The CDC also continues to educate parents and caregivers on the importance of immunization for children under two years. Along with my colleagues on the Appropriations Committee, I have helped ensure that funding for this important program totaled $532.5 million for fiscal year 2001. The CDC's lead poisoning prevention program annually identifies about 50,000 children with elevated blood levels and places those children under medical management. The program prevents the amount of lead in children's blood from reaching dangerous levels and is currently funded at $36 million.
In recent years, we have also strengthened funding for Community Health Centers, which provide immunizations, health advice, and health professions training. These Centers, administered by the Health Resources and Services Administration, provide a critical primary care safety net to rural and medically underserved communities, as well as uninsured individuals, migrant workers, the homeless, residents of public housing, and Medicaid recipients. For fiscal year 2001, these Centers received over $1.2 billion.
As former Chairman of the Select Committee on Intelligence and current Chairman of the Appropriations Subcommittee with jurisdiction over non-defense biomedical research, I have worked to transfer CIA imaging technology to the fight against breast cancer. Through the Office of Women's Health within the Department of Health and Human Services, I secured a $2 million contract in fiscal year 1996 for a research consortium led by the University of Pennsylvania to perform the first clinical trials testing the use of intelligence technology for breast cancer detection. My Appropriations Subcommittee has continued to provide funds to continue these clinical trials.
I have also been a strong supporter of funding for AIDS research, education, and prevention programs. Funding for Ryan White AIDS programs has increased from $757.4 million in 1996 to $1.6 billion for fiscal year 2001. Within the fiscal year 2001 funding, $65 million was included for pediatric AIDS programs and $589 million for the AIDS Drug Assistance Program (ADAP). AIDS research at the NIH totaled $742.4 million in 1989, and has increased to an estimated $2.1 billion in fiscal year 2001.
The health care community continues to recognize the importance of prevention in improving health status and reducing health care costs. The Balanced Budget Act of 1997 and the Consolidated Omnibus Appropriations Act of fiscal year 2001 established new and enhanced preventive benefits within the Medicare program, such as flu shots, bone mass measurements, yearly mammograms, biennial pap smears and pelvic exams, and coverage of colonoscopy for high risk patients. However, some of these ``wellness'' benefits have cost obligations, such as copayments or deductibles. In this bill, I have also included provisions which refine and strengthen preventive benefits within the Medicare program, including coverage of yearly pap smears, pelvic exams, and screening and diagnostic mammography with no copayment or Part B deductible; and coverage of insulin pumps for certain Type I Diabetics.
The proposed expansions in preventive health services included in Title V of my bill are conservatively projected to save approximately
$2.5 billion per year or $12.5 billion over five years. It is clearly difficult to quantify today the savings that will surely be achieved when future generations of children are truly educated in a range of health-related subjects.
Title VI of my bill would establish a federal standard and create uniform national forms concerning a patient's right to decline medical treatment. Nothing in my bill mandates the use of uniform forms. Rather, the purpose of this provision is to make it easier for individuals to make their own choices and determination regarding their treatment during this vulnerable and highly personal time. Studies have also indicated that advance directives do not increase health care costs. Data indicate that end-of-life costs account for 10 percent of total health expenditures and 28 percent of total Medicare expenditures. Loose projections indicate that a 10 percent savings made in the final days of life would result in approximately $10 billion of savings in medical costs per year, and about $4.7 billion in savings for Medicare alone.
However, economic considerations are not and should not be the primary reasons for using advance directives. They provide a means for patients to exercise their autonomy over end-of-life decisions. A study done at the Thomas Jefferson University Medical College in Philadelphia cited research which found that about 90 percent of the American population has expressed interest in discussing advance directives. However, even more recent studies indicate that living wills would be used by many more Americans if they were better understood. My bill would provide information on an individual's rights regarding living wills and advanced directives, and would make it easier for people to have their wishes known and honored. In my view, no one has the right to decide for anyone else what constitutes appropriate medical treatment to prolong a person's life. Encouraging the use of advance directives will ensure that patients are not needlessly and unlawfully treated against their will. No health care provider would be permitted to treat an adult contrary to the adult's wishes as outlined in an advance directive. However, in no way would the use of advance directives condone assisted suicide or any affirmative act to end human life.
The next title addresses the unique barriers to coverage which exist in both rural and urban medically underserved areas. Within Pennsylvania, such barriers result from a lack of health care providers in rural areas, and other problems associated with the lack of coverage for indigent populations living in inner cities. Title VII of my bill improves access to health care services for these populations by: (1) expanding Public Health Service programs and training more primary care providers to serve in such areas; (2) increasing the utilization of non-physician providers, including nurse practitioners, clinical nurse specialists and physician assistants, through increased reimbursements under the Medicare and Medicaid programs; and (3) increasing support for education and outreach.
I believe these provisions will also yield substantial savings. A study of the Canadian health system utilizing nurse practitioners projected savings of 10 to 15 percent of all medical costs. While our system is dramatically different from that of Canada, it may not be unreasonable to project annual savings of five percent, or $57.5 billion, from an increased number of primary care providers in our system. Again, experience will raise or lower this projection.
Outcomes research is another area where we can achieve considerable long term health care savings while also improving the quality of care. According to most outcomes management experts, it is estimated that about 25 to 30 percent of medical care is inappropriate or unnecessary. Dr. Marcia Angell, former editor-in-chief of the New England Journal of Medicine, also stated that 20 to 30 percent of health care procedures are either inappropriate, ineffective or unnecessary.
I joined my colleagues in recognizing this important area of research by supporting passage of legislation reauthorizing the Agency for Healthcare Research and Quality (formerly the Agency for Health Care Policy and Research. The renamed agency, dubbed ``AHRQ,'' is authorized to expand outcomes research necessary for the development of medical practice guidelines and for increased access to consumer information. In order to boost funding for this vital area of research, title VIII of my bill would establish a trust fund for medical treatment outcomes research, capitalized by a .001 cent tax on total U.S. health insurance premiums collected. This trust fund would be specifically authorized for use by AHRQ to supplement its outcomes research mission. Based on the Health Care Financing Administration's 1998 health spending review, private health insurance premiums totaled $375 billion. As provided in my bill, a surcharge would generate $375 million for an outcomes research fund.
Also included in this title is my ``Medical Errors Reduction Act,'' which I introduced in the 106th Congress with Senators Harkin and Inouye, in response to the November 29, 1999, Institute of Medicine
(IOM) report, ``To Err Is Human: Building a Safer Health System.'' The report concluded that medical mistakes have led to numerous injuries and deaths, affecting an estimated three to four percent of all hospital patients. The IOM report also concluded that health care is a decade or more behind other high-risk industries in its attention to ensuring basic safety.
According to the IOM, at least 44,000 Americans die each year as a result of medical errors, and the number may be as high as 98,000--
which catapults medical errors to the fifth leading cause of death nationwide. This total outnumbers deaths from motor vehicle accidents, breast cancer, and AIDS. Further, medical errors resulting in injury are estimated to cost the nation between $17 billion and $29 billion, including additional health care costs, lost income, lost household production, and disability costs.
The IOM findings are startling and beg for national attention to determine ways to reduce the number of medical errors. On December 13, 1999, I chaired a hearing of the Labor, HHS, Education Appropriations Subcommittee to hear details of IOM's report findings. On January 25, 2000, I chaired a joint Labor, HHS, and Education Appropriations Subcommittee/Veterans' Affairs Committee hearing to consider mandatory and voluntary reporting requirements and to begin to determine ways to reduce medical errors.
Specifically, my proposal would make grants available to states so they can establish their own error reporting systems and would establish 15 competitively-awarded research demonstration projects in rural and urban areas throughout the country. These projects would employ new and proven technologies and enhance staff training to determine ways to reduce errors. The provision also requires the Secretary of HHS to provide patient education programs to all individuals covered by Federal health plans.
I am pleased to report that my Appropriations Subcommittee has already taken some critical first steps to reduce the incidence of deaths and injuries related to medical errors. In fiscal year 2001, $50 million has been provided to explore opportunities for a better understanding of the systemic problems in health care, in the hope that we can dramatically reduce the incidence of medical errors. The research initiatives include a focus on developing guidance to assist in States' development of data collection systems so that national trends can be determined and analyzed. In addition, the Committee has encouraged health care providers to explore the use of technologies and other methods in reducing medical errors.
Nursing home care is another significant issue which must be addressed. Spending on long term care totaled $115 billion in 1997, and over 40 percent of that cost was borne by the Medicaid program. Despite these large public expenditures, the elderly face significant uncovered liability for long term care. Title IX of my bill would provide a tax credit for premiums paid to purchase private long-term care insurance. Other tax incentives and reforms provided in my bill to make long term care insurance more affordable include: (1) allowing employees to select long-term care insurance as part of a cafeteria plan and allowing employers to deduct this expense; (2) excluding from income tax the life insurance savings used to pay for long term care; and (3) setting standards for long term care insurance that reduce the bias that currently favors institutional care over community and home-based alternatives.
The final title of my bill would create a national fund for health research within the Department of the Treasury, to supplement the monies appropriated for the National Institutes of Health. To capitalize this fund, health insurance companies would be required to contribute 1 percent of all health insurance premiums received. This creative proposal was first developed by my distinguished colleagues, Senators Mark Hatfield and Tom Harkin. Their idea is a sound one and ought to be adopted. To this end, Senator Harkin and I introduced the National Fund for Health Research Act on March 13, 1997 (S. 441) and August 5, 1999
(S. 1504). I look forward to continuing to work with Senator Harkin to enact a biomedical research fund this Congress.
While precision is again impossible, my proposal could conceivably achieve a net annual savings of between $74 billion to $86 billion. The savings are totaled as follows: $9 billion in small employer market reforms coupled with employer purchasing groups; $2.5 billion for preventive health services; $17 to $29 billion for reducing costs associated with reducing medical errors; $10 billion from advanced directives; $57.5 billion from increasing primary care providers; and
$2.9 billion by reducing administrative costs. The costs would be conservatively estimated to be $2.8 billion for long term care tax credits, approximately $15 billion for community-based attendant care services under Medicaid, and $7 billion for general Medicaid expansion. Experience and more detailed analysis of the affected populations will require modification of these projections, and I am prepared to work with my colleagues to develop implementing legislation and to press for further action in the important area of health care reform.
The provisions which I have outlined today contain my ideas for a framework to provide affordable, high quality health care for all Americans. I am opposed to rationing health care. I do not want rationing for myself, for my family, or for America. In my judgment, we should not scrap, but rather we should build upon our current health delivery system. We do not need the overwhelming bureaucracy that President Clinton and other Democratic leaders proposed in 1993 to accomplish this. I believe we can provide care for the 43.9 million Americans who are now not covered and reduce health care costs for those who are covered within the currently growing $1.15 trillion in health care spending. Mr. President, the time has come for concerted action in this arena.
I urge the Congressional leadership, including the appropriate committee chairmen, to move this legislation and other health care bills forward promptly. I ask unanimous consent that the full text of the bill, a summary, and a list of my health reform bills be printed in the Record.
There being no objection, the material was ordered to be printed in the Record, as follows:
S. 24
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Health Care Assurance Act of 2001''.
(b) Table of Contents.--The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I--EXPANDED MEDICAID COVERAGE FOR LOW-INCOME INDIVIDUALS
Sec. 101. Expanded medicaid coverage for low-income individuals.
TITLE II--EXPANSION OF THE STATE CHILDREN'S HEALTH INSURANCE PROGRAM
Sec. 201. Increase in income eligibility.
TITLE III--EXPANDED HEALTH SERVICES FOR DISABLED INDIVIDUALS
Sec. 301. Coverage of community-based attendant services and supports under the medicaid program.
Sec. 302. Grants to develop and establish real choice systems change initiatives.
Sec. 303. State option for eligibility for individuals.
Sec. 304. Studies and reports.
Sec. 305. Task force on financing of long-term care services.
TITLE IV--HEALTH CARE INSURANCE COVERAGE
Subtitle A--General Provisions
Sec. 401. Amendments to the Employee Retirement Income Security Act of
1974.
Sec. 402. Amendments to the Public Health Service Act relating to the group market.
Sec. 403. Amendment to the Public Health Service Act relating to the individual market.
Sec. 404. Effective date.
Subtitle B--Tax Provisions
Sec. 411. Enforcement with respect to health insurance issuers.
Sec. 412. Enforcement with respect to small employers.
Sec. 413. Enforcement by excise tax on qualified associations.
Sec. 414. Deduction for health insurance costs of self-employed individuals.
Sec. 415. Amendments to COBRA.
TITLE V--PRIMARY AND PREVENTIVE CARE SERVICES
Sec. 501. Improvement of medicare preventive care services.
Sec. 502. Authorization of appropriations for healthy start program.
Sec. 503. Reauthorization of certain programs providing primary and preventive care.
Sec. 504. Comprehensive school health education program.
Sec. 505. Comprehensive early childhood health education program.
Sec. 506. Adolescent family life and abstinence.
TITLE VI--PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT
Sec. 601. Patient's right to decline medical treatment.
TITLE VII--PRIMARY AND PREVENTIVE CARE PROVIDERS
Sec. 701. Increased medicare reimbursement for physician assistants, nurse practitioners, and clinical nurse specialists.
Sec. 702. Requiring coverage of certain nonphysician providers under the medicaid program.
Sec. 703. Medical student tutorial program grants.
Sec. 704. General medical practice grants.
TITLE VIII--SAFE AND COST-EFFECTIVE MEDICAL TREATMENT
Sec. 801. Enhancing investment in cost-effective methods of health care.
Sec. 802. Medical Errors Reduction.
TITLE IX--TAX INCENTIVES FOR PURCHASE OF QUALIFIED LONG-TERM CARE
INSURANCE
Sec. 901. Credit for qualified long-term care premiums.
Sec. 902. Inclusion of qualified long-term care insurance in cafeteria plans and flexible spending arrangements.
Sec. 903. Exclusion from gross income for amounts received on cancellation of life insurance policies and used for qualified long-term care insurance contracts.
Sec. 904. Use of gain from sale of principal residence for purchase of qualified long-term health care insurance.
TITLE X--NATIONAL FUND FOR HEALTH RESEARCH
Sec. 1001. Establishment of Fund.
TITLE I--EXPANDED MEDICAID COVERAGE FOR LOW-INCOME INDIVIDUALS
SEC. 101. EXPANDED MEDICAID COVERAGE FOR LOW-INCOME
INDIVIDUALS.
(a) Required Coverage of Individuals Up To 133 Percent of Poverty.--Section 1902(a)(10)(A)(i) of the Social Security Act (42 U.S.C. 1396a(a)(10)(A)(i)) is amended--
(1) by striking ``or'' at the end of subclause (VI);
(2) by inserting ``or'' after the semicolon at the end of subclause (VII); and
(3) by adding at the end the following:
``(VIII) whose family income does not exceed 133 percent of the income official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size involved;''.
(b) Optional Coverage of Individuals Up To 200 Percent of Poverty.--Section 1902(a)(10)(A)(i)(VIII) of the Social Security Act, as added by subsection (a)(3), is amended by inserting ``(200 percent, at State option)'' after ``133 percent''.
(c) Effective Date.--
(1) In general.--The amendments made by this section take effect on October 1, 2001.
(2) Extension if state law amendment required.--In the case of a State plan under title XIX of the Social Security Act which the Secretary of Health and Human Services determines requires State legislation in order for the plan to meet the additional requirements imposed by the amendments made by this section, the State plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet these additional requirements before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of the session is considered to be a separate regular session of the State legislature.
TITLE II--EXPANSION OF THE STATE CHILDREN'S HEALTH INSURANCE PROGRAM
SEC. 201. INCREASE IN INCOME ELIGIBILITY.
(a) Definition of Low-Income Child.--Section 2110(c)(4) of the Social Security Act (42 U.S.C. 42 U.S.C. 1397jj(c)(4)) is amended by striking ``200'' and inserting ``235''.
(b) Effective Date.--The amendment made by subsection (a) takes effect on October 1, 2001.
TITLE III--EXPANDED HEALTH SERVICES FOR DISABLED INDIVIDUALS
SEC. 301. COVERAGE OF COMMUNITY ATTENDANT SERVICES AND
SUPPORTS UNDER THE MEDICAID PROGRAM.
(a) Required Coverage for Individuals Entitled to Nursing Facility Services or Eligible for Intermediate Care Facility Services for the Mentally Retarded.--Section 1902(a)(10)(D) of the Social Security Act (42 U.S.C. 1396a(a)(10)(D)) is amended--
(1) by inserting ``(i)'' after ``(D)'';
(2) by adding ``and'' after the semicolon; and
(3) by adding at the end the following:
``(ii) subject to section 1935, for the inclusion of community attendant services and supports for any individual who is eligible for medical assistance under the State plan and with respect to whom there has been a determination that the individual requires the level of care provided in a nursing facility or an intermediate care facility for the mentally retarded (whether or not coverage of such intermediate care facility is provided under the State plan) and who requires such community attendant services and supports based on functional need and without regard to age or disability;''.
(b) Medicaid Coverage of Community Attendant Services and Supports.--
(1) In general.--Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) is amended--
(A) by redesignating section 1935 as section 1936; and
(B) by inserting after section 1934 the following:
``community attendant services and supports
``Sec. 1935. (a) Definitions.--In this title:
``(1) Community attendant services and supports.--
``(A) In general.--The term `community attendant services and supports' means attendant services and supports furnished to an individual, as needed, to assist in accomplishing activities of daily living, instrumental activities of daily living, and health-related functions through hands-on assistance, supervision, or cueing--
``(i) under a plan of services and supports that is based on an assessment of functional need and that is agreed to by the individual or, as appropriate, the individual's representative;
``(ii) in a home or community setting, which may include a school, workplace, or recreation or religious facility, but does not include a nursing facility, an intermediate care facility for the mentally retarded, or other congregate facility;
``(iii) under an agency-provider model or other model (as defined in paragraph (2)(C)); and
``(iv) the furnishing of which is selected, managed, and dismissed by the individual, or, as appropriate, with assistance from the individual's representative.
``(B) Included services and supports.--Such term includes--
``(i) tasks necessary to assist an individual in accomplishing activities of daily living, instrumental activities of daily living, and health-related functions;
``(ii) acquisition, maintenance, and enhancement of skills necessary for the individual to accomplish activities of daily living, instrumental activities of daily living, and health-related functions;
``(iii) backup systems or mechanisms (such as the use of beepers) to ensure continuity of services and supports; and
``(iv) voluntary training on how to select, manage, and dismiss attendants.
``(C) Excluded services and supports.--Subject to subparagraph (D), such term does not include--
``(i) provision of room and board for the individual;
``(ii) special education and related services provided under the Individuals with Disabilities Education Act and vocational rehabilitation services provided under the Rehabilitation Act of 1973;
``(iii) assistive technology devices and assistive technology services;
``(iv) durable medical equipment; or
``(v) home modifications.
``(D) Flexibility in transition to community-based home setting.--Such term may include expenditures for transitional costs, such as rent and utility deposits, first months's rent and utilities, bedding, basic kitchen supplies, and other necessities required for an individual to make the transition from a nursing facility or intermediate care facility for the mentally retarded to a community-based home setting where the individual resides.
``(2) Additional definitions.--
``(A) Activities of daily living.--The term `activities of daily living' includes eating, toileting, grooming, dressing, bathing, and transferring.
``(B) Consumer directed.--The term `consumer directed' means a method of providing services and supports that allow the individual, or where appropriate, the individual's representative, maximum control of the community attendant services and supports, regardless of who acts as the employer of record.
``(C) Delivery models.--
``(i) Agency-provider model.--The term `agency-provider model' means, with respect to the provision of community attendant services and supports for an individual, a method of providing consumer-directed services and supports under which entities contract for the provision of such services and supports.
``(ii) Other models.--The term `other models' means methods, other than an agency-provider model, for the provision of consumer-directed services and supports. Such models may include the provision of vouchers, direct cash payments, or use of a fiscal agent to assist in obtaining services.
``(D) Health-related functions.--The term `health-related functions' means functions that can be delegated or assigned by licensed health-care professionals under State law to be performed by an attendant.
``(E) Instrumental activities of daily living.--The term
`instrumental activities of daily living' includes meal planning and preparation, managing finances, shopping for food, clothing and other essential items, performing essential household chores, communicating by phone and other media, and getting around and participating in the community.
``(F) Individual's representative.--The term `individual's representative' means a parent, a family member, a guardian, an advocate, or an authorized representative of an individual.
``(b) Limitation on Amounts of Expenditures under This Title.--In carrying out section 1902(a)(10)(D)(ii), a State shall permit an individual who has a level of severity of physical or mental impairment that entitles such individual to medical assistance with respect to nursing facility services or qualifies the individual for intermediate care facility services for the mentally retarded to choose to receive medical assistance for community attendant services and supports (rather than medical assistance for such institutional services and supports), in the most integrated setting appropriate to the needs of the individual, so long as the aggregate amount of the Federal expenditures for community attendant services and supports for all such individuals in a fiscal year does not exceed the total that would have been expended for such individuals to receive such institutional services and supports in the year.
``(c) Maintenance of Effort.--With respect to a fiscal year quarter, no Federal funds may be paid to a State for medical assistance provided to individuals described in section 1902(a)(10)(D)(ii) for such fiscal year quarter if the Secretary determines that the total of the State expenditures for programs to enable such individuals with disabilities to receive community attendant services and supports (or services and supports that are similar to such services and supports) under other provisions of this title for the preceding fiscal year quarter is less than the total of such expenditures for the same fiscal year quarter for the preceding fiscal year.
``(d) State Quality Assurance Program.--In order to continue to receive Federal financial participation for providing community attendant services and supports under this section, a State shall, at a minimum, establish and maintain a quality assurance program that provides for the following:
``(1) The State shall establish requirements, as appropriate, for agency-based and other models that include--
``(A) minimum qualifications and training requirements, as appropriate for agency-based and other models;
``(B) financial operating standards; and
``(C) an appeals procedure for eligibility denials and a procedure for resolving disagreements over the terms of an individualized plan.
``(2) The State shall modify the quality assurance program, where appropriate, to maximize consumer independence and consumer direction in both agency-provided and other models.
``(3) The State shall provide a system that allows for the external monitoring of the quality of services by entities consisting of consumers and their representatives, disability organizations, providers, family, members of the community, and others.
``(4) The State provides ongoing monitoring of the health and well-being of each recipient.
``(5) The State shall require that quality assurance mechanisms appropriate for the individual should be included in the individual's written plan.
``(6) The State shall establish a process for mandatory reporting, investigation, and resolution of allegations of neglect, abuse, or exploitation.
``(7) The State shall obtain meaningful consumer input, including consumer surveys, that measure the extent to which a participant receives the services and supports described in the individual's plan and the participant's satisfaction with such services and supports.
``(8) The State shall make available to the public the findings of the quality assurance program.
``(9) The State shall establish an on-going public process for the development, implementation, and review of the State's quality assurance program.
``(10) The State shall develop and implement a program of sanctions.
``(e) Federal Role in Quality Assurance.--The Secretary shall conduct a periodic sample review of outcomes for individuals based upon the individual's plan of support and based upon the quality assurance program of the State. The Secretary may conduct targeted reviews upon receipt of allegations of neglect, abuse, or exploitation. The Secretary shall develop guidelines for States to use in developing sanctions.
``(f) Requirement To Expand Eligibility.--Effective October 1, 2002, a State may not exercise the option of coverage of individuals under section 1902(a)(10)(A)(ii)(V) without providing coverage under section 1902(a)(10)(A)(ii)(VI).
``(g) Report on Impact of Section.--The Secretary shall submit to Congress periodic reports on the impact of this section on beneficiaries, States, and the Federal Government.''.
(c) Inclusion in Optional Eligibility Classification.--Section 1902(a)(10)(A)(ii)(VI) of the Social Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)(VI)) is amended by inserting ``or community attendant services and supports described in section 1935'' after ``section 1915'' each place such term appears.
(d) Coverage as Medical Assistance.--
(1) In general.--Section 1905(a) of the Social Security Act
(42 U.S.C. 1396d) is amended--
(A) by striking ``and'' at the end of paragraph (26);
(B) by redesignating paragraph (27) as paragraph (28); and
(C) by inserting after paragraph (26) the following:
``(27) community attendant services and supports (to the extent allowed and as defined in section 1935); and''.
(2) Conforming amendment.--Section 1902(a)(10)(C)(iv) of the Social Security Act (42 U.S.C. 1396a(a)(10)(C)(iv)) is amended by inserting ``and (27)'' after ``(24)''.
(e) Effective Date.--The amendments made by this section take effect on October 1, 2001, and apply to medical assistance provided under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) on or after that date.
SEC. 302. GRANTS TO DEVELOP AND ESTABLISH REAL CHOICE SYSTEMS
CHANGE INITIATIVES.
(a) Establishment.--
(1) In general.--The Secretary of Health and Human Services
(referred to in this section as the ``Secretary'') shall award grants described in subsection (b) to States for a fiscal year to support real choice systems change initiatives that establish specific action steps and specific timetables to provide consumer-responsive long term services and supports to eligible individuals in the most integrated setting appropriate based on the unique strengths and needs of the individual and the priorities and concerns of the individual (or, as appropriate, the individual's representative).
(2) Eligibility.--To be eligible for a grant under this section, a State shall--
(A) establish the Consumer Task Force in accordance with subsection (d); and
(B) submit an application at such time, in such manner, and containing such information as the Secretary may determine. The application shall be jointly developed and signed by the designated State official and the chairperson of such Task Force, acting on behalf of and at the direction of the Task Force.
(3) Definition of state.--In this section, the term
``State'' means each of the 50 States, the District of Columbia, Puerto Rico, Guam, the United States Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands.
(b) Grants for Real Choice Systems Change Initiatives.--
(1) In general.--From funds appropriated under subsection
(g), the Secretary shall award grants to States for a fiscal year to--
(A) support the establishment, implementation, and operation of the State real choice systems change initiatives described in subsection (a); and
(B) conduct outreach campaigns regarding the existence of such initiatives.
(2) Determination of awards; state allotments.--The Secretary shall develop a formula for the distribution of funds to States for each fiscal year under subsection (a). Such formula shall give preference to States that have a relatively higher proportion of long-term services and supports furnished to individuals in an institutional setting but who have a plan described in an application submitted under subsection (a)(2).
(c) Authorized Activities.--A State that receives a grant under this section shall use the funds made available through the grant to accomplish the purposes described in subsection
(a) and, in accomplishing such purposes, may carry out any of the following systems change activities:
(1) Needs assessment and data gathering.--The State may use funds to conduct a statewide needs assessment that may be based on data in existence on the date on which the assessment is initiated and may include information about the number of individuals within the State who are receiving long-term services and supports in unnecessarily segregated settings, the nature and extent to which current programs respond to the preferences of individuals with disabilities to receive services in home and community-based settings as well as in institutional settings, and the expected change in demand for services provided in home and community settings as well as institutional settings.
(2) Institutional bias.--The State may use funds to identify, develop, and implement strategies for modifying policies, practices, and procedures that unnecessarily bias the provision of long-term services and supports toward institutional settings and away from home and community-based settings, including policies, practices, and procedures governing statewideness, comparability in amount, duration, and scope of services, financial eligibility, individualized functional assessments and screenings (including individual and family involvement), and knowledge about service options.
(3) Over medicalization of services.--The State may use funds to identify, develop, and implement strategies for modifying policies, practices, and procedures that unnecessarily bias the provision of long-term services and supports by health care professionals to the extent that quality services and supports can be provided by other qualified individuals, including policies, practices, and procedures governing service authorization, case management, and service coordination, service delivery options, quality controls, and supervision and training.
(4) Interagency coordination; single point of entry.--The State may support activities to identify and coordinate Federal and State policies, resources, and services, relating to the provision of long-term services and supports, including the convening of interagency work groups and the entering into of interagency agreements that provide for a single point of entry and the design and implementation of a coordinated screening and assessment system for all persons eligible for long-term services and supports.
(5) Training and technical assistance.--The State may carry out directly, or may provide support to a public or private entity to carry out training and technical assistance activities that are provided for individuals with disabilities, and, as appropriate, their representatives, attendants, and other personnel (including professionals, paraprofessionals, volunteers, and other members of the community).
(6) Public awareness.--The State may support a public awareness program that is designed to provide information relating to the availability of choices available to individuals with disabilities for receiving long-term services and support in the most integrated setting appropriate.
(7) Downsizing of large institutions.--The State may use funds to support the per capita increased fixed costs in institutional settings directly related to the movement of individuals with disabilities out of specific facilities and into community-based settings.
(8) Transitional costs.--The State may use funds to provide transitional costs described in section 1935(a)(1)(D) of the Social Security Act, as added by section 301(b) of this Act.
(9) Task force.--The State may use funds to support the operation of the Consumer Task Force established under subsection (d).
(10) Demonstrations of new approaches.--The State may use funds to conduct, on a time-limited basis, the demonstration of new approaches to accomplishing the purposes described in subsection (a).
(11) Other activities.--The State may use funds for any systems change activities that are not described in any of the preceding paragraphs of this subsection and that are necessary for developing, implementing, or evaluating the comprehensive statewide system of long term services and supports.
(d) Consumer Task Force.--
(1) Establishment and duties.--To be eligible to receive a grant under this section, each State shall establish a Consumer Task Force (referred to in this section as the
``Task Force'') to assist the State in the development, implementation, and evaluation of real choice systems change initiatives.
(2) Appointment.--Members of the Task Force shall be appointed by the Chief Executive Officer of the State in accordance with the requirements of paragraph (3), after the solicitation of recommendations from representatives of organizations representing a broad range of individuals with disabilities and organizations interested in individuals with disabilities.
(3) Composition.--
(A) In general.--The Task Force shall represent a broad range of individuals with disabilities from diverse backgrounds and shall include representatives from Developmental Disabilities Councils, State Independent Living Councils, Commissions on Aging, organizations that provide services to individuals with disabilities and consumers of long-term services and supports.
(B) Individuals with disabilities.--A majority of the members of the Task Force shall be individuals with disabilities or the representatives of such individuals.
(C) Limitation.--The Task Force shall not include employees of any State agency providing services to individuals with disabilities other than employees of agencies described in the Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C. 6000 et seq.).
(e) Availability of Funds.--
(1) Funds allotted to states.--Funds allotted to a State under a grant made under this section for a fiscal year shall remain available until expended.
(2) Funds not allotted to states.--Funds not allotted to States in the fiscal year for which they are appropriated shall remain available in succeeding fiscal years for allotment by the Secretary using the allotment formula established by the Secretary under subsection (b)(2).
(f) Annual Report.--A State that receives a grant under this section shall submit an annual report to the Secretary on the use of funds provided under the grant. Each report shall include the percentage increase in the number of eligible individuals in the State who receive long-term services and supports in the most integrated setting appropriate, including through community attendant services and supports and other community-based settings.
(g) Appropriation.--Out of any funds in the Treasury not otherwise appropriated, there is authorized to be appropriated and there is appropriated to make grants under this section for--
(1) fiscal year 2002, $25,000,000; and
(2) for fiscal year 2003 and each fiscal year thereafter, such sums as may be necessary to carry out this section.
SEC. 303. STATE OPTION FOR ELIGIBILITY FOR INDIVIDUALS.
(a) In General.--Section 1903(f) of the Social Security Act
(42 U.S.C. 1396b(f)) is amended--
(1) in paragraph (4)(C), by inserting ``subject to paragraph (5),'' after ``does not exceed'', and
(2) by adding at the end the following:
``(5)(A) A State may waive the income, resources, and deeming limitations described in paragraph (4)(C) in such cases as the State finds the potential for employment opportunities would be enhanced through the provision of medical assistance for community attendant services and supports in accordance with section 1935.
``(B) In the case of an individual who is eligible for medical assistance described in subparagraph (A) only as a result of the application of such subparagraph, the State may, notwithstanding section 1916(b), impose a premium based on a sliding scale related to income.''.
(b) Effective Date.--The amendments made by subsection (a) shall apply to medical assistance provided for community attendant services and supports described in section 1935 of the Social Security Act, as added by section 301(b) of this Act, furnished on or after October 1, 2001.
SEC. 304. STUDIES AND REPORTS.
(a) Review of, and Report on, Regulations.--The National Council on Disability established under title IV of the Rehabilitation Act of 1973 (29 U.S.C. 780 et seq.) shall review regulations in existence under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) on the date of enactment of this Act insofar as such regulations regulate the provision of home health services, personal care services, and other services in home and community-based settings and, not later than 1 year after such date, submit a report to Congress on the results of such study, together with any recommendations for legislation that the Council determines to be appropriate as a result of the study.
(b) Report on Reduced Title XIX Expenditures.--Not later than 1 year after the date of enactment of this Act, the Secretary of Health and Human Services shall submit to Congress a report on how expenditures under the medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) can be reduced by the furnishing of community attendant services and supports in accordance with section 1935 of the Social Security Act (as added by section 301(b) of this Act).
SEC. 305. TASK FORCE ON FINANCING OF LONG-TERM CARE SERVICES.
The Secretary of Health and Human Services shall establish a task force to examine appropriate methods for financing long-term services and supports. The task force shall include significant representation of individuals (and representatives of individuals) who receive such services and supports.
TITLE IV--HEALTH CARE INSURANCE COVERAGE
Subtitle A--General Provisions
SEC. 401. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974.
(a) In General.--Part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181 et seq.) is amended--
(1) by redesignating subpart C as subpart D; and
(2) by inserting after subpart B, the following:
``Subpart C--General Insurance Coverage Reforms
``CHAPTER 1--INCREASED AVAILABILITY AND CONTINUITY OF HEALTH COVERAGE
``SEC. 721. DEFINITION.
``As used in this subpart, the term `qualified group health plan' means a group health plan, and a health insurance issuer offering group health insurance coverage, that is designed to provide standard coverage (consistent with section 721A(b)).
``SEC. 721A. ACTUARIAL EQUIVALENCE IN BENEFITS PERMITTED.
``(a) Set of Rules of Actuarial Equivalence.--
``(1) Initial determination.--The NAIC is requested to submit to the Secretary, within 6 months after the date of the enactment of this subpart, a set of rules which the NAIC determines is sufficient for determining, in the case of any group health plan, or a health insurance issuer offering group health insurance coverage, and for purposes of this section, the actuarial value of the coverage offered by the plan or coverage.
``(2) Certification.--If the Secretary determines that the NAIC has submitted a set of rules that comply with the requirements of paragraph (1), the Secretary shall certify such set of rules for use under this subpart. If the Secretary determines that such a set of rules has not been submitted or does not comply with such requirements, the Secretary shall promptly establish a set of rules that meets such requirements.
``(b) Standard Coverage.--
``(1) In general.--A group health plan, and a health insurance issuer offering group health insurance coverage, shall be considered to provide standard coverage consistent with this subsection if the benefits are determined, in accordance with the set of actuarial equivalence rules certified under subsection (a), to have a value that is within 5 percentage points of the target actuarial value for standard coverage established under paragraph (2).
``(2) Initial determination of target actuarial value for standard coverage.--
``(A) Initial determination.--
``(i) In general.--The NAIC is requested to submit to the Secretary, within 6 months after the date of the enactment of this subpart, a target actuarial value for standard coverage equal to the average actuarial value of the coverage described in clause (ii). No specific procedure or treatment, or classes thereof, is required to be considered in such determination by this subpart or through regulations. The determination of such value shall be based on a representative distribution of the population of eligible employees offered such coverage and a single set of standardized utilization and cost factors.
``(ii) Coverage described.--The coverage described in this clause is coverage for medically necessary and appropriate services consisting of medical and surgical services, medical equipment, preventive services, and emergency transportation in frontier areas. No specific procedure or treatment, or classes thereof, is required to be covered in such a plan, by this subpart or through regulations.
``(B) Certification.--If the Secretary determines that the NAIC has submitted a target actuarial value for standard coverage that complies with the requirements of subparagraph
(A), the Secretary shall certify such value for use under this chapter. If the Secretary determines that a target actuarial value has not been submitted or does not comply with the requirements of subparagraph (A), the Secretary shall promptly determine a target actuarial value that meets such requirements.
``(c) Subsequent Revisions.--
``(1) NAIC.--The NAIC may submit from time to time to the Secretary revisions of the set of rules of actuarial equivalence and target actuarial values previously established or determined under this section if the NAIC determines that revisions are necessary to take into account changes in the relevant types of health benefits provisions or in demographic conditions which form the basis for the set of rules of actuarial equivalence or the target actuarial values. The provisions of subsection (a)(2) shall apply to such a revision in the same manner as they apply to the initial determination of the set of rules.
``(2) Secretary.--The Secretary may by regulation revise the set of rules of actuarial equivalence and target actuarial values from time to time if the Secretary determines such revisions are necessary to take into account changes described in paragraph (1).
``SEC. 721B. ESTABLISHMENT OF PLAN STANDARDS.
``(a) Establishment of General Standards.--
``(1) Role of naic.--The NAIC is requested to submit to the Secretary, within 9 months after the date of the enactment of this subpart, model regulations that specify standards for making qualified group health plans available to small employers. If the NAIC develops recommended regulations specifying such standards within such period, the Secretary shall review the standards. Such review shall be completed within 60 days after the date the regulations are developed. Such standards shall serve as the standards under this section, with such amendments as the Secretary deems necessary. Such standards shall be nonbinding (except as provided in chapter 4).
``(2) Contingency.--If the NAIC does not develop such model regulations within the period described in paragraph (1), the Secretary shall specify, within 15 months after the date of the enactment of this subpart, model regulations that specify standards for insurers with regard to making qualified group health plans available to small employers. Such standards shall be nonbinding (except as provided in chapter 4).
``(3) Effective date.--The standards specified in the model regulations shall apply to group health plans and health insurance issuers offering group health insurance coverage in a State on or after the respective date the standards are implemented in the State.
``(b) No Preemption of State Law.--A State may implement standards for group health plans available, and health insurance issuers offering group health insurance coverage offered, to small employers that are more stringent than the standards under this section, except that a State may not implement standards that prevent the offering of at least one group health plan that provides standard coverage (as described in section 721A(b)).
``SEC. 721C. RATING LIMITATIONS FOR COMMUNITY-RATED MARKET.
``(a) Standard Premiums With Respect to Community-Rated Eligible Employees and Eligible Individuals.--
``(1) In general.--Each group health plan offered, and each health insurance issuer offering group health insurance coverage, to a small employer shall establish within each community rating area in which the plan is to be offered, a standard premium for enrollment of eligible employees and eligible individuals for the standard coverage (as defined under section 721A(b)).
``(2) Establishment of community rating area.--
``(A) In general.--Not later than January 1, 2002, each State shall, in accordance with subparagraph (B), provide for the division of the State into 1 or more community rating areas. The State may revise the boundaries of such areas from time to time consistent with this paragraph.
``(B) Geographic area variations.--For purposes of subparagraph (A), a State--
``(i) may not identify an area that divides a 3-digit zip code, a county, or all portions of a metropolitan statistical area;
``(ii) shall not permit premium rates for coverage offered in a portion of an interstate metropolitan statistical area to vary based on the State in which the coverage is offered; and
``(iii) may, upon agreement with one or more adjacent States, identify multi-State geographic areas consistent with clauses (i) and (ii).
``(3) Eligible individuals.--For purposes of this section, the term `eligible individuals' includes certain uninsured individuals (as described in section 721G).
``(b) Uniform Premiums Within Community Rating Areas.--
``(1) In general.--Subject to paragraphs (2) and (3), the standard premium for each group health plan to which this section applies shall be the same, but shall not include the costs of premium processing and enrollment that may vary depending on whether the method of enrollment is through a qualified small employer purchasing group, through a small employer, or through a broker.
``(2) Application to enrollees.--
``(A) In general.--The premium charged for coverage in a group health plan which covers eligible employees and eligible individuals shall be the product of--
``(i) the standard premium (established under paragraph
(1));
``(ii) in the case of enrollment other than individual enrollment, the family adjustment factor specified under subparagraph (B); and
``(iii) the age adjustment factor (specified under subparagraph (C)).
``(B) Family adjustment factor.--
``(i) In general.--The standards established under section 721B shall specify family adjustment factors that reflect the relative actuarial costs of benefit packages based on family classes of enrollment (as compared with such costs for individual enrollment).
``(ii) Classes of enrollment.--For purposes of this subpart, there are 4 classes of enrollment:
``(I) Coverage only of an individual (referred to in this subpart as the `individual' enrollment or class of enrollment).
``(II) Coverage of a married couple without children
(referred to in this subpart as the `couple-only' enrollment or class of enrollment).
``(III) Coverage of an individual and one or more children
(referred to in this subpart as the `single parent' enrollment or class of enrollment).
``(IV) Coverage of a married couple and one or more children (referred to in this subpart as the `dual parent' enrollment or class of enrollment).
``(iii) References to family and couple classes of enrollment.--In this subpart:
``(I) Family.--The terms `family enrollment' and `family class of enrollment' refer to enrollment in a class of enrollment described in any subclause of clause (ii) (other than subclause (I)).
``(II) Couple.--The term `couple class of enrollment' refers to enrollment in a class of enrollment described in subclause (II) or (IV) of clause (ii).
``(iv) Spouse; married; couple.--
``(I) In general.--In this subpart, the terms `spouse' and
`married' mean, with respect to an individual, another individual who is the spouse of, or is married to, the individual, as determined under applicable State law.
``(II) Couple.--The term `couple' means an individual and the individual's spouse.
``(C) Age adjustment factor.--The Secretary, in consultation with the NAIC, shall specify uniform age categories and maximum rating increments for age adjustment factors that reflect the relative actuarial costs of benefit packages among enrollees. For individuals who have attained age 18 but not age 65, the highest age adjustment factor may not exceed 3 times the lowest age adjustment factor.
``(3) Administrative charges.--
``(A) In general.--In accordance with the standards established under section 721B, a group health plan which covers eligible employees and eligible individuals may add a separately-stated administrative charge which is based on identifiable differences in legitimate administrative costs and which is applied uniformly for individuals enrolling through the same method of enrollment. Nothing in this subparagraph may be construed as preventing a qualified small employer purchasing group from negotiating a unique administrative charge with an insurer for a group health plan.
``(B) Enrollment through a qualified small employer purchasing group.--In the case of an administrative charge under subparagraph (A) for enrollment through a qualified small employer purchasing group, such charge may not exceed the lowest charge of such plan for enrollment other than through a qualified small employer purchasing group in such area.
``(c) Treatment of Negotiated Rate as Community Rate.--Notwithstanding any other provision of this section, a group health plan and a health insurance issuer offering health insurance coverage that negotiates a premium rate (exclusive of any administrative charge described in subsection (b)(3)) with a qualified small employer purchasing group in a community rating area shall charge the same premium rate to all eligible employees and eligible individuals.
``SEC. 721D. RATING PRACTICES AND PAYMENT OF PREMIUMS.
``(a) Full Disclosure of Rating Practices.--
``(1) In general.--A group health plan and a health insurance issuer offering health insurance coverage shall fully disclose rating practices for the plan to the appropriate certifying authority.
``(2) Notice on expiration.--A group health plan and a health insurance issuer offering health insurance coverage shall provide for notice of the terms for renewal of a plan at the time of the offering of the plan and at least 90 days before the date of expiration of the plan.
``(3) Actuarial certification.--Each group health plan and health insurance issuer offering health insurance coverage shall file annually with the appropriate certifying authority a written statement by a member of the American Academy of Actuaries (or other individual acceptable to such authority) who is not an employee of the group health plan or issuer certifying that, based upon an examination by the individual which includes a review of the appropriate records and of the actuarial assumptions of such plan or insurer and methods used by the plan or insurer in establishing premium rates and administrative charges for group health plans--
``(A) such plan or insurer is in compliance with the applicable provisions of this subpart; and
``(B) the rating methods are actuarially sound.Each plan and insurer shall retain a copy of such statement at its principal place of business for examination by any individual.
``(b) Payment of Premiums.--
``(1) In general.--With respect to a new enrollee in a group health plan, the plan may require advanced payment of an amount equal to the monthly applicable premium for the plan at the time such individual is enrolled.
``(2) Notification of failure to receive premium.--If a group health plan or a health insurance issuer offering health insurance coverage fails to receive payment on a premium due with respect to an eligible employee or eligible individual covered under the plan involved, the plan or issuer shall provide notice of such failure to the employee or individual within the 20-day period after the date on which such premium payment was due. A plan or issuer may not terminate the enrollment of an eligible employee or eligible individual unless such employee or individual has been notified of any overdue premiums and has been provided a reasonable opportunity to respond to such notice.
``SEC. 721E. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS.
``(a) Qualified Small Employer Purchasing Groups Described.--
``(1) In general.--A qualified small employer purchasing group is an entity that--
``(A) is a nonprofit entity certified under State law;
``(B) has a membership consisting solely of small employers;
``(C) is administered solely under the authority and control of its member employers;
``(D) with respect to each State in which its members are located, consists of not fewer than the number of small employers established by the State as appropriate for such a group;
``(E) offers a program under which qualified group health plans are offered to eligible employees and eligible individuals through its member employers and to certain uninsured individuals in accordance with section 721D; and
``(F) an insurer, agent, broker, or any other individual or entity engaged in the sale of insurance--
``(i) does not form or underwrite; and
``(ii) does not hold or control any right to vote with respect to.
``(2) State certification.--A qualified small employer purchasing group formed under this section shall submit an application to the State for certification. The State shall determine whether to issue a certification and otherwise ensure compliance with the requirements of this subpart.
``(3) Special rule.--Notwithstanding paragraph (1)(B), an employer member of a small employer purchasing group that has been certified by the State as meeting the requirements of paragraph (1) may retain its membership in the group if the number of employees of the employer increases such that the employer is no longer a small employer.
``(b) Board of Directors.--Each qualified small employer purchasing group established under this section shall be governed by a board of directors or have active input from an advisory board consisting of individuals and businesses participating in the group.
``(c) Domiciliary State.--For purposes of this section, a qualified small employer purchasing group operating in more than one State shall be certified by the State in which the group is domiciled.
``(d) Membership.--
``(1) In general.--A qualified small employer purchasing group shall accept all small employers and certain uninsured individuals residing within the area served by the group as members if such employers or individuals request such membership.
``(2) Voting.--Members of a qualified small employer purchasing group shall have voting rights consistent with the rules established by the State.
``(e) Duties of Qualified Small Employer Purchasing Groups.--Each qualified small employer purchasing group shall--
``(1) enter into agreements with insurers offering qualified group health plans;
``(2) enter into agreements with small employers under section 721F;
``(3) enroll only eligible employees, eligible individuals, and certain uninsured individuals in qualified group health plans, in accordance with section 721G;
``(4) provide enrollee information to the State;
``(5) meet the marketing requirements under section 721I; and
``(6) carry out other functions provided for under this subpart.
``(f) Limitation on Activities.--A qualified small employer purchasing group shall not--
``(1) perform any activity involving approval or enforcement of payment rates for providers;
``(2) perform any activity (other than the reporting of noncompliance) relating to compliance of qualified group health plans with the requirements of this subpart;
``(3) assume financial risk in relation to any such health plan; or
``(4) perform other activities identified by the State as being inconsistent with the performance of its duties under this subpart.
``(g) Rules of Construction.--
``(1) Establishment not required.--Nothing in this section shall be construed as requiring--
``(A) that a State organize, operate or otherwise establish a qualified small employer purchasing group, or otherwise require the establishment of purchasing groups; and
``(B) that there be only one qualified small employer purchasing group established with respect to a community rating area.
``(2) Single organization serving multiple areas and states.--Nothing in this section shall be construed as preventing a single entity from being a qualified small employer purchasing group in more than one community rating area or in more than one State.
``(3) Voluntary participation.--Nothing in this section shall be construed as requiring any individual or small employer to purchase a qualified group health plan exclusively through a qualified small employer purchasing group.
``SEC. 721F. AGREEMENTS WITH SMALL EMPLOYERS.
``(a) In General.--A qualified small employer purchasing group shall offer to enter into an agreement under this section with each small employer that employs eligible employees in the area served by the group.
``(b) Payroll Deduction.--
``(1) In general.--Under an agreement under this section between a small employer and a qualified small employer purchasing group, the small employer shall deduct premiums from an eligible employee's wages.
``(2) Additional premiums.--If the amount withheld under paragraph (1) is not sufficient to cover the entire cost of the premiums, the eligible employee shall be responsible for paying directly to the qualified small employer purchasing group the difference between the amount of such premiums and the amount withheld.
``SEC. 721G. ENROLLING ELIGIBLE EMPLOYEES, ELIGIBLE
INDIVIDUALS, AND CERTAIN UNINSURED INDIVIDUALS
IN QUALIFIED GROUP HEALTH PLANS.
``(a) In General.--Each qualified small employer purchasing group shall offer--
``(1) eligible employees,
``(2) eligible individuals, and
``(3) certain uninsured individuals,the opportunity to enroll in any qualified group health plan which has an agreement with the qualified small employer purchasing group for the community rating area in which such employees and individuals reside.
``(b) Uninsured Individuals.--For purposes of this section, an individual is described in subsection (a)(3) if such individual is an uninsured individual who is not an eligible employee of a small employer that is a member of a qualified small employer purchasing group or a dependent of such individual.
``SEC. 721H. RECEIPT OF PREMIUMS.
``(a) Enrollment Charge.--The amount charged by a qualified small employer purchasing group for coverage under a qualified group health plan shall be equal to the sum of--
``(1) the premium rate offered by such health plan;
``(2) the administrative charge for such health plan; and
``(3) the purchasing group administrative charge for enrollment of eligible employees, eligible individuals and certain uninsured individuals through the group.
``(b) Disclosure of Premium Rates and Administrative Charges.--Each qualified small employer purchasing group shall, prior to the time of enrollment, disclose to enrollees and other interested parties the premium rate for a qualified group health plan, the administrative charge for such plan, and the administrative charge of the group, separately.
``SEC. 721I. MARKETING ACTIVITIES.
``Each qualified small employer purchasing group shall market qualified group health plans to members through the entire community rating area served by the purchasing group.
``SEC. 721J. GRANTS TO STATES AND QUALIFIED SMALL EMPLOYER
PURCHASING GROUPS.
``(a) In General.--The Secretary shall award grants to States and small employer purchasing groups to assist such States and groups in planning, developing, and operating qualified small employer purchasing groups.
``(b) Application Requirements.--To be eligible to receive a grant under this section, a State or small employer purchasing group shall prepare and submit to the Secretary an application in such form, at such time, and containing such information, certifications, and assurances as the Secretary shall reasonably require.
``(c) Use of Funds.--Amounts awarded under this section may be used to finance the costs associated with planning, developing, and operating a qualified small employer purchasing group. Such costs may include the costs associated with--
``(1) engaging in education and outreach efforts to inform small employers, insurers, and the public about the small employer purchasing group;
``(2) soliciting bids and negotiating with insurers to make available group health plans;
``(3) preparing the documentation required to receive certification by the Secretary as a qualified small employer purchasing group; and
``(4) such other activities determined appropriate by the Secretary.
``(d) Authorization of Appropriations.--There are authorized to be appropriated for awarding grants under this section such sums as may be necessary.
``SEC. 721K. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS
ESTABLISHED BY A STATE.
``A State may establish a system in all or part of the State under which qualified small employer purchasing groups are the sole mechanism through which health care coverage for the eligible employees of small employers shall be purchased or provided.
``SEC. 721L. EFFECTIVE DATES.
``(a) In General.--Except as provided in this chapter, the provisions of this chapter are effective on the date of the enactment of this subpart.
``(b) Exception.--The provisions of section 721C(b) shall apply to contracts which are issued, or renewed, after the date which is 18 months after the date of the enactment of this subpart.
``CHAPTER 2--REQUIRED COVERAGE OPTIONS FOR ELIGIBLE EMPLOYEES AND
DEPENDENTS OF SMALL EMPLOYERS
``SEC. 722. REQUIRING SMALL EMPLOYERS TO OFFER COVERAGE FOR
ELIGIBLE INDIVIDUALS.
``(a) Requirement to Offer.--Each small employer shall make available with respect to each eligible employee a group health plan under which--
``(1) coverage of each eligible individual with respect to such an eligible employee may be elected on an annual basis for each plan year;
``(2) coverage is provided for at least the standard coverage specified in section 721A(b); and
``(3) each eligible employee electing such coverage may elect to have any premiums owed by the employee collected through payroll deduction.
``(b) No Employer Contribution Required.--An employer is not required under subsection (a) to make any contribution to the cost of coverage under a group health plan described in such subsection.
``(c) Special Rules.--
``(1) Exclusion of new employers and certain very small employers.--Subsection (a) shall not apply to any small employer for any plan year if, as of the beginning of such plan year--
``(A) such employer (including any predecessor thereof) has been an employer for less than 2 years;
``(B) such employer has no more than 2 eligible employees; or
``(C) no more than 2 eligible employees are not covered under any group health plan.
``(2) Exclusion of family members.--Under such procedures as the Secretary may prescribe, any relative of a small employer may be, at the election of the employer, excluded from consideration as an eligible employee for purposes of applying the requirements of subsection (a). In the case of a small employer that is not an individual, an employee who is a relative of a key employee (as defined in section 416(i)(1) of the Internal Revenue Code of 1986) of the employer may, at the election of the key employee, be considered a relative excludable under this paragraph.
``(3) Optional application of waiting period.--A group health plan and a health insurance issuer offering group health insurance coverage shall not be treated as failing to meet the requirements of subsection (a) solely because a period of service by an eligible employee of not more than 60 days is required under the plan for coverage under the plan of eligible individuals with respect to such employee.
``(d) Construction.--Nothing in this section shall be construed as limiting the group health plans, or types of coverage under such a plan, that an employer may offer to an employee.
``SEC. 722A. COMPLIANCE WITH APPLICABLE REQUIREMENTS THROUGH
MULTIPLE EMPLOYER HEALTH ARRANGEMENTS.
``(a) In General.--In any case in which an eligible employee is, for any plan year, a participant in a group health plan which is a multiemployer plan, the requirements of section 722(a) shall be deemed to be met with respect to such employee for such plan year if the employer requirements of subsection (b) are met with respect to the eligible employee, irrespective of whether, or to what extent, the employer makes employer contributions on behalf of the eligible employee.
``(b) Employer Requirements.--The employer requirements of this subsection are met under a group health plan with respect to an eligible employee if--
``(1) the employee is eligible under the plan to elect coverage on an annual basis and is provided a reasonable opportunity to make the election in such form and manner and at such times as are provided by the plan;
``(2) coverage is provided for at least the standard coverage specified in section 721A(b);
``(3) the employer facilitates collection of any employee contributions under the plan and permits the employee to elect to have employee contributions under the plan collected through payroll deduction; and
``(4) in the case of a plan to which part 1 does not otherwise apply, the employer provides to the employee a summary plan description described in section 102(a)(1) in the form and manner and at such times as are required under such part 1 with respect to employee welfare benefit plans.
``CHAPTER 3--REQUIRED COVERAGE OPTIONS FOR INDIVIDUALS INSURED THROUGH
ASSOCIATION PLANS
``Subchapter A--Qualified Association Plans
``SEC. 723. TREATMENT OF QUALIFIED ASSOCIATION PLANS.
``(a) General Rule.--For purposes of this chapter, in the case of a qualified association plan--
``(1) except as otherwise provided in this subchapter, the plan shall meet all applicable requirements of chapter 1 and chapter 2 for group health plans offered to and by small employers;
``(2) if such plan is certified as meeting such requirements and the requirements of this subchapter, such plan shall be treated as a plan established and maintained by a small employer, and individuals enrolled in such plan shall be treated as eligible employees; and
``(3) any individual who is a member of the association not enrolling in the plan shall not be treated as an eligible employee solely by reason of membership in such association.
``(b) Election To Be Treated as Purchasing Cooperative.--Subsection (a) shall not apply to a qualified association plan if--
``(1) the health insurance issuer makes an irrevocable election to be treated as a qualified small employer purchasing group for purposes of section 721D; and
``(2) such sponsor meets all requirements of this subpart applicable to a purchasing cooperative.
``SEC. 723A. QUALIFIED ASSOCIATION PLAN DEFINED.
``(a) General Rule.--For purposes of this chapter, a plan is a qualified association plan if the plan is a multiple employer welfare arrangement or similar arrangement--
``(1) which is maintained by a qualified association;
``(2) which has at least 500 participants in the United States;
``(3) under which the benefits provided consist solely of medical care (as defined in section 213(d) of the Internal Revenue Code of 1986);
``(4) which may not condition participation in the plan, or terminate coverage under the plan, on the basis of the health status or health claims experience of any employee or member or dependent of either;
``(5) which provides for bonding, in accordance with regulations providing rules similar to the rules under section 412, of all persons operating or administering the plan or involved in the financial affairs of the plan; and
``(6) which notifies each participant or provider that it is certified as meeting the requirements of this chapter applicable to it.
``(b) Self-Insured Plans.--In the case of a plan which is not fully insured (within the meaning of section 514(b)(6)(D)), the plan shall be treated as a qualified association plan only if--
``(1) the plan meets minimum financial solvency and cash reserve requirements for claims which are established by the Secretary and which shall be in lieu of any other such requirements under this chapter;
``(2) the plan provides an annual funding report (certified by an independent actuary) and annual financial statements to the Secretary and other interested parties; and
``(3) the plan appoints a plan sponsor who is responsible for operating the plan and ensuring compliance with applicable Federal and State laws.
``(c) Certification.--
``(1) In general.--A plan shall not be treated as a qualified association plan for any period unless there is in effect a certification by the Secretary that the plan meets the requirements of this subchapter. For purposes of this chapter, the Secretary shall be the appropriate certifying authority with respect to the plan.
``(2) Fee.--The Secretary shall require a $5,000 fee for the original certification under paragraph (1) and may charge a reasonable annual fee to cover the costs of processing and reviewing the annual statements of the plan.
``(3) Expedited procedures.--The Secretary may by regulation provide for expedited registration, certification, and comment procedures.
``(4) Agreements.--The Secretary of Labor may enter into agreements with the States to carry out the Secretary's responsibilities under this subchapter.
``(d) Availability.--Notwithstanding any other provision of this chapter, a qualified association plan may limit coverage to individuals who are members of the qualified association establishing or maintaining the plan, an employee of such member, or a dependent of either.
``(e) Special Rules for Existing Plans.--In the case of a plan in existence on January 1, 2001--
``(1) the requirements of subsection (a) (other than paragraphs (4), (5), and (6) thereof) shall not apply;
``(2) no original certification shall be required under this subchapter; and
``(3) no annual report or funding statement shall be required before January 1, 2003, but the plan shall file with the Secretary a description of the plan and the name of the health insurance issuer.
``SEC. 723B. DEFINITIONS AND SPECIAL RULES.
``(a) Qualified Association.--For purposes of this subchapter, the term `qualified association' means any organization which--
``(1) is organized and maintained in good faith by a trade association, an industry association, a professional association, a chamber of commerce, a religious organization, a public entity association, or other business association serving a common or similar industry;
``(2) is organized and maintained for substantial purposes other than to provide a health plan;
``(3) has a constitution, bylaws, or other similar governing document which states its purpose; and
``(4) receives a substantial portion of its financial support from its active, affiliated, or federation members.
``(b) Coordination.--The term `qualified association plan' shall not include a plan to which subchapter B applies.
``Subchapter B--Special Rule for Church, Multiemployer, and Cooperative
Plans
``SEC. 723F. SPECIAL RULE FOR CHURCH, MULTIEMPLOYER, AND
COOPERATIVE PLANS.
``(a) General Rule.--For purposes of this chapter, in the case of a group health plan to which this section applies--
``(1) except as otherwise provided in this subchapter, the plan shall be required to meet all applicable requirements of chapter 1 and chapter 2 for group health plans offered to and by small employers;
``(2) if such plan is certified as meeting such requirements, such plan shall be treated as a plan established and maintained by a small employer and individuals enrolled in such plan shall be treated as eligible employees; and
``(3) any individual eligible to enroll in the plan who does not enroll in the plan shall not be treated as an eligible employee solely by reason of being eligible to enroll in the plan.
``(b) Modified Standards.--
``(1) Certifying authority.--For purposes of this chapter, the Secretary shall be the appropriate certifying authority with respect to a plan to which this section applies.
``(2) Availability.--Rules similar to the rules of subsection (e) of section 723A shall apply to a plan to which this section applies.
``(3) Access.--An employer which, pursuant to a collective bargaining agreement, offers an employee the opportunity to enroll in a plan described in subsection (c)(2) shall not be required to make any other plan available to the employee.
``(4) Treatment under state laws.--A church plan described in subsection (c)(1) which is certified as meeting the requirements of this section shall not be deemed to be a multiple employer welfare arrangement or an insurance company or other insurer, or to be engaged in the business of insurance, for purposes of any State law purporting to regulate insurance companies or insurance contracts.
``(c) Plans to Which Section Applies.--This section shall apply to a health plan which--
``(1) is a church plan (as defined in section 414(e) of the Internal Revenue Code of 1986) which has at least 100 participants in the United States;
``(2) is a multiemployer plan which is maintained by a health plan sponsor described in section 3(16)(B)(iii) and which has at least 500 participants in the United States; or
``(3) is a plan which is maintained by a rural electric cooperative or a rural telephone cooperative association and which has at least 500 participants in the United States.''.
(b) Conforming Amendments.--Section 731(d) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1186(d)) is amended by adding at the end the following:
``(3) Eligible employee.--The term `eligible employee' means, with respect to an employer, an employee who normally performs on a monthly basis at least 30 hours of service per week for that employer.
``(4) Eligible individual.--The term `eligible individual' means, with respect to an eligible employee, such employee, and any dependent of such employee.
``(5) NAIC.--The term `NAIC' means the National Association of Insurance Commissioners.
``(6) Qualified group health plan.--The term `qualified group health plan' shall have the meaning given the term in section 721.''. SEC. 402. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT
RELATING TO THE GROUP MARKET.
(a) In General.--Subpart 2 of part A of title XXVII of the Public Health Service Act (42 U.S.C. 300gg-4 et seq.) is amended--
(1) by inserting after the subpart heading the following:
``CHAPTER 1--MISCELLANEOUS REQUIREMENTS'';
and
(2) by adding at the end the following:
``CHAPTER 2--GENERAL INSURANCE COVERAGE REFORMS
``Subchapter A--Increased Availability and Continuity of Health
Coverage
``SEC. 2707. DEFINITION.
``As used in this chapter, the term `qualified group health plan' means a group health plan, and a health insurance issuer offering group health insurance coverage, that is designed to provide standard coverage (consistent with section 2707A(b)).
``SEC. 2707A. ACTUARIAL EQUIVALENCE IN BENEFITS PERMITTED.
``(a) Set of Rules of Actuarial Equivalence.--
``(1) Initial determination.--The NAIC is requested to submit to the Secretary, within 6 months after the date of the enactment of this chapter, a set of rules which the NAIC determines is sufficient for determining, in the case of any group health plan, or a health insurance issuer offering group health insurance coverage, and for purposes of this section, the actuarial value of the coverage offered by the plan or coverage.
``(2) Certification.--If the Secretary determines that the NAIC has submitted a set of rules that comply with the requirements of paragraph (1), the Secretary shall certify such set of rules for use under this chapter. If the Secretary determines that such a set of rules has not been submitted or does not comply with such requirements, the Secretary shall promptly establish a set of rules that meets such requirements.
``(b) Standard Coverage.--
``(1) In general.--A a group health plan, and a health insurance issuer offering group health insurance coverage, shall be considered to provide standard coverage consistent with this subsection if the benefits are determined, in accordance with the set of actuarial equivalence rules certified under subsection (a), to have a value that is within 5 percentage points of the target actuarial value for standard coverage established under paragraph (2).
``(2) Initial determination of target actuarial value for standard coverage.--
``(A) Initial determination.--
``(i) In general.--The NAIC is requested to submit to the Secretary, within 6 months after the date of the enactment of this chapter, a target actuarial value for standard coverage equal to the average actuarial value of the coverage described in clause (ii). No specific procedure or treatment, or classes thereof, is required to be considered in such determination by this chapter or through regulations. The determination of such value shall be based on a representative distribution of the population of eligible employees offered such coverage and a single set of standardized utilization and cost factors.
``(ii) Coverage described.--The coverage described in this clause is coverage for medically necessary and appropriate services consisting of medical and surgical services, medical equipment, preventive services, and emergency transportation in frontier areas. No specific procedure or treatment, or classes thereof, is required to be covered in such a plan, by this chapter or through regulations.
``(B) Certification.--If the Secretary determines that the NAIC has submitted a target actuarial value for standard coverage that complies with the requirements of subparagraph
(A), the Secretary shall certify such value for use under this chapter. If the Secretary determines that a target actuarial value has not been submitted or does not comply with the requirements of subparagraph (A), the Secretary shall promptly determine a target actuarial value that meets such requirements.
``(c) Subsequent Revisions.--
``(1) NAIC.--The NAIC may submit from time to time to the Secretary revisions of the set of rules of actuarial equivalence and target actuarial values previously established or determined under this section if the NAIC determines that revisions are necessary to take into account changes in the relevant types of health benefits provisions or in demographic conditions which form the basis for the set of rules of actuarial equivalence or the target actuarial values. The provisions of subsection (a)(2) shall apply to such a revision in the same manner as they apply to the initial determination of the set of rules.
``(2) Secretary.--The Secretary may by regulation revise the set of rules of actuarial equivalence and target actuarial values from time to time if the Secretary determines such revisions are necessary to take into account changes described in paragraph (1).
``SEC. 2707B. ESTABLISHMENT OF PLAN STANDARDS.
``(a) Establishment of General Standards.--
``(1) Role of naic.--The NAIC is requested to submit to the Secretary, within 9 months after the date of the enactment of this chapter, model regulations that specify standards for making qualified group health plans available to small employers. If the NAIC develops recommended regulations specifying such standards within such period, the Secretary shall review the standards. Such review shall be completed within 60 days after the date the regulations are developed. Such standards shall serve as the standards under this section, with such amendments as the Secretary deems necessary. Such standards shall be nonbinding (except as provided in chapter 4).
``(2) Contingency.--If the NAIC does not develop such model regulations within the period described in paragraph (1), the Secretary shall specify, within 15 months after the date of the enactment of this chapter, model regulations that specify standards for insurers with regard to making qualified group health plans available to small employers. Such standards shall be nonbinding (except as provided in chapter 4).
``(3) Effective date.--The standards specified in the model regulations shall apply to group health plans and health insurance issuers offering group health insurance coverage in a State on or after the respective date the standards are implemented in the State.
``(b) No Preemption of State Law.--A State may implement standards for group health plans available, and health insurance issuers offering group health insurance coverage offered, to small employers that are more stringent than the standards under this section, except that a State may not implement standards that prevent the offering of at least one group health plan that provides standard coverage (as described in section 2707A(b)).
``SEC. 2707C. RATING LIMITATIONS FOR COMMUNITY-RATED MARKET.
``(a) Standard Premiums With Respect to Community-Rated Eligible Employees and Eligible Individuals.--
``(1) In general.--Each group health plan offered, and each health insurance issuer offering group health insurance coverage, to a small employer shall establish within each community rating area in which the plan is to be offered, a standard premium for enrollment of eligible employees and eligible individuals for the standard coverage (as defined under section 2707A(b)).
``(2) Establishment of community rating area.--
``(A) In general.--Not later than January 1, 2002, each State shall, in accordance with subparagraph (B), provide for the division of the State into 1 or more community rating areas. The State may revise the boundaries of such areas from time to time consistent with this paragraph.
``(B) Geographic area variations.--For purposes of subparagraph (A), a State--
``(i) may not identify an area that divides a 3-digit zip code, a county, or all portions of a metropolitan statistical area;
``(ii) shall not permit premium rates for coverage offered in a portion of an interstate metropolitan statistical area to vary based on the State in which the coverage is offered; and
``(iii) may, upon agreement with one or more adjacent States, identify multi-State geographic areas consistent with clauses (i) and (ii).
``(3) Eligible individuals.--For purposes of this section, the term `eligible individuals' includes certain uninsured individuals (as described in section 2707G).
``(b) Uniform Premiums Within Community Rating Areas.--
``(1) In general.--Subject to paragraphs (2) and (3), the standard premium for each group health plan to which this section applies shall be the same, but shall not include the costs of premium processing and enrollment that may vary depending on whether the method of enrollment is through a qualified small employer purchasing group, through a small employer, or through a broker.
``(2) Application to enrollees.--
``(A) In general.--The premium charged for coverage in a group health plan which covers eligible employees and eligible individuals shall be the product of--
``(i) the standard premium (established under paragraph
(1));
``(ii) in the case of enrollment other than individual enrollment, the family adjustment factor specified under subparagraph (B); and
``(iii) the age adjustment factor (specified under subparagraph (C)).
``(B) Family adjustment factor.--
``(i) In general.--The standards established under section 2707B shall specify family adjustment factors that reflect the relative actuarial costs of benefit packages based on family classes of enrollment (as compared with such costs for individual enrollment).
``(ii) Classes of enrollment.--For purposes of this chapter, there are 4 classes of enrollment:
``(I) Coverage only of an individual (referred to in this chapter as the `individual' enrollment or class of enrollment).
``(II) Coverage of a married couple without children
(referred to in this chapter as the `couple-only' enrollment or class of enrollment).
``(III) Coverage of an individual and one or more children
(referred to in this chapter as the `single parent' enrollment or class of enrollment).
``(IV) Coverage of a married couple and one or more children (referred to in this chapter as the `dual parent' enrollment or class of enrollment).
``(iii) References to family and couple classes of enrollment.--In this chapter:
``(I) Family.--The terms `family enrollment' and `family class of enrollment' refer to enrollment in a class of enrollment described in any subclause of clause (ii) (other than subclause (I)).
``(II) Couple.--The term `couple class of enrollment' refers to enrollment in a class of enrollment described in subclause (II) or (IV) of clause (ii).
``(iv) Spouse; married; couple.--
``(I) In general.--In this chapter, the terms `spouse' and
`married' mean, with respect to an individual, another individual who is the spouse of, or is married to, the individual, as determined under applicable State law.
``(II) Couple.--The term `couple' means an individual and the individual's spouse.
``(C) Age adjustment factor.--The Secretary, in consultation with the NAIC, shall specify uniform age categories and maximum rating increments for age adjustment factors that reflect the relative actuarial costs of benefit packages among enrollees. For individuals who have attained age 18 but not age 65, the highest age adjustment factor may not exceed 3 times the lowest age adjustment factor.
``(3) Administrative charges.--
``(A) In general.--In accordance with the standards established under section 2707B, a group health plan which covers eligible employees and eligible individuals may add a separately-stated administrative charge which is based on identifiable differences in legitimate administrative costs and which is applied uniformly for individuals enrolling through the same method of enrollment. Nothing in this subparagraph may be construed as preventing a qualified small employer purchasing group from negotiating a unique administrative charge with an insurer for a group health plan.
``(B) Enrollment through a qualified small employer purchasing group.--In the case of an administrative charge under subparagraph (A) for enrollment through a qualified small employer purchasing group, such charge may not exceed the lowest charge of such plan for enrollment other than through a qualified small employer purchasing group in such area.
``(c) Treatment of Negotiated Rate as Community Rate.--Notwithstanding any other provision of this section, a group health plan and a health insurance issuer offering health insurance coverage that negotiates a premium rate (exclusive of any administrative charge described in subsection (b)(3)) with a qualified small employer purchasing group in a community rating area shall charge the same premium rate to all eligible employees and eligible individuals.
``SEC. 2707D. RATING PRACTICES AND PAYMENT OF PREMIUMS.
``(a) Full Disclosure of Rating Practices.--
``(1) In general.--A group health plan and a health insurance issuer offering health insurance coverage shall fully disclose rating practices for the plan to the appropriate certifying authority.
``(2) Notice on expiration.--A group health plan and a health insurance issuer offering health insurance coverage shall provide for notice of the terms for renewal of a plan at the time of the offering of the plan and at least 90 days before the date of expiration of the plan.
``(3) Actuarial certification.--Each group health plan and health insurance issuer offering health insurance coverage shall file annually with the appropriate certifying authority a written statement by a member of the American Academy of Actuaries (or other individual acceptable to such authority) who is not an employee of the group health plan or issuer certifying that, based upon an examination by the individual which includes a review of the appropriate records and of the actuarial assumptions of such plan or insurer and methods used by the plan or insurer in establishing premium rates and administrative charges for group health plans--
``(A) such plan or insurer is in compliance with the applicable provisions of this chapter; and
``(B) the rating methods are actuarially sound.Each plan and insurer shall retain a copy of such statement at its principal place of business for examination by any individual.
``(b) Payment of Premiums.--
``(1) In general.--With respect to a new enrollee in a group health plan, the plan may require advanced payment of an amount equal to the monthly applicable premium for the plan at the time such individual is enrolled.
``(2) Notification of failure to receive premium.--If a group health plan or a health insurance issuer offering health insurance coverage fails to receive payment on a premium due with respect to an eligible employee or eligible individual covered under the plan involved, the plan or issuer shall provide notice of such failure to the employee or individual within the 20-day period after the date on which such premium payment was due. A plan or issuer may not terminate the enrollment of an eligible employee or eligible individual unless such employee or individual has been notified of any overdue premiums and has been provided a reasonable opportunity to respond to such notice.
``SEC. 2707E. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS.
``(a) Qualified Small Employer Purchasing Groups Described.--
``(1) In general.--A qualified small employer purchasing group is an entity that--
``(A) is a nonprofit entity certified under State law;
``(B) has a membership consisting solely of small employers;
``(C) is administered solely under the authority and control of its member employers;
``(D) with respect to each State in which its members are located, consists of not fewer than the number of small employers established by the State as appropriate for such a group;
``(E) offers a program under which qualified group health plans are offered to eligible employees and eligible individuals through its member employers and to certain uninsured individuals in accordance with section 2707D; and
``(F) an insurer, agent, broker, or any other individual or entity engaged in the sale of insurance--
``(i) does not form or underwrite; and
``(ii) does not hold or control any right to vote with respect to.
``(2) State certification.--A qualified small employer purchasing group formed under this section shall submit an application to the State for certification. The State shall determine whether to issue a certification and otherwise ensure compliance with the requirements of this chapter.
``(3) Special rule.--Notwithstanding paragraph (1)(B), an employer member of a small employer purchasing group that has been certified by the State as meeting the requirements of paragraph (1) may retain its membership in the group if the number of employees of the employer increases such that the employer is no longer a small employer.
``(b) Board of Directors.--Each qualified small employer purchasing group established under this section shall be governed by a board of directors or have active input from an advisory board consisting of individuals and businesses participating in the group.
``(c) Domiciliary State.--For purposes of this section, a qualified small employer purchasing group operating in more than one State shall be certified by the State in which the group is domiciled.
``(d) Membership.--
``(1) In general.--A qualified small employer purchasing group shall accept all small employers and certain uninsured individuals residing within the area served by the group as members if such employers or individuals request such membership.
``(2) Voting.--Members of a qualified small employer purchasing group shall have voting rights consistent with the rules established by the State.
``(e) Duties of Qualified Small Employer Purchasing Groups.--Each qualified small employer purchasing group shall--
``(1) enter into agreements with insurers offering qualified group health plans;
``(2) enter into agreements with small employers under section 2707F;
``(3) enroll only eligible employees, eligible individuals, and certain uninsured individuals in qualified group health plans, in accordance with section 2707G;
``(4) provide enrollee information to the State;
``(5) meet the marketing requirements under section 2707I; and
``(6) carry out other functions provided for under this chapter.
``(f) Limitation on Activities.--A qualified small employer purchasing group shall not--
``(1) perform any activity involving approval or enforcement of payment rates for providers;
``(2) perform any activity (other than the reporting of noncompliance) relating to compliance of qualified group health plans with the requirements of this chapter;
``(3) assume financial risk in relation to any such health plan; or
``(4) perform other activities identified by the State as being inconsistent with the performance of its duties under this chapter.
``(g) Rules of Construction.--
``(1) Establishment not required.--Nothing in this section shall be construed as requiring--
``(A) that a State organize, operate or otherwise establish a qualified small employer purchasing group, or otherwise require the establishment of purchasing groups; and
``(B) that there be only one qualified small employer purchasing group established with respect to a community rating area.
``(2) Single organization serving multiple areas and states.--Nothing in this section shall be construed as preventing a single entity from being a qualified small employer purchasing group in more than one community rating area or in more than one State.
``(3) Voluntary participation.--Nothing in this section shall be construed as requiring any individual or small employer to purchase a qualified group health plan exclusively through a qualified small employer purchasing group.
``SEC. 2707F. AGREEMENTS WITH SMALL EMPLOYERS.
``(a) In General.--A qualified small employer purchasing group shall offer to enter into an agreement under this section with each small employer that employs eligible employees in the area served by the group.
``(b) Payroll Deduction.--
``(1) In general.--Under an agreement under this section between a small employer and a qualified small employer purchasing group, the small employer shall deduct premiums from an eligible employee's wages.
``(2) Additional premiums.--If the amount withheld under paragraph (1) is not sufficient to cover the entire cost of the premiums, the eligible employee shall be responsible for paying directly to the qualified small employer purchasing group the difference between the amount of such premiums and the amount withheld.
``SEC. 2707G. ENROLLING ELIGIBLE EMPLOYEES, ELIGIBLE
INDIVIDUALS, AND CERTAIN UNINSURED INDIVIDUALS
IN QUALIFIED GROUP HEALTH PLANS.
``(a) In General.--Each qualified small employer purchasing group shall offer--
``(1) eligible employees,
``(2) eligible individuals, and
``(3) certain uninsured individuals,the opportunity to enroll in any qualified group health plan which has an agreement with the qualified small employer purchasing group for the community rating area in which such employees and individuals reside.
``(b) Uninsured Individuals.--For purposes of this section, an individual is described in subsection (a)(3) if such individual is an uninsured individual who is not an eligible employee of a small employer that is a member of a qualified small employer purchasing group or a dependent of such individual.
``SEC. 2707H. RECEIPT OF PREMIUMS.
``(a) Enrollment Charge.--The amount charged by a qualified small employer purchasing group for coverage under a qualified group health plan shall be equal to the sum of--
``(1) the premium rate offered by such health plan;
``(2) the administrative charge for such health plan; and
``(3) the purchasing group administrative charge for enrollment of eligible employees, eligible individuals and certain uninsured individuals through the group.
``(b) Disclosure of Premium Rates and Administrative Charges.--Each qualified small employer purchasing group shall, prior to the time of enrollment, disclose to enrollees and other interested parties the premium rate for a qualified group health plan, the administrative charge for such plan, and the administrative charge of the group, separately.
``SEC. 2707I. MARKETING ACTIVITIES.
``Each qualified small employer purchasing group shall market qualified group health plans to members through the entire community rating area served by the purchasing group.
``SEC. 2707J. GRANTS TO STATES AND QUALIFIED SMALL EMPLOYER
PURCHASING GROUPS.
``(a) In General.--The Secretary shall award grants to States and small employer purchasing groups to assist such States and groups in planning, developing, and operating qualified small employer purchasing groups.
``(b) Application Requirements.--To be eligible to receive a grant under this section, a State or small employer purchasing group shall prepare and submit to the Secretary an application in such form, at such time, and containing such information, certifications, and assurances as the Secretary shall reasonably require.
``(c) Use of Funds.--Amounts awarded under this section may be used to finance the costs associated with planning, developing, and operating a qualified small employer purchasing group. Such costs may include the costs associated with--
``(1) engaging in education and outreach efforts to inform small employers, insurers, and the public about the small employer purchasing group;
``(2) soliciting bids and negotiating with insurers to make available group health plans;
``(3) preparing the documentation required to receive certification by the Secretary as a qualified small employer purchasing group; and
``(4) such other activities determined appropriate by the Secretary.
``(d) Authorization of Appropriations.--There are authorized to be appropriated for awarding grants under this section such sums as may be necessary.
``SEC. 2707K. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS
ESTABLISHED BY A STATE.
``A State may establish a system in all or part of the State under which qualified small employer purchasing groups are the sole mechanism through which health care coverage for the eligible employees of small employers shall be purchased or provided.
``SEC. 2707L. EFFECTIVE DATES.
``(a) In General.--Except as provided in this chapter, the provisions of this chapter are effective on the date of the enactment of this chapter.
``(b) Exception.--The provisions of section 2707C(b) shall apply to contracts which are issued, or renewed, after the date which is 18 months after the date of the enactment of this chapter.
``Subchapter B--Required Coverage Options for Eligible Employees and
Dependents of Small Employers
``SEC. 2708. REQUIRING SMALL EMPLOYERS TO OFFER COVERAGE FOR
ELIGIBLE INDIVIDUALS.
``(a) Requirement To Offer.--Each small employer shall make available with respect to each eligible employee a group health plan under which--
``(1) coverage of each eligible individual with respect to such an eligible employee may be elected on an annual basis for each plan year;
``(2) coverage is provided for at least the standard coverage specified in section 2707A(b); and
``(3) each eligible employee electing such coverage may elect to have any premiums owed by the employee collected through payroll deduction.
``(b) No Employer Contribution Required.--An employer is not required under subsection (a) to make any contribution to the cost of coverage under a group health plan described in such subsection.
``(c) Special Rules.--
``(1) Exclusion of new employers and certain very small employers.--Subsection (a) shall not apply to any small employer for any plan year if, as of the beginning of such plan year--
``(A) such employer (including any predecessor thereof) has been an employer for less than 2 years;
``(B) such employer has no more than 2 eligible employees; or
``(C) no more than 2 eligible employees are not covered under any group health plan.
``(2) Exclusion of family members.--Under such procedures as the Secretary may prescribe, any relative of a small employer may be, at the election of the employer, excluded from consideration as an eligible employee for purposes of applying the requirements of subsection (a). In the case of a small employer that is not an individual, an employee who is a relative of a key employee (as defined in section 416(i)(1) of the Internal Revenue Code of 1986) of the employer may, at the election of the key employee, be considered a relative excludable under this paragraph.
``(3) Optional application of waiting period.--A group health plan and a health insurance issuer offering group health insurance coverage shall not be treated as failing to meet the requirements of subsection (a) solely because a period of service by an eligible employee of not more than 60 days is required under the plan for coverage under the plan of eligible individuals with respect to such employee.
``(d) Construction.--Nothing in this section shall be construed as limiting the group health plans, or types of coverage under such a plan, that an employer may offer to an employee.
``SEC. 2708A. COMPLIANCE WITH APPLICABLE REQUIREMENTS THROUGH
MULTIPLE EMPLOYER HEALTH ARRANGEMENTS.
``(a) In General.--In any case in which an eligible employee is, for any plan year, a participant in a group health plan which is a multiemployer plan, the requirements of section 2722(a) shall be deemed to be met with respect to such employee for such plan year if the employer requirements of subsection (b) are met with respect to the eligible employee, irrespective of whether, or to what extent, the employer makes employer contributions on behalf of the eligible employee.
``(b) Employer Requirements.--The employer requirements of this subsection are met under a group health plan with respect to an eligible employee if--
``(1) the employee is eligible under the plan to elect coverage on an annual basis and is provided a reasonable opportunity to make the election in such form and manner and at such times as are provided by the plan;
``(2) coverage is provided for at least the standard coverage specified in section 2707A(b);
``(3) the employer facilitates collection of any employee contributions under the plan and permits the employee to elect to have employee contributions under the plan collected through payroll deduction; and
``(4) in the case of a plan to which subchapter A does not otherwise apply, the employer provides to the employee a summary plan description described in section 102(a)(1) of the Employee Retirement Income Security Act of 1974 in the form and manner and at such times as are required under such subchapter A with respect to employee welfare benefit plans.
``Subchapter C--Required Coverage Options for Individuals Insured
Through Association Plans
``SEC. 2709. TREATMENT OF QUALIFIED ASSOCIATION PLANS.
``(a) General Rule.--For purposes of this chapter, in the case of a qualified association plan--
``(1) except as otherwise provided in this subchapter, the plan shall meet all applicable requirements of chapter 1 and chapter 2 for group health plans offered to and by small employers;
``(2) if such plan is certified as meeting such requirements and the requirements of this subchapter, such plan shall be treated as a plan established and maintained by a small employer, and individuals enrolled in such plan shall be treated as eligible employees; and
``(3) any individual who is a member of the association not enrolling in the plan shall not be treated as an eligible employee solely by reason of membership in such association.
``(b) Election To Be Treated as Purchasing Cooperative.--Subsection (a) shall not apply to a qualified association plan if--
``(1) the health insurance issuer makes an irrevocable election to be treated as a qualified small employer purchasing group for purposes of section 2707D; and
``(2) such sponsor meets all requirements of this chapter applicable to a purchasing cooperative.
``SEC. 2709A. QUALIFIED ASSOCIATION PLAN DEFINED.
``(a) General Rule.--For purposes of this chapter, a plan is a qualified association plan if the plan is a multiple employer welfare arrangement or similar arrangement--
``(1) which is maintained by a qualified association;
``(2) which has at least 500 participants in the United States;
``(3) under which the benefits provided consist solely of medical care (as defined in section 213(d) of the Internal Revenue Code of 1986);
``(4) which may not condition participation in the plan, or terminate coverage under the plan, on the basis of the health status or health claims experience of any employee or member or dependent of either;
``(5) which provides for bonding, in accordance with regulations providing rules similar to the rules under section 412, of all persons operating or administering the plan or involved in the financial affairs of the plan; and
``(6) which notifies each participant or provider that it is certified as meeting the requirements of this chapter applicable to it.
``(b) Self-Insured Plans.--In the case of a plan which is not fully insured (within the meaning of section 514(b)(6)(D)), the plan shall be treated as a qualified association plan only if--
``(1) the plan meets minimum financial solvency and cash reserve requirements for claims which are established by the Secretary and which shall be in lieu of any other such requirements under this chapter;
``(2) the plan provides an annual funding report (certified by an independent actuary) and annual financial statements to the Secretary and other interested parties; and
``(3) the plan appoints a plan sponsor who is responsible for operating the plan and ensuring compliance with applicable Federal and State laws.
``(c) Certification.--
``(1) In general.--A plan shall not be treated as a qualified association plan for any period unless there is in effect a certification by the Secretary that the plan meets the requirements of this subchapter. For purposes of this chapter, the Secretary shall be the appropriate certifying authority with respect to the plan.
``(2) Fee.--The Secretary shall require a $5,000 fee for the original certification under paragraph (1) and may charge a reasonable annual fee to cover the costs of processing and reviewing the annual statements of the plan.
``(3) Expedited procedures.--The Secretary may by regulation provide for expedited registration, certification, and comment procedures.
``(4) Agreements.--The Secretary of Labor may enter into agreements with the States to carry out the Secretary's responsibilities under this subchapter.
``(d) Availability.--Notwithstanding any other provision of this chapter, a qualified association plan may limit coverage to individuals who are members of the qualified association establishing or maintaining the plan, an employee of such member, or a dependent of either.
``(e) Special Rules for Existing Plans.--In the case of a plan in existence on January 1, 2001--
``(1) the requirements of subsection (a) (other than paragraphs (4), (5), and (6) thereof) shall not apply;
``(2) no original certification shall be required under this subchapter; and
``(3) no annual report or funding statement shall be required before January 1, 2003, but the plan shall file with the Secretary a description of the plan and the name of the health insurance issuer.
``SEC. 2709B. DEFINITIONS AND SPECIAL RULES.
``(a) Qualified Association.--For purposes of this subchapter, the term `qualified association' means any organization which--
``(1) is organized and maintained in good faith by a trade association, an industry association, a professional association, a chamber of commerce, a religious organization, a public entity association, or other business association serving a common or similar industry;
``(2) is organized and maintained for substantial purposes other than to provide a health plan;
``(3) has a constitution, bylaws, or other similar governing document which states its purpose; and
``(4) receives a substantial portion of its financial support from its active, affiliated, or federation members.
``(b) Coordination.--The term `qualified association plan' shall not include a plan to which subchapter B applies.
``SEC. 2709C. SPECIAL RULE FOR CHURCH, MULTIEMPLOYER, AND
COOPERATIVE PLANS.
``(a) General Rule.--For purposes of this chapter, in the case of a group health plan to which this section applies--
``(1) except as otherwise provided in this subchapter, the plan shall be required to meet all applicable requirements of subchapter A and subchapter B for group health plans offered to and by small employers;
``(2) if such plan is certified as meeting such requirements, such plan shall be treated as a plan established and maintained by a small employer and individuals enrolled in such plan shall be treated as eligible employees; and
``(3) any individual eligible to enroll in the plan who does not enroll in the plan shall not be treated as an eligible employee solely by reason of being eligible to enroll in the plan.
``(b) Modified Standards.--
``(1) Certifying authority.--For purposes of this chapter, the Secretary shall be the appropriate certifying authority with respect to a plan to which this section applies.
``(2) Availability.--Rules similar to the rules of subsection (e) of section 2709A shall apply to a plan to which this section applies.
``(3) Access.--An employer which, pursuant to a collective bargaining agreement, offers an employee the opportunity to enroll in a plan described in subsection (c)(2) shall not be required to make any other plan available to the employee.
``(4) Treatment under state laws.--A church plan described in subsection (c)(1) which is certified as meeting the requirements of this section shall not be deemed to be a multiple employer welfare arrangement or an insurance company or other insurer, or to be engaged in the business of insurance, for purposes of any State law purporting to regulate insurance companies or insurance contracts.
``(c) Plans to Which Section Applies.--This section shall apply to a health plan which--
``(1) is a church plan (as defined in section 414(e) of the Internal Revenue Code of 1986) which has at least 100 participants in the United States;
``(2) is a multiemployer plan which is maintained by a health plan sponsor described in section 3(16)(B)(iii) of the Employee Retirement Income Security Act of 1974 and which has at least 500 participants in the United States; or
``(3) is a plan which is maintained by a rural electric cooperative or a rural telephone cooperative association and which has at least 500 participants in the United States.''.
(b) Conforming Amendments.--Section 2791(d) of the Public Health Service Act (42 U.S.C. 300gg-91(d)) is amended by adding at the end the following:
``(15) Eligible employee.--The term `eligible employee' means, with respect to an employer, an employee who normally performs on a monthly basis at least 30 hours of service per week for that employer.
``(16) Eligible individual.--The term `eligible individual' means, with respect to an eligible employee, such employee, and any dependent of such employee.
``(17) NAIC.--The term `NAIC' means the National Association of Insurance Commissioners.
``(18) Qualified group health plan.--The term `qualified group health plan' shall have the meaning given the term in section 2707.''.
SEC. 403. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT RELATING
TO THE INDIVIDUAL MARKET.
The first subpart 3 of part B of title XXVII of the Public Health Service Act (42 U.S.C. 300gg-51 et seq.) is amended--
(1) by redesignating such subpart as subpart 2; and
(2) by adding at the end the following:
``SEC. 2753. APPLICABILITY OF GENERAL INSURANCE MARKET
REFORMS.
``The provisions of chapter 2 of subpart 2 of part A shall apply to health insurance coverage offered by a health insurance issuer in the individual market in the same manner as they apply to health insurance coverage offered by a health insurance issuer in connection with a group health plan in the small or large group market.''.
SEC. 404. EFFECTIVE DATE.
The amendments made by this subtitle shall apply with respect to health insurance coverage offered, sold, issued, renewed, in effect, or operated on or after January 1, 2002.
Subtitle B--Tax Provisions
SEC. 411. ENFORCEMENT WITH RESPECT TO HEALTH INSURANCE
ISSUERS.
(a) In General.--Chapter 43 of the Internal Revenue Code of 1986 (relating to qualified pension, etc., plans) is amended by adding at the end the following:
``SEC. 4980F. FAILURE OF INSURER TO COMPLY WITH CERTAIN
STANDARDS FOR HEALTH INSURANCE COVERAGE.
``(a) Imposition of Tax.--
``(1) In general.--There is hereby imposed a tax on the failure of a health insurance issuer to comply with the requirements applicable to such issuer under--
``(A) chapter 2 of subpart 2 of part A of title XXVII of the Public Health Service Act;
``(B) section 2753 of the Public Health Service Act; and
``(C) subpart C of part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974.
``(2) Exception.--Paragraph (1) shall not apply to a failure by a health insurance issuer in a State if the Secretary of Health and Human Services determines that the State has in effect a regulatory enforcement mechanism that provides adequate sanctions with respect to such a failure by such an issuer.
``(b) Amount of Tax.--
``(1) In general.--Subject to paragraph (2), the amount of the tax imposed by subsection (a) shall be $100 for each day during which such failure persists for each person to which such failure relates. A rule similar to the rule of section 4980D(b)(3) shall apply for purposes of this section.
``(2) Limitation.--The amount of the tax imposed by subsection (a) for a health insurance issuer with respect to health insurance coverage shall not exceed 25 percent of the amounts received under the coverage for coverage during the period such failure persists.
``(c) Liability for Tax.--The tax imposed by this section shall be paid by the health insurance issuer.
``(d) Limitations on Amount of Tax.--
``(1) Tax not to apply to failures corrected within 30 days.--No tax shall be imposed by subsection (a) on any failure if--
``(A) such failure was due to reasonable cause and not to willful neglect, and
``(B) such failure is corrected during the 30-day period
(or such period as the Secretary may determine appropriate) beginning on the first date the health insurance issuer knows, or exercising reasonable diligence could have known, that such failure existed.
``(2) Waiver by secretary.--In the case of a failure which is due to reasonable cause and not to willful neglect, the Secretary may waive part or all of the tax imposed by subsection (a) to the extent that the payment of such tax would be excessive relative to the failure involved.
``(e) Definitions.--For purposes of this section, the terms
`health insurance coverage' and `health insurance issuer' have the meanings given such terms in section 2791 of the Public Health Service Act and section 733 of the Employee Retirement Income Security Act of 1974.''.
(b) Conforming Amendment.--The table of sections for such chapter 43 is amended by adding at the end the following new item:
``Sec. 4980F. Failure of insurer to comply with certain standards for health insurance coverage.''.
SEC. 412. ENFORCEMENT WITH RESPECT TO SMALL EMPLOYERS.
(a) In General.--Chapter 47 of the Internal Revenue Code of 1986 (relating to excise taxes on certain group health plans) is amended by inserting after section 5000 the following new section:
``SEC. 5000A. SMALL EMPLOYER REQUIREMENTS.
``(a) General Rule.--There is hereby imposed a tax on the failure of any small employer to comply with the requirements applicable to such employer under--
``(1) subchapter C of chapter 2 of subpart 2 of part A of title XXVII of the Public Health Service Act;
``(2) section 2753 of the Public Health Service Act; and
``(3) chapter 2 of subpart C of part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974.
``(b) Amount of Tax.--The amount of tax imposed by subsection (a) shall be equal to $100 for each day for each individual for which such a failure occurs.
``(c) Limitation on Tax.--
``(1) Tax not to apply where failures corrected within 30 days.--No tax shall be imposed by subsection (a) with respect to any failure if--
``(A) such failure was due to reasonable cause and not to willful neglect, and
``(B) such failure is corrected during the 30-day period
(or such period as the Secretary may determine appropriate) beginning on the 1st date any of the individuals on whom the tax is imposed knew, or exercising reasonable diligence would have known, that such failure existed.
``(2) Waiver by secretary.--In the case of a failure which is due to reasonable cause and not to willful neglect, the Secretary may waive part or all of the tax imposed by subsection (a) to the extent that the payment of such tax would be excessive relative to the failure involved.''.
(b) Conforming Amendment.--The table of sections for such chapter 47 is amended by adding at the end the following new item:
``Sec. 5000A. Small employer requirements.''.
SEC. 413. ENFORCEMENT BY EXCISE TAX ON QUALIFIED
ASSOCIATIONS.
(a) In General.--Chapter 43 of the Internal Revenue Code of 1986 (relating to qualified pension, etc., plans), as amended by section 411, is amended by adding at the end the following new section:
``SEC. 4980G. FAILURE OF QUALIFIED ASSOCIATIONS, ETC., TO
COMPLY WITH CERTAIN STANDARDS FOR HEALTH
INSURANCE COVERAGE.
``(a) Imposition of Tax.--
``(1) In general.--There is hereby imposed a tax on the failure of a qualified association (as defined in section 2709A of the Public Health Service Act and section 723A of the Employee Retirement Income Security Act of 1974), church plan (as defined in section 414(e)), multiemployer plan, or plan maintained by a rural electric cooperative or a rural telephone cooperative association (within the meaning of section 3(40) of the Employee Retirement Income Security Act of 1974) to comply with the requirements applicable to such association or plans under--
``(A) subchapter C of chapter 2 of subpart 2 of part A of title XXVII of the Public Health Service Act;
``(B) section 2753 of the Public Health Service Act; and
``(C) subchapters A and B of chapter 3 of subpart C of part 7 of the Employee Retirement Income Security Act of 1974.
``(2) Exception.--Paragraph (1) shall not apply to a failure by a qualified association, church plan, multiemployer plan, or plan maintained by a rural electric cooperative or a rural telephone cooperative association in a State if the Secretary of Health and Human Services determines that the State has in effect a regulatory enforcement mechanism that provides adequate sanctions with respect to such a failure by such a qualified association or plan.
``(b) Amount of Tax.--The amount of the tax imposed by subsection (a) shall be $100 for each day during which such failure persists for each person to which such failure relates. A rule similar to the rule of section 4980D(b)(3) shall apply for purposes of this section.
``(c) Liability for Tax.--The tax imposed by this section shall be paid by the qualified association or plan.
``(d) Limitations on Amount of Tax.--
``(1) Tax not to apply to failures corrected within 30 days.--No tax shall be imposed by subsection (a) on any failure if--
``(A) such failure was due to reasonable cause and not to willful neglect, and
``(B) such failure is corrected during the 30-day period
(or such period as the Secretary may determine appropriate) beginning on the first date the qualified association, church plan, multiemployer plan, or plan maintained by a rural electric cooperative or a rural telephone cooperative association knows, or exercising reasonable diligence could have known, that such failure existed.
``(2) Waiver by secretary.--In the case of a failure which is due to reasonable cause and not to willful neglect, the Secretary may waive part or all of the tax imposed by subsection (a) to the extent that the payment of such tax would be excessive relative to the failure involved.''.
(b) Conforming Amendment.--The table of sections for such chapter 43, as amended by section 411, is amended by adding at the end the following new item:
``Sec. 4980G. Failure of qualified associations, etc., to comply with certain standards for health insurance plans.''.
SEC. 414. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-
EMPLOYED INDIVIDUALS.
(a) Full Deduction in 2002.--The table contained in section 162(l)(1)(B) of the Internal Revenue Code of 1986 (relating to special rules for health insurance costs of self-employed individuals) is amended--
(1) by striking ``2001'' and inserting ``2000'';
(2) by striking ``2002'' and all that follows; and
(3) by adding at the end the following:
``2001..................................................... 70
``2002 and thereafter...................................100.''.
(b) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000.
SEC. 415. AMENDMENTS TO COBRA.
(a) Amendments to Internal Revenue Code of 1986.--
(1) Lower cost coverage options.--Subparagraph (A) of section 4980B(f)(2) of the Internal Revenue Code of 1986
(relating to continuation coverage requirements of group health plans) is amended to read as follows:
``(A) Type of benefit coverage.--The coverage must consist of coverage which, as of the time the coverage is being provided--
``(i) is identical to the coverage provided under the plan to similarly situated beneficiaries under the plan with respect to whom a qualifying event has not occurred,
``(ii) is so identical, except such coverage is offered with an annual $1,000 deductible, and
``(iii) is so identical, except such coverage is offered with an annual $3,000 deductible.
If coverage under the plan is modified for any group of similarly situated beneficiaries, the coverage shall also be modified in the same manner for all individuals who are qualified beneficiaries under the plan pursuant to this subsection in connection with such group.''.
(2) Termination of cobra coverage after eligible for employer-based coverage for 90 days.--Clause (iv) of section 4980B(f)(2)(B) of the Internal Revenue Code of 1986 (relating to period of coverage) is amended--
(A) by striking ``or'' at the end of subclause (I);
(B) by redesignating subclause (II) as subclause (III); and
(C) by inserting after subclause (I) the following:
``(II) eligible for such employer-based coverage for more than 90 days, or''.
(3) Reduction of period of coverage.--Clause (i) of section 4980B(f)(2)(B) of the Internal Revenue Code of 1986 (relating to period of coverage) is amended by striking ``18 months'' each place it appears and inserting ``24 months''.
(4) Continuation coverage for dependent child.--Clause (i) of section 4980B(f)(2)(B) of the Internal Revenue Code of 1986 is amended by adding at the end the following:
``(VI) Special rule for dependent child.--In the case of a qualifying event described in paragraph (3)(E), the date that is 36 months after the date on which the dependent child of the covered employee ceases to be a dependent child under the plan.''.
(b) Amendments to Employee Retirement Income Security Act of 1974.--
(1) Lower cost coverage options.--Paragraph (1) of section 602 of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1162(1)) (relating to continuation coverage requirements of group health plans) is amended to read as follows:
``(1) Type of benefit coverage.--The coverage must consist of coverage which, as of the time the coverage is being provided--
``(A) is identical to the coverage provided under the plan to similarly situated beneficiaries under the plan with respect to whom a qualifying event has not occurred,
``(B) is so identical, except such coverage is offered with an annual $1,000 deductible, and
``(C) is so identical, except such coverage is offered with an annual $3,000 deductible.
If coverage under the plan is modified for any group of similarly situated beneficiaries, the coverage shall also be modified in the same manner for all individuals who are qualified beneficiaries under the plan pursuant to this subsection in connection with such group.''.
(2) Termination of cobra coverage after eligible for employer-based coverage for 90 days.--Subparagraph (D) of section 602(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1162(2)(D)) (relating to period of coverage) is amended--
(A) by striking ``or'' at the end of clause (i);
(B) by redesignating clause (ii) as clause (iii); and
(C) by inserting after clause (i) the following:
``(ii) eligible for such employer-based coverage for more than 90 days, or''.
(3) Reduction of period of coverage.--Subparagraph (A) of section 602(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1162(2)(A)) (relating to period of coverage) is amended by striking ``18 months'' each place it appears and inserting ``24 months''.
(4) Continuation coverage for dependent child.--Subparagraph (A) of section 602(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1162(2)(A)) is amended by adding at the end the following:
``(vi) Special rule for dependent child.--In the case of a qualifying event described in section 603(5), the date that is 36 months after the date on which the dependent child of the covered employee ceases to be a dependent child under the plan.''.
(c) Amendments to Public Health Service Act.--
(1) Lower cost coverage options.--Paragraph (1) of section 2202 of the Public Health Service Act (42 U.S.C. 300bb-2(1))
(relating to continuation coverage requirements of group health plans) is amended to read as follows:
``(1) Type of benefit coverage.--The coverage must consist of coverage which, as of the time the coverage is being provided--
``(A) is identical to the coverage provided under the plan to similarly situated beneficiaries under the plan with respect to whom a qualifying event has not occurred,
``(B) is so identical, except such coverage is offered with an annual $1,000 deductible, and
``(C) is so identical, except such coverage is offered with an annual $3,000 deductible.
If coverage under the plan is modified for any group of similarly situated beneficiaries, the coverage shall also be modified in the same manner for all individuals who are qualified beneficiaries under the plan pursuant to this subsection in connection with such group.''.
(2) Termination of cobra coverage after eligible for employer-based coverage for 90 days.--Subparagraph (D) of section 2202(2) of the Public Health Service Act (42 U.S.C. 300bb-2(2)(D)) (relating to period of coverage) is amended--
(A) by striking ``or'' at the end of clause (i);
(B) by redesignating clause (ii) as clause (iii); and
(C) by inserting after clause (i) the following:
``(ii) eligible for such employer-based coverage for more than 90 days, or''.
(3) Reduction of period of coverage.--Subparagraph (A) of section 2202(2) of the Public Health Service Act (42 U.S.C. 300bb-2(2)(A)) (relating to period of coverage) is amended by striking ``18 months'' each place it appears and inserting
``24 months''.
(4) Continuation coverage for dependent child.--Subparagraph (A) of section 2202(2) of the Public Health Service Act (42 U.S.C. 300bb-2(2)(A)) is amended by adding at the end the following:
``(vi) Special rule for dependent child.--In the case of a qualifying event described in section 2203(5), the date that is 36 months after the date on which the dependent child of the covered employee ceases to be a dependent child under the plan.''.
(d) Effective Date.--The amendments made by this section shall apply to qualifying events occurring after the date of the enactment of this Act.
TITLE V--PRIMARY AND PREVENTIVE CARE SERVICES
SEC. 501. IMPROVEMENT OF MEDICARE PREVENTIVE CARE SERVICES.
(a) Waiver of Coinsurance for Screening and Diagnostic Mammography.--
(1) In general.--Section 1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)), as amended by section 223(c) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (as enacted into law by section 1(a)(6) of Public Law 106-554), is amended--
(A) by striking ``and (U)'' and inserting ``(U)''; and
(B) by striking the semicolon at the end and inserting the following: ``, and (V) with respect to screening mammography
(as defined in section 1861(jj)) and diagnostic mammography, 100 percent of the payment basis determined under section 1848;''.
(2) Waiver of coinsurance in outpatient hospital settings.--The third sentence of section 1866(a)(2)(A) of the Social Security Act (42 U.S.C. 1395cc(a)(2)(A)) is amended by inserting after ``1861(s)(10)(A)'' the following: ``, with respect to screening mammography (as defined in section 1861(jj)) and diagnostic mammography,''.
(b) Coverage of Insulin Pumps.--
(1) Inclusion as item of durable medical equipment.--Section 1861(n) of the Social Security Act (42 U.S.C. 1395x(n)) is amended by inserting before the semicolon the following: ``, and includes insulin infusion pumps (as defined in subsection (ww)) prescribed by the physician of an individual with Type I diabetes who is experiencing severe swings of high and low blood glucose levels and has successfully completed a training program that meets standards established by the Secretary or who has used such a pump without interruption for at least 18 months immediately before enrollment under part B''.
(2) Definition of insulin infusion pump.--Section 1861 of the Social Security Act (42 U.S.C. 1395x), as amended by section 105(b) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (as enacted into law by section 1(a)(6) of Public Law 106-554), is amended by adding at the end the following:
``Insulin Infusion Pump
``(ww) The term `insulin infusion pump' means an infusion pump, approved by the Federal Food and Drug Administration, that provides for the computerized delivery of insulin for individuals with diabetes in lieu of multiple daily manual insulin injections.''.
(3) Payment for supplies relating to infusion pumps.--Section 1834(a)(2)(A) of the Social Security Act (42 U.S.C. 1395m(a)(2)(A)) is amended--
(A) in clause (ii), by striking ``or'' at the end;
(B) in clause (iii), by inserting ``or'' at the end; and
(C) by inserting after clause (iii) the following:
``(iv) which is an accessory used in conjunction with an insulin infusion pump (as defined in section 1861(ww)),''.
(c) Annual Screening Pap Smear and Pelvic Exams.--
(1) In general.--Section 1861(nn) of the Social Security Act (42 U.S.C. 1395x(nn), as amended by section 101(a) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (as enacted into law by section 1(a)(6) of Public Law 106-554), is amended to read as follows:
``Screening Pap Smear; Screening Pelvic Exam
``(nn)(1) The term `screening pap smear' means a diagnostic laboratory test consisting of a routine exfoliative cytology test (Papanicolaou test) provided to a woman for the purpose of early detection of cervical or vaginal cancer and includes a physician's interpretation of the results of the test, if the individual involved has not had such a test during the preceding year.
``(2) The term `screening pelvic exam' means a pelvic examination provided to a woman if the woman involved has not had such an examination during the preceding year, and includes a clinical breast examination, relevant history-taking, medical decision-making, and patient counseling.''.
(2) Waiver of coinsurance for pelvic exams.--Section 1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)), as amended by subsection (a)(1) and section 223(c) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (as enacted into law by section 1(a)(6) of Public Law 106-554), is amended--
(A) by striking ``and (V)'' and inserting ``(V)''; and
(B) by striking the semicolon at the end and inserting the following: ``, and (W) with respect to services described in section 1861(nn)(2), 100 percent of the payment basis determined under section 1848;''.
(e) Effective Date.--The amendments made by this section shall apply to items and services furnished on or after the first day of the first calendar quarter beginning on or after the date that is 6 months after the date of enactment of this Act.
SEC. 502. AUTHORIZATION OF APPROPRIATIONS FOR HEALTHY START
PROGRAM.
(a) Authorization of Appropriations.--To enable the Secretary of Health and Human Services to carry out the healthy start program established under the authority of section 301 of the Public Health Service Act (42 U.S.C. 241), there are authorized to be appropriated $115,000,000 for fiscal year 2002, $150,000,000 for fiscal year 2003,
$250,000,000 for fiscal year 2004, and $300,000,000 for each of the fiscal years 2005 through 2007.
(b) Model Projects.--
(1) In general.--Of the amount appropriated under subsection (a) for a fiscal year, the Secretary of Health and Human Services shall reserve $50,000,000 for such fiscal year to be distributed to model projects determined to be eligible under paragraph (2).
(2) Eligibility.--To be eligible to receive funds under paragraph (1), a model project shall--
(A) have been one of the original 15 Healthy Start projects; and
(B) be determined by Secretary of Health and Human Services to have been successful in serving needy areas and reducing infant mortality.
(3) Use of projects.--A model project that receives funding under paragraph (1) shall be utilized as a resource center to assist in the training of those individuals to be involved in projects established under subsection (c). It shall be the goal of such projects to become self-sustaining within the project area.
(4) Provision of matching funds.--In providing assistance to a project under this subsection, the Secretary of Health and Human Services shall ensure that--
(A) with respect to fiscal year 2002, the project shall make non-Federal contributions (in cash or in-kind) towards th---------------------
