S14696 CONGRESSIONAL RECORD — SENATE November 17, 1999 INTRODUCTION OF BILLS AND Education Act’’, to establish the John H. SUBMISSION OF CONCURRENT AND JOINT RESOLUTIONS Chafee Memorial Fellowship Program, to ex- SENATE RESOLUTIONS tend the programs under that Act, and for The following bills and joint resolu- other purposes; to the Committee on Envi- The following concurrent resolutions tions were introduced, read the first ronment and Public Works. and Senate resolutions were read, and and second time by unanimous con- By Mr. HATCH: referred (or acted upon), as indicated: sent, and referred as indicated: S. 1947. A bill to provide for an assessment By Mrs. HUTCHISON (for herself, Mr. By Mr. CRAIG: of the abuse of and trafficking in gamma hy- ABRAHAM, Mr. KYL, and Mr. GRAMM): S. 1937. A bill to amend the Pacific North- droxybutyric acid and other controlled sub- S. Con. Res. 74. A concurrent resolution west Electric Power Planning and Conserva- stances and drugs, and for other purposes; to recognizing the United States Border Pa- tion Act to provide for sales of electricity by the Committee on the Judiciary. trol’s 75 years of service since its founding; the Bonneville Power Administration to By Mr. LOTT: to the Committee on the Judiciary. joint operating entities; to the Committee S. 1948. A bill to amend the provisions of By Mr. DURBIN (for himself and Mr. on Energy and Natural Resources. title 17, United States Code, and the Commu- CAMPBELL): By Mr. CRAIG (for himself, Mr. THOM- nications Act of 1934, relating to copyright S. Con. Res. 75. A concurrent resolution ex- AS, Mr. CRAPO, and Mr. BURNS): licensing and carriage of broadcast signals pressing the strong opposition of Congress to S. 1938. A bill to provide for the return of by satellite; to the Committee on the Judici- the continued egregious violations of human fair and reasonable fees to the Federal Gov- ary. rights and the lack of progress toward the ernment for the use and occupancy of Na- By Mr. LEAHY: establishment of democracy and the rule of tional Forest System land under the recre- S. 1949. A bill to promote economically law in Belarus and calling on President Alex- ation residence program, and for other pur- sound modernization of electric power gen- ander Lukashenka to engage in negotiations poses; to the Committee on Agriculture, Nu- eration capacity in the United States, to es- with the representatives of the opposition trition, and Forestry. tablish requirements to improve the combus- and to restore the constitutional rights of By Mr. HELMS: tion heat rate efficiency of fossil fuel-fired the Belarusian people; to the Committee on S. 1939. A bill to amend the Internal Rev- electric utility generating units, to reduce Foreign Relations. enue Code of 1986 to allow a credit against emissions of mercury, carbon dioxide, nitro- f income tax for dry cleaning equipment which gen oxides, and sulfur dioxide, to require uses reduced amounts of hazardous sub- that all fossil fuel-fired electric utility gen- STATEMENTS ON INTRODUCED stances; to the Committee on Finance. erating units operating in the United States BILLS AND JOINT RESOLUTIONS meet new source review requirements, to By Mr. LEAHY (for himself, Mr. By Mr. CRAIG (for himself, Mr. BROWNBACK, Mr. FEINGOLD, Mr. KEN- promote the use of clean coal technologies, THOMAS, Mr. CRAPO, and Mr. NEDY, Mr. KERRY, Mr. JEFFORDS, and and to promote alternative energy and clean Mr. LAUTENBERG): energy sources such as solar, wind, biomass, BURNS): S. 1940. A bill to amend the Immigration and fuel cells; to the Committee on Finance. S. 1938. A bill to provide for the re- and Nationality Act to reaffirm the United By Mr. ENZI (for himself and Mr. turn of fair and reasonable fees to the States’ historic commitment to protecting THOMAS): Federal Government for the use and oc- refugees who are fleeing persecution or tor- S. 1950. A bill to amend the Mineral Leas- cupancy of National Forest System ture; to the Committee on the Judiciary. ing Act of 1920 to ensure the orderly develop- land under the recreation residence ment of coal, coalbed methane, natural gas, By Mr. DODD (for himself and Mr. program, and for other purposes; to the DEWINE): and oil in the Powder River Basin, Wyoming S. 1941. A bill to amend the Federal Fire and Montana, and for other purposes; to the Committee on Agriculture, Nutrition, Prevention and Control Act of 1974 to au- Committee on Energy and Natural Re- and Forestry. thorize the Director of the Federal Emer- sources. CABIN USER FEE FAIRNESS ACT OF 1999 gency Management Agency to provide assist- By Mr. SCHUMER (for himself and Ms. Mr. CRAIG. Mr. President, I am in- ance to fire departments and fire prevention COLLINS): troducing legislation today that will S. 1951. A bill to provide the Secretary of organizations for the purpose of protecting set a new course for the Forest Service the public and firefighting personnel against Energy with authority to draw down the fire and fire-related hazards; to the Com- Strategic Petroleum Reserve when oil and in determining fees for forest lots on mittee on Commerce, Science, and Transpor- gas prices in the United States rise sharply which families and individuals have tation. because of anticompetitive activity, and to been authorized to build cabins for sea- By Mr. JEFFORDS: require the President, through the Secretary sonal recreation since the early part of S. 1942. A bill to amend the Older Ameri- of Energy, to consult with Congress regard- this century. I am pleased to have Sen- cans Act of 1965 to establish grant programs ing the sale of oil from the Strategic Petro- ators MIKE CRAPO, CRAIG THOMAS, and leum Reserve; to the Committee on Energy to provide State pharmacy assistance pro- CONRAD BURNS joining me in spon- and Natural Resources. grams and medication management pro- soring this legislation, which is a com- grams; to the Committee on Health, Edu- By Mr. ABRAHAM: cation, Labor, and Pensions. S. 1952. A bill to amend the Internal Rev- panion bill to H.R. 3327, introduced in By Mrs. MURRAY: enue Code of 1986 to provide a simplified the House of Representatives by Con- S. 1943. A bill to provide for an inexpensive method for determining a partner’s share of gressman GEORGE NETHERCUTT. book distribution program; to the Com- items of a partnership which is a qualified In 1915, under the Term Permit Act, mittee on Health, Education, Labor, and investment club; to the Committee on Fi- Congress set up a program to give fam- Pensions. nance. ilies the opportunity to recreate on our S. 1944. A bill to provide national challenge By Mr. KERREY: public lands through the so-called grants for innovation in the education of S. 1953. A bill to amend the Illegal Immi- recreation residence program. Today, homeless children and youth; to the Com- gration Reform and Immigrant Responsi- mittee on Health, Education, Labor, and bility Act of 1996 to authorize the establish- 15,000 of these forest cabins remain, Pensions. ment of a voluntary legal employment au- providing generation after generation By Mr. BOND (for himself and Mr. thentication program (LEAP) as a successor of families and their friends a respite JOHNSON): to the current pilot programs for employ- from urban living and an opportunity S. 1945. A bill to amend title 23, United ment eligibility confirmation; to the Com- to use our public lands. States Code, to require consideration under mittee on the Judiciary. These cabins stand in sharp contrast the congestion mitigation and air quality By Mr. BINGAMAN (for himself, Mr. to many aspects of modern outdoor improvement program of the extent to which THOMPSON, and Mr. KENNEDY): recreation, yet are an important aspect a proposed project or program reduces sulfur S. 1954. A bill to establish a compensation or atmospheric carbon emissions, to make program for employees of the Department of of the mix recreation opportunities for renewable fuel projects eligible under that Energy, its contractors, subcontractors, and the American public. While many of us program, and for other purposes; to the Com- beryllium vendors, who sustained beryllium- enjoy fast, off-road machines and mittee on Environment and Public Works. related illness due to the performance of watercraft or hiking to the By Mr. INHOFE (for himself, Ms. their duty; to establish a compensation pro- backcountry with high-tech gear, oth- SNOWE, Mr. BAUCUS, Mr. WARNER, gram for certain workers at the Paducah, ers enjoy a relaxing weekend at their Mrs. FEINSTEIN, Mr. LIEBERMAN, Mr. Kentucky, gaseous diffusion plant; to estab- cabin in the woods with their family WYDEN, Mr. DOMENICI, Mr. MOYNIHAN, lish a pilot program for examining the pos- and friends. Ms. COLLINS, Mr. LAUTENBERG, Mr. sible relationship between workplace expo- KERRY, and Mr. BENNETT): sure to radiation and hazardous materials The recreation residence programs S. 1946. A bill to amend the National Envi- and illnesses or health conditions; and for allows families all across the country ronmental Education Act to redesignate that other purposes; to the Committee on Health, an opportunity to use our national for- Act as the ‘‘John H. Chafee Environmental Education, Labor, and Pensions. ests. This quiet, somewhat uneventful

VerDate 29-OCT-99 04:18 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00044 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.063 pfrm13 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14697 program continues to produce close to keep track of the booming land val- This is highly technical legislation. bonds and remarkable memories for ues associated with recreation develop- Its purpose is to send a clear set of in- hundreds of thousands of Americans, ment. structions to appraisers in the field and but in order to secure the future of the As the results of actual reappraisals a clear set of instructions to forest cabin program, this Congress needs to on the ground began reaching my office managers to respect the results of ap- reexamine the basis on which fees are in 1997, it became clear that far more praisals undertaken to place value on now being determined. than the inoperative IPD was out of the raw land being offered cabin own- Roughly 20 years ago, the Forest alignment in determining fees for the ers. Service saw the need to modernize the cabin owners. I intend to hold hearings on this leg- regulations under which the cabin pro- At the Pettit Lake tract in Idaho’s islation early in the next session. I gram is administered. Acknowledging Sawtooth National Recreation Area, urge each of my colleagues to be in that the competition for access and use the new base fees skyrocketed into contact with cabin owners in their of forest resources has increased dra- alarming five-digit amounts—so high State during the congressional recess. matically since 1915, both the cabin that a single annual fee was nearly There are more than 15,000 families out owners and the agency wanted a formal enough money to buy raw land outside there who fear that the long tradition understanding about the rights and ob- the forest and construct a cabin. Mean- of cabin-based forest recreation is ligations of using and maintaining while, the agency’s appraisal method- nearing an end because the agencies fee these structures. ology was resulting in new base fees in mechanism has made the program New rules that resulted nearly a dec- South Dakota, in Florida, and in some unaffordable for all but the wealthy. ade later reaffirmed the cabins as a locations in Colorado that were actu- These cabin owners and I would whole- valid recreational use of forest land. At ally lower than the previous fee. heartedly welcome the support and co- Very generally speaking, the value of the same time, the new policy reflected sponsorship of all Senators for this im- the use of the forest lot is approxi- numerous limitations on use that are portant legislation. felt to be appropriate in order to keep mately the same for any cabin owner, I ask unanimous consent that a copy areas of the forest where cabins are lo- whether they are tucked into what has of the legislation be printed in the become in recent years the Sawtooth cated open for recreational use by RECORD. other forest visitors. Commercial use National Recreation Area of Idaho, or There being no objection, the bill was high in the Sierra Mountain range of of the cabins is prohibited, as is year- ordered to be printed in the RECORD, as round occupancy by the owner. Owners California, or in the lowland forests of follows: the southeastern States. Yet Idaho are restricted in the size, shape, paint S. 1938 cabin owners are now expected to pay a color and presence of other structures new average fee of $9,221 each year, Be it enacted by the Senate and House of Rep- or installations on the cabin lot. The resentatives of the United States of America in while cabin owners in Kentucky will be only portion of a lot that is controlled Congress assembled, paying a new average fee of $140. SECTION. 1. SHORT TITLE. by the cabin owner is that portion of At the request of the chairman of the the lot that directly underlies the foot- This Act may be cited as the ‘‘Fair Cabin House Committee on Agriculture in User Fee Act of 1999’’. print of the cabin itself. 1998, the cabin owners named a coali- At some locations, the agency has de- SEC. 2. FINDINGS. tion of leaders of their various national termined a need to remove cabins for a Congress finds that— and State cabin owner associations to variety of reasons related to ‘‘higher (1) the recreation residence program is— examine the methodology being used (A) a valid use of forest land and 1 of the public purposes’’ and cabin owners by the Forest Service to determine multiple uses of the National Forest System; wanted to be certain in the writing of fees. It became obvious to these lay- and new regulations that a fair process men that analysis of appraisal method- (B) an important component of the recre- would guide any future decisions about ology and the determination of fees ation program of the Forest Service; (2) cabins located on forest land have pro- cabin removal. At other locations, was beyond their grasp, and a pres- some cabins have been destroyed by vided a unique recreation experience to a tigious consulting appraiser was re- large number of cabin owners, their families, fire, avalanche or falling trees, and a tained to guide the cabin owners more reliable process of determining and guests each year since Congress author- through their task. The report and rec- ized the recreation residence program in whether such cabins might be rebuilt ommendations of the coalition’s con- 1915; or relocated was needed. It was deter- sulting appraiser is available from my (3) tract associations, cabin owners, their mined, therefore, that this recreational office for those who might wish to ex- extended families, guests, and others that program would be tied more closely to amine the details. regularly use and enjoy forest cabin tracts the forest planning process. At the bottom line, it was learned have contributed significantly toward effi- The question of an appropriate fee to that the Forest Service—contrary to cient management of the program and the stewardship of forest land; be paid for the opportunity of con- its own policy—was appraising and structing and maintaining a cabin in (4) cabin user fees have traditionally gen- affixing value to the lots being pro- erated income to the Federal Government in the woods was also addressed at that vided to cabin owners as if this land amounts significantly greater than the Fed- time. Although the agency’s policies were fully developed, legally sub- eral cost of administering the program; for administration of the cabin pro- divided, fee simple residential land. (5) the rights and privileges granted to gram have, overall, held up well over In other words, the agency has been owners of cabins authorized under the pro- time, the portion dealing with periodic capturing the values associated with a gram have steadily diminished while regu- redetermination of fees proved in the variety of structures and services that latory restrictions and fees charged under last few years to be a failure. the homeowners themselves (not the the program have steadily increased; and (6) the current fee determination procedure A base fee was determined 20 years agency) provide. The Forest Service, in ago by an appraisal of sales of com- has been shown to incorrectly reflect market setting fees on this basis, has been cap- value and value of use. parable undeveloped lots in the real es- turing incremental values assigned by SEC. 3. PURPOSES. tate market adjacent to the national a developer at various stages of devel- The purposes of this Act are— forest where a cabin was located. The opment for risk, expectations of profit (1) to ensure, to the maximum extent prac- new policy called for reappraisal of the and other factors. ticable, that the National Forest System value of the lot 20 years later—a trig- My goal is to see that the cabin pro- recreation residence program is managed to ger that led to initiation of the re- gram remains affordable for American preserve the opportunity for individual and appraisal process in 1995. families. Consistent with the rec- family-oriented recreation at a reasonable In the meantime, according to the ommendations of the coalition’s con- cost; and policy, annual adjustments to the base sulting appraiser, the methodology for (2) to develop and implement a more effi- fee would be tracked by the Implicit cient, cost-effective procedure for deter- determining fees is directed toward the mining cabin user fees that better reflects Price Deflator (IPD), which proved to value of the use to the cabin owner— the probable value of that use by the cabin be a faulty mechanism for this purpose. not what the market would bear, owner, taking into consideration the limita- Annual adjustments to the fee based on should the Forest Service decide to sell tions of the authorization and other relevant movements of the IPD failed entirely off its assets. market factors.

VerDate 29-OCT-99 04:18 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00045 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.060 pfrm13 PsN: S17PT1 S14698 CONGRESSIONAL RECORD — SENATE November 17, 1999 SEC. 4. DEFINITIONS. justments to reflect limitations arising from parcels of rural land, generally similar in In this Act: the authorization and special use permit; size to the tract being examined, shall be (1) AGENCY.—The term ‘‘agency’’ means the (2) enter into a contract with an appro- given the most weight in the analysis. Forest Service. priate professional organization for the de- (B) SMALLER PARCELS.—Sales of smaller, (2) AUTHORIZATION.—The term ‘‘authoriza- velopment of specific appraisal guidelines in privately-owned, and preferably unimproved tion’’ means a special use permit for the use accordance with subsection (b), subject to parcels of rural land that are not part of an and occupancy of National Forest System public comment and congressional review; established subdivision shall be given sec- land by a cabin owner under the authority of (3) require that an appraisal be performed ondary weight in the analysis. the program. by a State-certified general real estate ap- (C) MAPPED AND RECORDED PARCELS.—Sales (3) BASE CABIN USER FEE.—The term ‘‘base praiser, selected by the Secretary and li- of privately-owned parcels in a mapped and cabin user fee’’ means the initial fee for an censed to practice in the State in which the recorded rural subdivision shall be given the authorization that results from the appraisal lot is located; least weight in the analysis. of a lot in accordance with sections 6 and 7. (4) provide the appraiser with— (3) EXCEPTION FOR CERTAIN SALES OF (4) CABIN.—The term ‘‘cabin’’ means a pri- (A) appraisal guidelines developed in ac- LAND.—In conducting an analysis under para- vately built and owned structure authorized cordance with this Act; and graph (2), the appraiser shall select sales of for use and occupancy on National Forest (B) a copy of the special use permit associ- comparable land that are outside the area of System land. ated with the typical lot to be appraised, influence of— (5) CABIN USER FEE.—The term ‘‘cabin user with an instruction to the appraiser to con- (A) land affected by urban growth bound- fee’’ means a special use fee paid annually by sider any prohibitions or limitations con- aries; a cabin owner to the Secretary in accordance tained in the authorization; (B) land for which a government or institu- with this Act. (5) notwithstanding any other provision of tion holds a conservation or recreational (6) CABIN OWNER.—The term ‘‘cabin owner’’ law, require the appraiser to coordinate the easement; or means— assignment closely with affected parties by (C) land designated for conservation or rec- (A) a person authorized by the agency to seeking advice, cooperation, and information reational purposes by Congress, a State, or a use and to occupy a cabin on National Forest from cabin owners and tract associations; political subdivision of a State. System land; and (6) require that the appraiser perform the (4) ADJUSTMENTS FOR TYPICAL VALUE INFLU- (B) an heir or assign of such a person. appraisal in compliance with— ENCES.— (7) CARETAKER CABIN.—The term ‘‘care- (A) the most current edition of the Uni- (A) IN GENERAL.—The appraiser shall con- taker cabin’’ means a caretaker residence form Standards of Professional Appraisal sider and adjust the price of sales of com- occupied in limited cases in which caretaker Practice on the date of the appraisal; parable land for all typical value influences services are necessary to maintain the secu- (B) the most current edition of the Uni- described in subparagraph (B). rity of a tract. form Appraisal Standards for Federal Land (B) VALUE INFLUENCES.—The typical value Acquisitions on the date of the appraisal; influences referred to in subparagraph (A) (8) CENTER.—The term ‘‘Center’’ means the Federal Center for Dispute Resolution of the and include— American Arbitration Association. (C) the specific appraisal guidelines devel- (i) differences in the locations of the par- oped in accordance with this Act; cels; (9) CURRENT CABIN USER FEE.—The term ‘‘current cabin user fee’’ means the most re- (7) require that the appraisal report be a (ii) accessibility, including limitations on cent cabin user fee that results from an an- self-contained report (as defined by the Uni- access attributable to— form Standards of Professional Appraisal (I) weather; nual adjustment to the base cabin user fee in Practice); (II) the condition of roads or trails; or accordance with section 8. (8) require that the appraisal report com- (III) other factors; (10) LOT.—The term ‘‘lot’’ means a parcel ply with the reporting guidelines established (iii) the presence of marketable timber; of land of the National Forest System on by the Uniform Appraisal Standards for Fed- (iv) limitations on, or the absence of, serv- which a cabin owner is authorized to build, eral Land Acquisitions; and ices such as law enforcement, fire control, use, occupy, and maintain a cabin and re- (9) before accepting any appraisal, conduct road maintenance, or snow plowing; lated improvements. a review of the appraisal to ensure that the (v) the condition and regulatory compli- (11) PROGRAM.—The term ‘‘program’’ guidelines made available to the appraiser ance of any site improvements; and means the recreation residence program es- have been followed and that the appraised (vi) any other typical value influences de- tablished under the Act of March 4, 1915 (38 values are properly supported. scribed in standard appraisal literature. Stat. 1101, chapter 144). (b) SPECIFIC APPRAISAL GUIDELINES.—In (5) ADJUSTMENTS FOR RESTRICTIONS ON (12) SECRETARY.—The term ‘‘Secretary’’ the development of specific appraisal guide- USE.—In evaluating the sale of a comparable means the Secretary of Agriculture, acting lines in accordance with paragraph (a)(2), the fee simple parcel, an adjustment to the sale through the Chief of the Forest Service. instructions to an appraiser shall require, at price of the parcel shall be made to reflect (13) TRACT.—The term ‘‘tract’’ means an a minimum, the following: the influence of prohibitions or limitations established location within a National For- (1) APPRAISAL OF A TYPICAL LOT.— on use or benefits imposed by the agency est containing 1 or more cabins authorized in (A) IN GENERAL.—In conducting an ap- that affect the value of the subject cabin lot, accordance with the program. praisal under this paragraph, the appraiser including— (14) TRACT ASSOCIATION.—The term ‘‘tract shall appraise a typical lot or lots within a (A) any prohibition against year-round use association’’ means a cabin owner associa- tract that are selected by the cabin owners and occupancy or any other restriction that tion in which all cabin owners within a tract and the agency in a manner consistent with limits or reduces the type or amount of are eligible for membership. the policy of the program. cabin use and occupancy; SEC. 5. ADMINISTRATION OF RECREATION RESI- (B) APPRAISAL.—In appraising a typical lot (B) any limitation on the right of the cabin DENCE PROGRAM. or lots within a tract, the appraiser shall— owner to sell, lease, or rent the cabin with- (a) IN GENERAL.—The Secretary shall en- (i) consult with affected cabin owners; and out restrictions imposed by the Secretary; sure, to the maximum extent practicable, (ii) appraise the typical lot or lots selected (C) any limitation on, or prohibition that the basis and procedure for calculating for purposes of comparison with other lots or against, improvements to the lot, such as re- cabin user fees results in a reasonable and groups of lots in the tract having similar modeling or enlargement of the cabin, con- fair fee for an authorization that reflects the value characteristics (rather than appraising struction of additional structures, land- probable value of the use and occupancy of a each individual lot). scaping, signs, fencing, clothes drying lines, lot to the cabin owner in accordance with (B) ESTIMATE OF MARKET VALUE OF TYPICAL mail boxes, swimming pools, or other rec- subsection (b). LOT.— reational facilities; and (b) DETERMINATION OF VALUE.—The value (i) IN GENERAL.—The appraiser shall esti- (D) any limitation on, or prohibition of the use and occupancy of a lot referred to mate the market value of a typical lot as a against, use of the lot for placement of in subsection (a)— parcel of undeveloped, raw land that has amenities such as playground equipment, do- (1) shall not be equivalent to a rental fee of been made available for use and occupancy mestic livestock, recreational vehicles, or the lot; and by the cabin owner on a seasonal or periodic boats. (2) shall reflect regional economic influ- basis. (6) ADJUSTMENTS TO SALES OF COMPARABLE ences, as determined by an appraisal of the (ii) NO EQUIVALENCE TO LEGALLY SUB- PARCELS.— value of use of the National Forest in which DIVIDED LOT.—The appraiser shall not ap- (A) IN GENERAL.— the lot is located. praise the typical lot as being equivalent to (i) UTILITIES PROVIDED BY AGENCY.—Only SEC. 6. APPRAISALS. a legally subdivided lot. utilities (such as water, sewer, electricity, or (a) REQUIREMENTS FOR CONDUCTING AP- (2) REQUIREMENT FOR ANALYSIS OF COM- telephone) or access roads or trails that are PRAISALS.—In implementing and conducting PARABLE SALES.—The appraisal shall be clearly established as of the date of the ap- an appraisal process for determining cabin based on a prioritized analysis of 1 or more praisal as having been provided and main- user fees, the Secretary shall— categories of sales of comparable land as fol- tained by the agency at a lot shall be in- (1) establish an appraisal process to deter- lows: cluded in the appraisal. mine the value of the fee simple estate of a (A) LARGER PARCELS.—Sales of larger, pri- (ii) FEATURES PROVIDED BY CABIN OWNER.— typical lot or lots within a tract, with ad- vately-owned, and preferably unimproved All cabin facilities, decks, docks, patios, and

VerDate 29-OCT-99 04:18 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00046 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.062 pfrm13 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14699

other nonnatural features (including utili- (i) 1⁄10 of the new base cabin user fee; by ally by the cabin owner on a monthly, quar- ties or access)— (ii) the number of years remaining in the terly, annual, or other schedule, as deter- (I) shall be presumed to have been provided term of the authorization after the year for mined by the Secretary. by, or funded by, the cabin owner; and which the cabin user fee is being calculated. (b) PAYMENT OF EQUAL OR LESSER FEE.—If, (II) shall be excluded from the appraisal by (d) ANNUAL CABIN USER FEE IN EVENT OF in accordance with section 7, the Secretary adjusting any comparable sales with the CHANGED CONDITIONS.—If a review of a deci- determines that the amount of a new base nonnatural features referred to in subpara- sion to convert a lot to an alternative public cabin user fee is equal to or less than the graph (B)(ii). use indicates that the continuation of the current base cabin user fee, the Secretary (iii) WITHDRAWAL OF UTILITY OR ACCESS BY authorization for use and occupancy of the shall require payment of the new base cabin AGENCY.—If, during the term of an authoriza- cabin by the cabin owner is warranted, and user fee by the cabin owner in accordance tion, the agency makes a substantial and the decision is subsequently reversed, the with subsection (a). materially adverse change in the provision Secretary may require the cabin owner to (c) PAYMENT OF GREATER FEE.—If, in ac- or maintenance of any utility or access, the pay any portion of annual cabin user fees, as cordance with section 7, the Secretary deter- cabin owner shall have the right to request calculated in accordance with subsection (d), mines that the amount of a new base cabin and obtain a new determination of the base that were forgone as a result of the expecta- user fee is greater than the current base cabin user fee at the expense of the agency. tion of termination of use and occupancy of cabin user fee, the Secretary shall— (B) ADJUSTMENT FOR IMPROVEMENTS.— the cabin by the cabin owner. (1) require full payment of the new base (i) IN GENERAL.—The appraiser shall con- (e) TERMINATION OF FEE OBLIGATION IN cabin user fee in the first year following sider and adjust the price of each sale of a LOSS RESULTING FROM ACTS OF GOD OR CATA- completion of the fee determination proce- comparable parcel for all nonnatural fea- STROPHIC EVENTS.—On a determination by dure if the increase in the amount of the new tures referred to in subparagraph (A)(ii) the agency that, due to an act of God or a base cabin user fee is not more than 100 per- that— catastrophic event, a lot cannot be safely oc- cent of the most recently paid cabin user fee; (I) are present at, or add value to, the par- cupied and that the authorization for the lot or cel; but should accordingly be terminated, the fee ob- (2) phase in the increase over the current (II) are not present at the lot being ap- ligation of the cabin owner shall terminate cabin user fee in approximately equal incre- praised or not included in the appraisal effective on the date of the occurrence of the ments over 3 years if the increase in the under subparagraph (A). act or event. amount of the new base cabin user fee is SEC. 8. ANNUAL ADJUSTMENT OF CABIN USER (ii) ADJUSTMENTS.—An adjustment to the greater than 100 percent of the most recently FEE. price of a parcel sold under this subpara- paid base cabin user fee. (a) IN GENERAL.—The Secretary shall ad- graph shall include allowances for matters (d) REQUIREMENT FOR PAYMENT DURING AR- just the cabin user fee annually, using a roll- such as— BITRATION, APPEAL, OR JUDICIAL REVIEW.—If ing 5-year average of a published price index (I) depreciated current replacement costs arbitration, an appeal, or judicial review in accordance with subsection (b) or (c) that of installing nonnatural features referred to concerning a cabin user fee is brought in ac- reports changes in rural or similar land val- in clause (i) at the typical lot being ap- cordance with section 11 or 12, the Secretary ues in the State, county, or market area in praised, including an allowance for entrepre- shall— which the lot is located. neurial profit and overhead; (1) suspend annual payment by the cabin (b) INITIAL INDEX.— (II) likely construction difficulties for non- owner of any increase in the cabin user fee, (1) IN GENERAL.—For the period of 10 years natural features referred to in clause (i) at beginning on the date of enactment of this pending completion of the arbitration, ap- the lot being appraised; and Act, the Secretary shall use changes in agri- peal, or judicial review; and (III) the deduction in price that would be cultural land prices in the appropriate State (2) make any adjustments, as necessary, taken in the market as a risk allowance if— or county, as reported in the Index of Agri- that result from the findings of the arbitra- (aa) a parcel does not have adequate access cultural Land Prices published by the De- tion, appeal, or judicial review by providing or adequate sewer or water systems; and partment of Agriculture, to determine the to the cabin owner— (bb) there is a risk of failure or material annual adjustment to the cabin user fee in (A)(i) a credit toward future cabin user fee cost overruns in attempting to provide the accordance with subsections (a) and (d). payments; or systems referred to in item (aa). (ii) a refund for any overpayment of the (2) STATEWIDE CHANGES.—In determining (C) REAPPRAISAL FOR AND RECALCULATION the annual adjustment to the cabin user fee cabin user fee; and OF BASE CABIN USER FEE.—Periodically, but for an authorization located in a county in (B) a supplemental billing for any addi- not less often than once every 10 years, the which agricultural land prices are influenced tional amount of the cabin user fee that is Secretary shall recalculate the base cabin by the factors described in section 6(b)(3), due. user fee (including conducting any re- the Secretary shall use average statewide SEC. 10. RIGHT OF SECOND APPRAISAL. appraisal required to recalculate the base changes in the State in which the lot is lo- (a) RIGHT OF SECOND APPRAISAL.—On re- cabin user fee). cated. ceipt of notice from the Secretary of the de- SEC. 7. CABIN USER FEES. (c) NEW INDEX.— termination of a new base cabin user fee, the (a) IN GENERAL.—The Secretary shall es- (1) IN GENERAL.—Not later than 10 years cabin owner— tablish the cabin user fee as the amount that after the date of enactment of this Act, the (1) not later than 60 days after the date on is equal to 5 percent of the value of the lot, Secretary may select and use an index other which the notice is received, shall notify the as determined in accordance with section 6, than the index described in subsection (b)(2) Secretary of the intent of the cabin owner to reflecting an adjustment to the market rate to adjust a cabin user fee if the Secretary de- obtain a second appraisal; and of return based solely on— termines that a different index better re- (2) may obtain, within 1 year following the (1) the limited term of the authorization; flects change in the value of a lot over time. date of receipt of the notice under this sub- (2) the absence of significant property (2) SELECTION PROCESS.—Before selecting a section, at the expense of the cabin owner, a rights normally attached to fee simple own- new index, the Secretary shall— second appraisal of the typical lot on which ership; and (A) solicit and consider comments from the the initial appraisal was conducted. (3) the public right of access to, and use of, public; and (b) CONDUCT OF SECOND APPRAISAL.—In any open portion of the lot on which the (B) not later than 60 days before the date conducting a second appraisal, the appraiser cabin or other enclosed improvements are on which the Secretary makes a final index selected by the cabin owner shall— not located. selection, submit any proposed selection of a (1) consider all relevant factors in accord- (b) FEE FOR CARETAKER RESIDENCES.—The new index to— ance with this Act (including guidelines de- base cabin user fee for a lot on which a care- (i) the Committee on Resources of the veloped under section 6(a)(2)); and taker residence is located shall not be great- House of Representatives; and (2) notify the Secretary of any material er than the base cabin user fee charged for (ii) the Committee on Energy and Natural differences of fact or opinion between the the authorized use of a similar typical lot in Resources of the Senate. initial appraisal conducted by the agency the tract. (d) LIMITATION.—In calculating an annual and the second appraisal. (c) ANNUAL CABIN USER FEE IN THE EVENT adjustment to the base cabin user fee, the (c) REQUEST FOR RECONSIDERATION OF BASE OF DETERMINATION NOT TO REISSUE AUTHOR- Secretary shall— CABIN USER FEE.—A cabin owner shall sub- IZATION.—If the Secretary determines that (1) limit any annual fee adjustment to an mit to the Secretary any request for recon- an authorization should not be reissued at amount that is not more than 5 percent per sideration of the base cabin user fee, based the end of a term, the Secretary shall— year when the change in agricultural land on the results of the second appraisal, not (1) establish as the new base cabin user fee values exceeds 5 percent in any 1 year; and later than 60 days after the receipt of the re- for the remaining term of the authorization (2) apply the amount of any adjustment port for a second appraisal. the amount charged as the cabin user fee in that exceeds 5 percent to the annual fee pay- (d) RECONSIDERATION OF BASE CABIN USER the year that was 10 years before the year in ment for the next year in which the change FEE.—On receipt of a request from the cabin which the authorization expires; and in the index factor is less than 5 percent. owner under subsection (c) for reconsider- (2) calculate the current cabin user fee for SEC. 9. PAYMENT OF CABIN USER FEES. ation of a base cabin user fee, not later than each of the remaining 9 years of the term of (a) DUE DATE FOR PAYMENT OF FEES.—A 60 days after the date of receipt of the re- the authorization by multiplying— cabin user fee shall be paid or prepaid annu- quest, the Secretary shall—

VerDate 29-OCT-99 04:18 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00047 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.062 pfrm13 PsN: S17PT1 S14700 CONGRESSIONAL RECORD — SENATE November 17, 1999 (1) review the initial appraisal of the agen- (C) a copy of this Act; and cabin owner the right to an administrative cy; (D) a copy of appraisal guidelines devel- appeal of the determination of a new base (2) review the results and commentary oped in accordance with section 6(a)(2). cabin user fee. from the second appraisal; (2) HEARING OR FIELD INSPECTION.—On (b) JUDICIAL REVIEW.—A cabin owner that (3) determine a new base cabin user fee in agreement of both parties, the arbitration is adversely affected by a final decision of an amount that is— may be conducted without a hearing or a the Secretary under this Act may commence (A) equal to the fee determined by the ini- field inspection. a civil action in United States district court. tial or the second appraisal; or (3) SCHEDULE FOR DECISION.— SEC. 13. CONSISTENCY WITH OTHER LAW AND (B) within the range of values, if any, be- (A) IN GENERAL.—Except as provided in RIGHTS. tween the initial and second appraisals; and subparagraph (B), not later than 60 days (a) CONSISTENCY WITH RIGHTS OF THE (4) notify the cabin owner of the amount of after the receipt of all materials described in UNITED STATES.—Nothing in this Act limits the new base cabin fee. paragraph (1), the arbitration panel shall or restricts any right, title, or interest of the United States in or to any land or resource. SEC. 11. RIGHT OF ARBITRATION. prepare and forward to the Secretary a writ- ten advisory decision on the appropriate (b) SPECIAL RULE FOR ALASKA.—In deter- (a) IN GENERAL.— mining a cabin user fee in the State of Alas- (1) REQUEST FOR ARBITRATION.—Not later amount of the base cabin user fee. (B) EXTENSION.—If the arbitration panel or ka, the Secretary shall not establish or im- than 30 days after the receipt of notice of a pose a cabin fee or a condition affecting a new base cabin fee under section 10(d)(4), the the parties to the arbitration determine that a hearing or field inspection is necessary, the cabin fee that is inconsistent with the re- tract association may request arbitration if quirements under section 1303(d) of the Alas- a cabin owner in the tract and the Secretary date for submission of the advisory decision under subparagraph (A) shall be extended ka National Interest Lands Conservation Act are unable to reach agreement on the (16 U.S.C. 3193(d)). amount of the base cabin user fee determined for— (i) not more than 30 days; or SEC. 14. REGULATIONS. in accordance with section 10. Not later than 1 year after the date of en- (2) IDENTIFICATION OF THIRD-PARTY (ii) in the case of difficult or hazardous road or weather conditions, such an addi- actment of this Act, the Secretary shall pro- NEUTRALS.—If arbitration is requested under mulgate regulations to implement this Act. paragraph (1), the Secretary shall promptly tional period of time as is necessary to com- SEC. 15. TRANSITION PROVISIONS. request the Center to develop a list of the plete the inspection. (a) IN GENERAL.—On enactment of this Act, names of not fewer than 20 appraisers and 10 (4) DETERMINATION OF RECOMMENDED BASE CABIN USER FEE.—The base cabin user fee rec- the Secretary shall— attorneys who possess appropriate training (1) suspend appraisal activities related to and experience in valuations of land and in- ommended by the arbitration panel shall fall within the range of values, if any, between existing authorizations until new rules, poli- terest in land to serve as qualified third- cies, and procedures are promulgated in ac- party neutrals. the initial and second appraisals submitted to the arbitration panel by the parties. cordance with this Act; and (b) ARBITRATION.—Not later than 30 days (2) temporarily charge an annual cabin after the receipt of a request from the tract (e) ADOPTION OF RECOMMENDED BASE CABIN USER FEE.— user fee for each lot that is— association for arbitration, the Secretary (A) an amount equal to the cabin user fee shall— (1) IN GENERAL.—Not later than 45 days after the receipt of the recommendation by for the lot that was in effect on September (1) notify the Center of the request; and 30, 1995, adjusted by application of the Im- (2) request the Center to provide to the the arbitration panel, the Secretary shall make a determination to adopt or reject the plicit Price Deflator–Gross National Product Secretary and the tract association, within Index, if no appraisal of the lot on which the 15 days— recommended base cabin user fee. (2) NOTICE TO TRACT ASSOCIATION.—Not cabin is located was completed after that (A) instructions related to arbitration pro- date and before the date of enactment of this cedures; and later than 15 days after making the deter- mination under paragraph (1), the Secretary Act; (B) the list of qualified third-party (B) an amount that is not more than 100 neutrals described in subsection (a)(2). shall provide notice of the determination to the tract association. percent greater than the cabin user fee in ef- (c) ARBITRATION PANEL.— (f) NO ADMISSION OF FACT OR RECOMMENDA- fect on September 30, 1995, adjusted by appli- (1) IN GENERAL.—Not later than 15 days TION.—Neither the fact that arbitration in cation of the Implicit Price Deflator–Gross after the receipt of the list described in sub- accordance with this section has occurred, National Product Index prior to reappraisal, section (a)(2), the Secretary and the tract as- nor the recommendation of the arbitration if an appraisal conducted after that date but sociation may each recommend the names of panel, shall be admissible in any court or ad- before the date of enactment of this Act re- 2 appraisers and 1 attorney from the list for ministrative proceeding. sulted in the increase; or consideration in the selection of an arbitra- (g) COSTS OF ARBITRATION.— (C) the cabin user fee in effect on the date tion panel by the Center. (1) FEES.— of enactment of this Act, if an appraisal con- (2) AVAILABILITY OF LIST.—The Secretary (A) IN GENERAL.—In addition to amounts ducted after September 30, 1995, including ad- and the tract association shall disclose to collected under paragraph (2), the Center justments resulting from application of the each other the names of third-party neutrals may charge a reasonable fee to each party to Implicit Price Deflator–Gross National Prod- recommended under paragraph (1). an arbitration under this Act for the provi- uct Index before the date of enactment of (3) OPTION TO ELIMINATE RECOMMENDED sion of arbitration services. this Act, resulted a base cabin user fee that NEUTRALS.—The Secretary and the tract as- (B) TRANSFER.—Fees collected under this is not greater than the fee in effect before sociation may each peremptorily eliminate paragraph shall be transferred to the Sec- the appraisal. from consideration for the arbitration panel retary for use in the administration of the (b) CONDUCT OF APPRAISALS UNDER NEW 1 third-party neutral recommended under program without further Act of appropria- LAW.—On publication of new rules, policies, paragraph (1). tion. and procedures under this Act, the Secretary (4) SELECTION BY CENTER.—From the third- (2) COST SHARING.—The agency and the shall carry out any appraisals of lots and de- party neutrals recommended to the Center tract association shall each pay 50 percent of terminations of fees that were not completed under paragraph (1) that are not eliminated the costs incurred by the Center in estab- between September 30, 1995, and the date of from consideration under paragraph (3), the lishing and administering an arbitration in enactment of this Act. Center shall select and retain an arbitration accordance with this section, unless the arbi- (c) REQUEST FOR NEW APPRAISAL UNDER panel consisting of 2 appraisers and 1 attor- tration panel recommends that either the NEW LAW.—Not later than 2 years after the ney. agency or the tract association bear the en- promulgation of final regulations and poli- (5) NOTIFICATION OF ESTABLISHMENT.—Not tire cost of establishing and administering cies and the development of appraisal guide- later than 5 days after the selection of mem- the arbitration. lines in accordance with section 6(a)(2), a bers of the arbitration panel, the Center (h) FUNDING.— cabin owner whose base cabin user fee was shall notify the Secretary and the tract asso- (1) AUTHORIZATION OF APPROPRIATIONS FOR adjusted subject to an appraisal completed ciation of the establishment of the arbitra- INITIAL COSTS.—There is authorized to be ap- after September 30, 1995, but before the date tion panel. propriated to the agency for the initial costs of enactment of this Act, may request that (d) ARBITRATION PROCEDURE.— of establishing and administering the pro- the Secretary conduct a new appraisal and (1) SUBMISSION OF INFORMATION.—Not later gram not to exceed $15,000. determine a new fee in accordance with this than 30 days after notification by the Center (2) ARBITRATION FEES.—Any amounts ex- Act. of the establishment of the arbitration panel ceeding the amount authorized by paragraph (d) CONDUCT OF NEW APPRAISAL.—On re- under subsection (c)(3), each party shall sub- (1) that are required for the administration ceiving a request under subsection (c), the mit to the arbitration panel— of the program shall be derived from arbitra- Secretary shall conduct, and bear all costs (A) the appraisal report of each party, in- tion fees charged under subsection (g)(1). incurred in conducting, a new appraisal and cluding comments, if any, of material dif- SEC. 12. RIGHT OF APPEAL AND JUDICIAL RE- fee determination in accordance with this ferences of fact or opinion related to the ini- VIEW. Act. tial appraisal or the second appraisal; (a) RIGHTS OF APPEAL.—Notwithstanding (e) ASSUMPTION OF NEW BASE CABIN USER (B) a copy of the authorization associated any action of a cabin owner to exercise FEE.—In the absence of a request under sub- with any typical lot that was subject to ap- rights in accordance with section 10 or 11, section (c) for a new appraisal and fee deter- praisal; the Secretary shall by regulation grant the mination from a cabin owner whose cabin

VerDate 29-OCT-99 04:18 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00048 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.062 pfrm13 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14701 user fee was determined as a result of an ap- quire proper documentation. Or a gov- United States, has since been found to praisal conducted after September 30, 1995, ernment may systematically strip refu- have a credible fear of persecution, and but before the date of enactment of this Act, gees of their documentation, as we saw is now awaiting an asylum hearing. the Secretary may consider the base cabin Serb soldiers do in Kosovo earlier this One can only wonder how many refu- user fee resulting from the appraisal con- ducted between September 30, 1995, and the year. gees in Dem’s position never receive date of enactment of this Act to be the base Second, expedited removal places an such a second chance. cabin user fee that complies with the transi- undue burden on refugees, and places While Dem was arriving in Los Ange- tion provisions of this Act. too much authority in the hands of les this January, a Tamil from Sri (f) TRANSITIONAL CABIN USER FEE OBLIGA- low-level INS officers. Refugees typi- Lanka named Arumugam Thevakumar TION.— cally arrive at our borders ragged and arrived at JFK Airport in New York (1) IN GENERAL.—In determining the liabil- tired from their ordeals, and often with seeking asylum. Mr. Thevakumar had ity of the cabin owner for payment of fees for little or no knowledge of English. Our escaped from Sri Lanka and its bloody the period of time between the date of enact- policy forces them to undergo a sec- civil war, but only after being per- ment of this Act and the determination of a base cabin user fee in accordance with this ondary inspection interview with a secuted by the army because he is a Act, the Secretary shall— low-level INS officer who can deport Tamil. When he had his secondary in- (A) require the cabin owner to remit any them on the spot, subject only to a su- spection interview, he told the inter- balance owed for any underpayment of an pervisor’s approval. By law, anyone preter that he was a refugee and sought annual cabin user fee; or who indicates a fear of persecution or asylum. The translator laughed and (B) if an overpayment of a cabin user fee requests asylum during this interview said that he was unable to translate has occurred, credit the cabin owner, or an is to be referred for an interview with Mr. Thevakumar’s request into heir or assign of the cabin owner, toward fu- an asylum officer. But no safeguards English. In addition to battling a lan- ture cabin user fee obligations. exist to guarantee that this happens, guage barrier and an uncooperative (2) BILLING.—The agency shall bill a cabin owner for amounts determined to be owed and the secondary inspection inter- translator, Mr. Thevakumar’s ability under paragraph (1)(A) in approximately views take place behind closed doors to convince the INS of his sincerity equal increments over 3 years. with no witnesses. Indeed, this inter- was further handicapped by the fact view often becomes unduly confronta- that he was handcuffed and shackled By Mr. LEAHY (for himself, Mr. tion and intimidating. As the Lawyers for significant portions of the inter- BROWNBACK, Mr. FEINGOLD, Mr. Committee for Human Rights has docu- view. KENNEDY, Mr. KERRY, Mr. JEF- mented, refugees are detained for as Following his interview, Mr. FORDS, and Mr. LAUTENBERG): long as 36 hours, are deprived of food Thevakumar was briefly detained and S. 1940. A bill to amend the Immigra- and water, and are often shackled. If was allowed to telephone a cousin, who tion and Nationality Act to reaffirm they are lucky, they will be provided arranged for a lawyer. The lawyer con- the United States’ historic commit- with an interpreter who speaks their tacted the INS to clarify that Mr. ment to protecting refugees who are language. If they are unlucky, they Thevakumar wanted to apply for asy- fleeing persecution or torture; to the will receive no interpreter at all, or an lum. But the INS sent Mr. Thevakumar Committee on the Judiciary. interpreter who works for the airline back to Istanbul, where his flight to THE REFUGEE PROTECTION ACT owned by the government that they New York had originated, without af- Mr. LEAHY. Mr. President, today claim is persecuting them. Such a sys- fording him even the opportunity to Senators BROWNBACK, FEINGOLD, KEN- tem is a betrayal of our ideals, and is show that he was deserving of asylum. NEDY, KERRY, JEFFORDS, and I are in- already producing a human cost. Indeed, the INS faulted him for not troducing the Refugee Protection Act Indeed, only a few years into this making his intention to apply for asy- of 1999, a bill to limit and reform the new regime, there are extraordinary lum clear during his secondary inspec- expedited removal system currently troubling stories of bona fide refugees tion interview. operating in our ports of entry. who were turned away unjustly at our Mr. Thevakumar’s ordeal did not end In 1996, I introduced an amendment borders. I will talk about two such ref- there. When he landed in Turkey, he that would have only authorized the ugees today. was jailed for four days by immigration use of expedited removal at times of ‘‘Dem’’ (a pseudonym) was a 21-year- officials, who beat and interrogated immigration emergencies. The bill I in- old ethnic Albanian student in Kosovo. him before handing him over to regular troduce today—with the cosponsorship In October 1998, Serbian police seized police. When he was finally released by of two Republican and three Demo- him and tortured him for 10 days, ac- the police, he was referred to a United cratic Senators—is modeled on that cusing him of terrorism and threat- Nations office in Ankara, halfway proposal. That amendment passed the ening to kill his family. Immediately across the country from Istanbul. After Senate with bipartisan support, but after this experience, Dem fled Kosovo, 15 days of travel wearing clothes that was omitted from the bill that was re- without travel documents. He traveled were completely unsuitable for the ported out of a partisan, closed con- through Albania to Italy, where he pur- Turkish winter, he finally arrived at ference. As a result, expedited removal chased a Slovenian passport. In Janu- the U.N. office and requested refugee took effect on April 1, 1997. America’s ary of this year, he flew via Mexico status and asked not to be sent back to historic reputation as a beacon for ref- City to California, hoping to find ref- Sri Lanka. He is currently living in a ugees has suffered as a consequence. uge in the United States. Red Cross facility in Turkey. Expedited removal allows INS inspec- Dem’s hopes were not realized. The These stories—just two of the many tions officers summarily to remove INS referred him for a secondary in- stories demonstrating the human cost aliens who arrive in the United States spection interview and provided for a of expedited removal—go a long way without travel documents, or even with Serbian translator to participate by toward showing the inhumanity of the facially valid travel documents that telephone. Since Dem could speak only new immigration regime that Congress the officers merely suspect are fraudu- Albanian, the interpreter was useless. imposed in 1996. But refugees are not lent, unless the aliens utter the magic Instead of finding an interpreter who the only people affected by expedited words ‘‘political asylum’’ upon their could speak Albanian, the INS officers removal. Human rights groups have first meeting with American immigra- simply closed Dem’s case, handcuffed also documented numerous cases where tion authorities. This policy is fun- his hands behind his back and put him people traveling to the United States damentally unwise and unfair, both in on a plane back to Mexico City. In on business, with proper travel docu- theory and in practice. other words, Dem—a victim of an eth- ments, have been removed based on the First, this policy ignores the fact nic conflict that was already front page so-called ‘‘sixth sense’’ of a low-level that many deserving asylum applicants news in America’s newspapers—was re- INS officer who suspected that their are forced to travel without papers. moved from the United States without facially valid documents were fraudu- For example, victims of repressive gov- ever being asked in a language he could lent. In other words, the damage done ernments often find themselves forced understand whether he was afraid to by expedited removal also threatens to flee their homelands at a moment’s return to Kosovo. Luckily, Dem suc- the increasingly international Amer- notice, without time or means to ac- ceeded in a second attempt to enter the ican economy—if businesspeople from

VerDate 29-OCT-99 04:18 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00049 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.062 pfrm13 PsN: S17PT1 S14702 CONGRESSIONAL RECORD — SENATE November 17, 1999 around the world are treated dis- cution, the applicant will now have a mit an application without the benefit respectfully at our ports of entry, they right to a prompt review by an immi- of counsel and without an under- are likely to take their business else- gration judge. The applicant will have standing of the legal requirements of a where. the right to appear at that review hear- successful asylum claim. Such people But perhaps the most distressing ing and to be represented, at the appli- deserve a second chance to dem- part of expedited removal is that there cant’s expense. In addition to providing onstrate that they deserve to receive is no way for us to know how many de- procedural guarantees, the bill also re- asylum. serving refugees have been excluded. defines ‘‘credible fear of persecution’’ Because secondary inspection inter- as a claim for asylum that is not clear- In conclusion, I point out that even views are conducted in secret, we typi- ly fraudulent and is related to the cri- in 1996, a year in which immigration cally only learn about mistakes when teria for granting asylum. In combina- was as unpopular in this Capitol as I refugees manage to make it back to tion, these changes will make it easier can remember, this body agreed that the U.S. a second time, like Dem, or for aliens requesting asylum in the expedited removal was inappropriate when they are deported to a third United States to receive an appropriate for a country of our ideals and our his- country they passed through on their asylum hearing before an immigrant toric commitment to human rights. way to the U.S., like Mr. Thevakumar. judge. And that agreement cut across party This uncertainty should lead us to be Fourth, the bill clarifies that the At- lines, as many of my Republican col- especially wary of continuing this torney General is not obligated to de- leagues voted to implement expedited failed experiment. tain asylum applicants while their removal only in times of immigration As I said, my bill would limit the use claims are pending. Asylum seekers are emergencies. I urge them, as well as of expedited removal to times of immi- not criminals and they do not deserve my fellow Democrats, to support this gration emergencies, defined as the ar- to be imprisoned or detained against legislation and to work for its passage rival or imminent arrival of aliens that their will. There may be cases where before the end of the 106th Congress. would substantially exceed the INS’ detention is appropriate, and this bill Mr. BROWNBACK. Mr. President, I ability to control our borders. The bill allows for such cases, but I believe that join my distinguished colleagues from gives the Attorney General the discre- that power should only be used in very Vermont, Senator LEAHY and Senator tion to declare an emergency migra- rare cases. After all, these applicants JEFFORDS, among others, to introduce tion situation, and the declaration is have by definition demonstrated a good for 90 days. During those 90 days, credible fear of persecution. Moreover, this bill entitled The Refugee Protec- the INS would be authorized to use ex- detaining asylum applicants imposes a tion Act of 1999, which restores fairness pedited removal. The Attorney General significant burden on the taxpayers, to our treatment of refugees who arrive is given the power to extend the dec- who of course must foot the bill for the at our shores seeking freedom from laration for further periods of 90 days, detention. This bill also gives the At- persecution and oppression. This bill in consultation with the House and torney General the ability to release should dramatically reduce incidences Senate Judiciary Committees. s an asylum applicant from detention where refugees are wrongly returned to This framework allows the govern- pending a final determination of cred- their countries to face imprisonment, ment to take extraordinary steps when ible fear of persecution. torture, and even death. a true immigration emergency threat- Finally, this Refugee Protection Act It was about 400 years when the ref- ens our ability to patrol our borders. also addresses a few other problems ugee Pilgrims arrived in this new land At the same time, it recognizes that that have arisen under the restrictive seeking religious liberty. Defined by expedited removal is an extraordinary immigration laws Congress passed in such events since the earliest days of 1996. First, it gives aliens the oppor- step, and is not an appropriate measure the Republic, America has provided tunity to demonstrate good cause for under ordinary circumstances. asylum to those fleeing tyranny and filing for asylum after the one-year This bill also provides safeguards seeking liberty. George Washington time limit for claims has expired. By that will ensure that refugees are as- urged his fellow citizens ‘‘to render sured of some due process rights, even definition, worthy asylum applicants this country more and more a safe and during immigration emergencies. have arrived in the United States fol- propitious asylum for the unfortunates First, aliens would be given the right lowing traumatic experiences abroad. of other countries.’’ In his 1801 First to have an immigration judge review a They often must spend their first Annual Message, President Thomas removal order, and would have the months here learning the language and right both to speak before the immi- adjusting to a culture that in many Jefferson asked, ‘‘Shall oppressed hu- gration judge on their own behalf and cases is extraordinarily different from manity find no asylum on this globe?’’ to be represented at the hearing at the one they know. Therefore, al- In 1996, Congress changed the proce- their own expense. To make these though I can understand the desire to dures by which arriving asylum seekers rights meaningful, immigration offi- have asylum seekers submit timely ap- ask for protection in the United States, cers would be required to inform aliens plications, we must apply the one-year which our legislation corrects. Pre- of their rights before they are removed rule with some discretion and common viously, arriving asylum seekers pre- or withdraw their application to enter sense. Indeed, when the Senate passed sented their claims directly to an im- the country. This provision takes away the 1996 immigration law, it contained migration judge at an evidentiary from low-level INS officers the unilat- a broad ‘‘good cause’’ exception that hearing. The applicant could present eral power to remove an alien from the did not survive to become part of the witnesses and documentation to sup- United States. final legislation. The Senate should port their claim. Decisions by the im- Second, expedited removal will not take up this issue again; we were right migration judge were subject to admin- apply to aliens who have fled from a in 1996, and the need is still there istrative and judicial review. country that engages in serious human today. rights violations. The Attorney Gen- In a similar vein, the bill allows asy- The new 1996 law did away with these eral, in consultation with the Assistant lum applicants whose claims have been fundamental due process protections, Secretary of State for Democracy, rejected to submit a second application and instead, granted lower level INS of- Human Rights, and Labor, will develop where they can show good cause. No ficers the power to make life and death and maintain a list of such countries. one wants to allow aliens to submit re- decisions that previously were en- This will help ensure that even during peated applications and drain the re- trusted to professional immigration an immigration emergency, we will sources of our INS officers and immi- judges. This new, unfortunate system provide added protection for many of gration courts. But there are excep- of ‘‘expedited removal’’ presently al- our most vulnerable refugees. tional cases where a second application lows for the immediate deportation of Third, this bill reforms the proce- is justified, beyond the ‘‘changed cir- individuals who arrive without valid dures used to determine whether an ap- cumstances’’ exception that exists travel documents, such as a passport plicant who seeks asylum has a cred- under current law. For example, ex- and visa. It can even be used against an ible fear of persecution. If an asylum traordinarily worthy asylum appli- individual who has a facially valid visa officer determines that an applicant cants, unfamiliar with the United that INS inspectors suspect was ob- does not have a credible fear of perse- States and its legal system, might sub- tained under false pretenses. In short,

VerDate 29-OCT-99 04:51 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00050 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.074 pfrm12 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14703 the process is so expedited and sum- people fleeing communism, including rived on our shores from all over the mary that it has resulted in the im- to those involved in ‘underground’ de- world. Immigrants have enriched our proper deportation of refugees fleeing mocracy movements in Hungary, Cuba, nation economically, culturally, and in persecution and torture. Simply put, and Southeast Asia. Yet it was not so many other invaluable ways. I don’t our legislation restores the pre-1996 due until 1980 that Congress enacted a com- think anyone can dispute that, of all process procedures, including a judicial prehensive asylum system using the the countries in the world, our nation review. criteria of the 1951 Convention Relat- has the deepest, richest commitment Last year, Congress addressed the ing to the Status of Refugees. The Con- to welcoming all people who want to problems of religious persecution vention defines a refugee as someone make a new home and a new life. which continues to be a serious prob- with a ‘‘well-founded fear of being per- At the same time, Mr. President, our lem worldwide. Enactment of the Inter- secuted for reasons of race, religion, nation also has a deep tradition of wel- national Religious Freedom Act was nationality, membership of a par- coming those who are fleeing oppres- the first time in the history of democ- ticular social group or political opin- sion in their native land. From the pil- racy that any country had adopted ion.’’ Under the procedures of this Ref- grims who set foot in present day Mas- comprehensive, national legislation on ugee Act of 1980, requests for asylum sachusetts and Virginia, to the religious liberty. That legislation en- were decided by an immigration judge, Kosovars who fled brutality in their sures that religious liberty will be an thus providing a fundamental due proc- homeland earlier this year, America important factor in our nation’s for- ess protection. Notably, this judicial has been a safe refuge for those fleeing eign policy considerations. In the May review was stripped in the 1996 legisla- persecution. Our nation’s first presi- 17, 1999 final report to the Secretary of tion, and is a flaw which our legisla- dent, George Washington, said: ‘‘Amer- State and to President of the United tion seeks to correct. ica is open to receive not only the opu- States, the Advisory Committee on Re- Fair procedures are critically impor- lent and respectable stranger, but the ligious Freedom Abroad said: tant in making life or death decisions, oppressed and persecuted of all nations Putting an end to such (religious) persecu- as asylum cases can be. At a June 24, and religions.’’ George Washington said tion cannot be accomplished without pro- 1999 hearing of the Senate Sub- those words in 1783. One hundred and viding meaningful protection to the victims committee on International Operations one years later, France would present of religious persecution. We must upgrade and Human Rights, Ms. Lavinia Limon, our country with a gift, a statue called domestic procedures that identify and pro- Director of the Office of Refugee Reset- ‘‘Liberty Enlightening the World.’’ In tect refugees and asylum seekers fleeing reli- tlement at the Department of Health 1884, that title was a profound state- gious persecution. We must strengthen our and Human Services, noted: ment of our nation’s past, our present overseas refugee processing mechanisms to reach those in need of rescue. . . And, here Once released, torture victims often at- and hope for the future. ‘‘Liberty En- at home we must eliminate processes such as tempt to flee to countries such as the United lightening the World’’ later became ‘‘expedited removal’’ that can make victims States to become invisible and safe, and to known as the Statue of Liberty. The of those fleeing religious persecution rather survive. But they retain the impact of tor- Statue of Liberty has these words in- than providing access to protection. ture: they are not able to speak of their ex- scribed on her: periences for fear officials will not believe Consistent with this commitment to them or understand them or will regard .. . Give me your tired, your poor, protect international religious liberty, them as criminals. They often cannot ex- Your huddled masses yearning to breathe we must also ensure that persons flee- press themselves effectively in asylum inter- free, ing religious persecution are not views because they cannot speak The wretched refuse of your teeming shore. wrongly turned away at our shores be- articulately of their experiences and they Send these, the homeless, tempest-tost to cause of unfair procedures. This will be feel vulnerable to all officials. They have me, accomplished through this Act. learned to fear government and the police I lift my lamp beside the golden door! The Refugee Protection Act returns and they do not trust any government offi- Unfortunately, Mr. President, our fairness to the system by limiting ex- cials and authorities to help them. They current asylum and immigration laws have been weakened and disabled psycho- have nearly slammed the door shut on pedited removal procedures only to logically from the torture. Many times the emergency situations. An ‘‘emergency’’ victims of persecution, even those who victims must flee alone, enduring long peri- are sure to suffer if returned to their must be declared as such by the Attor- ods of separation from their families who ney General, and typically involves might otherwise provide emotional support. home countries. Current law originates with the passage in 1996 of the Illegal large numbers of immigrants arriving Today the need for proper asylum re- Immigration Reform and Immigrant en masse, so as to overwhelm the INS views is greater than ever. Worldwide, Responsibility Act. That law was an review system. In the event that ‘‘expe- religious intolerance and ethnic strife attempt to combat illegal immigra- dited removal’’ is employed, the Act re- turn religious leaders and ordinary tion. But in the process, Congress de- quires an immigration judge to review citizens into desperate asylum seekers. nied victims of persecution the protec- the summary deportation order. Also, According to Amnesty International, it permits claims for asylum to be filed government-sanctioned torture is prac- tion that our nation historically has beyond the one-year deadline created ticed in 125 countries. offered. The current system provides by the 1996 legislation, if there is good This legislation helps those fleeing for the immediate deportation of indi- cause for the delay or when consider- intolerable injustices in the name of viduals who arrive without travel docu- ation of the claims is clearly in the in- religious freedom and democracy. Plac- ments precisely in order. Now, Mr. terest of justice. ing the decision squarely in the hands President, it’s appropriate that we re- Our refugee asylum system reflects of an immigration judge does not im- quire these documents, but people who both the best and the worst policies, pose an unreasonable or impossible have fled torture and great brutality throughout our history as a nation. In burden on the government. Congress may not have proper documentation 1939, more than 900 Jews aboard the SS should enact the Refugee Protection because of the circumstances under St. Louis, who were within sight of Act because it restores the funda- which they fled their homelands. As a Miami, were rejected and forced to re- mental due process protections needed result, genuine victims of persecution turn to Europe where they were mur- to ensure that legitimate asylum seek- face the risk of being turned away at dered in concentration camps. Yet ers are not wrongly turned away. our borders and put on the next plane when World War II ended, the United Mr. FEINGOLD. Mr. President, I rise back to face imprisonment, torture or States led the effort to establish uni- today to join my distinguished col- death. The 1996 law effectively empow- versally recognized fundamental leagues, Senators LEAHY, BROWNBACK, ers low level INS officers to summarily rights. As a result of this advocacy, the and JEFFORDS, to introduce a bill that make the life and death decision as to General Assembly of the United Na- will reduce the likelihood that people whether to deport an asylum seeker. tions adopted the Universal Declara- fleeing genuine persecution in their Prior to 1996, those decisions were tion of Human Rights on December 10, homelands and seeking refuge in Amer- made by an immigration judge. We 1948 which recognized a right of asy- ica will be unfairly returned to their must return a judicial role to the re- lum. countries. view of asylum claims. Over the next 30 years the United Mr. President, as you know, our na- As my colleagues who were here in States provided refuge to numerous tion has been built by people who ar- 1995 and 1996 may recall, the 1996 law

VerDate 29-OCT-99 04:18 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00051 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.076 pfrm13 PsN: S17PT1 S14704 CONGRESSIONAL RECORD — SENATE November 17, 1999 was enacted in reaction to a flurry of of being kicked out of our country, fighters are there without fail, restor- concern that our border controls were without even obtaining a perfunctory ing order and saving lives. too lax. The debate on the 1996 law was hearing before an immigration judge. Given all that they do, it should sur- fueled by legitimate concern over The Refugee Protection Act of 1999 prise no one that, across the Nation, criminals who managed to enter the will return fairness and due process to fire departments struggle to find re- country and commit acts of terrorism the treatment of asylum seekers. For sources to help keep our communities or other crimes. In response, the INS non-emergency migration situations, safe. As the demands placed on fire de- began a sensible tightening of the asy- the bill would restore the pre-1996 law, partments have grown in volume and lum process. In 1994 and 1995, the INS when immigration judges were in- magnitude, the ability of local resi- ceased issuing work authorizations at volved in the decision to deport some- dents to support them has been put to the border. Instead, asylum seekers one who claimed asylum. The current a severe test. As a result, towns and had to wait until an adjudication of process will continue to apply in emer- cities throughout the country are their case before receiving work au- gency migration situations and would struggling mightily to provide the fire thorization. As a result, claims for asy- designate the Attorney General as the departments with the resources they lum dropped dramatically—those who official with authority to determine require. were seeking work but did not have a when an emergency migration situa- The FIRE Act will help localities legitimate fear of persecution were no tion exists. The bill also would provide meet that critical objective. It will longer claiming asylum. The INS re- that an emergency cannot exist for provide grants to help localities hire forms were effective. But the 1996 law more than 90 days, unless the Attorney more firefighters, train new and exist- went too far. In our rush to keep unde- General, after consultation with the ing personnel to handle the volume and sirable asylum applicants out, Con- Senate and House Judiciary Commit- intensity of today’s tragedies, and pur- gress created a system where those tees, determines that the emergency chase badly needed equipment. This legislation will also provide with bona fide asylum claims face the situation continues to exist. great risk of being immediately de- Mr. President, this is a sensible bill critical resources to communities to fund fire prevention and education pro- ported to face the wrath of oppressive that allows us to scrutinize those who grams so that they can anticipate dis- home governments without a real come to our borders, but honors our asters and respond appropriately. Such chance to make their case. best traditions and returns fairness and programs are critical means of pre- Because an INS officer has the au- humanity to our treatment of those venting tragedies from occurring in the thority to deport refugees imme- who are fleeing persecution. I urge my first place. Eight out of ten fire deaths diately, with no record keeping re- colleagues to join me and Senators occur in a place where people feel the quirement, it has been difficult to de- LEAHY, BROWNBACK and JEFFORDS in safest—their homes. Tragically, our termine exactly how many genuine ref- fighting for basic human dignity, de- children and the elderly account for a ugees with a valid fear of persecution cency and justice. Let us lift the torch disproportionate number of these in their home countries have been of ‘‘Liberty Enlightening the World’’ deaths. Indeed, preschool children face turned away at our airports and bor- once again. Let us not reflexively turn a risk of death from fire that is more ders as a result of the 1996 law. Organi- away those whose very lives may de- than twice the risk for all age groups zations like the Lawyers Committee pend on a fair hearing as they seek ref- combined. While we can and should en- for Human Rights, however, have been uge in the United States. sure that the fire equipment and per- able to collect some data on the extent sonnel are available to respond to these of the problem. By Mr. DODD (for himself and tragedies, our best defense remains One of the most troubling stories is Mr. DEWINE): education and prevention. Yet, it is a the case of a 21-year-old Kosovar Alba- S. 1941. A bill to amend the Federal painful irony that when resources are nian known as ‘‘Dem.’’ In October 1998, Fire Prevention and Control Act of 1974 scarce, education and prevention ef- Serb police seized Dem at his home, to authorize the Director of the Fed- forts are often the first to be put on the beat him, and threatened to kill his eral Emergency Management Agency budgetary chopping block. The legisla- family. This abuse occurred over a pe- to provide assistance to fire depart- tion Senator DEWINE and I are intro- riod of ten days. When the Serb police ments and fire prevention organiza- ducing will help ensure that no locality finally released Dem, he fled Kosovo. tions for the purpose of protecting the is put in the painful position of choos- He eventually made his way to the public and firefighting personnel ing between prevention and responding United States in January of this year, against fire and fire-related hazards; to the Committee on Commerce, Science, to emergencies. landing in California via Mexico City. This legislation will enable our fire and Transportation. When he arrived, the INS arranged for departments to worry more about sav- a Serbian translator to assist by tele- FIREFIGHTER INVESTMENT AND RESPONSE ing lives and less about finding dollars. phone with its questioning of Dem. But ENHANCEMENT ACT It will enable communities to better Dem, a Kosovar Albanian, could not ∑ Mr. DODD. Mr. President, I rise prevent disasters, and better train fire- speak Serbian. After the translator today with my colleague and friend, fighters. spoke with Dem, the translator said Senator DEWINE of Ohio, to introduce I look forward to working with Sen- something to the INS officer. The INS legislation that would represent our ator DEWINE to successfully advance officer promptly handcuffed and nation’s first comprehensive commit- this legislation in the Senate. It is our fingerprinted Dem and then put him on ment to fire safety. The Firefighter In- shared hope that our colleagues will a plane back to Mexico City. vestment and Response Enhancement come to realize that this bill is one Fortunately, Dem was not returned Act (the FIRE bill), will, for the first whose time has come. Our Nation’s to Kosovo. Dem tried re-entering the time, provide volunteer and profes- firefighters deserve the support that United States and on this second at- sional firefighters with the resources this bill will provide, and I hope that tempt, he was allowed to apply for asy- they need to protect the people and we will give it to them before the end lum. But the facts supporting Dem’s property of their towns and cities. of this Congress.∑ asylum claim had not changed. We In communities throughout America, ∑ Mr. DEWINE. Mr. President, each must fix a system that produces such firefighters are almost always the first day, we entrust our lives and the safety arbitrary results where people’s lives, to respond to a call for help. They re- of our families, friends, and neighbors and American ideals, are at stake. spond to a fire alarm. They are on the to the capable hands of the brave men We don’t know exactly how many scene of traffic accidents and construc- and women in our local police and fire victims of real persecution have been tion accidents. Emergency medical departments. These individuals have immediately deported, and we obvi- technicians, who often belong to fire decided that they are willing to risk ously don’t know exactly what has departments, each day answer tens of their lives and safety out of a dedica- happened to each victim since enact- thousands of calls for medical assist- tion to their citizens and their commit- ment of the 1996 law. What we do know ance. And, when a natural or manmade ment to public service. is that an asylum seeker who is fleeing calamity strikes—from hurricanes to In Congress, we have recognized the torture, abuse or death faces the risk school shootings to bombings—fire- dangers inherent in police work by

VerDate 29-OCT-99 04:43 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00052 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.078 pfrm12 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14705 dedicating federal resources to help grant programs to provide State phar- to spend greater and greater portions local police departments. In fact, this macy assistance programs and medica- of their fixed incomes on prescription year, Fiscal Year (FY) 1999, the federal tion management programs; to the drugs which they need to live. Re- government spent $11 billion on law en- Committee on Health, Education, search and development of prescription forcement initiatives, such as the Labor, and Pensions. drugs have come a long way since COPS program, to help local law en- PHARMACEUTICAL AID FOR OLDER AMERICANS Medicare was originally enacted in forcement face the daily challenges of ACT 1965. Today, drugs are just as impor- their communities. In contrast, Mr. JEFFORDS. Mr. President, there tant as hospital visits, and in many though, the federal government spent has been considerable attention right- cases more important, and it just only $32 million on fire prevention and fully paid by our colleagues this year doesn’t make sense for Medicare to re- training. to the issue of providing prescription imburse hospitals for surgery but not We ask local firefighters to risk no drug coverage for our older American to provide coverage for the drugs that less than their lives every time they citizens. Estimates of the number of might prevent surgery. We need to respond to a fire alarm. We ask them older Americans without some form of modernize the Medicare program so to risk their lives responding to the ap- added coverage for prescription drugs that it does not go bankrupt in the proximately two million reports of fire vary between a low of 16.7 percent to 50 next 10 to 15 years, and at the same that they receive on an annual basis. percent. About 7.7 million Medicare time we must ensure that any Medi- We expect them to be willing to give beneficiaries with annual incomes care reform proposal we consider in- their lives in exchange for the lives of below 200 percent of poverty have no cludes a prescription drug benefit that our families, neighbors, and friends prescription drug coverage, despite helps all seniors. Mr. President, I have already intro- once every 71 seconds while responding some evidence indicating they are in duced two measures that will help our to the 400,000 residential fires—fires poorer health than those beneficiaries older citizens obtain the medicines which represent only about 22% of all with coverage. Those without added they need and at prices they can afford. fires reported. We count on them to coverage for prescription benefits spend approximately 50 percent of their My first bill, S. 1462, the ‘‘Personal Use protect our lives and the lives of our Prescription Drug Importation Act of total income on out-of-pocket health loved ones. 1999,’’ allows Americans of all ages to care costs, and there are anecdotal re- I believe the Federal Government avail themselves of the lower prices for ports that some elders forgo taking needs to show a greater commitment prescription medicines that are avail- their prescribed medicines in order to to the fire services. So, today, along able in Canada. A second measure, S. with my colleague and friend from Con- have food to eat. Finally, there are 1725, the ‘‘DrugGap Insurance for Sen- necticut, Senator DODD, I rise to intro- econometric studies that conclude that iors Act of 1999,’’ would provide for a duce the Firefighter Investment and a $1 increase in pharmaceutical ex- more comprehensive access to prescrip- Response Enhancement Act—or, FIRE penditure is associated with a $3.65 re- tion drugs by Medicare beneficiaries bill. This bill is very simple. It author- duction in hospital care expenditure. through reform and modernization of The problems posed by the lack of izes, over five years, $5 billion in grants the Medicare Supplemental, Medigap, to local fire departments. These grants prescription drug coverage for the program. Under this approach, all ex- can be used for just about any pur- neediest elders is compounded by the isting Medigap plans, and three new pose—training, equipment, hiring more well-documented effects of inappro- drug-only Medigap plans, would pro- firefighters, or education and preven- priate drug use among the elderly. In vide various levels of prescription drug tion programs. A new office, estab- 1995, the General Accounting Office benefits from which seniors could lished by this bill under the Federal (GAO) found that inappropriate drug choose. And our neediest elders’ needs Emergency Management Agency use among elders is acute and that el- would be supported through Federal (FEMA), would be responsible for dis- ders were particularly susceptible to contributions for the cost of their pre- tributing grants to local departments unintended, adverse drug events miums. based on a competitive process, involv- (ADEs), due in part to the natural During the 1st Session of the 106th ing needs assessment. To ensure that aging process and also to the likelihood Congress, no fewer than eight bills the funding is not spent solely on that they are taking multiple medica- have been introduced in the Senate to brand new state-of-the-art fire trucks, tions. One study of drug use by the el- provide a prescription drug benefit for it mandates that no more than 25% of derly, done by the Vermont Program Medicare beneficiaries—with most pro- the grant funding can be used to pur- for Quality in Health Care, found that posals estimated to cost between $5 bil- chase new fire vehicles. Finally, it re- it was not uncommon for elders to be lion and $40 billion per year. While I’m quires that at least 10% of the funds taking more than a dozen drugs at one hopeful that we will all work hard to are used for fire prevention programs. time. In fact, the Vermont study actu- include a prescription drug benefit for Our bill is supported by the National ally documented one case in which ‘‘a Medicare beneficiaries, I am also con- Safe Kids Campaign, the International single individual received prescriptions cerned that at the end of the Congress Association of Fire Fighters, Inter- for 71 different drugs in a single year, we may not be successful. That is why national Association of Fire Chiefs, na- several of which probably should not I am introducing a measure today, the tional Volunteer Fire Council, Inter- have been taken in combination.’’ ‘‘Pharmaceutical Aid to Older Ameri- national Association of Arson Inves- The GAO report also cited studies cans Act,’’ which will serve as a back- tigators, International Society of Fire showing that hospitalizations for elder- stop for our neediest elders. This pro- Service Instructors, and the National ly patients due to ADEs were six times gram builds on State pharmacy assist- Fire Protection Association. It is also greater than for the general popu- ance programs that are already in a companion measure to legislation in- lation, with an estimated annual cost place, and it encourages States to troduced in the House by Congressmen of $20 billion. However, a recent Jour- begin them where they don’t already PASCRELL and WELDON, where almost nal of the American Medical Associa- exist. 200 members of the House of Represent- tion article indicated that the level of Fifteen States are cutting new and atives have cosponsored it. I am proud ADEs could be reduced 66 percent, if a innovative paths for providing pre- to introduce this bill with my friend pharmacist participated in grand scription drug coverage for their need- from Connecticut and look forward to rounds. Clearly, more must be done to iest citizens. Most of these programs working to ensure that the federal gov- recognize the importance of medica- are for elder citizens (more than half ernment increases its commitment to tion management programs that en- also cover people with disabilities), and the men and women who make up our sure the quality of drug therapy, in- cover a wide variety of drugs—though local fire departments. We owe it to cluding patient evaluations, compli- some are limited to certain drugs or them.∑ ance assessments, and drug therapy re- conditions, some require cost sharing views. for prescription medicines, and some By Mr. JEFFORDS: We are all aware that prescription have annual enrollment fees or month- S. 1942. A bill to amend the Older drug costs continue to grow at an ly premiums. As of 1997, these pro- Americans Act of 1965 to establish alarming rate. Seniors are being forced grams aided over 700,000 people. The

VerDate 29-OCT-99 04:25 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00053 Fmt 0624 Sfmt 0634 E:\CR\FM\G17NO6.032 pfrm12 PsN: S17PT1 S14706 CONGRESSIONAL RECORD — SENATE November 17, 1999 Pharmaceutical Aid to Older Ameri- complished. However, if the latter ef- plans to assist with funds received under cans Act is designed to assist States in fort succeeds and the former doesn’t, subsection (a), including information on the their efforts to provide medicines and then the Pharmaceutical Assistance number of individuals served, eligibility cri- appropriate pharmacy counseling bene- for Older Americans Act will be in teria of individuals served, such as the age and income level of such individuals, drugs fits for their neediest elders. place to provide much-needed medi- covered by the program, and performance This Act will strengthen the Older cines for our neediest elders. I’m very measures used to evaluate the program. Americans Act by authorizing two dis- pleased Mr. President, that this meas- ‘‘(e) MINIMUM AMOUNT.—In awarding grants cretionary grant programs, subject to ure has received endorsement of two of under subsection (a), from the amount appro- appropriations, to fund State-based the key advocacy organizations associ- priated under subsection (l)(1) for each fiscal pharmaceutical assistance and medica- ated with the Older Americans Act, the year, the Assistant Secretary shall award, to tion management programs. Under this National Association of Area Agencies each eligible State, an amount that is not measure, States would develop models less than $250,000. on Aging and the National Association ‘‘(f) DURATION OF GRANT.—In awarding that work best for them and would of State Units on Aging. Note that grants under subsection (a), the Assistant have the latitude to design and imple- these guardians of the aged support Secretary shall award such grants for peri- ment innovative approaches for pro- this measure, like me, if and only if we ods of 2 years. viding benefits to their neediest elders. are unsuccessful in passing a prescrip- ‘‘(g) MATCHING REQUIREMENT.—The Assist- States awarded grant money would tion drug benefit for the Medicare pro- ant Secretary shall not award a grant to a State under subsection (a) unless that State agree to: match Federal funds with 30 gram. percent new or existing State funds or agrees that, with respect to the costs to be Mr. President, I ask unanimous con- incurred by the State in carrying out the in-kind contributions and not supplant sent that the bill and the text of these program for which the grant was awarded, current State expenditures with Fed- letters and this measure be printed in the State will make available (directly or eral funds. In-kind contributions the RECORD. through donations from public or private en- counting toward the match require- There being no objection, the mate- tities) non-Federal contributions in an ment could include assistance from rial was ordered to be printed in the amount that is not less than 30 percent of pharmaceutical companies and RECORD, as follows: Federal funds provided under the grant. organization- and community-based ‘‘(h) SUPPLEMENT NOT SUPPLANT.—Funds S. 1942 made available under this section shall be pharmacies, thereby making this ap- Be it enacted by the Senate and House of Rep- used to supplement, and not supplant, any proach a truly public-private partner- resentatives of the United States of America in other Federal, State, or local funds expended ship. Congress assembled, by a State to provide the services for pro- Each application for pharmaceutical SECTION 1. SHORT TITLE. grams described in this section. assistance funds must include a medi- This Act may be cited as the ‘‘Pharma- ‘‘(i) EVALUATIONS AND REPORT.— cation management program that en- ceutical Aid to Older Americans Act’’. ‘‘(1) PROGRAM EVALUATIONS.—Not later sures the quality of drug therapies SEC. 2. AMENDMENT TO OLDER AMERICANS ACT than 6 months after the end of the period for through patient evaluations, compli- OF 1965. which the grant is awarded under subsection Part B of title IV of the Older Americans (a), the State shall prepare an evaluation of ance assessments, and drug therapy re- Act of 1965 (42 U.S.C. 3034 et seq.) is amended the effectiveness of programs carried out views. Federal funds could be used to by adding at the end the following: with funds received under this section. Not provide drug coverage benefits only to ‘‘SEC. 429K. GRANTS FOR STATE PHARMACY AS- later than 6 months after the end of such pe- eligible beneficiaries, defined as Medi- SISTANCE PROGRAMS. riod, the State shall submit to the Assistant care beneficiaries with incomes up to ‘‘(a) PROGRAM AUTHORIZED.—The Assistant Secretary a report containing the results of 200 percent of poverty but without any Secretary may award grants to States to the evaluation, in such form and containing other coverage for prescription drug provide and administer State pharmacy as- such information as the Assistant Secretary benefits (States could expand eligi- sistance programs. may require. ‘‘(b) PREFERENCE.—In awarding grants ‘‘(2) REPORT TO CONGRESS.—Not later than bility with State resources). All senior under subsection (a), the Assistant Secretary 36 months after the date of enactment of this citizens could utilize the medication shall give preference to States that propose section, the Assistant Secretary shall pre- management portion of the program. to develop and implement State pharmacy pare and submit to the Speaker of the House This is not government control of assistance programs, or to provide assistance of Representatives and the President pro drug prices or price-fixing. The States to State pharmacy assistance programs in tempore of the Senate a report that de- can purchase pharmaceuticals from existence on the date of enactment of this scribes the effectiveness of the programs car- any willing seller, including pharma- section, that provide services for under- ried out with funds received under this sec- ceutical manufacturers, pharma- served populations or for populations resid- tion. ing in rural areas. ‘‘(j) SUNSET PROVISION.—This section shall ceutical distributors, wholesalers, ‘‘(c) USE OF FUNDS.—A State that receives not apply beginning on the date of enact- pharmacy benefit management firms a grant under subsection (a) shall use funds ment of legislation that provides comprehen- (PBMs), and chain or local pharmacies, made available through the grant to— sive health care coverage for prescription without any Federal requirement for ‘‘(1) develop and implement a State phar- drugs under the medicare program under wholesale prices or Medicaid-based re- macy assistance program, or to provide as- title XVIII of the Social Security Act (42 bates. In some instances, it’s likely sistance to a State pharmacy assistance pro- U.S.C. 1395 et seq.) for all medicare bene- that States may be able to negotiate gram in existence on the date of enactment ficiaries. ‘‘(k) DEFINITIONS.—In this section: better purchasing prices than any of of this section; and ‘‘(2) prepare and submit an evaluation to ‘‘(1) MEDICATION MANAGEMENT.—The term those set by some artificial, imposed the Assistant Secretary on the implementa- ‘medication management program’ means a ceiling. Finally, for those States that tion of, or provision of, or assistance to a program of services for older individuals, in- choose not to provide pharmaceutical program described in paragraph (1). cluding pharmacy counseling, medicine benefits, the Act authorizes grants to ‘‘(d) APPLICATION.—To be eligible to re- screening, or patient and health care pro- States to create or support stand-alone ceive a grant under subsection (a), a State vider education programs, that— Medication Management Programs shall submit to the Assistant Secretary an ‘‘(A) provides information and counseling that will involve the States in collabo- application at such time, in such manner, on the prescription drug purchases that are and containing such information as the As- currently the most economical, and safe and rative efforts with community, chain- sistant Secretary may require, including— effective; based, and institutional pharmacists to ‘‘(1) a description of a State pharmacy as- ‘‘(B) provides services to minimize unnec- implement medication management sistance program that such State plans to essary or inappropriate use of prescription programs. develop and implement, including informa- drugs; and As I mentioned earlier, Mr. Presi- tion on the anticipated number of individ- ‘‘(C) provides services to minimize adverse dent, I am fully committed to pro- uals to be served, eligibility criteria of indi- events due to unintended prescription drug- viding a prescription benefit for all our viduals to be served, such as the age and in- to-drug interactions. elders as we move forward on com- come level of such individuals, drugs to be ‘‘(2) STATE PHARMACY ASSISTANCE PRO- prehensive reform of the Medicare pro- covered by the program, and performance GRAMS.—The term ‘State pharmacy assist- measures to be used to evaluate the pro- ance program’ means a program that pro- gram. I am equally committed to see- gram; or vides coverage for prescription drugs and ing that the Older Americans Act is re- ‘‘(2) a description of a State pharmacy as- medication management programs for indi- authorized this Congress, and I will sistance program in existence on the date of viduals who— work diligently to get these jobs ac- enactment of this section that such State ‘‘(A) are not less than 65 years of age;

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00054 Fmt 0624 Sfmt 0634 E:\CR\FM\G17NO6.081 pfrm13 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14707

‘‘(B) are not eligible for medical assistance tiveness of the programs. Such report shall NATIONAL ASSOCIATION OF under title XIX of the Social Security Act in part be based on evaluations submitted STATE UNITS ON AGING, (42 U.S.C. 1396 et seq.); under subsection (b)(2). Washington, DC, November 10, 1999. ‘‘(C) are from families with incomes at or ‘‘(2) REPORT TO CONGRESS.—Not later than SEAN DONOHUE, below 200 percent of the poverty line; and 36 months after grants have been awarded U.S. Senate, Committee on Health, Education, ‘‘(D) have no coverage for prescription under subsection (a), the Assistant Secretary Labor, and Pensions, Washington, DC. drugs other than coverage provided by a shall prepare and submit to the Speaker of DEAR SEAN: Dan Quirk and I reviewed the State pharmacy assistance program. the House of Representatives and the Presi- draft you sent last week outlining Senator ‘‘(l) AUTHORIZATION OF APPROPRIATIONS.— dent pro tempore of the Senate a report that Jeffords’ proposed Pharmaceutical Aid to ‘‘(1) IN GENERAL.—There are authorized to describes the effectiveness of the programs Older Americans Act. Overall, the proposal be appropriated to carry out this section, carried out with funds received under this to provide grants to states to support the de- $25,000,000 for fiscal year 2001, and such sums section. velopment or expansion of pharmaceutical as may be necessary for each of fiscal years assistance programs and medication man- ‘‘(i) MEDICATION MANAGEMENT PROGRAMS.— 2002 through 2005. agement programs is a good one, and using In this section, the term ‘medication man- ‘‘(2) RESERVATION.—From the amount ap- the existing infrastructure of the Older propriated under paragraph (1), for each fis- agement program’ means a program of serv- Americans Act makes good sense. The aging cal year, the Assistant Secretary shall re- ices for older individuals, including phar- network is well suited to develop and admin- serve not less than 33.3 percent of such macy counseling, medicine screening, or pa- ister these types of programs. Your proposal amount to enable States to assist State tient and health care provider education pro- was well developed and thoughtful. pharmacy assistance programs in existence grams, that— Both programs would provide valuable as- on the date of enactment of this section. ‘‘(1) provides information and counseling sistance to older people who do not have any other prescription drug coverage available. ‘‘SEC. 429L. GRANTS FOR MEDICATION MANAGE- on the prescription drug purchases that are MENT PROGRAMS. currently the most economical, and safe and The requirement for a 30-percent state ‘‘(a) PROGRAM AUTHORIZED.—The Assistant effective; match seems high, but allowing contribu- Secretary may award grants to State agen- ‘‘(2) provides services to minimize unneces- tions to be ‘‘in-kind’’ will help states in that cies to assist such agencies or area agencies sary or inappropriate use of prescription regard. The income eligibility level of 200- on aging in providing and administering drugs; and percent of the federal poverty level may con- medication management programs. ‘‘(3) provides services to minimize adverse flict with the eligibility levels set by states ‘‘(b) USE OF FUNDS.—A State agency or events due to unintended prescription drug- in existing programs, though I haven’t done area agency on aging that receives funds to-drug interactions. an analysis of this yet. As with other pro- grams under the Older Americans Act, if through a grant awarded under subsection ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.— (a) shall use such funds to— state-funded programs already exist that There are authorized to be appropriated to provide the same services, and eligibility or ‘‘(1) develop and implement a medication carry out this section, $15,000,000 for fiscal management program, or to provide assist- cost sharing requirements are at odds with year 2001, and such sums as may be necessary ance to a medication management program the federal program, it requires states essen- for each of fiscal years 2002 through 2005.’’. in existence on the date of enactment of this tially to manage two different funding section; and streams for the same program or set of serv- ices. As always, giving states the flexibility ‘‘(2) prepare an evaluation on the imple- NATIONAL ASSOCIATION OF to blend federal funds with state funds to de- mentation of or provision of assistance to a AREA AGENCIES ON AGING, velop one program would decrease adminis- program described in paragraph (1), and, in Washington, DC, November 9, 1999. trative expenses for the states and allow the the case of an area agency on aging, submit Hon. JAMES JEFFORDS, money saved to be used for direct services. the evaluation to the appropriate State Chair, Committee on Health, Education, Labor NASUA continues to support overall re- agency. & Pensions, U.S. Senate, Washington, DC. form of the Medicare program that would ‘‘(c) APPLICATION.—To be eligible to receive DEAR SENATOR JEFFORDS: The National As- provide a comprehensive prescription drug a grant under subsection (a), a State agency sociation of Area Agencies on Aging (N4A) is benefit to beneficiaries. In the meantime, shall submit to the Assistant Secretary an pleased that you are introducing the Phar- state-funded programs that are being devel- application at such time, in such manner, oped and which would be supported under and containing such information as the As- maceutical Aid to Older Americans Act. We believe implementation of this Act could be this proposal continue to fill in the gaps for sistant Secretary may require. people with no coverage for prescription ‘‘(d) MINIMUM AMOUNT.—In awarding grants an ideal interim measure until a Medicare drugs. This proposal would strengthen the under subsection (a), from the amount appro- prescription drug benefit is enacted. existing infrastructure, and perhaps could priated under subsection (j) for each fiscal As you know, a fast-growing aging popu- serve to support a prescription program year, the Assistant Secretary shall award, to lation coupled with escalating pharma- under Medicare whenever it may be imple- each eligible State agency, an amount that ceutical costs makes the lack of prescription mented in the future. is not less than $50,000. drug coverage one of the most pressing prob- We hope this proposal will generate some ‘‘(e) DURATION OF GRANT.—In awarding lems facing our nation’s older Americans. further interest in reauthorizing the Older grants under subsection (a), the Assistant Americans Act as soon as possible, hopefully Secretary shall award such grants for a pe- The proposed State Pharmacy Assistance Program would allow states with existing before the end of the 106th Congress. We were riod of 2 years. very disappointed that reauthorization was ‘‘(f) MATCHING REQUIREMENT.—The Assist- benefit programs to expand services and pro- stalled over long-standing disagreements ant Secretary shall not award a grant to a vide a strong incentive for other states to implement a prescription drug program. over the Title V program. State agency under subsection (a) unless If there is anything NASUA can do to sup- that State agency agrees that, with respect Your legislative measure also goes far in port Senator Jeffords proposal and reauthor- to the costs to be incurred in carrying out addressing drug misuse, which is another es- ization, please let me know. programs for which the grant was awarded, calating and dangerous problem. The pro- Thanks for the opportunity to review the the State agency will make available (di- posed Medication Management Program Pharmaceutical Aid to Older Americans Act. rectly or through donations from public or would provide states with a financial base to Sincerely, private entities) non-Federal contributions implement a statewide information, edu- KATHLEEN C. KONKA, in an amount that is not less than 30 percent Policy Associate. of Federal funds provided under the grant. cation and counseling program that would significantly benefit the health and welfare ‘‘(g) SUPPLEMENT NOT SUPPLANT.—Funds By Mrs. MURRAY: made available under this section shall be of older adults. S. 1943. A bill to provide for an inex- used to supplement, and not supplant, any While N4A supports your proposal in con- pensive book distribution program; to other Federal, State, or local funds expended cept, we have some specific questions about the Committee on Health, Education, by a State agency or area agency on aging to the implementation of these programs and Labor, and Pensions. provide the services for programs described concerns about the roles and responsibilities FIRST BOOK DISTRIBUTION PROGRAM ACT in this section. of Area Agencies on Aging (AAAs) and Title ‘‘(h) REPORTS.— IV Native American grantees. We welcome ∑ Mrs. MURRAY. Mrs. MURRAY. Mr. ‘‘(1) REPORT TO ASSISTANT SECRETARY.—Not the opportunity to meet with you in the near President, today I introduce legislation later than 24 months after receipt of a grant future to address these concerns. on another topic I will be discussing under subsection (a), a State agency shall with Chairman JEFFORDS as we move Again, we applaud your efforts and look prepare and submit to the Assistant Sec- forward with reauthorization of the El- retary a report on the medication manage- forward to working with you next session as ment programs carried out by the State you further define the proposal and shepherd ementary and Secondary Education agency or area agencies on aging in the it through the legislative process. Act in the Senate Health, Education, State in such form and containing such in- Sincerely, Labor, and Pensions Committee. formation as the Assistant Secretary may JANICE JACKSON, I am introducing legislation today to require, including an analysis of the effec- Executive Director. fund an innovative book distribution

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00055 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.068 pfrm13 PsN: S17PT1 S14708 CONGRESSIONAL RECORD — SENATE November 17, 1999 program targeted at giving low-income that many schools struggle to over- pulsory license. Two-year transitional provi- students their own ‘‘first book.’’ come. sions were created to enable local network The ‘‘First Book’’ program is a non- My legislation will provide $2 million broadcasters to challenge satellite sub- profit private organization that has each year in national competitive chal- scribers’ receipt of satellite network service where the local network broadcaster had rea- been tremendously successful gath- lenge grants for innovation in the edu- son to believe that these subscribers received ering and distibuting new children’s cation of homeless children and youth. an adequate off-the-air signal from the books to needy children throughout We follow this same approach in edu- broadcaster. The transitional provisions the nation. Key to the success of ‘‘First cation technology and other areas, and were minimally effective and caused much Book’’ are local boards called ‘‘First challenge grants are remarkably suc- consumer confusion and anger regarding re- Book Local Advisory Boards.’’ Under cessful in sparking innovation and dis- ceipt of television network stations. The satellite license is slated to expire at my legislation, which would provide $5 semination of new methods of instruc- the end of this year, requiring Congress to million a year federal investment to tion. again consider the copyright licensing re- such boards, will help them leverage Homeless students face many chal- gime for satellite retransmissions of over- millions more in funds from other lenges, and schools face challenges in the-air television broadcast stations. In pass- sources. ‘‘First Book’’ has been suc- serving them. Creating a small chal- ing this legislation, the Conference Com- cessful because it is locally-driven, and lenge grant for homeless education is mittee was guided by several principles. reflects private industry initiative. one necessary step we can take to help First, the Conference Committee believes ‘‘First Book’’ provides new books, that promotion of competition in the mar- schools help these students succeed and ketplace for delivery of multichannel video which the program purchases from pub- achieve.∑ programming is an effective policy to reduce lishers at discount rates, to disadvan- costs to consumers. To that end, it is impor- taged children and families primarily By Mr. LOTT: tant that the satellite industry be afforded a through tutoring, mentoring, and fam- S. 1948. A bill to amend the provi- statutory scheme for licensing television ily literacy programs. sions of title 17, United States Code, broadcast programming similar to that of This bill builds on successful efforts and the Communications Act of 1934, the cable industry. At the same time, the underway in communities across the relating to copyright licensing and car- practical differences between the two indus- riage of broadcast signals by satellite; tries must be recognized and accounted for. country. It takes what has been a suc- Second, the Conference Committee re- cessful but very targeted program, and to the Committee on the Judiciary. asserts the importance of protecting and fos- will increase its reach and effect into INTELLECTUAL PROPERTY AND tering the system of television networks as many more American communities. COMMUNICATIONS OMNIBUS REFORM ACT OF 1999 they relate to the concept of localism. It is ‘‘First Book’’ makes a very real dif- Mr. LOTT: Mr. President, I ask unan- well recognized that television broadcast ference for disadvantaged children and imous consent that the following sec- stations provide valuable programming tai- their families, and with this invest- tion-by-section analysis be printed in lored to local needs, such as news, weather, special announcements and information re- ment, it will make a difference for the RECORD. lated to local activities. To that end, the thousands more.∑ There being no objection, the mate- Committee has structured the copyright li- rial was ordered to be printed in the censing regime for satellite to encourage and By Mrs. MURRAY: RECORD, as follows: promote retransmissions by satellite of local S. 1944. A bill to provide national S. 1948—SECTION-BY-SECTION ANALYSIS television broadcast stations to subscribers who reside in the local markets of those sta- challenge grants for innovation in the Section 1. Short Title. This Act may be cited tions. education of homeless children and as the ‘‘Intellectual Property and Commu- Third, perhaps most importantly, the Con- youth; to the Committee on Health, nications Omnibus Reform Act of 1999.’’ Education, Labor, and Pensions. ference Committee is aware that in creating TITLE I—SATELLITE HOME VIEWER compulsory licenses, it is acting in deroga- STUART MC KINNEY HOMELESS EDUCATION IMPROVEMENT ACT OF 1999 tion of the exclusive property rights granted IMPROVEMENT ACT When Congress passed the Satellite Home by the Copyright Act to copyright holders, ∑ Mrs. MURRAY. Mr. President, today Viewer Act in 1988, few Americans were fa- and that it therefore needs to act as nar- I introduce legislation on another topic miliar with satellite television. They typi- rowly as possible to minimize the effects of I will be discussing with Chairman JEF- cally resided in rural areas of the country the government’s intrusion on the broader FORDS as we move forward with reau- where the only means of receiving television market in which the affected property rights thorization of the Elementary and Sec- programming was through use of a large, and industries operate. In this context, the ondary Education Act in the Senate backyard C-band satellite dish. Congress rec- broadcast television market has developed in ognized the importance of providing these such a way that copyright licensing prac- Health, Education, Labor, and Pen- people with access to broadcast program- tices in this area take into account the na- sions Committee. ming, and created a compulsory copyright li- tional network structure, which grants ex- The bill deals with an improvement I cense in the Satellite Home Viewer Act that clusive territorial rights to programming in hope we can make in the Stuart enabled satellite carriers to easily license a local market to local stations either di- McKinney Homeless Education pro- the copyrights to the broadcast program- rectly or through affiliation agreements. The gram. While the McKinney program is ming that they retransmitted to their sub- licenses granted in this legislation attempt relatively small, my hope is that we scribers. to hew as closely to those arrangements as can greatly improve its effectiveness The 1988 Act fostered a boom in the sat- possible. For example, these arrangements ellite television industry. Coupled with the are mirrored in the section 122 ‘‘local-to- by recognizing and funding innovative development of high-powered satellite serv- local’’ license, which grants satellite carriers approaches for serving homeless stu- ice, or DSS, which delivers programming to the right to retransmit local stations within dents. a satellite dish as small as 18 inches in di- the station’s local market, and does not re- Chairman JEFFORDS and others have ameter, the satellite industry now serves quire a separate copyright payment because recognized that keeping a homeless homes nationwide with a wide range of high the works have already been licensed and child in their school district of origin quality programming. Satellite is no longer paid for with respect to viewers in those is vital to their success. Children, espe- primarily a rural service, for it offers an at- local markets. By contrast, allowing the im- cially homeless children, need con- tractive alternative to other providers of portation of distant or out-of-market net- tinuity in their lives. Yet as a nation, multichannel video programming; in par- work stations in derogation of the local sta- ticular, cable television. Because satellite tions’ exclusive right—bought and paid for in we have not yet focused on funding the can provide direct competition with the market-negotiated arrangements—to show innovative practices that will show cable industry, it is in the public interest to the works in question undermines those mar- how this can be done and done effec- ensure that satellite operates under a copy- ket arrangements. Therefore, the specific tively. right framework that permits it to be an ef- goal of the 119 license, which is to allow for In addition, there are chronic prob- fective competitor. a life-line network television service to lems facing homeless children, such as The compulsory copyright license created those homes beyond the reach of their local the problems of trying to reach out to by the 1988 Act was limited to a five year pe- television stations, must be met by only al- unaccompanied homeless youth, those riod to enable Congress to consider its effec- lowing distant network service to those tiveness and renew it where necessary. The homes which cannot receive the local net- young people who do not have parents license was renewed in 1994 for an additional work television stations. Hence, the or guardians with them in their home- five years, and amendments made that were ‘‘unserved household’’ limitation that has less situation. Homeless preschoolers intended to increase the enforcement of the been in the license since its inception. The present another whole range of issues network territorial restrictions of the com- Committee is mindful and respectful of the

VerDate 29-OCT-99 05:12 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00056 Fmt 0624 Sfmt 0634 E:\CR\FM\G17NO6.079 pfrm12 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14709 interrelationship between the communica- royalty for local retransmissions of broad- of the House bill, section 122(f)(1) of the tions policy of ‘‘localism’’ outlined above cast stations, the section 122 license does not Copyright Act is parallel to section 119(e), and property rights considerations in copy- require payment of any copyright royalty by and ensures that local stations, in addition right law, and seeks a proper balance be- satellite carriers for transmissions made in to any other parties that qualify under other tween the two. compliance with the requirements of section standing provisions of the Act, will have the Finally, although the legislation promotes 122. By contrast, the section 119 statutory li- ability to sue for violations of section 122. satellite retransmissions of local stations, cense for distant signals does require pay- New section 122(f)(2) of the Copyright Act en- the Conference Committee recognizes the ment of royalties. In addition, the section ables a local television station that is not continued need to monitor the effects of dis- 122 statutory license contains no ‘‘unserved being carried by a satellite carrier in viola- tant signal importation by satellite. To that household’’ limitation, while the section 119 tion of the license to file a copyright in- end, the compulsory license for retrans- license does contain that limitation. fringement lawsuit in federal court to en- mission of distant signals is extended for a Satellite carriers are liable for copyright force its rights. infringement, and subject to the full rem- period of five years, to afford Congress the Section 1003. Extension of Effect of Amendments edies of the Copyright Act, if they violate opportunity to evaluate the effectiveness to Section 119 of Title 17, United States Code one or more of the following requirements of and continuing need for that license at the As in both the House bill and the Senate end of the five-year period. the section 122 license. First, satellite car- riers may not in any way willfully alter the amendment, this Act extends the section 119 Section 1001. Short Title programming contained on a local broadcast satellite statutory license for a period of five This title may be cited as the ‘‘Satellite station. years by changing the expiration date of the Home Viewer Improvement Act.’’ Second, satellite carriers may not use the legislation from December 31, 1999, to De- Section 1002. Limitations on Exclusive Rights; section 122 license to retransmit a television cember 31, 2004. The procedural and remedial Secondary Transmissions by Satellite Car- broadcast station to a subscriber located provisions of section 119, which have already riers Within Local Markets outside the local market of the station. Re- been interpreted by the courts, are being ex- The House and the Senate provisions were transmission of a station to a subscriber lo- tended without change. Should the section in most respects highly similar. The con- cated outside the station’s local market is 119 license be allowed to expire in 2004, it ference substitute generally follows the covered by section 119, and is permitted only shall do so at midnight on December 31, 2004, House approach, with the differences de- when all conditions of that license are satis- so that the license will cover the entire sec- scribed here. fied. Accordingly, satellite carriers are re- ond accounting period of 2004. Section 1002 of this Act creates a new stat- quired to provide local broadcasters with ac- The advent of digital terrestrial broad- utory license, with no sunset provision, as a curate lists of the street addresses of their casting will necessitate additional review new section 122 of the Copyright Act of 1976. local-to-local subscribers so that broad- and reform of the distant signal statutory li- The new license authorizes the retrans- casters may verify that satellite carriers are cense. And responsibility to oversee the de- mission of television broadcast stations by making proper use of the license. The sub- velopment of the nascent local station sat- satellite carriers to subscribers located with- scriber information supplied to broadcasters ellite service may also require for review of in the local markets of those stations. is for verification purposes only, and may the distant signal statutory license in the fu- Creation of a new statutory license for re- not be used by broadcasters for any other ture. For each of these reasons, this Act es- transmission of local signals is necessary be- reason. Any knowing provision of false infor- tablishes a period for review in 5 years. cause the current section 119 license is lim- mation by a satellite carrier would, under Although the section 119 regime is largely ited to the retransmission of distance signals section 122(d), bar use of the Section 122 li- being extended in its current form, certain by satellite. The section 122 license allows cense by the carrier engaging in such prac- sections of the Act may have a near-term ef- satellite carriers for the first time to provide tices. The section 122 license contains reme- fect on pending copyright infringement law- their subscribers with the television signals dial provisions parallel to those of Section suits brought by broadcasters against sat- they want most: their local stations. A car- 119, including a ‘‘pattern or practice’’ provi- ellite carriers. These changes are prospective rier may retransmit the signal of a network sion that requires termination of the Section only; Congress does not intend to change the station (or superstation) to all subscribers 122 statutory license as to a particular sat- legality of any conduct that occurred prior who reside within the local market of that ellite carrier if it engages in certain abuses to the date of enactment. Congress does in- station, without regard to whether the sub- of the license. tend, however, to benefit consumers where Under this provision, just as in the statu- scriber resides in an ‘‘unserved household.’’ possible and consistent with existing copy- tory licenses codified in sections 111 and 119, The term ‘‘local market’’ is defined in Sec- right law and principles. a violation may be proven by showing willful This Act attempts to strike a balance tion 119(j)(2), and generally refers to a sta- activity, or simple delivery of the secondary among a variety of public policy goals. While tion’s Designated Market Area as defined by transmission over a certain period of time. increasing the number of potential sub- Nielsen. In addition to termination of service on a na- scribers to distant network signals, this Act Because the section 122 license is perma- tionwide or local or regional basis, statutory clarifies that satellite carriers may carry up nent, subscribers may obtain their local tele- damages are available up to $250,000 for each to, but no more than, two stations affiliated vision stations without fear that their local 6–month period during which the pattern or with the same network. The original purpose broadcast service may be turned off at a fu- practice of violations was carried out. Sat- of the Satellite Home Viewer Act was to en- ture date. In addition, satellite carriers may ellite carriers have the burden of proving sure that all Americans could receive net- deliver local stations to commercial estab- that they are not improperly making use of work programming and other television serv- lishments as well as homes, as the cable in- the section 122 license to serve subscribers ices provided they could not receive those dustry does under its license. These amend- outside the local markets of the television services over-the-air or in any other way. ments create parity and enhanced competi- broadcast stations they are providing. The This bill reflects the desire of the Conference tion between the satellite and cable indus- penalties created under this section parallel to meet this requirement and consumers’ ex- tries in the provision of local television those under Section 119, and are to deter sat- pectations to receive the traditional level of broadcast stations. ellite carriers from providing signals to sub- For a satellite carrier to be eligible for satellite service that has built up over the scribers in violation of the licenses. years, while avoiding an erosion of the pro- this license, this Act, following the House The section 122 license is limited in geo- approach, provides both in new section 122(a) gramming market affected by the statutory graphic scope to service to locations in the licenses. and in new section 122(d) that a carrier may United States, including any commonwealth, Section 1004. Computation of Royalty Fees for use the new local-to-local license only if it is territory or possession of the United States. Satellite Carriers in full compliance with all applicable rules In addition, section 122(j) makes clear that and regulations of the Federal Communica- local retransmission of television broadcast Like both the House bill and the Senate tions Commission, including any require- stations to subscribers is governed solely by amendment, this Act reduces the royalty ments that the Commission may adopt by the section 122 license, and that no provision fees currently paid by satellite carriers for regulation concerning carriage of stations or of the section 111 cable compulsory license the retransmission of network and supersta- programming exclusivity. These provisions should be interpreted to allow satellite car- tions by 45 percent and 30 percent, respec- are modeled on similar provisions in section riers to make local retransmissions of tele- tively. These are reductions of the 27–cent 111, the terrestrial compulsory license. Fail- vision broadcast stations under that license. royalty fees made effective by the Librarian ure to fully comply with Commission rules Likewise, no provision of the section 119 li- of Congress on January 1, 1998. The reduc- with respect to retransmission of one or cense (or any other law) should be inter- tions take effect on July 1, 1999, which is the more stations in the local market precludes preted as authorizing local-to-local retrans- beginning of the second accounting period the carrier from making use of the section missions. As with all statutory licenses, for 1999, and apply to all accounting periods 122 license. Put another way, the statutory these explicit limitations are consistent for the five-year extension of the section 119 license overrides the normal copyright with the general rule that, because statutory license. The Committee has drafted this pro- scheme only to the extent that carriers licenses are in derogation of the exclusive vision such that, if the section 119 license is strictly comply with the limits Congress has rights granted under the Copyright Act, they renewed after 2004, the 45 percent and 30 per- put on that license. should be interpreted narrowly. cent reductions of the 27–cent fee will remain Because terrestrial systems, such as cable, Section 1002(a) of this Act contains new in effect, unless altered by legislative as a general rule do not pay any copyright standing provisions. Adopting the approach amendment.

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00057 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 S14710 CONGRESSIONAL RECORD — SENATE November 17, 1999 In addition, section 119(c) of title 17, ceiving a signal of Grade B intensity. The who would otherwise be punished for the ac- United States Code, is amended to clarify conferees understand that the parties to tions of the satellite carriers. Note that in that in royalty distribution proceedings con- copyright infringement litigation under the the previous 18 months, court decisions have ducted under section 802 of the Copyright Satellite Home Viewer Act have agreed on required the termination of some distant Act, the Public Broadcasting Service may detailed procedures for implementing the network signals to some subscribers. How- act as agent for all public television copy- current version of ILLR, and nothing in this ever, the Conferees are aware that in some right claimants and all Public Broadcasting Act requires any change in those procedures. cases satellite carriers terminated distant Service member stations. In the future, when the FCC amends the network service that was not subject to the Section 1005. Distant Signal Eligibility for Con- ILLR model to make it more accurate pursu- original lawsuit. The Conferees intend that sumers ant to section 339(c)(3) of the Communica- affected subscribers remain eligible for such tions Act of 1934, the amended model should The Senate bill contained provisions re- service. be used in place of the current version of taining the existing Grade B intensity stand- The words ‘‘shall remain eligible’’ in sec- ILLR. The new language also confirms in ard in the definition of ‘‘unserved house- tion 119(e) refer to eligibility to receive sta- new section 119(a)(2)(B)(ii)(II) that the ulti- tions affiliated with the same network from hold.’’ The House agreed to the Senate provi- mate determination of eligibility to receive sions with amendments, which extend the the same satellite carrier through use of the network signals shall be a signal intensity same transmission technology at the same ‘‘unserved household’’ definition of section test pursuant to 47 C.F.R. § 73.686(d), as re- 119 of title 17 intact in certain respects and location; in other words, grandfathered sta- flected in new section 339(c)(5) of the Com- tus is not transferable to a different carrier amend it in other respects. Consistent with munications Act of 1934. Again, the conferees or a different type of dish or at a new ad- the approach of the Senate amendment, the understand that existing Satellite Home dress. The provisions of new section 119(e) central feature of the existing definition of Viewer Act court orders already incorporate are incorporated by reference in the defini- ‘‘unserved household’’—inability to receive, this FCC-approved measurement method, tion of ‘‘unserved household’’ as new section through use of a conventional outdoor roof- and nothing in this Act requires any change 119(d)(10)(C). top receiving antenna, a signal of Grade B in such orders. Such a signal intensity test intensity from a primary network station— may be conducted by any party to resolve a Section 1005(d) of this Act creates a new remains intact. The legislation directs the customer’s eligibility in litigation under sec- section 119(a)(11), which contains provisions FCC, however, to examine the definition of tion 119. governing delivery of network stations to ‘‘Grade B intensity,’’ reflecting the dBu lev- Section 1005(a)(2) of this Act creates a new recreational vehicles and commercial trucks. els long set by the Federal Communications section 119(a)(2)(B)(iii) of the Copyright Act This provision is, in turn, incorporated in Commission in 47 C.F.R. § 73.683(a), and issue to permit continued delivery by means of C- the definition of ‘‘unserved household’’ in a rulemaking within 6 months after enact- band transmissions of network stations to C- new section 119(d)(10)(D). The purpose of ment to evaluate the standard and, if appro- band dish owners who received signals of the these amendments is to allow the operators priate, make recommendations to Congress pertinent network on October 31, 1999, or of recreational vehicles and commercial about how to modify the analog standard, were recently required to have such service trucks to use satellite dishes permanently and make a further recommendation about terminated pursuant to court orders or set- attached to those vehicles to receive, on tel- what an appropriate standard would be for tlements under section 119. This provision evision sets located inside those vehicles, digital signals. In this fashion, the Congress does not authorize satellite delivery of net- distant network signals pursuant to section will have the best input and recommenda- work stations to such persons by any tech- 119. To prevent abuse of this provision, the tions from the Commission, allowing the nology other than C-band. exception for recreational vehicles and com- Commission wide latitude in its inquiry and Section 1005(b) also adds a new provision mercial trucks is limited to persons who recommendations, but reserve for itself the (E) to section 119(a)(5). The purpose of this have strictly complied with the documenta- final decision-making authority over the provision is to allow certain longstanding tion requirements set forth in section scope of the copyright licenses in question, superstations to continue to be delivered to 119(a)(11). Among other things, the exception in light of all relevant factors. satellite customers without regard to the will only become available as to a particular The amended definition of ‘‘unserved ‘‘unserved household’’ limitation, even if the recreational vehicle or commercial truck household’’ makes other consumer-friendly station now technically qualifies as a ‘‘net- after the satellite carrier has provided all af- changes. It will eliminate the requirement work station’’ under the 15–hour-per-week fected networks with all documentation set that a cable subscriber wait 90 days to be eli- definition of the Act. This exception will forth in section 119(a). The exception will gible for satellite delivery of distant net- cease to apply if such a station in the future apply only for reception in that particular work signals. After enactment, cable sub- becomes affiliated with one of the four net- recreational vehicle or truck, and does not scribers will be eligible to receive distant works (ABC, CBS, Fox, and NBC) that quali- authorize any delivery of network stations network signals by satellite, upon choosing fied as networks as of January 1, 1995. to any fixed dwelling. to do so, if they satisfy the other require- Section 1005(c) of this Act adds a new sec- Section 1006. Public Broadcasting Service Sat- ments of section 119. tion 119(e) of the Copyright Act. This provi- ellite Feed In addition, this Act adds three new cat- sion contains a moratorium on terminations egories to the definition of ‘‘unserved house- of network stations to certain otherwise in- The conference agreement follows the Sen- hold’’ in section 119(d)(10): (a) certain sub- eligible recent subscribers to network pro- ate bill with an amendment that applies the scribers to network programming who are gramming whose service has been (or soon network copyright royalty rate to the Public not predicted to receive a signal of Grade A would have been) terminated and allows Broadcasting Service the satellite feed. The intensity from any station of the relevant them to continue to be eligible for distant conference agreement grants satellite car- network, (b) operators of recreational vehi- signal services. The subscribers affected are riers a section 119 compulsory license to re- cles and commercial trucks who have com- those predicted by the current version of the transmit a national satellite feed distributed plied with certain documentation require- ILLR model to receive a signal of less than and designated by PBS. The license would ments, and (c) certain C-band subscribers to Grade A intensity from any network station apply to educational and informational pro- network programming. This Act also con- of the relevant network defined in section gramming to which PBS currently holds firms in new section 119(d)(10)(B) what has 73.683(a) of Commission regulations (47 broadcast rights. The license, which would long been understood by the parties and ac- C.F.R. 73.683(a)) as in effect January 1, 1999. extend to all households in the United cepted by the courts, namely that a sub- As the statutory language reflects, recent States, would sunset on January 1, 2002, the scriber may receive distant network service court orders and settlements between the date when local-to-local must-carry obliga- if all network stations affiliated with the satellite and broadcasting industries have re- tions become effective. Under the conference relevant network that are predicted to serve quired (or will in the near future require) agreement, PBS will designate the national that subscriber give their written consent. significant numbers of terminations of net- satellite feed for purposes of this section. Section 1005(a)(2) of the bill creates a new work stations to ineligible subscribers in Section 1007. Application of Federal Commu- section 119(a)(2)(B)(i) of the Copyright Act to this category. Although the conferees nications Commission Regulations prohibit a satellite carrier from delivering strongly condemn lawbreaking by satellite more than two distant TV stations affiliated carriers, and intend for satellite carriers to The section 119 license is amended to clar- with a single network in a single day to a be subject to all other available legal rem- ify that satellite carriers must comply with particular customer. This clarifies that a edies for any infringements in which the car- all rules, regulations, and authorizations of satellite carrier provides a signal of a tele- riers have engaged, the conferees have con- the Federal Communications Commission in vision station throughout the broadcast day, cluded that the public interest will be served order to obtain the benefits of the section 119 rather than switching between stations by the grandfathering of this limited cat- license. As provided in the House bill, this throughout a day to pick the best program- egory of subscribers whose service would would include any programming exclusivity ming among different signals. otherwise be terminated. provisions or carriage requirements that the Section 1005(a)(2) of this Act creates a new The decision by the conferees to direct this Commission may adopt. Violations of such section 119(a)(2)(B)(ii)(I) of the Copyright Act limited grandfathering should not be under- rules, regulations or authorizations would to confirm that courts should rely on the stood as condoning unlawful conduct by sat- render a carrier ineligible for the copyright FCC’s ILLR model to presumptively deter- ellite carriers, but rather reflects the con- statutory license with respect to that re- mine whether a household is capable of re- cern of the conference for those subscribers transmission.

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00058 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14711 Section 1008. Rules for Satellite Carriers Re- by carriers, not by the Congress. The pro- both duplicating local stations upon request transmitting Television Broadcast Signals posed licenses are a matter of legislative assures that satellite subscribers will not be The Senate agrees to the House bill provi- grace, in the nature of subsidies to satellite precluded from receiving the network affil- sions regarding carriage of television broad- carriers, and reviewable under the rational iate that is licensed to the state in which cast signals, with certain amendments, as basis standard.1 they reside. discussed below. Section 108 creates new sec- In addition, the conferees are confident Because of unique technical challenges on tions 338 and 339 of the Communications Act that the proposed license provisions would satellite technology and constraints on the of 1934. Section 338 addresses carriage of pass constitutional muster even if subjected use of satellite spectrum, satellite carriers local television signals, while section 339 ad- to the O’Brien standard applied to the cable may initially be limited in their ability to dresses distant television signals. must-carry requirement.2 The proposed pro- deliver must carry signals into multiple New section 338 requires satellite carriers, visions are intended to preserve free tele- markets. New compression technologies, by January 1, 2002, to carry upon request all vision for those not served by satellite or such as video streaming, may help overcome local broadcast stations’ signals in local cable systems and to promote widespread these barriers however, and, if deployed, markets in which the satellite carriers carry dissemination of information from a multi- could enable satellite carriers to deliver at least one signal pursuant to section 122 of plicity of sources. The Supreme Court has must-carry signals into many more markets title 17, United States Code. The conference found both to be substantial interests, unre- than they could otherwise. Accordingly, the report added the cross-reference to section lated to the suppression of free expression.3 conferees urge the FCC, pursuant to its obli- 122 to the House provision to indicate the re- Providing the proposed license on a market- gations under section 338, or in any other re- lationship between the benefits of the statu- by-market basis furthers both goals by pre- lated proceedings, to not prohibit satellite tory license and the carriage requirements venting satellite carriers from choosing to carriers from using reasonable compression, imposed by this Act. Thus, the conference re- carry only certain stations and effectively reformatting, or similar technologies to port provides that, as of January 1, 2002, roy- preventing many other local broadcasters meet their carriage obligations, consistent alty-free copyright licenses for satellite car- from reaching potential viewers in their with existing authority. riers to retransmit broadcast signals to service areas. The Conference Committee is * * * * * viewers in the broadcasters’ service areas concerned that, absent must-carry obliga- New section 339 of the Communications will be available only on a market-by-mar- tions, satellite carriers would carry the Act contains provisions concerning carriage ket basis. major network affiliates and few other sig- of distant television stations by satellite The procedural provisions applicable to nals. Non-carried stations would face the carriers. Section 339(a)(1) limits satellite section 338 (concerning costs, avoidance of same loss of viewership Congress previously carriers to providing a subscriber with no 4 duplication, channel positioning, compensa- found with respect to cable noncarriage. more than two stations affiliated with a tion for carriage, and complaints by broad- The proposed licenses place satellite car- given television network from outside the cast stations) are generally parallel to those rier in a comparable position to cable sys- local market. In addition, a satellite carrier applicable to cable systems. Within one year tems, competing for the same customers. Ap- that provides two distant signals to eligible after enactment, the Federal Communica- plying a must-carry rule in markets which households may also provide the local tele- tions Commission is to issue implementing satellite carriers choose to serve benefits vision signals pursuant to section 122 of title regulations which are to impose obligations consumers and enhances competition with 17 if the subscriber offers local-to-local serv- comparable to those imposed on cable sys- cable by allowing consumers the same range ice in the subscriber’s market. This provi- tems under paragraphs (3) and (4) of section of choice in local programming they receive sion furthers the congressional policy of lo- 614(b) and paragraphs (1) and (2) of section through cable service. The conferees expect calism and diversity of broadcast program- 615(g), such as the requirement to carry a that, by January 1, 2002, satellite carriers’ ming, which provides locally-relevant news, station’s entire signal without additions or market share will have increased and that weather, and information, but also allows deletions. The obligation to carry local sta- the Congress’ interest in maintaining free consumers in unserved households to enjoy tions on contiguous channels is illustrative over-the-air television will be undermined if network programming obtained via distant of the general requirement to ensure that local broadcasters are prevented from reach- signals. Under new section 339(a)(2), which is satellite carriers position local stations in a ing viewers by either cable or satellite dis- based on the Senate amendment, the know- way that is convenient and practically acces- tribution systems. The Congress’ preference ing and willful provision of distant television sible for consumers. By directing the FCC to for must-carry obligations has already been signals in violation of these restrictions is promulgate these must-carry rules, the con- proven effective, as attested by the appear- subject to a forfeiture penalty under section ferees do not take any position regarding the ance of several emerging networks, which 503 of the Communications Act of $50,000 per application of must-carry rules to carriage of often serve underserved market segments. violation or for each day of a continuing vio- digital television signals by either cable or There are no narrower alternatives that lation. satellite systems. would achieve the Congress’ goals. Although New section 339(b)(1)(A) requires the Com- To make use of the local license, satellite the conferees expect that subscribers who re- mission to commence within 45 days of en- carriers must provide the local broadcast ceive no broadcast signals at all from their actment, and complete within one year after station signal as part of their satellite serv- satellite service may install antennas or sub- the date of enactment, a rulemaking to de- ice, in a manner consistent with paragraphs scribe to cable service in addition to sat- velop regulations to apply network non- (b), (c), (d), and (e), FCC regulations, and re- ellite service, the Conference Committee is duplication, syndicated exclusivity and transmission consent requirements. Until less sanguine that subscribers who receive sports blackout rules to the transmission of January 1, 2002, satellite carriers are granted network signals and hundreds of other pro- nationally distributed superstations by sat- a royalty-free copyright license to re- gramming choices from their satellite car- ellite carriers. New section 339(b)(1)(B) re- transmit broadcast signals on a station-by- rier will undertake such trouble and expense quires the Commission to promulgate regu- station basis, consistent with retransmission to obtain over-the-air signals from inde- lations on the same schedule with regard to consent requirements. The transition period pendent broadcast stations. National feeds the application of sports blackout rules to is intended to provide the satellite industry would also be counterproductive because network stations. These regulations under with a transitional period to begin providing they siphon potential viewers from local subparagraph (B) are to be imposed ‘‘to the local-into-local satellite service to commu- over-the-air affiliates. In sum, the Con- extent technically feasible and not economi- nities throughout the country. ference Committee finds that trading the cally prohibitive’’ with respect to the af- The conferees believe that the must-carry benefits of the copyright license for the must fected parties. The burden of showing that provisions of this Act neither implicate nor carry requirement is a fair and reasonable conforming to rules similar to cable would violate the First Amendment. Rather than way of helping viewers have access to all be ‘‘economically prohibitive’’ is a heavy requiring carriage of stations in the manner local programming while benefitting sat- one. It would entail a very serious economic of cable’s mandated duty, this Act allows a ellite carriers and their customers. threat to the health of the carrier. Without satellite carrier to choose whether to incur Section 338(c) contains a limited exception that showing, the rules should be as similar the must-carry obligation in a particular to the general must-carry requirements, as possible to that applicable to cable serv- market in exchange for the benefits of the stating that a satellite carrier need not ices. local statutory license. It does not deprive carry two local affiliates of the same net- Section 339(c) of the Communications Act any programmers of potential access to car- work that substantially duplicate each oth- of 1934 addresses the three distinct areas dis- riage by satellite carriers. Satellite carriers ers’ programming, unless the duplicating cussed by the Commission in its Report & remain free to carry any programming for stations are licensed to communities in dif- Order in Docket No. 98–201: (i) the definition which they are able to acquire the property ferent states. The latter provisions address of ‘‘Grade B intensity,’’ which is the sub- rights. The provisions of this Act allow car- unique and limited cases, including WMUR stantive standard for determining eligibility riers an easier and more inexpensive way to (Manchester, New Hampshire) / WCVB (Bos- to receive distant network stations by sat- obtain the right to use the property of copy- ton, Massachusetts) and WPTZ (Plattsburg, ellite, (ii) prediction of whether a signal of right holders when they retransmit signals New York)/ WNNE (White River Junction, Grade B intensity from a particular station from all of a market’s broadcast stations to Vermont), in which mandatory carriage of is present at a particular household, and (iii) subscribers in that market. The choice measurement of whether a signal of Grade B whether to retransmit those signals is made See footnotes at end of Analysis. intensity from a particular station is present

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00059 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 S14712 CONGRESSIONAL RECORD — SENATE November 17, 1999 at a particular household. Section 339(c) ad- Order in Docket No. 98–201, namely signal in- Commission or any action in federal district dresses each of these topics. tensity testing. This provision permits sat- court to enforce any Commission order under New section 339(c) addresses evaluation ellite carriers and broadcasters to carry out this section after December 31, 2001. The con- and possible recommendations for modifica- signal intensity measurements, using the ferees believe that these procedural provi- tion by the Commission of the definition of procedures set forth by the Commission in 47 sions, which provide ample due process pro- Grade B intensity, which is incorporated C.F.R. § 73.686(d), to determine whether par- tections while ensuring speedy enforcement, into the definition of ‘‘unserved household’’ ticular households are unserved. Unless the will ensure that retransmission consent will in section 119 of the Copyright Act. Under parties otherwise agree, any such tests shall be respected by all parties and promote a section 339(c), the Commission is to complete be conducted on a ‘‘loser pays’’ basis, with smoothly functioning marketplace. a rulemaking within 1 year after enactment the network station bearing the costs of Section 1010. Severability to evaluate, and if appropriate to rec- tests showing the household to be unserved, Section 1010 of the Act provides that if any ommend modifications to the Grade B inten- and the satellite carrier bearing the costs of provision of section 325(b) of the Commu- sity standard for analog signals set forth in tests showing the household to be served. If nications Act as amended by this Act is de- 47 C.F.R. § 73.683(a), for purposes of deter- the satellite carrier and station is unable to clared unconstitutional, the remaining pro- mining eligibility for distant signal satellite agree on a qualified individual to perform visions of that section will stand. service. In addition, the Commission is to the test, the Commission is to designate an Section 1011. Technical Amendments recommend a signal standard for digital sig- independent and neutral entity by rule. The Section 1011 of this Act makes technical nals to prepare Congress to update the statu- Commission is to promulgate rules that tory license for digital television broad- and conforming amendments to sections 101, avoid any undue burdens being imposed on 111, 119, 501, and 510 of the Copyright Act. casting. The Committee intends that this re- any party. port would reflect the FCC’s best rec- Apart from these technical amendments, Section 1009. Retransmission Consent ommendations in light of all relevant consid- this legislation makes no changes to section erations, and be based on whatever factors Section 1009 amends the provisions of sec- 111 of the Copyright Act. In particular, noth- and information the Commission deems rel- tion 325 of the Communications Act gov- ing in this legislation makes any changes evant to determining whether the signal in- erning retransmission consent. As revised, concerning entitlement or eligibility for the tensity standard should be modified and in section 325(b)(1) bars multichannel video pro- statutory licenses under sections 111 and 119, what way. As discussed above, the two-part gramming distributors from retransmitting nor specifically to the definitions of ‘‘cable process allows the Commission to rec- the signals of television broadcast stations, system’’ under section 111(f), and ‘‘satellite ommend modifications leaving to Congress or any part thereof, without the express au- carrier’’ under section 119(d)(6). Certain tech- the decision-making power on modifications thority of the originating station. Section nical amendments to these definitions that of the copyright licenses at issue. 325(b)(2) contains several exceptions to this were included in the Conference Report to Section 339(c)(3) addresses requests to local general prohibition, including noncommer- the Intellectual Property and Communica- television stations by consumers for waivers cial stations, certain superstations, and, tions Omnibus Reform Act (IPCORA) of 1999 of the eligibility requirements under section until the end of 2004, retransmission of not are not included in this legislation. Congress 119 of title 17, United States Code. If a sat- more than two distant signals by satellite intends that neither the courts nor the Copy- ellite carrier is barred from delivering dis- carriers to unserved households outside of right Office give any legal significance either tant network signals to a particular cus- the local market of the retransmitted sta- to the inclusion of the amendments in the tomer because the ILLR model predicts the tions, and (E) for six months to the retrans- IPCORA conference report or their omission customer to be served by one or more tele- mission of local stations pursuant to the in this legislation. These statutory defini- vision stations affiliated with the relevant statutory license in section 122 of the title tions are to be interpreted in the same way network, the consumer may submit to those 17. after enactment of this legislation as they stations, through his or her satellite carrier, Section 1009 also amends section 325(b) of were interpreted prior to enactment of this a written request for a waiver. The statutory the Communications Act to require the Com- legislation. phrase ‘‘station asserting that the retrans- mission to issue regulations concerning the Section 1011(b) makes a technical and mission is prohibited’’ refers to a station exercise by television broadcast stations of clarifying change to the definition of a that is predicted by the ILLR model to serve the right to grant retransmission consent. ‘‘work made for hire’’ in section 101 of the the household. Each such station must ac- The regulations would, until January 1, 2006, Copyright Act. Sound recordings have been cept or reject the waiver request within 30 prohibit a television broadcast station from registered in the Copyright Office as works days after receiving the request from the entering into an exclusive retransmission made for hire since being protected in their satellite carrier. If a relevant network sta- consent agreement with a multichannel own right. This clarifying amendment shall tion grants the requested waiver, or fails to video programming distributor or refusing to not be deemed to imply that any sound re- act on the waiver within 30 days, the viewer negotiate in good faith regarding retrans- cording or any other work would not other- shall be deemed unserved with respect to the mission consent agreements. A television wise qualify as a work made for hire in the local network station in question. station may generally offer different re- absence of the amendment made by this sub- Section 339(c)(4) addresses the ILLR pre- transmission consent terms or conditions, section. dictive model developed by the Commission including price terms, to different distribu- Section 1012. Effective dates. in Docket No. 98–201. The provision requires tors. The FCC may determine that such dif- Under section 1012 of this Act, sections the Commission to attempt to increase its ferent terms represent a failure to negotiate 1001, 1003, 1005, and 1007 through 1011 shall be accuracy further by taking into account not in good faith only if they are not based on effective on the date of enactment. The only terrain, as the ILLR model does now, competitive marketplace considerations. amendments made by sections 1002, 1004, and but also land cover variations such as build- Section 1009 of the bill adds a new sub- 1006 shall be effective as of July 1, 1999. section (e) to section 325 of the Communica- ings and vegetation. If the Commission dis- TITLE II—RURAL LOCAL TELEVISION tions Act. New subsection 325(e) creates a set covers other practical ways to improve the SIGNALS accuracy of the ILLR model still further, it of expedited enforcement procedures for the Section 2001. Short Title shall implement those methods as well. The alleged retransmission of a television broad- linchpin of whether particular proposed re- cast station in its own local market without This title may be referred to as the ‘‘Rural finements to the ILLR model result in great- the station’s consent. The purpose of these Local Broadcast Signal Act.’’ er accuracy is whether the revised model’s expedited procedure is to ensure that delays Section 2002. Local Television Service in predictions are closer to the results of actual in obtaining relief from violations do not Unserved and Underserved Markets field testing in terms of predicting whether make the right to retransmission consent an To encourage the FCC to approve needed households are served by a local affiliate of empty one. The new provision requires 45– licenses (or other authorizations to use spec- the relevant network. day processing of local-to-local retrans- trum) to provide local TV service in rural The ILLR model of predicting subscribers’ mission consent complaints at the Commis- areas, the Commission is required to make eligibility will be of particular use in rural sion, followed by expedited enforcement of determinations regarding needed licenses areas. To make the ILLR more accurate and any Commission orders in the United States within one year of enactment. more useful to this group of Americans, the District Court for the Eastern District of However, the FCC shall ensure that no li- Conference Committee believes the Commis- Virginia. In addition, a television broadcast cense or authorization provided under this sion should be particularly careful to ensure station that has been retransmitted in its section will cause ‘‘harmful interference’’ to that the ILLR is accurate in areas that use local market without its consent will be en- the primary users of the spectrum or to pub- star routes, postal routes, or other address- titled to statutory damages of $25,000 per lic safety use. Subparagraph (2), states that ing systems that may not indicate clearly violation in an action in federal district the Commission shall not license under sub- the location of the actual dwelling of a po- court. Such damages will be awarded only if section (a) any facility that causes harmful tential subscriber. The Commission should the television broadcast station agrees to interference to existing primary users of to ensure the model accurately predicts the contribute any statutory damage award spectrum or to public safety use. The Com- signal strength at the viewers’ actual loca- above $1,000 to the United States Treasury mission typically categorizes a licensed serv- tion. for public purposes. The expedited enforce- ice as primary or secondary. Under Commis- New section 339(c)(5) addresses the third ment provision contains a sunset which pre- sion rules, a secondary service cannot be au- area discussed in the Commission’s Report & vents the filing of any complaint with the thorized to operate in the same band as a

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00060 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14713 primary user of that band unless the pro- er harm to the owner and confusion to a con- trademark owner’s name, a court may look posed secondary user conclusively dem- sumer in a shorter amount of time than is to this as an indication of the absence of bad onstrates that the proposed secondary use the case with traditional media. The protec- faith on the part of the registrant. will not cause harmful interference to the tion offered by section 43 to a personal name Fourth, under paragraph (1)(B)(i)(IV), a primary service. The Commission is to define which functions as a mark, as applied to do- court may consider the person’s bona fide ‘‘harmful interference’’ pursuant to the defi- main names, is subject to the same fair use noncommercial or fair use of the mark in a nition at 47 C.F.R. section 2.1 and in accord- and first amendment protections as have web site that is accessible under the domain ance with Commission rules and policies. been applied traditionally under trademark name at issue. This factor is intended to bal- For purposes of section 2005(b)(3) the FCC law, and is not intended to expand or limit ance the interests of trademark owners with may consider a compression, reformatting or any rights to publicity recognized by States the interests of those who would make law- other technology to be unreasonable if the under State law. ful noncommercial or fair uses of others’ technology is incompatible with other appli- Paragraph (1)(B)(i) of the new section 43(d) marks online, such as in comparative adver- cable FCC regulation or policy under the sets forth a number of nonexclusive, non- tising, comment, criticism, parody, news re- Communications Act of 1934, as amended. exhaustive factors to assist a court in deter- porting, etc. Under the bill, the mere fact The Commission also may not restrict any mining whether the required bad-faith ele- that the domain name is used for purposes of entity granted a license or other authoriza- ment exists in any given case. These factors comparative advertising, comment, criti- tion under this section, except as otherwise are designed to balance the property inter- cism, parody, news reporting, etc., would not specified, from using any reasonable com- ests of trademark owners with the legiti- alone establish a lack of bad-faith intent. pression, reformatting, or other technology. mate interests of Internet users and others The fact that a person uses a mark in a site who seek to make lawful uses of others’ in such a lawful manner may be an appro- TITLE III—TRADEMARK CYBERPIRACY marks, including for purposes such as com- priate indication that the person’s registra- PREVENTION parative advertising, comment, criticism, tion or use of the domain name lacked the Section 3001. Short Title; References parody, news reporting, fair use, etc. The bill required element of bad-faith. This factor is This section provides that the Act may be suggests a total of nine factors a court may not intended to create a loophole that other- cited as the ‘‘Anticybersquatting Consumer wish to consider. The first four suggest cir- wise might swallow the bill, however, by al- Protection Act’’ and that any references cumstances that may tend to indicate an ab- lowing a domain name registrant to evade within the bill to the Trademark Act of 1946 sence of bad-faith intent to profit from the application of the Act by merely putting up shall be a reference to the Act entitled ‘‘An goodwill of a mark, and the next four sug- a noninfringing site under an infringing do- Act to provide for the registration and pro- gest circumstances that may tend to indi- main name. For example, in the well know tection of trademarks used in commerce, to cate that such bad-faith intent exits. The case of Panavision Int’l v. Toeppen, 141 F.3d carry out the provisions of certain inter- last factor may suggest either bad-faith or 1316 (9th Cir. 1998), a well known national conventions, and for other pur- an absence thereof depending on the cir- cybersquatter had registered a host of do- poses,’’ approved July 5, 1946 (15 U.S.C. 1051 cumstances. main names mirroring famous trademarks, et seq.), also commonly referred to as the First, under paragraph (1)(B)(i)(I), a court including names for Panavision, Delta Air- Lanham Act. may consider whether the domain name reg- lines, Neiman Marcus, Eddie Bauer, Luft- istrant has trademark or any other intellec- hansa, and more than 100 other marks, and Sec. 3002. Cyberpiracy Prevention tual property rights in the name. This factor had attempted to sell them to the mark own- Subsection (a). In General. This subsection recognizes, as does trademark law in general, ers for amounts in the range of $10,000 to amends the Trademark Act to provide an ex- that there may be concurring uses of the $15,000 each. His use of the ‘‘panavision.com’’ plicit trademark remedy for cybersquatting same name that are noninfringing, such as and ‘‘panaflex.com’’ domain names was under a new section 43(d). Under paragraph the use of the ‘‘Delta’’ mark for both air seemingly more innocuous, however, as they (1)(A) of the new section 43(d), actionable travel and sink faucets. Similarly, the reg- served as addresses for sites that merely dis- conduct would include the registration, traf- istration of the domain name played pictures of Pana Illinois and the word ficking in, or use of a domain name that is ‘‘deltaforce.com’’ by a movie studio would ‘‘Hello’’ respectively. This bill would not identical or confusingly similar to, or dilu- not tend to indicate a bad faith intent on the allow a person to evade the holding of that tive of, the mark of another, including a per- part of the registrant to trade on Delta Air- case—which found that Mr. Toeppen had sonal name that is protected as a mark lines or Delta Faucets’ trademarks. made a commercial use of the Panavision under section 43 of the Lanham Act, provided Second, under paragraph (1)(B)(i)(II), a marks and that such uses were, in fact, di- that the mark was distinctive (i.e., enjoyed court may consider the extent to which the luting under the Federal Trademark Dilu- trademark status) at the time the domain domain name is the same as the registrant’s tion Act—merely by posting noninfringing name was registered, or in the case of trade- own legal name or a nickname by which that uses of the trademark on a site accessible mark dilution, was famous at the time the person is commonly identified. This factor under the offending domain name, as Mr. domain name was registered. The bill is recognizes, again as does the concept of fair Toeppen did. Similarly, the bill does not af- carefully and narrowly tailored, however, to use in trademark law, that a person should fect existing trademark law to the extent it extend only to cases where the plaintiff can be able to be identified by their own name, has addressed the interplay between First demonstrate that the defendant registered, whether in their business or on a web site. Amendment protections and the rights of trafficked in, or used the offending domain Similarly, a person may bear a legitimate trademark owners. Rather, the bill gives name with bad-faith intent to profit from nickname that is identical or similar to a courts the flexibility to weigh appropriate the goodwill of a mark belonging to someone well-known trademark, such as in the well- factors in determining whether the name else. Thus, the bill does not extend to inno- publicized case of the parents who registered was registered or used in bad faith, and it cent domain name registrations by those the domain name ‘‘pokey.org’’ for their recognizes that one such factor may be the who are unaware of another’s use of the young son who goes by that name, and these use the domain name registrant makes of name, or even to someone who is aware of individuals should not be deterred by this the mark. the trademark status of the name but reg- bill from using their name online. This fac- Fifth, under paragraph (1)(B)(i)(V), a court isters a domain name containing the mark tor is not intended to suggest that domain may consider whether, in registering or for any reason other than with bad faith in- name registrants may evade the application using the domain name, the registrant in- tent to profit from the goodwill associated of this act by merely adopting Exxon, Ford, tended to divert consumers away from the with that mark. or other well-known marks as their nick- trademark owner’s website to a website that The phrase ‘‘including a personal name names. It merely provides a court with the could harm the goodwill of the mark, either which is protected as a mark under this sec- appropriate discretion to determine whether for purposes of commercial gain or with the tion’’ addresses situations in which a per- or not the fact that a person bears a nick- intent to tarnish or disparage the mark, by son’s name is protected under section 43 of name similar to a mark at issue is an indica- creating a likelihood of confusion as to the the Lanham Act and is used as a domain tion of an absence of bad-faith on the part of source, sponsorship, affiliation, or endorse- name. The Lanham Act prohibits the use of the registrant. ment of the site. This factor recognizes that false designations of origin and false or mis- Third, under paragraph (1)(B)(i)(III), a one of the main reasons cybersquatters use leading representations. Protection under 43 court may consider the domain name reg- other people’s trademarks is to divert Inter- of the Lanham Act has been applied by the istrant’s prior use, if any, of the domain net users to their own sites by creating con- courts to personal names which function as name in connection with the bona fide offer- fusion as to the source, sponsorship, affili- marks, such as service marks, when such ing of goods or services. Again, this factor ation, or endorsement of the site. This is marks are infringed. Infringement may recognizes that the legitimate use of the do- done for a number of reasons, including to occur when the endorsement of products or main name in online commerce may be a pass off inferior goods under the name of a services in interstate commerce is falsely good indicator of the intent of the person well-known mark holder, to defraud con- implied through the use of a personal name, registering that name. Where the person has sumers into providing personally identifiable or otherwise, without regard to the goods or used the domain name in commerce without information, such as credit card numbers, to services of the parties. This protection also creating a likelihood of confusion as to the attract ‘‘eyeballs’’ to sites that price online applies to domain names on the Internet, source or origin of the goods or services and advertising according to the number of where falsely implied endorsements and has not otherwise attempted to use the name ‘‘hits’’ the site receives, or even just to harm other types of infringement can cause great- in order to profit from the goodwill of the the value of the mark. Under this provision,

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00061 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 S14714 CONGRESSIONAL RECORD — SENATE November 17, 1999 a court may give appropriate weight to evi- By sitting on these marks and not making the mark owner sends notice of the alleged dence that a domain name registrant in- the first move to offer to sell them to the violation and intent to proceed to the do- tended to confuse or deceive the public in mark owner, these cybersquatters have been main name registrant at the postal and e- this manner when making a determination largely successful in evading the case law de- mail address provided by the registrant to of bad-faith intent. veloped under the Federal Trademark Dilu- the registrar and publishes notice of the ac- Sixth, under paragraph (1)(B)(i)(VI), a tion Act. This bill does not suggest that the tion as the court may direct promptly after court may consider a domain name reg- mere registration of multiple domain names filing the action. Such acts are deemed to istrant’s offer to transfer, sell, or otherwise is an indication of bad faith, but it allows a constitute service of process by paragraph assign the domain name to the mark owner court to weigh the fact that a person has reg- (2)(B). or any third party for financial gain, where istered multiple domain names that infringe The concept of in rem jurisdiction has been the registrant has not used, and did not have or dilute the trademarks of others as part of with us since well before the Supreme any intent to use, the domain name in the its consideration of whether the requisite Court’s landmark decision in Pennoyer v. bona fide offering of any goods or services. A bad-faith intent exists. Neff, 95 U.S. 714 (1877). Although more recent court may also consider a person’s prior con- Lastly, under paragraph (1)(B)(i)(IX), a decisions have called into question the via- duct indicating a pattern of such conduct. court may consider the extent to which the bility of quasi in rem ‘‘attachment’’ jurisdic- This factor is consistent with the court mark incorporated in the person’s domain tion, see Shaffer v. Heitner, 433 U.S. 186 cases, like the Panavision case mentioned name registration is or is not distinctive and (1977), the Court has expressly acknowledged above, where courts have found a defendant’s famous within the meaning of subsection the propriety of true in rem proceedings (or offer to sell the domain name to the legiti- (c)(1) of section 43 of the Trademark Act of even type I quasi in rem proceedings 5) where mate mark owner as being indicative of the 1946. The more distinctive or famous a mark ‘‘claims to the property itself are the source defendant’s intent to trade on the value of a has become, the more likely the owner of of the underlying controversy between the trademark owner’s marks by engaging in the that mark is deserving of the relief available plaintiff and the defendant.’’ Id. at 207–08. business of registering those marks and sell- under this act. At the same time, the fact The Act clarifies the availability of in rem ing them to the rightful trademark owners. that a mark is not well-known may also sug- jurisdiction in appropriate cases involving It does not suggest that a court should con- gest a lack of bad-faith. claims by trademark holders against sider the mere offer to sell a domain name to Paragraph (1)(B)(ii) underscores the bad- cyberpirates. In so doing, the Act reinforces a mark owner or the failure to use a name in faith requirement by making clear that bad- the view that in rem jurisdiction has con- the bona fide offering of goods or services as faith shall not be found in any case in which tinuing constitutional vitality, see R.M.S. sufficient to indicate bad faith. Indeed, there the court determines that the person be- Titanic, Inc. v. Haver, 171 F.3d 943, 957–58 (4th are cases in which a person registers a name lieved and had reasonable grounds to believe Cir. 1999) (‘‘In rem actions only require that in anticipation of a business venture that that the use of the domain name was a fair a party seeking an interest in a res bring the simply never pans out. And someone who has use or otherwise lawful. res into the custody of the court and provide a legitimate registration of a domain name Paragraph (1)(C) makes clear that in any reasonable, public notice of its intention to that mirrors someone else’s domain name, civil action brought under the new section enable others to appear in the action to such as a trademark owner that is a lawful 43(d), a court may order the forfeiture, can- claim an interest in the res.’’); Chapman v. concurrent user of that name with another cellation, or transfer of a domain name to Vande Bunte, 604 F. Supp. 714, 716–17 (E.D. trademark owner, may, in fact, wish to sell the owner of the mark. N.C. 1985) (‘‘In a true in rem proceeding, in that name to the other trademark owner. Paragraph (1)(D) clarifies that a prohibited order to subject property to a judgment in This bill does not imply that these facts are ‘‘use’’ of a domain name under the bill ap- rem, due process requires only that the prop- an indication of bad-faith. It merely provides plies only to a use by the domain name reg- erty itself have certain minimum contacts a court with the necessary discretion to rec- istrant or that registrant’s authorized li- with the territory of the forum.’’). By authorizing in rem jurisdiction, the Act ognize the evidence of bad-faith when it is censee. also attempts to respond to the problems present. In practice, the offer to sell domain Paragraph (1)(E) defines what means to faced by trademark holders in attempting to names for exorbitant amounts to the rightful ‘‘traffic in’’ a domain name. Under this Act, effect personal service of process on mark owner has been one of the most com- ‘‘traffics in’’ refers to transactions that in- cyberpirates. In an effort to avoid being held mon threads in abusive domain name reg- clude, but are not limited to, sales, pur- accountable for their infringement or dilu- istrations. Finally, by using the financial chases, loans, pledges, licenses, exchanges of tion of famous trademarks, cyberpirates gain standard, this paragraph allows a court currency, and any other transfer for consid- often have registered domain names under to examine the motives of the seller. eration or receipt in exchange for consider- fictitious names and addresses or have used Seventh, under paragraph (1)(B)(i)(VII), a ation. offshore addresses or companies to register court may consider the registrant’s inten- Paragraph (2)(A) provides for in rem juris- domain names. Even when they actually do tional provision of material and misleading diction, which allows a mark owner to seek receive notice of a trademark holder’s claim, false contact information in an application the forfeiture, cancellation, or transfer of an cyberpirates often either refuse to acknowl- for the domain name registration, the per- infringing domain name by filing an in rem edge demands from a trademark holder alto- son’s intentional failure to maintain accu- action against the name itself, where the gether, or simply respond to an initial de- rate contact information, and the person’s mark owner has satisfied the court that it mand and then ignore all further efforts by prior conduct indicating a pattern of such has exercised due diligence in trying to lo- the trademark holder to secure the conduct. Falsification of contact informa- cate the owner of the domain name but is cyberpirate’s compliance. The in rem provi- unable to do so, or where the mark owner is tion with the intent to evade identification sions of the Act accordingly contemplate otherwise unable to obtain in personam ju- and service of process by trademark owners that a trademark holder may initiate in rem risdiction over such person. As indicated is also a common thread in cases of proceedings in cases where domain name reg- above, a significant problem faced by trade- cybersquatting. This factor recognizes that istrants are not subject to personal jurisdic- mark owners in the fight against fact, while still recognizing that there may tion or cannot reasonably be found by the cybersquatting is the fact that many be circumstances in which the provision of trademark holder. false information may be due to other fac- cybersquatters register domain names under Paragraph (2)(C) provides that in an in rem tors, such as mistake or, as some have sug- aliases or otherwise provide false informa- proceeding, a domain name shall be deemed gested in the case of political dissidents, for tion in their registration applications in to have its situs in the judicial district in purposes of anonymity. This bill balances order to avoid identification and service of which (1) the domain name registrar, reg- those factors by limiting consideration to process by the mark owner. This bill will al- istry, or other domain name authority that the person’s contact information, and even leviate this difficulty, while protecting the registered or assigned the domain name is lo- then requiring that the provision of false in- notions of fair play and substantial justice, cated, or (2) documents sufficient to estab- formation be material and misleading. As by enabling a mark owner to seek an injunc- lish control and authority regarding the dis- with the other factors, this factor is non- tion against the infringing property in those position of the registration and use of the exclusive and a court is called upon to make cases where, after due diligence, a mark domain name are deposited with the court. a determination based on the facts presented owner is unable to proceed against the do- Paragraph (2)(D) limits the relief available whether or not the provision of false infor- main name registrant because the registrant in such an in rem action to an injunction or- mation does, in fact, indicate bad-faith. has provided false contact information and is dering the forfeiture, cancellation, or trans- Eight, under paragraph (1)(B)(i)(VIII), a otherwise not to be found, or where a court fer of the domain name. Upon receipt of a court may consider the domain name reg- is unable to assert personal jurisdiction over written notification of the complaint, the istrant’s acquisition of multiple domain such person, provided the mark owner can domain name registrar, registry, or other au- names which the person knows are identical show that the domain name itself violates thority is required to deposit with the court or confusingly similar to, or dilutive of, oth- substantive federal trademark law (i.e., that documents sufficient to establish the court’s ers’ marks. This factor recognizes the in- the domain name violates the rights of the control and authority regarding the disposi- creasingly common cybersquatting practice registrant of a mark registered in the Patent tion of the registration and use of the do- known as ‘‘warehousing’’, in which a and Trademark Office, or section 43(a) or (c) main name to the court, and may not trans- cybersquatter registers multiple domain of the Trademark Act). Under the bill, a fer, suspend, or otherwise modify the domain names—sometimes hundreds, even thou- mark owner will be deemed to have exercised name during the pendency of the action, ex- sands—that mirror the trademarks of others. due diligence in trying to find a defendant if cept upon order of the court. Such domain

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00062 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14715 name registrar, registry, or other authority mate works of authorship would not exempt graph (D)(iv) in section 32(2), a trademark is immune from injunctive or monetary re- a person who registers a personal name as a owner who knowingly and materially mis- lief in such an action, except in the case of domain name with the intent to sell the do- represents to the domain name registrar or bad faith or reckless disregard, which would main name by itself, or in conjunction with registry that a domain name is infringing include a willful failure to comply with any a work of authorship (e.g., a copyrighted web shall be liable to the domain name registrant such court order. page) where the real object of the sale is the for damages resulting from the suspension, Paragraph (3) makes clear that the new domain name, rather than the copyrighted cancellation, or transfer of the domain civil action created by this Act and the in work. name. In addition, the court may grant in- rem action established therein, and any rem- In sum, this subsection is a narrow provi- junctive relief to the domain name reg- edies available under such actions, shall be sion intended to curtail one form of istrant by ordering the reactivation of the in addition to any other civil action or rem- ‘‘cybersquatting’’—the act of registering domain name or the transfer of the domain edy otherwise applicable. This paragraph someone else’s name as a domain name for name back to the domain name registrant. thus makes clear that the creation of a new the purpose of demanding remuneration from In creating a new subparagraph (D)(iii) of section 43(d) in the Trademark Act does not the person in exchange for the domain name. section 32(2), this section codifies current in any way limit the application of current Neither this section nor any other section in case law limiting the secondary liability of provisions of trademark, unfair competition this bill is intended to create a right of pub- domain name registrars and registries for and false advertising, or dilution law, or licity of any kind with respect to domain the act of registration of a domain name, ab- other remedies under counterfeiting or other names. Nor is it intended to create any new sent bad-faith on the part of the registrar statutes, to cybersquatting cases. property rights, intellectual or otherwise, in and registry. Finally, subparagraph (D)(v) provides addi- Paragraph (4) makes clear that the in rem a domain name that is the name of a person. tional protections for domain name holders jurisdiction established by the bill is in addi- This subsection applies prospectively only, by allowing a domain name registrant whose tion to any other jurisdiction that otherwise affecting only those domain names reg- name has been suspended, disabled, or trans- exists, whether in rem or in personam. istered on or after the date of enactment of this Act. ferred to file a civil action to establish that Subsection (b). Cyberpiracy Protection for Indi- the registration or use of the domain name viduals Sec. 3003. Damages and Remedies by such registrant is not a violation of the Subsection (b) prohibits the registration of This section applies traditional trademark Lanham Act. In such cases, a court may a domain name that is the name of another remedies, including injunctive relief, recov- grant injunctive relief to the domain name living person, or a name that is substantially ery of defendant’s profits, actual damages, registrant, including the reactivation of the and confusingly similar thereto, without and costs, to cybersquatting cases under the domain name or transfer of the domain name such person’s permission, if the registrant’s new section 43(d) of the Trademark Act. The to the domain name registrant. specific intent is to profit from the domain bill also amends section 35 of the Trademark Sec. 3005. Definitions name by selling it for financial gain to such Act to provide for statutory damages in This section amends the Trademark Act’s person or a third party. While the provision cybersquatting cases, in an amount of not definitions section (section 45) to add defini- is broad enough to apply to the registration less than $1,000 and not more than $100,000 tions for key terms used in this Act. First, of full names (e.g., johndoe.com), appella- per domain name, as the court considers the term ‘‘Internet’’ is defined consistent tions (e.g., doe.com), and variations thereon just. with the meaning given that term in the (e.g. john-doe.com or jondoe.com), the provi- Sec. 3004. Limitation on Liability Communications Act (47 U.S.C. 230(f)(1)). sion is still very narrow in that it requires a This section amends section 32(2) of the Second, this section creates a narrow defini- showing that the registrant of the domain Trademark Act to extend the Trademark tion of ‘‘domain name’’ to target the specific name registered that name with a specific Act’s existing limitations on liability to the bad faith conduct sought to be addressed intent to profit from the name by selling it cybersquatting context. This section also while excluding such things as screen names, to that person or to a third party for finan- creates a new subparagraph (D) in section file names, and other identifiers not assigned cial gain. This section authorizes the court 32(2) to encourage domain name registrars by a domain name registrar or registry. to grant injunctive relief, including ordering and registries to work with trademark own- Sec. 3006. Study on Abusive Domain Name Reg- the forfeiture or cancellation of the domain ers to prevent cybersquatting through a lim- istrations Involving Personal Names name or the transfer of the domain name to ited exemption from liability for domain This section directs the Secretary of Com- the plaintiff. Although the subsection does name registrars and registries that suspend, merce, in consultation with the Patent and not authorize a court to grant monetary cancel, or transfer domain names pursuant Trademark Office and the Federal Election damages, the court may award costs and at- to a court order or in the implementation of Commission, to conduct a study and report torneys’ fees to the prevailing party in ap- a reasonable policy prohibiting to Congress with recommendations on guide- propriate cases. cybersquatting. Under this exemption, a reg- lines and procedures for resolving disputes This subsection does not prohibit the reg- istrar, registry, or other domain name reg- involving the registration or use of domain istration of a domain name in good faith by istration authority that suspends, cancels, names that include personal names of others an owner or licensee of a copyrighted work, or transfers a domain name pursuant to a or names that are confusingly similar there- such as an audiovisual work, a sound record- court order or a reasonable policy prohib- to. This section further directs the Secretary ing, a book, or other work of authorship, iting cybersquatting will not be held liable of Commerce to collaborate with the Inter- where the personal name is used in, affiliated for monetary damages, and will be not be net Corporation for Assigned Names and with, or related to that work, where the per- subject to injunctive relief provided that the Numbers (ICANN) to develop guidelines and son’s intent in registering the domain is not registrar, registry, or other registration au- procedures for resolving disputes involving to sell the domain name other than in con- thority has deposited control of the domain the registration or use of domain names that junction with the lawful exploitation of the name with a court in which an action has include personal names of others or names work, and where such registration is not pro- been filed regarding the disposition of the that are confusingly similar thereto. hibited by a contract between the domain domain name, it has not transferred, sus- Sec. 3007. Historic Preservation name registered and the named person. This pended, or otherwise modified the domain This section provides a limited immunity limited exemption recognizes the First name during the pendency of the action, from suit under trademark law for historic Amendment issues that may arise in such other than in response to a court order, and buildings that are on or eligible for inclusion cases and defers to existing bodies of law it has not willfully failed to comply with any on the National Register of Historic Places, that have developed under State and Federal such court order. Thus, the exemption will or that are designated as an individual land- law to address such uses of personal names allow a domain name registrar, registry, or mark or as a contributing building in a his- in conjunction with works of expression. other registration authority to avoid being toric district. Such an exemption is not intended to pro- joined in a civil action regarding the disposi- Sec. 3008. Savings Clause vide a loophole for those whose specific in- tion of a domain name that has been taken This section provides an explicit savings tent is to profit from another’s name by sell- down pursuant to a dispute resolution pol- clause making clear that the bill does not af- ing the domain name to that person or a icy, provided the court has obtained control fect traditional trademark defenses, such as third party other than in conjunction with over the name from the registrar, registry, fair use, or a person’s first amendment the bona fide exploitation of a legitimate or other registration authority, but such rights. work of authorship. For example, the reg- registrar, registry, or other registration au- Sec. 3009. Effective Date istration of a domain name containing a per- thority would not be immune from suit for This section provides that damages pro- sonal name by the author of a screenplay injunctive relief where no such action has vided for under this bill shall not apply to that bears the same name, with the intent to been filed or where the registrar, registry, or the registration, trafficking, or use of a do- sell the domain name in conjunction with other registration authority has transferred, main name that took place prior to the en- the sale or license of the screenplay to a pro- suspended, or otherwise modified the domain actment of this Act. duction studio would not be barred by this name during the pendency of the action or subsection, although other provisions of wilfully failed to comply with a court order. TITLE VI—INVENTOR PROTECTION State or Federal law may apply. On the This section also protects the rights of do- Sec. 4001. Short Title other hand, the exemption for good faith reg- main name registrants against overreaching This title may be cited as the ‘‘American istrations of domain names tied to legiti- trademark owners. Under a new subpara- Inventors Protection Act of 1999.’’

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00063 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 S14716 CONGRESSIONAL RECORD — SENATE November 17, 1999 Sec. 4002. Table of Contents number of customers who have contracted tion promotion services. It is anticipated Section 4002 enumerates the table of con- for services with the invention promoter in that the Director will use appropriate discre- tents of this title. the prior five years; (3) The number of cus- tion in making such complaints available to tomers known by the invention promoter to the public for a reasonably sufficient, yet SUBTITLE A—INVENTORS’ RIGHTS have received a net financial profit as a di- limited, length of time, such as a period of Subtitle A creates a new section 297 in rect result of the invention promoter’s serv- three years from the date of receipt, and chapter 29 of title 35 of the United States ices; (4) The number of customers known by that the Director will consult with the Fed- Code, designed to curb the deceptive prac- the invention promoter to have received li- eral Trade Commission to determine wheth- tices of certain invention promotion compa- cense agreements for their inventions as a er the disclosure requirements of the FTC nies. Many of these companies advertise on direct result of the invention promoter’s and section 297(a) can be coordinated. television and in magazines that inventors services; and (5) the names and addresses of Sec. 4103. Effective date may call a toll-free number for assistance in all previous invention promotion companies This section provides that the effective marketing their inventions. They are sent an with which the invention promoter or its of- invention evaluation form, which they are ficers have collectively or individually been date of section 297 will be 60 days after the asked to complete to allow the promoter to affiliated in the previous 10 years to enable date of enactment of this Act. provide expert analysis of the market poten- the customer to evaluate the reputations of SUBTITLE B—PATENT AND TRADEMARK FEE tial of their inventions. The inventors return these companies. FAIRNESS the form with descriptions of the inventions, New section 297(b) of title 35 establishes a Subtitle B provides patent and trademark which become the basis for contacts by sales- civil cause of action against any invention fee reform, by lowering patent fees, by di- people at the promotion companies. The next promoter who injures a customer through recting the Director of the USPTO to study step is usually a ‘‘professional’’-appearing any material false or fraudulent statement, alternative fee structures to encourage full product research report which contains noth- representation, or omission of material fact participation in our patent system by all in- ing more than boilerplate information stat- by the invention promoter, or any person ventors, large and small, and by strength- ing that the invention has outstanding mar- acting on behalf of the invention promoter, ening the prohibition against the use of ket potential and fills an important need in or through failure of the invention promoter trademark fees for non-trademark uses. the field. The promotion companies attempt to make all the disclosures required under Sec. 4201. Short title to convince the inventor to buy their mar- subsection (a). In such a civil action, the cus- keting services, normally on a sliding scale tomer may recover, in addition to reasonable This subtitle may be cited as the ‘‘Patent in which the promoter will ask for a front- costs and attorneys’ fees, the amount of ac- and Trademark Fee Fairness Act of 1999.’’ end payment of up to $10,000 and a percent- tual damages incurred by the customer or, at Sec. 4202. Adjustment of patent fees. age of resulting profits, or a reduced front- the customer’s election, statutory damages This section reduces patent filing an re- end payment of $6,000 or $8,000 with commen- up to $5,000, as the court considers just. Sub- issue fees by $50, and reduces patent mainte- surately larger royalties on profits. Once section (b)(2) authorizes the court to in- nance fees by $110. This would mark only the paid under such a scenario, a promoter will crease damages to an amount not to exceed second time in history that patent fees have typically and only forward information to a three times the amount awarded as statu- been reduced. Because trademark fees have list of companies that never respond. tory or actual damages in a case where the not been increased since 1993 and because of This subtitle addresses these problems by customer demonstrates, and the court finds, the application of accounting based cost (1) requiring an invention promoter to dis- that the invention promoter intentionally principles and systems, patent fee income close certain materially relevant informa- misrepresented or omitted a material fact to has been partially offsetting the cost of tion to a customer in writing prior to enter- such customer, or failed to make the re- trademark operations. This section will re- ing into a contract for invention promotion quired disclosures under subsection (a), for store fairness to patent and trademark fees services; (2) establishing a federal cause of the purpose of deceiving the customer. In de- by reducing patent fees to better reflect the action for inventors who are injured by ma- termining the amount of increased damages, cost of services. terial false of fraudulent statements or rep- courts may take into account whether regu- Sec. 4203. Adjustment of trademark fees. resentations, or any omission of material latory sanctions or other corrective action This section will allow the Director of the fact, by an invention promoter, or by the in- has been taken as a result of previous com- USPTO to adjust trademark fees in fiscal vention promoter’s failure to make the re- plaints against the invention promoter. year 2000 without regard to fluctuations in quired written disclosures; and (3) requiring New section 297(c) defines the terms used the Consumer Price Index in order to better the Director of the United States Patent and in the section. These definitions are care- align those fees with the costs of services. Trademark Office to make publicly available fully crafted to cover true invention pro- complaints received involving invention pro- moters without casting the net too broadly. Sec. 4204. Study on alternative fee structures moters, along with the response to such com- Paragraph (3) excepts from the definition of This section directs the Director of the plaints, if any, from the invention pro- ‘‘invention promoter’’ departments and USPTO to conduct a study and report to the moters. agencies of the Federal, state, and local gov- Judiciary Committees of the House and Sen- Sec. 4101. Short title ernments; any nonprofit, charitable, sci- ate within one year on alternative fee struc- entific, or educational organizations quali- tures that could be adopted by the USPTO to This subtitle may be cited as the ‘‘Inven- fied under applicable State laws or described encourage maximum participation in the tors’’ Rights Act of 1999.’’ under § 170(b)(1)(A) of the Internal Revenue patent system by the American inventor Sec. 4102. Integrity in invention promotion serv- Code of 1986; persons or entities involved in community. ices evaluating the commercial potential of, or Sec. 4205. Patent and Trademark Office funding This section adds a new section 297 to in offering to license or sell, a utility patent or Pursuant to section 42(c) of the Patent chapter 29 of title 35, United States Code, in- a previously filed nonprovisional utility pat- Act, fees available to the Commissioner tended to promote integrity in invention ent application; any party participating in a under section 31 of the Trademark Act of promotion services. Legitimate invention as- transaction involving the sale of the stock or 1946 6 may be used only for the processing of sistance and development organizations can assets of a business; or any party who di- trademark registrations and for other trade- be of great assistance to novice inventors by rectly engages in the business of retail sales mark-related activities, and to cover a pro- providing information on how to protect an or distribution of products. Paragraph (4) de- portionate share of the administrative costs invention, how to develop it, how to obtain fines the term ‘‘invention promotion serv- of the USPTO. In an effort to more tightly financing to manufacture it, or how to li- ices’’ to mean the procurement or attempted ‘‘fence’’ trademark funds for trademark pur- cense or sell the invention. While many in- procurement for a customer of a firm, cor- poses, section 4205 amends this language vention developers are legitimate, the un- poration, or other entity to develop and mar- such that all (trademark) fees available to scrupulous ones take advantage of untutored ket products or services that include the cus- the Commissioner shall be used for trade- inventors, asking for large sums of money up tomer’s invention. mark registration and other trademark-re- front for which they provide no real service New section 297(d) requires the Director of lated purposes. In other words, the Commis- in return. This new section provides a much the USPTO to make publicly available all sioner may exercise no discretion when needed safeguard to assist independent in- complaints submitted to the USPTO regard- spending funds; they must be earmarked for ventors in avoiding becoming victims of the ing invention promoters, together with any trademark purposes. predatory practices of unscrupulous inven- responses by invention promoters to those tion promoters. complaints. The Director is required to no- SUBTITLE C—FIRST INVENTOR DEFENSE New section 297(a) of title 35 requires an in- tify the invention promoter of a complaint Subtitle C strikes an equitable balance be- vention promoter to disclose certain materi- and provide a reasonable opportunity to tween the interests of U.S. inventors who ally relevant information to a customer in reply prior to making such complaint public. have invented and commercialized business writing prior to entering into a contract for Section 297(d)(2) authorizes the Director to methods and processes, many of which until invention promotion services. Such informa- request from Federal and State agencies cop- recently were thought not to be patentable, tion includes: (1) The number of inventions ies of any complaints relating to invention and U.S. or foreign inventors who later pat- evaluated by the invention promoter and promotion services they have received and to ent the methods and processes. The subtitle stating the number of those evaluated posi- include those complaints in the records creates a defense for inventors who have re- tively and the number negatively; (2) The maintained by the USPTO regarding inven- duced an invention to practice in the U.S. at

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00064 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14717 least one year before the patent filing date of is inapplicable to subsequent commercializa- owner or persons in privity with the patent another, typically later, inventor and com- tion or use outside the entities; owner. Third, subsection (b)(3) makes clear mercially used the invention in the U.S. be- (3) ‘‘Method’’ means any method for doing that the application of the defense does not fore the filing date. A party entitled to the or conducting an entity’s business; and (4) create a general license under all claims of defense must not have derived the invention ‘‘Effective filing date’’ means the earlier of the patent in question—it extends only to from the patent owner. The bill protects the the actual filing date of the application for the specific subject matter claimed in the patent owner by providing that the estab- the patent or the filing date of any earlier patent with respect to which the person can lishment of the defense by such an inventor US, foreign, or international application to assert the defense. At the same time, how- or entrepreneur does not invalidate the pat- which the subject matter at issue is entitled ever, the defense does extend to variations in ent. under the Patent Act. the quantity or volume of use of the claimed The subtitle clarifies the interface between To be ‘‘commercially used’’ or in ‘‘com- subject matter, and to improvements that do two key branches of intellectual property mercial use’’ for purposes of subsection (a), not infringe additional, specifically-claimed law—patents and trade secrets. Patent law the use must be in connection with either an subject matter. serves the public interest by encouraging in- internal commercial use or an actual arm’s- Subsection (b)(4) requires that the person novation and investment in new technology, length sale or other arm’s-length commer- asserting the defense has the burden of proof and may be thought of as providing a right cial transfer of a useful end result. The in establishing it by clear and convincing to exclude other parties from an invention in method that is the subject matter of the de- evidence. Subsection (b)(5) establishes that return for the inventor making a public dis- fense may be an internal method for doing the person who abandons the commercial use closure of the invention. Trade secret law, business, such as an internal human re- of subject matter may not rely on activities however, also serves the public interest by sources management process, or a method performed before the date of such abandon- protecting investments in new technology. for conducting business such as a prelimi- ment in establishing the defense with respect Trade secrets have taken on a new impor- nary or intermediate manufacturing proce- to actions taken after the date of abandon- tance with an increase in the ability to pat- dure, which contributes to the effectiveness ment. Such a person can rely only on the ent all business methods and processes. It of the business by producing a useful end re- date when commercial use of the subject would be administratively and economically sult for the internal operation of the busi- matter was resumed. impossible to expect any inventor to apply ness or for external sale. Commercial use Subsection (b)(6) notes that the defense for a patent on all methods and processes does not require the subject matter at issue may only be asserted by the person who per- now deemed patentable. In order to protect to be accessible to or otherwise known to the formed the acts necessary to establish the inventors and to encourage proper disclo- public. defense, and, except for transfer to the pat- Subject matter that must undergo a pre- sure, this subtitle focuses on methods for ent owner, the right to assert the defense marketing regulatory review period during doing and conducting business, including cannot be licensed, assigned, or transferred which safety or efficacy is established before methods used in connection with internal to a third party except as an ancillary and commercial marketing or use is considered commercial operations as well as those used subordinate part of a good-faith assignment to be commercially used and in commercial in connection with the sale or transfer of or transfer for other reasons of the entire en- use during the regulatory review period. useful end results—whether in the form of terprise or line of business to which the de- The issue of whether an invention is a physical products, or in the form of services, fense relates. or in the form of some other useful results; method is to be determined based on its un- When the defense has been transferred for example, results produced through the derlying nature and not on the technicality along with the enterprise or line of business manipulation of data or other inputs to of the form of the claims in the patent. For to which it relates as permitted by sub- produce a useful result. example, a method for doing or conducting section (b)(6), subsection (b)(7) limits the The earlier-inventor defense is important business that has been claimed in a patent as sites for which the defense may be asserted. to many small and large businesses, includ- a programmed machine, as in the State Specifically, when the enterprise or line of ing financial services, software companies, Street case, is a method for purposes of sec- business to which the defense relates has and manufacturing firms—any business that tion 273 if the invention could have as easily been transferred, the defense may be as- relies on innovative business processes and been claimed as a method. Form should not serted only for uses at those sites where the methods. The 1998 opinion by the U.S. Court rule substance. subject matter was used before the later of of Appeals for the Federal Circuit in State Subsection (b)(1) of section 273 establishes the patent filing date or the date of transfer Street Bank and Trust Co. v. Signature Fi- a general defense against infringement under of the enterprise or line of business. nancial Group,7 which held that methods of section 271 of the Patent Act. Specifically, a doing business are patentable, has added to person will not be held liable with respect to Subsection (b)(8) states that a person who the urgency of the issue. As the Court noted, any subject matter that would otherwise in- fails to demonstrate a reasonable basis for the reference to the business method excep- fringe one or more claims to a method in an- asserting the defense may be held liable for tion had been improperly applied to a wide other party’s patent if the person: attorneys’ fees under section 285 of the Pat- variety of processes, blurring the essential (1) Acting in good faith, actually reduced ent Act. question of whether the invention produced a the subject matter to practice at least one Subsection (b)(9) specifies that the success- ‘‘useful, concrete, and tangible result.’’ In year before the effective filing date of the ful assertion of the defense does not mean the wake of State Street, thousands of meth- patent; and that the affected patent is invalid. Para- ods and processes used internally are now (2) Commercially used the subject matter graph (9) eliminates a point of uncertainty being patented. In the past, many businesses before the effective filing date of the patent. under current law, and strikes a balance be- that developed and used such methods and The first inventor defense is not limited to tween the rights of an inventor who obtains processes thought secrecy was the only pro- methods in any particular industry such as a patent after another inventor has taken tection available. Under established law, any the financial services industry, but applies the steps to qualify for a prior use defense. of these inventions which have been in com- to any industry which relies on trade secrecy The bill provides that the commercial use of mercial use—public or secret—for more than for protecting methods for doing or con- a method in operating a business before the one year cannot now be the subject of a valid ducting the operations of their business. patentee’s filing date, by an individual or en- Subsection (b)(2) states that the sale or U.S. patent. tity that can establish a section 273 defense, other lawful disposition of a useful end re- Sec. 4301. Short title does not invalidate the patent. For example, sult produced by a patented method, by a under current law, although the matter has This subtitle may be cited as the ‘‘First In- person entitled to assert a section 273 de- seldom been litigated, a party who commer- ventor Defense Act of 1999.’’ fense, exhausts the patent owner’s rights cially used an invention in secrecy before the Sec. 4302. Defense to patent infringement based with respect to that end result to the same patent filing date and who also invented the on earlier inventor extent such rights would have been ex- subject matter before the patent owner’s in- In establishing the defense, subsection (a) hausted had the sale or other disposition vention may argue that the patent is invalid of section 4302 creates a new section 273 of been made by the patent owner. For exam- under section 102 (g) of the Patent Act. Argu- the Patent Act, which in subsection (a) sets ple, if a purchaser would have had the right ably, commercial use of an invention in se- forth the following definitions: to resell a product or other end result if crecy is not suppression or concealment of (1) ‘‘Commercially used and commercial bought from the patent owner, the purchaser the invention within the meaning of section use’’ mean use of any method in the United will have the same right if the product is 102(g), and therefore the party’s earlier in- States so long as the use is in connection purchased from a person entitled to a section vention could invalidate the patent.8 with an internal commercial use or an actual 273 defense. sale or transfer of a useful end result; Subsection (b)(3) creates limitations and Sec. 4303. Effective date and applicability (2) ‘‘Commercial use as applied to a non- qualifications on the use of the defense. The effective date for subtitle C is the date profit research laboratory and nonprofit en- First, a person may not assert the defense of enactment, except that the title does not tities such as a university, research center, unless the invention for which the defense is apply to any infringement action pending on or hospital intended to benefit the public’’ asserted is for a commercial use of a method the date of enactment or to any subject mat- means that such entities may assert the de- as defined in section 273(a)(1) and (3). Second, ter for which an adjudication of infringe- fense only based on continued use by and in a person may not assert the defense if the ment, including a consent judgment, has the entities themselves, but that the defense subject matter was derived from the patent been made before the date of enactment.

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00065 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 S14718 CONGRESSIONAL RECORD — SENATE November 17, 1999

SUBTITLE D—PATENT TERM GUARANTEE (3) incurred at the request of an applicant and the appellate jurisdiction of the U.S. Subtitle D amends the provisions in the in excess of the three months to respond to Court of Appeals for the Federal Circuit.14 Patent Act that compensate patent appli- a notice from the Office permitted by section Sec. 4403. Continued examination of patent ap- cants for certain reductions in patent term 154(b)(2)(C)(ii) unless excused by a showing plications that are not the fault of the applicant. The by the applicant under section 154(b)(3)(C) Section 4403 amends section 132 of the Pat- provisions that were initially included in the that in spite of all due care the applicant ent Act to permit an applicant to request term adjustment provisions of patent bills in could not respond within three months that an examiner continue the examination the 105th Congress only provided adjust- shall not be considered a delay by the of an application following a notice of ments for up to 10 years for secrecy orders, USPTO and shall not be counted for purposes ‘‘final’’ rejection by the examiner. New sec- interferences, and successful appeals. Not of determining whether the patent issued tion 132(b) authorizes the Director to pre- only are these adjustments too short in some within three years from the actual filing scribe regulations for the continued exam- cases, but no adjustments were provided for date. ination of an application notwithstanding a administrative delays caused by the USPTO Day-for-day restoration is also granted final rejection, at the request of the appli- that were beyond the control of the appli- under new section 154(b)(1)(C) for delays re- cant. The Director may also establish appro- cant. Accordingly, subtitle D removes the 10– sulting from interferences,11 secrecy orders,12 priate fees for continued examination pro- year caps from the existing provisions, adds and appeals by the Board of Patent Appeals ceedings, and shall provide a 50% fee reduc- a new provision to compensate applicants and Interferences or a Federal court in which tion for small entities which qualify for such fully for USPTO-caused administrative a patent was issued as a result of a decision treatment under section 41(h)(1) of the Pat- delays, and, for good measure, includes a new reversing an adverse determination of pat- ent Act. provision guaranteeing diligent applicants at entability. Section 4404. Technical clarification least a 17–year term by extending the term Section 4402 imposes limitations on res- Section 4404 of the bill coordinates tech- of any patent not granted within three years toration of term. In general, pursuant to new nical term adjustment provisions set forth in of filing. Thus, no patent applicant dili- § 154(b)(2)(A)-(C) of the bill, total adjust- section 154(b) with those in section 156(a) of gently seeking to obtain a patent will re- ments granted for restorations under (b)(1) the Patent Act. ceive a term of less than the 17 years as pro- are reduced as follows: Section 4405. Effective date 9 vided under the pre-GATT standard; in fact, (1) To the extent that there are multiple The effective date for the amendments in most will receive considerably more. Only grounds for extending the term of a patent section 4402 and 4404 is six months after the those who purposely manipulate the system that may exist simultaneously (e.g., delay date of enactment and, with the exception of to delay the issuance of their patents will be due to a secrecy order under section 181 and design applications (the terms of which are penalized under subtitle D, a result that the administrative delay under section not measured from filing), applies to any ap- Conferees believe entirely appropriate. 154(b)(1)(A)), the term should not be extended plication filed on or after such date. The Sec. 4401. Short title for each ground of delay but only for the ac- amendments made by section 4403 take effect tual number of days that the issuance of a This subtitle may be cited as the ‘‘Patent six months after date of enactment to allow patent was delayed; Term Guarantee Act of 1999.’’ the USPTO to prepare implementing regula- (2) The term of any patent which has been tions an apply to all national and inter- Sec.4402. Patent term guarantee authority disclaimed beyond a date certain may not re- national (PCT) applications filed on or after Section 4402 amends section 154(b) of the ceive an adjustment beyond the expiration June 8, 1995. Patent Act covering term. First, new sub- date specified in the disclaimer; and SUBTITLE E—DOMESTIC PUBLICATION OF section (b)(1)(A)(i)-(iv) guarantees day-for- (3) Adjustments shall be reduced by a pe- PATENT APPLICATIONS PUBLISHED ABROAD day restoration of term lost as a result of riod equal to the time in which the applicant delay created by the USPTO when the agen- failed to engage in reasonable efforts to con- Subtitle E provides for the publication of cy fails to: clude prosecution of the application, based pending patent applications which have a corresponding foreign counterpart. Any (1) Make a notification of the rejection of on regulations developed by the Director, pending U.S. application filed only in the any claim for a patent or any objection or and an applicant shall be deemed to have United States (e.g., one that does not have a argument under § 132, or give or mail a writ- failed to engage in such reasonable efforts foreign counterpart) will not be published if ten notice of allowance under § 151, within 14 for any periods of time in excess of three the applicant so requests. Thus, an applicant months after the date on which a non-provi- months that are taken to respond to a notice wishing to maintain her application in con- sional application was actually filed in the from the Office making any rejection or fidence may do so merely by filing only in USPTO; other request; the United States and requesting that the (2) Respond to a reply under § 132, or to an New section 154(b)(3) sets forth the proce- USPTO not publish the application. For appeal taken under § 134, within four months dures for the adjustment of patent terms. those applicants who do file abroad or who after the date on which the reply was filed or Paragraph (3)(A) empowers the Director to voluntarily publish their applications, provi- the appeal was taken; establish regulations by which term exten- sional rights will be available for assertion (3) Act on an application within four sions are determined and contested. Para- against any third party who uses the claimed months after the date of a decision by the graph (3)(B) requires the Director to send a invention between publication and grant pro- Board of Patent Appeals and Interferences notice of any determination with the notice vided that substantially similar claims are under § 134 or § 135 or a decision by a Federal of allowance and to give the applicant one contained in both the published application court under §§ 141, 145, or 146 in a case in opportunity to request reconsideration of and granted patent. This change will ensure which allowable claims remain in the appli- the determination. Paragraph (3)(C) requires that American inventors will be able to see cation; or (4) Issue a patent within four the Director to reinstate any time the appli- the technology that our foreign competition months after the date on which the issue fee cant takes to respond to a notice from the is seeking to patent much earlier than is was paid under § 151 and all outstanding re- Office in excess of three months that was de- possible today. quirements were satisfied. ducted from any patent term extension that Further, subject to certain limitations, would otherwise have been granted if the ap- Sec. 4501. Short title infra, section 154(b)(1)(B) guarantees a total plicant can show that he or she was, in spite This subtitle may be cited as the ‘‘Domes- application pendency of no more than three of all due care, unable to respond within tic Publication of Foreign Filed Patent Ap- years. Specifically, day-for-day restoration three months. In no case shall more than an plications Act of 1999.’’ of term is granted if the USPTO has not additional three months be reinstated for Sec. 4502. Publication issued a patent within three years after ‘‘the each response. Paragraph (3)(D) requires the As provided in subsection (a) of section actual date of the application in the United Director to grant the patent after comple- 4502, amended section 122(a) of the Patent States.’’ This language was intentionally se- tion of determining any patent term exten- Act continues the general rule that patent lected to exclude the filing date of an appli- sion irrespective of whether the applicant applications will be maintained in con- cation under the Patent Cooperation Treaty appeals. fidence. Paragraph (1)(A) of new subsection (PCT).10 Otherwise, an applicant could obtain New section 154(b)(4) regulates appeals of (b) of section 122 creates a new exception to up to a 30–month extension of a U.S. patent term adjustment determinations made by this general rule by requiring publication of merely by filing under PCT, rather than di- the Director. Paragraph (4)(A) requires a dis- certain applications promptly after the expi- rectly in the USPTO, gaining an unfair ad- satisfied applicant to seek remedy in the ration of an 18–month period following the vantage in contrast to strictly domestic ap- District Court for the District of Columbia earliest claimed U.S. or foreign filing date. plicants. Any periods of time under the Administrative Procedures Act 13 The Director is authorized by subparagraph (1) consumed in the continued examination within 180 days after the grant of the patent. (B) to determine what information con- of the application under § 132(b) of the Patent The Director shall alter the term of the pat- cerning published applications shall be made Act as added by section 4403 of this Act; ent to reflect any final judgment. Paragraph available to the public, and, under subpara- (2) lost due to an interference under (4)(B) precludes a third party from chal- graph (C) any decision made in this regard is section135(a), a secrecy order under section lenging the determination of a patent term final and not subject to review. 181, or appellate review by the Board of Pat- prior to patent grant. Subsection (b)(2) enumerates exceptions to ent Appeals and Interferences or by a Fed- Section 4402(b) makes certain conforming the general rule requiring publication. Sub- eral court (irrespective of the outcome); and amendments to section 282 of the Patent Act paragraph (A) precludes publication of any

VerDate 29-OCT-99 05:12 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00066 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm12 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14719 application that is: (1) no longer pending at chapter 17 of the Patent Act, which governs under the PCT designating the United States the 18th month from filing; (2) the subject of secrecy of inventions in the interest of na- that is published in a language other than a secrecy order until the secrecy order is re- tional security. English, a translation of the application into scinded; (3) a provisional application;15 or (4) Subsection (b) of section 4502 of subtitle E English. a design patent application.16 requires the Government Accounting Office The requirement of actual notice is crit- Pursuant to subparagraph (B)(i), any appli- (GAO) to conduct a study of applicants who ical. The mere fact that the published appli- cant who is not filing overseas and does not file only in the United States during a three- cation is included in a commercial database wish her application to be published can sim- year period beginning on the effective date where it might be found is insufficient. The ply make a request and state that her inven- of subtitle E. The study will focus on the published applicant must give actual notice tion has not and will not be the subject of an percentage of U.S. applicants who file only of the published application to the accused application filed in a foreign country that re- in the United States versus those who file infringer and explain what acts are regarded quires publication after 18 months. Subpara- outside the United States; how many domes- as giving rise to provisional rights. graph (B)(ii) clarifies that an applicant may tic-only filers request not to be published; Another important limitation on the avail- rescind this request at any time. Moreover, how many who request not to be published ability of provisional royalties is that the if an applicant has requested that her appli- later rescind that request; and whether there claims in the published application that are cation not be published in a foreign country is any correlation between the type of appli- alleged to give rise to provisional rights with a publication requirement, subpara- cant (e.g., small vs. large entity) and publi- must also appear in the patent in substan- graph (B)(iii) imposes a duty on the appli- cation. The Comptroller General must sub- tially identical form. To allow anything less cant to notify the Director of this fact. An mit the findings of the study, once com- than substantial identity would impose an unexcused failure to notify the Director will pleted, to the Committees on the Judiciary unacceptable burden on the public. If provi- result in the abandonment of the applica- of the House and Senate. sional rights were available in the situation tion. If an applicant either rescinds a request Sec. 4503. Time for claiming benefit of earlier fil- where the only valid claim infringed first ap- that her application not be published or noti- ing date peared in substantially that form in the fies the Director that an application has Section 119 of the Patent Act prescribes granted patent, the public would have no been filed in an early publication country or procedures to implement the right to claim guidance as to the specific behavior to avoid through the PCT, the U.S. application will priority under Article 4 of the Paris Conven- between publication and grant. Every person be published at 18 months pursuant to sub- tion for the Protection of Industrial Prop- or company that might be operating within the scope of the disclosure of the published section (b)(1). erty.17 Under that Article, an applicant seek- Finally, under subparagraph (B)(v), where ing protection in the United States may application would have to conduct her own an applicant has filed an application in a for- claim the filing date of an application for private examination to determine whether a eign country, either directly or through the the same invention filed in another Conven- published application contained patentable PCT, so that the application will be pub- tion country—provided the subsequent appli- subject matter that she should avoid. The lished 18 months from its earliest effective cation is filed in the United States within 12 burden should be on the applicant to ini- filing date, the applicant may limit the months of the earlier filing in the foreign tially draft a schedule of claims that gives scope of the publication by the USPTO to country. adequate notice to the public of what she is the total of the cumulative scope of the ap- Section 4503 of subtitle V amends section seeking to patent. plications filed in all foreign countries. 119(b) of the Patent Act to authorize the Di- Amended section 154(d)(3) imposes a six- Where the foreign application is identical to rector to establish a cut-off date by which year statute of limitations from grant in the application filed in the United States or the applicant must claim priority. This is to which an action for reasonable royalties where an application filed under the PCT is ensure that the claim will be made early must be brought. Amended section 154(d)(4) sets forth some identical to the application filed in the enough—generally not later than the 16th additional rules qualifying when an inter- United States, the applicant may not limit month from the earliest effective filing national application under the PCT will give the extent to which the application filed in date—so as to permit an orderly publication rise to provisional rights. The date that will the United States is published. However, schedule for pending applications. As the give rise to provisional rights for inter- where an applicant has limited the descrip- USPTO moves to electronic filing, it is envi- national applications will be the date on tion of an application filed in a foreign coun- sioned that this date could be moved closer which the USPTO receives a copy of the ap- try, either directly or through the PCT in to the 18th month. comparison with the application filed in the The amendment to § 119(b) also gives the plication published under the PCT in the USPTO, the applicant may restrict the pub- Director the discretion to consider the fail- English language; if the application is pub- lication by the USPTO to no more than the ure of the applicant to file a timely claim for lished under the PCT in a language other cumulative details of what will be published priority to be a waiver of any such priority than English, then the date on which provi- in all of the foreign applications and through claim. The Director is also authorized to es- sional rights will arise will be the date on which the USPTO receives a translation of the PCT. The applicant may restrict the ex- tablish procedures (including the payment of the international application in the English tent of publication of her U.S. application by a surcharge) to accept an unintentionally de- language. The Director is empowered to re- submitting a redacted copy of the applica- layed priority claim. quire an applicant to provide a copy of the tion to the USPTO eliminating only those Section 4503(b) of subtitle E amends sec- international application and a translation details that will not be published in any of tion 120 of the Patent Act in a similar way. of it. the foreign applications. Any description This provision empowers the Director to: (1) contained in at least one of the foreign na- establish a time by which the priority of an Sec. 4505. Prior art effect of published applica- tional or PCT filings may not be excluded earlier filed United States application must tions from publication in the corresponding U.S. be claimed; (2) consider the failure to meet Section 4505 amends section 102(e) of the patent application. To ensure that any re- that time limit to be a waiver of the right to Patent Act to treat an application published dacted copy of the U.S. application is pub- claim such priority; and (3) accept an unin- by the USPTO in the same fashion as a pat- lished in place of the original U.S. applica- tentionally late claim of priority subject to ent published by the USPTO. Accordingly, a tion, the redacted copy must be received the payment of a surcharge. published application is given prior art effect within 16 months from the earliest effective Sec. 4504. Provisional rights as of its earliest effective U.S. filing date filing date. Finally, if the published U.S. ap- Section 4504 amends section 154 of the Pat- against any subsequently filed U.S. applica- plication as redacted by the applicant does ent Act by adding a new subsection (d) to ac- tions. As with patents, any foreign filing not enable a person skilled in the art to cord provisional rights to obtain a reason- date to which the published application is make and use the claimed invention, provi- able royalty for applicants whose applica- entitled will not be the effective filing date sional rights under section 154(d) shall not be tions are published under amended section of the U.S. published application for prior art purposes. An exception to this general available. 122(b) of the Patent Act, supra, or applica- rule is made for international applications Subsection (c) requires the Director to es- tions designating the United States filed designating the United States that are pub- tablish procedures to ensure that no protest under the PCT. Generally, this provision es- lished under Article 21(2)(a) of the PCT in or other form of pre-issuance opposition to tablishes the right of an applicant to obtain the English language. Such applications are the grant of a patent on an application may a reasonable royalty from any person who, given a prior art effect as of their inter- be initiated after publication without the ex- during the period beginning on the date that national filing date. The prior art effect ac- press written consent of the applicant. his or her application is published and end- corded to patents under section 4505 remains Subsection (d) protects our national secu- ing on the date a patent is issued— unchanged from present section 102(e) of the rity by providing that no application may be (1) makes, uses, offers for sale, or sells the Patent Act. published under subsection (b)(1) where the invention in the United States, or imports publication or disclosure of such invention such an invention into the United States; or Sec. 4506. Cost recovery for publications would be detrimental to the national secu- (2) if the invention claimed is a process, Section 4506 authorizes the Director to re- rity. In addition, the Director of the USPTO makes, uses, offers for sale, sells, or imports cover the costs of early publication required is required to establish appropriate proce- a product made by that process in the United by the amendment made by section 4502 of dures to ensure that such applications are States; and this Act by charging a separate publication promptly identified and the secrecy of such (3) had actual notice of the published appli- fee after a notice of allowance is given pursu- inventions is maintained in accordance with cation and, in the case of an application filed ant to section 151 of the Patent Act.

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00067 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 S14720 CONGRESSIONAL RECORD — SENATE November 17, 1999 Sec. 4507. Conforming amendments Subtitle F contains the important thresh- by the USPTO or raised in the patent own- Section 4507 consists of various technical old safeguard (also applied in ex parte reex- er’s response. Unless ordered by the Director and conforming amendments to the Patent amination) that an inter partes reexamina- for good cause, the agency must act in an Act. These include amending section 181 of tion cannot be commenced unless the inter partes reexamination matter with spe- the Patent Act to clarify that publication of USPTO makes a determination that a ‘‘sub- cial dispatch. pending applications does not apply to appli- stantial new question’’ of patentability is Proposed section 315 prescribes the proce- cations under secrecy orders, and amending raised. Also, as under Chapter 30, this deter- dures for appeal of an adverse USPTO deci- section 284 of the Patent Act to ensure that mination cannot be appealed, and grounds sion by the patent owner and the third-party increased damages authorized under section for inter partes reexamination are limited to requester in an inter partes reexamination. 284 shall not apply to the reasonable royal- earlier patents and printed publications— Both the patent owner and the third-party ties possible under amended section 154(d). In grounds that USPTO examiners are well- requester are entitled to appeal to the Board addition, section 374 of the Patent Act is suited to consider. of Patent Appeals and Interferences (section amended to provide that the effect of the Sec. 4601. Short title 134 of the Patent Act), but only the patentee publication of an international application This subtitle may be cited as the ‘‘Optional can appeal to the U.S. Court of Appeals for designating the United States shall be the Inter Partes Reexamination Procedure Act.’’ the Federal Circuit (§§ 141–144); either may same as the publication of an application also be a party to any appeal by the other to Sec. 4602. Clarification of Chapter 30 published under amended section 122(b), ex- the Board of Patent Appeals and Inter- cept as its effect as prior art is modified by This section distinguishes Chapter 31 from ferences. The patentee is not entitled to the amended section 102(e) and its giving rise to existing Chapter 30 by changing the title of alternative of an appeal of an inter partes re- provisional rights is qualified by new section Chapter 30 to ‘‘Ex Parte Reexamination of examination to the U.S. District Court for 154(d). Patents.’’ the District of Columbia. Such appeals are Sec. 4508. Effective date Sec. 4603. Definitions rarely taken from ex parte reexamination Subtitle E shall take effect on the date This section amends section 100 of the Pat- proceedings under existing law and its re- that is one year after the date of enactment ent Act by defining ‘‘third-party requester’’ moval should speed up the process. and shall apply to all applications filed as a person who is not the patent owner re- To deter unnecessary litigation, proposed under section 111 of the Patent Act on or questing ex parte reexamination under sec- section 315 imposes constraints on the third- after that date; and to all applications com- tion 302 or inter partes reexamination under party requester. In general, a third-party re- plying with section 371 of the Patent Act section 311. quester who is granted an inter partes reex- that resulted from international applica- Sec. 4604. Optional Inter Partes Reexamination amination by the USPTO may not assert at tions filed on or after that date. The provi- Procedure a later time in any civil action in U.S. dis- 18 sional rights provided in amended section Section 4604 amends Part III of title 35 by trict court the invalidity of any claim fi- 154(d) and the prior art effect provided in inserting a new Chapter 31 setting forth op- nally determined to be patentable on any amended section 102(e) shall apply to all ap- tional inter partes reexamination proce- ground that the third-party requester raised plications pending on the date that is one dures. or could have raised during the inter partes year after the date of enactment that are New section 311, as amended by this sec- reexamination. However, the third-party re- voluntarily published by their applicants. Fi- tion, differs from section 302 of existing law quester may assert invalidity based on newly nally, section 404 (provisional rights) shall in Chapter 30 of the Patent Act by requiring discovered prior art unavailable at the time apply to international applications desig- any person filing a written request for inter of the reexamination. Prior art was unavail- nating the United States that are filed on or partes reexamination to identify the real able at the time of the inter partes reexam- after the date that is one year after the date party in interest. ination if it was not known to the individ- of enactment. Similar to section 303 of existing law, new uals who were involved in the reexamination SUBTITLE F—OPTIONAL INTER PARTES section 312 of the Patent Act confers upon proceeding on behalf of the third-party re- REEXAMINATION PROCEDURE the Director the authority and responsibility quester and the USPTO. Subtitle F is intended to reduce expensive to determine, within three months after the Section 316 provides for the Director to patent litigation in U.S. district courts by filing of a request for inter partes reexam- issue and publish certificates canceling giving third-party requesters, in addition to ination, whether a substantial new question unpatentable claims, confirming patentable the existing ex parte reexamination in Chap- affecting patentability of any claim of the claims, and incorporating any amended or ter 30 of title 35, the option of inter partes patent is raised by the request. Also, the de- new claim determined to be patentable in an reexamination proceedings in the USPTO. cision in this regard is final and not subject inter partes procedure. Congress enacted legislation to authorize ex to judicial review. Subtitle F creates a new section 317 which parte reexamination of patents in the Proposed sections 313–14 under this subtitle sets forth certain conditions by which inter USPTO in 1980, but such reexamination has are similarly modeled after sections 304–305 partes reexamination is prohibited to guard been used infrequently since a third party of Chapter 30. Under proposed section 313, if against harassment of a patent holder. In who requests reexamination cannot partici- the Director determines that a substantial general, once an order for inter partes reex- pate at all after initiating the proceedings. new question of patentability affecting a amination has been issued, neither a third- Numerous witnesses have suggested that the claim is raised, the determination shall in- party requester nor the patent owner may volume of lawsuits in district courts will be clude an order for inter partes reexamination file a subsequent request for inter partes re- reduced if third parties can be encouraged to for resolution of the question. The order may examination until an inter partes reexam- use reexamination by giving them an oppor- be accompanied by the initial USPTO action ination certificate is issued and published, tunity to argue their case for patent inva- on the merits of the inter partes reexamina- unless authorized by the Director. Further, lidity in the USPTO. Subtitle F provides tion conducted in accordance with section if a third-party requester asserts patent in- that opportunity as an option to the existing 314. Generally, under proposed section 314, validity in a civil action and a final decision ex parte reexamination proceedings. inter partes reexamination shall be con- is entered that the party failed to prove the Subtitle F leaves existing ex parte reexam- ducted according to the procedures set forth assertion of invalidity, or if a final decision ination procedures in Chapter 30 of title 35 in sections 132–133 of the Patent Act. The in an inter partes reexamination instituted intact, but establishes an inter partes reex- patent owner will be permitted to propose by the requester is favorable to patent- amination procedure which third-party re- any amendment to the patent and a new ability, after any appeals, that third-party questers can use at their option. Subtitle VI claim or claims, with the same exception requester cannot thereafter request inter allows third parties who request inter partes contained in section 305: no proposed amend- partes reexamination on the basis of issues reexamination to submit one written com- ed or new claim enlarging the scope of the which were or which could have been raised. ment each time the patent owner files a re- claims will be allowed. However, the third-party requester may as- sponse to the USPTO. In addition, such Proposed section 314 elaborates on proce- sert invalidity based on newly discovered third-party requesters can appeal to the dure with regard to third-party requesters prior art unavailable at the time of the civil USPTO Board of Patent Appeals and Inter- who, for the first time, are given the option action or inter partes reexamination. Prior ferences from an examiner’s determination to participate in inter partes reexamination art was unavailable at the time if it was not that the reexamined patent is valid, but may proceedings. With the exception of the inter known to the individuals who were involved not appeal to the Court of Appeals for the partes reexamination request, any document in the civil action or inter partes reexamina- Federal Circuit. To prevent harassment, any- filed by either the patent owner or the third- tion proceeding on behalf of the third-party one who requests inter partes reexamination party requester shall be served on the other requester and the USPTO. must identify the real party in interest and party. In addition, the third party-requester Proposed section 318 gives a patent owner third-party requesters who participate in an in an inter partes reexamination shall re- the right, once an inter partes reexamina- inter partes reexamination proceeding are ceive a copy of any communication sent by tion has been ordered, to obtain a stay of any estopped from raising in a subsequent court the USPTO to the patent owner. After each pending litigation involving an issue of pat- action or inter partes reexamination any response by the patent owner to an action on entability of any claims of the patent that issue of patent validity that they raised or the merits by the USPTO, the third-party re- are the subject of the inter partes reexam- could have raised during such inter partes quester shall have one opportunity to file ination, unless the court determines that the reexamination. written comments addressing issues raised stay would not serve the interests of justice.

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00068 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14721 Sec. 4605. Conforming amendments from government-wide personnel ceilings. A chase printing services without regard to Section 4605 makes the following con- patent public advisory committee and a those federal laws which govern such pro- forming amendments to the Patent Act: trademark public advisory committee are es- ceedings; A patent owner must pay a fee of $1,210 for tablished to advise the Director on agency (5) the authority to use services, equip- each petition in connection with an uninten- policies, goals, performance, budget and user ment, personnel, facilities and equipment of other federal entities, with their consent and tionally abandoned application, delayed pay- fees. Sec. 4701. Short title on a reimbursable basis; ment, or delayed response by the patent (6) the authority to use, with the consent owner during any reexamination. This subtitle may be cited as the ‘‘Patent of the United States and the agency, govern- A patent applicant, any of whose claims and Trademark Office Efficiency Act.’’ ment, or international organization con- has been twice rejected; a patent owner in a Subchapter A—United States Patent and cerned, the services, records, facilities or reexamination proceeding; and a third-party Trademark Office personnel of any State or local government requester in an inter partes reexamination agency or foreign patent or trademark office proceeding may all appeal final adverse deci- Sec. 4711. Establishment of Patent and Trade- mark Office or international organization to perform sions from a primary examiner to the Board functions on its behalf; of Patent Appeals and Interferences. Section 4711 establishes the USPTO as an (7) the authority to retain and use all of its Proposed section 141 states that a patent agency of the United States within the De- revenues and receipts; owner in a reexamination proceeding may partment of Commerce and under the policy (8) a requirement to advise the President, appeal an adverse decision by the Board of direction of the Secretary of Commerce. The through the Secretary of Commerce, on na- Patent Appeals and Interferences only to the USPTO, as an autonomous agency, is explic- tional and certain international intellectual U.S. Court of Appeals for the Federal Circuit itly responsible for decisions regarding the property policy issues; as earlier noted. A third-party requester in management and administration of its oper- (9) a requirement to advise Federal depart- an inter partes reexamination proceeding ations and has independent control of budget ments and agencies of intellectual property may not appeal beyond the Board of Patent allocations and expenditures, personnel deci- policy in the United States and intellectual Appeals and Interferences. sions and processes, procurements, and other property protection abroad; The Director is required pursuant to sec- administrative and management functions. (10) a requirement to provide guidance re- tion 143 (proceedings on appeal to the Fed- Patent operations and trademark operations garding proposals offered by agencies to as- eral Circuit) to submit to the court the are to be treated as separate operating units sist foreign governments and international grounds for the USPTO decision in any reex- within the Office, each under the direction of intergovernmental organizations on matters amination addressing all the issues involved its respective Commissioner, as supervised of intellectual property protection; in the appeal. by the Director. (11) the authority to conduct programs, studies or exchanges regarding domestic or Sec. 4606. Report to Congress The USPTO shall maintain its principal of- fice in the metropolitan Washington, D.C., international intellectual property law and Not later than five years after the effective area, for the service of process and papers the effectiveness of intellectual property date of subtitle F, the Director must submit and for the purpose of discharging its func- protection domestically and abroad; to Congress a report evaluating whether the tions. For purposes of venue in civil actions, (12) a requirement to advise the Secretary inter partes reexamination proceedings set the agency is deemed to be a resident of the of Commerce on any programs and studies forth in the title are inequitable to any of district in which its principal office is lo- relating to intellectual property policy that the parties in interest and, if so, the report cated, except where otherwise provided by the USPTO may conduct or is authorized to shall contain recommendations for change to law. The USPTO is also permitted to estab- conduct, cooperatively with foreign intellec- eliminate the inequity. lish satellite offices in such other places in tual property offices and international inter- Sec. 4607. Estoppel Effect of Reexamination the United States as it considers necessary governmental organizations; and (13) the authority to (A) coordinate with and appropriate to conduct business. This is Section 4607 estops any party who requests the Department of State in conducting pro- intended to allow the USPTO, if appropriate, inter partes reexamination from challenging grams and studies cooperatively with foreign to serve American applicants better. at a later time, in any civil action, any fact intellectual property offices and inter- determined during the process of the inter Sec. 4712. Powers and duties national intergovernmental organizations, partes reexamination, except with respect to Subject to the policy direction of the Sec- and (B) transfer, with the concurrence of the a fact determination later proved to be erro- retary of the Commerce, in general the Secretary of State, up to $100,000 in any year neous based on information unavailable at USPTO will be responsible for the granting to the Department of State to pay an inter- the time of the inter partes reexamination. and issuing of patents, the registration of national intergovernmental organization for The estoppel arises after a final decision in trademarks, and the dissemination of patent studies and programs advancing inter- the inter partes reexamination or a final de- and trademark information to the public. national cooperation concerning patents, cision in any appeal of such reexamination. The USPTO will also possess specific pow- trademarks, and other matters. If section 4607 is held to be unenforceable, ers, which include: The specific powers set forth in new sub- the enforceability of the rest of subtitle F or (1) a requirement to adopt and use an Of- section (b) are clarified in new subsection the Act is not affected. fice seal for judicial notice purposes and for (c). The special payments of paragraph Sec. 4608. Effective date authenticating patents, trademark certifi- (14)(B) are additional to other payments or contributions and are not subject to any lim- Subtitle F shall take effect on the date of cates and papers issued by the Office; itation imposed by law. Nothing in sub- the enactment and shall apply to any patent (2) the authority to establish regulations, section (b) derogates from the duties of the that issues from an original application filed not inconsistent with law, that Secretary of State or the United States in the United States on or after that date, (A) govern the conduct of USPTO pro- Trade Representative as set forth in section except that the amendments made by section ceedings within the Office, 141 of the Trade Act of 1974 19, nor derogates 4605(a) shall take effect one year from the (B) are in accordance with § 553 of title 5, from the duties and functions of the Register date of enactment. (C) facilitate and expedite the processing of patent applications, particularly those of Copyrights. The Director is required to SUBTITLE G—UNITED STATES PATENT AND which can be processed electronically, consult with the Administrator of General TRADEMARK OFFICE (D) govern the recognition, conduct, and Services when exercising authority under Subtitle G establishes the United States qualifications of agents, attorneys, or other paragraphs (3) and (4)(A). Nothing in section Patent and Trademark Office (USPTO) as an persons representing applicants or others be- 4712 may be construed to nullify, void, can- agency of the United States within the De- fore the USPTO, cel, or interrupt any pending request-for-pro- partment of Commerce. The Secretary of (E) recognize the public interest in ensur- posal let or contract issued by the General Commerce gives policy direction to the agen- ing that the patent system retain a reduced Services Administration for the specific pur- cy, but the agency is autonomous and re- fee structure for small entities, and pose of relocating or leasing space to the sponsible for the management and adminis- (F) provide for the development of a per- USPTO. Finally, in exercising the powers tration of its operations and has independent formance-based process for managing that and duties under this section, the Director control of budget allocations and expendi- includes quantitative and qualitative meas- shall consult with the Register of Copyright tures, personnel decisions and processes, and ures, standards for evaluating cost-effective- on all Copyright and related matters. procurement. The Committee intends that ness, and consistency with principles of im- Sec. 4713. Organization and management the Office will conduct its patent and trade- partiality and competitiveness; Section 4713 details the organization and mark operations without micro-management (3) the authority to acquire, construct, management of the agency. The powers and by Department of Commerce officials, with purchase, lease, hold, manage, operate, im- duties of the USPTO shall be vested in the the exception of policy guidance of the Sec- prove, alter and renovate any real, personal, Under Secretary and Director, who shall be retary. The agency is headed by an Under or mixed property as it considers necessary appointed by the President, by and with the Secretary of Commerce for Intellectual to discharge its functions; consent of the Senate. The Under Secretary Property and Director of the United States (4) the authority to make purchases of and Director performs two main functions. Patent and Trademark Office, a Deputy, and property, contracts for construction, mainte- As Under Secretary of Commerce for Intel- a Commissioner of Patents and a Commis- nance, or management and operation of fa- lectual Property, she serves as the policy ad- sioner of Trademarks. The agency is exempt cilities, as well as to contract for and pur- visor to the Secretary of Commerce and the

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00069 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 S14722 CONGRESSIONAL RECORD — SENATE November 17, 1999 President on intellectual property issues. As under subsection (a). The persons serving as Director, the Commissioner for Trademarks, Director, she is responsible for supervising the Assistant Commissioner for Patents and the Commissioner for Patents, and the ad- the management and direction of the the Assistant Commissioner for Trademarks ministrative trademark judges shall serve on USPTO. She shall consult with the Public on the day before the effective date of the the Board. Advisory Committees, infra, on a regular Act may serve as the Commissioner for Pat- Sec. 4717. Board of Patent Appeals and Inter- basis regarding operations of the agency and ents and the Commissioner for Trademarks, ferences before submitting budgetary proposals and respectively, until a respective Commis- Under existing section 7 of the Patent Act, fee or regulation changes. The Director shall sioner is appointed under subsection (b)(2). the Commissioner, Deputy Commissioner, take an oath of office. The President may re- Sec. 4714. Public Advisory Committees Assistant Commissioners, and the exam- move the Director from office, but must pro- Section 4714 provides a new section 5 of the iners-in-chief constitute the Board of Patent vide notification to both houses of Congress. Patent Act which establishes a Patent Pub- Appeals and Interferences. Pursuant to sec- The Secretary of Commerce, upon nomina- tion 4717 of subtitle G, the Board shall be tion of the Director, shall appoint a Deputy lic Advisory Committee and a Trademark Public Advisory Committee. Each Com- comprised of the Director, the Commissioner Director to act in the capacity of the Direc- for Patents, the Commissioner for Trade- tor if the Director is absent or incapacitated. mittee has nine voting members with three- year terms appointed by and serving at the marks, and the administrative patent judges. The Secretary of Commerce shall also ap- In addition, the existing statute allows each point two Commissioners, one for Patents, pleasure of the Secretary of Commerce. Ini- tial appointments will be made within three appellant a hearing before three members of the other for Trademarks, without regard to the Board who are designated by the Direc- chapters 33, 51, or 53 of title 5 of the U.S. months of the effective date of the Act; and three of the initial appointees will receive tor. Section 4717 empowers the Director with Code. The Commissioners will have five-year this authority. terms and may be reappointed to new terms one-year terms, three will receive two-year Sec. 4718. Annual report of Director by the Secretary. Each Commissioner shall terms, and three will receive full terms. Va- possess a demonstrated experience in patent cancies will be filled within three months. No later than 180 days after the end of each and trademark law, respectively; and they The Secretary will also designate chair- fiscal year, the Director must provide a re- shall be responsible for the management and persons for three-year terms. port to Congress detailing funds received and direction of the patent and trademark oper- The members of the Committees will be expended by the USPTO, the purposes for ations, respectively. In addition to receiving U.S. citizens and will be chosen to represent which the funds were spent, the quality and a basic rate of compensation under the Sen- the interests of USPTO users. The Patent quantity of USPTO work, the nature of ior Executive Service 20 and a locality pay- Public Advisory Committee shall have mem- training provided to examiners, the evalua- ment,21 the Commissioners may receive bo- bers who represent small and large entity ap- tions of the Commissioners by the Secretary nuses of up to 50 percent of their annual plicants in the United States in proportion of Commerce, the Commissioners’ compensa- basic rate of compensation, not to exceed the to the number of applications filed by the tion, and other information relating to the salary of the Vice President, based on a per- small and large entity applicants. In no case agency. formance evaluation by the Secretary, act- shall the small entity applicants be rep- Sec. 4719. Suspension or exclusion from practice ing through the Director. The Secretary may resented by less than 25 percent of the mem- Under existing section 32 of the Patent remove Commissioners for misconduct or un- bers of the Patent Public Advisory Com- Act, the Commissioner (the Director pursu- satisfactory performance. It is intended that mittee, at least one of whom shall be an ant to this Act) has the authority, after no- the Commissioners will be non-political ex- independent inventor. The members of both tice and a hearing, to suspend or exclude pert appointees, independently responsible Committees shall include individuals with from further practice before the USPTO any for operations, subject to supervision by the substantial background and achievement in person who is incompetent, disreputable, in- Director. finance, management, labor relations, dulges in gross misconduct or fraud, or is The Director may appoint all other offi- science, technology, and office automation. noncompliant with USPTO regulations. Sec- cers, agents, and employees as she sees fit, The patent and trademark examiners’ unions tion 4719 permits the Director to designate and define their responsibilities with equal are entitled to have one representative on an attorney who is an officer or employee of discretion. The USPTO is specifically not their respective Advisory Committee in a the USPTO to conduct a hearing under sec- subject to any administratively or statu- non-voting capacity. tion 32. The Committees meet at the call of the torily imposed limits (full-time equivalents, Sec. 4720. Pay of Director and Deputy Director chair to consider an agenda established by or ‘‘FTEs’’) on positions or personnel. Section 4720 replaces the Assistant Sec- The USPTO is charged with developing and the chair. Each Committee reviews the poli- retary of Commerce and Commissioner of submitting to Congress a proposal for an in- cies, goals, performance, budget, and user Patents and Trademarks with the Under Sec- centive program to retain senior (of the pri- fees that bear on its area of concern and ad- retary of Commerce for Intellectual Prop- mary examiner grade or higher) patent and vises the Director on these matters. Within erty and Director of the United States Pat- trademark examiners eligible for retirement 60 days of the end of a fiscal year, the Com- ent and Trademark Office to receive pay at for the sole purpose of training patent and mittees prepare annual reports, transmit the Level III of the Executive Schedule.22 Sec- trademark examiners. reports to the Secretary of Commerce, the The Director of the USPTO, in consulta- President, and the Committees on the Judi- tion 4720 also establishes the pay of the Dep- tion with the Director of the Office of Per- ciary of the Congress, and publish the re- uty Director at Level IV of the Executive 23 sonnel Management, is required to maintain ports in the Official Gazette of the USPTO. Schedule. a program for identifying national security Members of the Committees are com- Subchapter B—Effective Date; Technical positions at the USPTO and for providing for pensated at a defined daily rate for meeting Amendments appropriate security clearances for USPTO and travel days. Members are provided ac- Sec. 4731. Effective date employees in order to maintain the secrecy cess to USPTO records and information The effective date of subtitle G is four of inventions as described in section 181 of other than personnel or other privileged in- months after the date of enactment. the Patent Act and to prevent disclosure of formation including that concerning patent Sec. 4732. Technical and conforming amend- sensitive and strategic information in the in- applications. Members are special Govern- ments ment employees within the meaning of sec- terest of national security. Section 4732 sets forth numerous technical The USPTO will be subject to all provi- tion 202 of title 18. The Federal Advisory and conforming amendments related to sub- sions of title 5 of the U.S. Code governing Committee Act shall not apply to the Com- title G. federal employees. All relevant labor agree- mittees. Finally, section 4714 provides that ments which are in effect the day before en- Committee meetings shall be open to the Subchapter C—Miscellaneous Provisions actment of subtitle G shall be adopted by the public unless by a majority vote the Com- Sec. 4741. References agency. All USPTO employees as of the day mittee meets in executive session to con- Section 4741 clarifies that any reference to before the effective date of subtitle G shall sider personnel or other confidential infor- the transfer of a function from a department remain officers and employees of the agency mation. or office to the head of such department or without a break in service. Other personnel Sec. 4715. Conforming amendments office means the head of such department or of the Department of Commerce shall be office to which the function is transferred. In Technical conforming amendments to the transferred to the USPTO only if necessary addition, references in other federal mate- Patent Act are set forth in section 4715. to carry out purposes of subtitle G of the bill rials to the current Commissioner of Patents and if a major function of their work is reim- Sec. 4716. Trademark Trial and Appeal Board and Trademarks refer, upon enactment, to bursed by the USPTO, they spend at least Section 4716 amends section 17 of the the Under Secretary of Commerce for Intel- half of their work time in support of the Trademark Act of 1946 by specifying that the lectual Property and Director of the United USPTO, or a transfer to the USPTO would be Director shall give notice to all affected par- States Patent and Trademark Office. Simi- in the interest of the agency, as determined ties and shall direct a Trademark Trial and larly, references to the Assistant Commis- by the Secretary of Commerce in consulta- Appeal Board to determine the respective sioner for Patents are deemed to refer to the tion with the Director. rights of those parties before it in a relevant Commissioner for Patents and references to On or after the effective date of the Act, proceeding. The section also invests the Di- the Assistant Commissioner for Trademarks the President shall appoint an individual to rector with the power of appointing adminis- are deemed to refer to the Commissioner for serve as Director until a Director qualifies trative trademark judges to the Board. The Trademarks.

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00070 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14723 Sec. 4742. Exercise of authorities Sec. 4749. Definitions ceive, disseminate, and maintain informa- Under section 4742, except as otherwise ‘‘Function’’ includes any duty, obligation, tion in electronic form. Subsection (d)(2), provided by law, a federal official to whom a power, authority, responsibility, right, privi- however, prohibits the Director from ceasing function is transferred pursuant to subtitle lege, activity, or program. to maintain paper or microform collections G may exercise all authorities under any ‘‘Office’’ includes any office, administra- of U.S. patents, foreign patent documents, other provision of law that were available re- tion, agency, bureau, institute, council, unit, and U.S. trademark registrations, except garding the performance of that function to organizational entity, or component thereof. pursuant to notice and opportunity for pub- the official empowered to perform that func- SUBTITLE H—MISCELLANEOUS PATENT lic comment and except the Director shall tion immediately before the date of the PROVISIONS first submit a report to Congress detailing any such plan, including a description of the transfer of the function. Subtitle H consists of seven largely-unre- mechanisms in place to ensure the integrity lated provisions that make needed clarifying Sec. 4743. Savings provisions of such collections and the data contained and technical changes to the Patent Act . therein, as well as to ensure prompt public Relevant legal documents that relate to a Subtitle H also authorizes a study. The pro- access to the most current available infor- function which is transferred by subtitle G, visions in Subtitle H take effect on the date mation, and certifying that the implementa- and which are in effect on the date of such of enactment except where stated otherwise tion of such plan will not negatively impact transfer, shall continue in effect according in certain sections. to their terms unless later modified or re- the public. Sec. 4801. Provisional applications pealed in an appropriate manner. Applica- In addition, in the operation of its infor- tions or proceedings concerning any benefit, Section 4801 amends section 111(b)(5) of the mation dissemination programs and as the service, or license pending on the effective Patent Act by permitting a provisional ap- sole source of patent data, the USPTO date of subtitle G before an office transferred plication to be converted into a non-provi- should implement procedures that assure shall not be affected, and shall continue sional application. The applicant must make that bulk patent data are provided in such a thereafter, but may later be modified or re- a request within 12 months after the filing manner that subscribers have the data in a pealed in the appropriate manner. date of the provisional application for it to manner that grants a sufficient amount of Subtitle G will not affect suits commenced be converted into a non-provisional applica- time for such subscribers to make the data available through their own systems at the before the effective date of passage. Suits or tion. Section 4801 also amends section 119(e) of same time the USPTO makes the data pub- actions by or against the Department of the Patent Act by clarifying the treatment licly available through its own Internet sys- Commerce, its employees, or the Secretary of a provisional application when its last day tem. shall not abate by reason of enactment of of pendency falls on a weekend or a Federal subtitle G. Suits against a relevant govern- Sec. 4805. Study and report on biologic deposits holiday, and by eliminating the requirement ment officer in her official capacity shall in support of biotechnology patents that a provisional application must be co- continue post enactment, and if a function Section 4805 charges the Comptroller Gen- pending with a non-provisional application if has transferred to another officer by virtue eral, in consultation with the Director of the the provisional application is to be relied on of enactment, that other officer shall sub- USPTO, with conducting a study and sub- in any USPTO proceeding. stitute as the defendant. Finally, adminis- mitting a report to Congress no later than trative and judicial review procedures that Sec. 4802. International applications six months after the date of enactment on apply to a function transferred shall apply to Section 4802 amends section 119(a) of the the potential risks to the U.S. biotechno- the head of the relevant federal agency and Patent Act to permit persons who filed an logical industry regarding biological depos- other officers to which the function is trans- application for patent first in a WTO 24 mem- its in support of biotechnology patents. The ferred. ber country to claim the right of priority in study shall include: an examination of the a subsequent patent application filed in the risk of export and of transfers to third par- Sec. 4744. Transfer of assets United States, even if such country does not ties of biological deposits, and the risks Section 4744 states that all available per- yet afford similar privileges on the basis of posed by the 18–month publication require- sonnel, property, records, and funds related applications filed in the United States. This ment of subtitle E; an analysis of compara- to a function transferred pursuant to sub- amendment was made in conformity with tive legal and regulatory regimes; and any title G shall be made available to the rel- the requirements of Articles 1 and 2 of the related recommendations. The USPTO is evant official or head of the agency to which TRIPS Agreement.25 These Articles require then charged with considering these rec- the function transfers at such time or times that WTO member countries apply the sub- ommendations when drafting regulations af- as the Director of the Office of Management stantive provisions of the Paris Convention fecting biological deposits. and Budget (OMB) directs. for the Protection of Industrial Property to Sec. 4806. Prior invention Sec. 4745. Delegation and assignment other WTO member countries. As some WTO Section 4806 amends section 102(g) of the member countries are not yet members of Section 4745 allows an official to whom a Patent Act to make clear that an inventor the Paris Convention, and as developing function is transferred under subtitle G to who is involved in a USPTO interference pro- countries are generally permitted periods of delegate that function to another officer or ceeding and establishes a date of invention up to 5 years before complying with all pro- employee. The official to whom the function under section 104 is subject to the require- visions of the TRIPS Agreement, they are was originally transferred nonetheless re- ments of section 102(g), including the re- not required to extend the right of priority mains responsible for the administration of quirement that the invention was not aban- to other WTO member countries until such the function. doned, suppressed, or concealed. time. Sec. 4807. Prior art exclusion for certain com- Sec. 4746. Authority of Director of the Office of Section 4802 also adds subsection (f) to sec- monly assigned patents Management and Budget with respect to tion 119 of the Patent Act to provide for the Section 4807 amends section 103 of the Pat- functions transferred right of priority in the United States on the ent Act, which sets forth patentability con- basis of an application for a plant breeder’s Pursuant to section 4746, if necessary the ditions related to the nonobviousness of sub- right first filed in a WTO member country or Director of OMB shall make any determina- ject matter. Section 103(c) of the current in a UPOV26 Contracting Party. Many for- tion of the functions transferred pursuant to statute states that subject matter developed eign countries provide only a sui generis sys- subtitle G. by another person which qualifies as prior tem of protection for plant varieties. Be- art only under section 102(f) or (g) shall not Sec. 4747. Certain vesting of functions consid- cause section 119 presently addresses only preclude granting a patent on an invention ered transfers patents and inventors’ certificates, appli- with only obvious differences where the sub- Section 4747 states that the vesting of a cants from those countries are technically ject matter and claimed invention were, at function in a department or office pursuant unable to base a priority claim on a foreign the time the invention was made, owned by to reestablishment of an office shall be con- application for a plant breeder’s right when the same person or subject to an obligation sidered to be the transfer of that function. seeking plant patent or utility patent pro- of assignment to the same person. The bill Sec. 4748. Availability of existing funds tection for a plant variety in this country. Subsection (g) is added to section 119 to de- amends section 103(c) by adding a reference Under section 4748, existing appropriations fine the terms ‘‘WTO member country’’ and to section 102(e), which currently bars the and funds available for the performance of ‘‘UPOV Contracting Party.’’ granting of a patent if the invention was de- functions and other activities terminated scribed in another patent granted on an ap- Sec. 4803. Certain limitations on remedies for pursuant to subtitle G shall remain available plication filed before the applicant’s date of patent infringement not applicable (for the duration of their period of avail- invention. The effect of the amendment is to ability) for necessary expenses in connection Section 4803 amends section 287(c)(4) of the allow an applicant to receive a patent when with the termination and resolution of such Patent Act, which pertains to certain limita- an invention with only obvious differences functions and activities, subject to the sub- tions on remedies for patent infringement, to from the applicant’s invention was described mission of a plan to House and Senate appro- make it applicable only to applications filed in a patent granted on an application filed priators in accordance with Public Law 105– on or after September 30, 1996. before the applicant’s invention, provided 277 (Departments of Commerce, Justice, and Sec. 4804. Electronic filing and publications the inventions are commonly owned or sub- State, the Judiciary and Related Agencies Section 4804 amends section 22 of the Pat- ject to an obligation of assignment to the Appropriations Act, Fiscal Year 1999). ent Act to clarify that the USPTO may re- same person.

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00071 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 S14724 CONGRESSIONAL RECORD — SENATE November 17, 1999 Sec. 4808. Exchange of copies of patents with Copyright Office and the Patent and Trade- opportunities for entering the television foreign countries mark Offices of the effectiveness of chapter broadcast business. Sec. 4808 amends section 12 of the Patent 13 are also amended by reducing the number The FCC estimates that there are more Act to prohibit the Director of the USPTO of studies from two to one, and requiring than 2,000 licensed and operational LPTV from entering into an agreement to exchange that the one study not be submitted until stations, about 1,500 of which are operated in patent data with a foreign country that is November 1, 2003. Current law requires deliv- the continental United States by 700 dif- not one of our NAFTA 27 or WTO trading ery of two studies within the first two years ferent licensees in nearly 750 towns and cit- 28 partners, unless the Secretary of Commerce of chapter 13, which is unnecessary and an ies. LPTV stations serve rural and urban explicitly authorizes such an exchange. insufficient amount of time for the Copy- communities alike, although about two- thirds of all LPTV stations serve rural com- TITLE V—MISCELLANEOUS PROVISIONS right Office and the Patent and Trademark Office to accurately measure and assess the munities. LPTV stations in urban markets Section 5001. Commission on Online Child Pro- effectiveness of design protection within the typically provide niche programming (e.g., tection. marine industry. bilingual or non-English programming) to Section 5001(a) provides that references The definition of a ‘‘vessel’’ in chapter 13 is under-served communities in large cities. In contained in the amendments made by this amended to provide that in addition to being many rural markets, LPTV stations are con- title are to section 1405 of the Child Online able to navigate on or through water, a ves- sumers’ only source of local, over-the-air Protection Act (47 U.S.C. 231 note). sel must be self-propelled and able to steer, programming. Owners of LPTV stations are Section 5001(b) amends the membership of and must be designed to carry at least one diverse, including high school and college the Commission on Online Child Protection passenger. This clarifies Congress’s intent student populations, churches and religious to remove a requirement that a specific not to allow design protection for such craft groups, local governments, large and small number of representatives come from des- as barges, toy and remote controlled boas, businesses, and even individual citizens. ignated sectors of private industry, as out- inner tubes and surf boards. From an engineering standpoint, the term ‘‘low-power television service’’ means pre- lined in the Act. Section 5001(b) also provides Section 5006. Informal Rulemaking of Copyright cisely what it implies, i.e., broadcast tele- that the members appointed to the Commis- Determination. sion as of October 31, 1999, shall remain as vision service that operates at a lower level members. Section 5001(b) also prevents the The Copyright Office has requested that of power than full-service stations. Specifi- members of the Commission from being paid Congress make a technical correction to sec- cally, LPTV stations radiate 3 kilowatts of for their work on the Commission. This pro- tion 1201(a)(1)(C) of title 17 by deleting the power for stations operating on the VHF vision, however, does not preclude members phrase ‘‘on the record.’’ The Copyright Office band (i.e., channels 2 through 13), and 150 from being reimbursed for legitimate costs believes that this correction is necessary to kilowatts of power for stations operating on associated with participating in the Commis- avoid any misunderstanding regarding the the UHF band (i.e., channels 14 through 69). sion (such as travel expenses). intent of Congress that the rulemaking pro- By comparison, full-service stations on VHF Section 5001(c) extends the due date for the ceeding which is the be conducted by the channels radiate up to 316 kilowatts of report of the Commission by one year. Copyright Office under this provision shall power, and stations on UHF channels radiate Section 5001(d) establishes that the Com- be an informal, rather than a formal, rule- up to 5,000 kilowatts of power. The reduced mission’s statutory authority will expire ei- making proceeding. Accordingly, the phrase power levels that govern LPTV stations ther (1) 30 days after the submission of the ‘‘on the record’’ is deleted as a technical cor- mean these stations serve a much smaller report required by the Act, or (2) November rection to clarify the intent of Congress that geographic region than do full-service sta- 30, 2000, whichever is earlier. the Copyright Office shall conduct the rule- tions. LPTV signals typically extend to a Section 5001(e) requires the Commission to making under section 1201(a)(1)(C) as an in- range of approximately 12 to 15 miles, where- commence its first meeting no later than formal rulemaking proceeding pursuant to as the originating signal of full-service sta- March 31, 2000. Section 5001(e) also requires section 553 of Title 5. The intent is to permit tions often reach households 60 or 80 miles that the Commission elect, by a majority interested persons an opportunity to partici- away. vote, a chairperson of the Commission not pate through the submission of written Compared to its rules for full-service tele- later than 30 days after holding its first statements, oral presentations at one or vision station licensees, the FCC’s rules for meeting. more of the public hearings, and the submis- obtaining and operating an LPTV license are Section 5001(f) establishes minimum rules sion of written responses to the submissions minimal. But in return for ease of licensing, for the operations of the Commission, and or presentations of others. LPTV stations must operate not only at re- also allows the Commission to adopt other Section 5007. Service of Process for Surety Cor- duced power levels but also as ‘‘secondary’’ rules as it deems necessary. porations licensees. This means LPTV stations are Section 5002. Privacy Protection for Donors to This section allows surety corporations, strictly prohibited from interfering with, Public Broadcasting Entities. like other corporations, to utilize approved and must accept signal interference from, This provision, which was added in Con- state officials to receive service of process in ‘‘primary’’ licensees, such as full-service tel- ference, protects the privacy of donors to any legal proceeding as an alternative to evision stations. Moreover, LPTV stations public broadcasting entities. having a separate agent for service of process must yield at any point in time to full-serv- in each of the 94 federal judicial districts. ice stations that increase their power levels, Section 5003. Completion of Biennial Regulatory as well as to new full-service stations. Review. Section 5008. Low-Power Television. The video programming marketplace is in- Section 5003 provides that, within 180 days Section 5008, which can be cited as the tensely competitive. The three largest after the date of enactment, the FCC will Community Broadcasters Protection Act of broadcast networks that once dominated the complete the biennial review required by 1999, will ensure that many communities market now face competition from several section 202(h) of the Telecommunications across the nation will continue to have ac- emerging broadcast and cable networks, Act of 1996. The Conferees expect that if the cess to free, over-the-air low-power tele- cable systems, satellite television operators, Commission concludes that it should retain vision (LPTV) stations, even as full-service wireless cable, and even the Internet. Low- any of the rules under the review unchanged, television stations proceed with their con- power television plays a valuable, albeit the Commission shall issue a report that in- version to digital format. In particular, Sec- modest, role in this market because it is ca- cludes a full justification of the basis for so tion 5008 requires the Federal Communica- pable of providing locally-originated pro- finding. tions Commission (FCC) to provide certain gramming to rural and urban communities Section 5004. Broadcasting Entities. qualifying LPTV stations with ‘‘primary’’ that have either no access to local program- regulatory status, which in turn will enable This provision, added in Conference, allows ming, or an over-abundance of national pro- these LPTV stations to attract the financing for a remittance of copyright damages for gramming. that is necessary to provide consumers with Low-power television’s future, however, is public broadcasting entities where they are critical information and programming. At uncertain. To begin with, LPTV’s secondary not aware and have no reason to believe that the same time, recognizing the importance regulatory status means a licensee can be their activities constituted violations of of, and the engineering complexity in, the summarily displaced by a full-service station copyright law. This is currently the standard FCC’s plan to convert full-service television that seeks to expand its own service area, or for nonprofit libraries, archives and edu- stations to digital format, Section 5009 pro- by a new full-service station seeking to enter cational institutions. tects the ability of these stations to provide the same market. This cloud of regulatory Section 5005. Technical Amendments Relating to both digital and analog service throughout uncertainty necessarily affects the ability of Vessel Hull Design Protection. their existing service areas. LPTV stations to raise capital over the long- This section makes several amendments to The FCC began awarding licenses for low- term, irrespective of an LPTV station’s pop- chapter 13 of the Copyright Act regarding de- power television service in 1982. Low-power ularity among consumers. sign protection for vessel hulls. The sunset television service is a relatively inexpensive The FCC’s plan to convert full-service sta- provision for chapter 13, enacted as part of and flexible means of delivering program- tions to digital substantially complicates the Digital Millennium Copyright Act, is re- ming tailored to the interests of viewers in LPTV stations’ already uncertain future. In moved so that chapter 13 is now a permanent small localized areas. It also ensures that its digital television (DTV) proceeding, the provision of the Copyright Act. The timing spectrum allocated for broadcast television FCC adopted a table of allotments for DTV and number of joint studies to be done by the service is more efficiently used and promotes service that provided a second channel for

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00072 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14725 each existing full-service station to use for finds, however, that LPTV stations’ sec- sity or for other reasons determined by the DTV service in making the transition from ondary regulatory status effectively blocks FCC. the existing analog technology to the new access to capital. Paragraph (3) provides that no LPTV sta- DTV technology. These second channels were Section 5008(c) amends section 336 of the tion authorized as of the date of enactment provided to broadcasters on a temporary Communications Act of 1934 30 to require the may be disqualified for a Class A license basis. At the end of the DTV transition, FCC to create a new ‘‘Class A’’ license for based on common ownership with any other which is currently scheduled for December certain qualifying LPTV stations. New para- medium of mass communication. 31, 2006, they must relinquish one of their graph (1)(A) in particular directs the FCC to Paragraph (4) makes clear that the FCC is two channels. prescribe rules within 120 days of enactment not required to issue Class A LPTV stations In assigning DTV channels, the FCC main- for the establishment of a new Class A tele- (or translators) an additional license for ad- tained the secondary status of LPTV sta- vision license that will be available to quali- vanced television services. The FCC, how- tions (as well as translators). In order to pro- fying LPTV stations. The FCC’s rules must ever, must accept applications for such serv- vide all full-service television stations with ensure that a Class A licensee receives the ices, provided the station will not cause in- a second channel, the FCC was compelled to same license terms and renewal standards as terference to any other broadcast facility ap- establish DTV allotments that will displace any full-service licensee, and that each Class plied for, protected, permitted or authorized a number of LPTV stations, particularly in A licensee is accorded primary regulatory on the date of the filing of the application the larger urban market areas where the status. Subparagraph (B) further requires for advanced television services. Either the available spectrum is most congested. the FCC, within 30 days of enactment, to new license for advanced services or the The FCC’s plan also provides for the recov- send to each existing LPTV licensee a notice original license must be forfeited at the end ery of a portion of the existing broadcast tel- that describes the requirements for Class A of the DTV transition. The licensee may evision spectrum so that it can be reallo- designation. Within 60 days of enactment (or elect to convert to advanced television serv- cated to new uses. Specifically, the FCC pro- within 30 days of the FCC’s notice), LPTV ices on its analog channel, but is not re- vided for immediate recovery of broadcast stations intending to seek Class A designa- quired to convert to digital format until the channels 60 through 69, and for recovery of tion must submit a certification of eligi- end of the DTV transition. broadcast channels 52 through 59 at the end bility to the FCC. Absent a material defi- Paragraph (5) clarifies that nothing in new of the DTV transition. As further required by ciency in an LPTV station’s certification subsection 336(f) preempts, or otherwise af- Congress under the Balanced Budget Act of materials, the FCC is required under sub- fects, section 337 of the Communications Act 29 paragraph (B) to grant a certification of eli- 1997, the FCC has completed the realloca- of 1934.31 tion of broadcast channels 60 through 69. Ex- gibility. Paragraph (6) precludes the FCC from Subparagraph (C) permits an LPTV sta- isting analog stations, including LPTV sta- granting Class A licenses to LPTV stations tion, within 30 days of the issuance of the tions and a few DTV stations, are permitted operating between 698 megahertz (MHz) and rules required under subparagraph (A), to to operate on these channels during the DTV 806 MHz (i.e., television broadcast channels submit an application for Class A designa- transition. But at the end of the transition, 52 through 69). However, the FCC shall pro- tion. The FCC must award a Class A license all analog broadcast TV stations will have to vide to LPTV stations assigned to, and tem- to a qualifying LPTV station within 30 days cease operation, and the DTV stations on porarily operating on, those channels the op- of receiving such application. Subparagraph broadcast channels 52 through 69 will be relo- portunity to qualify for a Class A license. If (D) mandates that the FCC must act to pre- cated to new channels in the DTV core spec- a qualifying LPTV station is ultimately as- serve the signal contours of an LPTV station trum. As a result, the FCC estimates that signed a channel within the band of fre- pending the final resolution of its applica- the DTV transition will require about 35 to quencies that will eventually comprise the tion for a Class A license. In the event tech- 45 percent of all LPTV stations to either ‘‘core spectrum’’ (i.e., television broadcast nical problems arise that require an engi- change their operation or cease operation. channels 2 through 51), then the FCC is re- neering solution to a full-service station’s Indeed, some full-service stations have al- quired to issue a Class A license simulta- allotted parameters or channel assignment ready ‘‘bumped’’ several LPTV stations a neously. However, the FCC may not grant a in the DTV table of allotments, subpara- number of times, at substantial cost to the Class A license to an LPTV station operating graph (D) requires the FCC to make the nec- LPTV station, with no guarantee that the on a channel within the core spectrum that essary modifications to ensure that such LPTV station will be permitted to remain on the FCC will identify within 180 days of en- full-service station can replicate or maxi- its new channel in the long term. actment. The conferees, therefore, seek to provide mize its service area, as provided for in the Finally, paragraph (7) provides that the some regulatory certainty for low-power tel- FCC’s rules. FCC may not grant a Class A license (or a evision service. The conferees recognize that, With regard to maximization, a full-service modification thereto) unless the requesting because of emerging DTV service, not all digital television station must file an appli- LPTV station demonstrates that it will not LPTV stations can be guaranteed a certain cation for maximization or a notice of intent interfere with one of three types of radio- future. Moreover, it is not clear that all to seek such maximization by December 31, based services. First, under subparagraph LPTV stations should be given such a guar- 1999, file a bona fide application for maxi- (A), the LPTV station must show that it will antee in light of the fact that many existing mization by May 1, 2000, and also comply not interfere with: (i) the predicted Grade B LPTV stations provide little or no original with all applicable FCC rules regarding the contour of any station transmitting in ana- programming service. construction of digital television facilities. log format; or (ii) the digital television serv- Instead, the conferees seek to buttress the The term ‘‘maximization’’ is defined in para- ice areas provided in the DTV table of allot- commercial viability of those LPTV stations graph 31 of the FCC’s Sixth Report and Order ments; or the digital television areas explic- which can demonstrate that they provide as the process by which stations increase itly protected (as opposed to those areas that valuable programming to their communities. their service areas by operating with addi- may be permitted) in the Commission’s dig- The House Committee on Commerce’s record tional power or higher antennae than speci- ital television regulations; or the digital tel- in considering this legislation reflects that fied in the FCC’s digital television table of evision service areas of stations subse- there are a significant number of LPTV sta- allotments. Subparagraph(E) requires that a quently granted by the FCC prior to the fil- tions which broadcast programming—includ- station must reduce the protected contour of ing of a Class A application; or lastly, sta- ing locally originated programming—for a its digital television service area in accord- tions seeking to maximize power under the substantial portion of each day. From the ance with any modifications requested in fu- FCC’s rules (provided such stations are in consumers’ perspective, these stations pro- ture change applications. This provision is compliance with the notification require- vide video programming that is functionally intended to ensure that stations indeed uti- ments under paragraph (1)). equivalent to the programming they view on lize the full amount of maximized spectrum Second, under subparagraph (B), the LPTV full-service stations, as well as national and for which they originally apply by the afore- station must show that it will not interfere local cable networks. Consequently, these mentioned deadlines. with any licensed, authorized or pending stations should be afforded roughly similar Paragraph (2) lists the criteria an LPTV LPTV station or translator. And third, under regulatory status. Section 5008, the Commu- station must meet to qualify for a Class A li- subparagraph (C), the LPTV station must nity Broadcasters Protection Act of 1999, cense. Specifically, the LPTV station must: show that it will not interfere with other will achieve that objective, and at the same during the 90 days preceding the date of en- services (e.g., land mobile services) that also time, protect the transition to digital. actment, broadcast a minimum of 18 hours Section 5008(a) provides that the short title per day—including at least 3 hours per week operate on television broadcast channels 14 of this section is the ‘‘Community Broad- of locally-originated programming—and also through 20. casters Protection Act of 1999.’’ be in compliance with the FCC’s rules on Finally, paragraph (8) establishes priority Section 5008(b) describes the Congress’ low-power television service; and from and for those LPTVs that are displaced by an ap- findings on the importance of low-power tel- after the date of its application for a Class A plication filed under this section, in that evision service. The Congress finds that license, be in compliance with the FCC’s these LPTVs have priority over other LPTVs LPTV stations have operated in a manner rules for full-service television stations. In in the assignment of available channels. beneficial to the public, and in many in- the alternative, the FCC may qualify an FOOTNOTES stances, provide worthwhile and diverse serv- LPTV station as a Class A licensee if it de- 1 See Rust v. Sullivan, 500 U.S. 173 (1991) (grants); ices to communities that lack access to termines that such qualification would serve Indopco, Inc. v. Commissioner, 503 U.S. 79, 84 (1992) over-the-air programming. The Congress also the public interest, convenience, and neces- (tax benefits). The First Amendment requires only

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00073 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 S14726 CONGRESSIONAL RECORD — SENATE November 17, 1999 that Congress not aim at ‘‘the suppression of dan- 29 See 47 U.S.C. § 337. changing market. Breaking down the gerous ideas.’’ NEA v. Finley, 118 S. Ct. 2168, 2178–79 30 47 U.S.C. § 336. (1998). 31 47 U.S.C. § 337. barriers of a regulated utility market 2 See United States v. O’Brien, 391 U.S. 367 (1968). can have important economic con- 3 See Turner Broadcasting Sys., Inc. v. FCC, 512 By Mr. LEAHY: sequences for utility customers. More U.S. 622, 663 (1994). S. 1949. A bill to promote economi- competition will drive down prices. But 4 See, e.g., H.R. Rep. No. 102–628, p. 51 (1992); S. Rep. No. 102–92, p. 62 (1991); see also Feb. 24 Hearing (Al cally sound modernization of electric these lower costs will come with a DeVaney). power generation capacity in the price—the cheapest power is unfortu- 5 The Supreme Court has described the ‘‘two United States, to establish require- nately produced by some of the dirtiest types’’ of quasi in rem proceedings: a type I pro- ceeding, in which ‘‘the plaintiff is seeking to secure ments to improve the combustion heat power plants. Most of these power a pre-existing claim in the subject property and to rate efficiency of fossil fuel-fired elec- plants were grandfathered under the extinguish or establish the nonexistence of similar tric utility generating units, to reduce Clean Air Act. interests of particular persons,’’ and a type II ac- emissions of mercury, carbon dioxide, tion, in which ‘‘the plaintiff seeks to apply what he So today I am introducing the ‘‘Clean concedes to be the property of the defendant to the nitrogen oxides, and sulfur dioxide, to Power Plant and Modernization Act’’ satisfaction of a claim against him.’’ Hanson v. require that all fossil fuel-fired electric to address the local, regional, and glob- Denckla, 357 U.S. 235, 246 n.12 (1958). utility generating units operating in al air pollution problems that are 6 15 U.S.C. § 1051, et seq. 7 149 F.3d 1368 (Fed. Cir. 1998) [hereinafter State the United States meet new review re- posed by fossil-fired power plants under Street]. quirements, to promote the use of a deregulated market. 8 See Dunlop Holdings v. Ram Golf Corp., 524 F.2d clean coal technologies, and to pro- In the last few weeks, the EPA and 33 (7th Cir. 1975), cert. denied, 424 US 985 (1976). mote alternative energy and clean en- 9 General Agreement on Tariffs and Trade, Pub. L. the Administration have taken some No. 103–465. The framework for international trade ergy sources such as solar, wind, bio- important steps to address the power since its inception in 1948, GATT is now adminis- mass, and fuel cells; to the Committee plant loophole in the Clean Air Act tered under the auspices of the World Trade Organi- on Finance. that allows hundreds of old, mostly zation (WTO) (see note 19, infra). 10 See Herbert F. Schwartz, Patent Law & Practice CLEAN POWER PLANT AND MODERNIZATION ACT coal-fired power plants to continue to (2d ed., Federal Judicial Center, 1995), note 72 at 22. OF 1999 pollute at levels much higher than new The PCT is a multilateral treaty among more than Mr. LEAHY. Mr. President, plants. Closing this loophole is critical 50 nations that is designed to simplify the patenting process when an applicant seeks a patent on the Vermonters have a proud tradition of to protecting the health of our environ- same invention in more than one nation. See also 35 protecting our environment. We have ment and the health of our children. U.S.C.A. chs. 35–37 and PCT Applicant’s Guide (1992, some of the strongest environmental Last week the Justice Department rev. 1994). laws in the country. Yet despite this and the Environmental Protection 11 35 U.S.C. § 135(a). 12 35 U.S.C. § 181. proud tradition of environmental stew- Agency filed suit against 32 coal-fired 13 5 U.S.C. §§ 551–559, 701–706, 1305, 3105, 3344, 5372, ardship, we have seen how pollution power plants who had made major 7521. from outside our state has affected our changes to their plants without also in- 14 28 U.S.C. § 1295. 15 35 U.S.C. § 111(b). Pursuant to 35 U.S.C. § 111(b)(5), mountains, lakes and streams. Acid stalling new equipment to control all provisional applications are abandoned 12 rain caused from sulfur dioxide emis- smog, acid rain and soot. This is ille- months after the date of their filing; accordingly, sions outside Vermont has drifted gal, even under the Clean Air Act, and they are not subject to the 18–month publication re- quirement. through the atmosphere and scarred it spotlights the glaring need to level 16 35 U.S.C. § 171. Since design applications do not our mountains and poisoned our the playing field for all power plants. disclose technology, inventors do not have a par- streams. Mercury has quietly made its This is particularly as our country ticular interest in having them published. The bill deadly poisonous presence into the food as written therefore simplifies the proposed system moves toward a deregulated electricity of publication to confine the requirement to those chain of our fish to the point where industry. applications for which there is a need for publica- health advisories have been posted for Unfortunately, some of our col- tion. the consumption of several species. leagues decided that this move unfairly 17 Mar. 20, 1883, as revised at Brussels, Dec. 14, 1900, 25 Stat. 1645, T.S. No. 579, and subsequently through And, despite our own tough air laws targeted some of their utilities that 1967. The Convention has 156 member nations, in- and small population, the EPA has con- have benefitted from this loophole for cluding the United States. sidered air quality warnings in almost thirty years. I would point out 18 See 28 U.S.C. § 1338. 19 19 U.S.C. § 2171. Vermont that are comparable to emis- that many of us from New England and 20 28 U.S.C. § 5382. sions consistent for much larger cities. New York believe it is unfair that our 21 5 U.S.C. § 5304(h)(2)(C). Silently each night, pollution from states have been the dumping ground 22 5 U.S.C. § 5314. for the pollution coming out of these 23 5 U.S.C. § 5315. outside Vermont seeps into our state, 24 World Trade Organization. The agreement estab- and our exemplary and forward-looking plants for the past thirty years. My lishing the WTO is a multilateral instrument which environmental laws are powerless to colleagues have heard me speak on the creates a permanent organization to oversee the im- stop or even limit the encroachment. floor about how this pollution is con- plementation of the Uruguay Round Agreements, in- cluding the GATT 1994, to provide a forum for multi- The Clean Air Act of 1970 was a mile- taminating our fish with mercury, lateral trade negotiations and to administer dispute stone law which established national damaging our lakes and forests with settlements (see note 3, supra). Staff of the House air quality standards for the first time acid rain, and causing respiratory prob- Comm. on Ways and Means, 104th Cong., 1st Sess., Overview and Compilation of U.S. Trade Statutes and attempted to provide protection lems and obscuring the view of 1040 (Comm. Print 1995) [hereinafter, Overview and for populations who are affected by Vermont’s mountains with summer- Compilation of U.S. Trade Statutes]. emissions outside their own local and time ozone pollution from nitrogen 25 Trade-Related Aspects of Intellectual Property state control. That bill did much to Rights Agreement; i.e., that component of GATT oxide emissions. which addresses intellectual property rights among halt declining air quality around the Now, added to these concerns is the the signatory members. country and improve it in some areas. growing body of knowledge showing 26 International Convention for the Protection of It also acknowledged that fossil fuel that carbon dioxide emissions are hav- New Varieties of Plants. UPOV is administered by the World Intellectual Property Organization utility plants contribute a significant ing an impact on the global climate. (WIPO), which is charged with the administration amount of air pollution not only in the More than a decade of record heat, re- of, and activities concerning revisions to, the inter- area immediately around the plant but ports from around the globe of dying national intellectual property treaties. UPOV has 40 members, and guarantees plant breeders national can affect air quality hundreds of miles coral reefs, and melting glaciers should treatment and right of priority in other countries away. be warning signals to all of us. that are members of the treaty, along with certain While the bill has improved air qual- In Vermont, one of our warning sig- other benefits. See M.A. Leaffer, International Trea- ity, changes in the utility market since nals is the impact to sugar maples. ties on Intellectual Property at 47 (BNA, 2d ed. 1997). 27 North American Free Trade Agreement, Pub. L. passage of the Clean Air Act make it Sugar maple now range naturally as No. 103–182. The cornerstone of NAFTA is the necessary to consider important up- far south as Tennessee and west of the phased-out elimination of all tariffs on trade be- dates to the legislation. States Mississippi River from Minnesota to tween the U.S., Canada, and Mexico. Overview and Compilation of U.S. Trade Statutes 1999. throughout the country are deregu- Missouri. Given the current predictions 28 LPTV stations are distinct from so called lating utilities and soon Congress may for climate changes, by the end of the ‘‘translators.’’ Whereas LPTV stations typically consider federal legislation on this next century the range of sugar maples offer original programming, translators merely am- issue. I support these economic in North America will be limited the plify or ‘‘boost’’ a full-service television station’s signal into rural and mountainous regions adjacent changes but Congress and the Adminis- state of Maine and portions of eastern to the station’s market. tration should keep pace with this Canada. Vermont’s climate may not

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00074 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.108 pfrm13 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14727 change so much that palm trees will Obviously, major changes in this in- bon dioxide from the atmosphere such line the streets of Burlington and dustry will not occur over night. The as planting trees, preserving wetlands, Montpelier, but the impact on the ‘‘continue-business-as-usual’’ inertia is and soil restoration. character and economy of Vermont and enormous. The old, inefficient, pollu- How will the environment benefit many other states will be profound. tion-prone power plants will operate from the emission and efficiency stand- It is hard to imagine a Vermont hill- until they fall down because they are ards in my bill? Mercury emissions will side in the fall without the brilliant paid for, burn the cheapest fuel, and be cut from more than 50 tons per year reds of the sugar maples, and it is hard are subject to much less stringent envi- to no more than 5 tons per year. An- to imagine a stack of pancakes without ronmental requirements. ‘‘Grand- nual emissions of sulfur dioxide that Vermont maple syrup. And it is un- fathered’’ plants have the statutory causes acid rain will be cut by more likely that sugar maples will be the equivalent of an eternal lifetime under than 6 million tons beyond the require- only species or crop that will be af- the Clean Air Act loophole. ments in Phase II of the Clean Air Act fected by climate change, or that the Mr. President, this article in Forbes of 1990. Nitrogen oxide emissions that effects will be limited to Vermont. Magazine describes how valuable the result in summertime ozone pollution Many like to dismiss concerns about old ‘‘grandfathered’’ power plants are. will be cut by more than 3 million tons pollution from power plants as a The article cites the example of the per year beyond Phase II requirements. ‘‘Northeastern issue.’’ It is not; it af- ‘‘grandfathered’’ Homer City gener- And the bill would prevent at least 650 fects all of us, perhaps in ways that we ating station outside of Pittsburgh. million tons of carbon dioxide emis- have not even begun to imagine. Until last year, the utility valued this sions per year. I can show you maps that mark the plant at $540 million. According to the Of course, this discussion should not deposition ‘‘hot spots’’ for these pollut- Forbes article, last year the utility just be about the impact to our envi- ants in the Everglades, the Upper Mid- sold the plant for $1.8 billion. That ronment. This debate should equally be west, New England, Long Island Sound, works out to $955 per kilowatt of gener- focused on public health. There is Chesapeake Bay and the West Coast. ating capacity, or about the cost of mounting evidence of the health effects This clearly is not a regional issue. building a new plant. Why are these old of these pollutants. The Washington Collectively, fossil fuel-fired power pollution-prone plants suddenly so val- Post Magazine ran an alarming article plants constitute the largest source of uable? Maybe their ‘‘grandfathered’’ that documented the escalating num- air pollution in the United States, an- status has something to do with it. ber of children with asthma, jumping nually emitting more than 2 billion What does my bill propose to do? to 17.3 million in 1998 from 6.8 million tons of carbon dioxide, more than 12 First, it closes the ‘‘grandfather’’ loop- in 1980. Asthma may not be caused di- million tons of acid rain producing sul- hole. Second, it lays out an aggressive rectly by air pollution, but it certainly fur dioxide, nearly 6 million tons of but achievable set of air pollution and aggravates it and can lead to pre- smog producing nitrogen oxides, and efficiency requirements for fossil-fired mature deaths. more than 50 tons of highly toxic mer- power plants. Third, the emissions The American public still over- cury. standards will allow clean coal tech- whelmingly supports the commitment These are staggering sums. Consider nologies to have a fair chance to com- to the environment that we made in the fact that it would take nearly pete in the future mix of electrical the early 1970s. As stewards of the envi- 25,000 Washington Monuments, weigh- power generation. Fourth, it provides ronment for our children and our ing 81,120 tons apiece, to add up to 2 industry decision-makers with a com- grandchildren, we need to act without billion tons. And that is just one year. prehensive and predictable set of regu- delay to ensure that in the new millen- Why are we continuing to allow pol- latory requirements and tax code nium the United States produces elec- lutants on that enormous scale to be changes so they can see up-front what tricity more efficiently and with much dumped on some of our most fragile the playing field is going to look like less environmental and public health ecosystems, much less into our lungs in the future. This will allow them to impact. There is no reason why we through the air we breathe? It is be- make informed, comprehensive, and should go into the next century still cause Congress assumed when it passed economically efficient business deci- using technology from the era of Ozzie the 1970 Clean Air Act that these old sions. Public health and the environ- and Harriet. pollution-prone plants would be retired ment will benefit, consumers will ben- Mr. President, I ask unanimous con- over time and replaced by newer, clean- efit, and the utility companies will sent that a section-by-section overview er plants. It has not worked out that benefit from this approach. of the bill, and an article entitled way, and it is time for the Congress to As U.S. power plants become more ef- ‘‘Poor Me’’ from the May 31, 1999, edi- rethink our strategy. ficient and more power is produced by tion of Forbes Magazine, be printed in More than 75 percent of the fossil- renewable technologies, less fossil fuel the RECORD. fuel fired plants in the United States will be consumed. This will have an im- There being no objection, the mate- began operation before the 1970 Clean pact on the workers and communities rial was ordered to be printed in the Air Act was passed. As a result, they that produce fossil fuels. These effects RECORD, as follows: are ‘‘grandfathered’’ out from under are likely to be greatest for coal, even S. 1949 the full force of its regulations. Many with significant deployment of clean Be it enacted by the Senate and House of Rep- of the environmental problems posed coal technology. The bill provides resentatives of the United States of America in by this industry are linked to the anti- funding for programs to help workers Congress assembled, quated and inefficient technologies at and communities during the period of SECTION 1. SHORT TITLE; TABLE OF CONTENTS. these plants. The average fossil-fuel transition. I am eager to work with or- (a) SHORT TITLE.—This Act may be cited as fired power plant uses combustion ganized labor to ensure that these pro- the ‘‘Clean Power Plant and Modernization technology devised in the 1950’s or be- visions address the needs of workers, Act of 1999’’. fore. Would any of us buy a car today particularly those who may not fully (b) TABLE OF CONTENTS.—The table of con- that was still using 1950s technology? benefit from retraining programs. tents of this Act is as follows: Of course not. So why are we still The bill provides substantial addi- Sec. 1. Short title; table of contents. tional funding for research, develop- Sec. 2. Findings and purposes. going out of our way to preserve 1950s Sec. 3. Definitions. technology for power plants? ment, and commercial demonstrations Sec. 4. Combustion heat rate efficiency As long as we allow these plants to of renewable and clean energy tech- standards for fossil fuel-fired operate inefficiently they will produce nologies such as solar, wind, biomass, generating units. enormous amounts of air pollution. My and fuel cells. As utilities retire their Sec. 5. Air emission standards for fossil fuel- bill takes a new approach to reducing ‘‘grandfathered’’ plants and plan for fu- fired generating units. this pollution by retiring the ineffi- ture generating capacity, renewable Sec. 6. Extension of renewable energy pro- duction credit. cient ‘‘grandfathered’’ power plants and clean technologies need to be part Sec. 7. Megawatt hour generation fees. and bring new, clean, and efficient of the equation. My bill also authorizes Sec. 8. Clean Air Trust Fund. technologies for the 21st Century on expenditures for implementing known Sec. 9. Accelerated depreciation for inves- line. ways of biologically sequestering car- tor-owned generating units.

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00075 Fmt 0624 Sfmt 0655 E:\CR\FM\G17NO6.070 pfrm13 PsN: S17PT1 S14728 CONGRESSIONAL RECORD — SENATE November 17, 1999 Sec. 10. Grants for publicly owned gener- (A) fossil fuel-fired power plants emit 1,999 wise be wasted, for the purpose of heating or ating units. pounds of carbon dioxide for every megawatt cooling office buildings, providing steam to Sec. 11. Recognition of permanent emission hour of electricity produced; processing facilities, or otherwise increasing reductions in future climate (B) coal-fired power plants emit 2,110 total efficiency; and change implementation pro- pounds of carbon dioxide for every megawatt (18) adopting the technologies and prac- grams. hour of electricity produced; and tices described in paragraph (17) would in- Sec. 12. Renewable and clean power genera- (C) coal-fired power plants emit 205 pounds crease competitiveness and productivity, se- tion technologies. of carbon dioxide for every million British cure employment, save lives, and preserve Sec. 13. Clean coal, advanced gas turbine, thermal units of fuel consumed; the future. (10) the average fossil fuel-fired generating and combined heat and power (b) PURPOSES.—The purposes of this Act unit in the United States commenced oper- demonstration program. are— ation in 1964, 6 years before the Clean Air (1) to protect and preserve the environ- Sec. 14. Evaluation of implementation of Act (42 U.S.C. 7401 et seq.) was amended to ment while safeguarding health by ensuring this Act and other statutes. establish requirements for stationary that each fossil fuel-fired generating unit Sec. 15. Assistance for workers adversely af- sources; minimizes air pollution to levels that are fected by reduced consumption (11)(A) according to the Department of En- technologically feasible through moderniza- of coal. ergy, only 23 percent of the 1,000 largest tion and application of pollution controls; Sec. 16. Community economic development emitting units are subject to stringent new (2) to greatly reduce the quantities of mer- incentives for communities ad- source performance standards under section versely affected by reduced con- 111 of the Clean Air Act (42 U.S.C. 7411); and cury, carbon dioxide, sulfur dioxide, and ni- sumption of coal. (B) the remaining 77 percent, commonly trogen oxides entering the environment from combustion of fossil fuels; Sec. 17. Carbon sequestration. referred to as ‘‘grandfathered’’ power plants, (3) to permanently reduce emissions of SEC. 2. FINDINGS AND PURPOSES. are subject to much less stringent require- ments; those pollutants by increasing the combus- (a) FINDINGS.—Congress finds that— (12) on the basis of scientific and medical tion heat rate efficiency of fossil fuel-fired (1) the United States is relying increas- evidence, exposure to mercury and mercury generating units to levels achievable ingly on old, needlessly inefficient, and high- compounds is of concern to human health through— ly polluting powerplants to provide elec- and the environment; (A) use of commercially available combus- tricity; (13) pregnant women and their developing tion technology, including clean coal tech- (2) the pollution from those powerplants fetuses, women of childbearing age, and chil- nologies such as pressurized fluidized bed causes a wide range of health and environ- dren are most at risk for mercury-related combustion and an integrated gasification mental damage, including— health impacts such as neurotoxicity; combined cycle system; (A) fine particulate matter that is associ- (14) although exposure to mercury and (B) installation of pollution controls; ated with the deaths of approximately 50,000 mercury compounds occurs most frequently (C) expanded use of renewable and clean Americans annually; through consumption of mercury-contami- energy sources such as biomass, geothermal, (B) urban ozone, commonly known as nated fish, such exposure can also occur solar, wind, and fuel cells; and ‘‘smog’’, that impairs normal respiratory through— (D) promotion of application of combined functions and is of special concern to indi- (A) ingestion of breast milk; heat and power technologies; viduals afflicted with asthma, emphysema, (B) ingestion of drinking water, and foods (4)(A) to create financial and regulatory in- and other respiratory ailments; other than fish, that are contaminated with centives to retire thermally inefficient gen- (C) rural ozone that obscures visibility and methyl mercury; and erating units and replace them with new damages forests and wildlife; (C) dermal uptake through contact with units that employ high-thermal-efficiency (D) acid deposition that damages estuaries, soil and water; combustion technology; and lakes, rivers, and streams (and the plants (15) the report entitled ‘‘Mercury Study (B) to increase use of renewable and clean and animals that depend on them for sur- Report to Congress’’ and submitted by the energy sources such as biomass, geothermal, vival) and leaches heavy metals from the Environmental Protection Agency under sec- solar, wind, and fuel cells; soil; tion 112(n)(1)(B) of the Clean Air Act (42 (5) to establish the Clean Air Trust Fund to (E) mercury and heavy metal contamina- U.S.C. 7412(n)(1)(B)), in conjunction with fund the training, economic development, tion that renders fish unsafe to eat, with es- other scientific knowledge, supports a plau- carbon sequestration, and research, develop- pecially serious consequences for pregnant sible link between mercury emissions from ment, and demonstration programs estab- women and their fetuses; combustion of coal and other fossil fuels and lished under this Act; (F) eutrophication of estuaries, lakes, riv- mercury concentrations in air, soil, water, (6) to eliminate the ‘‘grandfather’’ loophole ers, and streams; and and sediments; in the Clean Air Act relating to sources in (G) global climate change that may fun- (16)(A) the Environmental Protection operation before the promulgation of stand- damentally and irreversibly alter human, Agency report described in paragraph (15) ards under section 111 of that Act (42 U.S.C. animal, and plant life; supports a plausible link between mercury 7411); (3) tax laws and environmental laws— emissions from combustion of coal and other (7) to express the sense of Congress that (A) provide a very strong incentive for fossil fuels and methyl mercury concentra- permanent reductions in emissions of green- electric utilities to keep old, dirty, and inef- tions in freshwater fish; house gases that are accomplished through ficient generating units in operation; and (B) in 1997, 39 States issued health the retirement of old units and replacement (B) provide a strong disincentive to invest- advisories that warned the public about con- by new units that meet the combustion heat ing in new, clean, and efficient generating suming mercury-tainted fish, as compared to rate efficiency and emission standards speci- technologies; 27 States that issued such advisories in 1993; fied in this Act should be credited to the (4) fossil fuel-fired power plants, consisting and utility sector and the owner or operator in of plants fueled by coal, fuel oil, and natural (C) the number of mercury advisories na- any climate change implementation pro- gas, produce nearly two-thirds of the elec- tionwide increased from 899 in 1993 to 1,675 in gram; tricity generated in the United States; 1996, an increase of 86 percent; (8) to promote permanent and safe disposal (5) since, according to the Department of (17) pollution from powerplants can be re- of mercury recovered through coal cleaning, Energy, the average combustion heat rate ef- duced through adoption of modern tech- flue gas control systems, and other methods ficiency of fossil fuel-fired power plants in nologies and practices, including— of mercury pollution control; the United States is 33 percent, 67 percent of (A) methods of combusting coal that are (9) to increase public knowledge of the the heat generated by burning the fuel is intrinsically more efficient and less pol- sources of mercury exposure and the threat wasted; luting, such as pressurized fluidized bed com- to public health from mercury, particularly (6) technology exists to increase the com- bustion and an integrated gasification com- the threat to the health of pregnant women bustion heat rate efficiency of coal combus- bined cycle system; and their fetuses, women of childbearing age, tion from 35 percent to 50 percent above cur- (B) methods of combusting cleaner fuels, and children; rent levels, and technological advances are such as gases from fossil and biological re- (10) to decrease significantly the threat to possible that would boost the net combus- sources and combined cycle turbines; human health and the environment posed by tion heat rate efficiency even more; (C) treating flue gases through application mercury; (7) coal-fired power plants are the leading of pollution controls; (11) to provide worker retraining for work- source of mercury emissions in the United (D) methods of extracting energy from nat- ers adversely affected by reduced consump- States, releasing an estimated 52 tons of this ural, renewable resources of energy, such as tion of coal; and potent neurotoxin each year; solar and wind sources; (12) to provide economic development in- (8) in 1996, fossil fuel-fired power plants in (E) methods of producing electricity and centives for communities adversely affected the United States produced over 2,000,000,000 thermal energy from fuels without conven- by reduced consumption of coal. tons of carbon dioxide, the primary green- tional combustion, such as fuel cells; and house gas; (F) combined heat and power methods of SEC. 3. DEFINITIONS. (9) on average— extracting and using heat that would other- In this Act:

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(1) ADMINISTRATOR.—The term ‘‘Adminis- (b) EMISSION RATES FOR SOURCES REQUIRED (d) PERMIT REQUIREMENT.—Not later than trator’’ means the Administrator of the En- TO MAINTAIN 45 PERCENT EFFICIENCY.—Not 10 years after the date of enactment of this vironmental Protection Agency. later than 10 years after the date of enact- Act, each generating unit shall have a per- (2) GENERATING UNIT.—The term ‘‘gener- ment of this Act, each fossil fuel-fired gener- mit issued under title V of the Clean Air Act ating unit’’ means an electric utility gener- ating unit subject to section 4(a)(1) shall be (42 U.S.C. 7661 et seq.) that requires compli- ating unit. in compliance with the following emission ance with this section. SEC. 4. COMBUSTION HEAT RATE EFFICIENCY limitations: (e) COMPLIANCE DETERMINATION AND MONI- STANDARDS FOR FOSSIL FUEL- (1) MERCURY.—Each coal-fired or fuel oil- TORING.— FIRED GENERATING UNITS. fired generating unit shall be required to re- (1) REGULATIONS.—Not later than 2 years (a) STANDARDS.— move 90 percent of the mercury contained in after the date of enactment of this Act, the (1) IN GENERAL.—Not later than the day the fuel, calculated in accordance with sub- Administrator, in consultation with the Sec- that is 10 years after the date of enactment section (e). retary of Energy, shall promulgate methods of this Act, each fossil fuel-fired generating (2) CARBON DIOXIDE.— for determining initial and continuing com- unit that commences operation on or before (A) NATURAL GAS-FIRED GENERATING pliance with this section. that day shall achieve and maintain, at all UNITS.—Each natural gas-fired generating (2) CALCULATION OF MERCURY EMISSION RE- operating levels, a combustion heat rate effi- unit shall be required to achieve an emission DUCTIONS.—Not later than 2 years after the ciency of not less than 45 percent (based on rate of not more than 0.9 pounds of carbon date of enactment of this Act, the Adminis- the higher heating value of the fuel). dioxide per kilowatt hour of net electric trator shall promulgate fuel sampling tech- (2) FUTURE GENERATING UNITS.—Each fossil power output. niques and emission monitoring techniques fuel-fired generating unit that commences (B) FUEL OIL-FIRED GENERATING UNITS.— for use by generating units in calculating operation more than 10 years after the date Each fuel oil-fired generating unit shall be mercury emission reductions for the pur- of enactment of this Act shall achieve and required to achieve an emission rate of not poses of this section. maintain, at all operating levels, a combus- more than 1.3 pounds of carbon dioxide per (3) REPORTING.— tion heat rate efficiency of not less than 50 kilowatt hour of net electric power output. (A) IN GENERAL.—Not less than often than percent (based on the higher heating value of (C) COAL-FIRED GENERATING UNITS.—Each quarterly, the owner or operator of a gener- the fuel), unless granted a waiver under sub- coal-fired generating unit shall be required ating unit shall submit a pollutant-specific section (d). to achieve an emission rate of not more than emission report for each pollutant covered (b) TEST METHODS.—Not later than 2 years 1.55 pounds of carbon dioxide per kilowatt by this section. after the date of enactment of this Act, the hour of net electric power output. (B) SIGNATURE.—Each report required Administrator, in consultation with the Sec- (3) SULFUR DIOXIDE.—Each fossil fuel-fired under subparagraph (A) shall be signed by a retary of Energy, shall promulgate methods generating unit shall be required— responsible official of the generating unit, for determining initial and continuing com- (A) to remove 95 percent of the sulfur diox- who shall certify the accuracy of the report. pliance with this section. ide that would otherwise be present in the (C) PUBLIC REPORTING.—The Administrator (c) PERMIT REQUIREMENT.—Not later than flue gas; and shall annually make available to the public, 10 years after the date of enactment of this (B) to achieve an emission rate of not more through 1 or more published reports and 1 or Act, each generating unit shall have a per- than 0.3 pounds of sulfur dioxide per million more forms of electronic media, facility-spe- mit issued under title V of the Clean Air Act British thermal units of fuel consumed. cific emission data for each generating unit (42 U.S.C. 7661 et seq.) that requires compli- (4) NITROGEN OXIDES.—Each fossil fuel-fired and pollutant covered by this section. ance with this section. generating unit shall be required— (D) CONSUMER DISCLOSURE.—Not later than (d) WAIVER OF COMBUSTION HEAT RATE EF- (A) to remove 90 percent of nitrogen oxides 2 years after the date of enactment of this FICIENCY STANDARD.— that would otherwise be present in the flue Act, the Administrator shall promulgate reg- (1) APPLICATION.—The owner or operator of gas; and ulations requiring each owner or operator of a generating unit that commences operation (B) to achieve an emission rate of not more a generating unit to disclose to residential more than 10 years after the date of enact- than 0.15 pounds of nitrogen oxides per mil- consumers of electricity generated by the ment of this Act may apply to the Adminis- lion British thermal units of fuel consumed. unit, on a regular basis (but not less often trator for a waiver of the combustion heat (c) EMISSION RATES FOR SOURCES REQUIRED than annually) and in a manner convenient rate efficiency standard specified in sub- TO MAINTAIN 50 PERCENT EFFICIENCY.—Each to the consumers, data concerning the level section (a)(2) that is applicable to that type fossil fuel-fired generating unit subject to of emissions by the generating unit of each of generating unit. section 4(a)(2) shall be in compliance with pollutant covered by this section and each (2) ISSUANCE.—The Administrator may the following emission limitations: air pollutant covered by section 111 of the grant the waiver only if— (1) MERCURY.—Each coal-fired or fuel oil- Clean Air Act (42 U.S.C. 7411). (A)(i) the owner or operator of the gener- fired generating unit shall be required to re- (f) DISPOSAL OF MERCURY CAPTURED OR RE- ating unit demonstrates that the technology move 90 percent of the mercury contained in COVERED THROUGH EMISSION CONTROLS.— to meet the combustion heat rate efficiency the fuel, calculated in accordance with sub- (1) CAPTURED OR RECOVERED MERCURY.—Not standard is not commercially available; or section (e). later than 2 years after the date of enact- (ii) the owner or operator of the generating (2) CARBON DIOXIDE.— ment of this Act, the Administrator shall unit demonstrates that, despite best tech- (A) NATURAL GAS-FIRED GENERATING promulgate regulations to ensure that mer- nical efforts and willingness to make the UNITS.—Each natural gas-fired generating cury that is captured or recovered through necessary level of financial commitment, the unit shall be required to achieve an emission the use of an emission control, coal cleaning, combustion heat rate efficiency standard is rate of not more than 0.8 pounds of carbon or another method is disposed of in a manner not achievable at the generating unit; and dioxide per kilowatt hour of net electric that ensures that— (B) the owner or operator of the generating power output. (A) the hazards from mercury are not unit enters into an agreement with the Ad- (B) FUEL OIL-FIRED GENERATING UNITS.— transferred from 1 environmental medium to ministrator to offset by a factor of 1.5 to 1, Each fuel oil-fired generating unit shall be another; and using a method approved by the Adminis- required to achieve an emission rate of not (B) there is no release of mercury into the trator, the emission reductions that the gen- more than 1.2 pounds of carbon dioxide per environment. erating unit does not achieve because of the kilowatt hour of net electric power output. (2) MERCURY-CONTAINING SLUDGES AND failure to achieve the combustion heat rate (C) COAL-FIRED GENERATING UNITS.—Each WASTES.—The regulations promulgated by efficiency standard specified in subsection coal-fired generating unit shall be required the Administrator under paragraph (1) shall (a)(2). to achieve an emission rate of not more than ensure that mercury-containing sludges and (3) EFFECT OF WAIVER.—If the Adminis- 1.4 pounds of carbon dioxide per kilowatt wastes are handled and disposed of in accord- trator grants a waiver under paragraph (1), hour of net electric power output. ance with all applicable Federal and State the generating unit shall be required to (3) SULFUR DIOXIDE.—Each fossil fuel-fired laws (including regulations). achieve and maintain, at all operating lev- generating unit shall be required— (g) PUBLIC REPORTING OF FACILITY-SPECIFIC els, the combustion heat rate efficiency (A) to remove 95 percent of the sulfur diox- EMISSION DATA.— standard specified in subsection (a)(1). ide that would otherwise be present in the (1) IN GENERAL.—The Administrator shall SEC. 5. AIR EMISSION STANDARDS FOR FOSSIL flue gas; and annually make available to the public, FUEL-FIRED GENERATING UNITS. (B) to achieve an emission rate of not more through 1 or more published reports and the (a) ALL FOSSIL FUEL-FIRED GENERATING than 0.3 pounds of sulfur dioxide per million Internet, facility-specific emission data for UNITS.—Not later than 10 years after the British thermal units of fuel consumed. each generating unit and for each pollutant date of enactment of this Act, each fossil (4) NITROGEN OXIDES.—Each fossil fuel-fired covered by this section. fuel-fired generating unit, regardless of its generating unit shall be required— (2) SOURCE OF DATA.—The emission data date of construction or commencement of (A) to remove 90 percent of nitrogen oxides shall be taken from the emission reports sub- operation, shall be subject to, and operating that would otherwise be present in the flue mitted under subsection (e)(3). in physical and operational compliance with, gas; and SEC. 6. EXTENSION OF RENEWABLE ENERGY the new source review requirements under (B) to achieve an emission rate of not more PRODUCTION CREDIT. section 111 of the Clean Air Act (42 U.S.C. than 0.15 pounds of nitrogen oxides per mil- Section 45(c) of the Internal Revenue Code 7411). lion British thermal units of fuel consumed. of 1986 (relating to definitions) is amended—

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00077 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.080 pfrm13 PsN: S17PT1 S14730 CONGRESSIONAL RECORD — SENATE November 17, 1999 (1) in paragraph (1)— amounts equivalent to the taxes received in any new publicly owned generating unit (A) in subparagraph (A), by striking ‘‘and’’; the Treasury under section 4691. that— (B) in subparagraph (B), by striking the pe- ‘‘(c) EXPENDITURES FROM TRUST FUND.— (1) is in compliance with sections 4(a)(1) riod and inserting ‘‘, and’’; and Amounts in the Trust Fund shall be avail- and 5(b) shall, for a 15-year period, be eligible (C) by adding at the end the following: able, without further Act of appropriation, for partial reimbursement through annual ‘‘(C) solar power.’’; upon request by the head of the appropriate grants made by the Secretary of the Treas- (2) in paragraph (3)— Federal agency in such amounts as the agen- ury, in consultation with the Administrator, (A) by inserting ‘‘, and December 31, 1998, cy head determines are necessary— in an amount equal to the monetary value of in the case of a facility using solar power to ‘‘(1) to provide funding under section 12 of the depreciation deduction that would be re- produce electricity’’ after ‘‘electricity’’; and the Clean Power Plant and Modernization alized by reason of section 168(c)(3)(E) of the (B) by striking ‘‘1999’’ and inserting ‘‘2010’’; Act of 1999, as in effect on the date of enact- Internal Revenue Code of 1986 by a similarly- and ment of this section; situated investor-owned generating unit over (3) by adding at the end the following: ‘‘(2) to provide funding for the demonstra- that period; and ‘‘(4) SOLAR POWER.—The term ‘solar power’ tion program under section 13 of such Act, as (2) is in compliance with sections 4(a)(2) means solar power harnessed through— so in effect; and 5(c) shall, over a 12-year period, be eligi- ‘‘(A) photovoltaic systems, ‘‘(3) to provide assistance under section 15 ble for partial reimbursement through an- ‘‘(B) solar boilers that provide process of such Act, as so in effect; nual grants made by the Secretary of the heat, and ‘‘(4) to provide assistance under section 16 Treasury, in consultation with the Adminis- ‘‘(C) any other means.’’. of such Act, as so in effect; and trator, in an amount equal to the monetary SEC. 7. MEGAWATT HOUR GENERATION FEES. ‘‘(5) to provide funding under section 17 of value of the depreciation deduction that (a) IN GENERAL.—Chapter 38 of the Internal such Act, as so in effect.’’. would be realized by reason of section Revenue Code of 1986 (relating to miscella- (b) CONFORMING AMENDMENT.—The table of 168(c)(3)(D) of such Code by a similarly-situ- neous excise taxes) is amended by inserting sections for such subchapter A is amended by ated investor-owned generating unit over after subchapter D the following: adding at the end the following: that period. ‘‘Subchapter E—Megawatt Hour Generation ‘‘Sec. 9511. Clean Air Trust Fund.’’. SEC. 11. RECOGNITION OF PERMANENT EMIS- SION REDUCTIONS IN FUTURE CLI- Fees SEC. 9. ACCELERATED DEPRECIATION FOR IN- MATE CHANGE IMPLEMENTATION VESTOR-OWNED GENERATING ‘‘Sec. 4691. Imposition of fees. PROGRAMS. UNITS. ‘‘SEC. 4691. IMPOSITION OF FEES. It is the sense of Congress that— (a) IN GENERAL.—Section 168(e)(3) of the In- ‘‘(a) TAX IMPOSED.—There is hereby im- (1) permanent reductions in emissions of ternal Revenue Code of 1986 (relating to clas- posed on each covered fossil fuel-fired gener- carbon dioxide and nitrogen oxides that are sification of certain property) is amended— ating unit a tax equal to 30 cents per mega- accomplished through the retirement of old (1) in subparagraph (E) (relating to 15-year watt hour of electricity produced by the cov- generating units and replacement by new property), by striking ‘‘and’’ at the end of ered fossil fuel-fired generating unit. generating units that meet the combustion clause (ii), by striking the period at the end ‘‘(b) ADJUSTMENT OF RATES.—Not less often heat rate efficiency and emission standards of clause (iii) and inserting ‘‘, and’’, and by than once every 2 years beginning after 2002, specified in this Act, or through replacement adding at the end the following: the Secretary, in consultation with the Ad- of old generating units with nonpolluting re- ‘‘(iv) any 45-percent efficient fossil fuel- ministrator of the Environmental Protection newable power generation technologies, fired generating unit.’’; and Agency, shall evaluate the rate of the tax should be credited to the utility sector, and (2) by adding at the end the following: imposed by subsection (a) and increase the to the owner or operator that retires or re- ‘‘(F) 12-YEAR PROPERTY.—The term ‘12-year rate if necessary for any succeeding calendar places the old generating unit, in any cli- property’ includes any 50-percent efficient year to ensure that the Clean Air Trust Fund mate change implementation program en- fossil fuel-fired generating unit.’’. established by section 9511 has sufficient acted by Congress; (b) DEFINITIONS.—Section 168(i) of the In- amounts to fully fund the activities de- (2) the base year for calculating reductions ternal Revenue Code of 1986 (relating to defi- scribed in section 9511(c). under a program described in paragraph (1) nitions and special rules) is amended by add- ‘‘(c) PAYMENT OF TAX.—The tax imposed by should be the calendar year preceding the ing at the end the following: this section shall be paid quarterly by the calendar year in which this Act is enacted; ‘‘(15) FOSSIL FUEL-FIRED GENERATING owner or operator of each covered fossil fuel- and UNITS.— fired generating unit. (3) a reasonable portion of any monetary ‘‘(A) 50-PERCENT EFFICIENT FOSSIL FUEL- ‘‘(d) COVERED FOSSIL FUEL-FIRED GENER- value that may accrue from the crediting de- FIRED GENERATING UNIT.—The term ‘50-per- ATING UNIT.—The term ‘covered fossil fuel- scribed in paragraph (1) should be passed on cent efficient fossil fuel-fired generating fired generating unit’ means an electric util- to utility customers. ity generating unit that— unit’ means any property used in an inves- tor-owned fossil fuel-fired generating unit SEC. 12. RENEWABLE AND CLEAN POWER GEN- ‘‘(1) is powered by fossil fuels; ERATION TECHNOLOGIES. pursuant to a plan approved by the Sec- ‘‘(2) has a generating capacity of 5 or more (a) IN GENERAL.—Under the Renewable En- retary, in consultation with the Adminis- megawatts; and ergy and Energy Efficiency Technology Act trator of the Environmental Protection ‘‘(3) because of the date on which the gen- of 1989 (42 U.S.C. 12001 et seq.), the Secretary Agency, to place into service such a unit erating unit commenced commercial oper- of Energy shall fund research and develop- that is in compliance with sections 4(a)(2) ation, is not subject to all regulations pro- ment programs and commercial demonstra- and 5(c) of the Clean Power Plant and Mod- mulgated under section 111 of the Clean Air tion projects and partnerships to dem- ernization Act of 1999, as in effect on the Act (42 U.S.C. 7411).’’. onstrate the commercial viability and envi- date of enactment of this paragraph. (b) CONFORMING AMENDMENT.—The table of ronmental benefits of electric power genera- ‘‘(B) 45-PERCENT EFFICIENT FOSSIL FUEL- subchapters for such chapter 38 is amended tion from— FIRED GENERATING UNIT.—The term ‘45-per- by inserting after the item relating to sub- (1) biomass (excluding unseparated munic- cent efficient fossil fuel-fired generating chapter D the following: ipal solid waste), geothermal, solar, and wind unit’ means any property used in an inves- technologies; and ‘‘SUBCHAPTER E. Megawatt hour generation tor-owned fossil fuel-fired generating unit (2) fuel cells. fees.’’. pursuant to a plan so approved to place into (b) TYPES OF PROJECTS.—Demonstration (c) EFFECTIVE DATE.—The amendments service such a unit that is in compliance projects may include solar power tower made by this section shall apply to elec- with sections 4(a)(1) and 5(b) of such Act, as plants, solar dishes and engines, co-firing of tricity produced in calendar years beginning so in effect.’’. biomass with coal, biomass modular sys- after December 31, 2000. ONFORMING AMENDMENT.—The table (c) C tems, next-generation wind turbines and contained in section 168(c) of the Internal SEC. 8. CLEAN AIR TRUST FUND. wind turbine verification projects, geo- Revenue Code of 1986 (relating to applicable (a) IN GENERAL.—Subchapter A of chapter thermal energy conversion, and fuel cells. 98 of the Internal Revenue Code of 1986 (re- recovery period) is amended by inserting (c) AUTHORIZATION OF APPROPRIATIONS.—In lating to trust fund code) is amended by add- after the item relating to 10-year property addition to amounts made available under ing at the end the following: the following: any other law, there is authorized to be ap- ‘‘SEC. 9511. CLEAN AIR TRUST FUND. ‘‘12-year property ...... 12 propriated to carry out this section ‘‘(a) CREATION OF TRUST FUND.—There is years’’. $75,000,000 for each of fiscal years 2001 established in the Treasury of the United through 2010. States a trust fund to be known as the ‘Clean (d) EFFECTIVE DATE.—The amendments SEC. 13. CLEAN COAL, ADVANCED GAS TURBINE, Air Trust Fund’ (hereafter referred to in this made by this section shall apply to property AND COMBINED HEAT AND POWER section as the ‘Trust Fund’), consisting of used after the date of enactment of this Act. DEMONSTRATION PROGRAM. such amounts as may be appropriated or SEC. 10. GRANTS FOR PUBLICLY OWNED GENER- (a) IN GENERAL.—Under subtitle B of title credited to the Trust Fund as provided in ATING UNITS. XXI of the Energy Policy Act of 1992 (42 this section or section 9602(b). Any capital expenditure made after the U.S.C. 13471 et seq.), the Secretary of Energy ‘‘(b) TRANSFERS TO TRUST FUND.—There date of enactment of this Act to purchase, shall establish a program to fund projects are hereby appropriated to the Trust Fund install, and bring into commercial operation and partnerships designed to demonstrate

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00078 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.080 pfrm13 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14731 the efficiency and environmental benefits of be appropriated $75,000,000 for each of fiscal third of the energy in the fuel to electricity, electric power generation from— years 2001 through 2015 to provide assistance, and wasting 67% of the heat generated by (1) clean coal technologies, such as pressur- under the economic adjustment program of burning the fuel. Increasing efficiency in ized fluidized bed combustion and an inte- the Department of Commerce authorized by converting the energy in the fuel into elec- grated gasification combined cycle system; the Public Works and Economic Develop- tricity is really the only way to reduce car- (2) advanced gas turbine technologies, such ment Act of 1965 (42 U.S.C. 3121 et seq.), to bon dioxide ‘‘greenhouse’’ emissions from as flexible midsized gas turbines and base- assist communities adversely affected by re- these facilities. According to the Energy In- load utility scale applications; and duced consumption of coal by the electric formation Administration, fossil-fired power (3) combined heat and power technologies. power generation industry. plants in the United States emit more the 2 billion tons of carbon dioxide per year (or (b) SELECTION CRITERIA.— SECTION-BY-SECTION OVERVIEW OF ‘‘THE the weight equivalent of nearly 25,000 Wash- (1) IN GENERAL.—Not later than 1 year after CLEAN POWER PLANT AND MODERNIZATION ington Monuments every year). This is ap- the date of enactment of this Act, the Sec- ACT OF 1999’’ retary of Energy shall promulgate criteria proximately 40% of annual domestic carbon WHAT WILL THE ‘‘CLEAN POWER PLANT AND and procedures for selection of demonstra- dioxide emissions. MODERNIZATION ACT OF 1999’’ DO? tion projects and partnerships to be funded Section 4 lays out a phased two-stage proc- under subsection (a). The ‘‘Clean Power Plant and Moderniza- ess for increasing efficiency. In the first (2) REQUIRED CRITERIA.—At a minimum, tion Act of 1999’’ lays out an ambitious, stage, by 10 years after enactment, all units the selection criteria shall include— achievable, and balanced set of financial in- in operation must achieve a heat rate effi- (A) the potential of a proposed demonstra- centives and regulatory requirements de- ciency (at the higher heating value) of not tion project or partnership to reduce or signed to increase power plant efficiency, re- less than 45%. In the second stage, with ex- pected advances in combustion technology, avoid emissions of pollutants covered by sec- duce emissions, and encourage use of renew- units commencing operation more than 10 tion 5 and air pollutants covered by section able power generation methods. The bill en- years after enactment must achieve a heat 111 of the Clean Air Act (42 U.S.C. 7411); and courages innovation, entrepreneurship, and rate efficiency (at the higher heating value) (B) the potential commercial viability of risk-taking. The bill encourages ‘‘retirement and re- of not less than 50%. the proposed demonstration project or part- If, for some unforeseen reason, techno- nership. placement’’ of old, pollution-prone, and inef- ficient generating capacity with new, clean, logical advances do not achieve the 50% effi- (c) AUTHORIZATION OF APPROPRIATIONS.— ciency level, Section 4 contains a waiver pro- (1) IN GENERAL.—In addition to amounts and efficient capacity. The bill does not uti- lize a ‘‘cap and trade’’ approach. Many be- vision that allows owners of new units to off- made available under any other law, there is set any shortfall in carbon dioxide emissions lieve that the ‘‘retirement and replacement’’ authorized to be appropriated to carry out through implementation of carbon seques- approach does a superior job at the local and this section $75,000,000 for each of fiscal years tration projects. 2001 through 2010. regional levels of protecting public health Section 5. Air emission standards for fossil fuel- (2) DISTRIBUTION.—The Secretary shall and the environment from mercury pollu- fired generating units make reasonable efforts to ensure that, tion, ozone pollution, and acid deposition. On under the program established under this a global level, the ‘‘retirement and replace- Subsection (a) eliminates the ‘‘grand- section, the same amount of funding is pro- ment’’ also does a far superior job of perma- father’’ loophole in the Clean Air Act and re- quires all units, regardless of when they were vided for demonstration projects and part- nently reducing the volume of carbon diox- constructed or began operation, to comply nerships under each of paragraphs (1), (2), ide emitted. with existing new source review require- and (3) of subsection (a). WHAT WILL THE BILL DO FOR THE ments under Section 111 of the Clean Air SEC. 14. EVALUATION OF IMPLEMENTATION OF ENVIRONMENT? Act. The average ‘‘in service’’ date for fossil- THIS ACT AND OTHER STATUTES. The bill would prevent at least 650 million fired generating units in the United States is (a) IN GENERAL.—Not later than 2 years tons of carbon dioxide emissions per year. 1964—six years before passage of the Clean after the date of enactment of this Act, the Over time, even more greenhouse gas emis- Air Act. More than 75% of operating fossil- Secretary of Energy, in consultation with sions will be avoided annually as increases in fired generating units came into service be- the Chairman of the Federal Energy Regu- power plant efficiencies exceed 50%, more fore implementation of the 1970 Clean Air latory Commission and the Administrator, combined heat and power systems are in- Act and are subject to much less stringent shall submit to Congress a report on the im- stalled, and use of renewable energy sources requirements than newer units. plementation of this Act. increases. Prevention of greenhouse gas Subsection (b) sets mercury, carbon diox- (b) IDENTIFICATION OF CONFLICTING LAW.— ide, sulfur dioxide, and nitrogen oxide emis- The report shall identify any provision of the emissions of up to 1 billion tons per year sion standards for units that are subject to Energy Policy Act of 1992 (Public Law 102– may be possible. Mercury emissions will be the 45% thermal efficiency standards set 486), the Energy Supply and Environmental cut from more than 50 tons per year to no forth in Section 4. For mercury, 90% removal Coordination Act of 1974 (15 U.S.C. 791 et more than 5 tons per year. Annual emissions of mercury contained in the fuel is required. seq.), the Public Utility Regulatory Policies of acid rain producing sulfur dioxide emis- For carbon dioxide, the emission limits are Act of 1978 (16 U.S.C. 2601 et seq.), or the sions will be cut by more than 6 million tons set by fuel type (i.e., natural gas = 0.9 pounds Powerplant and Industrial Fuel Use Act of beyond Phase II Clean Air Act of 1990 re- per kilowatt hour of output; fuel oil = 1.3 1978 (42 U.S.C. 8301 et seq.), or the amend- quirements. Nitrogen oxide emissions that pounds per kilowatt hour of output; coal = ments made by those Acts, that conflicts result in summertime ozone pollution will be 1.55 pounds per kilowatt hour of output). with the intent or efficient implementation cut by 3.2 million tons per year beyond Ninety-five percent of sulfur dioxide emis- of this Act. Phase II requirements. sions (and not more than 0.3 pounds per mil- (c) RECOMMENDATIONS.—The report shall Over a 50 year period, the proposal laid out include recommendations from the Sec- in the bill will prevent more than 30 billion lion Btus of fuel consumed), and 90 percent of retary of Energy, the Chairman of the Fed- tons in carbon dioxide emissions, and maybe nitrogen oxides (and not more than 0.15 eral Energy Regulatory Commission, and the as high as 50 billion tons. Carbon dioxide is pounds per million Btus of fuel consumed) Administrator for legislative or administra- further addressed in the bill by authorizing are to be removed. Subsection (c) contains the same emission tive measures to harmonize and streamline expenditures for implementing known ways standards for mercury, sulfur dioxide, and the statutes specified in subsection (b) and of biologically sequestering carbon dioxide nitrogen oxides as those in Subsection (b). the regulations implementing those statutes. from the atmosphere such as planting trees, Increased thermal efficiency will result in SEC. 15. ASSISTANCE FOR WORKERS ADVERSELY preserving wetlands, and soil restoration. lower emissions of carbon dioxide, and the AFFECTED BY REDUCED CONSUMP- Over a 50 year period, more than 2,200 tons fuel specific emission limits at the 50% effi- TION OF COAL. of mercury emissions would be avoided. ciency level are lowered accordingly (i.e., In addition to amounts made available While this might not sound like a lot in rela- under any other law, there is authorized to natural gas = 0.8 pounds per kilowatt hour of tion to the other pollutants, consider that a output; fuel oil = 1.2 pounds per kilowatt be appropriated $75,000,000 for each of fiscal teaspoon of mercury is enough to contami- hour of output; coal = 1.4 pounds per kilo- years 2001 through 2015 to provide assistance, nate several millions of gallons of water. watt hour of output). under the economic dislocation and worker And over a 50 year period more than 300 mil- Furthering the public’s right-to-know in- adjustment assistance program of the De- lion tons of sulfur dioxide and 160 million formation on emission volumes, Subsection partment of Labor authorized by title III of tons of nitrogen oxides will be prevented be- (e) requires EPA to annually publish pollut- the Job Training Partnership Act (29 U.S.C. yond the Phase II emission limits specified ant-specific emissions data for each gener- 1651 et seq.), to coal industry workers who in the Clean Air Act of 1990. ating unit covered by the ‘‘Clean Power are terminated from employment as a result Section 1. Title; table of contents Plant and Modernization Act of 1999.’’ In ad- of reduced consumption of coal by the elec- Section 2. Findings and purposes dition, at least once per year residential con- tric power generation industry. Section 3. Definitions sumers will receive information from their SEC. 16. COMMUNITY ECONOMIC DEVELOPMENT Section 4. Heat rate efficiency standards for fos- electricity supplier on the emission volumes. INCENTIVES FOR COMMUNITIES AD- VERSELY AFFECTED BY REDUCED sil fuel-fired generating units Section 6. Extension of renewable energy pro- CONSUMPTION OF COAL. On average, fossil fuel-fired power plants duction credit In addition to amounts made available in the United States operate at a thermal ef- Section 45(c) of the Internal Revenue Code under any other law, there is authorized to ficiency rate of 33%, converting just one- of 1986 is amended to include solar power,

VerDate 29-OCT-99 04:20 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00079 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.080 pfrm13 PsN: S17PT1 S14732 CONGRESSIONAL RECORD — SENATE November 17, 1999 and to extend renewable energy production lating reductions will be the year preceding sult of reduced consumption of coal by the credit to 2010 (it is currently set to expire in enactment of the ‘‘Clean Power Plant and electric power generation industry. The 1999). Modernization Act of 1999.’’ The bill stipu- funds will be administered under the eco- Section 7. Mega watt hour generation fee, and lates that a portion of any monetary value nomic adjustment program of the Depart- Section 8. Clean air trust fund that may accrue from credits under this sec- ment of Commerce authorized by the Public The Clean Air Trust Fund is similar to the tion should be passed on to utility cus- Works and Economic Development Act of Highway Trust Fund and the Superfund. tomers. 1965. Revenue for the Clean Air Trust Fund will be Section 12. Renewable and clean power genera- Section 17. Carbon sequestration provided through implementation of a fee on tion technologies. This section authorizes expenditure of $345 electricity produced by fossil-fired gener- This section provides a total of $750 million over 10 years for development of a ating units that are ‘‘grandfathered’’ from million over 10 years to fund research long-term carbon sequestration strategy ($45 the Clean Air Act’s Section 111 new source and development programs and com- million) for the United States, and author- requirements. Utilities will be assessed at mercial demonstration projects and izes EPA and USDA to fund carbon seques- the rate of 30 cents per megawatt hour of tration projects including soil restoration, electricity that they produce from ‘‘grand- partnerships to demonstrate the com- tree planting, wetland’s protection, and fathered’’ units. For residential consumers mercial viability and environmental other ways of biologically sequestering car- receiving power from ‘‘grandfathered’’ benefits of electric power generation bon dioxide ($300 million). Projects funded plants, the cost of the fee would average 25 from biomass, geothermal, solar, wind, under this section may not be used to offset cents per month. Income from the fee will be and fuel cell technologies. Types of emissions otherwise mandated by the ‘‘Clean placed in the Clean Air Trust Fund to pay projects may include solar power tower Power Plant and Modernization Act of 1999.’’ for: a.) assistance to workers and commu- plants, solar dishes and engines, co-fir- nities adversely affected by reduced con- POOR ME ing biomass with coal, biomass mod- sumption of coal; b.) research and develop- (By Christopher Palmeri) ment and demonstration programs for re- ular systems, next-generation wind turbines and wind verification projects, Utilities are telling the rate regulators newable and clean power generation tech- that their old power plants are practically nologies (e.g., wind, solar, biomass, and fuel geothermal energy conversion, and fuel worthless. But they’re selling them for fancy cells); c) demonstrations of the efficiency, cells. prices. environmental benefits, and commercial via- Section 13. Clean coal, advanced gas turbine, The Homer City Generation Station is a 34- bility of electrical power generation from and combined heat and power generation year-old, coal-fired power plant near Pitts- clean coal, advanced gas, and combined heat demonstration program. burgh. What’s it worth? Until last year it and power technologies; and d.) carbon se- was carried on the books of two utilities for questration projects. This section provides a total of $750 million over 10 years to fund projects and partner- $540 million. Then the companies sold it for Section 9. Accelerated depreciation for investor- ships that demonstrate the efficiency and en- $1.8 billion, or $955 per kilowatt—about what owned generating units. vironmental benefits and commercial viabil- it would cost to build a brand-spanking-new Under the Internal Revenue Code of 1986, ity of electric power generation from clean electric plant. utilities can depreciate their generating coal technologies (including, but not limited Are old plants a millstone for utilities as equipment over a 20-year period. New, clean- to, pressurized fluidized bed combustion and they enter the deregulated future? That’s er and efficient generating technologies will integrated gasification combined cycle sys- what the utilities are telling rate regulators. experience shorter physical lifetimes com- tems), advanced gas turbine technologies (in- We built all these plants over the years be- pared to their dirtier, less efficient, but more cluding, but not limited to, flexible mid- cause you told us to, they are saying—and durable predecessors. Over a 20-year time- sized gas turbines and baseload utility scale now that newcomers are about to undercut frame, most components of new generating applications), and combined heat and power us, we need compensation for the ‘‘stranded units will need to be replaced; some compo- technologies. costs.’’ The logic of compensation for strand- nents will be replaced several times. To up- ed costs is unassailable. The only debate is Section 14. Evaluation of implementation of this date the Internal Revenue Code of 1986 to re- over the amount. Is the average power plant act and other statutes flect this change in the expected physical indeed a white elephant? lifetimes of generating equipment, Section 9 Not later than 2 years after enactment, According to data collected by Cambridge amends Section 168 of the Code to allow de- DOE, in consultation with EPA and FERC, Energy Research Associates, the average preciation over a 15-year period for units shall report to Congress on the implementa- nonnuclear power plant put up for sale in the meeting the 45% efficiency level and the tion of the ‘‘Clean Power Plant and Mod- last year sold for nearly twice its book emission standards in Section 5(b) above. ernization Act of 1999.’’ The report shall value. Granted, the plants being sold tend to Section 168 is further amended to allow for identify any provision of the Energy Policy be the more desirable ones, by dint of their deprecation over a 12-year period for units Act of 1992, the Energy Supply and Environ- location or their fuel efficiency. Still, the meeting the 50% efficiency level and the mental Coordination Act of 1974, the Public pricing makes one wonder whether the power emission standards in Section 5(c). Utilities Regulatory Policies Act of 1978, or industry should be entitled to much of any- Section 10. Grants for publicly-owned gener- the Powerplant and Industrial Fuel Use Act thing for stranded costs. ating units. of 1978 that conflicts with the efficient im- Some states—California, Maine, Con- plementation of the ‘‘Clean Power Plant and necticut and New York, for example—have No federal taxes are paid on publicly- Modernization Act of 1999.’’ The report shall ordered utilities to sell all or part of their owned generating units. Section 10 provides include recommendations for legislative or generation capacity. That should set an for annual grants in an amount equal to the administrative measures to harmonize and arm’s length fair price. Thanks largely to monetary value of the depreciation deduc- streamline these other statutes. the fat prices received for its power plants, tion that would be realized by a similarly- Sempra Energy, the parent of San Diego Gas situated investor owned generating unit Section 15. Assistance for workers adversely af- & Electric, says that its stranded-cost under Section 9. Units meeting the 45% effi- fected by reduced consumption of coal charges related to generation—about 12% of ciency level and the emission standards in With increased power plant efficiency, less a typical customer’s bill—will be paid off by Section 5(b) above would receive annual fuel will need to be burned to produce a July. That is two and a half years ahead of grants over a 15-year period, and units meet- given quantity of electricity. This section schedule, a savings of $400 million for south- ing the 50% efficiency level and the emission provides a total of $1.125 billion over 15 years ($75 million per year) to provide assistance ern Californians. standards in Section 5(c) would receive an- Not every state legislature or utility com- to workers who are adversely affected as a nual grants over a 12-year period. mission has the political will to force dives- result of reduced consumption of coal by the Section 11. Recognition of permanent emission titure, however. If a utility does not want to electric power generation industry. The reductions in future climate change imple- sell, the utility and the regulators have to funds will be administered under the eco- mentation programs. estimate the fair market value for a plant nomic dislocation and workers’ adjustment This section expresses the sense of Con- and then see if that is a lot less than book assistance program of the Department of gress that permanent reductions in emis- value. Labor authorized by Title III of the Job sions of carbon dioxide and nitrogen oxides This is tricky business. Last year Alle- Training Partnership Act. that are accomplished through the retire- gheny Energy, parent of West Penn Power ment of old generating units and replace- Section 16. Community economic development Co., estimated the value of its power plant at ment by new generating units that meet the incentives for communities adversely af- $148 a kilowatt, half of their book value. An efficiency and emissions standards in the fected by reduced consumption of coal expert hired by a number of industrial en- bill, or through replacement with non pol- With increased power plant efficiency, less ergy users suggested the value should be luting renewable power generation tech- fuel will need to be burned to produce a $409. A hearing revealed that Allegheny had nologies, should be credited to the utility given quantity of electricity. This section bought back a half-interest in one of its sector and to the owner/operator in any cli- provides a total of $1.125 billion over 15 years plants two years earlier at a price of $612 a mate change implementation program en- ($75 million per year) to provide assistance kilowatt. Allegheny settled with the Penn- acted by Congress. The base year for calcu- to communities adversely affected as a re- sylvania Public Utility Commission for a

VerDate 29-OCT-99 04:56 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00080 Fmt 0624 Sfmt 0634 E:\CR\FM\G17NO6.075 pfrm12 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14733 valuation of $225 a kilowatt, half again the county and the sixth largest producer issues its final valuation report, the original estimate. At that price, Allegheny’s of crude oil. The Powder River Basin court would enter an order setting the 700,000 customers in western Pennsylvania plays an important role in the Wyo- compensation that is due the developer are stuck paying $670 million in stranded ming’s oil and gas production, and this who had to temporarily or perma- costs. What happens if the utility doesn’t get the role promises to grow as the explo- nently forgo his development rights. compensation it wants? Litigation. In New ration and production of coalbed meth- This compensation would be paid by Hampshire the state legislature passed a law ane increases over the next several the owner of the mineral of greater designed to open up the power market in years. This region, and the State of economic value. A credit against fed- 1996. New Hampshire’s power companies and Wyoming as a whole, provides many of eral royalties would also be available utility commission have been tied up in the resources that heat our homes, fuel against the compensation price in a court ever since over the issue of stranded our cans, generate electricity for our limited number of situations where the costs. computers, microwaves, and tele- value of such compensation was not For this reason, legislators and regulators visions. In short, there is very little sometimes feel like they need to cut some foreseen in the original federal lease deal, any deal, just to get a competitive mar- that any of us do in a day that is not bid. ket moving forward. The state of Virginia, affected by the resources of coal, oil, Mr. President, the ‘‘Powder River for example, dodged any stranded cost cal- and natural gas. Basin Resource Development Act of culation. In a move supported by local utili- The production of these natural re- 1999’’ has several benefits over the ties, the legislature delayed true competi- sources is a vital part of the economy present system. First, it requires par- tion and simply froze electric rates until of my home state of Wyoming. The pro- ties whose mineral interests may come 2007. Utilities had donated more than $1 mil- duction of coal and oil and gas employs into conflict to attempt to negotiate lion to Virginia politicians in the last two more than 21,000 people in Wyoming. an agreement among themselves before election cycles. The property taxes, severance taxes, Last year Ohio legislators proposed a bill either one of them may avail them- to open up the power market. They figured and state and federal royalties fund our selves of the expedited resolution stranded costs at $6 billion, spread among schools, our roads, and many of the mechanism. No such requirement ex- Ohio’s eight big utilities. Not liking that other services that are essential for the ists today. Second, it directs the Sec- number, the utilities came up with an $18 functioning of our state. Since Wyo- retary of the Interior to encourage ex- billion figure. The latest compromise is $11 ming has no state income tax, our pedited development of federal min- billion. This number represents, in effect, State relies heavily on the minerals in- erals and that are leased pursuant to the excess of the plants’ book value over dustry for our tax base. the federal Mineral Leasing Act, that their market value. Given the great importance both the Wait a minute, says Samuel Randazzo, an exist in conflict areas, and which may attorney for some industrial power users. coal and oil and gas industries have to otherwise be lossed or bypassed. As That $11 billion number is more than the Wyoming’s economy, the State of Wyo- such, this legislation encourages full book value of all the plants. Can the utilities ming and the Federal Government have and expeditious development of federal lose more than their investment? Negotia- tried to encourage concurrent develop- resources in this narrow conflict area tions are to continue. ment in areas where it is feasible and where it is economically feasible and ‘‘We are applying a political solution to an safe to do so. Unfortunately, this is not safe to do so. Third and finally, this economic problem,’’ shrugs Ohio utility com- always possible. This legislation is de- bill provides an expeditious procedure missioner Craig Glazer. ‘‘All intellectual ar- signed to provide a procedure for the guments have been thrown out the window. to resolve conflicts that cannot be Now it comes down to who screams the loud- fair and expeditious resolution of con- solved by the two parties alone, and it est. flicts between oil and gas producers does so in a manner that ensures that Expect further screaming as utilities enter and coal producers who have interests any mineral owner will be fairly com- the deregulated market. on federal land in the Powder River pensated for any suspension or loss of Basin in Wyoming and southern Mon- his mineral rights. In turn, this pro- By Mr. ENZI (for himself and Mr. tana. posal will prevent the serious economic THOMAS): Mr. President, this legislation sets hardship to hundreds of families and S. 1950. A bill to amend the Mineral forth a reasonable procedure to resolve the State treasury that could occur if Leasing Act of 1920 to ensure the or- conflicts between coal producers and mineral development is stalled for an derly development of coal, coalbed oil and gas producers when their min- indefinite amount of time due to pro- methane, natural gas, and oil in the eral rights come into conflict because tracted litigation under the current Powder River Basin, Wyoming and of overlapping federal leasing. First, system. Montana, and for other purposes; to this proposal requires that once a po- Mr. President, this legislation builds the Committee on Energy and Natural tential conflict is identified, the par- on legislation I introduced last year Resources. ties must attempt to negotiate an with Senators THOMAS and BINGAMAN, THE POWDER RIVER BASIN RESOURCE agreement between themselves to re- which passed Congress and was signed DEVELOPMENT ACT solve this conflict. Second, if the par- into law last November. That bill, S. Mr. ENZI. Mr. President, I rise today ties are unable to come to an agree- 2500, ensured that existing lease and to introduce the ‘‘Powder River Basin ment between themselves, either of the contract rights to coalbed methane Resource Development Act of 1999.’’ parties may file a petition for relief in would not be terminated by a decision This legislation is designed to provide U.S. district court in the district in from the 10th Circuit Court of Appeals a procedure for the orderly and timely which the conflict is located. Third, which concluded that coalbed methane resolution of disputes between coal after such a petition is filed, the court gas was reserved to the federal govern- producers and oil and gas operators in would determine whether an actual ment under earlier coal reservation the Powder River Basin in north-cen- conflict exists. Fourth, if the court de- Acts. As it turned out, the Supreme tral Wyoming and southern Montana. termines that a conflict does in fact Court earlier this year realized we got This legislation is cosponsored by my exist, the court would determine in right in our bill and held that the colleague from Wyoming, Senator whether the public interest, as deter- coalbed methane was in fact a gas and THOMAS. mined by the greater economic benefit not a solid, and therefore was not re- Mr. President, the Powder River of each mineral, is best served by sus- served to the government under earlier Basin in Wyoming and southern Mon- pension of the federal coal lease or sus- coal reservation Acts. As such, the pro- tana is one of the richest energy re- pension or termination of all or part of tections we provided in S. 2500 were source regions in the world. This area the oil and gas lease. Fifth, a panel of guaranteed to future as well as past oil contains the largest coal reserves in three experts would be assembled to de- and gas leaseholders. the United States, providing nearly termine the value of the mineral of Mr. President, S. 2500 was an impor- thirty percent of America’s total coal lesser economic value. Each party to tant step in providing certainty and production. This region also contains the action; the oil and gas interest, the resolution to the question of mineral rich reserves of oil and gas, including coal interest, and the federal govern- ownership in Wyoming, and throughout coalbed methane. Wyoming is the fifth ment, would each appoint one of the the country. This bill, builds on last largest producer of natural gas in the three experts. Finally, after the panel year’s work by providing a means to

VerDate 29-OCT-99 04:56 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00081 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.081 pfrm12 PsN: S17PT1 S14734 CONGRESSIONAL RECORD — SENATE November 17, 1999 resolve ongoing development conflicts The chart behind me entitled, ‘‘Oil is measure to the OPEC production re- between owners of coal and oil and gas a Vital Resource for the U.S. Econ- ductions. This chart, ‘‘Crude and Dis- in the Powder River Basin. It rep- omy,’’ was prepared by the Energy In- tillate Price Outlook Higher than Last resents the result of nearly a year of formation Administration of the De- Winter’’ shows projections for steeply negotiations between the coal and coal- partment of Energy. On this chart, increased prices in crude oil and, con- bed producers, as well as the deep oil world oil prices are represented by the sequently, home heating oil. As you and gas interests, on a method to fairly blue line, and U.S. Gross Domestic can see, prices have risen already and reconcile mineral development dis- Product is represented by the red line. are expected to reach levels higher putes when they occur because of mul- It is easy to see the inverse relation- than those experienced during the win- tiple leasing by the federal govern- ship between the two. When world oil ter of 1996–97. ment. This bill has also incorporated prices are high, U.S. Gross Domestic Even if our diplomatic efforts fail to recommendations made by the Bureau Product drops. For example, in the late break OPEC’s choke-hold on the world of Land Management. I look forward to 1970s and early 1980s, as the price of oil working with all the affected parties climbed, the U.S. economy slumped oil supply, we need not sit idly as oil during the second session of the 106th into a deep recession. Conversely, the and gas prices rise well-beyond where Congress to pass legislation that will strength currently enjoyed by the U.S. they would be in a normally-func- put into place a reasonable, balanced economy was until recently accom- tioning market. method to ensure that we receive the panied by low oil prices. The United States has a tool avail- best return on our valuable natural re- If these historical trends hold, the able to ease the sting of this unfair sources in the Powder River Basin. current rise in crude oil prices is a seri- market manipulation. The United ous threat to our economic prosperity. States owns the largest strategic re- By Mr. SCHUMER (for himself This second chart entitled ‘‘EIA Crude serve of crude oil in the world. The and Ms. COLLINS): S. 1951. A bill to provide the Sec- Oil Price Outlook,’’ shows that crude Strategic Petroleum Reserve (SPR) retary of Energy with authority to oil prices have risen since January 1999 consists of roughly 571 million barrels draw down the Strategic Petroleum and are expected to continue rising of crude oil held in salt caverns in Reserve when oil and gas prices in the this winter. To a large extent, this Texas and Louisiana. The Energy Pol- United States rise sharply because of chart demonstrates the ability of icy and Conservation Act allows the anticompetitive activity, and to re- OPEC to drive the price of oil up. It is Secretary of Energy to sell oil from the quire the President, through the Sec- chilling, that the Federal agency re- reserve if the President makes certain retary of Energy, to consult with Con- sponsible for projecting energy prices findings set forth in the law. In order gress regarding the sale of oil from the for the government is predicting that to tap into the Reserve, the President Strategic Petroleum Reserve; to the the price of oil will be above $25 a bar- must determine that an emergency sit- Committee on Energy and Natural Re- rel into January of next year. This pre- uation exists causing significant and sources. diction underscores the need for the lasting reductions in the supply of oil CHUMER OIL PRICE SAFEGUARD ACT legislation Senator S and I in- and severe price increases likely to Ms. COLLINS. Mr. President, I rise troduce today. cause a major adverse impact on the this afternoon to join my distinguished The bottom line is that consumers, national economy. In the history of the as well as businesses, are hurt by ex- colleague, Senator SCHUMER, in intro- Reserve, the President has only made ducing legislation that provides an ef- pensive petroleum products. A rise in this declaration once, during the Gulf fective option to the President and the crude oil prices increases the price of War. home heating oil and gasoline. North- Secretary of Energy to address the un- The legislation I am proud to sponsor ern states like Maine are particularly fair, harmful manipulation in the glob- with Senator SCHUMER today, who has hard hit by increased oil prices because al oil market. The Oil Price Safeguard been a leader on this issue, will give of the need to heat homes through long Act would help to moderate sharp the President more flexibility in using cold winters. Since about 6 out of 10 spikes in oil and gas prices caused by the Strategic Petroleum Reserve to Maine homes burn oil and the average price fixing and production quotas protect American consumers. Specifi- household uses 800 gallons annually in- through the judicious use of our enor- cally, this measure will amend the En- creases in oil prices have a dramatic mous petroleum reserves. ergy Policy and Conservation Act to impact on the state’s population and The global oil market is dominated authorize a draw down of the reserve particularly on low-income families by an international cartel with the when the President finds that a signifi- ability to dramatically affect the price and seniors. A rural state like Maine is also hard cant reduction in the supply of oil has of oil. The eleven member countries of been caused by anti-competitive con- the Organization of Petroleum Export- hit by increased gasoline prices at the pump since rural residents often travel duct. While many, myself included, be- ing Countries known as OPEC supply lieve that the President currently over 40 percent of the world’s oil and further distances than those living in urban or suburban areas. For example, should consider ordering a draw down possess 78 percent of the world’s total to counteract OPEC’s latest market- proven crude oil reserves. Their control my constituents in Aroostook County are currently paying close to $1.50 a distorting production quotas, this leg- of the world’s oil supply allows these islation will make it clear that he has countries to collude to drive up the gallon for regular octane gasoline. At the same time, higher petroleum prices the power to do so. It will also ensure price of oil. OPEC has power to domi- that the proceeds from a draw-down of nate the market and when it wields increase the cost of transporting oil and gasoline to rural areas, like North- the Reserve are used to replenish its this power, consumers lose. Mr. Presi- oil. The bill does by mandating that dent, if OPEC operated in the United ern Maine. At a recent OPEC meeting, the mem- the proceeds are deposited in a special States, the Department of Justice account designed for that purpose. We would undoubtedly prosecute the cartel ber nations reasserted their resolve to maintain high crude oil prices through want to give the President the author- for violation of U.S. anti-trust laws, ity to use the SPR to restore market but the cartel is beyond the reach of production quotas. This is particularly discipline, but not to permanently de- our antitrust enforcement. troubling considering that the Energy plete the reserve in the process. To appreciate how much economic Information Administration has pro- power OPEC wields, it is helpful to re- jected that if New England experiences To further encourage the use of the view the historical relationship be- a particularly cold winter, the price of SPR to offset harmful and uncompeti- tween world oil prices and the U.S. home heating oil could reach as high as tive activities of foreign pricing car- Gross Domestic Product. When OPEC $1.20 per gallon. This is 50 percent high- tels, the Oil Price Safeguard Act will cuts production to increase profits, the er than what New Englanders paid for require the Secretary of Energy to con- American consumer suffers, as does our oil last year. Even if this winter has sult with Congress regarding the sale economy. Rising oil prices increase normal weather, the Energy Informa- of oil from the Reserve. If the price of transportation and manufacturing tion Administration predicts signifi- a barrel of crude exceeds 25 dollars for costs, dampening economic growth. cantly increased oil prices due in large a period greater than 14 days, the

VerDate 29-OCT-99 04:56 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00082 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.110 pfrm12 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14735 President, through the Secretary of Most industry and financial experts within 30 days after the price of oil sus- Energy, will be required to submit to believe oil prices above $25 per barrel tains a price higher than $25 for more Congress a report within thirty days. for an extended period will adversely than 2 weeks. This reporting require- This report will have four parts. First, affect economic growth, even if you ment—which will get Congress more it will detail the causes and potential come from Arizona; not only will it involved in SPR policies—simply calls consequences of the price increase. raise your gasoline prices—you don’t for a comprehensive review of the Second, it will provide an estimate of have to worry about home heating oil, causes and likely consequences of the the likely duration of the price in- but $35 per barrel is clearly reces- price increase. It also requires the crease, based on analyses and forecasts sionary. President to explain why the adminis- of the Energy Information Administra- The effects will be felt most among tration does or does not —we don’t tion. Third, it will provide an analysis the poor and elderly, both at the gas force his hand—support the drawdown of the effects of the price increase on pump and in a sharp increase in the and distribution of oil from the SPR. the cost of home heating oil. And cost of home heating oil. It will effect Before concluding, I want to make a fourth, the report will provide a spe- our manufacturing, transportation, as few things clear about this legislation. cific rationale for why the President well as other businesses that rely on First, it doesn’t attempt in any way to does or does not support a draw down oil. bring oil prices down to what some and distribution of oil from the SPR to I don’t believe in interfering with would call unreasonable levels. Most of counteract anti-competitive behavior free markets. But these OPEC deci- us believe oil prices were unrealisti- in the oil market. sions are not examples of fair economic cally low last winter, and that OPEC’s The bill we are introducing today play. In fact, OPEC recently announced initial supply cuts were an understand- will grant important new authority to that it would not even revisit the sup- able strategy to achieve a better bal- the President to protect consumers ply until March of 2000. With American ance between global supply and de- from the market-distorting behavior of and global oil demand increasing, and a mand. foreign cartels. It will require the cold winter forecast for North America, But to maintain the cuts despite the President to explain to Congress and OPEC’s continued supply quota could price recovery and the projected the American people why actions avail- have a severely detrimental effect on growth in demand amounts to nothing able to the President have not been ex- the U.S. economy over the coming less than price gouging. ercised to protect consumers. I urge months, and may very well throw sand OPEC is currently enjoying unity as a cartel not seen since the early 1980s. my colleagues to join Senator SCHUMER in the gears of the global economy. The bill also protects our national se- and me in working for expeditious pas- Unfortunately, OPEC, with more curity by requiring that proceeds from sage of this important measure. than 40 percent market share in the I yield to my colleague, the distin- global oil market, can have inordinate the sale of oil from the SPR be used guished Senator from New York, so he power over the global economy. only to resupply the SPR, with profits may provide further explanation of our So the question is, Should we rely on from sales remaining in the SPR ac- legislation. I commend him for his the judgment of OPEC ministers to count. Therefore, in the long run, we leadership on this issue. make the right decision when it comes are not going to deplete the oil reserve. Mr. SCHUMER. I thank Senator COL- to the American and the world econ- We are just going to use it to try to LINS from Maine for her leadership on omy? The answer is clearly no. bring oil prices to a reasonable level. this issue. She has well represented her The next question is, What can we do And with the SPR currently stocked constituents on an issue of great con- about it? at 570 million barrels, we have more cern. Like Maine, northern New York— My colleague from Maine, Senator than enough oil to release several hun- dred thousand barrels a day in the much of New York—is very concerned COLLINS, and I have worked together to with the prices of oil; not only gasoline formulate what we believe is a reason- event of a supply crisis without under- but some heating oil, which—just as it able response policy by the U.S. Gov- cutting our stockpile. This should be is in Maine—is going through the roof ernment to instances when foreign oil more than sufficient to pressure oil in New York as we come into this win- producers collude to manipulate oil producers to increase their supply to ter season, which, thus far anyway, has prices to a level that will likely cause more realistically meet demand. The bottom line is this legislation been colder than people have predicted. a significant adverse impact on our would show foreign producers the U.S. I thank the Senator for garnering time economy, not to mention gasoline, can and may well intervene when un- to talk about our legislation, and I which could go to a $1.60, $1.70, or even fair markets threaten our domestic look forward to working with her on higher a gallon, and home heating oil economy. We will say loud and clear this issue. that could go, in my part of the coun- our national economic health is a na- Two months ago, I wrote President try, from $1 to $1.25 a gallon. Clinton and Energy Secretary Richard- Here is how our legislation works. It tional security issue. That knowledge son requesting that they look into the works within the parameters of the may be sufficient to prevent OPEC possibility of releasing a modest 1975 Energy Policy and Conservation from extensive oil market manipula- amount of oil from our Nation’s well- Act, which set up the U.S. Strategic tions in the first place. A signal to OPEC that we are willing stocked Strategic Petroleum Reserve. I Petroleum Reserve and the Energy Pol- to use some of our strategic reserves to made this request not because the price icy Act of 1992, which described oil sup- stabilize oil prices is consistent with of crude oil was rising, but rather be- ply reductions leading to severe price the prudent long-term approach toward cause global oil prices had recently increases as a potential national emer- maintaining a stable economy. more than doubled, primarily due to gency. Mr. President, this legislation is a the new-found unity between OPEC We simply add a provision that al- measured, bipartisan response to a members and allies to uphold rigid sup- lows the Energy Secretary to order a vital economic issue. I look forward to ply quotas—not free market but rigid drawdown of the SPR when oil and gas debating and passing this legislation supply quotas. prices in the U.S. rise sharply because next year. OPEC’s decision in September to of anticompetitive conduct of foreign With that, I yield back my time to maintain the supply quotas meant the oil producers. the good Senator from Maine and daily global oil supply would remain Oil supply can fall short for many thank her for her leadership. millions of barrels below last year’s natural, market-based reasons. But Ms. COLLINS. Mr. President, it has levels—and millions of barrels per day when the shortfall is due to opportun- been a pleasure to work with the Sen- below global demand. The effects this istic manipulations by foreign pro- ator from New York on this issue. decision would have on oil prices were ducers, especially to the degree that it clear. Yesterday, my colleagues—listen will harm our economic well-being, we By Mr. BINGAMAN (for himself, to this—oil closed at nearly $26 a bar- have the right to act in our own de- Mr. THOMPSON, and Mr. KEN- rel, and many industry experts now be- fense. NEDY): lieve it will go to $30 or even $35 a bar- That is why our bill also requires the S. 1954. A bill to establish a com- rel this winter. administration to report to Congress pensation program for employees of the

VerDate 29-OCT-99 04:29 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00083 Fmt 0624 Sfmt 0634 E:\CR\FM\G17NO6.036 pfrm13 PsN: S17PT1 S14736 CONGRESSIONAL RECORD — SENATE November 17, 1999 Department of Energy, its contractors, highly radioactive materials that were definition allows the Secretary of Energy to subcontractors, and beryllium vendors, present in recycled uranium sent to the add other vendors by regulation. who sustained beryllium-related illness plant by the former Atomic Energy A covered employee is defined as an em- due to the performance of their duty; Commission. The AEC and the man- ployee of entities that contracted with the Department of Energy to perform certain to establish a compensation program agers of the plant knew about this haz- services at a Department of Energy facility for certain workers at the Paducah, ard in the 1950s, but enhanced protec- and an employee of a subcontractor. The def- Kentucky, gaseous diffusion plant; to tion for workers at Paducah was not inition also includes an employee of a beryl- establish a pilot program for exam- implemented until 1992. This is an un- lium vendor during a time when beryllium ining the possible relationship between believable and outrageous error. These was being processed and sold to the Depart- workplace exposure to radiation and workers deserve full compensation for ment of Energy. An employee of the federal hazardous materials and illnesses or the health effects of exposures that government is also a covered employee if the health conditions; and for other pur- they were subject to without their employee may have been exposed to beryl- poses; to the Committee on Health, lium at a Department of Energy facility or knowledge. that of a beryllium vendor. Education, Labor, and Pensions. The third situation that this bill ad- Covered illness is defined as Beryllium ENERGY EMPLOYEES’ COMPENSATION ACT dresses occurred to 55 workers at the Sensitivity and Chronic Beryllium Disease. Mr. BINGAMAN. Mr. President, I am DOE’s East Tennessee Technology The statute sets forth criteria by which the pleased to introduce today, along with Park, who also suffered exposures to existence of these conditions may be estab- my colleagues, Senators THOMPSON and radiation and hazardous materials that lished. Consequential injuries arising from KENNEDY, a bill to establish compensa- have resulted in occupational illness. these conditions are also covered illnesses. tion programs for workers at Depart- Through this provision, DOE can make SECTION 104. REGULATORY AUTHORITY TO ment of Energy sites, contractors, and a grant of $100,000 to each worker, if REVISE DEFINITIONS vendors who are ill because they were medical experts find that it is appro- This section provides specific authority for exposed to severe chemical and radio- priate. the Secretary of Energy to designate by reg- active hazards while on the job. This The Department of Energy, under ulation additional entities as beryllium ven- bill, the Energy Employees’ Compensa- dors for the purposes of this title. This sec- Secretary Richardson’s leadership, is tion also authorizes the Secretary of Energy tion Act, will recognize three of the facing up to some of its past failures to to provide by regulation additional criteria more egregious workplace hazards that properly oversee worker health and through which a claimant may establish the were allowed to exist over the years at safety at its facilities. It is a tragedy existence of a covered illness. DOE facilities. that we have to introduce and pass With regard to proposed subsection (a), it The first of these situations was the bills like this one, particularly in cases is possible that new vendors of beryllium or exposure of workers at DOE sites and where it seems so clear that the prob- beryllium-related products will develop con- vendors to beryllium, a metal that has lems could have been prevented. But tractual relationships with the Department of Energy in the future; as these contractual been used for the past 50 years in the this bill is the right thing to do for production of nuclear weapons. Even relationships develop, it will become nec- workers who served their country and essary to designate these vendors as ‘‘beryl- very small amounts of exposure to be- expected that they would be kept safe lium vendors’’ for the purposes of this title. ryllium can result in the onset of from occupational injury. As the Con- With respect to subsection (b), advances in Chronic Beryllium Disease (CBD), an gress considers this bill, I hope that we medical science and testing, and in the med- allergic lung reaction resulting in lung also remain vigilant to the ongoing ical field’s understanding of the harmful ef- scarring and loss of lung function. The challenges to worker safety and health fects of exposure to beryllium, are expected only treatment is the use of steroids to at DOE facilities, particularly in the to occur. The definition of ‘‘covered illness’’ in section 103(4) of this title represents the control the inflammation. There is no parts of the Department that are being cure. Once a person has been exposed to understanding of the Department of Energy reorganized as a result of legislation of the current state of medical knowledge on beryllium, he or she has a lifelong risk we passed earlier this year. the demonstrated methods of establishing of developing CBD. While only 1 to 6 I ask unanimous consent that a sec- beryllium sensitivity or chronic beryllium percent of exposed people will gen- tion-by-section analysis be printed in disease. This subsection would allow the Sec- erally develop CBD, some work tasks the RECORD. retary of Energy to specify additional cri- are associated with disease rates as There being no objection, the mate- teria by which a claimant may establish ex- high as 16 percent. Beryllium was used rial was ordered to be printed in the istence of a covered illness. at 20 DOE sites, including sites in my RECORD, as follows: SECTION 105. ADMINISTRATION state of New Mexico. An estimated SECTION-BY-SECTION ANALYSIS This section provides that the Secretary of 20,000 workers may have been exposed, TITLE I—ENERGY EMPLOYEES’ Energy may administer the program or may including 1,000–1,500 in New Mexico. To BERYLLIUM COMPENSATION ACT enter into an agreement with another agen- date, DOE screening programs have cy of the United States, such as the Depart- SECTION 101. SHORT TITLE ment of Labor, to administer the program. identified 146 cases of CBD among cur- This section designates this title as the The Department of Energy would reimburse rent and former workers, although the ‘‘Energy Employees’ Beryllium Compensa- the other agency for its administrative serv- number can be expected to grow. The tion Act.’’ ices. people who are affected by this disease SECTION 102. FINDINGS SECTION 106. EXPOSURE TO BERYLLIUM IN THE were typically blue-collar workers at Employees of the Department of Energy, PERFORMANCE OF DUTY these facilities. They are not covered and employees of the Department’s contrac- In order to receive compensation under the by the federal workers’ compensation tors and vendors, have been, and currently Energy Employees’ Beryllium Compensation system, and the various state workers’ may be, exposed to harmful substances, in- Act (EEBCA) for any condition related to ex- compensation programs are not well cluding dust particles or vapor of beryllium, posure to beryllium, a covered employee geared to deal with chronic occupa- while performing duties uniquely related to must be determined to have been exposed to the Department of Energy’s nuclear weapons beryllium in the performance of duty. tional illnesses like CBD. I believe production program. Exposure to dust par- that, since these workers became ex- Subsection (a) of this section provides a re- ticles or vapor of beryllium in this situation buttable presumption that employees of DOE posed to beryllium while working in may cause beryllium sensitivity and chronic contractors (section 103(3)(A)) and federal the defense of their country, the coun- beryllium disease, and those who suffer be- employees (section 103(3)(C)) who were em- try owes them something in return, ryllium-related health conditions should ployed at a DOE facility, or whose employ- should they come down with Chronic have uniform and adequate compensation. ment caused them to be present at a DOE or Beryllium Disease. That is why I will SECTION 103. DEFINITIONS a beryllium vendor’s facility, when beryl- fight to help the workers and their This section provides the definitions of a lium was present, were exposed to beryllium families in New Mexico and elsewhere number of terms necessary to implement in the performance of duty. To rebut the pre- through this part of the bill. this legislation. It also incorporates the defi- sumptions, substantial evidence would have The second situation which this bill nitions of multiple terms from the Federal to be introduced into the record establishing Employees’ Compensation Act, section 8101 that the covered employee was not exposed seeks to remedy occurred at the DOE of title, United States Code. to beryllium or beryllium dust during the Paducah Gaseous Diffusion Plant in A beryllium vendor is defined as those ven- employee’s presence at the facility. Kentucky. Here, workers were unknow- dors known to have produced or provided be- With respect to employees of beryllium ingly exposed to plutonium and other ryllium for the Department of Energy. The vendors (section 103(3)(B)), subsection (b) of

VerDate 29-OCT-99 04:29 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00084 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.111 pfrm13 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14737 this section provides that these employees based on the same covered illness or death, ee’s survivor of the right to make the elec- have the burden of establishing by substan- to elect either benefits under this title (sub- tion, whichever is later, unless the Secretary tial evidence exposure to beryllium that was ject to the reduction in benefits set forth in extends the time. Informed elections are ir- intended for sale to, or to be used by, the section 110) or under the applicable state revocable and binding on all survivors. DOE. Thus, to the extent that employees of workers’ compensation system, unless the When an employee or a survivor has made beryllium vendors adduce evidence of expo- state workers’ compensation coverage was an election, no other payment of compensa- sure to beryllium or beryllium dust solely in secured by an insurance policy or contract, tion may be made on account of any other circumstances where the eventual product and the Secretary of Energy specifically beryllium-releated illness. was not intended for sale to, or use by, the waives the requirement to make an election. A determination that the covered em- DOE, this evidence would not support a find- An informed election under these two sub- ployee had ‘‘beryllium-related pulmonary ing that the employees were exposed to be- sections, once made, is irrevocable. condition’’ does not constitute a determina- ryllium in the performance of duty. Subsection (f) requires a widow or widower tion that he or she had a covered illness. SECTION 107. COMPENSATION FOR DISABILITY OR who would theoretically be eligible for bene- Retroactive compensation is not subject to DEATH, MEDICAL SERVICES, AND VOCATIONAL fits derived from more than one husband or a cost of living adjustment. REHABILITATION wife to make an election of one benefit. The SECTION 112. EXCLUSIVITY OF REMEDY AGAINST provision prevents a potential duplication of This section incorporates into this statute THE UNITED STATES, CONTRACTORS, AND SUB- compensation benefits in unusual, but pre- the relevant provisions of the FECA regard- CONTRACTORS dictable, circumstances. An informed elec- ing payment of compensation and other ben- This section provides that the benefits au- tion under this subsection, once made, is ir- efits for covered illnesses. Provisions incor- thorized under this title are an exclusive revocable. porated by reference include FECA sections remedy for individuals against the United regarding medical services and benefits (5 SECTION 110. COORDINATION OF BENEFITS States, DOE, and DOE contractors and sub- U.S.C. § 8103); vocational rehabilitation This section provides for reduction of bene- contractors, except for proceedings under a (§§ 8104 and 8111(b)); total (§ 8105) and partial fits under this title if the claimant is award- state or federal workers compensation stat- (§ 8106) disability; schedule awards for perma- ed benefits under any state or federal work- ute, subject to sections 109 and 110 of this nent impairment (§§ 8107–8109); augmented ers’ compensation system for the same cov- title. ered illness or death. This section is intended compensation for dependents (§ 8110); addi- SECTION 113. ELECTION OF REMEDY AGAINST to prevent a double recovery by individuals tional compensation for services of attend- BERYLLIUM VENDORS ants (§ 8111(a)); maximum and minimum who have already received compensation for illnesses covered by this title. Subsection (a) This section provides that if an individual monthly payments (§ 8112); increase or de- elects to accept payment under this title, ac- crease of basic compensation (§ 8113); wage- of this section provides for a dollar-for-dollar reduction of benefits under this title by the ceptance also will be an exclusive remedy earning capacity (§ 8115); three-day waiting against beryllium vendors who have supplied period (§ 8117); compensation in case of death amount of benefits received under this state or federal workers’ compensation system, DOE with beryllium products, except for pro- (§ 8133); funeral expenses (§ 8134); lump-sum ceedings under a state or federal workers payment (§ 8135); and cost-of-living adjust- less than reasonable costs of obtaining such benefits. The determination of the reason- compensation statute, subject to sections 109 ment (§ 8146a (a) and (b)). and 110. Subsection (b) of this section provides that able costs obtaining such benefits is a mat- all of the compensation under this title will ter reserved to the Secretary of Energy. SECTION 114. CLAIM come out of the Energy Employees’ Beryl- Subsection (b) of this section provides This section adopts the requirements of a lium Compensation Fund established pursu- that, if the Secretary of Energy has granted claim in section 8121, title 5, United States ant to section 120 of this title and is limited a waiver of the election requirement under Code, which requires a claim to be in writing to amounts available in that fund. section 109(d)(2) of this title, the amount of and delivered or properly mailed to the Sec- Subsection (c) of this section prohibits any compensation benefits is reduced by eighty retary of Energy. The claim must be on an payment of compensation for any period percent of the net amount of any state work- approved form, contain all required informa- prior to the effective date of the title, except ers’ compensation benefits actually received tion, sworn, and accompanied by a physi- for the retroactive lump-sum compensation or entitled to be received in the future, after cian’s certificate stating the nature of the payment specified in section 111 of this title. deducting the claimant’s reasonable costs (as injury and the nature and probable extent of determined by the Secretary of Energy) of SECTION 108. COMPUTATION OF PAY the disability, although the Secretary may obtaining such benefits. Permitting an em- waive these latter four requirements for rea- This section incorporates 5 U.S.C. § 8114 re- ployee whose state workers’ compensation sonable cause. garding computation of pay into this title. remedy is secured by insurance to retain an SECTION 115. TIME LIMITATION ON FILING A Subsection (b) of this section contains slight additional twenty percent of state benefits CLAIM wording changes from 5 U.S.C. § 8114(d)(3) ne- provides an incentive for the employee to cessitated by the fact that not all covered seek such benefits in situations where the This section limits the time for fling a employees under this title are federal em- Secretary of Energy has determined that it claim under this title. ployees within the meaning of the FECA. is appropriate to waive the election require- SECTION 116. REVIEW OF AWARD SECTION 109. LIMITATIONS ON RECEIVING ment. In these circumstances; value may be This section provides that the decisions of COMPENSATION obtained for insurance policies purchased the Secretary of Energy in allowing or deny- This section parallels, with some modifica- prior to the enactment of this title. ing any payment under this title are final, tions, the restrictions on receipt of com- SECTION 111. RETROACTIVE COMPENSATION and are not subject to judicial review or re- pensation simultaneously with receipt of This section allows an eligible covered em- view by another official of the United States. other benefits for the same covered illness ployee to elect to receive retroactive com- For purposes of this section, decisions issued set forth in 5 U.S.C. § 8116. Subsections (a) pensation of $100,000, in lieu of any other by the Beryllium Compensation Appeals and (b) of section 109 contain the same prohi- compensation under this title, if the em- Panel (to be established under regulations bitions against dual benefits sete forth in 5 ployee was diagnosed, prior to October 1, authorized by section 122 of this title) are de- U.S.C. § 8116(a) and (b), and apply to federal 1999, as having a beryllium-related pul- cisions of the designee of the Secretary of employees and beneficiaries whose benefit monary condition consistent with Chronic Energy, in the same way that the decisions derives from federal employees. Thus, indi- Beryllium Disease and if the employee dem- of the Employees’ Compensation Appeals viduals who are eligible to receive benefits onstrates the existence of such diagnosis and Board established under 5 U.S.C. § 8149 are under this title may not simultaneously re- condition by medical documentation created decisions of the designee of the Secretary of ceive those benefits and an annuity from the during the employee’s lifetime, at the time Labor. Office of Personnel Management, whether of death, or autopsy. SECTION 117. ASSIGNMENT OF CLAIM such annuity is based on length of service or When an employee who would have been el- This section is identical to 5 U.S.C. § 8130. disability. The election required by sub- igible to elect to receive retroatice com- section (b) is not subject to the provisions of pensation dies prior to making the election, SECTION 118. ADJUDICATION section 110 regarding coordination of bene- of any cause, the employee’s survivors may Subsection (a) provides that, if the Sec- fits. make the election. The right to make an retary of Energy establishes new criteria for Subsection (c) applies only to federal em- election shall be afforded to survivors in the establishing coverage of a covered illness by ployees awarded benefits under this title and order of precedence set forth in section 8109 specifically promulgating a regulation pur- under FECA for the same covered illness or of title 5, United States Code, which is based, suant to the authority granted by section death, and requires an election between the in essence, on proximity of family relation- 104(b) of this title, a claimant has the right two systems. ship to the covered employee. to request reconsideration of a decision Once an informed election has been made, The employee or survivor must make the awarding or denying coverage. This provi- the election is irrevocable. election within 30 days after the date the sion is intended to permit a claimant whose Subsections (d) and (e) require an indi- Secretary of Energy determined to award claim was properly denied under the criteria vidual eligible to receive benefits under this compensation for total or partial disability in effect at the time of the initial denial to title, and also eligible to receive benefits or within 30 days after the date that the Sec- seek and obtain reconsideration based on the under a state worker’s compensation system retary informs the employee or the employ- new criteria, notwithstanding the fact that,

VerDate 29-OCT-99 05:09 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00085 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.092 pfrm12 PsN: S17PT1 S14738 CONGRESSIONAL RECORD — SENATE November 17, 1999

under the administrative appeal rights con- terminations of claims under this title that SECTION 204. SECRETARY OF ENERGY FINDING tained in this title, the claimant would not the Employees’ Compensation Appeals Board The contractor is required by this section be entitled to reconsideration. exercises over appeals from adverse deter- to provide the report of the panel to the Sec- Subsection (b) incorporates into this title minations of claims under the FECA. retary of Energy, who will determine wheth- FECA provisions regarding physical exami- SECTION 123. CIVIL SERVICE RETENTION RIGHTS er any of the employees who are covered by nations (§ 123); findings and awards (§ 8124); This section provides that a federal em- the report may have sustained an adverse misbehavior at proceedings (§ 8125); sub- ployee who meets the definition of a covered health condition from their employment. poenas, oaths, and examination of witnesses employee within the meaning of section SECTION 205. AWARD (§ 8126); representation and attorney’s fees 103(3)(C) of this title has the same civil serv- (§ 8127); reconsideration (§ 8128); and recovery If the Secretary of Energy makes a posi- ice retention rights as are applicable to fed- of overpayments (§ 8129). tive finding under section 204 concerning an eral employees by virtue of the provisions of employee, the employee may receive an SECTION 119. SUBROGATION OF THE UNITED 5 U.S.C. § 8151. Civil Service retention rights award of $100,000. If the employee is eligible STATES are administered by the Office of Personnel for an award under title I, the employee may This section incorporates the provisions of Management; as with 5 U.S.C. § 8151, see elect to receive payment under this title in 5 U.S.C. §§ 8131 and 8132 into this title. Based Charles J. McQuistion, 37 ECAB 193 (1985), place of compensation under title I. on these provisions, the United States has this section is intended to be administered, SECTION 206. ELECTION the same statutory right of reimbursement enforced, and interpreted by OPM. This section provides that the employee is of the compensation payable under this title SECTION 124. ANNUAL REPORT against the proceeds of any recovery from a to make the election under section 205 with- This section provides that the Secretary of responsible third party tortfeasor as that set in a certain period of time. Informed elec- Energy will prepare a report with respect to forth in the FECA. tions are irrevocable and binding on all sur- Subsection (c) notes that, for purposes of the administration of this title on a fiscal vivors. this title, the last sentence of 5 U.S.C. year basis, and will submit this report to SECTION 207. SURVIVOR’S ELECTION § 8131(a) that an ‘‘employee required to ap- Congress. If an individual dies before making the pear as a party or witness in the prosecution SECTION 125. AUTHORIZATION OF election, the employee’s survivor may make of such an action [against a third party] is in APPROPRIATIONS the election. The right to make an election an active duty status while so engaged’’ ap- This section authorizes appropriations and shall be afforded to survivors in the order of plies only to federal employees covered authorizes transfers from other DOE ac- precedence set forth in section 8109 of title 5, under this title, as defined in section counts, to the extent provided in advance in United States Code, which is based, in es- 103(3)(C). appropriations Acts, to carry out the pur- sence, on proximity of family relationship to SECTION 120. ENERGY EMPLOYEES BERYLLIUM poses of this title. This section also provides the covered employee. COMPENSATION FUND that the Secretary limit the amount for the SECTION 208. STATUS OF AWARD This section creates in the U.S. Treasury payment of compensation and other benefits An award is not income under the Internal the Energy Employees’ Beryllium Compensa- to an amount not in excess of the sum of the Revenue Code. appropriations to the Fund and amounts tion Fund, which consists of amounts appro- SECTION 209. PAYMENT IN FULL SETTLEMENT OF made available by transfer to the Fund. priated to it or transferred to it from other CLAIMS AGAINST THE UNITED STATES, CON- DOE accounts and amounts that otherwise SECTION 126. CONSTRUCTION TRACTORS, AND SUBCONTRACTORS accrue to it under this title. Amounts in the This section provides that any amend- This section provides that employees at Fund may be used for the payment of com- ments to provisions of the Federal Employ- the facility eligible for benefits under this pensation and other benefits and expenses ees’ Compensation Act, 5 U.S.C. §§ 8101–8151, title can elect which remedy to pursue. If authorized by this title and for payment of which have been incorporated by reference they elect to proceed under this title, then administrative expenses. into this title, will also be effective to pro- acceptance of payment under this title will SECTION 121. FORFEITURE OF BENEFITS BY ceedings under this title. be in full settlement of all claims against CONVICTED FELONS SECTION 127. CONFORMING AMENDMENTS the United States, DOE, a DOE contractor, a Any individual convicted of violating sec- This section makes conforming amend- DOE subcontractor, or an employee, agent, tion 1920 of title 18, United States Code, ments to criminal provisions of the United or assign of one of them arising out of the which prohibits false statements to obtain States Code (18 U.S.C. §§ 1920, 1921, and 1922). condition for which the payment was made, federal employees’ compensation, or any except that the employee would retain the SECTION 128. EFFECTIVE DATE other federal or state criminal statute relat- right to proceed under a state workers com- ing to fraud in the application or receipt of This section provides that the title is effec- pensation statute, subject to the reduction- any benefits under the title, or any other tive upon enactment, and applies to all of-benefits provision of subsection (c). Under workers’ compensation Act, shall forfeit (as claims, civil actions, and proceedings ‘‘pend- that subsection, the benefits awarded to a of the date of conviction) any benefits for ing on, or filed on or after, the date of the claimant under this title would be reduced any injury occurring on or before the date of enactment’’ of this title. Because compensa- by the amount of any other payments re- the conviction. This forfeiture is in addition tion under this title constitutes a covered ceived by that claimant because of the same to any action of the Secretary of Energy employee’s exclusive remedy against the illness or adverse health condition, exclud- under two other provisions of the FECA that United States, and DOE’s contractors and ing payments for medical expenses under a have been incorporated into this title. Sec- subcontractors, any claim against the workers’ compensation system. United States (under the Federal Tort tion 8106 of title 5, United States Code, pro- SECTION 210. SUBROGATION vides that an employee who fails to make a Claims Act) or against any of the other This section sets out the conditions under required report or knowingly understates above-referenced entities that has not been which the United States is subrogated to a earnings forfeits compensation for any pe- reduced to a final judgment before the date claim. riod for which the report was required. Sec- is barred by this title. tion 8129 provides for the recovery of over- TITLE II—ENERGY EMPLOYEES PILOT SECTION 211. AUTHORIZATION OF APPROPRIATION payments made to an individual due to a PROJECT ACT This section authorizes appropriations for mistake in fact or law by decreasing later SECTION 201. SHORT TITLE the program and provides that authority under this title to make payments is effec- payments. This section designates this Act as the tive in any fiscal year only to the extent, or Except for payments to dependents as cal- ‘‘Energy Employees Pilot Project Act.’’ culated under section 8133 of title 5, United in the amounts, provided in advance in an States Code, an individual confined for the SECTION 202. PILOT PROJECT appropriation Act commission of a felony may not receive ben- This section directs the Secretary of En- TITLE III—PADUCAH EMPLOYEES’ efits during the period of incarceration or ergy to conduct a pilot program to examine EXPOSURE COMPENSATION ACT the possible relationship between workplace retroactively after release. SECTION 301. SHORT TITLE State and federal governments must make exposures to radiation, hazardous materials, available to the Secretary of Energy, upon or both and occupational illness or other ad- This section designates this Act as the written request, the names and social secu- verse health conditions. ‘‘Paducah Employees’ Exposure Compensa- tion Act.’’ rity numbers of individuals who are incarcer- SECTION 203. PHYSICIANS PANEL SECTION 302. DEFINITIONS ated for felony offenses. This section requires a panel of physicians SECTION 122. REGULATIONS—BERYLLIUM who specialize in health conditions related This section defines a number of terms COMPENSATION APPEALS PANEL to occupational exposure to radiation and necessary to implement this legislation, in- This section, modeled after 5 U.S.C. § 8149, hazardous materials to issue a report which cluding ‘‘Paducah employee’’ and ‘‘specified authorizes the Secretary of Energy to pro- examines whether 55 current and former em- disease’’ vide by regulation for the creation of the Be- ployees of the Department of Energy’s East SECTION 303. PADUCAH EMPLOYEES’ EXPOSURE ryllium Compensation Appeals Panel. This Tennessee Technology Park may have sus- COMPENSATION FUND panel is intended to have the same adjudica- tained any illness or health condition as a This section establishes in the Treasury of tory authority over appeals from adverse de- result of their employment. the United States the Paducah Employee’s

VerDate 29-OCT-99 04:29 Nov 18, 1999 Jkt 079060 PO 00000 Frm 00086 Fmt 0624 Sfmt 0634 E:\CR\FM\A17NO6.096 pfrm13 PsN: S17PT1 November 17, 1999 CONGRESSIONAL RECORD — SENATE S14739 Exposure Compensation Fund. The amounts workers’ compensation statute, subject to for the purpose of fighting, to States in in the fund are available for expenditure by the reduction-of-benefits provision of sub- which animal fighting is lawful. the Attorney General under section 305, and paragraph (3). Under that subparagraph, the S. 505 the Fund terminates 22 years after the date benefits awarded to a claimant under this of enactment of this title. This section also title would be reduced by the amount of any At the request of Mr. GRASSLEY, the authorizes appropriations to the Fund in the other payments received by that claimant name of the Senator from South Da- sums necessary to carry out the purposes of because of the same specified illness, exclud- kota (Mr. JOHNSON) was added as a co- the title and provides that authority under ing payments for medical expenses under a sponsor of S. 505, a bill to give gifted this Act to enter into contracts or to make workers’ compensation system. and talented students the opportunity payments is not effective in any fiscal year Subsection (f) sets forth how costs of ad- to develop their capabilities. ministering the title are paid. except to the extent, or in the amounts, pro- S. 751 vided in advance in appropriations Acts. Subsection (g) provides that the duties of the Attorney General under this section At the request of Mr. LEAHY, the SECTION 304. ELIGIBLE EMPLOYEES name of the Senator from New Jersey This section sets forth who is eligible to cease when the Fund terminates. (Mr. LAUTENBERG) was added as a co- receive compensation under this title and Subsection (h) provides that amounts paid provides that an eligible employee who files to an individual under this section are not sponsor of S. 751, a bill to combat nurs- a claim that the Attorney General deter- subject to federal income tax under the in- ing home fraud and abuse, increase pro- mines meets the requirements of this title, ternal revenue laws of the United States; are tections for victims of telemarketing receives $100,000 as compensation. not included as income or resources for pur- fraud, enhance safeguards for pension A person eligible for compensation is a Pa- poses of determining eligibility to receive plans and health care benefit programs, ducah employee (as defined under section benefits described in section 3803(c)(2)(C) of title 31, United States Code or the amount of and enhance penalties for crimes 302(2)) who was employed at the Paducah, against seniors, and for other purposes. Kentucky, gaseous diffusion plant for at these benefits; and are not subject to offset S. 761 least one year during the period beginning under section 3701 et seq. of title 31, United on January 1, 1953, and ending on February 1, States Code. At the request of Mr. ABRAHAM, the 1992, who during that period was monitored Subsection (i) provides that the Attorney name of the Senator from New Hamp- through the use of dosimetry badges for ex- General may issue the regulations necessary shire (Mr. SMITH) was added as a co- posure at the plant to radiation from gamma to carry out this title. sponsor of S. 761, a bill to regulate Subsection (j) provides that regulations, rays or who worked in a job that, as deter- interstate commerce by electronic mined by regulation, led to exposure at the guidelines, and procedures to carry out this title shall be issued not later than 270 days means by permitting and encouraging plant to radioactive contaminants, including the continued expansion of electronic plutonium contaminants; and who submits after the date of enactment of this title. written medical documentation as to having Subsection (k) sets forth administrative commerce through the operation of contracted a specified disease after begin- appeals procedures and procedures for judi- free market forces, and for other pur- ning employment at the plant during the in- cial review. poses. dicated period and after being monitored or SECTION 306. CLAIMS NOT ASSIGNABLE OR S. 961 beginning work at a job that could have led TRANSFERABLE At the request of Mr. HARKIN, his to exposure as specified. This section provides that a claim cog- name was added as a cosponsor of S. SECTION 305. DETERMINATION AND PAYMENT OF nizable under this title is not assignable or 961, a bill to amend the Consolidated CLAIMS transferable. Farm And Rural Development Act to Generally, this section sets forth the pro- SECTION 307. LIMITATIONS ON CLAIMS improve shared appreciation arrange- cedures for filing claims, authority for the This section provides that claim to which ments. Attorney General to consider claims and this title applies shall be barred unless the S. 1187 make compensation payments, consequences claim is filed within 20 years after the date of payment of a claim, cost of administering of the enactment of this title. At the request of Mr. DORGAN, the names of the Senator from Utah (Mr. the program, and appeals procedures. SECTION 308. ATTORNEY FEES Subsection (a) provides that the Attorney BENNETT), and the Senator from Alas- This section limits the amount of attorney General establish procedures whereby indi- ka (Mr. STEVENS) were added as co- viduals may submit claims for payment fees for services rendered in connection with a claim under this title to no more than 10 sponsors of S. 1187, a bill to require the under this title. Secretary of the Treasury to mint Subsection (b) provides that the Attorney percent of a payment made on the claim. An General determine whether a claim filed attorney who violates this section shall be coins in commemoration of the bicen- under this title meets the requirements of fined not more than $5,000. tennial of the Lewis and Clark Expedi- the title. It also provides for consultation SECTION 309. CERTAIN CLAIMS NOT AFFECTED BY tion, and for other purposes. with the Surgeon General and the Secretary AWARDS OF DAMAGES S. 1272 of Energy in certain instances. This section provides that a payment made At the request of Mr. NICKLES, the Subsection (c) provides that the Attorney under this title shall not be considered as name of the Senator from Louisiana General pay, from amounts available in the any form of compensation or reimbursement (Mr. BREAUX) was added as a cosponsor Fund, claims filed under this title that the for a loss for purposes of imposing liability Attorney General determines meet the re- of S. 1272, a bill to amend the Con- on the individual receiving the payment, on trolled Substances Act to promote pain quirements of this title. This subsection also the basis of this receipt; to repay any insur- sets out the conditions under which pay- ance carrier for insurance payments. A pay- management and palliative care with- ments are offset and the United States is ment under this title does not affect any out permitting assisted suicide and eu- subrogated to a claim. It also provides for claim against an insurance carrier with re- thanasia, and for other purposes. payment to the survivor of a Paducah em- spect to insurance. S. 1384 ployee who is deceased at the time of pay- f At the request of Mr. KOHL, the name ment under this section. of the Senator from Louisiana (Mr. Subsection (d) provides that the Attorney ADDITIONAL COSPONSORS General complete the determination on each BREAUX) was added as a cosponsor of S. claim not later than twelve months after the S. 88 1384, a bill to amend the Public Health claim is so filed. The Attorney General may At the request of Mr. BUNNING, the Service Act to provide for a national request from any claimant, or from any indi- name of the Senator from North Da- folic acid education program to pre- vidual or entity on behalf of any claimant, kota (Mr. CONRAD) was added as a co- vent birth defects, and for other pur- additional information or documentation sponsor of S. 88, a bill to amend title poses. necessary to complete the determination. XIX of the Social Security Act to ex- Subsection (e) provides that employees at S. 1452 the Paducah facility eligible for benefits empt disabled individuals from being At the request of Mr. SHELBY, the under this title can elect which remedy to required to enroll with a managed care name of the Senator from South Da- pursue. If they elect to proceed under this entity under the medicaid program. kota (Mr. JOHNSON) was added as a co- title, then acceptance of payment under this S. 345 sponsor of S. 1452, a bill to modernize title will be in full settlement of all claims At the request of Mr. ALLARD, the the requirements under the National against the United States, DOE, a DOE con- name of the Senator from Oregon (Mr. Manufactured Housing Construction tractor, a DOE subcontractor, or an em- ployee, agent, or assign of one of them aris- WYDEN) was added as a cosponsor of S. and Safety Standards of 1974 and to es- ing out of the illness for which the payment 345, a bill to amend the Animal Welfare tablish a balanced consensus process was made, except for claims in an adminis- Act to remove the limitation that per- for the development, revision, and in- trative or judicial proceeding under a state mits interstate movement of live birds, terpretation of Federal construction

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