PL-104-208 Magnuson-Stevens Fishery Conservation and Management Act US

PRACTITIONER'S PERFORMANCE OF A MEDICAL ACTIVITY.

Section 287 of title 35, United States Code, is amended by adding at the end the following new subsection: (c)(1) With respect to a medical practitioner's performance of a medical activity that constitutes an infringement under section 271 (a) or (b) of this title, the provisions of sections 281, 283, 284, and 285 of this title shall not apply against the medical practitioner or against a related health care entity with respect to such medical activity. (2) For the purposes of this subsection: (A) the term ``medical activity'' means the performance of a medical or surgical procedure on a body, but shall not include (i) the use of a patented machine, manufacture, or composition of matter in violation of such patent, (ii) the practice of a patented use of a composition of matter in violation of such patent, or (iii) the practice of a process in violation of a biotechnology patent. (B) the term ``medical practitioner'' means any natural person who is licensed by a State to provide the medical activity described in subsection (c)(1) or who is acting under the direction of such person in the performance of the medical activity. (C) the term ``related health care entity'' shall mean an entity with which a medical practitioner has a professional affiliation under which the medical practitioner performs the medical activity, including but not limited to a nursing home, hospital, university, medical school, health maintenance organization, group medical practice, or a medical clinic. (D) the term ``professional affiliation'' shall mean staff privileges, medical staff membership, employment or contractual relationship, partnership or ownership interest, academic appointment, or other affiliation under which a medical practitioner provides the medical activity on behalf of, or in association with, the health care entity. (E) the term ``body'' shall mean a human body, organ or cadaver, or a nonhuman animal used in medical research or instruction directly relating to the treatment of humans. (F) the term ``patented use of a composition of matter'' does not include a claim for a method of performing a medical or surgical procedure on a body that recites the use of a composition of matter where the use of that composition of matter does not directly contribute to achievement of the objective of the claimed method. (G) the term ``State'' shall mean any state or territory of the United States, the District of Columbia, and the Commonwealth of Puerto Rico. (3) This subsection does not apply to the activities of any person, or employee or agent of such person (regardless of whether such person is a tax exempt organization under section 501(c) of the Internal Revenue Code), who is engaged in the commercial development, manufacture, sale, importation, or distribution of a

machine, manufacture, or composition of matter or the provision of pharmacy or clinical laboratory services (other than clinical laboratory services provided in a physician's office), where such activities are: (A) directly related to the commercial development, manufacture, sale, importation, or distribution of a machine, manufacture, or composition of matter or the provision of pharmacy or clinical laboratory services (other than clinical laboratory services provided in a physician's office), and (B) regulated under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, or the Clinical Laboratories Improvement Act. (4) This subsection shall not apply to any patent issued before the date of enactment of this subsection. Sec. 617. Effective with the enactment of this Act and in any fiscal year hereafter, section 8 of Public Law 96-132 is hereby repealed. Sec. 618. (a) In General.--The Secretary may issue a guarantee or a commitment to guarantee obligations under title XI of the Merchant Marine Act, 1936 (46 App. U.S.C. 1271 et seq.), upon such terms as the Secretary may prescribe, to assist in the reactivation and modernization of any shipyard in the United States that is closed on the date of the enactment of this Act, if the Secretary finds that-- (1) the closed shipyard historically built military vessels and responsible entities now seek to reopen it as an internationally competitive commercial shipyard; (2)(A) the closed shipyard has been designated by the President as a public-private partnership project; or (B) has a reuse plan approved by the Navy in which commercial shipbuilding and repair are primary activities and has a revolving economic conversion fund approved by the Department of Defense; and (3) the State in which the shipyard is located, and each other involved State, or a State-chartered agency, is making a significant financial investment in the overall cost of reactivation and modernization as its contribution to the reactivation and modernization project, in addition to the funds required by subsection (d)(2) of this section. (b) Waivers.--Notwithstanding any other provision of title XI of the Merchant Marine Act, 1936 (46 App. U.S.C. 1271 et seq.), the Secretary shall not apply the requirements of section 1104A(d) of that Act when issuing a guarantee or a commitment to guarantee an obligation under this section. (c) Conditions.--The Secretary shall impose such conditions on the issuance of a guarantee or a commitment to guarantee under this section as are necessary to protect the interests of the United States from the risk of a default. The Secretary shall consider the interdependency of such shipyard modernization and reactivation projects and related vessel loan guarantee requests pending under title XI of the Merchant Marine Act, 1936 (46 App. U.S.C. 1271 et seq.) before issuing a guarantee or a commitment to guarantee under this section. (d) Funding Provisions.-- (1) The Secretary may not guarantee or commit to guarantee obligations under this section that exceed $50,000,000 in the aggregate.

(2) The amount of appropriated funds required by the Federal Credit Reform Act of 1990 (2 U.S.C. 661a et seq.) in advance of the Secretary's issuance of a guarantee or a commitment to guarantee under this section shall be provided by the State in which the shipyard is located, and other involved States, or by a State-chartered agency, and deposited by the Secretary in the financing account established under the Federal Credit Reform Act of 1990 (2 U.S.C. 661a et seq.) for loan guarantees issued by the Secretary under title XI of the Merchant Marine Act of 1936 (46 App. U.S.C. 1271 et seq.). No federally appropriated funds shall be available for this purpose. The funds deposited into that financing account shall be held and applied by the Secretary in accordance with the provisions of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a et seq.), except that, unless the Secretary shall have earlier paid an obligee or been required to pay an obligee pursuant to the terms of a loan guarantee, the funds deposited in that financing account shall be returned, upon the expiration of the Secretary's loan guarantee, to the State, States, or State-chartered agency which originally provided the funds to the Secretary. (3) Notwithstanding the provisions of any other law or regulation, the cost (as that term is defined by the Federal Credit Reform Act of 1990 (2 U.S.C. 661a et seq.)) of a guarantee or commitment to guarantee issued under this section-- (A) may only be determined with reference to the merits of the specific closed shipyard reactivation project which is the subject of that guarantee or commitment to guarantee, without reference to any other project, type of project, or averaged risk; and (B) may not be used in determining the cost of any other project, type of project, or averaged risk applicable to guarantees or commitments to guarantee issued under title XI of the Merchant Marine Act, 1936 (46 App. U.S.C. 1271 et seq.). (e) Sunset.--No commitment to guarantee obligations under this section shall be issued by the Secretary after one year after the date of enactment of this section. (f) Definition.--As used in this section, the term ``Secretary'' means the Secretary of Transportation.

This title may be cited as the ``NATO Enlargement Facilitation Act of 1996''.

The Congress makes the following findings: (1) Since 1949, the North Atlantic Treaty Organization (NATO) has played an essential role in guaranteeing the security, freedom, and prosperity of the United States and its partners in the Alliance. (2) The NATO Alliance is, and has been since its inception, purely defensive in character, and it poses no threat to any nation. The enlargement of the NATO Alliance to include as full and equal members emerging democracies in Central and Eastern Europe will serve to reinforce stability and security in Europe by fostering their integration into the structures which have created and sustained peace in Europe since 1945. Their admission into NATO will not threaten any nation. America's security, freedom, and prosperity remain linked to the security of the countries of Europe. (3) The sustained commitment of the member countries of NATO to a mutual defense has made possible the democratic transformation of Central and Eastern Europe. Members of the Alliance can and should play a critical role in addressing the security challenges of the post-Cold War era and in creating the stable environment needed for those emerging democracies in Central and Eastern Europe to successfully complete political and economic transformation. (4) The United States continues to regard the political independence and territorial integrity of all emerging democracies in Central and Eastern Europe as vital to European peace and security. (5) The active involvement by the countries of Central and Eastern Europe has made the Partnership for Peace program an important forum to foster cooperation between NATO and those countries seeking NATO membership. (6) NATO has enlarged its membership on 3 different occasions since 1949. (7) Congress supports the admission of qualified new members to NATO and the European Union at an early date and has sought to facilitate the admission of qualified new members into NATO. (8) Lasting security and stability in Europe requires not only the military integration of emerging democracies in Central and Eastern Europe into existing European structures, but also the eventual economic and political integration of these countries into existing European structures. (9) As new members of NATO assume the responsibilities of Alliance membership, the costs of maintaining stability in Europe should be shared more widely. Facilitation of the enlargement process will require current members of NATO, and the United States in particular, to demonstrate the political will needed to build on successful ongoing programs such as the Warsaw Initiative and the Partnership for Peace by making

available the resources necessary to supplement efforts prospective new members are themselves undertaking. (10) New members will be full members of the Alliance, enjoying all rights and assuming all the obligations under the North Atlantic Treaty, signed at Washington on April 4, 1949 (hereafter in this Act referred to as the ``Washington Treaty''). (11) In order to assist emerging democracies in Central and Eastern Europe that have expressed interest in joining NATO to be prepared to assume the responsibilities of NATO membership, the United States should encourage and support efforts by such countries to develop force structures and force modernization priorities that will enable such countries to contribute to the full range of NATO missions, including, most importantly, territorial defense of the Alliance. (12) Cooperative regional peacekeeping initiatives involving emerging democracies in Central and Eastern Europe that have expressed interest in joining NATO, such as the Baltic Peacekeeping Battalion, the Polish-Lithuanian Joint Peacekeeping Force, and the Polish-Ukrainian Peacekeeping Force, can make an important contribution to European peace and security and international peacekeeping efforts, can assist those countries preparing to assume the responsibilities of possible NATO membership, and accordingly should receive appropriate support from the United States. (13) NATO remains the only multilateral security organization capable of conducting effective military operations and preserving security and stability of the Euro-Atlantic region. (14) NATO is an important diplomatic forum and has played a positive role in defusing tensions between members of the Alliance and, as a result, no military action has occurred between two Alliance member states since the inception of NATO in 1949. (15) The admission to NATO of emerging democracies in Central and Eastern Europe which are found to be in a position to further the principles of the Washington Treaty would contribute to international peace and enhance the security of the region. Countries which have become democracies and established market economies, which practice good neighborly relations, and which have established effective democratic civilian control over their defense establishments and attained a degree of interoperability with NATO, should be evaluated for their potential to further the principles of the Washington Treaty. (16) Democratic civilian control of defense forces is an essential element in the process of preparation for those states interested in possible NATO membership. (17) Protection and promotion of fundamental freedoms and human rights is an integral aspect of genuine security, and in evaluating requests for membership in NATO, the human rights records of the emerging democracies in Central and Eastern Europe should be evaluated according to their commitments to fulfill in good faith the human rights obligations of the Charter of the United Nations, the principles of the Universal Declaration on Human Rights, and the Helsinki Final Act. (18) A number of Central and Eastern European countries have expressed interest in NATO membership, and have taken

concrete steps to demonstrate this commitment, including their participation in Partnership for Peace activities. (19) The Caucasus region remains important geographically and politically to the future security of Central Europe. As NATO proceeds with the process of enlargement, the United States and NATO should continue to examine means to strengthen the sovereignty and enhance the security of United Nations recognized countries in that region. (20) In recognition that not all countries which have requested membership in NATO will necessarily qualify at the same pace, the accession date for each new member will vary. (21) The provision of additional NATO transition assistance should include those emerging democracies most ready for closer ties with NATO and should be designed to assist other countries meeting specified criteria of eligibility to move forward toward eventual NATO membership. (22) The Congress of the United States finds in particular that Poland, Hungary, and the Czech Republic have made significant progress toward achieving the criteria set forth in section 203(d)(3) of the NATO Participation Act of 1994 and should be eligible for the additional assistance described in this Act. (23) The evaluation of future membership in NATO for emerging democracies in Central and Eastern Europe should be based on the progress of those nations in meeting criteria for NATO membership, which require enhancement of NATO's security and the approval of all NATO members. (24) The process of NATO enlargement entails the consensus agreement of the governments of all 16 NATO members and ratification in accordance with their constitutional procedures. (25) Some NATO members, such as Spain and Norway, do not allow the deployment of nuclear weapons on their territory although they are accorded the full collective security guarantees provided by Article 5 of the Washington Treaty. There is no a priori requirement for the stationing of nuclear weapons on the territory of new NATO members, particularly in the current security climate. However, NATO retains the right to alter its security posture at any time as circumstances warrant.

It is the policy of the United States-- (1) to join with the NATO allies of the United States to adapt the role of the NATO Alliance in the post-Cold War world; (2) to actively assist the emerging democracies in Central and Eastern Europe in their transition so that such countries may eventually qualify for NATO membership; (3) to support the enlargement of NATO in recognition that enlargement will benefit the interests of the United States and the Alliance and to consider these benefits in any analysis of the costs of NATO enlargement; (4) to ensure that all countries in Central and Eastern Europe are fully aware of and capable of assuming the costs

and responsibilities of NATO membership, including the obligation set forth in Article 10 of the Washington Treaty that new members be able to contribute to the security of the North Atlantic area; and (5) to work to define a constructive and cooperative political and security relationship between an enlarged NATO and the Russian Federation.

It is the sense of the Congress that in order to promote economic stability and security in Slovakia, Estonia, Latvia, Lithuania, Romania, Bulgaria, Albania, Moldova, and Ukraine-- (1) the United States should continue and expand its support for the full and active participation of these countries in activities appropriate for qualifying for NATO membership; (2) the United States Government should use all diplomatic means available to press the European Union to admit as soon as possible any country which qualifies for membership; (3) the United States Government and the North Atlantic Treaty Organization should continue and expand their support for military exercises and peacekeeping initiatives between and among these nations, nations of the North Atlantic Treaty Organization, and Russia; and (4) the process of enlarging NATO to include emerging democracies in Central and Eastern Europe should not be limited to consideration of admitting Poland, Hungary, the Czech Republic, and Slovenia as full members of the NATO Alliance.

In view of the forcible incorporation of Estonia, Latvia, Lithuania into the Soviet Union in 1940 under the Molotov-Ribbentrop Pact and the refusal of the United States and other countries to recognize that incorporation for over 50 years, it is the sense of the Congress that-- (1) Estonia, Latvia, and Lithuania have valid historical security concerns that must be taken into account by the United States; and (2) Estonia, Latvia, and Lithuania should not be disadvantaged in seeking to join NATO by virtue of their forcible incorporation into the Soviet Union.

ASSISTANCE.

(a) In General.--The following countries are designated as eligible to receive assistance under the program established under section 203(a) of the NATO Participation Act of 1994 and shall be deemed to have been so designated pursuant to section 203(d)(1) of such Act: Poland, Hungary, and the Czech Republic. (b) Designation of Slovenia.--Effective 90 days after the date of enactment of this Act, Slovenia is designated as eligible to receive assistance under the program established under section 203(a) of the NATO Participation Act of 1994, and shall be deemed to have been so designated pursuant to section 203(d) of such Act, unless the President certifies to Congress prior to such effective date that Slovenia fails to meet the criteria under section 203(d)(3) of such Act.

(c) Designation of Other Countries.--The President shall designate other emerging democracies in Central and Eastern Europe as eligible to receive assistance under the program established under section 203(a) of such Act if such countries-- (1) have expressed a clear desire to join NATO; (2) have begun an individualized dialogue with NATO in preparation for accession; (3) are strategically significant to an effective NATO defense; and (4) meet the other criteria outlined in section 203(d)(3) of the NATO Participation Act of 1994 (title II of Public Law 103- 447; 22 U.S.C. 1928 note). (d) Rule of Construction.--Nothing in this section precludes the designation by the President of Estonia, Latvia, Lithuania, Romania, Slovakia, Bulgaria, Albania, Moldova, Ukraine, or any other emerging democracy in Central and Eastern Europe pursuant to section 203(d) of the NATO Participation Act of 1994 as eligible to receive assistance under the program established under section 203(a) of such Act.

ASSISTANCE.

(a) In General.--There are authorized to be appropriated $60,000,000 for fiscal year 1997 for the program established under section 203(a) of the NATO Participation Act of 1994. (b) Availability.--Of the funds authorized to be appropriated by subsection (a)-- (1) not less than $20,000,000 shall be available for the cost, as defined in section 502(5) of the Credit Reform Act of 1990, of direct loans pursuant to the authority of section 203(c)(4) of the NATO Participation Act of 1994 (relating to the ``Foreign Military Financing Program''); (2) not less than $30,000,000 shall be available for assistance on a grant basis pursuant to the authority of section 203(c)(4) of the NATO Participation Act of 1994 (relating to the ``Foreign Military Financing Program''); and (3) not more than $10,000,000 shall be available for assistance pursuant to the authority of section 203(c)(3) of the NATO Participation Act of 1994 (relating to international military education and training). (c) Rule of Construction.--Amounts authorized to be appropriated under this section are authorized to be appropriated in addition to such amounts as otherwise may be available for such purposes.

INFORMATION MANAGEMENT SYSTEM.

(a) In General.--To the extent provided in advance in appropriations acts for such purposes, funds described in subsection (b) are authorized to be made available to support the implementation of the Regional Airspace Initiative and the Partnership for Peace Information Management System, including-- (1) the procurement of items in support of these programs; and (2) the transfer of such items to countries participating in these programs. (b) Funds Described.--Funds described in this subsection are funds that are available--

(1) during any fiscal year under the NATO Participation Act of 1994 with respect to countries eligible for assistance under that Act; or (2) during fiscal year 1997 under any Act to carry out the Warsaw Initiative.

(a) Priority Delivery.--Notwithstanding any other provision of law, the delivery of excess defense articles under the authority of section 203(c) (1) and (2) of the NATO Participation Act of 1994 and section 516 of the Foreign Assistance Act of 1961 shall be given priority to the maximum extent feasible over the delivery of such excess defense articles to all other countries except those countries referred to in section 541 of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1995 (Public Law 103-306; 108 Stat. 1640). (b) Cooperative Regional Peacekeeping Initiatives.--The Congress encourages the President to provide excess defense articles and other appropriate assistance to cooperative regional peacekeeping initiatives involving emerging democracies in Central and Eastern Europe that have expressed an interest in joining NATO in order to enhance their ability to contribute to European peace and security and international peacekeeping efforts.

The Congress endorses efforts by the United States to modernize the defense capability of Poland, Hungary, the Czech Republic, Slovenia, and any other countries designated by the President pursuant to section 203(d) of the NATO Participation Act of 1994, by exploring with such countries options for the sale or lease to such countries of weapons systems compatible with those used by NATO members, including air defense systems, advanced fighter aircraft, and telecommunications infrastructure.

(a) Termination of Eligibility.--The eligibility of a country designated pursuant to subsection (a) or (b) of section 606 or pursuant to section 203(d) of the NATO Participation Act of 1994 may be terminated upon a determination by the President that such country does not meet the criteria set forth in section 203(d)(3) of the NATO Participation Act of 1994. (b) Notification.--At least 15 days before terminating the eligibility of any country pursuant to subsection (a), the President shall notify the congressional committees specified in section 634A of the Foreign Assistance Act of 1961 in accordance with the procedures applicable to reprogramming notifications under that section.

The NATO Participation Act of 1994 (title II of Public Law 103- 447; 22 U.S.C. 1928 note) is amended in sections 203(a), 203(d)(1), and 203(d)(2) by striking ``countries emerging from communist domination'' each place it appears and inserting ``emerging democracies in Central and Eastern Europe''.

This title may be cited as the ``Bank for Economic Cooperation and Development in the Middle East and North Africa Act''.

The President is hereby authorized to accept membership for the United States in the Bank for Economic Cooperation and Development in the Middle East and North Africa (in this title referred to as the ``Bank'') provided for by the agreement establishing the Bank (in this title referred to as the ``Agreement''), signed on May 31, 1996.

(a) Appointment.--At the inaugural meeting of the Board of Governors of the Bank, the Governor and the alternate for the Governor of the International Bank for Reconstruction and Development, appointed pursuant to section 3 of the Bretton Woods Agreements Act, shall serve ex-officio as a Governor and the alternate for the Governor, respectively, of the Bank. The President, by and with the advice and consent of the Senate, shall appoint a Governor of the Bank and an alternate for the Governor. (b) Compensation.--Any person who serves as a governor of the Bank or as an alternate for the Governor may not receive any salary or other compensation from the United States by reason of such service.

OF THE BRETTON WOODS AGREEMENTS ACT. Section 4 of the Bretton Woods Agreements Act shall apply to the Bank in the same manner in which such section applies to the International Bank for Reconstruction and Development and the International Monetary Fund.

DEPOSITORIES. Any Federal Reserve Bank which is requested to do so by the Bank may act as its depository, or as its fiscal agent, and the Board of Governors of the Federal Reserve System shall exercise general supervision over the carrying out of these functions.

(a) Subscription Authority.-- (1) In general.--The Secretary of the Treasury may subscribe on behalf of the United States to not more than 7,011,270 shares of the capital stock of the Bank. (2) Effectiveness of subscription commitment.--Any commitment to make such subscription shall be effective only to such extent or in such amounts as are provided for in advance by appropriations Acts. (b) Limitations on Authorization of Appropriations.--For payment by the Secretary of the Treasury of the subscription of the United States for shares described in subsection (a), there are authorized to be appropriated $1,050,007,800 without fiscal year limitation. (c) Limitations on Obligation of Appropriated Amounts for Shares of Capital Stock.-- (1) Paid-in capital stock.--

(A) In general.--Not more than $105,000,000 of the amounts appropriated pursuant to subsection (b) may be obligated for subscription to shares of paid-in capital stock. (B) Fiscal year 1997.--Not more than $52,500,000 of the amounts appropriated pursuant to subsection (b) for fiscal year 1997 may be obligated for subscription to shares of paid-in capital stock. (2) Callable capital stock.--Not more than $787,505,852 of the amounts appropriated pursuant to subsection (b) may be obligated for subscription to shares of callable capital stock. (d) Disposition of Net Income Distributions by the Bank.--Any payment made to the United States by the Bank as a distribution of net income shall be covered into the Treasury as a miscellaneous receipt.

ACTIONS BY OR AGAINST THE BANK. (a) Jurisdiction.--The United States district courts shall have original and exclusive jurisdiction of any civil action brought in the United States by or against the Bank. (b) Venue.--For purposes of section 1391(b) of title 28, United States Code, the Bank shall be deemed to be a resident of the judicial district in which the principal office of the Bank in the United States, or its agent appointed for the purpose of accepting service or notice of service, is located.

The Agreement shall have full force and effect in the United States, its territories and possessions, and the Commonwealth of Puerto Rico, upon acceptance of membership by the United States in the Bank and the entry into force of the Agreement.

CERTAIN SECURITIES ISSUED BY THE BANK; REPORTS REQUIRED. (a) Exemption from Securities Laws; Reports to Securities and Exchange Commission.--Any securities issued by the Bank (including any guaranty by the Bank, whether or not limited in scope) in connection with borrowing of funds, or the guarantee of securities as to both principal and interest, shall be deemed to be exempted securities within the meaning of section 3(a)(2) of the Securities Act of 1933 and section 3(a)(12) of the Securities Exchange Act of 1934. The Bank shall file with the Securities and Exchange Commission such annual and other reports with regard to such securities as the Commission shall determine to be appropriate in view of the special character of the Bank and its operations and necessary in the public interest or for the protection of investors. (b) Authority of Securities and Exchange Commission to Suspend Exemption; Reports to the Congress.--The Securities and Exchange Commission, acting in consultation with such agency or officer as the President shall designate, may suspend the provisions of subsection (a) at any time as to any or all securities issued or guaranteed by the Bank during the period of such suspension. The Commission shall include in its annual reports to the Congress such information as it shall deem advisable with regard to the operations and effect of this section.

(a) Annual Report Required on Participation of the United States in the Bank.--Section 1701(c)(2) of the International Financial Institutions Act (22 U.S.C. 262r(c)(2)) is amended by inserting ``Bank for Economic Cooperation and Development in the Middle East and North Africa,'' after ``Inter-American Development Bank''. (b) Exemption from Limitations and Restrictions on Power of National, Banking Associations To Deal in and Underwrite Investment Securities of the Bank.--The seventh sentence of paragraph 7 of section 5136 of the Revised Statutes of the United States (12 U.S.C. 24) is amended by inserting ``Bank for Economic Cooperation and Development in the Middle East and North Africa,'' after ``the Inter-American Development Bank''. (c) Benefits for United States Citizen-Representatives to the Bank.--Section 51 of Public Law 91-599 (22 U.S.C. 276c-2) is amended by inserting ``the Bank for Economic Cooperation and Development in the Middle East and North Africa,'' after ``the Inter-American Development Bank,''.

(d) For programs, projects or activities in the Department of the Interior and Related Agencies Appropriations Act, 1997, provided as follows, to be effective as if it had been enacted into law as the regular appropriations Act:

AN ACT <<NOTE: Department of the Interior and Related Agencies Appropriations Act, 1997.>>

Making appropriations for the Department of the Interior, and related agencies for the fiscal year ending September 30, 1997, and for other purposes.

This title may be cited as the ``Student Loan Marketing Association Reorganization Act of 1996''.

THROUGH THE FORMATION OF A HOLDING COMPANY.

(a) Amendment.--Part B of title IV of the Higher Education Act of 1965 (20 U.S.C. 1071 et seq.) is amended by inserting after section 439 (20 U.S.C. 1087-2) the following new section:

``SEC. 440. REORGANIZATION OF THE STUDENT LOAN MARKETING ASSOCIATION THROUGH THE FORMATION OF A HOLDING COMPANY.

``(a) Actions by the Association's Board of Directors.--The Board of Directors of the Association shall take or cause to be taken all such action as the Board of Directors deems necessary or appropriate to effect, upon the shareholder approval described in subsection (b), a restructuring of the common stock ownership of the Association, as set forth in a plan of reorganization adopted by the Board of Directors (the terms of which shall be consistent with this section) so that all of the outstanding common shares of the Association shall be directly owned by a Holding Company. Such actions may include, in the Board of Director's discretion, a merger of a wholly owned subsidiary of the Holding Company with and into the Association, which would have the effect provided in the plan of reorganization and the law of the jurisdiction in which such subsidiary is incorporated. As part of the restructuring, the Board of Directors may cause-- ``(1) the common shares of the Association to be converted, on the reorganization effective date, to common shares of the Holding Company on a one for one basis, consistent with applicable State or District of Columbia law; and ``(2) Holding Company common shares to be registered with the Securities and Exchange Commission.

``(b) Shareholder Approval.--The plan of reorganization adopted by the Board of Directors pursuant to subsection (a) shall be submitted to common shareholders of the Association for their approval. The reorganization shall occur on the reorganization effective date, provided that the plan of reorganization has been

approved by the affirmative votes, cast in person or by proxy, of the holders of a majority of the issued and outstanding shares of the Association common stock. ``(c) Transition.--In the event the shareholders of the Association approve the plan of reorganization under subsection (b), the following provisions shall apply beginning on the reorganization effective date: ``(1) In general.--Except as specifically provided in this section, until the dissolution date the Association shall continue to have all of the rights, privileges and obligations set forth in, and shall be subject to all of the limitations and restrictions of, section 439, and the Association shall continue to carry out the purposes of such section. The Holding Company and any subsidiary of the Holding Company (other than the Association) shall not be entitled to any of the rights, privileges, and obligations, and shall not be subject to the limitations and restrictions, applicable to the Association under section 439, except as specifically provided in this section. The Holding Company and any subsidiary of the Holding Company (other than the Association or a subsidiary of the Association) shall not purchase loans insured under this Act until such time as the Association ceases acquiring such loans, except that the Holding Company may purchase such loans if the Association is merely continuing to acquire loans as a lender of last resort pursuant to section 439(q) or under an agreement with the Secretary described in paragraph (6). ``(2) Transfer of certain property.-- ``(A) In general.--Except as provided in this section, on the reorganization effective date or as soon as practicable thereafter, the Association shall use the Association's best efforts to transfer to the Holding Company or any subsidiary of the Holding Company (or both), as directed by the Holding Company, all real and personal property of the Association (both tangible and intangible) other than the remaining property. Subject to the preceding sentence, such transferred property shall include all right, title, and interest in-- ``(i) direct or indirect subsidiaries of the Association (excluding special purpose funding companies in existence on the date of enactment of this section and any interest in any government- sponsored enterprise); ``(ii) contracts, leases, and other agreements of the Association; ``(iii) licenses and other intellectual property of the Association; and ``(iv) any other property of the Association. ``(B) Construction.--Nothing in this paragraph shall be construed to prohibit the Association from transferring remaining property from time to time to the Holding Company or any subsidiary of the Holding Company, subject to the provisions of paragraph (4). ``(3) Transfer of personnel.--On the reorganization effective date, employees of the Association shall become employees of the Holding Company (or any subsidiary of the Holding Company), and the Holding Company (or any subsidiary of the Holding Company) shall provide all necessary and appropriate management and operational support (including loan

servicing) to the Association, as requested by the Association. The Association, however, may obtain such management and operational support from persons or entities not associated with the Holding Company. ``(4) Dividends.--The Association may pay dividends in the form of cash or noncash distributions so long as at the time of the declaration of such dividends, after giving effect to the payment of such dividends as of the date of such declaration by the Board of Directors of the Association, the Association's capital would be in compliance with the capital standards and requirements set forth in section 439(r). If, at any time after the reorganization effective date, the Association fails to comply with such capital standards, the Holding Company shall transfer with due diligence to the Association additional capital in such amounts as are necessary to ensure that the Association again complies with the capital standards. ``(5) Certification prior to dividend.--Prior to the payment of any dividend under paragraph (4), the Association shall certify to the Secretary of the Treasury that the payment of the dividend will be made in compliance with paragraph (4) and shall provide copies of all calculations needed to make such certification. ``(6) Restrictions on new business activity or acquisition of assets by association.-- ``(A) In general.--After the reorganization effective date, the Association shall not engage in any new business activities or acquire any additional program assets described in section 439(d) other than in connection with-- ``(i) student loan purchases through September 30, 2007; ``(ii) contractual commitments for future warehousing advances, or pursuant to letters of credit or standby bond purchase agreements, which are outstanding as of the reorganization effective date; ``(iii) the Association serving as a lender- of-last-resort pursuant to section 439(q); and ``(iv) the Association's purchase of loans insured under this part, if the Secretary, with the approval of the Secretary of the Treasury, enters into an agreement with the Association for the continuation or resumption of the Association's secondary market purchase program because the Secretary determines there is inadequate liquidity for loans made under this part. ``(B) Agreement.--The Secretary is authorized to enter into an agreement described in clause (iv) of subparagraph (A) with the Association covering such secondary market activities. Any agreement entered into under such clause shall cover a period of 12 months, but may be renewed if the Secretary determines that liquidity remains inadequate. The fee provided under section 439(h)(7) shall not apply to loans acquired under any such agreement with the Secretary. ``(7) Issuance of debt obligations during the transition period; attributes of debt obligations.--After the reorganization effective date, the Association shall not issue debt obligations which mature later than September 30, 2008, except in connection with serving as a lender-of-last-resort

pursuant to section 439(q) or with purchasing loans under an agreement with the Secretary as described in paragraph (6). Nothing in this section shall modify the attributes accorded the debt obligations of the Association by section 439, regardless of whether such debt obligations are incurred prior to, or at any time following, the reorganization effective date or are transferred to a trust in accordance with subsection (d). ``(8) Monitoring of safety and soundness.-- ``(A) Obligation to obtain, maintain, and report information.--The Association shall obtain such information and make and keep such records as the Secretary of the Treasury may from time to time prescribe concerning-- ``(i) the financial risk to the Association resulting from the activities of any associated person, to the extent such activities are reasonably likely to have a material impact on the financial condition of the Association, including the Association's capital ratio, the Association's liquidity, or the Association's ability to conduct and finance the Association's operations; and ``(ii) the Association's policies, procedures, and systems for monitoring and controlling any such financial risk. ``(B) Summary reports.--The Secretary of the Treasury may require summary reports of the information described in subparagraph (A) to be filed no more frequently than quarterly. If, as a result of adverse market conditions or based on reports provided pursuant to this subparagraph or other available information, the Secretary of the Treasury has concerns regarding the financial or operational condition of the Association, the Secretary of the Treasury may, notwithstanding the preceding sentence and subparagraph (A), require the Association to make reports concerning the activities of any associated person whose business activities are reasonably likely to have a material impact on the financial or operational condition of the Association. ``(C) Separate operation of corporations.-- ``(i) In general.--The funds and assets of the Association shall at all times be maintained separately from the funds and assets of the Holding Company or any subsidiary of the Holding Company and may be used by the Association solely to carry out the Association's purposes and to fulfill the Association's obligations. ``(ii) Books and records.--The Association shall maintain books and records that clearly reflect the assets and liabilities of the Association, separate from the assets and liabilities of the Holding Company or any subsidiary of the Holding Company. ``(iii) Corporate office.--The Association shall maintain a corporate office that is physically separate from any office of the Holding Company or any subsidiary of the Holding Company. ``(iv) Director.--No director of the Association who is appointed by the President pursuant to section

439(c)(1)(A) may serve as a director of the Holding Company. ``(v) One officer requirement.--At least one officer of the Association shall be an officer solely of the Association. ``(vi) Transactions.--Transactions between the Association and the Holding Company or any subsidiary of the Holding Company, including any loan servicing arrangements, shall be on terms no less favorable to the Association than the Association could obtain from an unrelated third party offering comparable services. ``(vii) Credit prohibition.--The Association shall not extend credit to the Holding Company or any subsidiary of the Holding Company nor guarantee or provide any credit enhancement to any debt obligations of the Holding Company or any subsidiary of the Holding Company. ``(viii) Amounts collected.--Any amounts collected on behalf of the Association by the Holding Company or any subsidiary of the Holding Company with respect to the assets of the Association, pursuant to a servicing contract or other arrangement between the Association and the Holding Company or any subsidiary of the Holding Company, shall be collected solely for the benefit of the Association and shall be immediately deposited by the Holding Company or such subsidiary to an account under the sole control of the Association. ``(D) Encumbrance of assets.--Notwithstanding any Federal or State law, rule, or regulation, or legal or equitable principle, doctrine, or theory to the contrary, under no circumstances shall the assets of the Association be available or used to pay claims or debts of or incurred by the Holding Company. Nothing in this subparagraph shall be construed to limit the right of the Association to pay dividends not otherwise prohibited under this subparagraph or to limit any liability of the Holding Company explicitly provided for in this section. ``(E) Holding company activities.--After the reorganization effective date and prior to the dissolution date, all business activities of the Holding Company shall be conducted through subsidiaries of the Holding Company. ``(F) Confidentiality.--Any information provided by the Association pursuant to this section shall be subject to the same confidentiality obligations contained in section 439(r)(12). ``(G) Definition.--For purposes of this paragraph, the term `associated person' means any person, other than a natural person, who is directly or indirectly controlling, controlled by, or under common control with, the Association. ``(9) Issuance of stock warrants.-- ``(A) In general.--On the reorganization effective date, the Holding Company shall issue to the District of Columbia Financial Responsibility and Management Assistance Authority a number of stock warrants that is equal to

one percent of the outstanding shares of the Association, determined as of the last day of the fiscal quarter preceding the date of enactment of this section, with each stock warrant entitling the holder of the stock warrant to purchase from the Holding Company one share of the registered common stock of the Holding Company or the Holding Company's successors or assigns, at any time on or before September 30, 2008. The exercise price for such warrants shall be an amount equal to the average closing price of the common stock of the Association for the 20 business days prior to the date of enactment of this section on the exchange or market which is then the primary exchange or market for the common stock of the Association. The number of shares of Holding Company common stock subject to each stock warrant and the exercise price of each stock warrant shall be adjusted as necessary to reflect-- ``(i) the conversion of Association common stock into Holding Company common stock as part of the plan of reorganization approved by the Association's shareholders; and ``(ii) any issuance or sale of stock (including issuance or sale of treasury stock), stock split, recapitalization, reorganization, or other corporate event, if agreed to by the Secretary of the Treasury and the Association. ``(B) Authority to sell or exercise stock warrants; deposit of proceeds.--The District of Columbia Financial Responsibility and Management Assistance Authority is authorized to sell or exercise the stock warrants described in subparagraph (A). The District of Columbia Financial Responsibility and Management Assistance Authority shall deposit into the account established under section 3(e) of the Student Loan Marketing Association Reorganization Act of 1996 amounts collected from the sale and proceeds resulting from the exercise of the stock warrants pursuant to this subparagraph. ``(10) Restrictions on transfer of association shares and bankruptcy of association.--After the reorganization effective date, the Holding Company shall not sell, pledge, or otherwise transfer the outstanding shares of the Association, or agree to or cause the liquidation of the Association or cause the Association to file a petition for bankruptcy under title 11, United States Code, without prior approval of the Secretary of the Treasury and the Secretary of Education.

``(d) Termination of the Association.--In the event the shareholders of the Association approve a plan of reorganization under subsection (b), the Association shall dissolve, and the Association's separate existence shall terminate on September 30, 2008, after discharge of all outstanding debt obligations and liquidation pursuant to this subsection. The Association may dissolve pursuant to this subsection prior to such date by notifying the Secretary of Education and the Secretary of the Treasury of the Association's intention to dissolve, unless within 60 days after receipt of such notice the Secretary of Education notifies the Association that the Association continues to be needed to serve as a lender of last resort pursuant to section 439(q) or continues to be needed to purchase loans under an agreement with the Secretary described

in subsection (c)(6). On the dissolution date, the Association shall take the following actions: ``(1) Establishment of a trust.--The Association shall, under the terms of an irrevocable trust agreement that is in form and substance satisfactory to the Secretary of the Treasury, the Association and the appointed trustee, irrevocably transfer all remaining obligations of the Association to the trust and irrevocably deposit or cause to be deposited into such trust, to be held as trust funds solely for the benefit of holders of the remaining obligations, money or direct noncallable obligations of the United States or any agency thereof for which payment the full faith and credit of the United States is pledged, maturing as to principal and interest in such amounts and at such times as are determined by the Secretary of the Treasury to be sufficient, without consideration of any significant reinvestment of such interest, to pay the principal of, and interest on, the remaining obligations in accordance with their terms. To the extent the Association cannot provide money or qualifying obligations in the amount required, the Holding Company shall be required to transfer money or qualifying obligations to the trust in the amount necessary to prevent any deficiency. ``(2) Use of trust assets.--All money, obligations, or financial assets deposited into the trust pursuant to this subsection shall be applied by the trustee to the payment of the remaining obligations assumed by the trust. ``(3) Obligations not transferred to the trust.--The Association shall make proper provision for all other obligations of the Association not transferred to the trust, including the repurchase or redemption, or the making of proper provision for the repurchase or redemption, of any preferred stock of the Association outstanding. Any obligations of the Association which cannot be fully satisfied shall become liabilities of the Holding Company as of the date of dissolution. ``(4) Transfer of remaining assets.--After compliance with paragraphs (1) and (3), any remaining assets of the trust shall be transferred to the Holding Company or any subsidiary of the Holding Company, as directed by the Holding Company.

``(e) Operation of the Holding Company.--In the event the shareholders of the Association approve the plan of reorganization under subsection (b), the following provisions shall apply beginning on the reorganization effective date: ``(1) Holding company board of directors.--The number of members and composition of the Board of Directors of the Holding Company shall be determined as set forth in the Holding Company's charter or like instrument (as amended from time to time) or bylaws (as amended from time to time) and as permitted under the laws of the jurisdiction of the Holding Company's incorporation. ``(2) Holding company name.--The names of the Holding Company and any subsidiary of the Holding Company (other than the Association)-- ``(A) may not contain the name `Student Loan Marketing Association'; and ``(B) may contain, to the extent permitted by applicable State or District of Columbia law, `Sallie Mae' or variations thereof, or such other names as the Board of Directors

of the Association or the Holding Company deems appropriate. ``(3) Use of sallie mae name.--Subject to paragraph (2), the Association may assign to the Holding Company, or any subsidiary of the Holding Company, the `Sallie Mae' name as a trademark or service mark, except that neither the Holding Company nor any subsidiary of the Holding Company (other than the Association or any subsidiary of the Association) may use the `Sallie Mae' name on, or to identify the issuer of, any debt obligation or other security offered or sold by the Holding Company or any subsidiary of the Holding Company (other than a debt obligation or other security issued to and held by the Holding Company or any subsidiary of the Holding Company). The Association shall remit to the account established under section 3(e) of the Student Loan Marketing Association Reorganization Act of 1996, $5,000,000, within 60 days of the reorganization effective date as compensation for the right to assign the `Sallie Mae' name as a trademark or service mark. ``(4) Disclosure required.--Until 3 years after the dissolution date, the Holding Company, and any subsidiary of the Holding Company (other than the Association), shall prominently display-- ``(A) in any document offering the Holding Company's securities, a statement that the obligations of the Holding Company and any subsidiary of the Holding Company are not guaranteed by the full faith and credit of the United States; and ``(B) in any advertisement or promotional materials which use the `Sallie Mae' name or mark, a statement that neither the Holding Company nor any subsidiary of the Holding Company is a government-sponsored enterprise or instrumentality of the United States.

``(f) Strict Construction.--Except as specifically set forth in this section, nothing in this section shall be construed to limit the authority of the Association as a federally chartered corporation, or of the Holding Company as a State or District of Columbia chartered corporation. ``(g) Right To Enforce.--The Secretary of Education or the Secretary of the Treasury, as appropriate, may request that the Attorney General bring an action in the United States District Court for the District of Columbia for the enforcement of any provision of this section, or may, under the direction or control of the Attorney General, bring such an action. Such court shall have jurisdiction and power to order and require compliance with this section. ``(h) Deadline for Reorganization Effective Date.--This section shall be of no further force and effect in the event that the reorganization effective date does not occur on or before 18 months after the date of enactment of this section. ``(i) Definitions.--For purposes of this section: ``(1) Association.--The term `Association' means the Student Loan Marketing Association. ``(2) Dissolution date.--The term `dissolution date' means September 30, 2008, or such earlier date as the Secretary of Education permits the transfer of remaining obligations in accordance with subsection (d).

``(3) Holding company.--The term `Holding Company' means the new business corporation established pursuant to this section by the Association under the laws of any State of the United States or the District of Columbia for the purposes of the reorganization and restructuring described in subsection (a). ``(4) Remaining obligations.--The term `remaining obligations' means the debt obligations of the Association outstanding as of the dissolution date. ``(5) Remaining property.--The term `remaining property' means the following assets and liabilities of the Association which are outstanding as of the reorganization effective date: ``(A) Debt obligations issued by the Association. ``(B) Contracts relating to interest rate, currency, or commodity positions or protections. ``(C) Investment securities owned by the Association. ``(D) Any instruments, assets, or agreements described in section 439(d) (including, without limitation, all student loans and agreements relating to the purchase and sale of student loans, forward purchase and lending commitments, warehousing advances, academic facilities obligations, letters of credit, standby bond purchase agreements, liquidity agreements, and student loan revenue bonds or other loans). ``(E) Except as specifically prohibited by this section or section 439, any other nonmaterial assets or liabilities of the Association which the Association's Board of Directors determines to be necessary or appropriate to the Association's operations. ``(6) Reorganization.--The term `reorganization' means the restructuring event or events (including any merger event) giving effect to the Holding Company structure described in subsection (a). ``(7) Reorganization effective date.--The term `reorganization effective date' means the effective date of the reorganization as determined by the Board of Directors of the Association, which shall not be earlier than the date that shareholder approval is obtained pursuant to subsection (b) and shall not be later than the date that is 18 months after the date of enactment of this section. ``(8) Subsidiary.--The term `subsidiary' means one or more direct or indirect subsidiaries.''.

(b) Technical Amendments.-- (1) Eligible lender.-- (A) Amendments to the higher education act.-- (i) Definition of eligible lender.--Section 435(d)(1)(F) of the Higher Education Act of 1965 (20 U.S.C. 1085(d)(1)(F)) is amended by inserting after ``Student Loan Marketing Association'' the following: ``or the Holding Company of the Student Loan Marketing Association, including any subsidiary of the Holding Company, created pursuant to section 440,''. (ii) Definition of eligible lender and federal consolidation loans.--Sections 435(d)(1)(G) and 428C(a)(1)(A) of such Act (20 U.S.C. 1085(d)(1)(G) and 1078-3(a)(1)(A)) are each amended by inserting after ``Student Loan Marketing Association'' the following:

``or the Holding Company of the Student Loan Marketing Association, including any subsidiary of the Holding Company, created pursuant to section 440''. (B) Effective date.-- The amendments made by this paragraph shall take effect on the reorganization effective date as defined in section 440(h) of the Higher Education Act of 1965 (as added by subsection (a)). (2) Enforcement of safety and soundness requirements.-- Section 439(r) of the Higher Education Act of 1965 (20 U.S.C. 1087-2(r)) is amended-- (A) in the first sentence of paragraph (12), by inserting ``or the Association's associated persons'' after ``by the Association''; (B) by redesignating paragraph (13) as paragraph (15); and (C) by inserting after paragraph (12) the following new paragraph: ``(13) Enforcement of safety and soundness requirements.-- The Secretary of Education or the Secretary of the Treasury, as appropriate, may request that the Attorney General bring an action in the United States District Court for the District of Columbia for the enforcement of any provision of this section, or may, under the direction or control of the Attorney General, bring such an action. Such court shall have jurisdiction and power to order and require compliance with this section.''. (3) Financial safety and soundness.--Section 439(r) of the Higher Education Act of 1965 (20 U.S.C. 1087-2(r)) is further amended-- (A) in paragraph (1)-- (i) by striking ``and'' at the end of subparagraph (A); (ii) by striking the period at the end of subparagraph (B) and inserting ``; and''; and (iii) by adding at the end the following new subparagraph: ``(C)(i) financial statements of the Association within 45 days of the end of each fiscal quarter; and ``(ii) reports setting forth the calculation of the capital ratio of the Association within 45 days of the end of each fiscal quarter.''; (B) in paragraph (2)-- (i) by striking clauses (i) and (ii) of subparagraph (A) and inserting the following: ``(i) appoint auditors or examiners to conduct audits of the Association from time to time to determine the condition of the Association for the purpose of assessing the Association's financial safety and soundness and to determine whether the requirements of this section and section 440 are being met; and ``(ii) obtain the services of such experts as the Secretary of the Treasury determines necessary and appropriate, as authorized by section 3109 of title 5, United States Code, to assist in determining the condition of the Association for the purpose of assessing the Association's financial safety and soundness, and to determine whether the

requirements of this section and section 440 are being met.''; and (ii) by adding at the end the following new subparagraph: ``(D) Annual assessment.-- ``(i) In general.--For each fiscal year beginning on or after October 1, 1996, the Secretary of the Treasury may establish and collect from the Association an assessment (or assessments) in amounts sufficient to provide for reasonable costs and expenses of carrying out the duties of the Secretary of the Treasury under this section and section 440 during such fiscal year. In no event may the total amount so assessed exceed, for any fiscal year, $800,000, adjusted for each fiscal year ending after September 30, 1997, by the ratio of the Consumer Price Index for All Urban Consumers (issued by the Bureau of Labor Statistics) for the final month of the fiscal year preceding the fiscal year for which the assessment is made to the Consumer Price Index for All Urban Consumers for September 1997. ``(ii) Deposit.--Amounts collected from assessments under this subparagraph shall be deposited in an account within the Treasury of the United States as designated by the Secretary of the Treasury for that purpose. The Secretary of the Treasury is authorized and directed to pay out of any funds available in such account the reasonable costs and expenses of carrying out the duties of the Secretary of the Treasury under this section and section 440. None of the funds deposited into such account shall be available for any purpose other than making payments for such costs and expenses.''; and (C) by inserting after paragraph (13) (as added by paragraph (2)(C)) the following new paragraph: ``(14) Actions by secretary.-- ``(A) In general.--For any fiscal quarter ending after January 1, 2000, the Association shall have a capital ratio of at least 2.25 percent. The Secretary of the Treasury may, whenever such capital ratio is not met, take any one or more of the actions described in paragraph (7), except that-- ``(i) the capital ratio to be restored pursuant to paragraph (7)(D) shall be 2.25 percent; and ``(ii) if the relevant capital ratio is in excess of or equal to 2 percent for such quarter, the Secretary of the Treasury shall defer taking any of the actions set forth in paragraph (7) until the next succeeding quarter and may then proceed with any such action only if the capital ratio of the Association remains below 2.25 percent. ``(B) Applicability.--The provisions of paragraphs (4), (5), (6), (8), (9), (10), and (11) shall be of no further application to the Association for any period after January 1, 2000.''. (4) Information required; dividends.--Section 439(r) of the Higher Education Act of 1965 (20 U.S.C. 1087-2(r)) is further amended--

(A) by adding at the end of paragraph (2) (as amended in paragraph (3)(B)(ii)) the following new subparagraph: ``(E) Obligation to obtain, maintain, and report information.-- ``(i) In general.--The Association shall obtain such information and make and keep such records as the Secretary of the Treasury may from time to time prescribe concerning-- ``(I) the financial risk to the Association resulting from the activities of any associated person, to the extent such activities are reasonably likely to have a material impact on the financial condition of the Association, including the Association's capital ratio, the Association's liquidity, or the Association's ability to conduct and finance the Association's operations; and ``(II) the Association's policies, procedures, and systems for monitoring and controlling any such financial risk. ``(ii) Summary reports.--The Secretary of the Treasury may require summary reports of such information to be filed no more frequently than quarterly. If, as a result of adverse market conditions or based on reports provided pursuant to this subparagraph or other available information, the Secretary of the Treasury has concerns regarding the financial or operational condition of the Association, the Secretary of the Treasury may, notwithstanding the preceding sentence and clause (i), require the Association to make reports concerning the activities of any associated person, whose business activities are reasonably likely to have a material impact on the financial or operational condition of the Association. ``(iii) Definition.--For purposes of this subparagraph, the term `associated person' means any person, other than a natural person, directly or indirectly controlling, controlled by, or under common control with the Association.''; and (B) by adding at the end the following new paragraphs: ``(16) Dividends.--The Association may pay dividends in the form of cash or noncash distributions so long as at the time of the declaration of such dividends, after giving effect to the payment of such dividends as of the date of such declaration by the Board of Directors of the Association, the Association's capital would be in compliance with the capital standards set forth in this section. ``(17) Certification prior to payment of dividend.--Prior to the payment of any dividend under paragraph (16), the Association shall certify to the Secretary of the Treasury that the payment of the dividend will be made in compliance with paragraph (16) and shall provide copies of all calculations needed to make such certification.''.

(c) Sunset of the Association's Charter if No Reorganization Plan Occurs.--Section 439 of the Higher Education Act of 1965 (20 U.S.C. 1087-2) is amended by adding at the end the following new subsection: ``(s) Charter Sunset.--

``(1) Application of provisions.--This subsection applies beginning 18 months and one day after the date of enactment of this subsection if no reorganization of the Association occurs in accordance with the provisions of section 440. ``(2) Sunset plan.-- ``(A) Plan submission by the association.--Not later than July 1, 2007, the Association shall submit to the Secretary of the Treasury and to the Chairman and Ranking Member of the Committee on Labor and Human Resources of the Senate and the Chairman and Ranking Member of the Committee on Economic and Educational Opportunities of the House of Representatives, a detailed plan for the orderly winding up, by July 1, 2013, of business activities conducted pursuant to the charter set forth in this section. Such plan shall-- ``(i) ensure that the Association will have adequate assets to transfer to a trust, as provided in this subsection, to ensure full payment of remaining obligations of the Association in accordance with the terms of such obligations; ``(ii) provide that all assets not used to pay liabilities shall be distributed to shareholders as provided in this subsection; and ``(iii) provide that the operations of the Association shall remain separate and distinct from that of any entity to which the assets of the Association are transferred. ``(B) Amendment of the plan by the association.--The Association shall from time to time amend such plan to reflect changed circumstances, and submit such amendments to the Secretary of the Treasury and to the Chairman and Ranking Minority Member of the Committee on Labor and Human Resources of the Senate and Chairman and Ranking Minority Member of the Committee on Economic and Educational Opportunities of the House of Representatives. In no case may any amendment extend the date for full implementation of the plan beyond the dissolution date provided in paragraph (3). ``(C) Plan monitoring.--The Secretary of the Treasury shall monitor the Association's compliance with the plan and shall continue to review the plan (including any amendments thereto). ``(D) Amendment of the plan by the secretary of the treasury.--The Secretary of the Treasury may require the Association to amend the plan (including any amendments to the plan), if the Secretary of the Treasury deems such amendments necessary to ensure full payment of all obligations of the Association. ``(E) Implementation by the association.--The Association shall promptly implement the plan (including any amendments to the plan, whether such amendments are made by the Association or are required to be made by the Secretary of the Treasury). ``(3) Dissolution of the association.--The Association shall dissolve and the Association's separate existence shall terminate on July 1, 2013, after discharge of all outstanding debt obligations and liquidation pursuant to this subsection.

The Association may dissolve pursuant to this subsection prior to such date by notifying the Secretary of Education and the Secretary of the Treasury of the Association's intention to dissolve, unless within 60 days of receipt of such notice the Secretary of Education notifies the Association that the Association continues to be needed to serve as a lender of last resort pursuant to subsection (q) or continues to be needed to purchase loans under an agreement with the Secretary described in paragraph (4)(A). On the dissolution date, the Association shall take the following actions: ``(A) Establishment of a trust.--The Association shall, under the terms of an irrevocable trust agreement in form and substance satisfactory to the Secretary of the Treasury, the Association, and the appointed trustee, irrevocably transfer all remaining obligations of the Association to a trust and irrevocably deposit or cause to be deposited into such trust, to be held as trust funds solely for the benefit of holders of the remaining obligations, money or direct noncallable obligations of the United States or any agency thereof for which payment the full faith and credit of the United States is pledged, maturing as to principal and interest in such amounts and at such times as are determined by the Secretary of the Treasury to be sufficient, without consideration of any significant reinvestment of such interest, to pay the principal of, and interest on, the remaining obligations in accordance with their terms. ``(B) Use of trust assets.--All money, obligations, or financial assets deposited into the trust pursuant to this subsection shall be applied by the trustee to the payment of the remaining obligations assumed by the trust. Upon the fulfillment of the trustee's duties under the trust, any remaining assets of the trust shall be transferred to the persons who, at the time of the dissolution, were the shareholders of the Association, or to the legal successors or assigns of such persons. ``(C) Obligations not transferred to the trust.--The Association shall make proper provision for all other obligations of the Association, including the repurchase or redemption, or the making of proper provision for the repurchase or redemption, of any preferred stock of the Association outstanding. ``(D) Transfer of remaining assets.--After compliance with subparagraphs (A) and (C), the Association shall transfer to the shareholders of the Association any remaining assets of the Association. ``(4) Restrictions relating to winding up.-- ``(A) Restrictions on new business activity or acquisition of assets by the association.-- ``(i) In general.--Beginning on July 1, 2009, the Association shall not engage in any new business activities or acquire any additional program assets (including acquiring assets pursuant to contractual commitments) described in subsection (d) other than in connection with the Association-- ``(I) serving as a lender of last resort pursuant to subsection (q); and

``(II) purchasing loans insured under this part, if the Secretary, with the approval of the Secretary of the Treasury, enters into an agreement with the Association for the continuation or resumption of the Association's secondary market purchase program because the Secretary determines there is inadequate liquidity for loans made under this part. ``(ii) Agreement.--The Secretary is authorized to enter into an agreement described in subclause (II) of clause (i) with the Association covering such secondary market activities. Any agreement entered into under such subclause shall cover a period of 12 months, but may be renewed if the Secretary determines that liquidity remains inadequate. The fee provided under subsection (h)(7) shall not apply to loans acquired under any such agreement with the Secretary. ``(B) Issuance of debt obligations during the wind up period; attributes of debt obligations.--The Association shall not issue debt obligations which mature later than July 1, 2013, except in connection with serving as a lender of last resort pursuant to subsection (q) or with purchasing loans under an agreement with the Secretary as described in subparagraph (A). Nothing in this subsection shall modify the attributes accorded the debt obligations of the Association by this section, regardless of whether such debt obligations are transferred to a trust in accordance with paragraph (3). ``(C) Use of association name.--The Association may not transfer or permit the use of the name `Student Loan Marketing Association', `Sallie Mae', or any variation thereof, to or by any entity other than a subsidiary of the Association.''.

(d) Repeals.-- (1) In general.--Sections 439 of the Higher Education Act of 1965 (20 U.S.C. 1087-2) and 440 of such Act (as added by subsection (a) of this section) are repealed. (2) Effective date.--The repeals <<NOTE: 20 USC 1087-2 note.>> made by paragraph (1) shall be effective one year after-- (A) the date on which all of the obligations of the trust established under section 440(d)(1) of the Higher Education Act of 1965 (as added by subsection (a)) have been extinguished, if a reorganization occurs in accordance with section 440 of such Act; or (B) the date on which all of the obligations of the trust established under subsection 439(s)(3)(A) of such Act (as added by subsection (c)) have been extinguished, if a reorganization does not occur in accordance with section 440 of such Act.

(e) Association Names.--Upon dissolution in accordance with section 439(s) of the Higher Education Act of 1965 (20 U.S.C. 1087-2), the names ``Student Loan Marketing Association'', ``Sallie Mae'', and any variations thereof may not be used by any entity engaged in any business similar to the business conducted pursuant to section 439 of such Act (as such section was in effect on the date of enactment of this Act) without the approval of the Secretary of the Treasury.

(f) Right to Enforce.--The Secretary of Education or the Secretary of the Treasury, as appropriate, may request that the Attorney General bring an action in the United States District Court for the District of Columbia for the enforcement of any provision of subsection (e), or may, under the direction or control of the Attorney General, bring such an action. Such court shall have jurisdiction and power to order and require compliance with subsection (e).

(a) Status of the Corporation and Corporate Powers; Obligations Not Federally Guaranteed.-- (1) Status of the corporation.--The Corporation shall not be an agency, instrumentality, or establishment of the United States Government, nor a Government corporation, nor a Government controlled corporation, as such terms are defined in section 103 of title 5, United States Code. No action under section 1491 of title 28, United States Code (commonly known as the Tucker Act) shall be allowable against the United States based on the actions of the Corporation. (2) Corporate powers.--The Corporation shall be subject to the provisions of this section, and, to the extent not inconsistent with this section, to the District of Columbia Business Corporation Act (or the comparable law of another State, if applicable). The Corporation shall have the powers conferred upon a corporation by the District of Columbia Business Corporation Act (or such other applicable State law) as from time to time in effect in order to conduct the Corporation's affairs as a private, for-profit corporation and to carry out the Corporation's purposes and activities incidental thereto. The Corporation shall have the power to enter into contracts, to execute instruments, to incur liabilities, to provide products and services, and to do all things as are necessary or incidental to the proper management of the Corporation's affairs and the efficient operation of a private, for-profit business. (3) Limitation on ownership of stock.-- (A) Student loan marketing association.--The Student Loan Marketing Association shall not increase its share of the ownership of the Corporation in excess of 42 percent of the shares of stock of the Corporation outstanding on the date of enactment of this Act. The Student Loan Marketing Association shall not control the operation of the Corporation, except that the Student Loan Marketing Association may participate in the election of directors as a shareholder, and may continue to exercise the Student Loan Marketing Association's right to appoint directors under section 754 of the Higher Education Act of 1965 (20 U.S.C. 1132f-3) as long as that section is in effect. (B) Prohibition.--Until such time as the Secretary of the Treasury sells the stock of the Corporation owned by the Secretary of Education pursuant to subsection (c), the Student Loan Marketing Association shall not provide financial support or guarantees to the Corporation. (C) Financial support or guarantees.--After the Secretary of the Treasury sells the stock of the Corporation owned by the Secretary of Education pursuant to subsection

(c), the Student Loan Marketing Association may provide financial support or guarantees to the Corporation, if such support or guarantees are subject to terms and conditions that are no more advantageous to the Corporation than the terms and conditions the Student Loan Marketing Association provides to other entities, including, where applicable, other monoline financial guaranty corporations in which the Student Loan Marketing Association has no ownership interest. (4) No federal guarantee.-- (A) Obligations insured by the corporation.-- (i) Full faith and credit of the united states.--No obligation that is insured, guaranteed, or otherwise backed by the Corporation shall be deemed to be an obligation that is guaranteed by the full faith and credit of the United States. (ii) Student loan marketing association.--No obligation that is insured, guaranteed, or otherwise backed by the Corporation shall be deemed to be an obligation that is guaranteed by the Student Loan Marketing Association. (iii) Special rule.--This paragraph shall not affect the determination of whether such obligation is guaranteed for purposes of Federal income taxes. (B) Securities offered by the corporation.--No debt or equity securities of the Corporation shall be deemed to be guaranteed by the full faith and credit of the United States. (5) Definition.--The term ``Corporation'' as used in this section means the College Construction Loan Insurance Association as in existence on the day before the date of enactment of this Act, and any successor corporation.

(b) Related Privatization Requirements.-- (1) Notice requirements.-- (A) In general.--During the six-year period following the date of enactment of this Act, the Corporation shall include, in each of the Corporation's contracts for the insurance, guarantee, or reinsurance of obligations, and in each document offering debt or equity securities of the Corporation, a prominent statement providing notice that-- (i) such obligations or such securities, as the case may be, are not obligations of the United States, nor are such obligations or such securities, as the case may be, guaranteed in any way by the full faith and credit of the United States; and (ii) the Corporation is not an instrumentality of the United States. (B) Additional notice.--During the five-year period following the sale of stock pursuant to subsection (c)(1), in addition to the notice requirements in subparagraph (A), the Corporation shall include, in each of the contracts and documents referred to in such subparagraph, a prominent statement providing notice that the United States is not an investor in the Corporation. (2) Corporate charter.--The Corporation's charter shall be amended as necessary and without delay to conform to the requirements of this section.

(3) Corporate name.--The name of the Corporation, or of any direct or indirect subsidiary thereof, may not contain the term ``College Construction Loan Insurance Association'', or any substantially similar variation thereof. (4) Articles of incorporation.--The Corporation shall amend the Corporation's articles of incorporation without delay to reflect that one of the purposes of the Corporation shall be to guarantee, insure, and reinsure bonds, leases, and other evidences of debt of educational institutions, including Historically Black Colleges and Universities and other academic institutions which are ranked in the lower investment grade category using a nationally recognized credit rating system. (5) Requirements until stock sale.--Notwithstanding subsection (d), the requirements of sections 754 and 760 of the Higher Education Act of 1965 (20 U.S.C. 1132f-3 and 1132f-9), as such sections were in effect on the day before the date of enactment of this Act, shall continue to be effective until the day immediately following the date of closing of the purchase of the Secretary of Education's stock (or the date of closing of the final purchase, in the case of multiple transactions) pursuant to subsection (c)(1) of this Act.

(c) Sale of Federally Owned Stock.-- (1) Purchase by the corporation.--The Secretary of the Treasury shall sell and the Corporation shall purchase, within 90 days after the date of enactment of this Act, the stock of the Corporation held by the Secretary of Education at a price determined by the binding, independent appraisal of a nationally recognized financial firm, except that the 90-day period may be extended by mutual agreement of the Secretary of the Treasury and the Corporation to not more than 150 days after the date of enactment of this Act. The appraiser shall be jointly selected by the Secretary of the Treasury and the Corporation. In the event that the Secretary of the Treasury and the Corporation cannot agree on the appraiser, then the Secretary of the Treasury and the Corporation shall name an independent third party to select the appraiser. (2) Reimbursement of costs and expenses of sale.--The Secretary of the Treasury shall be reimbursed from the proceeds of the sale of the stock under this subsection for all reasonable costs and expenses related to such sale, except that one-half of all reasonable costs and expenses relating to the independent appraisal under paragraph (1) shall be borne by the Corporation. (3) Deposit into account.--Amounts collected from the sale of stock pursuant to this subsection that are not used to reimburse the Secretary of the Treasury pursuant to paragraph (2) shall be deposited into the account established under subsection (e). (4) Assistance by the corporation.--The Corporation shall provide such assistance as the Secretary of the Treasury and the Secretary of Education may require to facilitate the sale of the stock under this subsection. (5) Report to congress.--Not later than 6 months after the date of enactment of this Act, the Secretary of the Treasury shall report to the appropriate committees of Congress on the completion and terms of the sale of stock of the Corporation pursuant to this subsection.

(d) Repeal of Statutory Restrictions and Related Provisions.--Part D of title VII of the Higher Education Act of 1965 (20 U.S.C. 1132f et seq.) is repealed. (e) Establishment of Account.-- (1) In general.--Notwithstanding any other provision of law, the District of Columbia Financial Responsibility and Management Assistance Authority shall establish an account to receive-- (A) amounts collected from the sale and proceeds resulting from the exercise of stock warrants pursuant to section 440(c)(9) of the Higher Education Act of 1965; (B) amounts and proceeds remitted as compensation for the right to assign the ``Sallie Mae'' name as a trademark or service mark pursuant to section 440(e)(3) of the Higher Education Act of 1965; and (C) amounts and proceeds collected from the sale of the stock of the Corporation and deposited pursuant to subsection (c)(3). (2) Amounts and Proceeds.-- (A) Amounts and proceeds relating to sallie mae.-- The amounts and proceeds described in subparagraphs (A) and (B) of paragraph (1) shall be used to finance public elementary and secondary school facility construction and repair within the District of Columbia or to carry out the District of Columbia School Reform Act of 1995. (B) Amounts and proceeds relating to connie lee.-- The amounts and proceeds described in subparagraph (C) of paragraph (1) shall be used to finance public elementary and secondary school facility construction and repair within the District of Columbia.

Part B of title IV of the Higher Education Act of 1965 (20 U.S.C. 1071 et seq.) is amended by adding after section 440 (as added by section 602) the following new section:

``SEC. 440A. DISCRIMINATION IN SECONDARY MARKETS PROHIBITED. ``The Student Loan Marketing Association (and, if the Association is privatized under section 440, any successor entity functioning as a secondary market for loans under this part, including the Holding Company described in such section) shall not engage directly or indirectly in any pattern or practice that results in a denial of a borrower's access to loans under this part because of the borrower's race, sex, color, religion, national origin, age, disability status, income, attendance at a particular eligible institution, length of the borrower's educational program, or the borrower's academic year at an eligible institution.''.

This title may be cited as the ``Museum and Library Services Act of 1996''.

The Museum Services Act (20 U.S.C. 961 et seq.) is amended to read as follows:

``TITLE II--MUSEUM AND LIBRARY SERVICES

``Subtitle A--General Provisions

``SEC. 201. SHORT TITLE. ``This title may be cited as the `Museum and Library Services Act'.

``SEC. 202. GENERAL DEFINITIONS. ``As used in this title: ``(1) Commission.--The term `Commission' means the National Commission on Libraries and Information Science established under section 3 of the National Commission on Libraries and Information Sciences Act (20 U.S.C. 1502). ``(2) Director.--The term `Director' means the Director of the Institute appointed under section 204. ``(3) Institute.--The term `Institute' means the Institute of Museum and Library Services established under section 203. ``(4) Museum board.--The term `Museum Board' means the National Museum Services Board established under section 275.

``SEC. 203. INSTITUTE OF MUSEUM AND LIBRARY SERVICES. ``(a) Establishment.--There is established, within the National Foundation on the Arts and the Humanities, an Institute of Museum and Library Services. ``(b) Offices.--The Institute shall consist of an Office of Museum Services and an Office of Library Services. There shall be a National Museum Services Board in the Office of Museum Services.

``SEC. 204. DIRECTOR OF THE INSTITUTE. ``(a) Appointment.-- ``(1) In general.--The Institute shall be headed by a Director, appointed by the President, by and with the advice and consent of the Senate. ``(2) Term.--The Director shall serve for a term of 4 years. ``(3) Qualifications.--Beginning with the first individual appointed to the position of Director after the date of enactment of the Museum and Library Services Act of 1996, every second individual so appointed shall be appointed from among individuals who have special competence with regard to library and information services. Beginning with the second individual appointed to the position of Director after the date of enactment of the Museum and Library Services Act of 1996, every second individual so appointed shall be appointed from among individuals who have special competence with regard to museum services. ``(b) Compensation.--The Director may be compensated at the rate provided for level III of the Executive Schedule under section 5314 of title 5, United States Code. ``(c) Duties and Powers.--The Director shall perform such duties and exercise such powers as may be prescribed by law, including awarding financial assistance for activities described in this title. ``(d) Nondelegation.--The Director shall not delegate any of the functions of the Director to any person who is not an officer or employee of the Institute.

``(e) Coordination.--The Director shall ensure coordination of the policies and activities of the Institute with the policies and activities of other agencies and offices of the Federal Government having interest in and responsibilities for the improvement of museums and libraries and information services.

``SEC. 205. DEPUTY DIRECTORS. ``The Office of Library Services shall be headed by a Deputy Director, who shall be appointed by the Director from among individuals who have a graduate degree in library science and expertise in library and information services. The Office of Museum Services shall be headed by a Deputy Director, who shall be appointed by the Director from among individuals who have expertise in museum services.

``SEC. 206. PERSONNEL. ``(a) In General.--The Director may, in accordance with applicable provisions of title 5, United States Code, appoint and determine the compensation of such employees as the Director determines to be necessary to carry out the duties of the Institute. ``(b) Voluntary Services.--The Director may accept and utilize the voluntary services of individuals and reimburse the individuals for travel expenses, including per diem in lieu of subsistence, in the same amounts and to the same extent as authorized under section 5703 of title 5, United States Code, for persons employed intermittently in Federal Government service.

``SEC. 207. CONTRIBUTIONS. ``The Institute is authorized to solicit, accept, receive, and invest in the name of the United States, gifts, bequests, or devises of money and other property or services and to use such property or services in furtherance of the functions of the Institute. Any proceeds from such gifts, bequests, or devises, after acceptance by the Institute, shall be paid by the donor or the representative of the donor to the Director. The Director shall enter the proceeds in a special- interest bearing account to the credit of the Institute for the purposes specified in each case.

``Subtitle B--Library <<NOTE: Library Services and Technology Act. 20 USC 9101 note.>> Services and Technology

``SEC. 211. SHORT TITLE.

``This subtitle may be cited as the `Library Services and Technology Act'.

``SEC. 212. PURPOSE. ``It is the purpose of this subtitle-- ``(1) to consolidate Federal library service programs; ``(2) to stimulate excellence and promote access to learning and information resources in all types of libraries for individuals of all ages; ``(3) to promote library services that provide all users access to information through State, regional, national and international electronic networks; ``(4) to provide linkages among and between libraries; and ``(5) to promote targeted library services to people of diverse geographic, cultural, and socioeconomic backgrounds, to individuals with disabilities, and to people with limited functional literacy or information skills.

``SEC. 213. DEFINITIONS. ``As used in this subtitle: ``(1) Indian tribe.--The term `Indian tribe' means any tribe, band, nation, or other organized group or community, including any Alaska native village, regional corporation, or village corporation, as defined in or established pursuant to the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.), which is recognized by the Secretary of the Interior as eligible for the special programs and services provided by the United States to Indians because of their status as Indians. ``(2) Library.--The term `library' includes-- ``(A) a public library; ``(B) a public elementary school or secondary school library; ``(C) an academic library; ``(D) a research library, which for the purposes of this subtitle means a library that-- ``(i) makes publicly available library services and materials suitable for scholarly research and not otherwise available to the public; and ``(ii) is not an integral part of an institution of higher education; and ``(E) a private library, but only if the State in which such private library is located determines that the library should be considered a library for purposes of this subtitle. ``(3) Library consortium.--The term `library consortium' means any local, statewide, regional, interstate, or international cooperative association of library entities which provides for the systematic and effective coordination of the resources of school, public, academic, and special libraries and information centers, for improved services for the clientele of such library entities. ``(4) State.--The term `State', unless otherwise specified, includes each of the 50 States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. ``(5) State library administrative agency.--The term `State library administrative agency' means the official agency of a State charged by the law of the State with the extension and development of public library services throughout the State. ``(6) State plan.--The term `State plan' means the document which gives assurances that the officially designated State library administrative agency has the fiscal and legal authority and capability to administer all aspects of this subtitle, provides assurances for establishing the State's policies, priorities, criteria, and procedures necessary to the implementation of all programs under this subtitle, submits copies for approval as required by regulations promulgated by the Director, identifies a State's library needs, and sets forth the activities to be taken toward meeting the identified needs supported with the assistance of Federal funds made available under this subtitle.

``SEC. 214. AUTHORIZATION OF APPROPRIATIONS. ``(a) Authorization of Appropriations.--

``(1) In general.--There are authorized to be appropriated $150,000,000 for fiscal year 1997 and such sums as may be necessary for each of the fiscal years 1998 through 2002 to carry out this subtitle. ``(2) Transfer.--The Secretary of Education shall-- ``(A) transfer promptly to the Director any funds appropriated under the authority of paragraph (1), to enable the Director to carry out this subtitle; and ``(B) not exercise any authority concerning the administration of this title other than the transfer described in subparagraph (A). ``(b) Forward Funding.-- ``(1) In general.--To the end of affording the responsible Federal, State, and local officers adequate notice of available Federal financial assistance for carrying out ongoing library activities and projects, appropriations for grants, contracts, or other payments under any program under this subtitle are authorized to be included in the appropriations Act for the fiscal year preceding the fiscal year during which such activities and projects shall be carried out. ``(2) Additional authorization of appropriations.--In order to effect a transition to the timing of appropriation action authorized by subsection (a), the application of this section may result in the enactment, in a fiscal year, of separate appropriations for a program under this subtitle (whether in the same appropriations Act or otherwise) for two consecutive fiscal years. ``(c) Administration.--Not more than 3 percent of the funds appropriated under this section for a fiscal year may be used to pay for the Federal administrative costs of carrying out this subtitle.

``CHAPTER 1--BASIC PROGRAM REQUIREMENTS

``SEC. 221. RESERVATIONS AND ALLOTMENTS. ``(a) Reservations.-- ``(1) In general.--From the amount appropriated under the authority of section 214 for any fiscal year, the Director-- ``(A) shall reserve 1\1/2\ percent to award grants in accordance with section 261; and ``(B) shall reserve 4 percent to award national leadership grants or contracts in accordance with section 262. ``(2) Special rule.--If the funds reserved pursuant to paragraph (1)(B) for a fiscal year have not been obligated by the end of such fiscal year, then such funds shall be allotted in accordance with subsection (b) for the fiscal year succeeding the fiscal year for which the funds were so reserved. ``(b) Allotments.-- ``(1) In general.--From the sums appropriated under the authority of section 214 and not reserved under subsection (a) for any fiscal year, the Director shall award grants from minimum allotments, as determined under paragraph (3), to each State. Any sums remaining after minimum allotments are made for such year shall be allotted in the manner set forth in paragraph (2). ``(2) Remainder.--From the remainder of any sums appropriated under the authority of section 214 that are not reserved

under subsection (a) and not allotted under paragraph (1) for any fiscal year, the Director shall award grants to each State in an amount that bears the same relation to such remainder as the population of the State bears to the population of all States. ``(3) Minimum allotment.-- ``(A) In general.--For the purposes of this subsection, the minimum allotment for each State shall be $340,000, except that the minimum allotment shall be $40,000 in the case of the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. ``(B) Ratable reductions.--If the sum appropriated under the authority of section 214 and not reserved under subsection (a) for any fiscal year is insufficient to fully satisfy the aggregate of the minimum allotments for all States for that purpose for such year, each of such minimum allotments shall be reduced ratably. ``(C) Special rule.-- ``(i) In general.--Notwithstanding any other provision of this subsection and using funds allotted for the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau under this subsection, the Director shall award grants to Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau to carry out activities described in this subtitle in accordance with the provisions of this subtitle that the Director determines are not inconsistent with this subparagraph. ``(ii) Award basis.--The Director shall award grants pursuant to clause (i) on a competitive basis and pursuant to recommendations from the Pacific Region Educational Laboratory in Honolulu, Hawaii. ``(iii) Termination of eligibility.-- Notwithstanding any other provision of law, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau shall not receive any funds under this subtitle for any fiscal year that begins after September 30, 2001. ``(iv) Administrative costs.--The Director may provide not more than 5 percent of the funds made available for grants under this subparagraph to pay the administrative costs of the Pacific Region Educational Laboratory regarding activities assisted under this subparagraph. ``(4) Data.--The population of each State and of all the States shall be determined by the Director on the basis of the most recent data available from the Bureau of the Census.

``SEC. 222. ADMINISTRATION. ``(a) In General.--Not more than 4 percent of the total amount of funds received under this subtitle for any fiscal year by a State may be used for administrative costs.

``(b) Construction.--Nothing in this section shall be construed to limit spending for evaluation costs under section 224(c) from sources other than this subtitle.

``SEC. 223. PAYMENTS; FEDERAL SHARE; AND MAINTENANCE OF EFFORT REQUIREMENTS. ``(a) Payments.--Subject to appropriations provided pursuant to section 214, the Director shall pay to each State library administrative agency having a State plan approved under section 224 the Federal share of the cost of the activities described in the State plan. ``(b) Federal Share.-- ``(1) In general.--The Federal share shall be 66 percent. ``(2) Non-federal share.--The non-Federal share of payments shall be provided from non-Federal, State, or local sources. ``(c) Maintenance of Effort.-- ``(1) State expenditures.-- ``(A) Requirement.-- ``(i) In general.--The amount otherwise payable to a State for a fiscal year pursuant to an allotment under this chapter shall be reduced if the level of State expenditures, as described in paragraph (2), for the previous fiscal year is less than the average of the total of such expenditures for the 3 fiscal years preceding that previous fiscal year. The amount of the reduction in allotment for any fiscal year shall be equal to the amount by which the level of such State expenditures for the fiscal year for which the determination is made is less than the average of the total of such expenditures for the 3 fiscal years preceding the fiscal year for which the determination is made. ``(ii) Calculation.--Any decrease in State expenditures resulting from the application of subparagraph (B) shall be excluded from the calculation of the average level of State expenditures for any 3-year period described in clause (i). ``(B) Decrease in federal support.--If the amount made available under this subtitle for a fiscal year is less than the amount made available under this subtitle for the preceding fiscal year, then the expenditures required by subparagraph (A) for such preceding fiscal year shall be decreased by the same percentage as the percentage decrease in the amount so made available. ``(2) Level of state expenditures.--The level of State expenditures for the purposes of paragraph (1) shall include all State dollars expended by the State library administrative agency for library programs that are consistent with the purposes of this subtitle. All funds included in the maintenance of effort calculation under this subsection shall be expended during the fiscal year for which the determination is made, and shall not include capital expenditures, special one-time project costs, or similar windfalls. ``(3) Waiver.--The Director may waive the requirements of paragraph (1) if the Director determines that such a waiver

would be equitable due to exceptional or uncontrollable circumstances such as a natural disaster or a precipitous and unforeseen decline in the financial resources of the State.

``SEC. 224. STATE PLANS. ``(a) State Plan Required.-- ``(1) In general.--In order to be eligible to receive a grant under this subtitle, a State library administrative agency shall submit a State plan to the Director not later than April 1, 1997. ``(2) Duration.--The State plan shall cover a period of 5 fiscal years. ``(3) Revisions.--If a State library administrative agency makes a substantive revision to its State plan, then the State library administrative agency shall submit to the Director an amendment to the State plan containing such revision not later than April 1 of the fiscal year preceding the fiscal year for which the amendment will be effective. ``(b) Contents.--The State plan shall-- ``(1) establish goals, and specify priorities, for the State consistent with the purposes of this subtitle; ``(2) describe activities that are consistent with the goals and priorities established under paragraph (1), the purposes of this subtitle, and section 231, that the State library administrative agency will carry out during such year using such grant; ``(3) describe the procedures that such agency will use to carry out the activities described in paragraph (2); ``(4) describe the methodology that such agency will use to evaluate the success of the activities established under paragraph (2) in achieving the goals and meeting the priorities described in paragraph (1); ``(5) describe the procedures that such agency will use to involve libraries and library users throughout the State in policy decisions regarding implementation of this subtitle; and ``(6) provide assurances satisfactory to the Director that such agency will make such reports, in such form and containing such information, as the Director may reasonably require to carry out this subtitle and to determine the extent to which funds provided under this subtitle have been effective in carrying out the purposes of this subtitle. ``(c) Evaluation and Report.--Each State library administrative agency receiving a grant under this subtitle shall independently evaluate, and report to the Director regarding, the activities assisted under this subtitle, prior to the end of the 5-year plan. ``(d) Information.--Each library receiving assistance under this subtitle shall submit to the State library administrative agency such information as such agency may require to meet the requirements of subsection (c). ``(e) Approval.-- ``(1) In general.--The Director shall approve any State plan under this subtitle that meets the requirements of this subtitle and provides satisfactory assurances that the provisions of such plan will be carried out.

``(2) Public availability.--Each State library administrative agency receiving a grant under this subtitle shall make the State plan available to the public. ``(3) Administration.--If the Director determines that the State plan does not meet the requirements of this section, the Director shall-- ``(A) immediately notify the State library administrative agency of such determination and the reasons for such determination; ``(B) offer the State library administrative agency the opportunity to revise its State plan; ``(C) provide technical assistance in order to assist the State library administrative agency in meeting the requirements of this section; and ``(D) provide the State library administrative agency the opportunity for a hearing.

``CHAPTER 2--LIBRARY PROGRAMS

``SEC. 231. GRANTS TO STATES. ``(a) In General.--Of the funds provided to a State library administrative agency under section 214, such agency shall expend, either directly or through subgrants or cooperative agreements, at least 96 percent of such funds for-- ``(1)(A) establishing or enhancing electronic linkages among or between libraries; ``(B) electronically linking libraries with educational, social, or information services; ``(C) assisting libraries in accessing information through electronic networks; ``(D) encouraging libraries in different areas, and encouraging different types of libraries, to establish consortia and share resources; or ``(E) paying costs for libraries to acquire or share computer systems and telecommunications technologies; and ``(2) targeting library and information services to persons having difficulty using a library and to underserved urban and rural communities, including children (from birth through age 17) from families with incomes below the poverty line (as defined by the Office of Management and Budget and revised annually in accordance with section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)) applicable to a family of the size involved. ``(b) Special Rule.--Each State library administrative agency receiving funds under this chapter may apportion the funds available for the purposes described in subsection (a) between the two purposes described in paragraphs (1) and (2) of such subsection, as appropriate, to meet the needs of the individual State.

``CHAPTER 3--ADMINISTRATIVE PROVISIONS

``Subchapter A--State Requirements

``SEC. 251. STATE ADVISORY COUNCILS. ``Each State desiring assistance under this subtitle may establish a State advisory council which is broadly representative of the library entities in the State, including public, school, academic,

special, and institutional libraries, and libraries serving individuals with disabilities.

``Subchapter B--Federal Requirements

``SEC. 261. SERVICES FOR INDIAN TRIBES. ``From amounts reserved under section 221(a)(1)(A) for any fiscal year the Director shall award grants to organizations primarily serving and representing Indian tribes to enable such organizations to carry out the activities described in section 231.

``SEC. 262. NATIONAL LEADERSHIP GRANTS OR CONTRACTS. ``(a) In General.--From the amounts reserved under section 221(a)(1)(B) for any fiscal year the Director shall establish and carry out a program awarding national leadership grants or contracts to enhance the quality of library services nationwide and to provide coordination between libraries and museums. Such grants or contracts shall be used for activities that may include-- ``(1) education and training of persons in library and information science, particularly in areas of new technology and other critical needs, including graduate fellowships, traineeships, institutes, or other programs; ``(2) research and demonstration projects related to the improvement of libraries, education in library and information science, enhancement of library services through effective and efficient use of new technologies, and dissemination of information derived from such projects; ``(3) preservation of digitization of library materials and resources, giving priority to projects emphasizing coordination, avoidance of duplication, and access by researchers beyond the institution or library entity undertaking the project; and ``(4) model programs demonstrating cooperative efforts between libraries and museums. ``(b) Grants or Contracts.-- ``(1) In general.--The Director may carry out the activities described in subsection (a) by awarding grants to, or entering into contracts with, libraries, agencies, institutions of higher education, or museums, where appropriate. ``(2) Competitive basis.--Grants and contracts under this section shall be awarded on a competitive basis. ``(c) Special Rule.--The Director shall make every effort to ensure that activities assisted under this section are administered by appropriate library and museum professionals or experts.

``SEC. 263. STATE AND LOCAL INITIATIVES. ``Nothing in this subtitle shall be construed to interfere with State and local initiatives and responsibility in the conduct of library services. The administration of libraries, the selection of personnel and library books and materials, and insofar as consistent with the purposes of this subtitle, the determination of the best uses of the funds provided under this subtitle, shall be reserved for the States and their local subdivisions.

``Subtitle C--Museum Services

``SEC. 271. PURPOSE. ``It is the purpose of this subtitle--

``(1) to encourage and assist museums in their educational role, in conjunction with formal systems of elementary, secondary, and postsecondary education and with programs of nonformal education for all age groups; ``(2) to assist museums in modernizing their methods and facilities so that the museums are better able to conserve the cultural, historic, and scientific heritage of the United States; and ``(3) to ease the financial burden borne by museums as a result of their increasing use by the public.

``SEC. 272. DEFINITIONS. ``As used in this subtitle: ``(1) Museum.--The term `museum' means a public or private nonprofit agency or institution organized on a permanent basis for essentially educational or aesthetic purposes, that utilizes a professional staff, owns or utilizes tangible objects, cares for the tangible objects, and exhibits the tangible objects to the public on a regular basis. ``(2) State.--The term `State' means each of the 50 States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau.

``SEC. 273. MUSEUM SERVICES ACTIVITIES. ``(a) Grants.--The Director, subject to the policy direction of the Museum Board, may make grants to museums to pay for the Federal share of the cost of increasing and improving museum services, through such activities as-- ``(1) programs that enable museums to construct or install displays, interpretations, and exhibitions in order to improve museum services provided to the public; ``(2) assisting museums in developing and maintaining professionally trained or otherwise experienced staff to meet the needs of the museums; ``(3) assisting museums in meeting the administrative costs of preserving and maintaining the collections of the museums, exhibiting the collections to the public, and providing educational programs to the public through the use of the collections; ``(4) assisting museums in cooperating with each other in developing traveling exhibitions, meeting transportation costs, and identifying and locating collections available for loan; ``(5) assisting museums in the conservation of their collections; ``(6) developing and carrying out specialized programs for specific segments of the public, such as programs for urban neighborhoods, rural areas, Indian reservations, and penal and other State institutions; and ``(7) model programs demonstrating cooperative efforts between libraries and museums. ``(b) Contracts and Cooperative Agreements.-- ``(1) Projects to strengthen museum services.--The Director, subject to the policy direction of the Museum Board, is authorized to enter into contracts and cooperative agreements with appropriate entities, as determined by the Director, to

pay for the Federal share of enabling the entities to undertake projects designed to strengthen museum services, except that any contracts or cooperative agreements entered into pursuant to this subsection shall be effective only to such extent or in such amounts as are provided in appropriations Acts. ``(2) Limitation on amount.--The aggregate amount of financial assistance made available under this subsection for a fiscal year shall not exceed 15 percent of the amount appropriated under this subtitle for such fiscal year. ``(3) Operational expenses.--No financial assistance may be provided under this subsection to pay for operational expenses. ``(c) Federal Share.-- ``(1) 50 Percent.--Except as provided in paragraph (2), the Federal share described in subsection (a) and (b) shall be not more than 50 percent. ``(2) Greater than 50 percent.--The Director may use not more than 20 percent of the funds made available under this subtitle for a fiscal year to make grants under subsection (a), or enter into contracts or agreements under subsection (b), for which the Federal share may be greater than 50 percent. ``(d) Review and Evaluation.--The Director shall establish procedures for reviewing and evaluating grants, contracts, and cooperative agreements made or entered into under this subtitle. Procedures for reviewing grant applications or contracts and cooperative agreements for financial assistance under this subtitle shall not be subject to any review outside of the Institute.

``SEC. 274. AWARD. ``The Director, with the advice of the Museum Board, may annually award a National Award for Museum Service to outstanding museums that have made significant contributions in service to their communities.

``SEC. 275. NATIONAL MUSEUM SERVICES BOARD. ``(a) Establishment.--There is established in the Institute a National Museum Services Board. ``(b) Composition and Qualifications.-- ``(1) Composition.--The Museum Board shall consist of the Director and 14 members appointed by the President, by and with the advice and consent of the Senate. ``(2) Qualifications.--The appointive members of the Museum Board shall be selected from among citizens of the United States-- ``(A) who are members of the general public; ``(B) who are or have been affiliated with-- ``(i) resources that, collectively, are broadly representative of the curatorial, conservation, educational, and cultural resources of the United States; or ``(ii) museums that, collectively, are broadly representative of various types of museums, including museums relating to science, history, technology, art, zoos, and botanical gardens; and ``(C) who are recognized for their broad knowledge, expertise, or experience in museums or commitment to museums.

``(3) Geographic and other representation.--Members of the Museum Board shall be appointed to reflect persons from various geographic regions of the United States. The Museum Board may not include, at any time, more than 3 members from a single State. In making such appointments, the President shall give due regard to equitable representation of women, minorities, and persons with disabilities who are involved with museums. ``(c) Terms.-- ``(1) In general.--Each appointive member of the Museum Board shall serve for a term of 5 years, except that-- ``(A) of the members first appointed, 3 shall serve for terms of 5 years, 3 shall serve for terms of 4 years, 3 shall serve for terms of 3 years, 3 shall serve for terms of 2 years, and 2 shall serve for terms of 1 year, as designated by the President at the time of nomination for appointment; and ``(B) any member appointed to fill a vacancy shall serve for the remainder of the term for which the predecessor of the member was appointed. ``(2) Reappointment.--No member of the Museum Board who has been a member for more than 7 consecutive years shall be eligible for reappointment. ``(3) Service until successor takes office.--Notwithstanding any other provision of this subsection, a member of the Museum Board shall serve after the expiration of the term of the member until the successor to the member takes office. ``(d) Duties and Powers.--The Museum Board shall have the responsibility to advise the Director on general policies with respect to the duties, powers, and authority of the Institute relating to museum services, including general policies with respect to-- ``(1) financial assistance awarded under this subtitle for museum services; and ``(2) projects described in section 262(a)(4). ``(e) Chairperson.--The President shall designate 1 of the appointive members of the Museum Board as Chairperson of the Museum Board. ``(f) Meetings.-- ``(1) In general.--The Museum Board shall meet-- ``(A) not less than 3 times each year, including-- ``(i) not less than 2 times each year separately; and ``(ii) not less than 1 time each year in a joint meeting with the Commission, convened for purposes of making general policies with respect to financial assistance for projects described in section 262(a)(4); and ``(B) at the call of the Director. ``(2) Vote.--All decisions by the Museum Board with respect to the exercise of the duties and powers of the Museum Board shall be made by a majority vote of the members of the Museum Board who are present. All decisions by the Commission and the Museum Board with respect to the policies described in paragraph (1)(A)(ii) shall be made by a \2/3\ majority vote of the total number of the members of the Commission and the Museum Board who are present.

``(g) Quorum.--A majority of the members of the Museum Board shall constitute a quorum for the conduct of business at official meetings of the Museum Board, but a lesser number of members may hold hearings. A majority of the members of the Commission and a majority of the members of the Museum Board shall constitute a quorum for the conduct of business at official joint meetings of the Commission and the Museum Board. ``(h) Compensation and Travel Expenses.-- ``(1) Compensation.--Each member of the Museum Board who is not an officer or employee of the Federal Government may be compensated at a rate to be fixed by the President, but not to exceed the daily equivalent of the maximum rate authorized for a position above grade GS-15 of the General Schedule under section 5108 of title 5, United States Code, for each day (including travel time) during which such member is engaged in the performance of the duties of the Museum Board. All members of the Museum Board who are officers or employees of the Federal Government shall serve without compensation in addition to compensation received for their services as officers or employees of the Federal Government. ``(2) Travel expenses.--The members of the Museum Board may be allowed travel expenses, including per diem in lieu of subsistence, in the same amounts and to the same extent, as authorized under section 5703 of title 5, United States Code, for persons employed intermittently in Federal Government service. ``(i) Coordination.--The Museum Board, with the advice of the Director, shall take steps to ensure that the policies and activities of the Institute are coordinated with other activities of the Federal Government.

``SEC. 276. AUTHORIZATION OF APPROPRIATIONS. ``(a) Grants.--For the purpose of carrying out this subtitle, there are authorized to be appropriated to the Director $28,700,000 for the fiscal year 1997, and such sums as may be necessary for each of the fiscal years 1998 through 2002. ``(b) Administration.--Not more than 10 percent of the funds appropriated under this section for a fiscal year may be used to pay for the administrative costs of carrying out this subtitle. ``(c) Sums Remaining Available.--Sums appropriated pursuant to subsection (a) for any fiscal year shall remain available for obligation until expended.''.

(a) Functions.--Section 5 of the National Commission on Libraries and Information Science Act (20 U.S.C. 1504) is amended-- (1) by redesignating subsections (b) through (d) as subsections (d) through (f), respectively; and (2) by inserting after subsection (a) the following: ``(b) The Commission shall have the responsibility to advise the Director of the Institute of Museum and Library Services on general policies with respect to the duties, powers, and authority of the Institute of Museum and Library Services relating to library services, including-- ``(1) general policies with respect to--

``(A) financial assistance awarded under the Museum and Library Services Act for library services; and ``(B) projects described in section 262(a)(4) of such Act; and ``(2) measures to ensure that the policies and activities of the Institute of Museum and Library Services are coordinated with other activities of the Federal Government. ``(c)(1) The Commission shall meet not less than 1 time each year in a joint meeting with the National Museum Services Board, convened for purposes of providing advice on general policy with respect to financial assistance for projects described in section 262(a)(4) of such Act. ``(2) All decisions by the Commission and the National Museum Services Board with respect to the advice on general policy described in paragraph (1) shall be made by a \2/3\ majority vote of the total number of the members of the Commission and the National Museum Services Board who are present. ``(3) A majority of the members of the Commission and a majority of the members of the National Museum Services Board shall constitute a quorum for the conduct of business at official joint meetings of the Commission and the National Museum Services Board.''. (b) Membership.--Section 6 of the National Commission on Libraries and Information Science Act (20 U.S.C. 1505) is amended-- (1) in subsection (a)-- (A) in the first sentence, by striking ``Librarian of Congress'' and inserting ``Librarian of Congress, the Director of the Institute of Museum and Library Services (who shall serve as an ex officio, nonvoting member),''; (B) in the second sentence-- (i) by striking ``special competence or interest in'' and inserting ``special competence in or knowledge of; and (ii) by inserting before the period the following: ``and at least one other of whom shall be knowledgeable with respect to the library and information service and science needs of the elderly''; (C) in the third sentence, by inserting ``appointive'' before ``members''; and (D) in the last sentence, by striking ``term and at least'' and all that follows and inserting ``term.''; and (2) in subsection (b), by striking ``the rate specified'' and all that follows through ``and while'' and inserting ``the daily equivalent of the maximum rate authorized for a position above grade GS-15 of the General Schedule under section 5108 of title 5, United States Code, for each day (including travel- time) during which the members are engaged in the business of the Commission. While''.

INSTITUTE OF MUSEUM SERVICES. (a) Definitions.--For purposes of this section, unless otherwise provided or indicated by the context-- (1) the term ``Federal agency'' has the meaning given to the term ``agency'' by section 551(1) of title 5, United States Code;

(2) the term ``function'' means any duty, obligation, power, authority, responsibility, right, privilege, activity, or program; and (3) the term ``office'' includes any office, administration, agency, institute, unit, organizational entity, or component thereof. (b) Transfer of Functions From the Institute of Museum Services and the Library Program Office.--There are transferred to the Director of the Institute of Museum and Library Services established under section 203 of the Museum and Library Services Act-- (1) all functions that the Director of the Institute of Museum Services exercised before the date of enactment of this section (including all related functions of any officer or employee of the Institute of Museum Services); and (2) all functions that the Director of Library Programs in the Office of Educational Research and Improvement in the Department of Education exercised before the date of enactment of this section and any related function of any officer or employee of the Department of Education. (c) Determinations of Certain Functions by the Office of Management and Budget.--If necessary, the Office of Management and Budget shall make any determination of the functions that are transferred under subsection (b). (d) Delegation and Assignment.--Except where otherwise expressly prohibited by law or otherwise provided by this section, the Director of the Institute of Museum and Library Services may delegate any of the functions transferred to the Director of the Institute of Museum and Library Services by this section and any function transferred or granted to such Director of the Institute of Museum and Library Services after the effective date of this section to such officers and employees of the Institute of Museum and Library Services as the Director of the Institute of Museum and Library Services may designate, and may authorize successive redelegations of such functions as may be necessary or appropriate, except that any delegation of any such functions with respect to libraries shall be made to the Deputy Director of the Office of Library Services and with respect to museums shall be made to the Deputy Director of the Office of Museum Services. No delegation of functions by the Director of the Institute of Museum and Library Services under this section or under any other provision of this section shall relieve such Director of the Institute of Museum and Library Services of responsibility for the administration of such functions. (e) Reorganization.--The Director of the Institute of Museum and Library Services may allocate or reallocate any function transferred under subsection (b) among the officers of the Institute of Museum and Library Services, and may establish, consolidate, alter, or discontinue such organizational entities in the Institute of Museum and Library Services as may be necessary or appropriate. (f) Rules.--The Director of the Institute of Museum and Library Services may prescribe, in accordance with chapters 5 and 6 of title 5, United States Code, such rules and regulations as the Director of the Institute of Museum and Library Services determines to be necessary or appropriate to administer and manage the functions of the Institute of Museum and Library Services.

(g) Transfer and Allocations of Appropriations and Personnel.-- Except as otherwise provided in this section, the personnel employed in connection with, and the assets, liabilities, contracts, property, records, and unexpended balances of appropriations, authorizations, allocations, and other funds employed, used, held, arising from, available to, or to be made available in connection with the functions transferred by this section, subject to section 1531 of title 31, United States Code, shall be transferred to the Institute of Museum and Library Services. Unexpended funds transferred pursuant to this subsection shall be used only for the purposes for which the funds were originally authorized and appropriated. (h) Incidental Transfers.--The Director of the Office of Management and Budget, at such time or times as the Director shall provide, may make such determinations as may be necessary with regard to the functions transferred by this section, and make such additional incidental dispositions of personnel, assets, liabilities, grants, contracts, property, records, and unexpended balances of appropriations, authorizations, allocations, and other funds held, used, arising from, available to, or to be made available in connection with such functions, as may be necessary to carry out this section. The Director of the Office of Management and Budget shall provide for the termination of the affairs of all entities terminated by this section and for such further measures and dispositions as may be necessary to effectuate the purposes of this section. (i) Effect on Personnel.-- (1) In general.--Except as otherwise provided by this section, the transfer pursuant to this section of full-time personnel (except special Government employees) and part-time personnel holding permanent positions shall not cause any such employee to be separated or reduced in grade or compensation for 1 year after the date of transfer of such employee under this section. (2) Executive schedule positions.--Except as otherwise provided in this section, any person who, on the day preceding the effective date of this section, held a position compensated in accordance with the Executive Schedule prescribed in chapter 53 of title 5, United States Code, and who, without a break in service, is appointed in the Institute of Museum and Library Services to a position having duties comparable to the duties performed immediately preceding such appointment shall continue to be compensated in such new position at not less than the rate provided for such previous position, for the duration of the service of such person in such new position. (j) Savings Provisions.-- (1) Continuing effect of legal documents.--All orders, determinations, rules, regulations, permits, agreements, grants, contracts, certificates, licenses, registrations, privileges, and other administrative actions-- (A) that have been issued, made, granted, or allowed to become effective by the President, any Federal agency or official of a Federal agency, or by a court of competent jurisdiction, in the performance of functions that are transferred under this section; and (B) that were in effect before the effective date of this section, or were final before the effective date of this

section and are to become effective on or after the effective date of this section;

shall continue in effect according to their terms until modified, terminated, superseded, set aside, or revoked in accordance with law by the President, the Director of the Institute of Museum and Library Services or other authorized official, a court of competent jurisdiction, or by operation of law. (2) Proceedings not affected.--This section shall not affect any proceedings, including notices of proposed rulemaking, or any application for any license, permit, certificate, or financial assistance pending before the Institute of Museum Services on the effective date of this section, with respect to functions transferred by this section. Such proceedings and applications shall be continued. Orders shall be issued in such proceedings, appeals shall be taken from the orders, and payments shall be made pursuant to the orders, as if this section had not been enacted, and orders issued in any such proceedings shall continue in effect until modified, terminated, superseded, or revoked by a duly authorized official, by a court of competent jurisdiction, or by operation of law. Nothing in this paragraph shall be construed to prohibit the discontinuance or modification of any such proceeding under the same terms and conditions and to the same extent that such proceeding could have been discontinued or modified if this section had not been enacted. (3) Suits not affected.--This section shall not affect suits commenced before the effective date of this section, and in all such suits, proceedings shall be had, appeals taken, and judgments rendered in the same manner and with the same effect as if this section had not been enacted. (4) Nonabatement of actions.--No suit, action, or other proceeding commenced by or against the Institute of Museum Services, or by or against any individual in the official capacity of such individual as an officer of the Institute of Museum Services, shall abate by reason of the enactment of this section. (5) Administrative actions relating to promulgation of regulations.--Any administrative action relating to the preparation or promulgation of a regulation by the Institute of Museum Services relating to a function transferred under this section may be continued by the Institute of Museum and Library Services with the same effect as if this section had not been enacted. (k) Transition.--The Director of the Institute of Museum and Library Services may utilize-- (1) the services of such officers, employees, and other personnel of the Institute of Museum Services with respect to functions transferred to the Institute of Museum and Library Services by this section; and (2) funds appropriated to such functions for such period of time as may reasonably be needed to facilitate the orderly implementation of this section. (l) References.--A reference in any other Federal law, Executive order, rule, regulation, or delegation of authority, or any document of or relating to-- (1) the Director of the Institute of Museum Services with regard to functions transferred under subsection (b), shall be deemed to refer to the Director of the Institute of Museum and Library Services; and

(2) the Institute of Museum Services with regard to functions transferred under subsection (b), shall be deemed to refer to the Institute of Museum and Library Services. (m) Additional Conforming Amendments.-- (1) Recommended legislation.--After consultation with the appropriate committees of Congress and the Director of the Office of Management and Budget, the Director of the Institute of Museum and Library Services shall prepare and submit to the appropriate committees of Congress recommended legislation containing technical and conforming amendments to reflect the changes made by this section. (2) Submission to congress.--Not later than 6 months after the effective date of this section, the Director of the Institute of Museum and Library Services shall submit to the appropriate committees of Congress the recommended legislation referred to under paragraph (1).

DATE OF ENACTMENT. Notwithstanding section 204 of the Museum and Library Services Act, the individual who was appointed to the position of Director of the Institute of Museum Services under section 205 of the Museum Services Act (as such section was in effect on the day before the date of enactment of this Act) and who is serving in such position on the day before the date of enactment of this Act shall serve as the first Director of the Institute of Museum and Library Services under section 204 of the Museum and Library Services Act (as added by section 2 of this Act), and shall serve at the pleasure of the President.

Consistent with title 5, United States Code, in appointing employees of the Office of Library Services, the Director of the Institute of Museum and Library Services shall give strong consideration to individuals with experience in administering State-based and national library and information services programs.

(a) Transition.--The Director of the Office of Management and Budget shall take appropriate measures to ensure an orderly transition from the activities previously administered by the Director of Library Programs in the Office of Educational Research and Improvement in the Department of Education to the activities administered by the Institute for Museum and Library Services under this Act. Such measures may include the transfer of appropriated funds. (b) Transfer.--From any amounts available to the Secretary of Education for salaries and expenses at the Department of Education, the Secretary of Education shall transfer to the Director the amount of funds necessary to ensure the orderly transition from activities previously administered by the Director of the Office of Library Programs in the Office of Educational Research and Improvement in the Department of Education to the activities administered by the Institute for Museum and Library Services. In no event shall the amount of funds transferred pursuant to the preceding sentence be less than $200,000.

(a) Library Services and Construction Act.--The Library Services and Construction Act (20 U.S.C. 351 et seq.) is repealed. (b) Title II of the Higher Education Act of 1965.--Title II of the Higher Education Act of 1965 (20 U.S.C. 1021 et seq.), relating to academic libraries and information services, is repealed. (c) Part D of Title XIII of the Higher Education Amendments of 1986.--Part D of title XIII of the Higher Education Amendments of 1986 (20 U.S.C. 1029 note), relating to library resources, is repealed. (d) Section 519 of the Education Amendments of 1974.--Section 519 of the Education Amendments of 1974 (20 U.S.C. 1221i) is repealed. (e) Part F of the Technology for Education Act of 1994.--Part F of the Technology for Education Act of 1994 (20 U.S.C. 7001 et seq.), contained in title III of the Elementary and Secondary Education Act of 1965, is repealed.

(a) References to Library Services and Construction Act.-- (1) Technology for education act of 1994.--Section 3113(10) of the Technology for Education Act of 1994 (20 U.S.C. 6813(10)) is amended by striking ``section 3 of the Library Services and Construction Act;'' and inserting ``section 213 of the Library Services and Technology Act;''. (2) Omnibus education reconciliation act of 1981.--Section 528 of the Omnibus Education Reconciliation Act of 1981 (20 U.S.C. 3489) is amended-- (A) by striking paragraph (12); and (B) by redesignating paragraphs (13) through (15) as paragraphs (12) through (14), respectively. (3) Elementary and secondary education act of 1965.--Section 3113(10) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6813(10)) is amended by striking ``section 3 of the Library Services and Construction Act'' and inserting ``section 213 of the Library Services and Technology Act''. (4) Community improvement volunteer act of 1994.--Section 7305 of the Community Improvement Volunteer Act of 1994 (40 U.S.C. 276d-3) is amended-- (A) by striking paragraph (1); and (B) by redesignating paragraphs (2) through (6) as paragraphs (1) through (5), respectively. (5) Appalachian regional development act of 1965.--Section 214(c) of the Appalachian Regional Development Act of 1965 (40 U.S.C. App. 214(c)) is amended by striking ``Library Services and Construction Act;''. (6) Demonstration cities and metropolitan development act of 1966.--Section 208(2) of the Demonstration Cities and Metropolitan Development Act of 1966 (42 U.S.C. 3338(2)) is amended by striking ``title II of the Library Services and Construction Act;''. (7) Public law 87-688.--Subsection (c) of the first section of the Act entitled ``An Act to extend the application of certain laws to American Samoa'', approved September 25, 1962 (48 U.S.C. 1666(c)) is amended by striking ``the Library Services Act (70 Stat. 293; 20 U.S.C. 351 et seq.),''.

(8) Communications act of 1934.--Paragraph (4) of section 254(h) of the Communications Act of 1934 (47 U.S.C. 254(h)(4)) is amended by striking ``library not eligible for participation in State-based plans for funds under title III of the Library Services and Construction Act (20 U.S.C. 335c et seq.)'' and inserting ``library or library consortium not eligible for assistance from a State library administrative agency under the Library Services and Technology Act''. (b) References to Institute of Museum Services.-- (1) Title 5, united states code.--Section 5315 of title 5, United States Code, is amended by striking the following: ``Director of the Institute of Museum Services.'' and inserting the following: ``Director of the Institute of Museum and Library Services.''. (2) Department of education organization act.--Section 301 of the Department of Education Organization Act (20 U.S.C. 3441) is amended-- (A) in subsection (a)-- (i) by striking paragraph (5); and (ii) by redesignating paragraphs (6) and (7) as paragraphs (5) and (6), respectively; and (B) in subsection (b)-- (i) by striking paragraph (4); and (ii) by redesignating paragraphs (5) through (7) as paragraphs (4) through (6), respectively. (3) Elementary and secondary education act of 1965.-- (A) Sections 2101(b), 2205(c)(1)(D), 2208(d)(1)(H)(v), and 2209(b)(1)(C)(iv), and subsection (d)(6) and (e)(2) of section 10401 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6621(b), 6645(c)(1)(D), 6648(d)(1)(H)(v), 6649(b)(1)(C)(vi), and 8091 (d)(6) and (e)(2)) are amended by striking ``the Institute of Museum Services'' and inserting ``the Institute of Museum and Library Services''. (B) Section 10412(b) of such Act (20 U.S.C. 8102(b)) is amended-- (i) in paragraph (2), by striking ``the Director of the Institute of Museum Services,'' and inserting ``the Director of the Institute of Museum and Library Services,''; and (ii) in paragraph (7), by striking ``the Director of the Institute of Museum Services,'' and inserting ``the director of the Institute of Museum and Library Services,''. (C) Section 10414(a)(2)(B) of such Act (20 U.S.C. 8104(a)(2)(B)) is amended by striking clause (iii) and inserting the following new clause: ``(iii) the Institute of Museum and Library Services.''. (c) References to Office of Libraries and Learning Resources.-- Section 413(b)(1) of the Department of Education Organization Act (20 U.S.C. 3473(b)(1)) is amended-- (1) by striking subparagraph (H); and (2) by redesignating subparagraphs (I) through (M) as subparagraphs (H) through (L), respectively.

(d) Reference to State Postsecondary Review Entity Programs.-- Section 356(b)(2) of the Higher Education Act of 1965 (20 U.S.C. 10696(b)) is amended by striking ``II,''. This Act may be cited as the ``Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 1997''. (f) For programs, projects or activities in the Treasury, Postal Service, and General Appropriations Act, 1997, provided as follows, to be effective as if it had been enacted into law as the regular appropriations Act:

AN ACT

Making <<NOTE: Treasury, Postal Service, and General Government Appropriations Act, 1997.>> appropriations for the Treasury Department, the United States Postal Service, the Executive Office of the President, and certain Independent Agencies, for the fiscal year ending September 30, 1997, and for other purposes.

DOMESTIC VIOLENCE.

(a) Definition.--Section 921(a) of title 18, United States Code, is amended by adding at the end the following: ``(33)(A) Except as provided in subparagraph (C), the term `misdemeanor crime of domestic violence' means an offense that-- ``(i) is a misdemeanor under Federal or State law; and ``(ii) has, as an element, the use or attempted use of physical force, or the threatened use of a deadly weapon, committed by a current or former spouse, parent, or guardian of the victim, by a person with whom the victim shares a child in common, by a person who is cohabiting with or has cohabited with the victim as a spouse, parent, or guardian, or by a person similarly situated to a spouse, parent, or guardian of the victim. ``(B)(i) A person shall not be considered to have been convicted of such an offense for purposes of this chapter, unless-- ``(I) the person was represented by counsel in the case, or knowingly and intelligently waived the right to counsel in the case; and (II) in the case of a prosecution for an offense described in this paragraph for which a person was entitled to a jury trial in the jurisdiction in which the case was tried, either (aa) the case was tried by a jury, or (bb) the person knowingly and intelligently waived the right to have the case tried by a jury, by guilty plea or otherwise.

``(ii) A person shall not be considered to have been convicted of such an offense for purposes of this chapter if the conviction has been expunged or set aside, or is an offense for which the person has been pardoned or has had civil rights restored (if the law of the applicable jurisdiction provides for the loss of civil rights under such an offense) unless the pardon, expungement, or restoration of civil rights expressly provides that the person may not ship, transport, possess, or receive firearms.''. (b) Prohibitions.-- (1) Section 922(d) of such title is amended-- (A) by striking ``or'' at the end of paragraph (7); (B) by striking the period at the end of paragraph (8) and inserting ``; or''; and (C) by inserting after paragraph (8) the following: ``(9) has been convicted in any court of a misdemeanor crime of domestic violence.''. (2) Section 922(g) of such title is amended-- (A) by striking ``or'' at the end of paragrph (7); (B) by striking the comma at the end of paragraph (8) and inserting ``; or''; and (C) by inserting after paragraph (8) the following: ``(9) who has been convicted in any court of a misdemeanor crime of domestic violence,''. (3) Section 922(s)(3)(B)(i) of such title is amended by inserting ``, and has not been convicted in any court of a misdemeanor crime of domestic violence'' before this semicolon. (c) Government Entities Not Excepted.--Section 925(a)(1) of such title is amended by inserting ``sections 922(d)(9) and 922(g)(9) and'' after ``except for''.

Title I--Additional <<NOTE: Thrift Savings Investment Funds Act of 1996. 5 USC 8401 note.>> Investment Funds for the Thrift Savings Plan

This title may be cited as the ``Thrift Savings Investment Funds Act of 1996''.

sec. 102. additional investment funds for the thrift savings plan

Section 8438 of title 5, United States Code, is amended-- (1) in subsection (a)-- (A) by redesignating paragraphs (5) through (8) as paragraphs (6) through (9), respectively; (B) by inserting after paragraph (4) the following new paragraph: ``(5) the term `International Stock Index Investment Fund' means the International Stock Index Investment Fund established under subsection (b)(1)(E);''; (C) in paragraph (8) (as redesignated by subparagraph (A) of this paragraph) by striking out ``and'' at the end thereof; (D) in paragraph (9) (as redesignated by subparagraph (A) of this paragraph)--

(i) by striking out ``paragraph (7)(D)'' in each place it appears and inserting in each such place ``paragraph (8)(D)''; and (ii) by striking out the period and inserting in lieu thereof a semicolon and ``and''; and (E) by adding at the end thereof the following new paragraph: ``(10) the term `Small Capitalization Stock Index Investment Fund' means the Small Capitalization Stock Index Investment Fund established under subsection (b)(1)(D).''; and (2) in subsection (b)-- (A) in paragraph (1)-- (i) in subparagraph (B) by striking out ``and'' at the end thereof; (ii) in subparagraph (C) by striking out the period and inserting in lieu thereof a semicolon; and (iii) by adding at the end thereof the following new subparagraphs: ``(D) a Small Capitalization Stock Index Investment Fund as provided in paragraph (3); and ``(E) an International Stock Index Investment Fund as provided in paragraph (4).''; and (B) by adding at the end thereof the following new paragraphs: ``(3)(A) The Board shall select an index which is a commonly recognized index comprised of common stock the aggregate market value of which represents the United States equity markets excluding the common stocks included in the Common Stock Index Investment Fund. ``(B) The Small Capitalization Stock Index Investment Fund shall be invested in a portfolio designed to replicate the performance of the index in subparagraph (A). The portfolio shall be designed such that, to the extent practicable, the percentage of the Small Capitalization Stock Index Investment Fund that is invested in each stock is the same as the percentage determined by dividing the aggregate market value of all shares of that stock by the aggregate market value of all shares of all stocks included in such index. ``(4)(A) The Board shall select an index which is a commonly recognized index comprised of stock the aggregate market value of which is a reasonably complete representation of the international equity markets excluding the United States equity markets. ``(B) The International Stock Index Investment Fund shall be invested in a portfolio designed to replicate the performance of the index in subparagraph (A). The portfolio shall be designed such that, to the extent practicable, the percentage of the International Stock Index Investment Fund that is invested in each stock is the same as the percentage determined by dividing the aggregate market value of all shares of that stock by the aggregate market value of all shares of all stocks included in such index.''.

Section 8439(d) of title 5, United States Code, is amended by striking out ``Each employee, Member, former employee, or former Member who elects to invest in the Common Stock Index

Investment Fund or the Fixed Income Investment Fund described in paragraphs (1) and (3),'' and inserting in lieu thereof ``Each employee, Member, former employee, or former Member who elects to invest in the Common Stock Index Investment Fund, the Fixed Income Investment Fund, the International Stock Index Investment Fund, or the Small Capitalization Stock Index Investment Fund, defined in paragraphs (1), (3), (5), and (10),''.

This title shall take effect on the date of enactment of this Act, and the Funds established under this title shall be offered for investment at the earliest practicable election period (described in section 8432(b) of title 5, United States Code) as determined by the Executive Director in regulations.

Title II--Thrift Savings Accounts Liquidity <<NOTE: Thrift Savings Plan Act of 1996.>>

This title may be cited as the ``Thrift Savings Plan Act of 1996''.

sec. 202. notice to spouses for in-service withdrawals; de minimus accounts; civil service retirement system participants

Section 8351(b) of title 5, United States Code, is amended-- (1) in paragraph (5)-- (A) in subparagraph (B)-- (i) by striking out ``An election, change of election, or modification (relating to the commencement date of a deferred annuity)'' and inserting in lieu thereof ``An election or change of election''; (ii) by inserting ``or withdrawal'' after ``and a loan''; (iii) by inserting ``and (h)'' after ``8433(g)''; (iv) by striking out ``the election, change of election, or modification'' and inserting in lieu thereof ``the election or change of election''; and (v) by inserting ``or withdrawal'' after ``for such loan''; and (B) in subparagraph (D)-- (i) by inserting ``or withdrawals'' after ``of loans''; and (ii) by inserting ``or (h)'' after ``8433(g)''; and (2) in paragraph (6)-- (A) by striking out ``$3,500 or less'' and inserting in lieu thereof ``less than an amount that the Executive Director prescribes by regulation''; and (B) by striking out ``unless the employee or Member elects, at such time and otherwise in such manner as the Executive Director prescribes, one of the options available under subsection (b)''.

IN-SERVICE WITHDRAWALS; WITHDRAWAL ELECTIONS, FEDERAL EMPLOYEES RETIREMENT SYSTEM PARTICIPANTS

(a) In General.--Section 8433 of title 5, United States Code, is amended-- (1) by striking out subsections (b) and (c) and inserting in lieu thereof the following:

``(b) Subject to section 8435 of this title, any employee or Member who separates from Government employment is entitled and may elect to withdraw from the Thrift Savings Fund the balance of the employee's or Member's account as-- ``(1) an annuity; ``(2) a single payment; ``(3) 2 or more substantially equal payments to be made not less frequently than annually; or ``(4) any combination of payments as provided under paragraphs (1) through (3) as the Executive Director may prescribe by regulation.

``(c)(1) In addition to the right provided under subsection (b) to withdraw the balance of the account, an employee or Member who separates from Government service and who has not made a withdrawal under subsection (h)(1)(A) may make one withdrawal of any amount as a single payment in accordance with subsection (b)(2) from the employee's or Member's account. ``(2) An employee or Member may request that the amount withdrawn from the Thrift Savings Fund in accordance with subsection (b)(2) be transferred to an eligible retirement plan. ``(3) The Executive Director shall make each transfer elected under paragraph (2) directly to an eligible retirement plan or plans (as defined in section 402(c)(8) of the Internal Revenue Code of 1986) identified by the employee, Member, former employee, or former Member for whom the transfer is made. ``(4) A transfer may not be made for an employee, Member, former employee, or former Member under paragraph (2) until the Executive Director receives from that individual the information required by the Executive Director specifically to identify the eligible retirement plan or plans to which the transfer is to be made.''; (2) in subsection (d)-- (A) in paragraph (1) by striking out ``Subject to paragraph (3)(A)'' and inserting in lieu thereof ``Subject to paragraph (3)''; (B) by striking out paragraph (2) and redesignating paragraph (3) as paragraph (2); and (C) in paragraph (2) (as redesignated under subparagraph (B) of this paragraph)-- (i) in subparagraph (A) by striking out ``(A) by striking out ``(A)''; and (ii) by striking out subparagraph (B); (3) in subsection (f)(1)-- (A) by striking out ``$3,500 or less'' and inserting in lieu thereof ``less than an amount that the Executive Director prescribes by regulation; and (B) by striking out ``unless the employee or Member elects, at such time and otherwise in such manner as the Executive Director prescribes, one of the options available under subsection (b), or'' and inserting a comma; (4) in subsection (f)(2)-- (A) by striking out ``February 1'' and inserting in lieu thereof ``April 1''; (B) in subparagraph (A)-- (i) by striking out ``65'' and inserting in lieu thereof ``70\1/2\''; and (ii) by inserting ``or'' after the semicolon; (C) by striking out subparagraph (B); and

(D) by redesignating subparagraph (C) as subparagraph (B); (5) in subsection (g)-- (A) in paragraph (1) by striking out ``after December 31, 1987, and'', and by adding at the end of the paragraph the following sentence: ``Before a loan is issued, the Executive Director shall provide in writing the employee or Member with appropriate information concerning the cost of the loan relative to other sources of financing, as well as the lifetime cost of the loan, including the difference in interest rates between the funds offered by the Thrift Savings Fund, and any other effect of such loan on the employee's or Member's final account balance.''; and (B) by striking out paragraph (2) and redesignating paragraphs (3) through (5) as paragraphs (2) through (4), respectively; and (6) by adding after subsection (g) the following new subsection: ``(h)(1) An employee or Member may apply, before separation, to the Board for permission to withdraw an amount from the employee's or Member's account based upon-- ``(A) the employee or Member having attained age 59\1/2\; or ``(B) financial hardship. ``(2) A withdrawal under paragraph (1)(A) shall be available to each eligible participant one time only. ``(3) A withdrawal under paragraph (1)(B) shall be available only for an amount not exceeding the value of that portion of such account which is attributable to contributions made by the employee or Member under section 8432(a) of this title. ``(4) Withdrawals under paragraph (1) shall be subject to such other conditions as the Executive Director may prescribe by regulation. ``(5) A withdrawal may not be made under this subsection unless the requirements of section 8435(e) of this title are satisfied.''. (b) Invalidity of Certain Prior Elections.--Any election made under section 8433(b)(2) of title 5, United States Code (as in effect before the effective date of this title), with respect to an annuity which has not commenced before the implementation date of this title as provided by regulation by the Executive Director in accordance with section 207 of this title, shall be invalid.

sec. 204. survivor annuities for former spouses; notice to federal employees retirement system spouses for in-service withdrawals

Section 8435 of title 5, United States Code, is amended-- (1) in subsection (a)(1)(A)-- (A) by striking out ``may make an election under subsection (b)(3) or (b)(4) or section 8433 of this title or change an election previously made under subsection (b)(1) or (b)(2) of such section'' and inserting in lien thereof ``may withdraw all or part of a Thrift Savings Fund account under subsection (b) (2), (3), or (4) of section 8433 of this title or change a withdrawal election''; and (B) by adding at the end thereof ``A married employee or Member (or former employee or Member) may make a withdrawal from a Thrift Savings Fund account under

subsection (c)(1) of section 8433 of this title only if the employee or Member (or former employee or Member) satisfies the requirements of subparagraph (B).''; (2) in subsection (c)-- (A) in paragraph (1)-- (i) by striking out ``An election, change of election, or modification of the commencement date of a deferred annuity'' and inserting in lieu thereof ``An election or change of election''; and (ii) by striking out ``modification, or transfer'' and inserting in lien thereof ``or transfer''; and (B) in paragraph (2) in the matter following subparagraph (B)(ii) by striking out ``modification,''; (3) in subsection (e)-- (A) in paragraph (1)-- (i) in subparagraph (A)-- (I) by inserting ``or withdrawal'' after ``A loan''; (II) by inserting ``and (h)'' after ``8433(g)''; and (III) by inserting ``or withdrawal'' after ``such loan''; (ii) in subparagraph (B) by inserting ``or withdrawal'' after ``loan''; and (iii) in subparagraph (C)-- (I) by inserting ``or withdrawal'' after ``to a loan''; and (II) by inserting ``or withdrawal'' after ``for such loan''; and (B) in paragraph (2)-- (i) by inserting ``or withdrawal'' after ``loan''; and (ii) by inserting ``and (h)'' after ``8344(g)''; and (4) in subsection (g)-- (A) by inserting ``or withdrawals'' after ``loans''; and (B) by inserting ``and (h)'' after ``8344(g)''.

(a) Justices and Judges.--Section 8440a(b)(7) of title 5, United States Code, is amended-- (1) by striking out ``$3,500 or less'' and inserting in lieu thereof ``less than an amount that the Executive Director prescribes by regulation''; and (2) by striking out ``unless the justice or judge elects, at such time and otherwise in such manner as the Executive Director prescribes, one of the options available under section 8433(b)''. (b) Bankruptcy Judges and Magistrates.--Section 8440b(b) of title 5, United States Code, is amended-- (1) in paragraph (7) in the first sentence by inserting ``of the distribution'' after ``equal to the amount''; and (2) in paragraph (8)-- (A) by striking out ``$3,500 or less'' and inserting in lieu thereof ``less than an amount that the Executive Director prescribes by regulation''; and (B) by striking out ``unless the bankruptcy judge or magistrate elects, at such time and otherwise in such manner as the Executive Director prescribes, one of the options available under subsection (b)''.

(c) Federal Claims Judges.--Section 8440c(b) of title 5, United States Code, is amended-- (1) in paragraph (7) in the first sentence by inserting ``of the distribution'' after ``equal to the amount''; and (2) in paragraph (8)-- (A) by striking out ``$3,500 or less'' and inserting in lieu thereof ``less than an amount that the Executive Director prescribes by regulation''; and (B) by striking out ``unless the judge elects, at such time and otherwise in such manner as the Executive Director prescribes, one of the options available under section 8433(b)''.

(a) In General.--(1) Section 8401(4) of title 5, United States Code, is amended by striking out ``except as provided in subchapter III of this chapter,''. (2) Section 8431 of title 5, United States Code, is repealed. (b) Technical and Conforming Amendments.--(1) The table of sections for chapter 84 of title 5, United States Code, is amended by striking out the item relating to section 8431. (2) Section 5545a(h)(2)(A) of title 5, United States Code, is amended by striking out ``8431,''. (3) Section 615(f) of the Treasury, Postal Service, and General Government Appropriations Act, 1996 (Public Law 104-52; 109 Stat. 500; 5 U.S.C. 5343 note) is amended by striking out ``section 8431 of title 5, United States Code,''.

This title shall take effect on the date of the enactment of this Act and withdrawals and elections as provided under the amendments made by this title shall be made at the earliest practicable date as determined by the Executive Director in regulations. Sec. 660. Notwithstanding Section 613, interagency financing is authorized to carry out the purposes of the National Bioethics Advisory Commission. Sec. 661. (a) Designation.--The United States courthouse to be constructed at 111 South 18th Plaza, Omaha, Nebraska, shall be known and designated as the ``Roman L. Hruska United States Courthouse''. (b) References.--Any reference in a law, map, regulation, document, paper, or other record of the United States to the United States courthouse referred to in section 1 shall be deemed to be a reference to the ``Roman L. Hruska United States Courthouse''. Sec. 662. (a) Provisions Relating to Title 39, United States Code.-- ``(1) Appointment and removal of inspector general.--Section 202 of title 39, United States Code, is amended by adding at the end the following: ``(e)(1) The Governors shall appoint and shall have the power to remove the Inspector General. ``(2) The Inspector General shall be appointed-- ``(A) for a term of 7 years; ``(B) without regard to political affiliation; and ``(C) solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations.

``(3) The Inspector General may at any time be removed upon the written concurrence of at least 7 Governors, but only for cause. Nothing in this subsection shall be considered to exempt the Governors from the requirements of section 8G(e) of the Inspector General Act of 1978.''. (2) Definition.--Section 102 of title 39, United States Code, is amended-- (A) by striking ``and'' at the end of paragraph (2); (B) by striking the period at the end of paragraph (3) and inserting ``; and''; and (C) by adding at the end the following: ``(4) `Inspector General' means the Inspector General appointed under section 202(e) of this title.''. (3) Separate item in annual budget.--For purposes of the fifth sentence of section 2009 of title 39, United States Code, the operations of the Office of Inspector General of the United States Postal Service shall be considered a major type of activity. (b) Amendments to the Inspector General Act of 1978.-- (1) Governors as head of the postal service.--Section 8G(a)(4) of the Inspector General Act of 1978 (5 U.S.C. App.) is amended by striking ``except that'' and all that follows through the semicolon and inserting ``except that-- ``(A) with respect to the National Science Foundation, such term means the National Science Board; and ``(B) with respect to the United States Postal Service, such term means the Governors (within the meaning of section 102(3) of title 39, United States Code);''. (2) Special rules relating to the united states postal service.--Subsection (f) of section 8G of such Act is amended to read as follows: ``(f)(1) For purposes of carrying out subsection (c) with respect to the United States Postal Service, the appointment provisions of section 202(e) of title 39, United States Code, shall be applied. ``(2) In carrying out the duties and responsibilities specified in this Act, the Inspector General of the United States Postal Service (hereinafter in this subsection referred to as the `Inspector General') shall have oversight responsibility for all activities of the Postal Inspection Service, including any internal investigation performed by the Postal Inspection Service. The Chief Postal Inspector shall promptly report the significant activities being carried out by the Postal Inspection Service to such Inspector General. ``(3)(A)(i) Notwithstanding subsection (d), the Inspector General shall be under the authority, direction, and control of the Governors with respect to audits or investigations, or the issuance of subpoenas, which require access to sensitive information concerning-- ``(I) ongoing civil or criminal investigations or proceedings; ``(II) undercover operations; ``(III) the identity of confidential sources, including protected witnesses; ``(IV) intelligence or counterintelligence matters; or ``(V) other matters the disclosure of which would constitute a serious threat to national security. ``(ii) With respect to the information described under clause (i), the Governors may prohibit the Inspector General from carrying out or completing any audit or investigation, or from issuing any subpoena, after such Inspector General has decided to initiate,

carry out, or complete such audit or investigation or to issue such subpoena, if the Governors determine that such prohibition is necessary to prevent the disclosure of any information described under clause (i) or to prevent the significant impairment to the national interests of the United States. ``(iii) If the Governors exercise any power under clause (i) or (ii), the Governors shall notify the Inspector General in writing stating the reasons for such exercise. Within 30 days after receipt of any such notice, the Inspector General shall transmit a copy of such notice to the Committee on Governmental Affairs of the Senate and the Committee on Government Reform and Oversight of the House of Representatives, and to other appropriate committees or subcommittees of the Congress. ``(B) In carrying out the duties and responsibilities specified in this Act, the Inspector General-- ``(i) may initiate, conduct and supervise such audits and investigations in the United States Postal Service as the Inspector General considers appropriate; and ``(ii) shall give particular regard to the activities of the Postal Inspection Service with a view toward avoiding duplication and insuring effective coordination and cooperation. ``(C) Any report required to be transmitted by the Governors to the appropriate committees or subcommittees of the Congress under section 5(d) shall also be transmitted, within the seven-day period specified under such section, to the Committee on Governmental Affairs of the Senate and the Committee on Government Reform and Oversight of the House of Representatives. ``(3) Nothing in this Act shall restrict, eliminate, or otherwise adversely affect any of the rights, privileges, or benefits of either employees of the United States Postal Service, or labor organizations representing employees of the United States Postal Service, under chapter 12 of title 39, United States Code, the National Labor Relations Act, any handbook or manual affecting employee labor relations with the United States Postal Service, or any collective bargaining agreement. ``(4) As used in this subsection, the term `Governors' has the meaning given such term by section 102(3) of title 39, United States Code.''. (3) Technical correction.--The Inspector General Act of 1978 is amended by redesignating the second section which is designated as section 8G as section 8H. (c) Provisions Relating to Compensation.-- (1) Inspector general.--Section 5315 of title 5, United States Code, is amended by adding at the end the following: ``Inspector General, United States Postal Service.''.

The amendment made by the preceding sentence shall apply notwithstanding section 410 or any other provision of title 39, United States Code. (2) Officers and employees of the office of inspector general of the united states postal service; postal inspectors.-- (A) In general.--Section 1003 of title 39, United States Code, is amended-- (i) by redesignating subsection (b) as subsection (d); and (ii) by inserting after subsection (a) the following:

``(b) Compensation and benefits for all officers and employees serving in or under the Office of Inspector General of the United States Postal Service shall be maintained on a standard of comparability to the compensation and benefits paid for comparable levels of work in the respective Offices of Inspector General of the various establishments named in section 11(2) of the Inspector General Act of 1978. ``(c) Compensation and benefits for all Postal Inspectors shall be maintained on a standard of comparability to the compensation and benefits paid for comparable levels of work in the executive branch of the Government outside of the Postal Service. As used in this subsection, the term `Postal Inspector' included any agent to whom any investigative powers are granted under section 3061 of title 18.''. (B) Conforming amendment.--The first sentence of section 1003(a) of title 39, United States Code, is amended by striking ``chapters 2 and 12 of this title'' and inserting ``chapters 2 and 12 of this title, section 8G of the Inspector General Act of 1978,''. (d) Strategic Plans.-- (1) Office of inspector general of the united states postal service.-- (A) In general.--Strategic plans shall be prepared under this paragraph addressing staffing requirements, general goals and objectives for major functions and operations of the Office of Inspector General of the United States Postal Service, and how goals and objectives of the Office are to be achieved, including a description of operational processes, skills and technology, and the human, capital, information, and other resources required to meet those goals and objectives. (B) Specific requirements.--Plans under this paragraph-- (i) shall be prepared by the Inspector General of the United States Postal Service; (ii) shall each cover a 5-year period (the beginning and ending dates of which shall be specified in each such plan); and (iii) shall be included, as part of the annual budget required under section 2009 of title 39, United States Code, at least every 3 years. (C) First submission.--The first plan under this paragraph shall be prepared in time to be included with the annual budget under section 2009 of title 39, United States Code, next due to be submitted after the end of the 6-month period beginning on the date of the appointment of the first Inspector General to be appointed pursuant to the amendments made by this section. (2) Postal inspection service.--The Chief Postal Inspector shall, with respect to the Postal Inspection Service, prepare a strategic plan similar in content to that required under paragraph (1)(A) with respect to the Office of Inspector General of the United States Postal Service. Such plan shall be prepared in time to be included with the annual budget under section 2009 of such title 39 next due to be submitted after the end of the 30-day period beginning on the date of the enactment of this Act.

(e) First Appointment; Transfers; Transition Provision.-- (1) First appointment.--The first Inspector General of the United States Postal Service appointed pursuant to the amendments made by this section shall be appointed before the end of the 90-day period beginning on the date of the enactment of this Act. (2) Transfers.-- (A) In general.--All measures described in section 8G(b) of the Inspector General Act of 1978 necessary to establish an Office of Inspector General within the United States Postal Service pursuant to this section, including all appropriate transfers, shall occur-- (i) no earlier than the date the appointment under paragraph (1) is made; and (ii) no later than 60 days after the date the appointment under paragraph (1) is made. (B) Provisions relating to personnel.-- (i) Consultation.--Decisions concerning which personnel are to be transferred pursuant to subparagraph (A) shall be made by the Governors (within the meaning of section 102(3) of title 39, United States Code) in consultation with the Inspector General appointed under paragraph (1). (ii) Transferred personnel.--Personnel transferred pursuant to subparagraph (A) shall, to the extent not inconsistent with other provisions of this subsection, be transferred in accordance with applicable laws and regulations relating to the transfer of functions within the United States Postal Service, except that, notwithstanding any provision of section 1003(b) of title 39, United States Code, as amended by this section, the classification and compensation of such personnel shall not be reduced, by reason of having been transferred, for 1 year after being so transferred. (3) Transition provision.--The Chief Postal Inspector may continue to serve as Inspector General of the United States Postal Service until the date on which an Inspector General is appointed under paragraph (1) or, if earlier, the end of the period referred to in such paragraph. Compensation for any service under this paragraph shall be determined as if this section had not been enacted. (f) Technical and Conforming Amendments.-- (1) Section 410(b) of title 39, United States Code, is amended-- (A) by striking ``and'' at the end of paragraph (9); and (B) by amending paragraph (10) to read as follows: ``(10) the Inspector General Act of 1978; and'' (2)(A) Section 204 of such title 39 is amended-- (i) by amending the section heading to read as follows:

``Sec. 204. General Counsel; Judicial Officer; Chief Postal Inspector'';

(ii) in the first sentence by striking ``and a Judicial Officer.'' and inserting ``a Judicial Officer, and a Chief Postal Inspector.''; (iii) in the second sentence by striking ``and the Judicial Officer'' and inserting ``the Judicial Officer, and the Chief Postal Inspector''; and (iv) by adding at the end the following: ``The Chief Postal Inspector shall report to, and be under the general supervision

of, the Postmaster General. The Postmaster General shall promptly notify the Governors and both Houses of Congress in writing if he or she removes the Chief Postal Inspector or transfers the Chief Postal Inspector to another position or location within the Postal Service, and shall include in any such notification the reasons for the removal or transfer.''. (B) The table of sections for chapter 2 of such title 39 is amended by striking the item relating to section 204 and inserting the following:

``204. General Counsel; Judicial Officer; Chief Postal Inspector.''.

Sec. 663. Voluntary Separation Incentives for Employees of Certain Federal Agencies.--(a) Definitions.--For the purposes of this section-- (1) the term ``agency'' means any Executive agency (as defined in section 105 of title 5, United States Code), other than an Executive agency (except an agency receiving such authority in the Department of Transportation Appropriations Act, 1997) that is authorized by any other provision of this Act or any other Act to provide voluntary separation incentive payments during all, or any part of, fiscal year 1997; and (2) the term ``employee'' means an employee (as defined by section 2105 of title 5, United States Code) who is employed by an agency, is serving under an appointment without time limitation, and has been currently employed for a continuous period of at least 3 years, but does not include-- (A) a reemployed annuitant under subchapter III of chapter 83 or chapter 84 of title 5, United States Code, or another retirement system for employees of the agency; (B) an employee having a disability on the basis of which such employee is or would be eligible for disability retirement under subchapter III of chapter 83 or chapter 84 of title 5, United States Code, or another retirement system for employees of the agency; (C) an employee who is in receipt of a specific notice of involuntary separation for misconduct or unacceptable performance; (D) an employee who, upon completing an additional period of service as referred to in section 3(b)(2)(B)(ii) of the Federal Workforce Restructuring Act of 1994 (5 U.S.C. 5597 note), would qualify for a voluntary separation incentive payment under section 3 of such Act; (E) an employee who has previously received any voluntary separation incentive payment by the Federal Government under this section or any other authority and has not repaid such payment; (F) an employee covered by statutory reemployment rights who is on transfer to another organization; or (G) any employee who, during the twenty four month period preceding the date of separation, has received a recruitment or relocation bonus under section 5753 of title 5, United States Code, or who, within the twelve month period preceding the date of separation, received a retention allowance under section 5754 of title 5, United States Code. (b) Agency Strategic Plan.-- (1) In general.--The head of each agency, prior to obligating any resources for voluntary separation incentive payments,

shall submit to the House and Senate Committees on Appropriations and the Committee on Governmental Affairs of the Senate and the Committee on Government Reform and Oversight of the House of Representatives a strategic plan outlining the intended use of such incentive payments and a proposed organizational chart for the agency once such incentive payments have been completed. (2) Contents.--The agency's plan shall include-- (A) the positions and functions to be reduced or eliminated, identified by organizational unit, geographic location, occupational category and grade level; (B) the number and amounts of voluntary separation incentive payments to be offered; and (C) a description of how the agency will operate without the eliminated positions and functions. (c) Authority To Provide Voluntary Separation Incentive Payments.-- (1) In general.--A voluntary separation incentive payment under this section may be paid by an agency to any employee only to the extent necessary to eliminate the positions and functions identified by the strategic plan. (2) Amount and treatment of payments.--A voluntary separation incentive payment-- (A) shall be paid in a lump sum after the employee's separation; (B) shall be paid from appropriations or funds available for the payment of the basic pay of the employees; (C) shall be equal to the lesser of-- (i) an amount equal to the amount the employee would be entitled to receive under section 5595(c) of title 5, United States Code; or (ii) an amount determined by the agency head not to exceed $25,000; (D) may not be made except in the case of any qualifying employee who voluntarily separates (whether by retirement or resignation) before December 31, 1997; (E) shall not be a basis for payment, and shall not be included in the computation, of any other type of Government benefit; and (F) shall not be taken into account in determining the amount of any severance pay to which the employee may be entitled under section 5595 of title 5, United States Code, based on any other separation. (d) Additional Agency Contributions to the Retirement Fund.-- (1) In general.--In addition to any other payments which it is required to make under subchapter III of chapter 83 of title 5, United States Code, an agency shall remit to the Office of Personnel Management for deposit in the Treasury of the United States to the credit of the Civil Service Retirement and Disability Fund an amount equal to 15 percent of the final basic pay of each employee of the agency who is covered under subchapter III of chapter 83 or chapter 84 of title 5, United States Code, to whom a voluntary separation incentive has been paid under this section. (2) Definition.--For the purpose of paragraph (1), the term ``final basic pay'', with respect to an employee, means

the total amount of basic pay which would be payable for a year of service by such employee, computed using the employee's final rate of basic pay, and, if last serving on other than a full- time basis, with appropriate adjustment therefor. (e) Effect of Subsequent Employment With the Government.--An individual who has received a voluntary separation incentive payment under this section and accepts any employment for compensation with the Government of the United States, or who works for any agency of the United States Government through a personal services contract, within 5 years after the date of the separation on which the payment is based shall be required to pay, prior to the individual's first day of employment, the entire amount of the incentive payment to the agency that paid the incentive payment. (f) Reduction of Agency Employment Levels.-- (1) In general.--The total number of funded employee positions in the agency shall be reduced by one position for each vacancy created by the separation of any employee who has received, or is due to receive, a voluntary separation incentive payment under this section. For the purposes of this subsection, positions shall be counted on a full-time-equivalent basis. (2) Enforcement.--The President, through the Office of Management and Budget, shall monitor the agency and take any action necessary to ensure that the requirements of this subsection are met. (g) Effective Date.--This section shall take effect October 1, 1996.

Title 31, United States Code, is amended by inserting after section 3335 the following new section:

``Sec. 3336. Electronic benefit transfer pilot

``(a) The Congress finds that: ``(1) Electronic benefit transfer (EBT) is a safe, reliable, and economical way to provide benefit payments to individuals who do not have an account at a financial institution. ``(2) The designation of financial institutions as financial agents of the Federal Government for EBT is an appropriate and reasonable use of the Secretary's authority to designate financial agents. ``(3) A joint federal-state EBT system offers convenience and economies of scale for those states (and their citizens) that wish to deliver state-administered benefits on a single card by entering into a partnership with the federal government. ``(4) The Secretary's designation of a financial agent to deliver EBT is a specialized service not available through ordinary business channels and may be offered to the states pursuant to section 6501 et seq. of this title. ``(b) The Secretary shall continue to carry out the existing EBT pilot to disburse benefit payments electronically to recipients who do not have an account at a financial institution, which shall include the designation of one or more financial institution as a financial agent of the Government, and the offering to the participating states of the opportunity to contract with the financial agent

selected by the Secretary, as described in the Invitation for Expressions of Interest to Acquire EBT Services for the Southern Alliance of States dated March 9, 1995, as amended as of June 30, 1995, July 7, 1995, and August 1, 1995. [``(c) The selection and designation of financial agents, the design of the pilot program, and any other matter associated with or related to the EBT pilot described in subsection (b) shall not be subject to judicial review.'']

1. 12 U.S.C. 90 is amended by adding at the end thereof the following:

``Notwithstanding the Federal Property and Administrative Services Act of 1949, as amended, the Secretary may select associations as financial agents in accordance with any process the Secretary deems appropriate and their reasonable duties may include the provision of electronic benefit transfer services (including State-administered benefits with the consent of the States), as defined by the Secretary.''. 2. Make conforming amendments to 12 U.S.C. 265, 266, 391, 1452(d), 1767, 1789a, 2013, 2122 and to 31 U.S.C. 3122 and 3303.

This title may be cited as the ``Federal Financial Management Improvement Act of 1996.''

(a) Findings.--The Congress finds the following: (1) Much effort has been devoted to strengthening Federal internal accounting controls in the past. Although progress has been made in recent years, Federal accounting standards have not been uniformly implemented in financial management systems for agencies. (2) Federal financial management continues to be seriously deficient, and Federal financial management and fiscal practices have failed to-- (A) identify costs fully; (B) reflect the total liabilities of congressional actions; and (C) accurately report the financial condition of the Federal Government. (3) Current Federal accounting practices do not accurately report financial results of the Federal Government or the full costs of programs and activities. The continued use of these practices undermines the Government's ability to provide credible and reliable financial data and encourages already widespread Government waste, and will not assist in achieving a balanced budget. (4) Waste and inefficiency in the Federal Government undermine the confidence of the American people in the government and reduce the federal Government's ability to address vital public needs adequately. (5) To rebuild the accountability and credibility of the Federal Government, and restore public confidence in the Federal

Government, agencies must incorporate accounting standards and reporting objectives established for the Federal Government into their financial management systems so that all the assets and liabilities, revenues, and expenditures or expenses, and the full costs of programs and activities of the Federal Government can be consistently and accurately recorded, monitored, and uniformly reported throughout the Federal Government. (6) Since its establishment in October 1990, the Federal Accounting Standards Advisory Board (hereinafter referred to as the ``FASAB'') has made substantial progress toward developing and recommending a comprehensive set of accounting concepts and standards for the Federal Government. When the accounting concepts and standards developed by FASAB are incorporated into Federal financial management systems, agencies will be able to provide cost and financial information that will assist the Congress and financial managers to evaluate the cost and performance of Federal programs and activities, and will therefore provide important information that has been lacking, but is needed for improved decision making by financial managers and the Congress. (7) The development of financial management systems with the capacity to support these standards and concepts will, over the long term, improve Federal financial management. (b) Purpose--The purposes of this Act are to-- (1) provide for consistency of accounting by an agency from one fiscal year to the next, and uniform accounting standards throughout the Federal Government; (2) require Federal financial management systems to support full disclosure of Federal financial data, including the full costs of Federal programs and activities, to the citizens, the Congress, the President, and agency management, so that programs and activities can be considered based on their full costs and merits; (3) increase the accountability and credibility of federal financial management; (4) improve performance, productivity and efficiency of Federal Government financial management; (5) establish financial management systems to support controlling the cost of Federal Government; (6) build upon and complement the Chief Financial Officers Act of 1990 (Public Law 101-576; 104 Stat 2838), the Government Performance and Results Act of 1993 (Public Law 103-62 107 Stat. 285) and the Government Management Reform Act of 1994 (Public Law 103-356; 108 Stat. 3410); and (7) increase the capability of agencies to monitor execution of the budget by more readily permitting reports that compare spending of resources to results of activities.

FINANCIAL MANAGEMENT IMPROVEMENTS. (a) In General.--Each agency shall implement and maintain financial management systems that comply substantially with Federal financial management systems requirements, applicable Federal accounting standards, and the United States Government Standard General Ledger at the transaction level. (b) Audit Compliance Finding.--

(1) In general.--Each audit required by section 3521(e) of title 31, United States Code, shall report whether the agency financial management systems comply with the requirements of subsection (a). (2) Content of Reports.--When the person performing the audit required by section 3521(e) of title 31, United States Code, reports that the agency financial management systems do not comply with the requirements of subsection (a), the person performing the audit shall include in the report on the audit-- (A) the entity or organization responsible for the financial management systems that have been found not to comply with the requirements of subsection (a); (B) all facts pertaining to the failure to comply with the requirements of subsection (a), including-- (i) the nature and extent of the noncompliance including areas in which there is substantial but not full compliance; (ii) the primary reason or cause of the noncompliance; (iii) the entity or organization responsible for the non-compliance; and (iv) any relevant comments from any responsible officer or employee; and (C) a statement with respect to the recommended remedial actions and the time frames to implement such actions. (c) Compliance Implementation.-- (1) Determination.--No later than the date described under paragraph (2), the Head of an agency shall determine whether the financial management systems of the agency comply with the requirements of subsection (a). Such determination shall be based on-- (A) a review of the report on the applicable agency- wide audited financial statement; (B) any other information the Head of the agency considers relevant and appropriate. (2) Date of determination.--The determination under paragraph (1) shall be made no later than 120 days after the earlier of-- (A) the date of the receipt of an agency-wide audited financial statement; or (B) the last day of the fiscal year following the year covered by such statement. (3) Remediation plan.-- (A) If the Head of an agency determines that the agency's financial management systems do not comply with the requirements of subsection (a), the head of the agency, in consultation with the Director, shall establish a remediation plan that shall include resources, remedies, and intermediate target dates necessary to bring the agency's financial management systems into substantial compliance. (B) If the determination of the head of the agency differs from the audit compliance findings required in subsection (b), the Director shall review such determinations and provide a report on the findings to the appropriate committees of the Congress.

(4) Time period for compliance.--A remediation plan shall bring the agency's financial management systems into substantial compliance no later than 3 years after the date a determination is made under paragraph (1), unless the agency, with concurrence of the Director-- (A) determines that the agency's financial management systems cannot comply with the requirements of subsection (a) within 3 years; (B) specifies the most feasible date for bringing the agency's financial management systems into compliance with the requirements of subsection (a); and (C) designates an official of the agency who shall be responsible for bringing the agency's financial management systems into compliance with the requirements of subsection (a) by the date specified under subparagraph (B).

(a) Reports by the Director.--No later than March 31 of each year, the Director shall submit a report to the Congress regarding implementation of this Act. The Director may include the report in the financial management status report and the 5-year financial management plan submitted under section 3512(a)(1) of title 31, United States Code. (b) Reports by the Inspector General--Each Inspector General who prepares a report under section 5(a) of the Inspector General Act of 1978 (5 U.S.C. App.) shall report to Congress instances and reasons when an agency has not met the intermediate target dates established in the remediation plan required under section 3(c). Specifically the report shall include-- (1) the entity or organization responsible for the non- compliance; (2) the facts pertaining to the failure to comply with the requirements of subsection (a), including the nature and extent of the non-compliance, the primary reason or cause for the failure to comply, and any extenuating circumstances; and (3) a statement of the remedial actions needed to comply. (c) Reports by the Comptroller General.--No later than October 1, 1997, and October 1, of each year thereafter, the Comptroller General of the United States shall report to the appropriate committees of the Congress concerning-- (1) compliance with the requirements of section 3(a) of this Act, including whether the financial statements of the Federal Government have been prepared in accordance with applicable accounting standards; and (2) the adequacy of applicable accounting standards for the Federal Government.

(a) Audits by Agencies.--Section 3521(f)(1) of title 31, United States Code, is amended in the first sentence by inserting ``and the Controller of the Office of Federal Financial Management'' before the period. (b) Financial Management Status Report.--Section 3512(a)(2) of title 31, United States Code, is amended by-- (1) in subparagraph (D) by striking ``and' after the semicolon; (2) by redesignating subparagraph (E) as subparagraph (F); and

(3) by inserting after subparagraph (D) the following: ``(E) a listing of agencies whose financial management systems do not comply substantially with the requirements of Section 3(a) the Federal Financial Management Improvement Act of 1996, and a summary statement of the efforts underway to remedy the noncompliance; and'' (c) Inspector General Act of 1978.--Section 5(a) of the Inspector General Act of 1978 is amended-- (1) in paragraph (11) by striking ``and'' after the semicolon; (2) in paragraph (12) by striking the period and inserting ``; and''; and (3) by adding at the end the following new paragraph: ``(13) the information described under section 05(b) of the Federal Financial Management Improvement Act of 1996.''

For purposes of this title: (1) Agency.--The term ``agency'' means a department or agency of the United States Government as defined in section 901(b) of title 31, United States Code. (2) Director.--The term ``Director'' means the Director of the Office of Management and Budget. (3) Federal Accounting Standards.--The term ``Federal accounting standards'' means applicable accounting principles, standards, and requirements consistent with section 902(a)(3)(A) of title 31, United States Code. (4) Financial management systems.--The term ``financial management systems'' includes the financial systems and the financial portions of mixed systems necessary to support financial management, including automated and manual processes, procedures, controls, data, hardware, software, and support personnel dedicated to the operation and maintenance of system functions. (5) Financial system.--The term ``financial system'' includes an information system, comprised of one or more applications, that is used for-- (A) collecting, processing, maintaining, transmitting, or reporting data about financial events; (B) supporting financial planning or budgeting activities; (C) accumulating and reporting costs information; or (D) supporting the preparation of financial statements. (6) Mixed system.--The term ``mixed system' means an information system that supports both financial and nonfinancial functions of the Federal Government or components thereof.

This title shall take effect for the fiscal year ending September 30, 1997.

(a) Section 4001 of Public Law 104-106 (110 Stat. 642; 41 U.S.C. 251 note) is amended to read as follows:

``SEC. 4001. SHORT TITLE.

``This division and division E may be cited as the `Clinger-Cohen Act of 1996'.''.

(b) Section 5001 of Public Law 104-106 (110 Stat. 679; 40 U.S.C. 1401 note) is amended to read as follows:

``SEC. 5001. SHORT TITLE.

``This division and division D may be cited as the `Clinger-Cohen Act of 1996'.''. (c) Any reference in any law, regulation, document, record, or other paper of the United States to the Federal Acquisition Reform Act of 1996 or to the Information Technology Management Reform Act of 1996 shall be considered to be a reference to the Clinger-Cohen Act of 1996. This Act may be cited as the ``Treasury, Postal Service, and General Government Appropriations Act, 1997''.

SHORT TITLE; TABLE OF CONTENTS; DEFINITIONS

(a) Short Title.--This title may be cited as the ``Economic Growth and Regulatory Paperwork Reduction Act of 1996''. (b) Table of Contents.--The table of contents for this title is as follows:

DISCLOSURES REQUIRED UNDER RESPA AND TILA FOR MORTGAGE TRANSACTIONS.

(a) In General.--With respect to credit transactions which are subject to the Real Estate Settlement Procedures Act of 1974 and the Truth in Lending Act, the Board of Governors of the Federal Reserve System (hereafter in this section referred to as the ``Board'') and the Secretary of Housing and Urban Development (hereafter in this section referred to as the ``Secretary'') shall take such action as may be necessary before the end of the 6-month period beginning on the date of enactment of this Act-- (1) to simplify and improve the disclosures applicable to such transactions under such Acts, including the timing of the disclosures; and (2) to provide a single format for such disclosures which will satisfy the requirements of each such Act with respect to such transactions.

(b) Regulations.--To the extent that it is necessary to prescribe any regulation in order to effect any changes required to be made under subsection (a), the proposed regulation shall be published in the Federal Register before the end of the 6-month period referred to in subsection (a). (c) Recommendations for Legislation.--If the Board and the Secretary find that legislative action may be necessary or appropriate in order to simplify and unify the disclosure requirements under the Real Estate Settlement Procedures Act of 1974 and the Truth in Lending Act, the Board and the Secretary shall submit a report containing recommendations to the Congress concerning such action.

(a) Regulatory Flexibility.--Section 104 of the Truth in Lending Act (15 U.S.C. 1603) is amended-- (1) by redesignating paragraphs (5) and (6) as paragraphs (6) and (7), respectively; and (2) by inserting after paragraph (4) the following new paragraph:

``(5) Transactions for which the Board, by rule, determines that coverage under this title is not necessary to carry out the purposes of this title.''.

(b) Exemption Authority.--Section 105 of the Truth in Lending Act (15 U.S.C. 1604) is amended by adding at the end the following new subsection: ``(f) Exemption Authority.-- ``(1) In general.--The Board may exempt, by regulation, from all or part of this title any class of transactions, other than transactions involving any mortgage described in section 103(aa), for which, in the determination of the Board, coverage under all or part of this title does not provide a meaningful benefit to consumers in the form of useful information or protection. ``(2) Factors for consideration.--In determining which classes of transactions to exempt in whole or in part under paragraph (1), the Board shall consider the following factors and publish its rationale at the time a proposed exemption is published for comment: ``(A) The amount of the loan and whether the disclosures, right of rescission, and other provisions provide a benefit to the consumers who are parties to such transactions, as determined by the Board. ``(B) The extent to which the requirements of this title complicate, hinder, or make more expensive the credit process for the class of transactions. ``(C) The status of the borrower, including-- ``(i) any related financial arrangements of the borrower, as determined by the Board; ``(ii) the financial sophistication of the borrower relative to the type of transaction; and ``(iii) the importance to the borrower of the credit, related supporting property, and coverage under this title, as determined by the Board; ``(D) whether the loan is secured by the principal residence of the consumer; and ``(E) whether the goal of consumer protection would be undermined by such an exemption.''.

REGULATORY BURDENS.

(a) Unnecessary Disclosure.--Section 6(a) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(a)) is amended to read as follows: ``(a) Disclosure to Applicant Relating to Assignment, Sale, or Transfer of Loan Servicing.--Each person who makes a federally related mortgage loan shall disclose to each person who applies for the loan, at the time of application for the loan, whether the servicing of the loan may be assigned, sold, or transferred to any other person at any time while the loan is outstanding.''. (b) Consistency of Real Estate Settlement Procedures Act and Truth in Lending Act Exemption of Business Loans.--Section 7 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2606) is amended-- (1) by striking ``This Act'' and inserting the following:

``(a) In General.--This Act''; and (2) by adding at the end the following new subsection:

``(b) Interpretation.--In prescribing regulations under section 19(a), the Secretary shall ensure that, with respect to subsection (a) of this section, the exemption for credit transactions involving extensions of credit primarily for business, commercial, or agricultural purposes, as provided in section 7(1) of the Real Estate Settlement Procedures Act of 1974 shall be the same as the exemption for such credit transactions under section 104(1) of the Truth in Lending Act.''. (c) Redesignation of Controlled Business Arrangements as Affiliated Business Arrangements.--The Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.) is amended-- (1) in section 3(7), by striking ``controlled business arrangement'' and inserting ``affiliated business arrangement''; and (2) in subsections (c)(4) and (d)(6) of section 8, by striking ``controlled business arrangements'' and inserting ``affiliated business arrangements''.

(d) Disclosures by Telephone or Electronic Media.--Section 8(c)(4) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2607(c)(4)(A)) is amended by striking subparagraph (A) and inserting the following ``(A) a disclosure is made of the existence of such an arrangement to the person being referred and, in connection with such referral, such person is provided a written estimate of the charge or range of charges generally made by the provider to which the person is referred (i) in the case of a face-to-face referral or a referral made in writing or by electronic media, at or before the time of the referral (and compliance with this requirement in such case may be evidenced by a notation in a written, electronic, or similar system of records maintained in the regular course of business); (ii) in the case of a referral made by telephone, within 3 business days after the referral by telephone, (and in such case an abbreviated verbal disclosure of the existence of the arrangement and the fact that a written disclosure will be provided within 3 business days shall be made to the person being referred during the telephone referral); or (iii) in the case of a referral by a lender (including a referral by a lender to an affiliated lender), at the time the estimates required under section 5(c) are provided (notwithstanding clause (i) or (ii)); and any required written receipt of such disclosure (without regard to the manner of the disclosure under clause (i), (ii), or (iii)) may be obtained at the closing or settlement (except that a person making a face-to-face referral who provides the written disclosure at or before the time of the referral shall attempt to obtain any required written receipt of such disclosure at such time and if the person being referred chooses not to acknowledge the receipt of the disclosure at that time, that fact shall be noted in the written, electronic, or similar system of records maintained in the regular course of business by the person making the referral),''. (e) Limitation on Claims Arising From Violations of Requirements for Servicing Mortgages and Administering Escrow Accounts.--Section 16 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2614) is amended-- (1) by striking ``section 8 or 9'' and inserting ``section 6, 8, or 9''; and (2) by striking ``within one year'' and inserting ``within 3 years in the case of a violation of section 6 and 1 year in the case of a violation of section 8 or 9''.

(f) Delay of Effectiveness of Recent Final Regulation Relating to Payments to Employees.--Section 19 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2617) is amended by adding at the end the following new subsection: ``(d) Delay of Effectiveness of Recent Final Regulation Relating to Payments to Employees.-- ``(1) In general.--The amendment to part 3500 of title 24 of the Code of Federal Regulations contained in the final regulation prescribed by the Secretary and published in the Federal Register on June 7, 1996, which will, as of the effective date of such amendment-- ``(A) eliminate the exemption for payments by an employer to employees of such employer for referral activities which is currently codified as section 3500.14(g)(1)(vii) of such title 24; and ``(B) replace such exemption with a more limited exemption in new clauses (vii), (viii), and (ix) of section 3500.14 of such title 24,

shall not take effect before July 31, 1997. ``(2) Continuation of prior rule.--The regulation codified as section 3500.14(g)(1)(vii) of title 24 of the Code of Federal Regulations, relating to employer-employee payments, as in effect on May 1, 1996, shall remain in effect until the date the amendment referred to in paragraph (1) takes effect in accordance with such paragraph. ``(3) Public notice of effective date.--The Secretary shall provide public notice of the date on which the amendment referred to in paragraph (1) will take effect in accordance with such paragraph not less than 90 days and not more than 180 days before such effective date.''.

(g) Technical and Conforming Amendments.-- (1) Section 4(a) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2603(a)) is amended by striking ``Federal Home Loan Bank Board'' and inserting ``Director of the Office of Thrift Supervision''. (2) Section 10(c)(1)(C) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2609(c)(1)(C)) is amended by striking ``Not later than the expiration of the 90-day period beginning on the date of the enactment of the Cranston-Gonzalez National Affordable Housing Act, the'' and inserting ``The''.

(h) Repeal of Obsolete Provisions.--The Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.) is amended by <<NOTE: 12 USC 2611-2613.>> striking sections 13, 14 and 15.

Section 105 of the Truth in Lending Act (15 U.S.C. 1604) is amended by adding at the end the following new subsection: ``(g) Waiver for Certain Borrowers.-- ``(1) In general.--The Board, by regulation, may exempt from the requirements of this title certain credit transactions if-- ``(A) the transaction involves a consumer-- ``(i) with an annual earned income of more than $200,000; or ``(ii) having net assets in excess of $1,000,000 at the time of the transaction; and

``(B) a waiver that is handwritten, signed, and dated by the consumer is first obtained from the consumer. ``(2) Adjustments by the board.--The Board, at its discretion, may adjust the annual earned income and net asset requirements of paragraph (1) for inflation.''.

Section 128(a) of the Truth in Lending Act (15 U.S.C. 1638(a)) is amended by adding at the end the following new paragraph: ``(14) In the case of any variable interest rate residential mortgage transaction, in disclosures provided at application as prescribed by the Board for a variable rate transaction secured by the consumer's principal dwelling, at the option of the creditor, a statement that the periodic payments may increase or decrease substantially, and the maximum interest rate and payment for a $10,000 loan originated at a recent interest rate, as determined by the Board, assuming the maximum periodic increases in rates and payments under the program, or a historical example illustrating the effects of interest rate changes implemented according to the loan program.''.

TRUTH IN LENDING ACT.

Section 108(e)(3) of the Truth in Lending Act (15 U.S.C. 2602(3)) is amended-- (1) by striking ``ordered (A) if'' and inserting the following: ``ordered-- ``(A) if''; (2) by striking ``may require a partial'' and inserting ``may-- ``(i) require a partial''; (3) by striking ``, except that with respect'' and all that follows through ``Act, the agency shall require'' and inserting ``; or ``(ii) require''; (4) by striking ``reasonable, (B) the'' and inserting the following: ``reasonable, if (in the case of an agency referred to in paragraph (1), (2), or (3) of subsection (a)), the agency determines that a partial adjustment or making partial payments over an extended period is necessary to avoid causing the creditor to become undercapitalized pursuant to section 38 of the Federal Deposit Insurance Act; ``(B) the''; and (5) by striking ``(C) except'' and inserting the following: ``(C) except''.

(a) In General.--Section 139(a) of the Truth in Lending Act (15 U.S.C. 1649(a)) is amended by striking ``For any consumer credit transaction subject to this title'' and inserting ``For any closed end consumer credit transaction that is secured by real property or a dwelling, that is subject to this title, and''. (b) Effective Date.--The amendment made by subsection (a) shall be effective as of September 30, 1995.

Subtitle B--Streamlining Government Regulation

CHAPTER 1--ELIMINATING UNNECESSARY REGULATORY REQUIREMENTS AND PROCEDURES

TRANSACTIONS.

(a) In General.--Section 5(d)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1815(d)(3)) is amended-- (1) in subparagraph (A), by striking ``with the prior written approval of'' and inserting ``if the transaction is approved by''; (2) in subparagraph (E)-- (A) by striking clauses (i) and (iv); (B) by redesignating clauses (ii) and (iii) as clauses (i) and (ii), respectively; and (C) by adding at the end the following new clause: ``(iii) Capital requirements.--A transaction described in this paragraph shall not be approved under section 18(c)(2) unless the acquiring, assuming, or resulting depository institution will meet all applicable capital requirements upon consummation of the transaction.''; (3) by striking subparagraph (G); and (4) by redesignating subparagraphs (H) through (J) as subparagraphs (G) through (I), respectively.

(b) Conforming Amendments.-- (1) Revised statutes.--Section 5156A(b)(1) of the Revised Statutes of the United States (12 U.S.C. 215c(b)(1)) is amended by striking ``by section 5(d)(3) of the Federal Deposit Insurance Act or any other'' and inserting ``under any''. (2) Home owners' loan act.--Section 10(s)(2)(A) of the Home Owners' Loan Act (12 U.S.C. 1467a(s)(2)(A)) is amended by striking ``under section 5(d)(3) of the Federal Deposit Insurance Act or any other'' and inserting ``under any''.

HOLDING COMPANIES.

(a) Exemption for Bank Holding Companies.--Section 10 of the Home Owners' Loan Act (12 U.S.C. 1467a) is amended by adding at the end the following new subsection: ``(t) Exemption for Bank Holding Companies.--This section shall not apply to a bank holding company that is subject to the Bank Holding Company Act of 1956, or any company controlled by such bank holding company.''. (b) Definition.--Section 10(a)(1)(D) of the Home Owners' Loan Act (12 U.S.C. 1467a(a)(1)(D)) is amended to read as follows: ``(D) Savings and loan holding company.-- ``(i) In general.--Except as provided in clause (ii), the term `savings and loan holding company' means any company that directly or indirectly controls a savings association or that controls any other company that is a savings and loan holding company. ``(ii) Exclusion.--The term `savings and loan holding company' does not include a bank holding company that is registered under, and subject to, the Bank

Holding Company Act of 1956, or to any company directly or indirectly controlled by such company (other than a savings association).''.

(c) Acquisitions.--Section 10(e)(1) of the Home Owners' Loan Act (12 U.S.C. 1467a(e)(1)) is amended-- (1) in subparagraph (A)(iii)(VII), by inserting ``or'' at the end; (2) in subparagraph (A)(iv), by inserting ``and'' at the end; and (3) in subparagraph (B)-- (A) by striking ``or (ii)'' and inserting ``(ii)''; and (B) by inserting before the first period ``, or (iii) acquired by a bank holding company that is registered under, and subject to, the Bank Holding Company Act of 1956, or any company controlled by such bank holding company''.

(d) Amendments to the Bank Holding Company Act of 1956.--Section 4(i) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(i)) is amended by adding at the end the following new paragraphs: ``(4) Solicitation of views.-- ``(A) Notice to director.--Upon receiving any application or notice by a bank holding company to acquire, directly or indirectly, a savings association under subsection (c)(8), the Board shall solicit comments and recommendations from the Director with respect to such acquisition. ``(B) Comment period.--The comments and recommendations of the Director under subparagraph (A) with respect to any acquisition subject to such subparagraph shall be transmitted to the Board not later than 30 days after the receipt by the Director of the notice relating to such acquisition (or such shorter period as the Board may specify if the Board advises the Director that an emergency exists that requires expeditious action). ``(5) Examination.-- ``(A) Scope.--The Board shall consult with the Director, as appropriate, in establishing the scope of an examination by the Board of a bank holding company that directly or indirectly controls a savings association. ``(B) Access to inspection reports.--Upon the request of the Director, the Board shall furnish the Director with a copy of any inspection report, additional examination materials, or supervisory information relating to any bank holding company that directly or indirectly controls a savings association. ``(6) Coordination of enforcement efforts.--The Board and the Director shall cooperate in any enforcement action against any bank holding company that controls a savings association, if the relevant conduct involves such association. ``(7) Director defined.--For purposes of this section, the term `Director' means the Director of the Office of Thrift Supervision.''.

NATIONAL BANKS AND STATE MEMBER BANKS.

Section 5155(h) of the Revised Statutes of the United States (12 U.S.C. 36(h)) is amended to read as follows: ``(h) [Repealed]''.

TELLER MACHINES.

(a) ``Branch'' Under National Bank Act.--Section 5155(j) of the Revised Statutes of the United States (12 U.S.C. 36(j)) is amended by adding at the end the following: ``The term `branch', as used in this section, does not include an automated teller machine or a remote service unit.''. (b) ``Domestic Branch'' Under the Federal Deposit Insurance Act.-- Section 3(o) of the Federal Deposit Insurance Act (12 U.S.C. 1813(o)) is amended by striking ``lent; and the'' and inserting ``lent. The term `domestic branch' does not include an automated teller machine or a remote service unit. The''.

BANK PREMISES FOR WELL CAPITALIZED AND WELL MANAGED BANKS.

Section 24A of the Federal Reserve Act (12 U.S.C. 371d) is amended to read as follows:

``SEC. 24A. INVESTMENT IN BANK PREMISES OR STOCK OF CORPORATION HOLDING PREMISES.

``(a) Conditions of Investment.--No national bank or State member bank shall invest in bank premises, or in the stock, bonds, debentures, or other such obligations of any corporation holding the premises of such bank, or make loans to or upon the security of any such corporation-- ``(1) unless the bank receives the prior approval of the Comptroller of the Currency (with respect to a national bank) or the Board (with respect to a State member bank); ``(2) unless the aggregate of all such investments and loans, together with the amount of any indebtedness incurred by any such corporation that is an affiliate of the bank, is less than or equal to the amount of the capital stock of such bank; or ``(3) unless-- ``(A) the aggregate of all such investments and loans, together with the amount of any indebtedness incurred by any such corporation that is an affiliate of the bank, is less than or equal to 150 percent of the capital and surplus of the bank; and ``(B) the bank-- ``(i) has a CAMEL composite rating of 1 or 2 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system) as of the most recent examination of such bank; ``(ii) is well capitalized and will continue to be well capitalized after the investment or loan; and ``(iii) provides notification to the Comptroller of the Currency (with respect to a national bank) or to the Board (with respect to a State member bank) not later than 30 days after making the investment or loan.

``(b) Definitions.--For purposes of this section-- ``(1) the term `affiliate' has the same meaning as in section 2 of the Banking Act of 1933; and ``(2) the term `well capitalized' has the same meaning as in section 38(b) of the Federal Deposit Insurance Act.''.

Section 2(g) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(g)) is amended-- (1) in paragraph (1), by adding ``and'' at the end; (2) in paragraph (2), by striking ``; and'' and inserting a period; and (3) by striking paragraph (3).

WELL MANAGED BANKING ORGANIZATIONS.

(a) Notice Requirements.--Section 4(j) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(j)) is amended-- (1) in paragraph (1)(A), by striking ``No'' and inserting ``Except as provided in paragraph (3), no''; and (2) by adding at the end the following new paragraphs: ``(3) No notice required for certain transactions.--No notice under paragraph (1) of this subsection or under subsection (c)(8) or (a)(2)(B) is required for a proposal by a bank holding company to engage in any activity or acquire the shares or assets of any company, other than an insured depository institution, if the proposal qualifies under paragraph (4). ``(4) Criteria for statutory approval.--A proposal qualifies under this paragraph if all of the following criteria are met: ``(A) Financial criteria.--Both before and immediately after the proposed transaction-- ``(i) the acquiring bank holding company is well capitalized; ``(ii) the lead insured depository institution of such holding company is well capitalized; ``(iii) well capitalized insured depository institutions control at least 80 percent of the aggregate total risk-weighted assets of insured depository institutions controlled by such holding company; and ``(iv) no insured depository institution controlled by such holding company is undercapitalized. ``(B) Managerial criteria.-- ``(i) Well managed.--At the time of the transaction, the acquiring bank holding company, its lead insured depository institution, and insured depository institutions that control at least 90 percent of the aggregate total risk- weighted assets of insured depository institutions controlled by such holding company are well managed. ``(ii) Limitation on poorly managed institutions.--Except as provided in paragraph (6), no insured depository institution controlled by the acquiring bank holding company has received 1 of the 2

lowest composite ratings at the later of the institution's most recent examination or subsequent review. ``(C) Activities permissible.--Following consummation of the proposal, the bank holding company engages directly or through a subsidiary solely in-- ``(i) activities that are permissible under subsection (c)(8), as determined by the Board by regulation or order thereunder, subject to all of the restrictions, terms, and conditions of such subsection and such regulation or order; and ``(ii) such other activities as are otherwise permissible under this section, subject to the restrictions, terms and conditions, including any prior notice or approval requirements, provided in this section. ``(D) Size of acquisition.-- ``(i) Asset size.--The book value of the total assets to be acquired does not exceed 10 percent of the consolidated total risk-weighted assets of the acquiring bank holding company. ``(ii) Consideration.--The gross consideration to be paid for the securities or assets does not exceed 15 percent of the consolidated Tier 1 capital of the acquiring bank holding company. ``(E) Notice not otherwise warranted.--For proposals described in paragraph (5)(B), the Board has not, before the conclusion of the period provided in paragraph (5)(B), advised the bank holding company that a notice under paragraph (1) is required. ``(F) Compliance criterion.--During the 12-month period ending on the date on which the bank holding company proposes to commence an activity or acquisition, no administrative enforcement action has been commenced, and no cease and desist order has been issued pursuant to section 8 of the Federal Deposit Insurance Act, against the bank holding company or any depository institution subsidiary of the holding company, and no such enforcement action, order, or other administrative enforcement proceeding is pending as of such date. ``(5) Notification.-- ``(A) Commencement of activities approved by rule.-- A bank holding company that qualifies under paragraph (4) and that proposes to engage de novo, directly or through a subsidiary, in any activity that is permissible under subsection (c)(8), as determined by the Board by regulation, may commence that activity without prior notice to the Board and must provide written notification to the Board not later than 10 business days after commencing the activity. ``(B) Activities permitted by order and acquisitions.-- ``(i) In general.--At least 12 business days before commencing any activity pursuant to paragraph (3) (other than an activity described in subparagraph (A) of this paragraph) or acquiring shares or assets of

any company pursuant to paragraph (3), the bank holding company shall provide written notice of the proposal to the Board, unless the Board determines that no notice or a shorter notice period is appropriate. ``(ii) Description of activities and terms.--A notification under this subparagraph shall include a description of the proposed activities and the terms of any proposed acquisition. ``(6) Recently acquired institutions.--Any insured depository institution which has been acquired by a bank holding company during the 12-month period preceding the date on which the company proposes to commence an activity or acquisition pursuant to paragraph (3) may be excluded for purposes of paragraph (4)(B)(ii) if-- ``(A) the bank holding company has developed a plan for the institution to restore the capital and management of the institution which is acceptable to the appropriate Federal banking agency; and ``(B) all such insured depository institutions represent, in the aggregate, less than 10 percent of the aggregate total risk-weighted assets of all insured depository institutions controlled by the bank holding company. ``(7) Adjustment of percentages.--The Board may, by regulation, adjust the percentages and the manner in which the percentages of insured depository institutions are calculated under paragraph (4)(B)(i), (4)(D), or (6)(B) if the Board determines that any such adjustment is consistent with safety and soundness and the purposes of this Act.''.

(b) Definitions.--Section 2(o) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(o)) is amended-- (1) by striking paragraph (1) and inserting the following new paragraph: ``(1) Capital terms.-- ``(A) Insured depository institutions.--With respect to insured depository institutions, the terms `well capitalized', `adequately capitalized', and `undercapitalized' have the same meanings as in section 38(b) of the Federal Deposit Insurance Act. ``(B) Bank holding company.-- ``(i) Adequately capitalized.--With respect to a bank holding company, the term `adequately capitalized' means a level of capitalization which meets or exceeds all applicable Federal regulatory capital standards. ``(ii) Well capitalized.--A bank holding company is `well capitalized' if it meets the required capital levels for well capitalized bank holding companies established by the Board. ``(C) Other capital terms.--The terms `Tier 1' and `risk-weighted assets' have the meanings given those terms in the capital guidelines or regulations established by the Board for bank holding companies.''; and (2) by adding at the end the following new paragraphs: ``(8) Lead insured depository institutions.-- ``(A) In general.--The term `lead insured depository institution' means the largest insured depository institution controlled by the subject bank holding company at any

time, based on a comparison of the average total risk- weighted assets controlled by each insured depository institution during the previous 12-month period. ``(B) Branch or agency.--For purposes of this paragraph and section 4(j)(4), the term `insured depository institution' includes any branch or agency operated in the United States by a foreign bank. ``(9) Well managed.--The term `well managed' means-- ``(A) in the case of any company or depository institution which receives examinations, the achievement of-- ``(i) a CAMEL composite rating of 1 or 2 (or an equivalent rating under an equivalent rating system) in connection with the most recent examination or subsequent review of such company or institution; and ``(ii) at least a satisfactory rating for management, if such rating is given; or ``(B) in the case of a company or depository institution that has not received an examination rating, the existence and use of managerial resources which the Board determines are satisfactory.''.

APPOINTMENTS.

Section 32 of the Federal Deposit Insurance Act (12 U.S.C. 1831i) is amended-- (1) in subsection (a)-- (A) by inserting ``(or such other period, as determined by the appropriate Federal banking agency)'' after ``30 days''; (B) by striking ``if the insured depository institution or depository institution holding company'' and inserting ``if ''; (C) by striking paragraphs (1) and (2); (D) by redesignating paragraph (3) as paragraph (1); (E) in paragraph (1), as redesignated-- (i) by inserting ``the insured depository institution or depository institution holding company'' before ``is not in compliance''; and (ii) by striking the period at the end and inserting ``; or''; and (F) by adding at the end the following new paragraph: ``(2) the agency determines, in connection with the review by the agency of the plan required under section 38 or otherwise, that such prior notice is appropriate.''; and (2) in subsection (b), by striking ``30-day period'' and inserting ``notice period, not to exceed 90 days,''.

INTERLOCKS ACT.

(a) Dual Service Among Larger Organizations.--Section 204 of the Depository Institution Management Interlocks Act (12 U.S.C. 3203) is amended-- (1) by striking ``$1,000,000,000'' and inserting ``$2,500,000,000''; (2) by striking ``$500,000,000'' and inserting ``$1,500,000,000''; and

(3) by adding at the end the following: ``In order to allow for inflation or market changes, the appropriate Federal depository institutions regulatory agencies may, by regulation, adjust, as necessary, the amount of total assets required for depository institutions or depository holding companies under this section.''.

(b) Extension of Grandfather Exemption.--Section 206 of the Depository Institution Management Interlocks Act (12 U.S.C. 3205) is amended-- (1) in subsection (a), by striking ``for a period of, subject to the requirements of subsection (c), 20 years after the date of enactment of this title''; (2) in subsection (b), by striking the second sentence; and (3) by striking subsection (c).

(c) Regulations.--Section 209 of the Depository Institution Management Interlocks Act (12 U.S.C. 3207) is amended-- (1) in subsection (a)-- (A) by striking ``(a) In General.--Rules and regulations'' and inserting ``Regulations''; (B) by inserting ``, including regulations that permit service by a management official that would otherwise be prohibited by section 203 or section 204, if such service would not result in a monopoly or substantial lessening of competition,'' after ``title''; (C) in paragraph (4)-- (i) by striking ``Federal Home Loan Bank Board'' and inserting ``Director of the Office of Thrift Supervision''; and (ii) by striking ``Savings and Loan'' and inserting ``Deposit''; and (2) by striking subsections (b) and (c).

OFFICERS.

(a) Employee Benefit Plans.--Section 22(h)(2) of the Federal Reserve Act (12 U.S.C. 375b(2)) is amended-- (1) by redesignating subparagraphs (A) through (C) as clauses (i) through (iii), respectively, and indenting appropriately; (2) by striking ``(2) Preferential terms prohibited.-- '' and inserting the following: ``(2) Preferential terms prohibited.-- ``(A) In general.--''; and (3) by adding at the end the following new subparagraph: ``(B) Exception.--Nothing in this paragraph shall prohibit any extension of credit made pursuant to a benefit or compensation program-- ``(i) that is widely available to employees of the member bank; and ``(ii) that does not give preference to any officer, director, or principal shareholder of the member bank, or to any related interest of such person, over other employees of the member bank.''.

(b) Exception for Extensions of Credit to Executive Officers and Directors of Affiliates.--Section 22(h)(8)(B) of the Federal Reserve Act (12 U.S.C. 375b(8)(B)) is amended to read as follows:

``(B) Exception.--The Board may, by regulation, make exceptions to subparagraph (A) for any executive officer or director of a subsidiary of a company that controls the member bank if-- ``(i) the executive officer or director does not have authority to participate, and does not participate, in major policymaking functions of the member bank; and ``(ii) the assets of such subsidiary do not exceed 10 percent of the consolidated assets of a company that controls the member bank and such subsidiary (and is not controlled by any other company).''.

Section 1108 of the Federal Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3337) is amended by adding at the end the following new subsection.-- ``(c) Repayment of Treasury Loan.--Not later than September 30, 1998, the Appraisal Subcommittee shall repay to the Secretary of the Treasury the unpaid portion of the $5,000,000 paid to the Appraisal Subcommittee pursuant to this section.''.

Section 42 of the Federal Deposit Insurance Act (12 U.S.C. 1831r-1) is amended by adding at the end the following new subsection: ``(e) Scope of Application.--This section shall not apply with respect to-- ``(1) an automated teller machine; ``(2) the relocation of a branch or consolidation of one or more branches into another branch, if the relocation or consolidation-- ``(A) occurs within the immediate neighborhood; and ``(B) does not substantially affect the nature of the business or customers served; or ``(3) a branch that is closed in connection with-- ``(A) an emergency acquisition under-- ``(i) section 11(n); or ``(ii) subsection (f) or (k) of section 13; or ``(B) any assistance provided by the Corporation under section 13(c).''.

(a) Examination of Branches and Agencies by Board.--Section 7(c) of the International Banking Act of 1978 (12 U.S.C. 3105(c)) is amended-- (1) by striking ``(c)'' and inserting the following:

``(c) Foreign Bank Examinations and Reporting.--''; (2) in paragraph (1)(B), by adding at the end the following new clause: ``(iii) Avoidance of duplication.--In exercising its authority under this paragraph, the Board shall take all reasonable measures to reduce burden and avoid unnecessary duplication of examinations.''; (3) by striking subparagraph (C) of paragraph (1) and inserting the following: ``(C) On-site examination.--Each Federal branch or agency, and each State branch or agency, of a foreign

bank shall be subject to on-site examination by an appropriate Federal banking agency or State bank supervisor as frequently as would a national bank or a State bank, respectively, by the appropriate Federal banking agency.''; and (4) in paragraph (1)(D), by inserting before the period at the end the following: ``, only to the same extent that fees are collected by the Board for examination of any State member bank''.

(b) Establishment of Foreign Bank Offices in the United States.-- Section 7(d) of the International Banking Act of 1978 (12 U.S.C. 3105(d)) is amended-- (1) in paragraph (2), by striking ``The Board'' and inserting ``Except as provided in paragraph (6), the Board''; (2) in paragraph (5), by striking ``Consistent with the standards for approval in paragraph (2), the''; and inserting ``The''; and (3) by adding at the end the following new paragraphs: ``(6) Exception.-- ``(A) In general.--If the Board is unable to find, under paragraph (2), that a foreign bank is subject to comprehensive supervision or regulation on a consolidated basis by the appropriate authorities in its home country, the Board may nevertheless approve an application by such foreign bank under paragraph (1) if-- ``(i) the appropriate authorities in the home country of the foreign bank are actively working to establish arrangements for the consolidated supervision of such bank; and ``(ii) all other factors are consistent with approval. ``(B) Other considerations.--In deciding whether to use its discretion under subparagraph (A), the Board shall also consider whether the foreign bank has adopted and implements procedures to combat money laundering. The Board may also take into account whether the home country of the foreign bank is developing a legal regime to address money laundering or is participating in multilateral efforts to combat money laundering. ``(C) Additional conditions.--In approving an application under this paragraph, the Board, after requesting and taking into consideration the views of the appropriate State bank supervisor or the Comptroller of the Currency, as the case may be, may impose such conditions or restrictions relating to the activities or business operations of the proposed branch, agency, or commercial lending company subsidiary, including restrictions on sources of funding, as are considered appropriate. The Board shall coordinate with the appropriate State bank supervisor or the Comptroller of the Currency, as appropriate, in the implementation of such conditions or restrictions. ``(D) Modification of conditions.--Any condition or restriction imposed by the Board in connection with the approval of an application under authority of this paragraph may be modified or withdrawn. ``(7) Time period for board action.-- ``(A) Final action.--The Board shall take final action on any application under paragraph (1) not later than

180 days after receipt of the application, except that the Board may extend for an additional 180 days the period within which to take final action on such application after providing notice of, and the reasons for, the extension to the applicant foreign bank and any appropriate State bank supervisor or the Comptroller of the Currency, as appropriate. ``(B) Failure to submit information.--The Board may deny any application if it does not receive information requested from the applicant foreign bank or appropriate authorities in the home country of the foreign bank in sufficient time to permit the Board to evaluate such information adequately within the time periods for final action set forth in subparagraph (A). ``(C) Waiver.--A foreign bank may waive the applicability of this paragraph with respect to any application under paragraph (1).''.

(c) Termination of Foreign Bank Offices in the United States.-- Section 7(e)(1)(A) of the International Banking Act of 1978 (12 U.S.C. 3105(e)(1)(A)) is amended-- (1) by inserting ``(i)'' after ``(A)''; (2) by striking ``or'' at the end and inserting ``and''; and (3) by adding at the end the following new clause: ``(ii) the appropriate authorities in the home country of the foreign bank are not making demonstrable progress in establishing arrangements for the comprehensive supervision or regulation of such foreign bank on a consolidated basis; or''.

Section 4(c)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(c)(2)) is amended-- (1) by striking ``for not more than one year at a time''; and (2) by striking ``but no such extensions shall extend beyond a date five years'' and inserting ``and, in the case of a bank holding company which has not disposed of such shares within 5 years after the date on which such shares were acquired, the Board may, upon the application of such company, grant additional exemptions if, in the judgment of the Board, such extension would not be detrimental to the public interest and, either the bank holding company has made a good faith attempt to dispose of such shares during such 5-year period, or the disposal of such shares during such 5-year period would have been detrimental to the company, except that the aggregate duration of such extensions shall not extend beyond 10 years''.

(a) Federal Reserve Board Authority.--Section 106(b)(1) of the Bank Holding Company Act Amendments of 1970 (12 U.S.C. 1972(1)) is amended in the last sentence, by inserting ``and the prohibitions of section 4(f)(9) and 4(h)(2) of the Bank Holding Company Act of 1956'' after ``prohibition''. (b) OTS Authority.--Section 5(q) of the Home Owners' Loan Act (12 U.S.C. 1464(q)) is amended by adding at the end the following new paragraph:

``(6) Exceptions.--The Director may, by regulation or order, permit such exceptions to the prohibitions of this subsection as the Director considers will not be contrary to the purposes of this subsection and which conform to exceptions granted by the Board of Governors of the Federal Reserve System pursuant to section 106(b) of the Bank Holding Company Act Amendments of 1970.''.

Section 24 of the Federal Deposit Insurance Act (12 U.S.C. 1831a) is amended-- (1) in subsection (a)-- (A) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and indenting appropriately; (B) by striking ``In general.--'' and inserting the following: ``Permissible activities.-- ``(1) In general.--''; and (C) by adding at the end the following new paragraph: ``(2) Processing period.-- ``(A) In general.--The Corporation shall make a determination under paragraph (1)(A) not later than 60 days after receipt of a completed application that may be required under this subsection. ``(B) Extension of time period.--The Corporation may extend the 60-day period referred to in subparagraph (A) for not more than 30 additional days, and shall notify the applicant of any such extension.''; and (2) in subsection (d), by adding at the end the following new paragraph: ``(3) Processing period.-- ``(A) In general.--The Corporation shall make a determination under paragraph (1)(A) not later than 60 days after receipt of a completed application that may be required under this subsection. ``(B) Extension of time period.--The Corporation may extend the 60-day period referred to in subparagraph (A) for not more than 30 additional days, and shall notify the applicant of any such extension.''.

CHAPTER 2--ELIMINATING UNNECESSARY REGULATORY BURDENS

Section 10(d) of the Federal Deposit Insurance Act (12 U.S.C. 1820(d)) is amended-- (1) by redesignating the second paragraph designated as paragraph (8) as paragraph (10), and by inserting that paragraph, as redesignated, immediately after paragraph (9); and (2) in paragraph (10), as redesignated, by striking ``$175,000,000'' and inserting ``$250,000,000''.

(a) In General.--Not less frequently than once every 10 years, the Council and each appropriate Federal banking agency represented on the Council shall conduct a review of all regulations prescribed by the Council or by any such appropriate Federal banking agency, respectively, in order to identify outdated or otherwise

unnecessary regulatory requirements imposed on insured depository institutions. (b) Process.--In conducting the review under subsection (a), the Council or the appropriate Federal banking agency shall-- (1) categorize the regulations described in subsection (a) by type (such as consumer regulations, safety and soundness regulations, or such other designations as determined by the Council, or the appropriate Federal banking agency); and (2) at regular intervals, provide notice and solicit public comment on a particular category or categories of regulations, requesting commentators to identify areas of the regulations that are outdated, unnecessary, or unduly burdensome.

(c) Complete Review.--The Council or the appropriate Federal banking agency shall ensure that the notice and comment period described in subsection (b)(2) is conducted with respect to all regulations described in subsection (a) not less frequently than once every 10 years. (d) Regulatory Response.--The Council or the appropriate Federal banking agency shall-- (1) publish in the Federal Register a summary of the comments received under this section, identifying significant issues raised and providing comment on such issues; and (2) eliminate unnecessary regulations to the extent that such action is appropriate.

(e) Report to Congress.--Not later than 30 days after carrying out subsection (d)(1), the Council shall submit to the Congress a report, which shall include-- (1) a summary of any significant issues raised by public comments received by the Council and the appropriate Federal banking agencies under this section and the relative merits of such issues; and (2) an analysis of whether the appropriate Federal banking agency involved is able to address the regulatory burdens associated with such issues by regulation, or whether such burdens must be addressed by legislative action.

CUSTOMERS.

Subchapter II of chapter 53 of title 31, United States Code, is amended-- (1) by striking section 5327; (2) in the chapter analysis, by striking the item relating to section 5327; and (3) in section 5321(a), by striking paragraph (7).

(a) FDIA.--Section 477 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 251) is repealed. (b) FIRREA.--Section 918 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833 note) is repealed.

(c) ILS.--Section 913 of the International Lending Supervision Act of 1983 (12 U.S.C. 3912) is repealed.

(a) In General.--Section 309 of the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2808) is amended--

(1) by striking ``This title'' and inserting ``(a) In General.--This title''; (2) in the 3d sentence, by inserting ``(as determined without regard to the adjustment made by subsection (b))'' before the period; and (2) by adding at the end the following new subsection:

``(b) CPI Adjustments.-- ``(1) In general.--Subject to paragraph (2), the dollar amount applicable with respect to institutions described in section 303(2)(A) under the 2d sentence of subsection (a) shall be adjusted annually after December 31, 1996, by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers published by the Bureau of Labor Statistics. ``(2) 1-time adjustment for prior inflation.--The first adjustment made under paragraph (1) after the date of the enactment of the Economic Growth and Regulatory Paperwork Reduction Act of 1996 shall be the percentage by which-- ``(A) the Consumer Price Index described in such paragraph for the calendar year 1996, exceeds ``(B) such Consumer Price Index for the calendar year 1975. ``(3) Rounding.--The dollar amount applicable under paragraph (1) for any calendar year shall be the amount determined in accordance with subparagraphs (A) and (B) of paragraph (2) and rounded to the nearest multiple of $1,000,000.''.

(b) Opportunity To Reduce Compliance Burden.--Section 304 of the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2803) is amended by adding at the end the following new subsection: ``(m) Opportunity To Reduce Compliance Burden.-- ``(1) In general.-- ``(A) Satisfaction of public availability requirements.--A depository institution shall be deemed to have satisfied the public availability requirements of subsection (a) if the institution compiles the information required under that subsection at the home office of the institution and provides notice at the branch locations specified in subsection (a) that such information is available from the home office of the institution upon written request. ``(B) Provision of information upon request.--Not later than 15 days after the receipt of a written request for any information required to be compiled under subsection (a), the home office of the depository institution receiving the request shall provide the information pertinent to the location of the branch in question to the person requesting the information. ``(2) Form of information.--In complying with paragraph (1), a depository institution shall, in the sole discretion of the institution, provide the person requesting the information with-- ``(A) a paper copy of the information requested; or ``(B) if acceptable to the person, the information through a form of electronic medium, such as a computer disk.''.

Section 7(j) of the Federal Deposit Insurance Act (12 U.S.C. 1817(j)) is amended-- (1) in paragraph (9)(A)-- (A) by striking ``financial institution and any affiliate of any financial institution'' and inserting ``foreign bank, or any affiliate thereof,''; and (B) by striking ``by the financial institution and such institution's affiliates'' and inserting ``by the foreign bank or any affiliate thereof''; (2) in paragraph (9)(B)-- (A) by striking ``paragraph--'' and inserting ``paragraph, the following definitions shall apply:''; (B) by striking clause (i) and inserting the following: ``(i) Foreign bank.--The terms `foreign bank' and `affiliate' have the same meanings as in section 1 of the International Banking Act of 1978.''; and (C) in clause (iii), by striking ``financial institution'' and inserting ``foreign bank or any affiliate thereof''; (3) in paragraph (9)(C)-- (A) by striking ``financial institution or any of its affiliates'' and inserting ``foreign bank or any affiliate thereof''; and (B) by striking ``financial institution or its affiliates'' and inserting ``foreign bank or any affiliate thereof''; (4) in paragraph (9)(D)-- (A) in clause (i)-- (i) by striking ``the financial institution and all affiliates of the institution'' and inserting ``the foreign bank and all affiliates thereof''; and (ii) by striking ``financial institution or any such affiliate'' and inserting ``foreign bank or affiliate thereof''; (B) in clause (ii), by striking ``financial institution and any affiliate of such institution'' and inserting ``foreign bank and any affiliate thereof''; and (C) in clause (iii), by striking ``financial institution'' and inserting ``foreign bank or any affiliate thereof''; and (5) in paragraph (9)(E)-- (A) in clause (i)-- (i) by striking ``a financial institution and the affiliates of such institution'' and inserting ``a foreign bank or any affiliate thereof''; and (ii) by striking ``institution or affiliate'' each place such term appears and inserting ``foreign bank or any affiliate thereof''; and (B) in clause (ii), by striking ``financial institution and any affiliate of such institution'' and inserting ``foreign bank and any affiliate thereof''.

(a) Study.-- (1) In general.--Not later than 12 months after the date of enactment of this Act, and once every 60 months thereafter, the Board, in consultation with the Director of the Office of Thrift Supervision, the Comptroller of the Currency, the Board of Directors of the Corporation, the Administrator of the

National Credit Union Administration, the Administrator of the Small Business Administration, and the Secretary of Commerce, shall conduct a study and submit a report to the Congress detailing the extent of small business lending by all creditors. (2) Contents of study.--The study required under paragraph (1) shall identify, to the extent practicable, those factors which provide policymakers with insights into the small business credit market, including-- (A) the demand for small business credit, including consideration of the impact of economic cycles on the levels of such demand; (B) the availability of credit to small businesses; (C) the range of credit options available to small businesses, such as those available from insured depository institutions and other providers of credit; (D) the types of credit products used to finance small business operations, including the use of traditional loans, leases, lines of credit, home equity loans, credit cards, and other sources of financing; (E) the credit needs of small businesses, including, if appropriate, the extent to which such needs differ, based upon product type, size of business, cash flow requirements, characteristics of ownership or investors, or other aspects of such business; (F) the types of risks to creditors in providing credit to small businesses; and (G) such other factors as the Board deems appropriate.

(b) Use of Existing Data.--The studies required by this section shall not increase the regulatory or paperwork burden on regulated financial institutions, other sources of small business credit, or small businesses.

CHAPTER 3--REGULATORY MICROMANAGEMENT RELIEF

Section 5146 of the Revised Statutes of the United States (12 U.S.C. 72) is amended in the first sentence, by striking ``except'' and all that follows through the end of the sentence and inserting the following: ``except that the Comptroller may, in the discretion of the Comptroller, waive the requirement of residency.''.

Section 303(a) of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4803(a)) is amended-- (1) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and (2) by inserting after paragraph (1) the following new paragraph: ``(2) review the extent to which existing regulations require insured depository institutions and insured credit unions to produce unnecessary internal written policies and eliminate such requirements, where appropriate;''.

Section 2(a)(1)(C) of the Federal Deposit Insurance Act (12 U.S.C. 1812(a)(1)(C)) is amended by inserting before the period ``, 1 of whom shall have State bank supervisory experience''.

(a) In General.--Section 10 of the Federal Deposit Insurance Act (12 U.S.C. 1820) is amended by adding at the end the following new subsection: ``(j) Consultation Among Examiners.-- ``(1) In general.--Each appropriate Federal banking agency shall take such action as may be necessary to ensure that examiners employed by the agency-- ``(A) consult on examination activities with respect to any depository institution; and ``(B) achieve an agreement and resolve any inconsistencies in the recommendations to be given to such institution as a consequence of any examinations. ``(2) Examiner-in-charge.--Each appropriate Federal banking agency shall consider appointing an examiner-in-charge with respect to a depository institution to ensure consultation on examination activities among all of the examiners of that agency involved in examinations of the institution.''.

(b) Coordinated and Unified Examination Flexibility.--Section 10(d)(6)(B) of the Federal Deposit Insurance Act (12 U.S.C. 1820(d)(6)(B)) is amended by inserting ``or State bank supervisors'' after ``one of the Federal agencies''.

Subtitle C--Regulatory Impact on Cost of Credit and Credit Availability

(a) Auditor Attestations.--Section 36 of the Federal Deposit Insurance Act (12 U.S.C. 1831m) is amended by striking subsection (e) and inserting the following: ``(e) [Repealed]''. (b) Independent Audit Committees.--Section 36(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1831m(g)(1)) is amended-- (1) in subparagraph (A), by inserting ``, except as provided in subparagraph (D)'' after ``management of the institution''; and (2) by adding at the end the following new subparagraph: ``(D) Exemption authority.-- ``(i) In general.--An appropriate Federal banking agency may, by order or regulation, permit the independent audit committee of an insured depository institution to be made up of less than all, but no fewer than a majority of, outside directors, if the agency determines that the institution has encountered hardships in retaining and recruiting a sufficient number of competent outside directors to serve on the internal audit committee of the institution.

``(ii) Factors to be considered.--In determining whether an insured depository institution has encountered hardships referred to in clause (i), the appropriate Federal banking agency shall consider factors such as the size of the institution, and whether the institution has made a good faith effort to elect or name additional competent outside directors to the board of directors of the institution who may serve on the internal audit committee.''.

(c) Public Availability.--Section 36(a)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1831m(a)(3)) is amended by adding at the end the following: ``Notwithstanding the preceding sentence, the Corporation and the appropriate Federal banking agencies may designate certain information as privileged and confidential and not available to the public.''.

(a) Equal Credit Opportunity.-- (1) In general.--The Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) is amended by inserting after section 704 the following new section:

``SEC. 704A. INCENTIVES FOR SELF-TESTING AND SELF-CORRECTION.

``(a) Privileged Information.-- ``(1) Conditions for privilege.--A report or result of a self-test (as that term is defined by regulations of the Board) shall be considered to be privileged under paragraph (2) if a creditor-- ``(A) conducts, or authorizes an independent third party to conduct, a self-test of any aspect of a credit transaction by a creditor, in order to determine the level or effectiveness of compliance with this title by the creditor; and ``(B) has identified any possible violation of this title by the creditor and has taken, or is taking, appropriate corrective action to address any such possible violation. ``(2) Privileged self-test.--If a creditor meets the conditions specified in subparagraphs (A) and (B) of paragraph (1) with respect to a self-test described in that paragraph, any report or results of that self-test-- ``(A) shall be privileged; and ``(B) may not be obtained or used by any applicant, department, or agency in any-- ``(i) proceeding or civil action in which one or more violations of this title are alleged; or ``(ii) examination or investigation relating to compliance with this title.

``(b) Results of Self-Testing.-- ``(1) In general.--No provision of this section may be construed to prevent an applicant, department, or agency from obtaining or using a report or results of any self-test in any proceeding or civil action in which a violation of this title is alleged, or in any examination or investigation of compliance with this title if-- ``(A) the creditor or any person with lawful access to the report or results-- ``(i) voluntarily releases or discloses all, or any part of, the report or results to the applicant, department, or agency, or to the general public; or

``(ii) refers to or describes the report or results as a defense to charges of violations of this title against the creditor to whom the self- test relates; or ``(B) the report or results are sought in conjunction with an adjudication or admission of a violation of this title for the sole purpose of determining an appropriate penalty or remedy. ``(2) Disclosure for determination of penalty or remedy.-- Any report or results of a self-test that are disclosed for the purpose specified in paragraph (1)(B)-- ``(A) shall be used only for the particular proceeding in which the adjudication or admission referred to in paragraph (1)(B) is made; and ``(B) may not be used in any other action or proceeding.

``(c) Adjudication.--An applicant, department, or agency that challenges a privilege asserted under this section may seek a determination of the existence and application of that privilege in-- ``(1) a court of competent jurisdiction; or ``(2) an administrative law proceeding with appropriate jurisdiction.''. (2) Regulations.-- (A) In general.--Not later than 6 months after the date of enactment of this Act, in consultation with the Secretary of Housing and Urban Development and the agencies referred to in section 704 of the Equal Credit Opportunity Act, and after providing notice and an opportunity for public comment, the Board shall prescribe final regulations to implement section 704A of the Equal Credit Opportunity Act, as added by this section. (B) Self-test.-- (i) Definition.--The regulations prescribed under subparagraph (A) shall include a definition of the term ``self-test'' for purposes of section 704A of the Equal Credit Opportunity Act, as added by this section. (ii) Requirement for self-test.--The regulations prescribed under subparagraph (A) shall specify that a self-test shall be sufficiently extensive to constitute a determination of the level and effectiveness of compliance by a creditor with the Equal Credit Opportunity Act. (iii) Substantial similarity to certain fair housing act regulations.--The regulations prescribed under subparagraph (A) shall be substantially similar to the regulations prescribed by the Secretary of Housing and Urban Development to carry out section 814A(d) of the Fair Housing Act, as added by this section. (3) Clerical amendment.--The table of sections for title VII of the Consumer Credit Protection Act is amended by inserting after the item relating to section 704 the following new item:

``704A. Incentives for self-testing and self-correction.''.

(b) Fair Housing.-- (1) In general.--The Fair Housing Act (42 U.S.C. 3601 et seq.) is amended by inserting after section 814 the following new section:

``SEC. 814A. INCENTIVES FOR SELF-TESTING AND SELF-CORRECTION.

``(a) Privileged Information.-- ``(1) Conditions for privilege.--A report or result of a self-test (as that term is defined by regulation of the Secretary) shall be considered to be privileged under paragraph (2) if any person-- ``(A) conducts, or authorizes an independent third party to conduct, a self-test of any aspect of a residential real estate related lending transaction of that person, or any part of that transaction, in order to determine the level or effectiveness of compliance with this title by that person; and ``(B) has identified any possible violation of this title by that person and has taken, or is taking, appropriate corrective action to address any such possible violation. ``(2) Privileged self-test.--If a person meets the conditions specified in subparagraphs (A) and (B) of paragraph (1) with respect to a self-test described in that paragraph, any report or results of that self-test-- ``(A) shall be privileged; and ``(B) may not be obtained or used by any applicant, department, or agency in any-- ``(i) proceeding or civil action in which one or more violations of this title are alleged; or ``(ii) examination or investigation relating to compliance with this title.

``(b) Results of Self-Testing.-- ``(1) In general.--No provision of this section may be construed to prevent an aggrieved person, complainant, department, or agency from obtaining or using a report or results of any self-test in any proceeding or civil action in which a violation of this title is alleged, or in any examination or investigation of compliance with this title if-- ``(A) the person to whom the self-test relates or any person with lawful access to the report or the results-- ``(i) voluntarily releases or discloses all, or any part of, the report or results to the aggrieved person, complainant, department, or agency, or to the general public; or ``(ii) refers to or describes the report or results as a defense to charges of violations of this title against the person to whom the self- test relates; or ``(B) the report or results are sought in conjunction with an adjudication or admission of a violation of this title for the sole purpose of determining an appropriate penalty or remedy. ``(2) Disclosure for determination of penalty or remedy.-- Any report or results of a self-test that are disclosed for the purpose specified in paragraph (1)(B)-- ``(A) shall be used only for the particular proceeding in which the adjudication or admission referred to in paragraph (1)(B) is made; and ``(B) may not be used in any other action or proceeding.

``(c) Adjudication.--An aggrieved person, complainant, department, or agency that challenges a privilege asserted under this section may seek a determination of the existence and application of that privilege in--

``(1) a court of competent jurisdiction; or ``(2) an administrative law proceeding with appropriate jurisdiction.''. (2) Regulations.-- (A) In general.--Not later than 6 months after the date of enactment of this Act, in consultation with the Board and after providing notice and an opportunity for public comment, the Secretary of Housing and Urban Development shall prescribe final regulations to implement section 814A of the Fair Housing Act, as added by this section. (B) Self-test.-- (i) Definition.--The regulations prescribed by the Secretary under subparagraph (A) shall include a definition of the term ``self-test'' for purposes of section 814A of the Fair Housing Act, as added by this section. (ii) Requirement for self-test.--The regulations prescribed by the Secretary under subparagraph (A) shall specify that a self-test shall be sufficiently extensive to constitute a determination of the level and effectiveness of the compliance by a person engaged in residential real estate related lending activities with the Fair Housing Act. (iii) Substantial similarity to certain equal credit opportunity act regulations.--The regulations prescribed under subparagraph (A) shall be substantially similar to the regulations prescribed by the Board to carry out section 704A of the Equal Credit Opportunity Act, as added by this section.

(c) Applicability.-- (1) In general.--Except as provided in paragraph (2), the privilege provided for in section 704A of the Equal Credit Opportunity Act or section 814A of the Fair Housing Act (as those sections are added by this section) shall apply to a self- test (as that term is defined pursuant to the regulations prescribed under subsection (a)(2) or (b)(2) of this section, as appropriate) conducted before, on, or after the effective date of the regulations prescribed under subsection (a)(2) or (b)(2), as appropriate. (2) Exception.--The privilege referred to in paragraph (1) does not apply to such a self-test conducted before the effective date of the regulations prescribed under subsection (a) or (b), as appropriate, if-- (A) before that effective date, a complaint against the creditor or person engaged in residential real estate related lending activities (as the case may be) was-- (i) formally filed in any court of competent jurisdiction; or (ii) the subject of an ongoing administrative law proceeding; (B) in the case of section 704A of the Equal Credit Opportunity Act, the creditor has waived the privilege pursuant to subsection (b)(1)(A)(i) of that section; or (C) in the case of section 814A of the Fair Housing Act, the person engaged in residential real estate related lending activities has waived the privilege pursuant to subsection (b)(1)(A)(i) of that section.

(a) Credit Cards.--Section 5(b) of the Home Owners' Loan Act (12 U.S.C. 1464(b)) is amended-- (1) by striking paragraph (4); and (2) by redesignating paragraph (5) as paragraph (4).

(b) Loans or Investments Without Percentage of Assets Limitation.-- Section 5(c)(1) of the Home Owners' Loan Act (12 U.S.C. 1464(c)(1)) is amended by adding at the end the following new subparagraphs: ``(T) Credit card loans.--Loans made through credit cards or credit card accounts. ``(U) Educational loans.--Loans made for the payment of educational expenses.''.

(c) Commercial and Other Loans.--Section 5(c)(2)(A) of the Home Owners' Loan Act (12 U.S.C. 1464(c)(2)(A)) is amended to read as follows: ``(A) Commercial and other loans.--Secured or unsecured loans for commercial, corporate, business, or agricultural purposes. The aggregate amount of loans made under this subparagraph may not exceed 20 percent of the total assets of the Federal savings association, and amounts in excess of 10 percent of such total assets may be used under this subparagraph only for small business loans, as that term is defined by the Director.''.

(d) Loans or Investments Limited to 5 Percent of Assets.--Section 5(c)(3) of the Home Owners' Loan Act (12 U.S.C. 1464(c)(3)) is amended-- (1) by striking subparagraph (A); and (2) by redesignating subparagraphs (B), (C), and (D) as subparagraphs (A), (B), and (C), respectively.

(e) Qualified Thrift Lender Test.--Section 10(m)(1) of the Home Owners' Loan Act (12 U.S.C. 1467a(m)(1)) is amended-- (1) by redesignating subparagraph (B) as clause (ii); (2) in subparagraph (A), by striking ``(A) the savings'' and inserting ``(B)(i) the savings''; and (3) by inserting after ``if--'' the following new subparagraph: ``(A) the savings association qualifies as a domestic building and loan association, as such term is defined in section 7701(a)(19) of the Internal Revenue Code of 1986; or''.

(f) Branching.--Section 5(r) of the Home Owners' Loan Act (12 U.S.C. 1464(r)) is amended-- (1) in paragraph (1)-- (A) in the first sentence-- (i) by inserting before the period ``, or qualifies as a qualified thrift lender, as determined under section 10(m) of this Act''; and (ii) by striking ``(c)'' and inserting ``(C)''; and (B) in the second sentence, by inserting before the period ``or as a qualified thrift lender, as determined under section 10(m) of this Act, as applicable''; and (2) in paragraph (2), by striking subparagraph (C) and inserting the following: ``(C) the law of the State where the branch is located, or is to be located, would permit establishment of the branch if the association was a savings association or savings bank

chartered by the State in which its home office is located; or''.

(g) Definition.--Section 10(m)(4) of the Home Owners' Loan Act (12 U.S.C. 1467a(m)(4)) is amended-- (1) by striking ``subsection--'' and inserting ``subsection, the following definitions shall apply:''; (2) in subparagraph (C)-- (A) in clause (ii), by adding at the end the following new subclause: ``(VII) Loans for educational purposes, loans to small businesses, and loans made through credit cards or credit card accounts.''; and (B) in clause (iii), by striking subclause (VI) and inserting the following: ``(VI) Loans for personal, family, or household purposes (other than loans for personal, family, or household purposes described in clause (ii)(VII)).''; and (3) by adding at the end the following new subparagraphs: ``(D) Credit card.--The Director shall issue such regulations as may be necessary to define the term `credit card'. ``(E) Small business.--The Director shall issue such regulations as may be necessary to define the term `small business'.''.

(a) Growth Cap Relief.--Section 4(f)(3)(B) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(f)(3)(B)) is amended-- (1) in clause (ii), by adding ``or'' at the end; (2) in clause (iii), by striking ``; or'' at the end and inserting a period; and (3) by striking clause (iv).

(b) Limited Purpose Bank Exception.--Section 2(c)(2)(F) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(F)) is amended by inserting ``, including an institution that accepts collateral for extensions of credit by holding deposits under $100,000, and by other means'' after ``An institution''.

(a) In General.--Section 807(11) of the Fair Debt Collection Practices Act (15 U.S.C. 1692e(11)) is amended to read as follows: ``(11) The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action.''.

(b) Effective Date.--The amendment made by subsection (a) shall take effect 90 days after the date of enactment of this Act and shall apply to all communications made after that date of enactment.

Section 107(5)(A) of the Federal Credit Union Act (12 U.S.C. 1757(5)(A)) is amended-- (1) in clause (iv), by striking ``$10,000'' and inserting ``$20,000''; and (2) in clause (v), by striking ``$10,000'' and inserting ``$20,000''.

The 10th undesignated paragraph of section 25A of the Federal Reserve Act (12 U.S.C. 618) is amended by striking the last sentence and inserting the following: ``Any national bank may invest in the stock of any corporation organized under this section. The aggregate amount of stock held by any national bank in all corporations engaged in business of the kind described in this section or section 25 shall not exceed an amount equal to 10 percent of the capital and surplus of such bank unless the Board determines that the investment of an additional amount by the bank would not be unsafe or unsound and, in any case, shall not exceed an amount equal to 20 percent of the capital and surplus of such bank.''.

Subtitle D--Consumer Credit

CHAPTER <<NOTE: Consumer Credit Reporting Reform Act of 1996. 15 USC 1601 note.>> 1--CREDIT REPORTING REFORM

This chapter may be cited as the ``Consumer Credit Reporting Reform Act of 1996''.

(a) Adverse Action.--Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is amended by adding at the end the following new subsection: ``(k) Adverse Action.-- ``(1) Actions included.--The term `adverse action'-- ``(A) has the same meaning as in section 701(d)(6) of the Equal Credit Opportunity Act; and ``(B) means-- ``(i) a denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with the underwriting of insurance; ``(ii) a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee; ``(iii) a denial or cancellation of, an increase in any charge for, or any other adverse or unfavorable change in the terms of, any license or benefit described in section 604(a)(3)(D); and ``(iv) an action taken or determination that is-- ``(I) made in connection with an application that was made by, or a transaction that was initiated by, any consumer, or in connection with a

review of an account under section 604(a)(3)(F)(ii); and ``(II) adverse to the interests of the consumer. ``(2) Applicable findings, decisions, commentary, and orders.--For purposes of any determination of whether an action is an adverse action under paragraph (1)(A), all appropriate final findings, decisions, commentary, and orders issued under section 701(d)(6) of the Equal Credit Opportunity Act by the Board of Governors of the Federal Reserve System or any court shall apply.''.

(b) Firm Offer of Credit or Insurance.--Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) (as amended by subsection (a) of this section) is amended by adding at the end the following new subsection: ``(l) Firm Offer of Credit or Insurance.--The term `firm offer of credit or insurance' means any offer of credit or insurance to a consumer that will be honored if the consumer is determined, based on information in a consumer report on the consumer, to meet the specific criteria used to select the consumer for the offer, except that the offer may be further conditioned on one or more of the following: ``(1) The consumer being determined, based on information in the consumer's application for the credit or insurance, to meet specific criteria bearing on credit worthiness or insurability, as applicable, that are established-- ``(A) before selection of the consumer for the offer; and ``(B) for the purpose of determining whether to extend credit or insurance pursuant to the offer. ``(2) Verification-- ``(A) that the consumer continues to meet the specific criteria used to select the consumer for the offer, by using information in a consumer report on the consumer, information in the consumer's application for the credit or insurance, or other information bearing on the credit worthiness or insurability of the consumer; or ``(B) of the information in the consumer's application for the credit or insurance, to determine that the consumer meets the specific criteria bearing on credit worthiness or insurability. ``(3) The consumer furnishing any collateral that is a requirement for the extension of the credit or insurance that was-- ``(A) established before selection of the consumer for the offer of credit or insurance; and ``(B) disclosed to the consumer in the offer of credit or insurance.''.

(c) Credit or Insurance Transaction That Is Not Initiated by the Consumer.--Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) (as amended by subsection (b) of this section) is amended by adding at the end the following new subsection: ``(m) Credit or Insurance Transaction That Is Not Initiated by the Consumer.--The term `credit or insurance transaction that is not initiated by the consumer' does not include the use of a consumer report by a person with which the consumer has an account or insurance policy, for purposes of-- ``(1) reviewing the account or insurance policy; or

``(2) collecting the account.''.

(d) State.--Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) (as amended by subsection (c) of this section) is amended by adding at the end the following new subsection: ``(n) State.--The term `State' means any State, the Commonwealth of Puerto Rico, the District of Columbia, and any territory or possession of the United States.''. (e) Definition of Consumer Report.--Section 603(d) of the Fair Credit Reporting Act (15 U.S.C. 1681a(d)) is amended-- (1) by striking ``(d) The term'' and inserting the following:

``(d) Consumer Report.-- ``(1) In general.--The term''; (2) by striking ``for (1) credit'' and inserting the following: ``for-- ``(A) credit''; (3) by striking ``purposes, or (2)'' and all that follows through ``section 604.'' and inserting the following: ``purposes; ``(B) employment purposes; or ``(C) any other purpose authorized under section 604.''; and (4) by striking the second sentence and inserting the following: ``(2) Exclusions.--The term `consumer report' does not include-- ``(A) any-- ``(i) report containing information solely as to transactions or experiences between the consumer and the person making the report; ``(ii) communication of that information among persons related by common ownership or affiliated by corporate control; or ``(iii) any communication of other information among persons related by common ownership or affiliated by corporate control, if it is clearly and conspicuously disclosed to the consumer that the information may be communicated among such persons and the consumer is given the opportunity, before the time that the information is initially communicated, to direct that such information not be communicated among such persons; ``(B) any authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device; ``(C) any report in which a person who has been requested by a third party to make a specific extension of credit directly or indirectly to a consumer conveys his or her decision with respect to such request, if the third party advises the consumer of the name and address of the person to whom the request was made, and such person makes the disclosures to the consumer required under section 615; or ``(D) a communication described in subsection (o).''.

(f) Exclusion of Certain Communications by Employment Agencies From Definition of Consumer Report.--Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is amended by adding at the end the following new subsection:

``(o) Excluded Communications.--A communication is described in this subsection if it is a communication-- ``(1) that, but for subsection (d)(2)(E), would be an investigative consumer report; ``(2) that is made to a prospective employer for the purpose of-- ``(A) procuring an employee for the employer; or ``(B) procuring an opportunity for a natural person to work for the employer; ``(3) that is made by a person who regularly performs such procurement; ``(4) that is not used by any person for any purpose other than a purpose described in subparagraph (A) or (B) of paragraph (2); or ``(5) with respect to which-- ``(A) the consumer who is the subject of the communication-- ``(i) consents orally or in writing to the nature and scope of the communication, before the collection of any information for the purpose of making the communication; ``(ii) consents orally or in writing to the making of the communication to a prospective employer, before the making of the communication; and ``(iii) in the case of consent under clause (i) or (ii) given orally, is provided written confirmation of that consent by the person making the communication, not later than 3 business days after the receipt of the consent by that person; ``(B) the person who makes the communication does not, for the purpose of making the communication, make any inquiry that if made by a prospective employer of the consumer who is the subject of the communication would violate any applicable Federal or State equal employment opportunity law or regulation; and ``(C) the person who makes the communication-- ``(i) discloses in writing to the consumer who is the subject of the communication, not later than 5 business days after receiving any request from the consumer for such disclosure, the nature and substance of all information in the consumer's file at the time of the request, except that the sources of any information that is acquired solely for use in making the communication and is actually used for no other purpose, need not be disclosed other than under appropriate discovery procedures in any court of competent jurisdiction in which an action is brought; and ``(ii) notifies the consumer who is the subject of the communication, in writing, of the consumer's right to request the information described in clause (i).''.

(g) Consumer Reporting Agency That Compiles and Maintains Files on a Nationwide Basis.--Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) (as amended by subsection (f) of this section) is amended by adding at the end the following new subsection: ``(p) Consumer Reporting Agency That Compiles and Maintains Files on Consumers on a Nationwide Basis.--The term

`consumer reporting agency that compiles and maintains files on consumers on a nationwide basis' means a consumer reporting agency that regularly engages in the practice of assembling or evaluating, and maintaining, for the purpose of furnishing consumer reports to third parties bearing on a consumer's credit worthiness, credit standing, or credit capacity, each of the following regarding consumers residing nationwide: ``(1) Public record information. ``(2) Credit account information from persons who furnish that information regularly and in the ordinary course of business.''.

FURNISHING CONSUMER REPORTS; USE FOR EMPLOYMENT PURPOSES.

(a) Furnishing Consumer Reports for Business Transactions.--Section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b) is amended-- (1) by inserting ``(a) In General.--'' before ``A consumer reporting agency''; and (2) in subsection (a)(3) (as so designated by paragraph (1) of this subsection), by striking subparagraph (E) and inserting the following: ``(E) intends to use the information, as a potential investor or servicer, or current insurer, in connection with a valuation of, or an assessment of the credit or prepayment risks associated with, an existing credit obligation; or ``(F) otherwise has a legitimate business need for the information-- ``(i) in connection with a business transaction that is initiated by the consumer; or ``(ii) to review an account to determine whether the consumer continues to meet the terms of the account.''.

(b) Furnishing and Using Consumer Reports for Employment Purposes.-- Section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b) is amended by adding at the end the following new subsection: ``(b) Conditions for Furnishing and Using Consumer Reports for Employment Purposes.-- ``(1) Certification from user.--A consumer reporting agency may furnish a consumer report for employment purposes only if-- ``(A) the person who obtains such report from the agency certifies to the agency that-- ``(i) the person has complied with paragraph (2) with respect to the consumer report, and the person will comply with paragraph (3) with respect to the consumer report if paragraph (3) becomes applicable; and ``(ii) information from the consumer report will not be used in violation of any applicable Federal or State equal employment opportunity law or regulation; and ``(B) the consumer reporting agency provides with the report a summary of the consumer's rights under this title, as prescribed by the Federal Trade Commission under section 609(c)(3).

``(2) Disclosure to consumer.--A person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any consumer, unless-- ``(A) a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes; and ``(B) the consumer has authorized in writing the procurement of the report by that person. ``(3) Conditions on use for adverse actions.--In using a consumer report for employment purposes, before taking any adverse action based in whole or in part on the report, the person intending to take such adverse action shall provide to the consumer to whom the report relates-- ``(A) a copy of the report; and ``(B) a description in writing of the rights of the consumer under this title, as prescribed by the Federal Trade Commission under section 609(c)(3).''.

USE OF CONSUMER REPORTS FOR PRESCREENING; PROHIBITION ON UNAUTHORIZED OR UNCERTIFIED USE OF INFORMATION.

(a) In General.--Section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b) (as amended by section 2403 of this chapter) is amended-- (1) in subsection (a), by striking ``A consumer reporting agency'' and inserting ``Subject to subsection (c), any consumer reporting agency''; and (2) by adding at the end the following new subsections:

``(c) Furnishing Reports in Connection With Credit or Insurance Transactions That Are Not Initiated by the Consumer.-- ``(1) In general.--A consumer reporting agency may furnish a consumer report relating to any consumer pursuant to subparagraph (A) or (C) of subsection (a)(3) in connection with any credit or insurance transaction that is not initiated by the consumer only if-- ``(A) the consumer authorizes the agency to provide such report to such person; or ``(B)(i) the transaction consists of a firm offer of credit or insurance; ``(ii) the consumer reporting agency has complied with subsection (e); and ``(iii) there is not in effect an election by the consumer, made in accordance with subsection (e), to have the consumer's name and address excluded from lists of names provided by the agency pursuant to this paragraph. ``(2) Limits on information received under paragraph (1)(b).--A person may receive pursuant to paragraph (1)(B) only-- ``(A) the name and address of a consumer; ``(B) an identifier that is not unique to the consumer and that is used by the person solely for the purpose of verifying the identity of the consumer; and

``(C) other information pertaining to a consumer that does not identify the relationship or experience of the consumer with respect to a particular creditor or other entity. ``(3) Information regarding inquiries.--Except as provided in section 609(a)(5), a consumer reporting agency shall not furnish to any person a record of inquiries in connection with a credit or insurance transaction that is not initiated by a consumer.

``(d) Reserved ``(e) Election of Consumer To Be Excluded From Lists.-- ``(1) In general.--A consumer may elect to have the consumer's name and address excluded from any list provided by a consumer reporting agency under subsection (c)(1)(B) in connection with a credit or insurance transaction that is not initiated by the consumer, by notifying the agency in accordance with paragraph (2) that the consumer does not consent to any use of a consumer report relating to the consumer in connection with any credit or insurance transaction that is not initiated by the consumer. ``(2) Manner of notification.--A consumer shall notify a consumer reporting agency under paragraph (1)-- ``(A) through the notification system maintained by the agency under paragraph (5); or ``(B) by submitting to the agency a signed notice of election form issued by the agency for purposes of this subparagraph. ``(3) Response of agency after notification through system.--Upon receipt of notification of the election of a consumer under paragraph (1) through the notification system maintained by the agency under paragraph (5), a consumer reporting agency shall-- ``(A) inform the consumer that the election is effective only for the 2-year period following the election if the consumer does not submit to the agency a signed notice of election form issued by the agency for purposes of paragraph (2)(B); and ``(B) provide to the consumer a notice of election form, if requested by the consumer, not later than 5 business days after receipt of the notification of the election through the system established under paragraph (5), in the case of a request made at the time the consumer provides notification through the system. ``(4) Effectiveness of election.--An election of a consumer under paragraph (1)-- ``(A) shall be effective with respect to a consumer reporting agency beginning 5 business days after the date on which the consumer notifies the agency in accordance with paragraph (2); ``(B) shall be effective with respect to a consumer reporting agency-- ``(i) subject to subparagraph (C), during the 2-year period beginning 5 business days after the date on which the consumer notifies the agency of the election, in the case of an election for which a consumer notifies the agency only in accordance with paragraph (2)(A); or

``(ii) until the consumer notifies the agency under subparagraph (C), in the case of an election for which a consumer notifies the agency in accordance with paragraph (2)(B); ``(C) shall not be effective after the date on which the consumer notifies the agency, through the notification system established by the agency under paragraph (5), that the election is no longer effective; and ``(D) shall be effective with respect to each affiliate of the agency. ``(5) Notification system.-- ``(A) In general.--Each consumer reporting agency that, under subsection (c)(1)(B), furnishes a consumer report in connection with a credit or insurance transaction that is not initiated by a consumer, shall-- ``(i) establish and maintain a notification system, including a toll-free telephone number, which permits any consumer whose consumer report is maintained by the agency to notify the agency, with appropriate identification, of the consumer's election to have the consumer's name and address excluded from any such list of names and addresses provided by the agency for such a transaction; and ``(ii) publish by not later than 365 days after the date of enactment of the Consumer Credit Reporting Reform Act of 1996, and not less than annually thereafter, in a publication of general circulation in the area served by the agency-- ``(I) a notification that information in consumer files maintained by the agency may be used in connection with such transactions; and ``(II) the address and toll-free telephone number for consumers to use to notify the agency of the consumer's election under clause (i). ``(B) Establishment and maintenance as compliance.-- Establishment and maintenance of a notification system (including a toll-free telephone number) and publication by a consumer reporting agency on the agency's own behalf and on behalf of any of its affiliates in accordance with this paragraph is deemed to be compliance with this paragraph by each of those affiliates. ``(6) Notification system by agencies that operate nationwide.--Each consumer reporting agency that compiles and maintains files on consumers on a nationwide basis shall establish and maintain a notification system for purposes of paragraph (5) jointly with other such consumer reporting agencies.''.

(b) Use of Information Obtained From Reports.--Section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b) (as amended by subsection (a) of this section) is amended by adding at the end the following new subsection: ``(f) Certain Use or Obtaining of Information Prohibited.--A person shall not use or obtain a consumer report for any purpose unless-- ``(1) the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished under this section; and

``(2) the purpose is certified in accordance with section 607 by a prospective user of the report through a general or specific certification.''.

(c) FTC Guidelines Regarding Prescreening for Insurance Transactions.--The Federal Trade Commission may issue such guidelines as it deems necessary with respect to the use of consumer reports in connection with insurance transactions that are not initiated by the consumer pursuant to section 604(c) of the Fair Credit Reporting Act, as added by subsection (a) of this section.

CONTAINING MEDICAL INFORMATION.

Section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b) is amended by adding at the end the following new subsection: ``(g) Furnishing Reports Containing Medical Information.--A consumer reporting agency shall not furnish for employment purposes, or in connection with a credit or insurance transaction or a direct marketing transaction, a consumer report that contains medical information about a consumer, unless the consumer consents to the furnishing of the report.''.

REPORTS.

(a) Amendment to Large-Dollar Exception.--Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is amended-- (1) by inserting ``Information Excluded From Consumer Reports.--'' after ``(a)''; (2) in subsection (b)-- (A) in paragraph (1), by striking ``$50,000'' and inserting ``$150,000''; (B) in paragraph (2), by striking ``$50,000'' and inserting ``$150,000''; and (C) in paragraph (3), by striking ``$20,000'' and inserting ``$75,000''.

(b) Clarification of Reporting Period.--Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) (as amended by subsection (a) of this section) is amended by adding at the end the following new subsection: ``(c) Running of Reporting Period.-- ``(1) In general.--The 7-year period referred to in paragraphs (4) and (6) of subsection (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action. ``(2) Effective date.--Paragraph (1) shall apply only to items of information added to the file of a consumer on or after the date that is 455 days after the date of enactment of the Consumer Credit Reporting Reform Act of 1996.''.

(c) Additional Information on Bankruptcy Filings Required.--Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is amended by adding at the end the following new subsection: ``(d) Information Required To Be Disclosed.--Any consumer reporting agency that furnishes a consumer report that contains

information regarding any case involving the consumer that arises under title 11, United States Code, shall include in the report an identification of the chapter of such title 11 under which such case arises if provided by the source of the information. If any case arising or filed under title 11, United States Code, is withdrawn by the consumer before a final judgment, the consumer reporting agency shall include in the report that such case or filing was withdrawn upon receipt of documentation certifying such withdrawal.''. (d) Indication of Closure of Account; Indication of Dispute by Consumer.--Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is amended by adding at the end the following new subsections: ``(e) Indication of Closure of Account by Consumer.--If a consumer reporting agency is notified pursuant to section 623(a)(4) that a credit account of a consumer was voluntarily closed by the consumer, the agency shall indicate that fact in any consumer report that includes information related to the account. ``(f) Indication of Dispute by Consumer.--If a consumer reporting agency is notified pursuant to section 623(a)(3) that information regarding a consumer who was furnished to the agency is disputed by the consumer, the agency shall indicate that fact in each consumer report that includes the disputed information.''. (e) Conforming Amendments.-- (1) Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is amended in the section heading, by striking ``OBSOLETE INFORMATION'' and inserting ``REQUIREMENTS RELATING TO INFORMATION CONTAINED IN CONSUMER REPORTS''. (2) The table of sections for the Fair Credit Reporting Act (15 U.S.C. 1681a et seq.) is amended by striking the item relating to section 605 and inserting the following:

``605. Requirements relating to information contained in consumer reports.''.

(a) Disclosure of Consumer Reports by Users.--Section 607 of the Fair Credit Reporting Act (15 U.S.C. 1681e) is amended by adding at the end the following new subsection: ``(c) Disclosure of Consumer Reports by Users Allowed.--A consumer reporting agency may not prohibit a user of a consumer report furnished by the agency on a consumer from disclosing the contents of the report to the consumer, if adverse action against the consumer has been taken by the user based in whole or in part on the report.''. (b) Notice to Users and Providers of Information To Ensure Compliance.--Section 607 of the Fair Credit Reporting Act (15 U.S.C. 1681e) is amended by adding after subsection (c) (as added by subsection (a) of this section) the following new subsection: ``(d) Notice to Users and Furnishers of Information.-- ``(1) Notice requirement.--A consumer reporting agency shall provide to any person-- ``(A) who regularly and in the ordinary course of business furnishes information to the agency with respect to any consumer; or

``(B) to whom a consumer report is provided by the agency; a notice of such person's responsibilities under this title. ``(2) Content of notice.--The Federal Trade Commission shall prescribe the content of notices under paragraph (1), and a consumer reporting agency shall be in compliance with this subsection if it provides a notice under paragraph (1) that is substantially similar to the Federal Trade Commission prescription under this paragraph.''.

(c) Record of Identity of Users and Purposes Certified by Users of Reports.--Section 607 of the Fair Credit Reporting Act (15 U.S.C. 1681e) is amended by adding after subsection (d) (as added by subsection (b) of this section) the following new subsection: ``(e) Procurement of Consumer Report for Resale.-- ``(1) Disclosure.--A person may not procure a consumer report for purposes of reselling the report (or any information in the report) unless the person discloses to the consumer reporting agency that originally furnishes the report-- ``(A) the identity of the end-user of the report (or information); and ``(B) each permissible purpose under section 604 for which the report is furnished to the end-user of the report (or information). ``(2) Responsibilities of procurers for resale.--A person who procures a consumer report for purposes of reselling the report (or any information in the report) shall-- ``(A) establish and comply with reasonable procedures designed to ensure that the report (or information) is resold by the person only for a purpose for which the report may be furnished under section 604, including by requiring that each person to which the report (or information) is resold and that resells or provides the report (or information) to any other person-- ``(i) identifies each end user of the resold report (or information); ``(ii) certifies each purpose for which the report (or information) will be used; and ``(iii) certifies that the report (or information) will be used for no other purpose; and ``(B) before reselling the report, make reasonable efforts to verify the identifications and certifications made under subparagraph (A).''.

(a) All Information in Consumer's File Required To Be Disclosed.-- Section 609(a)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681g(a)(1)) is amended to read as follows: ``(1) All information in the consumer's file at the time of the request, except that nothing in this paragraph shall be construed to require a consumer reporting agency to disclose to a consumer any information concerning credit scores or any other risk scores or predictors relating to the consumer.''.

(b) More Information Concerning Recipients of Reports Required.-- Section 609(a)(3) of the Fair Credit Reporting Act (15 U.S.C. 1681g(a)) is amended to read as follows:

``(3)(A) Identification of each person (including each end- user identified under section 607(e)(1)) that procured a consumer report-- ``(i) for employment purposes, during the 2-year period preceding the date on which the request is made; or ``(ii) for any other purpose, during the 1-year period preceding the date on which the request is made. ``(B) An identification of a person under subparagraph (A) shall include-- ``(i) the name of the person or, if applicable, the trade name (written in full) under which such person conducts business; and ``(ii) upon request of the consumer, the address and telephone number of the person.''.

(c) Information Regarding Inquiries.--Section 609(a) of the Fair Credit Reporting Act (15 U.S.C. 1681g(a)) is amended by adding at the end the following new paragraph: ``(5) A record of all inquiries received by the agency during the 1-year period preceding the request that identified the consumer in connection with a credit or insurance transaction that was not initiated by the consumer.''.

(d) Summary of Rights Required To Be Included With Disclosure.-- (1) In general.--Section 609 of the Fair Credit Reporting Act (15 U.S.C. 1681g) is amended by adding at the end the following new subsection:

``(c) Summary of Rights Required To Be Included With Disclosure.-- ``(1) Summary of rights.--A consumer reporting agency shall provide to a consumer, with each written disclosure by the agency to the consumer under this section-- ``(A) a written summary of all of the rights that the consumer has under this title; and ``(B) in the case of a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis, a toll-free telephone number established by the agency, at which personnel are accessible to consumers during normal business hours. ``(2) Specific items required to be included.--The summary of rights required under paragraph (1) shall include-- ``(A) a brief description of this title and all rights of consumers under this title; ``(B) an explanation of how the consumer may exercise the rights of the consumer under this title; ``(C) a list of all Federal agencies responsible for enforcing any provision of this title and the address and any appropriate phone number of each such agency, in a form that will assist the consumer in selecting the appropriate agency; ``(D) a statement that the consumer may have additional rights under State law and that the consumer may wish to contact a State or local consumer protection agency or a State attorney general to learn of those rights; and ``(E) a statement that a consumer reporting agency is not required to remove accurate derogatory information from a consumer's file, unless the information is outdated under section 605 or cannot be verified.

``(3) Form of summary of rights.--For purposes of this subsection and any disclosure by a consumer reporting agency required under this title with respect to consumers' rights, the Federal Trade Commission (after consultation with each Federal agency referred to in section 621(b)) shall prescribe the form and content of any such disclosure of the rights of consumers required under this title. A consumer reporting agency shall be in compliance with this subsection if it provides disclosures under paragraph (1) that are substantially similar to the Federal Trade Commission prescription under this paragraph. ``(4) Effectiveness.--No disclosures shall be required under this subsection until the date on which the Federal Trade Commission prescribes the form and content of such disclosures under paragraph (3).''. (2) Technical amendment.--Section 606(a)(1)(B) of the Fair Credit Reporting Act (15 U.S.C. 1681d(a)(1)(B)) is amended by inserting ``and the written summary of the rights of the consumer prepared pursuant to section 609(c)'' before the semicolon.

(e) Form of Disclosures.-- (1) In general.--Subsections (a) and (b) of section 610 of the Fair Credit Reporting Act (15 U.S.C. 1681h) are amended to read as follows:

``(a) In General.-- ``(1) Proper identification.--A consumer reporting agency shall require, as a condition of making the disclosures required under section 609, that the consumer furnish proper identification. ``(2) Disclosure in writing.--Except as provided in subsection (b), the disclosures required to be made under section 609 shall be provided under that section in writing.

``(b) Other Forms of Disclosure.-- ``(1) In general.--If authorized by a consumer, a consumer reporting agency may make the disclosures required under 609-- ``(A) other than in writing; and ``(B) in such form as may be-- ``(i) specified by the consumer in accordance with paragraph (2); and ``(ii) available from the agency. ``(2) Form.--A consumer may specify pursuant to paragraph (1) that disclosures under section 609 shall be made-- ``(A) in person, upon the appearance of the consumer at the place of business of the consumer reporting agency where disclosures are regularly provided, during normal business hours, and on reasonable notice; ``(B) by telephone, if the consumer has made a written request for disclosure by telephone; ``(C) by electronic means, if available from the agency; or ``(D) by any other reasonable means that is available from the agency.''. (2) Simplified disclosure.--Not later than 90 days after the date of enactment of this Act, each consumer reporting agency shall develop a form on which such consumer reporting agency shall make the disclosures required under section 609(a)

of the Fair Credit Reporting Act, for the purpose of maximizing the comprehensibility and standardization of such disclosures. (3) Goals.--The Federal Trade Commission shall take appropriate action to assure that the goals of comprehensibility and standardization are achieved in accordance with paragraph (2). (4) Defamation.--Section 610(e) of the Fair Credit Reporting Act (15 U.S.C. 1681h(e)) is amended by inserting ``or based on information disclosed by a user of a consumer report to or for a consumer against whom the user has taken adverse action, based in whole or in part on the report'' before ``except''. (5) Conforming amendments.--The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended-- (A) in section 609(a), in the matter preceding paragraph (1), by striking ``and proper identification of any consumer'' and inserting ``, and subject to section 610(a)(1)''; (B) in section 610, in the section heading, by inserting ``AND FORM'' after ``CONDITIONS''; and (C) in the table of sections at the beginning of that Act, in the item relating to section 610, by inserting ``and form'' after ``conditions''.

INFORMATION IN A CONSUMER'S FILE.

(a) In General.--Section 611(a) of the Fair Credit Reporting Act (15 U.S.C. 1681i(a)) is amended to read as follows: ``(a) Reinvestigations of Disputed Information.-- ``(1) Reinvestigation required.-- ``(A) In general.--If the completeness or accuracy of any item of information contained in a consumer's file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly of such dispute, the agency shall reinvestigate free of charge and record the current status of the disputed information, or delete the item from the file in accordance with paragraph (5), before the end of the 30- day period beginning on the date on which the agency receives the notice of the dispute from the consumer. ``(B) Extension of period to reinvestigate.--Except as provided in subparagraph (C), the 30-day period described in subparagraph (A) may be extended for not more than 15 additional days if the consumer reporting agency receives information from the consumer during that 30-day period that is relevant to the reinvestigation. ``(C) Limitations on extension of period to reinvestigate.--Subparagraph (B) shall not apply to any reinvestigation in which, during the 30-day period described in subparagraph (A), the information that is the subject of the reinvestigation is found to be inaccurate or incomplete or the consumer reporting agency determines that the information cannot be verified. ``(2) Prompt notice of dispute to furnisher of information.-- ``(A) In general.--Before the expiration of the 5- business-day period beginning on the date on which a consumer reporting agency receives notice of a dispute from any consumer in accordance with paragraph (1), the agency

shall provide notification of the dispute to any person who provided any item of information in dispute, at the address and in the manner established with the person. The notice shall include all relevant information regarding the dispute that the agency has received from the consumer. ``(B) Provision of other information from consumer.--The consumer reporting agency shall promptly provide to the person who provided the information in dispute all relevant information regarding the dispute that is received by the agency from the consumer after the period referred to in subparagraph (A) and before the end of the period referred to in paragraph (1)(A). ``(3) Determination that dispute is frivolous or irrelevant.-- ``(A) In general.--Notwithstanding paragraph (1), a consumer reporting agency may terminate a reinvestigation of information disputed by a consumer under that paragraph if the agency reasonably determines that the dispute by the consumer is frivolous or irrelevant, including by reason of a failure by a consumer to provide sufficient information to investigate the disputed information. ``(B) Notice of determination.--Upon making any determination in accordance with subparagraph (A) that a dispute is frivolous or irrelevant, a consumer reporting agency shall notify the consumer of such determination not later than 5 business days after making such determination, by mail or, if authorized by the consumer for that purpose, by any other means available to the agency. ``(C) Contents of notice.--A notice under subparagraph (B) shall include-- ``(i) the reasons for the determination under subparagraph (A); and ``(ii) identification of any information required to investigate the disputed information, which may consist of a standardized form describing the general nature of such information. ``(4) Consideration of consumer information.--In conducting any reinvestigation under paragraph (1) with respect to disputed information in the file of any consumer, the consumer reporting agency shall review and consider all relevant information submitted by the consumer in the period described in paragraph (1)(A) with respect to such disputed information. ``(5) Treatment of inaccurate or unverifiable information.-- ``(A) In general.--If, after any reinvestigation under paragraph (1) of any information disputed by a consumer, an item of the information is found to be inaccurate or incomplete or cannot be verified, the consumer reporting agency shall promptly delete that item of information from the consumer's file or modify that item of information, as appropriate, based on the results of the reinvestigation. ``(B) Requirements relating to reinsertion of previously deleted material.-- ``(i) Certification of accuracy of information.--If any information is deleted from a consumer's file pursuant to subparagraph (A), the information may

not be reinserted in the file by the consumer reporting agency unless the person who furnishes the information certifies that the information is complete and accurate. ``(ii) Notice to consumer.--If any information that has been deleted from a consumer's file pursuant to subparagraph (A) is reinserted in the file, the consumer reporting agency shall notify the consumer of the reinsertion in writing not later than 5 business days after the reinsertion or, if authorized by the consumer for that purpose, by any other means available to the agency. ``(iii) Additional information.--As part of, or in addition to, the notice under clause (ii), a consumer reporting agency shall provide to a consumer in writing not later than 5 business days after the date of the reinsertion-- ``(I) a statement that the disputed information has been reinserted; ``(II) the business name and address of any furnisher of information contacted and the telephone number of such furnisher, if reasonably available, or of any furnisher of information that contacted the consumer reporting agency, in connection with the reinsertion of such information; and ``(III) a notice that the consumer has the right to add a statement to the consumer's file disputing the accuracy or completeness of the disputed information. ``(C) Procedures to prevent reappearance.--A consumer reporting agency shall maintain reasonable procedures designed to prevent the reappearance in a consumer's file, and in consumer reports on the consumer, of information that is deleted pursuant to this paragraph (other than information that is reinserted in accordance with subparagraph (B)(i)). ``(D) Automated reinvestigation system.--Any consumer reporting agency that compiles and maintains files on consumers on a nationwide basis shall implement an automated system through which furnishers of information to that consumer reporting agency may report the results of a reinvestigation that finds incomplete or inaccurate information in a consumer's file to other such consumer reporting agencies. ``(6) Notice of results of reinvestigation.-- ``(A) In general.--A consumer reporting agency shall provide written notice to a consumer of the results of a reinvestigation under this subsection not later than 5 business days after the completion of the reinvestigation, by mail or, if authorized by the consumer for that purpose, by other means available to the agency. ``(B) Contents.--As part of, or in addition to, the notice under subparagraph (A), a consumer reporting agency shall provide to a consumer in writing before the expiration of the 5-day period referred to in subparagraph (A)--

``(i) a statement that the reinvestigation is completed; ``(ii) a consumer report that is based upon the consumer's file as that file is revised as a result of the reinvestigation; ``(iii) a notice that, if requested by the consumer, a description of the procedure used to determine the accuracy and completeness of the information shall be provided to the consumer by the agency, including the business name and address of any furnisher of information contacted in connection with such information and the telephone number of such furnisher, if reasonably available; ``(iv) a notice that the consumer has the right to add a statement to the consumer's file disputing the accuracy or completeness of the information; and ``(v) a notice that the consumer has the right to request under subsection (d) that the consumer reporting agency furnish notifications under that subsection. ``(7) Description of reinvestigation procedure.--A consumer reporting agency shall provide to a consumer a description referred to in paragraph (6)(B)(iv) by not later than 15 days after receiving a request from the consumer for that description. ``(8) Expedited dispute resolution.--If a dispute regarding an item of information in a consumer's file at a consumer reporting agency is resolved in accordance with paragraph (5)(A) by the deletion of the disputed information by not later than 3 business days after the date on which the agency receives notice of the dispute from the consumer in accordance with paragraph (1)(A), then the agency shall not be required to comply with paragraphs (2), (6), and (7) with respect to that dispute if the agency-- ``(A) provides prompt notice of the deletion to the consumer by telephone; ``(B) includes in that notice, or in a written notice that accompanies a confirmation and consumer report provided in accordance with subparagraph (C), a statement of the consumer's right to request under subsection (d) that the agency furnish notifications under that subsection; and ``(C) provides written confirmation of the deletion and a copy of a consumer report on the consumer that is based on the consumer's file after the deletion, not later than 5 business days after making the deletion.''.

(b) Conforming Amendment.--Section 611(d) of the Fair Credit Reporting Act (15 U.S.C. 1681i(d)) is amended by striking ``The consumer reporting agency shall clearly'' and all that follows through the end of the subsection.

Section 612 of the Fair Credit Reporting Act (15 U.S.C. 1681j) is amended to read as follows:

``SEC. 612. CHARGES FOR CERTAIN DISCLOSURES.

``(a) Reasonable Charges Allowed for Certain Disclosures.--

``(1) In general.--Except as provided in subsections (b), (c), and (d), a consumer reporting agency may impose a reasonable charge on a consumer-- ``(A) for making a disclosure to the consumer pursuant to section 609, which charge-- ``(i) shall not exceed $8; and ``(ii) shall be indicated to the consumer before making the disclosure; and ``(B) for furnishing, pursuant to section 611(d), following a reinvestigation under section 611(a), a statement, codification, or summary to a person designated by the consumer under that section after the 30-day period beginning on the date of notification of the consumer under paragraph (6) or (8) of section 611(a) with respect to the reinvestigation, which charge-- ``(i) shall not exceed the charge that the agency would impose on each designated recipient for a consumer report; and ``(ii) shall be indicated to the consumer before furnishing such information. ``(2) Modification of amount.--The Federal Trade Commission shall increase the amount referred to in paragraph (1)(A)(i) on January 1 of each year, based proportionally on changes in the Consumer Price Index, with fractional changes rounded to the nearest fifty cents.

``(b) Free Disclosure After Adverse Notice to Consumer.--Each consumer reporting agency that maintains a file on a consumer shall make all disclosures pursuant to section 609 without charge to the consumer if, not later than 60 days after receipt by such consumer of a notification pursuant to section 615, or of a notification from a debt collection agency affiliated with that consumer reporting agency stating that the consumer's credit rating may be or has been adversely affected, the consumer makes a request under section 609. ``(c) Free Disclosure Under Certain Other Circumstances.--Upon the request of the consumer, a consumer reporting agency shall make all disclosures pursuant to section 609 once during any 12-month period without charge to that consumer if the consumer certifies in writing that the consumer-- ``(1) is unemployed and intends to apply for employment in the 60-day period beginning on the date on which the certification is made; ``(2) is a recipient of public welfare assistance; or ``(3) has reason to believe that the file on the consumer at the agency contains inaccurate information due to fraud.

``(d) Other Charges Prohibited.--A consumer reporting agency shall not impose any charge on a consumer for providing any notification required by this title or making any disclosure required by this title, except as authorized by subsection (a).''.

(a) Duties of Users Taking Adverse Actions.--Section 615(a) of the Fair Credit Reporting Act (15 U.S.C. 1681m(a)) is amended to read as follows: ``(a) Duties of Users Taking Adverse Actions on the Basis of Information Contained in Consumer Reports.--If any person takes any adverse action with respect to any consumer that is

based in whole or in part on any information contained in a consumer report, the person shall-- ``(1) provide oral, written, or electronic notice of the adverse action to the consumer; ``(2) provide to the consumer orally, in writing, or electronically-- ``(A) the name, address, and telephone number of the consumer reporting agency (including a toll-free telephone number established by the agency if the agency compiles and maintains files on consumers on a nationwide basis) that furnished the report to the person; and ``(B) a statement that the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken; and ``(3) provide to the consumer an oral, written, or electronic notice of the consumer's right-- ``(A) to obtain, under section 612, a free copy of a consumer report on the consumer from the consumer reporting agency referred to in paragraph (2), which notice shall include an indication of the 60-day period under that section for obtaining such a copy; and ``(B) to dispute, under section 611, with a consumer reporting agency the accuracy or completeness of any information in a consumer report furnished by the agency.''.

(b) Duties of Users Making Certain Credit Solicitations.--Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is amended by adding at the end the following new subsection: ``(d) Duties of Users Making Written Credit or Insurance Solicitations on the Basis of Information Contained in Consumer Files.-- ``(1) In general.--Any person who uses a consumer report on any consumer in connection with any credit or insurance transaction that is not initiated by the consumer, that is provided to that person under section 604(c)(1)(B), shall provide with each written solicitation made to the consumer regarding the transaction a clear and conspicuous statement that-- ``(A) information contained in the consumer's consumer report was used in connection with the transaction; ``(B) the consumer received the offer of credit or insurance because the consumer satisfied the criteria for credit worthiness or insurability under which the consumer was selected for the offer; ``(C) if applicable, the credit or insurance may not be extended if, after the consumer responds to the offer, the consumer does not meet the criteria used to select the consumer for the offer or any applicable criteria bearing on credit worthiness or insurability or does not furnish any required collateral; ``(D) the consumer has a right to prohibit information contained in the consumer's file with any consumer reporting agency from being used in connection with any credit or insurance transaction that is not initiated by the consumer; and ``(E) the consumer may exercise the right referred to in subparagraph (D) by notifying a notification system established under section 604(e).

``(2) Disclosure of address and telephone number.--A statement under paragraph (1) shall include the address and toll-free telephone number of the appropriate notification system established under section 604(e). ``(3) Maintaining criteria on file.--A person who makes an offer of credit or insurance to a consumer under a credit or insurance transaction described in paragraph (1) shall maintain on file the criteria used to select the consumer to receive the offer, all criteria bearing on credit worthiness or insurability, as applicable, that are the basis for determining whether or not to extend credit or insurance pursuant to the offer, and any requirement for the furnishing of collateral as a condition of the extension of credit or insurance, until the expiration of the 3-year period beginning on the date on which the offer is made to the consumer. ``(4) Authority of federal agencies regarding unfair or deceptive acts or practices not affected.--This section is not intended to affect the authority of any Federal or State agency to enforce a prohibition against unfair or deceptive acts or practices, including the making of false or misleading statements in connection with a credit or insurance transaction that is not initiated by the consumer.''.

(c) Duties of Users Making Other Solicitations.--Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is amended by adding at the end the following new subsection: ``(e)

(d) Conforming Amendment.--Section 615(c) of the Fair Credit Reporting Act (15 U.S.C. 1681m(c)) is amended by striking ``subsections (a) and (b)'' and inserting ``this section''. (e) Duties of Person Taking Certain Actions Based on Information Provided by Affiliate.--Section 615(b) of the Fair Credit Reporting Act (15 U.S.C. 1681m(b)) is amended-- (1) by striking ``(b) Whenever credit'' and inserting the following:

``(b) Adverse Action Based on Information Obtained From Third Parties Other Than Consumer Reporting Agencies.-- ``(1) In general.--Whenever credit''; (2) by adding at the end the following new paragraph: ``(2) Duties of person taking certain actions based on information provided by affiliate.-- ``(A) Duties, generally.--If a person takes an action described in subparagraph (B) with respect to a consumer, based in whole or in part on information described in subparagraph (C), the person shall-- ``(i) notify the consumer of the action, including a statement that the consumer may obtain the information in accordance with clause (ii); and ``(ii) upon a written request from the consumer received within 60 days after transmittal of the notice required by clause (i), disclose to the consumer the nature of the information upon which the action is based by not later than 30 days after receipt of the request. ``(B) Action described.--An action referred to in subparagraph (A) is an adverse action described in section

603(k)(1)(A), taken in connection with a transaction initiated by the consumer, or any adverse action described in clause (i) or (ii) of section 603(k)(1)(B). ``(C) Information described.--Information referred to in subparagraph (A)-- ``(i) except as provided in clause (ii), is information that-- ``(I) is furnished to the person taking the action by a person related by common ownership or affiliated by common corporate control to the person taking the action; and ``(II) bears on the credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living of the consumer; and ``(ii) does not include-- ``(I) information solely as to transactions or experiences between the consumer and the person furnishing the information; or ``(II) information in a consumer report.''.

(a) Civil Liability for Willful Noncompliance.--Section 616 of the Fair Credit Reporting Act (15 U.S.C. 1681n) is amended by striking ``Any consumer reporting agency or user of information which'' and inserting ``(a) In General.--Any person who''. (b) Minimum Civil Liability for Willful Noncompliance.--Section 616(a)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681n(1)), as so designated by subsection (a) of this section, is amended to read as follows: ``(1)(A) any actual damages sustained by the consumer as a result of the failure or damages of not less than $100 and not more than $1,000; or ``(B) in the case of liability of a natural person for obtaining a consumer report under false pretenses or knowingly without a permissible purpose, actual damages sustained by the consumer as a result of the failure or $1,000, whichever is greater;''.

(c) Civil Liability for Knowing Noncompliance.--Section 616 of the Fair Credit Reporting Act (15 U.S.C. 1681n) is amended by adding at the end the following new subsection: ``(b) Civil Liability for Knowing Noncompliance.--Any person who obtains a consumer report from a consumer reporting agency under false pretenses or knowingly without a permissible purpose shall be liable to the consumer reporting agency for actual damages sustained by the consumer reporting agency or $1,000, whichever is greater.''. (d) Civil Liability for Negligent Noncompliance.--Section 617 of the Fair Credit Reporting Act (15 U.S.C. 1681o) is amended by striking ``Any consumer reporting agency or user of information which'' and inserting ``(a) In General.--Any person who''. (e) Attorney's Fees.-- (1) Willful noncompliance.--Section 616 of the Fair Credit Reporting Act (15 U.S.C. 1681n) is amended by adding at the end the following new subsection:

``(c) Attorney's Fees.--Upon a finding by the court that an unsuccessful pleading, motion, or other paper filed in connection

with an action under this section was filed in bad faith or for purposes of harassment, the court shall award to the prevailing party attorney's fees reasonable in relation to the work expended in responding to the pleading, motion, or other paper.''. (2) Negligent noncompliance.--Section 617 of the Fair Credit Reporting Act (15 U.S.C. 1681o) is amended by adding at the end the following new subsection:

``(b) Attorney's Fees.--On a finding by the court that an unsuccessful pleading, motion, or other paper filed in connection with an action under this section was filed in bad faith or for purposes of harassment, the court shall award to the prevailing party attorney's fees reasonable in relation to the work expended in responding to the pleading, motion, or other paper.''.

CONSUMER REPORTING AGENCIES.

(a) In General.--The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended-- (1) by redesignating section 623 as section 624; and (2) by inserting after section 622 the following:

``SEC. 623. RESPONSIBILITIES OF FURNISHERS OF INFORMATION TO CONSUMER REPORTING AGENCIES.

``(a) Duty of Furnishers of Information To Provide Accurate Information.-- ``(1) Prohibition.-- ``(A) Reporting information with actual knowledge of errors.--A person shall not furnish any information relating to a consumer to any consumer reporting agency if the person knows or consciously avoids knowing that the information is inaccurate. ``(B) Reporting information after notice and confirmation of errors.--A person shall not furnish information relating to a consumer to any consumer reporting agency if-- ``(i) the person has been notified by the consumer, at the address specified by the person for such notices, that specific information is inaccurate; and ``(ii) the information is, in fact, inaccurate. ``(C) No address requirement.--A person who clearly and conspicuously specifies to the consumer an address for notices referred to in subparagraph (B) shall not be subject to subparagraph (A); however, nothing in subparagraph (B) shall require a person to specify such an address. ``(2) Duty to correct and update information.--A person who-- ``(A) regularly and in the ordinary course of business furnishes information to one or more consumer reporting agencies about the person's transactions or experiences with any consumer; and ``(B) has furnished to a consumer reporting agency information that the person determines is not complete or accurate,

shall promptly notify the consumer reporting agency of that determination and provide to the agency any corrections to that information, or any additional information, that is necessary to make the information provided by the person to

the agency complete and accurate, and shall not thereafter furnish to the agency any of the information that remains not complete or accurate. ``(3) Duty to provide notice of dispute.--If the completeness or accuracy of any information furnished by any person to any consumer reporting agency is disputed to such person by a consumer, the person may not furnish the information to any consumer reporting agency without notice that such information is disputed by the consumer. ``(4) Duty to provide notice of closed accounts.--A person who regularly and in the ordinary course of business furnishes information to a consumer reporting agency regarding a consumer who has a credit account with that person shall notify the agency of the voluntary closure of the account by the consumer, in information regularly furnished for the period in which the account is closed. ``(5) Duty to provide notice of delinquency of accounts.--A person who furnishes information to a consumer reporting agency regarding a delinquent account being placed for collection, charged to profit or loss, or subjected to any similar action shall, not later than 90 days after furnishing the information, notify the agency of the month and year of the commencement of the delinquency that immediately preceded the action.

``(b) Duties of Furnishers of Information Upon Notice of Dispute.-- ``(1) In general.--After receiving notice pursuant to section 611(a)(2) of a dispute with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency, the person shall-- ``(A) conduct an investigation with respect to the disputed information; ``(B) review all relevant information provided by the consumer reporting agency pursuant to section 611(a)(2); ``(C) report the results of the investigation to the consumer reporting agency; and ``(D) if the investigation finds that the information is incomplete or inaccurate, report those results to all other consumer reporting agencies to which the person furnished the information and that compile and maintain files on consumers on a nationwide basis. ``(2) Deadline.--A person shall complete all investigations, reviews, and reports required under paragraph (1) regarding information provided by the person to a consumer reporting agency, before the expiration of the period under section 611(a)(1) within which the consumer reporting agency is required to complete actions required by that section regarding that information.

``(c) Limitation on Liability.--Sections 616 and 617 do not apply to any failure to comply with subsection (a), except as provided in section 621(c)(1)(B). ``(d) Limitation on Enforcement.--Subsection (a) shall be enforced exclusively under section 621 by the Federal agencies and officials and the State officials identified in that section.''. (b) Conforming Amendment.--The table of sections at the beginning of the Fair Credit Reporting Act (15 U.S.C. 1681a et

seq.) is amended by striking the item relating to section 623 and inserting the following:

``623. Responsibilities of furnishers of information to consumer reporting agencies. ``624. Relation to State laws.''.

Section 606 of the Fair Credit Reporting Act (15 U.S.C. 1681d) is amended-- (1) in subsection (a)(1), by striking ``or'' at the end and inserting ``and''; (2) by striking subsection (a)(2) and inserting the following: ``(2) the person certifies or has certified to the consumer reporting agency that-- ``(A) the person has made the disclosures to the consumer required by paragraph (1); and ``(B) the person will comply with subsection (b).''; (3) in subsection (b), by striking ``shall'' the second place such term appears; and (4) by adding at the end the following new subsection:

``(d) Prohibitions.-- ``(1) Certification.--A consumer reporting agency shall not prepare or furnish an investigative consumer report unless the agency has received a certification under subsection (a)(2) from the person who requested the report. ``(2) Inquiries.--A consumer reporting agency shall not make an inquiry for the purpose of preparing an investigative consumer report on a consumer for employment purposes if the making of the inquiry by an employer or prospective employer of the consumer would violate any applicable Federal or State equal employment opportunity law or regulation. ``(3) Certain public record information.--Except as otherwise provided in section 613, a consumer reporting agency shall not furnish an investigative consumer report that includes information that is a matter of public record and that relates to an arrest, indictment, conviction, civil judicial action, tax lien, or outstanding judgment, unless the agency has verified the accuracy of the information during the 30-day period ending on the date on which the report is furnished. ``(4) Certain adverse information.--A consumer reporting agency shall not prepare or furnish an investigative consumer report on a consumer that contains information that is adverse to the interest of the consumer and that is obtained through a personal interview with a neighbor, friend, or associate of the consumer or with another person with whom the consumer is acquainted or who has knowledge of such item of information, unless-- ``(A) the agency has followed reasonable procedures to obtain confirmation of the information, from an additional source that has independent and direct knowledge of the information; or ``(B) the person interviewed is the best possible source of the information.''.

FALSE PRETENSES.

(a) Obtaining Information Under False Pretenses.--Section 619 of the Fair Credit Reporting Act (15 U.S.C. 1681q) is amended by striking ``fined not more than $5,000 or imprisoned not more than one year, or both'' and inserting ``fined under title 18, United States Code, imprisoned for not more than 2 years, or both''. (b) Unauthorized Disclosures by Officers or Employees.--Section 620 of the Fair Credit Reporting Act (15 U.S.C. 1681r) is amended by striking ``fined not more than $5,000 or imprisoned not more than one year, or both'' and inserting ``fined under title 18, United States Code, imprisoned for not more than 2 years, or both''.

(a) Available Enforcement Powers.--Section 621(a) of the Fair Credit Reporting Act (15 U.S.C. 1681s(a)) is amended-- (1) by inserting ``(1)'' after ``(a)''; (2) by adding at the end the following new paragraph:

``(2)(A) In the event of a knowing violation, which constitutes a pattern or practice of violations of this title, the Commission may commence a civil action to recover a civil penalty in a district court of the United States against any person that violates this title. In such action, such person shall be liable for a civil penalty of not more than $2,500 per violation. ``(B) In determining the amount of a civil penalty under subparagraph (A), the court shall take into account the degree of culpability, any history of prior such conduct, ability to pay, effect on ability to continue to do business, and such other matters as justice may require. ``(3) Notwithstanding paragraph (2), a court may not impose any civil penalty on a person for a violation of section 623(a)(1) unless the person has been enjoined from committing the violation, or ordered not to commit the violation, in an action or proceeding brought by or on behalf of the Federal Trade Commission, and has violated the injunction or order, and the court may not impose any civil penalty for any violation occurring before the date of the violation of the injunction or order. ``(4) Neither the Commission nor any other agency referred to in subsection (b) may prescribe trade regulation rules or other regulations with respect to this title.''. (b) Agencies Responsible for Enforcement.--Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s) is amended-- (1) in subsection (a), by inserting ``Enforcement by Federal Trade Commission.--'' before ``Compliance with the requirements''; (2) in subsection (b), by striking the matter preceding paragraph (1) and inserting the following:

``(b) Enforcement by Other Agencies.--Compliance with the requirements imposed under this title with respect to consumer reporting agencies, persons who use consumer reports from such agencies, persons who furnish information to such agencies, and users of information that are subject to subsection (d) or (e) of section 615 shall be enforced under--''; and

(3) in subsection (c), by adding at the end the following: ``Notwithstanding the preceding, no agency referred to in subsection (b) may conduct an examination of a bank, savings association, or credit union regarding compliance with the provisions of this title, except in response to a complaint (or if the agency otherwise has knowledge) that the bank, savings association, or credit union has violated a provision of this title, in which case, the agency may conduct an examination as necessary to investigate the complaint. If an agency determines during an investigation in response to a complaint that a violation of this title has occurred, the agency may, during its next 2 regularly scheduled examinations of the bank, savings association, or credit union, examine for compliance with this title.''.

Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s) is amended-- (1) by redesignating subsection (c) as subsection (d); and (2) by inserting after subsection (b) the following new subsection:

``(c) State Action for Violations.-- ``(1) Authority of states.--In addition to such other remedies as are provided under State law, if the chief law enforcement officer of a State, or an official or agency designated by a State, has reason to believe that any person has violated or is violating this title, the State-- ``(A) may bring an action to enjoin such violation in any appropriate United States district court or in any other court of competent jurisdiction; ``(B) subject to paragraph (5), may bring an action on behalf of the residents of the State to recover-- ``(i) damages for which the person is liable to such residents under sections 616 and 617 as a result of the violation; ``(ii) in the case of a violation of section 623(a), damages for which the person would, but for section 623(c), be liable to such residents as a result of the violation; or ``(iii) damages of not more than $1,000 for each willful or negligent violation; and ``(C) in the case of any successful action under subparagraph (A) or (B), shall be awarded the costs of the action and reasonable attorney fees as determined by the court. ``(2) Rights of federal regulators.--The State shall serve prior written notice of any action under paragraph (1) upon the Federal Trade Commission or the appropriate Federal regulator determined under subsection (b) and provide the Commission or appropriate Federal regulator with a copy of its complaint, except in any case in which such prior notice is not feasible, in which case the State shall serve such notice immediately upon instituting such action. The Federal Trade Commission or appropriate Federal regulator shall have the right-- ``(A) to intervene in the action; ``(B) upon so intervening, to be heard on all matters arising therein;

``(C) to remove the action to the appropriate United States district court; and ``(D) to file petitions for appeal. ``(3) Investigatory powers.--For purposes of bringing any action under this subsection, nothing in this subsection shall prevent the chief law enforcement officer, or an official or agency designated by a State, from exercising the powers conferred on the chief law enforcement officer or such official by the laws of such State to conduct investigations or to administer oaths or affirmations or to compel the attendance of witnesses or the production of documentary and other evidence. ``(4) Limitation on state action while federal action pending.--If the Federal Trade Commission or the appropriate Federal regulator has instituted a civil action or an administrative action under section 8 of the Federal Deposit Insurance Act for a violation of this title, no State may, during the pendency of such action, bring an action under this section against any defendant named in the complaint of the Commission or the appropriate Federal regulator for any violation of this title that is alleged in that complaint. ``(5) Limitations on state actions for violation of section 623(a)(1).-- ``(A) Violation of injunction required.--A State may not bring an action against a person under paragraph (1)(B) for a violation of section 623(a)(1), unless-- ``(i) the person has been enjoined from committing the violation, in an action brought by the State under paragraph (1)(A); and ``(ii) the person has violated the injunction. ``(B) Limitation on damages recoverable.--In an action against a person under paragraph (1)(B) for a violation of section 623(a)(1), a State may not recover any damages incurred before the date of the violation of an injunction on which the action is based.''.

Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s) is amended by adding at the end the following new subsection: ``(e) Interpretive Authority.--The Board of Governors of the Federal Reserve System may issue interpretations of any provision of this title as such provision may apply to any persons identified under paragraph (1), (2), and (3) of subsection (b), or to the holding companies and affiliates of such persons, in consultation with Federal agencies identified in paragraphs (1), (2), and (3) of subsection (b).''.

Section 624 of the Fair Credit Reporting Act (as redesignated by section 2413(a) of this chapter) is amended-- (1) by striking ``This title'' and inserting ``(a) In General.--Except as provided in subsections (b) and (c), this title''; and (2) by adding at the end the following new subsection:

``(b) General Exceptions.--No requirement or prohibition may be imposed under the laws of any State-- ``(1) with respect to any subject matter regulated under-- ``(A) subsection (c) or (e) of section 604, relating to the prescreening of consumer reports;

``(B) section 611, relating to the time by which a consumer reporting agency must take any action, including the provision of notification to a consumer or other person, in any procedure related to the disputed accuracy of information in a consumer's file, except that this subparagraph shall not apply to any State law in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996; ``(C) subsections (a) and (b) of section 615, relating to the duties of a person who takes any adverse action with respect to a consumer; ``(D) section 615(d), relating to the duties of persons who use a consumer report of a consumer in connection with any credit or insurance transaction that is not initiated by the consumer and that consists of a firm offer of credit or insurance; ``(E) section 605, relating to information contained in consumer reports, except that this subparagraph shall not apply to any State law in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996; or ``(F) section 623, relating to the responsibilities of persons who furnish information to consumer reporting agencies, except that this paragraph shall not apply-- ``(i) with respect to section 54A(a) of chapter 93 of the Massachusetts Annotated Laws (as in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996); or ``(ii) with respect to section 1785.25(a) of the California Civil Code (as in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996); ``(2) with respect to the exchange of information among persons affiliated by common ownership or common corporate control, except that this paragraph shall not apply with respect to subsection (a) or (c)(1) of section 2480e of title 9, Vermont Statutes Annotated (as in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996); or ``(3) with respect to the form and content of any disclosure required to be made under section 609(c).

``(c) Definition of Firm Offer of Credit or Insurance.-- Notwithstanding any definition of the term `firm offer of credit or insurance' (or any equivalent term) under the laws of any State, the definition of that term contained in section 603(l) shall be construed to apply in the enforcement and interpretation of the laws of any State governing consumer reports. ``(d) Limitations.--Subsections (b) and (c)-- ``(1) do not affect any settlement, agreement, or consent judgment between any State Attorney General and any consumer reporting agency in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996; and ``(2) do not apply to any provision of State law (including any provision of a State constitution) that-- ``(A) is enacted after January 1, 2004; ``(B) states explicitly that the provision is intended to supplement this title; and

``(C) gives greater protection to consumers than is provided under this title.''.

(a) In General.--Except as otherwise specifically provided in this chapter, the amendments made by this chapter shall become effective 365 days after the date of enactment of this Act. (b) Early Compliance.--Any person or other entity that is subject to the requirements of this chapter may, at its option, comply with any provision of this chapter before the date on which that provision becomes effective under this chapter, in which case, each of the corresponding provisions of this chapter shall be fully applicable to such person or entity.

Nothing in this chapter or the amendments made by this chapter shall be considered to supersede or otherwise affect section 2721 of title 18, United States Code, with respect to motor vehicle records for surveys, marketing, or solicitations.

(a) Study Required.--The Board of Governors of the Federal Reserve System, in consultation with the other Federal banking agencies (as defined in section 3 of the Federal Deposit Insurance Act) and the Federal Trade Commission, shall conduct a study of whether organizations which, as of the date of the enactment of this Act, are not subject to the Fair Credit Reporting Act as consumer reporting agencies (as defined in section 603 of such Act) are engaged in the business of making sensitive consumer identification information, including social security numbers, mothers' maiden names, prior addresses, and dates of birth, available to the general public. (b) Determination of Potential for Fraud.--If the Board of Governors of the Federal Reserve System determines that organizations referred to in subsection (a) are engaged in the business of making sensitive consumer identification information available to the general public, the Board shall determine-- (1) whether such activities create undue potential for fraud and risk of loss to insured depository institutions (as defined in section 3 of the Federal Deposit Insurance Act); and (2) if so, whether changes in Federal law are necessary to address such risks of fraud and loss.

(c) Report to Congress.--Before the end of the 6-month period beginning on the date of the enactment of this Act, the Board of Governors of the Federal Reserve System shall submit a report to the Congress containing-- (1) the findings and conclusion of the Board in connection with the study required under subsections (a) and (b); and (2) recommendations for such legislative or administrative action as the Board determines to be appropriate.

CHAPTER 2--CREDIT REPAIR ORGANIZATIONS

Title IV of the Consumer Credit Protection Act (Public Law 90-321, 82 Stat. 164) is amended to read as follows:

``TITLE IV--CREDIT REPAIR ORGANIZATIONS ``Sec. ``401. Short title. ``402. Findings and purposes. ``403. Definitions. ``404. Prohibited practices. ``405. Disclosures. ``406. Credit repair organizations contracts. ``407. Right to cancel contract. ``408. Noncompliance with this title. ``409. Civil liability. ``410. Administrative enforcement. ``411. Statute of limitations. ``412. Relation to State law. ``413. Effective date.

``SEC. 401. SHORT TITLE.

``This title may be cited as the `Credit Repair Organizations Act'.

``SEC. 402. FINDINGS AND PURPOSES.

``(a) Findings.--The Congress makes the following findings: ``(1) Consumers have a vital interest in establishing and maintaining their credit worthiness and credit standing in order to obtain and use credit. As a result, consumers who have experienced credit problems may seek assistance from credit repair organizations which offer to improve the credit standing of such consumers. ``(2) Certain advertising and business practices of some companies engaged in the business of credit repair services have worked a financial hardship upon consumers, particularly those of limited economic means and who are inexperienced in credit matters.

``(b) Purposes.--The purposes of this title are-- ``(1) to ensure that prospective buyers of the services of credit repair organizations are provided with the information necessary to make an informed decision regarding the purchase of such services; and ``(2) to protect the public from unfair or deceptive advertising and business practices by credit repair organizations.

``SEC. 403. DEFINITIONS.

``For purposes of this title, the following definitions apply: ``(1) Consumer.--The term `consumer' means an individual. ``(2) Consumer credit transaction.--The term `consumer credit transaction' means any transaction in which credit is offered or extended to an individual for personal, family, or household purposes. ``(3) Credit repair organization.--The term `credit repair organization'--

``(A) means any person who uses any instrumentality of interstate commerce or the mails to sell, provide, or perform (or represent that such person can or will sell, provide, or perform) any service, in return for the payment of money or other valuable consideration, for the express or implied purpose of-- ``(i) improving any consumer's credit record, credit history, or credit rating; or ``(ii) providing advice or assistance to any consumer with regard to any activity or service described in clause (i); and ``(B) does not include-- ``(i) any nonprofit organization which is exempt from taxation under section 501(c)(3) of the Internal Revenue Code of 1986; ``(ii) any creditor (as defined in section 103 of the Truth in Lending Act), with respect to any consumer, to the extent the creditor is assisting the consumer to restructure any debt owed by the consumer to the creditor; or ``(iii) any depository institution (as that term is defined in section 3 of the Federal Deposit Insurance Act) or any Federal or State credit union (as those terms are defined in section 101 of the Federal Credit Union Act), or any affiliate or subsidiary of such a depository institution or credit union. ``(4) Credit.--The term `credit' has the meaning given to such term in section 103(e) of this Act.

``SEC. 404. PROHIBITED PRACTICES.

``(a) In General.--No person may-- ``(1) make any statement, or counsel or advise any consumer to make any statement, which is untrue or misleading (or which, upon the exercise of reasonable care, should be known by the credit repair organization, officer, employee, agent, or other person to be untrue or misleading) with respect to any consumer's credit worthiness, credit standing, or credit capacity to-- ``(A) any consumer reporting agency (as defined in section 603(f) of this Act); or ``(B) any person-- ``(i) who has extended credit to the consumer; or ``(ii) to whom the consumer has applied or is applying for an extension of credit; ``(2) make any statement, or counsel or advise any consumer to make any statement, the intended effect of which is to alter the consumer's identification to prevent the display of the consumer's credit record, history, or rating for the purpose of concealing adverse information that is accurate and not obsolete to-- ``(A) any consumer reporting agency; ``(B) any person-- ``(i) who has extended credit to the consumer; or ``(ii) to whom the consumer has applied or is applying for an extension of credit; ``(3) make or use any untrue or misleading representation of the services of the credit repair organization; or

``(4) engage, directly or indirectly, in any act, practice, or course of business that constitutes or results in the commission of, or an attempt to commit, a fraud or deception on any person in connection with the offer or sale of the services of the credit repair organization.

``(b) Payment in Advance.--No credit repair organization may charge or receive any money or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed.

``SEC. 405. DISCLOSURES.

``(a) Disclosure Required.--Any credit repair organization shall provide any consumer with the following written statement before any contract or agreement between the consumer and the credit repair organization is executed:

`` `Consumer Credit File Rights Under State and Federal Law

`` `You have a right to dispute inaccurate information in your credit report by contacting the credit bureau directly. However, neither you nor any ``credit repair'' company or credit repair organization has the right to have accurate, current, and verifiable information removed from your credit report. The credit bureau must remove accurate, negative information from your report only if it is over 7 years old. Bankruptcy information can be reported for 10 years. `` `You have a right to obtain a copy of your credit report from a credit bureau. You may be charged a reasonable fee. There is no fee, however, if you have been turned down for credit, employment, insurance, or a rental dwelling because of information in your credit report within the preceding 60 days. The credit bureau must provide someone to help you interpret the information in your credit file. You are entitled to receive a free copy of your credit report if you are unemployed and intend to apply for employment in the next 60 days, if you are a recipient of public welfare assistance, or if you have reason to believe that there is inaccurate information in your credit report due to fraud. `` `You have a right to sue a credit repair organization that violates the Credit Repair Organization Act. This law prohibits deceptive practices by credit repair organizations. `` `You have the right to cancel your contract with any credit repair organization for any reason within 3 business days from the date you signed it. `` `Credit bureaus are required to follow reasonable procedures to ensure that the information they report is accurate. However, mistakes may occur. `` `You may, on your own, notify a credit bureau in writing that you dispute the accuracy of information in your credit file. The credit bureau must then reinvestigate and modify or remove inaccurate or incomplete information. The credit bureau may not charge any fee for this service. Any pertinent information and copies of all documents you have concerning an error should be given to the credit bureau.

`` `If the credit bureau's reinvestigation does not resolve the dispute to your satisfaction, you may send a brief statement to the credit bureau, to be kept in your file, explaining why you think the record is inaccurate. The credit bureau must include a summary of your statement about disputed information with any report it issues about you. `` `The Federal Trade Commission regulates credit bureaus and credit repair organizations. For more information contact:

`` `The Public Reference Branch

`` `Federal Trade Commission

`` `Washington, D.C. 20580'.

``(b) Separate Statement Requirement.--The written statement required under this section shall be provided as a document which is separate from any written contract or other agreement between the credit repair organization and the consumer or any other written material provided to the consumer. ``(c) Retention of Compliance Records.-- ``(1) In general.--The credit repair organization shall maintain a copy of the statement signed by the consumer acknowledging receipt of the statement. ``(2) Maintenance for 2 years.--The copy of any consumer's statement shall be maintained in the organization's files for 2 years after the date on which the statement is signed bythe consumer.

``SEC. 406. CREDIT REPAIR ORGANIZATIONS CONTRACTS.

``(a) Written Contracts Required.--No services may be provided by any credit repair organization for any consumer-- ``(1) unless a written and dated contract (for the purchase of such services) which meets the requirements of subsection (b) has been signed by the consumer; or ``(2) before the end of the 3-business-day period beginning on the date the contract is signed.

``(b) Terms and Conditions of Contract.--No contract referred to in subsection (a) meets the requirements of this subsection unless such contract includes (in writing)-- ``(1) the terms and conditions of payment, including the total amount of all payments to be made by the consumer to the credit repair organization or to any other person; ``(2) a full and detailed description of the services to be performed by the credit repair organization for the consumer, including-- ``(A) all guarantees of performance; and ``(B) an estimate of-- ``(i) the date by which the performance of the services (to be performed by the credit repair organization or any other person) will be complete; or ``(ii) the length of the period necessary to perform such services; ``(3) the credit repair organization's name and principal business address; and ``(4) a conspicuous statement in bold face type, in immediate proximity to the space reserved for the consumer's signature on the contract, which reads as follows: `You may cancel this

contract without penalty or obligation at any time before midnight of the 3rd business day after the date on which you signed the contract. See the attached notice of cancellation form for an explanation of this right.'.

``SEC. 407. RIGHT TO CANCEL CONTRACT.

``(a) In General.--Any consumer may cancel any contract with any credit repair organization without penalty or obligation by notifying the credit repair organization of the consumer's intention to do so at any time before midnight of the 3rd business day which begins after the date on which the contract or agreement between the consumer and the credit repair organization is executed or would, but for this subsection, become enforceable against the parties. ``(b) Cancellation Form and Other Information.--Each contract shall be accompanied by a form, in duplicate, which has the heading `Notice of Cancellation' and contains in bold face type the following statement: `` `You may cancel this contract, without any penalty or obligation, at any time before midnight of the 3rd day which begins after the date the contract is signed by you. `` `To cancel this contract, mail or deliver a signed, dated copy of this cancellation notice, or any other written notice to [ name of credit repair organization ] at [ address of credit repair organization ] before midnight on [ date ] `` `I hereby cancel this transaction, [ date ] [ purchaser's signature ].'.

``(c) Consumer Copy of Contract Required.--Any consumer who enters into any contract with any credit repair organization shall be given, by the organization-- ``(1) a copy of the completed contract and the disclosure statement required under section 405; and ``(2) a copy of any other document the credit repair organization requires the consumer to sign, at the time the contract or the other document is signed.

``SEC. 408. NONCOMPLIANCE WITH THIS TITLE.

``(a) Consumer Waivers Invalid.--Any waiver by any consumer of any protection provided by or any right of the consumer under this title-- ``(1) shall be treated as void; and ``(2) may not be enforced by any Federal or State court or any other person.

``(b) Attempt To Obtain Waiver.--Any attempt by any person to obtain a waiver from any consumer of any protection provided by or any right of the consumer under this title shall be treated as a violation of this title. ``(c) Contracts Not in Compliance.--Any contract for services which does not comply with the applicable provisions of this title-- ``(1) shall be treated as void; and ``(2) may not be enforced by any Federal or State court or any other person.

``SEC. 409. CIVIL LIABILITY.

``(a) Liability Established.--Any person who fails to comply with any provision of this title with respect to any other person

shall be liable to such person in an amount equal to the sum of the amounts determined under each of the following paragraphs: ``(1) Actual damages.--The greater of-- ``(A) the amount of any actual damage sustained by such person as a result of such failure; or ``(B) any amount paid by the person to the credit repair organization. ``(2) Punitive damages.-- ``(A) Individual actions.--In the case of any action by an individual, such additional amount as the court may allow. ``(B) Class actions.--In the case of a class action, the sum of-- ``(i) the aggregate of the amount which the court may allow for each named plaintiff; and ``(ii) the aggregate of the amount which the court may allow for each other class member, without regard to any minimum individual recovery. ``(3) Attorneys' fees.--In the case of any successful action to enforce any liability under paragraph (1) or (2), the costs of the action, together with reasonable attorneys' fees.

``(b) Factors To Be Considered in Awarding Punitive Damages.--In determining the amount of any liability of any credit repair organization under subsection (a)(2), the court shall consider, among other relevant factors-- ``(1) the frequency and persistence of noncompliance by the credit repair organization; ``(2) the nature of the noncompliance; ``(3) the extent to which such noncompliance was intentional; and ``(4) in the case of any class action, the number of consumers adversely affected.

``SEC. 410. ADMINISTRATIVE ENFORCEMENT.

``(a) In General.--Compliance with the requirements imposed under this title with respect to credit repair organizations shall be enforced under the Federal Trade Commission Act by the Federal Trade Commission. ``(b) Violations of This Title Treated as Violations of Federal Trade Commission Act.-- ``(1) In general.--For the purpose of the exercise by the Federal Trade Commission of the Commission's functions and powers under the Federal Trade Commission Act, any violation of any requirement or prohibition imposed under this title with respect to credit repair organizations shall constitute an unfair or deceptive act or practice in commerce in violation of section 5(a) of the Federal Trade Commission Act. ``(2) Enforcement authority under other law.--All functions and powers of the Federal Trade Commission under the Federal Trade Commission Act shall be available to the Commission to enforce compliance with this title by any person subject to enforcement by the Federal Trade Commission pursuant to this subsection, including the power to enforce the provisions of this title in the same manner as if the violation had been a violation of any Federal Trade Commission trade regulation rule, without regard to whether the credit repair organization--

``(A) is engaged in commerce; or ``(B) meets any other jurisdictional tests in the Federal Trade Commission Act.

``(c) State Action for Violations.-- ``(1) Authority of states.--In addition to such other remedies as are provided under State law, whenever the chief law enforcement officer of a State, or an official or agency designated by a State, has reason to believe that any person has violated or is violating this title, the State-- ``(A) may bring an action to enjoin such violation; ``(B) may bring an action on behalf of its residents to recover damages for which the person is liable to such residents under section 409 as a result of the violation; and ``(C) in the case of any successful action under subparagraph (A) or (B), shall be awarded the costs of the action and reasonable attorney fees as determined by the court. ``(2) Rights of commission.-- ``(A) Notice to commission.--The State shall serve prior written notice of any civil action under paragraph (1) upon the Federal Trade Commission and provide the Commission with a copy of its complaint, except in any case where such prior notice is not feasible, in which case the State shall serve such notice immediately upon instituting such action. ``(B) Intervention.--The Commission shall have the right-- ``(i) to intervene in any action referred to in subparagraph (A); ``(ii) upon so intervening, to be heard on all matters arising in the action; and ``(iii) to file petitions for appeal. ``(3) Investigatory powers.--For purposes of bringing any action under this subsection, nothing in this subsection shall prevent the chief law enforcement officer, or an official or agency designated by a State, from exercising the powers conferred on the chief law enforcement officer or such official by the laws of such State to conduct investigations or to administer oaths or affirmations or to compel the attendance of witnesses or the production of documentary and other evidence. ``(4) Limitation.--Whenever the Federal Trade Commission has instituted a civil action for violation of this title, no State may, during the pendency of such action, bring an action under this section against any defendant named in the complaint of the Commission for any violation of this title that is alleged in that complaint.

``SEC. 411. STATUTE OF LIMITATIONS.

``Any action to enforce any liability under this title may be brought before the later of-- ``(1) the end of the 5-year period beginning on the date of the occurrence of the violation involved; or ``(2) in any case in which any credit repair organization has materially and willfully misrepresented any information which-- ``(A) the credit repair organization is required, by any provision of this title, to disclose to any consumer; and

``(B) is material to the establishment of the credit repair organization's liability to the consumer under this title, the end of the 5-year period beginning on the date of the discovery by the consumer of the misrepresentation.

``SEC. 412. RELATION TO STATE LAW.

``This title shall not annul, alter, affect, or exempt any person subject to the provisions of this title from complying with any law of any State except to the extent that such law is inconsistent with any provision of this title, and then only to the extent of the inconsistency.

``SEC. 413. EFFECTIVE DATE.

``This title shall apply after the end of the 6-month period beginning on the date of the enactment of the Credit Repair Organizations Act, except with respect to contracts entered into by a credit repair organization before the end of such period.''.

It is the sense of the Senate that-- (1) individuals should generally be judged for credit worthiness based on their own credit worthiness and not on the zip code or neighborhood in which they live; and (2) the Federal Trade Commission, after consultation with the appropriate Federal banking agency, should report to the Committee on Banking, Housing, and Urban Affairs of the Senate as to whether and how the location of the residence of an applicant for unsecured credit is considered by many companies and financial institutions in deciding whether an applicant should be granted credit.

Subtitle E--Asset <<NOTE: Asset Conservation, Lender Liability, and Deposit Insurance Protection Act of 1996. 42 USC 9601 note.>> Conservation, Lender Liability, and Deposit Insurance Protection

This subtitle may be cited as the ``Asset Conservation, Lender Liability, and Deposit Insurance Protection Act of 1996''.

(a) In General.--Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9607) is amended by adding at the end the following: ``(n) Liability of Fiduciaries.-- ``(1) In general.--The liability of a fiduciary under any provision of this Act for the release or threatened release of a hazardous substance at, from, or in connection with a vessel or facility held in a fiduciary capacity shall not exceed the assets held in the fiduciary capacity. ``(2) Exclusion.--Paragraph (1) does not apply to the extent that a person is liable under this Act independently of the person's ownership of a vessel or facility as a fiduciary or actions taken in a fiduciary capacity. ``(3) Limitation.--Paragraphs (1) and (4) do not limit the liability pertaining to a release or threatened release of a

hazardous substance if negligence of a fiduciary causes or contributes to the release or threatened release. ``(4) Safe harbor.--A fiduciary shall not be liable in its personal capacity under this Act for-- ``(A) undertaking or directing another person to undertake a response action under subsection (d)(1) or under the direction of an on scene coordinator designated under the National Contingency Plan; ``(B) undertaking or directing another person to undertake any other lawful means of addressing a hazardous substance in connection with the vessel or facility; ``(C) terminating the fiduciary relationship; ``(D) including in the terms of the fiduciary agreement a covenant, warranty, or other term or condition that relates to compliance with an environmental law, or monitoring, modifying or enforcing the term or condition; ``(E) monitoring or undertaking 1 or more inspections of the vessel or facility; ``(F) providing financial or other advice or counseling to other parties to the fiduciary relationship, including the settlor or beneficiary; ``(G) restructuring, renegotiating, or otherwise altering the terms and conditions of the fiduciary relationship; ``(H) administering, as a fiduciary, a vessel or facility that was contaminated before the fiduciary relationship began; or ``(I) declining to take any of the actions described in subparagraphs (B) through (H). ``(5) Definitions.--As used in this Act: ``(A) Fiduciary.--The term `fiduciary'-- ``(i) means a person acting for the benefit of another party as a bona fide-- ``(I) trustee; ``(II) executor; ``(III) administrator; ``(IV) custodian; ``(V) guardian of estates or guardian ad litem; ``(VI) receiver; ``(VII) conservator; ``(VIII) committee of estates of incapacitated persons; ``(IX) personal representative; ``(X) trustee (including a successor to a trustee) under an indenture agreement, trust agreement, lease, or similar financing agreement, for debt securities, certificates of interest or certificates of participation in debt securities, or other forms of indebtedness as to which the trustee is not, in the capacity of trustee, the lender; or ``(XI) representative in any other capacity that the Administrator, after providing public notice, determines to be similar to the capacities described in subclauses (I) through (X); and ``(ii) does not include-- ``(I) a person that is acting as a fiduciary with respect to a trust or other fiduciary estate that was organized for the primary purpose of, or is

engaged in, actively carrying on a trade or business for profit, unless the trust or other fiduciary estate was created as part of, or to facilitate, 1 or more estate plans or because of the incapacity of a natural person; or ``(II) a person that acquires ownership or control of a vessel or facility with the objective purpose of avoiding liability of the person or of any other person. ``(B) Fiduciary capacity.--The term `fiduciary capacity' means the capacity of a person in holding title to a vessel or facility, or otherwise having control of or an interest in the vessel or facility, pursuant to the exercise of the responsibilities of the person as a fiduciary. ``(6) Savings clause.--Nothing in this subsection-- ``(A) affects the rights or immunities or other defenses that are available under this Act or other law that is applicable to a person subject to this subsection; or ``(B) creates any liability for a person or a private right of action against a fiduciary or any other person. ``(7) No effect on certain persons.--Nothing in this subsection applies to a person if the person-- ``(A)(i) acts in a capacity other than that of a fiduciary or in a beneficiary capacity; and ``(ii) in that capacity, directly or indirectly benefits from a trust or fiduciary relationship; or ``(B)(i) is a beneficiary and a fiduciary with respect to the same fiduciary estate; and ``(ii) as a fiduciary, receives benefits that exceed customary or reasonable compensation, and incidental benefits, permitted under other applicable law. ``(8) Limitation.--This subsection does not preclude a claim under this Act against-- ``(A) the assets of the estate or trust administered by the fiduciary; or ``(B) a nonemployee agent or independent contractor retained by a fiduciary.''.

(b) Definition of Owner or Operator.--Section 101(20) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601(20)) is amended by adding at the end the following: ``(E) Exclusion of lenders not participants in management.-- ``(i) Indicia of ownership to protect security.--The term `owner or operator' does not include a person that is a lender that, without participating in the management of a vessel or facility, holds indicia of ownership primarily to protect the security interest of the person in the vessel or facility. ``(ii) Foreclosure.--The term `owner or operator' does not include a person that is a lender that did not participate in management of a vessel or facility prior to foreclosure, notwithstanding that the person-- ``(I) forecloses on the vessel or facility; and ``(II) after foreclosure, sells, re- leases (in the case of a lease finance transaction), or liquidates the vessel or facility, maintains business activities,

winds up operations, undertakes a response action under section 107(d)(1) or under the direction of an on-scene coordinator appointed under the National Contingency Plan, with respect to the vessel or facility, or takes any other measure to preserve, protect, or prepare the vessel or facility prior to sale or disposition, if the person seeks to sell, re-lease (in the case of a lease finance transaction), or otherwise divest the person of the vessel or facility at the earliest practicable, commercially reasonable time, on commercially reasonable terms, taking into account market conditions and legal and regulatory requirements. ``(F) Participation in management.--For purposes of subparagraph (E)-- ``(i) the term `participate in management'-- ``(I) means actually participating in the management or operational affairs of a vessel or facility; and ``(II) does not include merely having the capacity to influence, or the unexercised right to control, vessel or facility operations; ``(ii) a person that is a lender and that holds indicia of ownership primarily to protect a security interest in a vessel or facility shall be considered to participate in management only if, while the borrower is still in possession of the vessel or facility encumbered by the security interest, the person-- ``(I) exercises decisionmaking control over the environmental compliance related to the vessel or facility, such that the person has undertaken responsibility for the hazardous substance handling or disposal practices related to the vessel or facility; or ``(II) exercises control at a level comparable to that of a manager of the vessel or facility, such that the person has assumed or manifested responsibility-- ``(aa) for the overall management of the vessel or facility encompassing day-to-day decisionmaking with respect to environmental compliance; or ``(bb) over all or substantially all of the operational functions (as distinguished from financial or administrative functions) of the vessel or facility other than the function of environmental compliance; ``(iii) the term `participate in management' does not include performing an act or failing to act prior to the time at which a security interest is created in a vessel or facility; and ``(iv) the term `participate in management' does not include-- ``(I) holding a security interest or abandoning or releasing a security interest; ``(II) including in the terms of an extension of credit, or in a contract or security agreement

relating to the extension, a covenant, warranty, or other term or condition that relates to environmental compliance; ``(III) monitoring or enforcing the terms and conditions of the extension of credit or security interest; ``(IV) monitoring or undertaking 1 or more inspections of the vessel or facility; ``(V) requiring a response action or other lawful means of addressing the release or threatened release of a hazardous substance in connection with the vessel or facility prior to, during, or on the expiration of the term of the extension of credit; ``(VI) providing financial or other advice or counseling in an effort to mitigate, prevent, or cure default or diminution in the value of the vessel or facility; ``(VII) restructuring, renegotiating, or otherwise agreeing to alter the terms and conditions of the extension of credit or security interest, exercising forbearance; ``(VIII) exercising other remedies that may be available under applicable law for the breach of a term or condition of the extension of credit or security agreement; or ``(IX) conducting a response action under section 107(d) or under the direction of an on-scene coordinator appointed under the National Contingency Plan, if the actions do not rise to the level of participating in management (within the meaning of clauses (i) and (ii)). ``(G) Other terms.--As used in this Act: ``(i) Extension of credit.--The term `extension of credit' includes a lease finance transaction-- ``(I) in which the lessor does not initially select the leased vessel or facility and does not during the lease term control the daily operations or maintenance of the vessel or facility; or ``(II) that conforms with regulations issued by the appropriate Federal banking agency or the appropriate State bank supervisor (as those terms are defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) or with regulations issued by the National Credit Union Administration Board, as appropriate. ``(ii) Financial or administrative function.-- The term `financial or administrative function' includes a function such as that of a credit manager, accounts payable officer, accounts receivable officer, personnel manager, comptroller, or chief financial officer, or a similar function. ``(iii) Foreclosure; foreclose.--The terms `foreclosure' and `foreclose' mean, respectively, acquiring, and to acquire, a vessel or facility through--

``(I)(aa) purchase at sale under a judgment or decree, power of sale, or nonjudicial foreclosure sale; ``(bb) a deed in lieu of foreclosure, or similar conveyance from a trustee; or ``(cc) repossession, if the vessel or facility was security for an extension of credit previously contracted; ``(II) conveyance pursuant to an extension of credit previously contracted, including the termination of a lease agreement; or ``(III) any other formal or informal manner by which the person acquires, for subsequent disposition, title to or possession of a vessel or facility in order to protect the security interest of the person. ``(iv) Lender.--The term `lender' means-- ``(I) an insured depository institution (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)); ``(II) an insured credit union (as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752)); ``(III) a bank or association chartered under the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.); ``(IV) a leasing or trust company that is an affiliate of an insured depository institution; ``(V) any person (including a successor or assignee of any such person) that makes a bona fide extension of credit to or takes or acquires a security interest from a nonaffiliated person; ``(VI) the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Agricultural Mortgage Corporation, or any other entity that in a bona fide manner buys or sells loans or interests in loans; ``(VII) a person that insures or guarantees against a default in the repayment of an extension of credit, or acts as a surety with respect to an extension of credit, to a nonaffiliated person; and ``(VIII) a person that provides title insurance and that acquires a vessel or facility as a result of assignment or conveyance in the course of underwriting claims and claims settlement. ``(v) Operational function.--The term `operational function' includes a function such as that of a facility or plant manager, operations manager, chief operating officer, or chief executive officer. ``(vi) Security interest.--The term `security interest' includes a right under a mortgage, deed of trust, assignment, judgment lien, pledge, security agreement, factoring agreement, or lease and any other right accruing to a person to secure the repayment of money, the performance of a duty, or any other obligation by a nonaffiliated person.''.

Section 9003(h) of the Solid Waste Disposal Act (42 U.S.C. 6991b(h)) is amended by striking paragraph (9) and inserting the following: ``(9) Definition of owner or operator.-- ``(A) In general.--As used in this subtitle, the terms `owner' and `operator' do not include a person that, without participating in the management of an underground storage tank and otherwise not engaged in petroleum production, refining, or marketing, holds indicia of ownership primarily to protect the person's security interest. ``(B) Security interest holders.--The provisions regarding holders of security interests in subparagraphs (E) through (G) of section 101(20) and the provisions regarding fiduciaries at section 107(n) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 shall apply in determining a person's liability as an owner or operator of an underground storage tank for the purposes of this subtitle. ``(C) Effect on rule.--Nothing in subparagraph (B) shall be construed as modifying or affecting the final rule issued by the Administrator on September 7, 1995 (60 Fed. Reg. 46,692), or as limiting the authority of the Administrator to amend the final rule, in accordance with applicable law. The final rule in effect on the date of enactment of this subparagraph shall prevail over any inconsistent provision regarding holders of security interests in subparagraphs (E) through (G) of section 101(20) or any inconsistent provision regarding fiduciaries in section 107(n) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980. Any amendment to the final rule shall be consistent with the provisions regarding holders of security interests in subparagraphs (E) through (G) of section 101(20) and the provisions regarding fiduciaries in section 107(n) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980. This subparagraph does not preclude judicial review of any amendment of the final rule made after the date of enactment of this subparagraph.''.

(a) In General.--Effective on the date of enactment of this Act, the portion of the final rule issued by the Administrator of the Environmental Protection Agency on April 29, 1992 (57 Fed. Reg. 18,344), prescribing section 300.1105 of title 40, Code of Federal Regulations, shall be deemed to have been validly issued under authority of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et seq.) and to have been effective according to the terms of the final rule. No additional judicial proceedings shall be necessary or may be held with respect to such portion of the final rule. Any reference in that portion of the final rule to section 300.1100 of title 40, Code of Federal Regulations, shall be deemed to be a reference to the amendments made by this subtitle. (b) Judicial Review.--Notwithstanding section 113(a) of the Comprehensive Environmental Response, Compensation, and

Liability Act of 1980 (42 U.S.C. 9613(a)), no court shall have jurisdiction to review the portion of the final rule issued by the Administrator of the Environmental Protection Agency on April 29, 1992 (57 Fed. Reg. 18,344) that prescribed section 300.1105 of title 40, Code of Federal Regulations. (c) Amendment.--No provision of this section shall be construed as limiting the authority of the President or a delegee of the President to amend the portion of the final rule issued by the Administrator of the Environmental Protection Agency on April 29, 1992 (57 Fed. Reg. 18,344), prescribing section 300.1105 of title 40, Code of Federal Regulations, consistent with the amendments made by this subtitle and other applicable law. (d) Judicial Review.--No provision of this section shall be construed as precluding judicial review of any amendment of section 300.1105 of title 40, Code of Federal Regulations, made after the date of enactment of this Act.

The amendments made by this subtitle shall be applicable with respect to any claim that has not been finally adjudicated as of the date of enactment of this Act.

Subtitle F--Miscellaneous

(a) Study of Electronic Stored Value Products.-- (1) Study.--The Board shall conduct a study of electronic stored value products which evaluates whether provisions of the Electronic Fund Transfer Act could be applied to such products without adversely impacting the cost, development, and operation of such products. (2) Considerations.--In conducting its study under paragraph (1), the Board shall consider whether alternatives to regulation under the Electronic Fund Transfer Act, such as allowing competitive market forces to shape the development and operation of electronic stored value products, could more efficiently achieve the objectives embodied in that Act.

(b) Report.--The Board shall submit a report of its study under subsection (a) to the Congress not later than 6 months after the date of enactment of this Act. (c) Action To Finalize.--The Board shall take no action to finalize any amendments to regulations under the Electronic Fund Transfer Act that would regulate electronic stored value products until the later of-- (1) 3 months after the date on which the report is submitted to the Congress under subsection (b); or (2) 9 months after the date of enactment of this Act.

BY THE RECEIVER OR CONSERVATOR.

Section 11(d) of the Federal Deposit Insurance Act (12 U.S.C. 1821(d)) is amended by adding at the end the following new paragraph: ``(20) Treatment of claims arising from breach of contracts executed by the receiver or conservator.--Notwithstanding any other provision of this subsection, any final

and unappealable judgment for monetary damages entered against a receiver or conservator for an insured depository institution for the breach of an agreement executed or approved by such receiver or conservator after the date of its appointment shall be paid as an administrative expense of the receiver or conservator. Nothing in this paragraph shall be construed to limit the power of a receiver or conservator to exercise any rights under contract or law, including to terminate, breach, cancel, or otherwise discontinue such agreement.''.

COUNTERFEITING.

(a) Increased Penalties for Counterfeiting Violations.--Sections 474 and 474A of title 18, United States Code, are amended by striking ``class C felony'' each place that term appears and inserting ``class B felony''. (b) Criminal Penalty for Production, Sale, Transportation, Possession of Fictitious Financial Instruments Purporting to be Those of the States, of Political Subdivisions, and of Private Organizations.-- (1) In general.--Chapter 25 of title 18, United States Code, is amended by inserting after section 513, the following new section:

``Sec. 514. Fictitious obligations

``(a) Whoever, with the intent to defraud-- ``(1) draws, prints, processes, produces, publishes, or otherwise makes, or attempts or causes the same, within the United States; ``(2) passes, utters, presents, offers, brokers, issues, sells, or attempts or causes the same, or with like intent possesses, within the United States; or ``(3) utilizes interstate or foreign commerce, including the use of the mails or wire, radio, or other electronic communication, to transmit, transport, ship, move, transfer, or attempts or causes the same, to, from, or through the United States,

any false or fictitious instrument, document, or other item appearing, representing, purporting, or contriving through scheme or artifice, to be an actual security or other financial instrument issued under the authority of the United States, a foreign government, a State or other political subdivision of the United States, or an organization, shall be guilty of a class B felony. ``(b) For purposes of this section, any term used in this section that is defined in section 513(c) has the same meaning given such term in section 513(c). ``(c) The United States Secret Service, in addition to any other agency having such authority, shall have authority to investigate offenses under this section.''. (2) Technical amendment.--The analysis for chapter 25 of title 18, United States Code, is amended by inserting after the item relating to section 513 the following:

``514. Fictitious obligations.''.

(a) Repeal.--Effective as of the end of the 5-year period beginning on the date of the enactment of this Act, section 271 of the Truth in Savings Act (12 U.S.C. 4310) is repealed.

(b) On-Premises Displays.--Section 263(c) of the Truth in Savings Act (12 U.S.C. 4302(c)) is amended-- (1) by striking paragraph (2); (2) by striking ``(1) In general.--''; and (3) by redesignating subparagraphs (A) and (B) as paragraphs (1) and (2), respectively, and indenting appropriately.

(c) Depository Institution Definition.--Section 274(6) of the Truth in Savings Act (12 U.S.C. 4313(6)) is amended by inserting before the period ``, but does not include any nonautomated credit union that was not required to comply with the requirements of this title as of the date of enactment of the Economic Growth and Regulatory Paperwork Reduction Act of 1996, pursuant to the determination of the National Credit Union Administration Board''. (d) Time Deposits.--Section 266(a)(3) of the Truth in Savings Act (12 U.S.C. 4305(a)(3)) is amended by inserting ``has a maturity of more than 30 days'' after ``deposit which''.

(a) Congressional Findings and Declaration of Purposes.-- (1) Findings.--The Congress finds that-- (A) competition among the various financial institutions and other firms engaged in the business of consumer leasing is greatest when there is informed use of leasing; (B) the informed use of leasing results from an awareness of the cost of leasing by consumers; and (C) there has been a continued trend toward leasing automobiles and other durable goods for consumer use as an alternative to installment credit sales and that leasing product advances have occurred such that lessors have been unable to provide consistent industry-wide disclosures to fully account for the competitive progress that has occurred. (2) Purposes.--The purposes of this section are-- (A) to assure a simple, meaningful disclosure of leasing terms so that the consumer will be able to compare more readily the various leasing terms available to the consumer and avoid the uninformed use of leasing, and to protect the consumer against inaccurate and unfair leasing practices; (B) to provide for adequate cost disclosures that reflect the marketplace without impairing competition and the development of new leasing products; and (C) to provide the Board with the regulatory authority to assure a simplified, meaningful definition and disclosure of the terms of certain leases of personal property for personal, family, or household purposes so as to-- (i) enable the lessee to compare more readily the various lease terms available to the lessee; (ii) enable comparison of lease terms with credit terms, as appropriate; and (iii) assure meaningful and accurate disclosures of lease terms in advertisements.

(b) Regulations.--

(1) In general.--Chapter 5 of the Truth in Lending Act (15 U.S.C. 1667 et seq.) is amended by adding at the end the following new section:

``SEC. 187. REGULATIONS.

``(a) Regulations Authorized.-- ``(1) In general.--The Board shall prescribe regulations to update and clarify the requirements and definitions applicable to lease disclosures and contracts, and any other issues specifically related to consumer leasing, to the extent that the Board determines such action to be necessary-- ``(A) to carry out this chapter; ``(B) to prevent any circumvention of this chapter; or ``(C) to facilitate compliance with the requirements of the chapter. ``(2) Classifications, adjustments.--Any regulations prescribed under paragraph (1) may contain classifications and differentiations, and may provide for adjustments and exceptions for any class of transactions, as the Board considers appropriate.

``(b) Model Disclosure.-- ``(1) Publication.--The Board shall establish and publish model disclosure forms to facilitate compliance with the disclosure requirements of this chapter and to aid the consumer in understanding the transaction to which the subject disclosure form relates. ``(2) Use of automated equipment.--In establishing model forms under this subsection, the Board shall consider the use by lessors of data processing or similar automated equipment. ``(3) Use optional.--A lessor may utilize a model disclosure form established by the Board under this subsection for purposes of compliance with this chapter, at the discretion of the lessor. ``(4) Effect of use.--Any lessor who properly uses the material aspects of any model disclosure form established by the Board under this subsection shall be deemed to be in compliance with the disclosure requirements to which the form relates.''. (2) Effective date.-- (A) In general.--Any regulation of the Board, or any amendment or interpretation of any regulation of the Board issued pursuant to section 187 of the Truth in Lending Act (as added by paragraph (1) of this subsection), shall become effective on the first October 1 that follows the date of promulgation of that regulation, amendment, or interpretation by not less than 6 months. (B) Longer period.--The Board may, at the discretion of the Board, extend the time period referred to in subparagraph (A) in accordance with subparagraph (C), to permit lessors to adjust their disclosure forms to accommodate the requirements of section 127 of the Truth in Lending Act (as added by paragraph (1) of this subsection). (C) Shorter period.--The Board may shorten the time period referred to in subparagraph (A), if the Board makes a specific finding that such action is necessary to comply with the findings of a court or to prevent an unfair or deceptive practice.

(D) Compliance before effective date.--Any lessor may comply with any means of disclosure provided for in section 127 of the Truth in Lending Act (as added by paragraph (1) of this subsection) before the effective date of such requirement. (E) Definitions.--For purposes of this subsection, the term ``lessor'' has the same meaning as in section 181 of the Truth in Lending Act. (3) Clerical amendment.--The table of sections for chapter 5 of title I of the Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended by inserting after the item relating to section 186 the following new item:

``187. Regulations.''.

(c) Consumer Lease Advertising.--Section 184 of the Truth in Lending Act (15 U.S.C. 1667c) is amended-- (1) by striking subsections (a) and (c); (2) by redesignating subsection (b) as subsection (c); and (3) by inserting before subsection (c), as so redesignated, the following:

``(a) In General.--If an advertisement for a consumer lease includes a statement of the amount of any payment or a statement that any or no initial payment is required, the advertisement shall clearly and conspicuously state, as applicable-- ``(1) the transaction advertised is a lease; ``(2) the total amount of any initial payments required on or before consummation of the lease or delivery of the property, whichever is later; ``(3) that a security deposit is required; ``(4) the number, amount, and timing of scheduled payments; and ``(5) with respect to a lease in which the liability of the consumer at the end of the lease term is based on the anticipated residual value of the property, that an extra charge may be imposed at the end of the lease term.

``(b) Advertising Medium Not Liable.--No owner or employee of any entity that serves as a medium in which an advertisement appears or through which an advertisement is disseminated, shall be liable under this section.''.

UNIONS.

(a) Definitions.--For purposes of this section, the following definitions shall apply: (1) Administration.--The term ``Administration'' means the National Credit Union Administration. (2) Board.--The term ``Board'' means the National Credit Union Administration Board. (3) Corporate credit union.--The term ``corporate credit union'' has the meaning given such term by rule or regulation of the Board. (4) Fund.--The term ``Fund'' means the National Credit Union Share Insurance Fund established under section 203 of the Federal Credit Union Act. (5) Secretary.--The term ``Secretary'' means the Secretary of the Treasury.

(b) Study.--

(1) In general.--The Secretary, in consultation with the Board, the Corporation, the Comptroller of the Currency, and the Administration, shall conduct a study and evaluation of-- (A) the oversight and supervisory practices of the Administration concerning the Fund, including the treatment of amounts deposited in the Fund pursuant to section 202(c) of the Federal Credit Union Act, including analysis of-- (i) whether those amounts should be-- (I) refundable; or (II) treated as expenses; and (ii) the use of those amounts in determining equity capital ratios; (B) the potential for, and potential effects of, administration of the Fund by an entity other than the Administration; (C) the 10 largest corporate credit unions in the United States, conducted in cooperation with appropriate employees of other Federal agencies with expertise in the examination of federally insured financial institutions, including-- (i) the investment practices of those credit unions; and (ii) the financial stability, financial operations, and financial controls of those credit unions; (D) the regulations of the Administration; and (E) the supervision of corporate credit unions by the Administration.

(c) Report.--Not later than 12 months after the date of enactment of this Act, the Secretary shall submit to the appropriate committees of the Congress, a report that includes the results of the study and evaluation conducted under subsection (b), together with any recommendations that the Secretary considers to be appropriate.

REGULATORY ACCOUNTING PRINCIPLES AND GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.

Not later than 180 days after the date of enactment of this Act, each appropriate Federal banking agency shall submit to the Committee on Banking and Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate, a report describing both the actions that have been taken by the agency and the actions that will be taken by the agency to eliminate or conform inconsistent or duplicative accounting and reporting requirements applicable to reports or statements filed with any such agency by insured depository institutions, as required by section 121 of the Federal Deposit Insurance Corporation Improvement Act of 1991.

STUDY OF BANK FEES.

Section 1002(b)(2)(A) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 note) is amended to read as follows: ``(A) a description of any discernible trend, in the Nation as a whole, in each of the 50 States, and in each consolidated metropolitan statistical area or primary metropolitan statistical area (as defined by the Director of the

Office of Management and Budget), in the cost and availability of retail banking services (including fees imposed for providing such services), that delineates differences between insured depository institutions on the basis of both the size of the institution and any engagement of the institution in multistate activity; and''.

Section 5118(d)(2) of title 31, United States Code, is amended by adding at the end the following: ``This paragraph shall apply to any obligation issued on or before October 27, 1977, notwithstanding any assignment or novation of such obligation after October 27, 1977, unless all parties to the assignment or novation specifically agree to include a gold clause in the new agreement. Nothing in the preceding sentence shall be construed to affect the enforceability of a Gold Clause contained in any obligation issued after October 27, 1977 if the enforceability of that Gold Clause has been finally adjudicated before the date of enactment of the Economic Growth and Regulatory Paperwork Reduction Act of 1996.''.

Section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841) is amended-- (1) in subsection (b), by inserting ``, and shall not include a qualified family partnership'' after ``by any State''; and (2) in subsection (o), by adding at the end the following: ``(10) Qualified family partnership.--The term `qualified family partnership' means a general or limited partnership that the Board determines-- ``(A) does not directly control any bank, except through a registered bank holding company; ``(B) does not control more than 1 registered bank holding company; ``(C) does not engage in any business activity, except indirectly through ownership of other business entities; ``(D) has no investments other than those permitted for a bank holding company pursuant to section 4(c); ``(E) is not obligated on any debt, either directly or as a guarantor; ``(F) has partners, all of whom are either-- ``(i) individuals related to each other by blood, marriage (including former marriage), or adoption; or ``(ii) trusts for the primary benefit of individuals related as described in clause (i); and ``(G) has filed with the Board a statement that includes-- ``(i) the basis for the eligibility of the partnership under subparagraph (F); ``(ii) a list of the existing activities and investments of the partnership; ``(iii) a commitment to comply with this paragraph; ``(iv) a commitment to comply with section 7 of the Federal Deposit Insurance Act with respect to any acquisition of control of an insured depository institution occurring after date of enactment of this paragraph; and

``(v) a commitment to be subject, to the same extent as if the qualified family partnership were a bank holding company-- ``(I) to examination by the Board to assure compliance with this paragraph; and ``(II) to section 8 of the Federal Deposit Insurance Act.''.

FARMERS AND RANCHERS IN DROUGHT-STRICKEN AREAS.

(a) Findings.--The Congress hereby finds the following: (1) Severe drought is being experienced in the Plains and the Southwest portions of our country. (2) Soil erosion is becoming a critical issue as the dry season approaches and summer winds may rob these fields of nutrient-rich topsoil. (3) Without immediate assistance, ranchers and farmers would be forced to cull their herds bringing tremendous volatility in the beef market. (4) The American people will feel the impact of this drought in their pocketbooks through higher prices for grain products. (5) The communities in drought-stricken areas are suffering and borrowers may have difficulty meeting their obligations to financial institutions. (6) Congress has already passed the Depository Institutions Disaster Relief Act of 1992 which allows financial institutions to make emergency exceptions to the appraisal requirement in times of national disasters.

(b) Sense of the Congress.--It is the sense of the Congress that financial institutions and Federal bank regulators should work cooperatively with farmers and ranchers in communities affected by drought conditions to allow financial obligations to be met without imposing undue burdens.

ACTIVITIES.

Section 4(c)(8) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(c)(8)) is amended by striking ``and opportunity for hearing'' and inserting the following: ``(and opportunity for hearing in the case of an acquisition of a savings association)''.

LIABILITY COMPANIES.

(a) Amendment to Short Title.--Section 1 of the Bank Service Corporation Act (12 U.S.C. 1861(a)) is amended by striking subsection (a) and inserting the following new subsection: ``(a) Short Title.--This Act may be cited as the `Bank Service Company Act'.''; (b) Amendments to Definitions.--Section 1(b) of the Bank Service Corporation Act (12 U.S.C. 1861(b)) is amended-- (1) by striking paragraph (2) and inserting the following new paragraph: ``(2) the term `bank service company' means-- ``(A) any corporation-- ``(i) which is organized to perform services authorized by this Act; and

``(ii) all of the capital stock of which is owned by 1 or more insured banks; and ``(B) any limited liability company-- ``(i) which is organized to perform services authorized by this Act; and ``(ii) all of the members of which are 1 or more insured banks.''; (2) in paragraph (6)-- (A) by striking ``corporation'' and inserting ``company''; and (B) by striking ``and'' after the semicolon; (3) by redesignating paragraph (7) as paragraph (8) and inserting after paragraph (6) the following new paragraph: ``(7) the term `limited liability company' means any company, partnership, trust, or similar business entity organized under the law of a State (as defined in section 3 of the Federal Deposit Insurance Act) which provides that a member or manager of such company is not personally liable for a debt, obligation, or liability of the company solely by reason of being, or acting as, a member or manager of such company; and''; and (4) in paragraph (8) (as so redesignated)-- (A) by striking ``corporation'' each place such term appears and inserting ``company''; and (B) by striking ``capital stock'' and inserting ``equity''.

(c) Amendments to Section 2.--Section 2 of the Bank Service Corporation Act (12 U.S.C. 1862) is amended-- (1) by striking ``corporation'' and inserting ``company''; (2) by striking ``corporations'' and inserting ``companies''; and (3) in the heading for such section, by striking ``corporation'' and inserting ``company''.

(d) Amendments to Section 3.--Section 3 of the Bank Service Corporation Act (12 U.S.C. 1863) is amended-- (1) by striking ``corporation'' each place such term appears and inserting ``company''; and (2) in the heading for such section, by striking ``corporation'' and inserting ``company''.

(e) Amendments to Section 4.--Section 4 of the Bank Service Corporation Act (12 U.S.C. 1864) is amended-- (1) by striking ``corporation'' each place such term appears and inserting ``company''; (2) in subsection (b), by inserting ``or members'' after ``shareholders'' each place such term appears; (3) in subsections (c) and (d), by inserting ``or member'' after ``shareholder'' each place such term appears; (4) in subsection (e)-- (A) by inserting ``or members'' after ``national bank and State bank shareholders''; (B) by striking ``its national bank shareholder or shareholders'' and inserting ``any shareholder or member of the company which is a national bank''; (C) by striking ``its State bank shareholder or shareholders'' and inserting ``any shareholder or member of the company which is a State bank''; (D) by striking ``such State bank or banks'' and inserting ``any such State bank''; and

(E) by inserting ``or members'' after ``State bank and national bank shareholders''; and (5) in the heading for such section, by striking ``corporation'' and inserting ``company''.

(f) Amendments to Section 5.--Section 5 of the Bank Service Corporation Act (12 U.S.C. 1865) is amended-- (1) by striking ``corporation'' each place such term appears and inserting ``company''; and (2) in the heading for such section, by striking ``corporations'' and inserting ``companies''.

(g) Amendments to Section 6.--Section 6 of the Bank Service Corporation Act (12 U.S.C. 1866) is amended-- (1) by striking ``corporation'' each place such term appears and inserting ``company''; (2) by inserting ``or is not a member of'' after ``does not own stock in''; (3) by striking ``the nonstockholding institution'' and inserting ``such depository institution''; (4) by inserting ``or is a member of'' after ``that owns stock in''; (5) in paragraphs (1) and (2), by inserting ``or nonmember'' after ``nonstockholding''; and (6) in the heading for such section by inserting ``or nonmembers'' after ``nonstockholders''.

(h) Amendments to Section 7.--Section 7 of the Bank Service Corporation Act (12 U.S.C. 1867) is amended-- (1) by striking ``corporation'' each place such term appears and inserting ``company''; (2) in subsection (a)-- (A) by inserting ``or principal member'' after ``principal shareholder''; and (B) by inserting ``or member'' after ``other shareholder''; and (3) in the heading for such section, by striking ``corporations'' and inserting ``companies''.

(a) In General.--Section 3(l)(5) of the Federal Deposit Insurance Act (12 U.S.C. 1813(l)(5) is amended-- (1) in subparagraph (A), by striking ``and'' at the end; (2) in subparagraph (B), by striking the period at the end and inserting ``; and''; and (3) by adding at the end the following new subparagraph: ``(C) any liability of an insured depository institution that arises under an annuity contract, the income of which is tax deferred under section 72 of the Internal Revenue Code of 1986.''.

(b) Effective Date.--The amendments made by subsection (a) shall apply to any liability of an insured depository that arises under an annuity contract issued on or after the date of enactment of this Act.

WITH GOVERNMENT-SPONSORED ENTERPRISES.

(a) Credit Unions.--Section 201 of the Federal Credit Union Act (12 U.S.C. 1781) is amended by adding at the end the following new subsection:

``(e) Prohibition on Certain Associations.-- ``(1) In general.--No insured credit union may be sponsored by or accept financial support, directly or indirectly, from any Government-sponsored enterprise, if the credit union includes the customers of the Government-sponsored enterprise in the field of membership of the credit union. ``(2) Routine business financing.--Paragraph (1) shall not apply with respect to advances or other forms of financial assistance generally provided by a Government-sponsored enterprise in the ordinary course of business of the enterprise. ``(3) Government-sponsored enterprise defined.--For purposes of this subsection, the term `Government-sponsored enterprise' has the meaning given to such term in section 1404(e)(1)(A) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. ``(4) Employee credit union.--No provision of this subsection shall be construed as prohibiting any employee of a Government-sponsored enterprise from becoming a member of a credit union whose field of membership is the employees of such enterprise.''.

(b) Banks and Savings Associations.--Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by adding at the end the following new subsection: ``(s) Prohibition on Certain Affiliations.-- ``(1) In general.--No depository institution may be an affiliate of, be sponsored by, or accept financial support, directly or indirectly, from any Government-sponsored enterprise. ``(2) Exception for members of a federal home loan bank.-- Paragraph (1) shall not apply with respect to the membership of a depository institution in a Federal home loan bank. ``(3) Routine business financing.--Paragraph (1) shall not apply with respect to advances or other forms of financial assistance provided by a Government-sponsored enterprise pursuant to the statutes governing such enterprise. ``(4) Government-sponsored enterprise defined.--For purposes of this subsection, the term `Government-sponsored enterprise' has the meaning given to such term in section 1404(e)(1)(A) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.''.

(c) Effective Date.--The amendments made by this section shall apply on and after January 1, 1996.

Subtitle G--Deposit Insurance Funds

This subtitle may be cited as the ``Deposit Insurance Funds Act of 1996''.

SAIF.

(a) In General.--Except as provided in subsection (f), the Board of Directors of the Federal Deposit Insurance Corporation shall impose a special assessment on the SAIF-assessable deposits of each insured depository institution in accordance with assessment regulations of the Corporation at a rate applicable to all such

institutions that the Board of Directors, in its sole discretion, determines (after taking into account the adjustments described in subsections (g), (h), and (j)) will cause the Savings Association Insurance Fund to achieve the designated reserve ratio on the first business day of the 1st month beginning after the date of the enactment of this Act. (b) Factors To Be Considered.--In carrying out subsection (a), the Board of Directors shall base its determination on-- (1) the monthly Savings Association Insurance Fund balance most recently calculated; (2) data on insured deposits reported in the most recent reports of condition filed not later than 70 days before the date of enactment of this Act by insured depository institutions; and (3) any other factors that the Board of Directors deems appropriate.

(c) Date of Determination.--For purposes of subsection (a), the amount of the SAIF-assessable deposits of an insured depository institution shall be determined as of March 31, 1995. (d) Date Payment Due.--Except as provided in subsection (g), the special assessment imposed under this section shall be-- (1) due on the first business day of the 1st month beginning after the date of the enactment of this Act; and (2) paid to the Corporation on the later of-- (A) the first business day of the 1st month beginning after such date of enactment; or (B) such other date as the Corporation shall prescribe, but not later than 60 days after the date of enactment of this Act.

(e) Assessment Deposited in SAIF.--Notwithstanding any other provision of law, the proceeds of the special assessment imposed under this section shall be deposited in the Savings Association Insurance Fund. (f) Exemptions for Certain Institutions.-- (1) Exemption for weak institutions.--The Board of Directors may, by order, in its sole discretion, exempt any insured depository institution that the Board of Directors determines to be weak, from paying the special assessment imposed under this section if the Board of Directors determines that the exemption would reduce risk to the Savings Association Insurance Fund. (2) Guidelines required.--Not later than 30 days after the date of enactment of this Act, the Board of Directors shall prescribe guidelines setting forth the criteria that the Board of Directors will use in exempting institutions under paragraph (1). Such guidelines shall be published in the Federal Register. (3) Exemption for certain newly chartered and other defined institutions.-- (A) In general.--In addition to the institutions exempted from paying the special assessment under paragraph (1), the Board of Directors shall exempt any insured depository institution from payment of the special assessment if the institution-- (i) was in existence on October 1, 1995, and held no SAIF-assessable deposits before January 1, 1993; (ii) is a Federal savings bank which--

(I) was established de novo in April 1994 in order to acquire the deposits of a savings association which was in default or in danger of default; and (II) received minority interim capital assistance from the Resolution Trust Corporation under section 21A(w) of the Federal Home Loan Bank Act in connection with the acquisition of any such savings association; or (iii) is a savings association, the deposits of which are insured by the Savings Association Insurance Fund, which-- (I) before January 1, 1987, was chartered as a Federal savings bank insured by the Federal Savings and Loan Insurance Corporation for the purpose of acquiring all or substantially all of the assets and assuming all or substantially all of the deposit liabilities of a national bank in a transaction consummated after July 1, 1986; and (II) as of the date of that transaction, had assets of less than $150,000,000. (B) Definition.--For purposes of this paragraph, an institution shall be deemed to have held SAIF-assessable deposits before January 1, 1993, if-- (i) it directly held SAIF-assessable deposits before that date; or (ii) it succeeded to, acquired, purchased, or otherwise holds any SAIF-assessable deposits as of the date of enactment of this Act that were SAIF- assessable deposits before January 1, 1993. (4) Exempt institutions required to pay assessments at former rates.-- (A) Payments to saif and dif.--Any insured depository institution that the Board of Directors exempts under this subsection from paying the special assessment imposed under this section shall pay semiannual assessments-- (i) during calendar years 1996, 1997, and 1998, into the Savings Association Insurance Fund, based on SAIF-assessable deposits of that institution, at assessment rates calculated under the schedule in effect for Savings Association Insurance Fund members on June 30, 1995; and (ii) during calendar year 1999-- (I) into the Deposit Insurance Fund, based on SAIF-assessable deposits of that institution as of December 31, 1998, at assessment rates calculated under the schedule in effect for Savings Association Insurance Fund members on June 30, 1995; or (II) in accordance with clause (i), if the Bank Insurance Fund and the Savings Association Insurance Fund are not merged into the Deposit Insurance Fund. (B) Optional pro rata payment of special assessment.--This paragraph shall not apply with respect to any insured depository institution (or successor insured depository institution) that has paid, during any calendar

year from 1997 through 1999, upon such terms as the Corporation may announce, an amount equal to the product of-- (i) 16.7 percent of the special assessment that the institution would have been required to pay under subsection (a), if the Board of Directors had not exempted the institution; and (ii) the number of full semiannual periods remaining between the date of the payment and December 31, 1999.

(g) Special Election for Certain Institutions Facing Hardship as a Result of the Special Assessment.-- (1) Election authorized.--If-- (A) an insured depository institution, or any depository institution holding company which, directly or indirectly, controls such institution, is subject to terms or covenants in any debt obligation or preferred stock outstanding on September 13, 1995; and (B) the payment of the special assessment under subsection (a) would pose a significant risk of causing such depository institution or holding company to default or violate any such term or covenant, the depository institution may elect, with the approval of the Corporation, to pay such special assessment in accordance with paragraphs (2) and (3) in lieu of paying such assessment in the manner required under subsection (a). (2) 1st assessment.--An insured depository institution which makes an election under paragraph (1) shall pay an assessment in an amount equal to 50 percent of the amount of the special assessment that would otherwise apply under subsection (a), by the date on which such special assessment is payable under subsection (d). (3) 2d assessment.--An insured depository institution which makes an election under paragraph (1) shall pay a 2d assessment, by the date established by the Board of Directors in accordance with paragraph (4), in an amount equal to the product of 51 percent of the rate determined by the Board of Directors under subsection (a) for determining the amount of the special assessment and the SAIF-assessable deposits of the institution on March 31, 1996, or such other date in calendar year 1996 as the Board of Directors determines to be appropriate. (4) Due date of 2d assessment.--The date established by the Board of Directors for the payment of the assessment under paragraph (3) by a depository institution shall be the earliest practicable date which the Board of Directors determines to be appropriate, which is at least 15 days after the date used by the Board of Directors under paragraph (3). (5) Supplemental special assessment.--An insured depository institution which makes an election under paragraph (1) shall pay a supplemental special assessment, at the same time the payment under paragraph (3) is made, in an amount equal to the product of-- (A) 50 percent of the rate determined by the Board of Directors under subsection (a) for determining the amount of the special assessment; and

(B) 95 percent of the amount by which the SAIF- assessable deposits used by the Board of Directors for determining the amount of the 1st assessment under paragraph (2) exceeds, if any, the SAIF-assessable deposits used by the Board for determining the amount of the 2d assessment under paragraph (3).

(h) Adjustment of Special Assessment for Certain Bank Insurance Fund Member Banks.-- (1) In general.--For purposes of computing the special assessment imposed under this section with respect to a Bank Insurance Fund member bank, the amount of any deposits of any insured depository institution which section 5(d)(3) of the Federal Deposit Insurance Act treats as insured by the Savings Association Insurance Fund shall be reduced by 20 percent-- (A) if the adjusted attributable deposit amount of the Bank Insurance Fund member bank is less than 50 percent of the total domestic deposits of that member bank as of June 30, 1995; or (B) if, as of June 30, 1995, the Bank Insurance Fund member-- (i) had an adjusted attributable deposit amount equal to less than 75 percent of the total assessable deposits of that member bank; (ii) had total assessable deposits greater than $5,000,000,000; and (iii) was owned or controlled by a bank holding company that owned or controlled insured depository institutions having an aggregate amount of deposits insured or treated as insured by the Bank Insurance Fund greater than the aggregate amount of deposits insured or treated as insured by the Savings Association Insurance Fund. (2) Adjusted attributable deposit amount.--For purposes of this subsection, the ``adjusted attributable deposit amount'' shall be determined in accordance with section 5(d)(3)(C) of the Federal Deposit Insurance Act.

(i) Adjustment to the Adjusted Attributable Deposit Amount for Certain Bank Insurance Fund Member Banks.--Section 5(d)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1815(d)(3)) is amended-- (1) in subparagraph (C), by striking ``The adjusted attributable deposit amount'' and inserting ``Except as provided in subparagraph (K), the adjusted attributable deposit amount''; and (2) by adding at the end the following new subparagraph: ``(K) Adjustment of adjusted attributable deposit amount.--The amount determined under subparagraph (C)(i) for deposits acquired by March 31, 1995, shall be reduced by 20 percent for purposes of computing the adjusted attributable deposit amount for the payment of any assessment for any semiannual period that begins after the date of the enactment of the Deposit Insurance Funds Act of 1996 (other than the special assessment imposed under section 2702(a) of such Act), for a Bank Insurance Fund member bank that, as of June 30, 1995--

``(i) had an adjusted attributable deposit amount that was less than 50 percent of the total deposits of that member bank; or ``(ii)(I) had an adjusted attributable deposit amount equal to less than 75 percent of the total assessable deposits of that member bank; ``(II) had total assessable deposits greater than $5,000,000,000; and ``(III) was owned or controlled by a bank holding company that owned or controlled insured depository institutions having an aggregate amount of deposits insured or treated as insured by the Bank Insurance Fund greater than the aggregate amount of deposits insured or treated as insured by the Savings Association Insurance Fund.''.

(j) Adjustment of Special Assessment for Certain Savings Associations.-- (1) Special assessment reduction.--For purposes of computing the special assessment imposed under this section, in the case of any converted association, the amount of any deposits of such association which were insured by the Savings Association Insurance Fund as of March 31, 1995, shall be reduced by 20 percent. (2) Converted association.--For purposes of this subsection, the term ``converted association'' means-- (A) any Federal savings association-- (i) that is a member of the Savings Association Insurance Fund and that has deposits subject to assessment by that fund which did not exceed $4,000,000,000, as of March 31, 1995; and (ii) that had been, or is a successor by merger, acquisition, or otherwise to an institution that had been, a State savings bank, the deposits of which were insured by the Federal Deposit Insurance Corporation before August 9, 1989, that converted to a Federal savings association pursuant to section 5(i) of the Home Owners' Loan Act before January 1, 1985; (B) a State depository institution that is a member of the Savings Association Insurance Fund that had been a State savings bank before October 15, 1982, and was a Federal savings association on August 9, 1989; (C) an insured bank that-- (i) was established de novo in order to acquire the deposits of a savings association in default or in danger of default; (ii) did not open for business before acquiring the deposits of such savings association; and (iii) was a Savings Association Insurance Fund member before the date of enactment of this Act; and (D) an insured bank that-- (i) resulted from a savings association before December 19, 1991, in accordance with section 5(d)(2)(G) of the Federal Deposit Insurance Act; and (ii) had an increase in its capital in conjunction with the conversion in an amount equal to more than 75 percent of the capital of the institution on the day before the date of the conversion.

(a) In General.--Section 21 of the Federal Home Loan Bank Act (12 U.S.C. 1441) is amended-- (1) in subsection (f)(2)-- (A) in the matter immediately preceding subparagraph (A)-- (i) by striking ``To the extent the amounts available pursuant to paragraph (1) are insufficient to cover the amount of interest payments, issuance costs, and custodial fees,'' and inserting ``In addition to the amounts obtained pursuant to paragraph (1),''; (ii) by striking ``Savings Association Insurance Fund member'' and inserting ``insured depository institution''; and (iii) by striking ``members'' and inserting ``institutions''; and (B) by striking ``, except that--'' and all that follows through the end of the paragraph and inserting ``, except that-- ``(A) the assessments imposed on insured depository institutions with respect to any BIF-assessable deposit shall be assessed at a rate equal to \1/5\ of the rate of the assessments imposed on insured depository institutions with respect to any SAIF-assessable deposit; and ``(B) no limitation under clause (i) or (iii) of section 7(b)(2)(A) of the Federal Deposit Insurance Act shall apply for purposes of this paragraph.''; and (2) in subsection (k)-- (A) by striking ``section--'' and inserting ``section, the following definitions shall apply:''; (B) by striking paragraph (1); (C) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively; and (D) by adding at the end the following new paragraphs: ``(3) Insured depository institution.--The term `insured depository institution' has the same meaning as in section 3 of the Federal Deposit Insurance Act ``(4) Deposit terms.-- ``(A) BIF-assessable deposits.--The term `BIF- assessable deposit' means a deposit that is subject to assessment for purposes of the Bank Insurance Fund under the Federal Deposit Insurance Act (including a deposit that is treated as a deposit insured by the Bank Insurance Fund under section 5(d)(3) of the Federal Deposit Insurance Act). ``(B) SAIF-assessable deposit.--The term `SAIF- assessable deposit' has the meaning given to such term in section 2710 of the Deposit Insurance Funds Act of 1996.''.

(b) Conforming Amendment.--Section 7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is amended by striking subparagraph (D). (c) Effective Date.-- (1) In general.--Subsections (a) and (c) and the amendments made by such subsections shall apply with respect to semiannual periods which begin after December 31, 1996. (2) Termination of certain assessment rates.--Subparagraph (A) of section 21(f)(2) of the Federal Home Loan

Bank Act (as amended by subsection (a)) shall not apply after the earlier of-- (A) December 31, 1999; or (B) the date as of which the last savings association ceases to exist.

(d) Prohibition on Deposit Shifting.-- (1) In general.--Effective as of the date of the enactment of this Act and ending on the date provided in subsection (c)(2) of this section, the Comptroller of the Currency, the Board of Directors of the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Director of the Office of Thrift Supervision shall take appropriate actions, including enforcement actions, denial of applications, or imposition of entrance and exit fees as if such transactions qualified as conversion transactions pursuant to section 5(d) of the Federal Deposit Insurance Act, to prevent insured depository institutions and depository institution holding companies from facilitating or encouraging the shifting of deposits from SAIF-assessable deposits to BIF-assessable deposits (as defined in section 21(k) of the Federal Home Loan Bank Act) for the purpose of evading the assessments imposed on insured depository institutions with respect to SAIF-assessable deposits under section 7(b) of the Federal Deposit Insurance Act and section 21(f)(2) of the Federal Home Loan Bank Act. (2) Regulations.--The Board of Directors of the Federal Deposit Insurance Corporation may issue regulations, including regulations defining terms used in paragraph (1), to prevent the shifting of deposits described in such paragraph. (3) Rule of construction.--No provision of this subsection shall be construed as prohibiting conduct or activity of any insured depository institution which-- (A) is undertaken in the ordinary course of business of such depository institution; and (B) is not directed towards the depositors of an insured depository institution affiliate (as defined in section 2(k) of the Bank Holding Company Act of 1956) of such depository institution.

(a) In General.-- (1) Merger.--The Bank Insurance Fund and the Savings Association Insurance Fund shall be merged into the Deposit Insurance Fund established by section 11(a)(4) of the Federal Deposit Insurance Act, as amended by this section. (2) Disposition of assets and liabilities.--All assets and liabilities of the Bank Insurance Fund and the Savings Association Insurance Fund shall be transferred to the Deposit Insurance Fund. (3) No separate existence.--The separate existence of the Bank Insurance Fund and the Savings Association Insurance Fund shall cease.

(b) Special Reserve of the Deposit Insurance Fund.-- (1) In general.--Immediately before the merger of the Bank Insurance Fund and the Savings Association Insurance Fund, if the reserve ratio of the Savings Association Insurance Fund exceeds the designated reserve ratio, the amount by which

that reserve ratio exceeds the designated reserve ratio shall be placed in the Special Reserve of the Deposit Insurance Fund, established under section 11(a)(5) of the Federal Deposit Insurance Act, as amended by this section. (2) Definition.--For purposes of this subsection, the term ``reserve ratio'' means the ratio of the net worth of the Savings Association Insurance Fund to the aggregate estimated amount of deposits insured by the Savings Association Insurance Fund.

(c) Effective Date.--This section and the amendments made by this section shall become effective on January 1, 1999, if no insured depository institution is a savings association on that date.

(d) Technical and Conforming Amendments.-- (1) Deposit insurance fund.--Section 11(a)(4) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(4)) is amended-- (A) by redesignating subparagraph (B) as subparagraph (C); (B) by striking subparagraph (A) and inserting the following: ``(A) Establishment.--There is established the Deposit Insurance Fund, which the Corporation shall-- ``(i) maintain and administer; ``(ii) use to carry out its insurance purposes in the manner provided by this subsection; and ``(iii) invest in accordance with section 13(a). ``(B) Uses.--The Deposit Insurance Fund shall be available to the Corporation for use with respect to Deposit Insurance Fund members.''; and (C) by striking ``(4) General provisions relating to funds.--'' and inserting the following: ``(4) Establishment of the deposit insurance fund.-- ''. (2) Other references.--Section 11(a)(4)(C) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(4)(C), as redesignated by paragraph (1) of this subsection) is amended by striking ``Bank Insurance Fund and the Savings Association Insurance Fund'' and inserting ``Deposit Insurance Fund''. (3) Deposits into fund.--Section 11(a)(4) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(4)) is amended by adding at the end the following new subparagraph: ``(D) Deposits.--All amounts assessed against insured depository institutions by the Corporation shall be deposited in the Deposit Insurance Fund.''. (4) Special reserve of deposits.--Section 11(a)(5) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(5)) is amended to read as follows: ``(5) Special reserve of deposit insurance fund.-- ``(A) Establishment.-- ``(i) In general.--There is established a Special Reserve of the Deposit Insurance Fund, which shall be administered by the Corporation and shall be invested in accordance with section 13(a). ``(ii) Limitation.--The Corporation shall not provide any assessment credit, refund, or other payment from any amount in the Special Reserve. ``(B) Emergency use of special reserve.-- Notwithstanding subparagraph (A)(ii), the Corporation may, in its sole discretion, transfer amounts from the Special Reserve

to the Deposit Insurance Fund, for the purposes set forth in paragraph (4), only if-- ``(i) the reserve ratio of the Deposit Insurance Fund is less than 50 percent of the designated reserve ratio; and ``(ii) the Corporation expects the reserve ratio of the Deposit Insurance Fund to remain at less than 50 percent of the designated reserve ratio for each of the next 4 calendar quarters. ``(C) Exclusion of special reserve in calculating reserve ratio.--Notwithstanding any other provision of law, any amounts in the Special Reserve shall be excluded in calculating the reserve ratio of the Deposit Insurance Fund under section 7.''. (5) Federal home loan bank act.--Section 21B(f)(2)(C)(ii) of the Federal Home Loan Bank Act (12 U.S.C. 1441b(f)(2)(C)(ii)) is amended-- (A) in subclause (I), by striking ``to Savings Associations Insurance Fund members'' and inserting ``to insured depository institutions, and their successors, which were Savings Association Insurance Fund members on September 1, 1995''; and (B) in subclause (II), by striking ``to Savings Associations Insurance Fund members'' and inserting ``to insured depository institutions, and their successors, which were Savings Association Insurance Fund members on September 1, 1995''. (6) Repeals.-- (A) Section 3.--Section 3(y) of the Federal Deposit Insurance Act (12 U.S.C. 1813(y)) is amended to read as follows:

``(y) Definitions Relating to the Deposit Insurance Fund.-- ``(1) Deposit insurance fund.--The term `Deposit Insurance Fund' means the fund established under section 11(a)(4). ``(2) Reserve ratio.--The term `reserve ratio' means the ratio of the net worth of the Deposit Insurance Fund to aggregate estimated insured deposits held in all insured depository institutions. ``(3) Designated reserve ratio.--The designated reserve ratio of the Deposit Insurance Fund for each year shall be-- ``(A) 1.25 percent of estimated insured deposits; or ``(B) a higher percentage of estimated insured deposits that the Board of Directors determines to be justified for that year by circumstances raising a significant risk of substantial future losses to the fund.'' (B) Section 7.--Section 7 of the Federal Deposit Insurance Act (12 U.S.C. 1817) is amended-- (i) by striking subsection (l); (ii) by redesignating subsections (m) and (n) as subsections (l) and (m), respectively; (iii) in subsection (b)(2), by striking subparagraphs (B) and (F), and by redesignating subparagraphs (C), (E), (G), and (H) as subparagraphs (B) through (E), respectively. (C) Section 11.--Section 11(a) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)) is amended-- (i) by striking paragraphs (6) and (7); and

(ii) by redesignating paragraph (8) as paragraph (6). (7) Section 5136 of the revised statutes.--The paragraph designated the ``Eleventh'' of section 5136 of the Revised Statutes of the United States (12 U.S.C. 24) is amended in the 5th sentence, by striking ``affected deposit insurance fund'' and inserting ``Deposit Insurance Fund''. (8) Investments promoting public welfare; limitations on aggregate investments.--The 23d undesignated paragraph of section 9 of the Federal Reserve Act (12 U.S.C. 338a) is amended in the 4th sentence, by striking ``affected deposit insurance fund'' and inserting ``Deposit Insurance Fund''. (9) Advances to critically undercapitalized depository institutions.--Section 10B(b)(3)(A)(ii) of the Federal Reserve Act (12 U.S.C. 347b(b)(3)(A)(ii)) is amended by striking ``any deposit insurance fund in'' and inserting ``the Deposit Insurance Fund of''. (10) Amendments to the balanced budget and emergency deficit control act of 1985.--Section 255(g)(1)(A) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)(A)) is amended-- (A) by striking ``Bank Insurance Fund'' and inserting ``Deposit Insurance Fund''; and (B) by striking ``Federal Deposit Insurance Corporation, Savings Association Insurance Fund;''. (11) Further amendments to the federal home loan bank act.-- The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is amended-- (A) in section 11(k) (12 U.S.C. 1431(k))-- (i) in the subsection heading, by striking ``SAIF'' and inserting ``the Deposit Insurance Fund''; and (ii) by striking ``Savings Association Insurance Fund'' each place such term appears and inserting ``Deposit Insurance Fund''; (B) in section 21A(b)(4)(B) (12 U.S.C. 1441a(b)(4)(B)), by striking ``affected deposit insurance fund'' and inserting ``Deposit Insurance Fund''; (C) in section 21A(b)(6)(B) (12 U.S.C. 1441a(b)(6)(B))-- (i) in the subparagraph heading, by striking ``SAIF-insured banks'' and inserting ``Charter conversions''; and (ii) by striking ``Savings Association Insurance Fund member'' and inserting ``savings association''; (D) in section 21A(b)(10)(A)(iv)(II) (12 U.S.C. 1441a(b)(10)(A)(iv)(II)), by striking ``Savings Association Insurance Fund'' and inserting ``Deposit Insurance Fund''; (E) in section 21B(e) (12 U.S.C. 1441b(e))-- (i) in paragraph (5), by inserting ``as of the date of funding'' after ``Savings Association Insurance Fund members'' each place such term appears; (ii) by striking paragraph (7); and (iii) by redesignating paragraph (8) as paragraph (7); and (F) in section 21B(k) (12 U.S.C. 1441b(k))-- (i) by striking paragraph (8); and (ii) by redesignating paragraphs (9) and (10) as paragraphs (8) and (9), respectively.

(12) Amendments to the home owners' loan act.--The Home Owners' Loan Act (12 U.S.C. 1461 et seq.) is amended-- (A) in section 5-- (i) in subsection (c)(5)(A), by striking ``that is a member of the Bank Insurance Fund''; (ii) in subsection (c)(6), by striking ``As used in this subsection--'' and inserting ``For purposes of this subsection, the following definitions shall apply:''; (iii) in subsection (o)(1), by striking ``that is a Bank Insurance Fund member''; (iv) in subsection (o)(2)(A), by striking ``a Bank Insurance Fund member until such time as it changes its status to a Savings Association Insurance Fund member'' and inserting ``insured by the Deposit Insurance Fund''; (v) in subsection (t)(5)(D)(iii)(II), by striking ``affected deposit insurance fund'' and inserting ``Deposit Insurance Fund''; (vi) in subsection (t)(7)(C)(i)(I), by striking ``affected deposit insurance fund'' and inserting ``Deposit Insurance Fund''; and (vii) in subsection (v)(2)(A)(i), by striking ``, the Savings Association Insurance Fund'' and inserting ``or the Deposit Insurance Fund''; and (B) in section 10-- (i) in subsection (e)(1)(A)(iii)(VII), by adding ``or'' at the end; (ii) in subsection (e)(1)(A)(iv), by adding ``and'' at the end; (iii) in subsection (e)(1)(B), by striking ``Savings Association Insurance Fund or Bank Insurance Fund'' and inserting ``Deposit Insurance Fund''; (iv) in subsection (e)(2), by striking ``Savings Association Insurance Fund or the Bank Insurance Fund'' and inserting ``Deposit Insurance Fund''; and (v) in subsection (m)(3), by striking subparagraph (E), and by redesignating subparagraphs (F), (G), and (H) as subparagraphs (E), (F), and (G), respectively. (13) Amendments to the national housing act.--The National Housing Act (12 U.S.C. 1701 et seq.) is amended-- (A) in section 317(b)(1)(B) (12 U.S.C. 1723i(b)(1)(B)), by striking ``Bank Insurance Fund for banks or through the Savings Association Insurance Fund for savings associations'' and inserting ``Deposit Insurance Fund''; and (B) in section 526(b)(1)(B)(ii) (12 U.S.C. 1735f- 14(b)(1)(B)(ii)), by striking ``Bank Insurance Fund for banks and through the Savings Association Insurance Fund for savings associations'' and inserting ``Deposit Insurance Fund''. (14) Further amendments to the federal deposit insurance act.--The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended-- (A) in section 3(a)(1) (12 U.S.C. 1813(a)(1)), by striking subparagraph (B) and inserting the following: ``(B) includes any former savings association.'';

(B) in section 5(b)(5) (12 U.S.C. 1815(b)(5)), by striking ``the Bank Insurance Fund or the Savings Association Insurance Fund;'' and inserting ``Deposit Insurance Fund,''; (C) in section 5(d) (12 U.S.C. 1815(d)), by striking paragraphs (2) and (3); (D) in section 5(d)(1) (12 U.S.C. 1815(d)(1))-- (i) in subparagraph (A), by striking ``reserve ratios in the Bank Insurance Fund and the Savings Association Insurance Fund'' and inserting ``the reserve ratio of the Deposit Insurance Fund''; (ii) by striking subparagraph (B) and inserting the following: ``(2) Fee credited to the deposit insurance fund.--The fee paid by the depository institution under paragraph (1) shall be credited to the Deposit Insurance Fund.''; (iii) by striking ``(1) Uninsured institutions.--''; and (iv) by redesignating subparagraphs (A) and (C) as paragraphs (1) and (3), respectively, and moving the margins 2 ems to the left; (E) in section 5(e) (12 U.S.C. 1815(e))-- (i) in paragraph (5)(A), by striking ``Bank Insurance Fund or the Savings Association Insurance Fund'' and inserting ``Deposit Insurance Fund''; (ii) by striking paragraph (6); and (iii) by redesignating paragraphs (7), (8), and (9) as paragraphs (6), (7), and (8), respectively; (F) in section 6(5) (12 U.S.C. 1816(5)), by striking ``Bank Insurance Fund or the Savings Association Insurance Fund'' and inserting ``Deposit Insurance Fund''; (G) in section 7(b) (12 U.S.C. 1817(b))-- (i) in paragraph (1)(D), by striking ``each deposit insurance fund'' and inserting ``the Deposit Insurance Fund''; (ii) in clauses (i)(I) and (iv) of paragraph (2)(A), by striking ``each deposit insurance fund'' each place such term appears and inserting ``the Deposit Insurance Fund''; (iii) in paragraph (2)(A)(iii), by striking ``a deposit insurance fund'' and inserting ``the Deposit Insurance Fund''; (iv) by striking clause (iv) of paragraph (2)(A); (v) in paragraph (2)(C) (as redesignated by paragraph (6)(B) of this subsection)-- (I) by striking ``any deposit insurance fund'' and inserting ``the Deposit Insurance Fund''; and (II) by striking ``that fund'' each place such term appears and inserting ``the Deposit Insurance Fund''; (vi) in paragraph (2)(D) (as redesignated by paragraph (6)(B) of this subsection)-- (I) in the subparagraph heading, by striking ``funds achieve'' and inserting ``fund achieves''; and (II) by striking ``a deposit insurance fund'' and inserting ``the Deposit Insurance Fund''; (vii) in paragraph (3)--

(I) in the paragraph heading, by striking ``funds'' and inserting ``fund''; (II) by striking ``members of that fund'' where such term appears in the portion of subparagraph (A) which precedes clause (i) of such subparagraph and inserting ``insured depository institutions''; (III) by striking ``that fund'' each place such term appears (other than in connection with term amended in subclause (II) of this clause) and inserting ``the Deposit Insurance Fund''; (IV) in subparagraph (A), by striking ``Except as provided in paragraph (2)(F), if'' and inserting ``If''; (V) in subparagraph (A), by striking ``any deposit insurance fund'' and inserting ``the Deposit Insurance Fund''; and (VI) by striking subparagraphs (C) and (D) and inserting the following: ``(C) Amending schedule.--The Corporation may, by regulation, amend a schedule prescribed under subparagraph (B).''; and (viii) in paragraph (6)-- (I) by striking ``any such assessment'' and inserting ``any such assessment is necessary''; (II) by striking ``(A) is necessary--''; (III) by striking subparagraph (B); (IV) by redesignating clauses (i), (ii), and (iii) as subparagraphs (A), (B), and (C), respectively, and moving the margins 2 ems to the left; and (V) in subparagraph (C) (as redesignated), by striking ``; and'' and inserting a period; (H) in section 11(f)(1) (12 U.S.C. 1821(f)(1)), by striking ``, except that--'' and all that follows through the end of the paragraph and inserting a period; (I) in section 11(i)(3) (12 U.S.C. 1821(i)(3))-- (i) by striking subparagraph (B); (ii) by redesignating subparagraph (C) as subparagraph (B); and (iii) in subparagraph (B) (as redesignated), by striking ``subparagraphs (A) and (B)'' and inserting ``subparagraph (A)''; (J) in section 11A(a) (12 U.S.C. 1821a(a))-- (i) in paragraph (2), by striking ``liabilities.--'' and all that follows through ``Except'' and inserting ``liabilities.--Except''; (ii) by striking paragraph (2)(B); and (iii) in paragraph (3), by striking ``the Bank Insurance Fund, the Savings Association Insurance Fund,'' and inserting ``the Deposit Insurance Fund''; (K) in section 11A(b) (12 U.S.C. 1821a(b)), by striking paragraph (4); (L) in section 11A(f) (12 U.S.C. 1821a(f)), by striking ``Savings Association Insurance Fund'' and inserting ``Deposit Insurance Fund''; (M) in section 13 (12 U.S.C. 1823)-- (i) in subsection (a)(1), by striking ``Bank Insurance Fund, the Savings Association Insurance Fund,'' and

inserting ``Deposit Insurance Fund, the Special Reserve of the Deposit Insurance Fund,''; (ii) in subsection (c)(4)(E)-- (I) in the subparagraph heading, by striking ``funds'' and inserting ``fund''; and (II) in clause (i), by striking ``any insurance fund'' and inserting ``the Deposit Insurance Fund''; (iii) in subsection (c)(4)(G)(ii)-- (I) by striking ``appropriate insurance fund'' and inserting ``Deposit Insurance Fund''; (II) by striking ``the members of the insurance fund (of which such institution is a member)'' and inserting ``insured depository institutions''; (III) by striking ``each member's'' and inserting ``each insured depository institution's''; and (IV) by striking ``the member's'' each place such term appears and inserting ``the institution's''; (iv) in subsection (c), by striking paragraph (11); (v) in subsection (h), by striking ``Bank Insurance Fund'' and inserting ``Deposit Insurance Fund''; (vi) in subsection (k)(4)(B)(i), by striking ``Savings Association Insurance Fund'' and inserting ``Deposit Insurance Fund''; and (vii) in subsection (k)(5)(A), by striking ``Savings Association Insurance Fund'' and inserting ``Deposit Insurance Fund''; (N) in section 14(a) (12 U.S.C. 1824(a)) in the 5th sentence-- (i) by striking ``Bank Insurance Fund or the Savings Association Insurance Fund'' and inserting ``Deposit Insurance Fund''; and (ii) by striking ``each such fund'' and inserting ``the Deposit Insurance Fund''; (O) in section 14(b) (12 U.S.C. 1824(b)), by striking ``Bank Insurance Fund or Savings Association Insurance Fund'' and inserting ``Deposit Insurance Fund''; (P) in section 14(c) (12 U.S.C. 1824(c)), by striking paragraph (3); (Q) in section 14(d) (12 U.S.C. 1824(d))-- (i) by striking ``BIF'' each place such term appears and inserting ``DIF''; and (ii) by striking ``Bank Insurance Fund'' each place such term appears and inserting ``Deposit Insurance Fund''; (R) in section 15(c)(5) (12 U.S.C. 1825(c)(5))-- (i) by striking ``the Bank Insurance Fund or Savings Association Insurance Fund, respectively'' each place such term appears and inserting ``the Deposit Insurance Fund''; and (ii) in subparagraph (B), by striking ``the Bank Insurance Fund or the Savings Association Insurance Fund, respectively'' and inserting ``the Deposit Insurance Fund''; (S) in section 17(a) (12 U.S.C. 1827(a))-- (i) in the subsection heading, by striking ``BIF, SAIF,'' and inserting ``the Deposit Insurance Fund''; and

(ii) in paragraph (1), by striking ``the Bank Insurance Fund, the Savings Association Insurance Fund,'' each place such term appears and inserting ``the Deposit Insurance Fund''; (T) in section 17(d) (12 U.S.C. 1827(d)), by striking ``the Bank Insurance Fund, the Savings Association Insurance Fund,'' each place such term appears and inserting ``the Deposit Insurance Fund''; (U) in section 18(m)(3) (12 U.S.C. 1828(m)(3))-- (i) by striking ``Savings Association Insurance Fund'' each place such term appears and inserting ``Deposit Insurance Fund''; and (ii) in subparagraph (C), by striking ``or the Bank Insurance Fund''; (V) in section 18(p) (12 U.S.C. 1828(p)), by striking ``deposit insurance funds'' and inserting ``Deposit Insurance Fund''; (W) in section 24 (12 U.S.C. 1831a) in subsections (a)(1) and (d)(1)(A), by striking ``appropriate deposit insurance fund'' each place such term appears and inserting ``Deposit Insurance Fund''; (X) in section 28 (12 U.S.C. 1831e), by striking ``affected deposit insurance fund'' each place such term appears and inserting ``Deposit Insurance Fund''; (Y) by striking section 31 (12 U.S.C. 1831h); (Z) in section 36(i)(3) (12 U.S.C. 1831m(i)(3)) by striking ``affected deposit insurance fund'' and inserting ``Deposit Insurance Fund''; (AA) in section 38(a) (12 U.S.C. 1831o(a)) in the subsection heading, by striking ``Funds'' and inserting ``Fund''; (BB) in section 38(k) (12 U.S.C. 1831o(k))-- (i) in paragraph (1), by striking ``a deposit insurance fund'' and inserting ``the Deposit Insurance Fund''; and (ii) in paragraph (2)(A)-- (I) by striking ``A deposit insurance fund'' and inserting ``The Deposit Insurance Fund''; and (II) by striking ``the deposit insurance fund's outlays'' and inserting ``the outlays of the Deposit Insurance Fund''; and (CC) in section 38(o) (12 U.S.C. 1831o(o))-- (i) by striking ``Associations.--'' and all that follows through ``Subsections (e)(2)'' and inserting ``Associations.--Subsections (e)(2)''; (ii) by redesignating subparagraphs (A), (B), and (C) as paragraphs (1), (2), and (3), respectively, and moving the margins 2 ems to the left; and (iii) in paragraph (1) (as redesignated), by redesignating clauses (i) and (ii) as subparagraphs (A) and (B), respectively, and moving the margins 2 ems to the left. (15) Amendments to the financial institutions reform, recovery, and enforcement act of 1989.--The Financial Institutions Reform, Recovery, and Enforcement Act is amended-- (A) in section 951(b)(3)(B) (12 U.S.C. 1833a(b)(3)(B)), by striking ``Bank Insurance Fund, the Savings Association

Insurance Fund,'' and inserting ``Deposit Insurance Fund''; and (B) in section 1112(c)(1)(B) (12 U.S.C. 3341(c)(1)(B)), by striking ``Bank Insurance Fund, the Savings Association Insurance Fund,'' and inserting ``Deposit Insurance Fund''. (16) Amendment to the bank enterprise act of 1991.--Section 232(a)(1) of the Bank Enterprise Act of 1991 (12 U.S.C. 1834(a)(1)) is amended by striking ``section 7(b)(2)(H)'' and inserting ``section 7(b)(2)(G)''. (17) Amendment to the bank holding company act of 1956.-- Section 2(j)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(j)(2)) is amended by striking ``Savings Association Insurance Fund'' and inserting ``Deposit Insurance Fund''.

Section 11(a)(6) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(6)) is amended by adding at the end the following new subparagraph: ``(L) Establishment of saif special reserve.-- ``(i) Establishment.--If, on January 1, 1999, the reserve ratio of the Savings Association Insurance Fund exceeds the designated reserve ratio, there is established a Special Reserve of the Savings Association Insurance Fund, which shall be administered by the Corporation and shall be invested in accordance with section 13(a). ``(ii) Amounts in special reserve.--If, on January 1, 1999, the reserve ratio of the Savings Association Insurance Fund exceeds the designated reserve ratio, the amount by which the reserve ratio exceeds the designated reserve ratio shall be placed in the Special Reserve of the Savings Association Insurance Fund established by clause (i). ``(iii) Limitation.--The Corporation shall not provide any assessment credit, refund, or other payment from any amount in the Special Reserve of the Savings Association Insurance Fund. ``(iv) Emergency use of special reserve.-- Notwithstanding clause (iii), the Corporation may, in its sole discretion, transfer amounts from the Special Reserve of the Savings Association Insurance Fund to the Savings Association Insurance Fund for the purposes set forth in paragraph (4), only if-- ``(I) the reserve ratio of the Savings Association Insurance Fund is less than 50 percent of the designated reserve ratio; and ``(II) the Corporation expects the reserve ratio of the Savings Association Insurance Fund to remain at less than 50 percent of the designated reserve ratio for each of the next 4 calendar quarters. ``(v) Exclusion of special reserve in calculating reserve ratio.--Notwithstanding any other provision of law, any amounts in the Special Reserve of the Savings Association Insurance Fund shall be excluded in calculating the reserve ratio of the Savings Association Insurance Fund.''.

DESIGNATED RESERVE AMOUNT.

Subsection (e) of section 7 of the Federal Deposit Insurance Act (12 U.S.C. 1817(e)) is amended to read as follows: ``(e) Refunds.-- ``(1) Overpayments.--In the case of any payment of an assessment by an insured depository institution in excess of the amount due to the Corporation, the Corporation may-- ``(A) refund the amount of the excess payment to the insured depository institution; or ``(B) credit such excess amount toward the payment of subsequent semiannual assessments until such credit is exhausted. ``(2) Balance in insurance fund in excess of designated reserve.-- ``(A) In general.--Subject to subparagraphs (B) and (C), if, as of the end of any semiannual assessment period beginning after the date of the enactment of the Deposit Insurance Funds Act of 1996, the amount of the actual reserves in-- ``(i) the Bank Insurance Fund (until the merger of such fund into the Deposit Insurance Fund pursuant to section 2704 of the Deposit Insurance Funds Act of 1996); or ``(ii) the Deposit Insurance Fund (after the establishment of such fund),

exceeds the balance required to meet the designated reserve ratio applicable with respect to such fund, such excess amount shall be refunded to insured depository institutions by the Corporation on such basis as the Board of Directors determines to be appropriate, taking into account the factors considered under the risk-based assessment system. ``(B) Refund not to exceed previous semiannual assessment.--The amount of any refund under this paragraph to any member of a deposit insurance fund for any semiannual assessment period may not exceed the total amount of assessments paid by such member to the insurance fund with respect to such period. ``(C) Refund limitation for certain institutions.-- No refund may be made under this paragraph with respect to the amount of any assessment paid for any semiannual assessment period by any insured depository institution described in clause (v) of subsection (b)(2)(A).''.

ASSESSMENT RATES FOR BIF MEMBERS.

Section 7(b)(2)(C) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)(E), as redesignated by section 2704(d)(6) of this subtitle) is amended-- (1) by striking ``and'' at the end of clause (i); (2) by striking the period at the end of clause (ii) and inserting ``; and''; and (3) by adding at the end the following new clause: ``(iii) notwithstanding any other provision of this subsection, during the period beginning on the date of enactment of the Deposit Insurance Funds Act of

1996, and ending on December 31, 1998, the assessment rate for a Savings Association Insurance Fund member may not be less than the assessment rate for a Bank Insurance Fund member that poses a comparable risk to the deposit insurance fund.''.

RATIO OF A DEPOSIT INSURANCE FUND.

(a) In General.--Section 7(b)(2)(A)(i) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)(A)(i)) is amended in the matter preceding subclause (I) by inserting ``when necessary, and only to the extent necessary'' after ``insured depository institutions''. (b) Limitation on Assessment.--Section 7(b)(2)(A)(iii) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)(A)(iii)) is amended to read as follows: ``(iii) Limitation on assessment.--Except as provided in clause (v), the Board of Directors shall not set semiannual assessments with respect to a deposit insurance fund in excess of the amount needed-- ``(I) to maintain the reserve ratio of the fund at the designated reserve ratio; or ``(II) if the reserve ratio is less than the designated reserve ratio, to increase the reserve ratio to the designated reserve ratio.''.

(c) Exception to Limitation on Assessments.--Section 7(b)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)(A)) is amended by adding at the end the following new clause: ``(v) Exception to limitation on assessments.--The Board of Directors may set semiannual assessments in excess of the amount permitted under clauses (i) and (iii) with respect to insured depository institutions that exhibit financial, operational, or compliance weaknesses ranging from moderately severe to unsatisfactory, or are not well capitalized, as that term is defined in section 38.''.

(a) Study Required.--The Secretary of the Treasury shall conduct a study of all issues which the Secretary considers to be relevant with respect to the development of a common charter for all insured depository institutions (as defined in section 3 of the Federal Deposit Insurance Act) and the abolition of separate and distinct charters between banks and savings associations. (b) Report to the Congress.-- (1) In general.--The Secretary of the Treasury shall submit a report to the Congress on or before March 31, 1997, containing the findings and conclusions of the Secretary in connection with the study conducted pursuant to subsection (a). (2) Detailed analysis and recommendations.--The report under paragraph (1) shall include-- (A) a detailed analysis of each issue the Secretary considered relevant to the subject of the study;

(B) recommendations of the Secretary with regard to the establishment of a common charter for insured depository institutions (as defined in section 3 of the Federal Deposit Insurance Act); and (C) such recommendations for legislative and administrative action as the Secretary determines to be appropriate to implement the recommendations of the Secretary under subparagraph (B).

For purposes of this subtitle, the following definitions shall apply: (1) Bank insurance fund.--The term ``Bank Insurance Fund'' means the fund established pursuant to section (11)(a)(5)(A) of the Federal Deposit Insurance Act, as that section existed on the day before the date of enactment of this Act. (2) BIF member, saif member.--The terms ``Bank Insurance Fund member'' and ``Savings Association Insurance Fund member'' have the same meanings as in section 7(l) of the Federal Deposit Insurance Act. (3) Various banking terms.--The terms ``bank'', ``Board of Directors'', ``Corporation'', ``deposit'', ``insured depository institution'', ``Federal savings association'', ``savings association'', ``State savings bank'', and ``State depository institution'' have the same meanings as in section 3 of the Federal Deposit Insurance Act. (4) Deposit insurance fund.--The term ``Deposit Insurance Fund'' means the fund established under section 11(a)(4) of the Federal Deposit Insurance Act (as amended by section 2704(d) of this subtitle). (5) Depository institution holding company.--The term ``depository institution holding company'' has the same meaning as in section 3 of the Federal Deposit Insurance Act. (6) Designated reserve ratio.--The term ``designated reserve ratio'' has the same meaning as in section 7(b)(2)(A)(iv) of the Federal Deposit Insurance Act. (7) SAIF.--The term ``Savings Association Insurance Fund'' means the fund established pursuant to section 11(a)(6)(A) of the Federal Deposit Insurance Act, as that section existed on the day before the date of enactment of this Act. (8) SAIF-assessable deposit.--The term ``SAIF-assessable deposit''-- (A) means a deposit that is subject to assessment for purposes of the Savings Association Insurance Fund under the Federal Deposit Insurance Act (including a deposit that is treated as insured by the Savings Association Insurance Fund under section 5(d)(3) of the Federal Deposit Insurance Act); and (B) includes any deposit described in subparagraph (A) which is assumed after March 31, 1995, if the insured depository institution, the deposits of which are assumed, is not an insured depository institution when the special assessment is imposed under section 2702(a).

For purposes of subtitle A of the Internal Revenue Code of 1986--

(1) the amount allowed as a deduction under section 162 of such Code for a taxable year shall include any amount paid during such year by reason of an assessment under section 2702 of this subtitle, and (2) section 172(f) of such Code shall not apply to any deduction described in paragraph (1).

(a) Commission Obligation To Make Additional Spectrum Available.-- The Federal Communications Commission shall-- (1) reallocate the use of frequencies at 2305-2320 megahertz and 2345-2360 megahertz to wireless services that are consistent with international agreements concerning spectrum allocations; and (2) assign the use of such frequencies by competitive bidding pursuant to section 309(j) of the Communications Act of 1934 (47 U.S.C. 309(j)). (b) Additional Requirements.--In making the bands of frequencies described in subsection (a) available for competitive bidding, the Commission shall-- (1) seek to promote the most efficient use of the spectrum; and (2) take into account the needs of public safety radio services. (c) Expedited Procedures.--The Commission shall commence the competitive bidding for the assignment of the frequencies described in subsection (a)(1) no later than April 15, 1997. The rules governing such frequencies shall be effective immediately upon publication in the Federal Register notwithstanding section 553(d), 801(a)(3), and 806(a) of title 5, United States Code. Chapter 6 of such title, and sections 3507 and 3512 of title 44, United States Code, shall not apply to the rules and competitive bidding procedures governing such frequencies. Notwithstanding section 309(b) of the Communications Act of 1934 (47 U.S.C. 309(b)), no application for an instrument of authorization for such frequencies shall be granted by the Commission earlier than 7 days following issuance of public notice by the Commission of the acceptance for filing of such application or of any substantial amendment thereto. Notwithstanding section 309(d)(1) of such Act (47 U.S.C. 309(d)(1)), the Commission may specify a period (no less than 5 days following issuance of such public notice) for the filing of petitions to deny any application for an instrument of authorization for such frequencies. (d) Deadline for Collection.--The Commission shall conduct the competitive bidding under subsection (a)(2) in a manner that ensures that all proceeds of the bidding are deposited in accordance with section 309(j)(8) of the Communications Act of 1934 not later September 30, 1997.

For purposes of section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985, on the calendar day after the Director of the Office of Management and Budget issues the final sequestration report for fiscal year 1997, the Director and the Director of the Congressional Budget Office shall change the balances (as computed pursuant to section 252(b) of that Act) of direct spending and receipts legislation-- (1) for fiscal year 1997 to zero if such balance for the fiscal year is not an increase in the deficit.

This Act may be cited as the ``Oregon Resource Conservation Act of 1996''.

This title may be cited as the ``Opal Creek Wilderness and Opal Creek Scenic Recreation Area Act of 1996''.

In this title: (1) Bull of the woods wilderness.--The term ``Bull of the Woods Wilderness'' means the land designated as wilderness by section 3(4) of the Oregon Wilderness Act of 1984 (Public Law 98-328; 16 U.S.C. 1132 note). (2) Opal creek wilderness.--The term ``Opal Creek Wilderness'' means certain land in the Willamette National Forest in the State of Oregon comprising approximately 12,800 acres, as generally depicted on the map entitled ``Proposed Opal Creek Wilderness and Scenic Recreation Area'', dated July 1996. (3) Scenic recreation area.--The term ``Scenic Recreation Area'' means the Opal Creek Scenic Recreation Area, comprising approximately 13,000 acres, as generally depicted on the map entitled ``Proposed Opal Creek Wilderness and Scenic Recreation Area'', dated July 1996 and established under section 104(a)(3) of this title. (4) Secretary.--The term ``Secretary'' means the Secretary of Agriculture.

The purposes of this title are: (1) to establish a wilderness and scenic recreation area to protect and provide for the enhancement of the natural, scenic, recreational, historic, and cultural resources of the area in the vicinity of Opal Creek; (2) to protect and support the economy of the communities in the Santiam Canyon; and (3) to provide increased protection for an important drinking water source for communities served by the north Santiam River.

WILDERNESS AND SCENIC RECREATION AREA. (a) Establishment.--On a determination by the Secretary under subsection (b)-- (1) the Opal Creek Wilderness, as depicted on the map described in section 102(2), is hereby designated as wilderness, subject to the provisions of the Wilderness Act of 1964, shall

become a component of the National Wilderness System, and shall be known as the Opal Creek Wilderness; (2) the part of the Bull of the Woods Wilderness that is located in the Willamette National Forest shall be incorporated into the Opal Creek Wildnerness; and (3) the Secretary shall establish the Opal Creek Scenic Recreation Area in the Willamette National Forest in the State of Oregon, comprising approximately 13,000 acres, as generally depicted on the map described in section 102(3). (b) Conditions.--The designations in subsection (a) shall not take effect unless the Secretary makes a determination, not later than 2 years after the date of enactment of this title, that the following conditions have been met: (1) the following have been donated to the United States in an acceptable condition and without encumbrances-- (A) all right, title, and interest in the following patented parcels of land-- (i) Santiam number 1, mineral survey number 992, as described in patent number 39-92-0002, dated December 11, 1991; (ii) Ruth Quartz Mine number 2, mineral survey number 994, as described in patent number 39-91- 0012, dated February 12, 1991; (iii) Morning Star Lode, mineral survey number 993, as described in patent number 36-91-0011, dated February 12, 1991; (B) all right, title, and interest held by any entity other than the Times Mirror Land and Timber Company, its successors and assigns, in and to lands located in section 18, township 8 south, range 5 east, Marion County, Oregon, Eureka numbers 6, 7, 8, and 13 mining claims; and (C) an easement across the Hewitt, Starvation, and Poor Boy Mill Sites, mineral survey number 990, as described in patent number 36-91-0017, dated May 9, 1991. In the sole discretion of the Secretary, such easement may be limited to administrative use if an alternative access route, adequate and appropriate for public use, is provided. (2) a binding agreement has been executed by the Secretary and the owners of record as of March 29, 1996, of the following interests, specifying the terms and conditions for the disposition of such interests to the United States Government-- (A) the lode mining claims known as Princess Lode, Black Prince Lode, and King number 4 Lode, embracing portions of sections 29 and 32, township 8 south, range 5 east, Willamette Meridian, Marion County, Oregon, the claims being more particularly described in the field notes and depicted on the plat of mineral survey number 887, Oregon; and (B) Ruth Quartz Mine number 1, mineral survey number 994, as described in patent number 39-91-0012, dated February 12, 1991. (c) Additions to the Wilderness and Scenic Recreation Areas.-- (1) Lands or interests in lands conveyed to the United States under this section shall be included in and become

part of, as appropriate, Opal Creek Wilderness or the Opal Creek Scenic Recreation Area. (2) On acquiring all or substantially all of the land located in section 36, township 8 south, range 4 east, of the Willamette Meridian, Marion County, Oregon, commonly known as the Rosboro section, by exchange, purchase from a willing seller, or by donation, the Secretary shall expand the boundary of the Scenic Recreation Area to include such land. (3) On acquiring all or substantially all of the land located in section 18, township 8 south, range 5 east, Marion County, Oregon, commonly known as the Times Mirror property, by exchange, purchase from a willing seller, or by donation, such land shall be included in and become a part of the Opal Creek Wilderness.

(a) In General.--The Secretary shall administer the Scenic Recreation Area in accordance with this title and the laws (including regulations) applicable to the National Forest System. (b) Opal Creek Management Plan.-- (1) In general.--Not later than 2 years after the date of establishment of the Scenic Recreation Area, the Secretary, in consultation with the advisory committee established under section 106(a), shall prepare a comprehensive Opal Creek Management Plan (Management Plan) for the Scenic Recreation Area. (2) Incorporation in land and resource management plan.-- Upon its completion, the Opal Creek Management Plan shall become part of the land and resource management plan for the Willamette National Forest and supersede any conflicting provision in such land and resource management plan. Nothing in this paragraph shall be construed to supersede the requirements of the Endangered Species Act or the National Forest Management Act or regulations promulgated under those Acts, or any other law. (3) Requirements.--The Opal Creek Management Plan shall provide for a broad range of land uses, including-- (A) recreation; (B) harvesting of nontraditional forest products, such as gathering mushrooms and material to make baskets; and (C) educational and research opportunities. (4) Plan amendments.--The Secretary may amend the Opal Creek Management Plan as the Secretary may determine to be necessary, consistent with the procedures and purposes of this title. (c) Recreation.-- (1) Recognition.--Congress recognizes recreation as an appropriate use of the Scenic Recreation Area. (2) Minimum levels.--The management plan shall permit recreation activities at not less than the levels in existence on the date of enactment of this title. (3) Higher levels.--The management plan may provide for levels of recreation use higher than the levels in existence on the date of enactment of this title if such uses are consistent with the protection of the resource values of Scenic Recreation Area.

(4) The management plan may include public trail access through section 28, township 8 south, range 5 east, Willamette Meridian, to Battle Axe Creek, Opal Pool and other areas in the Opal Creek Wilderness and the Opal Creek Scenic Recreation Area. (d) Transportation Planning.-- (1) In general.--Except as provided in this subparagraph, motorized vehicles shall not be permitted in the Scenic Recreation Area. To maintain reasonable motorized and other access to recreation sites and facilities in existence on the date of enactment of this title, the Secretary shall prepare a transportation plan for the Scenic Recreation Area that: (A) evaluates the road network within the Scenic Recreation Area to determine which roads should be retained and which roads should be closed; (B) provides guidelines for transportation and access consistent with this title; (C) considers the access needs of persons with disabilities in preparing the transportation plan for the Scenic Recreation Area; (D) allows forest road 2209 beyond the gate to the Scenic Recreation Area, as depicted on the map described in 102(2), to be used by motorized vehicles only for administrative purposes and for access by private inholders, subject to such terms and conditions as the Secretary may determine to be necessary; and (E) restricts construction on or improvements to forest road 2209 beyond the gate to the Scenic Recreation Area to maintaining the character of the road as it existed upon the date of enactment of this title, which shall not include paving or widening. In order to comply with subsection 107(b) of this title, the Secretary may make improvements to forest road 2209 and its bridge structures consistent with the character of the road as it existed on the date of enactment of this title. (e) Hunting and Fishing.-- (1) In general.--Subject to applicable Federal and State law, the Secretary shall permit hunting and fishing in the Scenic Recreation Area. (2) Limitation.--The Secretary may designate zones in which, and establish periods when, no hunting or fishing shall be permitted for reasons of public safety, administration, or public use and enjoyment of the Scenic Recreation Area. (3) Consultation.--Except during an emergency, as determined by the Secretary, the Secretary shall consult with the Oregon State Department of Fish and Wildlife before issuing any regulation under this subsection. (f) Timber Cutting.-- (1) In general.--Subject to paragraph (2), the Secretary shall prohibit the cutting and/or selling of trees in the Scenic Recreation Area. (2) Permitted cutting.-- (A) In general.--Subject to subparagraph (B), the Secretary may allow the cutting of trees in the Scenic Recreation Area only-- (i) for public safety, such as to control the continued spread of a forest fire in the Scenic Recreation

Area or on land adjacent to the Scenic Recreation Area; (ii) for activities related to administration of the Scenic Recreation Area, consistent with the Opal Creek Management Plan; or (iii) for removal of hazard trees along trails and roadways. (B) Salvage sales.--The Secretary may not allow a salvage sale in the Scenic Recreation Area. (g) Withdrawal.-- (1) Subject to valid existing rights, all lands in the Scenic Recreation Area are withdrawn from-- (i) any form of entry, appropriation, or disposal under the public land laws; (ii) location, entry, and patent under the mining laws; and (iii) disposition under the mineral and geothermal leasing laws. (h) Bornite Project.-- (1) Nothing in this title shall be construed to interfere with or approve any exploration, mining, or mining-related activity in the Bornite Project Area, depicted on the map described in subsection 102(3), conducted in accordance with applicable laws. (2) Nothing in this title shall be construed to interfere with the ability of the Secretary to approve and issue, or deny, special use permits in connection with exploration, mining, and mining-related activities in the Bornite Project Area. (3) Motorized vehicles, roads, structures, and utilities (including but not limited to power lines and water lines) may be allowed inside the Scenic Recreation Area to serve the activities conducted on land within the Bornite Project. (4) After the date of enactment of this title, no patent or claim shall be issued for any mining claim under the general mining laws located within the Bornite Project Area. (i) Water Impoundments.--Notwithstanding the Federal Power Act (16 U.S.C. 791a et seq.), the Federal Energy Regulatory Commission may not license the construction of any dam, water conduit, reservoir, powerhouse, transmission line, or other project work in the Scenic Recreation Area, except as may be necessary to comply with the provisions of subsection 105(h) with regard to the Bornite Project. (j) Cultural and Historic Resource Inventory.-- (1) In general.--Not later than 1 year after the date of establishment of the Scenic Recreation Area, the Secretary shall review and revise the inventory of the cultural and historic resources on the public land in the Scenic Recreation Area developed pursuant to the Oregon Wilderness Act of 1984 (Public Law 98-328; 16 U.S.C. 1132). (2) Interpretation.--Interpretive activities shall be developed under the management plan in consultation with State and local historic preservation organizations and shall include a balanced and factual interpretation of the cultural, ecological, and industrial history of forestry and mining in the Scenic Recreation Area. (k) Participation.--So that the knowledge, expertise, and views of all agencies and groups may contribute affirmatively to

the most sensitive present and future use of the Scenic Recreation Area and its various subareas for the benefit of the public: (1) Advisory council.--The Secretary shall consult on a periodic and regular basis with the advisory council established under section 106 with respect to matters relating to management of the Scenic Recreation Area. (2) Public participation.--The Secretary shall seek the views of private groups, individuals, and the public concerning the Scenic Recreation Area. (3) Other agencies.--The Secretary shall seek the views and assistance of, and cooperate with, any other Federal, State, or local agency with any responsibility for the zoning, planning, or natural resources of the Scenic Recreation Area. (4) Nonprofit agencies and organizations.--The Secretary shall seek the views of any nonprofit agency or organization that may contribute information or expertise about the resources and the management of the Scenic Recreation Area.

(a) Establishment.--Not later than 90 days after the establishment of the Scenic Recreation Area, the Secretary shall establish an advisory council for the Scenic Recreation Area. (b) Membership.--The advisory council shall consist of not more than 13 members, of whom-- (1) 1 member shall represent Marion County, Oregon, and shall be designated by the governing body of the county; (2) 1 member shall represent the State of Oregon and shall be designated by the Governor of Oregon; and (3) 1 member shall represent the city of Salem, and shall be designated by the mayor of Salem, Oregon; (4) 1 member from a city within a 25-mile radius of the Opal Creek Scenic Recreation Area, to be designated by the Governor of the State of Oregon from a list of candidates provided by the mayors of the cities located within a 25-mile radius of the Opal Creek Scenic Recreation Area; and (5) not more than 9 members shall be appointed by the Secretary from among persons who, individually or through association with a national or local organization, have an interest in the administration of the Scenic Recreation Area, including, but not limited to, representatives of the timber industry, environmental organizations, the mining industry, inholders in the Opal Creek Wilderness and Scenic Recreation Area, economic development interests and Indian Tribes. (c) Staggered Terms.--Members of the advisory council shall serve for staggered terms of three years. (d) Chairman.--The Secretary shall designate one member of the advisory council as chairman. (e) Vacancies.--The Secretary shall fill a vacancy on the advisory council in the same manner as the original appointment. (f) Compensation.--Members of the advisory council shall receive no compensation for service on the advisory council.

(a) Land Acquisition.-- (1) In general.--Subject to the other provisions of this title the Secretary may acquire any lands or interests in land in the Scenic Recreation Area or the Opal Creek Wilderness

that the Secretary determines are needed to carry out this title. (2) Public land.--Any lands or interests in land owned by a State or a political subdivision of a State may be acquired only by donation or exchange. (3) Condemnation.--Within the boundaries of the Opal Creek Wilderness or the Scenic Recreation Area, the Secretary may not acquire any privately owned land or interest in land without the consent of the owner unless the Secretary finds that-- (A) the nature of land use has changed significantly, or the landowner has demonstrated intent to change the land use significantly, from the use that existed on the date of the enactment of this title; and (B) acquisition by the Secretary of the land or interest in land is essential to ensure use of the land or interest in land in accordance with the purposes of this title or the management plan prepared under section 105(b). (4) Nothing in this title shall be construed to enhance or diminish the condemnation authority available to the Secretary outside the boundaries of the Opal Creek Wilderness or the Scenic Recreation Area. (b) Environmental Response Actions and Cost Recovery.-- (1) Response actions.--Nothing in this title shall limit the authority of the Secretary or a responsible party to conduct an environmental response action in the Scenic Recreation Area in connection with the release, threatened release, or cleanup of a hazardous substance, pollutant, or contaminant, including a response action conducted under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et seq.). (2) Liability.--Nothing in this title shall limit the authority of the Secretary or a responsible party to recover costs related to the release, threatened release, or cleanup of any hazardous substance or pollutant or contaminant in the Scenic Recreation Area. (c) Maps and Description.-- (1) In general.--As soon as practicable after the date of enactment of this title, the Secretary shall file a map and a boundary description for the Opal Creek Wilderness and for the Scenic Recreation Area with the Committee on Resources of the House of Representatives and the Committee on Energy and Natural Resources of the Senate. (2) Force and effect.--The boundary description and map shall have the same force and effect as if the description and map were included in this title, except that the Secretary may correct clerical and typographical errors in the boundary description and map. (3) Availability.--The map and boundary description shall be on file and available for public inspection in the Office of the Chief of the Forest Service, Department of Agriculture. (d) Nothing in this title shall interfere with any activity for which a special use permit has been issued, has not been revoked, and has not expired, before the date of enactment of this title, subject to the terms of the permit.

(a) Authorization.--Notwithstanding any other law, if the Rosboro Lumber Company (referred to in this section as ``Rosboro'') offers and conveys marketable title to the United States to the land described in subsection (b), the Secretary of Agriculture shall convey all right, title and interest held by the United States to sufficient lands described in subsection (c) to Rosboro, in the order in which they appear in subsection (c), as necessary to satisfy the equal value requirements of subsection (d). (b) Land to be Offered by Rosboro.--The land referred to in subsection (a) as the land to be offered by Rosboro shall comprise Section 36, Township 8 South, range 4 east, Willamette Meridian. (c) Land To Be Conveyed by the United States.--The land referred to in subsection (a) as the land to be conveyed by the United States shall comprise sufficient land from the following prioritized list to be of equal value under subparagraph (d): (1) Section 5, Township 17 South, Range 4 East, Lot 7 (37.63 acres). (2) Section 2, Township 17 South, Range 4 East, Lot 3 (29.28 acres). (3) Section 13, Township 17 South, Range 4 East, S\1/2\ SE\1/4\ (80 acres). (4) Section 2, Township 17 South, Range 4 East, SW\1/4\ SW\1/4\ (40 acres). (5) Section 2, Township 17 South, Range 4 East, NW\1/4\ SE\1/4\ (40 acres). (6) Section 8, Township 17 South, Range 4 East, SE\1/4\ SW\1/4\ (40 acres). (7) Section 11, Township 17 South, Range 4 East, W\1/2\ NW\1/4\ (80 acres). (d) Equal Value.--The land and interests in land exchanged under this section shall be of equal market value as determined by nationally recognized appraisal standards, including, to the extent appropriate, the Uniform Standards for Federal Land Acquisition, the Uniform Standards of Professional Appraisal Practice, or shall be equalized by way of payment of cash pursuant to the provisions of section 206(d) of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1716(d)), and other applicable law. The appraisal shall consider access costs for the parcels involved. (e) Timetable.-- (1) The exchange directed by this section shall be consummated not later than 120 days after the date Rosboro offers and conveys the property described in subsection (b) to the United States. (2) The authority provided by this section shall lapse if Rosboro fails to offer the land described in subsection (b) within two years after the date of enactment of this title. (f) Rosboro shall have the right to challenge in United States District Court for the District of Oregon a determination of marketability under subsection (a) and a determination of value for the lands described in subsections (b) and (c) by the Secretary of Agriculture. The Court shall have the authority to order the Secretary to complete the transaction contemplated in this Section. (g) Authorization of Appropriations.--There are authorized to be appropriated such sums as are necessary to carry out this section.

Section 3(a) of the Wild and Scenic Rivers Act (16 U.S.C. 1274(a)) is amended by adding at the end the following: ``( ) (A) Elkhorn creek.--The 6.4 mile segment traversing federally administered lands from that point along the Willamette National Forest boundary on the common section line between Sections 12 and 13, Township 9 South, Range 4 East, Willamette Meridian, to that point where the segment leaves federal ownership along the Bureau of Land Management boundary in Section 1, Township 9 South, Range 3 East, Willamette Meridian, in the following classes: ``(i) a 5.8-mile wild river area, extending from that point along the Willamette National Forest boundary on the common section line between Sections 12 and 13, Township 9 South, Range 4 East, Willamette Meridian, to its confluence with Buck Creek in Section 1, Township 9 South, Range 3 East, Willamette Meridian, to be administered as agreed on by the Secretaries of Agriculture and the Interior, or as directed by the President; and ``(ii) a 0.6-mile scenic river area, extending from the confluence with Buck Creek in Section 1, Township 9 South, Range 3 East, Willamette Meridian, to that point where the segment leaves federal ownership along the Bureau of Land Management boundary in Section 1, Township 9 South, Range 3 East, Willamette Meridian, to be administered by the Secretary of Interior, or as directed by the President. ``(B) Notwithstanding section 3(b) of this Act, the lateral boundaries of both the wild river area and the scenic river area along Elkhorn Creek shall include an average of not more than 640 acres per mile measured from the ordinary high water mark on both sides of the river.''

(a) Economic Development Plan.--As a condition for receiving funding under subsection (b) of this section, the State of Oregon, in consultation with Marion County and the Secretary of Agriculture, shall develop a plan for economic development projects for which grants under this section may be used in a manner consistent with this title and to benefit local communities in the vicinity of the Opal Creek area. Such plan shall be based on an economic opportunity study and other appropriate information. (b) Funds Provided to the States for Grants.--Upon completion of the Opal Creek Management Plan, and receipt of the plan referred to in subsection (a) of this section, the Secretary shall provide, subject to appropriations, $15,000,000, to the State of Oregon. Such funds shall be used to make grants or loans for economic development projects that further the purposes of this title and benefit the local communities in the vicinity of Opal Creek. (c) Report.--The State of Oregon shall-- (1) prepare and provide the Secretary and Congress with an annual report on the use of the funds made available under this section; (2) make available to the Secretary and to Congress, upon request, all accounts, financial records, and other information

related to grants and loans made available pursuant to this section; and (3) as loans are repaid, make additional grants and loans with the money made available for obligation by such repayments.

(a) Definitions.--In this section: (1) Ecosystem restoration office.--The term ``Ecosystem Restoration Office'' means the Klamath Basin Ecosystem Restoration Office operated cooperatively by the United States Fish and Wildlife Service, Bureau of Reclamation, Bureau of Land Management, and Forest Service. (2) Working group.--The term ``Working Group'' means the Upper Klamath Basin Working Group, established before the date of enactment of this title, consisting of members nominated by their represented groups, including: (A) 3 tribal members; (B) 1 representative of the city of Klamath Falls, Oregon; (C) 1 representative of Klamath County, Oregon; (D) 1 representative of institutions of higher education in the Upper Klamath Basin; (E) 4 representatives of the environmental community, including at least one such representative from the State of California with interests in the Klamath Basin National Wildlife Refuge Complex; (F) 4 representatives of local businesses and industries, including at least one representative of the wood products industry and one representative of the ocean commercial fishing industry and/or the recreational fishing industry based in either Oregon or California; (G) 4 representatives of the ranching and farming community, including representatives of Federal lease- land farmers and ranchers and of private land farmers and ranchers in the Upper Klamath Basin; (H) 2 representatives from State of Oregon agencies with authority and responsibility in the Klamath River Basin, including one from the Oregon Department of Fish and Wildlife and one from the Oregon Water Resources Department; (I) 4 representatives from the local community; (J) 1 representative each from the following Federal resource management agencies in the Upper Klamath Basin: Fish and Wildlife Service, Bureau of Reclamation, Bureau of Land Management, Bureau of Indian Affairs, Forest Service, Natural Resources Conservation Service, National Marine Fisheries Service and Ecosystem Restoration Office; and (K) 1 representative of the Klamath County Soil and Water Conservation District. (3) Secretary.--The term ``Secretary'' means the Secretary of the Interior.

(4) Task force.--The term ``Task Force'' means the Klamath River Basin Fisheries Task Force as established by the Klamath River Basin Fishery Resource Restoration Act (Public Law 99-552, 16 U.S.C. 460ss-3, et. seq.). (5) Compact commission.--The term ``Compact Commission'' means the Klamath River Basin Compact Commission created pursuant to the Klamath River Compact Act of 1954. (6) Consensus.--The term ``consensus'' means a unanimous agreement by the Working Group members present and consisting of at least a quorum at a regularly scheduled business meeting. (7) Quorum.--The term ``quorum'' means one more than half of those qualified Working Group members appointed and eligible to serve. (8) Trinity task force.--The term ``Trinity Task Force'' means the Trinity River Restoration Task Force created by Public Law 98-541, as amended by Public Law 104-143. (b) In General.-- (1) The Working Group through the Ecosystem Restoration Office, with technical assistance from the Secretary, will propose ecological restoration projects, economic development and stability projects, and projects designed to reduce the impacts of drought conditions to be undertaken in the Upper Klamath Basin based on a consensus of the Working Group membership. (2) The Secretary shall pay, to the greatest extent feasible, up to 50 percent of the cost of performing any project approved by the Secretary or his designee, up to a total amount of $1,000,000 during each of fiscal years 1997 through 2001. (3) Funds made available under this title through the Department of the Interior or the Department of Agriculture shall be distributed through the Ecosystem Restoration Office. (4) The Ecosystem Restoration Office may utilize not more than 15 percent of all Federal funds administered under this section for administrative costs relating to the implementation of this title. (5) All funding recommendations developed by the Working Group shall be based on a consensus of Working Group members. (c) Coordination.-- (1) The Secretary shall formulate a cooperative agreement among the Working Group, the Task Force, the Trinity Task Force and the Compact Commission for the purposes of ensuring that projects proposed and funded through the Working Group are consistent with other basin-wide fish and wildlife restoration and conservation plans, including but not limited to plans developed by the Task Force and the Compact Commission. (2) To the greatest extent practicable, the Working Group shall provide notice to, and accept input from, two members each of the Task Force, the Trinity Task Force, and the Compact Commission, so appointed by those entities, for the express purpose of facilitating better communication and coordination regarding additional basin-wide fish and wildlife and ecosystem restoration and planning efforts. The roles and relationships of the entities involved shall be clarified in the cooperative agreement.

(d) Public Meetings.--The Working Group shall conduct all meetings subject to applicable open meeting and public participation laws. The chartering requirements of 5 U.S.C. App 2 ss 1-15 are hereby deemed to have been met by this section. (e) Terms and Vacancies.--Working Group members shall serve for 3- year terms, beginning on the date of enactment of this title. Vacancies which occur for any reason after the date of enactment of this title shall be filled by direct appointment of the governor of the State of Oregon, in consultation with the Secretary of the Interior and the Secretary of Agriculture, in accordance with nominations from the appropriate groups, interests, and government agencies outlined in subsection (a)(2). (f) Rights, Duties and Authorities Unaffected.--The Working Group will supplement, rather than replace, existing efforts to manage the natural resources of the Klamath Basin. Nothing in this title affects any legal right, duty or authority of any person or agency, including any member of the working group. (g) Authorization of Appropriations.--There are authorized to be appropriated to carry out this title $1,000,000 for each of fiscal years 1997 through 2002.

(a) Definitions.--In this section: (1) Working group.--The term ``Working Group'' means the Deschutes River Basin Working Group established before the date of enactment of this title, consisting of members nominated by their represented groups, including: (A) 5 representatives of private interests including one each from hydroelectric production, livestock grazing, timber, land development, and recreation/ tourism; (B) 4 representatives of private interests including two each from irrigated agriculture and the environmental community; (C) 2 representatives from the Confederated Tribes of the Warm Springs Reservation of Oregon; (D) 2 representatives from Federal agencies with authority and responsibility in the Deschutes River Basin, including one from the Department of the Interior and one from the Agriculture Department; (E) 2 representatives from the State of Oregon agencies with authority and responsibility in the Deschutes River Basin, including one from the Oregon Department of Fish and Wildlife and one from the Oregon Water Resources Department; and (F) 4 representatives from county or city governments within the Deschutes River Basin county and/ or city governments. (2) Secretary.--The term ``Secretary'' means the Secretary of the Interior. (3) Federal agencies.--The term ``Federal agencies'' means agencies and departments of the United States, including, but not limited to, the Bureau of Reclamation, Bureau of Indian Affairs, Bureau of Land Management, Fish and Wildlife Service, Forest Service, Natural Resources Conservation

Service, Farm Services Agency, the National Marine Fisheries Service, and the Bonneville Power Administration. (4) Consensus.--The term ``consensus'' means a unanimous agreement by the Working Group members present and constituting at least a quorum at a regularly scheduled business meeting. (5) Quorum.--The term ``quorum'' means one more than half of those qualified Working Group members appointed and eligible to serve. (b) In General.-- (1) The Working Group will propose ecological restoration projects on both Federal and non-Federal lands and waters to be undertaken in the Deschutes River Basin based on a consensus of the Working Group, provided that such projects, when involving Federal land or funds, shall be proposed to the Bureau of Reclamation in the Department of the Interior and any other Federal agency with affected land or funds. (2) The Working Group will accept donations, grants or other funds and place such funds received into a trust fund, to be expended on ecological restoration projects which, when involving Federal land or funds, are approved by the affected Federal agency. (3) The Bureau of Reclamation shall pay from funds authorized under subsection (h) of this title up to 50 percent of the cost of performing any project proposed by the Working Group and approved by the Secretary, up to a total amount of $1,000,000 during each of the fiscal years 1997 through 2001. (4) Non-Federal contributions to project costs for purposes of computing the Federal matching share under paragraph (3) of this subsection may include in-kind contributions. (5) Funds authorized in subsection (h) of this title shall be maintained in and distributed by the Bureau of Reclamation in the Department of the Interior. The Bureau of Reclamation shall not expend more than 5 percent of amounts appropriated pursuant to subsection (h) for Federal administration of such appropriations pursuant to this title. (6) The Bureau of Reclamation is authorized to provide by grant to the Working Group not more than 5 percent of funds appropriated pursuant to subsection (h) of this title for not more than 50 percent of administrative costs relating to the implementation of this title. (7) The Federal agencies with authority and responsibility in the Deschutes River Basin shall provide technical assistance to the Working Group and shall designate representatives to serve as members of the Working Group. (8) All funding recommendations developed by the Working Group shall be based on a consensus of the Working Group members. (c) Public Notice and Participation.--The Working Group shall conduct all meetings subject to applicable open meeting and public participation laws. The chartering requirements of 5 U.S.C. App 2 ss 1- 15 are hereby deemed to have been met by this section. (d) Priorities.--The Working Group shall give priority to voluntary market-based economic incentives for ecosystem restoration including, but not limited to, water leases and purchases; land leases and purchases; tradable discharge permits; and acquisition

of timber, grazing, and land development rights to implement plans, programs, measures, and projects. (e) Terms and Vacancies.--Members of the Working Group representing governmental agencies or entities shall be named by the represented government agency. Members of the Working Group representing private interests shall be named in accordance with the articles of incorporation and bylaws of the Working Group. Representatives from Federal agencies will serve for terms of 3 years. Vacancies which occur for any reason after the date of enactment of this title shall be filled in accordance with this title. (f) Additional Projects.--Where existing authority and appropriations permit, Federal agencies may contribute to the implementation of projects recommended by the Working Group and approved by the Secretary. (g) Rights, Duties and Authorities Unaffected.--The Working Group will supplement, rather than replace, existing efforts to manage the natural resources of the Deschutes Basin. Nothing in this title affects any legal right, duty or authority of any person or agency, including any member of the working group. (h) Authorization of Appropriations.--There are authorized to be appropriated to carry out this title $1,000,000 for each of fiscal years 1997 through 2001.

(a) Authorization.--Notwithstanding any other law, if Longview Fibre Company (referred to in this section as ``Longview'') offers and conveys title that is acceptable to the United States to some or all of the land described in subsection (b), the Secretary of the Interior (referred to in this section as the ``Secretary'') shall convey to Longview title to some or all of the land described in subsection (c), as necessary to satisfy the requirements of subsection (d). (b) Land To Be Offered by Longview.--The land referred to in subsection (a) as the land to be offered by Longview are those lands depicted on the map entitled ``Mt. Hood Corridor Land Exchange Map'', dated July 18, 1996. (c) Land To Be Conveyed by the Secretary.--The land referred to in subsection (a) as the land to be conveyed by the Secretary are those lands depicted on the map entitled ``Mt. Hood Corridor Land Exchange Map'', dated July 18, 1996. (d) Equal Value.--The land and interests in land exchanged under this section shall be of equal market value as determined by nationally recognized appraisal standards, including, to the extent appropriate, the Uniform Standards for Federal Land Acquisition, the Uniform Standards of Professional Appraisal Practice, or shall be equalized by way of payment of cash pursuant to the provisions of section 206(d) of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1716(d)), and other applicable law. (e) Redesignation of Land To Maintain Revenue Flow.--So as to maintain the current flow of revenue from land subject to the Act entitled ``An Act relating to the revested Oregon and California Railroad and reconveyed Coos Bay Wagon Road grant land situated in the State of Oregon'', approved August 28, 1937

(43 U.S.C. 1181a et seq.), the Secretary may redesignate public domain land located in and west of Range 9 East, Willamette Meridian, Oregon, as land subject to that Act. (f) Timetable.--The exchange directed by this section shall be consummated not later than 1 year after the date of enactment of this title. (g) Withdrawal of Lands.--All lands managed by the Department of the Interior, Bureau of Land Management, located in Townships 2 and 3 South, Ranges 6 and 7 East, Willamette Meridian, which can be seen from the right-of-way of U.S. Highway 26 (in this section, such lands are referred to as the ``Mt. Hood Corridor Lands''), shall be managed primarily for the protection or enhancement of scenic qualities. Management prescriptions for other resource values associated with these lands shall be planned and conducted for purposes other than timber harvest, so as not to impair the scenic qualities of the area. (h) Timber Cutting.--Timber cutting may be conducted on Mt. Hood Corridor Lands following a resource-damaging catastrophic event. Such cutting may only be conducted to achieve the following resource management objectives, in compliance with the current land use plans-- (1) to maintain safe conditions for the visiting public; (2) to control the continued spread of forest fire; (3) for activities related to administration of the Mt. Hood Corridor Lands; or (4) for removal of hazard trees along trails and roadways. (i) Road Closure.--The forest road gate located on Forest Service Road 2503, located in T. 2 S., R. 6 E., sec. 14, shall remain closed and locked to protect resources and prevent illegal dumping and vandalism. Access to this road shall be limited to-- (1) Federal and State officers and employees acting in an official capacity; (2) employees and contractors conducting authorized activities associated with the telecommunication sites located in T. 2 S., R. 6 E., sec. 14; and (3) the general public for recreational purposes, except that all motorized vehicles will be prohibited. (j) NEPA Exemption.--The National Environmental Policy Act of 1969 (P.L. 91-190) shall not apply to this section for one year after the date of enactment of this title. (k) Authorization of Appropriations.--There are authorized to be appropriated such sums as are necessary to carry out this section.

(a) The Coquille Restoration Act (P.L. 101- 42) is amended by inserting at the end of section 5 the following: ``(d) Creation of the Coquille Forest.-- ``(1) Definitions.--In this subsection: ``(A) the term `Coquille Forest' means certain lands in Coos County, Oregon, comprising approximately 5,400 acres, as generally depicted on the map entitled `Coquille Forest Proposal', dated July 8, 1996.

``(B) the term `Secretary' means the Secretary of the Interior. ``(C) the term `the Tribe' means the Coquille Tribe of Coos County, Oregon. ``(2) Map.--The map described in subparagraph (d)(1)(A), and such additional legal descriptions which are applicable, shall be placed on file at the local District Office of the Bureau of Land Management, the Agency Office of the Bureau of Indian Affairs, and with the Senate Committee on Energy and Natural Resources and the House Committee on Resources. ``(3) Interim period.--From the date of enactment of this subsection until two years after the date of enactment of this subsection, the Bureau of Land Management shall: ``(A) retain Federal jurisdiction for the management of lands designated under this subsection as the Coquille Forest and continue to distribute revenues from such lands in a manner consistent with existing law; and, ``(B) prior to advertising, offering or awarding any timber sale contract on lands designated under this subsection as the Coquille Forest, obtain the approval of the Assistant Secretary for Indian Affairs, acting on behalf of and in consultation with the Tribe. (4) Transition planning and designation.-- ``(A) During the two year interim period provided for in paragraph (3), the Assistant Secretary for Indian Affairs, acting on behalf of and in consultation with the Tribe, is authorized to initiate development of a forest management plan for the Coquille Forest. The Secretary, acting through the Director of the Bureau of Land Management, shall cooperate and assist in the development of such plan and in the transition of forestry management operations for the Coquille Forest to the Assistant Secretary for Indian Affairs. ``(B) Two years after the date of enactment of this subsection, the Secretary shall take the lands identified under subparagraph (d)(1)(A) into trust, and shall hold such lands in trust, in perpetuity, for the Coquille Tribe. Such lands shall be thereafter designated as the Coquille Forest. ``(C) So as to maintain the current flow of revenue from land subject to the Act entitled `An Act relating to the revested Oregon and California Railroad and reconveyed Coos Bay Wagon Road grant land situated in the State of Oregon' (the O&C Act), approved August 28, 1937 (43 U.S.C. 1181a et seq.), the Secretary shall redesignate, from public domain lands within the tribe's service area, as defined in this Act, certain lands to be subject to the O&C Act. Lands redesignated under this subparagraph shall not exceed lands sufficient to constitute equivalent timber value as compared to lands constituting the Coquille Forest. ``(5) Management.--The Secretary of Interior, acting through the Assistant Secretary for Indian Affairs, shall manage the Coquille Forest under applicable State and Federal forestry and environmental protection laws, and subject to critical habitat designations under the Endangered Species Act, and subject to the standards and guidelines of Federal forest

plans on adjacent or nearby Federal lands, now and in the future. The Secretary shall otherwise manage the Coquille Forest in accordance with the laws pertaining to the management of Indian Trust lands and shall distribute revenues in accord with Public Law 101-630, 25 U.S.C. 3107. ``(A) Unprocessed logs harvested from the Coquille Forest shall be subject to the same Federal statutory restrictions on export to foreign Nations that apply to unprocessed logs harvested from Federal lands. ``(B) Notwithstanding any other provision of law, all sales of timber from land subject to this subsection shall be advertised, offered and awarded according to competitive bidding practices, with sales being awarded to the highest responsible bidder. ``(6) Indian self determination act agreement.--No sooner than two years after the date of enactment of this subsection, the Secretary may, upon a satisfactory showing of management competence and pursuant to the Indian Self-Determination Act (25 U.S.C. 450 et seq.), enter into a binding Indian self- determination agreement (agreement) with the Coquille Indian Tribe. Such agreement may provide for the tribe to carry out all or a portion of the forest management for the Coquille Forest. ``(A) Prior to entering such an agreement, and as a condition of maintaining such an agreement, the Secretary must find that the Coquille Tribe has entered into a binding memorandum of agreement (MOA) with the State of Oregon, as required under paragraph 7. ``(B) The authority of the Secretary to rescind the Indian self-determination agreement shall not be encumbered. ``(i) The Secretary shall rescind the agreement upon a demonstration that the tribe and the State of Oregon are no longer engaged in a memorandum of agreement as required under paragraph 7. ``(ii) The Secretary may rescind the agreement on a showing that the Tribe has managed the Coquille Forest in a manner inconsistent with this subsection, or the Tribe is no longer managing, or capable of managing, the Coquille Forest in a manner consistent with this subsection. ``(7) Memorandum of agreement.--The Coquille Tribe shall enter into a memorandum of agreement (MOA) with the State of Oregon relating to the establishment and management of the Coquille Forest. The MOA shall include, but not be limited to, the terms and conditions for managing the Coquille Forest in a manner consistent with paragraph (5) of this subsection, preserving public access, advancing jointly-held resource management goals, achieving tribal restoration objectives and establishing a coordinated management framework. Further, provisions set forth in the MOA shall be consistent with federal trust responsibility requirements applicable to Indian trust lands and paragraph (5) of this subsection. ``(8) Public access.--The Coquille Forest shall remain open to public access for purposes of hunting, fishing, recreation and transportation, except when closure is required by state or federal law, or when the Coquille Indian Tribe and the

State of Oregon agree in writing that restrictions on access are necessary or appropriate to prevent harm to natural resources, cultural resources or environmental quality; Provided, That the State of Oregon's agreement shall not be required when immediate action is necessary to protect archaeological resources. ``(9) Jurisdiction.-- ``(A) The United States District Court for the District of Oregon shall have jurisdiction over actions against the Secretary arising out of claims that this subsection has been violated. Consistent with existing precedents on standing to sue, any affected citizen may bring suit against the Secretary for violations of this subsection, except that suit may not be brought against the Secretary for claims that the MOA has been violated. The Court has the authority to hold unlawful and set aside actions pursuant to this subsection that are arbitrary and capricious, an abuse of discretion, or otherwise an abuse of law. ``(B) The United States District Court for the District of Oregon shall have jurisdiction over actions between the State of Oregon and the Tribe arising out of claims of breach of the MOA. ``(C) Unless otherwise provided for by law, remedies available under this subsection shall be limited to equitable relief and shall not include damages. ``(10) State regulatory and civil jurisdiction.--In addition to the jurisdiction described in paragraph 7 of this subsection, the State of Oregon may exercise exclusive regulatory civil jurisdiction, including but not limited to adoption and enforcement of administrative rules and orders, over the following subjects: ``(A) management, allocation and administration of fish and wildlife resources, including but not limited to establishment and enforcement of hunting and fishing seasons, bag limits, limits on equipment and methods, issuance of permits and licenses, and approval or disapproval of hatcheries, game farms, and other breeding facilities; Provided, That nothing herein shall be construed to permit the State of Oregon to manage fish or wildlife habitat on Coquille Forest lands; ``(B) allocation and administration of water rights, appropriation of water and use of water; ``(C) regulation of boating activities, including equipment and registration requirements, and protection of the public's right to use the waterways for purposes of boating or other navigation; ``(D) fills and removals from waters of the State, as defined in Oregon law; ``(E) protection and management of the State's proprietary interests in the beds and banks of navigable waterways; ``(F) regulation of mining, mine reclamation activities, and exploration and drilling for oil and gas deposits; ``(G) regulation of water quality, air quality (including smoke management), solid and hazardous waste, and remediation of releases of hazardous substances;

``(H) regulation of the use of herbicides and pesticides; and ``(I) enforcement of public health and safety standards, including standards for the protection of workers, well construction and codes governing the construction of bridges, buildings, and other structures. ``(11) Savings clause, state authority.-- ``(A) Nothing in this subsection shall be construed to grant tribal authority over private or State-owned lands. ``(B) To the extend that the State of Oregon is regulating the foregoing areas pursuant to a delegated Federal authority or a Federal program, nothing in this subsection shall be construed to enlarge or diminish the State's authority under such law. ``(C) Where both the State of Oregon and the United States are regulating, nothing herein shall be construed to alter their respective authorities. ``(D) To the extent that Federal law authorizes the Coquille Indian Tribe to assume regulatory authority over an area, nothing herein shall be construed to enlarge or diminish the tribe's authority to do so under such law. ``(E) Unless and except to the extent that the tribe has assumed jurisdiction over the Coquille Forest pursuant to Federal law, or otherwise with the consent of the State, the State of Oregon shall have jurisdiction and authority to enforce its laws addressing the subjects listed in subparagraph 10 of this subsection on the Coquille Forest against the Coquille Indian Tribe, its members and all other persons and entities, in the same manner and with the same remedies and protections and appeal rights as otherwise provided by general Oregon law. Where the State of Oregon and Coquille Indian Tribe agree regarding the exercise of tribal civil regulatory jurisdiction over activities on the Coquille Forest lands, the tribe may exercise such jurisdiction as its agreed upon. ``(12) In the event of a conflict between Federal and State law under this subsection, Federal law shall control.''

(a) The Secretary of Agriculture shall, in consultation with the city of Portland and other affected parties, undertake a study of that part of the Little Sandy Watershed that is within the unit (hereinafter referred to as the ``study area''), as depicted on the map described in section 604 of this title. (b) The study referred to in (a) shall determine-- (1) the impact of management activities within the study area on the quality of drinking water provided to the Portland Metropolitan area; (2) the identify and location of certain ecological features within the study area, including late successional forest characteristics, aquatic and terrestrial wildlife habitat, significant hydrological values, or other outstanding natural features; and (3) the location and extent of any significant cultural or other values within the study area. (c) The study referred to in subsection (a) shall include both legislative and regulatory recommendations to Congress on the future management of the study area. In formulating such recommendations, the Secretary shall consult with the city of Portland and other affected parties. (d) To the greatest extent possible, the Secretary shall use existing data and processes to carry out this study and report. (e) The study referred to in subsection (a) shall be submitted to the Senate Committees on Energy and Natural Resources and

Agriculture and the House Committees on Resources and Agriculture not later than one year from the date of enactment of this section. (f) The Secretary is prohibited from advertising, offering or awarding any timber sale within the study area for a period of two years after the date of enactment of this section. (g) Nothing in this section shall in any way affect any State or Federal law governing appropriation, use of or Federal right to water on or flowing through National Forest System lands. Nothing in this section is intended to influence the relative strength of competing claims to the waters of the Little Sandy River. Nothing in this section shall be construed to expand or diminish Federal, State, or local jurisdiction, responsibility, interests, or rights in water resources development or control, including rights in and current uses of water resources in the unit. Sec. 606. Lands within the Bull Run Management Unit, as defined in Public Law 95-200, but not contained within the Bull Run River Drainage, as defined by this title and as depicted on the map dated July 1996 described in Section 604 of this title, shall continue to be managed in accordance with Public Law 95-200.

(a) In furtherance of the purposes of the Wilderness Act of 1964, certain lands within the boundaries of the Oregon Islands National Wildlife Refuge, Oregon, comprising approximately ninety-five acres and as generally depicted on a map entitled ``Oregon Island Wilderness Additions--Proposed'' dated August 1996, are hereby designated as wilderness. The map shall be on file and available for public inspection in the offices of the Fish and Wildlife Service, Department of the Interior. (b) All other federally owned named, unnamed, surveyed and unsurveyed rocks, reefs, islets and islands lying within three goegraphic miles off the coast of Oregon and above mean high tide, not currently designated as wilderness and also within the Oregon Islands National Wildlife Refuge boundaries under the administration of the United States Fish and Wildlife Service, Department of the Interior, as designated by Executive Order 7035, Proclamation 2416, Public Land Orders 4395, 4475 and 6287, and Public Laws 91-504 and 95-450, are hereby designated as wilderness. (c) All federally owned named, unnamed, surveyed and unsurveyed rocks, reefs, islets and islands lying within three geographic miles off the coast of Oregon and above mean high tide, and presently under the jurisdiction of the Bureau of Land Management, except Chiefs Island, are hereby designated as wilderness, shall become part of the Oregon Islands National Wildlife Refuge and the Oregon Island Wilderness and shall be under the jurisdiction of the United States Fish and Wildlife Service, Department of the Interior. (d) As soon as practicable after this title takes effect, a map of the wilderness area and a description of its boundaries shall be filed with the Senate Committee on Energy and Natural

Resources and the House Committee on Resources, and such map shall have the same force and effect as if included in this title: Provided, however, That correcting clerical and typographical errors in the map and land descriptions may be made. (e) Public Land Order 6287 of June 16, 1982, which withdrew certain rocks, reefs, islets and islands lying within three geographical miles off the coast of Oregon and above mean high tide, including the ninety-five acres described in subsection (a), as an addition to the Oregon Islands National Wildlife Refuge is hereby made permanent.

UMPQUA RIVER LAND EXCHANGE STUDY: POLICY AND DIRECTION.

(a) In General.--The Secretaries of the Interior and Agriculture (Secretaries) are hereby authorized and directed to consult, coordinate, and cooperate with the Umpqua Land Exchange Project (ULEP), affected units and agencies of State and local government, and, as appropriate, the World Forestry Center and National Fish and Wildlife Foundation, to assist ULEP's ongoing efforts in studying and analyzing land exchange opportunities in the Umpqua River Basin and to provide scientific, technical, research, mapping and other assistance and information to such entities. Such consultation, coordination, and cooperation shall at a minimum include, but not be limited to: (1) working with ULEP to develop or assemble comprehensive scientific and other information (including comprehensive and integrated mapping) concerning the Umpqua River Basin's resources of forest, plants, wildlife, fisheries (anadromous and other), recreational opportunities, wetlands, riparian habitat, and other physical or natural resources; (2) working with ULEP to identify general or specific areas within the basin where land exchanges could promote consolidation of forestland ownership for long-term, sustained timber production; protection and restoration of habitat for plants, fish, and wildlife (including any federally listed threatened or endangered species); protection of drinking water supplies; recovery of threatened and endangered species; protection and restoration of wetlands, riparian lands, and other environmentally sensitive areas; consolidation of land ownership for improved public access and a broad array of recreational uses; and consolidation of land ownership to achieve management efficiency and reduced costs of administration; and (3) developing a joint report for submission to the Congress which discusses land exchange opportunities in the basin and outlines either a specific land exchange proposal or proposals which may merit consideration by the Secretaries or the Congress, or ideas and recommendations for new authorizations, direction, or changes in existing law or policy to expedite and facilitate the consummation of beneficial land exchanges in the basin via administrative means. (b) Matters for Specific Study.--In analyzing land exchange opportunities with ULEP, the Secretaries shall give priority to assisting ULEP's ongoing efforts in:

(1) studying, identifying, and mapping areas where the consolidation of land ownership via land exchanges could promote the goals of long term species and watershed protection and utilization, including but not limited to the goals of the Endangered Species Act of 1973 more effectively than current land ownership patterns and whether any changes in law or policy applicable to such lands after consummation of an exchange would be advisable or necessary to achieve such goals; (2) studying, identifying and mapping areas where land exchanges might be utilized to better satisfy the goals of sustainable timber harvest, including studying whether changes in existing law or policy applicable to such lands after consummation of an exchange would be advisable or necessary to achieve such goals; (3) identifying issues and studying options and alternatives, including possible changes in existing law or policy, to insure that combined post-exchange revenues to units of local government from State and local property, severance, and other taxes or levies and shared Federal land receipts will approximate pre-exchange revenues; (4) identifying issues and studying whether possible changes in law, special appraisal instruction, or changes in certain Federal appraisal procedures might be advisable or necessary to facilitate the appraisal of potential exchange lands which may have special characteristics or restrictions affecting land values; (5) identifying issues and studying options and alternatives, including changes in existing laws or policy, for achieving land exchanges without reducing the net supply of timber available to small businesses; (6) identifying, mapping, and recommending potential changes in land use plans, land classifications, or other actions which might be advisable or necessary to expedite, facilitate or consummate land exchanges in certain areas; (7) analyzing potential sources for new or enhanced Federal, State, or other funding to promote improved resource protection, species recovery, and management in the basin; and (8) identifying and analyzing whether increased efficiency and better land and resource management could occur through either consolidation of Federal forest management under one agency or exchange lands between the Forest Service and the Bureau of Land Management.

No later than February 1, 1998, ULEP and the Secretaries shall submit a joint report to the Committee on Resources of the United States House of Representatives and to the Committee on Energy and Natural Resources of the United States Senate concerning their studies, findings, recommendations, mapping and other activities conducted pursuant to this title.

In furtherance of the purposes of this title, there is hereby authorized to be appropriated the sum of $2 million, to remain available until expended.

DIVISION <<NOTE: Illegal Immigration Reform and Immigrant Responsibility Act of 1996.>> C--ILLEGAL IMMIGRATION REFORM AND IMMIGRANT RESPONSIBILITY ACT OF 1996

SHORT TITLE OF DIVISION; AMENDMENTS TO IMMIGRATION AND NATIONALITY ACT; APPLICATION OF DEFINITIONS OF SUCH ACT; TABLE OF CONTENTS OF DIVISION; SEVERABILITY.

(a) Short Title.--This division may be cited as the ``Illegal Immigration Reform and Immigrant Responsibility Act of 1996''.

(b) Amendments to Immigration and Nationality Act.--Except as otherwise specifically provided-- (1) whenever in this division an amendment or repeal is expressed as the amendment or repeal of a section or other provision, the reference shall be considered to be made to that section or provision in the Immigration and Nationality Act; and (2) amendments to a section or other provision are to such section or other provision before any amendment made to such section or other provision elsewhere in this division.

(c) Application of Certain Definitions.-- Except as otherwise specifically provided in this division, for purposes of titles I and VI of this division, the terms ``alien'', ``Attorney General'', ``border crossing identification card'', ``entry'', ``immigrant'', ``immigrant visa'', ``lawfully admitted for permanent residence'', ``national'', ``naturalization'', ``refugee'', ``State'', and ``United States'' shall have the meaning given such terms in section 101(a) of the Immigration and Nationality Act.

(d) Table of Contents of Division.--The table of contents of this division is as follows:

Sec. 1. Short title of division; amendments to Immigration and Nationality Act; application of definitions of such Act; table of contents of division; severability.

(a) Increased Number of Border Patrol Agents.--The Attorney General in each of fiscal years 1997, 1998, 1999, 2000, and 2001 shall increase by not less than 1,000 the number of positions for full-time, active- duty border patrol agents within the Immigration and Naturalization Service above the number of such positions for which funds were allotted for the preceding fiscal year. (b) Increase in Border Patrol Support Personnel.--The Attorney General, in each of fiscal years 1997, 1998, 1999, 2000,

and 2001, may increase by 300 the number of positions for personnel in support of border patrol agents above the number of such positions for which funds were allotted for the preceding fiscal year. (c) Deployment of Border Patrol Agents.--The Attorney General shall, to the maximum extent practicable, ensure that additional border patrol agents shall be deployed among Immigration and Naturalization Service sectors along the border in proportion to the level of illegal crossing of the borders of the United States measured in each sector during the preceding fiscal year and reasonably anticipated in the next fiscal year. (d) Forward Deployment.-- (1) In general.--The Attorney General shall forward deploy existing border patrol agents in those areas of the border identified as areas of high illegal entry into the United States in order to provide a uniform and visible deterrent to illegal entry on a continuing basis. The previous sentence shall not apply to border patrol agents located at checkpoints. (2) Preservation of law enforcement functions and capabilities in interior states.--The Attorney General shall, when deploying border patrol personnel from interior stations to border stations, coordinate with, and act in conjunction with, State and local law enforcement agencies to ensure that such deployment does not degrade or compromise the law enforcement capabilities and functions currently performed at interior border patrol stations. (3) Report.--Not later than 6 months after the date of the enactment of this Act, the Attorney General shall submit to the Committees on the Judiciary of the House of Representatives and of the Senate a report on-- (A) the progress and effectiveness of the forward deployment under paragraph (1); and (B) the measures taken to comply with paragraph (2).

(a) In General.--The Attorney General, in consultation with the Commissioner of Immigration and Naturalization, shall take such actions as may be necessary to install additional physical barriers and roads (including the removal of obstacles to detection of illegal entrants) in the vicinity of the United States border to deter illegal crossings in areas of high illegal entry into the United States. (b) Construction of Fencing and Road Improvements in the Border Area Near San Diego, California.-- (1) In general.--In carrying out subsection (a), the Attorney General shall provide for the construction along the 14 miles of the international land border of the United States, starting at the Pacific Ocean and extending eastward, of second and third fences, in addition to the existing reinforced fence, and for roads between the fences. (2) Prompt acquisition of necessary easements.--The Attorney General, acting under the authority conferred in section 103(b) of the Immigration and Nationality Act (as inserted by subsection (d)), shall promptly acquire such easements as may be necessary to carry out this subsection and shall commence construction of fences immediately following such acquisition (or conclusion of portions thereof).

(3) Safety features.--The Attorney General, while constructing the additional fencing under this subsection, shall incorporate such safety features into the design of the fence system as are necessary to ensure the well-being of border patrol agents deployed within or in near proximity to the system. (4) Authorization of appropriations.--There are authorized to be appropriated to carry out this subsection not to exceed $12,000,000. Amounts appropriated under this paragraph are authorized to remain available until expended.

(c) Waiver.--The provisions of the Endangered Species Act of 1973 and the National Environmental Policy Act of 1969 are waived to the extent the Attorney General determines necessary to ensure expeditious construction of the barriers and roads under this section. (d) Land Acquisition Authority.-- (1) In general.--Section 103 (8 U.S.C. 1103) is amended-- (A) by redesignating subsections (b), (c), and (d) as subsections (c), (d), and (e), respectively; and (B) by inserting after subsection (a) the following:

``(b)(1) The Attorney General may contract for or buy any interest in land, including temporary use rights, adjacent to or in the vicinity of an international land border when the Attorney General deems the land essential to control and guard the boundaries and borders of the United States against any violation of this Act. ``(2) The Attorney General may contract for or buy any interest in land identified pursuant to paragraph (1) as soon as the lawful owner of that interest fixes a price for it and the Attorney General considers that price to be reasonable. ``(3) When the Attorney General and the lawful owner of an interest identified pursuant to paragraph (1) are unable to agree upon a reasonable price, the Attorney General may commence condemnation proceedings pursuant to the Act of August 1, 1888 (Chapter 728; 25 Stat. 357). ``(4) The Attorney General may accept for the United States a gift of any interest in land identified pursuant to paragraph (1).''. (2) Conforming amendment.--Section 103(e) (as so redesignated by paragraph (1)(A)) is amended by striking ``subsection (c)'' and inserting ``subsection (d)''.

TECHNOLOGY.

The Attorney General is authorized to acquire and use, for the purpose of detection, interdiction, and reduction of illegal immigration into the United States, any Federal equipment (including fixed wing aircraft, helicopters, four-wheel drive vehicles, sedans, night vision goggles, night vision scopes, and sensor units) determined available for transfer by any other agency of the Federal Government upon request of the Attorney General.

(a) In General.--Section 101(a)(6) (8 U.S.C. 1101(a)(6)) is amended by adding at the end the following: ``Such regulations shall provide that (A) each such document include a biometric identifier (such as the fingerprint or handprint of the alien) that is machine readable and (B) an alien presenting a border crossing

identification card is not permitted to cross over the border into the United States unless the biometric identifier contained on the card matches the appropriate biometric characteristic of the alien.''. (b) Effective Dates.-- (1) Clause a.--Clause (A) of the sentence added by the amendment made by subsection (a) shall apply to documents issued on or after 18 months after the date of the enactment of this Act. (2) Clause b.--Clause (B) of such sentence shall apply to cards presented on or after 3 years after the date of the enactment of this Act.

(a) In General.--Section 275 (8 U.S.C. 1325) is amended-- (1) by redesignating subsections (b) and (c) as subsections (c) and (d), respectively; and (2) by inserting after subsection (a) the following:

``(b) Any alien who is apprehended while entering (or attempting to enter) the United States at a time or place other than as designated by immigration officers shall be subject to a civil penalty of-- ``(1) at least $50 and not more than $250 for each such entry (or attempted entry); or ``(2) twice the amount specified in paragraph (1) in the case of an alien who has been previously subject to a civil penalty under this subsection.

Civil penalties under this subsection are in addition to, and not in lieu of, any criminal or other civil penalties that may be imposed.''. (b) Effective Date.--The amendments made by subsection (a) shall apply to illegal entries or attempts to enter occurring on or after the first day of the sixth month beginning after the date of the enactment of this Act.

(a) Review of Hiring Standards.--Not later than 60 days after the date of the enactment of this Act, the Attorney General shall complete a review of all prescreening and hiring standards used by the Commissioner of Immigration and Naturalization, and, where necessary, revise such standards to ensure that they are consistent with relevant standards of professionalism. (b) Certification.--At the conclusion of each of fiscal years 1997, 1998, 1999, 2000, and 2001, the Attorney General shall certify in writing to the Committees on the Judiciary of the House of Representatives and of the Senate that all personnel hired by the Commissioner of Immigration and Naturalization for such fiscal year were hired pursuant to the appropriate standards, as revised under subsection (a). (c) Review of Training Standards.-- (1) Review.--Not later than 180 days after the date of the enactment of this Act, the Attorney General shall complete a review of the sufficiency of all training standards used by the Commissioner of Immigration and Naturalization. (2) Report.-- (A) In general.--Not later than 90 days after the completion of the review under paragraph (1), the Attorney General shall submit a report to the Committees on the

Judiciary of the House of Representatives and of the Senate on the results of the review, including-- (i) a description of the status of efforts to update and improve training throughout the Immigration and Naturalization Service; and (ii) an estimate of when such efforts are expected to be completed. (B) Areas requiring future review.--The report shall disclose those areas of training that the Attorney General determines require further review in the future.

(a) Evaluation of Strategy.--The Comptroller General of the United States shall track, monitor, and evaluate the Attorney General's strategy to deter illegal entry in the United States to determine the efficacy of such strategy. (b) Cooperation.--The Attorney General, the Secretary of State, and the Secretary of Defense shall cooperate with the Comptroller General of the United States in carrying out subsection (a). (c) Report.--Not later than one year after the date of the enactment of this Act, and every year thereafter for the succeeding 5 years, the Comptroller General of the United States shall submit a report to the Committees on the Judiciary of the House of Representatives and of the Senate on the results of the activities undertaken under subsection (a) during the previous year. Each such report shall include an analysis of the degree to which the Attorney General's strategy has been effective in reducing illegal entry. Each such report shall include a collection and systematic analysis of data, including workload indicators, related to activities to deter illegal entry and recommendations to improve and increase border security at the border and ports of entry.

CHECKPOINTS.

(a) Findings.--The Congress finds as follows: (1) Immigration checkpoints are an important component of the national strategy to prevent illegal immigration. (2) Individuals fleeing immigration checkpoints and leading law enforcement officials on high speed vehicle chases endanger law enforcement officers, innocent bystanders, and the fleeing individuals themselves. (3) The pursuit of suspects fleeing immigration checkpoints is complicated by overlapping jurisdiction among Federal, State, and local law enforcement officers.

(b) High Speed Flight from Immigration Checkpoints.-- (1) In general.--Chapter 35 of title 18, United States Code, is amended by adding at the end the following:

``Sec. 758. High speed flight from immigration checkpoint

``Whoever flees or evades a checkpoint operated by the Immigration and Naturalization Service, or any other Federal law enforcement agency, in a motor vehicle and flees Federal, State, or local law enforcement agents in excess of the legal speed limit shall be fined under this title, imprisoned not more than five years, or both.''.

(2) Clerical amendment.--The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 757 the following:

``758. High speed flight from immigration checkpoint.''.

(c) Grounds for Deportation.--Section 241(a)(2)(A) (8 U.S.C. 1251(a)(2)(A)) is amended-- (1) by redesignating clause (iv) as clause (v); (2) by inserting after clause (iii) the following: ``(iv) High speed flight.--Any alien who is convicted of a violation of section 758 of title 18, United States Code, (relating to high speed flight from an immigration checkpoint) is deportable.''; and (3) in clause (v) (as so redesignated by paragraph (1)), by striking ``and (iii)'' and inserting ``(iii), and (iv)''.

(a) Study.--The Attorney General, together with the Secretary of State, the Secretary of Agriculture, the Secretary of the Treasury, and appropriate representatives of the air transport industry, shall jointly undertake a study to develop a plan for making the transition to automated data collection at ports of entry. (b) Report.--Nine months after the date of the enactment of this Act, the Attorney General shall submit a report to the Committees on the Judiciary of the Senate and the House of Representatives on the outcome of the joint initiative under subsection (a), noting specific areas of agreement and disagreement, and recommending further steps to be taken, including any suggestions for legislation.

SYSTEM.

(a) System.--Not later than 2 years after the date of the enactment of this Act, the Attorney General shall develop an automated entry and exit control system that will-- (1) collect a record of departure for every alien departing the United States and match the records of departure with the record of the alien's arrival in the United States; and (2) enable the Attorney General to identify, through on-line searching procedures, lawfully admitted nonimmigrants who remain in the United States beyond the period authorized by the Attorney General.

(b) Report.-- (1) Deadline.--Not later than December 31 of each year following the development of the system under subsection (a), the Attorney General shall submit an annual report to the Committees on the Judiciary of the House of Representatives and of the Senate on such system. (2) Information.--The report shall include the following information: (A) The number of departure records collected, with an accounting by country of nationality of the departing alien. (B) The number of departure records that were successfully matched to records of the alien's prior arrival in the United States, with an accounting by the alien's country of nationality and by the alien's classification as an immigrant or nonimmigrant.

(C) The number of aliens who arrived as nonimmigrants, or as a visitor under the visa waiver program under section 217 of the Immigration and Nationality Act, for whom no matching departure record has been obtained through the system or through other means as of the end of the alien's authorized period of stay, with an accounting by the alien's country of nationality and date of arrival in the United States.

(c) Use of Information on Overstays.--Information regarding aliens who have remained in the United Staty beyond their authorized period of stay identified through the system shall be integrated into appropriate data bases of the Immigration and Naturalization Service and the Department of State, including those used at ports of entry and at consular offices.

POSITIONS FROM INTERIOR STATIONS.

Not later than November 30, 1996, the Attorney General shall submit to the Committees on the Judiciary of the House of Representatives and of the Senate a final plan regarding the redeployment of border patrol personnel from interior locations to the front lines of the border. The final plan shall be consistent with the following: (1) The preliminary plan regarding such redeployment submitted by the Attorney General on May 17, 1996, to the Committee on Appropriations of the House of Representatives and the Committee on Appropriations of the Senate. (2) The direction regarding such redeployment provided in the joint explanatory statement of the committee of conference in the conference report to accompany the Omnibus Consolidated Rescissions and Appropriations Act of 1996 (Public Law 104-134).

There are authorized to be appropriated such additional sums as may be necessary to ensure that the ``IDENT'' program (operated by the Immigration and Naturalization Service) is expanded to apply to illegal or criminal aliens apprehended nationwide.

Subtitle B--Facilitation of Legal Entry

In order to eliminate undue delay in the thorough inspection of persons and vehicles lawfully attempting to enter the United States, the Attorney General and the Secretary of the Treasury each shall increase, by approximately equal numbers in each of fiscal years 1997 and 1998, the number of full-time land border inspectors assigned to active duty by the Immigration and Naturalization Service and the United States Customs Service to a level adequate to assure full staffing during peak crossing hours of all border crossing lanes currently in use, under construction, or whose construction has been authorized by the Congress, except such low-use lanes as the Attorney General may designate.

(a) Extension of Land Border Inspection Project Authority; Establishment of Automated Permit Pilot Projects.--Section 286(q) is amended-- (1) by striking the matter preceding paragraph (2) and inserting the following:

``(q) Land Border Inspection Fee Account.--(1)(A)(i) Notwithstanding any other provision of law, the Attorney General is authorized to establish, by regulation, not more than 6 projects under which a fee may be charged and collected for inspection services provided at one or more land border points of entry. Such projects may include the establishment of commuter lanes to be made available to qualified United States citizens and aliens, as determined by the Attorney General. ``(ii) The program authorized in this subparagraph shall terminate on September 30, 2000, unless further authorized by an Act of Congress. ``(iii) This subparagraph shall take effect, with respect to any project described in clause (1) that was not authorized to be commenced before the date of the enactment of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, 30 days after submission of a written plan by the Attorney General detailing the proposed implementation of such project. ``(iv) The Attorney General shall prepare and submit on a quarterly basis, until September 30, 2000, a status report on each land border inspection project implemented under this subparagraph. ``(B) The Attorney General, in consultation with the Secretary of the Treasury, may conduct pilot projects to demonstrate the use of designated ports of entry after working hours through the use of card reading machines or other appropriate technology.''; and (2) by striking paragraph (5).

(b) Conforming amendment.--The Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriation Act, 1994 (Public Law 103-121, 107 Stat. 1161) is amended by striking the fourth proviso under the heading ``Immigration and Naturalization Service, Salaries and Expenses''.

(a) In General.--The Immigration and Nationality Act is amended by inserting after section 235 the following:

``preinspection at foreign airports

``Sec. 235A. (a) Establishment of Preinspection Stations.-- ``(1) New stations.--Subject to paragraph (5), not later than October 31, 1998, the Attorney General, in consultation with the Secretary of State, shall establish and maintain preinspection stations in at least 5 of the foreign airports that are among the 10 foreign airports which the Attorney General identifies as serving as last points of departure for the greatest numbers of inadmissible alien passengers who arrive from abroad by air at ports of entry within the United States. Such preinspection stations shall be in addition to any preinspection stations established prior to the date of the enactment of such Act.

``(2) Report.--Not later than October 31, 1998, the Attorney General shall report to the Committees on the Judiciary of the House of Representatives and of the Senate on the implementation of paragraph (1). ``(3) Data collection.--Not later than November 1, 1997, and each subsequent November 1, the Attorney General shall compile data identifying-- ``(A) the foreign airports which served as last points of departure for aliens who arrived by air at United States ports of entry without valid documentation during the preceding fiscal years; ``(B) the number and nationality of such aliens arriving from each such foreign airport; and ``(C) the primary routes such aliens followed from their country of origin to the United States. ``(4) Additional stations.--Subject to paragraph (5), not later than October 31, 2000, the Attorney General, in consultation with the Secretary of State, shall establish preinspection stations in at least 5 additional foreign airports which the Attorney General, in consultation with the Secretary of State, determines, based on the data compiled under paragraph (3) and such other information as may be available, would most effectively reduce the number of aliens who arrive from abroad by air at points of entry within the United States who are inadmissible to the United States. Such preinspection stations shall be in addition to those established prior to the date of the enactment of such Act or pursuant to paragraph (1). ``(5) Conditions.--Prior to the establishment of a preinspection station, the Attorney General, in consultation with the Secretary of State, shall ensure that-- ``(A) employees of the United States stationed at the preinspection station and their accompanying family members will receive appropriate protection; ``(B) such employees and their families will not be subject to unreasonable risks to their welfare and safety; and ``(C) the country in which the preinspection station is to be established maintains practices and procedures with respect to asylum seekers and refugees in accordance with the Convention Relating to the Status of Refugees (done at Geneva, July 28, 1951), or the Protocol Relating to the Status of Refugees (done at New York, January 31, 1967), or that an alien in the country otherwise has recourse to avenues of protection from return to persecution.

``(b) Establishment of Carrier Consultant Program.--The Attorney General shall assign additional immigration officers to assist air carriers in the detection of fraudulent documents at foreign airports which, based on the records maintained pursuant to subsection (a)(3), served as a point of departure for a significant number of arrivals at United States ports of entry without valid documentation, but where no preinspection station exists.''. (b) Clerical Amendment.--The table of contents is amended by inserting after the item relating to section 235 the following:

``Sec. 235A. Preinspection at foreign airports.''.

DOCUMENTS.

(a) Use of Funds.-- (1) In general.--Section 286(h)(2)(A) (8 U.S.C. 1356(h)(2)(A)) is amended-- (A) in clause (iv), by inserting ``, including training of, and technical assistance to, commercial airline personnel regarding such detection'' after ``United States''; and (B) by adding at the end the following:

``The Attorney General shall provide for expenditures for training and assistance described in clause (iv) in an amount, for any fiscal year, not less than 5 percent of the total of the expenses incurred that are described in the previous sentence.''. (2) Applicability.--The <<NOTE: 8 USC 1356 note.>> amendments made by paragraph (1) shall apply to expenses incurred during or after fiscal year 1997.

(b) Compliance With Detection Regulations.-- (1) In general.--Section 212(f) (8 U.S.C. 1182(f)) is amended by adding at the end the following: ``Whenever the Attorney General finds that a commercial airline has failed to comply with regulations of the Attorney General relating to requirements of airlines for the detection of fraudulent documents used by passengers traveling to the United States (including the training of personnel in such detection), the Attorney General may suspend the entry of some or all aliens transported to the United States by such airline.''. (2) Deadline.--The Attorney General shall first issue, in proposed form, regulations referred to in the second sentence of section 212(f) of the Immigration and Nationality Act, as added by the amendment made by paragraph (1), not later than 90 days after the date of the enactment of this Act.

Section 103(a) of the Immigration and Nationality Act (8 U.S.C. 1103(a)) is amended by adding at the end the following: ``After consultation with the Secretary of State, the Attorney General may authorize officers of a foreign country to be stationed at preclearance facilities in the United States for the purpose of ensuring that persons traveling from or through the United States to that foreign country comply with that country's immigration and related laws. Those officers may exercise such authority and perform such duties as United States immigration officers are authorized to exercise and perform in that foreign country under reciprocal agreement, and they shall enjoy such reasonable privileges and immunities necessary for the performance of their duties as the government of their country extends to United States immigration officers.''.

Subtitle C--Interior Enforcement

CERTAIN INVESTIGATORS.

(a) Authorization.--There are authorized to be appropriated such funds as may be necessary to enable the Commissioner of Immigration and Naturalization to increase the number of investigators and support personnel to investigate potential violations

of sections 274 and 274A of the Immigration and Nationality Act by a number equivalent to 300 full-time active-duty investigators in each of fiscal years 1997, 1998, and 1999. (b) Allocation of Investigators.--At least one-half of the investigators hired with funds made available under subsection (a) shall be assigned to investigate potential violations of section 274A of the Immigration and Nationality Act. (c) Limitation on Overtime.--None of the funds made available under subsection (a) shall be available for administrative expenses to pay any employee overtime pay in an amount in excess of $25,000 for any fiscal year.

INVESTIGATORS OF VISA OVERSTAYERS.

There are authorized to be appropriated such funds as may be necessary to enable the Commissioner of Immigration and Naturalization to increase the number of investigators and support personnel to investigate visa overstayers by a number equivalent to 300 full-time active-duty investigators in fiscal year 1997.

ENFORCEMENT.

Section 287 (8 U.S.C. 1357) is amended by adding at the end the following: ``(g)(1) Notwithstanding section 1342 of title 31, United States Code, the Attorney General may enter into a written agreement with a State, or any political subdivision of a State, pursuant to which an officer or employee of the State or subdivision, who is determined by the Attorney General to be qualified to perform a function of an immigration officer in relation to the investigation, apprehension, or detention of aliens in the United States (including the transportation of such aliens across State lines to detention centers), may carry out such function at the expense of the State or political subdivision and to the extent consistent with State and local law. ``(2) An agreement under this subsection shall require that an officer or employee of a State or political subdivision of a State performing a function under the agreement shall have knowledge of, and adhere to, Federal law relating to the function, and shall contain a written certification that the officers or employees performing the function under the agreement have received adequate training regarding the enforcement of relevant Federal immigration laws. ``(3) In performing a function under this subsection, an officer or employee of a State or political subdivision of a State shall be subject to the direction and supervision of the Attorney General. ``(4) In performing a function under this subsection, an officer or employee of a State or political subdivision of a State may use Federal property or facilities, as provided in a written agreement between the Attorney General and the State or subdivision. ``(5) With respect to each officer or employee of a State or political subdivision who is authorized to perform a function under this subsection, the specific powers and duties that may be, or are required to be, exercised or performed by the individual, the duration of the authority of the individual, and the position of the agency of the Attorney General who is required to supervise and direct the individual, shall be set forth in a written agreement between the Attorney General and the State or political subdivision.

``(6) The Attorney General may not accept a service under this subsection if the service will be used to displace any Federal employee. ``(7) Except as provided in paragraph (8), an officer or employee of a State or political subdivision of a State performing functions under this subsection shall not be treated as a Federal employee for any purpose other than for purposes of chapter 81 of title 5, United States Code, (relating to compensation for injury) and sections 2671 through 2680 of title 28, United States Code (relating to tort claims). ``(8) An officer or employee of a State or political subdivision of a State acting under color of authority under this subsection, or any agreement entered into under this subsection, shall be considered to be acting under color of Federal authority for purposes of determining the liability, and immunity from suit, of the officer or employee in a civil action brought under Federal or State law. ``(9) Nothing in this subsection shall be construed to require any State or political subdivision of a State to enter into an agreement with the Attorney General under this subsection. ``(10) Nothing in this subsection shall be construed to require an agreement under this subsection in order for any officer or employee of a State or political subdivision of a State-- ``(A) to communicate with the Attorney General regarding the immigration status of any individual, including reporting knowledge that a particular alien is not lawfully present in the United States; or ``(B) otherwise to cooperate with the Attorney General in the identification, apprehension, detention, or removal of aliens not lawfully present in the United States.''.

(a) In General.--Section 103 (8 U.S.C. 1103), as amended by section 102(e) of this division, is further amended by adding at the end the following: ``(f) The Attorney General shall allocate to each State not fewer than 10 full-time active duty agents of the Immigration and Naturalization Service to carry out the functions of the Service, in order to ensure the effective enforcement of this Act.''. (b) Effective Date.--The amendment made by subsection (a) shall take effect 90 days after the date of the enactment of this Act.

DOCUMENT FRAUD.

Section 2516(1) of title 18, United States Code, is amended-- (1) in paragraph (c), by striking ``or section 1992 (relating to wrecking trains)'' and inserting ``section 1992 (relating to

wrecking trains), a felony violation of section 1028 (relating to production of false identification documentation), section 1425 (relating to the procurement of citizenship or nationalization unlawfully), section 1426 (relating to the reproduction of naturalization or citizenship papers), section 1427 (relating to the sale of naturalization or citizenship papers), section 1541 (relating to passport issuance without authority), section 1542 (relating to false statements in passport applications), section 1543 (relating to forgery or false use of passports), section 1544 (relating to misuse of passports), or section 1546 (relating to fraud and misuse of visas, permits, and other documents)''; (2) by striking ``or'' at the end of paragraph (l); (3) by redesignating paragraphs (m), (n), and (o) as paragraphs (n), (o), and (p), respectively; and (4) by inserting after paragraph (l) the following new paragraph: ``(m) a violation of section 274, 277, or 278 of the Immigration and Nationality Act (8 U.S.C. 1324, 1327, or 1328) (relating to the smuggling of aliens);''.

Section 1961(1) of title 18, United States Code, as amended by section 433 of Public Law 104-132, is amended-- (1) by striking ``if the act indictable under section 1028 was committed for the purpose of financial gain''; (2) by inserting ``section 1425 (relating to the procurement of citizenship or nationalization unlawfully), section 1426 (relating to the reproduction of naturalization or citizenship papers), section 1427 (relating to the sale of naturalization or citizenship papers),'' after ``section 1344 (relating to financial institution fraud),''; (3) by striking ``if the act indictable under section 1542 was committed for the purpose of financial gain''; (4) by striking ``if the act indictable under section 1543 was committed for the purpose of financial gain''; (5) by striking ``if the act indictable under section 1544 was committed for the purpose of financial gain''; and (6) by striking ``if the act indictable under section 1546 was committed for the purpose of financial gain''.

(a) Commercial Advantage.--Section 274(a)(1)(B)(i) (8 U.S.C. 1324(a)(1)(B)(i)) is amended by inserting ``or in the case of a violation of subparagraph (A)(ii), (iii), or (iv) in which the offense was done for the purpose of commercial advantage or private financial gain'' after ``subparagraph (A)(i)''. (b) Additional Offenses.--Section 274(a) (8 U.S.C. 1324(a)) is amended-- (1) in paragraph (1)(A)-- (A) by striking ``or'' at the end of clause (iii); (B) by striking the comma at the end of clause (iv) and inserting ``; or''; and (C) by adding at the end the following new clause: ``(v)(I) engages in any conspiracy to commit any of the preceding acts, or ``(II) aids or abets the commission of any of the preceding acts,''; (2) in paragraph (1)(B)--

(A) in clause (i), by inserting ``or (v)(I)'' after ``(A)(i)''; (B) in clause (ii), by striking ``or (iv)'' and inserting ``(iv), or (v)(II)''; (C) in clause (iii), by striking ``or (iv)'' and inserting ``(iv), or (v)''; and (D) in clause (iv), by striking ``or (iv)'' and inserting ``(iv), or (v)''; (3) in paragraph (2)(B), by striking ``be fined'' and all that follows and inserting the following: ``be fined under title 18, United States Code, and shall be imprisoned, in the case of a first or second violation of subparagraph (B)(iii), not more than 10 years, in the case of a first or second violation of subparagraph (B)(i) or (B)(ii), not less than 3 nor more than 10 years, and for any other violation, not less than 5 nor more than 15 years.''; and (4) by adding at the end the following new paragraph:

``(3)(A) Any person who, during any 12-month period, knowingly hires for employment at least 10 individuals with actual knowledge that the individuals are aliens described in subparagraph (B) shall be fined under title 18, United States Code, or imprisoned for not more than 5 years, or both. ``(B) An alien described in this subparagraph is an alien who-- ``(i) is an unauthorized alien (as defined in section 274A(h)(3)), and ``(ii) has been brought into the United States in violation of this subsection.''.

(c) Smuggling of Aliens Who Will Commit Crimes.--Clause (i) of section 274(a)(2)(B) (8 U.S.C. 1324(a)(2)(B)) is amended to read as follows: ``(i) an offense committed with the intent or with reason to believe that the alien unlawfully brought into the United States will commit an offense against the United States or any State punishable by imprisonment for more than 1 year,''.

(d) Applying Certain Penalties on a Per Alien Basis.--Section 274(a)(2) (8 U.S.C. 1324(a)(2)) is amended by striking ``for each transaction constituting a violation of this paragraph, regardless of the number of aliens involved'' and inserting ``for each alien in respect to whom a violation of this paragraph occurs''. (e) Sentencing Guidelines.-- (1) In general.--Pursuant to its authority under section 994(p) of title 28, United States Code, the United States Sentencing Commission shall promulgate sentencing guidelines or amend existing sentencing guidelines for offenders convicted of offenses related to smuggling, transporting, harboring, or inducing aliens in violation of section 274(a) (1)(A) or (2) of the Immigration and Nationality Act (8 U.S.C. 1324(a)(1)(A), (2)(B)) in accordance with this subsection. (2) Requirements.--In carrying out this subsection, the Commission shall, with respect to the offenses described in paragraph (1)-- (A) increase the base offense level for such offenses at least 3 offense levels above the applicable level in effect on the date of the enactment of this Act; (B) review the sentencing enhancement for the number of aliens involved (U.S.S.G. 2L1.1(b)(2)), and increase the sentencing enhancement by at least 50 percent above the

applicable enhancement in effect on the date of the enactment of this Act; (C) impose an appropriate sentencing enhancement upon an offender with 1 prior felony conviction arising out of a separate and prior prosecution for an offense that involved the same or similar underlying conduct as the current offense, to be applied in addition to any sentencing enhancement that would otherwise apply pursuant to the calculation of the defendant's criminal history category; (D) impose an additional appropriate sentencing enhancement upon an offender with 2 or more prior felony convictions arising out of separate and prior prosecutions for offenses that involved the same or similar underling conduct as the current offense, to be applied in addition to any sentencing enhancement that would otherwise apply pursuant to the calculation of the defendant's criminal history category; (E) impose an appropriate sentencing enhancement on a defendant who, in the course of committing an offense described in this subsection-- (i) murders or otherwise causes death, bodily injury, or serious bodily injury to an individual; (ii) uses or brandishes a firearm or other dangerous weapon; or (iii) engages in conduct that consciously or recklessly places another in serious danger of death or serious bodily injury; (F) consider whether a downward adjustment is appropriate if the offense is a first offense and involves the smuggling only of the alien's spouse or child; and (G) consider whether any other aggravating or mitigating circumstances warrant upward or downward sentencing adjustments. (3) Emergency authority to sentencing commission.--The Commission shall promulgate the guidelines or amendments provided for under this subsection as soon as practicable in accordance with the procedure set forth in section 21(a) of the Sentencing Act of 1987, as though the authority under that Act had not expired.

(f) Effective Date.--This section and the amendments made by this section shall apply with respect to offenses occurring on or after the date of the enactment of this Act.

(a) In General.--The number of Assistant United States Attorneys employed by the Department of Justice for the fiscal year 1997 shall be increased by at least 25 above the number of Assistant United States Attorneys that were authorized to be employed as of September 30, 1996. (b) Assignment.--Individuals employed to fill the additional positions described in subsection (a) shall prosecute persons who bring into the United States or harbor illegal aliens or violate other criminal statutes involving illegal aliens.

(a) In General.--Title II is amended by adding at the end the following new section:

``undercover investigation authority

``Sec. 294. (a) In General.--With respect to any undercover investigative operation of the Service which is necessary for the detection and prosecution of crimes against the United States-- ``(1) sums appropriated for the Service may be used for leasing space within the United States and the territories and possessions of the United States without regard to the following provisions of law: ``(A) section 3679(a) of the Revised Statutes (31 U.S.C. 1341), ``(B) section 3732(a) of the Revised Statutes (41 U.S.C. 11(a)), ``(C) section 305 of the Act of June 30, 1949 (63 Stat. 396; 41 U.S.C. 255), ``(D) the third undesignated paragraph under the heading `Miscellaneous' of the Act of March 3, 1877 (19 Stat. 370; 40 U.S.C. 34), ``(E) section 3648 of the Revised Statutes (31 U.S.C. 3324), ``(F) section 3741 of the Revised Statutes (41 U.S.C. 22), and ``(G) subsections (a) and (c) of section 304 of the Federal Property and Administrative Services Act of 1949 (63 Stat. 395; 41 U.S.C. 254 (a) and (c)); ``(2) sums appropriated for the Service may be used to establish or to acquire proprietary corporations or business entities as part of an undercover operation, and to operate such corporations or business entities on a commercial basis, without regard to the provisions of section 304 of the Government Corporation Control Act (31 U.S.C. 9102); ``(3) sums appropriated for the Service, and the proceeds from the undercover operation, may be deposited in banks or other financial institutions without regard to the provisions of section 648 of title 18, United States Code, and of section 3639 of the Revised Statutes (31 U.S.C. 3302); and ``(4) the proceeds from the undercover operation may be used to offset necessary and reasonable expenses incurred in such operation without regard to the provisions of section 3617 of the Revised Statutes (31 U.S.C. 3302).

The authority set forth in this subsection may be exercised only upon written certification of the Commissioner, in consultation with the Deputy Attorney General, that any action authorized by paragraph (1), (2), (3), or (4) is necessary for the conduct of the undercover operation. ``(b) Disposition of Proceeds No Longer Required.--As soon as practicable after the proceeds from an undercover investigative operation, carried out under paragraphs (3) and (4) of subsection (a), are no longer necessary for the conduct of the operation, the proceeds or the balance of the proceeds remaining at the time shall be deposited into the Treasury of the United States as miscellaneous receipts. ``(c) Disposition of Certain Corporations and Business Entities.--If a corporation or business entity established or acquired as part of an undercover operation under paragraph (2) of subsection (a) with a net value of over $50,000 is to be liquidated, sold, or otherwise disposed of, the Service, as much in advance

as the Commissioner or Commissioner's designee determines practicable, shall report the circumstances to the Attorney General, the Director of the Office of Management and Budget, and the Comptroller General. The proceeds of the liquidation, sale, or other disposition, after obligations are met, shall be deposited in the Treasury of the United States as miscellaneous receipts. ``(d) Financial Audits.--The Service shall conduct detailed financial audits of closed undercover operations on a quarterly basis and shall report the results of the audits in writing to the Deputy Attorney General.''. (b) Clerical Amendment.--The table of contents is amended by inserting after the item relating to section 293 the following:

``Sec. 294. Undercover investigation authority.''.

Subtitle B--Deterrence of Document Fraud

ISSUED DOCUMENTS.

(a) Fraud and Misuse of Government-Issued Identification Documents.--(1) Section 1028(b) of title 18, United States Code, is amended-- (A) in paragraph (1), by inserting ``except as provided in paragraphs (3) and (4),'' after ``(1)'' and by striking ``five years'' and inserting ``15 years''; (B) in paragraph (2), by inserting ``except as provided in paragraphs (3) and (4),'' after ``(2)'' and by striking ``and'' at the end; (C) by redesignating paragraph (3) as paragraph (5); and (D) by inserting after paragraph (2) the following new paragraphs: ``(3) a fine under this title or imprisonment for not more than 20 years, or both, if the offense is committed to facilitate a drug trafficking crime (as defined in section 929(a)(2) of this title); ``(4) a fine under this title or imprisonment for not more than 25 years, or both, if the offense is committed to facilitate an act of international terrorism (as defined in section 2331(1) of this title); and''.

(2) Sections 1425 through 1427, sections 1541 through 1544, and section 1546(a) of title 18, United States Code, are each amended by striking ``imprisoned not more'' and all that follows through ``years'' each place it appears and inserting the following: ``imprisoned not more than 25 years (if the offense was committed to facilitate an act of international terrorism (as defined in section 2331 of this title)), 20 years (if the offense was committed to facilitate a drug trafficking crime (as defined in section 929(a) of this title)), 10 years (in the case of the first or second such offense, if the offense was not committed to facility such an act of international terrorism or a drug trafficking crime), or 15 years (in the case of any other offense)''. (b) Changes to the Sentencing Levels.-- (1) In general.--Pursuant to the Commission's authority under section 994(p) of title 28, United States Code, the United States Sentencing Commission shall promulgate sentencing guidelines or amend existing sentencing guidelines for offenders

convicted of violating, or conspiring to violate, sections 1028(b)(1), 1425 through 1427, 1541 through 1544, and 1546(a) of title 18, United States Code, in accordance with this subsection. (2) Requirements.--In carrying out this subsection, the Commission shall, with respect to the offenses referred to in paragraph (1)-- (A) increase the base offense level for such offenses at least 2 offense levels above the level in effect on the date of the enactment of this Act; (B) review the sentencing enhancement for number of documents or passports involved (U.S.S.G. 2L2.1(b)(2)), and increase the upward adjustment by at least 50 percent above the applicable enhancement in effect on the date of the enactment of this Act; (C) impose an appropriate sentencing enhancement upon an offender with 1 prior felony conviction arising out of a separate and prior prosecution for an offense that involved the same or similar underlying conduct as the current offense, to be applied in addition to any sentencing enhancement that would otherwise apply pursuant to the calculation of the defendant's criminal history category; (D) impose an additional appropriate sentencing enhancement upon an offender with 2 or more prior felony convictions arising out of separate and prior prosecutions for offenses that involved the same or similar underlying conduct as the current offense, to be applied in addition to any sentencing enhancement that would otherwise apply pursuant to the calculation of the defendant's criminal history category; and (E) consider whether any other aggravating or mitigating circumstances warrant upward or downward sentencing adjustments. (3) Emergency authority to sentencing commission.--The Commission shall promulgate the guidelines or amendments provided for under this subsection as soon as practicable in accordance with the procedure set forth in section 21(a) of the Sentencing Act of 1987, as though the authority under that Act had not expired.

(c) Effective Date.--This section and the amendments made by this section shall apply with respect to offenses occurring on or after the date of the enactment of this Act.

NEW DOCUMENT FRAUD OFFENSES; NEW CIVIL PENALTIES FOR DOCUMENT FRAUD.

(a) Activities Prohibited.--Section 274C(a) (8 U.S.C. 1324c(a)) is amended-- (1) in paragraph (1), by inserting before the comma at the end the following: ``or to obtain a benefit under this Act''; (2) in paragraph (2), by inserting before the comma at the end the following: ``or to obtain a benefit under this Act''; (3) in paragraph (3)-- (A) by inserting ``or with respect to'' after ``issued to''; (B) by adding before the comma at the end the following: ``or obtaining a benefit under this Act''; and (C) by striking ``or'' at the end; (4) in paragraph (4)--

(A) by inserting ``or with respect to'' after ``issued to''; (B) by adding before the period at the end the following: ``or obtaining a benefit under this Act''; and (C) by striking the period at the end and inserting ``, or''; and (5) by adding at the end the following new paragraphs: ``(5) to prepare, file, or assist another in preparing or filing, any application for benefits under this Act, or any document required under this Act, or any document submitted in connection with such application or document, with knowledge or in reckless disregard of the fact that such application or document was falsely made or, in whole or in part, does not relate to the person on whose behalf it was or is being submitted, or ``(6)(A) to present before boarding a common carrier for the purpose of coming to the United States a document which relates to the alien's eligibility to enter the United States, and (B) to fail to present such document to an immigration officer upon arrival at a United States port of entry.''.

(b) Definition of Falsely Make.--Section 274C (8 U.S.C. 1324c), as amended by section 213 of this division, is further amended by adding at the end the following new subsection: ``(f) Falsely Make.--For purposes of this section, the term `falsely make' means to prepare or provide an application or document, with knowledge or in reckless disregard of the fact that the application or document contains a false, fictitious, or fraudulent statement or material representation, or has no basis in law or fact, or otherwise fails to state a fact which is material to the purpose for which it was submitted.''. (c) Conforming Amendment.--Section 274C(d)(3) (8 U.S.C. 1324c(d)(3)) is amended by striking ``each document used, accepted, or created and each instance of use, acceptance, or creation'' each place it appears and inserting ``each document that is the subject of a violation under subsection (a)''. (d) Waiver by Attorney General.--Section 274C(d) (8 U.S.C. 1324c(d)) is amended by adding at the end the following new paragraph: ``(7) Waiver by attorney general.--The Attorney General may waive the penalties imposed by this section with respect to an alien who knowingly violates subsection (a)(6) if the alien is granted asylum under section 208 or withholding of deportation under section 243(h).''.

(e) Effective Date.--Section 274C(f) of the Immigration and Nationality Act, as added by subsection (b), applies to the preparation of applications before, on, or after the date of the enactment of this Act.

PREPARER OF FALSE APPLICATION FOR IMMIGRATION BENEFITS.

Section 274C (8 U.S.C. 1324c) is amended by adding at the end the following new subsection: ``(e) Criminal Penalties for Failure To Disclose Role as Document Preparer.--(1) Whoever, in any matter within the jurisdiction of the Service, knowingly and willfully fails to disclose, conceals, or covers up the fact that they have, on behalf of any person and for a fee or other remuneration, prepared or assisted

in preparing an application which was falsely made (as defined in subsection (f)) for immigration benefits, shall be fined in accordance with title 18, United States Code, imprisoned for not more than 5 years, or both, and prohibited from preparing or assisting in preparing, whether or not for a fee or other remuneration, any other such application. ``(2) Whoever, having been convicted of a violation of paragraph (1), knowingly and willfully prepares or assists in preparing an application for immigration benefits pursuant to this Act, or the regulations promulgated thereunder, whether or not for a fee or other remuneration and regardless of whether in any matter within the jurisdiction of the Service, shall be fined in accordance with title 18, United States Code, imprisoned for not more than 15 years, or both, and prohibited from preparing or assisting in preparing any other such application.''.

TO CONTAIN REASONABLE BASIS IN LAW OR FACT.

The fourth paragraph of section 1546(a) of title 18, United States Code, is amended by striking ``containing any such false statement'' and inserting ``which contains any such false statement or which fails to contain any reasonable basis in law or fact''.

Section 1015 of title 18, United States Code, is amended-- (1) by striking the dash at the end of paragraph (d) and inserting ``; or'', and (2) by inserting after paragraph (d) the following:

``(e) Whoever knowingly makes any false statement or claim that he is, or at any time has been, a citizen or national of the United States, with the intent to obtain on behalf of himself, or any other person, any Federal or State benefit or service, or to engage unlawfully in employment in the United States; or ``(f) Whoever knowingly makes any false statement or claim that he is a citizen of the United States in order to register to vote or to vote in any Federal, State, or local election (including an initiative, recall, or referendum)--''.

(a) In General.--Title 18, United States Code, is amended by inserting after section 610 the following:

``Sec. 611. Voting by aliens

``(a) It shall be unlawful for any alien to vote in any election held solely or in part for the purpose of electing a candidate for the office of President, Vice President, Presidential elector, Member of the Senate, Member of the House of Representatives, Delegate from the District of Columbia, or Resident Commissioner, unless-- ``(1) the election is held partly for some other purpose; ``(2) aliens are authorized to vote for such other purpose under a State constitution or statute or a local ordinance; and ``(3) voting for such other purpose is conducted independently of voting for a candidate for such Federal offices, in such a manner that an alien has the opportunity to vote for

such other purpose, but not an opportunity to vote for a candidate for any one or more of such Federal offices.

``(b) Any person who violates this section shall be fined under this title, imprisoned not more than one year, or both.''. (b) Clerical Amendment.--The table of sections at the beginning of chapter 29 of title 18, United States Code, is amended by inserting after the item relating to section 610 the following new item:

``611. Voting by aliens.''.

Section 982(a) of title 18, United States Code, is amended by inserting after paragraph (5) the following new paragraph: ``(6)(A) The court, in imposing sentence on a person convicted of a violation of, or conspiracy to violate, section 1425, 1426, 1427, 1541, 1542, 1543, 1544, or 1546 of this title, or a violation of, or conspiracy to violate, section 1028 of this title if committed in connection with passport or visa issuance or use, shall order that the person forfeit to the United States, regardless of any provision of State law-- ``(i) any conveyance, including any vessel, vehicle, or aircraft used in the commission of a violation of, or a conspiracy to violate, subsection (a); and ``(ii) any property real or personal-- ``(I) that constitutes, or is derived from or is traceable to the proceeds obtained directly or indirectly from the commission of a violation of, or a conspiracy to violate, subsection (a), section 274A(a)(1) or 274A(a)(2) of the Immigration and Nationality Act, or section 1028, 1425, 1426, 1427, 1541, 1542, 1543, 1544, or 1546 of this title; or ``(II) that is used to facilitate, or is intended to be used to facilitate, the commission of a violation of, or a conspiracy to violate, subsection (a), section 274A(a)(1) or 274A(a)(2) of the Immigration and Nationality Act, or section 1028, 1425, 1426, 1427, 1541, 1542, 1543, 1544, or 1546 of this title.

The court, in imposing sentence on such person, shall order that the person forfeit to the United States all property described in this subparagraph. ``(B) The criminal forfeiture of property under subparagraph (A), including any seizure and disposition of the property and any related administrative or judicial proceeding, shall be governed by the provisions of section 413 of the Comprehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 853), other than subsections (a) and (d) of such section 413.''.

(a) Amendments to Title 18.--Sections 1581, 1583, 1584, and 1588 of title 18, United States Code, are amended by striking ``five'' each place it appears and inserting ``10''. (b) Review of Sentencing Guidelines.--The United States Sentencing Commission shall ascertain whether there exists an unwarranted disparity--

(1) between the sentences for peonage, involuntary servitude, and slave trade offenses, and the sentences for kidnapping offenses in effect on the date of the enactment of this Act; and (2) between the sentences for peonage, involuntary servitude, and slave trade offenses, and the sentences for alien smuggling offenses in effect on the date of the enactment of this Act and after the amendment made by subsection (a).

(c) Amendment of Sentencing Guidelines.-- (1) In general.--Pursuant to its authority under section 994(p) of title 28, United States Code, the United States Sentencing Commission shall review its guidelines on sentencing for peonage, involuntary servitude, and slave trade offenses under sections 1581 through 1588 of title 18, United States Code, and shall amend such guidelines as necessary to-- (A) reduce or eliminate any unwarranted disparity found under subsection (b) that exists between the sentences for peonage, involuntary servitude, and slave trade offenses, and the sentences for kidnapping offenses and alien smuggling offenses; (B) ensure that the applicable guidelines for defendants convicted of peonage, involuntary servitude, and slave trade offenses are sufficiently stringent to deter such offenses and adequately reflect the heinous nature of such offenses; and (C) ensure that the guidelines reflect the general appropriateness of enhanced sentences for defendants whose peonage, involuntary servitude, or slave trade offenses involve-- (i) a large number of victims; (ii) the use or threatened use of a dangerous weapon; or (iii) a prolonged period of peonage or involuntary servitude. (2) Emergency authority to sentencing commission.--The Commission shall promulgate the guidelines or amendments provided for under this subsection as soon as practicable in accordance with the procedure set forth in section 21(a) of the Sentencing Act of 1987, as though the authority under that Act had not expired.

(d) Effective Date.--This section and the amendments made by this section shall apply with respect to offenses occurring on or after the date of the enactment of this Act.

Section 274 (8 U.S.C. 1324) is amended by adding at the end thereof the following new subsection: ``(d) Notwithstanding any provision of the Federal Rules of Evidence, the videotaped (or otherwise audiovisually preserved) deposition of a witness to a violation of subsection (a) who has been deported or otherwise expelled from the United States, or is otherwise unable to testify, may be admitted into evidence in an action brought for that violation if the witness was available for cross examination and the deposition otherwise complies with the Federal Rules of Evidence.''.

Section 274C(d)(1) (8 U.S.C. 1324c(d)(1)) is amended-- (1) by striking ``and'' at the end of subparagraph (A); (2) by striking the period at the end of subparagraph (B) and inserting ``, and''; and (3) by inserting after subparagraph (B) the following: ``(C) immigration officers designated by the Commissioner may compel by subpoena the attendance of witnesses and the production of evidence at any designated place prior to the filing of a complaint in a case under paragraph (2).''.

AUTHORIZATION AS NOT ADMITTED.

(a) ``Admission'' Defined.--Paragraph (13) of section 101(a) (8 U.S.C. 1101(a)) is amended to read as follows: ``(13)(A) The terms `admission' and `admitted' mean, with respect to an alien, the lawful entry of the alien into the United States after inspection and authorization by an immigration officer. ``(B) An alien who is paroled under section 212(d)(5) or permitted to land temporarily as an alien crewman shall not be considered to have been admitted. ``(C) An alien lawfully admitted for permanent residence in the United States shall not be regarded as seeking an admission into the United States for purposes of the immigration laws unless the alien-- ``(i) has abandoned or relinquished that status, ``(ii) has been absent from the United States for a continuous period in excess of 180 days, ``(iii) has engaged in illegal activity after having departed the United States, ``(iv) has departed from the United States while under legal process seeking removal of the alien from the United States, including removal proceedings under this Act and extradition proceedings, ``(v) has committed an offense identified in section 212(a)(2), unless since such offense the alien has been granted relief under section 212(h) or 240A(a), or ``(vi) is attempting to enter at a time or place other than as designated by immigration officers or has not been admitted to the United States after inspection and authorization by an immigration officer.''.

(b) Inadmissibility of Aliens Previously Removed and Unlawfully Present.--

(1) In general.--Section 212(a) (8 U.S.C. 1182(a)) is amended by redesignating paragraph (9) as paragraph (10) and by inserting after paragraph (8) the following new paragraph: ``(9) Aliens previously removed.-- ``(A) Certain aliens previously removed.-- ``(i) Arriving aliens.--Any alien who has been ordered removed under section 235(b)(1) or at the end of proceedings under section 240 initiated upon the alien's arrival in the United States and who again seeks admission within 5 years of the date of such removal (or within 20 years in the case of a second or subsequent removal or at any time in the case of an alien convicted of an aggravated felony) is inadmissible. ``(ii) Other aliens.--Any alien not described in clause (i) who-- ``(I) has been ordered removed under section 240 or any other provision of law, or ``(II) departed the United States while an order of removal was outstanding, and who seeks admission within 10 years of the date of such alien's departure or removal (or within 20 years of such date in the case of a second or subsequent removal or at any time in the case of an alien convicted of an aggravated felony) is inadmissible. ``(iii) Exception.--Clauses (i) and (ii) shall not apply to an alien seeking admission within a period if, prior to the date of the alien's reembarkation at a place outside the United States or attempt to be admitted from foreign contiguous territory, the Attorney General has consented to the alien's reapplying for admission. ``(B) Aliens unlawfully present.-- ``(i) In general.--Any alien (other than an alien lawfully admitted for permanent residence) who-- ``(I) was unlawfully present in the United States for a period of more than 180 days but less than 1 year, voluntarily departed the United States (whether or not pursuant to section 244(e)) prior to the commencement of proceedings under section 235(b)(1) or section 240, and again seeks admission within 3 years of the date of such alien's departure or removal, or ``(II) has been unlawfully present in the United States for one year or more, and who again seeks admission within 10 years of the date of such alien's departure or removal from the United States, is inadmissible. ``(ii) Construction of unlawful presence.--For purposes of this paragraph, an alien is deemed to be unlawfully present in the United States if the alien is present in the United States after the expiration of the period of stay authorized by the Attorney General or is present in the United States without being admitted or paroled.

``(iii) Exceptions.-- ``(I) Minors.--No period of time in which an alien is under 18 years of age shall be taken into account in determining the period of unlawful presence in the United States under clause (i). ``(II) Asylees.--No period of time in which an alien has a bona fide application for asylum pending under section 208 shall be taken into account in determining the period of unlawful presence in the United States under clause (i) unless the alien during such period was employed without authorization in the United States. ``(III) Family unity.--No period of time in which the alien is a beneficiary of family unity protection pursuant to section 301 of the Immigration Act of 1990 shall be taken into account in determining the period of unlawful presence in the United States under clause (i). ``(IV) Battered women and children.--Clause (i) shall not apply to an alien who would be described in paragraph (6)(A)(ii) if `violation of the terms of the alien's nonimmigrant visa' were substituted for `unlawful entry into the United States' in subclause (III) of that paragraph. ``(iv) Tolling for good cause.--In the case of an alien who-- ``(I) has been lawfully admitted or paroled into the United States, ``(II) has filed a nonfrivolous application for a change or extension of status before the date of expiration of the period of stay authorized by the Attorney General, and ``(III) has not been employed without authorization in the United States before or during the pendency of such application, the calculation of the period of time specified in clause (i)(I) shall be tolled during the pendency of such application, but not to exceed 120 days. ``(v) Waiver.--The Attorney General has sole discretion to waive clause (i) in the case of an immigrant who is the spouse or son or daughter of a United States citizen or of an alien lawfully admitted for permanent residence, if it is established to the satisfaction of the Attorney General that the refusal of admission to such immigrant alien would result in extreme hardship to the citizen or lawfully resident spouse or parent of such alien. No court shall have jurisdiction to review a decision or action by the Attorney General regarding a waiver under this clause. ``(C) Aliens unlawfully present after previous immigration violations.-- ``(i) In general.--Any alien who-- ``(I) has been unlawfully present in the United States for an aggregate period of more than 1 year, or

``(II) has been ordered removed under section 235(b)(1), section 240, or any other provision of law, and who enters or attempts to reenter the United States without being admitted is inadmissible. ``(ii) Exception.--Clause (i) shall not apply to an alien seeking admission more than 10 years after the date of the alien's last departure from the United States if, prior to the alien's reembarkation at a place outside the United States or attempt to be readmitted from a foreign contiguous territory, the Attorney General has consented to the alien's reapplying for admission.''. (2) Limitation on change of status.--Section 248 (8 U.S.C. 1258) is amended by inserting ``and who is not inadmissible under section 212(a)(9)(B)(i) (or whose inadmissibility under such section is waived under section 212(a)(9)(B)(v))'' after ``maintain that status''. (3) Treatment of unlawful presence before effective date.--In applying section 212(a)(9)(B) of the Immigration and Nationality Act, as inserted by paragraph (1), no period before the title III-A effective date shall be included in a period of unlawful presence in the United States.

(c) Revision to Ground of Inadmissibility for Illegal Entrants and Immigration Violators.-- (1) In general.--Subparagraphs (A) and (B) of section 212(a)(6) (8 U.S.C. 1182(a)(6)) are amended to read as follows: ``(A) Aliens present without admission or parole.-- ``(i) In general.--An alien present in the United States without being admitted or paroled, or who arrives in the United States at any time or place other than as designated by the Attorney General, is inadmissible. ``(ii) Exception for certain battered women and children.--Clause (i) shall not apply to an alien who demonstrates that-- ``(I) the alien qualifies for immigrant status under subparagraph (A)(iii), (A)(iv), (B)(ii), or (B)(iii) of section 204(a)(1), ``(II)(a) the alien has been battered or subjected to extreme cruelty by a spouse or parent, or by a member of the spouse's or parent's family residing in the same household as the alien and the spouse or parent consented or acquiesced to such battery or cruelty, or (b) the alien's child has been battered or subjected to extreme cruelty by a spouse or parent of the alien (without the active participation of the alien in the battery or cruelty) or by a member of the spouse's or parent's family residing in the same household as the alien when the spouse or parent consented to or acquiesced in such battery or cruelty and the alien did not actively participate in such battery or cruelty, and

``(III) there was a substantial connection between the battery or cruelty described in subclause (I) or (II) and the alien's unlawful entry into the United States. ``(B) Failure to attend removal proceeding.--Any alien who without reasonable cause fails or refuses to attend or remain in attendance at a proceeding to determine the alien's inadmissibility or deportability and who seeks admission to the United States within 5 years of such alien's subsequent departure or removal is inadmissible. ''. (2) Transition for battered spouse or child provision.--The requirements of subclauses (II) and (III) of section 212(a)(6)(A)(ii) of the Immigration and Nationality Act, as inserted by paragraph (1), shall not apply to an alien who demonstrates that the alien first arrived in the United States before the title III-A effective date (described in section 309(a) of this division).

(d) Adjustment in Grounds for Deportation.--Section 241 (8 U.S.C. 1251), before redesignation as section 237 by section 305(a)(2) of this division, is amended-- (1) in the matter before paragraph (1) of subsection (a), by striking ``in the United States'' and inserting ``in and admitted to the United States''; (2) in subsection (a)(1), by striking ``Excludable'' each place it appears and inserting ``Inadmissible''; (3) in subsection (a)(1)(A), by striking ``excludable'' and inserting ``inadmissible''; and (4) by amending subparagraph (B) of subsection (a)(1) to read as follows: ``(B) Present in violation of law.--Any alien who is present in the United States in violation of this Act or any other law of the United States is deportable.

INSPECTION OF ALIENS; EXPEDITED REMOVAL OF INADMISSIBLE ARRIVING ALIENS; REFERRAL FOR HEARING (REVISED SECTION 235).

(a) In General.--Section 235 (8 U.S.C. 1225) is amended to read as follows:

``inspection by immigration officers; expedited removal of inadmissible arriving aliens; referral for hearing

``Sec. 235. (a) Inspection.-- ``(1) Aliens treated as applicants for admission.--An alien present in the United States who has not been admitted or who arrives in the United States (whether or not at a designated port of arrival and including an alien who is brought to the United States after having been interdicted in international or United States waters) shall be deemed for purposes of this Act an applicant for admission. ``(2) Stowaways.--An arriving alien who is a stowaway is not eligible to apply for admission or to be admitted and shall be ordered removed upon inspection by an immigration officer. Upon such inspection if the alien indicates an intention to apply for asylum under section 208 or a fear of persecution, the officer shall refer the alien for an interview under subsection (b)(1)(B). A stowaway may apply for asylum only if

the stowaway is found to have a credible fear of persecution under subsection (b)(1)(B). In no case may a stowaway be considered an applicant for admission or eligible for a hearing under section 240. ``(3) Inspection.--All aliens (including alien crewmen) who are applicants for admission or otherwise seeking admission or readmission to or transit through the United States shall be inspected by immigration officers. ``(4) Withdrawal of application for admission.--An alien applying for admission may, in the discretion of the Attorney General and at any time, be permitted to withdraw the application for admission and depart immediately from the United States. ``(5) Statements.--An applicant for admission may be required to state under oath any information sought by an immigration officer regarding the purposes and intentions of the applicant in seeking admission to the United States, including the applicant's intended length of stay and whether the applicant intends to remain permanently or become a United States citizen, and whether the applicant is inadmissible.

``(b) Inspection of Applicants for Admission.-- ``(1) Inspection of aliens arriving in the united states and certain other aliens who have not been admitted or paroled.-- ``(A) Screening.-- ``(i) In general.--If an immigration officer determines that an alien (other than an alien described in subparagraph (F)) who is arriving in the United States or is described in clause (iii) is inadmissible under section 212(a)(6)(C) or 212(a)(7), the officer shall order the alien removed from the United States without further hearing or review unless the alien indicates either an intention to apply for asylum under section 208 or a fear of persecution. ``(ii) Claims for asylum.--If an immigration officer determines that an alien (other than an alien described in subparagraph (F)) who is arriving in the United States or is described in clause (iii) is inadmissible under section 212(a)(6)(C) or 212(a)(7) and the alien indicates either an intention to apply for asylum under section 208 or a fear of persecution, the officer shall refer the alien for an interview by an asylum officer under subparagraph (B). ``(iii) Application to certain other aliens.-- ``(I) In general.--The Attorney General may apply clauses (i) and (ii) of this subparagraph to any or all aliens described in subclause (II) as designated by the Attorney General. Such designation shall be in the sole and unreviewable discretion of the Attorney General and may be modified at any time. ``(II) Aliens described.--An alien described in this clause is an alien who is not described in subparagraph (F), who has not been admitted or paroled into the United States, and who has not affirmatively shown, to the satisfaction of an

immigration officer, that the alien has been physically present in the United States continuously for the 2-year period immediately prior to the date of the determination of inadmissibility under this subparagraph. ``(B) Asylum interviews.-- ``(i) Conduct by asylum officers.--An asylum officer shall conduct interviews of aliens referred under subparagraph (A)(ii), either at a port of entry or at such other place designated by the Attorney General. ``(ii) Referral of certain aliens.--If the officer determines at the time of the interview that an alien has a credible fear of persecution (within the meaning of clause (v)), the alien shall be detained for further consideration of the application for asylum. ``(iii) Removal without further review if no credible fear of persecution.-- ``(I) In general.--Subject to subclause (III), if the officer determines that an alien does not have a credible fear of persecution, the officer shall order the alien removed from the United States without further hearing or review. ``(II) Record of determination.--The officer shall prepare a written record of a determination under subclause (I). Such record shall include a summary of the material facts as stated by the applicant, such additional facts (if any) relied upon by the officer, and the officer's analysis of why, in the light of such facts, the alien has not established a credible fear of persecution. A copy of the officer's interview notes shall be attached to the written summary. ``(III) Review of determination.-- The Attorney General shall provide by regulation and upon the alien's request for prompt review by an immigration judge of a determination under subclause (I) that the alien does not have a credible fear of persecution. Such review shall include an opportunity for the alien to be heard and questioned by the immigration judge, either in person or by telephonic or video connection. Review shall be concluded as expeditiously as possible, to the maximum extent practicable within 24 hours, but in no case later than 7 days after the date of the determination under subclause (I). ``(IV) Mandatory detention.--Any alien subject to the procedures under this clause shall be detained pending a final determination of credible fear of persecution and, if found not to have such a fear, until removed. ``(iv) Information about interviews.--The Attorney General shall provide information concerning the asylum interview described in this subparagraph to aliens who may be eligible. An alien who is eligible for such interview may consult with a person or persons of the alien's choosing prior to the interview or any review thereof, according to regulations prescribed

by the Attorney General. Such consultation shall be at no expense to the Government and shall not unreasonably delay the process. ``(v) Credible fear of persecution defined.-- For purposes of this subparagraph, the term `credible fear of persecution' means that there is a significant possibility, taking into account the credibility of the statements made by the alien in support of the alien's claim and such other facts as are known to the officer, that the alien could establish eligibility for asylum under section 208. ``(C) Limitation on administrative review.--Except as provided in subparagraph (B)(iii)(III), a removal order entered in accordance with subparagraph (A)(i) or (B)(iii)(I) is not subject to administrative appeal, except that the Attorney General shall provide by regulation for prompt review of such an order under subparagraph (A)(i) against an alien who claims under oath, or as permitted under penalty of perjury under section 1746 of title 28, United States Code, after having been warned of the penalties for falsely making such claim under such conditions, to have been lawfully admitted for permanent residence, to have been admitted as a refugee under section 207, or to have been granted asylum under section 208. ``(D) Limit on collateral attacks.--In any action brought against an alien under section 275(a) or section 276, the court shall not have jurisdiction to hear any claim attacking the validity of an order of removal entered under subparagraph (A)(i) or (B)(iii). ``(E) Asylum officer defined.--As used in this paragraph, the term `asylum officer' means an immigration officer who-- ``(i) has had professional training in country conditions, asylum law, and interview techniques comparable to that provided to full-time adjudicators of applications under section 208, and ``(ii) is supervised by an officer who meets the condition described in clause (i) and has had substantial experience adjudicating asylum applications. ``(F) Exception.--Subparagraph (A) shall not apply to an alien who is a native or citizen of a country in the Western Hemisphere with whose government the United States does not have full diplomatic relations and who arrives by aircraft at a port of entry. ``(2) Inspection of other aliens.-- ``(A) In general.--Subject to subparagraphs (B) and (C), in the case of an alien who is an applicant for admission, if the examining immigration officer determines that an alien seeking admission is not clearly and beyond a doubt entitled to be admitted, the alien shall be detained for a proceeding under section 240. ``(B) Exception.--Subparagraph (A) shall not apply to an alien-- ``(i) who is a crewman, ``(ii) to whom paragraph (1) applies, or ``(iii) who is a stowaway.

``(C) Treatment of aliens arriving from contiguous territory.--In the case of an alien described in subparagraph (A) who is arriving on land (whether or not at a designated port of arrival) from a foreign territory contiguous to the United States, the Attorney General may return the alien to that territory pending a proceeding under section 240. ``(3) Challenge of decision.--The decision of the examining immigration officer, if favorable to the admission of any alien, shall be subject to challenge by any other immigration officer and such challenge shall operate to take the alien whose privilege to be admitted is so challenged, before an immigration judge for a proceeding under section 240.

``(c) Removal of Aliens Inadmissible on Security and Related Grounds.-- ``(1) Removal without further hearing.--If an immigration officer or an immigration judge suspects that an arriving alien may be inadmissible under subparagraph (A) (other than clause (ii)), (B), or (C) of section 212(a)(3), the officer or judge shall-- ``(A) order the alien removed, subject to review under paragraph (2); ``(B) report the order of removal to the Attorney General; and ``(C) not conduct any further inquiry or hearing until ordered by the Attorney General. ``(2) Review of order.--(A) The Attorney General shall review orders issued under paragraph (1). ``(B) If the Attorney General-- ``(i) is satisfied on the basis of confidential information that the alien is inadmissible under subparagraph (A) (other than clause (ii)), (B), or (C) of section 212(a)(3), and ``(ii) after consulting with appropriate security agencies of the United States Government, concludes that disclosure of the information would be prejudicial to the public interest, safety, or security, the Attorney General may order the alien removed without further inquiry or hearing by an immigration judge. ``(C) If the Attorney General does not order the removal of the alien under subparagraph (B), the Attorney General shall specify the further inquiry or hearing that shall be conducted in the case. ``(3) Submission of statement and information.--The alien or the alien's representative may submit a written statement and additional information for consideration by the Attorney General.

``(d) Authority Relating to Inspections.-- ``(1) Authority to search conveyances.--Immigration officers are authorized to board and search any vessel, aircraft, railway car, or other conveyance or vehicle in which they believe aliens are being brought into the United States. ``(2) Authority to order detention and delivery of arriving aliens.--Immigration officers are authorized to order an owner, agent, master, commanding officer, person in charge, purser, or consignee of a vessel or aircraft bringing an alien (except an alien crewmember) to the United States--

``(A) to detain the alien on the vessel or at the airport of arrival, and ``(B) to deliver the alien to an immigration officer for inspection or to a medical officer for examination. ``(3) Administration of oath and consideration of evidence.--The Attorney General and any immigration officer shall have power to administer oaths and to take and consider evidence of or from any person touching the privilege of any alien or person he believes or suspects to be an alien to enter, reenter, transit through, or reside in the United States or concerning any matter which is material and relevant to the enforcement of this Act and the administration of the Service. ``(4) Subpoena authority.--(A) The Attorney General and any immigration officer shall have power to require by subpoena the attendance and testimony of witnesses before immigration officers and the production of books, papers, and documents relating to the privilege of any person to enter, reenter, reside in, or pass through the United States or concerning any matter which is material and relevant to the enforcement of this Act and the administration of the Service, and to that end may invoke the aid of any court of the United States. ``(B) Any United States district court within the jurisdiction of which investigations or inquiries are being conducted by an immigration officer may, in the event of neglect or refusal to respond to a subpoena issued under this paragraph or refusal to testify before an immigration officer, issue an order requiring such persons to appear before an immigration officer, produce books, papers, and documents if demanded, and testify, and any failure to obey such order of the court may be punished by the court as a contempt thereof.''.

(b) GAO Study on Operation of Expedited Removal Procedures.-- (1) Study.--The Comptroller General shall conduct a study on the implementation of the expedited removal procedures under section 235(b)(1) of the Immigration and Nationality Act, as amended by subsection (a). The study shall examine-- (A) the effectiveness of such procedures in deterring illegal entry, (B) the detention and adjudication resources saved as a result of the procedures, (C) the administrative and other costs expended to comply with the provision, (D) the effectiveness of such procedures in processing asylum claims by undocumented aliens who assert a fear of persecution, including the accuracy of credible fear determinations, and (E) the cooperation of other countries and air carriers in accepting and returning aliens removed under such procedures. (2) Report.--By not later than 18 months after the date of the enactment of this Act, the Comptroller General shall submit to the Committees on the Judiciary of the House of Representatives and the Senate a report on the study conducted under paragraph (1).

(a) In General.--Section 236 (8 U.S.C. 1226) is amended to read as follows:

``apprehension and detention of aliens

``Sec. 236. (a) Arrest, Detention, and Release.--On a warrant issued by the Attorney General, an alien may be arrested and detained pending a decision on whether the alien is to be removed from the United States. Except as provided in subsection (c) and pending such decision, the Attorney General-- ``(1) may continue to detain the arrested alien; and ``(2) may release the alien on-- ``(A) bond of at least $1,500 with security approved by, and containing conditions prescribed by, the Attorney General; or ``(B) conditional parole; but ``(3) may not provide the alien with work authorization (including an `employment authorized' endorsement or other appropriate work permit), unless the alien is lawfully admitted for permanent residence or otherwise would (without regard to removal proceedings) be provided such authorization.

``(b) Revocation of Bond or Parole.--The Attorney General at any time may revoke a bond or parole authorized under subsection (a), rearrest the alien under the original warrant, and detain the alien. ``(c) Detention of Criminal Aliens.-- ``(1) Custody.--The Attorney General shall take into custody any alien who-- ``(A) is inadmissible by reason of having committed any offense covered in section 212(a)(2), ``(B) is deportable by reason of having committed any offense covered in section 237(a)(2)(A)(ii), (A)(iii), (B), (C), or (D), ``(C) is deportable under section 237(a)(2)(A)(i) on the basis of an offense for which the alien has been sentence to a term of imprisonment of at least 1 year, or ``(D) is inadmissible under section 212(a)(3)(B) or deportable under section 237(a)(4)(B), when the alien is released, without regard to whether the alien is released on parole, supervised release, or probation, and without regard to whether the alien may be arrested or imprisoned again for the same offense. ``(2) Release.--The Attorney General may release an alien described in paragraph (1) only if the Attorney General decides pursuant to section 3521 of title 18, United States Code, that release of the alien from custody is necessary to provide protection to a witness, a potential witness, a person cooperating with an investigation into major criminal activity, or an immediate family member or close associate of a witness, potential witness, or person cooperating with such an investigation, and the alien satisfies the Attorney General that the alien will not pose a danger to the safety of other persons or of property and is likely to appear for any scheduled proceeding. A decision relating to such release shall take place in accordance with

a procedure that considers the severity of the offense committed by the alien.

``(d) Identification of Criminal Aliens.--(1) The Attorney General shall devise and implement a system-- ``(A) to make available, daily (on a 24-hour basis), to Federal, State, and local authorities the investigative resources of the Service to determine whether individuals arrested by such authorities for aggravated felonies are aliens; ``(B) to designate and train officers and employees of the Service to serve as a liaison to Federal, State, and local law enforcement and correctional agencies and courts with respect to the arrest, conviction, and release of any alien charged with an aggravated felony; and ``(C) which uses computer resources to maintain a current record of aliens who have been convicted of an aggravated felony, and indicates those who have been removed.

``(2) The record under paragraph (1)(C) shall be made available-- ``(A) to inspectors at ports of entry and to border patrol agents at sector headquarters for purposes of immediate identification of any alien who was previously ordered removed and is seeking to reenter the United States, and ``(B) to officials of the Department of State for use in its automated visa lookout system.

``(3) Upon the request of the governor or chief executive officer of any State, the Service shall provide assistance to State courts in the identification of aliens unlawfully present in the United States pending criminal prosecution. ``(e) Judicial Review.--The Attorney General's discretionary judgment regarding the application of this section shall not be subject to review. No court may set aside any action or decision by the Attorney General under this section regarding the detention or release of any alien or the grant, revocation, or denial of bond or parole.''. (b) Effective Date.-- (1) In general.--The amendment made by subsection (a) shall become effective on the title III-A effective date. (2) Notification regarding custody.--If the Attorney General, not later than 10 days after the date of the enactment of this Act, notifies in writing the Committees on the Judiciary of the House of Representatives and the Senate that there is insufficient detention space and Immigration and Naturalization Service personnel available to carry out section 236(c) of the Immigration and Nationality Act, as amended by subsection (a), or the amendments made by section 440(c) of Public Law 104-132, the provisions in paragraph (3) shall be in effect for a 1-year period beginning on the date of such notification, instead of such section or such amendments. The Attorney General may extend such 1-year period for an additional year if the Attorney General provides the same notice not later than 10 days before the end of the first 1-year period. After the end of such 1-year or 2-year periods, the provisions of such section 236(c) shall apply to individuals released after such periods. (3) Transition period custody rules.--

(A) In general.--During the period in which this paragraph is in effect pursuant to paragraph (2), the Attorney General shall take into custody any alien who-- (i) has been convicted of an aggravated felony (as defined under section 101(a)(43) of the Immigration and Nationality Act, as amended by section 321 of this division), (ii) is inadmissible by reason of having committed any offense covered in section 212(a)(2) of such Act, (iii) is deportable by reason of having committed any offense covered in section 241(a)(2)(A)(ii), (A)(iii), (B), (C), or (D) of such Act (before redesignation under this subtitle), or (iv) is inadmissible under section 212(a)(3)(B) of such Act or deportable under section 241(a)(4)(B) of such Act (before redesignation under this subtitle), when the alien is released, without regard to whether the alien is released on parole, supervised release, or probation, and without regard to whether the alien may be arrested or imprisoned again for the same offense. (B) Release.--The Attorney General may release the alien only if the alien is an alien described in subparagraph (A)(ii) or (A)(iii) and-- (i) the alien was lawfully admitted to the United States and satisfies the Attorney General that the alien will not pose a danger to the safety of other persons or of property and is likely to appear for any scheduled proceeding, or (ii) the alien was not lawfully admitted to the United States, cannot be removed because the designated country of removal will not accept the alien, and satisfies the Attorney General that the alien will not pose a danger to the safety of other persons or of property and is likely to appear for any scheduled proceeding.

REMOVAL PROCEEDINGS; CANCELLATION OF REMOVAL AND ADJUSTMENT OF STATUS; VOLUNTARY DEPARTURE (REVISED AND NEW SECTIONS 239 TO 240C).

(a) In General.--Chapter 4 of title II is amended-- (1) by redesignating section 239 (8 U.S.C. 1229) as section 234 and by moving such section to immediately follow section 233; (2) by redesignating section 240 (8 U.S.C. 1230) as section 240C; and (3) by inserting after section 238 the following new sections:

``initiation of removal proceedings

``Sec. 239. (a) Notice to Appear.-- ``(1) In general.--In removal proceedings under section 240, written notice (in this section referred to as a `notice to appear') shall be given in person to the alien (or, if personal service is not practicable, through service by mail to the alien or to the alien's counsel of record, if any) specifying the following: ``(A) The nature of the proceedings against the alien.

``(B) The legal authority under which the proceedings are conducted. ``(C) The acts or conduct alleged to be in violation of law. ``(D) The charges against the alien and the statutory provisions alleged to have been violated. ``(E) The alien may be represented by counsel and the alien will be provided (i) a period of time to secure counsel under subsection (b)(1) and (ii) a current list of counsel prepared under subsection (b)(2). ``(F)(i) The requirement that the alien must immediately provide (or have provided) the Attorney General with a written record of an address and telephone number (if any) at which the alien may be contacted respecting proceedings under section 240. ``(ii) The requirement that the alien must provide the Attorney General immediately with a written record of any change of the alien's address or telephone number. ``(iii) The consequences under section 240(b)(5) of failure to provide address and telephone information pursuant to this subparagraph. ``(G)(i) The time and place at which the proceedings will be held. ``(ii) The consequences under section 240(b)(5) of the failure, except under exceptional circumstances, to appear at such proceedings. ``(2) Notice of change in time or place of proceedings.-- ``(A) In general.--In removal proceedings under section 240, in the case of any change or postponement in the time and place of such proceedings, subject to subparagraph (B) a written notice shall be given in person to the alien (or, if personal service is not practicable, through service by mail to the alien or to the alien's counsel of record, if any) specifying-- ``(i) the new time or place of the proceedings, and ``(ii) the consequences under section 240(b)(5) of failing, except under exceptional circumstances, to attend such proceedings. ``(B) Exception.--In the case of an alien not in detention, a written notice shall not be required under this paragraph if the alien has failed to provide the address required under paragraph (1)(F). ``(3) Central address files.--The Attorney General shall create a system to record and preserve on a timely basis notices of addresses and telephone numbers (and changes) provided under paragraph (1)(F).

``(b) Securing of Counsel.-- ``(1) In general.--In order that an alien be permitted the opportunity to secure counsel before the first hearing date in proceedings under section 240, the hearing date shall not be scheduled earlier than 10 days after the service of the notice to appear, unless the alien requests in writing an earlier hearing date. ``(2) Current lists of counsel.--The Attorney General shall provide for lists (updated not less often than quarterly) of persons who have indicated their availability to represent

pro bono aliens in proceedings under section 240. Such lists shall be provided under subsection (a)(1)(E) and otherwise made generally available. ``(3) Rule of construction.--Nothing in this subsection may be construed to prevent the Attorney General from proceeding against an alien pursuant to section 240 if the time period described in paragraph (1) has elapsed and the alien has failed to secure counsel.

``(c) Service by Mail.--Service by mail under this section shall be sufficient if there is proof of attempted delivery to the last address provided by the alien in accordance with subsection (a)(1)(F). ``(d) Prompt Initiation of Removal.--(1) In the case of an alien who is convicted of an offense which makes the alien deportable, the Attorney General shall begin any removal proceeding as expeditiously as possible after the date of the conviction. ``(2) Nothing in this subsection shall be construed to create any substantive or procedural right or benefit that is legally enforceable by any party against the United States or its agencies or officers or any other person.

``removal proceedings

``Sec. 240. (a) Proceeding.-- ``(1) In general.--An immigration judge shall conduct proceedings for deciding the inadmissibility or deportability of an alien. ``(2) Charges.--An alien placed in proceedings under this section may be charged with any applicable ground of inadmissibility under section 212(a) or any applicable ground of deportability under section 237(a). ``(3) Exclusive procedures.--Unless otherwise specified in this Act, a proceeding under this section shall be the sole and exclusive procedure for determining whether an alien may be admitted to the United States or, if the alien has been so admitted, removed from the United States. Nothing in this section shall affect proceedings conducted pursuant to section 238.

``(b) Conduct of Proceeding.-- ``(1) Authority of immigration judge.--The immigration judge shall administer oaths, receive evidence, and interrogate, examine, and cross-examine the alien and any witnesses. The immigration judge may issue subpoenas for the attendance of witnesses and presentation of evidence. The immigration judge shall have authority (under regulations prescribed by the Attorney General) to sanction by civil money penalty any action (or inaction) in contempt of the judge's proper exercise of authority under this Act. ``(2) Form of proceeding.-- ``(A) In general.--The proceeding may take place-- ``(i) in person, ``(ii) where agreed to by the parties, in the absence of the alien, ``(iii) through video conference, or ``(iv) subject to subparagraph (B), through telephone conference. ``(B) Consent required in certain cases.--An evidentiary hearing on the merits may only be conducted

through a telephone conference with the consent of the alien involved after the alien has been advised of the right to proceed in person or through video conference. ``(3) Presence of alien.--If it is impracticable by reason of an alien's mental incompetency for the alien to be present at the proceeding, the Attorney General shall prescribe safeguards to protect the rights and privileges of the alien. ``(4) Aliens rights in proceeding.--In proceedings under this section, under regulations of the Attorney General-- ``(A) the alien shall have the privilege of being represented, at no expense to the Government, by counsel of the alien's choosing who is authorized to practice in such proceedings, ``(B) the alien shall have a reasonable opportunity to examine the evidence against the alien, to present evidence on the alien's own behalf, and to cross-examine witnesses presented by the Government but these rights shall not entitle the alien to examine such national security information as the Government may proffer in opposition to the alien's admission to the United States or to an application by the alien for discretionary relief under this Act, and ``(C) a complete record shall be kept of all testimony and evidence produced at the proceeding. ``(5) Consequences of failure to appear.-- ``(A) In general.--Any alien who, after written notice required under paragraph (1) or (2) of section 239(a) has been provided to the alien or the alien's counsel of record, does not attend a proceeding under this section, shall be ordered removed in absentia if the Service establishes by clear, unequivocal, and convincing evidence that the written notice was so provided and that the alien is removable (as defined in subsection (e)(2)). The written notice by the Attorney General shall be considered sufficient for purposes of this subparagraph if provided at the most recent address provided under section 239(a)(1)(F). ``(B) No notice if failure to provide address information.--No written notice shall be required under subparagraph (A) if the alien has failed to provide the address required under section 239(a)(1)(F). ``(C) Rescission of order.--Such an order may be rescinded only-- ``(i) upon a motion to reopen filed within 180 days after the date of the order of removal if the alien demonstrates that the failure to appear was because of exceptional circumstances (as defined in subsection (e)(1)), or ``(ii) upon a motion to reopen filed at any time if the alien demonstrates that the alien did not receive notice in accordance with paragraph (1) or (2) of section 239(a) or the alien demonstrates that the alien was in Federal or State custody and the failure to appear was through no fault of the alien. The filing of the motion to reopen described in clause (i) or (ii) shall stay the removal of the alien pending disposition of the motion by the immigration judge. ``(D) Effect on judicial review.--Any petition for review under section 242 of an order entered in absentia

under this paragraph shall (except in cases described in section 242(b)(5)) be confined to (i) the validity of the notice provided to the alien, (ii) the reasons for the alien's not attending the proceeding, and (iii) whether or not the alien is removable. ``(E) Additional application to certain aliens in contiguous territory.--The preceding provisions of this paragraph shall apply to all aliens placed in proceedings under this section, including any alien who remains in a contiguous foreign territory pursuant to section 235(b)(2)(C). ``(6) Treatment of frivolous behavior.--The Attorney General shall, by regulation-- ``(A) define in a proceeding before an immigration judge or before an appellate administrative body under this title, frivolous behavior for which attorneys may be sanctioned, ``(B) specify the circumstances under which an administrative appeal of a decision or ruling will be considered frivolous and will be summarily dismissed, and ``(C) impose appropriate sanctions (which may include suspension and disbarment) in the case of frivolous behavior.

Nothing in this paragraph shall be construed as limiting the authority of the Attorney General to take actions with respect to inappropriate behavior. ``(7) Limitation on discretionary relief for failure to appear.--Any alien against whom a final order of removal is entered in absentia under this subsection and who, at the time of the notice described in paragraph (1) or (2) of section 239(a), was provided oral notice, either in the alien's native language or in another language the alien understands, of the time and place of the proceedings and of the consequences under this paragraph of failing, other than because of exceptional circumstances (as defined in subsection (e)(1)) to attend a proceeding under this section, shall not be eligible for relief under section 240A, 240B, 245, 248, or 249 for a period of 10 years after the date of the entry of the final order of removal.

``(c) Decision and Burden of Proof.-- ``(1) Decision.-- ``(A) In general.--At the conclusion of the proceeding the immigration judge shall decide whether an alien is removable from the United States. The determination of the immigration judge shall be based only on the evidence produced at the hearing. ``(B) Certain medical decisions.--If a medical officer or civil surgeon or board of medical officers has certified under section 232(b) that an alien has a disease, illness, or addiction which would make the alien inadmissible under paragraph (1) of section 212(a), the decision of the immigration judge shall be based solely upon such certification. ``(2) Burden on alien.--In the proceeding the alien has the burden of establishing-- ``(A) if the alien is an applicant for admission, that the alien is clearly and beyond doubt entitled to be admitted and is not inadmissible under section 212; or

``(B) by clear and convincing evidence, that the alien is lawfully present in the United States pursuant to a prior admission. In meeting the burden of proof under subparagraph (B), the alien shall have access to the alien's visa or other entry document, if any, and any other records and documents, not considered by the Attorney General to be confidential, pertaining to the alien's admission or presence in the United States. ``(3) Burden on service in cases of deportable aliens.-- ``(A) In general.--In the proceeding the Service has the burden of establishing by clear and convincing evidence that, in the case of an alien who has been admitted to the United States, the alien is deportable. No decision on deportability shall be valid unless it is based upon reasonable, substantial, and probative evidence. ``(B) Proof of convictions.--In any proceeding under this Act, any of the following documents or records (or a certified copy of such an official document or record) shall constitute proof of a criminal conviction: ``(i) An official record of judgment and conviction. ``(ii) An official record of plea, verdict, and sentence. ``(iii) A docket entry from court records that indicates the existence of the conviction. ``(iv) Official minutes of a court proceeding or a transcript of a court hearing in which the court takes notice of the existence of the conviction. ``(v) An abstract of a record of conviction prepared by the court in which the conviction was entered, or by a State official associated with the State's repository of criminal justice records, that indicates the charge or section of law violated, the disposition of the case, the existence and date of conviction, and the sentence. ``(vi) Any document or record prepared by, or under the direction of, the court in which the conviction was entered that indicates the existence of a conviction. ``(vii) Any document or record attesting to the conviction that is maintained by an official of a State or Federal penal institution, which is the basis for that institution's authority to assume custody of the individual named in the record. ``(C) Electronic records.--In any proceeding under this Act, any record of conviction or abstract that has been submitted by electronic means to the Service from a State or court shall be admissible as evidence to prove a criminal conviction if it is-- ``(i) certified by a State official associated with the State's repository of criminal justice records as an official record from its repository or by a court official from the court in which the conviction was entered as an official record from its repository, and ``(ii) certified in writing by a Service official as having been received electronically from the State's record repository or the court's record repository. A certification under clause (i) may be by means of a computer-generated signature and statement of authenticity.

``(4) Notice.--If the immigration judge decides that the alien is removable and orders the alien to be removed, the judge shall inform the alien of the right to appeal that decision and of the consequences for failure to depart under the order of removal, including civil and criminal penalties. ``(5) Motions to reconsider.-- ``(A) In general.--The alien may file one motion to reconsider a decision that the alien is removable from the United States. ``(B) Deadline.--The motion must be filed within 30 days of the date of entry of a final administrative order of removal. ``(C) Contents.--The motion shall specify the errors of law or fact in the previous order and shall be supported by pertinent authority. ``(6) Motions to reopen.-- ``(A) In general.--An alien may file one motion to reopen proceedings under this section. ``(B) Contents.--The motion to reopen shall state the new facts that will be proven at a hearing to be held if the motion is granted, and shall be supported by affidavits or other evidentiary material. ``(C) Deadline.-- ``(i) In general.--Except as provided in this subparagraph, the motion to reopen shall be filed within 90 days of the date of entry of a final administrative order of removal. ``(ii) Asylum.--There is no time limit on the filing of a motion to reopen if the basis of the motion is to apply for relief under sections 208 or 241(b)(3) and is based on changed country conditions arising in the country of nationality or the country to which removal has been ordered, if such evidence is material and was not available and would not have been discovered or presented at the previous proceeding. ``(iii) Failure to appear.--The filing of a motion to reopen an order entered pursuant to subsection (b)(5) is subject to the deadline specified in subparagraph (C) of such subsection.

``(d) Stipulated Removal.--The Attorney General shall provide by regulation for the entry by an immigration judge of an order of removal stipulated to by the alien (or the alien's representative) and the Service. A stipulated order shall constitute a conclusive determination of the alien's removability from the United States. ``(e) Definitions.--In this section and section 240A: ``(1) Exceptional circumstances.--The term `exceptional circumstances' refers to exceptional circumstances (such as serious illness of the alien or serious illness or death of the spouse, child, or parent of the alien, but not including less compelling circumstances) beyond the control of the alien. ``(2) Removable.--The term `removable' means-- ``(A) in the case of an alien not admitted to the United States, that the alien is inadmissible under section 212, or ``(B) in the case of an alien admitted to the United States, that the alien is deportable under section 237.

``cancellation of removal; adjustment of status

``Sec. 240A. (a) Cancellation of Removal for Certain Permanent Residents.--The Attorney General may cancel removal in the case of an alien who is inadmissible or deportable from the United States if the alien-- ``(1) has been an alien lawfully admitted for permanent residence for not less than 5 years, ``(2) has resided in the United States continuously for 7 years after having been admitted in any status, and ``(3) has not been convicted of any aggravated felony.

``(b) Cancellation of Removal and Adjustment of Status for Certain Nonpermanent Residents.-- ``(1) In general.--The Attorney General may cancel removal in the case of an alien who is inadmissible or deportable from the United States if the alien-- ``(A) has been physically present in the United States for a continuous period of not less than 10 years immediately preceding the date of such application; ``(B) has been a person of good moral character during such period; ``(C) has not been convicted of an offense under section 212(a)(2), 237(a)(2), or 237(a)(3); and ``(D) establishes that removal would result in exceptional and extremely unusual hardship to the alien's spouse, parent, or child, who is a citizen of the United States or an alien lawfully admitted for permanent residence. ``(2) Special rule for battered spouse or child.--The Attorney General may cancel removal in the case of an alien who is inadmissible or deportable from the United States if the alien demonstrates that-- ``(A) the alien has been battered or subjected to extreme cruelty in the United States by a spouse or parent who is a United States citizen or lawful permanent resident (or is the parent of a child of a United States citizen or lawful permanent resident and the child has been battered or subjected to extreme cruelty in the United States by such citizen or permanent resident parent); ``(B) the alien has been physically present in the United States for a continuous period of not less than 3 years immediately preceding the date of such application; ``(C) the alien has been a person of good moral character during such period; ``(D) the alien is not inadmissible under paragraph (2) or (3) of section 212(a), is not deportable under paragraph (1)(G) or (2) through (4) of section 237(a), and has not been convicted of an aggravated felony; and ``(E) the removal would result in extreme hardship to the alien, the alien's child, or (in the case of an alien who is a child) to the alien's parent. In acting on applications under this paragraph, the Attorney General shall consider any credible evidence relevant to the application. The determination of what evidence is credible and the weight to be given that evidence shall be within the sole discretion of the Attorney General.

``(3) Adjustment of status.--The Attorney General may adjust to the status of an alien lawfully admitted for permanent residence any alien who the Attorney General determines meets the requirements of paragraph (1) or (2). The number of adjustments under this paragraph shall not exceed 4,000 for any fiscal year. The Attorney General shall record the alien's lawful admission for permanent residence as of the date the Attorney General's cancellation of removal under paragraph (1) or (2) or determination under this paragraph.

``(c) Aliens Ineligible for Relief.--The provisions of subsections (a) and (b)(1) shall not apply to any of the following aliens: ``(1) An alien who entered the United States as a crewman subsequent to June 30, 1964. ``(2) An alien who was admitted to the United States as a nonimmigrant exchange alien as defined in section 101(a)(15)(J), or has acquired the status of such a nonimmigrant exchange alien after admission, in order to receive graduate medical education or training, regardless of whether or not the alien is subject to or has fulfilled the two-year foreign residence requirement of section 212(e). ``(3) An alien who-- ``(A) was admitted to the United States as a nonimmigrant exchange alien as defined in section 101(a)(15)(J) or has acquired the status of such a nonimmigrant exchange alien after admission other than to receive graduate medical education or training, ``(B) is subject to the two-year foreign residence requirement of section 212(e), and ``(C) has not fulfilled that requirement or received a waiver thereof. ``(4) An alien who is inadmissible under section 212(a)(3) or deportable under section 237(a)(4). ``(5) An alien who is described in section 241(b)(3)(B)(i). ``(6) An alien whose removal has previously been cancelled under this section or whose deportation was suspended under section 244(a) or who has been granted relief under section 212(c), as such sections were in effect before the date of the enactment of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996.

``(d) Special Rules Relating to Continuous Residence or Physical Presence.-- ``(1) Termination of continuous period.--For purposes of this section, any period of continuous residence or continuous physical presence in the United States shall be deemed to end when the alien is served a notice to appear under section 239(a) or when the alien has committed an offense referred to in section 212(a)(2) that renders the alien inadmissible to the United States under section 212(a)(2) or removable from the United States under section 237(a)(2) or 237(a)(4), whichever is earliest. ``(2) Treatment of certain breaks in presence.--An alien shall be considered to have failed to maintain continuous physical presence in the United States under subsections (b)(1) and (b)(2) if the alien has departed from the United States for any period in excess of 90 days or for any periods in the aggregate exceeding 180 days.

``(3) Continuity not required because of honorable service in armed forces and presence upon entry into service.--The requirements of continuous residence or continuous physical presence in the United States under subsections (a) and (b) shall not apply to an alien who-- ``(A) has served for a minimum period of 24 months in an active-duty status in the Armed Forces of the United States and, if separated from such service, was separated under honorable conditions, and ``(B) at the time of the alien's enlistment or induction was in the United States.

``(e) Annual Limitation.--The Attorney General may not cancel the removal and adjust the status under this section, nor suspend the deportation and adjust the status under section 244(a) (as in effect before the enactment of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996), of a total of more than 4,000 aliens in any fiscal year. The previous sentence shall apply regardless of when an alien applied for such cancellation and adjustment and whether such an alien had previously applied for suspension of deportation under such section 244(a).

``voluntary departure

``Sec. 240B. (a) Certain Conditions.-- ``(1) In general.--The Attorney General may permit an alien voluntarily to depart the United States at the alien's own expense under this subsection, in lieu of being subject to proceedings under section 240 or prior to the completion of such proceedings, if the alien is not deportable under section 237(a)(2)(A)(iii) or section 237(a)(4)(B). ``(2) Period.--Permission to depart voluntarily under this subsection shall not be valid for a period exceeding 120 days. ``(3) Bond.--The Attorney General may require an alien permitted to depart voluntarily under this subsection to post a voluntary departure bond, to be surrendered upon proof that the alien has departed the United States within the time specified. ``(4) Treatment of aliens arriving in the united states.--In the case of an alien who is arriving in the United States and with respect to whom proceedings under section 240 are (or would otherwise be) initiated at the time of such alien's arrival, paragraph (1) shall not apply. Nothing in this paragraph shall be construed as preventing such an alien from withdrawing the application for admission in accordance with section 235(a)(4).

``(b) At Conclusion of Proceedings.-- ``(1) In general.--The Attorney General may permit an alien voluntarily to depart the United States at the alien's own expense if, at the conclusion of a proceeding under section 240, the immigration judge enters an order granting voluntary departure in lieu of removal and finds that-- ``(A) the alien has been physically present in the United States for a period of at least one year immediately preceding the date the notice to appear was served under section 239(a); ``(B) the alien is, and has been, a person of good moral character for at least 5 years immediately preceding the alien's application for voluntary departure;

``(C) the alien is not deportable under section 237(a)(2)(A)(iii) or section 237(a)(4); and ``(D) the alien has established by clear and convincing evidence that the alien has the means to depart the United States and intends to do so. ``(2) Period.--Permission to depart voluntarily under this subsection shall not be valid for a period exceeding 60 days. ``(3) Bond.--An alien permitted to depart voluntarily under this subsection shall be required to post a voluntary departure bond, in an amount necessary to ensure that the alien will depart, to be surrendered upon proof that the alien has departed the United States within the time specified.

``(c) Aliens Not Eligible.--The Attorney General shall not permit an alien to depart voluntarily under this section if the alien was previously permitted to so depart after having been found inadmissible under section 212(a)(6)(A). ``(d) Civil Penalty for Failure to Depart.--If an alien is permitted to depart voluntarily under this section and fails voluntarily to depart the United States within the time period specified, the alien shall be subject to a civil penalty of not less than $1,000 and not more than $5,000, and be ineligible for a period of 10 years for any further relief under this section and sections 240A, 245, 248, and 249. The order permitting the alien to depart voluntarily shall inform the alien of the penalties under this subsection. ``(e) Additional Conditions.--The Attorney General may by regulation limit eligibility for voluntary departure under this section for any class or classes of aliens. No court may review any regulation issued under this subsection. ``(f) Judicial Review.--No court shall have jurisdiction over an appeal from denial of a request for an order of voluntary departure under subsection (b), nor shall any court order a stay of an alien's removal pending consideration of any claim with respect to voluntary departure.''. (b) Repeal of Section 212(c).--Section 212(c) (8 U.S.C. 1182(c)) is repealed. (c) Streamlining Removal of Criminal Aliens.-- (1) In general.--Section 242A(b)(4) (8 U.S.C. 1252a(b)(4)), as amended by section 442(a) of Public Law 104-132 and before redesignation by section 308(b)(5) of this division, is amended-- (A) by striking subparagraph (D); (B) by amending subparagraph (E) to read as follows: ``(D) a determination is made for the record that the individual upon whom the notice for the proceeding under this section is served (either in person or by mail) is, in fact, the alien named in such notice;''; and (C) by redesignating subparagraphs (F) and (G) as subparagraph (E) and (F), respectively. (2) Effective date.--The amendments made by paragraph (1) shall be effective as if included in the enactment of section 442(a) of Public Law 104- 132.

241).

(a) In General.--Title II is further amended-- (1) by striking section 237 (8 U.S.C. 1227),

(2) by redesignating section 241 (8 U.S.C. 1251) as section 237 and by moving such section to immediately follow section 236, and (3) by inserting after section 240C (as redesignated by section 304(a)(2)) of this division the following new section:

``detention and removal of aliens ordered removed

``Sec. 241. (a) Detention, Release, and Removal of Aliens Ordered Removed.-- ``(1) Removal period.-- ``(A) In general.--Except as otherwise provided in this section, when an alien is ordered removed, the Attorney General shall remove the alien from the United States within a period of 90 days (in this section referred to as the `removal period'). ``(B) Beginning of period.--The removal period begins on the latest of the following: ``(i) The date the order of removal becomes administratively final. ``(ii) If the removal order is judicially reviewed and if a court orders a stay of the removal of the alien, the date of the court's final order. ``(iii) If the alien is detained or confined (except under an immigration process), the date the alien is released from detention or confinement. ``(C) Suspension of period.--The removal period shall be extended beyond a period of 90 days and the alien may remain in detention during such extended period if the alien fails or refuses to make timely application in good faith for travel or other documents necessary to the alien's departure or conspires or acts to prevent the alien's removal subject to an order of removal. ``(2) Detention.--During the removal period, the Attorney General shall detain the alien. Under no circumstance during the removal period shall the Attorney General release an alien who has been found inadmissible under section 212(a)(2) or 212(a)(3)(B) or deportable under section 237(a)(2) or 237(a)(4)(B). ``(3) Supervision after 90-day period.--If the alien does not leave or is not removed within the removal period, the alien, pending removal, shall be subject to supervision under regulations prescribed by the Attorney General. The regulations shall include provisions requiring the alien-- ``(A) to appear before an immigration officer periodically for identification; ``(B) to submit, if necessary, to a medical and psychiatric examination at the expense of the United States Government; ``(C) to give information under oath about the alien's nationality, circumstances, habits, associations, and activities, and other information the Attorney General considers appropriate; and ``(D) to obey reasonable written restrictions on the alien's conduct or activities that the Attorney General prescribes for the alien. ``(4) Aliens imprisoned, arrested, or on parole, supervised release, or probation.--

``(A) In general.--Except as provided in section 343(a) of the Public Health Service Act (42 U.S.C. 259(a)) and paragraph (2), the Attorney General may not remove an alien who is sentenced to imprisonment until the alien is released from imprisonment. Parole, supervised release, probation, or possibility of arrest or further imprisonment is not a reason to defer removal. ``(B) Exception for removal of nonviolent offenders prior to completion of sentence of imprisonment.--The Attorney General is authorized to remove an alien in accordance with applicable procedures under this Act before the alien has completed a sentence of imprisonment-- ``(i) in the case of an alien in the custody of the Attorney General, if the Attorney General determines that (I) the alien is confined pursuant to a final conviction for a nonviolent offense (other than an offense related to smuggling or harboring of aliens or an offense described in section 101(a)(43)(B), (C), (E), (I), or (L) and (II) the removal of the alien is appropriate and in the best interest of the United States; or ``(ii) in the case of an alien in the custody of a State (or a political subdivision of a State), if the chief State official exercising authority with respect to the incarceration of the alien determines that (I) the alien is confined pursuant to a final conviction for a nonviolent offense (other than an offense described in section 101(a)(43)(C) or (E)), (II) the removal is appropriate and in the best interest of the State, and (III) submits a written request to the Attorney General that such alien be so removed. ``(C) Notice.--Any alien removed pursuant to this paragraph shall be notified of the penalties under the laws of the United States relating to the reentry of deported aliens, particularly the expanded penalties for aliens removed under subparagraph (B). ``(D) No private right.--No cause or claim may be asserted under this paragraph against any official of the United States or of any State to compel the release, removal, or consideration for release or removal of any alien. ``(5) Reinstatement of removal orders against aliens illegally reentering.--If the Attorney General finds that an alien has reentered the United States illegally after having been removed or having departed voluntarily, under an order of removal, the prior order of removal is reinstated from its original date and is not subject to being reopened or reviewed, the alien is not eligible and may not apply for any relief under this Act, and the alien shall be removed under the prior order at any time after the reentry. ``(6) Inadmissible or criminal aliens.--An alien ordered removed who is inadmissible under section 212, removable under section 237(a)(1)(C), 237(a)(2), or 237(a)(4) or who has been determined by the Attorney General to be a risk to the community or unlikely to comply with the order of removal, may be detained beyond the removal period and, if released, shall be subject to the terms of supervision in paragraph (3).

``(7) Employment authorization.--No alien ordered removed shall be eligible to receive authorization to be employed in the United States unless the Attorney General makes a specific finding that-- ``(A) the alien cannot be removed due to the refusal of all countries designated by the alien or under this section to receive the alien, or ``(B) the removal of the alien is otherwise impracticable or contrary to the public interest.

``(b) Countries to Which Aliens May Be Removed.-- ``(1) Aliens arriving at the united states.--Subject to paragraph (3)-- ``(A) In general.--Except as provided by subparagraphs (B) and (C), an alien who arrives at the United States and with respect to whom proceedings under section 240 were initiated at the time of such alien's arrival shall be removed to the country in which the alien boarded the vessel or aircraft on which the alien arrived in the United States. ``(B) Travel from contiguous territory.--If the alien boarded the vessel or aircraft on which the alien arrived in the United States in a foreign territory contiguous to the United States, an island adjacent to the United States, or an island adjacent to a foreign territory contiguous to the United States, and the alien is not a native, citizen, subject, or national of, or does not reside in, the territory or island, removal shall be to the country in which the alien boarded the vessel that transported the alien to the territory or island. ``(C) Alternative countries.--If the government of the country designated in subparagraph (A) or (B) is unwilling to accept the alien into that country's territory, removal shall be to any of the following countries, as directed by the Attorney General: ``(i) The country of which the alien is a citizen, subject, or national. ``(ii) The country in which the alien was born. ``(iii) The country in which the alien has a residence. ``(iv) A country with a government that will accept the alien into the country's territory if removal to each country described in a previous clause of this subparagraph is impracticable, inadvisable, or impossible. ``(2) Other aliens.--Subject to paragraph (3)-- ``(A) Selection of country by alien.--Except as otherwise provided in this paragraph-- ``(i) any alien not described in paragraph (1) who has been ordered removed may designate one country to which the alien wants to be removed, and ``(ii) the Attorney General shall remove the alien to the country the alien so designates. ``(B) Limitation on designation.--An alien may designate under subparagraph (A)(i) a foreign territory contiguous to the United States, an adjacent island, or an island adjacent to a foreign territory contiguous to the United States as the place to which the alien is to be removed

only if the alien is a native, citizen, subject, or national of, or has resided in, that designated territory or island. ``(C) Disregarding designation.--The Attorney General may disregard a designation under subparagraph (A)(i) if-- ``(i) the alien fails to designate a country promptly; ``(ii) the government of the country does not inform the Attorney General finally, within 30 days after the date the Attorney General first inquires, whether the government will accept the alien into the country; ``(iii) the government of the country is not willing to accept the alien into the country; or ``(iv) the Attorney General decides that removing the alien to the country is prejudicial to the United States. ``(D) Alternative country.--If an alien is not removed to a country designated under subparagraph (A)(i), the Attorney General shall remove the alien to a country of which the alien is a subject, national, or citizen unless the government of the country-- ``(i) does not inform the Attorney General or the alien finally, within 30 days after the date the Attorney General first inquires or within another period of time the Attorney General decides is reasonable, whether the government will accept the alien into the country; or ``(ii) is not willing to accept the alien into the country. ``(E) Additional removal countries.--If an alien is not removed to a country under the previous subparagraphs of this paragraph, the Attorney General shall remove the alien to any of the following countries: ``(i) The country from which the alien was admitted to the United States. ``(ii) The country in which is located the foreign port from which the alien left for the United States or for a foreign territory contiguous to the United States. ``(iii) A country in which the alien resided before the alien entered the country from which the alien entered the United States. ``(iv) The country in which the alien was born. ``(v) The country that had sovereignty over the alien's birthplace when the alien was born. ``(vi) The country in which the alien's birthplace is located when the alien is ordered removed. ``(vii) If impracticable, inadvisable, or impossible to remove the alien to each country described in a previous clause of this subparagraph, another country whose government will accept the alien into that country. ``(F) Removal country when united states is at war.--When the United States is at war and the Attorney General decides that it is impracticable, inadvisable, inconvenient, or impossible to remove an alien under this subsection because of the war, the Attorney General may remove the alien--

``(i) to the country that is host to a government in exile of the country of which the alien is a citizen or subject if the government of the host country will permit the alien's entry; or ``(ii) if the recognized government of the country of which the alien is a citizen or subject is not in exile, to a country, or a political or territorial subdivision of a country, that is very near the country of which the alien is a citizen or subject, or, with the consent of the government of the country of which the alien is a citizen or subject, to another country. ``(3) Restriction on removal to a country where alien's life or freedom would be threatened.-- ``(A) In general.--Notwithstanding paragraphs (1) and (2), the Attorney General may not remove an alien to a country if the Attorney General decides that the alien's life or freedom would be threatened in that country because of the alien's race, religion, nationality, membership in a particular social group, or political opinion. ``(B) Exception.--Subparagraph (A) does not apply to an alien deportable under section 237(a)(4)(D) or if the Attorney General decides that-- ``(i) the alien ordered, incited, assisted, or otherwise participated in the persecution of an individual because of the individual's race, religion, nationality, membership in a particular social group, or political opinion; ``(ii) the alien, having been convicted by a final judgment of a particularly serious crime is a danger to the community of the United States; ``(iii) there are serious reasons to believe that the alien committed a serious nonpolitical crime outside the United States before the alien arrived in the United States; or ``(iv) there are reasonable grounds to believe that the alien is a danger to the security of the United States. For purposes of clause (ii), an alien who has been convicted of an aggravated felony (or felonies) for which the alien has been sentenced to an aggregate term of imprisonment of at least 5 years shall be considered to have committed a particularly serious crime. The previous sentence shall not preclude the Attorney General from determining that, notwithstanding the length of sentence imposed, an alien has been convicted of a particularly serious crime. For purposes of clause (iv), an alien who is described in section 237(a)(4)(B) shall be considered to be an alien with respect to whom there are reasonable grounds for regarding as a danger to the security of the United States.

``(c) Removal of Aliens Arriving at Port of Entry.-- ``(1) Vessels and aircraft.--An alien arriving at a port of entry of the United States who is ordered removed either without a hearing under section 235(b)(1) or 235(c) or pursuant to proceedings under section 240 initiated at the time of such alien's arrival shall be removed immediately on a vessel or aircraft owned by the owner of the vessel or aircraft on which the alien arrived in the United States, unless--

``(A) it is impracticable to remove the alien on one of those vessels or aircraft within a reasonable time, or ``(B) the alien is a stowaway-- ``(i) who has been ordered removed in accordance with section 235(a)(1), ``(ii) who has requested asylum, and ``(iii) whose application has not been adjudicated or whose asylum application has been denied but who has not exhausted all appeal rights. ``(2) Stay of removal.-- ``(A) In general.--The Attorney General may stay the removal of an alien under this subsection if the Attorney General decides that-- ``(i) immediate removal is not practicable or proper; or ``(ii) the alien is needed to testify in the prosecution of a person for a violation of a law of the United States or of any State. ``(B) Payment of detention costs.--During the period an alien is detained because of a stay of removal under subparagraph (A)(ii), the Attorney General may pay from the appropriation `Immigration and Naturalization Service--Salaries and Expenses'-- ``(i) the cost of maintenance of the alien; and ``(ii) a witness fee of $1 a day. ``(C) Release during stay.--The Attorney General may release an alien whose removal is stayed under subparagraph (A)(ii) on-- ``(i) the alien's filing a bond of at least $500 with security approved by the Attorney General; ``(ii) condition that the alien appear when required as a witness and for removal; and ``(iii) other conditions the Attorney General may prescribe. ``(3) Costs of detention and maintenance pending removal.-- ``(A) In general.--Except as provided in subparagraph (B) and subsection (d), an owner of a vessel or aircraft bringing an alien to the United States shall pay the costs of detaining and maintaining the alien-- ``(i) while the alien is detained under subsection (d)(1), and ``(ii) in the case of an alien who is a stowaway, while the alien is being detained pursuant to-- ``(I) subsection (d)(2)(A) or (d)(2)(B)(i), ``(II) subsection (d)(2)(B)(ii) or (iii) for the period of time reasonably necessary for the owner to arrange for repatriation or removal of the stowaway, including obtaining necessary travel documents, but not to extend beyond the date on which it is ascertained that such travel documents cannot be obtained from the country to which the stowaway is to be returned, or ``(III) section 235(b)(1)(B)(ii), for a period not to exceed 15 days (excluding Saturdays, Sundays, and holidays) commencing on the first such day which begins on the earlier of 72 hours after the

time of the initial presentation of the stowaway for inspection or at the time the stowaway is determined to have a credible fear of persecution. ``(B) Nonapplication.--Subparagraph (A) shall not apply if-- ``(i) the alien is a crewmember; ``(ii) the alien has an immigrant visa; ``(iii) the alien has a nonimmigrant visa or other documentation authorizing the alien to apply for temporary admission to the United States and applies for admission not later than 120 days after the date the visa or documentation was issued; ``(iv) the alien has a reentry permit and applies for admission not later than 120 days after the date of the alien's last inspection and admission; ``(v)(I) the alien has a nonimmigrant visa or other documentation authorizing the alien to apply for temporary admission to the United States or a reentry permit; ``(II) the alien applies for admission more than 120 days after the date the visa or documentation was issued or after the date of the last inspection and admission under the reentry permit; and ``(III) the owner of the vessel or aircraft satisfies the Attorney General that the existence of the condition relating to inadmissibility could not have been discovered by exercising reasonable care before the alien boarded the vessel or aircraft; or ``(vi) the individual claims to be a national of the United States and has a United States passport.

``(d) Requirements of Persons Providing Transportation.-- ``(1) Removal at time of arrival.--An owner, agent, master, commanding officer, person in charge, purser, or consignee of a vessel or aircraft bringing an alien (except an alien crewmember) to the United States shall-- ``(A) receive an alien back on the vessel or aircraft or another vessel or aircraft owned or operated by the same interests if the alien is ordered removed under this part; and ``(B) take the alien to the foreign country to which the alien is ordered removed. ``(2) Alien stowaways.--An owner, agent, master, commanding officer, charterer, or consignee of a vessel or aircraft arriving in the United States with an alien stowaway-- ``(A) shall detain the alien on board the vessel or aircraft, or at such place as the Attorney General shall designate, until completion of the inspection of the alien by an immigration officer; ``(B) may not permit the stowaway to land in the United States, except pursuant to regulations of the Attorney General temporarily-- ``(i) for medical treatment, ``(ii) for detention of the stowaway by the Attorney General, or ``(iii) for departure or removal of the stowaway; and

``(C) if ordered by an immigration officer, shall remove the stowaway on the vessel or aircraft or on another vessel or aircraft. The Attorney General shall grant a timely request to remove the stowaway under subparagraph (C) on a vessel or aircraft other than that on which the stowaway arrived if the requester has obtained any travel documents necessary for departure or repatriation of the stowaway and removal of the stowaway will not be unreasonably delayed. ``(3) Removal upon order.--An owner, agent, master, commanding officer, person in charge, purser, or consignee of a vessel, aircraft, or other transportation line shall comply with an order of the Attorney General to take on board, guard safely, and transport to the destination specified any alien ordered to be removed under this Act.

``(e) Payment of Expenses of Removal.-- ``(1) Costs of removal at time of arrival.--In the case of an alien who is a stowaway or who is ordered removed either without a hearing under section 235(a)(1) or 235(c) or pursuant to proceedings under section 240 initiated at the time of such alien's arrival, the owner of the vessel or aircraft (if any) on which the alien arrived in the United States shall pay the transportation cost of removing the alien. If removal is on a vessel or aircraft not owned by the owner of the vessel or aircraft on which the alien arrived in the United States, the Attorney General may-- ``(A) pay the cost from the appropriation `Immigration and Naturalization Service--Salaries and Expenses'; and ``(B) recover the amount of the cost in a civil action from the owner, agent, or consignee of the vessel or aircraft (if any) on which the alien arrived in the United States. ``(2) Costs of removal to port of removal for aliens admitted or permitted to land.-- In the case of an alien who has been admitted or permitted to land and is ordered removed, the cost (if any) of removal of the alien to the port of removal shall be at the expense of the appropriation for the enforcement of this Act. ``(3) Costs of removal from port of removal for aliens admitted or permitted to land.-- ``(A) Through appropriation.--Except as provided in subparagraph (B), in the case of an alien who has been admitted or permitted to land and is ordered removed, the cost (if any) of removal of the alien from the port of removal shall be at the expense of the appropriation for the enforcement of this Act. ``(B) Through owner.-- ``(i) In general.--In the case of an alien described in clause (ii), the cost of removal of the alien from the port of removal may be charged to any owner of the vessel, aircraft, or other transportation line by which the alien came to the United States. ``(ii) Aliens described.--An alien described in this clause is an alien who-- ``(I) is admitted to the United States (other than lawfully admitted for permanent residence) and is ordered removed within 5 years of the date

of admission based on a ground that existed before or at the time of admission, or ``(II) is an alien crewman permitted to land temporarily under section 252 and is ordered removed within 5 years of the date of landing. ``(C) Costs of removal of certain aliens granted voluntary departure.--In the case of an alien who has been granted voluntary departure under section 240B and who is financially unable to depart at the alien's own expense and whose removal the Attorney General deems to be in the best interest of the United States, the expense of such removal may be paid from the appropriation for the enforcement of this Act.

``(f) Aliens Requiring Personal Care During Removal.-- ``(1) In general.--If the Attorney General believes that an alien being removed requires personal care because of the alien's mental or physical condition, the Attorney General may employ a suitable person for that purpose who shall accompany and care for the alien until the alien arrives at the final destination. ``(2) Costs.--The costs of providing the service described in paragraph (1) shall be defrayed in the same manner as the expense of removing the accompanied alien is defrayed under this section.

``(g) Places of Detention.-- ``(1) In general.--The Attorney General shall arrange for appropriate places of detention for aliens detained pending removal or a decision on removal. When United States Government facilities are unavailable or facilities adapted or suitably located for detention are unavailable for rental, the Attorney General may expend from the appropriation `Immigration and Naturalization Service--Salaries and Expenses', without regard to section 3709 of the Revised Statutes (41 U.S.C. 5), amounts necessary to acquire land and to acquire, build, remodel, repair, and operate facilities (including living quarters for immigration officers if not otherwise available) necessary for detention. ``(2) Detention facilities of the immigration and naturalization service.--Prior to initiating any project for the construction of any new detention facility for the Service, the Commissioner shall consider the availability for purchase or lease of any existing prison, jail, detention center, or other comparable facility suitable for such use.

``(h) Statutory Construction.--Nothing in this section shall be construed to create any substantive or procedural right or benefit that is legally enforceable by any party against the United States or its agencies or officers or any other person.''. (b) Reentry of Alien Removed Prior to Completion of Term of Imprisonment.--Section 276(b) (8 U.S.C. 1326(b)), as amended by section 321(b) of this division, is amended-- (1) by striking ``or'' at the end of paragraph (2), (2) by adding ``or'' at the end of paragraph (3), and (3) by inserting after paragraph (3) the following new paragraph: ``(4) who was removed from the United States pursuant to section 241(a)(4)(B) who thereafter, without the permission of the Attorney General, enters, attempts to enter, or is at any time found in, the United States (unless the Attorney

General has expressly consented to such alien's reentry) shall be fined under title 18, United States Code, imprisoned for not more than 10 years, or both.

(c) Miscellaneous Conforming Amendment.--Section 212(a)(4) (8 U.S.C. 1182(a)(4)), as amended by section 621(a) of this division, is amended by striking ``241(a)(5)(B)'' each place it appears and inserting ``237(a)(5)(B)''.

(a) In General.--Section 242 (8 U.S.C. 1252) is amended-- (1) by redesignating subsection (j) as subsection (i) and by moving such subsection and adding it at the end of section 241, as inserted by section 305(a)(3) of this division; and (2) by amending the remainder of section 242 to read as follows:

``judicial review of orders of removal

``Sec. 242. (a) Applicable Provisions.-- ``(1) General orders of removal.--Judicial review of a final order of removal (other than an order of removal without a hearing pursuant to section 235(b)(1)) is governed only by chapter 158 of title 28 of the United States Code, except as provided in subsection (b) and except that the court may not order the taking of additional evidence under section 2347(c) of such title. ``(2) Matters not subject to judicial review.-- ``(A) Review relating to section 235(b)(1).-- Notwithstanding any other provision of law, no court shall have jurisdiction to review-- ``(i) except as provided in subsection (e), any individual determination or to entertain any other cause or claim arising from or relating to the implementation or operation of an order of removal pursuant to section 235(b)(1), ``(ii) except as provided in subsection (e), a decision by the Attorney General to invoke the provisions of such section, ``(iii) the application of such section to individual aliens, including the determination made under section 235(b)(1)(B), or ``(iv) except as provided in subsection (e), procedures and policies adopted by the Attorney General to implement the provisions of section 235(b)(1). ``(B) Denials of discretionary relief.-- Notwithstanding any other provision of law, no court shall have jurisdiction to review-- ``(i) any judgment regarding the granting of relief under section 212(h), 212(i), 240A, 240B, or 245, or ``(ii) any other decision or action of the Attorney General the authority for which is specified under this title to be in the discretion of the Attorney General, other than the granting of relief under section 208(a). ``(C) Orders against criminal aliens.-- Notwithstanding any other provision of law, no court shall have jurisdiction to review any final order of removal against an alien who is removable by reason of having committed a criminal offense covered in section 212(a)(2) or

237(a)(2)(A)(iii), (B), (C), or (D), or any offense covered by section 237(a)(2)(A)(ii) for which both predicate offenses are, without regard to their date of commission, otherwise covered by section 237(a)(2)(A)(i). ``(3) Treatment of certain decisions.--No alien shall have a right to appeal from a decision of an immigration judge which is based solely on a certification described in section 240(c)(1)(B).

``(b) Requirements for Review of Orders of Removal.--With respect to review of an order of removal under subsection (a)(1), the following requirements apply: ``(1) Deadline.--The petition for review must be filed not later than 30 days after the date of the final order of removal. ``(2) Venue and forms.--The petition for review shall be filed with the court of appeals for the judicial circuit in which the immigration judge completed the proceedings. The record and briefs do not have to be printed. The court of appeals shall review the proceeding on a typewritten record and on typewritten briefs. ``(3) Service.-- ``(A) In general.--The respondent is the Attorney General. The petition shall be served on the Attorney General and on the officer or employee of the Service in charge of the Service district in which the final order of removal under section 240 was entered. ``(B) Stay of order.--Service of the petition on the officer or employee does not stay the removal of an alien pending the court's decision on the petition, unless the court orders otherwise. ``(C) Alien's brief.--The alien shall serve and file a brief in connection with a petition for judicial review not later than 40 days after the date on which the administrative record is available, and may serve and file a reply brief not later than 14 days after service of the brief of the Attorney General, and the court may not extend these deadlines except upon motion for good cause shown. If an alien fails to file a brief within the time provided in this paragraph, the court shall dismiss the appeal unless a manifest injustice would result. ``(4) Scope and standard for review.--Except as provided in paragraph (5)(B)-- ``(A) the court of appeals shall decide the petition only on the administrative record on which the order of removal is based, ``(B) the administrative findings of fact are conclusive unless any reasonable adjudicator would be compelled to conclude to the contrary, ``(C) a decision that an alien is not eligible for admission to the United States is conclusive unless manifestly contrary to law, and ``(D) the Attorney General's discretionary judgment whether to grant relief under section 208(a) shall be conclusive unless manifestly contrary to the law and an abuse of discretion. ``(5) Treatment of nationality claims.-- ``(A) Court determination if no issue of fact.--If the petitioner claims to be a national of the United

States and the court of appeals finds from the pleadings and affidavits that no genuine issue of material fact about the petitioner's nationality is presented, the court shall decide the nationality claim. ``(B) Transfer if issue of fact.--If the petitioner claims to be a national of the United States and the court of appeals finds that a genuine issue of material fact about the petitioner's nationality is presented, the court shall transfer the proceeding to the district court of the United States for the judicial district in which the petitioner resides for a new hearing on the nationality claim and a decision on that claim as if an action had been brought in the district court under section 2201 of title 28, United States Code. ``(C) Limitation on determination.--The petitioner may have such nationality claim decided only as provided in this paragraph. ``(6) Consolidation with review of motions to reopen or reconsider.--When a petitioner seeks review of an order under this section, any review sought of a motion to reopen or reconsider the order shall be consolidated with the review of the order. ``(7) Challenge to validity of orders in certain criminal proceedings.-- ``(A) In general.--If the validity of an order of removal has not been judicially decided, a defendant in a criminal proceeding charged with violating section 243(a) may challenge the validity of the order in the criminal proceeding only by filing a separate motion before trial. The district court, without a jury, shall decide the motion before trial. ``(B) Claims of united states nationality.--If the defendant claims in the motion to be a national of the United States and the district court finds that-- ``(i) no genuine issue of material fact about the defendant's nationality is presented, the court shall decide the motion only on the administrative record on which the removal order is based and the administrative findings of fact are conclusive if supported by reasonable, substantial, and probative evidence on the record considered as a whole; or ``(ii) a genuine issue of material fact about the defendant's nationality is presented, the court shall hold a new hearing on the nationality claim and decide that claim as if an action had been brought under section 2201 of title 28, United States Code.

The defendant may have such nationality claim decided only as provided in this subparagraph. ``(C) Consequence of invalidation.--If the district court rules that the removal order is invalid, the court shall dismiss the indictment for violation of section 243(a). The United States Government may appeal the dismissal to the court of appeals for the appropriate circuit within 30 days after the date of the dismissal. ``(D) Limitation on filing petitions for review.-- The defendant in a criminal proceeding under section 243(a) may not file a petition for review under subsection (a) during the criminal proceeding.

``(8) Construction.--This subsection-- ``(A) does not prevent the Attorney General, after a final order of removal has been issued, from detaining the alien under section 241(a); ``(B) does not relieve the alien from complying with section 241(a)(4) and section 243(g); and ``(C) does not require the Attorney General to defer removal of the alien. ``(9) Consolidation of questions for judicial review.-- Judicial review of all questions of law and fact, including interpretation and application of constitutional and statutory provisions, arising from any action taken or proceeding brought to remove an alien from the United States under this title shall be available only in judicial review of a final order under this section.

``(c) Requirements for Petition.--A petition for review or for habeas corpus of an order of removal-- ``(1) shall attach a copy of such order, and ``(2) shall state whether a court has upheld the validity of the order, and, if so, shall state the name of the court, the date of the court's ruling, and the kind of proceeding.

``(d) Review of Final Orders.--A court may review a final order of removal only if-- ``(1) the alien has exhausted all administrative remedies available to the alien as of right, and ``(2) another court has not decided the validity of the order, unless the reviewing court finds that the petition presents grounds that could not have been presented in the prior judicial proceeding or that the remedy provided by the prior proceeding was inadequate or ineffective to test the validity of the order.

``(e) Judicial Review of Orders Under Section 235(b)(1).-- ``(1) Limitations on relief.--Without regard to the nature of the action or claim and without regard to the identity of the party or parties bringing the action, no court may-- ``(A) enter declaratory, injunctive, or other equitable relief in any action pertaining to an order to exclude an alien in accordance with section 235(b)(1) except as specifically authorized in a subsequent paragraph of this subsection, or ``(B) certify a class under Rule 23 of the Federal Rules of Civil Procedure in any action for which judicial review is authorized under a subsequent paragraph of this subsection. ``(2) Habeas corpus proceedings.--Judicial review of any determination made under section 235(b)(1) is available in habeas corpus proceedings, but shall be limited to determinations of-- ``(A) whether the petitioner is an alien, ``(B) whether the petitioner was ordered removed under such section, and ``(C) whether the petitioner can prove by a preponderance of the evidence that the petitioner is an alien lawfully admitted for permanent residence, has been admitted as a refugee under section 207, or has been granted asylum under section 208, such status not having been terminated, and is entitled to such further inquiry as prescribed by the Attorney General pursuant to section 235(b)(1)(C).

``(3) Challenges on validity of the system.-- ``(A) In general.--Judicial review of determinations under section 235(b) and its implementation is available in an action instituted in the United States District Court for the District of Columbia, but shall be limited to determinations of-- ``(i) whether such section, or any regulation issued to implement such section, is constitutional; or ``(ii) whether such a regulation, or a written policy directive, written policy guideline, or written procedure issued by or under the authority of the Attorney General to implement such section, is not consistent with applicable provisions of this title or is otherwise in violation of law. ``(B) Deadlines for bringing actions.--Any action instituted under this paragraph must be filed no later than 60 days after the date the challenged section, regulation, directive, guideline, or procedure described in clause (i) or (ii) of subparagraph (A) is first implemented. ``(C) Notice of appeal.--A notice of appeal of an order issued by the District Court under this paragraph may be filed not later than 30 days after the date of issuance of such order. ``(D) Expeditious consideration of cases.--It shall be the duty of the District Court, the Court of Appeals, and the Supreme Court of the United States to advance on the docket and to expedite to the greatest possible extent the disposition of any case considered under this paragraph. ``(4) Decision.--In any case where the court determines that the petitioner-- ``(A) is an alien who was not ordered removed under section 235(b)(1), or ``(B) has demonstrated by a preponderance of the evidence that the alien is an alien lawfully admitted for permanent residence, has been admitted as a refugee under section 207, or has been granted asylum under section 208, the court may order no remedy or relief other than to require that the petitioner be provided a hearing in accordance with section 240. Any alien who is provided a hearing under section 240 pursuant to this paragraph may thereafter obtain judicial review of any resulting final order of removal pursuant to subsection (a)(1). ``(5) Scope of inquiry.--In determining whether an alien has been ordered removed under section 235(b)(1), the court's inquiry shall be limited to whether such an order in fact was issued and whether it relates to the petitioner. There shall be no review of whether the alien is actually inadmissible or entitled to any relief from removal.

``(f) Limit on Injunctive Relief.-- ``(1) In general.--Regardless of the nature of the action or claim or of the identity of the party or parties bringing the action, no court (other than the Supreme Court) shall have jurisdiction or authority to enjoin or restrain the operation of the provisions of chapter 4 of title II, as amended by the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, other than with respect to the application of such

provisions to an individual alien against whom proceedings under such chapter have been initiated. ``(2) Particular cases.--Notwithstanding any other provision of law, no court shall enjoin the removal of any alien pursuant to a final order under this section unless the alien shows by clear and convincing evidence that the entry or execution of such order is prohibited as a matter of law.

``(g) Exclusive Jurisdiction.--Except as provided in this section and notwithstanding any other provision of law, no court shall have jurisdiction to hear any cause or claim by or on behalf of any alien arising from the decision or action by the Attorney General to commence proceedings, adjudicate cases, or execute removal orders against any alien under this Act.''. (b) Repeal of Section 106.--Section 106 (8 U.S.C. 1105a) is repealed. (c) Effective Date.-- (1) In general.--Subject to paragraph (2), the amendments made by subsections (a) and (b) shall apply to all final orders of deportation or removal and motions to reopen filed on or after the date of the enactment of this Act and subsection (g) of section 242 of the Immigration and Nationality Act (as added by subsection (a)), shall apply without limitation to claims arising from all past, pending, or future exclusion, deportation, or removal proceedings under such Act. (2) Limitation.--Paragraph (1) shall not be considered to invalidate or to require the reconsideration of any judgment or order entered under section 106 of the Immigration and Nationality Act, as amended by section 440 of Public Law 104- 132.

(d) Technical Amendment.--Effective as if included in the enactment of the Antiterrorism and Effective Death Penalty Act of 1996 (Public Law 104-132), subsections (a), (c), (d), (g), and (h) of section <<NOTE: 8 USC 1105a, 1182, 1252, 1252a.>> 440 of such Act are amended by striking ``any offense covered by section 241(a)(2)(A)(ii) for which both predicate offenses are covered by section 241(a)(2)(A)(i)'' and inserting ``any offense covered by section 241(a)(2)(A)(ii) for which both predicate offenses are, without regard to the date of their commission, otherwise covered by section 241(a)(2)(A)(i)''.

(a) In General.--Section 243 (8 U.S.C. 1253) is amended to read as follows:

``penalties related to removal

``Sec. 243. (a) Penalty for Failure To Depart.-- ``(1) In general.--Any alien against whom a final order of removal is outstanding by reason of being a member of any of the classes described in section 237(a), who-- ``(A) willfully fails or refuses to depart from the United States within a period of 90 days from the date of the final order of removal under administrative processes, or if judicial review is had, then from the date of the final order of the court, ``(B) willfully fails or refuses to make timely application in good faith for travel or other documents necessary to the alien's departure,

``(C) connives or conspires, or takes any other action, designed to prevent or hamper or with the purpose of preventing or hampering the alien's departure pursuant to such, or ``(D) willfully fails or refuses to present himself or herself for removal at the time and place required by the Attorney General pursuant to such order, shall be fined under title 18, United States Code, or imprisoned not more than four years (or 10 years if the alien is a member of any of the classes described in paragraph (1)(E), (2), (3), or (4) of section 237(a)), or both. ``(2) Exception.--It is not a violation of paragraph (1) to take any proper steps for the purpose of securing cancellation of or exemption from such order of removal or for the purpose of securing the alien's release from incarceration or custody. ``(3) Suspension.--The court may for good cause suspend the sentence of an alien under this subsection and order the alien's release under such conditions as the court may prescribe. In determining whether good cause has been shown to justify releasing the alien, the court shall take into account such factors as-- ``(A) the age, health, and period of detention of the alien; ``(B) the effect of the alien's release upon the national security and public peace or safety; ``(C) the likelihood of the alien's resuming or following a course of conduct which made or would make the alien deportable; ``(D) the character of the efforts made by such alien himself and by representatives of the country or countries to which the alien's removal is directed to expedite the alien's departure from the United States; ``(E) the reason for the inability of the Government of the United States to secure passports, other travel documents, or removal facilities from the country or countries to which the alien has been ordered removed; and ``(F) the eligibility of the alien for discretionary relief under the immigration laws.

``(b) Willful Failure To Comply with Terms of Release Under Supervision.--An alien who shall willfully fail to comply with regulations or requirements issued pursuant to section 241(a)(3) or knowingly give false information in response to an inquiry under such section shall be fined not more than $1,000 or imprisoned for not more than one year, or both. ``(c) Penalties Relating To Vessels and Aircraft.-- ``(1) Civil penalties.-- ``(A) Failure to carry out certain orders.--If the Attorney General is satisfied that a person has violated subsection (d) or (e) of section 241, the person shall pay to the Commissioner the sum of $2,000 for each violation. ``(B) Failure to remove alien stowaways.--If the Attorney General is satisfied that a person has failed to remove an alien stowaway as required under section 241(d)(2), the person shall pay to the Commissioner the sum of $5,000 for each alien stowaway not removed.

``(C) No compromise.--The Attorney General may not compromise the amount of such penalty under this paragraph. ``(2) Clearing vessels and aircraft.-- ``(A) Clearance before decision on liability.--A vessel or aircraft may be granted clearance before a decision on liability is made under paragraph (1) only if a bond approved by the Attorney General or an amount sufficient to pay the civil penalty is deposited with the Commissioner. ``(B) Prohibition on clearance while penalty unpaid.--A vessel or aircraft may not be granted clearance if a civil penalty imposed under paragraph (1) is not paid.

``(d) Discontinuing Granting Visas to Nationals of Country Denying or Delaying Accepting Alien.--On being notified by the Attorney General that the government of a foreign country denies or unreasonably delays accepting an alien who is a citizen, subject, national, or resident of that country after the Attorney General asks whether the government will accept the alien under this section, the Secretary of State shall order consular officers in that foreign country to discontinue granting immigrant visas or nonimmigrant visas, or both, to citizens, subjects, nationals, and residents of that country until the Attorney General notifies the Secretary that the country has accepted the alien.''.

REDESIGNATION AND REORGANIZATION OF OTHER PROVISIONS; ADDITIONAL CONFORMING AMENDMENTS.

(a) Conforming Amendment to Table of Contents; Overview of Reorganized Chapters.--The table of contents, as amended by sections 123(b) and 671(e)(1) of this division, is amended-- (1) by striking the item relating to section 106, and (2) by striking the item relating to chapter 4 of title II and all that follows through the item relating to section 244A and inserting the following:

``chapter 4--inspection, apprehension, examination, exclusion, and removal

``Sec. 231. Lists of alien and citizen passengers arriving or departing; record of resident aliens and citizens leaving permanently for foreign country. ``Sec. 232. Detention of aliens for physical and mental examination. ``Sec. 233. Entry through or from foreign territory and adjacent islands; landing stations. ``Sec. 234. Designation of ports of entry for aliens arriving by civil aircraft. ``Sec. 235. Inspection by immigration officers; expedited removal of inadmissible arriving aliens; referral for hearing. ``Sec. 235A. Preinspection at foreign airports. ``Sec. 236. Apprehension and detention of aliens not lawfully in the United States. ``Sec. 237. General classes of deportable aliens. ``Sec. 238. Expedited removal of aliens convicted of committing aggravated felonies. ``Sec. 239. Initiation of removal proceedings. ``Sec. 240. Removal proceedings.

``Sec. 240A. Cancellation of removal; adjustment of status. ``Sec. 240B. Voluntary departure. ``Sec. 240C. Records of admission. ``Sec. 241. Detention and removal of aliens ordered removed. ``Sec. 242. Judicial review of orders of removal. ``Sec. 243. Penalties relating to removal. ``Sec. 244. Temporary protected status.

``chapter 5--adjustment and change of status''.

(b) Reorganization of Other Provisions.--Chapters 4 and 5 of title II are amended as follows: (1) Amending chapter heading.--Amend the heading for chapter 4 of title II to read as follows:

``Chapter 4--Inspection, Apprehension, Examination, Exclusion, and Removal''.

(2) Redesignating section 232 as section 232(a).--Amend section 232 (8 U.S.C. 1222)-- (A) by inserting ``(a) Detention of Aliens.--'' after ``Sec. 232.'', and (B) by amending the section heading to read as follows:

``detention of aliens for physical and mental examination''.

(3) Redesignating section 234 as section 232(b).--Amend section 234 (8 U.S.C. 1224)-- (A) by striking the heading, (B) by striking ``Sec. 234.'' and inserting the following: ``(b) Physical and Mental Examination.--'', and (C) by moving such provision to the end of section 232. (4) Redesignating section 238 as section 233.--Redesignate section 238 (8 U.S.C. 1228) as section 233 and move the section to immediately follow section 232. (5) Redesignating section 242a as section 238.--Redesignate section 242A as section 238, strike ``deportation'' in its heading and insert ``removal'', and move the section to immediately follow section 237 (as redesignated by section 305(a)(2)). (6) Striking section 242b.--Strike section 242B (8 U.S.C. 1252b). (7) Striking section 244 and redesignating section 244a as section 244.--Strike section 244 (8 U.S.C. 1254) and redesignate section 244A as section 244. (8) Amending chapter heading.--Amend the heading for chapter 5 of title II to read as follows:

``Chapter 5--Adjustment and Change of Status''.

(c) Additional Conforming Amendments.-- (1) Expedited procedures for aggravated felons (former section 242a).--Section 238 (which, previous to redesignation under section 308(b)(5) of this division, was section 242A) is amended-- (A) in subsection (a)(1), by striking ``section 242'' and inserting ``section 240'';

(B) in subsection (a)(2), by striking ``section 242(a)(2)'' and inserting ``section 236(c)''; and (C) in subsection (b)(1), by striking ``section 241(a)(2)(A)(iii)'' and inserting ``section 237(a)(2)(A)(iii)''. (2) Treatment of certain helpless aliens.-- (A) Certification of helpless aliens.--Section 232 (8 U.S.C. 1222), as amended by section 308(b)(2) of this division, is further amended by adding at the end the following new subsection:

``(c) Certification of Certain Helpless Aliens.--If an examining medical officer determines that an alien arriving in the United States is inadmissible, is helpless from sickness, mental or physical disability, or infancy, and is accompanied by another alien whose protection or guardianship may be required, the officer may certify such fact for purposes of applying section 212(a)(10)(B) with respect to the other alien.''. (B) Ground of inadmissibility for protection and guardianship of aliens denied admission for health or infancy.--Subparagraph (B) of section 212(a)(10) (8 U.S.C. 1182(a)(10)), as redesignated by section 301(a)(1) of this division, is amended to read as follows: ``(B) Guardian required to accompany helpless alien.--Any alien-- ``(i) who is accompanying another alien who is inadmissible and who is certified to be helpless from sickness, mental or physical disability, or infancy pursuant to section 232(c), and ``(ii) whose protection or guardianship is determined to be required by the alien described in clause (i), is inadmissible.''. (3) Contingent consideration in relation to removal of aliens.--Section 273(a) (8 U.S.C. 1323(a)) is amended-- (A) by inserting ``(1)'' after ``(a)'', and (B) by adding at the end the following new paragraph:

``(2) It is unlawful for an owner, agent, master, commanding officer, person in charge, purser, or consignee of a vessel or aircraft who is bringing an alien (except an alien crewmember) to the United States to take any consideration to be kept or returned contingent on whether an alien is admitted to, or ordered removed from, the United States.''. (4) Clarification.--(A) Section 238(a)(1), which, previous to redesignation under section 308(b)(5) of this division, was section 242A(a)(1), is amended by adding at the end the following: ``Nothing in this section shall be construed to create any substantive or procedural right or benefit that is legally enforceable by any party against the United States or its agencies or officers or any other person.''. (B) Section 225 of the Immigration and Nationality Technical Corrections Act of 1994 (Public Law 103-416) <<NOTE: 8 USC 1101 note.>> is amended by striking ``and nothing in'' and all that follows up to ``shall''.

(d) Additional Conforming Amendments Relating to Exclusion and Inadmissibility.-- (1) Section 212.--Section 212 (8 U.S.C. 1182(a)) is amended-- (A) in the heading, by striking ``excluded from'' and inserting ``ineligible for'';

(B) in the matter in subsection (a) before paragraph (1), by striking all that follows ``(a)'' and inserting the following: ``Classes of Aliens Ineligible for Visas or Admission.--Except as otherwise provided in this Act, aliens who are inadmissible under the following paragraphs are ineligible to receive visas and ineligible to be admitted to the United States:''; (C) in subsection (a), by striking ``is excludable'' and inserting ``is inadmissible'' each place it appears; (D) in subsections (a)(5)(C) (before redesignation by section 343(c)(1) of this division), (d)(1), and (k), by striking ``exclusion'' and inserting ``inadmissibility''; (E) in subsections (b), (d)(3), (h)(1)(A)(i), and (k), by striking ``excludable'' each place it appears and inserting ``inadmissible''; (F) in subsection (b)(2), by striking ``or ineligible for entry''; (G) in subsection (d)(7), by striking ``excluded from'' and inserting ``denied''; and (H) in subsection (h)(1)(B), by striking ``exclusion'' and inserting ``denial of admission''. (2) Section 241.--Section 241 (8 U.S.C. 1251), before redesignation as section 237 by section 305(a)(2) of this division, is amended-- (A) in subsection (a)(1)(H), by striking ``excludable'' and inserting ``inadmissible''; (B) in subsection (a)(4)(C)(ii), by striking ``excludability'' and inserting ``inadmissibility''; (C) in subsection (c), by striking ``exclusion'' and inserting ``inadmissibility''; and (D) effective upon enactment of this Act, by striking subsection (d), as added by section 414(a) of the Antiterrorism and Effective Death Penalty Act of 1996 (P.L. 104-132). (3) Other general references.--The following provisions are amended by striking ``excludability'' and ``excludable'' each place each appears and inserting ``inadmissibility'' and ``inadmissible'', respectively: (A) <<NOTE: 8 USC 1101, 1183, 1224, 1251, 1322, 1327, 1356.>> Sections 101(f)(3), 213, 234 (before redesignation by section 308(b) of this division), 241(a)(1) (before redesignation by section 305(a)(2) of this division), 272(a), 277, 286(h)(2)(A)(v), and 286(h)(2)(A)(vi). (B) Section 601(c) of the Immigration Act of 1990. (C) Section 128 of the Foreign Relations Authorization Act, Fiscal Years 1992 and 1993 (Public Law 102-138). (D) Section 1073 of the National Defense Authorization Act for Fiscal Year 1995 (Public Law 103- 337). (E) Section 221 of the Immigration and Nationality Technical Corrections Act of 1994 (Public Law 103-416). (4) Related terms.-- (A) Section 101(a)(17) (8 U.S.C. 1101(a)(17)) is amended by striking ``or expulsion'' and inserting ``expulsion, or removal''. (B) Section 102 (8 U.S.C. 1102) is amended by striking ``exclusion or deportation'' and inserting ``removal''.

(C) Section 103(c)(2) (8 U.S.C. 1103(c)(2)) is amended by striking ``been excluded or deported'' and inserting ``not been admitted or have been removed''. (D) Section 206 (8 U.S.C. 1156) is amended by striking ``excluded from admission to the United States and deported'' and inserting ``denied admission to the United States and removed''. (E) Section 216(f) (8 U.S.C. 1186a) is amended by striking ``exclusion'' and inserting ``inadmissibility''. (F) Section 217 (8 U.S.C. 1187) is amended by striking ``excluded from admission'' and inserting ``denied admission at the time of arrival'' each place it appears. (G) Section 221(f) (8 U.S.C. 1201) is amended by striking ``exclude'' and inserting ``deny admission to''. (H) Section 232(a) (8 U.S.C. 1222(a)), as redesignated by subsection (b)(2), is amended by striking ``excluded by'' and ``the excluded classes'' and inserting ``inadmissible under'' and ``inadmissible classes'', respectively. (I)(i) Section 272 (8 U.S.C. 1322) is amended-- (I) by striking ``exclusion'' in the heading and inserting ``denial of admission'', (II) in subsection (a), by striking ``excluding condition'' and inserting ``condition causing inadmissibility'', and (III) in subsection (c), by striking ``excluding''. (ii) The item in the table of contents relating to such section is amended by striking ``exclusion'' and inserting ``denial of admission''. (J) Section 276(a) (8 U.S.C. 1326(a)) is amended-- (i) in paragraph (1), as amended by section 324(a) of this division-- (I) by striking ``arrested and deported, has been excluded and deported,'' and inserting ``denied admission, excluded, deported, or removed'', and (II) by striking ``exclusion or deportation'' and inserting ``exclusion, deportation, or removal''; and (ii) in paragraph (2)(B), by striking ``excluded and deported'' and inserting ``denied admission and removed''. (K) Section 286(h)(2)(A)(vi) (8 U.S.C. 1356(h)(2)(A)(vi)) is amended by striking ``exclusion'' each place it appears and inserting ``removal''. (L) Section 287 (8 U.S.C. 1357) is amended-- (i) in subsection (a), by striking ``or expulsion'' each place it appears and inserting ``expulsion, or removal'', and (ii) in subsection (c), by striking ``exclusion from'' and inserting ``denial of admission to''. (M) Section 290(a) (8 U.S.C. 1360(a)) is amended by striking ``admitted to the United States, or excluded therefrom'' each place it appears and inserting ``admitted or denied admission to the United States''. (N) Section 291 (8 U.S.C. 1361) is amended by striking ``subject to exclusion'' and inserting ``inadmissible'' each place it appears.

(O) Section 292 (8 U.S.C. 1362) is amended by striking ``exclusion or deportation'' each place it appears and inserting ``removal''. (P) Section 360 (8 U.S.C. 1503) is amended-- (i) in subsection (a), by striking ``exclusion'' each place it appears and inserting ``removal'', and (ii) in subsection (c), by striking ``excluded from'' and inserting ``denied''. (Q) Section 507(b)(2)(D) (8 U.S.C. 1537(b)(2)(D)) is amended by striking ``exclusion because such alien is excludable'' and inserting ``removal because such alien is inadmissible''. (R) Section 301(a)(1) of <<NOTE: 8 USC 1255a note.>> the Immigration Act of 1990 is amended by striking ``exclusion'' and inserting ``inadmissibility''. (S) Section 401(c) of the Refugee Act of 1980 is amended by striking ``deportation or exclusion'' and inserting ``removal''. (T) Section 501(e)(2) of the Refugee Education Assistance Act of 1980 (Public Law 96-422) is amended-- (i) by striking ``exclusion or deportation'' each place it appears and inserting ``removal'', and (ii) by striking ``deportation or exclusion'' each place it appears and inserting ``removal''. (U) Section 4113(c) of title 18, United States Code, is amended by striking ``exclusion and deportation'' and inserting ``removal''. (5) Repeal of superseded provision.--Effective as of the date of the enactment of the Antiterrorism and Effective Death Penalty Act of 1996, section 422 of such Act is repealed and the Immigration and Nationality Act shall be applied as if such section had not been enacted.

(e) Revision of Terminology Relating to Deportation.-- (1) Each of the following is amended by striking ``deportation'' each place it appears and inserting ``removal'': (A) Subparagraphs (A)(iii)(II), (A)(iv)(II), and (B)(iii)(II) of section 204(a)(1) (8 U.S.C. 1154(a)(1)). (B) Section 212(d)(1) (8 U.S.C. 1182(d)(1)). (C) Section 212(d)(11) (8 U.S.C. 1182(d)(11)). (D) Section 214(k)(4)(C) (8 U.S.C. 1184(k)(4)(C)), as redesignated by section 671(a)(3)(A) of this division. (E) Section 241(a)(1)(H) (8 U.S.C. 1251(a)(1)(H)), before redesignation as section 237 by section 305(a)(2) of this division. (F) Section 242A (8 U.S.C. 1252a), before redesignation as section 238 by subsection (b)(5). (G) Subsections (a)(3) and (b)(5)(B) of section 244A (8 U.S.C. 1254a), before redesignation as section 244 by subsection (b)(7). (H) Section 246(a) (8 U.S.C. 1256(a)). (I) Section 254 (8 U.S.C. 1284). (J) Section 263(a)(4) (8 U.S.C. 1303(a)(4)). (K) Section 276(b) (8 U.S.C. 1326(b)). (L) Section 286(h)(2)(A)(v) (8 U.S.C. 1356(h)(2)(A)(v)). (M) Section 287(g) (8 U.S.C. 1357(g)) (as added by section 122 of this division). (N) Section 291 (8 U.S.C. 1361).

(O) Section 318 (8 U.S.C. 1429). (P) Section 130005(a) of the Violent Crime Control and Law Enforcement Act of 1994 (Public Law 103-322). (Q) Section 4113(b) of title 18, United States Code. (2) Each of the following is amended by striking ``deported'' each place it appears and inserting ``removed'': (A) Section 212(d)(7) (8 U.S.C. 1182(d)(7)). (B) Section 214(d) (8 U.S.C. 1184(d)). (C) Section 241(a) (8 U.S.C. 1251(a)), before redesignation as section 237 by section 305(a)(2) of this division. (D) Section 242A(c)(2)(D)(iv) (8 U.S.C. 1252a(c)(2)(D)(iv)), as amended by section 671(b)(13) of this division but before redesignation as section 238 by subsection (b)(5). (E) Section 252(b) (8 U.S.C. 1282(b)). (F) Section 254 (8 U.S.C. 1284). (G) Subsections (b) and (c) of section 266 (8 U.S.C. 1306). (H) Section 301(a)(1) of the Immigration Act of 1990. (I) Section 4113 of title 18, United States Code. (3) Section 101(g) (8 U.S.C. 1101(g)) is amended by inserting ``or removed'' after ``deported'' each place it appears. (4) Section 103(c)(2) (8 U.S.C. 1103(c)(2)) is amended by striking ``suspension of deportation'' and inserting ``cancellation of removal''. (5) Section 201(b)(1)(D) (8 U.S.C. 1151(b)(1)(D)) is amended by striking ``deportation is suspended'' and inserting ``removal is canceled''. (6) Section 212(l)(2)(B) (8 U.S.C. 1182(l)(2)(B)) is amended by striking ``deportation against'' and inserting ``removal of''. (7) Subsections (b)(2), (c)(2)(B), (c)(3)(D), (c)(4)(A), and (d)(2)(C) of section 216 (8 U.S.C. 1186a) are each amended by striking ``deportation'', ``deportation'', ``deport'', and ``deported'' each place each appears and inserting ``removal'', ``removal'', ``remove'', and ``removed'', respectively. (8) Subsections (b)(2), (c)(2)(B), (c)(3)(D), and (d)(2)(C) of section 216A (8 U.S.C. 1186b) are each amended by striking ``deportation'', ``deportation'', ``deport'', and ``deported'' and inserting ``removal'', ``removal'', ``remove'', and ``removed'', respectively. (9) Section 217(b)(2) (8 U.S.C. 1187(b)(2)) is amended by striking ``deportation against'' and inserting ``removal of''. (10) Section 242A (8 U.S.C. 1252a), before redesignation as section 238 by subsection (b)(6), is amended, in the headings to various subdivisions, by striking ``Deportation'' and ``deportation'' and inserting ``Removal'' and ``removal'', respectively. (11) Section 244A(a)(1)(A) (8 U.S.C. 1254a(a)(1)(A)), before redesignation as section 244 by subsection (b)(8), is amended-- (A) in subsection (a)(1)(A), by striking ``deport'' and inserting ``remove'', and (B) in subsection (e), by striking ``Suspension of Deportation'' and inserting ``Cancellation of Removal''. (12) Section 254 (8 U.S.C. 1284) is amended by striking ``deport'' each place it appears and inserting ``remove''. (13) Section 273(d) (8 U.S.C. 1323(d)) is repealed. (14)(A) Section 276 (8 U.S.C. 1326) is amended by striking ``deported'' and inserting ``removed''.

(B) The item in the table of contents relating to such section is amended by striking ``deported'' and inserting ``removed''. (15) Section 318 (8 U.S.C. 1429) is amended by striking ``suspending'' and inserting ``canceling''. (16) Section 301(a) of the Immigration Act of 1990 is amended by striking ``Deportation'' and inserting ``Removal''. (17) The heading of section 130005 of the Violent Crime Control and Law Enforcement Act of 1994 (Public Law 103- 322) is amended by striking ``DEPORTATION'' and inserting ``REMOVAL''. (18) Section 9 of the Peace Corps Act (22 U.S.C. 2508) is amended by striking ``deported'' and all that follows through ``Deportation'' and inserting ``removed pursuant to chapter 4 of title II of the Immigration and Nationality Act''. (19) Section 8(c) of the Foreign Agents Registration Act (22 U.S.C. 618(c)) is amended by striking ``deportation'' and all that follows and inserting ``removal pursuant to chapter 4 of title II of the Immigration and Nationality Act.''.

(f) Revision of References to Entry.-- (1) The following provisions are amended by striking ``entry'' and inserting ``admission'' each place it appears: (A) Section 101(a)(15)(K) (8 U.S.C. 1101(a)(15)(K)). (B) Section 101(a)(30) (8 U.S.C. 1101(a)(30)). (C) Section 212(a)(2)(D) (8 U.S.C. 1182(a)(2)(D)). (D) Section 212(a)(6)(C)(i) (8 U.S.C. 1182(a)(6)(C)(i)). (E) Section 212(h)(1)(A)(i) (8 U.S.C. 1182(h)(1)(A)(i)). (F) Section 212(j)(1)(D) (8 U.S.C. 1182(j)(1)(D)). (G) Section 214(c)(2)(A) (8 U.S.C. 1184(c)(2)(A)). (H) Section 214(d) (8 U.S.C. 1184(d)). (I) Section 216(b)(1)(A)(i) (8 U.S.C. 1186a(b)(1)(A)(i)). (J) Section 216(d)(1)(A)(i)(III) (8 U.S.C. 1186a(d)(1)(A)(i)(III)). (K) Subsection (b) of section 240 (8 U.S.C. 1230), before redesignation as section 240C by section 304(a)(2) of this division. (L) Subsection (a)(1)(G) of section 241 (8 U.S.C. 1251), before redesignation as section 237 by section 305(a)(2) of this division. (M) Subsection (a)(1)(H) of section 241 (8 U.S.C. 1251), before redesignation as section 237 by section 305(a)(2) of this division, other than the last time it appears. (N) Paragraphs (2) and (4) of subsection (a) of section 241 (8 U.S.C. 1251), before redesignation as section 237 by section 305(a)(2) of this division. (O) Section 245(e)(3) (8 U.S.C. 1255(e)(3)). (P) Section 247(a) (8 U.S.C. 1257(a)). (Q) Section 601(c)(2) of the Immigration Act of 1990. (2) The following provisions are amended by striking ``enter'' and inserting ``be admitted'': (A) Section 204(e) (8 U.S.C. 1154(e)). (B) Section 221(h) (8 U.S.C. 1201(h)). (C) Section 245(e)(2) (8 U.S.C. 1255(e)(2)). (3) The following provisions are amended by striking ``enters'' and inserting ``is admitted to'': (A) Section 212(j)(1)(D)(ii) (8 U.S.C. 1154(e)). (B) Section 214(c)(5)(B) (8 U.S.C. 1184(c)(5)(B)).

(4) Subsection (a) of section 238 (8 U.S.C. 1228), before redesignation as section 233 by section 308(b)(4) of this division, is amended by striking ``entry and inspection'' and inserting ``inspection and admission''. (5) Subsection (a)(1)(H)(ii) of section 241 (8 U.S.C. 1251), before redesignation as section 237 by section 305(a)(2) of this division, is amended by striking ``at entry''. (6) Section 7 of the Central Intelligence Agency Act of 1949 (50 U.S.C. 403h) is amended by striking ``that the entry'', ``given entry into'', and ``entering'' and inserting ``that the admission'', ``admitted to'', and ``admitted to''. (7) Section 4 of the Atomic Weapons and Special Nuclear Materials Rewards Act (50 U.S.C. 47c) is amended by striking ``entry'' and inserting ``admission''.

(g) Conforming References to Reorganized Sections.-- (1) References <<NOTE: 8 USC 1182, 1221, 1224 note, 1252a, 1254a note, 1255a note, 1321, 1356, 1364, 1531; 42 USC 402.>> to sections 232, 234, 238, 239, 240, 241, 242a, and 244a.--Any reference in law in effect on the day before the date of the enactment of this Act to section 232, 234, 238, 239, 240, 241, 242A, or 244A of the Immigration and Nationality Act (or a subdivision of such section) is deemed, as of the title III-A effective date, to refer to section 232(a), 232(b), 233, 234, 234A, 237, 238, or 244 of such Act (or the corresponding subdivision of such section), as redesignated by this subtitle. Any reference in law to section 241 (or a subdivision of such section) of the Immigration and Nationality Act in an amendment made by a subsequent subtitle of this title is deemed a reference (as of the title III-A effective date) to section 237 (or the corresponding subdivision of such section), as redesignated by this subtitle. (2) References to section 106.-- (A) Sections 242A(b)(3) and 242A(c)(3)(A)(ii) (8 U.S.C. 1252a(b)(3), 1252a(c)(3)(A)(ii)), as amended by section 671(b)(13) of this division but before redesignation as section 238 by subsection (b)(5), are each amended by striking ``106'' and inserting ``242''. (B) Sections 210(e)(3)(A) and 245A(f)(4)(A) (8 U.S.C. 1160(e)(3)(A), 1255a(f)(4)(A)) are amended by inserting ``(as in effect before October 1, 1996)'' after ``106''. (C) Section 242A(c)(3)(A)(iii) (8 U.S.C. 1252a(c)(3)(A)(iii)), as amended by section 671(b)(13) of this division but before redesignation as section 238 by subsection (b)(5), is amended by striking ``106(a)(1)'' and inserting ``242(b)(1)''. (3) References to section 236.-- (A) Sections 205 and 209(a)(1) (8 U.S.C. 1155, 1159(a)(1)) are each amended by striking ``236'' and inserting ``240''. (B) Section 4113(c) of title 18, United States Code, is amended by striking ``1226 of title 8, United States Code'' and inserting ``240 of the Immigration and Nationality Act''. (4) References to section 237.-- (A) Section 209(a)(1) (8 U.S.C. 1159(a)(1)) is amended by striking ``237'' and inserting ``241''. (B) Section 212(d)(7) (8 U.S.C. 1182(d)(7)) is amended by striking ``237(a)'' and inserting ``241(c)''.

(C) Section 280(a) (8 U.S.C. 1330(a)) is amended by striking ``237, 239, 243'' and inserting ``234, 243(c)(2)''. (5) References to section 242.-- (A)(i) Sections 214(d), 252(b), and 287(f)(1) (8 U.S.C. 1184(d), 1282(b), 1357(f)(1)) are each amended by striking ``242'' and inserting ``240''. (ii) Subsection (c)(4) of section 242A (8 U.S.C. 1252a), as amended by section 671(b)(13) of this division but before redesignation as section 238 by subsection (b)(5), are each amended by striking ``242'' and inserting ``240''. (iii) Section 245A(a)(1)(B) (8 U.S.C. 1255a(a)(1)(B)) is amended by inserting ``(as in effect before October 1, 1996)'' after ``242''. (iv) Section 4113 of title 18, United States Code, is amended-- (I) in subsection (a), by striking ``section 1252(b) or section 1254(e) of title 8, United States Code,'' and inserting ``section 240B of the Immigration and Nationality Act''; and (II) in subsection (b), by striking ``section 1252 of title 8, United States Code,'' and inserting ``section 240 of the Immigration and Nationality Act''. (B) Section 130002(a) of Public Law 103-322, as amended by section 345 of this division, is amended by striking ``242(a)(3)(A)'' and inserting ``236(d)''. (C) Section 242A(b)(1) (8 U.S.C. 1252a(b)(1)), before redesignation as section 238 by section 308(b)(5) of this division, is amended by striking ``242(b)'' and inserting ``240''. (D) Section 242A(c)(2)(D)(ii) (8 U.S.C. 1252a(c)(2)(D)(ii)), as amended by section 671(b)(13) of this division but before redesignation as section 238 by subsection (b)(5), is amended by striking ``242(b)'' and inserting ``240''. (E) Section 1821(e) of title 28, United States Code, is amended by striking ``242(b)'' and inserting ``240''. (F) Section 130007(a) of Public Law 103-322 is amended by striking ``242(i)'' and inserting ``239(d)''. (G) Section 20301(c) of Public Law 103-322 is amended by striking ``242(j)(5)'' and ``242(j)'' and inserting ``241(h)(5)'' and ``241(h)'', respectively. (6) References to section 242b.-- (A) Section 303(d)(2) of the Immigration Act of 1990 is amended by striking ``242B'' and inserting ``240(b)(5)''. (B) Section 545(g)(1)(B) <<NOTE: 8 USC 1254b note.>> of the Immigration Act of 1990 is amended by striking ``242B(a)(4)'' and inserting ``239(a)(4)''. (7) References to section 243.-- (A) Section 214(d) (8 U.S.C. 1184(d)) is amended by striking ``243'' and inserting ``241''. (B) Section 504(k)(2) (8 U.S.C. 1534(k)(2)) is amended by striking ``withholding of deportation under section 243(h)'' and inserting ``by withholding of removal under section 241(b)(3)''. (C)(i) Section 315(c) of the Immigration Reform and Control Act of 1986 is amended by striking ``243(g)'' and ``1253(g)''and inserting ``243(d)'' and ``1253(d)'' respectively.

(ii) Section 702(b) of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1988 is amended by striking ``243(g)'' and inserting ``243(d)''. (iii) Section 903(b) of Public Law 100-204 is amended by striking ``243(g)'' and inserting ``243(d)''. (D)(i) Section 6(f)(2)(F) of the Food Stamp Act of 1977 (7 U.S.C. 2015(f)(2)(F)) is amended by striking ``243(h)'' and inserting ``241(b)(3)''. (ii) Section 214(a)(5) of the Housing and Community Development Act of 1980 (42 U.S.C. 1436a(a)(5)) is amended by striking ``243(h)'' and inserting ``241(b)(3)''. (E)(i) Subsection (c)(2)(B)(ii) of section 244A (8 U.S.C. 1254a), before redesignated as section 244 by section 308(b)(7), is amended by striking ``243(h)(2)'' and inserting ``208(b)(2)(A)''. (ii) Section 301(e)(2) of the Immigration Act of 1990 is amended by striking ``243(h)(2)'' and inserting ``208(b)(2)(A)''. (F) Section 316(f) (8 U.S.C. 1427(f)) is amended by striking ``subparagraphs (A) through (D) of paragraph 243(h)(2)'' and inserting ``clauses (i) through (v) of section 208(b)(2)(A)''. (8) References to section 244.-- (A)(i) Section 201(b)(1)(D) (8 U.S.C. 1151(b)(1)(D)) and subsection (e) of section 244A (8 U.S.C. 1254a), before redesignation as section 244 by section 308(b)(7) of this division, are each amended by striking ``244(a)'' and inserting ``240A(a)''. (ii) Section 304(c)(1)(B) of the Miscellaneous and Technical Immigration and Naturalization Amendments of 1991 (Public Law 102-232) is amended by <<NOTE: 8 USC 1254a note.>> striking ``244(a)'' and inserting ``240A(a)''. (B) Section 504(k)(3) (8 U.S.C. 1534(k)(3)) is amended by striking ``suspension of deportation under subsection (a) or (e) of section 244'' and inserting ``cancellation of removal under section 240A''. (C) Section 304(c)(1)(B) of the Miscellaneous and Technical Immigration and Naturalization Amendments of 1991 (Public Law 102-232) is <<NOTE: 8 USC 1254a note.>> amended by striking ``244(b)(2)'' and inserting ``240A(b)(2)''. (D) Section 364(a)(2) of this division is amended by striking ``244(a)(3)'' and inserting ``240A(a)(3)''. (E) Section 431(c)(1)(B)(iii) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, as added by section 501 of this division, is amended by striking ``suspension of deportation and adjustment of status pursuant to section 244(a)(3) of such Act'' and inserting ``cancellation of removal under section 240A of such Act''. (9) References to chapter 5.-- (A) Sections 266(b), 266(c), and 291 (8 U.S.C. 1306(b), 1306(c), 1361) are each amended by striking ``chapter 5'' and inserting ``chapter 4''. (B) Section 6(b) of the Act of August 1, 1956 (50 U.S.C. 855(b)) is amended by striking ``chapter 5, title II, of the

Immigration and Nationality Act (66 Stat. 163)'' and inserting ``chapter 4 of title II of the Immigration and Nationality Act''. (10) Miscellaneous cross-reference corrections for newly added provisions.-- (A) Section 212(h), as amended by section 301(h) of this division, is amended by striking ``section 212(c)'' and inserting ``paragraphs (1) and (2) of section 240A(a)''. (B) Section 245(c)(6), as amended by section 332(d) of this division, is amended by striking ``241(a)(4)(B)'' and inserting ``237(a)(4)(B)''. (C) Section 249(d), as amended by section 332(e) of this division, is amended by striking ``241(a)(4)(B)'' and inserting ``237(a)(4)(B)''. (D) Section 274C(d)(7), as added by section 212(d) of this division, is amended by striking ``withholding of deportation under section 243(h)'' and inserting ``withholding of removal under section 241(b)(3)''. (E) Section 3563(b)(21) of title 18, United States Code, as inserted by section 374(b) of this division, is amended by striking ``242A(d)(5)'' and inserting ``238(d)(5)''. (F) Section 130007(a) of the Violent Crime Control and Law Enforcement Act of 1994 (Public Law 103-322), as amended by section 671(a)(6) of this division, is amended by striking ``242A(a)(3)'' and inserting ``238(a)(3)''. (G) Section 386(b) of this division is amended by striking ``excludable'' and ``excludable'' and inserting ``inadmissible'' and ``inadmissible'', respectively, each place each appears. (H) Subsections (a), (c), (d), (g), and (h) of section 440 of the Antiterrorism and Effective Death Penalty Act of 1996 (Public Law 104-132), as amended by section 306(d) of this <<NOTE: 8 USC 1105a, 1182, 1252, 1252a.>> division, are amended by striking ``241(a)(2)(A)(ii)'' and ``241(a)(2)(A)(i)'' and inserting ``237(a)(2)(A)(ii)'' and ``237(a)(2)(A)(i)'', respectively.

EFFECTIVE DATES; TRANSITION.

(a) In General.--Except as provided in this section and sections 303(b)(2), 306(c), 308(d)(2)(D), or 308(d)(5) of this division, this subtitle and the amendments made by this subtitle shall take effect on the first day of the first month beginning more than 180 days after the date of the enactment of this Act (in this title referred to as the ``title III-A effective date'').

(b) Promulgation of Regulations.--The Attorney General shall first promulgate regulations to carry out this subtitle by not later than 30 days before the title III-A effective date. (c) Transition for Aliens in Proceedings.-- (1) General rule that new rules do not apply.--Subject to the succeeding provisions of this subsection, in the case of an alien who is in exclusion or deportation proceedings as of the title III-A effective date-- (A) the amendments made by this subtitle shall not apply, and (B) the proceedings (including judicial review thereof) shall continue to be conducted without regard to such amendments.

(2) Attorney general option to elect to apply new procedures.--In a case described in paragraph (1) in which an evidentiary hearing under section 236 or 242 and 242B of the Immigration and Nationality Act has not commenced as of the title III-A effective date, the Attorney General may elect to proceed under chapter 4 of title II of such Act (as amended by this subtitle). The Attorney General shall provide notice of such election to the alien involved not later than 30 days before the date any evidentiary hearing is commenced. If the Attorney General makes such election, the notice of hearing provided to the alien under section 235 or 242(a) of such Act shall be valid as if provided under section 239 of such Act (as amended by this subtitle) to confer jurisdiction on the immigration judge. (3) Attorney general option to terminate and reinitiate proceedings.--In the case described in paragraph (1), the Attorney General may elect to terminate proceedings in which there has not been a final administrative decision and to reinitiate proceedings under chapter 4 of title II the Immigration and Nationality Act (as amended by this subtitle). Any determination in the terminated proceeding shall not be binding in the reinitiated proceeding. (4) Transitional changes in judicial review.--In the case described in paragraph (1) in which a final order of exclusion or deportation is entered more than 30 days after the date of the enactment of this Act, notwithstanding any provision of section 106 of the Immigration and Nationality Act (as in effect as of the date of the enactment of this Act) to the contrary-- (A) in the case of judicial review of a final order of exclusion, subsection (b) of such section shall not apply and the action for judicial review shall be governed by the provisions of subsections (a) and (c) of such in the same manner as they apply to judicial review of orders of deportation; (B) a court may not order the taking of additional evidence under section 2347(c) of title 28, United States Code; (C) the petition for judicial review must be filed not later than 30 days after the date of the final order of exclusion or deportation; (D) the petition for review shall be filed with the court of appeals for the judicial circuit in which the administrative proceedings before the special inquiry officer or immigration judge were completed; (E) there shall be no appeal of any discretionary decision under section 212(c), 212(h), 212(i), 244, or 245 of the Immigration and Nationality Act (as in effect as of the date of the enactment of this Act); (F) service of the petition for review shall not stay the deportation of an alien pending the court's decision on the petition, unless the court orders otherwise; and (G) there shall be no appeal permitted in the case of an alien who is inadmissible or deportable by reason of having committed a criminal offense covered in section 212(a)(2) or section 241(a)(2)(A)(iii), (B), (C), or (D) of the Immigration and Nationality Act (as in effect as of the

date of the enactment of this Act), or any offense covered by section 241(a)(2)(A)(ii) of such Act (as in effect on such date) for which both predicate offenses are, without regard to their date of commission, otherwise covered by section 241(a)(2)(A)(i) of such Act (as so in effect). (5) Transitional rule with regard to suspension of deportation.--Paragraphs (1) and (2) of section 240A(d) of the Immigration and Nationality Act (relating to continuous residence or physical presence) shall apply to notices to appear issued before, on, or after the date of the enactment of this Act. (6) Transition for certain family unity aliens.--The Attorney General may waive the application of section 212(a)(9) of the Immigration and Nationality Act, as inserted by section 301(b)(1) of this division, in the case of an alien who is provided benefits under the provisions of section 301 of the Immigration Act of 1990 (relating to family unity). (7) Limitation on suspension of deportation.--The Attorney General may not suspend the deportation and adjust the status under section 244 of the Immigration and Nationality Act of more than 4,000 aliens in any fiscal year (beginning after the date of the enactment of this Act). The previous sentence shall apply regardless of when an alien applied for such suspension and adjustment.

(d) Transitional References.--For purposes of carrying out the Immigration and Nationality Act, as amended by this subtitle-- (1) any reference in section 212(a)(1)(A) of such Act to the term ``inadmissible'' is deemed to include a reference to the term ``excludable'', and (2) any reference in law to an order of removal shall be deemed to include a reference to an order of exclusion and deportation or an order of deportation.

(e) Transition.--No period of time before the date of the enactment of this Act shall be included in the period of 1 year described in section 212(a)(6)(B)(i) of the Immigration and Nationality Act (as amended by section 301(c) of this division).

Subtitle B--Criminal Alien Provisions

(a) In General.--Section 101(a)(43) (8 U.S.C. 1101(a)(43)), as amended by section 441(e) of the Antiterrorism and Effective Death Penalty Act of 1996 (P.L. 104-132), is amended-- (1) in subparagraph (A), by inserting ``, rape, or sexual abuse of a minor'' after ``murder''; (2) in subparagraph (D), by striking ``$100,000'' and inserting ``$10,000''; (3) in subparagraphs (F), (G), (N), and (P), by striking ``is at least 5 years'' each place it appears and inserting ``at least one year''; (4) in subparagraph (J), by striking ``sentence of 5 years' imprisonment'' and inserting ``sentence of one year imprisonment''; (5) in subparagraph (K)(ii), by inserting ``if committed'' before ``for commercial advantage''; (6) in subparagraph (L)--

(A) by striking ``or'' at the end of clause (i), (B) by inserting ``or'' at the end of clause (ii), and (C) by adding at the end the following new clause: ``(iii) section 601 of the National Security Act of 1947 (relating to protecting the identity of undercover agents);''; (7) in subparagraph (M), by striking ``$200,000'' each place it appears and inserting ``$10,000''; (8) in subparagraph (N), by striking ``for which the term'' and all that follows and inserting the following: ``, except in the case of a first offense for which the alien has affirmatively shown that the alien committed the offense for the purpose of assisting, abetting, or aiding only the alien's spouse, child, or parent (and no other individual) to violate a provision of this Act''; (9) in subparagraph (P), by striking ``18 months'' and inserting ``12 months, except in the case of a first offense for which the alien has affirmatively shown that the alien committed the offense for the purpose of assisting, abetting, or aiding only the alien's spouse, child, or parent (and no other individual) to violate a provision of this Act''; (10) in subparagraph (R), by striking ``for which a sentence of 5 years' imprisonment or more may be imposed'' and inserting ``for which the term of imprisonment is at least one year''; and (11) in subparagraph (S), by striking ``for which a sentence of 5 years' imprisonment or more may be imposed'' and inserting ``for which the term of imprisonment is at least one year''.

(b) Effective Date of Definition.--Section 101(a)(43) (8 U.S.C. 1101(a)(43)) is amended by adding at the end the following new sentence: ``Notwithstanding any other provision of law (including any effective date), the term applies regardless of whether the conviction was entered before, on, or after the date of enactment of this paragraph.''. (c) Effective Date.--The amendments made by this section shall apply to actions taken on or after the date of the enactment of this Act, regardless of when the conviction occurred, and shall apply under section 276(b) of the Immigration and Nationality Act only to violations of section 276(a) of such Act occurring on or after such date.

(a) Definition.-- (1) In general.--Section 101(a) (8 U.S.C. 1101(a)) is amended by adding at the end the following new paragraph:

``(48)(A) The term `conviction' means, with respect to an alien, a formal judgment of guilt of the alien entered by a court or, if adjudication of guilt has been withheld, where-- ``(i) a judge or jury has found the alien guilty or the alien has entered a plea of guilty or nolo contendere or has admitted sufficient facts to warrant a finding of guilt, and ``(ii) the judge has ordered some form of punishment, penalty, or restraint on the alien's liberty to be imposed.

``(B) Any reference to a term of imprisonment or a sentence with respect to an offense is deemed to include the period of incarceration or confinement ordered by a court of law regardless of

any suspension of the imposition or execution of that imprisonment or sentence in whole or in part.''. (2) Conforming amendments.-- (A) Section 101(a)(43) (8 U.S.C. 1101(a)(43)) is amended by striking ``imposed (regardless of any suspension of imprisonment)'' each place it appears in subparagraphs (F), (G), (N), and (P). (B) Section 212(a)(2)(B) (8 U.S.C. 1182(a)(2)(B)) is amended by striking ``actually imposed''.

(b) Reference to Proof Provisions.--For provisions relating to proof of convictions, see subparagraphs (B) and (C) of section 240(c)(3) of the Immigration and Nationality Act, as inserted by section 304(a)(3) of this division. (c) Effective Date.--The amendments made by subsection (a) shall apply to convictions and sentences entered before, on, or after the date of the enactment of this Act. Subparagraphs (B) and (C) of section 240(c)(3) of the Immigration and Nationality Act, as inserted by section 304(a)(3) of this division, shall apply to proving such convictions.

CRIMINAL PAROLE.

Section 263(a) (8 U.S.C. 1303(a)) is amended by striking ``and (5)'' and inserting ``(5) aliens who are or have been on criminal probation or criminal parole within the United States, and (6)''.

(a) In General.--Section 276(a)(1) (8 U.S.C. 1326(a)(1)) is amended to read as follows: ``(1) has been arrested and deported, has been excluded and deported, or has departed the United States while an order of exclusion or deportation is outstanding, and thereafter''.

(b) Treatment of Stipulations.--The last sentence of section 276(b) (8 U.S.C. 1326(b)) is amended by inserting ``(or not during)'' after ``during''. (c) Effective Date.--The amendment made by subsection (a) shall apply to departures that occurred before, on, or after the date of the enactment of this Act, but only with respect to entries (and attempted entries) occurring on or after such date.

Section 2424 of title 18, United States Code, is amended-- (1) in the first undesignated paragraph of subsection (a)-- (A) by striking ``alien'' each place it appears; (B) by inserting after ``individual'' the first place it appears the following: ``, knowing or in reckless disregard of the fact that the individual is an alien''; and (C) by striking ``within three years after that individual has entered the United States from any country, party to the arrangement adopted July 25, 1902, for the suppression of the white-slave traffic''; (2) in the second undesignated paragraph of subsection (a)-- (A) by striking ``thirty'' and inserting ``five business''; and (B) by striking ``within three years after that individual has entered the United States from any country, party

to the said arrangement for the suppression of the white-slave traffic,''; and (3) in the text following the third undesignated paragraph of subsection (a), by striking ``two'' and inserting ``10''.

Subsection (a) of section 130002 of the Violent Crime Control and Law Enforcement Act of 1994 (Public Law 103- 322), as amended by section 432 of Public Law 104-132, is amended to read as follows:

``(a) Operation and Purpose.--The Commissioner of Immigration and Naturalization shall, under the authority of section 242(a)(3)(A) of the Immigration and Nationality Act operate a criminal alien identification system. The criminal alien identification system shall be used to assist Federal, State, and local law enforcement agencies in identifying and locating aliens who may be subject to removal by reason of their conviction of aggravated felonies, subject to prosecution under section 275 of such Act, not lawfully present in the United States, or otherwise removable. Such system shall include providing for recording of fingerprint records of aliens who have been previously arrested and removed into appropriate automated fingerprint identification systems.''.

Section 130002(b) of the Violent Crime Control and Law Enforcement Act of 1994 (8 U.S.C. 1252 note) is amended-- (1) by inserting ``and'' after ``1996;'', and (2) by striking paragraph (2) and all that follows through the period at the end and inserting the following: ``(2) $5,000,000 for each of fiscal years 1997 through 2001.''.

PROGRAM.

(a) Modification of Authority.-- (1) In general.--Section 241(i), as redesignated by section 306(a)(1) of this division, is amended-- (A) in paragraph (3)(A), by striking ``felony and sentenced to a term of imprisonment'' and inserting ``felony or two or more misdemeanors'', and (B) by adding at the end the following new paragraph: ``(6) To the extent of available appropriations, funds otherwise made available under this section with respect to a State (or political subdivision, including a municipality) for incarceration of an undocumented criminal alien may, at the discretion of the recipient of the funds, be used for the costs of imprisonment of such alien in a State, local, or municipal prison or jail.''. (2) Effective date.--The amendment made by paragraph (1) shall apply beginning with fiscal year 1997.

(b) Sense of the Congress With Respect to Program.-- (1) Findings.--The Congress finds as follows: (A) Of the $130,000,000 appropriated in fiscal year 1995 for the State Criminal Alien Assistance Program, the Department of Justice disbursed the first $43,000,000 to States on October 6, 1994, 32 days before the 1994 general election, and then failed to disburse the remaining $87,000,000 until January 31, 1996, 123 days after the end of fiscal year 1995.

(B) While H.R. 2880, the continuing appropriation measure funding certain operations of the Federal Government from January 26, 1996 to March 15, 1996, included $66,000,000 to reimburse States for the cost of incarcerating documented illegal immigrant felons, the Department of Justice failed to disburse any of the funds to the States during the period of the continuing appropriation. (2) Sense of the congress.--It is the sense of the Congress that-- (A) the Department of Justice was disturbingly slow in disbursing fiscal year 1995 funds under the State Criminal Alien Assistance Program to States after the initial grants were released just prior to the 1994 election; and (B) the Attorney General should make it a high priority to expedite the disbursement of Federal funds intended to reimburse States for the cost of incarcerating illegal immigrants, aiming for all State Criminal Alien Assistance Program funds to be disbursed during the fiscal year for which they are appropriated.

INCARCERATION FACILITY OF ANAHEIM, CALIFORNIA.

(a) Authority.--The Attorney General shall conduct a project demonstrating the feasibility of identifying, from among the individuals who are incarcerated in local governmental prison facilities prior to arraignment on criminal charges, those individuals who are aliens unlawfully present in the United States. (b) Description of Project.--The project authorized by subsection (a) shall include-- (1) the detail to incarceration facilities within the city of Anaheim, California and the county of Ventura, California, of an employee of the Immigration and Naturalization Service who has expertise in the identification of aliens unlawfully in the United States, and (2) provision of funds sufficient to provide for-- (A) access for such employee to records of the Service necessary to identify such aliens, and (B) in the case of an individual identified as such an alien, pre-arraignment reporting to the court regarding the Service's intention to remove the alien from the United States.

(c) Termination.--The authority under this section shall cease to be effective 6 months after the date of the enactment of this Act.

(a) Negotiations With Other Countries.--(1) Congress advises the President to begin to negotiate and renegotiate, not later than 90 days after the date of enactment of this Act, bilateral prisoner transfer treaties, providing for the incarceration, in the country of the alien's nationality, of any alien who-- (A) is a national of a country that is party to such a treaty; and (B) has been convicted of a criminal offense under Federal or State law and who-- (i) is not in lawful immigration status in the United States, or

(ii) on the basis of conviction for a criminal offense under Federal or State law, or on any other basis, is subject to deportation or removal under the Immigration and Nationality Act,

for the duration of the prison term to which the alien was sentenced for the offense referred to in subparagraph (B). Any such agreement may provide for the release of such alien pursuant to parole procedures of that country. (2) In entering into negotiations under paragraph (1), the President may consider providing for appropriate compensation, subject to the availability of appropriations, in cases where the United States is able to independently verify the adequacy of the sites where aliens will be imprisoned and the length of time the alien is actually incarcerated in the foreign country under such a treaty. (b) Sense of Congress.--It is the sense of the Congress that-- (1) the focus of negotiations for such agreements should be-- (A) to expedite the transfer of aliens unlawfully in the United States who are (or are about to be) incarcerated in United States prisons, (B) to ensure that a transferred prisoner serves the balance of the sentence imposed by the United States courts, (C) to eliminate any requirement of prisoner consent to such a transfer, and (D) to allow the Federal Government or the States to keep their original prison sentences in force so that transferred prisoners who return to the United States prior to the completion of their original United States sentences can be returned to custody for the balance of their prisons sentences; (2) the Secretary of State should give priority to concluding an agreement with any country for which the President determines that the number of aliens described in subsection (a) who are nationals of that country in the United States represents a significant percentage of all such aliens in the United States; and (3) no new treaty providing for the transfer of aliens from Federal, State, or local incarceration facilities to a foreign incarceration facility should permit the alien to refuse the transfer.

(c) Prisoner Consent.--Notwithstanding any other provision of law, except as required by treaty, the transfer of an alien from a Federal, State, or local incarceration facility under an agreement of the type referred to in subsection (a) shall not require consent of the alien. (d) Annual Report.--Not later than 90 days after the date of the enactment of this Act, and annually thereafter, the Attorney General shall submit a report to the Committees on the Judiciary of the House of Representatives and of the Senate stating whether each prisoner transfer treaty to which the United States is a party has been effective in the preceding 12 months in bringing about the return of deportable incarcerated aliens to the country of which they are nationals and in ensuring that they serve the balance of their sentences. (e) Training Foreign Law Enforcement Personnel.--(1) Subject to paragraph (2), the President shall direct the Border Patrol Academy and the Customs Service Academy to enroll for

training an appropriate number of foreign law enforcement personnel, and shall make appointments of foreign law enforcement personnel to such academies, as necessary to further the following United States law enforcement goals: (A) Preventing of drug smuggling and other cross-border criminal activity. (B) Preventing illegal immigration. (C) Preventing the illegal entry of goods into the United States (including goods the sale of which is illegal in the United States, the entry of which would cause a quota to be exceeded, or the appropriate duty or tariff for which has not been paid).

(2) The appointments described in paragraph (1) shall be made only to the extent there is capacity in such academies beyond what is required to train United States citizens needed in the Border Patrol and Customs Service, and only of personnel from a country with which the prisoner transfer treaty has been stated to be effective in the most recent report referred to in subsection (d). (f) Authorization of Appropriations.--There are authorized to be appropriated such sums as may be necessary to carry out this section.

(a) Report to Congress.--Not later than 180 days after the date of the enactment of this Act, the Secretary of State and the Attorney General shall submit to the Committees on the Judiciary of the House of Representatives and of the Senate a report that describes the use and effectiveness of the prisoner transfer treaties with the three countries with the greatest number of their nationals incarcerated in the United States in removing from the United States such incarcerated nationals. (b) Use of Treaty.--The report under subsection (a) shall include-- (1) the number of aliens convicted of a criminal offense in the United States since November 30, 1977, who would have been or are eligible for transfer pursuant to the treaties; (2) the number of aliens described in paragraph (1) who have been transferred pursuant to the treaties; (3) the number of aliens described in paragraph (2) who have been incarcerated in full compliance with the treaties; (4) the number of aliens who are incarcerated in a penal institution in the United States who are eligible for transfer pursuant to the treaties; and (5) the number of aliens described in paragraph (4) who are incarcerated in Federal, State, and local penal institutions in the United States.

(c) Recommendations.--The report under subsection (a) shall include the recommendations of the Secretary of State and the Attorney General to increase the effectiveness and use of, and full compliance with, the treaties. In considering the recommendations under this subsection, the Secretary and the Attorney General shall consult with such State and local officials in areas disproportionately impacted by aliens convicted of criminal offenses as the Secretary and the Attorney General consider appropriate. Such recommendations shall address--

(1) changes in Federal laws, regulations, and policies affecting the identification, prosecution, and deportation of aliens who have committed criminal offenses in the United States; (2) changes in State and local laws, regulations, and policies affecting the identification, prosecution, and deportation of aliens who have committed a criminal offense in the United States; (3) changes in the treaties that may be necessary to increase the number of aliens convicted of criminal offenses who may be transferred pursuant to the treaties; (4) methods for preventing the unlawful reentry into the United States of aliens who have been convicted of criminal offenses in the United States and transferred pursuant to the treaties; (5) any recommendations by appropriate officials of the appropriate government agencies of such countries regarding programs to achieve the goals of, and ensure full compliance with, the treaties; (6) whether the recommendations under this subsection require the renegotiation of the treaties; and (7) the additional funds required to implement each recommendation under this subsection.

Not later than 12 months after the date of the enactment of this Act, and annually thereafter, the Attorney General shall submit to the Committees on the Judiciary of the House of Representatives and of the Senate a report detailing-- (1) the number of illegal aliens incarcerated in Federal and State prisons for having committed felonies, stating the number incarcerated for each type of offense; (2) the number of illegal aliens convicted of felonies in any Federal or State court, but not sentenced to incarceration, in the year before the report was submitted, stating the number convicted for each type of offense; (3) programs and plans underway in the Department of Justice to ensure the prompt removal from the United States of criminal aliens subject to removal; and (4) methods for identifying and preventing the unlawful reentry of aliens who have been convicted of criminal offenses in the United States and removed from the United States.

ASSISTING AN ALIEN TO COMMIT AN OFFENSE UNDER THE CONTROLLED SUBSTANCES IMPORT AND EXPORT ACT.

(a) Review of Guidelines.--Not later than 6 months after the date of the enactment of this Act, the United States Sentencing Commission shall conduct a review of the guidelines applicable to an offender who conspires with, or aids or abets, a person who is not a citizen or national of the United States in committing any offense under section 1010 of the Controlled Substance Import and Export Act (21 U.S.C. 960). (b) Revision of Guidelines.--Following such review, pursuant to section 994(p) of title 28, United States Code, the Commission shall promulgate sentencing guidelines or amend existing sentencing guidelines to ensure an appropriately stringent sentence for such offenders.

DEPART, ILLEGAL REENTRY, AND PASSPORT AND VISA FRAUD.

(a) Failing to Depart.--The United States Sentencing Commission shall promptly promulgate, pursuant to section 994 of title 28, United States Code, amendments to the sentencing guidelines to make appropriate increases in the base offense level for offenses under section 242(e) and 276(b) of the Immigration and Nationality Act (8 U.S.C. 1252(e) and 1326(b)) to reflect the amendments made by section 130001 of the Violent Crime Control and Law Enforcement Act of 1994. (b) Passport and Visa Offenses.--The United States Sentencing Commission shall promptly promulgate, pursuant to section 994 of title 28, United States Code, amendments to the sentencing guidelines to make appropriate increases in the base offense level for offenses under chapter 75 of title 18, United States Code to reflect the amendments made by section 130009 of the Violent Crime Control and Law Enforcement Act of 1994.

Subtitle C--Revision of Grounds for Exclusion and Deportation

(a) In General.--Section 212(a)(1)(A) (8 U.S.C. 1182(a)(1)(A)) is amended-- (1) by redesignating clauses (ii) and (iii) as clauses (iii) and (iv), respectively, and (2) by inserting after clause (i) the following new clause: ``(ii) who seeks admission as an immigrant, or who seeks adjustment of status to the status of an alien lawfully admitted for permanent residence, and who has failed to present documentation of having received vaccination against vaccine- preventable diseases, which shall include at least the following diseases: mumps, measles, rubella, polio, tetanus and diphtheria toxoids, pertussis, influenza type B and hepatitis B, and any other vaccinations against vaccine-preventable diseases recommended by the Advisory Committee for Immunization Practices,''.

(b) Waiver.--Section 212(g) (8 U.S.C. 1182(g)) is amended by striking ``, or'' at the end of paragraph (1) and all that follows and inserting a semicolon and the following: ``in accordance with such terms, conditions, and controls, if any, including the giving of bond, as the Attorney General, in the discretion of the Attorney General after consultation with the Secretary of Health and Human Services, may by regulation prescribe; ``(2) subsection (a)(1)(A)(ii) in the case of any alien-- ``(A) who receives vaccination against the vaccine- preventable disease or diseases for which the alien has failed to present documentation of previous vaccination, ``(B) for whom a civil surgeon, medical officer, or panel physician (as those terms are defined by section 34.2 of title 42 of the Code of Federal Regulations) certifies, according to such regulations as the Secretary of Health and

Human Services may prescribe, that such vaccination would not be medically appropriate, or ``(C) under such circumstances as the Attorney General provides by regulation, with respect to whom the requirement of such a vaccination would be contrary to the alien's religious beliefs or moral convictions; or ``(3) subsection (a)(1)(A)(iii) in the case of any alien, in accordance with such terms, conditions, and controls, if any, including the giving of bond, as the Attorney General, in the discretion of the Attorney General after consultation with the Secretary of Health and Human Services, may by regulation prescribe.''.

(c) Effective Date.--The amendments made by this section shall apply with respect to applications for immigrant visas or for adjustment of status filed after September 30, 1996.

DOCUMENTATION TO TERRORISTS AS A BASIS FOR EXCLUSION FROM THE UNITED STATES.

(a) In General.--Section 212(a)(3)(B) (8 U.S.C. 1182(a)(3)(B)) is amended-- (1) by redesignating subclauses (III) and (IV) of clause (i) as subclauses (IV) and (V), respectively; (2) by inserting after subclause (II) of clause (i) the following new subclause: ``(III) has, under circumstances indicating an intention to cause death or serious bodily harm, incited terrorist activity,''; and (3) in clause (iii)(III), by inserting ``documentation or'' before ``identification'';

(b) Effective Date.--The amendments made by subsection (a) shall take effect on the date of the enactment of this Act and shall apply to incitement regardless of when it occurs.

Section 212(a)(5) (8 U.S.C. 1182(a)(5)) is amended-- (1) by redesignating subparagraph (C) as subparagraph (D), and (2) by inserting after subparagraph (B) the following new subparagraph: ``(C) Uncertified foreign health-care workers.--Any alien who seeks to enter the United States for the purpose of performing labor as a health-care worker, other than a physician, is excludable unless the alien presents to the consular officer, or, in the case of an adjustment of status, the Attorney General, a certificate from the Commission on Graduates of Foreign Nursing Schools, or a certificate from an equivalent independent credentialing organization approved by the Attorney General in consultation with the Secretary of Health and Human Services, verifying that-- ``(i) the alien's education, training, license, and experience-- ``(I) meet all applicable statutory and regulatory requirements for entry into the United States under the classification specified in the application;

``(II) are comparable with that required for an American health-care worker of the same type; and ``(III) are authentic and, in the case of a license, unencumbered; ``(ii) the alien has the level of competence in oral and written English considered by the Secretary of Health and Human Services, in consultation with the Secretary of Education, to be appropriate for health care work of the kind in which the alien will be engaged, as shown by an appropriate score on one or more nationally recognized, commercially available, standardized assessments of the applicant's ability to speak and write; and ``(iii) if a majority of States licensing the profession in which the alien intends to work recognize a test predicting the success on the profession's licensing or certification examination, the alien has passed such a test or has passed such an examination. For purposes of clause (ii), determination of the standardized tests required and of the minimum scores that are appropriate are within the sole discretion of the Secretary of Health and Human Services and are not subject to further administrative or judicial review.''.

(a) Exclusion of Aliens Who Have Falsely Claimed United States Citizenship.--Section 212(a)(6)(C) (8 U.S.C. 1182(a)(6)(C)) is amended-- (1) by redesignating clause (ii) as clause (iii), and (2) by inserting after clause (i) the following new clause: ``(ii) Falsely claiming citizenship.--Any alien who falsely represents, or has falsely represented, himself or herself to be a citizen of the United States for any purpose or benefit under this Act (including section 274A) or any other Federal or State law is excludable.''.

(b) Deportation of Aliens Who Have Falsely Claimed United States Citizenship.--Section 241(a)(3) (8 U.S.C. 1251(a)(3)) is amended by adding at the end the following new subparagraph: ``(D) Falsely claiming citizenship.--Any alien who falsely represents, or has falsely represented, himself to be a citizen of the United States for any purpose or benefit under this Act (including section 274A) or any Federal or State law is deportable.''.

(c) Effective Date.--The amendments made by this section shall apply to representations made on or after the date of the enactment of this Act.

274C VIOLATORS.

(a) Exclusion Grounds.--Section 212 (8 U.S.C. 1182) is amended-- (1) by amending subparagraph (F) of subsection (a)(6) to read as follows: ``(F) Subject of civil penalty.--

``(i) In general.--An alien who is the subject of a final order for violation of section 274C is inadmissible. ``(ii) Waiver authorized.--For provision authorizing waiver of clause (i), see subsection (d)(12).''; and (2) by adding at the end of subsection (d) the following new paragraph:

``(12) The Attorney General may, in the discretion of the Attorney General for humanitarian purposes or to assure family unity, waive application of clause (i) of subsection (a)(6)(F)-- ``(A) in the case of an alien lawfully admitted for permanent residence who temporarily proceeded abroad voluntarily and not under an order of deportation or removal and who is otherwise admissible to the United States as a returning resident under section 211(b), and ``(B) in the case of an alien seeking admission or adjustment of status under section 201(b)(2)(A) or under section 203(a),

if no previous civil money penalty was imposed against the alien under section 274C and the offense was committed solely to assist, aid, or support the alien's spouse or child (and not another individual). No court shall have jurisdiction to review a decision of the Attorney General to grant or deny a waiver under this paragraph.''. (b) Ground of Deportation.--Subparagraph (C) of section 241(a)(3) (8 U.S.C. 1251(a)(3)), before redesignation by section 305(a)(2) of this division, is amended to read as follows: ``(C) Document fraud.-- ``(i) In general.--An alien who is the subject of a final order for violation of section 274C is deportable. ``(ii) Waiver authorized.--The Attorney General may waive clause (i) in the case of an alien lawfully admitted for permanent residence if no previous civil money penalty was imposed against the alien under section 274C and the offense was incurred solely to assist, aid, or support the alien's spouse or child (and no other individual). No court shall have jurisdiction to review a decision of the Attorney General to grant or deny a waiver under this clause.''.

(a) In General.--Section 212(a)(6) (8 U.S.C. 1182(a)(6)) is amended by adding at the end the following new subparagraph: ``(G) Student visa abusers.--An alien who obtains the status of a nonimmigrant under section 101(a)(15)(F)(i) and who violates a term or condition of such status under section 214(l) is excludable until the alien has been outside the United States for a continuous period of 5 years after the date of the violation.''.

(b) Effective Date.--The amendment made by subsection (a) shall apply to aliens who obtain the status of a nonimmigrant under section 101(a)(15)(F) of the Immigration and Nationality Act after the end of the 60-day period beginning on the date of the enactment of this Act, including aliens whose status as such a nonimmigrant is extended after the end of such period.

(a) Exclusion of Aliens Who Have Unlawfully Voted.--Section 212(a)(10) (8 U.S.C. 1182(a)(10)), as redesignated by section

301(b) of this division, is amended by adding at the end the following new subparagraph: ``(D) Unlawful voters.--Any alien who has voted in violation of any Federal, State, or local constitutional provision, statute, ordinance, or regulation is excludable.''.

(b) Deportation of Aliens Who Have Unlawfully Voted.--Section 241(a) (8 U.S.C. 1251(a)), before redesignation by section 305(a)(2) of this division, is amended by adding at the end the following new paragraph: ``(6) Unlawful voters.--Any alien who has voted in violation of any Federal, State, or local constitutional provision, statute, ordinance, or regulation is deportable.''.

(c) Effective Date.--The amendments made by this section shall apply to voting occurring before, on, or after the date of the enactment of this Act.

(a) In General.--Section 212(h) (8 U.S.C. 1182(h)) is amended by adding at the end the following: ``No waiver shall be granted under this subsection in the case of an alien who has previously been admitted to the United States as an alien lawfully admitted for permanent residence if either since the date of such admission the alien has been convicted of an aggravated felony or the alien has not lawfully resided continuously in the United States for a period of not less than 7 years immediately preceding the date of initiation of proceedings to remove the alien from the United States. No court shall have jurisdiction to review a decision of the Attorney General to grant or deny a waiver under this subsection.''.

(b) Effective Date.--The amendment made by subsection (a) shall be effective on the date of the enactment of this Act and shall apply in the case of any alien who is in exclusion or deportation proceedings as of such date unless a final administrative order in such proceedings has been entered as of such date.

CERTAIN ALIEN.

Subsection (i) of section 212 (8 U.S.C. 1182) is amended to read as follows: ``(i)(1) The Attorney General may, in the discretion of the Attorney General, waive the application of clause (i) of subsection (a)(6)(C) in the case of an immigrant who is the spouse, son, or daughter of a United States citizen or of an alien lawfully admitted for permanent residence if it is established to the satisfaction of the Attorney General that the refusal of admission to the United States of such immigrant alien would result in extreme hardship to the citizen or lawfully resident spouse or parent of such an alien. ``(2) No court shall have jurisdiction to review a decision or action of the Attorney General regarding a waiver under paragraph (1).''.

DEPORTATION.

(a) In General.--Section 241(a)(2) (8 U.S.C. 1251(a)(2)) is amended by adding at the end the following:

``(E) Crimes of domestic violence, stalking, or violation of protection order, crimes against children and.-- ``(i) Domestic violence, stalking, and child abuse.--Any alien who at any time after entry is convicted of a crime of domestic violence, a crime of stalking, or a crime of child abuse, child neglect, or child abandonment is deportable. For purposes of this clause, the term `crime of domestic violence' means any crime of violence (as defined in section 16 of title 18, United States Code) against a person committed by a current or former spouse of the person, by an individual with whom the person shares a child in common, by an individual who is cohabiting with or has cohabited with the person as a spouse, by an individual similarly situated to a spouse of the person under the domestic or family violence laws of the jurisdiction where the offense occurs, or by any other individual against a person who is protected from that individual's acts under the domestic or family violence laws of the United States or any State, Indian tribal government, or unit of local government. ``(ii) Violators of protection orders.--Any alien who at any time after entry is enjoined under a protection order issued by a court and whom the court determines has engaged in conduct that violates the portion of a protection order that involves protection against credible threats of violence, repeated harassment, or bodily injury to the person or persons for whom the protection order was issued is deportable. For purposes of this clause, the term `protection order' means any injunction issued for the purpose of preventing violent or threatening acts of domestic violence, including temporary or final orders issued by civil or criminal courts (other than support or child custody orders or provisions) whether obtained by filing an independent action or as a pendente lite order in another proceeding.''.

(b) Effective Date.--The amendment made by subsection (a) shall apply to convictions, or violations of court orders, occurring after the date of the enactment of this Act.

WAIVER FROM EXCLUSION OR DEPORTATION FOR SMUGGLING.

(a) Exclusion.--Section 212(d)(11) (8 U.S.C. 1182(d)(11)) is amended by inserting ``an individual who at the time of such action was'' after ``aided only''. (b) Deportation.--Section 241(a)(1)(E)(iii) (8 U.S.C. 1251(a)(1)(E)(iii)) is amended by inserting ``an individual who at the time of the offense was'' after ``aided only''. (c) Effective Date.--The amendments made by this section shall apply to applications for waivers filed before, on, or after the date of the enactment of this Act, but shall not apply to such an application for which a final determination has been made as of the date of the enactment of this Act.

AVOID UNITED STATES TAXATION.

(a) In General.--Section 212(a)(10) (8 U.S.C. 1182(a)(10)), as redesignated by section 301(b) of this division and as amended by section 347(a) of this division, is amended by adding at the end the following: ``(E) Former citizens who renounced citizenship to avoid taxation.--Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States is excludable.''.

(b) Effective Date.--The amendment made by subsection (a) shall apply to individuals who renounce United States citizenship on and after the date of the enactment of this Act.

(a) Deportation for High Speed Flight.--For provision making high speed flight from an immigration checkpoint subject to deportation, see section 108(c) of this division. (b) Inadmissibility of Aliens Previously Removed and Unlawfully Present.--For provision making aliens previously removed and unlawfully present in the United States inadmissible, see section 301(b) of this division. (c) Inadmissibility of Illegal Entrants.--For provision revising the ground of inadmissibility for illegal entrants and immigration violators, see section 301(c) of this division. (d) Deportation for Visa Violators.--For provision revising the ground of deportation for illegal entrants, see section 301(d) of this division. (e) Labor Certifications for Professional Athletes.--For provision providing for continued validity of labor certifications and classification petitions for professional athletes, see section 624 of this division.

Subtitle D--Changes in Removal of Alien Terrorist Provisions

(a) Limitation on Provision of Summaries; Use of Special Attorneys in Challenges to Classified Information.-- (1) No provision of summary in certain cases.--Section 504(e)(3)(D) (8 U.S.C. 1534(e)(3)(D)) is amended-- (A) in clause (ii), by inserting before the period at the end the following: ``unless the judge makes the findings under clause (iii)'', and (B) by adding at the end the following new clause: ``(iii) Findings.--The findings described in this clause are, with respect to an alien, that-- ``(I) the continued presence of the alien in the United States would likely cause serious and irreparable harm to the national security or death or serious bodily injury to any person, and ``(II) the provision of the summary would likely cause serious and irreparable harm to the national

security or death or serious bodily injury to any person.''. (2) Special challenge procedures.--Section 504(e)(3) (8 U.S.C. 1534(e)(3)) is amended by adding at the end the following new subparagraphs: ``(E) Continuation of hearing without summary.--If a judge makes the findings described in subparagraph (D)(iii)-- ``(i) if the alien involved is an alien lawfully admitted for permanent residence, the procedures described in subparagraph (F) shall apply; and ``(ii) in all cases the special removal hearing shall continue, the Department of Justice shall cause to be delivered to the alien a statement that no summary is possible, and the classified information submitted in camera and ex parte may be used pursuant to this paragraph. ``(F) Special procedures for access and challenges to classified information by special attorneys in case of lawful permanent aliens.-- ``(i) In general.--The procedures described in this subparagraph are that the judge (under rules of the removal court) shall designate a special attorney to assist the alien-- ``(I) by reviewing in camera the classified information on behalf of the alien, and ``(II) by challenging through an in camera proceeding the veracity of the evidence contained in the classified information. ``(ii) Restrictions on disclosure.--A special attorney receiving classified information under clause (i)-- ``(I) shall not disclose the information to the alien or to any other attorney representing the alien, and ``(II) who discloses such information in violation of subclause (I) shall be subject to a fine under title 18, United States Code, imprisoned for not less than 10 years nor more than 25 years, or both.''. (3) Appeals.--Section 505(c) (8 U.S.C. 1535(c)) is amended-- (A) in paragraph (1), by striking ``The decision'' and inserting ``Subject to paragraph (2), the decision''; (B) in paragraph (3)(D), by inserting before the period at the end the following: ``, except that in the case of a review under paragraph (2) in which an alien lawfully admitted for permanent residence was denied a written summary of classified information under section 504(c)(3), the Court of Appeals shall review questions of fact de novo''; (C) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and (D) by inserting after paragraph (1) the following new paragraph: ``(2) Automatic appeals in cases of permanent resident aliens in which no summary provided.--

``(A) In general.--Unless the alien waives the right to a review under this paragraph, in any case involving an alien lawfully admitted for permanent residence who is denied a written summary of classified information under section 504(e)(3) and with respect to which the procedures described in section 504(e)(3)(F) apply, any order issued by the judge shall be reviewed by the Court of Appeals for the District of Columbia Circuit. ``(B) Use of special attorney.--With respect to any issue relating to classified information that arises in such review, the alien shall be represented only by the special attorney designated under section 504(e)(3)(F)(i) on behalf of the alien.''. (4) Establishment of panel of special attorneys.--Section 502 (8 U.S.C. 1532) is amended by adding at the end the following new subsection:

``(e) Establishment of Panel of Special Attorneys.--The removal court shall provide for the designation of a panel of attorneys each of whom-- ``(1) has a security clearance which affords the attorney access to classified information, and ``(2) has agreed to represent permanent resident aliens with respect to classified information under section 504(e)(3) in accordance with (and subject to the penalties under) this title.''. (5) Definition of special attorney.--Section 501 (8 U.S.C. 1531) is amended-- (A) by striking ``and'' at the end of paragraph (5), (B) by striking the period at the end of paragraph (6) and inserting ``; and'', and (C) by adding at the end the following new paragraph: ``(7) the term `special attorney' means an attorney who is on the panel established under section 502(e).''.

(b) Other Provisions Relating to Classified Information.-- (1) Introduction of classified information.--Section 504(e) (8 U.S.C. 1534(e)) is amended-- (A) in paragraph (1)-- (i) by inserting after ``(A)'' the following: ``the Government is authorized to use in a removal proceedings the fruits of electronic surveillance and unconsented physical searches authorized under the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C. 1801 et seq.) without regard to subsections (c), (e), (f), (g), and (h) of section 106 of that Act and'', and (ii) by striking ``the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C. 1801 et seq.)'' and inserting ``such Act''; and (B) by striking the period at the end of paragraph (3)(A) and inserting the following: ``and neither the alien nor the public shall be informed of such evidence or its sources other than through reference to the summary provided pursuant to this paragraph. Notwithstanding the previous sentence, the Department of Justice may, in its discretion and, in the case of classified information, after coordination with the originating agency, elect to introduce such evidence in open session.''.

(2) Maintenance of confidentiality of classified information in arguments.--Section 504(f) (8 U.S.C. 1534(f)) is amended by adding at the end the following: ``The judge may allow any part of the argument that refers to evidence received in camera and ex parte to be heard in camera and ex parte.''. (3) Maintenance of confidentiality of classified information in orders.--Section 504(j) (8 U.S.C. 1534(j)) is amended by adding at the end the following: ``Any portion of the order that would reveal the substance or source of information received in camera and ex parte pursuant to subsection (e) shall not be made available to the alien or the public.''.

Section 212(a)(3)(B)(i)(IV) (8 U.S.C. 1182(a)(3)(B)(i)(VI)), as inserted by section 411(1)(C) of Public Law 104-132, is amended by inserting ``which the alien knows or should have known is a terrorist organization'' after ``219,''.

DESIGNATIONS.

Section 219(b)(3) (8 U.S.C. 1189(b)(3)), as added by section 302(a) of Public Law 104-132, is amended-- (1) by striking ``or'' at the end of subparagraph (B), (2) by striking the period at the end of subparagraph (C) and inserting a semicolon, and (3) by adding at the end the following: ``(D) lacking substantial support in the administrative record taken as a whole or in classified information submitted to the court under paragraph (2), or ``(E) not in accord with the procedures required by law.''.

Section 504(k) (8 U.S.C. 1534(k)) is amended-- (1) by redesignating paragraphs (4) and (5) as paragraphs (5) and (6), and (2) by inserting after paragraph (3) the following new paragraph: ``(4) voluntary departure under section 244(e);''.

The amendments made by this subtitle shall be effective as if included in the enactment of subtitle A of title IV of the Antiterrorism and Effective Death Penalty Act of 1996 (Public Law 104-132).

Subtitle E--Transportation of Aliens

(a) Stowaway Defined.--Section 101(a) (8 U.S.C. 1101(a)), as amended by section 322(a)(1) of this division, is amended by adding at the end the following new paragraph:

``(49) The term `stowaway' means any alien who obtains transportation without the consent of the owner, charterer, master or person in command of any vessel or aircraft through concealment aboard such vessel or aircraft. A passenger who boards with a valid ticket is not to be considered a stowaway.''. (b) Effective Date.--The amendment made by subsection (a) shall take effect on the date of the enactment of this Act.

(a) Coverage of Noncontiguous Territory.--Section 238 (8 U.S.C. 1228), before redesignation as section 233 under section 308(b)(4) of this division, is amended-- (1) in the heading, by striking ``contiguous'', and (2) by striking ``contiguous'' each place it appears in subsections (a), (b), and (d).

(b) Coverage of Railroad Train.--Subsection (d) of such section is further amended by inserting ``or railroad train'' after ``aircraft''.

Subtitle F--Additional Provisions

(a) Definition of Term.--Paragraph (4) of section 101(b) (8 U.S.C. 1101(b)) is amended to read as follows: ``(4) The term `immigration judge' means an attorney whom the Attorney General appoints as an administrative judge within the Executive Office for Immigration Review, qualified to conduct specified classes of proceedings, including a hearing under section 240. An immigration judge shall be subject to such supervision and shall perform such duties as the Attorney General shall prescribe, but shall not be employed by the Immigration and Naturalization Service.''. (b) Substitution for Term ``Special Inquiry Officer''.--The Immigration and Nationality Act is amended by striking ``a special inquiry officer'', ``A special inquiry officer'', ``special inquiry officer'', and ``special inquiry officers'' and inserting ``an immigration judge'', ``An immigration judge'', ``immigration judge'', and ``immigration judges'', respectively, each place it appears in the following sections: (1) Section 106(a)(2) (8 U.S.C. 1105a(a)(2)), before its repeal by section 306(c) of this division. (2) Section 209(a)(2) (8 U.S.C. 1159(a)(2)). (3) Section 234 (8 U.S.C. 1224), before redesignation by section 308(b) of this division. (4) Section 235 (8 U.S.C. 1225), before amendment by section 302(a) of this division. (5) Section 236 (8 U.S.C. 1226), before amendment by section 303 of this division. (6) Section 242(b) (8 U.S.C. 1252(b)), before amendment by section 306(a)(2) of this division. (7) Section 242B(d)(1) (8 U.S.C. 1252b(d)(1)), before repeal by section 306(b)(6) of this division. (8) Section 273(d) (8 U.S.C. 1323(d)), before its repeal by section 308(e)(13) of this division. (9) Section 292 (8 U.S.C. 1362).

(c) Compensation for Immigration Judges.--

(1) In general.--There shall be four levels of pay for immigration judges, under the Immigration Judge Schedule (designated as IJ-1, 2, 3, and 4, respectively), and each such judge shall be paid at one of those levels, in accordance with the provisions of this subsection. (2) Rates of pay.-- (A) The rates of basic pay for the levels established under paragraph (1) shall be as follows:

IJ-1..................70% of the next to highest rate of basic pay for the Senior Executive Service IJ-2..................80% of the next to highest rate of basic pay for the Senior Executive Service IJ-3..................90% of the next to highest rate of basic pay for the Senior Executive Service IJ-4..................92% of the next to highest rate of basic pay for the Senior Executive Service.

(B) Locality pay, where applicable, shall be calculated into the basic pay for immigration judges. (3) Appointment.-- (A) Upon appointment, an immigration judge shall be paid at IJ-1, and shall be advanced to IJ-2 upon completion of 104 weeks of service, to IJ-3 upon completion of 104 weeks of service in the next lower rate, and to IJ-4 upon completion of 52 weeks of service in the next lower rate. (B) Notwithstanding subparagraph (A), the Attorney General may provide for appointment of an immigration judge at an advanced rate under such circumstances as the Attorney General may determine appropriate. (4) Transition.--Immigration judges serving as of the effective date shall be paid at the rate that corresponds to the amount of time, as provided under paragraph (3)(A), that they have served as an immigration judge, and in no case shall be paid less after the effective date than the rate of pay prior to the effective date.

(d) Effective Dates.-- (1) Subsections (a) and (b) shall take effect on the date of the enactment of this Act. (2) Subsection (c) shall take effect 90 days after the date of the enactment of this Act.

Section 103(a) (8 U.S.C. 1103(a)) is amended-- (1) inserting ``(1)'' after ``(a)'', (2) by designating each sentence (after the first sentence) as a separate paragraph with appropriate consecutive numbering and initial indentation, (3) by adding at the end the following new paragraph:

``(8) In the event the Attorney General determines that an actual or imminent mass influx of aliens arriving off the coast of the United States, or near a land border, presents urgent circumstances requiring an immediate Federal response, the Attorney General may authorize any State or local law enforcement officer, with the consent of the head of the department, agency, or establishment under whose jurisdiction the individual is serving, to perform or exercise any of the powers, privileges, or duties conferred or imposed by this Act or regulations issued thereunder upon officers or employees of the Service.''.

COMMISSIONER.

Section 103 (8 U.S.C. 1103) is amended-- (1) by adding at the end of subsection (a) the following new paragraph:

``(9) The Attorney General, in support of persons in administrative detention in non-Federal institutions, is authorized-- ``(A) to make payments from funds appropriated for the administration and enforcement of the laws relating to immigration, naturalization, and alien registration for necessary clothing, medical care, necessary guard hire, and the housing, care, and security of persons detained by the Service pursuant to Federal law under an agreement with a State or political subdivision of a State; and ``(B) to enter into a cooperative agreement with any State, territory, or political subdivision thereof, for the necessary construction, physical renovation, acquisition of equipment, supplies or materials required to establish acceptable conditions of confinement and detention services in any State or unit of local government which agrees to provide guaranteed bed space for persons detained by the Service.''; and (2) by adding at the end of subsection (c), as redesignated by section 102(d)(1) of this division, the following: ``The Commissioner may enter into cooperative agreements with State and local law enforcement agencies for the purpose of assisting in the enforcement of the immigration laws.''.

(a) In General.--Section 242A(d) (8 U.S.C. 1252a(d)), as added by section 224(a) of Immigration and Nationality Technical Corrections Act of 1994 and before redesignation by section 308(b)(5) of this division, is amended-- (1) in paragraph (1), by striking ``whose criminal conviction causes such alien to be deportable under section 241(a)(2)(A)'' and inserting ``who is deportable''; (2) in paragraph (4), by striking ``without a decision on the merits''; and (3) by adding at the end the following new paragraph: ``(5) Stipulated judicial order of deportation.--The United States Attorney, with the concurrence of the Commissioner, may, pursuant to Federal Rule of Criminal Procedure 11, enter into a plea agreement which calls for the alien, who is deportable under this Act, to waive the right to notice and a hearing under this section, and stipulate to the entry of a judicial order of deportation from the United States as a condition of the plea agreement or as a condition of probation or supervised release, or both. The United States district court, in both felony and misdemeanor cases, and a United States magistrate judge in misdemeanor cases, may accept such a stipulation and shall have jurisdiction to enter a judicial order of deportation pursuant to the terms of such stipulation.''.

(b) Deportation As a Condition of Probation.--Section 3563(b) of title 18, United States Code, is amended-- (1) by striking ``or'' at the end of paragraph (20); (2) by redesignating paragraph (21) as paragraph (22); and

(3) by inserting after paragraph (20) the following new paragraph: ``(21) be ordered deported by a United States district court, or United States magistrate judge, pursuant to a stipulation entered into by the defendant and the United States under section 242A(d)(5) of the Immigration and Nationality Act, except that, in the absence of a stipulation, the United States district court or a United States magistrate judge, may order deportation as a condition of probation, if, after notice and hearing pursuant to such section, the Attorney General demonstrates by clear and convincing evidence that the alien is deportable; or''.

(c) Effective Date.--The amendment made by subsection (a)(2) shall be effective as if included in the enactment of section 224(a) of the Immigration and Nationality Technical Corrections Act of 1994.

Section 245(c) (8 U.S.C. 1255(c)) is amended-- (1) by striking ``or (6)'' and inserting ``(6)''; and (2) by inserting before the period at the end the following: ``; (7) any alien who seeks adjustment of status to that of an immigrant under section 203(b) and is not in a lawful nonimmigrant status; or (8) any alien who was employed while the alien was an unauthorized alien, as defined in section 274A(h)(3), or who has otherwise violated the terms of a nonimmigrant visa''.

(a) Increase in Fee.--Section 245(i) (8 U.S.C. 1255(i)), as added by section 506(b) of Public Law 103-317, is amended-- (1) in paragraph (1), by striking ``five times the fee required for the processing of applications under this section'' and inserting ``$1,000''; and (2) by amending paragraph (3) to read as follows:

``(3)(A) The portion of each application fee (not to exceed $200) that the Attorney General determines is required to process an application under this section and is remitted to the Attorney General pursuant to paragraphs (1) and (2) of this subsection shall be disposed of by the Attorney General as provided in subsections (m), (n), and (o) of section 286. ``(B) Any remaining portion of such fees remitted under such paragraphs shall be deposited by the Attorney General into the Immigration Detention Account established under section 286(s).''. (b) Immigration Detention Account.--Section 286 (8 U.S.C. 1356) is amended by adding at the end the following new subsection: ``(s) Immigration Detention Account.--(1) There is established in the general fund of the Treasury a separate account which shall be known as the `Immigration Detention Account'. Notwithstanding any other section of this title, there shall be deposited as offsetting receipts into the Immigration Detention Account amounts described in section 245(i)(3)(B) to remain available until expended. ``(2)(A) The Secretary of the Treasury shall refund out of the Immigration Detention Account to any appropriation the amount paid out of such appropriation for expenses incurred by the Attorney General for the detention of aliens under sections 236(c) and 241(a).

``(B) The amounts which are required to be refunded under subparagraph (A) shall be refunded at least quarterly on the basis of estimates made by the Attorney General of the expenses referred to in subparagraph (A). Proper adjustments shall be made in the amounts subsequently refunded under subparagraph (A) to the extent prior estimates were in excess of, or less than, the amount required to be refunded under subparagraph (A). ``(C) The amounts required to be refunded from the Immigration Detention Account for fiscal year 1997 and thereafter shall be refunded in accordance with estimates made in the budget request of the Attorney General for those fiscal years. Any proposed changes in the amounts designated in such budget requests shall only be made after notification to the Committees on Appropriations of the House of Representatives and the Senate in accordance with section 605 of Public Law 104-134. ``(D) The Attorney General shall prepare and submit annually to the Congress statements of financial condition of the Immigration Detention Account, including beginning account balance, revenues, withdrawals, and ending account balance and projection for the ensuing fiscal year.''. (c) Effective Date.--The amendments made by this section shall apply to applications made on or after the end of the 90-day period beginning on the date of the enactment of this Act.

(a) Limitation on Court Jurisdiction.--Section 245A(f)(4) (8 U.S.C. 1255a(f)(4)) is amended by adding at the end the following new subparagraph: ``(C) Jurisdiction of courts.--Notwithstanding any other provision of law, no court shall have jurisdiction of any cause of action or claim by or on behalf of any person asserting an interest under this section unless such person in fact filed an application under this section within the period specified by subsection (a)(1), or attempted to file a complete application and application fee with an authorized legalization officer of the Service but had the application and fee refused by that officer.''.

(b) Effective Date.--The amendment made by subsection (a) shall be effective as if included in the enactment of the Immigration Reform and Control Act of 1986.

(a) In General.--Section 246(a) (8 U.S.C. 1256(a)) is amended by adding at the end the following sentence: ``Nothing in this subsection shall require the Attorney General to rescind the alien's status prior to commencement of procedures to remove the alien under section 240, and an order of removal issued by an immigration judge shall be sufficient to rescind the alien's status.''. (b) Effective Date.--The amendment made by subsection (a) shall take effect on the title III-A effective date (as defined in section 309(a) of this division).

(a) In General.--Sections 274A(e)(7) and 274C(d)(4) (8 U.S.C. 1324a(e)(7), 1324c(d)(4)) are each amended-- (1) by striking ``unless, within 30 days, the Attorney General modifies or vacates the decision and order'' and inserting ``unless either (A) within 30 days, an official delegated by

regulation to exercise review authority over the decision and order modifies or vacates the decision and order, or (B) within 30 days of the date of such a modification or vacation (or within 60 days of the date of decision and order of an administrative law judge if not so modified or vacated) the decision and order is referred to the Attorney General pursuant to regulations''; and (2) by striking ``a final order'' and inserting ``the final agency decision and order''.

(b) Effective Date.--The amendments made by subsection (a) shall apply to orders issued on or after the date of the enactment of this Act.

(a) In General.--The Immigration and Nationality Act is amended by inserting after section 274C the following new section:

``civil penalties for failure to depart

``Sec. 274D. (a) In General.--Any alien subject to a final order of removal who-- ``(1) willfully fails or refuses to-- ``(A) depart from the United States pursuant to the order, ``(B) make timely application in good faith for travel or other documents necessary for departure, or ``(C) present for removal at the time and place required by the Attorney General; or ``(2) conspires to or takes any action designed to prevent or hamper the alien's departure pursuant to the order,

shall pay a civil penalty of not more than $500 to the Commissioner for each day the alien is in violation of this section. ``(b) Construction.--Nothing in this section shall be construed to diminish or qualify any penalties to which an alien may be subject for activities proscribed by section 243(a) or any other section of this Act.''. (b) Clerical Amendment.--The table of contents is amended by inserting after the item relating to section 274C the following new item:

``Sec. 274D. Civil penalties for failure to depart.''.

(c) Effective Date.--The amendment made by subsection (a) shall apply to actions occurring on or after the title III-A effective date (as defined in section 309(a) of this division).

(a) In General.--Section 279 (8 U.S.C. 1329) is amended-- (1) by amending the first sentence to read as follows: ``The district courts of the United States shall have jurisdiction of all causes, civil and criminal, brought by the United States that arise under the provisions of this title.'', and (2) by adding at the end the following new sentence: ``Nothing in this section shall be construed as providing jurisdiction for suits against the United States or its agencies or officers.''.

(b) Effective Date.--The amendments made by subsection (a) shall apply to actions filed after the date of the enactment of this Act.

(a) In General.--Subsection (b) of section 280 (8 U.S.C. 1330) is amended to read as follows: ``(b)(1) There is established in the general fund of the Treasury a separate account which shall be known as the `Immigration Enforcement Account'. Notwithstanding any other section of this title, there shall be deposited as offsetting receipts into the Immigration Enforcement Account amounts described in paragraph (2) to remain available until expended. ``(2) The amounts described in this paragraph are the following: ``(A) The increase in penalties collected resulting from the amendments made by sections 203(b) and 543(a) of the Immigration Act of 1990. ``(B) Civil penalties collected under sections 240B(d), 274C, 274D, and 275(b).

``(3)(A) The Secretary of the Treasury shall refund out of the Immigration Enforcement Account to any appropriation the amount paid out of such appropriation for expenses incurred by the Attorney General for activities that enhance enforcement of provisions of this title. Such activities include-- ``(i) the identification, investigation, apprehension, detention, and removal of criminal aliens; ``(ii) the maintenance and updating of a system to identify and track criminal aliens, deportable aliens, inadmissible aliens, and aliens illegally entering the United States; and ``(iii) for the repair, maintenance, or construction on the United States border, in areas experiencing high levels of apprehensions of illegal aliens, of structures to deter illegal entry into the United States.

``(B) The amounts which are required to be refunded under subparagraph (A) shall be refunded at least quarterly on the basis of estimates made by the Attorney General of the expenses referred to in subparagraph (A). Proper adjustments shall be made in the amounts subsequently refunded under subparagraph (A) to the extent prior estimates were in excess of, or less than, the amount required to be refunded under subparagraph (A). ``(C) The amounts required to be refunded from the Immigration Enforcement Account for fiscal year 1996 and thereafter shall be refunded in accordance with estimates made in the budget request of the Attorney General for those fiscal years. Any proposed changes in the amounts designated in such budget requests shall only be made after notification to the Committees on Appropriations of the House of Representatives and the Senate in accordance with section 605 of Public Law 104-134. ``(D) The Attorney General shall prepare and submit annually to the Congress statements of financial condition of the Immigration Enforcement Account, including beginning account balance, revenues, withdrawals, and ending account balance and projection for the ensuing fiscal year.''. (b) Immigration User Fee Account.--Section 286(h)(1)(B) (8 U.S.C. 1356(h)(1)(B)) is amended by striking ``271'' and inserting ``243(c), 271,''. (c) Effective Date.--The amendments made by this section shall apply to fines and penalties collected on or after the date of the enactment of this Act.

(a) In General.--Section 301(e) of the Immigration Act of 1990 (8 U.S.C. 1255a note) is amended-- (1) by striking ``or'' at the end of paragraph (1), (2) by striking the period at the end of paragraph (2) and inserting ``, or'', and (3) by adding at the end the following new paragraph: ``(3) has committed an act of juvenile delinquency which if committed by an adult would be classified as-- ``(A) a felony crime of violence that has an element the use or attempted use of physical force against another individual, or ``(B) a felony offense that by its nature involves a substantial risk that physical force against another individual may be used in the course of committing the offense.''.

(b) Effective Date.--The amendments made by subsection (a) shall apply to benefits granted or extended after the date of the enactment of this Act.

INFORMATION.

(a) In General.--Except as provided in subsection (b), in no case may the Attorney General, or any other official or employee of the Department of Justice (including any bureau or agency of such Department)-- (1) make an adverse determination of admissibility or deportability of an alien under the Immigration and Nationality Act using information furnished solely by-- (A) a spouse or parent who has battered the alien or subjected the alien to extreme cruelty, (B) a member of the spouse's or parent's family residing in the same household as the alien who has battered the alien or subjected the alien to extreme cruelty when the spouse or parent consented to or acquiesced in such battery or cruelty, (C) a spouse or parent who has battered the alien's child or subjected the alien's child to extreme cruelty (without the active participation of the alien in the battery or extreme cruelty), or (D) a member of the spouse's or parent's family residing in the same household as the alien who has battered the alien's child or subjected the alien's child to extreme cruelty when the spouse or parent consented to or acquiesced in such battery or cruelty and the alien did not actively participate in such battery or cruelty,

unless the alien has been convicted of a crime or crimes listed in section 241(a)(2) of the Immigration and Nationality Act; or (2) permit use by or disclosure to anyone (other than a sworn officer or employee of the Department, or bureau or agency thereof, for legitimate Department, bureau, or agency purposes) of any information which relates to an alien who is the beneficiary of an application for relief under clause (iii) or (iv) of section 204(a)(1)(A), clause (ii) or (iii) of section 204(a)(1)(B), section 216(c)(4)(C), or section 244(a)(3) of such Act as an alien (or the parent of a child) who has been battered or subjected to extreme cruelty.

The limitation under paragraph (2) ends when the application for relief is denied and all opportunities for appeal of the denial have been exhausted. (b) Exceptions.-- (1) The Attorney General may provide, in the Attorney General's discretion, for the disclosure of information in the same manner and circumstances as census information may be disclosed by the Secretary of Commerce under section 8 of title 13, United States Code. (2) The Attorney General may provide in the discretion of the Attorney General for the disclosure of information to law enforcement officials to be used solely for a legitimate law enforcement purpose. (3) Subsection (a) shall not be construed as preventing disclosure of information in connection with judicial review of a determination in a manner that protects the confidentiality of such information. (4) Subsection (a)(2) shall not apply if all the battered individuals in the case are adults and they have all waived the restrictions of such subsection.

(c) Penalties for Violations.--Anyone who willfully uses, publishes, or permits information to be disclosed in violation of this section shall be subject to appropriate disciplinary action and subject to a civil money penalty of not more than $5,000 for each such violation. (d) Conforming Amendments to Other Disclosure Restrictions.-- (1) In general.--The last sentence of section 210(b)(6) and the second sentence of section 245A(c)(5) (8 U.S.C. 1255a(c)(5)) are each amended to read as follows: ``Anyone who uses, publishes, or permits information to be examined in violation of this paragraph shall be subject to appropriate disciplinary action and subject to a civil money penalty of not more than $5,000 for each violation.''. (2) Effective date.--The amendments made by this subsection shall apply to offenses occurring on or after the date of the enactment of this Act.

In addition to the amounts otherwise authorized to be appropriated for each fiscal year beginning with fiscal year 1996, there are authorized to be appropriated to the Attorney General $150,000,000 for costs associated with the removal of inadmissible or deportable aliens, including costs of detention of such aliens pending their removal, the hiring of more investigators, and the hiring of more detention and deportation officers.

INCREASE IN INS DETENTION FACILITIES; REPORT ON DETENTION SPACE.

(a) Increase in Detention Facilities.--Subject to the availability of appropriations, the Attorney General shall provide for an increase in the detention facilities of the Immigration and Naturalization Service to at least 9,000 beds before the end of fiscal year 1997. (b) Report on Detention Space.-- (1) In general.--Not later than 6 months after the date of the enactment of this Act, and every 6 months thereafter,

the Attorney General shall submit a report to the Committees on the Judiciary of the House of Representatives and of the Senate estimating the amount of detention space that will be required, during the fiscal year in which the report is submitted and the succeeding fiscal year, to detain-- (A) all aliens subject to detention under section 236(c) of the Immigration and Nationality Act (as amended by section 303 of this title) and section 241(a) of the Immigration and Nationality Act (as inserted by section 305(a)(3) of this title); (B) all excludable or deportable aliens subject to proceedings under section 238 of the Immigration and Nationality Act (as redesignated by section 308(b)(5) of this title) or section 235(b)(2)(A) or 240 of the Immigration and Nationality Act; and (C) other excludable or deportable aliens in accordance with the priorities established by the Attorney General. (2) Estimate of number of aliens released into the community.-- (A) Criminal aliens.-- (i) In general.--The first report submitted under paragraph (1) shall include an estimate of the number of criminal aliens who, in each of the 3 fiscal years concluded prior to the date of the report-- (I) were released from detention facilities of the Immigration and Naturalization Service (whether operated directly by the Service or through contract with other persons or agencies); or (II) were not taken into custody or detention by the Service upon completion of their incarceration. (ii) Aliens convicted of aggravated felonies.--The estimate under clause (i) shall estimate separately, with respect to each year described in such clause, the number of criminal aliens described in such clause who were convicted of an aggravated felony. (B) All excludable or deportable aliens.--The first report submitted under paragraph (1) shall also estimate the number of excludable or deportable aliens who were released into the community due to a lack of detention facilities in each of the 3 fiscal years concluded prior to the date of the report notwithstanding circumstances that the Attorney General believed justified detention (for example, a significant probability that the released alien would not appear, as agreed, at subsequent exclusion or deportation proceedings). (C) Subsequent reports.--Each report under paragraph (1) following the first such report shall include the estimates under subparagraphs (A) and (B), made with respect to the 6-month period immediately preceding the date of the submission of the report.

MILITARY BASES FOR THE DETENTION OF INADMISSIBLE OR DEPORTABLE ALIENS.

(a) Establishment.--The Attorney General and the Secretary of Defense shall establish one or more pilot programs for up to 2 years each to determine the feasibility of the use of military bases, available because of actions under a base closure law, as detention centers by the Immigration and Naturalization Service. In selecting real property at a military base for use as a detention center under the pilot program, the Attorney General and the Secretary shall consult with the redevelopment authority established for the military base and give substantial deference to the redevelopment plan prepared for the military base. (b) Report.--Not later than 30 months after the date of the enactment of this Act, the Attorney General, together with the Secretary of Defense, shall submit a report to the Committees on the Judiciary of the House of Representatives and of the Senate, and the Committees on Armed Services of the House of Representatives and of the Senate, on the feasibility of using military bases closed under a base closure law as detention centers by the Immigration and Naturalization Service. (c) Definition.--For purposes of this section, the term ``base closure law'' means each of the following: (1) The Defense Base Closure and Realignment Act of 1990 (part A of title XXIX of Public Law 101-510; 10 U.S.C. 2687 note). (2) Title II of the Defense Authorization Amendments and Base Closure and Realignment Act (Public Law 100-526; 10 U.S.C. 2687 note). (3) Section 2687 of title 10, United States Code. (4) Any other similar law enacted after the date of the enactment of this Act.

PROGRAM.

Not later than 30 months after the date of the enactment of this Act, the Attorney General, in consultation with the Secretary of State, shall submit a report to the Committees on the Judiciary of the House of Representatives and of the Senate on the operation of the program of interior repatriation developed under section 437 of the Antiterrorism and Effective Death Penalty Act of 1996 (Public Law 104-132).

(a) In General.--The Attorney General shall conduct 3 pilot programs of employment eligibility confirmation under this subtitle. (b) Implementation Deadline; Termination.--The Attorney General shall implement the pilot programs in a manner that permits persons and other entities to have elections under section 402 of this division made and in effect no later than 1 year after

the date of the enactment of this Act. Unless the Congress otherwise provides, the Attorney General shall terminate a pilot program at the end of the 4-year period beginning on the first day the pilot program is in effect. (c) Scope of Operation of Pilot Programs.--The Attorney General shall provide for the operation-- (1) of the basic pilot program (described in section 403(a) of this division) in, at a minimum, 5 of the 7 States with the highest estimated population of aliens who are not lawfully present in the United States; (2) of the citizen attestation pilot program (described in section 403(b) of this division) in at least 5 States (or, if fewer, all of the States) that meet the condition described in section 403(b)(2)(A) of this division; and (3) of the machine-readable-document pilot program (described in section 403(c) of this division) in at least 5 States (or, if fewer, all of the States) that meet the condition described in section 403(c)(2) of this division.

(d) References in Subtitle.--In this subtitle-- (1) Pilot program references.--The terms ``program'' or ``pilot program'' refer to any of the 3 pilot programs provided for under this subtitle. (2) Confirmation system.--The term ``confirmation system'' means the confirmation system established under section 404 of this division. (3) References to section 274a.--Any reference in this subtitle to section 274A (or a subdivision of such section) is deemed a reference to such section (or subdivision thereof) of the Immigration and Nationality Act. (4) I-9 or similar form.--The term ``I-9 or similar form'' means the form used for purposes of section 274A(b)(1)(A) or such other form as the Attorney General determines to be appropriate. (5) Limited application to recruiters and referrers.--Any reference to recruitment or referral (or a recruiter or referrer) in relation to employment is deemed a reference only to such recruitment or referral (or recruiter or referrer) that is subject to section 274A(a)(1)(B)(ii). (6) United states citizenship.--The term ``United States citizenship'' includes United States nationality. (7) State.--The term ``State'' has the meaning given such term in section 101(a)(36) of the Immigration and Nationality Act.

(a) Voluntary Election.--Subject to subsection (c)(3)(B), any person or other entity that conducts any hiring (or recruitment or referral) in a State in which a pilot program is operating may elect to participate in that pilot program. Except as specifically provided in subsection (e), the Attorney General may not require any person or other entity to participate in a pilot program. (b) Benefit of Rebuttable Presumption.-- (1) In general.--If a person or other entity is participating in a pilot program and obtains confirmation of identity and employment eligibility in compliance with the terms and conditions of the program with respect to the hiring (or recruitment

or referral) of an individual for employment in the United States, the person or entity has established a rebuttable presumption that the person or entity has not violated section 274A(a)(1)(A) with respect to such hiring (or such recruitment or referral). (2) Construction.--Paragraph (1) shall not be construed as preventing a person or other entity that has an election in effect under subsection (a) from establishing an affirmative defense under section 274A(a)(3) if the person or entity complies with the requirements of section 274A(a)(1)(B) but fails to obtain confirmation under paragraph (1).

(c) General Terms of Elections.-- (1) In general.--An election under subsection (a) shall be in such form and manner, under such terms and conditions, and shall take effect, as the Attorney General shall specify. The Attorney General may not impose any fee as a condition of making an election or participating in a pilot program. (2) Scope of election.-- (A) In general.--Subject to paragraph (3), any electing person or other entity may provide that the election under subsection (a) shall apply (during the period in which the election is in effect)-- (i) to all its hiring (and all recruitment or referral) in the State (or States) in which the pilot program is operating, or (ii) to its hiring (or recruitment or referral) in one or more pilot program States or one or more places of hiring (or recruitment or referral, as the case may be) in the pilot program States. (B) Application of programs in non-pilot program states.--In addition, the Attorney General may permit a person or entity electing-- (i) the basic pilot program (described in section 403(a) of this division) to provide that the election applies to its hiring (or recruitment or referral) in one or more States or places of hiring (or recruitment or referral) in which the pilot program is not otherwise operating, or (ii) the citizen attestation pilot program (described in 403(b) of this division) or the machine-readable-document pilot program (described in section 403(c) of this division) to provide that the election applies to its hiring (or recruitment or referral) in one or more States or places of hiring (or recruitment or referral) in which the pilot program is not otherwise operating but only if such States meet the requirements of 403(b)(2)(A) and 403(c)(2) of this division, respectively. (3) Acceptance and rejection of elections.-- (A) In general.--Except as provided in subparagraph (B), the Attorney General shall accept all elections made under subsection (a). (B) Rejection of elections.--The Attorney General may reject an election by a person or other entity under this section or limit its applicability to certain States or places of hiring (or recruitment or referral) if the Attorney General has determined that there are insufficient

resources to provide appropriate services under a pilot program for the person's or entity's hiring (or recruitment or referral) in any or all States or places of hiring. (4) Termination of elections.--The Attorney General may terminate an election by a person or other entity under this section because the person or entity has substantially failed to comply with its obligations under the pilot program. A person or other entity may terminate an election in such form and manner as the Attorney General shall specify.

(d) Consultation, Education, and Publicity.-- (1) Consultation.--The Attorney General shall closely consult with representatives of employers (and recruiters and referrers) in the development and implementation of the pilot programs, including the education of employers (and recruiters and referrers) about such programs. (2) Publicity.--The Attorney General shall widely publicize the election process and pilot programs, including the voluntary nature of the pilot programs and the advantages to employers (and recruiters and referrers) of making an election under this section. (3) Assistance through district offices.--The Attorney General shall designate one or more individuals in each District office of the Immigration and Naturalization Service for a Service District in which a pilot program is being implemented-- (A) to inform persons and other entities that seek information about pilot programs of the voluntary nature of such programs, and (B) to assist persons and other entities in electing and participating in any pilot programs in effect in the District, in complying with the requirements of section 274A, and in facilitating confirmation of the identity and employment eligibility of individuals consistent with such section.

(e) Select Entities Required to Participate in a Pilot Program.-- (1) Federal government.-- (A) Executive departments.-- (i) In general.--Each Department of the Federal Government shall elect to participate in a pilot program and shall comply with the terms and conditions of such an election. (ii) Election.--Subject to clause (iii), the Secretary of each such Department-- (I) shall elect the pilot program (or programs) in which the Department shall participate, and (II) may limit the election to hiring occurring in certain States (or geographic areas) covered by the program (or programs) and in specified divisions within the Department, so long as all hiring by such divisions and in such locations is covered. (iii) Role of attorney general.--The Attorney General shall assist and coordinate elections under this subparagraph in such manner as assures that-- (I) a significant portion of the total hiring within each Department within States covered by a pilot program is covered under such a program, and

(II) there is significant participation by the Federal Executive branch in each of the pilot programs. (B) Legislative branch.--Each Member of Congress, each officer of Congress, and the head of each agency of the legislative branch, that conducts hiring in a State in which a pilot program is operating shall elect to participate in a pilot program, may specify which pilot program or programs (if there is more than one) in which the Member, officer, or agency will participate, and shall comply with the terms and conditions of such an election. (2) Application to certain violators.--An order under section 274A(e)(4) or section 274B(g) of the Immigration and Nationality Act may require the subject of the order to participate in, and comply with the terms of, a pilot program with respect to the subject's hiring (or recruitment or referral) of individuals in a State covered by such a program. (3) Consequence of failure to participate.--If a person or other entity is required under this subsection to participate in a pilot program and fails to comply with the requirements of such program with respect to an individual-- (A) such failure shall be treated as a violation of section 274A(a)(1)(B) with respect to that individual, and (B) a rebuttable presumption is created that the person or entity has violated section 274A(a)(1)(A). Subparagraph (B) shall not apply in any prosecution under section 274A(f)(1).

(f) Construction.--This subtitle shall not affect the authority of the Attorney General under any other law (including section 274A(d)(4)) to conduct demonstration projects in relation to section 274A.

(a) Basic Pilot Program.--A person or other entity that elects to participate in the basic pilot program described in this subsection agrees to conform to the following procedures in the case of the hiring (or recruitment or referral) for employment in the United States of each individual covered by the election: (1) Provision of additional information.--The person or entity shall obtain from the individual (and the individual shall provide) and shall record on the I-9 or similar form-- (A) the individual's social security account number, if the individual has been issued such a number, and (B) if the individual does not attest to United States citizenship under section 274A(b)(2), such identification or authorization number established by the Immigration and Naturalization Service for the alien as the Attorney General shall specify,

and shall retain the original form and make it available for inspection for the period and in the manner required of I-9 forms under section 274A(b)(3). (2) Presentation of documentation.-- (A) In general.--The person or other entity, and the individual whose identity and employment eligibility are being confirmed, shall, subject to subparagraph (B), fulfill the requirements of section 274A(b) with the following modifications:

(i) A document referred to in section 274A(b)(1)(B)(ii) (as redesignated by section 412(a) of this division) must be designated by the Attorney General as suitable for the purpose of identification in a pilot program. (ii) A document referred to in section 274A(b)(1)(D) must contain a photograph of the individual. (iii) The person or other entity has complied with the requirements of section 274A(b)(1) with respect to examination of a document if the document reasonably appears on its face to be genuine and it reasonably appears to pertain to the individual whose identity and work eligibility is being confirmed. (B) Limitation of requirement to examine documentation.--If the Attorney General finds that a pilot program would reliably determine with respect to an individual whether-- (i) the person with the identity claimed by the individual is authorized to work in the United States, and (ii) the individual is claiming the identity of another person,

if a person or entity could fulfill the requirement to examine documentation contained in subparagraph (A) of section 274A(b)(1) by examining a document specified in either subparagraph (B) or (D) of such section, the Attorney General may provide that, for purposes of such requirement, only such a document need be examined. In such case, any reference in section 274A(b)(1)(A) to a verification that an individual is not an unauthorized alien shall be deemed to be a verification of the individual's identity. (3) Seeking confirmation.-- (A) In general.--The person or other entity shall make an inquiry, as provided in section 404(a)(1) of this division, using the confirmation system to seek confirmation of the identity and employment eligibility of an individual, by not later than the end of 3 working days (as specified by the Attorney General) after the date of the hiring (or recruitment or referral, as the case may be). (B) Extension of time period.--If the person or other entity in good faith attempts to make an inquiry during such 3 working days and the confirmation system has registered that not all inquiries were received during such time, the person or entity can make an inquiry in the first subsequent working day in which the confirmation system registers that it has received all inquiries. If the confirmation system cannot receive inquiries at all times during a day, the person or entity merely has to assert that the entity attempted to make the inquiry on that day for the previous sentence to apply to such an inquiry, and does not have to provide any additional proof concerning such inquiry. (4) Confirmation or nonconfirmation.-- (A) Confirmation upon initial inquiry.--If the person or other entity receives an appropriate confirmation of an individual's identity and work eligibility under the confirmation system within the time period specified under

section 404(b) of this division, the person or entity shall record on the I-9 or similar form an appropriate code that is provided under the system and that indicates a final confirmation of such identity and work eligibility of the individual. (B) Nonconfirmation upon initial inquiry and secondary verification.-- (i) Nonconfirmation.--If the person or other entity receives a tentative nonconfirmation of an individual's identity or work eligibility under the confirmation system within the time period specified under 404(b) of this division, the person or entity shall so inform the individual for whom the confirmation is sought. (ii) No contest.--If the individual does not contest the nonconfirmation within the time period specified in section 404(c) of this division, the nonconfirmation shall be considered final. The person or entity shall then record on the I-9 or similar form an appropriate code which has been provided under the system to indicate a tentative nonconfirmation. (iii) Contest.--If the individual does contest the nonconfirmation, the individual shall utilize the process for secondary verification provided under section 404(c) of this division. The nonconfirmation will remain tentative until a final confirmation or nonconfirmation is provided by the confirmation system within the time period specified in such section. In no case shall an employer terminate employment of an individual because of a failure of the individual to have identity and work eligibility confirmed under this section until a nonconfirmation becomes final. Nothing in this clause shall apply to a termination of employment for any reason other than because of such a failure. (iv) Recording of conclusion on form.--If a final confirmation or nonconfirmation is provided by the confirmation system under section 404(c) of this division regarding an individual, the person or entity shall record on the I-9 or similar form an appropriate code that is provided under the system and that indicates a confirmation or nonconfirmation of identity and work eligibility of the individual. (C) Consequences of nonconfirmation.-- (i) Termination or notification of continued employment.--If the person or other entity has received a final nonconfirmation regarding an individual under subparagraph (B), the person or entity may terminate employment (or recruitment or referral) of the individual. If the person or entity does not terminate employment (or recruitment or referral) of the individual, the person or entity shall notify the Attorney General of such fact through the confirmation system or in such other manner as the Attorney General may specify. (ii) Failure to notify.--If the person or entity fails to provide notice with respect to an individual as required under clause (i), the failure is deemed

to constitute a violation of section 274A(a)(1)(B) with respect to that individual and the applicable civil monetary penalty under section 274A(e)(5) shall be (notwithstanding the amounts specified in such section) no less than $500 and no more than $1,000 for each individual with respect to whom such violation occurred. (iii) Continued employment after final nonconfirmation.--If the person or other entity continues to employ (or to recruit or refer) an individual after receiving final nonconfirmation, a rebuttable presumption is created that the person or entity has violated section 274A(a)(1)(A). The previous sentence shall not apply in any prosecution under section 274A(f)(1).

(b) Citizen Attestation Pilot Program.-- (1) In general.--Except as provided in paragraphs (3) through (5), the procedures applicable under the citizen attestation pilot program under this subsection shall be the same procedures as those under the basic pilot program under subsection (a). (2) Restrictions.-- (A) State document requirement to participate in pilot program.--The Attorney General may not provide for the operation of the citizen attestation pilot program in a State unless each driver's license or similar identification document described in section 274A(b)(1)(D)(i) issued by the State-- (i) contains a photograph of the individual involved, and (ii) has been determined by the Attorney General to have security features, and to have been issued through application and issuance procedures, which make such document sufficiently resistant to counterfeiting, tampering, and fraudulent use that it is a reliable means of identification for purposes of this section. (B) Authorization to limit employer participation.-- The Attorney General may restrict the number of persons or other entities that may elect to participate in the citizen attestation pilot program under this subsection as the Attorney General determines to be necessary to produce a representative sample of employers and to reduce the potential impact of fraud. (3) No confirmation required for certain individuals attesting to u.s. citizenship.--In the case of a person or other entity hiring (or recruiting or referring) an individual under the citizen attestation pilot program, if the individual attests to United States citizenship (under penalty of perjury on an I-9 or similar form which form states on its face the criminal and other penalties provided under law for a false representation of United States citizenship)-- (A) the person or entity may fulfill the requirement to examine documentation contained in subparagraph (A) of section 274A(b)(1) by examining a document specified in either subparagraph (B)(i) or (D) of such section; and (B) the person or other entity is not required to comply with respect to such individual with the procedures

described in paragraphs (3) and (4) of subsection (a), but only if the person or entity retains the form and makes it available for inspection in the same manner as in the case of an I-9 form under section 274A(b)(3). (4) Waiver of document presentation requirement in certain cases.-- (A) In general.--In the case of a person or entity that elects, in a manner specified by the Attorney General consistent with subparagraph (B), to participate in the pilot program under this paragraph, if an individual being hired (or recruited or referred) attests (in the manner described in paragraph (3)) to United States citizenship and the person or entity retains the form on which the attestation is made and makes it available for inspection in the same manner as in the case of an I-9 form under section 274A(b)(3), the person or entity is not required to comply with the procedures described in section 274A(b). (B) Restriction.--The Attorney General shall restrict the election under this paragraph to no more than 1,000 employers and, to the extent practicable, shall select among employers seeking to make such election in a manner that provides for such an election by a representative sample of employers. (5) Nonreviewable determinations.--The determinations of the Attorney General under paragraphs (2) and (4) are within the discretion of the Attorney General and are not subject to judicial or administrative review.

(c) Machine-Readable-Document Pilot Program.-- (1) In general.--Except as provided in paragraph (3), the procedures applicable under the machine-readable-document pilot program under this subsection shall be the same procedures as those under the basic pilot program under subsection (a). (2) State document requirement to participate in pilot program.--The Attorney General may not provide for the operation of the machine-readable-document pilot program in a State unless driver's licenses and similar identification documents described in section 274A(b)(1)(D)(i) issued by the State include a machine-readable social security account number. (3) Use of machine-readable documents.--If the individual whose identity and employment eligibility must be confirmed presents to the person or entity hiring (or recruiting or referring) the individual a license or other document described in paragraph (2) that includes a machine-readable social security account number, the person or entity must make an inquiry through the confirmation system by using a machine- readable feature of such document. If the individual does not attest to United States citizenship under section 274A(b)(2), the individual's identification or authorization number described in subsection (a)(1)(B) shall be provided as part of the inquiry.

(d) Protection From Liability for Actions Taken on the Basis of Information Provided by the Confirmation System.--No person or entity participating in a pilot program shall be civilly or criminally liable under any law for any action taken in good faith reliance on information provided through the confirmation system.

(a) In General.--The Attorney General shall establish a pilot program confirmation system through which the Attorney General (or a designee of the Attorney General, which may be a nongovernmental entity)-- (1) responds to inquiries made by electing persons and other entities (including those made by the transmittal of data from machine-readable documents under the machine-readable pilot program) at any time through a toll-free telephone line or other toll-free electronic media concerning an individual's identity and whether the individual is authorized to be employed, and (2) maintains records of the inquiries that were made, of confirmations provided (or not provided), and of the codes provided to inquirers as evidence of their compliance with their obligations under the pilot programs.

To the extent practicable, the Attorney General shall seek to establish such a system using one or more nongovernmental entities. (b) Initial Response.--The confirmation system shall provide confirmation or a tentative nonconfirmation of an individual's identity and employment eligibility within 3 working days of the initial inquiry. If providing confirmation or tentative nonconfirmation, the confirmation system shall provide an appropriate code indicating such confirmation or such nonconfirmation. (c) Secondary Verification Process in Case of Tentative Nonconfirmation.--In cases of tentative nonconfirmation, the Attorney General shall specify, in consultation with the Commissioner of Social Security and the Commissioner of the Immigration and Naturalization Service, an available secondary verification process to confirm the validity of information provided and to provide a final confirmation or nonconfirmation within 10 working days after the date of the tentative nonconfirmation. When final confirmation or nonconfirmation is provided, the confirmation system shall provide an appropriate code indicating such confirmation or nonconfirmation. (d) Design and Operation of System.--The confirmation system shall be designed and operated-- (1) to maximize its reliability and ease of use by persons and other entities making elections under section 402(a) of this division consistent with insulating and protecting the privacy and security of the underlying information; (2) to respond to all inquiries made by such persons and entities on whether individuals are authorized to be employed and to register all times when such inquiries are not received; (3) with appropriate administrative, technical, and physical safeguards to prevent unauthorized disclosure of personal information; and (4) to have reasonable safeguards against the system's resulting in unlawful discriminatory practices based on national origin or citizenship status, including-- (A) the selective or unauthorized use of the system to verify eligibility; (B) the use of the system prior to an offer of employment; or (C) the exclusion of certain individuals from consideration for employment as a result of a perceived likelihood

that additional verification will be required, beyond what is required for most job applicants.

(e) Responsibilities of the Commissioner of Social Security.--As part of the confirmation system, the Commissioner of Social Security, in consultation with the entity responsible for administration of the system, shall establish a reliable, secure method, which, within the time periods specified under subsections (b) and (c), compares the name and social security account number provided in an inquiry against such information maintained by the Commissioner in order to confirm (or not confirm) the validity of the information provided regarding an individual whose identity and employment eligibility must be confirmed, the correspondence of the name and number, and whether the individual has presented a social security account number that is not valid for employment. The Commissioner shall not disclose or release social security information (other than such confirmation or nonconfirmation). (f) Responsibilities of the Commissioner of the Immigration and Naturalization Service.--As part of the confirmation system, the Commissioner of the Immigration and Naturalization Service, in consultation with the entity responsible for administration of the system, shall establish a reliable, secure method, which, within the time periods specified under subsections (b) and (c), compares the name and alien identification or authorization number described in section 403(a)(1)(B) of this division which are provided in an inquiry against such information maintained by the Commissioner in order to confirm (or not confirm) the validity of the information provided, the correspondence of the name and number, and whether the alien is authorized to be employed in the United States. (g) Updating Information.--The Commissioners of Social Security and the Immigration and Naturalization Service shall update their information in a manner that promotes the maximum accuracy and shall provide a process for the prompt correction of erroneous information, including instances in which it is brought to their attention in the secondary verification process described in subsection (c). (h) Limitation on Use of the Confirmation System and Any Related Systems.-- (1) In general.--Notwithstanding any other provision of law, nothing in this subtitle shall be construed to permit or allow any department, bureau, or other agency of the United States Government to utilize any information, data base, or other records assembled under this subtitle for any other purpose other than as provided for under a pilot program. (2) No national identification card.--Nothing in this subtitle shall be construed to authorize, directly or indirectly, the issuance or use of national identification cards or the establishment of a national identification card.

The Attorney General shall submit to the Committees on the Judiciary of the House of Representatives and of the Senate reports on the pilot programs within 3 months after the end of the third and fourth years in which the programs are in effect. Such reports shall-- (1) assess the degree of fraudulent attesting of United States citizenship,

(2) include recommendations on whether or not the pilot programs should be continued or modified, and (3) assess the benefits of the pilot programs to employers and the degree to which they assist in the enforcement of section 274A.

Subtitle B--Other Provisions Relating to Employer Sanctions

PAPERWORK REQUIREMENTS.

(a) In General.--Section 274A(b) (8 U.S.C. 1324a(b)) is amended by adding at the end the following new paragraph: ``(6) Good faith compliance.-- ``(A) In general.--Except as provided in subparagraphs (B) and (C), a person or entity is considered to have complied with a requirement of this subsection notwithstanding a technical or procedural failure to meet such requirement if there was a good faith attempt to comply with the requirement. ``(B) Exception if failure to correct after notice.--Subparagraph (A) shall not apply if-- ``(i) the Service (or another enforcement agency) has explained to the person or entity the basis for the failure, ``(ii) the person or entity has been provided a period of not less than 10 business days (beginning after the date of the explanation) within which to correct the failure, and ``(iii) the person or entity has not corrected the failure voluntarily within such period. ``(C) Exception for pattern or practice violators.-- Subparagraph (A) shall not apply to a person or entity that has or is engaging in a pattern or practice of violations of subsection (a)(1)(A) or (a)(2).''.

(b) Effective Date.--The amendment made by subsection (a) shall apply to failures occurring on or after the date of the enactment of this Act.

(a) Reducing the Number of Documents Accepted for Employment Verification.--Section 274A(b)(1) (8 U.S.C. 1324a(b)(1)) is amended-- (1) in subparagraph (B)-- (A) by striking clauses (ii) through (iv), (B) in clause (v), by striking ``or other alien registration card, if the card'' and inserting ``, alien registration card, or other document designated by the Attorney General, if the document'' and redesignating such clause as clause (ii), and (C) in clause (ii), as so redesignated-- (i) in subclause (I), by striking ``or'' before ``such other personal identifying information'' and inserting ``and'', (ii) by striking ``and'' at the end of subclause (I),

(iii) by striking the period at the end of subclause (II) and inserting ``, and'', and (iv) by adding at the end the following new subclause: ``(III) contains security features to make it resistant to tampering, counterfeiting, and fraudulent use.''; (2) in subparagraph (C)-- (A) by adding ``or'' at the end of clause (i), (B) by striking clause (ii), and (C) by redesignating clause (iii) as clause (ii); and (3) by adding at the end the following new subparagraph: ``(E) Authority to prohibit use of certain documents.--If the Attorney General finds, by regulation, that any document described in subparagraph (B), (C), or (D) as establishing employment authorization or identity does not reliably establish such authorization or identity or is being used fraudulently to an unacceptable degree, the Attorney General may prohibit or place conditions on its use for purposes of this subsection.''.

(b) Reduction of Paperwork for Certain Employees.--Section 274A(a) (8 U.S.C. 1324a(a)) is amended by adding at the end the following new paragraph: ``(6) Treatment of documentation for certain employees.-- ``(A) In general.--For purposes of this section, if-- ``(i) an individual is a member of a collective-bargaining unit and is employed, under a collective bargaining agreement entered into between one or more employee organizations and an association of two or more employers, by an employer that is a member of such association, and ``(ii) within the period specified in subparagraph (B), another employer that is a member of the association (or an agent of such association on behalf of the employer) has complied with the requirements of subsection (b) with respect to the employment of the individual, the subsequent employer shall be deemed to have complied with the requirements of subsection (b) with respect to the hiring of the employee and shall not be liable for civil penalties described in subsection (e)(5). ``(B) Period.--The period described in this subparagraph is 3 years, or, if less, the period of time that the individual is authorized to be employed in the United States. ``(C) Liability.-- ``(i) In general.--If any employer that is a member of an association hires for employment in the United States an individual and relies upon the provisions of subparagraph (A) to comply with the requirements of subsection (b) and the individual is an alien not authorized to work in the United States, then for the purposes of paragraph (1)(A), subject to clause (ii), the employer shall be presumed to have known at the time of hiring or afterward that the individual

was an alien not authorized to work in the United States. ``(ii) Rebuttal of presumption.--The presumption established by clause (i) may be rebutted by the employer only through the presentation of clear and convincing evidence that the employer did not know (and could not reasonably have known) that the individual at the time of hiring or afterward was an alien not authorized to work in the United States. ``(iii) Exception.--Clause (i) shall not apply in any prosecution under subsection (f)(1).''.

(c) Elimination of Dated Provisions.--Section 274A (8 U.S.C. 1324a) is amended by striking subsections (i) through (n). (d) Clarification of Application to Federal Government.--Section 274A(a) (8 U.S.C. 1324a(a)), as amended by subsection (b), is amended by adding at the end the following new paragraph: ``(7) Application to federal government.--For purposes of this section, the term `entity' includes an entity in any branch of the Federal Government.''.

(e) Effective Dates.-- (1) The amendments made by subsection (a) shall apply with respect to hiring (or recruitment or referral) occurring on or after such date (not later than 12 months after the date of the enactment of this Act) as the Attorney General shall designate. (2) The amendment made by subsection (b) shall apply to individuals hired on or after 60 days after the date of the enactment of this Act. (3) The amendment made by subsection (c) shall take effect on the date of the enactment of this Act. (4) The amendment made by subsection (d) applies to hiring occurring before, on, or after the date of the enactment of this Act, but no penalty shall be imposed under subsection (e) or (f) of section 274A of the Immigration and Nationality Act for such hiring occurring before such date.

ENFORCEMENT OF EMPLOYER SANCTIONS PROVISIONS.

(a) In General.--Not later than 1 year after the date of the enactment of this Act, the Attorney General shall submit to the Committees on the Judiciary of the House of Representatives and of the Senate a report on any additional authority or resources needed-- (1) by the Immigration and Naturalization Service in order to enforce section 274A of the Immigration and Nationality Act, or (2) by Federal agencies in order to carry out the Executive Order of February 13, 1996 (entitled ``Economy and Efficiency in Government Procurement Through Compliance with Certain Immigration and Naturalization Act Provisions'') and to expand the restrictions in such order to cover agricultural subsidies, grants, job training programs, and other Federally subsidized assistance programs.

(b) Reference to Increased Authorization of Appropriations.--For provision increasing the authorization of appropriations

for investigators for violations of sections 274 and 274A of the Immigration and Nationality Act, see section 131 of this division.

(a) In General.--Subsection (c) of section 290 (8 U.S.C. 1360) is amended to read as follows: ``(c)(1) Not later than 3 months after the end of each fiscal year (beginning with fiscal year 1996), the Commissioner of Social Security shall report to the Committees on the Judiciary of the House of Representatives and the Senate on the aggregate quantity of social security account numbers issued to aliens not authorized to be employed, with respect to which, in such fiscal year, earnings were reported to the Social Security Administration. ``(2) If earnings are reported on or after January 1, 1997, to the Social Security Administration on a social security account number issued to an alien not authorized to work in the United States, the Commissioner of Social Security shall provide the Attorney General with information regarding the name and address of the alien, the name and address of the person reporting the earnings, and the amount of the earnings. The information shall be provided in an electronic form agreed upon by the Commissioner and the Attorney General.''. (b) Report on Fraudulent Use of Social Security Account Numbers.--The Commissioner of Social Security shall transmit to the Attorney General, by not later than 1 year after the date of the enactment of this Act, a report on the extent to which social security account numbers and cards are used by aliens for fraudulent purposes.

Section 264 (8 U.S.C. 1304) is amended by adding at the end the following new subsection: ``(f) Notwithstanding any other provision of law, the Attorney General is authorized to require any alien to provide the alien's social security account number for purposes of inclusion in any record of the alien maintained by the Attorney General or the Service.''.

Section 274A(e)(2) (8 U.S.C. 1324a(e)(2)) is amended-- (1) by striking ``and'' at the end of subparagraph (A); (2) by striking the period at the end of subparagraph (B) and inserting ``, and''; and (3) by inserting after subparagraph (B) the following: ``(C) immigration officers designated by the Commissioner may compel by subpoena the attendance of witnesses and the production of evidence at any designated place prior to the filing of a complaint in a case under paragraph (2).''.

Subtitle C--Unfair Immigration-Related Employment Practices

IMMIGRATION-RELATED EMPLOYMENT PRACTICES.

(a) In General.--Section 274B(a)(6) (8 U.S.C. 1324b(a)(6)) is amended-- (1) by striking ``For purposes of paragraph (1), a'' and inserting ``A''; and (2) by striking ``relating to the hiring of individuals'' and inserting the following: ``if made for the purpose or with the intent of discriminating against an individual in violation of paragraph (1)''.

(b) Effective Date.--The amendments made by subsection (a) shall apply to requests made on or after the date of the enactment of this Act.

BATTERED ALIENS.

Section 431 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1641) is amended by adding at the end the following new subsection: ``(c) Treatment of Certain Battered Aliens as Qualified Aliens.--For purposes of this title, the term `qualified alien' includes-- ``(1) an alien who-- ``(A) has been battered or subjected to extreme cruelty in the United States by a spouse or a parent, or by a member of the spouse or parent's family residing in the same household as the alien and the spouse or parent consented to, or acquiesced in, such battery or cruelty, but only if (in the opinion of the Attorney General, which opinion is not subject to review by any court) there is a substantial connection between such battery or cruelty and the need for the benefits to be provided; and ``(B) has been approved or has a petition pending which sets forth a prima facie case for-- ``(i) status as a spouse or a child of a United States citizen pursuant to clause (ii), (iii), or (iv) of section 204(a)(1)(A) of the Immigration and Nationality Act, ``(ii) classification pursuant to clause (ii) or (iii) of section 204(a)(1)(B) of the Act, ``(iii) suspension of deportation and adjustment of status pursuant to section 244(a)(3) of such Act, or

``(iv) status as a spouse or child of a United States citizen pursuant to clause (i) of section 204(a)(1)(A) of such Act, or classification pursuant to clause (i) of section 204(a)(1)(B) of such Act; or ``(2) an alien-- ``(A) whose child has been battered or subjected to extreme cruelty in the United States by a spouse or a parent of the alien (without the active participation of the alien in the battery or cruelty), or by a member of the spouse or parent's family residing in the same household as the alien and the spouse or parent consented or acquiesced to such battery or cruelty, and the alien did not actively participate in such battery or cruelty, but only if (in the opinion of the Attorney General, which opinion is not subject to review by any court) there is a substantial connection between such battery or cruelty and the need for the benefits to be provided; and ``(B) who meets the requirement of clause (ii) of subparagraph (A).

This subsection shall not apply to an alien during any period in which the individual responsible for such battery or cruelty resides in the same household or family eligibility unit as the individual subjected to such battery or cruelty.''.

ISSUANCE OF DRIVER'S LICENSES TO ILLEGAL ALIENS.

(a) In General.--Pursuant to guidelines prescribed by the Attorney General not later than 6 months after the date of the enactment of this Act, all States may conduct pilot programs within their State to determine the viability, advisability, and cost-effectiveness of the State's denying driver's licenses to aliens who are not lawfully present in the United States. Under a pilot program a State may deny a driver's license to aliens who are not lawfully present in the United States. Such program shall be conducted in cooperation with relevant State and local authorities. (b) Report.--Not later than 3 years after the date of the enactment of this Act, the Attorney General shall submit a report to the Judiciary Committees of the House of Representatives and of the Senate on the results of the pilot programs conducted under subsection (a).

SECURITY BENEFITS.

(a) In General.--Section 202 of the Social Security Act (42 U.S.C. 402) is amended by adding at the end the following new subsection:

``Limitation on Payments to Aliens

``(y) Notwithstanding any other provision of law, no monthly benefit under this title shall be payable to any alien in the United States for any month during which such alien is not lawfully present in the United States as determined by the Attorney General.''. (b) Effective Date.--The amendment made by subsection (a) shall apply with respect to benefits for which applications are filed on or after the first day of the first month that begins at least 60 days after the date of the enactment of this Act.

PUBLIC BENEFITS.

Section 432(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1642) is amended-- (1) by inserting ``(1)'' after the dash, and (2) by adding at the end the following:

``(2) Not later than 18 months after the date of the enactment of this Act, the Attorney General, in consultation with the Secretary of Health and Human Services, shall also establish procedures for a person applying for a Federal public benefit (as defined in section 401(c)) to provide proof of citizenship in a fair and nondiscriminatory manner.''.

PREFERENTIAL TREATMENT OF ALIENS NOT LAWFULLY PRESENT ON BASIS OF RESIDENCE FOR HIGHER EDUCATION BENEFITS.

(a) In General.--Notwithstanding any other provision of law, an alien who is not lawfully present in the United States shall not be eligible on the basis of residence within a State (or a political subdivision) for any postsecondary education benefit unless a citizen or national of the United States is eligible for such a benefit (in no less an amount, duration, and scope) without regard to whether the citizen or national is such a resident. (b) Effective Date.--This section shall apply to benefits provided on or after July 1, 1998.

ELIGIBILITY FOR POSTSECONDARY FEDERAL STUDENT FINANCIAL ASSISTANCE.

(a) GAO Study and Report.-- (1) Study.--The Comptroller General shall conduct a study to determine the extent to which aliens who are not lawfully admitted for permanent residence are receiving postsecondary Federal student financial assistance. (2) Report.--Not later than 1 year after the date of the enactment of this Act, the Comptroller General shall submit a report to the appropriate committees of the Congress on the study conducted under paragraph (1).

(b) Report on Computer Matching Program.-- (1) In general.--Not later than one year after the date of the enactment of this Act, the Secretary of Education and the Commissioner of Social Security shall jointly submit to the appropriate committees of the Congress a report on the computer matching program of the Department of Education under section 484(p) of the Higher Education Act of 1965. (2) Report elements.--The report under paragraph (1) shall include the following: (A) An assessment by the Secretary and the Commissioner of the effectiveness of the computer matching program, and a justification for such assessment. (B) The ratio of successful matches under the program to inaccurate matches. (C) Such other information as the Secretary and the Commissioner jointly consider appropriate.

(c) Appropriate Committees of the Congress.--For purposes of this section the term ``appropriate committees of the Congress'' means the Committee on Economic and Educational Opportunities

and the Committee on the Judiciary of the House of Representatives and the Committee on Labor and Human Resources and the Committee on the Judiciary of the Senate.

SECURITY AND HIGHER EDUCATIONAL ASSISTANCE.

(a) Social Security Act State Income and Eligibility Verification Systems.--Section 1137(d)(4)(B)(i)) of the Social Security Act (42 U.S.C. 1320b-7(d)(4)(B)(i)) is amended to read as follows: ``(i) the State shall transmit to the Immigration and Naturalization Service either photostatic or other similar copies of such documents, or information from such documents, as specified by the Immigration and Naturalization Service, for official verification,''.

(b) Eligibility for Assistance Under Higher Education Act of 1965.-- Section 484(g)(4)(B)(i) of the Higher Education Act of 1965 (20 U.S.C. 1091(g)(4)(B)(i)) is amended to read as follows: ``(i) the institution shall transmit to the Immigration and Naturalization Service either photostatic or other similar copies of such documents, or information from such documents, as specified by the Immigration and Naturalization Service, for official verification,''.

ORGANIZATIONS.

Section 432 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1642) is amended by adding at the end the following new subsection: ``(d) No Verification Requirement for Nonprofit Charitable Organizations.--Subject to subsection (a), a nonprofit charitable organization, in providing any Federal public benefit (as defined in section 401(c)) or any State or local public benefit (as defined in section 411(c)), is not required under this title to determine, verify, or otherwise require proof of eligibility of any applicant for such benefits.''.

ALIENS WHO ARE NOT QUALIFIED ALIENS ON BEHALF OF ELIGIBLE INDIVIDUALS.

Not later than 180 days after the date of the enactment of this Act, the Comptroller General shall submit to the Committees on the Judiciary of the House of Representatives and of the Senate and to the Inspector General of the Department of Justice a report on the extent to which means-tested public benefits are being paid or provided to aliens who are not qualified aliens (as defined in section 431(b) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996) in order to provide such benefits to individuals who are United States citizens or qualified aliens (as so defined). Such report shall address the locations in which such benefits are provided and the incidence of fraud or misrepresentation in connection with the provision of such benefits.

FOOD STAMP PROGRAM.

Effective as if included in the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996,

subclause (I) of section 402(a)(2)(D)(ii) (8 U.S.C. 1612(a)(2)(D)(ii)) is amended to read as follows: ``(I) In general.--With respect to the specified Federal program described in paragraph (3)(B), ineligibility under paragraph (1) shall not apply until April 1, 1997, to an alien who received benefits under such program on the date of enactment of this Act, unless such alien is determined to be ineligible to receive such benefits under the Food Stamp Act of 1977. The State agency shall recertify the eligibility of all such aliens during the period beginning April 1, 1997, and ending August 22, 1997.''.

Subtitle B--Public Charge Exclusion

(a) In General.--Paragraph (4) of section 212(a) (8 U.S.C. 1182(a)) is amended to read as follows: ``(4) Public charge.-- ``(A) In general.--Any alien who, in the opinion of the consular officer at the time of application for a visa, or in the opinion of the Attorney General at the time of application for admission or adjustment of status, is likely at any time to become a public charge is excludable. ``(B) Factors to be taken into account.--(i) In determining whether an alien is excludable under this paragraph, the consular officer or the Attorney General shall at a minimum consider the alien's-- ``(I) age; ``(II) health; ``(III) family status; ``(IV) assets, resources, and financial status; and ``(V) education and skills. ``(ii) In addition to the factors under clause (i), the consular officer or the Attorney General may also consider any affidavit of support under section 213A for purposes of exclusion under this paragraph. ``(C) Family-sponsored immigrants.--Any alien who seeks admission or adjustment of status under a visa number issued under section 201(b)(2) or 203(a) is excludable under this paragraph unless-- ``(i) the alien has obtained-- ``(I) status as a spouse or a child of a United States citizen pursuant to clause (ii), (iii), or (iv) of section 204(a)(1)(A), or ``(II) classification pursuant to clause (ii) or (iii) of section 204(a)(1)(B); or ``(ii) the person petitioning for the alien's admission (including any additional sponsor required under section 213A(f)) has executed an affidavit of support described in section 213A with respect to such alien. ``(D) Certain employment-based immigrants.--Any alien who seeks admission or adjustment of status under a visa number issued under section 203(b) by virtue of a classification petition filed by a relative of the alien

(or by an entity in which such relative has a significant ownership interest) is excludable under this paragraph unless such relative has executed an affidavit of support described in section 213A with respect to such alien.''.

(b) Effective Date.--The amendment made by subsection (a) shall apply to applications submitted on or after such date, not earlier than 30 days and not later than 60 days after the date the Attorney General promulgates under section 551(c)(2) of this division a standard form for an affidavit of support, as the Attorney General shall specify, but subparagraphs (C) and (D) of section 212(a)(4) of the Immigration and Nationality Act, as so amended, shall not apply to applications with respect to which an official interview with an immigration officer was conducted before such effective date.

Subtitle C--Affidavits of Support

(a) In General.--Section 213A (8 U.S.C. 1183a), as inserted by section 423(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, is amended to read as follows:

``requirements for sponsor's affidavit of support

``Sec. 213A. (a) Enforceability.-- ``(1) Terms of affidavit.--No affidavit of support may be accepted by the Attorney General or by any consular officer to establish that an alien is not excludable as a public charge under section 212(a)(4) unless such affidavit is executed by a sponsor of the alien as a contract-- ``(A) in which the sponsor agrees to provide support to maintain the sponsored alien at an annual income that is not less than 125 percent of the Federal poverty line during the period in which the affidavit is enforceable; ``(B) that is legally enforceable against the sponsor by the sponsored alien, the Federal Government, any State (or any political subdivision of such State), or by any other entity that provides any means-tested public benefit (as defined in subsection (e)), consistent with the provisions of this section; and ``(C) in which the sponsor agrees to submit to the jurisdiction of any Federal or State court for the purpose of actions brought under subsection (b)(2). ``(2) Period of enforceability.--An affidavit of support shall be enforceable with respect to benefits provided for an alien before the date the alien is naturalized as a citizen of the United States, or, if earlier, the termination date provided under paragraph (3). ``(3) Termination of period of enforceability upon completion of required period of employment, etc.-- ``(A) In general.--An affidavit of support is not enforceable after such time as the alien (i) has worked 40 qualifying quarters of coverage as defined under title II of the Social Security Act or can be credited with such qualifying quarters as provided under subparagraph (B), and (ii) in the case of any such qualifying quarter creditable for any period beginning after December 31, 1996, did

not receive any Federal means-tested public benefit (as provided under section 403 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996) during any such period. ``(B) Qualifying quarters.--For purposes of this section, in determining the number of qualifying quarters of coverage under title II of the Social Security Act an alien shall be credited with-- ``(i) all of the qualifying quarters of coverage as defined under title II of the Social Security Act worked by a parent of such alien while the alien was under age 18, and ``(ii) all of the qualifying quarters worked by a spouse of such alien during their marriage and the alien remains married to such spouse or such spouse is deceased. No such qualifying quarter of coverage that is creditable under title II of the Social Security Act for any period beginning after December 31, 1996, may be credited to an alien under clause (i) or (ii) if the parent or spouse (as the case may be) of such alien received any Federal means-tested public benefit (as provided under section 403 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996) during the period for which such qualifying quarter of coverage is so credited. ``(C) Provision of information to save system.--The Attorney General shall ensure that appropriate information regarding the application of this paragraph is provided to the system for alien verification of eligibility (SAVE) described in section 1137(d)(3) of the Social Security Act.

``(b) Reimbursement of Government Expenses.-- ``(1) Request for reimbursement.-- ``(A) Requirement.--Upon notification that a sponsored alien has received any means-tested public benefit, the appropriate nongovernmental entity which provided such benefit or the appropriate entity of the Federal Government, a State, or any political subdivision of a State shall request reimbursement by the sponsor in an amount which is equal to the unreimbursed costs of such benefit. ``(B) Regulations.--The Attorney General, in consultation with the heads of other appropriate Federal agencies, shall prescribe such regulations as may be necessary to carry out subparagraph (A). ``(2) Actions to compel reimbursement.-- ``(A) In case of nonresponse.--If within 45 days after a request for reimbursement under paragraph (1)(A), the appropriate entity has not received a response from the sponsor indicating a willingness to commence payment an action may be brought against the sponsor pursuant to the affidavit of support. ``(B) In case of failure to pay.--If the sponsor fails to abide by the repayment terms established by the appropriate entity, the entity may bring an action against the sponsor pursuant to the affidavit of support. ``(C) Limitation on actions.--No cause of action may be brought under this paragraph later than 10 years after

the date on which the sponsored alien last received any means-tested public benefit to which the affidavit of support applies. ``(3) Use of collection agencies.--If the appropriate entity under paragraph (1)(A) requests reimbursement from the sponsor or brings an action against the sponsor pursuant to the affidavit of support, the appropriate entity may appoint or hire an individual or other person to act on behalf of such entity acting under the authority of law for purposes of collecting any amounts owed.

``(c) Remedies.--Remedies available to enforce an affidavit of support under this section include any or all of the remedies described in section 3201, 3203, 3204, or 3205 of title 28, United States Code, as well as an order for specific performance and payment of legal fees and other costs of collection, and include corresponding remedies available under State law. A Federal agency may seek to collect amounts owed under this section in accordance with the provisions of subchapter II of chapter 37 of title 31, United States Code.

``(d) Notification of Change of Address.-- ``(1) General requirement.--The sponsor shall notify the Attorney General and the State in which the sponsored alien is currently a resident within 30 days of any change of address of the sponsor during the period in which an affidavit of support is enforceable. ``(2) Penalty.--Any person subject to the requirement of paragraph (1) who fails to satisfy such requirement shall, after notice and opportunity to be heard, be subject to a civil penalty of-- ``(A) not less than $250 or more than $2,000, or ``(B) if such failure occurs with knowledge that the sponsored alien has received any means-tested public benefits (other than benefits described in section 401(b), 403(c)(2), or 411(b) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996) not less than $2,000 or more than $5,000. The Attorney General shall enforce this paragraph under appropriate regulations.

``(e) Jurisdiction.--An action to enforce an affidavit of support executed under subsection (a) may be brought against the sponsor in any appropriate court-- ``(1) by a sponsored alien, with respect to financial support; or ``(2) by the appropriate entity of the Federal Government, a State or any political subdivision of a State, or by any other nongovernmental entity under subsection (b)(2), with respect to reimbursement.

``(f) Sponsor Defined.-- ``(1) In general.--For purposes of this section the term `sponsor' in relation to a sponsored alien means an individual who executes an affidavit of support with respect to the sponsored alien and who-- ``(A) is a citizen or national of the United States or an alien who is lawfully admitted to the United States for permanent residence; ``(B) is at least 18 years of age;

``(C) is domiciled in any of the several States of the United States, the District of Columbia, or any territory or possession of the United States; ``(D) is petitioning for the admission of the alien under section 204; and ``(E) demonstrates (as provided in paragraph (6)) the means to maintain an annual income equal to at least 125 percent of the Federal poverty line. ``(2) Income requirement case.--Such term also includes an individual who does not meet the requirement of paragraph (1)(E) but accepts joint and several liability together with an individual under paragraph (5). ``(3) Active duty armed services case.--Such term also includes an individual who does not meet the requirement of paragraph (1)(E) but is on active duty (other than active duty for training) in the Armed Forces of the United States, is petitioning for the admission of the alien under section 204 as the spouse or child of the individual, and demonstrates (as provided in paragraph (6)) the means to maintain an annual income equal to at least 100 percent of the Federal poverty line. ``(4) Certain employment-based immigrants case.--Such term also includes an individual-- ``(A) who does not meet the requirement of paragraph (1)(D), but is the relative of the sponsored alien who filed a classification petition for the sponsored alien as an employment-based immigrant under section 203(b) or who has a significant ownership interest in the entity that filed such a petition; and ``(B)(i) who demonstrates (as provided under paragraph (6)) the means to maintain an annual income equal to at least 125 percent of the Federal poverty line, or ``(ii) does not meet the requirement of paragraph (1)(E) but accepts joint and several liability together with an individual under paragraph (5). ``(5) Non-petitioning case.--Such term also includes an individual who does not meet the requirement of paragraph (1)(D) but who accepts joint and several liability with a petitioning sponsor under paragraph (2) or relative of an employment-based immigrant under paragraph (4) and who demonstrates (as provided under paragraph (6)) the means to maintain an annual income equal to at least 125 percent of the Federal poverty line. ``(6) Demonstration of means to maintain income.-- ``(A) In general.-- ``(i) Method of demonstration.--For purposes of this section, a demonstration of the means to maintain income shall include provision of a certified copy of the individual's Federal income tax return for the individual's 3 most recent taxable years and a written statement, executed under oath or as permitted under penalty of perjury under section 1746 of title 28, United States Code, that the copies are certified copies of such returns. ``(ii) Flexibility.--For purposes of this section, aliens may demonstrate the means to maintain income

through demonstration of significant assets of the sponsored alien or of the sponsor, if such assets are available for the support of the sponsored alien. ``(iii) Percent of poverty.--For purposes of this section, a reference to an annual income equal to at least a particular percentage of the Federal poverty line means an annual income equal to at least such percentage of the Federal poverty line for a family unit of a size equal to the number of members of the sponsor's household (including family and non-family dependents) plus the total number of other dependents and aliens sponsored by that sponsor. ``(B) Limitation.--The Secretary of State, or the Attorney General in the case of adjustment of status, may provide that the demonstration under subparagraph (A) applies only to the most recent taxable year.

``(h) Federal Poverty Line Defined.--For purposes of this section, the term `Federal poverty line' means the level of income equal to the official poverty line (as defined by the Director of the Office of Management and Budget, as revised annually by the Secretary of Health and Human Services, in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 9902)) that is applicable to a family of the size involved. ``(i) Sponsor's Social Security Account Number Required To Be Provided.--(1) An affidavit of support shall include the social security account number of each sponsor. ``(2) The Attorney General shall develop an automated system to maintain the social security account number data provided under paragraph (1). ``(3) The Attorney General shall submit an annual report to the Committees on the Judiciary of the House of Representatives and the Senate setting forth-- ``(A) for the most recent fiscal year for which data are available the number of sponsors under this section and the number of sponsors in compliance with the financial obligations of this section; and ``(B) a comparison of such numbers with the numbers of such sponsors for the preceding fiscal year.''.

(b) Conforming Amendments.-- (1) Section 421(a)(1) and section 422(a)(1) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1631(a)(1), 1632(a)(1)) are each amended by inserting ``and as amended by section 551(a) of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996'' after ``section 423''. (2) Section 423 of such Act (8 U.S.C. 1138a note) is amended by striking subsection (c).

(c) Effective Date; Promulgation of Form.-- (1) In general.--The amendments made by this section shall apply to affidavits of support executed on or after a date specified by the Attorney General, which date shall be not earlier than 60 days (and not later than 90 days) after the date the Attorney General formulates the form for such affidavits under paragraph (2). (2) Promulgation of form.--Not later than 90 days after the date of the enactment of this Act, the Attorney General, in consultation with the heads of other appropriate agencies,

shall promulgate a standard form for an affidavit of support consistent with the provisions of section 213A of the Immigration and Nationality Act, as amended by subsection (a).

ATTRIBUTION OF INCOME RULE.

Section 421 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1631) is amended by adding at the end the following new subsection: ``(e) Indigence Exception.-- ``(1) In general.--For an alien for whom an affidavit of support under section 213A of the Immigration and Nationality Act has been executed, if a determination described in paragraph (2) is made, the amount of income and resources of the sponsor or the sponsor's spouse which shall be attributed to the sponsored alien shall not exceed the amount actually provided for a period beginning on the date of such determination and ending 12 months after such date. ``(2) Determination described.--A determination described in this paragraph is a determination by an agency that a sponsored alien would, in the absence of the assistance provided by the agency, be unable to obtain food and shelter, taking into account the alien's own income, plus any cash, food, housing, or other assistance provided by other individuals, including the sponsor. The agency shall notify the Attorney General of each such determination, including the names of the sponsor and the sponsored alien involved.

``(f) Special Rule for Battered Spouse and Child.-- ``(1) In general.--Subject to paragraph (2) and notwithstanding any other provision of this section, subsection (a) shall not apply to benefits-- ``(A) during a 12 month period if the alien demonstrates that (i) the alien has been battered or subjected to extreme cruelty in the United States by a spouse or a parent, or by a member of the spouse or parent's family residing in the same household as the alien and the spouse or parent consented to or acquiesced to such battery or cruelty, or (ii) the alien's child has been battered or subjected to extreme cruelty in the United States by the spouse or parent of the alien (without the active participation of the alien in the battery or cruelty), or by a member of the spouse's or parent's family residing in the same household as the alien when the spouse or parent consented or acquiesced to and the alien did not actively participate in such battery or cruelty, and the battery or cruelty described in clause (i) or (ii) (in the opinion of the agency providing such public benefits, which opinion is not subject to review by any court) has a substantial connection to the need for the public benefits applied for; and ``(B) after a 12 month period (regarding the batterer's income and resources only) if the alien demonstrates that such battery or cruelty under subparagraph (A) has been recognized in an order of a judge or administrative law judge or a prior determination of the Immigration and Naturalization Service, and that such battery or cruelty (in the opinion of the agency providing such public benefits,

which opinion is not subject to review by any court) has a substantial connection to the need for the benefits. ``(2) Limitation.--The exception under paragraph (1) shall not apply to benefits for an alien during any period in which the individual responsible for such battery or cruelty resides in the same household or family eligibility unit as the individual who was subjected to such battery or cruelty.''.

SUBDIVISIONS OF STATES TO LIMIT ASSISTANCE TO ALIENS AND TO DISTINGUISH AMONG CLASSES OF ALIENS IN PROVIDING GENERAL CASH PUBLIC ASSISTANCE.

(a) In General.--Subject to subsection (b) and notwithstanding any other provision of law, a State or political subdivision of a State is authorized to prohibit or otherwise limit or restrict the eligibility of aliens or classes of aliens for programs of general cash public assistance furnished under the law of the State or a political subdivision of a State. (b) Limitation.--The authority provided for under subsection (a) may be exercised only to the extent that any prohibitions, limitations, or restrictions imposed by a State or political subdivision of a State are not more restrictive than the prohibitions, limitations, or restrictions imposed under comparable Federal programs. For purposes of this section, attribution to an alien of a sponsor's income and resources (as described in section 421 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1631)) for purposes of determining eligibility for, and the amount of, benefits shall be considered less restrictive than a prohibition of eligibility for such benefits.

Subtitle D--Miscellaneous Provisions

COUNTERFEITING SEAL OF A FEDERAL DEPARTMENT OR AGENCY TO FACILITATE BENEFIT FRAUD BY AN UNLAWFUL ALIEN.

Section 506 of title 18, United States Code, is amended to read as follows:

``Sec. 506. Seals of departments or agencies

``(a) Whoever-- ``(1) falsely makes, forges, counterfeits, mutilates, or alters the seal of any department or agency of the United States, or any facsimile thereof; ``(2) knowingly uses, affixes, or impresses any such fraudulently made, forged, counterfeited, mutilated, or altered seal or facsimile thereof to or upon any certificate, instrument, commission, document, or paper of any description; or ``(3) with fraudulent intent, possesses, sells, offers for sale, furnishes, offers to furnish, gives away, offers to give away, transports, offers to transport, imports, or offers to import any such seal or facsimile thereof, knowing the same to have been so falsely made, forged, counterfeited, mutilated, or altered,

shall be fined under this title, or imprisoned not more than 5 years, or both.

``(b) Notwithstanding subsection (a) or any other provision of law, if a forged, counterfeited, mutilated, or altered seal of a department or agency of the United States, or any facsimile thereof, is-- ``(1) so forged, counterfeited, mutilated, or altered; ``(2) used, affixed, or impressed to or upon any certificate, instrument, commission, document, or paper of any description; or ``(3) with fraudulent intent, possessed, sold, offered for sale, furnished, offered to furnish, given away, offered to give away, transported, offered to transport, imported, or offered to import,

with the intent or effect of facilitating an alien's application for, or receipt of, a Federal benefit to which the alien is not entitled, the penalties which may be imposed for each offense under subsection (a) shall be two times the maximum fine, and 3 times the maximum term of imprisonment, or both, that would otherwise be imposed for an offense under subsection (a). ``(c) For purposes of this section-- ``(1) the term `Federal benefit' means-- ``(A) the issuance of any grant, contract, loan, professional license, or commercial license provided by any agency of the United States or by appropriated funds of the United States; and ``(B) any retirement, welfare, Social Security, health (including treatment of an emergency medical condition in accordance with section 1903(v) of the Social Security Act (19 U.S.C. 1396b(v))), disability, veterans, public housing, education, food stamps, or unemployment benefit, or any similar benefit for which payments or assistance are provided by an agency of the United States or by appropriated funds of the United States; and ``(2) each instance of forgery, counterfeiting, mutilation, or alteration shall constitute a separate offense under this section.''.

EMERGENCY MEDICAL SERVICES EXCEPTION.

(a) In General.--Subject to such amounts as are provided in advance in appropriation Acts, each State or political subdivision of a State that provides medical assistance for care and treatment of an emergency medical condition (as defined in subsection (d)) through a public hospital or other public facility (including a nonprofit hospital that is eligible for an additional payment adjustment under section 1886 of the Social Security Act) or through contract with another hospital or facility to an individual who is an alien not lawfully present in the United States is eligible for payment from the Federal Government of its costs of providing such services, but only to the extent that such costs are not otherwise reimbursed through any other Federal program and cannot be recovered from the alien or another person. (b) Confirmation of Immigration Status Required.--No payment shall be made under this section with respect to services furnished to an individual unless the immigration status of the individual has been verified through appropriate procedures established by the Secretary of Health and Human Services and the Attorney General.

(c) Administration.--This section shall be administered by the Attorney General, in consultation with the Secretary of Health and Human Services. (d) Emergency Medical Condition Defined.--For purposes of this section, the term ``emergency medical condition'' means a medical condition (including emergency labor and delivery) manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in-- (1) placing the patient's health in serious jeopardy, (2) serious impairment to bodily functions, or (3) serious dysfunction of any bodily organ or part.

(e) Effective Date.--Subsection (a) shall apply to medical assistance for care and treatment of an emergency medical condition furnished on or after January 1, 1997.

FOR EMERGENCY AMBULANCE SERVICES.

Subject to the availability of appropriations, the Attorney General shall fully reimburse States and political subdivisions of States for costs incurred by such a State or subdivision for emergency ambulance services provided to any alien who-- (1) is injured while crossing a land or sea border of the United States without inspection or at any time or place other than as designated by the Attorney General; and (2) is under the custody of the State or subdivision pursuant to a transfer, request, or other action by a Federal authority.

BONDING.

(a) In General.-- (1) The Attorney General of the United States shall establish a pilot program in 5 district offices of the Immigration and Naturalization Service to require aliens to post a bond in addition to the affidavit requirements under section 213A of the Immigration and Nationality Act and the deeming requirements under section 421 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1631). Any pilot program established pursuant to this subsection shall require an alien to post a bond in an amount sufficient to cover the cost of benefits described in section 213A(d)(2)(B) of the Immigration and Nationality Act (as amended by section 551(a) of this division) for the alien and the alien's dependents and shall remain in effect until the departure, naturalization, or death of the alien. (2) Suit on any such bonds may be brought under the terms and conditions set forth in section 213A of the Immigration and Nationality Act.

(b) Regulations.--Not later than 180 days after the date of the enactment of this Act, the Attorney General shall issue regulations for establishing the pilot programs, including-- (1) criteria and procedures for-- (A) certifying bonding companies for participation in the program, and (B) debarment of any such company that fails to pay a bond, and (2) criteria for setting the amount of the bond to assure that the bond is in an amount that is not less than the cost

of providing benefits under the programs described in subsection (a)(1) for the alien and the alien's dependents for 6 months.

(c) Authorization of Appropriations.--There are authorized to be appropriated such sums as may be necessary to carry out this section. (d) Annual Reporting Requirement.--Beginning 9 months after the date of implementation of the pilot program, the Attorney General shall submit annually to the Committees on the Judiciary of the House of Representatives and the Senate a report on the effectiveness of the program. The Attorney General shall submit a final evaluation of the program not later than 1 year after termination. (e) Sunset.--The pilot program under this section shall terminate after 3 years of operation. (f) Bonds in Addition to Sponsorship and Deeming Requirements.-- Section 213 (8 U.S.C. 1183) is amended by inserting ``(subject to the affidavit of support requirement and attribution of sponsor's income and resources under section 213A)'' after ``in the discretion of the Attorney General''.

Not later than 180 days after the end of each fiscal year, the Attorney General shall submit a report to the Inspector General of the Department of Justice and the Committees on the Judiciary of the House of Representatives and of the Senate describing the following: (1) Public charge deportations.--The number of aliens deported on public charge grounds under section 241(a)(5) of the Immigration and Nationality Act during the previous fiscal year. (2) Indigent sponsors.--The number of determinations made under section 421(e) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (as added by section 552 of this division) during the previous fiscal year. (3) Reimbursement actions.--The number of actions brought, and the amount of each action, for reimbursement under section 213A of the Immigration and Nationality Act (including private collections) for the costs of providing public benefits.

Subtitle E--Housing Assistance <<NOTE: Use of Assisted Housing by Aliens Act of 1996. 42 USC 1436a note.>>

This subtitle may be cited as the ``Use of Assisted Housing by Aliens Act of 1996''.

Section 214(b) of the Housing and Community Development Act of 1980 (42 U.S.C. 1436a(b)) is amended-- (1) by inserting ``(1)'' after ``(b)''; and (2) by adding at the end the following new paragraph:

``(2) If the eligibility for financial assistance of at least one member of a family has been affirmatively established under the program of financial assistance and under this section, and the ineligibility of one or more family members has not been affirmatively established under this section, any financial assistance made

available to that family by the Secretary of Housing and Urban Development shall be prorated, based on the number of individuals in the family for whom eligibility has been affirmatively established under the program of financial assistance and under this section, as compared with the total number of individuals who are members of the family.''.

Section 214(c)(1) of the Housing and Community Development Act of 1980 (42 U.S.C. 1436a(c)(1)) is amended-- (1) in the matter preceding subparagraph (A), by striking ``may, in its discretion,'' and inserting ``shall''; (2) in subparagraph (A), by adding at the end the following: ``Financial assistance continued under this subparagraph for a family may be provided only on a prorated basis, under which the amount of financial assistance is based on the percentage of the total number of members of the family that are eligible for that assistance under the program of financial assistance and under this section.''; and (3) in subparagraph (B)-- (A) by striking ``3 years'' and inserting ``18- months''; (B) by inserting ``(i)'' after ``(B)''; (C) by striking ``Any deferral'' and inserting the following: ``(ii) Except as provided in clause (iii), any deferral''; and (D) by adding at the end the following new clauses: ``(iii) The time period described in clause (ii) shall not apply in the case of a refugee under section 207 of the Immigration and Nationality Act or an individual seeking asylum under section 208 of that Act.''.

FINANCIAL ASSISTANCE.

Section 214(d) of the Housing and Community Development Act of 1980 (42 U.S.C. 1436a(d)) is amended-- (1) in the matter preceding paragraph (1), by inserting ``or to be'' after ``being''; (2) in paragraph (1)(A), by adding at the end the following: ``If the declaration states that the individual is not a citizen or national of the United States and that the individual is younger than 62 years of age, the declaration shall be verified by the Immigration and Naturalization Service. If the declaration states that the individual is a citizen or national of the United States, the Secretary of Housing and Urban Development, or the agency administering assistance covered by this section, may request verification of the declaration by requiring presentation of documentation that the Secretary considers appropriate, including a United States passport, resident alien card, alien registration card, social security card, or other documentation.''; (3) in paragraph (2)-- (A) in the matter preceding subparagraph (A), by striking ``on the date of the enactment of the Housing and Community Development Act of 1987'' and inserting ``on the date of enactment of the Use of Assisted Housing

by Aliens Act of 1996 or applying for financial assistance on or after that date''; and (B) by adding at the end the following:

``In the case of an individual applying for financial assistance on or after the date of enactment of the Use of Assisted Housing by Aliens Act of 1996, the Secretary may not provide any such assistance for the benefit of that individual before documentation is presented and verified under paragraph (3) or (4).''; (4) in paragraph (4)-- (A) in the matter preceding subparagraph (A), by striking ``on the date of the enactment of the Housing and Community Development Act of 1987'' and inserting ``on the date of enactment of the Use of Assisted Housing by Aliens Act of 1996 or applying for financial assistance on or after that date''; (B) in subparagraph (A)-- (i) in clause (i)-- (I) by inserting ``, not to exceed 30 days,'' after ``reasonable opportunity''; and (II) by striking ``and'' at the end; and (ii) by striking clause (ii) and inserting the following: ``(ii) in the case of any individual receiving assistance on the date of enactment of the Use of Assisted Housing by Aliens Act of 1996, may not delay, deny, reduce, or terminate the eligibility of that individual for financial assistance on the basis of the immigration status of that individual until the expiration of that 30-day period; and ``(iii) in the case of any individual applying for financial assistance on or after the date of enactment of the Use of Assisted Housing by Aliens Act of 1996, may not deny the application for such assistance on the basis of the immigration status of that individual until the expiration of that 30-day period; and''; and (C) in subparagraph (B), by striking clause (ii) and inserting the following: ``(ii) pending such verification or appeal, the Secretary may not-- ``(I) in the case of any individual receiving assistance on the date of enactment of the Use of Assisted Housing by Aliens Act of 1996, delay, deny, reduce, or terminate the eligibility of that individual for financial assistance on the basis of the immigration status of that individual; and ``(II) in the case of any individual applying for financial assistance on or after the date of enactment of the Use of Assisted Housing by Aliens Act of 1996, deny the application for such assistance on the basis of the immigration status of that individual; and''; (5) in paragraph (5), by striking ``status--'' and all that follows through the end of the paragraph and inserting the following: ``status, the Secretary shall-- ``(A) deny the application of that individual for financial assistance or terminate the eligibility of that individual for financial assistance, as applicable;

``(B) provide that the individual may request a fair hearing during the 30-day period beginning upon receipt of the notice under subparagraph (C); and ``(C) provide to the individual written notice of the determination under this paragraph, the right to a fair hearing process, and the time limitation for requesting a hearing under subparagraph (C).''; and (6) by striking paragraph (6) and inserting the following: ``(6) The Secretary shall terminate the eligibility for financial assistance of an individual and the members of the household of the individual, for a period of not less than 24 months, upon determining that such individual has knowingly permitted another individual who is not eligible for such assistance to reside in the public or assisted housing unit of the individual. This provision shall not apply to a family if the ineligibility of the ineligible individual at issue was considered in calculating any proration of assistance provided for the family.''.

ASSISTANCE ELIGIBILITY DETERMINATIONS.

Section 214(e) of the Housing and Community Development Act of 1980 (42 U.S.C. 1436a(e)) is amended-- (1) in paragraph (2), by adding ``or'' at the end; (2) in paragraph (3), by adding at the end the following: ``the response from the Immigration and Naturalization Service to the appeal of that individual.''; and (3) by striking paragraph (4).

Section 214 of the Housing and Community Development Act of 1980 (42 U.S.C. 1436a) is amended by adding at the end the following new subsection: ``(h) Verification of Eligibility.-- ``(1) In general.--Except in the case of an election under paragraph (2)(A), no individual or family applying for financial assistance may receive such financial assistance prior to the affirmative establishment and verification of eligibility of at least the individual or one family member under this section by the Secretary or other appropriate entity. ``(2) Rules applicable to public housing agencies.--A public housing agency (as that term is defined in section 3 of the United States Housing Act of 1937)-- ``(A) may elect not to comply with this section; and ``(B) in complying with this section-- ``(i) may initiate procedures to affirmatively establish or verify the eligibility of an individual or family under this section at any time at which the public housing agency determines that such eligibility is in question, regardless of whether or not that individual or family is at or near the top of the waiting list of the public housing agency; ``(ii) may affirmatively establish or verify the eligibility of an individual or family under this section in accordance with the procedures set forth in section 274A(b)(1) of the Immigration and Nationality Act; and

``(iii) shall have access to any relevant information contained in the SAVE system (or any successor thereto) that relates to any individual or family applying for financial assistance. ``(3) Eligibility of families.--For purposes of this subsection, with respect to a family, the term `eligibility' means the eligibility of each family member.''.

(a) Issuance.--Not later than the 60 days after the date of enactment of this Act, the Secretary of Housing and Urban Development shall issue any regulations necessary to implement the amendments made by this part. Such regulations shall be issued in the form of an interim final rule, which shall take effect upon issuance and shall not be subject to the provisions of section 533 of title 5, United States Code, regarding notice or opportunity for comment. (b) Failure To Issue.--If the Secretary fails to issue the regulations required under subsection (a) before the date specified in that subsection, the regulations relating to restrictions on assistance to noncitizens, contained in the final rule issued by the Secretary of Housing and Urban Development in RIN-2501-AA63 (Docket No. R-95-1409; FR-2383-F-050), published in the Federal Register on March 20, 1995 (Vol. 60, No. 53; pp. 14824-14861), shall not apply after that date.

Subtitle F--General Provisions

Except as provided in this title, this title and the amendments made by this title shall take effect on the date of the enactment of this Act.

This title does not apply to any Federal, State, or local governmental program, assistance, or benefits provided to an alien under any program of foreign assistance as determined by the Secretary of State in consultation with the Attorney General.

(a) In General.--Each agency of the Federal Government or a State or political subdivision that administers a program affected by the provisions of this title, shall, directly or through the States, provide general notification to the public and to program recipients of the changes regarding eligibility for any such program pursuant to this title. (b) Failure To Give Notice.--Nothing in this section shall be construed to require or authorize continuation of eligibility if the notice under this section is not provided.

Except as otherwise provided in this title, for purposes of this title-- (1) the terms ``alien'', ``Attorney General'', ``national'', ``naturalization'', ``State'', and ``United States'' shall have the meaning given such terms in section 101(a) of the Immigration and Nationality Act; and

(2) the term ``child'' shall have the meaning given such term in section 101(c) of the Immigration and Nationality Act.

METHODS.

(a) Definition of Refugee.-- (1) Section 101(a)(42) (8 U.S.C. 1101(a)(42)) is amended by adding at the end the following: ``For purposes of determinations under this Act, a person who has been forced to abort a pregnancy or to undergo involuntary sterilization, or who has been persecuted for failure or refusal to undergo such a procedure or for other resistance to a coercive population control program, shall be deemed to have been persecuted on account of political opinion, and a person who has a well founded fear that he or she will be forced to undergo such a procedure or subject to persecution for such failure, refusal, or resistance shall be deemed to have a well founded fear of persecution on account of political opinion.''. (2) Not later than 90 days after the end of each fiscal year, the Attorney General shall submit a report to the Committee on the Judiciary of the House of Representatives and the Committee on the Judiciary of the Senate describing the number and countries of origin of aliens granted refugee status or asylum under determinations pursuant to the amendment made by paragraph (1). Each such report shall also contain projections regarding the number and countries of origin of aliens that are likely to be granted refugee status or asylum for the subsequent 2 fiscal years.

(b) Numerical Limitation.--Section 207(a) (8 U.S.C. 1157(a)) is amended by adding at the end the following new paragraph: ``(5) For any fiscal year, not more than a total of 1,000 refugees may be admitted under this subsection or granted asylum under section 208 pursuant to a determination under the third sentence of section 101(a)(42) (relating to persecution for resistance to coercive population control methods).''.

(a) Parole Authority.--Section 212(d)(5)(A) (8 U.S.C. 1182(d)(5)) is amended by striking ``for emergent reasons or for reasons deemed strictly in the public interest'' and inserting ``only on a case-by-case basis for urgent humanitarian reasons or significant public benefit''. (b) Report to Congress.--Not later than 90 days after the end of each fiscal year, the Attorney General shall submit a report to the Committee on the Judiciary of the House of Representatives and the Committee on the Judiciary of the Senate describing the number and categories of aliens paroled into the United States under section 212(d)(5) of the Immigration and Nationality Act. Each such report shall provide the total number of aliens paroled into and residing in the United States and shall contain information

and data for each country of origin concerning the number and categories of aliens paroled, the duration of parole, the current status of aliens paroled, and the number and categories of aliens returned to the custody from which they were paroled during the preceding fiscal year.

NUMERICAL LIMITATIONS.

Section 201(c) (8 U.S.C. 1151(c)) is amended-- (1) by amending paragraph (1)(A)(ii) to read as follows: ``(ii) the sum of the number computed under paragraph (2) and the number computed under paragraph (4), plus''; and (2) by adding at the end the following new paragraphs:

``(4) The number computed under this paragraph for a fiscal year (beginning with fiscal year 1999) is the number of aliens who were paroled into the United States under section 212(d)(5) in the second preceding fiscal year-- ``(A) who did not depart from the United States (without advance parole) within 365 days; and ``(B) who (i) did not acquire the status of aliens lawfully admitted to the United States for permanent residence in the two preceding fiscal years, or (ii) acquired such status in such years under a provision of law (other than section 201(b)) which exempts such adjustment from the numerical limitation on the worldwide level of immigration under this section.

``(5) If any alien described in paragraph (4) (other than an alien described in paragraph (4)(B)(ii)) is subsequently admitted as an alien lawfully admitted for permanent residence, such alien shall not again be considered for purposes of paragraph (1).''.

(a) Asylum Reform.--Section 208 (8 U.S.C. 1158) is amended to read as follows:

``asylum

``Sec. 208. (a) Authority To Apply for Asylum.-- ``(1) In general.--Any alien who is physically present in the United States or who arrives in the United States (whether or not at a designated port of arrival and including an alien who is brought to the United States after having been interdicted in international or United States waters), irrespective of such alien's status, may apply for asylum in accordance with this section or, where applicable, section 235(b). ``(2) Exceptions.-- ``(A) Safe third country.--Paragraph (1) shall not apply to an alien if the Attorney General determines that the alien may be removed, pursuant to a bilateral or multilateral agreement, to a country (other than the country of the alien's nationality or, in the case of an alien having no nationality, the country of the alien's last habitual residence) in which the alien's life or freedom would not be threatened on account of race, religion, nationality, membership in a particular social group, or political opinion, and where the alien would have access to a full and fair procedure for determining a claim to asylum or equivalent temporary protection, unless the Attorney General finds

that it is in the public interest for the alien to receive asylum in the United States. ``(B) Time limit.--Subject to subparagraph (D), paragraph (1) shall not apply to an alien unless the alien demonstrates by clear and convincing evidence that the application has been filed within 1 year after the date of the alien's arrival in the United States. ``(C) Previous asylum applications.--Subject to subparagraph (D), paragraph (1) shall not apply to an alien if the alien has previously applied for asylum and had such application denied. ``(D) Changed circumstances.--An application for asylum of an alien may be considered, notwithstanding subparagraphs (B) and (C), if the alien demonstrates to the satisfaction of the Attorney General either the existence of changed circumstances which materially affect the applicant's eligibility for asylum or extraordinary circumstances relating to the delay in filing an application within the period specified in subparagraph (B). ``(3) Limitation on judicial review.--No court shall have jurisdiction to review any determination of the Attorney General under paragraph (2).

``(b) Conditions for Granting Asylum.-- ``(1) In general.--The Attorney General may grant asylum to an alien who has applied for asylum in accordance with the requirements and procedures established by the Attorney General under this section if the Attorney General determines that such alien is a refugee within the meaning of section 101(a)(42)(A). ``(2) Exceptions.-- ``(A) In general.--Paragraph (1) shall not apply to an alien if the Attorney General determines that-- ``(i) the alien ordered, incited, assisted, or otherwise participated in the persecution of any person on account of race, religion, nationality, membership in a particular social group, or political opinion; ``(ii) the alien, having been convicted by a final judgment of a particularly serious crime, constitutes a danger to the community of the United States; ``(iii) there are serious reasons for believing that the alien has committed a serious nonpolitical crime outside the United States prior to the arrival of the alien in the United States; ``(iv) there are reasonable grounds for regarding the alien as a danger to the security of the United States; ``(v) the alien is inadmissible under subclause (I), (II), (III), or (IV) of section 212(a)(3)(B)(i) or removable under section 237(a)(4)(B) (relating to terrorist activity), unless, in the case only of an alien inadmissible under subclause (IV) of section 212(a)(3)(B)(i), the Attorney General determines, in the Attorney General's discretion, that there are not reasonable grounds for regarding the alien as a danger to the security of the United States; or ``(vi) the alien was firmly resettled in another country prior to arriving in the United States.

``(B) Special rules.-- ``(i) Conviction of aggravated felony.--For purposes of clause (ii) of subparagraph (A), an alien who has been convicted of an aggravated felony shall be considered to have been convicted of a particularly serious crime. ``(ii) Offenses.--The Attorney General may designate by regulation offenses that will be considered to be a crime described in clause (ii) or (iii) of subparagraph (A). ``(C) Additional limitations.--The Attorney General may by regulation establish additional limitations and conditions, consistent with this section, under which an alien shall be ineligible for asylum under paragraph (1). ``(D) No judicial review.--There shall be no judicial review of a determination of the Attorney General under subparagraph (A)(v). ``(3) Treatment of spouse and children.--A spouse or child (as defined in section 101(b)(1)(A), (B), (C), (D), or (E)) of an alien who is granted asylum under this subsection may, if not otherwise eligible for asylum under this section, be granted the same status as the alien if accompanying, or following to join, such alien.

``(c) Asylum Status.-- ``(1) In general.--In the case of an alien granted asylum under subsection (b), the Attorney General-- ``(A) shall not remove or return the alien to the alien's country of nationality or, in the case of a person having no nationality, the country of the alien's last habitual residence; ``(B) shall authorize the alien to engage in employment in the United States and provide the alien with appropriate endorsement of that authorization; and ``(C) may allow the alien to travel abroad with the prior consent of the Attorney General. ``(2) Termination of asylum.--Asylum granted under subsection (b) does not convey a right to remain permanently in the United States, and may be terminated if the Attorney General determines that-- ``(A) the alien no longer meets the conditions described in subsection (b)(1) owing to a fundamental change in circumstances; ``(B) the alien meets a condition described in subsection (b)(2); ``(C) the alien may be removed, pursuant to a bilateral or multilateral agreement, to a country (other than the country of the alien's nationality or, in the case of an alien having no nationality, the country of the alien's last habitual residence) in which the alien's life or freedom would not be threatened on account of race, religion, nationality, membership in a particular social group, or political opinion, and where the alien is eligible to receive asylum or equivalent temporary protection; ``(D) the alien has voluntarily availed himself or herself of the protection of the alien's country of nationality or, in the case of an alien having no nationality, the alien's country of last habitual residence, by returning to such

country with permanent resident status or the reasonable possibility of obtaining such status with the same rights and obligations pertaining to other permanent residents of that country; or ``(E) the alien has acquired a new nationality and enjoys the protection of the country of his or her new nationality. ``(3) Removal when asylum is terminated.--An alien described in paragraph (2) is subject to any applicable grounds of inadmissibility or deportability under section 212(a) and 237(a), and the alien's removal or return shall be directed by the Attorney General in accordance with sections 240 and 241. ``(d) Asylum Procedure.-- ``(1) Applications.--The Attorney General shall establish a procedure for the consideration of asylum applications filed under subsection (a). The Attorney General may require applicants to submit fingerprints and a photograph at such time and in such manner to be determined by regulation by the Attorney General. ``(2) Employment.--An applicant for asylum is not entitled to employment authorization, but such authorization may be provided under regulation by the Attorney General. An applicant who is not otherwise eligible for employment authorization shall not be granted such authorization prior to 180 days after the date of filing of the application for asylum. ``(3) Fees.--The Attorney General may impose fees for the consideration of an application for asylum, for employment authorization under this section, and for adjustment of status under section 209(b). Such fees shall not exceed the Attorney General's costs in adjudicating the applications. The Attorney General may provide for the assessment and payment of such fees over a period of time or by installments. Nothing in this paragraph shall be construed to require the Attorney General to charge fees for adjudication services provided to asylum applicants, or to limit the authority of the Attorney General to set adjudication and naturalization fees in accordance with section 286(m). ``(4) Notice of privilege of counsel and consequences of frivolous application.--At the time of filing an application for asylum, the Attorney General shall-- ``(A) advise the alien of the privilege of being represented by counsel and of the consequences, under paragraph (6), of knowingly filing a frivolous application for asylum; and ``(B) provide the alien a list of persons (updated not less often than quarterly) who have indicated their availability to represent aliens in asylum proceedings on a pro bono basis. ``(5) Consideration of asylum applications.-- ``(A) Procedures.--The procedure established under paragraph (1) shall provide that-- ``(i) asylum cannot be granted until the identity of the applicant has been checked against all appropriate records or databases maintained by the Attorney General and by the Secretary of State, including the Automated Visa Lookout System, to determine any grounds on which the alien may be inadmissible to

or deportable from the United States, or ineligible to apply for or be granted asylum; ``(ii) in the absence of exceptional circumstances, the initial interview or hearing on the asylum application shall commence not later than 45 days after the date an application is filed; ``(iii) in the absence of exceptional circumstances, final administrative adjudication of the asylum application, not including administrative appeal, shall be completed within 180 days after the date an application is filed; ``(iv) any administrative appeal shall be filed within 30 days of a decision granting or denying asylum, or within 30 days of the completion of removal proceedings before an immigration judge under section 240, whichever is later; and ``(v) in the case of an applicant for asylum who fails without prior authorization or in the absence of exceptional circumstances to appear for an interview or hearing, including a hearing under section 240, the application may be dismissed or the applicant may be otherwise sanctioned for such failure. ``(B) Additional regulatory conditions.--The Attorney General may provide by regulation for any other conditions or limitations on the consideration of an application for asylum not inconsistent with this Act. ``(6) Frivolous applications.--If the Attorney General determines that an alien has knowingly made a frivolous application for asylum and the alien has received the notice under paragraph (4)(A), the alien shall be permanently ineligible for any benefits under this Act, effective as of the date of a final determination on such application. ``(7) No private right of action.--Nothing in this subsection shall be construed to create any substantive or procedural right or benefit that is legally enforceable by any party against the United States or its agencies or officers or any other person.''. (b) Conforming and Clerical Amendments.-- (1) The item in the table of contents relating to section 208 is amended to read as follows:

``Sec. 208. Asylum.''.

(2) Section 104(d)(1)(A) of the Immigration Act of 1990 (Public Law 101-649) is amended by striking ``208(b)'' and inserting ``208''. (c) Effective Date.--The amendment made by subsection (a) shall apply to applications for asylum filed on or after the first day of the first month beginning more than 180 days after the date of the enactment of this Act.

Subject to the availability of appropriations, the Attorney General shall provide for an increase in the number of asylum officers to at least 600 asylum officers by fiscal year 1997.

ADJUSTMENT ACT. (a) In General.--Public Law 89-732 is repealed effective only upon a determination by the President under section 203(c)(3) of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 (Public Law 104-114) that a democratically elected government in Cuba is in power. (b) Limitation.--Subsection (a) shall not apply to aliens for whom an application for adjustment of status is pending on such effective date.

Subtitle B--Miscellaneous Amendments to the Immigration and Nationality Act

Section 214(j)(1) (8 U.S.C. 1184(j)(1)) (as added by section 130003(b)(2) of the Violent Crime Control and Law Enforcement Act of 1994 (Public Law 103-322; 108 Stat. 2025)) (relating to numerical limitations on the number of aliens who may be provided a visa as nonimmigrants under section 101(a)(15)(S) of the Immigration and Nationality Act) is amended-- (1) by striking ``100.'' and inserting ``200.''; and (2) by striking ``25.'' and inserting ``50.''.

TO INTERNATIONAL MEDICAL GRADUATES.

(a) Extension of Waiver Program.--Section 220(c) of the Immigration and Nationality Technical Corrections Act of 1994 (8 U.S.C. 1182 note) is amended by striking ``1996.'' and inserting ``2002.''. (b) Conditions on Federally Requested Waivers.--Section 212(e) (8 U.S.C. 1182(e)) is amended by inserting after ``except that in the case of a waiver requested by a State Department of Public Health, or its equivalent'' the following: ``, or in the case of a waiver requested by an interested United States Government agency on behalf of an alien described in clause (iii),''. (c) Restrictions on Federally Requested Waivers.--Section 214(k) (8 U.S.C. 1184(k)) (as added by section 220(b) of the Immigration and Nationality Technical Corrections Act of 1994 (Public Law 103-416; 108 Stat. 4319)) is amended to read as follows: ``(k)(1) In the case of a request by an interested State agency, or by an interested Federal agency, for a waiver of the 2-year foreign residence requirement under section 212(e) on behalf of an alien described in clause (iii) of such section, the Attorney General shall not grant such waiver unless-- ``(A) in the case of an alien who is otherwise contractually obligated to return to a foreign country, the government of such country furnishes the Director of the United States Information Agency with a statement in writing that it has no objection to such waiver; ``(B) in the case of a request by an interested State agency, the grant of such waiver would not cause the number of waivers allotted for that State for that fiscal year to exceed 20; ``(C) in the case of a request by an interested Federal agency or by an interested State agency--

``(i) the alien demonstrates a bona fide offer of full-time employment at a health facility or health care organization, which employment has been determined by the Attorney General to be in the public interest; and ``(ii) the alien agrees to begin employment with the health facility or health care organization within 90 days of receiving such waiver, and agrees to continue to work for a total of not less than 3 years (unless the Attorney General determines that extenuating circumstances exist, such as closure of the facility or hardship to the alien, which would justify a lesser period of employment at such health facility or health care organization, in which case the alien must demonstrate another bona fide offer of employment at a health facility or health care organization for the remainder of such 3-year period); and ``(D) in the case of a request by an interested Federal agency (other than a request by an interested Federal agency to employ the alien full-time in medical research or training) or by an interested State agency, the alien agrees to practice medicine in accordance with paragraph (2) for a total of not less than 3 years only in the geographic area or areas which are designated by the Secretary of Health and Human Services as having a shortage of health care professionals. ``(2)(A) Notwithstanding section 248(2), the Attorney General may change the status of an alien who qualifies under this subsection and section 212(e) to that of an alien described in section 101(a)(15)(H)(i)(b). ``(B) No person who has obtained a change of status under subparagraph (A) and who has failed to fulfill the terms of the contract with the health facility or health care organization named in the waiver application shall be eligible to apply for an immigrant visa, for permanent residence, or for any other change of nonimmigrant status, until it is established that such person has resided and been physically present in the country of his nationality or his last residence for an aggregate of at least 2 years following departure from the United States. ``(3) Notwithstanding any other provision of this subsection, the 2-year foreign residence requirement under section 212(e) shall apply with respect to an alien described in clause (iii) of such section, who has not otherwise been accorded status under section 101(a)(27)(H), if-- ``(A) at any time the alien ceases to comply with any agreement entered into under subparagraph (C) or (D) of paragraph (1); or ``(B) the alien's employment ceases to benefit the public interest at any time during the 3-year period described in paragraph (1)(C).''.

INFORMATION.

(a) Confidentiality of Information.--Section 245A(c)(5) (8 U.S.C. 1255a(c)(5)) is amended to read as follows: ``(5) Confidentiality of information.-- ``(A) In general.--Except as provided in this paragraph, neither the Attorney General, nor any other official

or employee of the Department of Justice, or bureau or agency thereof, may-- ``(i) use the information furnished by the applicant pursuant to an application filed under this section for any purpose other than to make a determination on the application, for enforcement of paragraph (6), or for the preparation of reports to Congress under section 404 of the Immigration Reform and Control Act of 1986; ``(ii) make any publication whereby the information furnished by any particular applicant can be identified; or ``(iii) permit anyone other than the sworn officers and employees of the Department or bureau or agency or, with respect to applications filed with a designated entity, that designated entity, to examine individual applications. ``(B) Required disclosures.--The Attorney General shall provide the information furnished under this section, and any other information derived from such furnished information, to a duly recognized law enforcement entity in connection with a criminal investigation or prosecution, when such information is requested in writing by such entity, or to an official coroner for purposes of affirmatively identifying a deceased individual (whether or not such individual is deceased as a result of a crime). ``(C) Authorized disclosures.--The Attorney General may provide, in the Attorney General's discretion, for the furnishing of information furnished under this section in the same manner and circumstances as census information may be disclosed by the Secretary of Commerce under section 8 of title 13, United States Code. ``(D) Construction.-- ``(i) In general.--Nothing in this paragraph shall be construed to limit the use, or release, for immigration enforcement purposes or law enforcement purposes of information contained in files or records of the Service pertaining to an application filed under this section, other than information furnished by an applicant pursuant to the application, or any other information derived from the application, that is not available from any other source. ``(ii) Criminal convictions.--Information concerning whether the applicant has at any time been convicted of a crime may be used or released for immigration enforcement or law enforcement purposes. ``(E) Crime.--Whoever knowingly uses, publishes, or permits information to be examined in violation of this paragraph shall be fined not more than $10,000.''. (b) Special Agricultural Workers.--Section 210(b)(6) (8 U.S.C. 1160(b)(6)) is amended to read as follows: ``(6) Confidentiality of information.-- ``(A) In general.--Except as provided in this paragraph, neither the Attorney General, nor any other official or employee of the Department of Justice, or bureau or agency thereof, may--

``(i) use the information furnished by the applicant pursuant to an application filed under this section for any purpose other than to make a determination on the application, including a determination under subsection (a)(3)(B), or for enforcement of paragraph (7); ``(ii) make any publication whereby the information furnished by any particular individual can be identified; or ``(iii) permit anyone other than the sworn officers and employees of the Department or bureau or agency or, with respect to applications filed with a designated entity, that designated entity, to examine individual applications. ``(B) Required disclosures.--The Attorney General shall provide information furnished under this section, and any other information derived from such furnished information, to a duly recognized law enforcement entity in connection with a criminal investigation or prosecution, when such information is requested in writing by such entity, or to an official coroner for purposes of affirmatively identifying a deceased individual (whether or not such individual is deceased as a result of a crime). ``(C) Construction.-- ``(i) In general.--Nothing in this paragraph shall be construed to limit the use, or release, for immigration enforcement purposes or law enforcement purposes of information contained in files or records of the Service pertaining to an application filed under this section, other than information furnished by an applicant pursuant to the application, or any other information derived from the application, that is not available from any other source. ``(ii) Criminal convictions.--Information concerning whether the applicant has at any time been convicted of a crime may be used or released for immigration enforcement or law enforcement purposes. ``(D) Crime.--Whoever knowingly uses, publishes, or permits information to be examined in violation of this paragraph shall be fined not more than $10,000.''.

PETITIONS FOR PROFESSIONAL ATHLETES.

(a) Labor Certification.--Section 212(a)(5)(A) (8 U.S.C. 1182(a)(5)(A)) is amended by adding at the end the following: ``(iii) Professional athletes.-- ``(I) In general.--A certification made under clause (i) with respect to a professional athlete shall remain valid with respect to the athlete after the athlete changes employer, if the new employer is a team in the same sport as the team which employed the athlete when the athlete first applied for the certification. ``(II) Definition.--For purposes of subclause (I), the term `professional athlete' means an individual who is employed as an athlete by--

``(aa) a team that is a member of an association of 6 or more professional sports teams whose total combined revenues exceed $10,000,000 per year, if the association governs the conduct of its members and regulates the contests and exhibitions in which its member teams regularly engage; or ``(bb) any minor league team that is affiliated with such an association.''.

(b) Classification Petitions.--Section 204 (8 U.S.C. 1154) is amended by adding at the end the following: ``(i) Professional Athletes.-- ``(1) In general.--A petition under subsection (a)(4)(D) for classification of a professional athlete shall remain valid for the athlete after the athlete changes employers, if the new employer is a team in the same sport as the team which was the employer who filed the petition. ``(2) Definition.--For purposes of paragraph (1), the term `professional athlete' means an individual who is employed as an athlete by-- ``(A) a team that is a member of an association of 6 or more professional sports teams whose total combined revenues exceed $10,000,000 per year, if the association governs the conduct of its members and regulates the contests and exhibitions in which its member teams regularly engage; or ``(B) any minor league team that is affiliated with such an association.''.

(a) Limitations.-- (1) In general.--Section 214 (8 U.S.C. 1184) is amended by adding at the end the following new subsection:

``(l)(1) An alien may not be accorded status as a nonimmigrant under section 101(a)(15)(F)(i) in order to pursue a course of study-- ``(A) at a public elementary school or in a publicly funded adult education program; or ``(B) at a public secondary school unless-- ``(i) the aggregate period of such status at such a school does not exceed 12 months with respect to any alien, and (ii) the alien demonstrates that the alien has reimbursed the local educational agency that administers the school for the full, unsubsidized per capita cost of providing education at such school for the period of the alien's attendance.

``(2) An alien who obtains the status of a nonimmigrant under section 101(a)(15)(F)(i) in order to pursue a course of study at a private elementary or secondary school or in a language training program that is not publicly funded shall be considered to have violated such status, and the alien's visa under section 101(a)(15)(F) shall be void, if the alien terminates or abandons such course of study at such a school and undertakes a course of study at a public elementary school, in a publicly funded adult education program, in a publicly funded adult education language training program, or at a public secondary school (unless the requirements of paragraph (1)(B) are met).''.

(2) Conforming amendment.--Section 101(a)(15)(F) (8 U.S.C. 1101(a)(15)(F)) is amended by inserting ``consistent with section 214(l)'' after ``such a course of study''.

(b) Reference to New Ground of Exclusion for Student Visa Abusers.-- For addition of ground of inadmissibility for certain nonimmigrant student abusers, see section 347 of this division. (c) Effective Date.--The amendments made by subsection (a) shall apply to individuals who obtain the status of a nonimmigrant under section 101(a)(15)(F) of the Immigration and Nationality Act after the end of the 60-day period beginning on the date of the enactment of this Act, including aliens whose status as such a nonimmigrant is extended after the end of such period.

KILLED IN THE LINE OF DUTY.

(a) In General.--Title II, as amended by section 205(a) of this division, is amended by adding at the end the following new section:

``transportation of remains of immigration officers and border patrol agents killed in the line of duty

``Sec. 295. (a) In General.--To the extent provided in appropriation Acts, when an immigration officer or border patrol agent is killed in the line of duty, the Attorney General may pay from appropriations available for the activity in which the officer or agent was engaged-- ``(1) the actual and necessary expenses of transportation of the remains of the officer or agent to a place of burial located in any State, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau; ``(2) travel expenses, including per diem in lieu of subsistence, of the decedent's spouse and minor children to and from such site at rates not greater than those established for official government travel under subchapter I of chapter 57 of title 5, United States Code; and ``(3) any other memorial service authorized by the Attorney General.

``(b) Prepayment.--The Attorney General may prepay any expense authorized to be paid under this section.''. (b) Clerical Amendment.--The table of contents, as amended by section 205(b) of this division, is amended by inserting after the item relating to section 294 the following new item:

``Sec. 295. Transportation of remains of immigration officers and border patrol agents killed in the line of duty.''.

Subtitle C--Provisions Relating to Visa Processing and Consular Efficiency

(a) Extension of Validity of Immigrant Visas to 6 Months.--Section 221(c) (8 U.S.C. 1201(c)) is amended by striking ``four months'' and inserting ``six months''.

(b) Authorizing Application of Reciprocity Rule for Nonimmigrant Visa in Case of Refugees and Permanent Residents.--Such section is further amended by inserting before the period at the end of the third sentence the following: ``; except that in the case of aliens who are nationals of a foreign country and who either are granted refugee status and firmly resettled in another foreign country or are granted permanent residence and residing in another foreign country, the Secretary of State may prescribe the period of validity of such a visa based upon the treatment granted by that other foreign country to alien refugees and permanent residents, respectively, in the United States''.

(a) In General.--Section 222 (8 U.S.C. 1202) is amended by adding at the end the following: ``(g)(1) In the case of an alien who has been admitted on the basis of a nonimmigrant visa and remained in the United States beyond the period of stay authorized by the Attorney General, such visa shall be void beginning after the conclusion of such period of stay. ``(2) An alien described in paragraph (1) shall be ineligible to be readmitted to the United States as a nonimmigrant, except-- ``(A) on the basis of a visa (other than the visa described in paragraph (1)) issued in a consular office located in the country of the alien's nationality (or, if there is no office in such country, in such other consular office as the Secretary of State shall specify); or ``(B) where extraordinary circumstances are found by the Secretary of State to exist.''.

(b) Applicability.-- (1) Visas.--Section 222(g)(1) of the Immigration and Nationality Act, as added by subsection (a), shall apply to a visa issued before, on, or after the date of the enactment of this Act. (2) Aliens seeking readmission.--Section 222(g)(2) of the Immigration and Nationality Act, as added by subsection (a), shall apply to any alien applying for readmission to the United States after the date of the enactment of this Act, except an alien applying for readmission on the basis on a visa that-- (A) was issued before such date; and (B) is not void through the application of section 222(g)(1) of the Immigration and Nationality Act, as added by subsection (a).

Section 202(a)(1) (8 U.S.C. 1152(a)(1)) is amended-- (1) by inserting ``(A)'' after ``Nondiscrimination.--''; and (2) by adding at the end the following: ``(B) Nothing in this paragraph shall be construed to limit the authority of the Secretary of State to determine the procedures for the processing of immigrant visa applications or the locations where such applications will be processed.''.

(a) Nonimmigrant Applications.--Section 222(c) (8 U.S.C. 1202(c)) is amended--

(1) by striking ``personal description'' through ``marks of identification);''; (2) by striking ``applicant'' and inserting ``applicant, the determination of his eligibility for a nonimmigrant visa,''; and (3) by adding at the end the following: ``At the discretion of the Secretary of State, application forms for the various classes of nonimmigrant admissions described in section 101(a)(15) may vary according to the class of visa being requested.''.

(b) Disposition of Applications.--Section 222(e) (8 U.S.C. 1202(e)) is amended-- (1) in the first sentence, by striking ``required by this section'' and inserting ``for an immigrant visa''; and (2) in the fourth sentence-- (A) by striking ``stamp'' and inserting ``stamp, or other (B) by striking ``by the consular officer''.

(a) Elimination of Joint Action Requirement.--Section 217 (8 U.S.C. 1187) is amended-- (1) in subsection (a), by striking ``Attorney General and the Secretary of State, acting jointly'' and inserting ``Attorney General, in consultation with the Secretary of State''; (2) in subsection (c)(1), by striking ``Attorney General and the Secretary of State acting jointly'' and inserting ``Attorney General, in consultation with the Secretary of State,''; and (3) in subsection (d), by striking ``Attorney General and the Secretary of State, acting jointly,'' and inserting ``Attorney General, in consultation with the Secretary of State,''.

(b) Extension of Program.--Section 217(f) (8 U.S.C. 1187(f)) is amended by striking ``1996'' and inserting ``1997.''. (c) Duration and Termination of Designation of Pilot Program Countries.-- (1) In general.--Section 217(g) (8 U.S.C. 1187(g)) is amended to read as follows:

``(g) Duration and Termination of Designation.-- ``(1) In general.-- ``(A) Determination and notification of disqualification rate.--Upon determination by the Attorney General that a pilot program country's disqualification rate is 2 percent or more, the Attorney General shall notify the Secretary of State. ``(B) Probationary status.--If the program country's disqualification rate is greater than 2 percent but less than 3.5 percent, the Attorney General shall place the program country in probationary status for a period not to exceed 2 full fiscal years following the year in which the determination under subparagraph (A) is made. ``(C) Termination of designation.--Subject to paragraph (3), if the program country's disqualification rate is 3.5 percent or more, the Attorney General shall terminate the country's designation as a pilot program country effective at the beginning of the second fiscal year following the fiscal year in which the determination under subparagraph (A) is made. ``(2) Termination of probationary status.--

``(A) In general.--If the Attorney General determines at the end of the probationary period described in paragraph (1)(B) that the program country placed in probationary status under such paragraph has failed to develop a machine-readable passport program as required by section (c)(2)(C), or has a disqualification rate of 2 percent or more, the Attorney General shall terminate the designation of the country as a pilot program country. If the Attorney General determines that the program country has developed a machine-readable passport program and has a disqualification rate of less than 2 percent, the Attorney General shall redesignate the country as a pilot program country. ``(B) Effective date.--A termination of the designation of a country under subparagraph (A) shall take effect on the first day of the first fiscal year following the fiscal year in which the determination under such subparagraph is made. Until such date, nationals of the country shall remain eligible for a waiver under subsection (a). ``(3) Nonapplicability of certain provisions.--Paragraph (1)(C) shall not apply unless the total number of nationals of a pilot program country described in paragraph (4)(A) exceeds 100. ``(4) Definition.--For purposes of this subsection, the term `disqualification rate' means the percentage which-- ``(A) the total number of nationals of the pilot program country who were-- ``(i) excluded from admission or withdrew their application for admission during the most recent fiscal year for which data are available; and ``(ii) admitted as nonimmigrant visitors during such fiscal year and who violated the terms of such admission; bears to ``(B) the total number of nationals of such country who applied for admission as nonimmigrant visitors during such fiscal year.''. (2) Transition.--A country designated as a pilot program country with probationary status under section 217(g) of the Immigration and Nationality Act (as in effect on the day before the date of the enactment of this Act) shall be considered to be designated as a pilot program country on and after such date, subject to placement in probationary status or termination of such designation under such section (as amended by paragraph (1)). (3) Conforming amendment.--Section 217(a)(2)(B) (8 U.S.C. 1187(a)(2)(B)) is amended by striking ``or is'' through ``subsection (g).'' and inserting a period.

LOTTERY.

The Secretary of State may establish a fee to be paid by each applicant for an immigrant visa described in section 203(c) of the Immigration and Nationality Act. Such fee may be set at a level that will ensure recovery of the cost to the Department of State of allocating visas under such section, including the cost of processing all applications thereunder. All fees collected under this section shall be used for providing consular services. All fees collected under this section shall be deposited as an offsetting

collection to any Department of State appropriation and shall remain available for obligations until expended. The provisions of the Act of August 18, 1856 (11 Stat. 58; 22 U.S.C. 4212-4214), concerning accounting for consular fees, shall not apply to fees collected under this section.

POLISH APPLICANTS FOR THE 1995 DIVERSITY IMMIGRANT PROGRAM.

(a) In General.--The Attorney General, in consultation with the Secretary of State, shall include among the aliens selected for diversity immigrant visas for fiscal year 1997 pursuant to section 203(c) of the Immigration and Nationality Act any alien who, on or before September 30, 1995-- (1) was selected as a diversity immigrant under such section for fiscal year 1995; (2) applied for adjustment of status to that of an alien lawfully admitted for permanent residence pursuant to section 245 of such Act during fiscal year 1995, and whose application, and any associated fees, were accepted by the Attorney General, in accordance with applicable regulations; (3) was not determined by the Attorney General to be excludable under section 212 of such Act or ineligible under section 203(c)(2) of such Act; and (4) did not become an alien lawfully admitted for permanent residence during fiscal year 1995.

(b) Priority.--The aliens selected under subsection (a) shall be considered to have been selected for diversity immigrant visas for fiscal year 1997 prior to any alien selected under any other provision of law. (c) Reduction of Immigrant Visa Number.--For purposes of applying the numerical limitations in sections 201 and 203(c) of the Immigration and Nationality Act, aliens selected under subsection (a) who are granted an immigrant visa shall be treated as aliens granted a visa under section 203(c) of such Act.

Subtitle D--Other Provisions

TO NONIMMIGRANT FOREIGN STUDENTS AND OTHER EXCHANGE PROGRAM PARTICIPANTS.

(a) In General.-- (1) Program.--The Attorney General, in consultation with the Secretary of State and the Secretary of Education, shall develop and conduct a program to collect from approved institutions of higher education and designated exchange visitor programs in the United States the information described in subsection (c) with respect to aliens who-- (A) have the status, or are applying for the status, of nonimmigrants under subparagraph (F), (J), or (M) of section 101(a)(15) of the Immigration and Nationality Act; and (B) are nationals of the countries designated under subsection (b). (2) Deadline.--The program shall commence not later than January 1, 1998.

(b) Covered Countries.--The Attorney General, in consultation with the Secretary of State, shall designate countries for purposes of subsection (a)(1)(B). The Attorney General shall initially designate not less than 5 countries and may designate additional countries at any time while the program is being conducted. (c) Information To Be Collected.-- (1) In general.--The information for collection under subsection (a) with respect to an alien consists of-- (A) the identity and current address in the United States of the alien; (B) the nonimmigrant classification of the alien and the date on which a visa under the classification was issued or extended or the date on which a change to such classification was approved by the Attorney General; (C) in the case of a student at an approved institution of higher education, the current academic status of the alien, including whether the alien is maintaining status as a full-time student or, in the case of a participant in a designated exchange visitor program, whether the alien is satisfying the terms and conditions of such program; and (D) in the case of a student at an approved institution of higher education, any disciplinary action taken by the institution against the alien as a result of the alien's being convicted of a crime or, in the case of a participant in a designated exchange visitor program, any change in the alien's participation as a result of the alien's being convicted of a crime. (2) FERPA.--The Family Educational Rights and Privacy Act of 1974 shall not apply to aliens described in subsection (a) to the extent that the Attorney General determines necessary to carry out the program under subsection (a). (3) Electronic collection.--The information described in paragraph (1) shall be collected electronically, where practicable. (4) Computer software.-- (A) Collecting institutions.--To the extent practicable, the Attorney General shall design the program in a manner that permits approved institutions of higher education and designated exchange visitor programs to use existing software for the collection, storage, and data processing of information described in paragraph (1). (B) Attorney general.--To the extent practicable, the Attorney General shall use or enhance existing software for the collection, storage, and data processing of information described in paragraph (1).

(d) Participation by Institutions of Higher Education and Exchange Visitor Programs.-- (1) Condition.--The information described in subsection (c) shall be provided by as a condition of-- (A) in the case of an approved institution of higher education, the continued approval of the institution under subparagraph (F) or (M) of section 101(a)(15) of the Immigration and Nationality Act; and (B) in the case of an approved institution of higher education or a designated exchange visitor program, the

granting of authority to issue documents to an alien demonstrating the alien's eligibility for a visa under subparagraph (F), (J), or (M) of section 101(a)(15) of such Act. (2) Effect of failure to provide information.--If an approved institution of higher education or a designated exchange visitor program fails to provide the specified information, such approvals and such issuance of visas shall be revoked or denied.

(e) Funding.-- (1) In general.--Beginning on April 1, 1997, an approved institution of higher education and a designated exchange visitor program shall impose on, and collect from, each alien described in paragraph (3), with respect to whom the institution or program is required by subsection (a) to collect information, a fee established by the Attorney General under paragraph (4) at the time-- (A) when the alien first registers with the institution or program after entering the United States; or (B) in a case where a registration under subparagraph (A) does not exist, when the alien first commences activities in the United States with the institution or program. (2) Remittance.--An approved institution of higher education and a designated exchange visitor program shall remit the fees collected under paragraph (1) to the Attorney General pursuant to a schedule established by the Attorney General. (3) Aliens described.--An alien referred to in paragraph (1) is an alien who has nonimmigrant status under subparagraph (F), (J), or (M) of section 101(a)(15) of the Immigration and Nationality Act (other than a nonimmigrant under section 101(a)(15)(J) of such Act who has come to the United States as a participant in a program sponsored by the Federal Government). (4) Amount and use of fees.-- (A) Establishment of amount.--The Attorney General shall establish the amount of the fee to be imposed on, and collected from, an alien under paragraph (1). Except as provided in subsection (g)(2), the fee imposed on any individual may not exceed $100. The amount of the fee shall be based on the Attorney General's estimate of the cost per alien of conducting the information collection program described in this section. (B) Use.--Fees collected under paragraph (1) shall be deposited as offsetting receipts into the Immigration Examinations Fee Account (established under section 286(m) of the Immigration and Nationality Act) and shall remain available until expended for the Attorney General to reimburse any appropriation the amount paid out of which is for expenses in carrying out this section.

(f) Joint Report.--Not later than 4 years after the commencement of the program established under subsection (a), the Attorney General, the Secretary of State, and the Secretary of Education shall jointly submit to the Committees on the Judiciary of the Senate and the House of Representatives a report on the operations of the program and the feasibility of expanding the program to cover the nationals of all countries. (g) Worldwide Applicability of the Program.-- (1) Expansion of program.--

(A) In general.--Not later than 6 months after the submission of the report required by subsection (f), the Attorney General, in consultation with the Secretary of State and the Secretary of Education, shall commence expansion of the program to cover the nationals of all countries. (B) Deadline.--Such expansion shall be completed not later than 1 year after the date of the submission of the report referred to in subsection (f). (2) Revision of fee.--After the program has been expanded, as provided in paragraph (1), the Attorney General may, on a periodic basis, revise the amount of the fee imposed and collected under subsection (e) in order to take into account changes in the cost of carrying out the program.

(h) Definitions.--As used in this section: (1) Approved institution of higher education.--The term ``approved institution of higher education'' means a college or university approved by the Attorney General, in consultation with the Secretary of Education, under subparagraph (F), (J), or (M) of section 101(a)(15) of the Immigration and Nationality Act. (2) Designated exchange visitor program.--The term ``designated exchange visitor program'' means a program that has been-- (A) designated by the Director of the United States Information Agency for purposes of section 101(a)(15)(J) of the Immigration and Nationality Act; and (B) selected by the Attorney General for purposes of the program under this section.

AGENCIES AND THE IMMIGRATION AND NATURALIZATION SERVICE.

(a) In General.--Notwithstanding any other provision of Federal, State, or local law, a Federal, State, or local government entity or official may not prohibit, or in any way restrict, any government entity or official from sending to, or receiving from, the Immigration and Naturalization Service information regarding the citizenship or immigration status, lawful or unlawful, of any individual. (b) Additional Authority of Government Entities.--Notwithstanding any other provision of Federal, State, or local law, no person or agency may prohibit, or in any way restrict, a Federal, State, or local government entity from doing any of the following with respect to information regarding the immigration status, lawful or unlawful, of any individual: (1) Sending such information to, or requesting or receiving such information from, the Immigration and Naturalization Service. (2) Maintaining such information. (3) Exchanging such information with any other Federal, State, or local government entity.

(c) Obligation to Respond to Inquiries.--The Immigration and Naturalization Service shall respond to an inquiry by a Federal, State, or local government agency, seeking to verify or ascertain the citizenship or immigration status of any individual within the jurisdiction of the agency for any purpose authorized by law, by providing the requested verification or status information.

RESIDENCE.

Not later than 6 months after the date of the enactment of this Act, the Commissioner of Immigration and Naturalization shall issue regulations governing rights of ``habitual residence'' in the United States under the terms of the following: (1) The Compact of Free Association between the Government of the United States and the Governments of the Marshall Islands and the Federated States of Micronesia (48 U.S.C. 1901 note). (2) The Compact of Free Association between the Government of the United States and the Government of Palau (48 U.S.C. 1931 note).

MUTILATION.

(a) Provision of Information Regarding Female Genital Mutilation.-- The Immigration and Naturalization Service (in cooperation with the Department of State) shall make available for all aliens who are issued immigrant or nonimmigrant visas, prior to or at the time of entry into the United States, the following information: (1) Information on the severe harm to physical and psychological health caused by female genital mutilation which is compiled and presented in a manner which is limited to the practice itself and respectful to the cultural values of the societies in which such practice takes place. (2) Information concerning potential legal consequences in the United States for (A) performing female genital mutilation, or (B) allowing a child under his or her care to be subjected to female genital mutilation, under criminal or child protection statutes or as a form of child abuse.

(b) Limitation.--In consultation with the Secretary of State, the Commissioner of Immigration and Naturalization shall identify those countries in which female genital mutilation is commonly practiced and, to the extent practicable, limit the provision of information under subsection (a) to aliens from such countries. (c) Definition.--For purposes of this section, the term ``female genital mutilation'' means the removal or infibulation (or both) of the whole or part of the clitoris, the labia minora, or labia majora.

(a) Findings.--The Congress finds that-- (1) the practice of female genital mutilation is carried out by members of certain cultural and religious groups within the United States; (2) the practice of female genital mutilation often results in the occurrence of physical and psychological health effects that harm the women involved; (3) such mutilation infringes upon the guarantees of rights secured by Federal and State law, both statutory and constitutional; (4) the unique circumstances surrounding the practice of female genital mutilation place it beyond the ability of any single State or local jurisdiction to control; (5) the practice of female genital mutilation can be prohibited without abridging the exercise of any rights guaranteed

under the first amendment to the Constitution or under any other law; and (6) Congress has the affirmative power under section 8 of article I, the necessary and proper clause, section 5 of the fourteenth Amendment, as well as under the treaty clause, to the Constitution to enact such legislation.

(b) Crime.-- (1) In general.--Chapter 7 of title 18, United States Code, is amended by adding at the end the following:

``Sec. 116. Female genital mutilation

``(a) Except as provided in subsection (b), whoever knowingly circumcises, excises, or infibulates the whole or any part of the labia majora or labia minora or clitoris of another person who has not attained the age of 18 years shall be fined under this title or imprisoned not more than 5 years, or both. ``(b) A surgical operation is not a violation of this section if the operation is-- ``(1) necessary to the health of the person on whom it is performed, and is performed by a person licensed in the place of its performance as a medical practitioner; or ``(2) performed on a person in labor or who has just given birth and is performed for medical purposes connected with that labor or birth by a person licensed in the place it is performed as a medical practitioner, midwife, or person in training to become such a practitioner or midwife.

``(c) In applying subsection (b)(1), no account shall be taken of the effect on the person on whom the operation is to be performed of any belief on the part of that person, or any other person, that the operation is required as a matter of custom or ritual.''. (2) Conforming amendment.--The table of sections at the beginning of chapter 7 of title 18, United States Code, is amended by adding at the end the following new item:

``116. Female genital mutilation.''.

(c) Effective Date.--The amendments made by subsection (b) shall take effect on the date that is 180 days after the date of the enactment of this Act.

POLISH AND HUNGARIAN PAROLEES.

(a) In General.--The Attorney General shall adjust the status of an alien described in subsection (b) to that of an alien lawfully admitted for permanent residence if the alien-- (1) applies for such adjustment; (2) has been physically present in the United States for at least 1 year and is physically present in the United States on the date the application for such adjustment is filed; (3) is admissible to the United States as an immigrant, except as provided in subsection (c); and (4) pays a fee (determined by the Attorney General) for the processing of such application.

(b) Aliens Eligible for Adjustment of Status.--The benefits provided in subsection (a) shall only apply to an alien who-- (1) was a national of Poland or Hungary; and

(2) was inspected and granted parole into the United States during the period beginning on November 1, 1989, and ending on December 31, 1991, after being denied refugee status.

(c) Waiver of Certain Grounds for Inadmissibility.--The provisions of paragraphs (4), (5), and (7)(A) of section 212(a) of the Immigration and Nationality Act shall not apply to adjustment of status under this section and the Attorney General may waive any other provision of such section (other than paragraph (2)(C) and subparagraphs (A), (B), (C), or (E) of paragraph (3)) with respect to such an adjustment for humanitarian purposes, to assure family unity, or when it is otherwise in the public interest. (d) Date of Approval.--Upon the approval of such an application for adjustment of status, the Attorney General shall create a record of the alien's admission as an alien lawfully admitted for permanent residence as of the date of the alien's inspection and parole described in subsection (b)(2). (e) No Offset in Number of Visas Available.--When an alien is granted the status of having been lawfully admitted for permanent residence under this section, the Secretary of State shall not be required to reduce the number of immigrant visas authorized to be issued under the Immigration and Nationality Act.

(a) In General.--The Attorney General shall make available funds under this section, in each of fiscal years 1997 through 2001, to the Commissioner of Immigration and Naturalization or to other public or private nonprofit entities to support demonstration projects under this section at 10 sites throughout the United States. Each such project shall be designed to provide for the administration of the oath of allegiance under section 337(a) of the Immigration and Nationality Act on a business day around Independence Day to approximately 500 people whose application for naturalization has been approved. Each project shall provide for appropriate outreach and ceremonial and celebratory activities. (b) Selection of Sites.--The Attorney General shall, in the Attorney General's discretion, select diverse locations for sites on the basis of the number of naturalization applicants living in proximity to each site and the degree of local community participation and support in the project to be held at the site. Not more than 2 sites may be located in the same State. The Attorney General shall consider changing the sites selected from year to year. (c) Amounts Available; Use of Funds.-- (1) Amount.--The amount made available under this section with respect to any single site for a year shall not exceed $5,000. (2) Use.--Funds made available under this section may be used only to cover expenses incurred in carrying out oath administration ceremonies at the demonstration sites under subsection (a), including expenses for-- (A) cost of personnel of the Immigration and Naturalization Service (including travel and overtime expenses); (B) rental of space; and (C) costs of printing appropriate brochures and other information about the ceremonies.

(3) Availability of funds.--Funds that are otherwise available to the Immigration and Naturalization Service to carry out naturalization activities shall be available, to the extent provided in appropriation Acts, to carry out this section.

(d) Application.--In the case of an entity other than the Immigration and Naturalization Service seeking to conduct a demonstration project under this section, no amounts may be made available to the entity under this section unless an appropriate application has been made to, and approved by, the Attorney General, in a form and manner specified by the Attorney General.

AMERICAN-MADE PRODUCTS; REQUIREMENTS REGARDING NOTICE.

(a) Purchase of American-Made Equipment and Products.--It is the sense of the Congress that, to the greatest extent practicable, all equipment and products purchased with funds made available under this division should be American-made. (b) Notice to Recipients of Grants.--In providing grants under this division, the Attorney General, to the greatest extent practicable, shall provide to each recipient of a grant a notice describing the statement made in subsection (a) by the Congress.

Section 1 of the Act of June 15, 1917 (50 U.S.C. 191) is amended in the first sentence by inserting ``or whenever the Attorney General determines that an actual or anticipated mass migration of aliens en route to, or arriving off the coast of, the United States presents urgent circumstances requiring an immediate Federal response,'' after ``United States,'' the first place such term appears.

(a) In General.--The Attorney General shall investigate, and submit a report to the Committees on the Judiciary of the House of Representatives and of the Senate regarding, the practices of entities authorized to administer standardized citizenship tests pursuant to section 312.3(a) of title 8, Code of Federal Regulations. The report shall include any findings of fraudulent practices by such entities. (b) Preliminary and Final Reports.--Not later than 90 days after the date of the enactment of this Act, the Attorney General shall submit to the Committees on the Judiciary of the House of Representatives and of the Senate a preliminary report on the investigation conducted under subsection (a). The Attorney General shall submit to such Committees a final report on such investigation not later than 275 days after the submission of the preliminary report.

BUILDING.

(a) Designation.--The United States Customs Administrative Building at the Ysleta/Zaragosa Port of Entry located at 797 South Zaragosa Road in El Paso, Texas, is designated as the ``Timothy C. McCaghren Customs Administrative Building''. (b) Legal References.--Any reference in any law, regulation, document, record, map, or other paper of the United States to the building referred to in subsection (a) is deemed to be a reference to the ``Timothy C. McCaghren Customs Administrative Building''.

(a) Findings.--The Congress finds as follows: (1) There is a substantial ``mail-order bride'' business in the United States. With approximately 200 companies in the United States, an estimated 2,000 to 3,500 men in the United States find wives through mail-order bride catalogs each year. However, there are no official statistics available on the number of mail-order brides entering the United States each year. (2) The companies engaged in the mail-order bride business earn substantial profits. (3) Although many of these mail-order marriages work out, in many other cases, anecdotal evidence suggests that mail-order brides find themselves in abusive relationships. There is also evidence to suggest that a substantial number of mail-order marriages are fraudulent under United States law. (4) Many mail-order brides come to the United States unaware or ignorant of United States immigration law. Mail-order brides who are battered often think that if they flee an abusive marriage, they will be deported. Often the citizen spouse threatens to have them deported if they report the abuse. (5) The Immigration and Naturalization Service estimates that the rate of marriage fraud between foreign nationals and United States citizens or aliens lawfully admitted for permanent residence is 8 percent. It is unclear what percentage of these marriage fraud cases originate as mail-order marriages.

(b) Information Dissemination.-- (1) Requirement.--Each international matchmaking organization doing business in the United States shall disseminate to recruits, upon recruitment, such immigration and naturalization information as the Immigration and Naturalization Service deems appropriate, in the recruit's native language, including information regarding conditional permanent residence status and the battered spouse waiver under such status, permanent resident status, marriage fraud penalties, the unregulated nature of the business engaged in by such organizations, and the study required under subsection (c). (2) Civil penalty.-- (A) Violation.--Any international matchmaking organization that the Attorney General determines has violated subsection (b) shall be subject, in addition to any other penalties that may be prescribed by law, to a civil money penalty of not more than $20,000 for each such violation. (B) Procedures for imposition of penalty.--Any penalty under subparagraph (A) may be imposed only after notice and opportunity for an agency hearing on the record in accordance with sections 554 through 557 of title 5, United States Code.

(c) Study.--The Attorney General, in consultation with the Commissioner of Immigration and Naturalization and the Director of the Violence Against Women Initiative of the Department of Justice, shall conduct a study of mail-order marriages to determine, among other things-- (1) the number of such marriages;

(2) the extent of marriage fraud in such marriages, including an estimate of the extent of marriage fraud arising from the services provided by international matchmaking organizations; (3) the extent to which mail-order spouses utilize section 244(a)(3) of the Immigration and Nationality Act (providing for suspension of deportation in certain cases involving abuse), or section 204(a)(1)(A)(iii) of such Act (providing for certain aliens who have been abused to file a classification petition on their own behalf); (4) the extent of domestic abuse in mail-order marriages; and (5) the need for continued or expanded regulation and education to implement the objectives of the Violence Against Women Act of 1994 and the Immigration Marriage Fraud Amendments of 1986 with respect to mail-order marriages.

(d) Report.--Not later than 1 year after the date of the enactment of this Act, the Attorney General shall submit a report to the Committees on the Judiciary of the House of Representatives and of the Senate setting forth the results of the study conducted under subsection (c). (e) Definitions.--As used in this section: (1) International matchmaking organization.-- (A) In general.--The term ``international matchmaking organization'' means a corporation, partnership, business, or other legal entity, whether or not organized under the laws of the United States or any State, that does business in the United States and for profit offers to United States citizens or aliens lawfully admitted for permanent residence, dating, matrimonial, or social referral services to nonresident noncitizens, by-- (i) an exchange of names, telephone numbers, addresses, or statistics; (ii) selection of photographs; or (iii) a social environment provided by the organization in a country other than the United States. (B) Exception.--Such term does not include a traditional matchmaking organization of a religious nature that otherwise operates in compliance with the laws of the countries of the recruits of such organization and the laws of the United States. (2) Recruit.--The term ``recruit'' means a noncitizen, nonresident person, recruited by the international matchmaking organization for the purpose of providing dating, matrimonial, or social referral services to United States citizens or aliens lawfully admitted for permanent residence.

(a) Sense of the Congress.--It is the sense of the Congress that the H2-A nonimmigrant worker program should be reviewed and may need improvement in order to meet the need of producers of labor-intensive agricultural commodities and livestock in the United States for an adequate workforce. (b) Review.--The Comptroller General shall review the effectiveness of the H-2A nonimmigrant worker program to ensure that the program provides a sufficient supply of agricultural labor

in the event of future shortages of domestic workers after the enactment of this Act. Among other things, the Comptroller General shall review the H-2A nonimmigrant worker program to determine-- (1) whether the program ensures that an adequate supply of qualified United States workers is available at the time and place needed for employers seeking such workers after the date of enactment of this Act; (2) whether the program ensures that there is timely approval of applications for temporary foreign workers under the program in the event of shortages of United States workers after the date of the enactment of this Act; (3) whether the program ensures that implementation of the program is not displacing United States agricultural workers or diminishing the terms and conditions of employment of United States agricultural workers; (4) if, and to what extent, the program is contributing to the problem of illegal immigration; and (5) that the program adequately meets the needs of agricultural employers for all types of temporary foreign agricultural workers, including higher-skilled workers in occupations which require a level of specific vocational preparation of 4 or higher (as described in the 4th edition of the Dictionary of Occupational Title, published by the Department of Labor).

(c) Report.--Not later than December 31, 1996, or 3 months after the date of the enactment of this Act, whichever occurs earlier, the Comptroller General shall submit a report to the appropriate committees of the Congress setting forth the conclusions of the Comptroller General from the review conducted under subsection (b). (d) Definitions.--As used in this section: (1) The term ``Comptroller General'' means the Comptroller General of the United States. (2) The term ``H-2A nonimmigrant worker program'' means the program for the admission of nonimmigrant aliens described in section 101(a)(15)(H)(ii)(a) of the Immigration and Nationality Act.

AGENTS.

(a) Study and Review.-- (1) In general.--Not later than 30 days after the date of the enactment of this Act, the Commissioner of the United States Customs Service shall initiate a study of harassment by Canadian customs agents allegedly undertaken for the purpose of deterring cross-border commercial activity along the United States-New Brunswick border. Such study shall include a review of the possible connection between any incidents of harassment and the discriminatory imposition of the New Brunswick provincial sales tax on goods purchased in the United States by New Brunswick residents, and with any other actions taken by the Canadian provincial governments to deter cross-border commercial activities. (2) Consultation.--In conducting the study under paragraph (1), the Commissioner of the United States Customs Service shall consult with representatives of the State of Maine,

local governments, local businesses, and any other knowledgeable persons who the Commissioner considers to be important to the completion of the study.

(b) Report.--Not later than 120 days after the date of the enactment of this Act, the Commissioner of the United States Customs Service shall submit to the Committees on the Judiciary of the House of Representatives and of the Senate a report on the study and review conducted under subsection (a). The report shall include recommendations for steps that the United States Government can take to help end any harassment by Canadian customs agents that is found to have occurred.

BRUNSWICK PROVINCIAL SALES TAX.

(a) Findings.--The Congress finds as follows: (1) In July 1993, Canadian customs officers began collecting an 11 percent New Brunswick provincial sales tax on goods purchased in the United States by New Brunswick residents, an action that has caused severe economic harm to United States businesses located in proximity to the border with New Brunswick. (2) This impediment to cross-border trade compounds the damage already done from the Canadian Government's imposition of a 7 percent tax on all goods bought by Canadians in the United States. (3) Collection of the New Brunswick provincial sales tax on goods purchased outside of New Brunswick is effected only along the United States-Canadian border, not along New Brunswick's borders with other Canadian provinces; the tax is thus being administered by Canadian authorities in a manner uniquely discriminatory to Canadians shopping in the United States. (4) In February 1994, the United States Trade Representative publicly stated an intention to seek redress from the discriminatory application of the New Brunswick provincial sales tax under the dispute resolution process in chapter 20 of the North American Free Trade Agreement (NAFTA), but the United States Government has still not made such a claim under NAFTA procedures. (5) Initially, the United States Trade Representative argued that filing a New Brunswick provincial sales tax claim was delayed only because the dispute mechanism under NAFTA had not yet been finalized, but more than a year after such mechanism has been put in place, the claim has still not been put forward by the United States Trade Representative.

(b) Sense of Congress.--It is the sense of the Congress that-- (1) the provincial sales tax levied by the Canadian province of New Brunswick on Canadian citizens of that province who purchase goods in the United States-- (A) raises questions about a possible violation of the North American Free Trade Agreement in the discriminatory application of the tax to cross-border trade with the United States; and (B) damages good relations between the United States and Canada; and (2) the United States Trade Representative should move forward without further delay in seeking redress under the

dispute resolution process in chapter 20 of the North American Free Trade Agreement for the violation.

RELATED DOCUMENTS.

(a) Birth Certificates.-- (1) Standards for acceptance by federal agencies.-- (A) In general.-- (i) General rule.--Subject to clause (ii), a Federal agency may not accept for any official purpose a certificate of birth, unless the certificate-- (I) is a birth certificate (as defined in paragraph (3)); and (II) conforms to the standards set forth in the regulation promulgated under subparagraph (B). (ii) Applicability.--Clause (i) shall apply only to a certificate of birth issued after the day that is 3 years after the date of the promulgation of a final regulation under subparagraph (B). Clause (i) shall not be construed to prevent a Federal agency from accepting for official purposes any certificate of birth issued on or before such day. (B) Regulation.-- (i) Consultation with government agencies.-- The President shall select 1 or more Federal agencies to consult with State vital statistics offices, and with other appropriate Federal agencies designated by the President, for the purpose of developing appropriate standards for birth certificates that may be accepted for official purposes by Federal agencies, as provided in subparagraph (A). (ii) Selection of lead agency.--Of the Federal agencies selected under clause (i), the President shall select 1 agency to promulgate, upon the conclusion of the consultation conducted under such clause, a regulation establishing standards of the type described in such clause. (iii) Deadline.--The agency selected under clause (ii) shall promulgate a final regulation under such clause not later than the date that is 1 year after the date of the enactment of this Act. (iv) Minimum requirements.--The standards established under this subparagraph-- (I) at a minimum, shall require certification of the birth certificate by the State or local custodian of record that issued the certificate, and shall require the use of safety paper, the seal of the issuing custodian of record, and other features designed to limit tampering, counterfeiting, and photocopying, or otherwise duplicating, the birth certificate for fraudulent purposes; (II) may not require a single design to which birth certificates issued by all States must conform; and (III) shall accommodate the differences between the States in the manner and form in

which birth records are stored and birth certificates are produced from such records. (2) Grants to states.-- (A) Assistance in meeting federal standards.-- (i) In general.--Beginning on the date a final regulation is promulgated under paragraph (1)(B), the Secretary of Health and Human Services, acting through the Director of the National Center for Health Statistics and after consulting with the head of any other agency designated by the President, shall make grants to States to assist them in issuing birth certificates that conform to the standards set forth in the regulation. (ii) Allocation of grants.--The Secretary shall provide grants to States under this subparagraph in proportion to the populations of the States applying to receive a grant and in an amount needed to provide a substantial incentive for States to issue birth certificates that conform to the standards described in clause (i). (B) Assistance in matching birth and death records.-- (i) In general.--The Secretary of Health and Human Services, acting through the Director of the National Center for Health Statistics and after consulting with the head of any other agency designated by the President, shall make grants to States to assist them in developing the capability to match birth and death records, within each State and among the States, and to note the fact of death on the birth certificates of deceased persons. In developing the capability described in the preceding sentence, a State that receives a grant under this subparagraph shall focus first on individuals born after 1950. (ii) Allocation and amount of grants.--The Secretary shall provide grants to States under this subparagraph in proportion to the populations of the States applying to receive a grant and in an amount needed to provide a substantial incentive for States to develop the capability described in clause (i). (C) Demonstration projects.--The Secretary of Health and Human Services, acting through the Director of the National Center for Health Statistics, shall make grants to States for a project in each of 5 States to demonstrate the feasibility of a system under which persons otherwise required to report the death of individuals to a State would be required to provide to the State's office of vital statistics sufficient information to establish the fact of death of every individual dying in the State within 24 hours of acquiring the information. (3) Birth certificate.--As used in this subsection, the term ``birth certificate'' means a certificate of birth-- (A) of-- (i) an individual born in the United States; or (ii) an individual born abroad-- (I) who is a citizen or national of the United States at birth; and

(II) whose birth is registered in the United States; and (B) that-- (i) is a copy, issued by a State or local authorized custodian of record, of an original certificate of birth issued by such custodian of record; or (ii) was issued by a State or local authorized custodian of record and was produced from birth records maintained by such custodian of record.

(b) State-Issued Drivers Licenses and Comparable Identification Documents.-- (1) Standards for acceptance by federal agencies.-- (A) In general.--A Federal agency may not accept for any identification-related purpose a driver's license, or other comparable identification document, issued by a State, unless the license or document satisfies the following requirements: (i) Application process.--The application process for the license or document shall include the presentation of such evidence of identity as is required by regulations promulgated by the Secretary of Transportation after consultation with the American Association of Motor Vehicle Administrators. (ii) Social security number.--Except as provided in subparagraph (B), the license or document shall contain a social security account number that can be read visually or by electronic means. (iii) Form.--The license or document otherwise shall be in a form consistent with requirements set forth in regulations promulgated by the Secretary of Transportation after consultation with the American Association of Motor Vehicle Administrators. The form shall contain security features designed to limit tampering, counterfeiting, photocopying, or otherwise duplicating, the license or document for fraudulent purposes and to limit use of the license or document by impostors. (B) Exception.--The requirement in subparagraph (A)(ii) shall not apply with respect to a driver's license or other comparable identification document issued by a State, if the State-- (i) does not require the license or document to contain a social security account number; and (ii) requires-- (I) every applicant for a driver's license, or other comparable identification document, to submit the applicant's social security account number; and (II) an agency of the State to verify with the Social Security Administration that such account number is valid. (C) Deadline.--The Secretary of Transportation shall promulgate the regulations referred to in clauses (i) and (iii) of subparagraph (A) not later than 1 year after the date of the enactment of this Act. (2) Grants to states.--Beginning on the date final regulations are promulgated under paragraph (1), the Secretary of

Transportation shall make grants to States to assist them in issuing driver's licenses and other comparable identification documents that satisfy the requirements under such paragraph. (3) Effective dates.-- (A) In general.--Except as otherwise provided in this paragraph, this subsection shall take effect on the date of the enactment of this Act. (B) Prohibition on federal agencies.--Subparagraphs (A) and (B) of paragraph (1) shall take effect beginning on October 1, 2000, but shall apply only to licenses or documents issued to an individual for the first time and to replacement or renewal licenses or documents issued according to State law.

(c) Report.--Not later than 1 year after the date of the enactment of this Act, the Secretary of Health and Human Services shall submit a report to the Congress on ways to reduce the fraudulent obtaining and the fraudulent use of birth certificates, including any such use to obtain a social security account number or a State or Federal document related to identification or immigration. (d) Federal Agency Defined.--For purposes of this section, the term ``Federal agency'' means any of the following: (1) An Executive agency (as defined in section 105 of title 5, United States Code). (2) A military department (as defined in section 102 of such title). (3) An agency in the legislative branch of the Government of the United States. (4) An agency in the judicial branch of the Government of the United States.

COUNTERFEIT-RESISTANT SOCIAL SECURITY CARD.

(a) Development.-- (1) In general.--The Commissioner of Social Security (in this section referred to as the ``Commissioner'') shall, in accordance with the provisions of this section, develop a prototype of a counterfeit-resistant social security card. Such prototype card-- (A) shall be made of a durable, tamper-resistant material such as plastic or polyester; (B) shall employ technologies that provide security features, such as magnetic stripes, holograms, and integrated circuits; and (C) shall be developed so as to provide individuals with reliable proof of citizenship or legal resident alien status. (2) Assistance by attorney general.--The Attorney General shall provide such information and assistance as the Commissioner deems necessary to achieve the purposes of this section.

(b) Studies and Reports.-- (1) In general.--The Comptroller General and the Commissioner of Social Security shall each conduct a study, and issue a report to the Congress, that examines different methods of improving the social security card application process.

(2) Elements of studies.--The studies shall include evaluations of the cost and work load implications of issuing a counterfeit-resistant social security card for all individuals over a 3, 5, and 10 year period. The studies shall also evaluate the feasibility and cost implications of imposing a user fee for replacement cards and cards issued to individuals who apply for such a card prior to the scheduled 3, 5, and 10 year phase-in options. (3) Distribution of reports.--Copies of the reports described in this subsection, along with facsimiles of the prototype cards as described in subsection (a), shall be submitted to the Committees on Ways and Means and Judiciary of the House of Representatives and the Committees on Finance and Judiciary of the Senate not later than 1 year after the date of the enactment of this Act.

(a) Authority.--Notwithstanding section 203 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 484) or any other provision of law, the Attorney General is authorized to transfer and convey to the Border Patrol Museum and Memorial Library Foundation, incorporated in the State of Texas, such equipment, artifacts, and memorabilia held by the Immigration and Naturalization Service as the Attorney General may determine is necessary to further the purposes of the Museum and Foundation. (b) Technical Assistance.--The Attorney General is authorized to provide technical assistance, through the detail of personnel of the Immigration and Naturalization Service, to the Border Patrol Museum and Memorial Library Foundation for the purpose of demonstrating the use of the items transferred under subsection (a).

AND NATURALIZATION SERVICE.

It is the sense of the Congress that the mission statement of the Immigration and Naturalization Service should include a statement that it is the responsibility of the Service to detect, apprehend, and remove those aliens unlawfully present in the United States, particularly those aliens involved in drug trafficking or other criminal activity.

CERTAIN ALIENS.

Section 112(d)(1) of title 32, United States Code, is amended by adding at the end the following new sentence: ``The plan as approved by the Secretary may provide for the use of personnel and equipment of the National Guard of that State to assist the Immigration and Naturalization Service in the transportation of aliens who have violated a Federal or State law prohibiting or regulating the possession, use, or distribution of a controlled substance.''.

Subtitle E--Technical Corrections

(a) Amendments Relating to Public Law 103-322 (Violent Crime Control and Law Enforcement Act of 1994).--

(1) Section 60024(1)(F) of the Violent Crime Control and Law Enforcement Act of 1994 (Public Law 103- 322) (in this subsection referred to as ``VCCLEA'') is amended by inserting ``United States Code,'' after ``title 18,''. (2) Section 130003(b)(3) of VCCLEA is amended by striking ``Naturalization'' and inserting ``Nationality''. (3)(A) Section 214 (8 U.S.C. 1184) is amended by redesignating the subsection (j), added by section 130003(b)(2) of VCCLEA (108 Stat. 2025), and the subsection (k), as amended by section 622(c) of this division, as subsections (k) and (l), respectively. (B) Section 101(a)(15)(S) (8 U.S.C. 1101(a)(15)(S)) is amended by striking ``214(j)'' and inserting ``214(k)''. (4)(A) Section 245 (8 U.S.C. 1255) is amended by redesignating the subsection (i) added by section 130003(c)(1) of VCCLEA as subsection (j). (B) Section 241(a)(2)(A)(i)(I) (8 U.S.C. 1251(a)(2)(A)(i)(I)), as amended by section 130003(d) of VCCLEA and before redesignation by section 305(a)(2) of this division, is amended by striking ``245(i)'' and inserting ``245(j)''. (5) Section 245(j)(3), as added by section 130003(c)(1) of VCCLEA and as redesignated by paragraph (4)(A), is amended by striking ``paragraphs (1) or (2)'' and inserting ``paragraph (1) or (2)''. (6) Section 130007(a) of VCCLEA is amended by striking ``242A(d)'' and inserting ``242A(a)(3)''. (7) The amendments made by this subsection shall be effective as if included in the enactment of the VCCLEA.

(b) Amendments Relating to Immigration and Nationality Technical Corrections Act of 1994.-- (1) Section 101(d) of the Immigration and Nationality Technical Corrections Act of 1994 (Public Law 103-416) (in this subsection referred to as ``INTCA'') is amended-- (A) by striking ``Application'' and all that follows through ``This'' and inserting ``Applicability of Transmission Requirements.--This''; (B) by striking ``any residency or other retention requirements for'' and inserting ``the application of any provision of law relating to residence or physical presence in the United States for purposes of transmitting United States''; and (C) by striking ``as in effect'' and all that follows through the end and inserting ``to any person whose claim is based on the amendment made by subsection (a) or through whom such a claim is derived.''. (2) Section 102 of INTCA is amended by adding at the end the following:

``(e) Transition.--In applying the amendment made by subsection (a) to children born before November 14, 1986, any reference in the matter inserted by such amendment to `five years, at least two of which' is deemed a reference to `10 years, at least 5 of which'.''. (3) Section 351(a) (8 U.S.C. 1483(a)), as amended by section 105(a)(2)(A) of INTCA, is amended by striking the comma after ``nationality''. (4) Section 207(2) of INTCA is amended by inserting a comma after ``specified''.

(5) Section 101(a)(43) (8 U.S.C. 1101(a)(43)) is amended in subparagraph (K)(ii), by striking the comma after ``1588''. (6) Section 273(b) (8 U.S.C. 1323(b)), as amended by section 209(a) of INTCA, is amended by striking ``remain'' and inserting ``remains''. (7) Section 209(a)(1) of INTCA is amended by striking ``$3000'' and inserting ``$3,000''. (8) Section 209(b) of INTCA is amended by striking ``subsection'' and inserting ``section''. (9) Section 219(cc) of INTCA is amended by striking `` `year 1993 the first place it appears' '' and inserting `` `year 1993' the first place it appears''. (10) Section 219(ee) of INTCA is amended by adding at the end the following:

``(3) The amendments made by this subsection shall take effect on the date of the enactment of this Act.''. (11) Paragraphs (4) and (6) of section 286(r) (8 U.S.C. 1356(r)) are amended by inserting ``the'' before ``Fund'' each place it appears. (12) Section 221 of INTCA is amended-- (A) by striking each semicolon and inserting a comma, (B) by striking ``disasters.'' and inserting ``disasters,''; and (C) by striking ``The official'' and inserting ``the official''. (13) Section 242A (8 U.S.C. 1252a), as added by section 224(a) of INTCA and before redesignation as section 238 by section 308(b)(5) of this division, is amended by redesignating subsection (d) as subsection (c). (14) Except as otherwise provided in this subsection, the amendments made by this subsection shall take effect as if included in the enactment of INTCA.

(c) Amendments Relating to Public Law 104-132 (Antiterrorism and Effective Death Penalty Act of 1996).-- (1) Section 219 (8 U.S.C. 1189), as added by section 302(a) of Antiterrorism and Effective Death Penalty Act of 1996 (Public Law 104-132) (in this subsection referred to as ``AEDPA''), is amended by striking the heading and all that follows through ``(a)'' and inserting the following:

``designation of foreign terrorist organizations

``Sec. 219. (a)''. (2) Section 302(b) of AEDPA is amended by striking ``, relating to terrorism,''. (3) Section 106(a) (8 U.S.C. 1105a(a)), as amended by sections 401(e) and 440(a) of AEDPA, is amended-- (A) by striking ``and'' at the end of paragraph (8); (B) by striking the period at the end of paragraph (9) and inserting ``; and''; and (C) in paragraph (10), by striking ``Any'' and inserting ``any''. (4) Section 440(a) of the AEDPA is amended by striking ``Section 106 of the Immigration and Nationality Act (8 U.S.C. 1105a(a)(10)) is amended to read as follows:'' and inserting ``Section 106(a) of the Immigration and Nationality Act (8 U.S.C. 1105a(a)) is amended by adding at the end the following:'' (5) Section 440(g)(1)(A) of AEDPA is amended--

(A) by striking ``of this title''; and (B) by striking the period after ``241(a)(2)(A)(i)''. (6) Section 440(g) of AEDPA is amended by striking paragraph (2). (7) The amendments made by this subsection shall take effect as if included in the enactment of subtitle A of title IV of AEPDA.

(d) Striking References to Section 210A.-- (1)(A) Section 201(b)(1)(C) (8 U.S.C. 1151(b)(1)(C)) is amended by striking ``, 210A,''. (B) Section 274B(a)(3)(B) (8 U.S.C. 1324b(a)(3)(B)) is amended by striking ``, 210A(a),''. (C) Section 241(a)(1) (8 U.S.C. 1251(a)(1)), before redesignation by section 305(a)(2) of this division, is amended by striking subparagraph (F). (2) Sections 204(c)(1)(D)(i) and 204(j)(4) of Immigration Reform and Control Act of 1986 are each amended by striking ``, 210A,''.

(e) Miscellaneous Changes in the Immigration and Nationality Act.-- (1) Before being amended by section 308(a)(2) of this division, the item in the table of contents relating to section 242A is amended to read as follows:

``Sec. 242A. Expedited deportation of aliens convicted of committing aggravated felonies.''.

(2) Section 101(c)(1) (8 U.S.C. 1101(c)(1)) is amended by striking ``, 321, and 322'' and inserting ``and 321''. (3) Section 212(d)(11) (8 U.S.C. 1182(d)(11)) is amended by inserting a comma after ``(4) thereof)''. (4) Pursuant to section 6(b) of Public Law 103-272 (108 Stat. 1378)-- (A) section 214(f)(1) (8 U.S.C. 1184(f)(1)) is amended by striking ``section 101(3) of the Federal Aviation Act of 1958'' and inserting ``section 40102(a)(2) of title 49, United States Code''; and (B) section 258(b)(2) (8 U.S.C. 1288(b)(2)) is amended by striking ``section 105 or 106 of the Hazardous Materials Transportation Act (49 U.S.C. App. 1804, 1805)'' and inserting ``section 5103(b), 5104, 5106, 5107, or 5110 of title 49, United States Code''. (5) Section 286(h)(1)(A) (8 U.S.C. 1356(h)(1)(A)) is amended by inserting a period after ``expended''. (6) Section 286(h)(2)(A) (8 U.S.C. 1356(h)(2)(A)) is amended-- (A) by striking ``and'' at the end of clause (iv); (B) by moving clauses (v) and (vi) 2 ems to the left; (C) by striking ``; and'' in clauses (v) and (vi) and inserting ``and for''; (D) by striking the colons in clauses (v) and (vi); and (E) by striking the period at the end of clause (v) and inserting ``; and''. (7) Section 412(b) (8 U.S.C. 1522(b)) is amended by striking the comma after ``is authorized'' in paragraph (3) and after ``The Secretary'' in paragraph (4).

(f) Miscellaneous Change in the Immigration Act of 1990.--Section 161(c)(3) of the Immigration Act of 1990 is amended by striking ``an an'' and inserting ``of an''.

(g) Miscellaneous Changes in Other Acts.-- (1) Section 506(a) of the Intelligence Authorization Act, Fiscal Year 1990 (Public Law 101-193) <<NOTE: 8 USC 1430 note.>> is amended by striking ``this section'' and inserting ``such section''. (2) Section 140 of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995, as amended by section 505(2) of Public Law 103-317, is amended-- (A) by moving the indentation of subsections (f) and (g) 2 ems to the left; and (B) in subsection (g), by striking ``(g)'' and all that follows through ``shall'' and inserting ``(g) Subsections (d) and (e) shall''.

DIVISION <<NOTE: Small Business Programs Improvement Act of 1996. 15 USC 631 note.>> D--SMALL BUSINESS PROGRAMS IMPROVEMENT ACT

SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This division may be cited as the ``Small Business Programs Improvement Act of 1996''. (b) Table of Contents.--

Sec. 1. Short title; table of contents. Sec. 2. Administrator defined. Sec. 3. Effective date.

For purposes of this Act, the term ``Administrator'' means the Administrator of the Small Business Administration.

Except as otherwise expressly provided, this Act and the amendments made by this Act shall take effect on October 1, 1996.

Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Small Business Act (15 U.S.C. 631 et seq.).

Section 4(b) (15 U.S.C. 633) is amended by inserting after paragraph (2) the following: ``(3) Risk management database.-- ``(A) Establishment.--The Administration shall establish, within the management system for the loan programs authorized by subsections (a) and (b) of section 7 of this Act and title V of the Small Business Investment Act of 1958, a management information system that will generate a database capable of providing timely and accurate information in order to identify loan underwriting, collections, recovery, and liquidation problems. ``(B) Information to be maintained.--In addition to such other information as the Administration considers appropriate, the database established under subparagraph (A) shall, with respect to each loan program described in subparagraph (A), include information relating to-- ``(i) the identity of the institution making the guaranteed loan or issuing the debenture; ``(ii) the identity of the borrower; ``(iii) the total dollar amount of the loan or debenture; ``(iv) the total dollar amount of government exposure in each loan; ``(v) the district of the Administration in which the borrower has its principal office; ``(vi) the principal line of business of the borrower, as identified by Standard Industrial Classification Code (or any successor to that system); ``(vii) the delinquency rate for each program (including number of instances and days overdue);

``(viii) the number and amount of repurchases, losses, and recoveries in each program; ``(ix) the number of deferrals or forbearances in each program (including days and number of instances); ``(x) comparisons on the basis of loan program, lender, Administration district and region, for all the data elements maintained; and ``(xi) underwriting characteristics of each loan that has entered into default, including term, amount and type of collateral, loan-to-value and other actual and projected ratios, line of business, credit history, and type of loan. ``(C) Deadline for operational capability.--The database established under subparagraph (A) shall-- ``(i) be operational not later than June 30, 1997; and ``(ii) capture data beginning on the first day of the second quarter of fiscal year 1997 beginning after such date and thereafter.''.

SECTION 7(a) LOAN PROGRAM.

(a) Servicing and Liquidation of Loans by Preferred Lenders.-- Section 7(a)(2)(C)(ii)(II) (15 U.S.C. 636(a)(2)(C)(ii)(II)) is amended to read as follows: ``(II) complete authority to service and liquidate such loans without obtaining the prior specific approval of the Administration for routine servicing and liquidation activities, but shall not take any actions creating an actual or apparent conflict of interest.''. (b) Certified Lenders Program.--Section 7(a)(19) (15 U.S.C. 636(a)(19)) is amended by adding at the end the following new subparagraph: ``(C) Authority to liquidate loans.-- ``(i) In general.--The Administrator may permit lenders participating in the Certified Lenders Program to liquidate loans made with a guarantee from the Administration pursuant to a liquidation plan approved by the Administrator. ``(ii) Automatic approval.--If the Administrator does not approve or deny a request for approval of a liquidation plan within 10 business days of the date on which the request is made (or with respect to any routine liquidation activity under such a plan, within 5 business days) such request shall be deemed to be approved.''. (c) Limitation on Conducting Pilot Projects.--Section 7(a) (15 U.S.C. 636(a)) is amended by adding at the end the following new paragraph: ``(25) Limitation on conducting pilot projects.-- ``(A) In general.--Not more than 10 percent of the total number of loans guaranteed in any fiscal year under this subsection may be awarded as part of a pilot program which is commenced by the Administrator on or after October 1, 1996.

``(B) Pilot program defined.--In this paragraph, the term `pilot program' means any lending program initiative, project, innovation, or other activity not specifically authorized by law. ``(C) Low documentation loan program.--The Administrator may carry out the low documentation loan program for loans of $100,000 or less only through lenders with significant experience in making small business loans. Not later than 90 days after the date of enactment of this subsection, the Administrator shall promulgate regulations defining the experience necessary for participation as a lender in the low documentation loan program.''. (d) Calculation of Subsidy Rate.--Section 7(a) (15 U.S.C. 636(a)) is amended by adding at the end the following new paragraph: ``(26) Calculation of subsidy rate.--All fees, interest, and profits received and retained by the Administration under this subsection shall be included in the calculations made by the Director of the Office of Management and Budget to offset the cost (as that term is defined in section 502 of the Federal Credit Reform Act of 1990) to the Administration of purchasing and guaranteeing loans under this Act.''. (e) Sale of Unguaranteed Portions of SBA Loans.--Section 5(f)(3) (15 U.S.C. 634(f)(3)) is amended by adding at the end the following: ``Beginning on March 31, 1997, the sale of the unguaranteed portion of any loan made under section 7(a) shall not be permitted until a final regulation that applies uniformly to both depository institutions and other lenders is promulgated by the Administration setting forth the terms and conditions under which such sales can be permitted, including maintenance of appropriate reserve requirements and other safeguards to protect the safety and soundness of the program.''. (f) Conditions on Purchase of Loans.--Section 7(a)(4) (15 U.S.C. 636(a)(4)) is amended-- (1) by striking ``(4) Notwithstanding'' and inserting the following: ``(4) Interest rates and fees.-- ``(A) Interest rates.--Notwithstanding''; and (2) by adding at the end the following new subparagraph: ``(B) Payment of accrued interest.-- ``(i) In general.--Any bank or other lending institution making a claim for payment on the guaranteed portion of a loan made under this subsection shall be paid the accrued interest due on the loan from the earliest date of default to the date of payment of the claim at a rate not to exceed the rate of interest on the loan on the date of default, minus one percent. ``(ii) Loans sold on secondary market.--If a loan described in clause (i) is sold on the secondary market, the amount of interest paid to a bank or other lending institution described in that clause from the earliest date of default to the date of payment of the claim shall be no more than the agreed upon rate, minus one percent.''. (g) Plan for Transfer of Loan Servicing Functions to Centralized Centers.--

(1) Implementation plan required.--The Administrator shall submit a detailed plan for completing the consolidation, in one or more centralized centers, of the performance of the various functions relating to the servicing of loans directly made or guaranteed by the Administration pursuant to the Small Business Act, addressing the matters described in paragraph (2) by the deadline specified in paragraph (3). (2) Contents of plan.--In addition to such other matters as the Administrator may deem appropriate, the plan required by paragraph (1) shall include-- (A) the proposed number and location of such centralized loan servicing centers; (B) the proposed workload (identified by type and numbers of loans and their geographic origin by the Small Business Administration district office) and staffing of each such center; (C) a detailed, time-phased plan for the transfer of the identified loan servicing functions to each proposed center; and (D) any identified impediments to the timely execution of the proposed plan (including adequacy of available financial resources, availability of needed personnel, facilities, and related equipment) and the recommendations of the Administrator for addressing such impediments. (3) Deadline for submission.--Not later than February 28, 1997, the plan required by paragraph (1) shall be submitted to the Committees on Small Business of the House of Representatives and Senate. (h) Preferred Lender Standard Review Program.--Not later than 90 days after the date of enactment of this Act, the Administrator shall commence a standard review program for the Preferred Lender Program established by section 5(b)(7) of the Small Business Act (15 U.S.C. 634(b)(7)), which shall include annual or more frequent assessments of the participation of the lender in the program, including defaults, loans, and recoveries of loans made by that lender under the authority of this section. The Administrator shall require such standard review for each new entrant to the Preferred Lender Program. (i) Independent Study of Loan Programs.-- (1) Study required.--The Administrator shall contract with one or more private sector parties to conduct a comprehensive assessment of the performance of the loan programs authorized by section 7(a) of the Small Business Act (15 U.S.C. 636(a)) and title V of the Small Business Investment Act of 1958 (15 U.S.C. 661) addressing the matters described in paragraph (2) and resulting in a report to the Congress pursuant to paragraph (5). (2) Matters to be assessed.--In addition to such other matters as the Administrator considers appropriate, the assessment required by paragraph (1) shall address, with respect to each loan program described in paragraph (1) for each of the fiscal years described in paragraph (3)-- (A) the number and frequency of deferrals and defaults; (B) default rates; (C) comparative loss rates, by--

(i) type of lender (separately addressing preferred lenders, certified lenders, and general participation lenders); (ii) term of the loan; (iii) dollar value of the loan at disbursement; and (iv) underwriting characteristics of each loan that has entered into default, including term, amount and type of collateral, loan-to-value and other actual and projected ratios, line of business, credit history, and type of loan; and (D) the economic models used by the Office of Management and Budget to calculate the credit subsidy rate applicable to the loan programs. (3) Period of assessment.--The assessments undertaken pursuant to paragraph (2) shall address data for the period beginning with fiscal year 1986 of each loan program described in paragraph (1). (4) Access to information.--The Administrator shall provide to the contractor access to any information collected by or available to the Administration with regard to the loan programs being assessed. The contactor shall preserve the confidentiality of any information for which confidentiality is protected by law or properly asserted by the person submitting such information. (5) Contract funding.--The Administrator shall fund the cost of the contract from the amounts appropriated for the salaries and expenses of the Administration for fiscal year 1997. (6) Report to the congress.-- (A) Contents.--The contractor shall prepare a report of-- (i) its analyses of the matters to be assessed pursuant to paragraph (2); and (ii) its independent recommendations for improving program performance with respect to each loan program, regarding-- (I) improving the timely collection and subsequent management by the Administration of data to measure the performance of each loan program described in paragraph (1); and (II) reducing loss rates for and improving the performance of each such loan program. (B) Submission to the congress.--Not later than June 30, 1997, the Administrator shall submit the report prepared under subparagraph (A) to the Committees on Small Business of the House of Representatives and the Senate. The Administrator shall append his comments, and those of the Office of Management and Budget, if any, to the report.

(a) Private Sector Loan Servicing Demonstration Program.-- (1) In general.-- (A) Demonstration program required.--Notwithstanding any other provision of law, the Administration

shall conduct a demonstration program, within the parameters described in paragraph (2), to evaluate the comparative costs and benefits of having the Administration's portfolio of disaster loans serviced under contract rather than directly by employees of the Administration. All costs of the demonstration program shall be paid from amounts made available for the Salaries and Expenses Account of the Administration. (B) Initiation date.--Not later than 90 days after the date of enactment of this Act, the Administration shall issue a request for proposals for the program parameters described in paragraph (2). (2) Demonstration program parameters.-- (A) Loan sample.--The sample of loans for the demonstration program shall be randomly drawn from the Administration's portfolio of loans made pursuant to section 7(b) of the Small Business Act and shall include a representative group of not less than 30 percent of all loans for residential properties, including 30 percent of all loans made during the demonstration program after the date of enactment of this Act, which loans shall be selected by the Administration on the basis of geographic distribution and such other factors as the Administration determines to be appropriate. (B) Contract and options.--The Administration shall solicit and competitively award one or more contracts to service the loans included in the sample of loans described in subparagraph (A) for a term of not less than one year, with 3 one-year contract renewal options, each of which shall be exercised by the Administration unless the Administration terminates the contractor or contractors for good cause. (3) Term of demonstration program.--The demonstration program shall commence not later than October 1, 1997. (4) Reports.-- (A) Interim reports.--Not later than 120 days before the expiration of the initial 4-year contract performance period, the Administrator shall submit to the Committees on Small Business of the House of Representatives and the Senate an interim report on the conduct of the demonstration program. The contractor shall be afforded a reasonable opportunity to attach comments to each such report. (B) Final report.--Not later than 120 days after the termination of the demonstration program, the Administrator shall submit to the Committees on Small Business of the House of Representatives and the Senate a final report on the performance of the demonstration program, together with the recommendations of the Administrator for continuation, termination, or modification of the demonstration program. (b) Definition of Disaster.-- (1) In general.--Section 3(k) (15 U.S.C. 632(k)) is amended by inserting ``commercial fishery failures or fishery resource disasters (as determined by the Secretary of Commerce under section 308(b) of the Interjurisdictional Fisheries Act of 1986),'' after ``tidal waves,''.

(2) Effective date.--The amendment made by paragraph (1) shall be effective with respect to any disaster occurring on or after March 1, 1994.

Section 7(m)(7)(B) (15 U.S.C. 636(m)(4)) is amended by adding at the end the following: ``If, however, at the beginning of the fourth quarter of a fiscal year the Administration determines that a portion of appropriated microloan funds are unlikely to be awarded during that year, the Administration may make additional funds available to a State in excess of 125 percent of the pro rata share of that State.''.

(a) Associate Administrator for Small Business Development Centers.-- (1) Duties.--Section 21(h) (15 U.S.C. 648(h)) is amended to read as follows: ``(h) Associate Administrator for Small Business Development Centers.-- ``(1) Appointment and compensation.--The Administrator shall appoint an Associate Administrator for Small Business Development Centers who shall report to an official who is not more than one level below the Office of the Administrator and who shall serve without regard to the provisions of title 5 governing appointments in the competitive service, and without regard to chapter 51, and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates, but at a rate not less than the rate of GS-17 of the General Schedule. ``(2) Duties.-- ``(A) In general.--The sole responsibility of the Associate Administrator for Small Business Development Centers shall be to administer the small business development center program. Duties of the position shall include recommending the annual program budget, reviewing the annual budgets submitted by each applicant, establishing appropriate funding levels therefore, selecting applicants to participate in this program, implementing the provisions of this section, maintaining a clearinghouse to provide for the dissemination and exchange of information between small business development centers and conducting audits of recipients of grants under this section. ``(B) Consultation requirements.--In carrying out the duties described in this subsection, the Associate Administrator shall confer with and seek the advice of the Board established by subsection (i) and Administration officials in areas served by the small business development centers; however, the Associate Administrator shall be responsible for the management and administration of the program and shall not be subject to the approval or concurrence of such Administration officials.''. (2) References to associate administrator.--Section 21 (15 U.S.C. 648) is amended-- (A) in subsection (c)(7), by striking ``Deputy Associate Administrator of the Small Business Development Center program'' and inserting ``Associate Administrator for Small Business Development Centers''; and

(B) in subsection (i)(2), by striking ``Deputy Associate Administrator for Management Assistance'' and inserting ``Associate Administrator for Small Business Development Centers''. (b) Extension or Renewal of Cooperative Agreements.--Section 21(k)(3) (15 U.S.C. 648(k)(3)) is amended to read as follows: ``(3) Extension or renewal of cooperative agreements.-- ``(A) In general.--In extending or renewing a cooperative agreement of a small business development center, the Administration shall consider the results of the examination and certification program conducted pursuant to paragraphs (1) and (2). ``(B) Certification requirement.--After September 30, 2000, the Administration may not renew or extend any cooperative agreement with a small business development center unless the center has been approved under the certification program conducted pursuant to this subsection, except that the Associate Administrator for Small Business Development Centers may waive such certification requirement, in the discretion of the Associate Administrator, upon a showing that the center is making a good faith effort to obtain certification.''. (c) Technical Correction.--Section 21(l) (15 U.S.C. 648(l)) is amended to read as follows: ``(l) Contract Authority.--The authority to enter into contracts shall be in effect for each fiscal year only to the extent and in the amounts as are provided in advance in appropriations Acts. After the administration has entered a contract, either as a grant or a cooperative agreement, with any applicant under this section, it shall not suspend, terminate, or fail to renew or extend any such contract unless the Administration provides the applicant with written notification setting forth the reasons therefore and affording the applicant an opportunity for a hearing, appeal, or other administrative proceeding under the provisions of chapter 5 of title 5, United States Code.''.

ASSISTANCE.

(a) Funding Limitation; Seminars.--Section 7(d) (15 U.S.C. 636(d)) is amended-- (1) by striking ``(d)(1)'' and inserting ``(d)''; and (2) by striking paragraph (2). (b) Trade Adjustment Loans.--Section 7(e) (15 U.S.C. 636(e)) is amended to read as follows: ``(e) [RESERVED].''. (c) Waiver of Credit Elsewhere Test for Colleges and Universities.--Section 7(f) (15 U.S.C. 636(f)) is amended to read as follows: ``(f) [RESERVED].''. (d) Loans to Small Business Concerns for Solar Energy and Energy Conservation Measures.--Section 7(l) (15 U.S.C. 636(l)) is amended to read as follows: ``(l) [RESERVED].''.

(a) Extension of Demonstration Program.--

(1) In general.--Section 711(c) of the Small Business Competitiveness Demonstration Program Act of 1988 (15 U.S.C. 644 note; 102 Stat. 3890) is amended by striking ``September 30, 1996'' and inserting ``September 30, 1997''. (2) Repeal.--Section 717(f) of the Small Business Competitiveness Demonstration Program Act of 1988 (15 U.S.C. 644 note) is repealed. (b) Reporting of Subcontract Participation in Contracts for Architectural and Engineering Services.--Section 714(b)(5) of the Small Business Competitiveness Demonstration Program Act of 1988 (15 U.S.C. 644 note; 102 Stat. 3892) is amended to read as follows: ``(5) Duration.--The system described in subsection (a) shall be established not later than October 1, 1996 (or as soon as practicable thereafter on the first day of a subsequent quarter of fiscal year 1997), and shall terminate on September 30, 1997.''. (c) Reports to the Congress.-- (1) In general.--Section 716 of the Small Business Competitiveness Demonstration Program Act of 1988 (15 U.S.C. 644 note; 102 Stat. 3893) is amended-- (A) in subsection (a), by striking ``fiscal year 1991 and 1995'' and inserting ``each of fiscal years 1991 through 1996''; (B) in subsection (b), by striking ``results'' and inserting ``cumulative results''; and (C) in subsection (c), by striking ``1996'' and inserting ``1997''. (2) Cumulative report through fiscal year 1995.--A cumulative report of the results of the Small Business Competitiveness Demonstration Program for fiscal years 1991 through 1995 shall be submitted not later than February 28, 1997 pursuant to section 716(a) of the Small Business Competitiveness Demonstration Program Act of 1988 (15 U.S.C. 644 note; 102 Stat. 3893), as amended by paragraph (1) of this subsection.

OF 1993.

(a) In general.--Section 7 of the Small Business Guaranteed Credit Enhancement Act of 1993 (Public Law 103-81; 15 U.S.C. 634 note) is repealed effective September 29, 1996. (b) Clerical Amendment.--The table of contents for the Small Business Guaranteed Credit Enhancement Act of 1993 (Public Law 103-81; 15 U.S.C. 631 note) is amended by striking the item relating to section 7.

Section 9(n)(1)(C) (15 U.S.C. 638(n)(1)(C)) is amended by striking ``fiscal year 1996'' and inserting ``fiscal years 1996 and 1997''.

Section 7(A)(2) (15 U.S.C. 636(A)(2)) is amended by adding at the end the following: ``(D) Participation under export working capital program.--Notwithstanding subparagraph (A), in an agreement to participate in a loan on a deferred basis under the Export Working Capital Program established

pursuant to paragraph (14)(A), such participation by the Administration shall not exceed 90 percent.''.

Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Small Business Investment Act of 1958 (15 U.S.C. 661 et seq.).

(a) Decreased Loan to Value Ratios.--Section 502(3) (15 U.S.C. 696(3)) is amended to read as follows: ``(3) Criteria for assistance.-- ``(A) In general.--Any development company assisted under this section or section 503 of this title must meet the criteria established by the Administration, including the extent of participation to be required or amount of paid-in capital to be used in each instance as is determined to be reasonable by the Administration. ``(B) Community injection funds.-- ``(i) Sources of funds.--Community injection funds may be derived, in whole or in part, from-- ``(I) State or local governments; ``(II) banks or other financial institutions; ``(III) foundations or other not- for-profit institutions; or ``(IV) the small business concern (or its owners, stockholders, or affiliates) receiving assistance through a body authorized by this title. ``(ii) Funding from institutions.--Not less than 50 percent of the total cost of any project financed pursuant to clauses (i), (ii), or (iii) of subparagraph (C) shall come from the institutions described in subclauses (I), (II), and (III) of clause (i). ``(C) Funding from a small business concern.--The small business concern (or its owners, stockholders, or affiliates) receiving assistance through a body authorized by this title shall provide-- ``(i) at least 15 percent of the total cost of the project financed, if the small business concern has been in operation for a period of 2 years or less; ``(ii) at least 15 percent of the total cost of the project financed if the project involves the construction of a limited or single purpose building or structure; ``(iii) at least 20 percent of the total cost of the project financed if the project involves both of the conditions set forth in clauses (i) and (ii); or ``(iv) at least 10 percent of the total cost of the project financed, in all other circumstances, at the discretion of the development company.''.

(b) Guarantee Fee for Development Company Debentures.--Section 503(b)(7)(A) (15 U.S.C. 697(b)(7)(A)) is amended by striking ``equal to 0.125 percent'' and all that follows before the semicolon and inserting the following: ``equal to the lesser of-- ``(i) 0.9375 percent per year of the outstanding balance of the loan; or ``(ii) such percentage per year of the outstanding balance of the loan as the Administrator may determine to be necessary to reduce the cost (as that term is defined in section 502 of the Federal Credit Reform Act of 1990) to the Administration of purchasing and guaranteeing debentures under this Act to an amount that, taking into consideration any available appropriated funds, would permit the Administration to purchase or guarantee $2,000,000,000 of debentures in fiscal year 1997''. (c) Fees To Offset Subsidy Cost.--Section 503(d) (15 U.S.C. 697(d)) is amended to read as follows: ``(d) Charges for Administration Expenses.-- ``(1) Level of charges.--The Administration may impose an additional charge for administrative expenses with respect to each debenture for which payment of principal and interest is guaranteed under subsection (a). ``(2) Participation fee.--The Administration shall collect a one-time fee in an amount equal to 50 basis points on the total participation in any project of any institution described in subclause (I), (II), or (III) of section 502(3)(B)(i). Such fee shall be imposed only when the participation of the institution will occupy a senior credit position to that of the development company. All proceeds of the fee shall be used to offset the cost (as that term is defined in section 502 of the Credit Reform Act of 1990) to the Administration of making guarantees under subsection (a). ``(3) Development company fee.--The Administration shall collect annually from each development company a fee of 0.125 percent of the outstanding principal balance of any guaranteed debenture authorized by the Administration after September 30, 1996. Such fee shall be derived from the servicing fees collected by the development company pursuant to regulation, and shall not be derived from any additional fees imposed on small business concerns. All proceeds of the fee shall be used to offset the cost (as that term is defined in section 502 of the Credit Reform Act of 1990) to the Administration of making guarantees under subsection (a).''. (d) Effective Date.--Section 503 (15 U.S.C. 697) is amended by adding at the end the following new subsection: ``(f) Effective Date.--The fees authorized by subsections (b) and (c) shall apply to financings approved by the Administration on or after October 1, 1996, but shall not apply to financings approved by the Administration on or after October 1, 1997.''. (e) Calculation of Subsidy Rate.--Section 503 (15 U.S.C. 697a) is amended by adding at the end the following new subsection: ``(g) Calculation of Subsidy Rate.--All fees, interest, and profits received and retained by the Administration under this section shall be included in the calculations made by the Director of the Office of Management and Budget to offset the cost (as

that term is defined in section 502 of the Federal Credit Reform Act of 1990) to the Administration of purchasing and guaranteeing debentures under this Act.''.

Section 503 (15 U.S.C. 697) is amended by adding at the end the following new subsection: ``(h) Required Actions Upon Default.-- ``(1) Initial actions.--Not later than the 45th day after the date on which a payment on a loan funded through a debenture guaranteed under this section is due and not received, the Administration shall-- ``(A) take all necessary steps to bring such a loan current; or ``(B) implement a formal written deferral agreement. ``(2) Purchase or acceleration of debenture.--Not later than the 65th day after the date on which a payment on a loan described in paragraph (1) is due and not received, and absent a formal written deferral agreement, the administration shall take all necessary steps to purchase or accelerate the debenture. ``(3) Prepayment penalties.--With respect to the portion of any project derived from funds set forth in section 502(3), the Administration-- ``(A) shall negotiate the elimination of any prepayment penalties or late fees on defaulted loans made prior to September 30, 1996; ``(B) shall not pay any prepayment penalty or late fee on the default based purchase of loans issued after September 30, 1996; and ``(C) for any project financed after September 30, 1996, shall not pay any default interest rate higher than the interest rate on the note prior to the date of default.''.

(a) In General.--The Administrator shall carry out a loan liquidation pilot program (in this section referred to as the ``pilot program'') in accordance with the requirements of this section. (b) Selection of Development Companies.-- (1) In general.--Not later than 90 days after the date of the enactment of this Act, the Administrator shall establish a pilot program under which certain development companies authorized to make loans and issue debentures under title V of the Small Business Investment Act of 1958 are selected by the Administrator in accordance with this subsection to carry out loan liquidations. (2) Conflicts of interest.--The development companies selected under paragraph (1) shall agree not to take any action that would create a potential conflict of interest involving the development company, the third party lender, or an associate of the third party lender. (3) Qualifications.--In order to qualify to participate in the pilot program under this section, each development company shall-- (A) have not less than 6 years of experience in the program established by title V of the Small Business Investment Act of 1958;

(B) have made, during the 6 most recent fiscal years, an average of not less than 10 loans per year through the program established by such title V of the Small Business Investment Act of 1958; (C) have not less than 2 years of experience in liquidating loans under the authority of a Federal, State, or other lending program; and (D) meet such other requirements as the Administration may establish. (c) Authority of Development Companies.--The development companies selected under subsection (b) shall, for loans in their portfolio of loans made through debentures guaranteed under title V of the Small Business Investment Act of 1958 that are in default after the date of enactment of this Act, be authorized to-- (1) perform all liquidation and foreclosure functions, including the acceleration or purchase of community injection funds, subject to such company obtaining prior written approval from the Administrator before committing the agency to purchase any other indebtedness secured by the property: Provided, That the Administrator shall approve or deny a request for such purchase within a period of 10 business days; and (2) liquidate such loans in a reasonable and sound manner and according to commercially accepted practices pursuant to a liquidation plan approved by the administrator in advance of its implementation. If the administrator does not approve or deny a request for approval of a liquidation plan within 10 business days of the date on which the request is made (or with respect to any routine liquidation activity under such a plan, within 5 business days) such request shall be deemed to be approved. (d) Authority of the Administrator.--In carrying out the pilot program, the Administrator shall-- (1) have full authority to rescind the authority granted any development company under this section upon a 10-day written notice stating the reasons for the rescission; and (2) not later than 90 days after the admission of the development companies specified in subsection (b), implement the pilot program. (e) Report.-- (1) In general.--The Administrator shall issue a report on the results of the pilot program to the Committees on Small Business of the House of Representatives and the Senate. The report shall include information relating to-- (A) the total dollar amount of each loan and project liquidated; (B) the total dollar amount guaranteed by the Administration; (C) total dollar losses; (D) total recoveries both as percentage of the amount guaranteed and the total cost of the project; and (E) a comparison of the pilot program information with the same information for liquidation conducted outside the pilot program over the period of time. (2) Reporting period.--The report shall be based on data from, and issued not later than 90 days after the close of, the first eight 8 fiscal quarters of the pilot program's operation after the date of implementation.

(a) Certificates Sold Pursuant to Small Business Act.--Section 5(h) of the Small Business Act (15 U.S.C. 634(h)) is amended-- (1) by redesignating paragraphs (1) through (4) as subparagraphs (A) through (D); (2) by striking ``(h)'' and inserting ``(h)(1)''; (3) by striking subparagraph (A), as redesignated by paragraph (1) of this subsection, and inserting the following: ``(A) provide for a central registration of all loans and trust certificates sold pursuant to subsections (f) and (g) of this section;''; and (4) by adding at the end the following: ``(2) Nothing in this subsection shall prohibit the utilization of a book-entry or other electronic form of registration for trust certificates. The Administration may, with the consent of the Secretary of the Treasury, use the book- entry system of the Federal Reserve System.''. (b) Certificates Sold Pursuant to Small Business Investment Company Program.--Section 321(f) (15 U.S.C. 687l(f)) is amended-- (1) in paragraph (1), by striking ``Such central registration shall include'' and all that follows through the period at the end of the paragraph; and (2) by adding at the end the following: ``(5) Nothing in this subsection shall prohibit the use of a book-entry or other electronic form of registration for trust certificates.''. (c) Certificates Sold Pursuant to Development Company Program.-- Section 505(f) (15 U.S.C. 697b(f)) is amended-- (1) by redesignating paragraphs (1) through (4) as subparagraphs (A) through (D); (2) by striking ``(f)'' and inserting ``(f)(1)''; (3) by striking subparagraph (A), as redesignated by paragraph (1) of this subsection, and inserting the following: ``(A) provide for a central registration of all trust certificates sold pursuant to this section;'' and (4) by adding at the end the following: ``(2) Nothing in this subsection shall prohibit the utilization of a book-entry or other electronic form of registration for trust certificates.''.

(a) Admissions of Additional Program Participants.--Section 411(a) (15 U.S.C. 694(a)) is amended by adding a new paragraph (5), as follows: ``(5)(A) The Administration shall promptly act upon an application from a surety to participate in the Preferred Surety Bond Guarantee Program, authorized by paragraph (3), in accordance with criteria and procedures established in regulations pursuant to subsection (d). ``(B) The Administration is authorized to reduce the allotment of bond guarantee authority or terminate the participation of a surety in the Preferred Surety Bond Guarantee Program based on the rate of participation of such surety during the 4 most recent fiscal year quarters compared to the median rate of participation by the other sureties in the program.''.

(b) Effective Date.--The amendments made by subsection (a) shall apply with respect to applications received (or pending substantive evaluation) on or after October 1, 1995.

(a) In General.--It is the sense of the Congress that the subsidy models prepared by the Office of Management and Budget relative to loan programs sponsored by the United States Small Business Administration have a tendency to-- (1) overestimate potential risks of loss; and (2) overemphasize historical losses that may be anomalous and do not truly reflect the success of the programs as a whole. (b) Independent Study.--Consequently, the Congress mandates the independent study in section 103(h) in an attempt to improve the ability of the Office of Management and Budget to reflect more accurately the budgetary implications of such programs.

(a) Definitions.-- (1) Small Business Concern.--Section 103(5) (15 U.S.C. 662(5)) is amended by inserting before the semicolon the following: ``, except that, for purposes of this Act, an investment by a venture capital firm, investment company (including a small business investment company) employee welfare benefit plan or pension plan, or trust, foundation, or endowment that is exempt from Federal income taxation-- ``(A) shall not cause a business concern to be deemed not independently owned and operated; ``(B) shall be disregarded in determining whether a business concern satisfies size standards established pursuant to section 3(a)(2) of the Small Business Act; and ``(C) shall be disregarded in determining whether a small business concern is a smaller enterprise''. (2) Private capital.--Section 103(9) (15 U.S.C. 662(9)) is amended to read as follows: ``(9) the term `private capital'-- ``(A) means the sum of-- ``(i) the paid-in capital and paid-in surplus of a corporate licensee, the contributed capital of the partners of a partnership licensee, or the equity investment of the members of a limited liability company licensee; and ``(ii) unfunded binding commitments, from investors that meet criteria established by the Administrator, to contribute capital to the licensee: Provided, That such unfunded commitments may be counted as private capital for purposes of approval by the Administrator of any request for leverage, but leverage shall not be funded based on such commitments; and ``(B) does not include any-- ``(i) funds borrowed by a licensee from any source; ``(ii) funds obtained through the issuance of leverage; or ``(iii) funds obtained directly or indirectly from any Federal, State, or local government, or any government agency or instrumentality, except for--

``(I) funds invested by an employee welfare benefit plan or pension plan; and ``(II) any qualified nonprivate funds (if the investors of the qualified nonprivate funds do not control, directly or indirectly, the management, board of directors, general partners, or members of the licensee);''. (3) New definitions.--Section 103 (15 U.S.C. 662) is amended by striking paragraph (10) and inserting the following:

``(10) the term `leverage' includes--

``(A) debentures purchased or guaranteed by the Administration;

``(B) participating securities purchased or guaranteed by the Administration; and

``(C) preferred securities outstanding as of October 1, 1995;

``(11) the term `third party debt' means any indebtedness for borrowed money, other than indebtedness owed to the Administration;

``(12) the term `smaller enterprise' means any small business concern that, together with its affiliates--

``(A) has--

``(i) a net financial worth of not more than $6,000,000, as of the date on which assistance is provided under this Act to that business concern; and

``(ii) an average net income for the 2-year period preceding the date on which assistance is provided under this Act to that business concern, of not more than $2,000,000, after Federal income taxes (excluding any carryover losses); or

``(B) satisfies the standard industrial classification size standards established by the Administration for the industry in which the small business concern is primarily engaged; ``(13) the term `qualified nonprivate funds' means any-- ``(A) funds directly or indirectly invested in any applicant or licensee on or before August 16, 1982, by any Federal agency, other than the Administration, under a provision of law explicitly mandating the inclusion of those funds in the definition of the term `private capital'; ``(B) funds directly or indirectly invested in any applicant or licensee by any Federal agency under a provision of law enacted after September 4, 1992, explicitly mandating the inclusion of those funds in the definition of the term `private capital'; and ``(C) funds invested in any applicant or licensee by one or more State or local government entities (including any guarantee extended by those entities) in an aggregate amount that does not exceed 33 percent of the private capital of the applicant or licensee; ``(14) the terms `employee welfare benefit plan' and `pension plan' have the same meanings as in section 3 of the Employee Retirement Income Security Act of 1974, and are intended to include-- ``(A) public and private pension or retirement plans subject to such Act; and

``(B) similar plans not covered by such Act that have been established and that are maintained by the Federal Government or any State or political subdivision, or any agency or instrumentality thereof, for the benefit of employees; ``(15) the term `member' means, with respect to a licensee that is a limited liability company, a holder of an ownership interest or a person otherwise admitted to membership in the limited liability company; and ``(16) the term `limited liability company' means a business entity that is organized and operating in accordance with a State limited liability company statute approved by the Administration.''. (b) Organization of Small Business Investment Companies.-- (1) Limited liability companies.--Section 301(a) (15 U.S.C. 681(a)) is amended in the first sentence, by striking ``body or'' and inserting ``body, a limited liability company, or''. (2) Issuance of license.--Section 301(c) (15 U.S.C. 681(c)) is amended to read as follows: ``(c) Issuance of License.-- ``(1) Submission of application.--Each applicant for a license to operate as a small business investment company under this Act shall submit to the Administrator an application, in a form and including such documentation as may be prescribed by the Administrator. ``(2) Procedures.-- ``(A) Status.--Not later than 90 days after the initial receipt by the Administrator of an application under this subsection, the Administrator shall provide the applicant with a written report detailing the status of the application and any requirements remaining for completion of the application. ``(B) Approval or disapproval.--Within a reasonable time after receiving a completed application submitted in accordance with this subsection and in accordance with such requirements as the Administrator may prescribe by regulation, the Administrator shall-- ``(i) approve the application and issue a license for such operation to the applicant if the requirements of this section are satisfied; or ``(ii) disapprove the application and notify the applicant in writing of the disapproval. ``(3) Matters considered.--In reviewing and processing any application under this subsection, the Administrator-- ``(A) shall determine whether-- ``(i) the applicant meets the requirements of subsections (a) and (c) of section 302; and ``(ii) the management of the applicant is qualified and has the knowledge, experience, and capability necessary to comply with this Act; ``(B) shall take into consideration-- ``(i) the need for and availability of financing for small business concerns in the geographic area in which the applicant is to commence business;

``(ii) the general business reputation of the owners and management of the applicant; and ``(iii) the probability of successful operations of the applicant, including adequate profitability and financial soundness; and ``(C) shall not take into consideration any projected shortage or unavailability of leverage. ``(4) Exception.-- ``(A) In general.--Notwithstanding any other provision of this Act, the Administrator may, in the discretion of the Administrator and based on a showing of special circumstances and good cause, approve an application and issue a license under this subsection with respect to any applicant that-- ``(i) has private capital of not less than $3,000,000; ``(ii) would otherwise be issued a license under this subsection, except that the applicant does not satisfy the requirements of section 302(a); and ``(iii) has a viable business plan reasonably projecting profitable operations and a reasonable timetable for achieving a level of private capital that satisfies the requirements of section 302(a). ``(B) Leverage.--An applicant licensed pursuant to the exception provided in this paragraph shall not be eligible to receive leverage as a licensee until the applicant satisfies the requirements of section 302(a).''. (3) Specialized small business investment companies.-- (A) Repeal.--Section 301(d) (15 U.S.C. 681(d)) is repealed. (B) Effect on existing licenses.--The repeal under subparagraph (A) shall not be construed to require the Administrator to cancel, revoke, withdraw, or modify any license issued under section 301(d) of the Small Business Investment Act of 1958 before the date of enactment of this Act. (c) Capital Requirements.-- (1) Increased minimum capital requirements.--Section 302(a) (15 U.S.C. 682(a)) is amended by striking ``(a)'' and all that follows through ``The Administration shall also determine the ability of the company,'' and inserting the following: ``(a) Amount.-- ``(1) In general.--Except as provided in paragraph (2), the private capital of each licensee shall be not less than-- ``(A) $5,000,000; or ``(B) $10,000,000, with respect to each licensee authorized or seeking authority to issue participating securities to be purchased or guaranteed by the Administration under this Act. ``(2) Exception.--The Administrator may, in the discretion of the Administrator and based on a showing of special circumstances and good cause, permit the private capital of a licensee authorized or seeking authorization to issue participating securities to be purchased or guaranteed by the Administration to be less than $10,000,000, but not less than $5,000,000, if the Administrator determines that such action would not create or otherwise contribute to an unreasonable risk of default or loss to the Federal Government.

``(3) Adequacy.--In addition to the requirements of paragraph (1), the Administrator shall-- ``(A) determine whether the private capital of each licensee is adequate to assure a reasonable prospect that the licensee will be operated soundly and profitably, and managed actively and prudently in accordance with its articles; and ``(B) determine that the licensee will be able''. (2) Exemption for certain licensees.--Section 302(a) (15 U.S.C. 682(a)) is amended by adding at the end the following new paragraph: ``(4) Exemption from capital requirements.--The Administrator may, in the discretion of the Administrator, approve leverage for any licensee licensed under subsection (c) or (d) of section 301 before the date of enactment of the Small Business Program Improvement Act of 1996 that does not meet the capital requirements of paragraph (1), if-- ``(A) the licensee certifies in writing that not less than 50 percent of the aggregate dollar amount of its financings after the date of enactment of the Small Business Program Improvement Act of 1996 will be provided to smaller enterprises; and ``(B) the Administrator determines that such action would not create or otherwise contribute to an unreasonable risk of default or loss to the United States Government.''. (3) Diversification of ownership.--Section 302(c) (15 U.S.C. 682(c)) is amended to read as follows: ``(c) Diversification of Ownership.--The Administrator shall ensure that the management of each licensee licensed after the date of enactment of the Small Business Program Improvement Act of 1996 is sufficiently diversified from and unaffiliated with the ownership of the licensee in a manner that ensures independence and objectivity in the financial management and oversight of the investments and operations of the licensee.''. (d) Borrowing.-- (1) Debentures.--Section 303(b) (15 U.S.C. 683(b)) is amended in the first sentence, by striking ``(but only'' and all that follows through ``terms)''. (2) Third party debt.--Section 303(c) (15 U.S.C. 683(c)) is amended to read as follows: ``(c) Third Party Debt.--The Administrator-- ``(1) shall not permit a licensee having outstanding leverage to incur third party debt that would create or contribute to an unreasonable risk of default or loss to the Federal Government; and ``(2) shall permit such licensees to incur third party debt only on such terms and subject to such conditions as may be established by the Administrator, by regulation or otherwise.''. (3) Requirement to finance smaller enterprises.--Section 303(d) (15 U.S.C. 683(d)) is amended to read as follows: ``(d) Requirement to Finance Smaller Enterprises.--The Administrator shall require each licensee, as a condition of approval of an application for leverage, to certify in writing that not less than 20 percent of the aggregate dollar amount of the financings of the licensee will be provided to smaller enterprises.''. (4) Capital impairment requirements.--

(A) In general.--Section 303(e) (15 U.S.C. 683(e)) is amended to read as follows: ``(e) Capital Impairment.--Before approving any application for leverage submitted by a licensee under this Act, the Administrator-- ``(1) shall determine that the private capital of the licensee meets the requirements of section 302(a); and ``(2) shall determine, taking into account the nature of the assets of the licensee, the amount and terms of any third party debt owed by such licensee, and any other factors determined to be relevant by the Administrator, that the private capital of the licensee has not been impaired to such an extent that the issuance of additional leverage would create or otherwise contribute to an unreasonable risk of default or loss to the Federal Government.''. (B) Regulations.-- (i) Uniform applicability.--Any regulation issued by the Administration to implement section 303(e) of the Small Business Investment Act of 1958 that applies to any licensee with outstanding leverage obtained before the effective date of that regulation, shall apply uniformly to all licensees with outstanding leverage obtained before that effective date. (ii) Definitions.--For purposes of this subparagraph, the terms ``Administration'', ``leverage'' and ``licensee'' have the same meanings as in section 103 of the Small Business Investment Act of 1958. (5) Equity investment requirement.--Section 303(g)(4) (15 U.S.C. 683(g)(4)) is amended by striking ``and maintain''. (6) Fees.--Section 303 (15 U.S.C. 683) is amended-- (A) in subsection (b), in the fifth sentence, by striking ``1 per centum'', and all that follows before the period at the end of the sentence and inserting the following: ``1 percent, plus an additional charge of 1 percent per annum which shall be paid to and retained by the Administration''; (B) in subsection (g)(2), by striking ``1 per centum,'' and all that follows before the period at the end of the paragraph and inserting the following: ``1 percent, plus an additional charge of 1 percent per annum which shall be paid to and retained by the Administration''; and (C) by adding at the end the following new subsections: ``(i) Leverage Fee.--With respect to leverage granted by the Administration to a licensee, the Administration shall collect from the licensee a nonrefundable fee in an amount equal to 3 percent of the face amount of leverage granted to the licensee, payable upon the earlier of the date of entry into any commitment for such leverage or the date on which the leverage is drawn by the licensee. ``(j) Calculation of Subsidy Rate.--All fees, interest, and profits received and retained by the Administration under this section shall be included in the calculations made by the Director of the Office of Management and Budget to offset the cost (as that term is defined in section 502 of the Federal Credit Reform Act of 1990) to the Administration of purchasing and guaranteeing debentures and participating securities under this Act.''.

(e) Liability of the United States.--Section 308(e) (15 U.S.C. 687(e)) is amended by striking ``Nothing'' and inserting ``Except as expressly provided otherwise in this Act, nothing''. (f) Examinations; Valuations.-- (1) Examinations.--Section 310(b) (15 U.S.C. 687b(b)) is amended in the first sentence by inserting ``which may be conducted with the assistance of a private sector entity that has both the qualifications to conduct and expertise in conducting such examinations,'' after ``Investment Division of the Administration,''. (2) Valuations.--Section 310(d) (15 U.S.C. 687b(d)) is amended to read as follows: ``(d) Valuations.-- ``(1) Frequency of valuations.-- ``(A) In general.--Each licensee shall submit to the Administrator a written valuation of the loans and investments of the licensee not less often than semiannually or otherwise upon the request of the Administrator, except that any licensee with no leverage outstanding shall submit such valuations annually, unless the Administrator determines otherwise. ``(B) Material adverse changes.--Not later than 30 days after the end of a fiscal quarter of a licensee during which a material adverse change in the aggregate valuation of the loans and investments or operations of the licensee occurs, the licensee shall notify the Administrator in writing of the nature and extent of that change. ``(C) Independent certification.-- ``(i) In General.--Not less than once during each fiscal year, each licensee shall submit to the Administrator the financial statements of the licensee, audited by an independent certified public accountant approved by the Administrator. ``(ii) Audit requirements.--Each audit conducted under clause (i) shall include-- ``(I) a review of the procedures and documentation used by the licensee in preparing the valuations required by this section; and ``(II) a statement by the independent certified public accountant that such valuations were prepared in conformity with the valuation criteria applicable to the licensee established in accordance with paragraph (2). ``(2) Valuation criteria.--Each valuation submitted under this subsection shall be prepared by the licensee in accordance with valuation criteria, which shall-- ``(A) be established or approved by the Administrator; and ``(B) include appropriate safeguards to ensure that the noncash assets of a licensee are not overvalued.''. (g) Trustee or Receivership Over Licensees.-- (1) Finding.--It is the finding of the Congress that increased recoveries on assets in liquidation under the Small Business Investment Act of 1958 are in the best interests of the Federal Government. (2) Definitions.--For purposes of this subsection--

(A) the term ``Administrator'' means the Administrator of the Small Business Adminstration; (B) the term ``Administration'' means the Small Business Administration; and (C) the term ``licensee'' has the same meaning as in section 103. (3) Liquidation plan.-- (A) In general.--Not later than October 15, 1996, the Administrator shall submit to the Committees on Small Business of the Senate and the House of Representatives a detailed plan to expedite the orderly liquidation of all licensee assets in liquidation, including assets of licensees in receivership or in trust held by or under the control of the Administration or its agents. (B) Contents.--The plan submitted under paragraph (1) shall include a timetable for liquidating the liquidation portfolio of small business investment company assets owned by the Administration, and shall contain the findings and recommendations of the Administrator on various options providing for the fair and expeditious liquidation of such assets within a reasonable period of time, giving due consideration to the option of entering into one or more contracts with private sector entities having the capability to carry out the orderly liquidation of similar assets. (h) Technical and Conforming Amendments.-- (1) Small business investment act of 1958.--The Small Business Investment Act of 1958 (15 U.S.C. 661 et seq.) is amended-- (A) in section 303 -- (i) in subsection (a), by striking ``debenture bonds,'' and inserting ``securities,''; (ii) by striking subsection (f) and inserting the following: ``(f) Redemption or Repurchase of Preferred Stock.-- Notwithstanding any other provision of law-- ``(1) the Administrator may allow the issuer of any preferred stock sold to the Administration before November 1, 1989 to redeem or repurchase such stock, upon the payment to the Administration of an amount less than the par value of such stock, for a repurchase price determined by the Administrator after consideration of all relevant factors, including-- ``(A) the market value of the stock; ``(B) the value of benefits provided and anticipated to accrue to the issuer; ``(C) the amount of dividends paid, accrued, and anticipated; and ``(D) the estimate of the Administrator of any anticipated redemption; and ``(2) any moneys received by the Administration from the repurchase of preferred stock shall be available solely to provide debenture leverage to licensees having 50 percent or more in aggregate dollar amount of their financings invested in smaller enterprises.''; and (iii) in subsection (g)(8)-- (I) by striking ``partners or shareholders'' and inserting ``partners, shareholders, or members'';

(II) by striking ``partner's or shareholder's'' and inserting ``partner's, shareholder's, or member's''; and (III) by striking ``partner or shareholder'' and inserting ``partner, shareholder, or member''; (B) in section 308(h), by striking ``subsection (c) or (d) of section 301'' each place that term appears and inserting ``section 301''; (C) in section 310(c)(4), by striking ``not less than four years in the case of section 301(d) licensees and in all other cases,''; (D) in section 312 -- (i) by striking ``shareholders or partners'' and inserting ``shareholders, partners, or members''; and (ii) by striking ``shareholder, or partner'' each place that term appears and inserting ``shareholder, partner, or member''; (E) by striking sections 317 and 318 <<NOTE: 15 USC 80a-18, 687i-687m.>>, and redesignating sections 319 through 322 as sections 317 through 320, respectively; (F) in section 319, as redesignated-- (i) in subsection (a), by striking ``, including companies operating under the authority of section 301(d),''; and (ii) in subsection (f)(2), by inserting ``or investments in obligations of the United States'' after ``accounts''; (G) in section 320, as redesignated, by striking ``section 321'' and inserting ``section 319''; and (H) in section 509 -- (i) in subsection (a)(1), by striking the second sentence; and (ii) in subsection (e)(1)(B), by striking ``subsection (c) or (d) of section 301'' and inserting ``section 301''. (2) Amendment in other law.--Section 11(h) of the Federal Home Loan Bank Act (12 U.S.C. 1431(h)) is amended by striking ``301(d)'' and inserting ``301''. (i) Amendments to the Small Business Act.-- (1) Powers of the administrator.--Section 5(b)(7) of the Small Business Act (15 U.S.C. 634(b)(7)) is amended by striking the colon and all that follows before the semicolon at the end of the paragraph and inserting the following: ``: Provided, That with respect to deferred participation loans, the Administrator may, in the discretion of and pursuant to regulations promulgated by the Administrator, authorize participating lending institutions to take actions relating to loan servicing on behalf of the Administrator, including determining eligibility and creditworthiness and loan monitoring, collection, and liquidation''. (2) Authorization of appropriations.--Section 20(p)(3) of the Small Business Act (15 U.S.C. 631 note) is amended by striking subparagraph (B) and inserting the following: ``(B) $300,000,000 in guarantees of debentures; and''. (j) Effective Date.--This section and the amendments made by this section shall become effective on the date of enactment of this Act.

DIVISION E

This title may be cited as the ``California Bay-Delta Environmental Enhancement and Water Security Act.''

(a) Authorization of Appropriations.--For each of the fiscal years 1998, 1999 and 2000, there are authorized to be appropriated an additional $143,300,000 for both (1) the initial Federal share of the cost of developing and implementing that portion of an ecosystem protection plan for the Bay-Delta, referred to as ``the Category III program'' emanating out of the document entitled ``Principles for Agreement on Bay-Delta Standards Between the State of California and the Federal Government,'' dated December 15, 1994, and, (2) the initial Federal share of the cost of developing and implementing the ecosystem restoration elements of the long-term CALFED Bay-Delta Program, pursuant to the cost-sharing agreement required by Section 78684.10 of California Senate Bill 900, Chapter 135, Statutes of 1996, signed by the Governor of California on July 11, 1996. Funds appropriated pursuant to this section shall remain available until expended and shall be administered in accordance with procedures established by CALFED Bay-Delta Program until Congress authorizes another entity that is recommended by CALFED Bay-Delta Program to carry out this section. (b) Funds authorized to be appropriated pursuant to this section to those agencies that are currently or subsequently become participants in the CALFED Bay-Delta Program shall be in addition to the baseline funding levels established pursuant to section 103 of this title, for currently authorized projects and programs under the Central Valley Project Improvement Act, Title 34 of Public Law 102-575 and other currently authorized Federal programs for the purpose of Bay-Delta ecosystem protection and restoration. (c) Nothing in this title shall be deemed to diminish the Federal interest in and responsibility for working with the State of California through the CALFED Bay-Delta Program in developing, funding and implementing a balanced, long-term solution to the problems of ecosystem quality, water quality, water supply and reliability, and system vulnerability affecting the San Francisco Bay/Sacramento-San Joaquin Delta Watershed in California. Participation in such long-term solution shall only be undertaken pursuant to authorization provided by law other than this title, and shall be based on the equitable allocation of program costs among beneficiary groups that the CALFED Bay-Delta programs shall develop. (d) To the extent not otherwise authorized, those agencies and departments that are currently or subsequently become participants in the CALFED Bay-Delta Program are hereby authorized to undertake the activities and programs for which Federal cost sharing is provided by this section. The United States shall immediately initiate coordinated consultations and negotiations with the State

of California to expeditiously execute the cost-sharing agreement required by Section 78684.10 of California Senate Bill 900, Chapter 135, Statutes of 1996, signed by the Governor of California on July 11, 1996. Such activities shall include, but not be limited to, planning, design, technical assistance and construction for ecosystem restoration programs and projects.

The Office of Management and Budget is directed to submit to the House and Senate Committees on Appropriations, as part of the President's Fiscal Year 1998 Budget, an interagency budget crosscut that displays Federal spending for fiscal years 1993 through 1998 on ecosystem restoration and other purposes in the Bay-Delta region, separately showing funding provided previously or requested under both preexisting authorities and new authorities granted by this title.

Section 102 of this title shall take effect on the date of passage of California State Proposition 204. This Act may be cited as the ``Omnibus Consolidated Appropriations Act, 1997''.

Approved September 30, 1996.

LEGISLATIVE HISTORY--H.R. 3610 (S. 1894): ---------------------------------------------------------------------------

HOUSE REPORTS: Nos. 104-617 (Comm. on Appropriations) and 104-863 (Comm. on Conference). SENATE REPORTS: No. 104-286 accompanying S. 1894 (Comm. on Appropriations). CONGRESSIONAL RECORD, Vol. 142 (1996): June 13, considered and passed House. July 11, 17, 18, considered and passed Senate, amended, in lieu of S. 1894. Sept. 28, House agreed to conference report. Sept. 30, Senate agreed to conference report. WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 32 (1996): Sept. 30, Presidential statement.

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